Yesterday I attended the the Commerce and Regulatory Reform Committee meeting. I tried to take pretty good notes. I also took video, which I’ve integrated below. (The audio is not as good as I had hoped.)

The quick take is that folks are going to be talking about Universal Service Funds (USF), Intercarrier Compensation (ICC), Inter- and Intrastate access charges. The local telcos have one opinion and the larger providers have another. There’s a push to address the issue immediately by folks who pay into these charges and a push to wait to see what they do at the National level (these topics are on the National Broadband Plan shortlist) by folks who receive these charges.

Here are my notes:

Bill Introduced 1692: Telecommunications regulations streamlined, and civil penalties, rate regulation, regulatory requirements, and technical provisions modified and updated. (This is the last official committee meeting of the year.)

This is the AT&T bill – our intention is to start the discussion. We want to talk about access reform, the PUC… We can continue the discussion later.

Bill Bass from AT&T –

Need to update access charge mechanism. 21 states have addressed access charges. Wisconsin passed a bill today addressing it.
The bill introduced today is a discussion piece and a way to move forward. We have a wide variety of companies interested in the bill. Some companies are interested only access reform. Others are interested in preserving status quo.

Last year there was a hearing. Many sectors of the telecommunications have had discussions. We tried to find common ground to address issues. It’s difficult to make everyone happy – but generally if you’re 80 percent happy that’s a good day.

After a year of discussion we haven’t moved the needle much. We want to work on these issues. The companies that have discussed the issues are in the room. We have good reasonable people so AT&T thinks we will find a solution.
If these issues aren’t addresses we’ll have critical issues in a few years.

Questions:
Can you get service in the State Office Building basement?
Only one company (Sprint) is allowed to have their equipment in the Capitol.

Brent Christensen from Minnesota Telecommunications Association

We represent 80 independent telcos.

Access and intrastate access is only one revenue stream we rely on in rural areas. Before Qwest/CenturyTel merger, we represented 50% of area; 15% of residents.

The FCC is actively working on ICC and USF. We also need to be in step with the National Broadband Plan. We don’t’ want to have to un-do anything.

One issue moving forward is the difference between interstate rates and intrastate rates.

Our end goal is looking at what’s in it for the end consumer.

Mr Hammond from Blue Earth Valley Telephone

11,750 customers (8500 are broadband customers/ the rest are cable)

Our average line bill is $27.00 about $9 is revenue from Interstate Access Charges if Intrastate charges were same as Inter our revenue would be cut in a third. We use the money to invest in infrastructure.

We are looking at a National Program on ICC. Compensation is various forms of regulation (state, local fed). The National level is looking at having decisions this summer. It would make sense to wait to see what happens at the National level.

We don’t know what the FCC will do. But what happens in MN could be pre-empted.

This bill could have a big impact on our strategic plans.

Dan Lipschultz (TWA Telecom & others – CLECs)

Telecom Reform made the competitive carrier possible. Reform to federal laws made this possible.

We are glad MN is looking to modernize the telecommunications policy. We think competition is better than government intervention. However this is an industry like any other.
Why is telecom different in terms of needing regulation?
1. Telecom industry is an industry on which all others depend
2. It trends towards consolidation – at some point consolidation will squeeze out smaller competitors.
If you want competition, you need targeted laws that will encourage competition and strong fully equipped agency to enforce those laws.

Sean Simpson( T-Mobile Wireless)

Traffic pumping is our concern – when a LEC enters into a relationship with third party conference call/chat company. The chat provider advertises local number. The high access rate the local provider gets means revenue – but not obtained as intended. It drives more minutes of use, which they can get more subsidies, which they may share with chat provider. Chat provider isn’t local; but traffic pumping is.

Long distance and wireless providers end up paying for this traffic pumping. The chat services lose the 900-stigma and are often used by adult chat services.

The discussion ended – but legislators indicated that the topics would come up again this summer.