S-1319.1                   _______________________________________________

                                                     SENATE BILL 5690

                              _______________________________________________

State of Washington                              53rd Legislature                             1993 Regular Session

By Senators Hochstatter and Vognild

Read first time 02/09/93.  Referred to Committee on Energy & Utilities.

Setting a standard for classifying a telecommunications company as competitive.

          AN ACT Relating to classification of telecommunications companies; and amending RCW 80.36.330.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  RCW 80.36.330 and 1989 c 101 s 16 are each amended to read as follows:

          (1) The commission may classify a telecommunications service provided by a telecommunications company as a competitive telecommunications service if it finds, after notice and hearing, that the service is subject to effective competition.  Effective competition means that customers of the service have reasonably available alternatives and that the service is not provided to a significant captive customer base.  In determining whether a service is competitive, factors the commission shall consider include but are not limited to:

          (a) The number and size of alternative providers of services;

          (b) The extent to which services are available from alternative providers in the relevant market;

          (c) The ability of alternative providers to make functionally equivalent or substitute services readily available at competitive rates, terms, and conditions; and

          (d) Other indicators of market power, which may include market share, growth in market share, ease of entry, and the affiliation of providers of services.

          (2) A telecommunications service provided by a telecommunications company making application under this section shall be classified as a competitive service if such service, or a functionally equivalent or substitute service:

(a) Is provided by another telecommunications company and has been classified as competitive under this section; or

(b) Is provided, or is authorized by the commission to be provided, by a competitive telecommunications company.

(3) When the commission finds that a telecommunications company has demonstrated that a telecommunications service is competitive, the commission may permit the service to be provided under a price list effective on ten days notice to the commission and customers.  The commission shall prescribe the form of notice.  The commission may adopt procedural rules necessary to  implement this section.

          (((3))) (4) Prices or rates charged for competitive telecommunications services shall cover their cost.  The commission shall determine proper cost standards to implement this section, provided that in making any assignment of costs or allocating any revenue requirement, the commission shall act to preserve affordable universal telecommunications service.

          (((4))) (5) The commission may investigate prices for competitive telecommunications services upon complaint.  In any complaint proceeding initiated by the commission, the telecommunications company providing the service shall bear the burden of proving that the prices charged cover cost, and are fair, just, and reasonable.

          (((5))) (6) Telecommunications companies shall provide the commission with all data it deems necessary to implement this section.

          (((6))) (7) No losses incurred by a telecommunications company in the provision of competitive services may be recovered through rates for noncompetitive services.  The commission may order refunds or credits to any class of subscribers to a noncompetitive telecommunications service which has paid excessive rates because of below cost pricing of competitive telecommunications services.

          (((7))) (8) The commission may reclassify any competitive telecommunications service if reclassification would protect the public interest.

          (((8))) (9) The commission may waive the requirements of RCW 80.36.170 and 80.36.180 in whole or in part for a service classified as competitive if it finds that competition will serve the same purpose and protect the public interest.

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