1 On September 3, 2008, the Washington utilities and transportation commission (commission) filed with the code reviser an order amending and adopting rules permanently in WAC 480-120-071 and 480-120-103, relating to extension of service and application for service. The order is filed at WSR 08-19-001. The effective date for the adoption of the rules is October 4, 2008.

     2 The commission recently learned that an intended addition of the effective date to subsections (8)(a) and (b) of WAC 480-120-071, as published at WSR 08-19-001, was erroneously omitted in the rule submitted for adoption. The effective date that should have been included in subsections (8)(a) and (b) is set out below in italics:

     WAC 480-120-071 Extension of service.

     (8) Application of rule.

     (a) The prior WAC 480-120-071, as it was in effect on June 1, 2008, will continue to apply to applications for extension of service that a company has completed or accepted before October 4, 2008.

     (b) This section, as amended effective October 4, 2008, applies to all other requests for service before and after the effective date.

     3 Failure to insert the effective date of October 4, 2008, to subsections (8)(a) and (b) of WAC 480-120-071, submitted to the code reviser with the adoption order constitutes an oversight. Accordingly the commission enters this order to correct the rule by inserting the October 4, 2008, effective date in subsections (8)(a) and (b) of WAC 480-120-071. A copy of the corrected rule is shown below this order as Appendix A.

     DATED at Olympia, Washington, September 29, 2008.

     WASHINGTON STATE UTILITIES AND TRANSPORTATION COMMISSION

Mark H. Sidran, Chairman

Patrick J. Oshie, Commissioner

Philip B. Jones, Commissioner

     (("Basic monthly service rate" means the rate for nonmeasured service for the lowest-priced class of service ordered by the applicant.

     "Binding site plan" has the same meaning as "binding site plan" in RCW 58.17.020.

     "Constructed" means a residential building that has been approved for occupancy by the appropriate local government agency.

     "Cost justification" means such cost and engineering information as the commission may request.

     "Cost of service extension" means the direct and indirect costs of the material and labor to plan and construct the facilities including, but not limited to, drop wire, permitting fees, rights-of-way fees, and payments to subcontractors, and does not include the cost of reinforcement, network upgrade, or similar costs.

     "Development" has the same meaning as "development" and "developed lands" in RCW 58.19.020.

     "Distribution plant" means telephone equipment and facilities necessary to provide service to a premises, but does not include drop wire.

     "Drop wire" means company-supplied wire and pedestals to be placed between a premise and the company distribution plant at the applicant's property line. For drop wire installed after the effective date of this section, a drop wire must be sufficient in capacity to allow the provisioning of three individual basic exchange voice-grade access lines.

     "Extension of service" means an extension of company distribution plant to a location that is outside any municipal boundary and where no distribution plant of the extending company exists at the time an extension is requested, that is constructed at the request of one or more applicants for service who pay a charge under this section, and that extends more than 1/10 mile. Extensions of service do not include customer trenches, conduits or other support structure for placement of company-provided facilities from the customer property line to the premises to be served.

     "Filed" means the approved plat, short plat, binding site plan or other similar approved instrument filed for record with a county auditor and authorizing development activity.

     "Lot" has the same meaning as "lot" in RCW 58.17.020.

     "Marina" has the same meaning as "marina" in RCW 88.12.010.

     "Mobile home lot," "mobile home park," "mobile home park cooperative," and "mobile home park subdivision" have the same meanings as "mobile home lot," "mobile home park," "mobile home park cooperative," and "mobile home park subdivision" have in RCW 59.20.030.

     "Neighboring exchange" means an exchange bordering on any other exchange.

     "Premises" means any structure that is used as a residence, including farm houses, but does not include predominantly commercial or industrial structures.

     "Radio communications service company" has the meaning contained in RCW 80.04.010.

     "Residential buildings" has the same meaning as "residential buildings" in RCW 58.19.020.

     "Short subdivision" has the same meaning as "short subdivision" in RCW 58.17.020.

     "Subdivision" has the same meaning as "subdivision" in RCW 58.17.020.

     "Temporary occupancy" means occupancy definitely known to be for less than one year but does not include intermittent or seasonal use when such intermittent or seasonal use will occur in more than a one-year period.

     "Temporary service" means service definitely known to be for a short period of time, such as service provided for sales campaigns, athletic contests, conventions, fairs, circuses, and similar events.

