Text: HF00161 Text: HF00163 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 476.1E INCENTIVE REGULATION FOR
1 2 TELEPHONE COMPANIES.
1 3 1. The board may approve a stipulated plan for incentive
1 4 regulation that is submitted jointly by a telephone utility
1 5 and the consumer advocate to provide incentives for telephone
1 6 utilities to achieve any of the goals listed in subsection 2,
1 7 notwithstanding contrary provisions of this chapter.
1 8 2. The goals to be achieved may include promoting
1 9 competition, accelerating infrastructure deployment, improving
1 10 the quality of life, furthering societal goals, or achieving,
1 11 maintaining, or improving universal telephone service.
1 12 3. The board, after notice and opportunity for hearing,
1 13 may approve or disapprove the plan for an incentive form of
1 14 regulation specific to that utility.
1 15 Sec. 2. NEW SECTION. 476.1F APPLICABILITY OF AUTHORITY
1 16 &endash; CERTAIN TELEPHONE COMPANIES.
1 17 1. Notwithstanding contrary provisions of this chapter
1 18 relating to rate-of-return regulation, a telephone company
1 19 having more than fifteen thousand customers and more than
1 20 fifteen thousand access lines may elect to be regulated
1 21 pursuant to section 476.6A.
1 22 2. A telephone company shall exercise the option provided
1 23 for in subsection 1 by giving written notice to the board not
1 24 less than thirty days prior to the date such regulation is to
1 25 commence.
1 26 Sec. 3. NEW SECTION. 476.6A PRICING FLEXIBILITY FOR
1 27 TELEPHONE COMPANIES.
1 28 1. DEFINITIONS. For purposes of this section, unless the
1 29 context otherwise requires:
1 30 a. "Basic exchange services" means the provision of dial
1 31 tone access, for the transmission of two-way switched voice
1 32 communications within a local exchange area, or services
1 33 allowing access to two-way switched voice communications
1 34 between exchange areas, or services essential to the public
1 35 safety. Services which are basic exchange services include,
2 1 but are not limited to, the following:
2 2 (1) Single party residence service, which is furnished to
2 3 a dwelling and which is used for personal or domestic purposes
2 4 and not for business, occupational, professional, or
2 5 institutional purposes.
2 6 (2) Business service, which is used for occupational,
2 7 professional, or institutional purposes. This includes
2 8 single-line service, service for nonswitched multi-line
2 9 business communication systems, and service for switched
2 10 business communications systems.
2 11 (3) Extended area service or the grouping of two or more
2 12 local exchange areas which allows customers of one exchange in
2 13 the group to place and receive two-way switched voice
2 14 communications to or from customers in one or more other
2 15 exchanges in the group without an interexchange toll charge.
2 16 (4) Dual party relay service established under chapter
2 17 477C.
2 18 (5) 911 and E911 services established in chapters 34 and
2 19 34A.
2 20 b. "Local exchange area" means a territorial unit
2 21 established by a telephone company for the administration of
2 22 basic exchange services within a specific area generally as
2 23 described in maps filed with and approved by the board.
2 24 c. "Nonbasic exchange services" means all services other
2 25 than basic exchange services.
2 26 d. "Service rate" means the monthly charge imposed by a
2 27 telephone company for a specific service, but does not include
2 28 any charges or taxes imposed by a governmental body which are
2 29 included on customer billings by the telephone company.
2 30 2. RATES FOR BASIC EXCHANGE SERVICES. The rates for basic
2 31 exchange services provided by a telephone company operating
2 32 under this section shall be set as follows:
2 33 a. The initial basic exchange service rates to be charged
2 34 by a telephone company that has elected to be regulated under
2 35 this section shall be ten percent less than the service rates
3 1 approved and in effect at the time of the company's election
3 2 to be regulated under this section.
