WSR 14-21-045

PERMANENT RULES

UTILITIES AND TRANSPORTATION

COMMISSION

[Docket UT-131239, General Order R-575—Filed October 7, 2014, 2:29 p.m., effective November 7, 2014]

In the matter of amending and adopting rules in chapter 480-123 WAC, relating to universal service.

ORDER CORRECTING TEXT OF WAC 480-123-100, 480-123-110, 480-123-120, and 480-123-150 SUBMITTED FOR ADOPTION.

1 On May 22, 2014, the Washington utilities and transportation commission (commission) filed with the code reviser an order amending and adopting rules permanently in chapter 480-123 WAC (adoption order or order), relating to universal service. The order is filed at WSR 14-12-008. The effective date for the adoption of the rules is June 22, 2014.

2 The commission recently learned that certain changes reflected in the adoption order were erroneously omitted in the rules submitted for adoption. Specifically, the changes were set out in paragraph 43 of the adoption order as follows:

•	WAC 480-123-100(b), correct 253(h) to 251(h) and add immediately thereafter, "or has been designated as an incumbent local exchange carrier by the Federal Communications Commission";
•	WAC 480-123-110 (1)(h), delete the word "calendar";
•	WAC 480-123-110(3), delete the phrase "in conjunction with its application for certification as an eligible telecommunications carrier,";
•	WAC 480-123-120, in the first sentence, replace "a calendar year" with "an annual"; in the second sentence, replace "that" with "each" and add the following phrase at the end of the sentence: "of eligibility, except as otherwise authorized by the commission"; and
•	WAC 480-123-150 (2)(a)(v), replace "division" with "section" to accurately name public counsel.

3 The commission has authority to take this action pursuant to RCW 80.01.040(4), 80.36.630, 80.36.650, 80.36.660, 80.36.670, 80.36.680, 80.36.690, and 80.36.700.

4 This proceeding complies with the Administrative Procedure Act (chapter 34.05 RCW), the State Register Act (chapter 34.08 RCW), the State Environmental Policy Act of 1971 (chapter 43.21C RCW), and the Regulatory Fairness Act (chapter 19.85 RCW).

5 Failure to include the changes set forth in paragraph 43 of the adoption order, submitted to the code reviser on May 22, 2014, constitutes an oversight. Accordingly the commission enters this order to correct the omissions. A copy of the corrected rules reflecting the intended changes referenced above in paragraph 2 are shown below this order as Appendix A.

6 The commission adopts these rules on the date this order is entered.

ORDER

7 THE COMMISSION ORDERS:

8 The commission amends and adopts WAC 480-123-100, 480-123-110, 480-123-120, and 480-123-150 to read as set forth in Appendix A, as rules of the Washington utilities and transportation commission, to take effect on the thirty-first day after the date of filing with the code reviser pursuant to RCW 34.05.380(2).

DATED at Olympia, Washington, October 7, 2014.

Washington Utilities and Transportation Commission

David W. Danner, Chairman

Philip B. Jones, Commissioner

Jeffrey D. Goltz, Commissioner

Docket UT-131239

Appendix A

NEW SECTION

WAC 480-123-100 Prerequisites for requesting program support.

(1) Wireline communications providers. A wireline communications provider may seek support from the program if the provider satisfies all of the following requirements:

(a) The provider is a local exchange company as defined in WAC 480-120-021 that serves less than forty thousand access lines within the state;

(b) The provider is an incumbent local exchange carrier as defined in 47 U.S.C. Sec. 251(h) or has been designated as an incumbent local exchange carrier by the Federal Communications Commission;

(c) The provider offers basic residential and business exchange telecommunications services as set forth in WAC 480-120-021 and RCW 80.36.630;

(d) The provider's rates for residential local exchange service, plus mandatory extended area service charges, are no lower than the local urban rate floor established by the commission as the benchmark rate based on the Federal Communications Commission's most current calculation of a national local urban rate floor pursuant to 47 C.F.R. Sec. 54.318 in the year in which the provider files a petition for support; provided that, if the provider's rates exceed the benchmark, the provider may not seek support from the program for the purpose of reducing those rates towards or to the benchmark; and

(e) The provider has been designated by the commission as an eligible telecommunications carrier for purposes of receiving federal universal service support pursuant to 47 C.F.R. Part 54 Subpart D – Universal Service Support for High Cost Areas, with respect to the service areas for which the provider is seeking program support.