     (2) Extensions of service.

     (a) Each company required to file tariffs under RCW 80.36.100 must have on file an extension of service tariff and must extend service consistent with its tariff and this section and provide drop wire for customer use. Service extensions must be completed within eighteen months after a request is made and the customer makes the initial payment, unless the commission extends the time on a showing of good cause.

     (b) Extension of service is required to occupied premises unless the company demonstrates occupancy is temporary. In the case of new construction commenced after the effective date of this section, extension of service is required only if the applicant has permission to build from the applicable local government and the need for service is not temporary.

     (c) Any company required to extend service under this section may do so by extending distribution plant or by making a service and financial agreement with a radio communications service company or other alternative provider to provide service. The services provided through a radio communications service company or other alternative provider must be reasonably comparable services at reasonably comparable prices compared to services provided through wireline distribution facilities in the area of the exchange where service has been requested. In addition, the services must include all elements of basic service defined in RCW 80.36.600. A company extending service through a service agreement with a radio communications service company or other alternative provider may file a tariff as permitted under subsection (4) of this section to recover the lesser of the actual direct cost to extend the service through the cooperative agreement or the direct cost of extending wireline distribution plant.

     (3) Service extension charge to applicants.

     (a) For service provided under subsection (2) of this section, companies must submit a tariff that sets the level of an initial fee and per-month fee for any applicant requesting an extension of service. The tariff may also impose such fees upon applicants for new service from a service extension that is less than five years old measured from the date of the initial service provided by the extension. The charge to applicants for service extensions must include an initial payment to process the order. The maximum initial payment to process the order is an amount equal to twenty times the customer's basic monthly service rate exclusive of all fees, taxes or other charges.

     A per-month payment beginning with the first monthly bill for service must be charged once the order is complete and service is provided. The maximum allowable per-month payment for a period of twenty months is an amount equal to the customer's basic monthly service rate, exclusive of all fees, taxes or other charges. Customers may pay the entire amount at any time, in lieu of monthly payments, and must pay the entire remaining amount at the time of disconnecting service if the disconnection occurs prior to full payment.

     (b) Customers are responsible for providing or paying the cost of trenching, conduit, or other structures required for placement of company-provided drop wire from the customer's property line to the premises.

     (4) Cost recovery for extensions of service.

     (a) A company with a terminating-access tariff under WAC 480-120-540 and a service-extension tariff imposing fees or charges under subsection (3) of this section may file tariffs to include a service-extension element on terminating access in an amount necessary to recover the cost of an extension of service. The tariff may not recover costs covered by applicant or customer payments for service extensions, federal universal service funds, or any similar funds or grants from other sources. The company must file the tariff to be effective only so long as necessary to recover the costs allowed under this section.

     (b) Companies may recover costs by filing a tariff under (b)(i) or (ii) of this subsection. In the case of companies that serve fewer than two percent of the access lines in the state, placement of the tariff on the agenda of a commission open meeting constitutes notice of an opportunity to be heard on the need for any reporting requirements related to a tariff based on estimated costs.

     (i) A company may file a proposed tariff to recover fifty percent of the estimated cost of an extension after it obtains all permits necessary for construction related to the extension of service. Extensions of service must be completed within twelve months of the effective date of a tariff that uses estimated costs. The tariff based on estimates is null and void at the end of that twelve-month period if the extension of service is not completed however, the commission, for good cause shown, may permit the tariff based on estimates to remain in effect after twelve months. If the commission does not permit the tariff based on estimates to continue, the company must within thirty days of the commission's decision or the end of the twelve-month period, whichever is later, file a replacement tariff to offset the amounts collected. After completion of an extension subject to a tariff based on estimated costs, the company may file a tariff to recover the cost of the extension less any amount already recovered or, in the event of an over-collection, must file a tariff to reduce terminating access sufficient to offset the amount over-collected through the initial tariff.

     Class A companies that have in effect a service-extension tariff based on estimated costs must report quarterly on collections, expenditures, and construction timetables and progress, including a final report after completion of the extension and termination of the tariff. Companies that serve fewer than two percent of the access lines in the state and that have in effect a service-extension tariff based on estimated costs must make the same report every six months if ordered by the commission.

