House Bill hb1683

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    Florida House of Representatives - 2002                HB 1683

        By the Committee on Utilities & Telecommunications and
    Representative Maygarden





  1                      A bill to be entitled

  2         An act relating to switched network access

  3         rates; amending s. 364.10, F.S.; revising

  4         provisions for Lifeline Assistance Plan

  5         service; providing for certification and

  6         maintenance of claims by Office of Public

  7         Counsel; amending s. 364.163, F.S.; revising

  8         provisions relating to caps on rates; deleting

  9         provisions relating to recovery of costs of

10         government programs; revising provisions

11         relating to rate changes; providing for

12         adjustments in long distance revenues and

13         pass-through to customers; creating s. 364.164,

14         F.S.; providing for establishment of revenue

15         categories; providing for notification;

16         providing for timetable for reductions in

17         access rates; providing for revenue neutrality;

18         providing for notice; providing definitions;

19         providing for oversight of local exchange

20         companies; providing an effective date.

21

22  Be It Enacted by the Legislature of the State of Florida:

23

24         Section 1.  Subsection (3) is added to section 364.10,

25  Florida Statutes, to read:

26         364.10  Undue advantage to person or locality

27  prohibited; exception.--

28         (3)  Any local exchange telecommunications company

29  subject to the provisions of s. 364.164(1)(a) and any

30  telecommunications company electing under s. 364.164(1)(b)

31  shall, effective March 31, 2003, have tariffed and shall

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  1  provide Lifeline Assistance Plan service to any otherwise

  2  eligible customer or potential customer who meets an income

  3  eligibility test at 125 percent of the federal poverty income

  4  guidelines for Lifeline Assistance Plan customers. Such test

  5  for eligibility shall augment, rather than replace, the

  6  eligibility standards established by federal law and based on

  7  participation in certain low-income assistance programs. Each

  8  interexchange telecommunications carrier shall, effective

  9  March 31, 2003, file a tariff providing, at a minimum, the

10  current Lifeline Assistance Plan benefits and exemptions to

11  Lifeline Assistance Plan customers who meet the income

12  eligibility test set forth in this subsection. The Office of

13  Public Counsel shall serve as the state agency which certifies

14  and maintains claims submitted by a customer for eligibility

15  under the income test authorized by this subsection.

16         Section 2.  Section 364.163, Florida Statutes, is

17  amended to read:

18         364.163  Network access services.--For purposes of this

19  section, "network access service" is defined as any service

20  provided by a local exchange telecommunications company to a

21  telecommunications company certificated under this chapter or

22  licensed by the Federal Communications Commission to access

23  the local exchange telecommunications network, excluding the

24  local interconnection arrangements in s. 364.16 and the resale

25  arrangements in s. 364.161. Each local exchange

26  telecommunications company subject to s. 364.051 shall

27  maintain tariffs with the commission containing the terms,

28  conditions, and rates for each of its network access services.

29         (1)  Effective January 1, 1999, the rates for switched

30  network access services of each company subject to this

31  section shall be capped at the rates in effect on January 1,

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  1  1999, and shall remain capped until January 1, 2001. Upon the

  2  date of filing its election with the commission, the network

  3  access service rates of a company that elects to become

  4  subject to this section shall be capped at the rates in effect

  5  on that date and shall remain capped for 5 years.

  6         (1)(2)  After the termination of the caps imposed on

  7  rates by subsection (1) and after a local exchange

  8  telecommunications company's intrastate switched network

  9  access rates are reduced to or below reach parity, as defined

10  in s. 364.164(5), the company's intrastate switched network

11  access rates shall be capped and shall remain capped for 3

12  years thereafter. with its interstate switched access rates, a

13  company subject to this section may, on 30 days' notice,

14  annually adjust any specific network access service rate in an

15  amount not to exceed the cumulative change in inflation

16  experienced after the date of the last adjustment, provided,

17  however, that no such adjustment shall ever exceed 3 percent

18  annually of the then-current prices.  Inflation shall be

19  measured by the changes in Gross Domestic Product Fixed 1987

20  Weights Price Index, or successor fixed weight price index,

21  published in the Survey of Current Business, or successor

22  publication, by the United States Department of Commerce.

