September 13, 2005, Introduced by Senator BROWN and referred to the Committee on Technology and Energy.
A bill to amend 1991 PA 179, entitled
"Michigan telecommunications act,"
by amending sections 102, 202, 208, and 304 (MCL 484.2102,
484.2202, 484.2208, and 484.2304), section 102 as amended by 1998
PA 41, sections 202 and 208 as amended by 1995 PA 216, and section
304 as amended by 2000 PA 295; and to repeal acts and parts of
acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 102. As used in this act:
(a) "Access service" means access to a local exchange network
for the purpose of enabling a provider to originate or terminate
telecommunication services within the local exchange. Except for
end-user common line services, access service does not include
access service to a person who is not a provider.
(b)
"Basic local exchange service" or "local exchange
service"
means the provision of an access line and
usage within a
local
calling area for the transmission of high-quality 2-way
interactive
switched voice or data communication 1 primary access
line to a residential customer for voice communication and a
minimum amount of local usage on that line of not fewer than 50
calls per month.
(c) "Cable service" means 1-way transmission to subscribers of
video programming or other programming services and subscriber
interaction for the selection of video programming or other
programming services.
(d) "Commission" means the Michigan public service commission.
(e) "Contested case" or "case" means a proceeding as defined
in section 3 of the administrative procedures act of 1969, 1969 PA
306, MCL 24.203.
(f) "Educational institution" means a public educational
institution or a private non-profit educational institution
approved by the department of education to provide a program of
primary, secondary, or higher education, a public library, or a
nonprofit association or consortium whose primary purpose is
education. A nonprofit association or consortium under this
subdivision shall consist of 2 or more of the following:
(i) Public educational institutions.
(ii) Nonprofit educational institutions approved by the
department of education.
(iii) The state board of education.
(iv) Telecommunication providers.
(v) A nonprofit association of educational institutions or
consortium of educational institutions.
(g) "Energy management services" means a service of a public
utility providing electric power, heat, or light for energy use
management, energy use control, energy use information, and energy
use communication.
(h) "Exchange" means 1 or more contiguous central offices and
all associated facilities within a geographical area in which basic
local
exchange telecommunication services are service is offered
by a provider.
(i) "Information services" or "enhanced services" means the
offering of a capability for generating, acquiring, storing,
transforming, processing, retrieving, utilizing, or making
available information, including energy management services, that
is conveyed by telecommunications. Information services or enhanced
services do not include the use of such capability for the
management, control, or operation of a telecommunications system or
the management of a telecommunications service.
(j) "Interconnection" means the technical arrangements and
other elements necessary to permit the connection between the
switched networks of 2 or more providers to enable a
telecommunication service originating on the network of 1 provider
to terminate on the network of another provider.
(k) "Inter-LATA prohibition" means the prohibitions on the
offering of inter-exchange or inter-LATA service contained in the
modification of final judgment entered pursuant to a consent decree
in United States v American Telephone and Telegraph Co., 552 F.
Supp. 131 (D.D.C. 1982), and in the consent decree approved in
United States v GTE Corp., 603 F. Supp. 730 (D.D.C. 1984).
(l) "LATA" means the local access and transport area as defined
in United States v American Telephone and Telegraph Co., 569 F.
Supp. 990 (D.D.C. 1983).
(m) "License" means a license issued pursuant to this act.
(n) "Line" or "access line" means the medium over which a
telecommunication user connects into the local exchange.
(o) "Local calling area" means a geographic area encompassing
1 or more local communities as described in maps, tariffs, or rate
schedules filed with and approved by the commission.
(p) "Local directory assistance" means the provision by
telephone of a listed telephone number within the caller's area
code.
(q) "Local exchange rate" means the monthly and usage rate,
including all necessary and attendant charges, imposed for basic
local exchange service to customers.
(r) "Loop" means the transmission facility between the network
interface on a subscriber's premises and the main distribution
frame in the servicing central office.
(s) "Operator service" means a telecommunication service that
includes automatic or live assistance to a person to arrange for
completion and billing of a telephone call originating within this
state that is specified by the caller through a method other than 1
of the following:
(i) Automatic completion with billing to the telephone from
which the call originated.
