H*4694 Session 111 (1995-1996)
H*4694(Rat #0431, Act #0354 of 1996) General Bill, By Harrison, Bailey,
J.M. Baxley, Boan, T. Brown, Cave, Clyburn, Delleney, R.C. Fulmer, Govan,
J.L. Harris, J.H. Hodges, Jennings, M.H. Kinon, Klauber, Knotts, L.H. Limbaugh,
L.M. Martin, McCraw, J.H. Neal, Phillips, Meacham, Scott, J.S. Shissias,
Simrill, D. Smith, Stuart, P.H. Thomas, J.W. Tucker, J.M. White, S.S. Wofford,
D.A. Wright, Young-Brickell and W.J. Young
Similar(S 1224)
A Bill to amend Section 58-9-10, Code of Laws of South Carolina, 1976,
relating to the regulation of telephone companies and definitions, so as to
add provisions defining "basic local exchange telephone service", "carrier of
last resort", "incumbent local exchange carrier" or "incumbent LEC", "local
exchange carrier" or "LEC", "new entrant local exchange carrier" or "new
entrant LEC", "small local exchange carrier" or "small LEC",
"telecommunications services", and "universal service"; to amend Section
58-9-280, relating to telephone companies and the requirement that a
certificate of public convenience and necessity must be obtained before
construction, operation, or extension of a plant or system, so as to add
provisions which provide, among other things, that after notice and an
opportunity to be heard, the Public Service Commission may grant a certificate
to operate as a telephone utility to applicants proposing to furnish local
telephone service in the service territory of an "incumbent LEC", subject to
certain conditions and exemptions stated in this Section and in applicable
Federal Law, that a LEC shall negotiate the rates, terms and conditions for
local interconnection, that nothing in Chapter 9 of Title 58 shall be
interpreted to limit or restrict any right that any local exchange carrier may
have under Federal Law, and that any local exchange carrier, upon a showing of
changed circumstances or that it is necessary or appropriate to realign rates
with the costs of various telecommunications components, may petition the
Commission to re-examine any rates that have been capped pursuant to the
provisions of Chapter 9 of Title 58 and to set new price caps; and to amend
the 1976 Code by adding Section 58-9-576, so as to provide, among other
things, that any "LEC" may elect to have rates, terms and conditions pursuant
to the plan described in Section 58-9-576(B), as long as the Commission has
approved a local interconnection agreement in which the LEC is a parti
02/29/96 House Introduced and read first time HJ-5
02/29/96 House Referred to Committee on Labor, Commerce and
Industry HJ-5
03/27/96 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-5
04/02/96 House Debate adjourned until Wednesday, April 3, 1996 HJ-18
04/03/96 House Objection by Rep. S. Whipper, L. Whipper,
Anderson, Breeland, Cobb-Hunter, Howard, Cato,
Cooper, Vaughn, Easterday, Young-Brickell, Cain,
Marchbanks & Limbaugh HJ-42
04/17/96 House Amended HJ-91
04/17/96 House Read second time HJ-101
04/17/96 House Roll call Yeas-101 Nays-0 HJ-101
04/18/96 House Read third time and sent to Senate HJ-43
04/23/96 Senate Introduced and read first time SJ-24
04/23/96 Senate Referred to Committee on Judiciary SJ-24
04/24/96 Senate Committee report: Favorable with amendment
Judiciary SJ-31
04/30/96 Senate Read second time SJ-48
04/30/96 Senate Ordered to third reading with notice of
amendments SJ-48
05/08/96 Senate Amended SJ-21
05/09/96 Senate Amended SJ-55
05/09/96 Senate Read third time and returned to House with
amendments SJ-55
05/15/96 House Concurred in Senate amendment and enrolled HJ-46
05/23/96 Ratified R 431
05/29/96 Signed By Governor
05/29/96 Effective date 05/29/96
06/06/96 Copies available
06/06/96 Act No. 354
(A354, R431, H4694)
AN ACT TO AMEND SECTION 58-9-10, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO THE REGULATION OF
TELEPHONE COMPANIES AND DEFINITIONS, SO AS TO ADD
PROVISIONS DEFINING "BASIC LOCAL EXCHANGE
TELEPHONE SERVICE", "CARRIER OF LAST
RESORT", "INCUMBENT LOCAL EXCHANGE" OR
"INCUMBENT LEC", "LOCAL EXCHANGE
CARRIER" OR "LEC", "NEW ENTRANT
LOCAL EXCHANGE CARRIER" OR "NEW ENTRANT
LEC", "SMALL LOCAL EXCHANGE CARRIER" OR
"SMALL LEC", "TELECOMMUNICATIONS
SERVICES", AND "UNIVERSAL SERVICE"; TO
AMEND SECTION 58-9-280, RELATING TO TELEPHONE
COMPANIES AND THE REQUIREMENT THAT A CERTIFICATE
OF PUBLIC CONVENIENCE AND NECESSITY MUST BE
