2005 Legislation
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HOUSE BILL NO. 57 – Telecommunicatns/not regulated/when

HOUSE BILL NO. 57

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Bill Status



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

Bill Text


                                                                        
                                                                        
  ]]]]              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 / Fiscal Impact


                       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