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PAG LIN
1 1 Amend Senate File 411 as follows:
1 2 #1. By striking everything after the enacting
1 3 clause and inserting the following:
1 4 "Section 1. Section 476.3, subsection 2, Code
1 5 1995, is amended by adding the following new
1 6 unnumbered paragraph:
1 7 NEW UNNUMBERED PARAGRAPH. Notwithstanding the
1 8 provisions of this subsection, the consumer advocate
1 9 shall not file a petition under this subsection that
1 10 alleges a local exchange carrier's rates are excessive
1 11 while the local exchange carrier is participating in a
1 12 price regulation plan approved by the board pursuant
1 13 to section 476.30B.
1 14 Sec. 2. Section 476.10, unnumbered paragraph 4,
1 15 Code 1995, is amended to read as follows:
1 16 Whenever the board shall deem it necessary in order
1 17 to carry out the duties imposed upon it in connection
1 18 with rate regulation under section 476.6,
1 19 investigations under section 476.3, or review
1 20 proceedings under section 476.31, the board may employ
1 21 additional temporary or permanent staff, or may
1 22 contract with persons who are not state employees for
1 23 engineering, accounting, or other professional
1 24 services, or both. The costs of these additional
1 25 employees and contract services shall be paid by the
1 26 public utility whose rates are being reviewed in the
1 27 same manner as other expenses are paid under this
1 28 section. Beginning on July 1, 1991, there is
1 29 appropriated out of any funds in the state treasury
1 30 not otherwise appropriated, such sums as may be
1 31 necessary to enable the board to hire additional staff
1 32 and contract for services under this section. The
1 33 board shall increase quarterly assessments specified
1 34 in unnumbered paragraph 2, by amounts necessary to
1 35 enable the board to hire additional staff and contract
1 36 for services under this section. The authority to
1 37 hire additional temporary or permanent staff that is
1 38 granted to the board by this section shall not be
1 39 subject to limitation by any administrative or
1 40 executive order or decision that restricts the number
1 41 of state employees or the filling of employee
1 42 vacancies, and shall not be subject to limitation by
1 43 any law of this state that restricts the number of
1 44 state employees or the filling of employee vacancies
1 45 unless that law is made applicable to this section by
1 46 express reference to this section. Before the board
1 47 expends or encumbers an amount in excess of the funds
1 48 budgeted for rate regulation and before the board
1 49 increases quarterly assessments pursuant to this
1 50 paragraph, the director of the department of
2 1 management shall approve the expenditure or
2 2 encumbrance. Before approval is given, the director
2 3 of the department of management shall determine that
2 4 the expenses exceed the funds budgeted by the general
2 5 assembly to the board for rate regulation and that the
2 6 board does not have other funds from which the
2 7 expenses can be paid. Upon approval of the director
2 8 of the department of management the board may expend
2 9 and encumber funds for the excess expenses, and
2 10 increase quarterly assessments to raise the additional
2 11 funds. The board and the office of consumer advocate
2 12 may add additional personnel or contract for
2 13 additional assistance to review and evaluate energy
2 14 efficiency plans and the implementation of energy
2 15 efficiency programs including, but not limited to,
2 16 professionally trained engineers, accountants,
2 17 attorneys, skilled examiners and inspectors, and
2 18 secretaries and clerks. The board and the office of
2 19 consumer advocate may also contract for additional
2 20 assistance in the evaluation and implementation of
2 21 issues relating to telecommunication competition. The
2 22 board and the office of the consumer advocate may
2 23 expend additional sums beyond those sums appropriated.
2 24 However, the authority to add additional personnel or
2 25 contract for additional assistance must first be
2 26 approved by the department of management. The
2 27 additional sums for energy efficiency shall be
2 28 provided to the board and the office of the consumer
2 29 advocate by the utilities subject to the energy
2 30 efficiency requirements in this chapter. Telephone
2 31 companies shall pay any additional sums needed for
2 32 assistance with telecommunication competition issues.
2 33 The assessments shall be in addition to and separate
2 34 from the quarterly assessment.
2 35 Sec. 3. Section 476.11, Code 1995, is amended by
2 36 adding the following new unnumbered paragraph:
2 37 NEW UNNUMBERED PARAGRAPH. The board may resolve
2 38 complaints, upon notice and hearing, that a utility,
2 39 operating under section 476.29, has failed to provide
2 40 just, reasonable, and nondiscriminatory arrangements
2 41 for interconnection of its telecommunications services
2 42 with another telecommunications provider.
