Wireless Wave: So what’s the right balance in the federal-state relationship, especially in light of the old-school regulatory thinking compared to the new model you’ve mentioned?
Comissioner Chong: I truly believe in the benefits of competition, and if you have it, you don’t need regulation which is intend-ed for a situation where one party has market power. There are 30 states and the District of Columbia that have deregulated telecommunications because they have seen vigorous competition in their states’ marketplaces. So it's not a revolutionary notion anymore that deregulation is good for consumers.
Wireless Wave: What’s your thinking on possible solutions to the debate between federal v. state authority on wireless terms and conditions?
Comissioner Chong: The problem is dif-ficult, as new technologies make things complicated, like VOIP, wireless, and info ser-vices such as DSL and cable modems. But I think the solution is simple. Stop shooting at each other and sit down to resolve it. I have suggested to my NARUC colleagues that the FCC, NARUC, and CTIA sit down together and agree where the feds versus the state agencies have core competencies on the issues. And agree who will do what. Then let Congress know we have worked it out and get it to cod-ify the agreement.
Wireless Wave: I read that you once said something to the effect that carriers can be trusted in a competitive environment, because consumers will demand it. Would you please explain that?
Comissioner Chong: My point is that wireless is a competitive market and wireless providers have the right incentive to serve customers as well as they can. If they don’t, that customer can take his business some-where else. Consumers vote with their feet in a competitive market.
Competition—even if imperfect—is always better than regulation. That’s why I think it’s urgent that we update our regulatory framework. If we don’t we run the risk of driving telecom companies out of California and that will hinder our economic development in our state. I want California to have the world’s best broadband network, and that includes all of the innovation wireless brings to the table.
Wireless Wave: You’ve previously mentioned early termination fees. What are your thoughts about them with regard to the federal proceeding?
Comissioner Chong: My view is that the early termination fee has a lot of benefits for consumers. I understand that ETFs can lower your initial payment and your monthly pay-ments charged by the wireless carrier. The customer also knows what service and price they’re receiving for a guaranteed period of time, and the carriers receive certainty of hav-ing the customer for X period of time as well.
I think the ETF is part of the larger rate agreement between a consumer and the carrier and that it is not part of “terms and conditions.”
