The Federal Communications Commission was charged by a watchdog agency yesterday with a massive failure to monitor the activities of American Telephone & Telegraph Co. and prepare for a series of new responsibilities mandated by the agency's landmark deregulation decision.
The criticism was so sweeping that a top congressional policy maker suggested after the hearing where the matter surfaced that congressional telecommunications deregulation plans might have to take an entirely new thrust.
"This calls into the question our ability to depend upon the discretion of the agency," said Rep. Timothy Wirth (D-Colo.), chairman of the telecommunications panel, in an interview. "We may have to consider redrafting the Communications Act creating different constructs because the task may be too great to leave to the commission."
The criticism came from the General Accounting Office, the independent congressional auditing arm, and was presented to a joint hearing of the House oversight and investigative subcommittee and the House telecommunications subcommittee.
In a 219-page report, pieces of which were reported earlier, the GAO concludes that the FCC, after years of study does not clearly know the costs of providing telephone service and after 15 years of study has been unable to develop standards for evaluating AT&T's costs, a program the GAO terms a "troubled and ultimately futile exercise."
Further, the agency's ability to monitor AT&T's rate base and expenses has been virtually impossible in light of the "absence of any auditing capabilities" within the FCC, the GAO said.
The GAO went on to charge that the FCC is not "now equipped, or is likely soon to be equipped to undertake a regulatory task" of overseeing the restructuring of AT&T required under last year's Computer II decision. That decision is scheduled to go into effect next March 1 and members of the two subcommittees and FCC member Joseph Fogarty agreed that there is little likelihood the massive decision will actually be implemented on that date.
In essence, the GAO recommended that the FCC step up its auditing efforts, that the agency be given the tools to assemble an accounting methodology to monitor AT&T behavior, and that the commission go further in drawing lines between the Bell System's regulated and unregulated activities under the Computer II decision.
But FCC Chairman Mark Fowler, in office just over four months, defended the commission's ability to deal with the massive problems outlined by the GAO, despite the FCC's acknowledged failure to even formalize an implementation plan for implementing its deregulation initiative. "We do have a plan and we believe it will work," Fowler said.
Fogarty, however, a critic of the FCC's handling of a variety of AT&T matters, said yesterday's hearing was the first time he had heard of the implementation plan. "We should have started it two years ago," he said.
Rep. Edward Markey (D-Mass.) was among the FCC critics, during the hearing, charging that the agency is in a "state of paralysis," while Rep. Albert Gore (D-Tenn.) said it is "no more than an illusion that the invisible hand of competition will protection the public."
But AT&T spokesman Pickard Wagner said the GAO report has "an air of unreality about it" and charged that the report is "another example of government being unable to get its act together."
"The focus nowadays is on deregulation and the GAO has come in with a proposal for more, not less regulation," Wager said after the hearing. "If they adopt more controls it will slow down technological innovation in our business.
Wagner said the company hoped any delays in implementing the Computer II decision would be short. "If the commission has decided that competition is in the public interest, it's in the public interest to get on with it," he said.