WSR 97-24-115

PROPOSED RULES

UTILITIES AND TRANSPORTATION

COMMISSION

[Filed December 3, 1997, 11:37 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-15-053.

Title of Rule: Establishing procedures for contracts for federally subsidized telecommunications services and establishing discount rates for such contracts for schools and libraries. Docket No. UT-970317.

Purpose: These proposals will enable eligible institutions in Washington state to enter federally subsidized discount rate contracts for telecommunications services as provided in federal law.

Statutory Authority for Adoption: RCW 80.36.080.

Statute Being Implemented: Telecommunications Act of 1996, sections 254, etc.

Summary: This proposal will enable eligible institutions - schools, libraries, and rural health care providers, to qualify for federally subsidized discount contracts for telecommunications services under provisions of the 1996 Federal Telecommunications Act and FCC Order No. 97-157 thereunder.

Reasons Supporting Proposal: This proposal is necessary in order for Washington institutions to become eligible for the federal subsidy. It will not affect the contributions of Washington telecommunications consumers.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Steve McLellan, Secretary, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504, (360) 664-1174.

Name of Proponent: Washington Utilities and Transportation Commission, governmental.

Rule is necessary because of federal law, Telecommunications Act of 1996, section 254; FCC Order No. 97-157.

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose and Summary above.

Proposal Changes the Following Existing Rules: The proposal adds specific provisions for federally subsidized discount contracts under tariff and price list regulations, and adds a schedule of discounts for eligible schools and libraries.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposal has no adverse effect on any business.

RCW 34.05.328 does not apply to this rule adoption. The commission is not an agency to which RCW 34.05.328 applies, and this rule change is not a significant legislative rule as defined therein.

Hearing Location: Commission Hearing Room, Chandler Plaza, Second Floor, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504, on January 14, 1998, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Pat Valentine by January 8, 1997 [1998], TDD (360) 586-8303, or (360) 664-1133.

Submit Written Comments to: Steve McLellan, Secretary, Washington Utilities and Transportation Commission, P.O. Box 47250, Olympia, WA 98504-7250, FAX (360) 586-1150, by January 5, 1998.

Date of Intended Adoption: January 14, 1998.

December 2, 1997

Terrance Stapleton

for Steve McLellan

Secretary

AMENDATORY SECTION (Amending Order R-301, Docket No. U-88-1704-R, filed 6/1/89)

WAC 480-80-330 Telecommunications contracts. (1) Contracts to be filed. All contracts with end use customers for the retail sale of regulated intrastate telecommunications services which contain or state rates or conditions not in conformance with any applicable tariff or which provide for telecommunications services which are not specifically addressed in the telecommunications company's published tariffs shall be filed with the commission in accordance with this section. For purposes of this section the modification of a previously executed contract will be treated as a new contract. This section shall not apply to contracts which offer services subject to a price list filed pursuant to WAC 480-120-027.

(2) Application. This section shall apply prospectively to all contracts as defined in subsection (1) of this section executed after the effective date of this section.

(3) Time for filing and effectiveness. With the exception of firm bid contracts allowed under subsection (4) of this section, each contract shall be filed with the commission in accordance with this subsection. A contract which does not qualify for treatment under subsection (4) of this section shall be filed with the commission not less than thirty days prior to the proposed effective date of the contract, and shall become effective according to its terms unless earlier approved or rejected by the commission: Provided, That upon application and for good cause shown, the commission may approve the contract as of an effective date prior to the date that the contract would have become effective in accordance with this section.

(4) Federal contracts. Where a federal agency asserts its authority to solicit a firm offer of services and a contract subject to this section is submitted in response to that solicitation, the provisions of subsection (3) of this section will not apply. Upon the acceptance of such a contract offer by the federal agency, the telecommunications company shall immediately file the contract with the commission and must include the same documentation required for approval by subsection (5) of this section.

(5) Documentation. Each contract and substantial contract modification filed pursuant to this section shall be accompanied by documentation to show that the contract does not result in undue or unreasonable discrimination between customers receiving like and contemporaneous service under substantially similar circumstances; and provides for the recovery of all costs associated with the provision of the services. In addition, the telecommunications company shall file the following information in conjunction with each contract submitted:

(a) A statement summarizing the basis of the rate or charge proposed in the contract and an explanation of the derivation of the proposed rate or charge;

(b) An explanation of all cost computations involved in arriving at the derivation of the level of the rate or charge in the contract; and

(c) A statement indicating the basis for the use of a contract rather than a filed tariff for the specific service involved.

(6) Duration of contract. All contracts shall be for a stated time period.

(7) Confidentiality. Filings under this section may be submitted with portions designated "confidential" pursuant to WAC 480-08-015. However, any filing which designates as "confidential" the essential terms and conditions will be rejected by the commission.

