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Congressional Testimony
March 9, 2000, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 2520 words
HEADLINE:
TESTIMONY March 09, 2000 BRIAN MOIR PARTNER MOIR & HARDMAN
HOUSE COMMERCE telecommunications, trade and consumer
protection ITEMIZED PHONE BILLS
BODY:
Prepared
Statement of Mr. Brian Moir Partner Moir & Hardman March 9, 2000 Mr.
Chairman, I am pleased to have been invited to testify before the Subcommittee
Telecommunications, Trade, and Consumer Protection regarding H.R. 3011, the
"Truth in Billing Act of 1999" and H.R. 3022, the "Rest of the Truth in Billing
Act of 1999". Mr. Chairman, you, Chairman Bliley, and Congressman Markey, as
well as the members of the Subcommittee and staff, are to be commended for your
efforts to ensure that America's telephone customers are
explicitly told what governmentally imposed taxes, fees, and
subsidies they are being required to pay in their monthly
telephone bills. Clearly, the issues addressed in H.R. 3011 and
H.R. 3022 are ones that warrant prompt action. My testimony will represent the
perspective of the telecommunications end user, and I hope that the perspective
of the telephone customer will facilitate the Subcommittee's
deliberations by on these important matters. The International Communications
Association ("ICA") is the largest and most broadly-based organization of
telecommunications end users in the United States. ICA is a not-for-profit
league of almost 500 corporate, educational, and governmental users of
telecommunications and information equipment, facilities, and services. ICA
members do not include firms predominantly engaged in the production, sale, or
rental of telecommunications services or equipment. Collectively, ICA members
spend over $32 billion per year in this area. On average, individual ICA member
telecommunications/information expenditures exceed $30 million annually.
Two-thirds of ICA member companies employ over 10,000 persons, and only 2% have
work forces under 1,000. Over 86% of these firms conduct business from fifteen
or more locations. As always, ICA speaks from a telephone
customer perspective that is broadly informed on the state of the
telecommunications and information industries in the United States. If the
results of this Subcommittee's deliberations become law, and we hope they do,
the monthly telephone bills of ICA members, and other
telephone customers as well, could be positively impacted.
Introduction ICA believes that competition is the ultimate safeguard for the
telecommunications industry. In recent years, significant progress has been made
in developing a competitive telecommunications. ICA vigorously supports
pro-competitive policies and the extension of such policies to all sectors of
the local telephone marketplace. Unfortunately, whether a
market is competitive or not does not impact the likelihood that
telephone bills will accurately and explicitly reflect the
numerous governmentally imposed fees, taxes, and subsidies that
ratepayers are forced to pay. All too often, governmental bodies find it in
their interest to pressure the telecommunications carrier community into not
explicitly showing these costs to consumers. Even worse, as market prices
continue to decrease, some governmental bodies have demonstrated an increased
incentive to create pet fees, taxes, and subsidies in hopes
that they will not be noticed by telecom ratepayers. These government bodies
attempt to time the implementation of their pet projects to coincide with a
forthcoming rate reduction thereby hijacking a portion of the monies that would
otherwise have benefitted ratepayers in higher savings. Business Users'
Dependence on Telecommunications Since ICA members face competitors in both the
technologically developed countries and the low-wage, less-developed countries,
they must always be mindful to minimize their operational costs as much as
possible. To compete in the world marketplace, large business has an absolute
need for timely, accurate, cost effective information that can be made available
on demand. To accomplish this, user companies must be able to obtain, operate,
maintain, and fully utilize state-of-the-art telecommunications and information
technology at cost based rates. With the development of various voice and data
based systems and applications, large business users have become dependent on
efficient, reliable, readily available, and reasonably priced telecommunications
equipment, facilities, and services. If this Subcommittee is able to ensure that
American telephone customers pay as few governmentally imposed
telecommunications fees, taxes, and subsidies as possible, then
America's business users and its economic future will be significantly
benefitted by your efforts. For this reason, ICA members are fully support these
deliberations of the Subcommittee. Legislative Objective of Business Users
Typically, ICA's objectives in telecommunications legislation have been based on
several principles: A. Legislation should ensure economically rational pricing.
