71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2392
B-Engrossed
House Bill 2659
Ordered by the Senate July 5
Including House Amendments dated June 6 and Senate Amendments
dated July 5
Sponsored by Representative HILL
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Modifies provisions allowing telecommunications carriers to opt
out of rate of return regulation. Requires Public Utility
Commission to establish prices for certain extended area service
by telecommunications carriers that opt out of rate of return
regulation in manner that allows carrier to recover all costs and
lost net revenues resulting from implementing new extended area
service routes.
{ + Allows pay telephone provider to apply to Public Utility
Commission for refund of universal service surcharge imposed on
provider for provision of pay telephone service.
Requires that certain moneys deposited in Connecting Oregon
Communities Fund be placed in School Technology Account. + }
A BILL FOR AN ACT
Relating to telecommunications service; creating new provisions;
and amending ORS 759.410, 759.425 and 759.445 and sections 34
and 37, chapter 1093, Oregon Laws 1999.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 759.410 is amended to read:
759.410. (1) It is the intent of the Legislative Assembly that:
(a) The State of Oregon cease regulation of telecommunications
carriers on a rate of return basis;
(b) Telecommunications carriers subject to rate of return
regulation have the ability to opt out of rate of return
regulation;
(c) A telecommunications carrier that opts out of rate of
return regulation under this section and ORS 759.405 shall be
subject to price cap regulation and the carrier under price cap
regulation shall continue to meet service quality requirements;
and
(d) Telecommunications carriers that opt out of rate of return
regulation under this section and ORS 759.405 shall make payments
to the state to support the use of advanced telecommunications
services and to support deployment of advanced telecommunications
services.
(2) A telecommunications carrier that elects to be subject to
this section and ORS 759.405 shall be subject to price regulation
as provided in this section and shall not be subject to any other
retail rate regulation, including but not limited to any form of
earnings-based, rate-based or rate of return regulation.
(3) The price a telecommunications utility that elects to be
subject to this section and ORS 759.405 may charge for basic
telephone service shall be established by the Public Utility
Commission under ORS 759.425. Subject to ORS 759.415, the regular
tariff rate of intrastate switched access and retail
telecommunications services regulated by the commission, other
than basic telephone service, in effect on the date the carrier
elects to be subject to this section and ORS 759.405 shall be the
maximum price the telecommunications carrier may charge for that
service.
(4) A telecommunications carrier that elects to be subject to
this section and ORS 759.405 may adjust the price for
{ + intrastate switched access or + } a regulated retail
telecommunications service between the maximum price established
under this section and a price floor equal to the sum of the
total service long run incremental cost of providing the service
for the nonessential functions of the service and the price that
is charged to other telecommunications carriers for the essential
functions. Basic telephone service shall not be subject to a
price floor.
(5) The price for a new regulated retail telecommunications
service introduced by a telecommunications carrier within four
years after the date the carrier elects to be subject to this
section and ORS 759.405 shall be subject to a price floor test by
the commission to ensure that the service is not priced below the
sum of the total service long run incremental cost of providing
the service for the nonessential functions of the service and the
price that is charged to other telecommunications carriers for
the essential functions. Beginning on the date four years after
September 1, 1999, the price of a new telecommunications service
shall be subject to a price floor test by the commission to
ensure that the service is not priced below the total service
long run incremental cost of providing the service, without
regard to whether the service is considered essential or
nonessential.
(6) A telecommunications carrier that elects to be subject to
this section and ORS 759.405 may package and offer any of its
retail telecommunications services with any other service at any
price, provided the following conditions apply:
(a) Any regulated telecommunications service may be purchased
separately at or below the maximum price.
(b) The price of the package is not less than the sum of the
price floors of each regulated retail telecommunications service
included in the package.
(c) The price of a package that is comprised entirely of
regulated retail telecommunications services does not exceed the
sum of the maximum prices for each of the services.
