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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 subparagraphsubsection 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 basic34 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 serviceset 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 the6 effective date of this actJuly 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 the9 quality of such service, its general availability, and terms and condi-10 tions under which it is offered. Upon complaint to the commission and11 after notice to the telephone corporation providing such service and hear-12 ing, the commission finds that the quality, general availability or terms13 and conditions for such service are adverse to the public interest, the14 commission shall have authority to negotiate or require changes in how15 such telecommunication services are providedregulate 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 is29 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 chaptera 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