Z-0788.2  _______________________________________________

                    SUBSTITUTE HOUSE BILL 1528

          _______________________________________________

State of Washington      57th Legislature     2001 Regular Session

By House Committee on Technology, Telecommunications & Energy (originally sponsored by Representatives Poulsen, Crouse, Ruderman and Delvin; by request of Utilities & Transportation Commission)

Read first time .  Referred to Committee on .

Reducing regulatory requirements on competitive telecommunications services and companies.

    AN ACT Relating to telecommunications; amending RCW 80.36.320 and 80.36.330; and adding a new section to chapter 80.36 RCW.

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

    Sec. 1.  RCW 80.36.320 and 1998 c 337 s 5 are each amended to read as follows:

    (1) The commission shall classify a telecommunications company as a competitive telecommunications company if the services it offers are subject to effective competition.  Effective competition means that the company's customers have reasonably available alternatives and that the company does not have a significant captive customer base.  In determining whether a company is competitive, factors the commission shall consider include but are not limited to:

    (a) The number and sizes of alternative providers of service;

    (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.

    The commission shall conduct the initial classification and any subsequent review of the classification in accordance with such procedures as the commission may establish by rule.

    (2) ((Competitive telecommunications companies shall be subject to minimal regulation.  Minimal regulation means that competitive telecommunications companies may file, instead of tariffs, price lists that shall be effective after ten days' notice to the commission and customers.  The commission shall prescribe the form of notice.  The commission may also waive other regulatory requirements under this title for competitive telecommunications companies when it determines that competition will serve the same purposes as public interest regulation.  The commission may waive different regulatory requirements for different companies if such different treatment is in the public interest.))

    A competitive telecommunications company shall at a minimum:

    (a) Keep its accounts according to regulations as determined by the commission;

    (b) File financial reports with the commission as required by the commission and in a form and at times prescribed by the commission;

    (c) ((Keep on file at the commission)) Maintain such current price lists and service standards as the commission may require; and

    (d) Cooperate with commission investigations of customer complaints.

    (3) ((When a telecommunications company has demonstrated that the equal access requirements ordered by the federal district court in the case of U.S. v. AT&T, 552 F. Supp. 131 (1982), or in supplemental orders, have been met, the commission shall review the classification of telecommunications companies providing inter-LATA interexchange services.  At that time, the commission shall classify all such companies as competitive telecommunications companies unless it finds that effective competition, as defined in subsection (1) of this section, does not then exist.

    (4))) The commission may revoke any waivers it grants and may reclassify any competitive telecommunications company if the revocation or reclassification would protect the public interest.

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

    Sec. 2.  RCW 80.36.330 and 1998 c 337 s 6 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 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) ((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))) Prices or rates charged for ((competitive)) telecommunications services classified as competitive under this section 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))) (3) The commission may investigate prices for ((competitive)) telecommunications services classified as competitive under this section 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))) (4) Telecommunications companies shall provide the commission with all data it deems necessary to implement this section.

    (((6))) (5) No losses incurred by a telecommunications company in the provision of ((competitive)) telecommunications services classified as competitive under this section 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))) (6) The commission may reclassify any ((competitive)) telecommunications service classified as competitive under this section if reclassification would protect the public interest.

    (((8) 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.))

NEW SECTION. Sec. 3.  A new section is added to chapter 80.36 RCW to read as follows:

    (1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

    (a) "Competitive telecommunications service" includes any service provided by a company classified as competitive under RCW 80.36.320 and any service classified as competitive under RCW 80.36.330.

    (b) "Price list" means a written offer containing the prices, terms, and conditions under which a competitive telecommunications service is offered.

    (2) Competitive telecommunications services shall be subject to minimal regulation as provided for in this section.

    (a) The commission shall waive the application to competitive telecommunications service of any regulatory requirement under this title, except RCW 80.36.320 and 80.36.330 and this section, if it determines that competition will serve the same purposes as public interest regulation.  The commission may waive different regulatory requirements for different types of service or different types of companies if the treatment is in the public interest and does not result in unfair competitive advantage.

    (b) The commission may permit or require that telecommunications companies maintain publicly accessible price lists or file price lists with the commission.  However, regardless of whether price lists are filed with the commission, no telecommunications company may impose mandatory local measured telecommunications service that is inconsistent with the provisions of RCW 80.04.130(3).

    (c) Each telecommunications company shall notify customers of any change in the prices, terms, or conditions under which any competitive telecommunications service is offered or provided.  The commission may prescribe the form, manner, and timing of the notice.

                            --- END ---