COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE HARLEY O. STAGGERS, West Virginia, Chairman SAMUEL N. FRIEDEL, Maryland TORBERT H. MACDONALD, Massachusetts JOHN JARMAN, Oklahoma LIONEL VAN DEERLIN, California FRED B. ROONEY, Pennsylvania W. S. (BILL) STUCKEY, JR., Georgia WILLIAM L. SPRINGER, Illinois G. ROBERT WATKINS, Pennsylvania W. E. WILLIAMSON, Clerk JAMES M. MENGER, Jr. WILLIAM J. DIXON Professional Staff ROBERT F. GUTHRIE KURT BORCHARDT SUBCOMMITTEE ON COMMUNICATIONS AND POWER TORBERT H. MACDONALD, Massachusetts, Chairman LIONEL VAN DEERLIN, California JAMES T. BROYHILL, North Carolina DONALD G. BROTZMAN, Colorado (II) Adams, Hon. Brock, a Representative Baker, H. Leroy, Chief, Field Organization Division, Federal Com- 79 5, 64 79 Bloom, George I., first vice president, NARUC, and chairman, Penn- sylvania Public Utility Commission... Burch, Hon. Dean, Chairman, Federal Communications Commission.. Cox, Kenneth A., Commissioner, Federal Communications Commis- Hutchinson, A. L., chairman, NARUC Subcommittee of Staff Experts, and executive director, Kentucky Public Service Commission____ Pearson, Francis, president, National Association of Regulatory Utility Commissioners, and member, Utilities and Transportation Commission of the State of Washington__ Riordan, Francis J., second vice president, NARUC, and chairman, New Hampshire Public Utilities Commission Rodgers, Paul, general counsel, NARUC.. Schuchart, P. M., chairman, NARUC Staff Subcommittee on Separa- tions and Toll Rate Disparity, and engineer for the Pennsylvania Smith, Archie, chairman, Rhode Island Public Utilities Commission 5, 44 Symons, William, president, California Public Utilities Commission_ Farrar, Hon. Frank L., Governor of the State of South Dakota, letter Federal Communications Commission: Correspondence between Dean Burch, Chairman, Francis Pear- son, president, NARUC, and Senators Warren G. Magnuson and John O. Pastore concerning enactment of S. 1917. Letter dated December 10, 1969, from Commissioner Nicholas Johnson to Senator Warren G. Magnuson explaining his rea- sons for dissent to the adoption of public notice of Novem- Letter dated December 10, 1969, from Dean Burch, Chairman, to Senator Warren G. Magnuson re interpretation of public no- Letter dated November 17, 1969, from Dean Burch, Chairman, to Chairman Staggers re proposed reductions to be made in interstate long distance rates Rates for interstate long distance calls to be reduced (public Report and order (docket No. 17975)-In the matter of prescrip- Statements from State Utility Commissions: Additional material submitted for the record by-Continued Fuqua, Hon. Don, a Representative in Congress from the State of Page 136 55 revenue requirements 53 8 9 Wold, Hon. John S., a Representative in Congress from the State of Wyoming, statement introducing statement of Wyoming Public 135 JOINT BOARD FOR TELEPHONE SEPARATIONS TUESDAY, FEBRUARY 24, 1970 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMUNICATIONS AND POWER, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The subcommittee met at 10 a.m., pursuant to notice, in room 2322, Rayburn House Office Building, Hon. Torbert H. Macdonald (chairman of the subcommittee) presiding. Mr. MACDONALD. The subcommittee will come to order. This morning the Subcommittee on Communications and Power begins hearings on H.R. 12150, which was introduced by our colleague, Congressman Fred Rooney of Pennsylvania. As most of those who are present here today know, regulatory jurisdiction over the telephone industry is divided between the Federal Communications Commission and the regulatory commissions of the several States. The FCC regulates interstate and foreign telephone rates, and the State commissions regulate intrastate and local rates. These rates are determined in terms of plant and operating expenses involved in furnishing the telephone service. The combination of Federal and State regulation results in a situation of extreme complexity because most telephone plant and expenses are devoted to providing users with both interstate and intrastate telephone service. Therefore, telephone plant and expenses over the years have been allocated, or in the jargon of the industry, "separated" as between interstate and intrastate uses for purposes of ratemaking. The bill before the subcommittee would establish a Federal-State Joint Board to prescribe uniform procedures for determining the portion of the plant and expenses of telephone companies which would be attributed to interstate and foreign operations and the portion which would be attributed to intrastate operations. Thus, the joint board. would carry out certain functions now performed by the FCC. The joint board would