HOUSE BILL REPORT

HB 1756

BYRepresentatives Sprenkle, S. Wilson, Rector, Fuhrman, Hargrove, K. Wilson, Haugen, Jacobsen and Scott

Providing for extended area service by telecommunications companies.

House Committe on Energy & Utilities

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass. (10)

      Signed by Representatives Nelson, Chair; Todd, Vice Chair; Brooks, Cooper, Gallagher, Jacobsen, May, R. Meyers, H. Myers and S. Wilson.

Minority Report:  Do not pass. (2)

      Signed by Representatives Hankins, Ranking Republican Member and Miller.

House Staff:Deborah Senn (786-7384)

AS REPORTED BY COMMITTEE ON ENERGY & UTILITIES FEBRUARY 21, 1989

BACKGROUND:

Extended Area Service (EAS) means the ability to call from one exchange to another exchange without incurring a toll charge.  Many communities in the state have EAS.  The most well known example is the ability to call from Seattle to Bellevue without incurring an additional toll charge.  Other communities have limited calling areas.  Monroe, Washington is an example of one. Monroe residents must pay a toll charge to call its neighboring town of Snohomish, and the nearby city of Everett.  EAS patterns have not always been consistent with the type of growth experienced by a community.  The result has been that some communities are extremely pleased with the EAS provided to them and some are extremely displeased.  The urban communities tend to have a wider geographical base for EAS. The base for rural communities is smaller.  The Utilities and Transportation Commission (UTC) formed an EAS advisory committee to make recommendations on state-wide EAS policy.  That recommendation has been published and submitted to the commissioners of the UTC.

SUMMARY:

SUBSTITUTE BILL:  Any telephone customer, either business or residential, may petition to have EAS to a certain community, within the boundaries of a single telephone company. First, the petitioner must collect signatures of a representative majority of the affected customers.  A representative majority is defined as 15 percent of the access lines in that community. Once the signatures are collected, the UTC authorizes a study to determine if there is a "community of interest." A "community of interest" is established if the average number of calls from the petitioning community to the location to which EAS is desired is five.

The commission shall then calculate any increase increment based on the charges to a rate group having the same or similar calling capability.  The telecommunications company affected may propose an alternative plan.  The UTC then notifies the subscribers of the increased increment and the alternative plan and they are polled.  If a majority votes in favor, the Commission shall order the EAS.  If no community of interest is found, the UTC shall order the telecommunications company to offer an optional plan. Finally, if the community of interest requirement cannot be met and government offices in the community provide essential services, the petitioners may apply for, and the UTC may grant a waiver for EAS to those offices.  The residents, businesses, or community that are eligible for the program are ones that have petitions on file with the UTC as of January 1, 1989.  Petitions subsequent to January 1, 1989 are subject to terms and conditions of the UTC.  The program sunsets on December 1, 1990.  However, EAS granted under this legislation will remain in place.  The UTC is to report to the legislature about EAS by December 1, 1990.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill adds language in the legislative intent section which creates a pilot program for determining EAS. The legislation is limited to intra company EAS, as opposed to EAS between companies.  A telecommunications company can offer an alternative to the EAS program designated in the bill, when a poll of subscribers is taken.  The pilot program applies to petitions that have been filed before the UTC as of January 1, 1989.  Petitions that are filed subsequent to that date are subject to the terms and conditions set by the UTC.  The Commission is to report to the legislature on the EAS program, and any other recommendations for legislation by December 1, 1990.  The pilot program sunsets on December 1, 1990.  However, any communities that received EAS under the program will continue to have EAS under that methodology.

Fiscal Note:      Available.

House Committee ‑ Testified For:    Bob Joy, Washington State Grange; Joe O'Sullivan; John Walker, Sultan Mayor; Marie Jack, Sky Valley Mental Health Consultants; Barbara Bird, Sky Valley Chamber of Commerce; Dr. George Knox, Monroe Family Practice; William McCleary, Monroe Public Schools; Gordon Tjerne, City of Monroe.

House Committee - Testified Against:      Tony Gorman, Yelm Telephone Company; Bratton Luce, GTE.

House Committee - Testimony For:    Community growth and calling patterns have not always been consistent with telecommunication company calling areas.  Some communities have had to pay toll charges for calls to their neighbors.  This program would resolve those situations and make the telephone service affordable.

House Committee - Testimony Against:      Some of the costs of this program may be spread to other ratepayers .  However, as the proposed substitute limited the EAS program to a pilot program, some of the opposing parties became neutral.