verizon’s policy chief on the record

Get used to the names. These men from the U.S. Senate and House of Representatives presumably will lead the charge in 2005 to reform national telecommunications policies.

Tom Tauke

Tom Tauke knows the names well. The former Iowa Congressman oversees Verizon’s public policy and external affairs group. During a recent interview with Josh Long of xchange, Tauke discussed Verizon’s position on a wide range of telecom policies, from reform of federal law to Internet phone regulation.

Tauke emphasizes that Verizon is not seeking to rewrite the entire law, but is lobbying for a national policy deregulating new broadband networks and preempting state regulators from asserting jurisdiction over wireless services.

“We believe that [a] national policy should ensure there is no unbundling required of new fiber networks, that it should provide for the FCC to have authority for regulation but to be able to exercise that authority only when it finds a market failure,” says Tauke, Verizon’s executive vice president of public affairs and communications.

Verizon considers wireless an interstate service that should be outside the jurisdiction of state regulators. “We want confirmation that the policy is a national policy at the federal level and that the states are not able to regulate wireless,” Tauke says.

Tauke says it is important Congress sets the direction to limit a trend since the Bell system was divested in 1984 — courts setting policies as a result of disputes. “It would be far preferable for Congress to establish a clear policy so the FCC or state regulators or anybody else involved knows what the rules are and what the law is,” he says.

It is anybody’s guess as to how long it could take Congress to reform the law. Tauke says Congress passed the Telecommunications Act of 1996 the prior year after a bill was first developed in 1994. Congressional attempts to reform telecom policy date back to the mid-1980s following the breakup of the Bell system, according to Tauke, who was a member of the House of Representatives at the time.

Tauke says a number of lawmakers from the Senate and House of Representatives are expected to lead deliberations to reform the current law. Among them: Stevens (R-Ala.), the chairman of the Senate Committee on Science, Commerce and Transportation; Inouye, (D-Hawaii), a ranking member of the Senate Commerce Committee and one of the most senior members of the Senate; Barton (R-Texas), chairman of the House Committee on Energy and Commerce; Dingell (D-Mich.), a ranking member on the House Committee on Energy and Commerce; and Upton (R-Mich.), chairman of the House Energy and Commerce Subcommittee on Telecommunications and the Internet.

Tauke says the ICF’s plan assumes the federal government has the authority to set intrastate rates, superseding the states. Verizon believes the FCC has the authority to set the intrastate rates, he says, “but we don’t find it in the statute.” Tauke says it was Verizon’s position that the group needed to address that potentially thorny legal matter.

In a different vein, Verizon felt the proposal was bad timing during an election year. The ICF, represented by AT&T Corp., SBC Communications Inc. and seven other companies, has proposed lowering the access fees phone companies pay one another to complete calls — abolishing the fees in 2011 — and granting local phone companies authority to raise end-user charges.

The plan would authorize local phone companies to raise the subscriber line charge, a monthly fee accessed to help local phone companies recover the cost of maintaining the local network. Supporters of the proposal argue consumers would not fall victim to inflated phone bills because long-distance carriers would no longer have to pay billions of dollars in access fees. In theory, they would have an incentive to lower their rates.

But Verizon was alarmed there would have been a tendency among politicians to oppose the plan before all the issues could be sorted out had it received tremendous visibility.

“We recognized the political challenge of pushing that kind of issue particularly in the midst of an election year,” Tauke says. “There would be a big temptation from somebody in the election cycle” to criticize the plan for political purposes.

“We think the world of IP telephony should not be regulated like the world of traditional telephony. It should be treated like instant messaging and other applications on the Internet and should be subject to very light regulation,” Tauke says.

He says Verizon supports wiretapping capabilities under federal law and mandatory emergency 911 services if the Internet phone service is the primary phone service in the home.

It is Verizon’s position that companies should pay access charges when an Internet phone call terminates on the PSTN, Tauke says, but the call should not be subject to the access charges if it ends over an IP network.

“We don’t know what the rules are ... for video or any other service we might offer,” Tauke says.

He says it is unclear whether video will be regulated under Title 1, Title 2 or Title 6 of the Telecommunications Act of 1996. Title 1 covers information services, Title 2 covers phone services and Title 6 covers cable services.

Says Tauke: “Arguably, it’s none of those things.”

“It’s very hard for [an] industry to offer services when you don’t know what the rules are,” he adds. “That’s why it’s important for clarity to come.” The best way to achieve clarity is through Congress, says Tauke.