2 43 Sec. 4. Section 476.29, subsection 2, Code 1995,
2 44 is amended to read as follows:
2 45 2. Except as provided in subsection 12, a
2 46 certificate shall be issued by the board, after notice
2 47 and opportunity for hearing, if the board determines
2 48 that the service proposed to be rendered will promote
2 49 the public convenience and necessity, provided that an
2 50 applicant other than a local exchange carrier, as
3 1 defined in section 476.30A, shall not be denied a
3 2 certificate if the board finds that the applicant
3 3 possesses the technical, financial, and managerial
3 4 ability to provide the service it proposes to render
3 5 and the board finds the service is consistent with the
3 6 public interest. The board shall make a determination
3 7 within ninety days of the submission by the applicant
3 8 of evidence of its technical, financial, and
3 9 managerial ability, unless the board determines that
3 10 additional time is necessary to consider the
3 11 application, in which case the board may extend the
3 12 time for making a determination for an additional
3 13 sixty days. The board may establish reasonable
3 14 conditions or restrictions on the certificate at the
3 15 time of issuance.
3 16 Sec. 5. NEW SECTION. 476.30 FINDINGS &endash;
3 17 STATEMENT OF POLICY.
3 18 The general assembly finds all of the following:
3 19 1. Communications services should be available
3 20 throughout the state at just, reasonable, and
3 21 affordable rates from a variety of providers.
3 22 2. In rendering decisions with respect to
3 23 regulation of telecommunications companies, the board
3 24 shall consider the effects of its decisions on
3 25 competition in telecommunications markets and, to the
3 26 extent reasonable and lawful, shall act to further the
3 27 development of competition in those markets.
3 28 3. In order to encourage competition for all
3 29 telecommunications services, the board should address
3 30 issues relating to the movement of prices toward cost
3 31 and the removal of subsidies in the existing price
3 32 structure of the incumbent local exchange carrier.
3 33 4. Regulatory flexibility is appropriate when
3 34 competition provides customers with competitive
3 35 choices in the variety, quality, and pricing of
3 36 communications services, and when consistent with
3 37 consumer protection and other relevant public
3 38 interests.
3 39 5. The board should respond with speed and
3 40 flexibility to changes in the communications industry.
3 41 6. Economic development can be fostered by the
3 42 existence of advanced communications networks.
3 43 Sec. 6. NEW SECTION. 476.30A DEFINITIONS.
3 44 As used in section 476.30, this section, and
3 45 sections 476.30B through 476.30G, unless the context
3 46 otherwise requires:
3 47 1. "Basic communications service" includes at a
3 48 minimum, basic local telephone service, switched
3 49 access, 911 and E-911 services, and dual party relay
3 50 service. The board is authorized to classify by rule
4 1 at any time, any other two-way switched communications
4 2 services as basic communications services consistent
4 3 with community expectations and the public interest.
4 4 2. "Basic local telephone service" means the
4 5 provision of dial tone access and usage, for the
4 6 transmission of two-way switched communications within
4 7 a local exchange area, including, but not limited to,
4 8 the following:
4 9 a. Residence service and business services,
4 10 including flat rate or local measured service, private
4 11 branch exchange trunks, trunk type hunting services,
4 12 direct inward dialing, and the network access portion
4 13 of central office switched exchange service.
4 14 b. Extended area service.
4 15 c. Touch tone service when provided separately.
4 16 d. Call tracing.
4 17 e. Calling number blocking on either a per call or
4 18 a per line basis.
4 19 f. Local exchange white pages directories.
4 20 g. Installation and repair of local network
4 21 access.
4 22 h. Local operator services, excluding directory
4 23 assistance.
4 24 i. Toll service blocking and 1-900 and 1-976
4 25 access blocking.
4 26 3. "Competitive local exchange service provider"
4 27 means any person that provides local exchange
4 28 services, other than a local exchange carrier or a
4 29 nonrate-regulated wireline provider of local exchange
4 30 services under an authorized certificate of public
4 31 convenience and necessity within a specific geographic
4 32 area described in maps filed with and approved by the
4 33 board as of September 30, 1992.
4 34 4. "Interim number portability" means one or more
4 35 mechanisms by which a local exchange customer at a
4 36 particular location may change the customer's local
4 37 exchange services provider without any change in the
4 38 local exchange customer's telephone number, while
4 39 experiencing as little loss of functionality as is
4 40 feasible using available technology.
4 41 5. "Local exchange carrier" means any person that
4 42 was the incumbent and historical rate-regulated
4 43 wireline provider of local exchange services or any
4 44 successor to such person that provides local exchange
4 45 services under an authorized certificate of public
4 46 convenience and necessity within a specific geographic
4 47 area described in maps filed with and approved by the
4 48 board as of September 30, 1992.
4 49 6. "Nonbasic communications services" means all
4 50 communications services subject to the board's
5 1 jurisdiction which are not deemed either by statute or
5 2 by rule to be basic communications services, including
5 3 any service offered by the local exchange carrier for
5 4 the first time after the effective date of this Act.
5 5 A service is not considered new if it constitutes the
5 6 bundling, unbundling, or repricing of an already
5 7 existing service. Consistent with community
5 8 expectations and the public interest, the board may
5 9 reclassify by rule as nonbasic those two-way switched
5 10 communications services previously classified by rule
5 11 as basic.