(8) Federal universal service contracts with schools, libraries, and rural health care providers pursuant to 47 CFR, Part 54. When a telecommunications company enters into a contract to provide service to a school, library, or rural health care provider, as part of the federal universal service program, the telecommunications company must file the contract if the rates, terms, or conditions of the prediscounted contract service depart from the tariff. The contract must be filed immediately upon acceptance by the administrator of the federal universal service program for schools and libraries. The filing must include the same documentation required for approval by subsection (5) of this section. The contract may become effective immediately upon filing with the commission, or at such later time as is specified in the contract.

[Statutory Authority: RCW 80.01.040. 89-12-038 (Order R-301, Docket No. U-88-1704-R), 480-80-330, filed 6/1/89; 88-22-037 (Order 291, Docket No. U-88-2337-R), 480-80-330, filed 10/28/88; Order R-5, 480-80-330, filed 6/6/69, effective 10/9/69.]

AMENDATORY SECTION (Amending Order R-301, Docket No. U-88-1704-R, filed 6/1/89)

WAC 480-120-027 Price lists. (1) Pursuant to RCW 80.36.310 telecommunications services classified by the commission as competitive will be offered under price lists. All services of competitive telecommunications companies as classified by the commission under RCW 80.36.310 will be offered under price lists.

(2) All price lists filed with the commission must describe the service being offered and all prices, charges, terms, and conditions pertaining thereto. Each page of every price list shall contain, in general, the company name, the page number, and the effective date. All subsequent revisions of a price list shall bear consecutive revision numbers. Price lists must provide sufficient detail for customers and potential customers reasonably to determine what is being offered and what charges the customer incurs in obtaining the service.

(3) Contracts (including modifications to previously executed contracts) for services which are governed by this section may be offered subject to the requirements of this subsection.

(a) Contracts of companies classified "competitive" under RCW 80.36.310 shall be filed with the commission not later than five business days after execution. A contract filed pursuant to this subdivision will not be rejected by the commission in the absence of competent evidence that the contract is unlawful.

(b) Contracts which offer services classified as "competitive" under RCW 80.36.330 shall be filed with the commission at least ten days prior to the effective date. Such contracts may not include both "price listed" and "tariffed" services unless the tariffed services are set forth separately and offered under an approved tariff or contract (see WAC 480-80-330). A contract filed pursuant to this subdivision may be rejected if the telecommunications company is unable to document that the price charged covered its relevant costs under either a long run incremental cost analysis or a fully distributed cost analysis whichever is lower, or any other commission-approved cost method. A contract filed pursuant to this subdivision may also be rejected upon a showing that it is otherwise unlawful. To meet its burden of proving that the contract is cost-based, the company shall, at a minimum, provide the following information at the time of filing:

(i) A statement summarizing the basis of the rate or charge proposed in the contract and an explanation of the derivation of the proposed rate or charge; and

(ii) An explanation of all cost computations involved in arriving at the derivation of the level of the rate or charge in the contract.

(c) All contracts filed pursuant to this subsection shall be for a stated time period.

(d) Filings under this subsection may be submitted with portions designated "confidential" pursuant to WAC 480-08-015. However, any filing which designates as "confidential" the essential terms and conditions will be rejected by the commission.

(4) Federal contracts. Where a federal agency asserts its authority to solicit a firm offer of services and a contract subject to this section is submitted in response to that solicitation, the provisions of subsection (3) of this section will not apply. Upon the acceptance of such a contract offer by the federal agency, the telecommunications company shall immediately file the contract with the commission and must include the same documentation otherwise required by this section.

(5) Federal universal service contracts with schools, libraries, and rural health care providers pursuant to 47 CFR, Part 54. When a telecommunications company enters into a contract to provide competitively classified service to a school, library, or rural health care provider, as part of the federal universal service program, the telecommunications company must file the contract if the rates, terms, or conditions of the prediscounted contract service depart from the tariff. The contract must be filed immediately upon acceptance by the administrator of the federal universal service program for schools and libraries. The filing must include the same documentation required for approval by subsection (3)(b) of this section. The contract may become effective immediately upon filing with the commission, or at such later time as is specified in the contract.

[Statutory Authority: RCW 80.01.040. 89-12-038 (Order R-301, Docket No. U-88-1704-R), 480-120-027, filed 6/1/89; 87-24-055 (Order R-282, Cause No. U-86-125), 480-120-027, filed 11/30/87.]

NEW SECTION

WAC 480-123-010 Federal universal service contracts. For purposes of schools and libraries receiving federal universal service funding under 47 CFR, Part 54 of the Federal Communications Commission rules, the following discounts shall apply:

SCHOOLS AND LIBRARIES DISCOUNT MATRIX DISCOUNT LEVEL

HOW DISADVANTAGED?

% of students eligible for urban rural

national school lunch program discount discount

(%) (%)

<1 20 25

1-19 40 50

20-34 50 60

35-49 60 70

50-74 80 80

75-100 90 90



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