HOUSE BILL REPORT

HB 458

BYRepresentatives Todd, Barnes, Nelson, Schmidt and Jacobsen

Extending the moratorium on mandatory local measured telecommunications service.

House Committe on Energy & Utilities

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (11)

     Signed by Representatives Nelson, Chair; Todd, Vice Chair; Barnes, Brooks, Gallagher, Hankins, Jacobsen, Jesernig, Madsen, Sutherland and Unsoeld.

Minority Report:     Do not pass.  (4)

     Signed by Representatives Armstrong, May, Miller and S. Wilson.

House Staff:Fred Adair (786-7113) and Deborah Senn (786-7198)

AS REPORTED BY COMMITTEE ON ENERGY & UTILITIES FEBRUARY 16, 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  This request was later withdrawn, and in 1985 the legislature enacted a prohibition against mandatory local measured service (LMS) on any customer prior to June 1, 1987.

SUMMARY:

SUBSTITUTE BILL:  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.  An exception is made in that the UTC may accept for filing and approve a tariff that imposes mandatory measured service for a telecommunications company's extended area service or foreign exchange service.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The expiration date of June 1, 1990 for the prohibition was inserted as was the exception for extended area service or foreign exchange service.

Fiscal Note:    Requested January 26, 1987.

House Committee ‑ Testified For:     Robin Home, Pace Network; David Martin, Houser, Martin, Morris & Associates; Tom Ferree, Ferree & Associates; Robert Newgard, Four Seasons Athletic Club; Shirley Lansing, General Employment; Arthur Butler, TRACER; Lane Nothman, Washington Public Interest Research Group; Liz Thomas, Evergreen Legal Services; Chuck Adams, Public Counsel Section, Office of the Attorney General; Arnold Livingston, Senior Citizen Lobby; Gary Smith, Independent Business Association.

House Committee - Testified Against: Kit Hawkins, General Telephone Company; Tom Gorman, Yelm Telephone Company; Steve McLellan, Utilities and Transportation Commission; Dale Vincent, Pacific Northwest Bell (Mr. Vincent was asked by the committee to come forward to answer questions and did not express a position pro or con on the bill).

House Committee - Testimony For:     Studies show mandatory local measured service is more costly and less efficient for telephone subscribers than flat rate local service.  Moreover, certain businesses that are telephone-dependent would be greatly hurt.  Further, low-income elderly would be deprived of a health-sustaining link with the outside community and low-income unemployed would be hampered in finding work.  Polls in this state and voter initiatives in other states indicate people don't want "metered" local telephone service.

House Committee - Testimony Against: Oppose any lessening of means to enable the Utilities and Transportation Commission to regulate telecommunications companies in the public interest.  Need options, particularly in the areas of extended area and foreign exchange service, to provide fair rates for the majority of subscribers.