23         (3)  After the termination of the caps imposed on rates

24  by subsection (1), a company subject to this section may, at

25  any time, petition the commission for a network access service

26  rate change to recover the cost of governmentally mandated

27  projects or programs or an increase in federal or state income

28  tax incurred after that date.  The costs and expenses of the

29  government program or project required in part II of this

30  chapter shall not be recovered under this subsection unless

31  such costs and expenses are incurred in the absence of a bid

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  1  and subject to carrier of last resort obligations as provided

  2  for in part II of this chapter.  With respect to

  3  governmentally mandated projects and programs, such petition

  4  shall be acted upon no later than 90 days after the date of

  5  filing.  A company subject to this section shall show the

  6  commission that the cost of a project or program is not

  7  recoverable either from the government mandating the project

  8  or program or from the beneficiaries of the project or program

  9  through user fees or other new revenue sources from the

10  project or program, and to the extent that cost decreases

11  resulting from the project or program are reflected as an

12  offset to cost increases.  A company subject to this section

13  shall decrease its network access rates by amounts that

14  reflect any federal or state income tax reduction. Nothing

15  contained in this section shall allow any revisions in the

16  rates, terms, and conditions for commercial mobile radio

17  service access, which revisions are inconsistent with the

18  requirements or methodologies of the Federal Communications

19  Commission.

20         (4)  A company subject to this section may choose to

21  implement all or a portion of a rate increase allowed for

22  network access service by subsections (1), (2), and (3).

23  Notwithstanding subsections (1), (2), and (3), a company

24  subject to this section may choose to decrease network service

25  rates at any time, and decreased rates shall become effective

26  upon 7 days' notice.

27         (5)  Company-proposed changes to the terms and

28  conditions for existing network access services in accordance

29  with subsections (1), (2), (3), and (4) shall be presumed

30  valid and become effective upon 15 days' notice.

31  Company-proposed rate reductions shall become effective upon 7

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  1  days' notice. Rate increases made by the local exchange

  2  telecommunications company shall be presumed valid and become

  3  effective on the date specified in the tariff, but in no event

  4  earlier than 30 days after the filing of such tariff.  The

  5  commission shall have continuing regulatory oversight of local

  6  exchange telecommunications company-provided network access

  7  services for purposes of determining the correctness of any

  8  price increase resulting from the application of the inflation

  9  index and making any necessary adjustments, establishing

10  reasonable service quality criteria, and assuring resolution

11  of service complaints. No later than 30 days after the filing

12  of such tariff, the commission may, with respect to

13  determining the correctness of any price increase, vote,

14  without hearing, the local exchange telecommunications company

15  to hold subject to refund all revenues collected under the

16  rate increase. Within 60 days after such order, the commission

17  must make a determination either compelling a refund of all or

18  part of such revenues or releasing them from such requirement.

19         (2)(6)  Any local exchange telecommunications company

20  with more than 100,000, but fewer than 3 million, basic local

21  telecommunications service access lines in service on July 1,

22  1995, shall reduce its intrastate switched access rates by 5

23  percent on July 1, 1998, and by 10 percent on October 1, 1998.

24  Any interexchange telecommunications carrier company whose

25  intrastate switched network access rate is reduced as a result

26  of the rate adjustments decreases made by a local exchange

27  telecommunications company in accordance with s. 364.164 this

28  subsection shall decrease its intrastate long distance

29  revenues rates by the amount necessary to return the benefits

30  of such reduction to both its residential and business

31  customers but shall not reduce per minute intra-LATA toll

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  1  rates by a percentage greater than the per minute intrastate

  2  switched access rate reductions required by this act. The

  3  interexchange telecommunications carrier may determine the

  4  specific intrastate rates to be decreased, provided that

  5  residential and business customers benefit from the rate

  6  decreases. However, any interexchange telecommunications

  7  carrier that charges an in-state connection fee shall use any

  8  decrease in the intrastate switched network access rate

  9  reductions required by s. 364.164 to first eliminate that fee

10  before it reduces its long distance toll rates. In any event,

11  any in-state connection fee shall be eliminated by March 1,

12  2004, provided that the timetable approved pursuant to s.

