2002 Legislation
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SENATE BILL NO. 1447 – Telecommunicatn/local basic exchng

SENATE BILL NO. 1447

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S1447......................................................by STATE AFFAIRS
TELECOMMUNICATIONS - Amends existing law relating to telecommunications
regulation to revise the definition of "basic local exchange service" and
to provide a definition of "wire center"; to authorize the Public Utilities
Commission to cease regulating the price of business or residential basic
local exchange service for all, or a portion of a local exchange area upon
a showing that effective competition for such service exists within the
area; to provide the conditions under which the Public Utilities Commission
may find that effective competition exists; to provide authority for the
Public Utilities Commission to review orders authorizing the cessation of
pricing regulation and to negotiate or require such changes in pricing as
may be necessary in the public interest; and to provide that the Public
Utilities Commission shall determine nondiscriminatory, noneconomic
regulatory requirements that shall be applicable to all telephone
corporations providing basic local exchange service or designated as an
eligible telecommunications carrier.
                                                                        
02/12    Senate intro - 1st rdg - to printing
02/13    Rpt prt - to St Aff

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  Second Regular Session - 2002
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1447
                                                                        
                                 BY STATE AFFAIRS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO TELECOMMUNICATIONS; AMENDING SECTION 62-603, IDAHO CODE, TO REVISE
  3        THE DEFINITION OF "BASIC LOCAL EXCHANGE SERVICE" AND TO PROVIDE A  DEFINI-
  4        TION  OF "WIRE CENTER"; AND AMENDING SECTION 62-622, IDAHO CODE, TO AUTHO-
  5        RIZE THE PUBLIC UTILITIES COMMISSION TO CEASE REGULATING THE PRICE OF RES-
  6        IDENTIAL BASIC LOCAL EXCHANGE SERVICE OR  BUSINESS  BASIC  LOCAL  EXCHANGE
  7        SERVICE  FOR  ALL,  OR  A PORTION OF, A LOCAL EXCHANGE AREA UPON A SHOWING
  8        THAT EFFECTIVE COMPETITION FOR SUCH SERVICE EXISTS  WITHIN  THE  AREA,  TO
  9        PROVIDE  THE  CONDITIONS  UNDER  WHICH THE PUBLIC UTILITIES COMMISSION MAY
 10        FIND THAT EFFECTIVE COMPETITION EXISTS, TO PROVIDE AUTHORITY FOR THE  PUB-
 11        LIC  UTILITIES  COMMISSION  TO  REVIEW ORDERS AUTHORIZING THE CESSATION OF
 12        PRICING REGULATION AND, FOLLOWING COMPLAINT AND HEARING, TO  NEGOTIATE  OR
 13        REQUIRE SUCH CHANGES IN PRICING AS MAY BE NECESSARY IN THE PUBLIC INTEREST
 14        AND  TO  PROVIDE THAT THE PUBLIC UTILITIES COMMISSION SHALL DETERMINE NON-
 15        DISCRIMINATORY NONECONOMIC REGULATORY REQUIREMENTS THAT SHALL BE  APPLICA-
 16        BLE  TO  ALL TELEPHONE CORPORATIONS PROVIDING BASIC LOCAL EXCHANGE SERVICE
 17        OR DESIGNATED AS AN ELIGIBLE TELECOMMUNICATIONS CARRIER.
                                                                        
 18    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 19        SECTION 1.  That Section 62-603, Idaho Code, be, and the  same  is  hereby
 20    amended to read as follows:
                                                                        
 21        62-603.  DEFINITIONS. As used in this chapter:
 22        (1)  "Basic local exchange service" means the provision of access lines to
 23    residential  and  or small business customers with the associated transmission
 24    of two-way interactive switched voice communication within  a  local  exchange
 25    calling area.
 26        (2)  "Basic  local exchange rate" shall mean the monthly charge imposed by
 27    a telephone corporation for  basic  local  exchange  service,  but  shall  not
 28    include  any  charges  resulting  from  action by a federal agency or taxes or
 29    surcharges imposed by a governmental body which are  separately  itemized  and
 30    billed by a telephone corporation to its customers.
 31        (3)  "Chapter" as used herein shall mean chapter 6, title 62, Idaho Code.
 32        (4)  "Commission" means the Idaho public utilities commission.
 33        (5)  "Facilities  based  competitor"  means  a local exchange carrier that
 34    offers basic local exchange service either: (a) exclusively over its own tele-
 35    communications service facilities; or (b) predominantly over its  own  facili-
 36    ties  in combination with the resale of telecommunications services of another
 37    carrier.
 38        (6)  "Incumbent telephone corporation" means a  telephone  corporation  or
 39    its  successor  which  was providing basic local exchange service on or before
 40    February 8, 1996.
 41        (7)  "Local exchange calling area" means a  geographic  area  encompassing
 42    one  (1)  or more local communities as described in maps, tariffs, rate sched-
 43    ules, price lists, or other descriptive material filed with the commission  by
                                                                        