(ii) Completion through an access code or a proprietary account
number used by the person, with billing to an account previously
established with the provider by the person.
(iii) Completion in association with directory assistance
services.
(t) "Operator service provider" or "OSP" means a provider of
operator service.
(u) "Payphone service" means a telephone call provided from a
public, semipublic, or individually owned and operated telephone
that is available to the public and is accessed by the depositing
of coin or currency or by other means of payment at the time the
call is made.
(v) "Person" means an individual, corporation, partnership,
association, governmental entity, or any other legal entity.
(w) "Person with disabilities" means a person who has 1 or
more of the following physical characteristics:
(i) Blindness.
(ii) Inability to ambulate more than 200 feet without having to
stop and rest during any time of the year.
(iii) Loss of use of 1 or both legs or feet.
(iv) Inability to ambulate without the prolonged use of a
wheelchair, walker, crutches, braces, or other device required to
aid mobility.
(v) A lung disease from which the person's expiratory volume
for 1 second, when measured by spirometry, is less than 1 liter, or
from which the person's arterial oxygen tension is less than 60
mm/hg of room air at rest.
(vi) A cardiovascular disease from which the person measures
between 3 and 4 on the New York heart classification scale, or from
which a marked limitation of physical activity causes fatigue,
palpitation, dyspnea, or anginal pain.
(vii) Other diagnosed disease or disorder including, but not
limited to, severe arthritis or a neurological or orthopedic
impairment that creates a severe mobility limitation.
(x) "Port" except for the loop, means the entirety of local
exchange, including dial tone, a telephone number, switching
software, local calling, and access to directory assistance, a
white pages listing, operator services, and interexchange and
intra-LATA toll carriers.
(y) "Reasonable rate" or "just and reasonable rate" means a
rate that is not inadequate, excessive, or unreasonably
discriminatory. A rate is inadequate if it is less than the total
service long run incremental cost of providing the service.
(z) "Residential customer" means a person to whom
telecommunication services are furnished predominantly for personal
or domestic purposes at the person's dwelling.
(aa) "Special access" means the provision of access service,
other than switched access service, to a local exchange network for
the purpose of enabling a provider to originate or terminate
telecommunication service within the exchange, including the use of
local private lines.
(bb) "State institution of higher education" means an
institution of higher education described in sections 4, 5, and 6
of article VIII of the state constitution of 1963.
(cc)
"Telecommunication provider" or "provider" means a person
or
an affiliate of the person each of which that for compensation
provides 1 or more telecommunication services.
(dd) "Telecommunication services" or "services" includes
regulated and unregulated services offered to customers for the
transmission of 2-way interactive communication and associated
usage. A telecommunication service is not a public utility service.
(ee) "Toll service" means the transmission of 2-way
interactive switched communication between local calling areas.
Toll service does not include individually negotiated contracts for
similar telecommunication services or wide area telecommunications
service.
(ff) "Total service long run incremental cost" means, given
current service demand, including associated costs of every
component necessary to provide the service, 1 of the following:
(i) The total forward-looking cost of a telecommunication
service, relevant group of services, or basic network component,
using current least cost technology that would be required if the
provider had never offered the service.
(ii) The total cost that the provider would incur if the
provider were to initially offer the service, group of services, or
basic network component.
(gg) "Wide area telecommunications service" or "WATS" means
the transmission of 2-way interactive switched communication over a
dedicated access line.
Sec. 202. In addition to the other powers and duties
prescribed by this act, the commission shall do all of the
following:
(a) Establish by order the manner and form in which
telecommunication providers of regulated services within the state
keep accounts, books of accounts, and records in order to determine
the total service long run incremental costs and imputation
requirements of this act of providing a service. The commission
requirements under this subdivision shall be consistent with any
regulations covering the same subject matter made by the federal
communications commission.
(b)
Require by order that a provider of a regulated service ,
including
access service, make available for public inspection and
file
with the commission a schedule tariff of the provider's
rates,
services, and conditions of service, including access
service
provided by contract regulated
services. The tariffs shall
be effective upon 1 day's notice of submission to the commission.
