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
House Bill 2659
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 as
introduced.
Provides that all telecommunications carriers be subject to
price cap regulation. Requires that telecommunications carriers
that previously had not elected to be subject to price cap
regulation pay 20 percent of telecommunications carrier's gross
regulated intrastate revenue for 2001 into telecommunications
infrastructure account. Specifies manner in which amounts in
account be expended.
A BILL FOR AN ACT
Relating to telecommunications service; creating new provisions;
and amending ORS 759.405, 759.410 and 759.430 and section 30,
chapter 1093, Oregon Laws 1999.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 759.405 is amended to read:
759.405. (1) { + Before January 1, 2002, + } a
telecommunications carrier may elect to be subject to { - this
section and ORS 759.410 - } { + price cap regulation + }. The
telecommunications carrier shall notify, in writing, the Public
Utility Commission of its election. Such election shall be
effective 30 days after the written notification is received by
the Public Utility Commission. { - A telecommunications carrier
that elects to be subject to this section and ORS 759.410 shall
be subject to the infrastructure investment and price regulation
requirements of this section and ORS 759.410 and shall not be
subject to any other regulation based on earnings, rates or rate
of return. - }
{ - (2) A telecommunications carrier that elects to be
subject to this section and ORS 759.410 shall establish in its
accounts a Telecommunications Infrastructure Account. The
telecommunications carrier shall commit to its Telecommunications
Infrastructure Account over a four-year period amounts totaling
20 percent of the telecommunications carrier's gross regulated
intrastate revenue for the calendar year immediately prior to the
year the telecommunications carrier elects to be subject to this
section and ORS 759.410. Of the total committed amount, 30
percent shall be credited to and made available for the purposes
of the electing carrier's account on the date the
telecommunications carrier's election becomes effective. An
electing telecommunications carrier shall credit an equal amount
on the same date in the next following year. The electing carrier
shall credit to its Telecommunications Infrastructure Account an
amount equal to 20 percent of the total committed amount on the
same date in each of the next following two years. - }
{ + (2) On and after January 1, 2002, any telecommunications
carrier that has not elected to be subject to price cap
regulation under subsection (1) of this section shall become
subject to price cap regulation and shall not be subject to any
other regulation based on earnings, rates or rate of return.
(3) All telecommunications carriers shall establish a
telecommunications infrastructure account. A telecommunications
carrier shall pay into its telecommunications infrastructure
account over a four-year period amounts totaling 20 percent of
the telecommunications carrier's gross regulated intrastate
revenue for:
(a) The calendar year immediately prior to the year the
telecommunications carrier elected to be subject to price cap
regulation under subsection (1) of this section; or
(b) 2001, if the telecommunications carrier became subject to
price cap regulation under subsection (2) of this section.
(4) Of the total amount payable to a telecommunications
infrastructure account under subsection (3) of this section:
(a) 30 percent shall be paid into the account on the date the
telecommunications carrier's election becomes effective under
subsection (1) of this section, or on January 1, 2002, if the
telecommunications carrier becomes subject to price cap
regulation under subsection (2) of this section;
(b) 30 percent shall be paid into the account on the first
anniversary of the date specified in paragraph (a) of this
subsection; and
(c) 20 percent shall be paid into the account on the second and
third anniversaries of the date specified in paragraph (a) of
this subsection. + }
{ - (3)(a) - } { + (5)(a) + } A telecommunications carrier
{ - that elects to be subject to this section and ORS
759.410 - } shall expend the moneys in the telecommunications
carrier's telecommunications infrastructure account on a plan or
plans approved by the Oregon Economic Development Commission
under ORS 759.430. Subject to
{ - paragraphs (c) and (d) of this subsection, - } { + the
requirements of subsection (6) of this section, + } the total
amount of capital and other expenses associated with completing
the projects shall equal the total amount of moneys available in
the account.
(b) Moneys in { - the account - } { + telecommunications
infrastructure accounts + } shall be used primarily to ensure
that rural and urban Oregonians have improved access to
telecommunications technology and services. Expenditures from
{ - the account - } { + telecommunications infrastructure
accounts + } shall be used for investment in telecommunications
infrastructure and deployment of new and advanced
telecommunications services.