5 12 7. "Provider number portability" means the
5 13 capability of a local exchange customer to change the
5 14 customer's local exchange services provider at the
5 15 customer's same location without any change in the
5 16 local exchange customer's telephone number, while
5 17 preserving the full range of functionality that the
5 18 customer currently experiences. "Provider number
5 19 portability" includes the equal availability of
5 20 information concerning the local exchange provider
5 21 serving the number to all carriers, and the ability to
5 22 deliver traffic directly to that provider without
5 23 having first to route traffic to the local exchange
5 24 carrier or otherwise use the services, facilities, or
5 25 capabilities of the local exchange carrier to complete
5 26 the call, and without the dialing of additional digits
5 27 or access codes.
5 28 Sec. 7. NEW SECTION. 476.30B PRICE REGULATION.
5 29 1. Notwithstanding contrary provisions of this
5 30 chapter relating to rate regulation, the board may
5 31 approve a plan for price regulation submitted by a
5 32 rate-regulated local exchange carrier. The plan for
5 33 price regulation is not effective until the approval
5 34 by the board of tariffs implementing the unbundling of
5 35 essential facilities pursuant to section 476.30F,
5 36 subsection 4, except for a local exchange carrier with
5 37 less than seventy-five thousand access lines whose
5 38 plan for price regulation will be effective concurrent
5 39 with the approval of its plan. The board may approve
5 40 a plan for price regulation prior to the adoption of
5 41 rules related to the unbundling of essential
5 42 facilities or concurrent with a rate proceeding under
5 43 section 476.3, 476.6, or 476.7. During the term of
5 44 the plan, the board shall regulate the prices of the
5 45 local exchange carrier's basic and nonbasic
5 46 communications services pursuant to the requirements
5 47 of the price regulation plan approved by the board.
5 48 The local exchange carrier shall not be subject to
5 49 rate of return regulation during the term of the plan.
5 50 2. The board, after notice and opportunity for
6 1 hearing, may approve, modify, or reject the plan. The
6 2 local exchange carrier shall have ten days to accept
6 3 or reject any board modifications to its plan. If the
6 4 local exchange carrier rejects a modification to its
6 5 plan, the board shall reject the plan without
6 6 prejudice to the local exchange carrier to submit
6 7 another plan.
6 8 3. A price regulation plan, at a minimum, shall
6 9 include provisions, consistent with the provisions of
6 10 this section and any rules adopted by the board, for
6 11 the following:
6 12 a. (1) Establishing and changing prices, terms,
6 13 and conditions for basic communications services. The
6 14 initial plan for price regulation must include a
6 15 proposal, which the board shall approve, for reducing
6 16 the local exchange carrier's average intrastate access
6 17 service rates to the local exchange carrier's average
6 18 interstate access service rates in effect as of the
6 19 last day of the calendar year immediately preceding
6 20 the date of filing of the plan, as follows:
6 21 (a) A local exchange carrier with five hundred
6 22 thousand or more access lines in this state shall
6 23 reduce its average intrastate access service rates to
6 24 its average interstate access service rates as of the
6 25 date that the plan becomes effective.
6 26 (b) A local exchange carrier with fewer than five
6 27 hundred thousand but seventy-five thousand or more
6 28 access lines in this state shall reduce its average
6 29 intrastate access service rates to its average
6 30 interstate access service rates in increments of at
6 31 least twenty-five percent, with the initial reduction
6 32 to take effect on approval of the plan and equal
6 33 annual reductions on each anniversary of the approval
6 34 during the first three years that its plan is in
6 35 effect.
6 36 (c) A local exchange carrier with fewer than
6 37 seventy-five thousand access lines in this state shall
6 38 reduce its average intrastate access service rates to
6 39 its average interstate access service rates with equal
6 40 annual reductions during a period beginning no more
6 41 than two years and ending no more than five years from
6 42 the plan's inception.
6 43 (2) This section shall not be construed to do
6 44 either of the following:
6 45 (a) Prohibit an additional decrease in a carrier's
6 46 average intrastate access service rate during the term
6 47 of the plan.
6 48 (b) Permit any increase in a carrier's average
6 49 intrastate access service rates during the term of the
6 50 plan.
7 1 (3) The plan shall also provide that the initial
7 2 prices for basic communications services shall be six
7 3 percent less than the rates approved and in effect at
7 4 the time the local exchange carrier files its plan. A
7 5 local exchange carrier which elects to reduce its
7 6 rates by six percent shall not, at a later time,
7 7 increase its rates for basic communications services
7 8 as a result of the carrier's compliance with the
7 9 board's rules relating to unbundling. In lieu of the
7 10 six percent reduction, and prior to the adoption of
7 11 rules relating to unbundling pursuant to section
7 12 476.30F, subsection 4, paragraph "a", subparagraph
7 13 (1), the local exchange carrier may request and the
7 14 board may establish a regulated revenue requirement in
7 15 a rate proceeding under section 476.3 or 476.6
7 16 commenced after the effective date of this Act. After
7 17 the determination of the local exchange carrier's
7 18 regulated revenue requirement pursuant to the rate
7 19 proceeding, the local exchange carrier shall not
7 20 immediately implement rates designed to recover that
7 21 regulated revenue requirement. Following the adoption
7 22 of rules relating to unbundling pursuant to section
7 23 476.30F, subsection 4, paragraph "a", subparagraph
7 24 (1), the local exchange carrier shall commence a
7 25 tariff proceeding for the approval of tariffs
7 26 implementing such unbundling. The board has six
7 27 months to complete this tariff proceeding and
7 28 determine the local exchange carrier's final unbundled
7 29 rates. The local exchange carrier shall carry forward
7 30 the regulated revenue requirement determined by the
7 31 board pursuant to the rate proceeding and design rates
7 32 that comply with the board's rules relating to
7 33 unbundling that recover the regulated revenue
7 34 requirement, and that implement the board's approved
7 35 rate design established in the tariff proceeding.
