Monday, April 21, 2008

Bearing in Mind Forbearance's Purpose - Part II

A couple of weeks ago in this space I took note of AT&T's pending forbearance petition in a piece entitled, "Bearing in Mind Forbearance's Purpose." The piece explained why the FCC should grant AT&T's petition asking the agency to forbear from applying its cost assignment rules now that they have become largely irrelevant in an era in which the FCC and the states have abandoned cost-of-service regulation in favor of price caps. You can read the blog for a more complete explanation.

But I was interested to see the item in today's Communications Daily [subscription required] reporting that the public staff of the NC Public Utilities Commission is urging the commission to eliminate a PUC rule requiring incumbent carriers to submit cost studies for new services. The reason? According to Communications Daily, the public staff, which represents consumer interests before the PUC, said that because all incumbents now are under price caps and face competition, "cost studies mean little." The public staff pointed out that the incumbents' competitors faced no cost study requirement.

From press reports, it appears that Republican Commissioner Robert McDowell may be questioning whether AT&T's forbearance petition should be granted. The petition is scheduled to be acted upon this week. This should not be a difficult call for Commissioner McDowell, who is generally supportive of reducing unnecessary regulation, or, for that matter, for all the other commissioners. The cost assignment rules that are the subject of AT&T's petition are a relic of a bygone regulatory era. If the public staff of the NC Public Utilities Commission can see the need to jettison outdated rules in the context of cost studies submitted to the state commission, the FCC ought to be able to do the same with respect to its rules.