(c) Promulgate rules under section 213 and issue orders to
establish and enforce quality standards for providing
telecommunication services in this state.
(d) Preserve the provision of high quality basic local
exchange service.
(e) Create a task force to study changes occurring in the
federal universal service fund and the need for the establishment
of a state universal service fund to promote and maintain basic
local exchange service in high cost rural areas at affordable
rates. The task force shall issue a report to the legislature and
governor on or before December 31, 1996 containing its findings and
recommendations. The task force shall consist of all of the
following members:
(i) The chairperson of the commission.
(ii) One representative from each basic local exchange provider
with 250,000 or more access lines.
(iii) Four representatives from providers who, together with
affiliated providers, provide basic local exchange or toll service
to less than 250,000 end users in this state.
(iv) Two representatives of other providers of regulated
services.
(v) One representative of the general public.
(f) On or before January 1, 1997, the commission shall study
and report to the legislature and governor on the following matters
that have impact on the basic local exchange calling activities of
all residential customers in the state:
(i) The percentage of intra-LATA calls and minutes of usage
which are charged as basic local exchange calls.
(ii) The average size and range of sizes of basic local
exchange calling areas.
(iii) The ability of customers to contact emergency services,
school districts, and county, municipal, and local units of
government without a toll call.
(iv) Whether there are significant differences in basic local
exchange calling patterns between urban, suburban, and rural areas.
(v) The impact on basic local exchange rates which would occur
if basic local exchange calling areas are altered.
(vi) The impact when basic local exchange calling areas overlap
LATA boundaries.
(vii) The impact on basic local exchange rates which would
occur if basic local exchange calling areas are expanded within
LATA boundaries.
(g) On or before January 1, 1997, conduct a study of internet
access provider locations to determine which exchanges can reach
the nearest location only by making a toll call. The commission
shall then gather input from internet access providers, local
exchange providers, and other interested parties and make a
recommendation to the legislature as to the steps needed to allow
all local exchange customers to access an internet provider by
making a local call.
Sec.
208. (1) If a competitive market for a regulated
telecommunication
service in which the rate is regulated exists in
this
state, a provider may file with the commission to classify
that
service for all providers within the competitive market as a
competitive
service. A provider may
classify a regulated service
as unregulated under this section by filing with the commission
notice of the classification. Any tariff filed with the commission
shall indicate whether the service to be provided is regulated or
unregulated.
(2)
Except as provided under section 321, if a regulated
service
is classified as competitive, the rate for the service
shall
be deregulated and not subject to review under this act.
(3)
A service is competitive under this section if for an
identifiable
class or group of customers in an exchange, group of
exchanges,
or other clearly defined geographical area, the service
is
available from more than 1 unaffiliated provider and 3 or more
of
the following apply:
(a)
Actual competition, including facilities based
competition,
exists within the local exchange, group of exchanges,
or
geographic area.
(b)
Both residential and business end-users have service
alternatives
available from more than 1 unaffiliated provider or
service
reseller.
(c)
Competition and end-user usage has been demonstrated and
measured
by independent and reliable methods.
(d)
Rates and charges for the service have changed within the
previous
12-month period.
(e)
There is a functionally equivalent service, reasonably
available
to end users from an unaffiliated provider or supplier.
(4)
Except as provided under subsection (5), a service is not
competitive
under this section if for an identifiable class or
group
of customers in an exchange, group of exchanges, or other
clearly
defined geographical area, 1 of the providers of the
service
is an unaffiliated provider of facilities based basic local
exchange
service to less than 250,000 end-users in this state. A
provider
may apply to the commission for a review of the service
under
section 203 to determine whether the service is competitive
and
the rate deregulated.
(5)
Subsection (4) does not apply if there are 3 or more
providers
of facilities based basic local exchange service
throughout
the competitive market and 1 or more of the providers is
a
provider of facilities based basic local exchange service to less
than
250,000 end-users in this state.
