House Bill hb1683er

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    ENROLLED

    2002 Legislature                   CS/HB 1683, First Engrossed



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  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; requiring certain local exchange

  8         telecommunications companies to provide

  9         specified materials relating to the plan;

10         requiring state agencies to provide such

11         material to affected applicants; exempting plan

12         beneficiaries from certain rate increases under

13         certain circumstances; providing for

14         notification; amending s. 364.163, F.S.;

15         revising provisions relating to caps on rates;

16         deleting provisions relating to recovery of

17         costs of government programs; revising

18         provisions relating to rate changes; providing

19         for adjustments in long distance revenues and

20         pass-through to customers; maintaining

21         continuing oversight by the commission;

22         creating s.364.164, F.S.; providing findings;

23         providing for petition to the commission for

24         reduction of access rates; providing for final

25         order; providing for criteria; providing for

26         establishment of revenue category mechanisms;

27         providing for notification; providing for

28         revenue neutrality; providing for notice;

29         providing limitations on adjustments; providing

30         for pricing units; maintaining exemptions;

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  1         providing definitions; providing an effective

  2         date.

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

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

  7  Florida Statutes, to read:

  8         364.10  Undue advantage to person or locality

  9  prohibited; exception.--

10         (3)(a)  Any local exchange telecommunications company

11  authorized by the commission to reduce its switched network

12  access rate pursuant to s. 364.164, shall, effective March 31,

13  2003, have tariffed and shall provide Lifeline Assistance Plan

14  service to any otherwise eligible customer or potential

15  customer who meets an income eligibility test at 125 percent

16  or less of the federal poverty income guidelines for Lifeline

17  Assistance Plan customers. Such test for eligibility shall

18  augment, rather than replace, the eligibility standards

19  established by federal law and based on participation in

20  certain low-income assistance programs. Each interexchange

21  telecommunications carrier shall, effective March 31, 2003,

22  file a tariff providing, at a minimum, the interexchange

23  telecommunications carrier's current Lifeline Assistance Plan

24  benefits and exemptions to Lifeline Assistance Plan customers

25  who meet the income eligibility test set forth in this

26  subsection. The Office of Public Counsel shall serve as the

27  state agency which certifies and maintains claims submitted by

28  a customer for eligibility under the income test authorized by

29  this subsection.

30         (b)  Each local exchange telecommunications company

31  subject to this subsection shall provide each state and


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  1  federal agency that provides benefits to persons that are

  2  eligible for the Lifeline Assistance Plan service with

  3  applications, brochures, pamphlets, or other materials which

  4  inform such persons of their eligibility for the Lifeline

  5  Assistance Plan service, and each state agency providing such

  6  benefits shall furnish such materials to affected persons at

  7  the time such persons apply for benefits.

  8         (c)  Any local exchange telecommunications company

  9  customer receiving Lifeline Assistance Plan benefits shall not

10  be subject to any residential basic local telecommunications

11  service rate increases authorized by s. 364.164 until such

12  time as the local exchange telecommunications company reaches

13  parity as defined in s. 364.164(6) or until the customer no

14  longer qualifies for the Lifeline Assistance Plan benefits

15  established by this section or s. 364.105, or unless otherwise

16  determined by the commission upon petition by a local exchange

17  telecommunications company.

18         (d)  Each agency that provides benefits to persons that

19  are eligible for the Lifeline Assistance Plan service shall,

20  by December 31, 2002, notify each such person by postcard of

21  his or her eligibility for the Lifeline Assistance Plan

22  service, together with the name of the local exchange

23  telecommunications company.  The direct cost of this postcard

24  production and mailing shall be paid by the local exchange

25  telecommunications companies with more than one million access

26  lines in service.  The commission shall report to the

27  Governor, the Speaker of the House of Representatives and the

28  President of the Senate by December 31st of each year on the

29  number of customers who are subscribing to Lifeline Assistance

30  Plan service.

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    2002 Legislature                   CS/HB 1683, First Engrossed



  1         Section 2.  Section 364.163, Florida Statutes, is

  2  amended to read:

  3         364.163  Network access services.--For purposes of this

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

  5  provided by a local exchange telecommunications company to a

  6  telecommunications company certificated under this chapter or

  7  licensed by the Federal Communications Commission to access

  8  the local exchange telecommunications network, excluding the

  9  local interconnection arrangements in s. 364.16 and the resale

10  arrangements in s. 364.161. Each local exchange

11  telecommunications company subject to s. 364.051 shall

12  maintain tariffs with the commission containing the terms,

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

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

15  network access services of each company subject to this

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

17  1999, and shall remain capped until January 1, 2001. Upon the

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

19  access service rates of a company that elects to become

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

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

22         (1)(2)  After the termination of the caps imposed on

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

24  telecommunications company's intrastate switched network

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

26  in s. 364.164(6), the company's intrastate switched network

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

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

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

30  annually adjust any specific network access service rate in an

31  amount not to exceed the cumulative change in inflation


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    2002 Legislature                   CS/HB 1683, First Engrossed



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

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

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

  4  measured by the changes in Gross Domestic Product Fixed 1987

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

  6  published in the Survey of Current Business, or successor

  7  publication, by the United States Department of Commerce.

