Report of the Task Force on Deregulation of the Oklahoma Telecommunications Service Provider Industry

              L 1335.49/2 T2678 2004
c.1
BOB ANTHONY
Commissioner
DENISE A. BODE
Commissioner
JEFF CLOUD
Commissioner
OKLAHOMA
CORPORATION COMMISSION
P.O. BOX 52000
OKLAHOMA CITY, OKLAHOMA 73152-2000
304 Jim Thorpe Building
Telephone: (405) 521-2264
FAX: (405) 522-1623
Jeff Cloud Commis:
November 12,2004
Report of the Task Force on Deregulation of the
Oklahoma Telecommunications Service Provider Industry
The Task Force on Deregulation of the Oklahoma Telecommunications Service Provider
Industry, created pursuant to Senate Concurrent Resolution 74 (2004), met for the first time at
the State Capitol on October 14, 2004, at which time Representative David Braddock proposed a
series of findings and recommendations relating to the fulfillment of the directives in SCR 74.
At a second meeting at the State Capitol on October 21, 2004, again held pursuant to the
Open Meetings Act, those members of the Task Force present, after discussion, voted 14-0 to
amend the findings and recommendations in Representative Braddock's proposed report and to
adopt the amended version as the Report of the Task Force.
In addition to those members of the Task Force present, both meetings were attended by
numerous other interested parties.
The findings and recommendations adopted by the Task Force, therefore, are as follow:
FINDINGS
1. The Task Force on the Deregulation of the Oklahoma Telecommunications
Service Provider Industry was created by Senate Concurrent Resolution 74, adopted by both the
Oklahoma Senate and Oklahoma House of Representatives in May 2004.
2. The Task Force was charged with advising the Oklahoma Legislature in an effort
to determine "the necessity and feasibility of abolishing certain statutory provisions, relating to
the telecommunications service provider industry in the State of Oklahoma." Said advice was to
cover a variety of components of suggested proposals relating to telecommunications service
providers.
3. The Oklahoma Constitution and state statutes have charged the Oklahoma
Corporation Commission with the authority and responsibility of regulating the
telecommunications industry.
4. Technological changes in the telecommunications industry are driving a great
number of challenges and opportunities for telecommunications service providers and their
customers, and regulation of the industry should encourage, not impede, the deployment of new
services and the infrastructure necessary to deliver those services.
5. These critical telecommunications issues may be appropriately examined by the
Oklahoma Corporation Commission in proceedings that allow the public and providers to
participate and be heard by an agency charged with making decisions relating to
telecommunications service provider regulation and deregulation.
6. The Oklahoma Legislature has the authority - through its lawmaking and budget
setting authority - to oversee the Oklahoma Corporation Commission's regulation of
telecommunications service providers.
RECOMMENDATIONS
1. The Task Force on the Deregulation of the Oklahoma Telecommunications
Service Provider Industry recommends that the Oklahoma Corporation Commission, pursuant to
its constitutional and statutory regulatory authority, continue to conduct proceedings to
determine the appropriate regulation of telecommunications service providers. The Oklahoma
Corporation Commission should take such actions it deems to be in the best interests of the
public.
2. The Oklahoma Legislature, with its Constitutional authority to make, amend and
repeal law, should continue its oversight of regulatory issues relating to telecommunications
services and consider such legislative proposals it determines to be appropriate during its regular
legislative session.
3. The Oklahoma Corporation Commission should, upon completion of the
proceedings and actions taken pursuant to Recommendation 1 hereof, make a report to the
members of the Task Force at a meeting to be called by the Chair or by such other means as the
Chair determines to be appropriate consistent with the provisions of Senate Concurrent
Resolution 74.
4. The Task Force on the Deregulation of the Oklahoma Telecommunications
Service Provider Industry does submit these findings and recommendations pursuant to the
provisions of Senate Concurrent Resolution 74.
