Certification explained: a civics lesson from Art

America's Network, Dec 1, 2003 by Art Brothers

In October I mentioned that I'd discuss why, as a matter of trust, we telcos are granted a franchise. Alan Smith says that in what might be called, in 19th Century Law, the old franchise system, a legislature granted a franchise as a matter of trust to a selected candidate. Utility certification is a vestige of this law. The certificate vests the utility with the public authority as a matter of public trust (hence, the grant of condemnation rights to utilities). Usually trustees may not delegate or sell their powers to others.

Can a utility contract or delegate its responsibility to perform the duty of its Certificate? There is an analogous principle in corporation or other fiduciary-related law that forbids the "sale of office" by fiduciaries. An example might be Nevada Bell contracting with (and subsidizing) Western Wireless to provide 900 MHz analog two-way radio telephone service to certain rural Nevada areas.

There has been some argument that this deal appears to be Bell "selling out," since it shortchanges its customers by delegating the duty to serve that area to a non-certificated, non-approved carrier, and therefore does not entail the investment in plant and facilities that otherwise would be required to upgrade the quality of service to modern standards. The deal was--sort of--winked at by the Nevada PUC as suitable service required by the Certificate issued to Bell.

A simpler, more compelling analogy may be to the law of transferring certificates pursuant to the utilities code. We all know that a transfer can't occur without commission approval, and the reason is because we want commissions to insure that any such transfer serves the "public interest." The aforementioned delegation of duty to serve is tantamount to a transfer of the certificate. Kosher or not?

EXPECTATIONS

In October two years ago the FCC sponsored a Summit about Broadband. In December 2001, I summarized what had to be done to make it happen. The thinkers got it. Plans and Policy guys got it. Chairman Powell got it. The associations did not "get it."

Chairman Powell detailed his "what you gotta do" vision such as (my words) how we don't understand teenage kids tossing the book in favor of a modern cell handset. Their clothing, manner and expectations are not the same as ours. The movie "Head of State" contrasts differences because many over 25 "don't get (all of) it." (I loved it)

Our younger generation's expectations far outpace what the Communications Act addresses. We have outgrown the act. New Federal Legislation that "gets it" for today and tomorrow must be a priority for our industry.

VOIP

Is Vonage a noun or a verb? At the recent USTA convention in Las Vegas, representatives of VOIP carriers, speaking for Vonage, flat out agreed that they should pay terminating access to carriers that terminate their traffic. They also agreed that USF is as important as universal service. And I agreed they should be mostly free from any other regulation. VOIP calls which never see the telcom network as voice, that is, IP to IP, means zero regulation other than providing (and paying for) 911 type access.

What about 911? Well, the agencies will just have to be receptive to IP access. The new act?

At the same time, state commissions need to abolish baggage which does not keep pace with technical stuff.

Should we adopt a flat rate national tax for e-bay and all IP sales transactions? The Feds would then rebate to the states based on population? Are your meetings discussing the one-time Universal Service Fund fee that would support the network, payable by makers of anything with a computer in it that could access another?

Art Brothers (awb@beehive.net) runs Beehive Telephone Co., Wendover, Utah.