SENATE BILL REPORT

SHB 458

BYHouse Committee on Energy & Utilities (originally sponsored by Representatives Todd, Barnes, Nelson, Schmidt and Jacobsen)

Extending the moratorium on mandatory local measured telecommunications service.

House Committe on Energy & Utilities

Senate Committee on Energy & Utilities

Senate Hearing Date(s):March 24, 1987; March 31, 1987

Majority Report:  Do pass.

      Signed by Senators Williams, Chairman; Benitz, Nelson, Smitherman, Stratton.

Senate Staff:Deborah Senn (786-7450)

                  March 31, 1987

AS REPORTED BY COMMITTEE ON ENERGY & UTILITIES, MARCH 31, 1987

BACKGROUND:

There are two ways that a telephone company charges for local telephone services, flat rates and measured rates.  Under flat rates, there is a single monthly charge for local telephone service, regardless of the number of calls made or the length of these calls.  Under measured rates, the cost reflects the amount the telephone is used.  Rates are based upon elements such as: (1) time of day; (2) duration of call; (3) the distance a call travels; and (4) number of calls made.

In late 1983 Pacific Northwest Bell (PNB) filed a telephone rate restructuring proposal with the Washington Utilities and Transportation Commission (UTC) to impose a mandatory measured service rate on business customers.  This request was later withdrawn, and in 1985 the legislature enacted a prohibition against mandatory local measured service (LMS) on any customer prior to June 1, 1987.  If the Legislature takes no action, there will be no legislative ban on mandatory local measured service subsequent to June 1, 1987.

SUMMARY:

The Washington Utilities and Transportation Commission (UTC) shall not accept for filing or approve a tariff filed by a telecommunications company which imposes mandatory local measured service on any customers or class of customers until June 1, 1990.

There are two exceptions to the ban.  First, the UTC may accept for filing and approve a tariff that imposes mandatory measured service for a telecommunications company's extended area service.  This means that a telecommunications company that has flat rate service in both its local exchange, and extended area, can petition the UTC to allow the imposition of mandatory LMS in the extended area (beyond the local exchange area).  So, for example, calls from Seattle to Bellevue and Bellevue to Seattle right now under flat rate EAS, can be changed from a flat rate service to mandatory measured service.

Second, there would be an exception for foreign exchange service.  The foreign exchange or FX exception would operate in a similar manner.  Foreign exchange service allows customers of a business to call that business some distance away and be charged the local flat rate.  The business, the recipient of the call, pays the phone company a flat fee to offer that service to the customer.  Under the FX exception, the charge to the business could be placed on a measured basis.

Fiscal Note:      available

Senate Committee - Testified: Kit Hawkins, Frank Dillow, Earl Jones, GTE-Northwest; David Martin, Houser Martin Morris & Associates; Frank Tissell, Action Travel; Shirley Lansing, General Employment; Jeanne Krutzer, Pace Network; Stan Enebo, AARP; Thomas Ferree, Ferree & Associates; Larry Stevens, CONTEL; Lane Mothem, Washington PIRG; Pat Doughty; Art Butler; Steve McClellen, UTC; Dale Vincent, PNB