A Regulators Perspective on Policy, Regulatory Institutions, and the Law

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A Regulators Perspective on Policy, Regulatory
Institutions, and the Law

• NetTel_at_Africa Grand Workshop
• June 2005
• Joan H. Smith
• Oregon Public Utility Commission (Retired)
• jhsmith1141_at_earthlink.net

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Hans Hofmann, painter, 1880-1966

• The ability to simplify means to eliminate the
  unnecessary so the necessary may speak.

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Objective/Outcome

• Objective Provide an overview of current trends
  and issues in regulatory policy, institutions and
  law.
• Outcome Encourage a fresh look at regulatory
  infrastructure and refresh thinking about
  solutions.

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Content

• Introduction
• Regulations Foundations/Institutions
• Requirements for Effective Regulation
• Regulatory Capacity
• Kinds of Regulation
• Todays Critical Issues

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Why regulate??

• Munn v. Illinois (1887)
• Industry affected with the public interest
• Use of police powers
• Definition of public interestthe customer the
  countrys welfare

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Regulations Foundation
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Regulatory Requirements Due Process

• Goals Definition
• Transparent, inclusive, open
• Timely decisions based on the record
• Alternative Dispute Resolution
• Allowance for changetechnological neutrality

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Regulatory Capacity

• Engineering
• Accounting Financial Analysis
• Economic Analysis
• Process Management
• Support Staff

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Kinds of Regulation A question of consumer needs
market realities

• Safety, reliability
• Fair trade rules (competition)
• Rationing (spectrum, numbers)
• Social, environmental goals
• Economic regulation (monopoly, dominant operator
  designation)

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A Zero Sum Game

• Each form of regulation is about cost.
• The question is who pays?
• The decision how, when, who

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Elements of all Current Issues

• Technology
• Infrastructure Investment
• Universal Accessrural, poor customers
• Timing
• Appropriate regulation

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Critical Issue 1 Wholesale Regulation

• Definitions Dominant Carrier, Relevant Market,
  Contestable Market
• Interoperability
• Intercarrier Compensation
• Participation in subsidies

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Despite the difficulty of the task, the search
for effectivemethods of incentive regulation
will continue simply because it must. The
evidence is overwhelming that traditional
cost-of-service regulation has produced poor
results in the past and is likely to produce even
worse results in the future.

• Regulated Industries, Pierce Gellhorn, Fourth
  Edition (1999) p. 392

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Critical Issue 2Price Cap/Incentive Regulation

• Simple, Accountable, Business Risk on Operator,
  Explicit Subsidies, Technology Neutral,
  Opportunity for Profit
• Conflict resolution, Complaint process
• Burden on operator to make case
• Expeditious Appeal

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Critical Issue 3 Universal Access

• Definition who, where, what level of service
• Cost study
• Funding infrastructure, subscriber fee, level of
  subsidy
• Technology opportunities

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Conclusion

• Check the fundamentals of regulation.
• Define issues from the point of view of the
  customer.
• Ensure the private operator has the opportunity
  to earn a return.
• Design a fair process.
• Teach options for practical solutions.

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Links

• Consumer Information Registry www.fcc.gov/cgb/cont
  acts/
• National Exchange Carriers www.neca.org
• National Association of Regulatory Utility
  Commissioners
• www.naruc.org