(d) The price of a package comprised of regulated and
unregulated retail telecommunications services does not exceed
the sum of the maximum prices established under this section for
regulated services and the retail price charged by the carrier
for the individual unregulated services in the package. A
telecommunications carrier subject to regulation under this
section shall provide notice to the commission within 30 days of
a change in the price of an unregulated telecommunications
service contained in the package.
(7) Nothing in this section or ORS 759.405 is intended to limit
the ability of a telecommunications carrier to seek deregulation
of telecommunications services under ORS 759.030.
(8)(a) Notice of a price change authorized under subsection (4)
of this section, of the introduction of a new regulated
telecommunications service or of the packaging of services, must
be given to the commission within 30 days following the effective
date of the price change, new service or packaged service. Notice
of a new regulated telecommunications service shall indicate the
retail price charged by the carrier for the service.
(b) The commission may investigate any price change authorized
under subsection (4) of this section, the price of a new
regulated telecommunications service or the price of a package of
services to determine that the price complies with the provisions
of this section and any other applicable law. If the commission
determines that the price of the service or package of services
does not comply with the provisions of this section or other
applicable law, the commission may order the telecommunications
carrier to take such action as the commission determines
necessary to bring the price into compliance with this section or
other applicable law.
(9) Nothing in this section affects the authority of a city or
municipality to manage the public rights of way or to require
fair and reasonable compensation from a telecommunications
carrier, on a competitively neutral and nondiscriminatory basis,
under ORS 221.420, 221.450, 221.510 and 221.515.
{ + (10) Notwithstanding any other provision of this section,
the commission shall establish prices for extended area service
in a manner that allows a telecommunications carrier that elects
to be subject to this section and ORS 759.405 to recover all
costs and lost net revenues attributable to implementing new
extended area service routes. The provisions of this subsection
apply to telecommunications service provided on a flat or
measured basis between exchanges defined by exchange maps filed
with and approved by the commission. + }
SECTION 2. { + The amendments to ORS 759.410 by section 1 of
this 2001 Act apply to all telecommunications carriers that elect
to be subject to ORS 759.405 and 759.410, whether they make that
election before, on or after the effective date of this 2001
Act. + }
SECTION 3. ORS 759.425 is amended to read:
759.425. (1) Within 12 months following September 1, 1999, the
Public Utility Commission shall establish and implement a
competitively neutral and nondiscriminatory universal service
fund to ensure basic telephone service is available at a
reasonable and affordable rate. The universal service fund shall
conform to section 254 of the federal Telecommunications Act of
1996 (Public Law 104-104). The commission may delay
implementation for rural telecommunications carriers, as defined
in the federal Act, for up to six months after the date the
Federal Communications Commission adopts a cost methodology for
rural carriers.
(2)(a) The Public Utility Commission shall establish the price
a telecommunications utility may charge its customers for basic
telephone service. The commission in its discretion shall
periodically review and evaluate the status of telecommunications
services in the state and designate the services included in
basic telephone service. The commission in its discretion shall
periodically review and adjust as necessary the price a
telecommunications utility may charge for basic telephone
service.
(b) The provisions of this subsection do not apply to the basic
telephone service provided by a telecommunications utility
described in ORS 759.040.
(3)(a) The Public Utility Commission shall establish a
benchmark for basic telephone service as necessary for the
administration and distribution of the universal service fund.
The universal service fund shall provide explicit support to an
eligible telecommunications carrier that is equal to the
difference between the cost of providing basic telephone service
and the benchmark, less any explicit compensation received by the
carrier from federal sources specifically targeted to recovery of
local loop costs and less any explicit support received by the
carrier from a federal universal service program.
(b) The commission in its discretion shall periodically review
the benchmark and adjust it as necessary to reflect:
(A) Changes in competition in the telecommunications industry;
(B) Changes in federal universal service support; and
(C) Other relevant factors as determined by the commission.
(c) Except for a telecommunications utility described in ORS
759.040, the commission shall seek to limit the difference
between the price a telecommunications utility may charge for
basic telephone service and the benchmark.