3 3 b. A telephone company may change its rates for basic
3 4 exchange services after written notice to all affected
3 5 customers, the board, and the consumer advocate, as follows:
3 6 (1) A proposed rate increase which does not increase any
3 7 basic exchange service rate by more than the most recent
3 8 annual increase in the implicit gross domestic product price
3 9 deflator, as published by the federal government, less three
3 10 percentage points, shall be reviewed by the board pursuant to
3 11 subsection 3, except as provided in subparagraph (2). The
3 12 board shall by rule create a penalty mechanism for up to a two
3 13 percentage point increase in the percentage offset for
3 14 inadequate service provided by, or insufficient investment
3 15 made by, the telephone company proposing rate increases
3 16 pursuant to this section. The board shall by rule create an
3 17 incentive mechanism for up to a one percentage point decrease
3 18 in the percentage offset to encourage infrastructure
3 19 investment by the telephone company proposing rate increases
3 20 pursuant to this section.
3 21 (2) An increase in any basic service rate shall not be
3 22 undertaken within twelve months of the date the telephone
3 23 company elects to operate under the provisions of this
3 24 section, or within twelve months of the last increase in any
3 25 basic service rate.
3 26 (3) A proposed rate increase which exceeds the percentages
3 27 established in subparagraph (1) shall require that the
3 28 telephone company comply with all requirements of section
3 29 476.6.
3 30 (4) There is no limit or review of a decrease in rates
3 31 proposed by a telephone company, unless the proposal to
3 32 decrease rates includes a proposal that other rates be
3 33 increased.
3 34 c. A telephone company shall decrease its rates for basic
3 35 exchange services, upon application of the consumer advocate,
4 1 as follows:
4 2 (1) If the implicit gross domestic product price deflator,
4 3 as published by the federal government, decreases, rates for
4 4 basic exchange services shall be decreased by a percentage
4 5 equal to the most recent annual decrease in the implicit gross
4 6 domestic product price deflator plus three percentage points.
4 7 (2) If an increase in the most recent implicit gross
4 8 domestic product price deflator, as published by the federal
4 9 government, less three percentage points results in a negative
4 10 percentage, rates for basic exchange services shall be
4 11 decreased by a percentage equal to the negative percentage.
4 12 d. A telephone company shall file a tariff with the board
4 13 which contains the rates and charges for basic exchange
4 14 services which are set pursuant to this section. A telephone
4 15 company shall file an initial tariff with the board regarding
4 16 initial service rates established pursuant to this section,
4 17 and shall amend that filing within thirty days of the
4 18 effective date of a decrease in rates or of an increase in
4 19 rates as approved under this section.
4 20 e. New services or products offered by a telephone company
4 21 on or after July 1, 1995, shall be nonbasic exchange services,
4 22 unless the board determines after notice and hearing that a
4 23 new service is a basic exchange service. A new service is a
4 24 basic exchange service if the board finds that the general
4 25 public interest would be promoted by the widespread
4 26 availability of the new service, including the new service as
4 27 a basic exchange service would not adversely affect
4 28 universally available telephone service, and including the new
4 29 service as a basic exchange service would not result in cross-
4 30 subsidies between customers. The telephone company offering
4 31 the new service shall set the initial service rate at no less
4 32 than long-run incremental cost for a new service.
4 33 f. Promotional pricing for a service for a period of up to
4 34 one hundred twenty days in any one-year period is not a rate
4 35 change for purposes of this section. However, a telephone
5 1 company shall provide written notice to the board concerning
5 2 the promotional pricing and the period during which the
5 3 pricing will be in effect, no less than ten days prior to the
5 4 date the pricing is to commence. For purposes of this
5 5 subsection, promotional pricing must entail prices which are
5 6 less than the prices which would otherwise be charged for the
5 7 same service pursuant to the company's filed tariff.
5 8 3. REVIEW OF PROPOSED RATES FOR BASIC EXCHANGE SERVICES.
5 9 The board shall review proposed rates under the procedures
5 10 established in this subsection upon formal complaint signed by
5 11 three percent of all affected customers, or upon the request
5 12 of the consumer advocate. The complaint shall specifically
5 13 set forth the particular rate or charge for which review is
5 14 requested and the reasons for the requested review.
5 15 a. Upon the filing of a complaint or upon the request of
5 16 the consumer advocate, the board shall conduct an
5 17 investigation, hold hearings, and issue its findings with
5 18 respect to the complaint. In determining whether a proposed
5 19 increase in a basic exchange service rate is just and
5 20 reasonable, the board shall consider all evidence provided
5 21 related to the following factors:
5 22 (1) The time elapsed since the rate was last changed.