13  364.164(1)(a) reduces intrastate switched network access rates

14  in an amount that results in the elimination of the access

15  recovery charge in a revenue-neutral manner. The tariff

16  changes, if any, made by the interexchange telecommunications

17  carrier to carry out the requirements of this subsection shall

18  be presumed valid and become effective on 1 day's notice.

19         (7)  Telecommunications company intrastate switched

20  access and customer long distance rate reductions shall become

21  effective on October 1 of each relevant year.  Rate decreases

22  proposed in tariff revisions filed by the telecommunications

23  companies with the commission shall be presumed valid and

24  become effective on October 1 of each relevant year.

25         (8)  No later than 30 days after the filing of such

26  tariff, the commission may, with respect to determining the

27  correctness of any rate decrease, vote, without hearing, the

28  telecommunications company to hold subject to refund all

29  intrastate switched access or customer long distance rate

30  revenues collected after the rate decrease.  Within 60 days

31  after such order, the commission must make a determination

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  1  either compelling a refund of the appropriate part of such

  2  revenues or releasing all such revenues from such requirement.

  3         (3)(9)  The commission shall have continuing regulatory

  4  oversight of intrastate switched network access and customer

  5  long distance rates for purposes of determining the

  6  correctness of any rate decrease by a telecommunications

  7  company resulting from the application of s. 364.164 this

  8  section and making any necessary adjustments to those rates,

  9  establishing reasonable service quality criteria, and assuring

10  resolution of service complaints.

11         Section 3.  Section 364.164, Florida Statutes, is

12  created to read:

13         364.164  Switched network access rate reduction.--

14         (1)(a)  Notwithstanding the provisions of s.

15  364.051(3), effective December 1, 2002, each local exchange

16  telecommunications company with more than 1 million access

17  lines in service shall, for purposes of this section only,

18  establish a revenue category to include both basic local

19  telecommunications service revenues and intrastate switched

20  network access revenues, and it shall notify the commission

21  that it has established this revenue category.  The company's

22  notification to the commission that it has established such

23  revenue category shall include a timetable for reducing the

24  company's intrastate switched network access rates within that

25  revenue category to or below parity.  The commission shall

26  approve such switched network access rate reductions timetable

27  within 60 days after the timetable is filed with the

28  commission, provided the submitted timetable reaches parity or

29  below parity within 2 to 5 years and includes switched network

30  access rate reductions equal in amounts once in any 12-month

31  period.  However, the commission may, only after consultation

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  1  with the company, adjust the timetable for reducing intrastate

  2  switched network access rates filed by the company if the

  3  commission finds that it is in the public interest to do so

  4  and so long as the adjusted timetable for reducing intrastate

  5  switched network access rates is within 2 to 5 years and the

  6  intrastate switched network access rate reductions are equal

  7  in amounts and occur once in any 12-month period.

  8         (b)  Notwithstanding the provisions of s. 364.051(2),

  9  effective December 1, 2003, each local exchange

10  telecommunications company with 1 million or less access lines

11  in service may, for purposes of this section only, establish a

12  revenue category to include both basic local

13  telecommunications service revenues and intrastate switched

14  network access revenues, and shall notify the commission that

15  the revenue category has been established. The company's

16  notification to the commission that it has established such

17  revenue category shall include a timetable for reducing the

18  company's intrastate switched network access service rates

19  within that revenue category to or below parity.  The

20  commission shall approve such switched network access service

21  rate reductions timetable within 60 days after the timetable

22  is filed with the commission, provided the submitted timetable

23  reaches parity or below parity within 2 to 5 years and

24  includes switched network access service rate reductions equal

25  in amounts once in any 12-month period.  However, the

26  commission may, only after consultation with the company,

27  adjust the timetable for reducing intrastate switched network

28  access rates filed by the company if the commission finds that

29  it is in the public interest to do so and so long as the

30  adjusted timetable for reducing intrastate switched network

31  access rates is within 2 to 5 years and the intrastate

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  1  switched network access rate reductions are equal in amounts

  2  and occur once in any 12-month period.

  3         (c)  The revenue category created pursuant to this

  4  section shall not include revenues generated from pay

  5  telephone access lines.

