STAND. COM. REP. NO.1398

Honolulu, Hawaii

, 2003

RE: H.B. No. 96

H.D. 1

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 96, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC UTILITIES,"

begs leave to report as follows:

The purpose of this measure is to prohibit the Public Utilities Commission (PUC) from imputing an organization's telephone directory advertising revenues when establishing rates for an affiliated telecommunications carrier.

Verizon Hawaii testified in support of the measure. The PUC and the Consumer Advocate opposed the measure.

Generally, in regulating public utility rates, the PUC may distribute, apportion, or allocate income and deductions between two or more organizations controlled by the same interests. This measure would establish an exception thereto by prohibiting the consideration of an organization's telephone directory advertising revenues when establishing rates for an affiliated telecommunications carrier.

The proponent of the measure submits that this measure would enable the carrier's telephone directory business to compete in the marketplace without its revenues being utilized to subsidize rate regulated services. Opponents of the measure contend that there is a unique and interdependent relationship between a telecommunications carrier and its affiliated directory publishing business that has historically justified imputation of the latter's revenues, and that this issue should be considered by the PUC on a case-by-case basis.

Your Committee finds that this measure raises significant issues that warrant further consideration in conference committee. Therefore, your Committee has amended this measure to insert a delayed effective date of July 1, 3000.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 96, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 96, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,

____________________________

RON MENOR, Chair