(2) Wireless communications providers. A wireless communications provider may seek support from the program if the provider satisfies all of the following requirements:

(a) The provider is licensed by the Federal Communications Commission to offer commercial mobile radio service within the state of Washington;

(b) The provider serves fewer than the equivalent of forty thousand access lines in Washington; and

(c) The provider has been designated by the commission as an eligible telecommunications carrier for purposes of receiving federal universal service support pursuant to 47 C.F.R. Part 54 Subpart D – Universal Service Support for High Cost Areas, with respect to the service areas for which the provider is seeking program support.

(3) In calculating access lines or equivalents under this section, the access lines or equivalents of all affiliates must be counted as a single threshold, if the lines or equivalents are located in Washington; provided that only the wireline access lines of the affiliates of a provider seeking support as a wireline carrier will count toward the single threshold for that provider, and only the wireless access line equivalents of the affiliates of a provider seeking support as a wireless carrier will count toward the single threshold for that provider.

NEW SECTION

WAC 480-123-110 Petitions for eligibility to receive program support.

(1) Wireline communications providers. A wireline communications provider that satisfies the prerequisites in WAC 480-123-100 may petition the commission to receive support from the program. The provider must petition the commission each year to be eligible to receive support from the program the following year. The petition must include the following information:

(a) The name of the legal entity that provides communications services and is seeking program support;

(b) A corporate organization chart showing the relationship between the legal entity identified in (a) of this subsection and all affiliates as defined in RCW 80.16.010 and a detailed description of any transactions between the provider and those affiliates recorded in the provider's operating accounts;

(c) A service area map or detailed reference to any maps on file with the commission showing the provider's Washington service area;

(d) A demonstration that the provider's customers are at risk of rate instability or service interruptions or cessation in the absence of support from the program;

(e) Detailed financial information and supporting documentation in a form prescribed by the commission for the provider's total Washington regulated operations for the two calendar years prior to the year in which the provider is filing the petition including, but not limited to, the following:

(i) The provider's balance sheet and statements of income and retained earnings or margin from, or in the same format and detail required in, Rural Utilities Service (RUS) Form 479;

(ii) The provider's consolidated audited financial statements; if the provider does not have consolidated audited financial statements prepared in the normal course of its business, the provider must submit financial statements reviewed by a certified public accountant;

(iii) Information demonstrating the provider's earned rate of return on a total Washington unseparated regulated operations basis for each of the two prior years;

(iv) Information demonstrating the provider's earned return on equity on a total company (regulated and nonregulated) Washington basis for each of the two prior years;

(v) Information detailing all of the provider's revenues from the statements of income and retained earnings or margin section of RUS Form 479 for the two prior years; if the provider does not submit RUS Form 479, the provider must file with the commission the same revenue information specified in this subsection that is required to complete the applicable portion of that form;

(vi) Information detailing the amounts of any corporate operations adjustments to existing high-cost loop and interstate common line support mechanisms the Federal Communications Commission required of the provider for the two prior years or a statement under penalty of perjury from a company officer of the provider with personal knowledge and responsibility certifying that no such adjustments apply to the provider;

(vii) Any additional supporting information the commission requests to enable it to analyze the provider's financial results for program purposes; and

(viii) A statement under penalty of perjury from a company officer of the provider with personal knowledge and responsibility certifying that the provider complies with state and federal accounting, cost allocation, and cost adjustment rules pertaining to incumbent local exchange companies;

(f) A complete copy of the FCC Form 481 the provider filed with the Federal Communications Commission for the calendar year preceding the year in which the provider is filing the petition; if the provider does not submit FCC Form 481 to the Federal Communications Commission, the provider must file with the commission the same information required to complete that form;

(g) Information detailing the number of residential and business local exchange access lines the provider served as of December 31st for each of the prior two years and the monthly rate charged to each customer category; and

(h) A statement under penalty of perjury from a company officer of the provider certifying that if it receives program support the provider will continue to provide communications services pursuant to its tariffs on file with the commission throughout its service territory in Washington for which it is seeking and receives program support during the entirety of the year in which the provider is applying for support from the program.

(2) Wireless communications provider. A wireless communications provider that meets the requirements in WAC 480-123-100 may petition the commission to receive support from the program. The provider must petition the commission each year to be eligible to receive support from the program the following year. The petition must include the same type of information for the same periods required of wireline communications providers in subsection (1) of this section. The first time a wireless communications provider seeks to file such a petition, the provider must first submit its request to file the petition to the advisory board, pursuant to any guidelines the advisory board will adopt, detailing how the provider will compile and supply the information required by this rule. The advisory board will make a recommendation to the commission, and the commission will determine the precise information the provider must file in support of its petition.

