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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0707.01 DHG HOUSE BILL 98­1258

STATE OF COLORADO

BY REPRESENTATIVE Young;

also SENATOR Schroeder.

AGR., LIVESTOCK & NATURAL RESOURCES

A BILL FOR AN ACT

CONCERNING THE REGULATION OF RURAL TELEPHONE COMPANIES, AND, IN CONNECTION THEREWITH, ADOPTING A DEFINITION OF "RURAL TELEPHONE COMPANY" THAT IS CONSISTENT WITH FEDERAL LAW AND GRANTING RURAL TELEPHONE COMPANIES A PARTIAL EXEMPTION FROM LIMITATIONS ON RESIDENTIAL RATE INCREASES.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.)

Adopts a definition of "rural telephone company" that is substantially identical to the definition adopted by Congress in the federal "Telecommunications Act of 1996". Substitutes the phrase "rural telephone company" in existing statutes for descriptions that appear to refer to the same type of entities but do not currently use the same phrase.

Allows rural telephone companies to exceed the rate cap for residential basic local exchange service that was adopted in 1995 as part of legislation instituting competition in local exchange service upon a showing that the increase is necessary to meet the requirements of orders by the Colorado public utilities commission (PUC) or the federal communications commission. Allows such increases on 30 days' notice and exempts them from suspension and review by the PUC except upon complaint by 500 residential customers or by 10% of the rural telephone company's residential customers, whichever is less.

Allows aggregation of increases under the existing annual 5% rate cap so that, for example, if a rural telephone company had not had a rate increase for 2 years, it could raise rates 10%.


Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  40­15­102, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

40­15­102.  Definitions.  As used in this article, unless the context otherwise requires:

(24.5)  "RURAL TELEPHONE COMPANY" MEANS A LOCAL EXCHANGE PROVIDER THAT MEETS ANY OF THE FOLLOWING CRITERIA:

(a)  PROVIDES BASIC SERVICE TO ANY LOCAL EXCHANGE CARRIER STUDY AREA THAT DOES NOT INCLUDE EITHER:

(I)  AN INCORPORATED PLACE OF TEN THOUSAND INHABITANTS OR MORE, OR ANY PART OF SUCH INCORPORATED PLACE, BASED ON THE MOST RECENTLY AVAILABLE POPULATION STATISTICS OF THE FEDERAL BUREAU OF THE CENSUS; OR

(II)  ANY TERRITORY, INCORPORATED OR UNINCORPORATED, INCLUDED IN AN URBANIZED AREA, AS DEFINED BY THE FEDERAL BUREAU OF THE CENSUS AS OF AUGUST 10, 1993;

(b)  PROVIDES BASIC SERVICE TO FEWER THAN FIFTY THOUSAND ACCESS LINES;

(c)  PROVIDES BASIC SERVICE TO ANY LOCAL EXCHANGE CARRIER STUDY AREA WITH FEWER THAN ONE HUNDRED THOUSAND ACCESS LINES; OR

(d)  HAS LESS THAN FIFTEEN PERCENT OF ITS ACCESS LINES IN COMMUNITIES OF MORE THAN FIFTY THOUSAND AS OF FEBRUARY 8, 1996.

SECTION 2.  40­15­203.5, Colorado Revised Statutes, is amended to read:

40­15­203.5.  Simplified regulatory treatment for rural telephone companies. (1)  The commission, with due consideration of the public interest, quality of service, financial condition, and just and reasonable rates, shall grant regulatory treatment which is less comprehensive than otherwise provided for under this article to small local exchange providers that serve fewer than fifty thousand access lines in the state RURAL TELEPHONE COMPANIES. The commission shall issue policy statements and rules and regulations which THAT maintain reasonable regulatory oversight and that consider the cost of regulation in relation to the benefit derived from such regulation. These rules and regulations shall encourage the cost effective deployment and use of modern telecommunications technology. All proposed rules applicable to small local exchange providers which RURAL TELEPHONE COMPANIES THAT come before the commission shall consider the economic impact on small local exchange providers RURAL TELEPHONE COMPANIES and their subscribers. The commission and small local exchange providers RURAL TELEPHONE COMPANIES are encouraged to work together in a cooperative and proactive fashion to implement this section. Initial implementation of this section shall consist of a review of the rules in existence on July 1, 1993, presentation of proposed changes to the commission no later than January 1, 1994, and adoption of simplified rules no later than June 30, 1994.

