Report Title:

Telecommunications; Local Exchange Carriers

Description:

Allows local exchange carriers to elect alternate form of regulation, including its rates, terms, and conditions for its retail services. Allows for specified rate increases and decreases. Allows for rate adjustments or recover changes in costs or in revenues because of an exogenous event.

THE SENATE

S.B. NO.

2290

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to telecommunications.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 269, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . local EXCHANGE carriers

§269-A Definitions. As used in this part, unless the context clearly requires otherwise:

"Basic telecommunications services" means voice-grade, single-line residential and business local exchange services over the primary lines serving the end users that include dial tone, touch tone functionality, unlimited calling within an exchange area, and access to the following: enhanced 911, telecommunications relay service, operator service, and directory assistance service.

"Exchange area" means the geographic territory established for the administration of basic telecommunications services in a specified area, as defined in the electing local exchange area's tariffs on file with the commission.

"Non-basic telecommunications services" means all telecommunications services offered by an electing local exchange area except for basic telecommunications service and switched access services.

"Switched access services" means the provision of exchange services for the purpose of transmitting, switching, or routing interexchange telecommunications that originate or terminate in an exchange area.

§269-B Election. (a) Notwithstanding any other provision of this chapter, effective July 1, 2004, any local exchange carrier may petition the commission to elect to have its rates, terms, and conditions for its retail services determined pursuant to the plan described in this part. This plan shall be in lieu of all other forms of regulation including rate of return or rate base regulation or any existing alternative regulatory plan. This plan shall take effect upon commission approval.

(b) On the date the commission approves the local exchange carrier's petition to elect the plan described in this part, the local exchange carrier shall be considered an electing local exchange carrier and shall no longer be subject to the following statutes nor to any rules or orders promulgated thereunder: sections 269-7(a), 269-7.5, 269-8, 269-8.2, 269-8.5, 269-9, 269-10, 269-12, 269-15, 269-16, 269-17, 269-17.5, 269-18, 269-19, 269-19.5, 269-25, 269-38(2), 269-39, 269-41, 269-42, and 269-43.

(c) The commission shall order implementation of the plan described in this part, unless it finds that the local exchange carrier is not authorized to provide telecommunications service in Hawaii or if the plan inhibits competition. A local exchange carrier may provide telecommunications service if it has a certificate of public convenience and necessity, is exempt from the certificate of public convenience requirement granted pursuant to section 269-7.5(c), or has a certificate of authority or certificate of registration.

(d) Not later than sixty days after the commission's approval of the local exchange carrier's petition, the company or companies affected by the order may file with the commission an election not to proceed with the alternative form of regulation as authorized by the commission.

§269-C Basic telecommunications services. (a) The electing local exchange carrier may offer basic telecommunications services in any exchange area at rates equal to the local exchange carrier's long run incremental cost or the local exchange carrier's highest tariffed rates for residential and business basic telecommunications services, respectively, in any exchange area in effect on the date the commission approves the electing local exchange carrier's petitions (including any intrastate surcharge), whichever is higher; provided that the electing local exchange carrier shall not increase the monthly basic rates under this subsection by more than $2 during any twelve-month period for the first three years after commission approval of the plan. For the purposes of this subsection, the basic rate prescribed by this subsection excludes any federal and state subscriber line charges, carrier common line charges, primary interexchange carrier charges, and other charges, fees, and taxes imposed or permitted by any government agency.

(b) In addition to the rate increases permitted in subsection (a), the electing local exchange carrier may increase rates for basic telecommunications services in any exchange area once during any twelve-month period, by an amount not to exceed the change in inflation as measured by the gross domestic product price index or any successor index. The electing local exchange carrier also may increase rates for basic telecommunications services because of changes due to exogenous events, as set forth in section 269-F.

(c) An electing local exchange carrier may decrease rates for residential and business basic telecommunications services in any exchange area, and on a customer-specific basis in any exchange area, as market conditions warrant; provided that the reduced rates are at least equal to the volume-sensitive long run incremental costs of the respective services.

(d) An electing local exchange carrier's basic telecommunications services shall be subject to service quality standards and associated penalties; provided that those standards and penalties do not exceed the standards and penalties in effect on the date the commission approves the plan.

(e) An electing local exchange carrier may petition the commission to reclassify basic service as non-basic for any exchange area or for a specific class of customer.

§269-D Non-basic telecommunications services. (a) On the date the commission approves the plan described in this part, the commission shall no longer regulate or monitor the local exchange carrier's non-basic telecommunications services except as provided in subsection (c). The electing local exchange carrier, however, may choose to file informational, informal tariffs for any non-basic telecommunications service that set out the rates, terms, and conditions of service. An electing local exchange carrier that chooses to file informational, informal tariffs for a service may choose to discontinue those tariffs at any time.

(b) An electing local exchange carrier may package basic telecommunications services with any other service or any service of an affiliate or third party, and that package shall be deemed a non-basic service.

(c) An electing local exchange carrier shall price each service offered separately or as part of a package at a rate not lower than the service's or package's volume-sensitive long run incremental cost. An affected person may file a complaint alleging that the electing local exchange carrier has priced a service in a manner that does not meet the pricing standards of this subsection. The complaint shall be filed before the thirty-first day after the date the electing local exchange carrier implements the rate.

§269-E Switched access services. (a) Beginning on the date the commission approves the plan, the electing local exchange carrier may increase its switched access charges once in any twelve-month period by an amount not to exceed the change in inflation, as measured by the gross domestic product price index or any successor index. An electing local exchange carrier may decrease its rates for switched access services in any exchange area at any time; provided that the reduced rate is at least equal to the volume-sensitive long run incremental cost of the service.

(b) If the commission reduces an electing local exchange carrier's rates for switched access services, it shall permit the electing local exchange carrier to raise rates for basic telecommunications services to offset the revenue loss from the reduction in switched access services rates on a dollar-for-dollar basis. This increase in rates for basic telecommunications services shall be in addition to those set forth in section 269-C(a), (b), and (c) and section 269-F.

§269-F Exogenous events. (a) An electing local exchange carrier may file a petition with the commission for an adjustment in basic telecommunications services rates to recover changes in costs or in revenues because of an exogenous event. For the purposes of this section, an exogenous event is one that is beyond the control of the company and that changes the company's cost of providing, or changes its revenues from, basic services by more than $500,000. Exogenous events shall include:

(1) Changes in tax laws;

(2) Changes in generally accepted accounting principles that apply specifically to telecommunications or changes in the Federal Communications Commission Uniform Systems of Accounts:

(3) Any Federal Communications Commission regulatory changes pertaining to jurisdictional separations;

(4) Regulatory, judicial, or legislative changes affecting the telecommunications industry, including rules and orders that are necessary to implement those changes; and

(5) Natural disasters, acts of war, or terrorism affecting the local exchange carrier's serving territory.

(b) If the commission finds that an exogenous event has occurred, it shall allow the local exchange carrier to reflect the amount of change over a reasonable period of time.

§269-G Termination. The plan described in this part shall remain in effect unless terminated by an electing local exchange carrier upon the filing of a notice with the commission."

SECTION 2. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 3. This Act shall take effect on July 1, 2004.

INTRODUCED BY:

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