He's mixed telecommunications, history


December 03, 1990|By Leslie Cauley

Fate has placed Scott J. Rafferty at the scene of history-making events more than once in his 34 years.

In the early 1980s, for example, Mr. Rafferty signed on as counsel for a congressional subcommittee to help draft a bill aimed at reorganizing American Telephone & Telegraph Co., then a phone monopoly. His nine-month stint on Capitol Hill ended -- two-and-a-half years later -- with the landmark breakup of AT&T.

Fate worked its magic again last year when Mr. Rafferty just happened to show up in Czechoslovakia on the day the government resigned, a historic event that sent thousands pouring into the streets in jubilation.

Mr. Rafferty, in Prague on a business trip, recorded the event for posterity with his camera. To get a better view of the celebrating crowd, he climbed a nearby tree and took the shot from there.

That photo hangs today in the office of Mr. Rafferty, who became the telecommunications director for the Maryland Public Service Commission just two weeks ago.

In his new job, Mr. Rafferty is once again positioned to witness a potentially historic event: the creation of a new cost-allocation manual for Chesapeake & Potomac Telephone Co. of Maryland.

While that may not sound titillating at first, consider this: Cost-allocation manuals outline how phone companies divide their costs and ultimately determine the cost of basic phone services.

The challenge for Maryland regulators is to ensure that monopoly services, such as basic phone service, don't wind up subsidizing the riskier, competitive side of the business, which carry the potential for substantial losses.

Given C&P's plan to expand the competitive side of its business, the importance of tracking cost-allocation is critical to the long-term welfare of the state and its more than 3 million phone customers, Mr. Rafferty said.

"Our goal is to have the best darn cost-allocation manual there is, one that breaks ground and solves a lot of knotty problems," said Mr. Rafferty, a Rhodes scholar who holds degrees from Yale and Princeton.

Mr. Rafferty dismisses the notion that the enormously complicated accounting procedures of phone companies make it virtually impossible for state regulators to prevent subsidization.

"A lot of people say it can't work . . . but I don't buy into thgloom and doom," he said. Maryland's PSC now has the opportunity to illustrate -- through the new C&P cost-allocation manual -- that "cost-allocation can work to prevent subsidization," he added.

Mr. Rafferty and his professional staff of four will make recommendations to the PSC on all telecommunications issues, including configuring C&P's cost-allocation manual. The final manual is being written by the commission, not C&P, he noted.

Mr. Rafferty has a long history of making recommendations to ruling bodies on important telecommunications issues.

A lawyer, he began his career as a specialist in antitrust and regulatory matters in Washington before being named staff counsel to the House subcommittee on telecommunications in 1982.

Later, as a senior vice president of Telco Research, the consultative arm of NYNEX, one of the regional Bell telephone companies, he advised a host of clients on technical and strategic problems.

Most recently, he was an independent consultant to governments worldwide, offering advice on a variety of telecommunications matters. For example, he advised members of the British Parliament during the privatization of the government-owned telephone system.

Although one might think that a spot with Maryland's PSC would pale in comparison after that, Mr. Rafferty says that just isn't so.

"We have an exciting agenda here," said Mr. Rafferty, ticking off a host of telecommunications issues now slated to come before the commission. "We have one of the most profitable telephone compa

nies in the country that has an ability to make enormous contributions to the state."

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