(4) Except as provided in subsections (6) and (7) of this
section, there is imposed on the sale of all retail
telecommunications services sold in this state a universal
service surcharge. The surcharge shall be established by the
commission as a uniform percentage of the sale of retail
telecommunications services in an amount sufficient to support
the purpose of the universal service fund. The surcharge may be
shown as a separate line item by all telecommunications carriers
using language prescribed by the commission. A telecommunications
carrier shall deposit amounts collected into the universal
service fund according to a schedule adopted by the commission.
(5) The commission is authorized to establish a universal
service fund, separate and distinct from the General Fund. The
fund shall consist of all universal service surcharge moneys
collected by telecommunications carriers and paid into the fund.
The fund shall be used only for the purpose described in this
section, and for payment of expenses incurred by the commission
or a third party appointed by the commission to administer this
section. All moneys in the fund are continuously appropriated to
the commission to carry out the provisions of this section.
Interest on moneys deposited in the fund shall accrue to the
fund.
(6) For purposes of this section, 'retail telecommunications
service' does not include radio communications service, radio
paging service, commercial mobile radio service, personal
communications service or cellular communications service.
(7)(a) Notwithstanding subsection (6) of this section, a person
who primarily provides radio communications service, radio paging
service, commercial mobile radio service, personal communications
service or cellular communications service may request
designation as an eligible telecommunications carrier by the
Public Utility Commission for purposes of participation in the
universal service fund.
(b) In the event a person who primarily provides radio
communications service, radio paging service, commercial mobile
radio service, personal communications service or cellular
communications service seeks designation as an eligible
telecommunications carrier for purposes of participation in the
universal service fund, the person shall provide written notice
to the Public Utility Commission requesting designation as an
eligible telecommunications carrier within 60 days of the date
the commission establishes the fund. Upon receiving notice, the
commission may designate the person as an eligible
telecommunications carrier for purposes of participation in the
fund.
(c) A person who primarily provides radio communications
service, radio paging service, commercial mobile radio service,
personal communications service or cellular communications
service who fails to request designation as an eligible
telecommunications carrier within 60 days of the date the
universal service fund is established by the Public Utility
Commission may not be designated as an eligible
telecommunications carrier unless the person has contributed to
the fund for at least one year immediately prior to requesting
designation.
{ + (8) A pay telephone provider may apply to the Public
Utility Commission, on a form developed by the commission, for a
refund of the universal service surcharge imposed on the provider
under subsection (4) of this section for the provision of pay
telephone service. + }
SECTION 4. { + The amendments to ORS 759.425 by section 3 of
this 2001 Act apply to universal service surcharges imposed on
pay telephone service provided on or after July 1, 2003. + }
SECTION 5. { + The Public Utility Commission may take action
before the operative date of the amendments to ORS 759.425 by
section 3 of this 2001 Act to adopt rules for the administration
of the refund program required by the amendments to ORS 759.425
by section 3 of this 2001 Act. + }
SECTION 6. { + The amendments to ORS 759.425 by section 3 of
this 2001 Act become operative on July 1, 2003. + }
SECTION 7. ORS 759.445 is amended to read:
759.445. (1) There is established in the State Treasury,
separate and distinct from the General Fund, the Connecting
Oregon Communities Fund. Moneys in the fund shall consist of
amounts deposited in the fund under ORS 759.405 { + and any
other moneys deposited by a telecommunications carrier that
elects to be subject to ORS 759.405 and 759.410, including
amounts deposited pursuant to a performance assurance plan
implemented by a telecommunications carrier in connection with an
application under 47 U.S.C. 271, as in effect on the effective
date of this 2001 Act + }. Interest earned on moneys in the fund
shall accrue to the fund. Moneys in the fund may be invested as
provided in ORS 293.701 to 293.820. Moneys in the fund shall be
used to provide access to advanced telecommunications technology
in elementary schools and high schools, colleges and
universities, community colleges, public television corporations,
rural health care providers, public libraries and other eligible
persons.
