In “CPUC Denies COLR Relief to AT&T but Will Weigh Updating Rules,” published on June 21, Communications Daily’s Adam Bender has a good account of the California Public Utilities Commission’s denial of AT&T’s request, as an incumbent carrier, to be relieved of what’s called “Carrier of Last Resort” (COLR) obligations. As the designation implies, AT&T and other COLRs, cannot simply stop providing service without prior government permission. By the way, as you might anticipate, the COLR designation comes with strict regulation of rates and other terms of service.
In an era before consumers in almost all areas of the country, including California, had more than a single option from which to choose for the provision of basic voice telephone service, it may have made sense for the government to have the power to require that a service provider be designated as the Carrier of Last Resort. Needless to say, nowadays, consumers in most all areas have several options for acquiring voice telephone service from various providers that employ different technologies – copper wires, coaxial cable, fiber, cellular, satellite, and hybrid networks combining these facilities.
Without belaboring the point here in this short post, the carrier that happens to be saddled with COLR obligations, some of which are costly and involve offering free or reduced-price services and maintaining in place legacy equipment, likely is put at a competitive disadvantage vis-à-vis other competitors. But here I don’t want to argue the particulars of AT&T’s case, which it can do itself.
I only want to comment on one aspect of the CPUC’s action that was highlighted in the Communications Daily report. In initiating a new proceeding to consider whether the Commission should revise its COLR rules, the agency declares it “adopts a rebuttable presumption that the COLR construct remains necessary, at least for certain individuals or communities in California.”
Given the undeniable change in the competitive landscape, driven by ongoing technological advancements, since the “Carrier of Last Resort” concept was developed, the CPUC has the presumption backwards. In other words, there should be a rebuttable presumption that the COLR construct remains unnecessary.
As far back as 2011, I was suggesting in papers that, in light of the rapidly changing competitive landscape even then, the FCC should employ rebuttable presumptions in favor of regulatory relief in its mandated periodic regulatory reviews and consideration of forbearance petitions.
It’s 2024. In its consideration of whether to retain COLR, the California Public Utilities Commission should flip its proposal and its regulatory mindset. Retaining outdated legacy regulations that impose unnecessary costs harm overall consumer welfare. There should be a rebuttable presumption that the COLR construct remains unnecessary.
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