State and Local Governments Want Bigger Role in Telecom Reform

State and local government associations are working together to make sure new legislation doesn't eliminate universal service and local control of telecom rights of way.

by / January 31, 1995
Last fall, state and local governments received a rude wake-up call from Congress regarding telecommunications reform. The Senate attempted to pass S. 1822, legislation designed to reform the country's telecommunications laws, which included a provision to eliminate state and local governments' ability to regulate access to public rights of way. To the relief of many, the legislation did not pass.

The Senate, under the control of the Democrats at the time, was attempting to remove what it saw as barriers to competition. Many local governments saw it differently. "In many respects, Congress was attempting to disempower local governments in the name of freedom for the telecommunications industry," said James L. Ley, assistant county manager for Clark County, Nev., "we almost lost our right to self-determination."

Now with a Republican majority in both the Senate and House, state and local governments can expect to see another attempt to deregulate telecommunications. "A new telecommunications bill will emerge in the Republican-controlled 104th Congress, which is more aggressively pro-competitive and de-regulatory," predicted Sen. Larry Pressler (R-SD), the next chairman of the U.S. Senate Commerce, Science and Transportation Committee, which is holding hearings on telecommunications legislation.

Congress is attempting to create laws that allow video, data and voice communications on a single line into homes and businesses. The essential laws governing telecommunications were written in 1934, well before today's technology existed.

Not surprisingly, state and local governments are concerned about what almost happened in Congress last session, and what could happen in the new Congress. "It was spun to Congress that local governments were just another unneeded, regulatory roadblock in the path toward building the information superhighway, and they should be eliminated," said Ley, who is working with industry and government to develop a vision of how telecommunications can benefit the residents of Clark County.

To counter attempts at diluting state and local control of public rights of way, franchising and the right to maintain universal access to telecommunications services, government associations are banding together to make their voices heard on Capitol Hill. The most influential ones have formed a coalition to leverage their lobbying skills and influence. They include the National Governors' Association, the National League of Cities, the National Association of Counties, the National Conference of Mayors, the National Association of State Legislators, and the National Association of Telecommunications Officers and Advisors, among others.

Lacking the big bucks of the telecommunications industry, the coalition hopes it can persuade Congress to keep the public interest in mind as it writes new legislation. Most state and local officials agree it won't be easy.

LEGISLATION NEEDED

Ironically, the consensus among the associations is that new telecommunications legislation is needed for several reasons. State and local governments do not want to see the courts settling key telecommunications issues. The result, they say, would be a series of conflicting decisions, which can only muddy the waters. Nor do they want to see telecommunications reform end up in the hands of the Federal Communications Commission, which can write regulations and rules that may or may not fit the needs of the individual states and localities.

More importantly, state and local governments recognize that opening up competition can directly benefit them. As some of the largest users of telecommunications services, cities, counties and states would stand to gain better services at lower costs if cable firms, long distance and regional phone companies competed against one another.

Competition in telecommunications can also boost economic development. With more of today's business based on information, telecommunications is seen by government officials as a key driver for greater productivity and a better economy. "A good telecommunications system can boost the productivity of so many businesses," pointed out Tim Masanz, group director for economic development and commerce at the National Governors' Association. "States today have to have good [telecommunication] systems in order to attract jobs and business."

UNIVERSAL ACCESS

But leveling the playing field to increase competition has to be done in a fair and equitable manner, according to the associations. In other words, state and local governments should be allowed to treat similar providers in similar ways, explained Susan Littlefield, president of the National Association of Telecommunications Officers and Advisors (NATOA).

"We feel requirements and compensation should be the same for all the providers," said Littlefield, who is the cable regulatory administrator for the city of St. Louis. "Right now, cable franchises have universal service requirements. If competition is opened up to other telecommunications companies, they should meet the same requirements." Otherwise, Littlefield pointed out, competitors will cherry-pick the rich neighborhoods and not provide service to the poor neighborhoods.

In fact, the issue of maintaining universal service resonates loudly among just about all the government players in telecommunications reform, including Sen. Pressler, who has come out in favor of retaining some form of universal service. His job will require balancing the need for increased competition with retaining basic services at reasonable costs for the rich and poor, urban and rural.

But before Congress can do that, they will need to define universal service. "Our view of universal service is one of capacity," said Masanz. "The NGA doesn't think that universal service should be defined by specific information services such as Compuserve, but having the capacity to do certain things." Masanz went on to say that the NGA wants Congress to give the states the flexibility to define what the capacity for universal service is, since the situation differs for each state.