7 36 In lieu of taking the six percent reduction, a
7 37 local exchange carrier that submits a plan for price
7 38 regulation after the board adopts rules relating to
7 39 unbundling may file a rate proceeding under section
7 40 476.3 or 476.6 and the board may approve rates
7 41 designed to comply with those rules which allow the
7 42 carrier to recover the established regulated revenue
7 43 requirement and that implement the board's approved
7 44 rate design established in the tariff proceeding.
7 45 (4) The plan shall provide for both increases and
7 46 decreases in the prices for basic communications
7 47 services reflecting annual changes in inflation and
7 48 productivity. Prior to January 1, 1998, the board
7 49 shall use the gross domestic product price index, as
7 50 published by the federal government, for an inflation
8 1 measure, and two and six-tenths percentage points for
8 2 a productivity measure. After January 1, 1998, the
8 3 board by rule may adopt current measures of inflation
8 4 and productivity.
8 5 (5) The plan may provide that price increases for
8 6 basic communications services which are permitted
8 7 under this section may be deferred and accumulated for
8 8 a maximum of three years into a single price increase,
8 9 provided that a deferred and accumulated price
8 10 increase under this section shall not at any time
8 11 exceed six percent. A price decrease for basic
8 12 communications services shall not be deferred or
8 13 accumulated, except that price decreases of less than
8 14 two percent may be deferred by the local exchange
8 15 carrier for one year. A price decrease required under
8 16 this section may be offset by a price increase for a
8 17 basic communications service that would have been
8 18 permitted under this section in the previous twelve-
8 19 month period, but which was deferred by the local
8 20 exchange carrier.
8 21 b. Establishing and changing prices, terms, and
8 22 conditions for nonbasic communications services.
8 23 c. Reporting new service offerings to the board.
8 24 d. Reflecting in rates any changes in revenues,
8 25 expenses, and investment due to exogenous factors
8 26 beyond the control of the local exchange carrier.
8 27 e. Providing notice to customers, the board, and
8 28 the consumer advocate of changes in prices, terms, or
8 29 conditions for basic and nonbasic communications
8 30 services.
8 31 4. The board shall consider the extent to which a
8 32 proposed plan complies with the requirements of
8 33 subsection 3 and achieves the following:
8 34 a. Just, nondiscriminatory, and reasonable rates.
8 35 b. High quality, universally available
8 36 communications services.
8 37 c. Encouragement of investment in communications
8 38 infrastructure, efficiency improvements, and
8 39 technological innovation.
8 40 d. The introduction of new communications products
8 41 and services from a variety of sources.
8 42 e. Regulatory efficiency including reduction of
8 43 regulatory costs and delays. A plan shall not provide
8 44 for waiver of, release from, or delay in implementing
8 45 the provisions of this section, section 476.30F or
8 46 476.30G or any rules adopted by the board pursuant to
8 47 those sections.
8 48 5. Notwithstanding an approved plan for price
8 49 regulation, the board shall continue to have
8 50 regulatory authority over the following:
9 1 a. The level, extent, and timing of the unbundling
9 2 of essential facilities offered by a local exchange
9 3 carrier.
9 4 b. Ensuring against cross-subsidization between
9 5 nonbasic communications services and basic
9 6 communications services.
9 7 6. Any person, including the consumer advocate, a
9 8 body politic, or the board on its own motion, may file
9 9 a written complaint pursuant to section 476.3,
9 10 subsection 1, regarding a local exchange carrier's
9 11 implementation, operation under, or satisfaction of
9 12 the purposes of its price regulation plan.
9 13 7. The consumer advocate may represent consumers
9 14 before the board regarding any rule, order, or
9 15 proceeding pertaining to price regulation. The
9 16 consumer advocate may act as attorney for and
9 17 represent consumers generally before any state or
9 18 federal court concerning a board rule, order, or
9 19 proceeding pertaining to price regulation.
9 20 8. In implementing price regulation, the board
9 21 shall consider competitively neutral methods to assist
9 22 lower-income Iowans to secure and retain telephone
9 23 services.