(2) Two dedicated accounts shall be established within the
Connecting Oregon Communities Fund for purposes of supporting
education and public access to advanced telecommunications
services. The first $25 million of the moneys deposited in the
Connecting Oregon Communities Fund in both 2000 and 2001 shall be
appropriated to the School Technology Account established under
subsection (3) of this section. { + Except as provided in
subsection (8) of this section, + } any additional moneys
available in the fund shall be appropriated to the Public Access
Account established under subsection (4) of this section.
(3) There is established the School Technology Account within
the Connecting Oregon Communities Fund. The purpose of the School
Technology Account is to improve access to advanced
telecommunications services for students attending public school
in kindergarten through grade 12. Moneys in the account shall be
expended as provided in section 34, chapter 1093, Oregon Laws
1999.
(4)(a) There is established the Public Access Account within
the Connecting Oregon Communities Fund. The purpose of the Public
Access Account is to improve access to advanced
telecommunications services for community colleges, universities,
public libraries and rural health care providers.
(b) If funding has not been provided from other sources, the
first $3 million available in the Public Access Account shall be
transferred to the Department of Higher Education for the purpose
of funding the Oregon Wide Area Network project to provide and
expand Internet access for the State System of Higher Education.
The Department of Higher Education shall complete an audit of
bandwidth utilization and report to the Joint Legislative
Committee on Information Management and Technology during the
Seventy-first Legislative Assembly in the manner provided in ORS
192.245.
(c) Following the transfer of funds described in paragraph (b)
of this subsection, the next $1 million available in the Public
Access Account shall be transferred to the Department of Higher
Education for Oregon State University for the purpose of
providing virtual access to persons with disabilities.
(d) Following the transfer of funds as described in paragraphs
(b) and (c) of this subsection, the next $2 million available in
the Public Access Account shall be transferred to the Department
of Community Colleges and Workforce Development for distribution
to community colleges for the purpose of developing connectivity
and distance education programs.
(e) Following the transfer of funds described in paragraphs (b)
to (d) of this subsection, the next $4 million available in the
Public Access Account shall be transferred to the Department of
Higher Education for video transport and network management
services for the Oregon university system.
(f) Following the transfer of funds described in paragraphs (b)
to (e) of this subsection, the next $5.5 million available in the
Public Access Account shall be transferred to the Oregon Public
Broadcasting Corporation for the purpose of digitizing the state
television network, using the Oregon Enterprise Network when
possible.
(g) Following the transfer of funds described in paragraphs (b)
to (f) of this subsection, the next $500,000 available in the
Public Access Account shall be transferred to the Southern Oregon
Public Television Corporation for the purpose of digitizing the
state television network, using the Oregon Enterprise Network
when possible.
(h) Following the transfer of funds described in paragraphs (b)
to (g) of this subsection, a state institution of higher
education, including the Oregon Health Sciences University, may
apply for one-time matching funds up to $1 million from the
Public Access Account to endow a telecommunications chair for the
purpose of increasing research and development of advanced
telecommunications services applications. Only one chair may be
endowed under this paragraph.
(5)(a) The Oregon Economic and Community Development Commission
shall approve expenditure of any remaining moneys in the Public
Access Account consistent with this section and ORS 759.430.
(b) Community colleges, state institutions of higher education,
public libraries, public television corporations and rural health
care providers may apply to the Oregon Economic and Community
Development Commission for funding from the Public Access Account
under this subsection.
(c) Funds received from the account shall be used for the
purchase of advanced telecommunications services, equipment or
recurring costs of telecommunications connectivity. Priority
shall be given to collaborative projects that improve access to
advanced telecommunications services.
(d) Funds available in the Public Access Account under this
subsection are continuously appropriated to the Economic and
Community Development Department for the purposes described in
this subsection.
(6) Public libraries and rural health care providers must apply
for federal universal service support in order to be eligible for
a grant from the Public Access Account.