As an example, Masanz pointed to how some states moved first to make Touch-Tone dialing a non-billable service. Eventually it became universal throughout the country. "Universal service is a moving thing," he said. "We want the federal government to recognize the need for some flexibility in determining what it is, so states have room to move."

REFORM AND RIGHTS OF WAY

While Congress is probably in accord with state and local governments on maintaining universal service, the groups are in discord over deregulation. The cable and telephone companies want Congress to remove any barriers to their entry into the telecommunications arena for delivering video and data along with voice to homes and businesses. In response, the Senate drafted a bill that contained a clause stating: "No local government may ... impose or collect any franchise, license, permit, or right-of-way fee or any assessment, rental, or any other charge ... from any telecommunications carrier." The House version of the bill did not have a similar clause, but it did contain language that would have infringed on some of the franchising authority of local governments.

Despite Congress' failure to pass S 1822, the state and local government associations are concentrating their efforts on stopping the new Congress from adopting anything similar when new legislation is drafted. "We believe the new legislation must contain language allowing local governments to maintain their public rights of way and to receive just and reasonable compensation for the use of the public rights of way," said legislative counsel Cara Woodson, explaining the position of the National League of Cities.

Without the ability to regulate how public rights of way are used and to receive compensation for their use, local governments predict that communities will lose revenue, have gridlock in the streets and have lower levels of public safety if telecommunications firms lay cable whenever and wherever they like.

NATOA's Littlefield has heard and experienced horror stories of what happens when private industry takes advantage of public rights of way. She told of communities in Illinois waking up to find unlicensed contractors digging up newly paved roads without consulting local officials. Once, a contractor began boring underneath the streets in St. Louis to lay some cable, hit a gas line and then tried to leave without fixing the problem or telling anyone about the accident.

In Las Vegas, traffic congestion has swelled along with the growing population, making it a major political issue, according to Clark County's Ley. If the city and county are unable to control the public rights of way, traffic disruptions from street diggings and repair could inflame an already raw nerve in the community.

State and local governments are also extremely concerned about losing their right to receive compensation for the use of public rights of way. "We strongly feel that private users of public rights of way for private profit should pay for the privilege," explained Littlefield. Saying that local governments are merely acting as landlords protecting public assets, she pointed out that when telecommunications firms run cable alongside a railroad's right of way, they pay the railroad a rental fee to do so. "The public rights of way are no different," she added.

State and local governments also want Congress to consider their right to media access. State and community officials want to share in the benefits of broadband telecommunications by having interconnection to the information superhighway at reduced rates. According to Masanz, negotiations for media should be done at the state and local level, but Congress needs to establish the policy first.

STAKEHOLDERS

When Business Week magazine ran an article last year on the information superhighway, it covered all the major players but one. No mention was made of local government and its role. When the Clinton administration formed the National Information Infrastructure Advisory Committee to define public and private roles in the NII debate, only one local government official was on the panel.

There's little disagreement that state and local governments were the missing players when the debate about the direction of the country's telecommunications began. The stakes are too high, say the leading associations, to sit out a second time.

If state and local governments lose out to Congress and the telecommunications companies on the issue of deregulation, the short-term impact could be loss of franchise revenue and a rise in traffic congestion, to name just a few. But the long-term impact could mean losing control of their destiny, especially regarding all uses of public rights of way. That could impact everything from economic development to keeping the public informed.

Forming a coalition of the most influential associations is seen by many as a strong step in the right direction for lobbying Congress on the issues that concern cities, counties and states the most. But more has to be done, say some officials. State and local governments must recognize their role as stakeholders in the battle over telecommunications reform.

"We need active participation from all local governments, especially elected officials," said Littlefield. She and others advocate that local governments need to become better educated about the issues so they can add their voice to the political debate.

According to Ley, Clark County has opened up discussions with the local phone and cable companies, explaining to them what the County sees as its stake in telecommunications. At the same time, the county managers have been meeting with the board of county commissioners and state legislators. Ley sees these discussions as a way to inform and educate all parties about the role local government has to play in telecommunications in order to ensure communities get some social benefit from the advancing technology, and not just 500 channels of movies and shopping shows. He also stressed that cities and counties shouldn't be afraid to leverage their position as a major user of telecommunications, as well as their franchising authority of rights of way. The goal, however, is to create a win-win situation for government and the telecommunications industry.

But unless state and local governments become more active and gain more influence on Capitol Hill, Congress and the telecommunications industry will call all the shots, Ley warned. "What's at stake here," he said, "is giving away the farm at the federal level."