OBTAINED BEFORE CONSTRUCTION, OPERATION, OR
EXTENSION OF A PLANT OR SYSTEM, SO AS TO ADD
PROVISIONS WHICH PROVIDE, AMONG OTHER THINGS, THAT
AFTER NOTICE AND AN OPPORTUNITY TO BE HEARD, THE
PUBLIC SERVICE COMMISSION MAY GRANT A CERTIFICATE
TO OPERATE AS A TELEPHONE UTILITY TO APPLICANTS
PROPOSING TO FURNISH LOCAL TELEPHONE SERVICE IN THE
SERVICE TERRITORY OF AN "INCUMBENT LEC",
SUBJECT TO THE CONDITIONS AND EXEMPTIONS STATED IN
THIS SECTION AND IN APPLICABLE FEDERAL LAW, THAT A
LEC SHALL NEGOTIATE THE RATES, TERMS, AND CONDITIONS
FOR LOCAL INTERCONNECTION, THAT NOTHING IN CHAPTER
9 OF TITLE 58 SHALL BE INTERPRETED TO LIMIT OR
RESTRICT ANY RIGHT THAT ANY LOCAL EXCHANGE CARRIER
MAY HAVE UNDER FEDERAL LAW, AND THAT ANY LOCAL
EXCHANGE CARRIER, UPON A SHOWING OF CHANGED
CIRCUMSTANCES OR THAT IT IS NECESSARY OR
APPROPRIATE TO REALIGN RATES WITH THE COSTS OF
VARIOUS TELECOMMUNICATIONS COMPONENTS, MAY
PETITION THE COMMISSION TO RE-EXAMINE ANY RATES
THAT HAVE BEEN CAPPED PURSUANT TO THE PROVISIONS OF
CHAPTER 9 OF TITLE 58 AND TO SET NEW PRICE CAPS; AND
TO AMEND THE 1976 CODE BY ADDING SECTION 58-9-576, SO
AS TO PROVIDE, AMONG OTHER THINGS, THAT ANY LEC MAY
ELECT TO HAVE RATES, TERMS, AND CONDITIONS
DETERMINED PURSUANT TO THE PLAN DESCRIBED IN
SECTION 58-9-576(B), AS LONG AS THE COMMISSION HAS
APPROVED A LOCAL INTERCONNECTION AGREEMENT IN
WHICH THE LEC IS A PARTICIPANT WITH AN ENTITY
DETERMINED BY THE COMMISSION NOT TO BE AFFILIATED
WITH THE LEC OR THE COMMISSION DETERMINES THAT
ANOTHER PROVIDER'S SERVICE COMPETES WITH THE LEC'S
BASIC LOCAL EXCHANGE TELEPHONE SERVICE; AND SECTION
58-9-577, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT
NOTWITHSTANDING SECTIONS 58-9-575 AND 58-9-576, ANY
SMALL LEC MAY ELECT TO HAVE THE RATES, TERMS, AND
CONDITIONS OF ITS SERVICES DETERMINED PURSUANT TO
ALTERNATIVE FORMS OF REGULATION, WHICH MAY DIFFER
AMONG COMPANIES AND MAY INCLUDE, BUT NOT BE
LIMITED TO, PRICE REGULATION RATHER THAN RATE OF
RETURN OR OTHER FORMS OF EARNING REGULATION.
Be it enacted by the General Assembly of the State of South
Carolina:
Definitions added
SECTION 1. Section 58-9-10 of the 1976 Code is amended by
adding:
"(9) The term `basic local exchange telephone service' means
for residential and single-line business customers, access to basic voice
grade local service with touchtone, access to available emergency services
and directory assistance, the capability to access interconnecting carriers,
relay services, access to operator services, and one annual local directory
listing (white pages or equivalent).
(10) The term `carrier of last resort' means a facilities-based local
exchange carrier, as determined by the commission, not inconsistent with
the federal Telecommunications Act of 1996, which has the obligation to
provide basic local exchange telephone service, upon reasonable request,
to all residential and single-line business customers within a defined
service area. Initially, the incumbent LEC must be a carrier of last resort
within its existing service area.
(11) The term `incumbent local exchange carrier' or `incumbent
LEC' means a telecommunications company, its affiliates, successors, or
its assigns, which provide local exchange service pursuant to a certificate
of public convenience and necessity issued by the commission before
July 1, 1995, or operating as a local exchange carrier before that date
pursuant to commission authority, to provide local exchange service
within a certificated geographic service area of the State. Any such
entity must be treated as the incumbent local exchange carrier only
within the geographic area where it maintains service pursuant to:
(a) any certificate of public convenience and necessity issued
before July 1, 1995; or
(b) any certificate of public convenience and necessity issued to
supersede, in whole or in part, any certificate of public convenience and
necessity issued before July 1, 1995.
(12) The term `local exchange carrier' or `LEC' means either an
incumbent local exchange carrier or a new entrant local exchange
carrier.
(13) The term `new entrant local exchange carrier' or `new entrant
LEC' means a telecommunications company holding a certificate of
public convenience and necessity issued by the commission pursuant to
Section 58-9-280 (B) after December 31, 1995, to provide local exchange
service within a certificated geographic service area of the State.