9 24 9. The board shall determine the duration of any
9 25 plan. The board shall review a local exchange
9 26 carrier's operation under its plan, with notice and an
9 27 opportunity for hearing, within four years of the
9 28 initiation of the plan and prior to the termination of
9 29 the plan. The local exchange carrier, consumer
9 30 advocate, or any person may propose, and the board may
9 31 approve, any reasonable modifications to a local
9 32 exchange carrier's plan as a result of the review,
9 33 except that such modifications shall not require a
9 34 reduction in the rates for any basic communications
9 35 service.
9 36 10. The board, in determining whether to file a
9 37 written complaint pursuant to subsection 6 or prior to
9 38 reviewing a local exchange carrier's operation
9 39 pursuant to subsection 9, may request that such
9 40 carrier provide any information which the board deems
9 41 necessary to make such determination or conduct such
9 42 review. The carrier shall provide the requested
9 43 information upon receipt of the request from the
9 44 board.
9 45 11. a. Notwithstanding subsections 1 through 10,
9 46 a local exchange carrier with fewer than five hundred
9 47 thousand access lines in this state shall have the
9 48 option to be regulated pursuant to subsections 1
9 49 through 10 or pursuant to this subsection.
9 50 b. A local exchange carrier which elects to become
10 1 price regulated under this subsection shall give
10 2 written notice to the board of such election not less
10 3 than thirty days prior to the date such regulation is
10 4 to commence.
10 5 c. Upon election of a local exchange carrier to
10 6 become price-regulated under this subsection, the
10 7 carrier shall reduce its rates for basic local
10 8 telephone service an average of three percent. In
10 9 lieu of the three percent reduction, the local
10 10 exchange carrier may establish its rates for basic
10 11 local telephone service in a rate proceeding under
10 12 section 476.3 or 476.6 commenced after the effective
10 13 date of this Act.
10 14 d. Initial prices for basic communications
10 15 services, other than basic local telephone service,
10 16 shall be set at the rates in effect as of the first of
10 17 July prior to the date such regulation is to commence.
10 18 e. (1) A price-regulated local exchange carrier
10 19 shall not increase its rates for basic communications
10 20 services, for a period of twelve months after electing
10 21 to become price regulated. To the extent necessary,
10 22 rates for basic services may be increased to carry out
10 23 the purpose of any rules that may be adopted by the
10 24 board relating to the terms and conditions of
10 25 unbundled services and interconnection. A price-
10 26 regulated local exchange carrier may increase its
10 27 rates for basic communications services following the
10 28 initial twelve-month period, to the extent that the
10 29 change in rate does not exceed two percentage points
10 30 less than the most recent annual change in the gross
10 31 domestic product price index, as published by the
10 32 federal government. If application of such formula
10 33 achieves a negative result, prices shall be reduced so
10 34 that the cumulative price change for basic services,
10 35 including prior price reductions in these services,
10 36 achieves the negative result. After January 1, 2000,
10 37 the board by rule may adopt different measures of
10 38 inflation and productivity if they are found to be
10 39 more reflective of the individual price-regulated
10 40 carriers.
10 41 (2) Price increases for basic communications
10 42 services which are permitted under this subsection may
10 43 be deferred and accumulated for a maximum of three
10 44 years into a single price increase, provided that a
10 45 deferred and accumulated price increase under this
10 46 subsection shall not at any time exceed six percent.
10 47 A price decrease for basic communications services
10 48 shall not be deferred or accumulated, except that
10 49 price decreases of less than two percent may be
10 50 deferred by the local exchange carrier for one year.
11 1 A price decrease required under this section may be
11 2 offset by a price increase for a basic communications
11 3 service that would have been permitted under this
11 4 section in the previous twelve-month period, but which
11 5 was deferred by the local exchange carrier. A rate
11 6 change pursuant to this subsection may take effect
11 7 thirty days after the notification of the board and
11 8 consumers.
11 9 (3) A price-regulated local exchange carrier shall
11 10 not increase its aggregate revenue weighted prices for
11 11 nonbasic communications services more than six percent
11 12 in any twelve-month period.
11 13 (4) A price-regulated local exchange carrier may
11 14 reduce the price for any basic communications service,
11 15 to an amount not less than the total service long-run
11 16 incremental cost for such service on one day's notice
11 17 filed with the board. For purposes of this
11 18 subsection, "total service long-run incremental costs"
11 19 means the difference between the company's total cost
11 20 and the total cost of the company less the applicable
11 21 service, feature, or function.
11 22 (5) A price-regulated local exchange carrier may
11 23 offer new service alternatives for any basic
11 24 communications services on thirty days prior notice to
11 25 the board, provided that the preexisting basic
11 26 communications service rate structure continues to be
11 27 offered to customers. New telecommunications services
11 28 shall be considered nonbasic communications services
11 29 as defined in section 476.30A, subsection 6.
11 30 (6) A price-regulated local exchange carrier must
11 31 reduce the average intrastate access service rates to
11 32 the carrier's average interstate access service rates.
