"The day-to-day impact is literally not known," said Herb Kirchhoff, editor of State Telephone Regulation Report, a biweekly published by Alexandria, Va.-based Capital Publications. "It won't be known for another year to 18 months because the rules to implement [the act] haven't been written."
The massive rewrite of telecommunications law is intended to promote competition among telecommunications providers and reduce regulation. It allows previously separate telecommunications providers to compete with one another. For example, long-distance and local telephone service providers will be able to compete head-to-head. Laws, rules and regulations, and case law developed since the 1930s are being rewritten by the sweeping Telecommunications Act, the subsequent implementation rules and regulations, and eventually, litigation in state and federal courts. (See Government Technology, February 1995)
The Federal Communications Commission (FCC) has begun, through its public hearings process, to make the rules and regulations to apply the new laws. Later, state legislatures and public utility commissions (PUCs) get a crack at it. Finally, state and local governments will know how they can begin to apply telecommunications reform fully.
As with many sweeping acts passed by legislative bodies, the Telecommunications Act contains a combination of clear directives, undefined terms and vague guidelines. Executive branch agencies normally take legislation and create rules and regulations with public input to implement the intent and letter of legislation enacted by an elected body.
The FCC, which has jurisdiction of telecommunications reform rulemaking, has opened an aggressive schedule and will finish some of these rules within six months, and the rest in about a year. (The schedule is available on the Web at
Many state PUCs have already started to work on some issues under their jurisdiction, such as local competition. Legislatures have been passing telecommunications reform over the past few years directing PUCs to begin rulemaking on a variety of issues, including universal service definitions and funding. (Government Technology, September 1995.)
The states will also participate in federal universal service rules through a Federal-State Joint Board which will make recommendations to the FCC. The eight-member board, whose members include representatives from the FCC, state PUCs and a consumer advocate, will make recommendations to the full FCC by this fall. The FCC then has 15 months to implement the board's recommendations.
AGGRESSIVE COMMUNICATION NEEDED
The FCC and state PUCs will take some time to create the rules needed to implement the federal legislation, but it is important for state and local governments to remain at least as engaged in telecommunications reform as they were when Congress debated the legislation, assert state and local government representatives interviewed for this story.
An important step is for local governments and state executive branches to make friends with the state PUC and aggressively communicate their interests to the commission. State PUCs will likely be approached by lobbyists representing various interests at the utility commissions, making it even more important that state and local government interests are heard and understood by the commission.
Executive branch officials should attend public hearings and listen, as well as generate a dialogue with commissioners and staff members to ensure that their concerns are heard, said Jake Hoffman, an official in the Information Technology Division of the Idaho Department of Administration.
The same goes for city and county governments. "Local governments have to be involved with the FCC," said Barrie Tabin, a National League of Cities advocate in Washington, D.C. "We are advising locals to send comments
LOCALS RETAIN RIGHTS-OF-WAY
Besides this lobbying effort with utilities commissions, there are a number of things which local governments can do as the federal and state rules are created. The Telecommunications Act allows local control over rights-of-way, a principle cities and counties struggled to keep while the legislation was debated in Congress. The act's language allows locals to "require fair and reasonable compensation" for private use of the public space, as long as it is done "on a competitively neutral and nondiscriminatory basis."
This could mean that while locals maintain traditional control over rights-of-way, city and county governments will have to create nondiscriminating procedures for dealing with companies wanting to enter a market and use public rights-of-way. What "nondiscriminatory" means in the law "is the great conundrum," said Brenda Trainor, regional telecommunications manager for Clark County, Nev.
Companies wanting to lay wire in a jurisdiction "are all different, but have to be treated the same," she said. "We have to do a lot of work on what 'the same' means."
This issue may ultimately be decided in the courts after local governments create, then defend, what they consider to be compensation on a nondiscriminatory basis. "We don't really know what it means," said Tabin. "It may take shape in litigation."
A key place for local governments to start is to assess their jurisdic-
tion over rights-of-way, said Mike Humphrey, Public Technology Inc.'s telecommunications and infrastructure business director. "A major understanding cities and counties need is what they own and what they need to do themselves," he said, adding that jurisdictions should do this before sitting down with telecommunications companies under the new regulatory regime.
Another victory for local governments in the legislation is their ability to approve the placement and modification of wireless facilities -- as long as the local government does not discriminate among service providers. Local governments have to figure out how to handle land-use issues on wireless facility placement without being a barrier to entry into the local market.
Possibly more important than creating the processes for controlling rights-of-way and wireless facility placement is finding out what the local community wants and needs. This means outreach to school districts, neighborhood associations, and others to learn about the community's priorities.
Once this assessment is made, local officials can sit down with a company wanting to use the public rights-of-way and negotiate a trade-off which will benefit the community most, such as installing cable at local schools. "It is important for public officials to know what the local needs are and to catalog them," said Humphrey. "Local government has to be on the lookout to promote local needs and local business activity."
BETTER DEALS COMING?
An immediate, nonpolitical result the telecommunications reform uncertainty is having on state and local governments is a reluctance by some managers to sign long-term service contracts. While a short-term contract is more expensive than a multi-year deal, there are too many unknowns right now to commit to multi-year telecommunications deals, said Hoffman.
Partnerships between companies are likely to be formed under the new rules, and some companies will begin offering services which they couldn't provide under the old rules. "We don't know who the partners will be yet," Hoffman said.
Although the details are impossible to predict at this early date, state and local governments may get better deals once the private sector begins using the new rules. "When this is farther down the road, they may have vendors able to respond to all items in an RFP for communications services," said Kirchhoff. "It may give governments more leverage on big contracts."
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