AN ACT Relating to the state universal communications services program; amending RCW 80.36.630, 80.36.650, 80.36.660, 80.36.670, 80.36.680, and 80.36.690; and repealing RCW 80.36.700.

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

Sec. 1.  RCW 80.36.630 and 2013 2nd sp.s. c 8 s 202 are each amended to read as follows:

(((1))) The definitions in this section apply throughout this section and RCW 80.36.650 through 80.36.690 and 80.36.610 unless the context clearly requires otherwise.

(((a))) (1) "Basic residential service" means those services set out in 47 C.F.R. Sec. 54.101(a) (2011) and mandatory extended area service approved by the commission.

(((b))) (2) "Basic telecommunications services" means the following services:

(((i))) (a) Single-party service;

(((ii))) (b) Voice grade access to the public switched network;

(((iii))) (c) Support for local usage;

(((iv))) (d) Dual tone multifrequency signaling (touch-tone);

(((v))) (e) Access to emergency services (911);

(((vi))) (f) Access to operator services;

(((vii))) (g) Access to interexchange services;

(((viii))) (h) Access to directory assistance; and

(((ix))) (i) Toll limitation services.

(((c))) (3) "Communications provider" means a provider of communications services that assigns a working telephone number to a final consumer for intrastate wireline or wireless communications services or interconnected voice over internet protocol service, and includes local exchange carriers.

(((d))) (4) "Communications services" includes telecommunications services and information services and any combination thereof.

(((e))) (5) "Incumbent local exchange carrier" has the same meaning as set forth in 47 U.S.C. Sec. 251(h).

(((f))) (6) "Incumbent public network" means the network established by incumbent local exchange carriers for the delivery of communications services to customers that is used by communications providers for origination or termination of communications services by or to customers.

(((g))) (7) "Interconnected voice over internet protocol service" means an interconnected voice over internet protocol service that: (a) (([(i)])) Enables real-time, two-way voice communications; (b) (([(ii)])) requires a broadband connection from the user's location; (c) (([(iii)])) requires internet protocol-compatible customer premises equipment; and (d) (([(iv)])) permits users generally to receive calls that originate on the public network and to terminate calls to the public network.

(((h))) (8) "Program" means the state universal communications services program created in RCW 80.36.650.

(((i))) (9) "Telecommunications" has the same meaning as defined in 47 U.S.C. Sec. 153(43).

(((j))) (10) "Telecommunications act of 1996" means the telecommunications act of 1996 (P.L. 104-104, 110 Stat. 56).

(((k))) (11) "Working telephone number" means a north American numbering plan telephone number, or successor dialing protocol, that is developed for use in placing calls to or from the public network, that enables a consumer to make or receive calls.

Sec. 2.  RCW 80.36.650 and 2016 c 145 s 1 are each amended to read as follows:

(1) A state universal communications services program is established. The program is established to protect public safety and welfare under the authority of the state to regulate telecommunications under Article XII, section 19 of the state Constitution. The purpose of the program is to support continued provision of basic telecommunications services under rates, terms, and conditions established by the commission ((during the time over which incumbent communications providers in the state are adapting to changes in federal universal service fund and intercarrier compensation support)) and the provision, enhancement, and maintenance of broadband services, recognizing that the incumbent public network functions to provide all communications services including, but not limited to, voice and broadband services.

(2) Under the program, eligible communications providers may receive distributions from the universal communications services account created in RCW 80.36.690 in exchange for the affirmative agreement to provide continued telecommunications services under the rates, terms, and conditions established by the commission under this chapter and broadband services for the period covered by the distribution. The commission must implement and administer the program under terms and conditions established in RCW 80.36.630 through 80.36.690. Expenditures for the program may not exceed five million dollars per fiscal year; provided, however, that if less than five million dollars is expended in any fiscal year, the unexpended portion must be carried over to subsequent fiscal years and, unless fully expended, must be available for program expenditures in such subsequent fiscal years in addition to the five million dollars allotted for each of those subsequent fiscal years.