The Task Force on the Deregulation of the Oklahoma Telecommunications Service
Provider Industry, upon adoption of these findings and recommendations, did adjourn, subject to
the call of the Chair. Qi~ Corporation Commissioner and
Chairman of the Task Force on the Deregulation
of the Oklahoma Telecommunications Service
Provider Industry
Task Force on Deregulation of the Oklahoma Telecommunications
Service Provider Industry, pursuant to SCR 74
Minutes of Second Task Force Meeting: October 21, 2004; 1:30 p.m.
Room 419-C, State Capitol, Oklahoma City, Oklahoma 73105
NOTICE AND AGENDA for the Second meeting of the Task Force on
Deregulation of the Oklahoma Telecommunications Service Provider
Industry were properly given and posted at the State Capitol in compliance
with the Oklahoma Open Meeting Act.
A quorum was present (14 of the 16 members of the Task Force being
present and a quorum consisting of at least nine) and Task Force Chairman
Jeff Cloud called the meeting to order at 1:35 p.m.
Roll call showed those Task Force members present were: Ed Apple, Dave
Bialis, Rep. David Braddock, Sonny Bright, Don Cain, Attorney General
Drew Edmondson, Martha Findley, Sen. Jay Paul Gumm, John P. Harris,
Rep. Bill Nations, Thomas F. Riley Jr., Gloria Trotter, Amy Yarkoni, and
Corporation Commissioner Jeff Cloud, Task Force Chair. Also in attendance
were more than 25 other interested observers. Absent were two Task Force
members: state Treasurer Robert Butkin and Sen. Richard Lerblance.
AGENDA:
1. Call meeting to order
2. Discussion of issues raised in Task Force meeting of October 14,2004
3. Discussion of proposed Task Force report involving Corporation
Commission investigation of study items listed in Senate Concurrent
Resolution 74, passed in May 2004
4. Possible action and votes to amend and adopt findings and
recommendations of proposed Task Force report and to submit that
document as the final report of the Task Force
5. Other business
6. Discussion of and possible vote on any need for scheduling future
meetings
7. Motion and vote to adjourn
After roll call, the Chair called for discussion as per meeting agenda.
Rep. Braddock called on the Task Force to consider adopting as its report,
pursuant to Senate Concurrent Resolution 74, an amended version of a two-page
document with proposed findings and recommendations. Rep.
Braddock had introduced the original unamended version of that report at
the first Task Force meeting on Oct. 14,2004. Because the notice and
agenda for the first Task Force meeting did not give any notice of a possible
vote, as would be required under the Open Meetings Act, and because at
least one Task Force member at that meeting indicated a desire for more
time to review the proposal, consideration of Rep. Braddock's draft report
was put off from Oct. 14 to the next Task Force meeting on Oct. 21. That
original version's findings and recommendations read as follows:
FINDINGS
1. The Task Force on the Deregulation of the Oklahoma
Telecommunications Service Provider Industry was created by Senate Concurrent
Resolution 74, adopted by both the Oklahoma Senate and Oklahoma House of
Representatives in May 2004.
2. The Task Force was charged with advising the Oklahoma Legislature in
an effort to determine "the necessity and feasibility of abolishing certain statutory
provisions, relating to the telecommunications service provider industry in the State of
Oklahoma." Said advice was to cover a variety of components of suggested proposals
relating to telecommunications service providers.
3. The Oklahoma Constitution and state statutes have charged the Oklahoma
Corporation Commission with the authority and responsibility of regulating the
telecommunications industry.
4. Technological changes in the telecommunications industry are driving a
great number of challenges and opportunities for telecommunications service providers
and their customers, and regulation of the industry should encourage, not impede, the
deployment of new services and the infrastructure necessary to deliver those services.
5. These critical telecommunications issues may be appropriately examined
by the Oklahoma Corporation Commission in proceedings that allow the public and
providers to participate and be heard by an agency charged with making decisions
relating to telecommunications service provider regulation and deregulation.
