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H0057......................................................by STATE AFFAIRS
TELECOMMUNICATIONS - Amends and adds to existing law to authorize a
telephone corporation to elect to have all or part of its
telecommunications services excluded from regulation pursuant to Title 61,
Idaho Code, and to be subject to regulation pursuant to Chapter 6, Title
62, Idaho Code; to authorize the Public Utilities Commission to regulate
telephone corporations for the purpose of implementing the Federal
Communications Act of 1966; to provide the Public Utilities Commission with
authority to determine noneconomic regulatory requirements for telephone
corporations providing basic local exchange service during the period of
three years following the effective date of the election; to authorize the
Public Utilities Commission to extend the transition period for an
additional two years; to establish the rates for basic local exchange
service to be used to determine eligibility of certain telephone companies
to draw funds from the state universal service fund; to prohibit a
telephone corporation from requiring a basic local exchange service
customer to purchase or subscribe to telecommunication services other than
basic local exchange services; to prohibit any increase in the stand-alone
basic local exchange service rate to an amount that is higher than the rate
for such service for basic local exchange customers in the local exchange
calling area having the highest number of basic local exchange customers
served by the telephone corporation; to define "stand-alone basic local
exchange rate"; to provide an exception to the exemption from the antitrust
liability of a telephone corporation; and to provide the Public Utility
Commission authority to establish a minimum price for basic local exchange
service upon complaint by another telephone corporation relating to below
variable cost pricing for such services by telephone corporations not
subject to Title 61, Idaho Code.
01/27 House intro - 1st rdg - to printing
01/28 Rpt prt - to St Aff
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 57
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO TELECOMMUNICATION REGULATION; AMENDING SECTION 62-604, IDAHO CODE,
