TITLE: CONCERNING THE CONDITIONS UNDER WHICH LOCAL EXCHANGE TELECOMMUNICATIONS PROVIDERS COMPETE IN COLORADO.

Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues Cash Fund - Fixed Utilities Fund	($13,835)	($13,835)
State Expenditures Cash Fund - Fixed Utilities Fund	($11,492)	($11,492)
FTE Position Change	(0.3 FTE)	(0.3 FTE)
Other State Impact: TABOR
Effective Date: 90 days after adjournment unless an initiative petition is filed
Appropriation Summary for FY 1999-2000: Department of Regulatory Agencies - ($11,492) and (0.3 FTE) Fixed Utilities Fund
Local Government Impact: None

The bill, as amended in the House Business Affairs and Labor Committee (April 22, 1999), strikes the bill as introduced below the enacting clause. The bill, as amended, makes changes to the statutory regulation of "Intrastate Telecommunication Services" by the Public Utilities Commission (PUC), Department of Regulatory Agencies. The bill makes the following changes that impact the PUC's workload:

• exempts both InterLATA and IntraLATA (local access and transport areas LATAs) toll calls from pricing and rate regulation until July 1, 2001, after which time all InterLATA and IntraLATA tolls will be exempted from regulation by the PUC, except for the jurisdiction to designate a minimum of two or more service providers to provide such services to subscribers of rural telecommunications providers throughout the state; •exempts directory assistance and digital private line service, and analog private line service with the capacity of twenty-four or more voice grade circuits from regulation by the PUC; and

• requires the PUC to conduct an official proceeding to address the options that might be considered in establishing additional universal support mechanisms or market mechanisms or other methods of payment for the costs of ensuring the availability of advanced telecommunications services throughout the state.

The bill requires the PUC to report its findings, policy options for consideration, and recommendations if any, to the House and Senate Business Affairs and Labor Committees on or before January 31, 2001. The bill also provides for an expedited hearing process, but only upon approval of the commission. The bill allows the PUC to award reasonable attorney fees. The bill requires the PUC to direct that any settlement proceeds agreed to be invested by any provider in improvements to that provider's telecommunications facilities be invested in both basic and advanced services.

Current law, Section 40-15-503 (5) C.R.S., directs the PUC to create a system of support mechanisms to assist in the provision of universal basic service and universal access to advanced service in high-cost areas. Current law further provides that such mechanisms be funded equitably and on a nondiscriminatory, competitively neutral basis through assessments on all telecommunications services providers in the state.

Assessments are made by the PUC against utilities regulated by them to fund their costs of administration. This bill would decrease the costs of the Public Utilities Commission and would therefore result in a reduction in revenues to the Fixed Utilities Fund received by the PUC by $13,835 CF (including costs not included in this fiscal analysis - see below) in FY 1999-00 and FY 2000-01.

The provision of the bill that deregulates the rates charged for services currently regulated by the PUC including InterLATA and IntraLATA toll, private line services, and directory services will reduce the PUC staff time to administer these current provisions by approximately 0.30 FTE at a cost savings of $11,492 (including PERA and Medicare) to the Fixed Utilities Fund in FY 1999-00 and FY 2000-01 .

The bill requires the PUC to report its findings, policy options for consideration, and recommendations if any, on or before January 31, 2001. Given the amount of time between implementation of the bill and the reporting date required, the PUC can conduct an official proceeding to address the options and report its findings, policy options for consideration, and recommendations within its existing appropriation. The provisions of this bill will not affect the Office of Consumer Counsel (OCC) or any other state agency or unit of local government.

Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:

This fiscal note implies that the Public Utilities Commission, Department of Regulatory Agencies should have its current appropriation reduced by $11,492 cash fund and 0.3 FTE beginning in FY 1999-00.