(7) The video transport and network management services
purchased with funds made available under this section shall be
purchased through the Oregon Department of Administrative
Services.
{ + (8) Any moneys deposited in the Connecting Oregon
Communities Fund under subsection (1) of this section pursuant to
a performance assurance plan implemented by a telecommunications
carrier in connection with an application under 47 U.S.C. 271, as
in effect on the effective date of this 2001 Act, shall be placed
in the School Technology Account to be expended as provided in
section 34, chapter 1093, Oregon Laws 1999. + }
SECTION 8. Section 34, chapter 1093, Oregon Laws 1999, is
amended to read:
{ + Sec. 34. + } (1) In addition to and not in lieu of any
other transfer or appropriation, for the calendar year beginning
January 1, 2000, there is transferred to the Department of
Education from the School Technology Account the sum of $9,600
for each eligible school facility as defined in section 35
(1) { + , + } { - of this 1999 Act - } { + chapter 1093,
Oregon Laws 1999 + }, which shall be expended for the purpose of
providing a local area network and associated equipment to public
school facilities pursuant to section 35 { + , + } { - of this
1999 Act - } { + chapter 1093, Oregon Laws 1999 + }.
(2) In addition to and not in lieu of any other transfer or
appropriation, there is transferred to the Department of
Education from the School Technology Account, to be distributed
to the Oregon Association of Education Service Districts for the
Oregon Public Education Network, for:
(a) The recurring costs of Internet bandwidth:
(A) $500,000 for the calendar year beginning January 1, 2000;
and
(B) $1 million for the calendar year beginning January 1, 2001.
(b) The purchase of telecommunications equipment:
(A) $250,000 for the calendar year beginning January 1, 2000;
and
(B) $250,000 for the calendar year beginning January 1, 2001.
(c) The purpose of an on-line film and video server pilot
project to digitize and electronically distribute video content,
$250,000 for the calendar year beginning January 1, 2000.
(3) In addition to and not in lieu of any other transfer or
appropriation, for the calendar years beginning January 1, 2000,
and January 1, 2001, there is transferred to the Department of
Education from the School Technology Account the sum of $5,400
for each eligible school facility as defined in section 36
(1) { + , + } { - of this 1999 Act - } { + chapter 1093,
Oregon Laws 1999 + }, for the purpose of distribution to school
districts and education service districts pursuant to section
36 { + , + } { - of this 1999 Act - } { + chapter 1093,
Oregon Laws 1999, + } for the recurring costs of
telecommunications connectivity.
(4)(a) In addition to and not in lieu of any other transfer or
appropriation, there is transferred to the Department of
Education from the School Technology Account for the purpose of
purchasing a two-way interactive distance education system for
each public high school and education service district:
(A) $3,050,000 for the calendar year beginning January 1, 2000;
and
(B) $3,050,000 for the calendar year beginning January 1, 2001.
(b) The Department of Education, in consultation with the
Oregon Department of Administrative Services, shall develop an
implementation plan for this subsection. The implementation plan
shall include an implementation timeline and requirements for
each public high school and education service district that
receives a two-way interactive distance education system under
this subsection. The Department of Education shall ensure that a
distance education system purchased by the Department of
Education meets State of Oregon information technology standards,
is consistent with any related interactive video strategy of the
Oregon Department of Administrative Services and is procured
through a competitively bid or negotiated state contract. The
Department of Education shall reimburse the Oregon Department of
Administrative Services from funds made available under this
subsection for costs incurred by the Oregon Department of
Administrative Services in developing the implementation plan.
(5)(a) In addition to and not in lieu of any other transfer or
appropriation, there is transferred to the Department of
Education from the School Technology Account for the purpose of
paying the recurring costs of telecommunications connectivity and
video services associated with the two-way interactive distance
education systems purchased with funds transferred under this
section:
(A) $550,000 for the calendar year beginning January 1, 2000;
and
(B) $550,000 for the calendar year beginning January 1, 2001.
