Henry Geller, Senior Fellow in The Annenberg Washington Program, facilitated an open discussion among attendees. Mr. Geller described the planning conference as a "defining moment" in telecommunications policymaking, and predicted that Congress will pass legislation in 1994 that will settle the "future of federal, state, and local jurisdictional issues." This session would permit local and state officials to provide their views to Congress and to the Administration, and to seek comment particularly on the issue of federal preemption of the states within one year regarding obstacles to local exchange competition. Chairman Ronald Eachus (Oregon) expressed concern that the FCC might slow down the unbundling of the local network in Oregon and other states. Commissioner Joe Miller (Idaho) would favor a policymaking approach similar to the Public Regulatory Practices Act (PURPA) model, whereby Congress establishes broad preferences and allows states to implement them based on particular circumstances. He agreed with Chairman Eachus that most states will not seek to impede progress.
Chairman Kenneth Gordon (Massachusetts) agreed that the PURPA model is attractive, albeit some states ignored it for a considerable period of time. He also observed that the federal government will be concerned about similar issues of competitive entry with both the state and local authorities, and that a federal "overlay" would be needed to prevent delays in implementation by some states. Chairman Sharon Nelson (Washington) believes that most state policymakers want to encourage open entry, but the option of open exit may not be acceptable to rural states. She posited that, overall, there should be a presumption of open entry and then flexibility to address specific cases. Commissioner Bruce Hagen (North Dakota) agreed that federal standards are needed. Chairman David Rolka (Pennsylvania) asserted that it would be acceptable for the federal government to set goals, priorities, and standards, but that preemption would not be in the best interests of the people in his state.
Commissioner Squadron (New York City) argued that, organizationally and institutionally, local officials have been as supportive of open entry as any level of government. As trustees of public property, local governments have the responsibility to make sure that entry benefits communities. Information exchanges about possible intergovernmental policy conflicts are warranted. Messrs. Geller and Squadron debated whether the cable franchise fee is a taxing mechanism to raise revenues that can be put to "pensions and potholes," or a rent for use of public property. Michael Keeler, a high school teacher and former employee of the New York State Department of Economic Development, proposed that the federal government recommend to the states that they devote tax revenues or rental income to fund education.
Commissioner Miller stressed that the appropriate transitions in removing entry barriers should be allowed to occur at the state level in a sensible time period. Chairman Gordon stated that sufficient, albeit sensitive, federal pressure will be needed to ensure that "people will take the steps to prepare themselves to do exactly what is going to have to be done when the competition actually comes." Commissioner Lilo Schifter (Maryland) asserted that federal requirements should stop short of setting rates and interconnection adjustments for the basic carrier, leaving such regulation to other levels of government. Kathy Brown (New York) urged that state experiments be permitted to go forward.
Chairman Kenneth McClure (Missouri) concurred with the notion that some pressure be applied on the states by either the FCC or Congress, but argued that realistic timeframes need to be used. Chairman Nelson stated that detailed Congressional legislation would be wrong, preferring to leave resolution of local transitional regulatory issues to the states, the FCC, and federal-state joint boards. She believes that these regulatory mechanisms should be used to reform universal service funding; for example, Washington State is ensuring the availability of enhanced 911 service in all of its counties by assessing an excise tax on subscriber lines.
Chairman Dennis Nagel (Iowa) observed that the current three-to-one disparity in Des Moines' business and residential rates cannot exist in a competitive arena. He asserted that as the local exchange is opened to competition, there is a need to be sensitive to the different nuances that are found in each state. Chairman Eachus agreed that the varying situations in different states should be recognized, and that states should be seen as the resources, not the problem. Chairman Nelson also regards micromanagement by federal executive or administrative agencies as imprudent. A discussion ensued reflecting differing viewpoints on the likelihood of action by the MFJ court, Congressional legislation, and FCC preemption.
In response to a question from Mr. Geller regarding "telco" entry into the cable business, Chairman Nelson and Commissioner Squadron expressed their preferences for some element of a common-carrier obligation. Michael Hunt, a former NATOA member, offered the view that there is a "valuable function" that each level of government can perform in policymaking relating to the information superhighway.
Mr. Geller concluded the open session with his assessment that a consensus was reached in three areas. First, there was "not great objection" to the federal government directing that competition be promoted in the states if the details and the timing were left to the discretion of the states. Second, federal direction accompanied by "a lot of leeway" to reflect local conditions would be acceptable in the "competitive environment for the incumbent". Third, telephone entry into the cable TV market should be conditioned by a "strong common carrier component."