Utility regulation bears rethinking, says national advocacy group
St. Petersburg Times, Fla. --Sep. 15
Sep. 15--A new national advocacy group co-headed by a Florida Public Service commissioner is calling for a fresh, market-oriented approach to utility regulation.
On Tuesday, the Federation for Economically Rational Utility Policy convened
its first annual "summit meeting" in Washington, D.C., boasting a
formidable roster of speakers, including Federal Communications Commission
chairman Michael Powell, FCC commissioner Jonathan Adelstein, BellSouth Corp.
chairman and chief executive Duane Ackerman, SBC Communications Inc. chairman
and chief executive Edward Whitacre and Cingular Wireless president and chief
executive Stan Sigman.
It made for a promising start and an unofficial coming-out party for the
federation, a group of about 14 state utility regulators -- including Florida
Public Service commissioners Charles Davidson and Rudy Bradley -- who say they
favor "market-oriented, consumer-focused" solutions to regulatory
problems.
Some consumer advocates suspect the federation favors scaled-back regulation
of phone companies and electric utilities.
But Davidson, who co-chairs the group with California Public Utilities
commissioner Susan Kennedy, said that would be an unfair characterization of the
new group's philosophy.
"It's not less regulation than more," he said. "It's
economically rational regulation."
As its name implies, the federation came together to represent the views of
utility regulators who sometimes found themselves at odds with the official
pronouncements of the National Association of Regulatory Utility Commissioners,
or NARUC.
So far, the federation has focused on regulations affecting the
telecommunications industry.
In March, a federal appeals court overturned FCC rules requiring regional
Bell phone companies to lease access to various components of their networks to
competing carriers at regulated rates. Consumer advocates criticized the
decision, arguing it would undermine competition and limit consumer choice in
phone services.
The consumer argument was embraced by NARUC, which called on the Bush
administration to appeal the decision to the U.S. Supreme Court.
But in a letter to the Bush administration, the federation took the opposite
position. Arguing against an appeal, the group said the FCC rules would have
created a "patchwork of disparate state policies" and called instead
for a national regulatory framework for traditional phone services.
The federation also believes a hands-off regulatory approach is the best way
to encourage the development of Internet phone services, in contrast to some
senior officials at NARUC who, Davidson said, "would like to pigeonhole
(Internet phone services) into the telecom regulatory box."
NARUC general counsel Brad Ramsay downplayed the differences between the
association and the federation, saying divergent points of view weren't unusual
among NARUC members and that "the nature of organizations is you typically
end up with the lowest common denominator" when they adopt policy
positions.
But Ramsay conceded that he wasn't aware of previous policy disagreements
that had resulted in the formation of a new group boasting its own Web site (www.ferup.org)
and an annual meeting that could attract top government regulators and corporate
leaders.
Still, "there's nothing in our bylaws that would in any way mute"
the voices of individual commissioners, he said.
Davidson attended the federation's summit meeting Tuesday with his chief
adviser Katrina Tew, who is one of 10 candidates being considered to succeed PSC
commissioner Lila Jaber when Jaber's term expires in January. Bradley did not
attend the meeting.
The daylong meeting featured discussions about phone regulation and the
appropriate roles for federal and state utility regulators. In addition to
regulators, congressional staff members, Wall Street analysts, industry trade
group officials and public policy think tank representatives were also scheduled
to attend.
Tallahassee consumer attorney Mike Twomey said he was worried that no
representatives from any consumer organizations were listed on the agenda of
Tuesday's meeting.
"I'm concerned that a relatively small splinter group of utility
commissioners from around the country are able to attract a number of CEOs of
companies they regulate for a Washington "summit,"' he said. "I
can't imagine that anything good will come of it on behalf of consumers."
Davidson argued that the federation's goals are in line with those of
consumers, pointing to the lightly regulated and highly competitive wireless
industry as an example.
Recent trends in the telecom market, such as the continued growth in wireless
services and the bundling of traditional wireline phone service with Internet
and video services, require utility regulators to consider new approaches,
Davidson said.
Overregulation of emerging technologies, he warned, "is a very dangerous
slippery slope that will result in less consumer choice."
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