{ - (c)(A) Within 120 days following the effective date of a
telecommunications carrier's election to be regulated under this
section and ORS 759.410, but not later than January 1 of the year
following the effective date of a telecommunications carrier's
election, and on the same date in each of the next following
three years, a telecommunications carrier serving less than one
million access lines in Oregon shall transfer 40 percent of the
moneys most recently credited to its Telecommunications
Infrastructure Account to the Connecting Oregon Communities Fund
established under ORS 759.445. - }
{ - (B) Within 120 days following the effective date of a
telecommunications carrier's election to be regulated under this
section and ORS 759.410, but not later than January 1 of the year
following the effective date of a telecommunications carrier's
election, and on the same date in the next following year, a
telecommunications carrier serving one million or more access
lines in Oregon shall transfer 70 percent of the moneys most
recently credited to its Telecommunications Infrastructure
Account to the Connecting Oregon Communities Fund established
under ORS 759.445. - }
{ + (6) Within 120 days after making a deposit to a
telecommunications infrastructure account under subsection (4) of
this section, a telecommunications carrier shall transfer to the
Connecting Oregon Communities Fund established under ORS 759.445
an amount equal to:
(a) 40 percent of the amount deposited if the carrier serves
fewer than one million access lines in Oregon; or
(b) 70 percent of the amount deposited if the carrier serves
one million or more access lines in Oregon. + }
{ - (d) - } { + (7) + } Notwithstanding ORS 285A.075 (2),
if the Oregon Economic and Community Development Commission
determines, following notice and a public hearing, that the
telecommunications carrier is not complying with plans or plan
modifications approved under ORS 759.430, following notice to the
telecommunications carrier and reasonable opportunity to cure any
noncompliance, the Oregon Economic and Community Development
Commission may require the telecommunications carrier to transfer
any or all moneys remaining in the carrier's telecommunications
infrastructure account, and any future amounts credited to the
account, to the Connecting Oregon Communities Fund established
under ORS 759.445.
{ - (4) - } { + (8) + } 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.
SECTION 2. 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) - } { + (b) + } { - A - } Telecommunications
{ - carrier that opts out of rate of return regulation under
this section and ORS 759.405 shall - } { + carriers + } be
subject to price cap regulation and { - the carrier under price
cap regulation shall - } continue to meet service quality
requirements; and
{ - (d) - } { + (c) + } 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 - } { + is + }
subject to price regulation as provided in this section and
{ - shall - } { + is + } 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 { + that + } a telecommunications { - utility
that elects to be subject to this section and ORS 759.405 - }
{ + carrier + } 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 { + that
are + } regulated by the commission { + on January 1, 1999 + },
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 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 - } { + before September 1,
2003, + } 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 - } { + 2003 + }, 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.
SECTION 3. { + Section 4 of this 2001 Act is added to and made
a part of ORS 759.400 to 759.455. + }
SECTION 4. { + In a rate proceeding brought before the
effective date of this 2001 Act by or against a
telecommunications carrier that becomes subject to price cap
regulation under ORS 759.405 (2), a final rate for a
telecommunications service established in the proceeding shall be
the maximum rate for the service for purposes of ORS 759.410. + }
SECTION 5. ORS 759.430 is amended to read:
759.430. (1)(a) Notwithstanding ORS 285A.075 (2), the Oregon
Economic and Community Development Commission shall approve plans
and plan modifications for projects funded by a
telecommunications carrier's telecommunications infrastructure
account established under ORS 759.405. Projects funded from a
telecommunications carrier's telecommunications infrastructure
account shall be completed by the carrier and shall be
substantially for the benefit of the carrier's customers. Plans
approved by the commission must be consistent with the purpose of
the fund as described in ORS 759.405. The commission shall give
priority to projects that provide increased bandwidth between
communities, route diversity and access to advanced
telecommunications services in an expedited manner. The
commission shall seek to ensure that an approved project is the
most technically appropriate means of addressing the
circumstances presented in a project plan. The commission shall
review recommendations and analysis from the Connecting Oregon
Communities Advisory Board established in subsection (2) of this
section prior to approving a plan. Project plans may be submitted
by local communities including but not limited to local
governments, community institutions, citizen groups, public and
private educational institutions and business groups.
(b) Under the policies and guidance of the commission, the
Economic and Community Development Department shall adopt rules
for the submission of project plans by telecommunications
carriers and other persons, including criteria for approval of
such plans. The rules shall include criteria to determine if the
telecommunications carrier reasonably should be expected to make
the investment based on an economic analysis of the project.