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  1    a  telephone  corporation, within which area basic local exchange rates rather
  2    than message telecommunication service rates apply.
  3        (8)  "Message telecommunication service (MTS)" means the  transmission  of
  4    two-way  interactive switched voice communication between local exchange call-
  5    ing areas for which charges are made on a per-unit basis, not  including  wide
  6    area  telecommunications  service  (WATS),  or its equivalent, or individually
  7    negotiated contracts for telecommunication services.
  8        (9)  "Residential customers" shall mean persons to whom telecommunication
  9    services are furnished at a dwelling and which are used for personal or domes-
 10    tic purposes and not for business, professional or institutional purposes.
 11        (10) "Rural telephone company" means a local  exchange  carrier  operating
 12    entity to the extent that the entity:
 13        (a)  Provides  common  carrier service to any local exchange carrier study
 14        area that does not include either:
 15             (i)   any incorporated place of ten thousand (10,000) inhabitants  or
 16             more, or any part thereof, based on the most recently available popu-
 17             lation statistics of the bureau of the census; or
 18             (ii)  any  territory,  incorporated or unincorporated, included in an
 19             urbanized area, as defined by the bureau of the census as  of  August
 20             10, 1993;
 21        (b)  Provides  telephone  exchange  service, including exchange access, to
 22        fewer than fifty thousand (50,000) access lines;
 23        (c)  Provides telephone exchange service to  any  local  exchange  carrier
 24        study area with fewer than one hundred thousand (100,000) access lines; or
 25        (d)  Has  less  than fifteen percent (15%) of its access lines in communi-
 26        ties of more than fifty thousand (50,000) on the date of enactment of  the
 27        federal telecommunications act of 1996.
 28        (11) "Small  business  customers" shall mean a business entity, whether an
 29    individual, partnership, corporation or any other business form, to whom tele-
 30    communication services are furnished for occupational, professional or  insti-
 31    tutional  purposes,  and which business entity does not subscribe to more than
 32    five (5) access lines which are billed to a single billing location.
 33        (12) "Telecommunications act of 1996" means the federal telecommunications
 34    act of 1996, public law no. 104-104 as enacted effective February 8, 1996.
 35        (13) "Telecommunication service" means the transmission of two-way  inter-
 36    active  switched  signs,  signals, writing, images, sounds, messages, data, or
 37    other  information  of  any  nature  by  wire,  radio,  lightwaves,  or  other
 38    electromagnetic means (which includes message  telecommunication  service  and
 39    access  service), which originate and terminate in this state, and are offered
 40    to or for the public, or some portion thereof,  for  compensation.  Except  as
 41    otherwise  provided  by  statute, "telecommunication service" does not include
 42    the one-way transmission to subscribers of  (i)  video  programming,  or  (ii)
 43    other  programming  service,  and  subscriber  interaction,  if  any, which is
 44    required for the selection of such video programming or other programming ser-
 45    vice, surveying, or the provision of radio paging, mobile radio telecommunica-
 46    tion services, answering services (including computerized or  otherwise  auto-
 47    mated  answering  or  voice  message services), and such services shall not be
 48    subject to the provisions of title 61, Idaho Code, or title 62, Idaho Code.
 49        (14) "Telephone corporation" means every corporation or person, their les-
 50    sees, trustees, receivers or trustees appointed by any court whatsoever,  pro-
 51    viding telecommunication services for compensation within this state, provided
 52    that  municipal, cooperative, or mutual nonprofit telephone companies shall be
 53    included in this definition only for  the  purposes  of  sections  62-610  and
 54    62-617 through 62-620, Idaho Code. Except  as otherwise  provided  by statute,
 55    telephone corporations providing radio paging, mobile radio telecommunications
                                                                        