(b) Any telecommunications or video services purchased by the
Department of Education with funds transferred under this
subsection shall be purchased from the Oregon Department of
Administrative Services as long as such services are available
through the Oregon Department of Administrative Services at a
comparable level and comparable cost as can be obtained
elsewhere. Purchase of services and technology from the Oregon
Department of Administrative Services shall be through the Oregon
Enterprise Network provided the Oregon Enterprise Network can
provide the services and technology at a cost equal to or less
than the price for the same or similar services and technology
from other contracts or programs of the Oregon Department of
Administrative Services. The Department of Education shall ensure
that telecommunications and video services purchased by the
Department of Education meet State of Oregon information
technology standards, are consistent with any related interactive
video strategy of the Oregon Department of Administrative
Services and are purchased through a competitively bid or
negotiated state contract.
(c) Upon request of the North Central, Malheur, Jackson or
Northwest Region education service district, the Department of
Education may waive the requirements of paragraph (b) of this
subsection until such time as the district changes its systems to
use the services available through the Oregon Department of
Administrative Services, as determined by the implementation plan
established under subsection (4)(b) of this section.
(d) Upon request of a school district or education service
district, the Oregon Department of Administrative Services may
waive the requirements of paragraph (b) of this subsection if a
state contract is not available for use by the district.
(6)(a) In addition to and not in lieu of any other transfer or
appropriation, there is transferred to the Oregon Department of
Administrative Services from the School Technology Account for
the purchase of hub equipment necessary to support public school
needs for two-way interactive video system bridging and other
services:
(A) $700,000 for the calendar year beginning January 1, 2000;
and
(B) $700,000 for the calendar year beginning January 1, 2001.
(b) The Oregon Department of Administrative Services shall
reduce rates paid by school districts and education service
districts to the department for video services by the amount
transferred under this subsection.
(7) In addition to and not in lieu of any other transfer or
appropriation, there is transferred to the Department of
Education
{ - for the calendar year beginning January 1, 2000, and the
calendar year beginning January 1, 2001, from the School
Technology Account, - } any amounts remaining in the account
after the transfers described in subsections (1) to (6) of this
section are made, which shall be distributed to school districts
pursuant to section 37 { + , + } { - of this 1999 Act - } { +
chapter 1093, Oregon Laws 1999 + }.
(8) Amounts described in this section shall be transferred each
year only when sufficient funds are available in the School
Technology Account.
SECTION 9. Section 37, chapter 1093, Oregon Laws 1999, is
amended to read:
{ + Sec. 37. + } (1) As used in this section:
(a) 'ADMw' means the weighted average daily membership of the
school district for the prior fiscal year as calculated under ORS
327.013.
(b) 'Statewide ADMw' means the total ADMw of all school
districts for the prior fiscal year as calculated under ORS
327.013.
(2) { - During the calendar years beginning January 1, 2000,
and January 1, 2001, - } The Department of Education shall
distribute grants from amounts transferred under section 34
(7) { + , + } { - of this 1999 Act - } { + chapter 1093,
Oregon Laws 1999, + } to school districts.
(3) Except as provided in subsection (4) of this section, a
school district's grant under this section = the school
district's ADMw X (the total amount transferred to the department
for the grants under section 34 (7) { + , + } { - of this 1999
Act - } { + chapter 1093, Oregon Laws 1999 + } : the total
statewide ADMw).
(4) A school district's grant under this section shall not be
less than $25,000.
(5) A school district that receives grant funds under this
section shall use those funds to support telecommunications
connectivity including:
(a) Building wiring and electrical power requirements;
(b) Servers, hubs and routers;
(c) Network design and installation;
(d) Video distance education equipment;
(e) Technology support staff salaries; and
(f) Other costs necessary to support telecommunications
connectivity.
(6) A school district may not use grant funds received under
this section for payment of debt service on bonds.
(7) The State Board of Education may adopt any rules necessary
for the administration of this section.
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