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

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

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

11  rate change to recover the cost of governmentally mandated

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

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

14  government program or project required in part II of this

15  chapter shall not be recovered under this subsection unless

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

17  and subject to carrier of last resort obligations as provided

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

19  governmentally mandated projects and programs, such petition

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

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

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

23  recoverable either from the government mandating the project

24  or program or from the beneficiaries of the project or program

25  through user fees or other new revenue sources from the

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

27  resulting from the project or program are reflected as an

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

29  shall decrease its network access rates by amounts that

30  reflect any federal or state income tax reduction. Nothing

31  contained in this section shall allow any revisions in the


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  1  rates, terms, and conditions for commercial mobile radio

  2  service access, which revisions are inconsistent with the

  3  requirements or methodologies of the Federal Communications

  4  Commission.

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

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

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

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

  9  subject to this section may choose to decrease network service

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

11  upon 7 days' notice.

12         (5)  company-proposed changes to the terms and

13  conditions for existing network access services in accordance

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

15  valid and become effective upon 15 days' notice.

16  company-proposed rate reductions shall become effective upon 7

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

18  telecommunications company shall be presumed valid and become

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

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

21  commission shall have continuing regulatory oversight of local

22  exchange telecommunications company-provided network access

23  services for purposes of determining the correctness of any

24  price increase resulting from the application of the inflation

25  index and making any necessary adjustments, establishing

26  reasonable service quality criteria, and assuring resolution

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

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

29  determining the correctness of any price increase, vote,

30  without hearing, the local exchange telecommunications company

31  to hold subject to refund all revenues collected under the


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

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

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

  4         (2)(6)  Any local exchange telecommunications company

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

  6  telecommunications service access lines in service on July 1,

  7  1995, shall reduce its intrastate switched access rates by 5

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

  9  Any interexchange telecommunications carrier company whose

10  intrastate switched network access rate is reduced as a result

11  of the rate adjustments decreases made by a local exchange

12  telecommunications company in accordance with s. 364.164 this

13  subsection shall decrease its intrastate long distance

14  revenues rates by the amount necessary to return the benefits

15  of such reduction to both its residential and business

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

17  rates by a percentage greater than the per minute intrastate

18  switched access rate reductions required by this act. The

19  interexchange telecommunications carrier may determine the

20  specific intrastate rates to be decreased, provided that

21  residential and business customers benefit proportionally from

22  the rate decreases.  Subject to the foregoing, any

23  interexchange telecommunications carrier that charges an

24  in-state connection fee shall use any decrease in the

25  intrastate switched network access rate reductions required by

26  s. 364.164 to first eliminate that fee before it reduces its

27  long distance toll rates. In any event, any in-state

28  connection fee shall be eliminated by March 1, 2004, provided

29  that the timetable approved pursuant to s. 364.164(2) reduces

30  intrastate switched network access rates in an amount that

31  results in the elimination of the access recovery charge in a


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  1  revenue-neutral manner. The tariff changes, if any, made by

  2  the interexchange telecommunications carrier to carry out the

  3  requirements of this subsection shall be presumed valid and

  4  become effective on 1 day's notice.

  5         (7)  Telecommunications company intrastate switched

  6  access and customer long distance rate reductions shall become

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

  8  proposed in tariff revisions filed by the telecommunications

  9  companies with the commission shall be presumed valid and

10  become effective on October 1 of each relevant year.

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

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

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

14  telecommunications company to hold subject to refund all

15  intrastate switched access or customer long distance rate

16  revenues collected after the rate decrease.  Within 60 days

17  after such order, the commission must make a determination

18  either compelling a refund of the appropriate part of such

19  revenues or releasing all such revenues from such requirement.

20         (3)(9)  The commission shall have continuing regulatory

21  oversight of intrastate switched network access and customer

22  long distance rates for purposes of determining the

23  correctness of any rate decrease by a telecommunications

24  company resulting from the application of this section and s.

25  364.164, and making any necessary adjustments to those rates,

26  establishing reasonable service quality criteria, and assuring

27  resolution of service complaints. Nothing in this subsection

28  shall be construed to mean that the commission does not have

29  continuing regulatory oversight of service quality criteria or

30  the authority to resolve service complaints for all

31  telecommunications companies subject to this section.


