MICHAEL H. MICHAUD
COMMllrffS'
Julius Genachowski, Chairman
Federal Communications Commission
445 12
th
Street, S. W.
Washington, D.C. 20554
SMALL BUSINESS
S"l'COJ,O~"TTEEON RIJfV<l. AHD URBAN
ENTERPAENE.URSHIP
S ·()OM.MTTEE ONFl~AN!) TIo)(
VETERANS' AFFAIRS
SU8COMMITTEE ON HI;.I\l.TH
CH""R""'N
TRANSPORTATION AND INFRASTRUCTURE
SU9COM....,TTEE ON HlGflW"'VS ANO TRANSIT
SUIJCC)MIol,nEE ON RAILROAD, P,PnlNrs
AND H.o.LAADOU5 M"'TEf'lW.S
SUQC;()I.n,l'TTEE ON ECONOJ.IIC OtVHoPM[NT,
PU8l-1C BUll[)lNG$ ANO
EIol[f'I()[NCV M.o.w.clMt.NI
~J
Us, F
_L~1M''''C-
OI!:J-.
January 27, 2011
([011g1'£55 of f11£ E11if£ll §faf£5
i~ollacuf iRrprcarntatiura
lDmd)illgtl1l1. D<1: 211513
2NI} 015Tf'lI<;1, M""NI
wwwm,chaud house,gO\!
WASHINGTON OFFICE
1724loNOWORTH HouSf OffiCI; BUILDING
WASHINt,IOH, DC 20515
PHON( (202) 225-6306
FAA (202) 225-2943
Dear Chairman Genachowski:
I am writing to express my concerns with an issue that was brought to my attention by
several small rural telephone companies in the State ofMaine. 1 understand that the FCC
is currently considering a petition to preempt a decision that the Maine Public Utilities
Commission (PUC) made to ensure continued access to affordable telephone services to
the residents of rural Maine. In making a final decision, I hope that you will carefully
consider the processth~twas undertaken in Maine and the conclusion that was t:ltimately
reached by the Maine PUC.
It is my understanding that in Ncvember 2007, Ti:ne Warner Cable (through its
wholesale partner CRC Communications) filed a peti ion with the lvlaine PUC asking that
the Commission commence mandatory arbitration proceedings belween Time Warner
and CRC and five rural telephone cOf!lpanies. Time Warner hoped to receive the
accommodations necessary to expand its p';one service into some of the areas currently
served by the other companies. However, in May 2008, the Maine PUC ruled that
arbitration could not proceed because the five rural telephone companies were protected
by the "Rural Exemption."
Congress adopted the Rural Exemption to protect smaIJer rural carricrs from competition
that would create revenue losses that could threaten universal service goals. This is'a
particular concern when a competitor proposes an expansion into the densest service
areas while leaving the sparser and less profitable areas to be served by the rural
telephone companies. In establishing the Rural Exemption, Congress intended to prevent
,ituat;cns in which additional competition would cause. rate increases fer remaining
customers and jeopardize the ability of rural telephone companies to meet universal
service g0als.
'1',
I. ' 'i
. ,
"
..,
••
" ,
• J.,
BANGOR:
6 SI""l SIRlll, SUII( 101
8AOK'''", ME 04401
PU''lt<f (207) 942-6935
F...... (207) 942-5907
" ' , LEWISTON;
, ,
17~I,'P~Sm(o, GROUNIJ rIO,'"
"lJWl5~o..,Me 04240
PftOtl( (207) 782·3704
F...... (207) 782-5330 I , }oil'"
PRESQUE ISLE:
445 M""N SII1((T
IPIl'l~\)t~:l~(:MEO~769,. I
PHONE (207) 764 1036
F..." (207) 764-1060
• II'
WATERVILLE;
16 COMMON SlR((l
W"'IERVll~[.ME 04901
PHONe (207) 873-5713
F...... (207) 873-5717
The Maine PUC agreed to interpret Time Warner's arbitration petition as a formal
request to terminate the Rural Exemption and established a proceeding based on the
process outlined by Congress. In July 2010, the Maine PUC ruled that the Rural
Exemption should not be terminated for these companies. Rather than seek
reconsideration ofthe July 2010 decision to maintain the Rural Exemption, Time Warner
has liled a petition that queslio!1s the soundness ofthe May 2008 ruling. Time Warner's
effort to disregard a two-ycar process by the Maine PUC that they voluntarily
participated in, rather than simply question the soundness ofthe final decision itself, is
concerning.
Congress intentionally provided that a decision whether to terminate the Rural Exemption
should be made by the State PUC, which is closer to the service areas, economics and
effects on customers. I sincerely hope that the FCC will give due consideration to the
position of the State of Maine, as refiecled in the decision of the Maine PUC, before
reaching a final decision.
With warmest regards,
~1.
Michael H. Michaud
Member of Congress
cc: Michael J. Copps, Commissioner
Robert M. McDowell, Commissioner
Mignon Clyburn, Commissioner
Meredith Attwell Baker, Commissioner