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Tuesday
Nov152011

Copps on USF/ICC Reform – Lawsuits, Waiver Requests “Frivolous”

In the Midst of USF Reform News Drought, Copps Speaks out at NARUC Annual Meeting

First we thought the rules would be available last week, but no such luck.  Now the rural telecom industry is bracing for a pre-Thanksgiving release of this epic document.  As the Connect America Fund R&O and FNPRM waiting game continues, it was actually exciting today to read FCC Commissioner Michael Copps’ Nov. 15 commentary from the National Association of Regulatory Utility Commissioners (NARUC) Annual Meeting in St. Louis, MO. He didn’t give a release date for the order, but he did make interesting remarks about some aspects of the order including the controversial role of states under the new regime. He also expressed mild contempt for parties who may be tempted to file lawsuits…and waivers.

Here are some notable quotes from Copps’ speech:

  • “The old saying is, ‘If it ain’t broke, don’t fix it.’ Well, you can’t make that argument here. The system was broken—and we were left with no real option short of a major overhaul.”
  • “Now I know that not everyone here is satisfied with everything the Commission did three weeks ago. Neither am I. But I think we both made a difference. Your input did greatly inform the Commission’s deliberations and its ultimate decisions—even though we had to make difficult choices that will change some legacy state responsibilities.”
  • “We incorporated numerous ideas from the state Joint Board members’ comments, such as imposing significant reporting requirements on USF recipients and requiring all reporting data to be jointly provided to the FCC and state Commissions.”
  • “States can perform many functions better than the federal government—and by ‘many functions’ I mean a whole lot of them. And I am looking for ways to expand the state role under the reformed system.”

In his remarks at the Oct. 27 FCC Open Meeting, Copps did emphasize that he wanted to expand the states’ role, in contrast to the ILECs’ ABC Plan recommendations. Going by the next comment from Copps, he appears to be taking a solid stance against the large ILECs’ pleas for reduced state involvement in the Connect America Fund:

  • “Nothing undermines this kind of substantive state role more than the few carriers who run to state legislatures lobbying for laws that effectively put state public service commissions out of the business of public interest oversight and consumer protection. That mocks the law. It mocks good telecommunications policy. And it mocks consumers.”

Copps continued stressing a “needs of many…” attitude, and warning that he will not take kindly to lawsuits and waivers filed after the release of the Order. It will be very interesting to see what kinds of hoops-on-fire the FCC will impose on the RLECs who are hoping to file a waiver. Copps asserted:

  • “I have no illusions about what perils await the new Order, but I do want to suggest how much better off we will be if our efforts going forward focus on working together to implement these new frameworks, and working constructively to make changes where they may be called for, rather than spending precious time that the country does not have on litigation or legislative end-runs that seek to advantage factional interests at the expense of the greater good.”
  • “I contest no one’s right to take us to court, of course, but America just doesn’t have time to waste watching warring parties duke it out in courts that themselves often disagree while millions of citizens go unserved.”
  • “I think another example of time wasted would be for carriers to file frivolous waiver requests to lock in legacy support that is not really needed to ensure that consumers have a landline voice provider. All that accomplishes is the diversion of precious resources away from carriers who really do need a safety net.”

With Copps movin’ on out of the FCC at the end of the year, it is hard to tell if the hard core opponents of the Order, such as the cable industry, will be deterred from going to court by Copps’ amusing comment, “I’m thinking about conferring my own special award on the first party who takes these decisions to court – I’m calling it the ‘Great Courthouse Cop-Out’ – and it might be accompanied by a stocking full of coal if it happens around the holidays.”

Although Copps’ speech lacked any shocking revelations about the Order, it was rather revealing about his attitude toward the states’ role, large ILECs, and his expectations for the aftermath of the release. He seems to be expecting lawsuits and waivers, but would likely prefer to see the industry just accept the changes and move forward. He emphasizes this by saying, “Let’s just get at it! America works best when people pull together toward an important goal.”

Copps didn’t indicate what constitutes a “frivolous” waiver; but it is nevertheless worrisome that the FCC may be crafting a waiver process that is unreasonably difficult for small rural companies with limited resources.  An unreasonably difficult and costly waiver process could be yet another way that the FCC signals its general disregard for small rural carriers. However, this is clearly speculation at this point since the details of the Order, including the waiver process, are still locked safely inside the FCC away from the critical eyes of the entire industry and public.

What did you think of Copps’ remarks about the Connect America Fund Order? Does a soon-to-be ex-Commissioner have enough sway to deter lawsuits and waivers?

The full text of his speech is available here.

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