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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
|||| 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
2
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
3
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-
4
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-
5
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
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