Federal Communications Commission TC 310 May 14, 2008

Structure 5 Commissioners, including 1 Chairperson  Only 3 of the same party at any given time Bureaus  Handle specific areas, hold hearings, etc. Enforcement Wireless Media Wireline Competition

Pre-FCC Early Telephone Networks  Mostly unregulated Bell has patents, develops monopoly Patents expire, competition emerges, redundant  All players want some regulation Bell: avoid cream skimming Independents: Make Bell interconnect States: Reduce inefficient competition

ICC Regulation Interstate Commerce Commission  Mann-Elkins Act, 1910 Telecos are common carriers  Limits of Act No tariff filing requirements No telecom forced interconnection  ICC Ineffectively regulates Telecom Cares more about railroads Allows rates to be set by carriers No national plan

ICC Successes Kingsbury Commitment (1913)‏  DoJ and ICC  Letter from VP Kingsbury to Attorney General Divest Western Union No new acquisitions without ICC approval Interconnect to Long Distance  Not local or to other long distance Shreveport Rate Case (1914 SC decision)‏ Smith v. Illinois Bell Telephone Co. (1930)‏

1934 Communications Act Federal counterweight to Bell Distinctions between Federal and State Improve availability, quality, of radio and telephony in the U.S. Creates FCC to specifically deal with communication technology, no more ICC jurisdiction

FCC Jurisdiction/Authority 1934 limits them to interstate only  Reversal of Shreveport and Smith Gives authority over all things necessary for communication Flexible for new technologies

State Authority 45 States have some form of regulatory commission 98% of calls are intrastate 1934 Act leaves authority to states to deal with rates, infrastructure, etc, for anything that is intrastate

How to separate? Networks do not follow geographic boundaries  Equipment arbitrarily separated.  Facilities also separated.  Depreciation problematic  Accounting problematic

1996 Act Federalization of local issues  Get rid of barriers to entry, including states  Require unbundling, interconnection at LEC  Who has authority to do this then? States argue FCC has specific local authority  Portability, numbering, unbundling FCC sees Act as authorization from Congress to make national rules.  8 th Circuit rules with states; Supreme Court overturns

Preemption North Carolina Utilities Commission v FCC  (1976)‏  CPE is at issue, NCUC not allowing connetion to network; FCC preempts  Court upholds FCC power to do so Services is inseperable intra v. inter Inter greatly affected by intra (Smith again?)‏ Power of Preemption grows

Limit of Preemption Louisiana Public Service Commission v. FCC  (1986)‏  FCC pushing new depreciation/accounting rules  Over turned by Supreme Court When it is possible to separate costs, separate jurisdictions make sense, different rates can apply Act grants FCC greater power, ability to preempt in order to protect competition. States still have authority, but must be neutral.

Back Door Power 1996 Act gives FCC power to regulate States  FCC substitution (Section 252(e)(5))‏ What constitutes State failure?  Complaint Process(Section 208)‏ Bypass States and Courts  Entry into interLATA by LECs (Section 271(c)(2))‏ Commission has to approve after completion of checklist Does this include pricing?

FCC and Common Carriers Common Carriers regulated by Title II  Interconnection; active, now passive  Tariffs- must be filed with FCC Attempted forbearance; 1996 forbearance granted Why tariffing problematic?  Just and Reasonable Rates/ No Discrimination  Facility Building  Competition  Interconnection rates

Oversight of Industry In addition to industry wide, FCC can  Regulate internal management by owners, CEOs, shareholders. Must all be reported  Set depreciation rates. Still battled between States/Feds  Mergers  License transfer. Good for public interest?

Procedures Complaints  FCC first, then Court of Appeals Enforcement  FCC first, can also go to federal courts  FCC has power to enforce Act using Courts Private Actions  Harmed by violation can file action for damages to FCC. Applies to Act violations only.

Forbearance Unique power to FCC Authority not to regulate, uphold Communications Act requirements Earlier attempts disputed by Courts, 1996 Grants Some limitations  General findings period, public interest supported  Interconnection required, interLATA BOC entry

Triggers for Policy Triggers  Mandatory Congress Command Judicial Order  Optional Suggestion from Exec, or Leg. Sua sponte  Private Party Vetted through public comments process

Creation Process Notice of Inquiry (NOI)‏  General position, what to do  Kills with Memorandum Opinion and Order (MO&O)‏ Notice of Proposed Rule Making (NPRM)‏  Report and Order (N&O)‏  Goes to Federal Register 30 days a Petition for Reconsideration Opposition and Replies to Oppositions  Order on Reconsideration or MO&O