Projects that are determined to meet the criteria but are not
economically self-supporting or would not be undertaken in the
time frame proposed shall be given priority over similar projects
that would be economically self-supporting or likely would be
completed in the time frame proposed. The rules shall provide for
review of the economic benefits of the proposed plan to the
affected community and the potential for the proposed plan to
leverage other funding sources including but not limited to
federal, state and private sources.
(c) The commission also shall approve expenditures from the
Public Access Account of the Connecting Oregon Communities Fund
established in ORS 759.445 (4).
(2) There is established within the Economic and Community
Development Department the Connecting Oregon Communities Advisory
Board consisting of five members appointed by the commission. The
commission shall seek advice from the Governor prior to making an
appointment to the advisory board.
(3) There shall be one member of the advisory board from each
of the following areas:
(a) Eastern Oregon, including Hood River County;
(b) Central Oregon;
(c) Southern Oregon;
(d) Coastal Oregon; and
(e) The Willamette Valley.
(4) Employees of the Public Utility Commission, employees of
state or local government who are responsible for purchasing
telecommunications services or equipment and employees of a
telecommunications carrier may not be appointed to the advisory
board.
(5) The advisory board shall select one of its members as
chairperson and another of its members as vice chairperson, for
such terms and with duties and powers necessary for the
performance of the functions of those offices as the board
determines.
(6) The purpose of the advisory board is to review and make
recommendations to the Oregon Economic and Community Development
Commission for approval of and modifications to projects funded
by a telecommunications carrier's telecommunications
infrastructure account under this section and ORS 759.405. The
advisory board shall seek advice and comment on plans submitted
by a telecommunications carrier from affected local communities
including but not limited to local governments, citizens and
businesses. The advisory board also shall seek advice and comment
from state and federal agencies when appropriate to ensure that
investments will maximize statewide public benefits and are
consistent with the needs and desires of the local communities.
The advisory board shall consider the needs of and impact on
education, health care, economic development and the delivery of
state and local governmental services when evaluating a plan.
(7) The advisory board also shall review proposals submitted to
the commission under ORS 759.445 (5) and make recommendations to
the commission regarding approval, modification or denial of the
proposals.
(8) The advisory board shall make an annual report to the Joint
Legislative Committee on Information Management and Technology on
the plans and activities funded under ORS 759.405 and 759.445
(5).
(9)(a) Reasonable expenses incurred by the members of the
advisory board in the performance of their duties, costs of the
Economic and Community Development Department directly related to
providing staff to the advisory board and costs to the department
for providing technical assistance to local communities shall be
paid out of the telecommunications infrastructure accounts
created under ORS 759.405.
(b) Following the transfer of funds required under ORS 759.405
{ - (2) and - } (3) { + and (6) + }, a telecommunications
carrier that
{ - elects - } { + elected + } to be subject to { + price
cap + } regulation { - under ORS 759.405 and 759.410 - }
{ + under ORS 759.405 (1) + } shall transfer from the remaining
funds in its telecommunications infrastructure account the
following amounts to the Economic and Community Development
Department to be used for the payment of expenses described in
paragraph (a) of this subsection:
(A) $575,000 in 2000;
(B) $325,000 in 2001;
(C) { - $325,000 - } { + $___ + } in 2002; and
(D) { - $325,000 - } { + $___ + } in 2003.
{ - (c) If more than one telecommunications carrier elects to
be subject to regulation under ORS 759.405 and 759.410, the
funding requirements described in paragraph (b) of this
subsection shall be distributed pro rata among the electing
carriers. - }
{ + (c) Following the transfer of funds required under ORS
759.405 (3) and (6), a telecommunications carrier that is subject
to price cap regulation under ORS 759.405 (2) shall transfer from
the remaining funds in its telecommunications infrastructure
account the following amounts to the Economic and Community
Development Department to be used for the payment of expenses
described in paragraph (a) of this subsection:
(A) $___ in 2002;
(B) $___ in 2003;
(C) $___ in 2004; and
(D) $___ in 2005. + }
SECTION 6. Section 30, chapter 1093, Oregon Laws 1999, is
amended to read:
{ + Sec. 30. + } (1) In addition to the minimum service
quality standards established by the Public Utility Commission
under
{ - section 29 of this 1999 Act - } { + ORS 759.450 + }, a
telecommunications carrier { - that elects to be subject to
sections 24 and 25 of this 1999 Act shall be - } { + is + }
subject to the retail telecommunications service quality
standards and associated penalties for noncompliance established
in this section. Retail telecommunications service quality
standards and associated penalties are as follows:
(a)(A) Held orders. A customer request for access line
telephone service shall be considered a held order if the service
is not installed due to facility reasons within five business
days of the date the service is scheduled to be installed, unless
a different date is agreed to by the customer and the
telecommunications carrier. The average monthly number of held
orders shall not exceed 6.25 per 1,000 inward orders and shall be
calculated as a monthly average for each quarterly period. A
penalty of $20,000 per held order per quarterly period in excess
of the standard may be assessed.