(3) Information already on file with the commission. To the extent that the provider has filed any of the information required under this rule, the provider need not include that same information in its petition so long as the provider identifies the docket number, documents, and location within those documents in which the provider included that information.

(4) Timing of petitions. A provider must file a complete petition that fully complies with this section no later than August 1st if the company seeks support from the program for the following calendar year. Program support is available annually until the expiration of the program on June 30, 2019.

(5) Certification. One or more company officers responsible for the provider's business and financial operations must certify in the form of a statement under penalty of perjury that the information and representations made in the petition are accurate and that the provider has not knowingly withheld any information required to be provided to the commission pursuant to the rules governing the program. The provider must file this certification with its petition.

NEW SECTION

WAC 480-123-120 Eligibility and distributions from the program.

The commission will authorize distributions from the program on an annual basis. Each eligible provider will receive a single distribution for the year after January 1st of each year of eligibility, except as otherwise authorized by the commission.

(1) Eligibility. A wireline communications provider that complies with the requirements in this chapter is eligible to receive distributions from the program if the provider demonstrates that its financial circumstances are such that its customers are at risk of rate instability or service interruptions or cessations absent a distribution to the provider that will allow the provider to maintain rates reasonably close to the benchmark the commission has established. In making that determination, the commission will consider the provider's earned rate of return on a total Washington company books and unseparated regulated operations basis, the provider's return on equity, the status of the provider's existing debt obligations, and other relevant factors including, but not limited to, the extent to which the provider is planning or implementing operational efficiencies and business plan modifications to transition or expand from primary provision of legacy voice telephone service to broadband service or otherwise reduce its reliance on support from the program.

(2) Calculation of support amount. The amount that a wireline communications provider eligible to receive support from the program may receive in a calendar year shall not exceed the sum of the following:

(a) The amount the provider received in 2012 from the former traditional USF fund established in Docket U-85-23, et al., and administered by the Washington exchange carrier association; and

(b) The cumulative reduction in support from the Connect America Fund incurred by the provider up through and including the year for which program support is distributed to the provider to the extent the program contains sufficient funds.

(3) Distribution to wireless communications providers. The advisory board will make a recommendation to the commission on eligibility and distribution calculations for any wireless communications provider that seeks support from the program, and the commission will determine that provider's eligibility and the amount of support, if any, the provider may receive consistent with RCW 80.36.650 and commission rules.

(4) Total requests in excess of available funds. If the total requests for support for a calendar year exceed the program funds available for that year, the commission will distribute the available funds to eligible carriers on a pro rata basis. The commission may seek a recommendation from the advisory board on the best pro rata distribution methodology to use.

(5) Commission determination. The commission will consider petitions from companies seeking support from the program and will make the necessary eligibility and distribution determinations in response to those petitions prior to January 1st of the calendar year in which funds from the program will be distributed.

NEW SECTION

WAC 480-123-150 Advisory board.

(1) Establishment. The commission will establish an industry and consumer advisory board to provide recommendations to the commission on the implementation and management of the program.

(2) Membership. The commission secretary is authorized to solicit nominations and approve membership on the board.

(a) The board will be comprised of members representing the following interests:

(i) One from incumbent local exchange companies serving fewer than forty thousand access lines in Washington;

(ii) One from incumbent local exchange companies serving more than forty thousand access lines in Washington;

(iii) One from competitive local exchange companies serving customers in Washington;

(iv) One from wireless communications providers offering service in Washington;

(v) One from the public counsel section of the office of the attorney general of Washington; and

(vi) One from the commission staff.

(b) Commission staff and public counsel shall have permanent membership on the board. The commission will appoint industry members for a term of three years, at the expiration of which the industry members are eligible for appointment to a subsequent three-year term.

(3) Duties. The board shall:

(a) Have a consultative role on matters directly referred to it by the commission;

(b) Conduct meetings no less than once per year;

(d) Prepare and submit to the commission a written report on matters brought to it for consideration including, where appropriate, a recommendation to the commission on potential resolution of such matters.

(4) Initiating board action. The commission alone may initiate board action other than the execution of administrative duties, which the board may conduct on its own initiative. Any person who seeks board participation in program issues or matters must petition the commission to initiate board action.