consist of four members of the FCC and three State regulatory commissioners nominated by the National Association of Regulatory Utility Commissioners (NARUC). This hearing takes place shortly after a reduction of $237 million per year in interstate rates has gone into effect with respect to the Bell Telephone Systems, and at a time when over one-half billion dollars in rate increases are pending before the State regulatory commissions. The Association of State Commissioners contends that the separation procedures which have brought about this situation are inequitable. (1) I am informed that discussions at the staff level are currently underway between the FCC and the State commissions on the problem of telephone separations. We shall expect to be informed on the progress of these discussions in the course of these hearings. Our purpose in these hearings will be to determine whether existing telephone separation procedures operate in the public interest and, if not, whether H.R. 12150 or some other alternative would best serve the public interest. (The text of H.R. 12150 and departmental report thereon follows:) [H.R. 12150, 91st Cong., 1st Sess., introduced by Mr. Rooney of Pennsylvania (by request) on June 16, 1969] A BILL To amend the Communications Act of 1934, as amended, to establish a FederalState Joint Board to prescribe uniform procedures for determining what part of the property and expenses of communication common carriers shall be considered as used in interstate or foreign communication toll service, and what part of such property and expenses shall be considered as used in intrastate and exchange service, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "FederalState Communications Joint Board Act of 1969." SEC. 2. The Communications Act of 1934, as amended, is further amended by striking subsections (c) and (d) of section 221 and inserting in lieu thereof the following: "(c) There is hereby established a Federal-State Joint Board (hereinafter defined) vested with sole administrative authority under this Act to adopt and amend from time to time by order uniform procedures for determining what part of the property and expenses of common carriers engaged in wire or radio communication shall be considered as used in interstate or foreign communication toll service subject to the jurisdiction of the Commission, and what part of such property and expenses shall be considered as used in intrastate, exchange or other communication service not subject to the jurisdiction of the Commission. Such uniform procedures shall be determined after opportunity for hearing, upon notice to each affected carrier, the State commission (or the Governor, if the State has no State commission) of any State in which the property of such carrier is located, and such other persons as the Federal-State Joint Board prescribe. The establishment of the Federal-State Joint Board shall not impair in any way the right of any State commission, the national organization of the State commissions, hereinafter referred to, or any other interested party to advocate its position on issues before such Board, to submit evidence and oral argument concerning same, and to seek reconsideration and judicial review of the Board's decisions. "(d) The Federal-State Joint Board shall be composed of four Commissioners of the Commission designated by the Commission, and three commissioners of State commissions, nominated by the national organization of the State commissions, as referred to in sections 202(b) and 205 (f) of the Interstate Commerce Act, as amended, and appointed by the Commission. The Commission shall designate one of the members of the Board as Chairman. "(e) Each State commissioner member of the Federal-State Joint Board shall be selected in the following manner. The national organization of the State commissions or a committee designated by it shall nominate one, two, or three State commissioners, as requested by the Commission, and certify the name, title, and address of each nominee to the Commission within ninety days after the date this Act becomes law, or at least ninety days prior to the expiration of the term of an incumbent State commissioner, or within thirty days after a vacancy occurs in the office, as the case may be. Within thirty days after receipt of such certification, the Commission shall appoint the nominee or one of the nominees as a member of the Federal-State Joint Board. In any case where the national organization of the State commissions fails to so nominate and certify State commissioners within the prescribed time, the Commission shall appoint a State commissioner as a member of the Board to serve in lieu of the nominee it would have otherwise appointed. |