Ray Marner, general manager of Kalona Cooperative Telephone Co, Inc. and president of the Iowa Telephone Association, expressed concern and disappointment about the U. S. Supreme Court’s ruling …
Ray Marner, general manager of Kalona Cooperative Telephone Co, Inc. and president of the Iowa Telephone Association, expressed concern and disappointment about the U. S. Supreme Court’s ruling concerning local telephone services.
The ruling states that the Federal Communications Commission has the power to set pricing guidelines for local phone services.
The decision in the case of AT&T vs. Iowa Utilities Board, basically opens up the local phone market for competition. Marner fears this will allow AT&T, US West, McLeod and others to use lines and services of local phone companies such as KCTC to compete unfairly against them.
“Local utilities boards (such as Iowa Utilities Board) should have jurisdiction at this level,” Marner said. “Control should be at the local level. The FCC doesn’t understand local issues and needs .”
Marner said he would not have any further comment until he has had an opportunity to read the fine print on the Supreme Court ruling.
The court’s ruling is based on the Telecommunications Act of 1996. The FCC pricing guidelines do the following:
•mandates that the new company can resell what the established phone company is offering by negotiating a discount from the wholesale rate.
•allows the new company to build its own facility.
•allows the new company to purchase elements of the established company, such as local lines or operator service.
The ruling has brought mixed reactions. For those at rural companies such as KCTC, it would mean being forced to shut down because the bigger companies might be able to offer lower prices. For the larger companies looking to enter the market, it means opportunities to grow. For consumers, it could mean lower phone bills.
Though she argued in front of the Supreme Court to give the states authority to set prices, Diane Mums, general counsel for the Iowa Utilities Board, said the decision likely will not affect the state or the rural companies.
“I don’t see a big impact from the U.S. Supreme Court deciding that the goal of the state and FCC is to bring competition to the local market,” she said. When the states were setting prices for US West and GTE, they were following the principle of the FCC rules.”
Mums said some of the rules the FCC adopted exempted small companies from interconnection requirements if those companies proved it was “economically burdensome or technically unfeasible.”
AT&T spokesman Jim McGann said the ruling allows small companies or big companies to enter the lucrative $110 billion local telephone market.
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