6. The Oklahoma Legislature has the authority - through its lawmaking and
budget setting authority - to oversee the Oklahoma Corporation Commission's regulation
of telecommunications service providers.
7. Senate Concurrent Resolution 74 requires the Task Force to present its
recommendations by November 30, 2004, a period of only 47 days from the date of the
first meeting of the Task Force. A full and fair hearing of all the issues relating to
telecommunications service provider deregulation would be difficult in such a short
period of time under the best of conditions. With elections only 19 days hence, and
initial organizational efforts for the 2005 legislative session to follow shortly thereafter,
the ability of the Task Force to complete its mission within the time allotted is made even
more difficult.
RECOMMENDATIONS
1. The Task Force on the Deregulation ofthe Oklahoma
Telecommunications Service Provider Industry recommends that the Oklahoma
Corporation Commission, pursuant to its constitutional and statutory regulatory authority,
continue to investigate during the interim prior to commencement of the next legislative
session, the appropriate regulation of telecommunications service providers. The
Oklahoma Corporation Commission should take such actions it deems to be in the best
interests of the public.
2. The Oklahoma Legislature, with its Constitutional authority to make,
amend and repeal law, should continue its oversight of regulatory issues relating to
telecommunications services and consider such legislative proposals it determines to be
appropriate during its regular legislative session.
3. The Task Force on the Deregulation of the Oklahoma
Telecommunications Service Provider Industry does submit these findings and
recommendations pursuant to the provisions of Senate Concurrent Resolution 74.
FURTHER, I move the Task Force on the Deregulation ofthe Oklahoma
Telecommunications Service Provider Industry, upon adoption of the findings and
recommendations contained here in, do adjourn sine die.
As amendments to the original draft, Rep. Braddock proposed deleting
Finding 7 in its entirety. "That was really just a discussion about the time
constraints, and we really didn't necessarily need that in there," he said.
Also, Rep. Braddock noted that a motion had been made by Mr. Riley at the
Oct. 14,2004, first Task Force meeting, to delete from Recommendation 1
the phrase "during the interim prior to commencement of the next legislative
session ... " Deleting that phrase would remove the apparent time constraint
on the Corporation Commission to complete its investigation of issues
related to SCR 74. "I thought that (deletion) made good sense," said Rep.
Braddock, adding that he accepted that recommendation and incorporated it
into his latest draft, which was distributed at this Oct. 21 meeting.
Mr. Apple asked for discussion of any points of disagreement or agreement
related to Rep. Braddock's proposal and issues related to SCR 74.
Mr. Cain said his employer, SBC, was a proponent of a bill (Senate Bill
1119) which was introduced in the 2004 legislative session and which led to
SCR 74. "We think there's enough competition in the (telecommunications)
marketplace today that every operator and every technology should ... be
free to operate in the marketplace under the same limited set of rules. Today,
all the wire-line companies face tremendous competition from wireless
carriers, cable carriers, satellite carriers, and there are all the different and
various sets of regulations," Mr. Cain said. He noted that Federal
Communications Commission Chairman Michael Powell has indicated that
in November, an emerging telecommunications technology known as Voice
Over Internet Protocol will be declared an interstate service. "It won't be
regulated by the Oklahoma Corporation Commission," Mr. Cain said. He
said that the freedom of competitors in long distance, high speed Internet
access and cellular services to raise and lower prices for their services based
on the competitive market has benefited consumers, and the same approach
should be taken with respect to those competitive telecommunications
services regulated by the Corporation Commission, with appropriate
protections for Universal Service.
Mr. Bialis said that at his employer, Cox Communications, "We think there
needs to be a little more systematic way of determining if there is
competition. What is the true level of competition is a question mark in our
mind. It needs to be evaluated." He said he believes the Corporation
Commission's existing telecommunications rules are good and he urged
against deregulating telecommunication service pricing before the transition
to a competitive market is complete. "We've never said we want different
rules. We think it should be the same for all providers ... but I think we need
some oversight during this transition," he said.