(3) A communications provider is eligible to receive distributions from the account if:

(a) The communications provider is: (i) An incumbent local exchange carrier serving fewer than forty thousand access lines in the state; or (ii) a radio communications service company providing wireless two-way voice communications service and broadband services to less than the equivalent of forty thousand access lines in the state. For purposes of determining the access line threshold in this subsection, the access lines or equivalents of all wireline affiliates must be counted as a single threshold, if the lines or equivalents are located in Washington;

(b) The ((customers of the communications provider 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)) communications provider has adopted a plan to provide, enhance, or maintain broadband service in its service area; and

(c) The communications provider meets any other requirements established by the commission pertaining to the provision of communications services, including basic telecommunications services.

(4)(a) Distributions to eligible communications providers are based on a ((benchmark established by the commission. The benchmark is the rate the commission determines to be a reasonable amount customers should pay for basic residential service provided over the incumbent public network. However, if an incumbent local exchange carrier is charging rates above the benchmark for the basic residential service, that provider may not seek distributions from the fund for the purpose of reducing those rates to the benchmark)) formula that includes the loss of revenues from at least the following sources: The amount the provider received in 2012 from the former traditional universal service fund established in commission docket U-85-23, et. al., and administered by the Washington exchange carrier association; plus 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; and plus reductions to federal high cost loop support and connect America broadband loop support resulting from application of the budget control mechanism of the federal communications commission.

(b) If the program does not have sufficient funds to fully fund the distribution formula set out in (a) of this subsection, distributions must be reduced on a pro rata basis using the amounts calculated for that year's program support as the basis of the pro rata calculations.

(c) To receive a distribution under the program, an eligible communications provider must affirmatively consent to continue providing communications services to its customers under rates, terms, and conditions established by the commission pursuant to this chapter for the period covered by the distribution.

(5) The program is funded from amounts deposited by the legislature in the universal communications services account established in RCW 80.36.690. The commission must operate the program within amounts appropriated for this purpose and deposited in the account.

(6) The commission must periodically review the accounts and records of any communications provider that receives distributions under the program to ensure compliance with the program and monitor the providers' use of the funds.

Sec. 3.  RCW 80.36.660 and 2013 2nd sp.s. c 8 s 204 are each amended to read as follows:

(((1))) To implement the program, the commission must adopt rules for the following purposes:

(((a))) (1) Operation of the program, including criteria for: Eligibility for distributions; use of the funds; identification of any reports or data that must be filed with the commission, including, but not limited to, how a communication provider used the distributed funds; and the communications provider's infrastructure;

(((b))) (2) Operation of the universal communications services account established in RCW 80.36.690; and

(((c))) (3) Establishment of the ((benchmark)) formula used to calculate distributions((; and

(2) This section expires July 1, 2020)).

Sec. 4.  RCW 80.36.670 and 2013 2nd sp.s. c 8 s 205 are each amended to read as follows:

(1) In addition to any other penalties prescribed by law, the commission may impose penalties for failure to make or delays in making or filing any reports required by the commission for administration of the program. In addition, the commission may recover amounts determined to have been improperly distributed under RCW 80.36.650. For the purposes of this section, the provisions of RCW 80.04.380 through 80.04.405, inclusive, apply to all companies that receive support from the universal communications services account created in RCW 80.36.690.

(2) Any action taken under this section must be taken only after providing the affected communications provider with notice and an opportunity for a hearing, unless otherwise provided by law.

(3) Any amounts recovered under this section must be deposited in the universal communications services account created in RCW 80.36.690.

Sec. 5.  RCW 80.36.680 and 2013 2nd sp.s. c 8 s 206 are each amended to read as follows:

(((1))) The commission may delegate to the commission secretary or other staff the authority to resolve disputes and make other administrative decisions necessary to the administration and supervision of the program consistent with the relevant statutes and commission rules.

Sec. 6.  RCW 80.36.690 and 2013 2nd sp.s. c 8 s 208 are each amended to read as follows:

(((1))) The universal communications services account is created in the custody of the state treasurer. Revenues to the account consist of moneys deposited in the account by the legislature and any penalties or other recoveries received pursuant to RCW 80.36.670. Expenditures from the account may be used only for the purposes of the universal communications services program established in RCW 80.36.650. Only the secretary of the commission or the secretary's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

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