(2) A service may be classified as unregulated to the extent
that, for some identifiable class or group of customers in an
exchange, group of exchanges, or some other clearly defined
geographical area, the service, its functional equivalent, or a
substitute service is available from more than 1 provider.
(3) (6)
A provider shall give notice to its customers if a
service is to be classified as competitive and its rate
deregulated. The notice shall be included in or on the bill of each
affected customer of the provider before the effective date of the
classification.
(4) (7)
The service classification under this section shall
take
effect 45 60 days from the date of the filing with the
commission
of notice required by subsection (4)
(1).
(8)
Upon receiving a complaint filed by a provider or consumer
or
on its own motion, the commission may require a filing under
section
203 to review a competitive classification and issue an
order
approving, modifying, or rejecting the classification.
(9)
A provider shall not file to have a service classified as
competitive
until the provider has received the approval of the
commission
of a total service long run incremental cost study for
the
service to be classified.
(5) The commission shall have the jurisdiction and authority
to investigate and approve, modify, or reject any classification of
a service as unregulated upon receipt of a complaint filed under
this act. Any investigation shall proceed under section 203. The
commission in its final order shall determine whether the criteria
in subsection (2) are met for classification of a service as
unregulated. A commission order to modify or reclassify an
unregulated service shall have prospective effect only. In any
hearing or investigation under this section, the burden of proof as
to the proper classification of any service shall be upon the
complainant. In evaluating whether a service is a substitute for
another, the commission shall consider whether the services satisfy
a similar consumer demand or whether 1 service is reasonably
interchangeable with another.
(6) (10)
Except as otherwise provided by law, the commission
or
a local unit of government does not have authority over a
rate
for
a service classified as competitive
unregulated under this
section.
Sec.
304. (1) Except as provided in section 304a, the The
rates for basic local exchange service shall be just and
reasonable. Each provider shall set the initial rates for basic
local exchange service to be effective within 90 days from the
effective date of the amendatory act that added subsection (11).
The initial rates may not exceed the rates in place before the
rates are set under this subsection unless the rates in place do
not exceed the total service long run incremental costs of the
rates.
(2) A provider may alter its initial rates for basic local
exchange services by 1 or more of the following:
(a) Filing with the commission notice of a decrease, discount,
promotional rate, or other rate reduction in a basic local exchange
rate. A rate alteration under this subdivision shall become
effective without commission review or approval.
(b) Filing with the commission a notice of an increase in a
basic local exchange rate to a level not to exceed the initial rate
set under subsection (1). A rate alteration under this subdivision
is effective without commission review or approval.
(c) (b)
Filing with the commission notice of an annual
increase in a basic local exchange rate that does not exceed 1%
less than the consumer price index. Unless the commission
determines that the rate alteration exceeds the allowed increase
under
this subdivision, the rate alteration shall take effect 90
not less than 60 days from the date of the notice required under
subsection (3). As used in this subdivision, "consumer price index"
means the most recent reported annual average percentage increase
in the Detroit consumer price index for all items for the prior 12-
month period by the United States department of labor.
(d) Filing with the commission notice of a combination of
increases and decreases in basic local exchange rates that are
projected to be revenue neutral for the next 12-month period.
Unless the commission determines that the combination will result
in an increase in revenues for the services in question during the
next 12-month period, the combination of increases and decreases
shall take effect not less than 60 days from the notice required
under subsection (3).
(e) Filing with the commission notice of a rate alteration
that includes a range of rates within which the provider can
increase or decrease rates in different amounts for different
geographic areas. The upper limit of the range of increases shall
be equal to 1% less than the consumer price index and the lower
limit shall be selected by the provider consistent with the
requirements of this act. The range of rates shall take effect
without commission review or approval not less than 60 days from
the date of the notice required under subsection (3).
(f) (c)
Filing with the commission an application to
increase a basic local exchange rate in an amount greater than that
allowed
under subdivision (b) subdivisions (c), (d), and (e).
The
application shall be accompanied with sufficient documentary
support that the rate alteration is just and reasonable. The
commission shall make a determination within the 90-day period
provided for in subsection (5) of 1 of the following:
(i) That the rate alteration is just and reasonable.