Mr. Apple said he would hope that if the Corporation Commission proceeds
to study the issues originally assigned to the Task Force that the
Commission would provide notice of such proceedings and related
information to SCR 74 Task Force members. Mr. Cloud said, "I believe we
can do that."
Ms. Findley asked the Task Force to "remember competition isn't
everywhere. We need to remember rural Oklahoma ..."
Mr. Braddock made a motion to adopt the findings and recommendations in
his proposed letter report as presented, without the original Finding 7 and
with deletion of the time-limiting language in Recommendation 1 as
proposed previously by Mr. Riley.
Mr. Bialis proposed amending Rep. Braddock's proposed Recommendation
1 so it would not call for the Corporation Commission just to "continue to
investigate" appropriate regulation of Oklahoma telecommunications
providers but rather would call for the Commission to "conduct proceedings
to determine" the appropriate regulation.
Mr. Riley suggested modification also of the last sentence of Rep.
Braddock's proposed report, following the Recommendations section, to
state that the Task Force would adjourn after the Corporation Commission
completes its investigation or proceedings and the Task Force determines
that its directives under SCR 74 were fulfilled through the commission
investigation and actions. It was also suggested that some mention of the
Corporation Commission reporting its own determinations and actions back
to the Task Force might be incorporated into Rep. Braddock's proposed
Finding 6.
Mr. Cloud noted that SCR 74 calls for the Task Force to submit its Final
Report by not later than November 30,2004, and that SCR 74 only
authorized the Task Force to remain in existence until January 31,2005.
Mr. Riley said, "Notwithstanding the fact that we've got a deadline, we've
also been given a responsibility, and 1think it's incumbent upon us to fulfill
our responsibility."
Mr. Cloud said, "So the question is back to Representative Braddock,
whether he will entertain Mr. Bialis's motion." Rep. Braddock responded
by restating Mr. Bialis's proposed amendment to replace the existing words
in Recommendation 1 which read "continue to investigate " with the new
language "continue to conduct proceedings to determine " Rep. Braddock
said, "I don't have any problem with that."
Rep. Braddock said, "The only other thing 1would recommend is instead of
putting something into (Finding) Number Six about (the Corporation
Commission) passing on (its) recommendations to the Task Force members,
maybe we could make that recommendation a new (Recommendation) three
or new four or whatever. 1think ... instead of having it under the findings; it
would probably be better under the recommendations. ... Actually, it would
probably have to be a new (Recommendation) three. And (then) move
(existing Recommendation) three to (become Recommendation) four." A
suggestion was made to amend the last sentence of Rep. Braddock's
proposed report, to delete the words, "do adjourn sine die," and replace them
with the new language, "until the Corporation Commission concludes its
proceedings." But Rep. Braddock noted, "I think technically according to
the language in the Senate Concurrent Resolution, this Task Force goes
away on January 31st, so 1 don't know how we could really do that. 1think
we could definitely say in here that the commission is to pass along its
findings, etc., at some point in the future, whenever the commission gets
through studying the issues .... However, I assume the same people that are
involved here would be in all those discussions and meetings that you will
have at the Corporation Commission. I assume there's going to be a
tremendous amount of input from all parties."
Sen. Gumm proposed amending the Bialis motion to add a new
Recommendation 3 and renumbering the subsequent Recommendation(s), so
that the new Recommendation 3 would read as follows: "The Oklahoma
Corporation Commission shall, upon completion of the proceedings and
actions taken pursuant to Recommendation 1 hereof, make a report to the
members of the Task Force at a meeting to be called by the Chair or by such
other means as the Chair determines to be appropriate consistent with the
provisions of Senate Concurrent Resolution 74." Sen. Gumm said it also
would be appropriate for the closing sentence of the proposed report to say
that the Task Force would "adjourn, subject to the call of the Chair." He
noted further that if the Corporation Commission's determinations and
findings from its own investigation of the issues outlined in SCR 74 are not
available until after January 31,2005, when the Task Force sunsets, the Task
Force Chairman would still be able to distribute those findings and
determinations to those people who were members of the Task Force.