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  1    services,  answering  services  (including computerized or otherwise automated
  2    answering or voice message services), or one-way transmission  to  subscribers
  3    of  (i)  video  programming, or (ii) other programming service, and subscriber
  4    interaction, if any, which is required for the selection of  such  video  pro-
  5    gramming  or  other  programming  service  or  surveying  are  exempt from any
  6    requirement of this chapter or title 61, Idaho Code, in the provision of  such
  7    services;  provided,  that the providers of these exempted services shall have
  8    the benefits given them under section 62-608, Idaho Code.
  9        (15) "Wire center" means a central facility where the  telephone  corpora-
 10    tion  terminates subscriber outside cable plant or local lines with the neces-
 11    sary testing facilities to maintain them.
                                                                        
 12        SECTION 2.  That Section 62-622, Idaho Code, be, and the  same  is  hereby
 13    amended to read as follows:
                                                                        
 14        62-622.  REGULATION  OF  BASIC  LOCAL  EXCHANGE  RATES, SERVICES AND PRICE
 15    LISTS. (1) The commission shall regulate the prices for basic  local  exchange
 16    services for incumbent telephone corporations in accordance with the following
 17    provisions:
 18        (a)  At the request of the incumbent telephone corporation, the commission
 19        shall establish maximum just and reasonable rates for basic local exchange
 20        service. Maximum basic local exchange rates shall be sufficient to recover
 21        the costs incurred to provide the services. Costs shall include authorized
 22        depreciation,  a reasonable portion of shared and common costs, and a rea-
 23        sonable profit. Authorized depreciation lives  shall  use  forward-looking
 24        competitive  market  lives. Authorized depreciation lives shall be applied
 25        prospectively and to undepreciated balances.
 26        (b)  At the request of the telephone corporation, the commission may  find
 27        that existing rates for local services constitute the maximum rates.
 28        (c)  The  commission  shall  issue its order establishing maximum rates no
 29        later than one hundred eighty (180) days after the filing of  the  request
 30        unless the telephone corporation consents to a longer period.
 31        (d)  An  incumbent  telephone corporation may charge prices lower than the
 32        maximum basic local exchange rates established by the commission. Provided
 33        however, upon the petition of a nonincumbent  telephone  corporation,  the
 34        commission  shall  establish  a  minimum price for the incumbent telephone
 35        corporation's basic local exchange service if the commission finds,  by  a
 36        preponderance  of the evidence, that the incumbent telephone corporation's
 37        prices for basic local exchange services in the local  exchange  area  are
 38        below  the incumbent telephone corporation's average variable cost of pro-
 39        viding such services.
 40        (e)  After the commission has established  maximum  basic  local  exchange
 41        rates,  an incumbent telephone corporation may change its tariffs or price
 42        lists reflecting the availability, price, terms and conditions  for  local
 43        exchange  service  effective not less than ten (10) days after filing with
 44        the commission and giving notice to affected customers. Changes to tariffs
 45        or price lists that are for nonrecurring  services  and  that  are  quoted
 46        directly  to  the customer when an order for service is placed, or changes
 47        that result in price reductions or new service offerings, shall be  effec-
 48        tive immediately upon filing with the commission and no other notice shall
 49        be required.
 50        (2)  The commission shall not regulate the prices for basic local exchange
 51    services for telephone corporations that were not providing such local service
 52    on  or  before  February 8, 1996. Provided however, such telephone corporation
 53    providing basic local exchange services shall file price lists with  the  com-
                                                                        