     (ii) A company may file a tariff to recover the cost of a service extension at any time within two years after completion of an extension and may accumulate the cost of multiple line extensions before filing a tariff.

     (c) The commission will review the cost justification for the tariffs and approve the tariffs if they are consistent with this section. The commission will not conduct an earnings review of the company's operations for the purpose of reviewing the proposed tariffs.

     (5) Extension of service to neighboring exchange facilities.

     (a) A company that is willing to extend service to a neighboring exchange may recover under subsection (4) of this section the cost of an extension to a neighboring exchange if companies obligated to serve the neighboring exchange agree that the cost of a cross-boundary service extension would be less than the cost of extension within the applicants' exchange and agree to the cross-boundary extension.

     (b) In the case of a cross-boundary extension, an applicant will become a customer of the extending company. The customer's rates and local calling capabilities must be the same as other customers served out of the extending company's same central office.

     (c) The newly constructed facilities will be the property of the extending company, but the exchange boundary will remain unchanged.

     (d) The charge to the customer shall be determined in accordance with subsection (3) of this section.

     (6) Extensions to developments. The cost of extensions to developments should be borne by those who gain economic advantage from development and not by ratepayers in general. This policy promotes the economic good of having telephone infrastructure placed at the same time as other infrastructure is constructed as a part of development. Accordingly, local exchange companies may not recover under subsection (4) of this section the costs of extensions to serve the following:

     (a) Developments filed after the effective date of this rule for which a public offering statement is required under chapter 58.19 RCW;

     (b) Divisions of land filed after the effective date of this rule that use binding site plans under RCW 58.17.035 to create five or more lots or units;

     (c) Subdivisions filed after the effective date of this rule;

     (d) Short subdivisions with five or more lots filed after the effective date of this rule;

     (e) Developments filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were constructed after the division of land and prior to the effective date of this rule;

     (f) Divisions of land using binding site plans under chapter 58.17 RCW with five or more lots or units filed prior to the effective date of this rule, in which all lots, units or both were under common ownership and control on the effective date of this rule, and in which no residential buildings or commercial or industrial buildings were constructed after the division of land and prior to the effective date of this rule;

     (g) Subdivisions filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were constructed after the division of land and prior to the effective date of this rule;

     (h) Short subdivisions with five or more lots filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were constructed after the division of land and prior to the effective date of this rule;

     (i) Mobile home parks, mobile home park cooperatives, and mobile home park subdivisions filed after the effective date of this rule;

     (j) Mobile home parks, mobile home park cooperatives, and mobile home park subdivisions filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were placed or constructed after the division of land and prior to the effective date of this rule;

     (k) Marinas;

     (l) Camping resorts regulated under chapter 19.105 RCW;

     (m) Condominiums regulated under chapters 64.32 and 64.34 RCW;

     (n) Timeshares regulated under chapter 64.36 RCW.

     (7) Waiver of obligation under this section.

     (a) The commission retains the authority under RCW 80.36.090 to determine whether any applicant for service is not reasonably entitled to service and whether the local exchange company is not obligated to provide service to an applicant under subsection (2)(b) of this section. In determining the reasonable entitlement, the commission may consider those factors listed in (b)(ii)(A) through (G) of this subsection and such other information that it may consider necessary to a proper determination.

     (b) Waiver of subsection (3)(a) of this section:

     (i) A company may petition for a waiver of subsection (3)(a) of this section in order to charge an applicant the direct cost to extend service if it is unreasonable for the direct cost of the extension of service to be borne by rates permitted under subsection (4) of this section.

     (ii) In determining whether cost recovery under subsection (4) of this section for an extension is unreasonable and granting a waiver is consistent with public interest, the commission will consider:

     (A) The total direct cost of the extension;

     (B) The number of customers to be served;

     (C) The comparative price and capabilities of radio communication service or other alternatives available to customers;

     (D) Technological difficulties and physical barriers presented by the requested extensions;

     (E) The effect on the individuals and communities involved;

     (F) The effect on the public switched network; and

     (G) The effect on the company.)) "Applicant" means any person applying to a telecommunications company for new tariffed residential basic local exchange service. Applicant does not include developers requesting service for developments.

