A Timid Step Toward Modernization

05.17.2013

In February 2012, USTelecom filed a petition asking the Federal Communications Commission to eliminate 17 categories of antiquated rules and reporting requirements that are no longer relevant to today’s marketplace for voice communications. Some of these rules date back to the telegraph era, and others are rooted in a regulatory system set up decades ago when competition to provide voice service was prohibited and long distance and local phone services were sold separately.

While the FCC agreed to do some de-cluttering in response to our petition , it missed the opportunity for the  thorough spring cleaning that has long been needed – one that would have been a meaningful fulfillment of the commitment by President Obama and Chairman Genechowski to eliminate unnecessary regulation – and instead left in place a variety of legacy rules and paperwork requirements that produce – and now will keep producing – reams of information that the Commission no longer looks at – and has not looked at –  for the last five years. This is the regulatory equivalent of “extreme hoarding” – like stacks of old Life magazines that gather dust in the basement.

USTelecom won partial relief with its petition two months ago on three of the 17 categories and today, 15 months after filing and to meet the deadline established by Congress, the commission has granted relief on 10 additional sets of rules or reporting requirements.

Much of the relief that was granted involves simply extending to mid-sized and small incumbent local exchange carriers (ILECs) relief that had been granted to the largest carriers years ago. However, the commission declined to grant relief in connection with several of the most burdensome rules raised in USTelecom’s petition, including Part 32 accounting rules, CEI/ONA rules and streamlining Section 214 notification requirements.

The Part 32 rules require ILECs to keep a second set of “regulatory” accounting books besides those that public companies maintain to satisfy auditors, shareholders and the Securities and Exchange Commission. To the extent that there are particular pieces of financial information necessary for the FCC to carry out its mission, companies can, and in fact have offered to, supply those pieces of information directly to the FCC on request.

The CEI/ONA rules are remnants of the FCC’s 40-year-old Computer Inquiry proceedings and require companies to offer certain parts of their basic service on a non-discriminatory basis.

Section 214 requires carriers to get approval before making changes to their networks including changing out facilities to upgrade to IP.

Leaving these antiquated and burdensome rules in place is a missed opportunity, given how much the communications world has changed.  Eliminating regulation that no longer serves a purpose should be the starting point for developing a new regulatory approach based on competitive and technological realities and consumer needs. Outmoded regulatory requirements, for example, to collect and maintain an entire set of purely regulatory books of data that the commission has not even looked at in five years, are a burden on the marketplace, on innovation and ultimately on consumers.

We recognize and appreciate that the commission is undertaking further review of these legacy rules. Given the fact that we have already gone through 15 months of study we would hope that this further review could be completed by the end of the year.

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