State Commissions Must Agree Not to Criticize Plan to Enter Missoula Talks
State regulators wanting to participate in talks on the Missoula plan for reforming FCC intercarrier compensation rules are being asked to agree beforehand never to criticize the process followed to develop the plan and won’t speak ill of the plan as long as they're in discussions. Me. regulator Kurt Adams -- not companies behind Missoula -- proposed the rules. Vt. has agreed to abide by the rules.
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“It’s a gag rule,” said Billy Jack Gregg, dir. of the Consumer Advocate Division of the W.Va. PSC. “They're basically saying, ‘The price of admission to negotiations is you can’t say anything bad about the Missoula group process or the plan.’ It’s ridiculous.”
The rules appeared in an e-mail by a regulator’s staff member as state commissioners were asking for discussions on parts of the plan, sources said. States are being asked to agree that any state electing to participate “will not criticize (now or later) the process that the Missoula Group used to develop its plan.” States are also being asked to agree that during negotiations “that state will support the Missoula Plan in any public statements and will file favorable comments at the FCC.”
Discussions occurred at a meeting in D.C. and then at a NARUC summer meeting in San Francisco at state commissioners’ request, said AT&T Senior Vp Robert Quinn. Regulators hoped to discuss possible modifications to the plan, which was submitted to the FCC in late July (CD July 25 p1), Quinn said.
Regulators were particularly interested in the “Early Adopter Fund,” intended to ease the Missoula Plan’s impact on states that already had acted to rationalize intercarrier compensation differences, Quinn said. Some states are deemed “early adopters” because they already raised either the subscriber line charge (SLC) line items or local phone rates. Companies in these states may be hit excessively hard by a plan requirement for SLC increases, Quinn said. The meetings with state commissioners were aimed at how to size the fund and how it would work.
Gregg, who led intercarrier compensation negotiations for NASUCA before it quit the group that ultimately developed the Missoula plan, told us some state regulators strongly opposed the demands being put on states wanting to come to the table. “What’s kind of unprecedented is getting parties to agree beforehand that they will keep their mouth shut if they want even to be part of the negotiations,” Gregg said: “I don’t blame any party for asking for the moon but it’s pretty remarkable that any of these states would agree to his.”
It’s unusual to require a state regulatory body to follow nondisclosure rules, an industry source opposed to the plan said. “It’s one thing to impose a rule like this on private parties who are negotiating among themselves, but I have never heard of such a rule being imposed on governmental agencies like the state PUCs as a condition for sitting down and talking to the companies they regulate,” the source said.
Adams told us he was surprised at the criticisms. “The task force set up by NARUC had a complete cloak around it and states signed up for that,” he said: “I will not back away from being critical of the plan unless the plan is corrected… If they give us what they appear to give us -- a process to resolve our issues -- and they engage in that process in good faith, it would be unfair to attack the process that brought forward the Missoula plan.”
As a small state already engaged in reforming intercarrier compensation, Me. would be disadvantaged by the early adopter provisions as written, Adams said. “To allow other states who have not engaged in the same efforts special dispensation is unfair, particularly if there is a rate impact on Maine,” he said. “Having done the right thing having to pay the freight for other states is unfair.”
It’s unfair to characterize the ground rules as unfair demands, Quinn said. Industry simply wanted states to keep private concessions companies might offer, he said: “At the end of the day, if companies express a willingness to make concessions, they shouldn’t be able to use it against us.” It’s the same approach as in the “give-and-take of commercial negotiations,” he said. The rules also reflected the industry group’s promise to the FCC that modifications would be made within 90 days, Quinn said.
State discussions were envisioned when the Missoula Plan was submitted to the FCC, Quinn said, citing a footnote that reads: “Supporters are committing resources to work with state commissioners to help size the Early Adopter Fund and determine how that fund should work when states have rebalanced access rates through state funds, local rate increase and/or new line items.” Another footnote describes state discussions to determine “how plan mechanisms… can be used to encourage carriers to invest in rural areas.”
A 90-day deadline for reaching agreement with the states on outstanding issues, which also has been criticized, was envisioned when the plan was announced, Quinn said. One of the plan’s footnotes says any agreements reached with state commissioners within 90 days will be added to the plan. “We've told the FCC time is of the essence,” he said.
Quinn also defended a request that states be represented by a commissioner, not a staffer, at meetings with Missoula supporters. Participants need the authority to agree to compromises, he said. Asked if the latest flap over meeting rules reflects growing opposition to the plan, Quinn said some opposition is to be expected, since the plan doesn’t give anyone everything they want.