     "Cost of service extension" means the direct and indirect costs of the material and labor to plan and construct the facilities including, but not limited to, permitting fees, rights of way fees, and payments to subcontractors, and does not include the cost of reinforcement, network upgrade, or similar costs.

     "Developer" means any owner of a development who offers it for disposition, or an agent of such an owner.

     "Development" means land which is divided or is proposed to be divided for the purpose of disposition into four or more lots, parcels, or units.

     "Distribution plant" means telephone equipment and facilities necessary to provide new tariffed residential basic local exchange service to a premises, but does not include drop wire.

     "Drop wire" means company-supplied wire and pedestals to be placed between a premises and the company distribution plant at the applicant's property line. For drop wire installed after January 15, 2001, a drop wire must be sufficient in capacity to allow the provisioning of three individual basic exchange voice-grade access lines.

     "Extension of service" means an extension of company distribution plant for new tariffed residential basic local exchange service to a location where no distribution plant of the extending company exists at the time an extension of service is requested. An extension is constructed at the request of one or more applicants for service. Extensions of service do not include trenches, conduits, or other support structure for placement of company-provided facilities from the applicant's property line to the premises to be served. Extension of service, as defined in this rule, does not apply to extensions of service to developments or to extensions of service for temporary occupancy or temporary service.

     "Extraordinary cost" means a substantial expense resulting from circumstances or conditions beyond the control of the company that are exceptional and unlikely to occur in the normal course of planning and constructing facilities contemplated by this rule.

     "Order date" as defined in WAC 480-120-021 (Definitions) means the date when an applicant requests service unless a company identifies specific actions a customer must first complete in order to be in compliance with tariffs or commission rules. Except as provided in WAC 480-120-061 (Refusing service) and 480-120-104 (Information to consumers), when specific actions are required to be completed by the applicant, the order date becomes the date the company receives the completed application for extension of service.

     "Premises" means any structure that is used as a residence, but does not include predominantly commercial or industrial structures.

     "Tariffed" means offered under a tariff filed with the commission.

     "Temporary occupancy" means occupancy definitely known to be for less than one year but does not include intermittent or seasonal use when the intermittent or seasonal use will occur in more than a one-year period.

     "Temporary service" means service definitely known to be for a short period of time, such as service provided for construction huts, sales campaigns, athletic contests, conventions, fairs, circuses, and similar events.

     (2) Tariffed residential basic local exchange service.

     (a) Each company required to file tariffs under RCW 80.36.100, and each company required to do so under an alternative form of regulation, must have on file with the commission an extension of service tariff for residential basic local exchange service consistent with this rule. Each company must extend service consistent with its tariff and this section.

     (b) Within seven business days of an applicant's initial request, each company to which (a) of this subsection applies must provide the applicant with an application for extension of service. The company must also provide the applicant a brief explanation of the extension of service rules, including the requirement that subsequent applicants must contribute to the cost of a previously built extension that is less than five years old.

     (c) The company must process applications that require an extension of service in a timely manner, consistent with the following:

     (i) When there will be no charge for an extension of service as a result of the allowances required under subsection (3) of this section, the company must construct the extension and provide new tariffed residential basic local exchange service within thirteen months of the order date unless the commission grants the company's request to charge the applicant for extraordinary extension of service costs.

     (ii) For an extension of service that exceeds the allowances provided under subsection (3) of this section, within one hundred twenty days of the order date, the company must provide the applicant a bill for the estimated cost of construction of the extension of service under subsection (4)(a) of this section. The company must include with the bill a notice to the applicant of the right to be reimbursed for a portion of the cost by a subsequent applicant as provided under subsection (5) of this section.

     (iii) When the company bills for the estimated construction charges, including extraordinary costs as allowed in this section, it must complete the extension of service and provide new tariffed residential basic local exchange service within twelve months after the applicant meets the payment terms established by the company (e.g., payment in full, partial payment on a schedule). If there are multiple applicants under subsection (4)(b) of this section, then all applicants must meet the payment terms established by the company.

     (3) Allowances.

     (a) A company's tariff must allow for an extension of service within its service territory up to one thousand feet at no charge to the applicant. The tariff may allow for an extension of service for distances over the allowance at no charge to the applicant.