This is critical to ICA members ability to successfully budget and plan for
their information and telecommunications needs. It is also critical to American
businesses ability to carefully control costs in an era of rampant global
competition. For less than fully competitive markets, ICA encourages the
application of cost- based pricing principles by regulators. Of equal importance
is the fact that all governmentally imposed fees, taxes, and
subsidies should be clearly and explicitly reflected on customer
telephone bills and kept to a bare minimum. Since American
telecommunications technology leads the world, governmental bodies should not be
allowed to needlessly increase its cost to American business by regularly
dumping various charges on the bills of American ratepayers. B. Legislation
should increase the availability of services for real user applications and
needs -- today and tomorrow. It is important that new services be ones that ICA
members can really use, not just services that are pre-defined by carriers and
other providers. Public policies should promote increased interoperability among
services and networks and allow maximum flexibility for the provision of new
telecommunications services. If governmentally imposed fees,
taxes, and subsidies are fully warranted, they should be fairly
and evenly applied to all services so that end user decision making on which
services to use is not skewed by unfairly imposed government charges. C.
Legislation should enhance the ability of ICA members to effectively plan and
manage their telecommunications service needs. The need for customers to manage
their telecommunications resources on a day-to-day basis must be accounted for.
A dizzying array of governmentally imposed fees, taxes, and
subsidies only makes end user management of the telecom services more difficult.
D. Legislation should contain new incentives leading to worldwide compatibility
and uniform access to customers and services. The development of a
technologically advanced network based on worldwide standards is critical to ICA
members who are relying upon more and more specialized telecommunications
applications in order to remain competitive and innovative in a global
environment. Ever increasing governmentally imposed telecom fees,
taxes, and subsidies retard these incentives in the U.S. and
create incentives for investments to be made in those countries that do not have
these charges. The government imposition of charges for school wiring,
presubscribed interexchange carrier charges (PICCs), subscriber line charges at
varying levels, telephone number portability, federal
excise taxes originally intended to help fund the Spanish
American War, 911 services, infrastructure maintenance, and others does not
facilitate the most robust use of the telecom networks possible. In addition,
the imposition of government subsidies is all too often at unsupportable levels
or not explicitly charged. Last Fall, the FCC revised its universal service
rules for large local carriers. The revised rules reduced the allowable levels
of support for some companies, but the FCC also adopted a "hold harmless" policy
that effectively negated the ratepayer benefit of these rules by allowing the
effected carriers to continue to collect subsidies at the previous levels
provided under the old rules. Also, ratepayers in a number of states subsidize
the ratepayers in other states without any knowledge of this happening. Without
questioning the wisdom of these policies, it is only fair that ratepayers know
what they are paying for. In addition, business users are often required to pay
higher fees (subscriber line charges, PICCs, etc.) than other ratepayers for
non-traffic sensitive costs. All ratepayers should pay fixed costs equally. If
subsidies are required, they should be explicitly indicated and fairly imposed.
CONCLUSION American businesses and educational institutions rely on
telecommunications as a strategic resource and will do so even more in the
future. Telecommunications is one of the keys to increased competitive
advantage, increased profitability, economic growth, and job creation. This
reliance places upon government policy makers, and in particular members of
Congress who want to revise existing policies, the responsibility to see that
telecommunications equipment, facilities, and services continue to be readily
available and provided at reasonable rates. A dizzying array of governmentally
imposed telecommunications fees, taxes, and subsidies
contradicts these objectives. ICA stands ready to work with those who want to
increase user choice by making the telecommunications marketplace, and American
business generally, more competitive and free of needless governmentally imposed
fees, taxes, and subsidies. We support your quick passage of
legislative language consistent with the objectives of H.R. 3011 and H.R. 3022.
LOAD-DATE: March 15, 2000, Wednesday