Mr. Cloud asked if a vote, therefore, was needed on the Bialis motion. Rep.
Braddock said, "We had a motion, and I accepted it." The call for a vote on
the Bialis motion was entered and properly seconded. Attorney General
Edmondson noted that under the Open Meetings Act, the vote should be a
recorded roll call vote, which was taken as follows with aye votes in favor of
the Bialis motion being entered by Apple, Bialis, Braddock, Bright, Cain,
Edmondson, Findley, Gumm, Harris, Nations, Riley, Trotter, Yarkoni and
Cloud; and no nay votes were received. The Bialis motion passed 14-0.
Sen. Gumm then restated his own proposed amendment and moved that its
language be inserted as a new Recommendation 3 to read as follows: "The
Oklahoma Corporation Commission shall, upon completion of the
proceedings and actions taken pursuant to Recommendation 1 hereof, make
a report to the members of the Task Force at a meeting to be called by the
chair or by such other means as the chair determines to be appropriate
consistent with the provisions of Senate Concurrent Resolution 74." He said
the Chair could call such a meeting until January 31, 2005. Sen. Gumm said
that with his proposed new Recommendation 3, then the previous
Recommendation 3 should be re-numbered as Recommendation 4. Rep.
Braddock said he would accept such Sen. Gumm's proposed amendments.
Ms. Trotter requested clarification. Rep. Braddock said, "Essentially under
the guidelines set out in the SCR and given the time frame, we would expect
the Corporation Commission to continue to investigate or continue to
conduct proceedings to determine what's appropriate, what type of
regulation for telecommunications service providers is appropriate." He said
Task Force members would be able provide input into such investigation and
proceedings at the Corporation Commission, which would be able to keep
Task Force members and other interested parties advised of such
proceedings and investigation and the results of such activities. Mr. Apple
said Task Force members can offer input at any hearings or proceedings
conducted at the Corporation Commission. "You're not losing your forum.
As a member of this committee, you have a great deal of personal authority
to present your opinion at any time ... and don't ever relinquish that," Mr.
Apple said.
Attorney General Edmondson said noted that Sen. Gumm' s proposed
language would be mandatory in stating, "The Oklahoma Corporation
Commission shall ... " do certain things. Mr. Edmondson said, "I don't
believe the Task Force has the authority to direct the Corporation
Commission to do anything." Sen. Gumm said he would amend his own
proposal to replace the word "shall" with "should."
Mr. Cloud restated Sen. Gumm's proposed language in full to read, "The
Oklahoma Corporation Commission should, upon completion of the
proceedings and actions taken pursuant to Recommendation 1 hereof, make
a report to the members of the Task Force at a meeting to be called by the
chair or by such other means as the chair determines to be appropriate
consistent with the provisions of Senate Concurrent Resolution 74."
The Gumm amendment, being properly offered and seconded, a roll call
vote was taken as follows with aye votes in favor of the Gumm amendment
being entered by: Apple, Bialis, Braddock, Bright, Cain, Edmondson,
Findley, Gumm, Harris, Nations, Riley, Trotter, Yarkoni and Cloud; and no
nay votes were received. The Gumm motion to amend the proposed
Braddock report passed 14-0.
Rep. Braddock then made a motion for a vote on the Task Force accepting
and adopting his proposed report with findings and recommendations, as
amended, as a report of the Task Force, and that the body then adjourn. Mr.