3 TO AUTHORIZE A TELEPHONE CORPORATION TO ELECT TO HAVE ALL OR PART OF ITS
4 TELECOMMUNICATION SERVICES EXCLUDED FROM REGULATION PURSUANT TO TITLE 61,
5 IDAHO CODE, AND TO BE THEREAFTER SUBJECT TO REGULATION PURSUANT TO CHAPTER
6 6, TITLE 62, IDAHO CODE; AMENDING SECTION 62-605, IDAHO CODE, TO REVISE
7 THE PROCEDURE FOR THE NOTICE OF ELECTION, TO AUTHORIZE THE PUBLIC UTILI-
8 TIES COMMISSION TO REGULATE TELEPHONE CORPORATIONS FOR THE PURPOSE OF
9 IMPLEMENTING THE FEDERAL COMMUNICATIONS ACT OF 1996, TO PROVIDE THE PUBLIC
10 UTILITIES COMMISSION WITH CONTINUING AUTHORITY TO DETERMINE NONECONOMIC
11 REGULATORY REQUIREMENTS FOR TELEPHONE CORPORATIONS PROVIDING BASIC LOCAL
12 EXCHANGE SERVICE, PROHIBITING CERTAIN RATE INCREASES FOR BASIC LOCAL
13 EXCHANGE SERVICE DURING THE PERIOD OF THREE YEARS FOLLOWING THE EFFECTIVE
14 DATE OF THE ELECTION, TO AUTHORIZE THE PUBLIC UTILITIES COMMISSION TO
15 EXTEND THE TRANSITION PERIOD FOR TWO ADDITIONAL YEARS AND TO ESTABLISH THE
16 RATES FOR BASIC LOCAL EXCHANGE SERVICE TO BE USED TO DETERMINE ELIGIBILITY
17 OF CERTAIN TELEPHONE CORPORATIONS TO DRAW FUNDS FROM THE STATE UNIVERSAL
18 SERVICE FUND; AMENDING CHAPTER 6, TITLE 62, IDAHO CODE, BY THE ADDITION OF
19 A NEW SECTION 62-607A, IDAHO CODE, TO PROHIBIT A TELEPHONE CORPORATION
20 FROM REQUIRING A BASIC LOCAL EXCHANGE SERVICE CUSTOMER, AS A CONDITION OF
21 RECEIVING BASIC LOCAL EXCHANGE SERVICE, TO PURCHASE OR SUBSCRIBE TO TELE-
22 COMMUNICATION SERVICES OTHER THAN BASIC LOCAL EXCHANGE SERVICES, TO PRO-
23 HIBIT ANY INCREASE IN THE STAND-ALONE BASIC LOCAL EXCHANGE SERVICE RATE TO
24 AN AMOUNT THAT IS HIGHER THAN THE RATE FOR SUCH SERVICE FOR BASIC LOCAL
25 EXCHANGE CUSTOMERS IN THE LOCAL EXCHANGE CALLING AREA HAVING THE HIGHEST
26 NUMBER OF BASIC LOCAL EXCHANGE CUSTOMERS SERVED BY THE TELEPHONE CORPORA-
27 TION AND TO DEFINE "STAND-ALONE BASIC LOCAL EXCHANGE RATE"; AMENDING SEC-
28 TION 62-617, IDAHO CODE, TO PROVIDE AN EXCEPTION TO THE EXEMPTION FROM THE
29 ANTITRUST LIABILITY OF A TELEPHONE CORPORATION; AND AMENDING CHAPTER 6,
30 TITLE 62, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 62-622A, IDAHO
31 CODE, TO PROVIDE PUBLIC UTILITY COMMISSION AUTHORITY TO ESTABLISH A MINI-
32 MUM PRICE FOR BASIC LOCAL EXCHANGE SERVICE UPON COMPLAINT BY ANOTHER TELE-
33 PHONE CORPORATION RELATING TO BELOW VARIABLE COST PRICING FOR SUCH SER-
34 VICES BY TELEPHONE CORPORATIONS NOT SUBJECT TO TITLE 61, IDAHO CODE.
35 Be It Enacted by the Legislature of the State of Idaho:
36 SECTION 1. That Section 62-604, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 62-604. APPLICABILITY OF CHAPTER.
39 (1) (a) Any telephone corporation, except any mutual nonprofit or cooper-
40 ative telephone corporation, which did not, on January 1, 1988, hold a
41 certificate of public convenience and necessity issued by the commission
42 and, which does not provide basic local exchange service, shall, on and
43 after the effective date of this act, be subject to the provisions of this
2
1 chapter and shall be exempt from the provisions of title 61, Idaho Code.
2 (b) All telephone corporations, as set forth in subparagraph subsection
3 (1)(a) of this section, shall file a notice with the commission, which
4 notice shall set forth the following information:
5 (i) the name of the telephone corporation and the address of its
6 principal place of business within the state;
7 (ii) a description of the telecommunication services offered by such
8 telephone corporation and the area served by it or in which it offers
9 telecommunication services,.
10 (c) Such notice shall be filed on or before the 1st day of January of
11 each year following the effective date of this act.
12 (2) Any telephone corporation holding a certificate of public convenience
13 and necessity on January 1, 1988, issued by the commission pursuant to title
14 61, Idaho Code, may, pursuant to section 62-605, Idaho Code:
15 (a) elect to exclude all, or part of its telecommunication services,
16 other than basic local exchange service including recurring and nonrecur-
17 ring charges therefor, from regulation pursuant to title 61, Idaho Code,
18 and such excluded telecommunication services shall thereafter be subject
19 to the provisions of this chapter, except for the provisions of section
20 62-622(1) through (3), Idaho Code;
21 (b) notwithstanding any other provision of this chapter, a telephone cor-
22 poration which, pursuant to section 61-538, Idaho Code, was, prior to the
23 effective date of this chapter, subject to the provisions of such section,
24 shall continue to be subject to the provisions of section 61-538, Idaho
25 Code, notwithstanding such telephone corporation is subject to the provi-
26 sions of this chapter.
27 SECTION 2. That Section 62-605, Idaho Code, be, and the same is hereby
28 amended to read as follows:
29 62-605. PROCEDURE FOR NOTICE OF ELECTION -- COMMISSION CONTINUING AUTHOR-
30 ITY. (1) A telephone corporation which held a certificate of public conve-
31 nience and necessity on January 1, 1988, may file with the commission a notice
32 that such telephone corporation elects to be subject to the provisions of this
33 chapter for all, or part of its telecommunication services, other than basic
34 local exchange service, which notice shall include the following:
35 (a) The name and address of the telephone corporation;
36 (b) A narrative description of the telecommunication services provided by
37 the telephone corporation and the geographic area and market served by the
38 telephone corporation and a description of the telecommunication services
39 for which the election is made.
40 (2) Upon the expiration of thirty (30) days from the filing of such
41 notice of election, said telephone corporation shall, as to telecommunication
42 services other than basic local exchange service set forth in the notice of
43 election, be exempt from the provisions of title 61, Idaho Code, and such
44 telecommunication services shall thereafter be subject to the provisions of
45 this chapter with the exception of the provisions of section 62-622(1) through
46 (3), Idaho Code.
47 (3) Nothing contained in the provisions of this chapter or title 61,
48 Idaho Code, shall be construed to prevent any person or entity from providing
49 telecommunication services in competition with a telephone corporation as to
50 those services which have been excluded from regulation under title 61, Idaho
51 Code, pursuant to the provisions of this chapter, or with a telephone corpora-
52 tion, other than a mutual, nonprofit or cooperative telephone corporation,
53 which was not, on the effective date of this act, subject to regulation by the
3
1 commission pursuant to title 61, Idaho Code.