11 33 Such carrier shall reduce the average intrastate
11 34 access service rates by at least twenty-five percent
11 35 of the difference of such rates within ninety days of
11 36 the election to be price-regulated and twenty-five
11 37 percent each of the next three years.
11 38 f. A local exchange carrier shall notify customers
11 39 of a rate change under this subsection at least thirty
11 40 days prior to the effective date of the rate change.
11 41 g. The board may review a local exchange carrier's
11 42 operation under this subsection, with notice and an
11 43 opportunity for hearing, after four years of the
11 44 carrier's election to be price-regulated. The local
11 45 exchange carrier, consumer advocate, or any person may
11 46 propose, and the board may approve, any reasonable
11 47 modifications to the price-regulation requirements in
11 48 this subsection as a result of the specific carrier
11 49 review, except that such modifications shall not
11 50 require a reduction in the rates for any basic
12 1 communications service or a return to rate-base, rate-
12 2 of-return regulation.
12 3 Sec. 8. NEW SECTION. 476.30C EARNINGS
12 4 CALCULATION AND REPORT.
12 5 1. The consumer advocate shall calculate an
12 6 estimate of the return of a local exchange carrier
12 7 operating under a plan of price regulation pursuant to
12 8 section 476.30B as if the carrier were subject to
12 9 rate-of-return regulation. The calculation shall be
12 10 based upon the annual report of such carrier and other
12 11 information provided to the consumer advocate by the
12 12 carrier. The calculation shall be made every two
12 13 years beginning following the end of the second
12 14 calendar year after the year in which the plan becomes
12 15 effective. The consumer advocate shall provide a
12 16 written report to the general assembly including the
12 17 results of this calculation on or before July 1 of the
12 18 year immediately following the two-year period for
12 19 which a calculation is made. If, after a review of
12 20 the information used to make the calculation required
12 21 in this section, the consumer advocate determines that
12 22 the public interest would be better served by a
12 23 different form of rate regulation, the consumer
12 24 advocate shall provide a recommendation that the
12 25 general assembly direct the utilities board to
12 26 implement a different form of rate regulation.
12 27 Sec. 9. NEW SECTION. 476.30D ADDITIONAL PRICE
12 28 REGULATION PLAN PROVISIONS.
12 29 In addition to the provisions required in section
12 30 476.30B to be included in a plan of price regulation,
12 31 the plan shall include provisions for the following:
12 32 1. Reflecting in rates any changes due to changes
12 33 in the average cost of the local exchange carrier
12 34 resulting from the sale of an exchange in this state.
12 35 2. Encouraging modernization of the local exchange
12 36 carrier's telecommunications infrastructure. This
12 37 provision shall include a requirement that the local
12 38 exchange carrier develop and file with the board an
12 39 increased modernization plan.
12 40 Sec. 10. NEW SECTION. 476.30E PROHIBITED ACTS.
12 41 A local exchange carrier shall not do any of the
12 42 following:
12 43 1. Discriminate against another provider of
12 44 communications services by refusing or delaying access
12 45 to the local exchange carrier's services.
12 46 2. Discriminate against another provider of
12 47 communications services by refusing or delaying access
12 48 to essential facilities on terms and conditions no
12 49 less favorable than those the local exchange carrier
12 50 provides to itself and its affiliates. An essential
13 1 facility is a local telecommunications facility,
13 2 feature, function, or capability of the local exchange
13 3 carrier's network that competitors cannot practically
13 4 or economically duplicate or obtain from other
13 5 sources, and to which reasonable access is necessary
13 6 to enable competition.
13 7 3. Degrade the quality of access or service
13 8 provided to another provider of communications
13 9 services.
13 10 4. Fail to disclose in a timely manner, upon
13 11 reasonable request and pursuant to a protective
13 12 agreement concerning proprietary information, all
13 13 information reasonably necessary for the design of
13 14 network interface equipment, network interface
13 15 services, or software that will meet the
13 16 specifications of the local exchange carrier's local
13 17 exchange network.
13 18 5. Unreasonably refuse or delay interconnections
13 19 or provide inferior interconnections to another
13 20 provider.
13 21 6. Use basic exchange service rates, directly or
13 22 indirectly, to subsidize or offset the costs of other
13 23 products or services offered by the local exchange
13 24 carrier.
13 25 7. Discriminate in favor of itself or an affiliate
13 26 in the provision and pricing of, or extension of
13 27 credit for, any telephone service.
13 28 Sec. 11. NEW SECTION. 476.30F LOCAL EXCHANGE
13 29 COMPETITION.
