Statement of Rep. Tom Bliley (R-VA). Re: HR 4445 IH, the Reciprocal Compensation Adjustment Act of 2000. Date: June 22, 2000. Source: House Commerce Committee.

Mr. Chairman, thank you for holding this legislative hearing on H.R. 4445, the Reciprocal Compensation Adjustment Act of 2000.

The cornerstone of the 1996 Act was bringing competition to local telephone markets. This Committee carefully crafted those provisions to ensure that consumers would have the same choice and innovation in local services that they now have in all other telecom markets.

As a component of bringing competition to the local loop, we provided a mechanism for carriers to compensate each other for the exchange of local traffic.

Congress and the FCC have been enabling inter-carrier compensation since 1984 in the market for interstate access. Long distance carriers pay access charges to local phone companies when they exchange traffic.

Congress also ensured that wireline carriers are compensated for terminating calls that originate on wireless networks.

My colleagues will recall that we considered the idea of "bill and keep" . . . a concept which would essentially have barred compensation for the exchange of local traffic.

But in the end, we opted for requiring reciprocal compensation . . . in part because the local phone companies argued that "bill and keep" would be unfair.

But here we are . . . four years later . . . and the local phone companies now think some forms of inter-carrier compensation may not be such a good idea after all. But what's even more ironic is that I find myself in general agreement with them.

As my colleagues know, I have fought long and hard for the cause of reducing access charges . . . which is just another form of inter-carrier compensation. While the recent CALLS proposal helps matters, access charges still remain too high in my view . . . and I therefore look forward to further reductions.

But in the meantime, access charges will continue to tax consumers . . . and distort competition.

I raise the issue of inflated access charges because this Committee must be vigilant that the same pricing distortions do not grab hold of the local market . . . which is struggling enough as it is to become competitive. This legislation is a good starting point for this Committee to debate this important issue.

It is equally important that the FCC insert itself in this debate, as well. I note that the Court of Appeals remanded their most recent ruling on this issue last February . . . yet the FCC has yet to take a single step toward resolving the matter.

The Committee should get answers this morning from the FCC witness as to why that is the case. We should also make sure that the FCC will meet our September 30 deadline for completing this matter.

Mr. Chairman, I look forward to the testimony of all the witnesses this morning . . . and I look forward to working with you on this issue as we move forward.

Thank you, Mr. Chairman, and I yield back my time.