2 (4) Nothing contained in the provisions of this chapter shall be con-
3 strued to prevent any telephone corporation from maintaining on file with the
4 commission a tariff or price list describing the details of its services.
5 (5) (a) For any telecommunication service which was subject, on the
6 effective date of this act July 1, 1988, to title 61, Idaho Code, and
7 which at the election of the telephone corporation became subject to this
8 chapter, the commission shall have continuing authority to review the
9 quality of such service, its general availability, and terms and condi-
10 tions under which it is offered. Upon complaint to the commission and
11 after notice to the telephone corporation providing such service and hear-
12 ing, the commission finds that the quality, general availability or terms
13 and conditions for such service are adverse to the public interest, the
14 commission shall have authority to negotiate or require changes in how
15 such telecommunication services are provided regulate the telephone corpo-
16 ration to the extent necessary to implement the federal communications act
17 of 1996, in accordance with section 62-615, Idaho Code.
18 (b) The commission shall have the continuing authority to determine the
19 noneconomic regulatory requirements relating to basic local exchange ser-
20 vice for all telephone corporations providing basic local exchange service
21 or designated as an eligible telecommunications carrier pursuant to sec-
22 tions 62-610A through 62-610F, Idaho Code, including, but not limited to,
23 such matters as service quality standards, provision of access to carriers
24 providing message telecommunications service, filing of price lists, cus-
25 tomer notice and customer relation rules, and billing practices and proce-
26 dures, which requirements shall be technologically and competitively neu-
27 tral.
28 (c) In addition, if the commission finds that such corrective action is
29 inadequate, it shall have the authority to require that such telecommuni-
30 cation services be subject to the requirements of title 61, Idaho Code,
31 rather than the provisions of this chapter a telephone corporation has
32 made an election pursuant to section 62-604, Idaho Code, and section
33 62-605, Idaho Code, with reference to basic local exchange service, the
34 telephone corporation shall not, during the transition period, establish a
35 stand-alone basic local exchange rate, as defined in section 62-607A,
36 Idaho Code, that is higher than the maximum basic local exchange rate that
37 was in effect and authorized or approved by the commission for any tele-
38 phone corporation regulated pursuant to title 61, Idaho Code, or section
39 62-622(1), Idaho Code, for residence and business basic local exchange
40 service rates, respectively, on the date the telephone corporation made
41 the election pursuant to section 62-604, Idaho Code, and section 62-605,
42 Idaho Code, with reference to basic local exchange service.
43 (d) The term "transition period," as used in this section, means a period
44 of three (3) years from the effective date of the election by a telephone
45 corporation to exclude basic local exchange services from regulation pur-
46 suant to title 61, Idaho Code, or section 62-622(1), Idaho Code. Provided
47 however, the commission may, during the one hundred eighty (180) day
48 period prior to the expiration of the initial three (3) year transition
49 period, by order, extend the transition period for a period of two (2)
50 additional years if the commission finds that such action is necessary to
51 protect the public interest. The commission shall, if the transition
52 period is extended, as herein provided, file a copy of the commission's
53 order with the governor and the legislature.
54 (e) For the purpose of calculating the weighted statewide average rates
55 for residence and business basic local exchange service rates to enable
4
1 the commission to determine eligibility for distributions to eligible
2 telecommunications carriers from the universal service fund established
3 pursuant to chapter 6, title 62, Idaho Code, the residence and business
4 basic local exchange rates in effect on July 1, 2005, shall constitute the
5 basis for such calculation, unless the commission determines that changes
6 in basic local exchange rates subsequent to July 1, 2005, should be used
7 for such calculation for the purpose of determining the eligibility of
8 telecommunications carriers for distributions from the universal service
9 fund.
10 SECTION 3. That Chapter 6, Title 62, Idaho Code, be, and the same is
11 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
12 ignated as Section 62-607A, Idaho Code, and to read as follows:
13 62-607A. PROHIBITED ACTIVITIES BY A TELEPHONE CORPORATION. (1) No incum-
14 bent telephone corporation, or eligible telecommunications carrier as defined
15 in section 62-610B(1), Idaho Code, shall require a residential or small busi-
16 ness customer, as a condition of receiving basic local exchange service, to
17 purchase or subscribe to telecommunication services other than one (1) access
18 line for the provision of basic local exchange service.