13 30 1. A certificate of public convenience and
13 31 necessity to provide local telephone service shall not
13 32 be interpreted as conveying a monopoly, exclusive
13 33 privilege, or franchise. A competitive local exchange
13 34 service provider shall not be subject to the
13 35 requirements of this chapter, except that a
13 36 competitive local exchange service provider shall
13 37 obtain a certificate of public convenience and
13 38 necessity pursuant to section 476.29, file tariffs,
13 39 notify affected customers prior to any rate increase,
13 40 file reports, information, and pay assessments
13 41 pursuant to section 476.2, subsection 4, and sections
13 42 476.9, 476.10, 476.16, 476.30G, and 477C.7, and shall
13 43 be subject to the board's authority with respect to
13 44 adequacy of service, interconnection, discontinuation
13 45 of service, civil penalties, and complaints. If,
13 46 after notice and opportunity for hearing, the board
13 47 determines that a competitive local exchange service
13 48 provider possesses market power in its local exchange
13 49 market or markets, the board may apply such other
13 50 provisions of chapter 476 to a competitive local
14 1 exchange service provider as it deems appropriate.
14 2 2. The duty of a local exchange carrier includes
14 3 the duty, in accordance with requirements prescribed
14 4 by the board pursuant to subsection 3 and other laws,
14 5 to provide equal access to, and interconnection with,
14 6 its facilities so that its network is fully
14 7 interoperable with the telecommunications services and
14 8 information services of other providers, and to offer
14 9 unbundled essential facilities.
14 10 3. A local exchange carrier shall provide
14 11 reasonable access to ducts, conduits, rights-of-way,
14 12 and other pathways owned or controlled by the local
14 13 exchange carrier to which reasonable access is
14 14 necessary to a competitive local exchange service
14 15 provider in order for a competitive local exchange
14 16 service provider to provide service and is feasible
14 17 for the local exchange carrier.
14 18 Upon application of a local exchange carrier or a
14 19 competitive local exchange service provider, the board
14 20 shall determine any matters concerning reasonable
14 21 access to ducts, conduits, rights-of-way, and other
14 22 pathways owned or controlled by the local exchange
14 23 carrier upon which agreement cannot be reached,
14 24 including but not limited to, matters regarding
14 25 valuation, space, and capacity restraints, and
14 26 compensation for access.
14 27 4. a. Prior to September 1, 1995, the board shall
14 28 initiate a rule-making proceeding to adopt rules that
14 29 satisfy the requirements enumerated in subparagraphs
14 30 (1) through (4). The rule-making proceeding shall be
14 31 completed as promptly as possible. The board, upon
14 32 petition or on its own motion, may conduct a separate
14 33 evidentiary hearing on the same or related subjects.
14 34 The evidence from a hearing may be considered by the
14 35 board during the rule-making proceeding, provided that
14 36 the board announces its intention to do so prior to
14 37 the oral presentation in the rule-making proceeding.
14 38 The rules shall do the following:
14 39 (1) Require a local exchange carrier to provide
14 40 unbundled essential facilities of its network, and
14 41 allow reasonable and nondiscriminatory equal access
14 42 to, use of, and interconnection with, those unbundled
14 43 essential facilities on reasonable, cost-based, and
14 44 tariffed terms and conditions. The board's rules must
14 45 require a local exchange carrier, including those
14 46 operating under a plan of price regulation, to file
14 47 tariffs implementing the unbundled essential
14 48 facilities within ninety days of the board's final
14 49 order adopting such rules, except for local exchange
14 50 carriers with less than seventy-five thousand access
15 1 lines which must file such tariffs within two years of
15 2 the effective date of this Act. Such access, use, and
15 3 interconnection shall be on terms and conditions no
15 4 less favorable than those the local exchange carrier
15 5 provides to itself and its affiliates for the
15 6 provision of local exchange, access, and toll
15 7 services. This subsection shall not be construed to
15 8 establish a presumption as to the level of
15 9 interconnection charges, if any, to be determined by
15 10 the board pursuant to subparagraph (2).
15 11 (2) Establish reciprocal cost-based compensation
15 12 for termination of telecommunications services between
15 13 local exchange carriers and competitive local exchange
15 14 service providers. The board may also implement an
15 15 appropriate surcharge to be effective on July 1, 1997,
15 16 or upon the availability of provider number
15 17 portability, whichever is first, if the ratio of
15 18 residence to business customers served on a facilities
15 19 basis by a competitive local exchange service provider
15 20 does not approximate the ratio of residence to
15 21 business customers served by the local exchange
15 22 carrier. The board may eliminate the surcharge upon
15 23 the occurrence of either of the following:
15 24 (a) When the local exchange carrier's prices for
15 25 local exchange service cover the carrier's costs as
15 26 determined by the board.
15 27 (b) Once the competitive local exchange service
15 28 provider's ratio of residence to business customers
15 29 approximates that of the local exchange carrier.
15 30 The board may require the local exchange carrier,
15 31 by tariff, to implement an equalization adjustment
15 32 mechanism on an annual basis that recognizes the
15 33 competitive local exchange service provider's average
15 34 annual ratio of residence to business customers and
15 35 which makes appropriate pro rata reductions in the
15 36 surcharge if the competitive local exchange service
15 37 provider demonstrates a year-over-year change in the
15 38 ratio of residence to business customers served. The
15 39 tariff may also provide for an equalization adjustment
15 40 on an annual basis if the local exchange carrier
15 41 experienced an increase in its residential local
15 42 service rates during the preceding year.
