[BETA] Fortnightly

"What now?"

That was the question on the minds of representatives from local telephone exchange carriers (LECs) who huddled at the United States Telephone Association (USTA) National Issues Conference days before legislators passed sweeping telecommunications legislation that would affect everyone's future.

But the question went beyond what would become law when President Clinton fulfilled his promise to sign the bill. "What now" had more to do with what happens when the 280-page document's deadlines and directives arrive at the Federal Communications Commission (FCC) and each state's public utility commission (PUC). Or when competitors straddle new markets to come face to face with rivals they've never seen before, such as electric utilities.

Besides the thoughts of price wars and mergers, conference attendees worried about the intimacy they'd have to kindle with their PUCs. The commissions, one speaker noted, will carry the "major burden" of the legislation. Attendees wondered (em as did the senators, representatives, and industry leaders who took the dais (em whether the FCC is prepared for what's to come. If, when felled by the budget ax, the FCC would, like other federal agencies, crawl along by mere workload.

One USTA conference attendee summed up the future this way: "It's a whole new ballgame."

But are the players ready?

Almost. Maybe. First, most agreed, telecommunications reform will need reform. Rep. Rick Boucher (D-VA) cited several areas:

s Antitrust exemptions. Small companies will be able to get enhanced services from neighboring large companies. An exemption is needed to protect smaller entrants from the antitrust implications of those relationships.

s Section 214 approval. When LECs face competition, they shouldn't have to obtain section 214 approval for investments in new equipment, file tariffs when they want to offer new services, or file depreciation schedules at the FCC. If new entrants aren't required to comply with the rules, LECs shouldn't have to either, Boucher argued.

s Price regulation. Price regulation should replace rate-of-return regulation across the board. Price regulation encourages greater efficiency, Boucher noted, by rewarding only those investments that enhance productivity. It also places risk where it belongs (em on shareholders, not consumers.

FCC reform also is on the agenda, Boucher said.

"We need to be very conscious of the fact that the FCC needs what it currently has, and it's probably going to need more (em at least in the short term (em as it drafts the rules necessary to affect the many transitions toward competitive markets," he said.

But less, not more, might be likely.

"The guiding principle, at least in the House these days, is that we should trim substantially the budgets of virtually all agencies, abolish many agencies," the congressman said. "And to think of the FCC in terms of resources, I think, hangs in the balance."

Rachelle Chong, FCC Commissioner, who earlier waved a Gumby toy to poke fun at the "supple" 60-year-old communications laws her agency worked under, was more hopeful. Congress understands what's needed to carry out the new law, she said. As many as 80 rulemakings, carrying short deadlines, are required. "Congress members assured me that they