Entering the Third Phase of Regulation

Posted:  01/2000

Entering the Third Phase of Regulation
By Kim Sunderland

It follows naturally that after the spring comes summer; after the rain comes
sunshine; after pregnancy comes birth; and after life comes death. The world of
telecom regulation isn’t any different. Because the rules of the
Telecommunications Act of 1996 are law and the FCC (www.fcc.gov)
has moved to implement most of these provisions, it follows that the federal
agency’s next objective is enforcement of those rules. It’s the inevitable
progression of how the FCC believes it must operate in this next millennium.

"We are moving into the post-implementation phase of the
Telecommunications Act," FCC Chairman William E. Kennard said during a
November press conference. "We’re transitioning away from implementing the
rules of the act to making sure the rules are enforced and consumers are
protected."

The FCC (www.fcc.gov), which Congress
charged with implementing the Telecom Act, to date has written most of the act’s
rules and now advances into a period in which the act’s procompetitive policies
must be protected. To do this, Kennard has formed the Enforcement and Consumer
Information Bureaus. Consider it his two-fisted punch to improve the FCC’s role
in an increasingly competitive marketplace. It’s also part of Kennard’s vision
to restructure the federal agency along functional lines, making it leaner,
meaner and more proactive.

"Our decision to establish bureaus devoted exclusively to enforcement
and consumer information signals the enormous importance of these functions in
our transition from an industry regulator to a market facilitator," Kennard
says. "This reorganization is the first step in a larger effort to
streamline and modernize the FCC."

David H. Solomon is chief of the Enforcement Bureau, moving over from a
five-year stint as the commission’s deputy general counsel. Solomon says the
bureau will enforce provisions relating to issues such as local competition,
slamming, cramming, merger conditions and disabilities.

Primarily the Enforcement Bureau is responsible for enforcing the Telecom
Act, as well as FCC rules orders and authorizations. The bureau has four
divisions with particular responsibilities:

1. Telecommunications Consumers Division handles enforcement
regarding the consumer-related obligations of common carriers, such as slamming
and cramming, and resolution of formal complaints filed by consumers against
common carriers.

2. Market Disputes Resolution Division is responsible for
resolution of complaints (market issues) against common carriers by competitors
and other carriers.

3. Technical and Public Safety Division oversees resolution of
complaints involving public safety and technical issues such as tower marking
and lighting, equipment requirements and unauthorized construction or operation.

4. Investigations and Hearings Division will attempt to resolve
complaints against broadcast stations on nontechnical issues. The division also
will conduct, or assist in conducting, any investigations being handled by the
bureau. It also will serve as the trial staff in formal FCC hearings.

"The FCC and the industry as well are shifting their focus," says
Jane E. Mago, deputy chief of Enforcement Bureau. "I think everybody has to
or the Telecom Act isn’t going to work. We have to keep up with the industry and
not get caught up in the paperwork."

Likewise, the FCC’s new Consumer Information Bureau will have one division,
one center and three staff offices. The Consumer Information Network Division
oversees consumer inquiries and informally resolves consumer complaints through
a Consumer Center in Gettysburg, Pa. A similar center and an informal complaints
team will be established in Washington. The Reference Information Center is
responsible for the FCC’s management and maintenance of public records. The
three offices in this bureau are the Consumer Education Office, the Strategic
Information Office and the Disabilities Rights Office, which individually handle
the collection, evaluation and dissemination of specific data, as well as
complaints.

Kennard says the Consumer Information Bureau will attempt to alleviate the
concerns customers have expressed about issues such as slamming, cramming and
some dial-around services. "We’re trying to reconnect with consumers out
there and give them a place to go where their problems can be handled," he
says. "And they’ll be able to get feedback." Lorraine C. Miller has
been named bureau chief, bringing vast experience in consumer issues with her
from her role as director of the Office of Congressional Relations for the
Federal Trade Commission.

"We will not let people get bounced around," Miller says. "We
want our folks to be clear, clean and precise and we want to be proactive. We
plan on being the eyes and ears of the consuming public and relay their concerns
to the [full] commission."

The FCC’s multifaceted enforcement strategy includes possible expansion of
the Rocket Docket, more properly referred to as the agency’s accelerated
complaint process. Common Carrier Bureau Chief Lawrence E. Strickling says the
Rocket Docket was created to address the goals of speedier dispute resolution,
as well as behavior modification.

The Rocket Docket sets 60 days to adjudicate a dispute, Strickling says, and
"brings back the prospect of actual testimony by people involved in the
behavior that is the subject of the dispute. It’s a way to bring home to
individual employees that their behavior has consequences because they may have
to come into Washington and testify in a hearing." Employees largely have
been insulated from this process, he explains, because lawyers and lobbyists
traditionally have dealt with it. But the Rocket Docket now ensures "they
have to be concerned in a way they never had to before," Strickling says.

He says it works because parties are brought before an issue very quickly
and, therefore, must focus on what’s actually in dispute, what’s important.
"Tied to the front end of the Rocket Docket are mediation
requirements," Strickling says. "We have done a number of mediations
which have been successful in getting the parties to resolve the dispute, which
is really what we’re all about."

Mediated topics run the gamut of competitive issues and generally are
carrier-against-carrier complaints. Strickling says the best enforcement tool is
the act’s Section 271 process, which thoroughly assesses what companies are
doing competitively. "But it can’t be the only tool you use," he says,
"because some companies haven’t filed a 271 application yet. We must
augment our enforcement capabilities and the Rocket Docket has taken up some of
these issues."

The industry shouldn’t be fooled into believing that the FCC’s enhanced
enforcement efforts merely mean more paper work. "We’re moving away from
just thinking about problems, from just figuring out policies and rules and
writing 50-page papers," Solomon says. "We have to be much more
responsive because the market is changing so rapidly." The bureau will
track information, determine trends, and single out the bad actors that aren’t
complying with the law. "And there will be serious consequences," he
says. "We’re going to go after them." This includes levying fines and
assessing other anti-backsliding penalties.

But the process for collecting fines, Kennard says, is cumbersome. He would
like to see statutory changes made to modify the process. "We don’t have as
many tools as I’d like for quick resolution of some of these issues," he
says. Naturally, that means that anything the Enforcement Bureau does will be
subject to someone going to court.

Court is another natural progression in telecom. For instance, if the FCC
wants increased enforcement powers, it may have to relinquish regulatory powers
in return, says Ken Johnson, press secretary for W.J. "Billy" Tauzin,
R-La., chairman of the House telecom subcommittee. Tauzin and other key
Republican members of Congress, in fact, won’t look kindly upon FCC enforcement
measures that resemble the 30 conditions placed on the SBC Communications Inc. (www.sbc.com
)/Ameritech Corp. (www.ameritech.com)
merger. There could be clashes on this front if the Republicans feel the FCC is
treating the ILECs unjustly.

Kennard, though, is undeterred in his quest to protect consumers while
streamlining the FCC. "As we bring greater clarity to the rules [of the
Telecom Act], we must enforce them with vigor," Kennard says. "I am
committed to making enforcement mean something at the FCC."