  6         (2)  Upon the commission's approval of the intrastate

  7  switched network access rate reduction timetable, the local

  8  exchange telecommunications company shall thereafter, on 45

  9  days' notice, adjust the various prices and rates of the

10  services within its revenue category authorized by this

11  section once in any 12-month period in a revenue-neutral

12  manner.  All annual rate adjustments within the revenue

13  category established pursuant to this section shall be

14  implemented simultaneously and shall be revenue neutral.  The

15  commission shall, within 45 days after the rate adjustment

16  filing, issue a final order confirming compliance with this

17  section, and such order shall be final for all purposes.

18         (3)  Any filing under this section shall be based on

19  the company's most recent 12 months' pricing units in

20  accordance with subsection (7) for any service included in the

21  revenue category established under this section. The

22  commission shall have the authority only to verify the pricing

23  units for the purpose of ensuring that the company's specific

24  adjustments, as authorized by this section, make the revenue

25  category revenue neutral for each filing.  Any discovery or

26  information requests under this section shall be limited to a

27  verification of historical pricing units necessary to fulfill

28  the commission's specific responsibilities under this section

29  of ensuring that the company's rate adjustments make the

30  revenue category revenue neutral for each annual filing.

31

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  1         (4)  Nothing in this section shall affect the local

  2  exchange telecommunications company's exemptions pursuant to

  3  s. 364.051(1)(c) or authorize any local exchange

  4  telecommunications company to increase the cost of local

  5  exchange services to any person providing services under s.

  6  364.3375.

  7         (5)  For purposes of this section, "parity" means that

  8  the local exchange telecommunications company's intrastate

  9  switched network access rate is equal to its interstate

10  switched network access rate in effect on January 1, 2002, if

11  the company has more than 4 million access lines in service.

12  If the company has 4 million or less and more than 1 million

13  access lines in service, "parity" means that the company's

14  intrastate switched network access rate is equal to 2 cents

15  per minute.  If the company has 1 million or less access lines

16  in service, "parity" means that the company's intrastate

17  switched network access rate is equal to 8 cents per minute.

18  Nothing in this section shall prevent the company from making

19  further reductions in its intrastate switched network access

20  rate, within the revenue category established in this section,

21  below parity on a revenue-neutral basis, or from making other

22  revenue neutral rate adjustments within this category.

23         (6)  For purposes of this section, "intrastate switched

24  network access rate" means the composite of the originating

25  and terminating network access rate for carrier common line,

26  local channel/entrance facility, switched common transport,

27  access tandem switching, interconnection charge, information

28  surcharge, and local switching.

29         (7)  For purposes of this section, "revenue neutral"

30  means that the total revenue within the revenue category

31  established pursuant to this section remains the same before

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  1  and after the local exchange telecommunications company

  2  implements any rate adjustments under this section.

  3  Calculation of revenue received from each service prior to

  4  implementation of any rate adjustment shall be made by

  5  multiplying the then-current rate for each service by the most

  6  recent 12 months' actual pricing units for each service within

  7  the category, without any adjustments to the number of pricing

  8  units. Calculation of revenue for each service to be received

  9  after implementation of rate adjustments shall be made by

10  multiplying the rate to be applicable for each service by the

11  most recent 12 months' actual pricing units for each service

12  within the category, without any adjustments to the number of

13  pricing units.

14         Section 4.  This act shall take effect upon becoming a

15  law.

16

17            *****************************************

18                          HOUSE SUMMARY

19
      Revises provisions relating to switched network access.
20    Provides income standards test for eligibility for
      Lifeline Assistance Plan service by certain local
21    exchange telecommunications companies.

22
      Revises provisions relating to rate caps and provides for
23    3-year caps on intrastate switched network access rates
      under described conditions. Revises provisions relating
24    to rate changes. Provides for return of benefits of
      certain rate adjustments to both business and residential
25    customers. Eliminates in-state connection fees. Provides
      presumption of validity of certain tariff changes.
26

27    Provides for switched network access rate reductions,
      timetables therefor, adjustments, and oversight by the
28    Public Service Commission.

29
      See bill for details.
30

31

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