15 43 (3) Require local exchange carriers to make
15 44 interim number portability available on request of a
15 45 competitive local exchange service provider, and to
15 46 implement provider number portability as soon as the
15 47 availability of necessary technology makes provider
15 48 number portability economically and technically
15 49 feasible, as determined by the board. The rules shall
15 50 also devise a reasonable and nondiscriminatory
16 1 mechanism for the recovery of all recurring and
16 2 nonrecurring costs of interim and provider number
16 3 portability.
16 4 (4) Develop the cost methodology appropriate for a
16 5 competitive telecommunications environment.
16 6 b. The rules adopted in paragraph "a",
16 7 subparagraphs (2) and (3), do not apply to local
16 8 exchange carriers with less than seventy-five thousand
16 9 access lines until a competitive local exchange
16 10 service provider has filed for a certificate to
16 11 provide basic communications services in an exchange
16 12 or exchanges of the local exchange carrier, or the
16 13 board determines that competitive necessity requires
16 14 the implementation of the rules in paragraph "a",
16 15 subparagraphs (2) and (3), by the local exchange
16 16 carrier.
16 17 5. Local exchange carriers shall file tariffs or
16 18 price lists in accordance with board rules with
16 19 respect to the services, features, functions, and
16 20 capabilities offered to comply with board rules on
16 21 unbundling of essential facilities and
16 22 interconnection. Local exchange carriers shall submit
16 23 with the tariffs or price lists for basic
16 24 communications services and toll services supporting
16 25 information that is sufficient for the board to
16 26 determine the relationship between the proposed
16 27 charges and the costs of providing such services,
16 28 features, functions, or capabilities, including the
16 29 imputed cost of intrastate access service rates in
16 30 toll service rates pursuant to existing board orders.
16 31 The board shall review the tariffs or price lists to
16 32 ensure that the charges are cost-based and that the
16 33 terms and conditions contained in the tariffs or price
16 34 lists unbundle any essential facilities in accordance
16 35 with the board's rules and any other applicable laws.
16 36 6. This section shall not be construed to prohibit
16 37 the board from enforcing rules or orders entered in
16 38 contested cases pending on the effective date of this
16 39 Act to the extent that such rules and orders are
16 40 consistent with the provisions of this section.
16 41 7. Except as provided under section 476.29,
16 42 subsection 2, and this section, the board shall not
16 43 impose or allow a local exchange carrier to impose
16 44 restrictions on the resale of local exchange services,
16 45 functions, or capabilities. The board may prohibit
16 46 residential service from being resold as a different
16 47 class of service.
16 48 8. Any person may file a written complaint with
16 49 the board requesting the board to determine compliance
16 50 by a local exchange carrier with the provisions of
17 1 sections 476.30A through 476.30E, 476.30G, and this
17 2 section, or any board rules implementing those
17 3 sections. Upon the filing of such complaint, the
17 4 board may promptly initiate a formal complaint
17 5 proceeding and give notice of the proceeding and the
17 6 opportunity for hearing. The formal complaint
17 7 proceeding may be initiated at any time by the board
17 8 on its own motion. The board shall render a decision
17 9 in the proceeding within ninety days after the date
17 10 the written complaint was filed.
17 11 Sec. 12. NEW SECTION. 476.30G UNIVERSAL SERVICE.
17 12 1. The board shall initiate a proceeding to
17 13 preserve universal service such that it shall be
17 14 maintained in a competitively neutral fashion. As a
17 15 part of this proceeding, the board shall determine the
17 16 difference between the cost of providing universal
17 17 service and the prices determined to be appropriate
17 18 for such service.
17 19 2. The board shall base policies for the
17 20 preservation of universal service on the following
17 21 principles:
17 22 a. A plan adopted by the board should ensure the
17 23 continued viability of universal service by
17 24 maintaining quality services at just and reasonable
17 25 rates.
17 26 b. The plan should define the nature and extent of
17 27 the service encompassed within any entities' universal
17 28 service obligations.
17 29 c. The plan should establish specific and
17 30 predictable mechanisms to provide competitively
17 31 neutral support for universal service. Those
17 32 mechanisms shall include a nondiscriminatory mechanism
17 33 by which funds to support universal service shall be
17 34 collected, and a mechanism for disbursement of support
17 35 funds to eligible subscribers, either directly to
17 36 those subscribers, or to the subscriber's provider of
17 37 local exchange services chosen by the subscriber.
17 38 d. The plan should be based on other principles as
17 39 the board determines are necessary and appropriate for
17 40 the protection of the public interest, convenience,
17 41 and necessity and consistent with the purposes of
17 42 sections 476.30 through 476.30F and this section.
17 43 Sec. 13. REPORT. The utilities board shall submit
17 44 a report to the general assembly no later than January
17 45 15, 1999, concerning the implementation of price
17 46 regulation for local exchange carriers furnishing
17 47 communications services."
17 48
17 49
17 50
18 1 PATRICK J. DELUHERY
18 2 SF 411.701 76
18 3 mj/sc
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