Cloud reviewed the amendments - the Bialis amendment to
Recommendation 1 and the Gumm amendment to insert a new
Recommendation 3 and renumber the previous Recommendation 3 as
Recommendation 4. Braddock's motion for adoption of his report, as
presented at this meeting, including those new amendments, being properly
offered and seconded, a roll call vote was taken as follows with aye votes in
favor of the Mr. Braddock's motion entered by: Apple, Bialis, Braddock,
Bright, Cain, Edmondson, Findley, Gumm, Harris, Nations, Riley, Trotter,
Yarkoni and Cloud; and no nay votes were received. The Braddock motion
to adopt the proposed report passed 14-0, with findings and
recommendations as follows:
FINDINGS
1. The Task Force on the Deregulation of the Oklahoma Telecommunications
Service Provider Industry was created by Senate Concurrent Resolution 74, adopted by
both the Oklahoma Senate and Oklahoma House of Representatives in May 2004.
2. The Task Force was charged with advising the Oklahoma Legislature in an
effort to determine "the necessity and feasibility of abolishing certain statutory
provisions, relating to the telecommunications service provider industry in the State of
Oklahoma." Said advice was to cover a variety of components of suggested proposals
relating to telecommunications service providers.
3. The Oklahoma Constitution and state statutes have charged the Oklahoma
Corporation Commission with the authority and responsibility of regulating the
telecommunications industry.
4. Technological changes in the telecommunications industry are driving a great
number of challenges and opportunities for telecommunications service providers and
their customers, and regulation of the industry should encourage, not impede, the
deployment of new services and the infrastructure necessary to deliver those services.
5. These critical telecommunications issues may be appropriately examined by
the Oklahoma Corporation Commission in proceedings that allow the public and
providers to participate and be heard by an agency charged with making decisions
relating to telecommunications service provider regulation and deregulation.
6. The Oklahoma Legislature has the authority - through its lawmaking and
budget setting authority - to oversee the Oklahoma Corporation Commission's regulation
of telecommunications service providers.
RECOMMENDATIONS
1. The Task Force on the Deregulation ofthe Oklahoma Telecommunications
Service Provider Industry recommends that the Oklahoma Corporation Commission,
pursuant to its constitutional and statutory regulatory authority, continue to conduct
proceedings to determine the appropriate regulation of telecommunications service
providers. The Oklahoma Corporation Commission should take such actions it deems to
be in the best interests of the public.
2. The Oklahoma Legislature, with its Constitutional authority to make, amend
and repeal law, should continue its oversight of regulatory issues relating to
telecommunications services and consider such legislative proposals it determines to be
appropriate during its regular legislative session.
3. The Oklahoma Corporation Commission shall, upon completion of the
proceedings or actions taken pursuant to Recommendation 1 hereof, make a report to the
members of the Task Force at a meeting to be called by the Chair or by such other means
as the Chair determines to be appropriate consistent with the provisions of Senate
Concurrent Resolution 74.
4. The Task Force on the Deregulation of the Oklahoma Telecommunications
Service Provider Industry does submit these findings and recommendations pursuant to
the provisions of Senate Concurrent Resolution 74.
FURTHER, I move the Task Force on the Deregulation of the Oklahoma
Telecommunications Service Provider Industry, upon adoption of the findings and
recommendations contained herein, do adjourn, subject to the call of the Chair.
Responding to a question about the timing of proceedings at the Corporation
Commission to investigate the issues outlined in SCR 74, Mr. Cloud said, "I
think some of them are already underway, and I would say the possibility of
other action taken at the start of next year." Copies of findings and
recommendations related to those proceedings and investigations will be
distributed, he said.
There being no other business on the agenda at 2:20 p.m. to address, Rep.
Braddock moved that the Task Force adjourn. Mr. Cloud thanked the Task
Force members and other attendees and advised that the study of the issues
identified in SCR 74 will be undertaken at the Corporation Commission and
that the Task Force members will be kept informed. The Task Force voted
unanimously to adjourn.
###
MINUTES APPROVED:
J F LOUD
Corporation Commissioner, and
Chairman, Task Force on Deregulation
of the Oklahoma Telecommunications
Service Provider Industry
,
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