NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES
R E S O L U T I O N
CALLS ( Coalition for Affordable Local and Long Distance Service )
WHEREAS, the Telecommunications Act of 1996 was passed to secure lower prices and higher quality services for American telecommunications consumers; and
WHEREAS, the Coalition for Affordable Local and Long Distance (CALLS), representing many of the largest companies in the local and long distance telecommunications industry, have petitioned the Federal Communications Commission (FCC) to adopt the so-called “CALLS plan” which would substantially change the manner in which interstate access costs are recovered and would substantially increase federal surcharges paid by consumers purchasing local service; and
WHEREAS, the CALLS plan will increase fixed, unvoidable surcharges paid by local exchange service customers by greatly increasing the Subscriber Line Charge (SLC); and
WHEREAS, the CALLS plan would eliminate any possibility of reduction of the SLC under the FCC’s price cap mechanism; and
WHEREAS, the CALLS plan will also result in an increase in monthly surcharges on consumers to pay for increased universal service costs; and
WHEREAS, Section 254 of the Telecommunications Act of 1996 requires that universal service be preserved and advanced, and be available to consumers at affordable prices; and
WHEREAS, Section 254(d) of the Telecommunications Act of 1996 requires that universal service support be paid by telecommunications carriers, rather than end users; and
WHEREAS, in its May 8, 1997, universal service order the FCC ruled against any increase in the SLC on primary lines out of concern for maintaining universal service; and
WHEREAS, customers are already frustrated and confused about various surcharges that continue to be added to their telecommunications bills; and
WHEREAS, adding another mandatory surcharge or increasing an existing surcharge on monthly bills will be unacceptable to consumers, especially low-volume consumers; and
WHEREAS, the CALLS plan would shift to the end user all joint and common costs of the interstate common line, and would force all consumers of local service to pay such joint and common costs as a condition of purchasing services defined as universal services; and
WHEREAS, shifting all joint and common costs of the local loop to a surcharge on basic local service would violate the prohibition against such cost shifting contained in Section 254(k) of the Telecommunications Act of 1996; and
WHEREAS, the allocation of a disproportionate share of joint and common costs to a subset of services is unreasonable and inconsistent with economic principles, the holdings of the U.S. Supreme Court and most regulatory authorities; and
WHEREAS, the CALLS plan’s assumption that 100% of the common line costs must be charged to the end user as a cost of local service fails to recognize that the common line is now being used to provide many services other than local service; and
WHEREAS, the CALLS plan will result in inefficiency because long distance providers will be given free use of the loop and other facilities that constitute necessary inputs for the provision of interstate service; and
WHEREAS, long distance providers should pay their full costs for use of the local network, and price their own services as appropriate to recover those costs in a competitive market; and
WHEREAS, placing virtually all interstate access costs in the SLC and eliminating all productivity offsets reduces incentives for efficiency by incumbent local service providers and tends toward guaranteeing recovery of the incumbent’s costs; and
WHEREAS, the CALLS plan proposal to shift recovery of interstate costs from the preferred interexchange carrier charge (PICC) to the SLC reduces competitive choice since consumers will no longer be able to choose a carrier that does not charge a PICC; and
WHEREAS, the CALLS plan insulates interstate access costs from competitive pressures; and
WHEREAS, reducing or eliminating the SLC and empowering consumers to effectively participate in competitive markets is the appropriate way to achieve the pro-competitive goals of the Telecommunications Act of 1996;
THEREFORE, BE IT RESOLVED, that the National Association of State Utility Consumer Advocates (NASUCA) opposes the CALLS plan as inconsistent with the pro-competitive and universal service goals of the Telecommunications Act of 1996, and as harmful to consumers; and
BE IT FURTHER RESOLVED, that NASUCA urges the FCC to reject the CALLS plan as proposed; and
BE IT FURTHER RESOLVED, that NASUCA urges the FCC to embrace pro-competitive policies that benefit consumers by commencing a program to reduce or eliminate the SLC; and
BE IT FURTHER RESOLVED, that if the terms of the CALLS Plan are subjected to negotiations, NASUCA should take action consistent with this resolution, including but not limited to coordination with other consumer interest groups, participation in negotiations, and promotion of NASUCA’s positions before the FCC; and
BE IT FURTHER RESOLVED, that NASUCA authorizes its Executive Committee to develop specific positions and to take appropriate actions consistent with the terms of this resolution. The Executive Committee shall notify the membership of any action taken pursuant to this resolution.
Approved by NASUCA:
November, 1999, San Antonio, Texas
Submitted by:
NASUCA Telecommunications Committee
Michael J. Travieso, MD, Chairman
Alice Hyde, IA
Angela Acree, D.C.
B. Robert Piller, PULP NY
Carl Wolf Billek, Esq., NJ
Charlie Beck, FL
Douglas W. Elfner, NY
Garth Morrisette, MN
Gene Lafitte, WV
Heikki Leesment, NJ
Karen Hardie, OH
Kelly McQueen, AR
Kevin Anderson, NC
Laurie Pappas, TX
Letitia Wiggins McKoy, D.C.
Martha S. Hogerty, MO
Michael McNamara, CA
Mike Eckert, IN
Phil Bullock, UT
Philip McClelland, PA
Regina Costa, TURN CA
Richard Weiner, NM
Simon ffitch, WA
Steve Welch, NV
Theresa Czarski, MD
Thorvald Nelson, CO
Timothy Seat, IN
Wayne Jortner, ME
William Homeyer, NH
William Vallee, Jr., CT