5 23 (2) The percentage increase in the proposed service rate
5 24 compared with changes in consumer prices generally for a
5 25 comparable time period.
5 26 (3) The communications technology currently in service and
5 27 the investment plan proposed by the telephone company.
5 28 (4) Changes in the quality of basic exchange services
5 29 provided by the telephone company.
5 30 (5) The maintenance of the network of the telephone
5 31 company.
5 32 (6) The quality of the service provided by the telephone
5 33 company.
5 34 (7) The availability of alternative communications
5 35 services, and the prices or rates for those alternative
6 1 services.
6 2 (8) Whether services would be cross-subsidized as a result
6 3 of the proposed increase.
6 4 b. Within one hundred twenty days from the date of the
6 5 complaint or request, the board shall issue its final decision
6 6 on the proposed increase. An application is deemed to be
6 7 approved as a matter of law if the board does not issue a
6 8 decision within the required time. Approval of the proposed
6 9 rate pursuant to this subsection is subject to judicial review
6 10 as provided in section 476.13.
6 11 4. COMPETITION FOR BASIC EXCHANGE SERVICES. Upon a
6 12 determination by the board pursuant to section 476.1D that a
6 13 basic exchange service is subject to effective competition,
6 14 the board may adopt policies and enter orders necessary to
6 15 provide for flexibility in the regulation of such service,
6 16 recategorize the service as a nonbasic exchange service, or
6 17 provide for deregulation of the service.
6 18 5. DISCONTINUANCE OF BASIC EXCHANGE SERVICES. A telephone
6 19 company providing basic exchange services shall not
6 20 discontinue providing such services unless written notice is
6 21 provided to the board and the board finds that the same or
6 22 comparable services are available to the affected customers
6 23 from a supplier other than the telephone company.
6 24 6. PROHIBITIONS REGARDING BASIC EXCHANGE SERVICES. A
6 25 telephone company providing basic exchange service shall not
6 26 do any of the following:
6 27 a. Discriminate against another telephone company or long
6 28 distance carrier by refusing or delaying access to the local
6 29 exchange.
6 30 b. Unreasonably refuse or delay interconnections or
6 31 provide inferior interconnections to another telephone company
6 32 or long distance carrier.
6 33 c. Use basic exchange service rates, directly or
6 34 indirectly, to subsidize or offset the costs of other products
6 35 or services offered by the telephone company.
7 1 d. Degrade the quality of access provided to another
7 2 company.
7 3 e. Fail to fully disclose in a timely manner, upon
7 4 reasonable request, all available information necessary for
7 5 the design of equipment that will meet the specifications of
7 6 the local exchange network.
7 7 f. Sell services or products, extend credit, or offer
7 8 other terms and conditions on more favorable terms to an
7 9 affiliate of the telephone company than those offered to
7 10 others.
7 11 7. RATES FOR NONBASIC EXCHANGE SERVICES. Initial rates
7 12 for nonbasic exchange services shall be filed as a price list
7 13 with the board not more than ten days after the telephone
7 14 company's election to operate under this section, or not more
7 15 than ten days after the nonbasic exchange service is initially
7 16 offered to customers. Changes to nonbasic exchange service
7 17 rates shall be made as follows:
7 18 a. The telephone company shall notify the board and the
7 19 consumer advocate in writing of any change in nonbasic
7 20 exchange service rate not less than ten days prior to the
7 21 effective date of the change.
7 22 b. A nonbasic exchange service price shall not be
7 23 increased until at least twelve months have elapsed since the
7 24 rate was last increased.
7 25 c. A rate may be decreased, without review, at any time.
7 26 d. The telephone company shall file a price list for all
7 27 nonbasic exchange services with the board which notes current
7 28 prices.
7 29 e. There shall be no restrictions on the resale, reuse, or
7 30 interconnection of nonbasic exchange services.
7 31 f. Promotional pricing for a service for a period of up to
7 32 one hundred twenty days in any one-year period is not a rate
7 33 change for purposes of this section. However, a telephone
7 34 company shall provide written notice to the board concerning
7 35 the promotional pricing and the period during which the
8 1 pricing will be in effect, no less than ten days prior to the
8 2 date the pricing is to commence. For purposes of this
8 3 subsection, promotional pricing must entail prices which are
8 4 less than the prices which would otherwise be charged for the
8 5 same service pursuant to the company's filed price list.