(2)  THE LIMITATIONS ON RATES FOR RESIDENTIAL BASIC SERVICE AS SET FORTH IN SECTION 40­15­502 (3) (b) (I) SHALL BE SUBJECT TO THE FOLLOWING EXCEPTIONS IN THE CASE OF RURAL TELEPHONE COMPANIES:

(a)  RATES FOR RESIDENTIAL BASIC SERVICE MAY BE INCREASED BY UP TO FIVE PERCENT PER YEAR WITHOUT ADVANCE APPROVAL BY THE COMMISSION FOR THE PURPOSE OF RECOVERING COSTS OF:

(I)   NETWORK, FACILITIES, AND SWITCHING INVESTMENTS MADE IN COMPLIANCE WITH ORDERS OF THE COMMISSION OR OF THE FEDERAL COMMUNICATIONS COMMISSION;

(II)  INCREASES IN FEDERAL, STATE, OR LOCAL TAXES OR FEES; OR

(III)  PROVIDING NEW PRODUCTS AND SERVICES AS PART OF BASIC SERVICE IN ANTICIPATION OF THE ADDITION OF SUCH PRODUCTS AND SERVICES TO THE DEFINITION OF BASIC SERVICE AS CONTEMPLATED IN SECTION 40­15­502 (2).

(b)  PRICE INCREASES FOR RESIDENTIAL BASIC SERVICE MAY BE IMPLEMENTED UPON THIRTY DAYS' WRITTEN NOTICE TO ALL CUSTOMERS AFFECTED BY SUCH INCREASES, AND SHALL NOT BE SUBJECT TO SUSPENSION AND INVESTIGATION BY THE COMMISSION EXCEPT UPON REQUEST BY FIVE HUNDRED OF SUCH CUSTOMERS OR TEN PERCENT OF THE RESIDENTIAL CUSTOMERS OF THE RURAL TELEPHONE COMPANY, WHICHEVER IS LESS, NOTWITHSTANDING SECTION 40­6­108 (1) (b) OR 40­6­111 (1).

(c)  A RURAL TELEPHONE COMPANY MAY AGGREGATE ITS INCREASES SO LONG AS THE AVERAGE INCREASE DOES NOT EXCEED FIVE PERCENT PER YEAR FOR ANY PERIOD OF TWO OR MORE YEARS DURING WHICH THERE WERE NO INCREASES.

SECTION 3.  40­15­105 (2), Colorado Revised Statutes, is amended to read:

40­15­105.  Nondiscriminatory access charges. (2)  At its option, any local exchange provider with fifty thousand or fewer access lines RURAL TELEPHONE COMPANY may, in lieu of the provisions of subsection (1) of this section, remain under the jurisdiction of the commission pursuant to part 2 of this article. A local exchange provider RURAL TELEPHONE COMPANY operating under this subsection (2) may at any time apply to the commission for regulatory relief under section 40­15­203 or 40­15­207. Any such local exchange provider COMPANY, upon the granting of regulatory relief, shall provide access services under the conditions established in subsection (1) of this section; except that the commission shall set the maximum price for access services for such provider COMPANY.

SECTION 4.  40­15­109 (1), Colorado Revised Statutes, is amended to read:

40­15­109.  Assurance of interconnections ­ averaging of rates. (1)  If a local exchange provider does not have interconnection with an interexchange provider, the commission may order any provider of interexchange service in the state to interconnect with the local exchange provider. Nothing in this subsection (1) shall require a local exchange provider with less than fifty thousand lines RURAL TELEPHONE COMPANY to provide interexchange telecommunications service.

SECTION 5.  40­15­503 (2) (d), (2) (g) (IX) (A), and (2) (h), Colorado Revised Statutes, are amended to read:

40­15­503.  Opening of competitive local exchange market ­ process of negotiation and rule­making ­ issues to be considered by commission. (2) (d)  The commission shall adopt rules providing for simplified regulatory treatment for basic local exchange providers that serve only rural exchanges of ten thousand or fewer access lines RURAL TELEPHONE COMPANIES. Such simplified treatment may include, but shall not be limited to, optional methods of regulatory treatment that reduce regulatory requirements, reduce the financial burden of regulation, and allow pricing flexibility. Such simplified treatment may also allow extensions of time for the implementation of requirements under this part 5 in rural exchanges for which there are no competing basic local exchange providers RURAL TELEPHONE COMPANIES certified.

(g) (IX)  The following entities shall be exempt from the requirements of this paragraph (g):

(A)  A basic local exchange provider that serves only rural exchanges of ten thousand or fewer access lines RURAL TELEPHONE COMPANY;

(h)  The commission shall require by rule that any telecommunications service provider required to file temporary interim tariffs pursuant to paragraph (g) of this subsection (2) and, to the extent such a requirement is permissible under federal law, any basic local exchange provider that serves only rural exchanges of ten thousand or fewer access lines and RURAL TELEPHONE COMPANY that has received a bona fide request for interconnection shall file advice letters with the commission to place into effect temporary interim tariffs and commission tariffs for unbundled facilities or functions, interconnection, services for resale, or local number portability by such dates certain as the commission may determine by rule.

SECTION 6.  Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.