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  1    mission  that  reflect  the availability, price, terms and conditions for such
  2    services. Changes to such price lists shall be effective  not  less  than  ten
  3    (10)  days after filing with the commission and giving notice to affected cus-
  4    tomers. Changes to price lists that are for nonrecurring services and that are
  5    quoted directly to the customer when  an  order  for  service  is  placed,  or
  6    changes  that  result  in  price reductions or new service offerings, shall be
  7    effective immediately upon filing with the  commission  and  no  other  notice
  8    shall be required.
  9        (3)  (a) The  commission  shall  cease  regulating residential basic local
 10        exchange rates or small business basic local exchange rates in those  por-
 11        tions  of  a  local  exchange  calling  area upon a showing by in which an
 12        incumbent telephone corporation that shows to the commission that, for the
 13        class of service for which the  showing  is  made,  effective  competition
 14        exists for such residential or small business basic local exchange service
 15        throughout  in  that  portion of the local exchange calling area for which
 16        the cessation of rate regulation is sought by the  telephone  corporation.
 17        Such  area,  if smaller than the basic local exchange calling area, shall,
 18        in no event, be smaller than the area served by a wire center  within  the
 19        local exchange calling area.
 20        (b)  Effective competition exists throughout a local exchange calling area
 21        when: either:
 22             (ai)   Actual competition from a facilities-based competitor is pres-
 23             ent  for  both residential and or small business basic local exchange
 24             customers for the class of service for which the cessation  of  price
 25             regulation is sought; or
 26             (bii)  There  are functionally equivalent, competitively priced local
 27             services reasonably available to both residential and or small  busi-
 28             ness  customers  from  a  telephone corporation unaffiliated with the
 29             incumbent telephone corporation for the class of  service  for  which
 30             the cessation of price regulation is sought; or
 31             (iii) An  incumbent telephone corporation has provisioned collocation
 32             for not less than three  (3)  competitors'  equipment  necessary  for
 33             interconnection  or  access  to  unbundled network elements that will
 34             enable the competitors to provide residential or small business basic
 35             local  exchange  service  to  residential  or  small  business  local
 36             exchange customers within the service area for which the cessation of
 37             price regulation is sought. If the incumbent telephone corporation is
 38             a Bell operating company, as defined in the telecommunications act of
 39             1996, such incumbent telephone corporation shall, for the purposes of
 40             this subparagraph (iii), also show that it  has  been  authorized  to
 41             provide  interLATA services pursuant to section 271 of the telecommu-
 42             nications act of 1996.
 43        (c)  The commission may also find that effective competition exists  based
 44        on  such  other  evidence as the commission may determine to be reasonable
 45        and not adverse to the public interest.
 46        (4)  The commission shall, for a period of twenty-four (24) months follow-
 47    ing the entry of an order authorizing the cessation of pricing regulation  for
 48    either  residential or small business basic local exchange service pursuant to
 49    small business basic local exchange service pursuant to subsection (3) of this
 50    section, have continuing authority to review the effect of its  order  on  the
 51    availability  of  reasonably  priced  and  functionally equivalent basic local
 52    exchange services in the area affected  by  its  order.   During  such  review
 53    period,  upon complaint to the commission and, if the commission upon investi-
 54    gation and notice to the affected telephone corporation determines that  there
 55    may be reasonable grounds for the complaint, the commission shall set the mat-
                                                                        
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  1    ter  for  hearing  upon the complaint. If, after hearing, the commission finds
  2    that, following its order authorizing the cessation of pricing regulation  for
  3    basic  local  exchange  service,  effective  competition  for such service has
  4    ceased to exist and that the pricing of such service in the affected  area  by
  5    the  incumbent  telephone  corporation  is adverse to the public interest, the
  6    commission shall have authority to negotiate or require such  changes  in  the
  7    pricing  of  the  affected basic local exchange service by the incumbent tele-
  8    phone corporation as may be necessary in the public interest.
  9        (5)  Telephone corporations shall not resell:
 10        (a)  A telecommunications service that is available at retail  only  to  a
 11        category of subscribers to a different category of subscribers;
 12        (b)  A means-tested service to ineligible customers; or
 13        (c)  A  category  of  service  to  circumvent  switched  or special access
 14        charges.
 15        (56)  The commission shall determine  the  nondiscriminatory,  noneconomic
 16    regulatory requirements for that shall be applicable to all telephone corpora-
 17    tions  providing  basic  local  exchange  service or designated as an eligible
 18    telecommunications carrier pursuant to sections 62-610A through 62-610F, Idaho
 19    Code, including, but not limited to, such matters  as  service  quality  stan-
 20    dards,  provision  of  access to carriers providing message telecommunications
 21    service, filing of price lists, customer notice and customer relation rules.

Statement of Purpose / Fiscal Impact


                STATEMENT OF PURPOSE		
                       RS 11871

The proposed legislation amends existing legislation that provides 
authority for the Public Utilities Commission to cease regulating 
basic local exchange rates for incumbent telephone companies if 
effective competition for basic local exchange service exists 
throughout the local exchange area. Also clarifies existing law 
to grant authority to the IPUC to (1) cease rate regulation for 
residential or small business customers, separately, within the 
area in which effective competition exists; (2) cease rate 
regulation if at least three competitors have been provided 
collocation of equipment, on the incumbent’s premises, that is 
necessary to provide local exchange services to the incumbent 
company’s customers; or, (3) cease rate regulation if the 
Commission finds other reasonable evidence showing that effective 
competition exists and that it would not be adverse to the public 
interest.

	For a period of two years following the entry of its order, 
the IPUC may reconsider and take corrective action if it finds 
that effective competition has ceased to exist and that the pricing 
policies of the incumbent are adverse to the public interest.


                       FISCAL IMPACT

There is no fiscal impact.


Contact: Bart M. Davis
	 208/332-1307




STATEMENT OF PURPOSE/FISCAL NOTE           S 1447