(B) As used in this paragraph, 'access line' means a dial tone
line that provides basic exchange services extending from the
carrier's switching equipment to a point of termination at the
premises of the carrier's end use customer.
(b) Held orders over 30 days. The number of held orders for
primary basic telephone service held for facility reasons in
excess of 30 business days shall not exceed 20 percent of the
total held order standard for each quarterly period. A penalty of
$10,000 per held order in excess of the standard may be assessed.
(c) Trouble report rate. A wire center shall not have more than
four trouble reports per 100 access lines per month calculated as
a monthly average for each quarterly period, excluding those
trouble reports beyond the control of the telecommunications
carrier. A penalty of $25,000 per wire center may be assessed for
each month of noncompliance with this standard.
(d) Network blockage. Of all properly dialed calls, 98 percent
shall not experience blockage during any normal busy hour,
excluding blockage that is beyond the control of the
telecommunications carrier. A penalty of $10,000 per wire center
may be assessed for each month of noncompliance with this
standard.
(e) Trouble reports cleared. Of all trouble reports, 90 percent
shall be cleared within 48 hours. A penalty of $15,000 per month
may be assessed for each month of noncompliance with this
standard, except that a penalty shall not be assessed if the
telecommunications carrier has met this standard on an overall
basis for the annual period.
(f) Repair center access. Of calls to a telecommunications
carrier's repair center or centers, 80 percent shall be answered
in 20 seconds or less. A penalty of $15,000 per month may be
assessed for each month of noncompliance with this standard.
(g) Sales office access. Of calls to a telecommunications
carrier's sales office or offices, 75 percent shall be answered
in 20 seconds or less. A penalty of $15,000 per month may be
assessed for each month of noncompliance with this standard.
(2) The service quality standards established in this section
and { - section 29 of this 1999 Act - } { + ORS 759.450 + }
apply to normal operating conditions and do not establish a level
of performance to be achieved during periods of emergency,
catastrophe, natural disaster, severe storm or other events
affecting large numbers of telecommunications customers. The
service quality standards shall not apply to extraordinary or
abnormal conditions of operation such as those conditions
resulting from work stoppage or slowdown, civil unrest or other
events for which the telecommunications carrier reasonably may
not have been expected to accommodate. To the extent such
conditions affect the performance of a telecommunications
carrier, it shall be the responsibility of the telecommunications
carrier to separately document the duration and magnitude of each
occurrence.
(3) A telecommunications carrier subject to this section shall
report to the commission quarterly the carrier's performance
relative to each of the minimum service quality standards.
(4) Penalties for a violation of the service quality standards
established under this section shall be imposed by order
following complaint as provided under ORS 756.500 to 756.610. Any
complaint filed under this section shall be filed within 90 days
of each anniversary of the date the telecommunications carrier
became subject to regulation under { - sections 24 and 25 of
this 1999 Act - } { + ORS 759.405 and 759.410 + }. Penalties
imposed under this section shall be:
(a) Paid in the form of bill credits to the telecommunications
carrier's customers in a manner approved by the commission; or
(b) Directed by the commission to targeted investments by the
telecommunications carrier to address specific issues of service
quality.
(5)(a) Total combined annual penalties imposed on a
telecommunications utility under this section and { - sections
29 and 38 of this 1999 Act - } { + ORS 759.450 and 759.455 + }
shall not exceed two percent of the utility's gross intrastate
revenue from the sale of telecommunications services in the
calendar year preceding the year in which the penalties are
assessed.
(b) Penalties imposed under { - section 29 of this 1999
Act - } { + ORS 759.450 + } shall be reduced by an amount equal
to the penalty amount incurred by a telecommunications utility
under this section, provided the penalties are imposed or
incurred for violations resulting from the same incident.
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