19 (2) A telephone corporation that has made the election provided in sec-
20 tions 62-604 and 62-605, Idaho Code, with reference to basic local exchange
21 service, shall not increase its stand-alone basic local exchange rate to resi-
22 dential or small business customers in any local exchange calling area to an
23 amount that is higher than that telephone corporation's stand-alone basic
24 local exchange rate for residential or small business customers in the local
25 exchange calling area having the highest number of basic local exchange ser-
26 vice residential or business customers served by the telephone corporation
27 within the state.
28 (3) "Stand-alone basic local exchange rate," as used herein, means the
29 monthly charge made by a telephone corporation to a residential or small busi-
30 ness basic local exchange service customer for a single line that is not
31 included in a package of services or price discounted in a promotional offer-
32 ing. "Stand-alone basic local exchange rate" does not include any charges
33 resulting from action by a federal agency or taxes or surcharge imposed by a
34 governmental body that are separately itemized and billed by a telephone cor-
35 poration to its customers.
36 SECTION 4. That Section 62-617, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 62-617. TELEPHONE CORPORATION ANTITRUST LIABILITY. No action under the
39 antitrust laws or any other provision or doctrine of law of the state of Idaho
40 shall lie against a telephone corporation for providing service in compliance
41 with any order of the commission. Provided however, this section shall not
42 apply to the provision of any service for which the commission has approved or
43 acknowledged an election pursuant to section 62-605(1), Idaho Code, except to
44 the extent such service thereafter is the subject of a specific commission
45 order pursuant to title 62, Idaho Code.
46 SECTION 5. That Chapter 6, Title 62, Idaho Code, be, and the same is
47 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
48 ignated as Section 62-622A, Idaho Code, and to read as follows:
49 62-622A. COMMISSION AUTHORITY TO ESTABLISH MINIMUM PRICING OF BASIC LOCAL
5
1 EXCHANGE SERVICE. A telephone corporation may file a petition with the commis-
2 sion alleging that another telephone corporation, not subject to regulation
3 pursuant to title 61, Idaho Code, is offering basic local exchange service to
4 customers in a local exchange calling area at a price below its average vari-
5 able cost of providing such service in the local exchange calling area. The
6 commission shall, if after hearing it finds by a preponderance of the evidence
7 that the allegations contained in the petition are true, establish a minimum
8 price for basic local exchange service of the telephone corporation in the
9 local exchange calling area, which minimum price shall reflect the telephone
10 corporation's average variable cost of providing such service.
STATEMENT OF PURPOSE
RS 14560C2
This proposal will permit telephone companies, whose
retail rates are regulated by the Public Utilities
Commission, to transition into a technologically and
competitively neutral communications market environment and
away from a state-created monopoly regulatory environment,
created by the state in 1913.
Changes in federal and state law, in 1996 and 1997,
respectively, revoked the monopoly status of Idaho's retail
rate regulated companies and mandated "network-sharing" with
unregulated and competing companies. In addition, the
digital revolution made possible the dramatic growth in
wireless usage, the steady increase in cable telephony, the
rise of Voice-Over-Internet Protocol (VOIP) services, and
the explosion of electronic messaging, none of which are
regulated by the state. These factors have truly created a
dynamic and contestable marketplace in Idaho and throughout
the nation.
This legislation will allow Idaho's retail price
regulated companies to elect to have their prices determined
by the competitive market. However, the legislation
significantly protects the consumer interest, as follows:
Caps retail stand-alone telephone service prices at
a rate that does not exceed the maximum basic local
exchange rate approved by the Public Utilities
Commission, for a minimum period of three years, or
up to five years, at the option of the Commission;
Assures that the benefits of price competition in
urban areas will also benefit customers in rural
areas, by prohibiting rural rate increases above the
rate established in the company's most populous
urban area;
Protects customers of rural companies from unwanted
price increases by using the prices in effect July
1, 2005, as the benchmark pricing for eligibility to
draw from the Universal Service Fund, unless the PUC
determines another benchmark should be used;
Guarantees that a customer will always have the
option of "plain old telephone service" (POTS),
without having to take package plans or services the
customer does not want;
Provides the Public Utilities Commission with
continuing authority over basic local exchange
service quality standards, billing practices and
procedures, and customer notice and customer-
relations rules; and
Does not interfere with the continued availability
of the Idaho Telecommunications Service Assistance
Plan (ITSAP) to assist low-income persons to obtain
lower cost telephone service within the state. [I.C.
Chapter 9, Title 56]
FISCAL NOTE
There is no fiscal impact on the General Fund.
CONTACT:
Name: William C. Roden
Phone: (208) 336-7930
Name: Edward Lodge, Qwest
Phone: (208) 385-2154
STATEMENT OF PURPOSE/FISCAL NOTE H 57