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  1         Section 3.  Section 364.164, Florida Statutes, is

  2  created to read:

  3         364.164  Switched network access rate reduction.--

  4         (1)  The Legislature finds the following:

  5         (a)  Residential local exchange competition is in the

  6  best interest of Florida and its telecommunications consumers;

  7         (b)  Residential basic local telecommunications service

  8  prices are, on average, below cost, being subsidized with

  9  revenues from other services including switched network access

10  charges;

11         (c)  The intrastate switched network access charges

12  paid by interexchange telecommunications companies in Florida

13  are above cost and are higher than the interstate switched

14  network access charges which such companies pay to the same

15  local exchange telecommunications companies in Florida;

16         (d)  The subsidization of residential basic local

17  telecommunications service prices with revenues from

18  intrastate switched network access charges is inhibiting the

19  development of residential basic local exchange service

20  competition;

21         (e)  Restructuring the prices for residential basic

22  local telecommunications service and intrastate switched

23  network access closer to the cost of providing these services

24  should promote local and long distance competition; and

25         (f)  The Florida Public Service Commission is the

26  appropriate body to determine whether intrastate switched

27  network access charges and basic local telecommunications

28  service prices will be adjusted in a manner which is revenue

29  neutral to the local exchange telecommunications company and

30  beneficial to residential consumers.

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  1         (2)  Each local exchange telecommunications company

  2  with more than 1 million access lines in service may, after

  3  December 1, 2002, petition the commission to reduce its

  4  intrastate switched network access rates in a revenue neutral

  5  manner.  Any local exchange telecommunications company with 1

  6  million or less access lines in service may, after December 1,

  7  2003, petition the commission to reduce its intrastate

  8  switched network access rates in a revenue neutral manner.

  9  The commission shall issue its final order granting or denying

10  any petition filed pursuant to this section within 90 days.

11  The commission shall grant the petition if it finds that

12  granting the petition:

13         (a)  Will result in switched network access rate

14  reductions that will be implemented during a period to be

15  determined by the commission, but such period shall not be

16  less than 2 years or more than 5 years;

17         (b)  Will benefit residential consumers by reducing or

18  eliminating the subsidy to residential basic local

19  telecommunications service rates provided by intrastate

20  switched network access rates;

21         (c)  Will move intrastate switched network access rates

22  to parity;

23         (d)  Will create a more favorable competitive

24  environment;

25         (e)  Will be revenue neutral to the local exchange

26  telecommunications company as set forth in subsection (3); and

27         (f)  Will result in benefits to toll customers.

28         (3)  In the event the commission grants the local

29  exchange telecommunications company's petition, the local

30  exchange telecommunications company is authorized, the

31  requirements of s. 364.051(3) notwithstanding, to immediately


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  1  implement a revenue category mechanism consisting of basic

  2  local telecommunications service revenues and intrastate

  3  switched network access revenues, to achieve revenue

  4  neutrality.  The local exchange telecommunications company

  5  shall thereafter, on 45 days' notice, adjust the various

  6  prices and rates of the services within its revenue category

  7  authorized by this section once in any 12-month period in a

  8  revenue neutral manner.  In no event shall any adjustment in

  9  rates be offset entirely by the monthly recurring rate for

10  basic local telecommunications service.  All annual rate

11  adjustments within the revenue category established pursuant

12  to this section shall be implemented simultaneously and shall

13  be revenue neutral.  The commission shall, within 45 days

14  after the rate adjustment filing, issue a final order

15  confirming compliance with this section, and such order shall

16  be final for all purposes.

17         (4)  Any filing under this section shall be based on

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

19  accordance with subsection (8) for any service included in the

20  revenue category established under this section. The

21  commission shall have the authority only to verify the pricing

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

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

24  category revenue neutral for each filing.  Any discovery or

25  information requests under this section shall be limited to a

26  verification of historical pricing units necessary to fulfill

27  the commission's specific responsibilities under this section

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

29  revenue category revenue neutral for each annual filing.

30         (5)  Nothing in this section shall affect the local

31  exchange telecommunications company's exemptions pursuant to


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

  2  telecommunications company to increase the cost of local

  3  exchange services to any person providing services under s.

  4  364.3375.

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

  6  the local exchange telecommunications company's intrastate

  7  switched network access rate is equal to its interstate

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

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

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

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

12  intrastate switched network access rate is equal to 2 cents

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

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

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

16  Nothing in this section shall prevent the company from making

17  further reductions in its intrastate switched network access

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

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

20  revenue neutral rate adjustments within this category.

21         (7)  For purposes of this section, "intrastate switched

22  network access rate" means the composite of the originating

23  and terminating network access rate for carrier common line,

24  local channel/entrance facility, switched common transport,

25  access tandem switching, interconnection charge, information

26  surcharge, and local switching.

27         (8)  For purposes of this section, "revenue neutral"

28  means that the total revenue within the revenue category

29  established pursuant to this section remains the same before

30  and after the local exchange telecommunications company

31  implements any rate adjustments under this section.


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  1  Calculation of revenue received from each service prior to

  2  implementation of any rate adjustment shall be made by

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

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

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

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

  7  after implementation of rate adjustments shall be made by

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

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

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

11  pricing units. Billing units associated with Lifeline

12  Assistance Plan service shall not be included in any

13  calculation under this subsection.

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

15  law.

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