Originally created 08/15/97

Federal official calls for stepping up local phone competition



WASHINGTON (AP) - Just 18 months after Congress deregulated the communications industry, the nation's top telephone regulator asked lawmakers Thursday for more tools to bring Americans local phone competition.

"So far, scarcely any local competition has been delivered to residential or business consumers," Federal Communications Commission Chairman Reed Hundt said in a speech to the American Enterprise Institute.

"We have a major challenge to introduce competition in the local telephone markets and that challenge is not yet being met," he said.

Hundt asked Congress to write into law provisions:

  • Giving the FCC authority to set national pricing rules for those seeking access to local phone networks.
  • Requiring courts to defer to reasonable FCC judgments in disputes over the telecommunications law.
  • Consolidating appeals over the telecommunications law and FCC rules before a single unspecified court.
  • Creating a national policy to enforce the telecommunications law, giving the FCC power to compensate injured parties. The FCC now can order violators to stop breaking the law and fine offenders.
  • Congressional hearings into the slow pace of local phone competition are slated for this fall.

    Sen. John McCain, R-Ariz., chairman of the Commerce Committee that oversees telecommunications policy, said when asked about the proposals, "I do not think that giving the FCC more authority to regulate is the answer."

    "While I haven't had time to thoroughly examine Mr. Hundt's proposals, I will certainly consider them as I prepare to hold hearings on the act," McCain said.

    Ken Johnson, spokesman for Rep. Billy Tauzin, R-La., chairman of the House telecommunications subcommittee, said: "There appears to be little sentiment to reopen the act in the House. No one wants to open up that can of worms."

    Hundt shares some blame for the slow pace of competition, Johnson added. "If Reed Hundt would stop reading between the lines and just read the lines as written in the act, we would have fewer problems," he said.

    Last month, a federal appeals court in St. Louis threw out key parts of new regulations designed to open the $100 billion local phone market to long-distance companies and other rivals.

    In a blow to the FCC's power, the court said states, not the FCC, have authority to write pricing rules for would-be rivals to lease pieces of existing local phone networks or buy local service and resell it to consumers.

    "This decision is a recipe for delay, doubt and uncertainty," Hundt said.

    Challenges to the 1996 telecommunications law and regulations implementing it are pending in 93 federal courts, he said.

    This is likely to lead to piecemeal telecommunications policy, rather than a national policy, further slowing the pace of competition, he said.

    "GTE's taste for litigation is unslaked," Hundt said, noting that the company has challenged pricing decisions by state regulators in 23 federal courts.

    A GTE spokesperson responded that the company would pursue its rights wherever it thought appropriate.

    Hundt also questioned why SBC Communications Inc., a regional Bell telephone company, is challenging the law that it lobbied Congress to enact.

    "We recognized its flaws from the beginning but chose to give the new law a chance," said SBC's general counsel Jim Ellis.