8 6 8. Rates for intrastate access services shall not be
8 7 higher than the rates in effect as of December 31, 1994. Any
8 8 decreases in rates for intrastate access services shall be
8 9 passed on to consumers in the form of lower long distance
8 10 rates.
8 11 9. DEPRECIATION. The setting of depreciation rates by a
8 12 telephone company that has opted to be regulated under this
8 13 section shall not require board approval. The board shall
8 14 retain jurisdiction to determine what portion of the
8 15 depreciation expense resulting from the depreciation rates set
8 16 by a telephone company should be included in rates charged to
8 17 customers.
8 18 10. REGULATORY AUTHORITY. The board shall retain
8 19 regulatory authority over the quality of basic and nonbasic
8 20 exchange services provided by telephone companies subject to
8 21 this section, and shall investigate and resolve customer
8 22 complaints concerning quality of service, customer deposits,
8 23 and disconnection of service.
8 24 11. AUTHORITY OF CONSUMER ADVOCATE. This section does not
8 25 prohibit the consumer advocate from representing customers as
8 26 a whole before any state or federal regulatory agency, or any
8 27 court, regarding any rule, order, or other proceeding
8 28 pertaining to utilities furnishing communications services.
8 29 The consumer advocate may file an application to decrease
8 30 rates pursuant to subsection 2, paragraph "c".
8 31 Notwithstanding the provisions of section 476.3, subsection 2,
8 32 the consumer advocate shall not file a petition under section
8 33 476.3, subsection 2, that alleges that a utility's rates are
8 34 excessive while the utility has elected to be regulated under
8 35 this section.
9 1 12. Not later than April 1 of each year following a year
9 2 in which a telephone company has operated under this section,
9 3 the telephone company shall file with the board, the consumer
9 4 advocate, and the general assembly a report which discloses
9 5 the financial results of the telephone company for the
9 6 preceding year. The report shall show all regulated Iowa
9 7 intrastate expenses and revenue for the year; gross and net
9 8 investment for regulated Iowa intrastate operations; and the
9 9 rate of return on investment, and on equity, earned on Iowa
9 10 intrastate operations. The report shall show both the
9 11 unadjusted results for the year, and the results incorporating
9 12 any adjustments that the telephone company believes are
9 13 appropriate. All documentation and explanation relating to
9 14 these results, or adjustments, shall be provided to the board,
9 15 the consumer advocate, and the general assembly upon request.
9 16 Sec. 4. FUTURE REPEAL. Sections 1, 2, and 3 of this Act
9 17 are repealed four years after the date those sections take
9 18 effect.
9 19 EXPLANATION
9 20 This bill provides for incentive and price regulation for
9 21 telecommunications companies.
9 22 New section 476.1E provides that the utilities board may
9 23 approve a stipulated plan for incentive regulation submitted
9 24 jointly by a telephone company and the consumer advocate for
9 25 the purpose of providing incentives to telephone utilities to
9 26 promote competition, accelerate infrastructure deployment,
9 27 improve the quality of life, further societal goals, or
9 28 achieve, maintain, or improve universal telephone service.
9 29 New section 476.1F provides that a telephone company having
9 30 more than 15,000 customers and access lines may elect to be
9 31 regulated under a plan of pricing flexibility.
9 32 New section 476.6A establishes pricing flexibility for
9 33 telephone companies. The section identifies certain services
9 34 as basic exchange services, the rates of which are to be 10
9 35 percent less than the service rates approved and in effect for
10 1 such services at the time of the company's election to be
10 2 price regulated. Limits are established for the increase of
10 3 rates for basic exchange services based upon the implicit
10 4 gross domestic product price deflator, as published by the
10 5 federal government. The section also provides that the
10 6 initial rates for nonbasic exchange services are to be filed
10 7 as a price list with the board not more than 10 days after the
10 8 telephone company's election to operate under price regulation
10 9 or not more than 10 days after the service is initially
10 10 offered to customers. The telephone company is to notify the
10 11 board of any changes in such prices. Review is provided for
10 12 increases in prices.
10 13 LSB 2106HH 76
10 14 mj/jj/8.1
Text: HF00161 Text: HF00163 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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