(ii) That a filing under section 203 is necessary to review the
rate alteration.
(3) Notice to customers of a rate alteration is required for a
rate
alteration under subsection (2)(b) or (c) (2)(c), (d), (e),
and (f) and section 304a and shall be included in or on the bill of
each affected customer of the provider before the effective date of
the rate alteration.
(4) The notice required under subsection (3) shall contain at
least all of the following information:
(a) A statement that the customer's rate may change.
(b) An estimate of the amount of the annual change for the
typical residential customer that would result by the rate change.
(c) A statement that a customer may comment on or receive
complete details of the rate alteration by calling or writing the
commission. The statement shall also include the telephone number
and address of the commission. Complete details of the rate
alteration shall be provided free of charge to the customer at the
expense of the provider.
(5) Except as otherwise provided in subsections (2) and (6),
an
altered basic local exchange rate shall take effect 90
10 days
from the date of the notice required by subsection (3).
(6) Upon receiving a complaint or pursuant to a determination
under subsection (2)(c), the commission may require a filing under
section 203 to review a proposed rate alteration under subsection
(2)(c). The commission's final order may approve, modify, or reject
the rate alteration.
(7)
In reviewing a rate alteration under subsection (6)
(2)(f), the commission shall consider only 1 or more of the
following factors if relevant to the rate alteration as specified
by the provider:
(a) Total service long run incremental cost of basic local
exchange services.
(b) Whether the proposed rate alteration would discourage
competition for telecommunication services.
(c) (b)
Comparison of the proposed rate to the rates charged
by other providers in this state for the same service.
(d) (c)
Whether a new function, feature, or capability is
being offered as a component of basic local exchange service.
(e) (d)
Whether there has been an increase in the costs to
provide basic local exchange service in the geographic area of the
proposed rate.
(f) (e)
Whether the provider's further investment in the
network infrastructure of the geographic area of the proposed rate
is economically justifiable without the proposed rate.
(g) Whether additional revenue resulting from the rate
alteration could be reinvested in the basic local exchange network
for the development or implementation of new technology or the
enhancement of the telecommunications infrastructure.
(h) Whether the proposed rate alteration produces a reasonable
rate.
(8)
A provider shall be allowed only 1 rate increase for each
class
or type of service during any 12-month period.
(9)
A provider shall not make a rate alteration under this
section
until the rate has been restructured under section 304a.
(8) (10)
The commission shall exempt a provider from this
section and section 310(2) if it finds all of the following:
(a) The provider provides basic local exchange service or
basic local exchange and toll service to less than 250,000 end-
users in this state.
(b) The provider offers to end-users single-party basic local
exchange service, tone dialing, toll access service, including end-
user common line services and dialing parity at a total price of no
higher than the amount charged as of May 1, 2000.
(c) The provider provides dialing parity access to operator,
telecommunication relay, and emergency services to all basic local
exchange end-users.
(9) A provider may charge a late payment fee to customers who
do not make timely payments of the outstanding balance of their
account as provided in tariffs filed with the commission.
(10) (11)
A call made to a local calling area
adjacent to
the
caller's local calling area party
located within the caller's
home exchange or located within any exchange adjacent to the
caller's home exchange shall be considered a local call and shall
be billed as a local call.
(11) An alteration by a provider to the rate of a package,
combination, or bundle of telecommunication or other services which
includes basic local exchange service is not subject to this
section as long as the basic local exchange service component of
the package, combination, or bundle is available for purchase on a
stand-alone basis.
(12) A call made to a called party who is not located within
the geographic area of the caller's exchange or an adjacent
exchange is not a local call if the tariff of the provider
originating the call does not classify the call as a local call.
(13) A provider of basic local exchange service may satisfy
any obligations to provide such service by offering an alternative
service using different technologies, including those services or
technologies not subject to regulation by the commission under this
act.
Enacting section 1. Section 304b of the Michigan
telecommunications act, 1991 PA 179, MCL 484.2304b, is repealed.