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