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The FCC is disconnected from reality

Hasty proposal could add to financial burden of millions of Americans.
Wednesday, October 29, 2008 | 10:00 a.m. CDT; updated 11:17 a.m. CDT, Tuesday, May 4, 2010

This has been a difficult year for all of us, as we have watched the stock markets sputter, housing values plummet and banks crash. Too many Americans are struggling to make their mortgage payment and are wondering how they will ever be able to afford retirement. Many people are wondering if regular citizens are ever going to be able to stop bailing out big companies. Apparently the Federal Communications Commission (FCC) thinks we need a "relief package" for the nation's largest telecommunications providers. That's why the FCC is just days away from voting on a proposed order that could end up costing millions of consumers millions of dollars on their monthly phone bills.

Right now, when AT&T and Verizon use smaller carriers' telephone networks to complete calls, they have to pay an access charge to those carriers. This is a major revenue source for the mid-sized telecommunications companies that serve mostly rural, high-cost areas. The order proposed by FCC Chairman Kevin J. Martin would all but do away with that revenue, instead shifting the burden to all residential and business telephone customers by forcing carriers to raise their rates $2 to $15 per month. As an inevitable consequence of this order, monthly service rates will shoot up, forcing many low income and senior citizens to choose between basic necessities and essential telecommunications services, including reliable 911 and broadband access.

The consequences for business and economic development are just as dire. Businesses with multiple phone lines will have to make the same painful choices as consumers. If the draft FCC order goes into effect, we can expect a long-term slowdown in economic development in parts of the country that are depending on new and expanding telecommunications services. And, it is likely that the negative impact on smaller carriers will cost telecommunications jobs in rural areas and force reductions in broadband investment.

Make no mistake - the system of access charges currently used by the telephone companies to compensate each other for use of their networks is very complicated, and no one questions the need for reform. But it has to be the right reform, done the right way at the right time. The telecommunications industry has been trying to work toward a sensible and mutually beneficial solution for years. There are a number of more balanced proposals already in circulation. However, Martin is pushing his radical reform, which hardly resembles anything the industry has ever envisioned. He has given his fellow commissioners only a few weeks to review a massive, 160-page long draft order, and Congress, consumers, and carriers serving rural America will never even see the order until it has been voted on.

Most astonishingly, Martin insists the FCC must vote on this order on Nov 4, 2008, the same day Americans, among them our members of Congress, go to their polling places to vote in the presidential election. Perhaps he assumes no one will be paying attention when this proposal is approved without even the slightest input from consumers or anyone representing their interests. I hope he is wrong; I hope business owners, residential customers and everyone who has an interest in promoting fairness will speak up and ask the FCC to stop its headlong rush towards this disastrous policy.

I encourage everyone reading this to take the time to send a note to the FCC Commissioners (email addresses are below) and to your representatives in Congress, urging them to look out for consumers, not just provide another hasty bailout of big companies at the expense of the average American. We need time to ask the right questions, assess all the risks, evaluate all the alternatives and reach a real solution. We need to stop this vote. The only vote taking place on Nov4 should be in the voting booth, not at the FCC.

Kevin Martin at KJMWEB@fcc.gov; Debra Tate at dtaylortateweb@fcc.gov; Robert McDowell at Robert.McDowell@fcc.gov; Michael Copps at Michael.Copps@fcc.gov; Jonathan Adelstein at Jonathan.Adelstein@fcc.gov

 

 


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