     (b) The applicant is responsible for the cost of that portion of the extension of service, if any, that exceeds the allowance. When the applicant meets the company's payment terms under subsection (2)(c)(iii) of this section, the company must construct the extension of service. The company's tariff must permit multiple applicants to aggregate their allowances when an extension of service to two or more applicants would follow a single construction path.

     (c) If the company determines that the first one thousand feet of an extension of service will involve extraordinary costs, the company may petition for permission to charge the applicant(s) for those costs. The petition must be in the form required under WAC 480-07-370 (1)(b)(ii) and the company must file the petition within one hundred twenty days after the order date. The company must provide notice to the applicant of the petition.

     (4) Determining costs and billing for extensions of service longer than allowances.

     (a) The company must estimate the cost of the service extension that is attributable to distribution plant that must be extended beyond the applicable allowance established under subsection (3)(b) of this section.

     (b) When two or more applicants request service and aggregate their allowances, and it is still necessary to construct an extension of service longer than the aggregated incremental allowances, the company must bill each applicant for an equal portion of the allowable charge (e.g., when two applicants aggregate allowances, the charge is divided by two; when five applicants aggregate allowances, the charge is divided by five). Multiple applicants may agree to divide the bill among themselves in amounts different from those billed as long as the billing company receives full payment.

     (c) At the completion of the construction of the extension of service, the company must determine the difference between the estimated cost provided under subsection (2)(c)(ii) of this section and the actual cost of construction. The company must provide to the applicant detailed construction costs showing the difference. The company must refund any overpayment and may charge the applicant for reasonable additional costs up to ten percent of the estimate.

     (d) The company must retain records pertaining to the construction charges paid for a period of at least six years from payment of the charges by the original applicant(s).

     (5) Subsequent applicants to existing extensions of service for which construction charges were paid.

     (a) If within five years of the order date for an extension of service a subsequent applicant seeks service from that previous extension of service and the original applicant(s) paid construction charges under subsection (4) of this section, then the company tariff must require the subsequent applicant to pay a proportionate share of the original extension of service charges before extending service. The tariff must provide that the amount paid by subsequent applicants will be refunded proportionately to the original applicant(s) who paid the extension charges.

     (b) The company must provide notice to the last known address of the original applicant(s) of the amount of the refund due the applicant(s). Any refund not requested within sixty days of the date notice was sent will be returned to the subsequent applicant.

     (6) Requirements for supporting structures and trenches.

     (a) A company tariff may condition construction on completion of support structures, trenches, or both on the applicant's property.

     (i) Applicants are responsible for installation of all supporting structures required for placement of company-provided drop wire from the applicant's property line to the applicant's premises. The company may offer to construct supporting structures and dig trenches and may charge for those services, but the tariff must not require that applicants use only company services to construct supporting structures and dig trenches. The offer must clearly state that the applicant may choose to employ a different company for construction services.

     (ii) The company tariff may require that all supporting structures required for placement of company-provided drop wire from the applicant's property line to the premises are placed in accordance with reasonable company construction specifications. The tariff must require that, once in place and in use, all supporting structures and drop wire will be maintained by the company as long as the company provides service, and any support structure and trenches constructed at company expense are owned by the company.

     (b) The tariff must provide that once supporting structures, trenches, or both, have been constructed, the company will provide drop wire to applicants at no charge.

     (7) Temporary service. Each company required to file tariffs under RCW 80.36.100 (Tariff schedules to be filed and open to public -- Exceptions), and each company regulated under an alternative form of regulation, must have on file with the commission an extension of service tariff for temporary service consistent with this rule. Each company must extend service consistent with its tariff and this section. A company tariff for extension of temporary service may not provide allowances (e.g., one thousand feet without charge) or discounts on the cost of construction.

     (8) Application of rule.

     (a) The prior WAC 480-120-071, as it was in effect on June 1, 2008, will continue to apply to applications for extension of service that a company has completed or accepted before (the effective date of the amended rule) October 4, 2008.

     (b) This section, as amended effective (the effective date of the amended rule) October 4, 2008, applies to all other requests for service before and after the effective date.

[Statutory Authority: RCW 80.01.040, 80.04.160, 80.36.080, 80.36.300. 00-24-097 (Order R-474, Docket No. UT-991737), § 480-120-071, filed 12/5/00, effective 1/15/01; Order R-25, § 480-120-071, filed 5/5/71. Formerly WAC 480-120-170.]

     Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.

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