(14) The term `small local exchange carrier' or `small LEC' means
a rural telephone company as defined on February 8, 1996, in the federal
Telecommunications Act of 1996.
(15) The term `telecommunications services' means the services for
the transmission of voice and data communications to the public for hire,
including those nonwireline services provided in competition to landline
services.
(16) The term `universal service' means the providing of basic local
exchange telephone service, at affordable rates, upon reasonable request,
to all residential and single-line business customers within a defined
service area."
Certificate for local telephone service; etc.
SECTION 2. Section 58-9-280 of the 1976 Code is amended to read:
"Section 58-9-280. (A) No telephone utility shall begin the
construction or operation of any telephone utility plant or system, or of
any extension thereof, except those ordered by the commission under the
provisions of Section 58-9-270, without first obtaining from the
commission a certificate that public convenience and necessity require or
will require such construction or operation. But this section shall not be
construed to require any telephone utility to secure a certificate for any
extension within any municipality or district within which it had lawfully
commenced operations on June 16, 1950, or for an extension within or to
territory already served by it, necessary in the ordinary course of its
business, or for an extension into territory contiguous to that already
occupied by it as defined by the commission and not receiving similar
service from another telephone utility; but, if any telephone utility in
constructing or extending its lines, plant, or system unreasonably
interferes or is about to interfere unreasonably with the service or system
of any other telephone utility, the commission may make such order and
prescribe such terms and conditions in harmony with Articles 1 through
13 of this chapter as are just and reasonable.
(B) After notice and an opportunity to be heard, the commission may
grant a certificate to operate as a telephone utility, as defined in Section
58-9-10(6), to applicants proposing to furnish local telephone service in
the service territory of an incumbent LEC, subject to the conditions and
exemptions stated in this section and in applicable federal law. The
provisions of this act shall apply to any such application for a certificate
pending before the commission on the effective date of this act; provided,
however, that any carrier filing an application to furnish
telecommunications service as a private line or special access service
provider or as a carrier's carrier prior to March 25, 1996, may elect to
comply with the certification requirements in effect on that date rather
than those contained within this subsection (B); provided, further,
however, that such carrier shall comply with subsection (B)(4) hereof. In
determining whether to grant a certificate under this subsection, the
commission may require, not inconsistent with the federal
Telecommunications Act of 1996, that the:
(1) applicant show that it possesses technical, financial, and
managerial resources sufficient to provide the services requested;
(2) service to be provided will meet the service standards that the
commission may adopt;
(3) provision of the service will not adversely impact the availability
of affordable local exchange service;
(4) applicant, to the extent it may be required to do so by the
commission, will participate in the support of universally available
telephone service at affordable rates; and
(5) provision of the service does not otherwise adversely impact the
public interest.
In its application for certification, the applicant seeking to provide the
service shall set forth with particularity the proposed geographic territory
to be served, and a price list and informational tariff regarding the types
of local exchange and exchange access services to be provided. Any
person granted authority under this section shall maintain a current price
list with the commission. A commission order, denying or approving an
application for certification of a new local telephone service provider,
shall be entered no more than sixty days from the filing of the
application, except that the commission, upon notice, may extend that
period not to exceed an additional sixty days.
(C) The commission shall determine the requirements applicable to all
local telephone service providers necessary to implement this subsection.
These requirements shall be consistent with applicable federal law and
shall:
(1) provide for the reasonable interconnection of facilities between
all certificated local telephone service providers upon a bona fide request
for interconnection, subject to the negotiation process set forth in
subsection (D) of this section;
(2) provide for the transfer of telephone numbers between local
telephone service providers in a manner that is technically feasible;
(3) provide for the reasonable unbundling of network elements upon
a request from a LEC where technically feasible and priced in a manner
that recovers the providing LEC's cost;
(4) determine, for small LEC's, when and under what circumstances
resale of local exchange telephone services is in the public interest and
should be allowed. Telecommunications services that are available at
retail to a specific category of subscribers only shall not be offered for
resale to a different category of subscribers; and
(5) provide for the continued development and encouragement of
universally available basic local exchange telephone service at reasonably
affordable rates.
The final commission order implementing these requirements shall be
issued within six months of the effective date of this section, except that
the commission, upon notice, may extend that period up to an additional
ninety days.
(D) A LEC shall negotiate the rates, terms, and conditions for local
interconnection. In the event that the parties are unable to agree on
appropriate rates, terms, and conditions for interconnection within one
hundred thirty-five to one hundred sixty days of receipt of a bona fide
request, either party may petition the commission for determination of the
appropriate rates, terms, and conditions for interconnection. This period
may be shortened or extended by mutual agreement of the parties. The
commission shall determine the appropriate rates, terms, and conditions
for interconnection within nine months from the filing of the petition in
accordance with the terms of applicable federal law.
(E) In continuing South Carolina's commitment to universally
available basic local exchange telephone service at affordable rates and to
assist with the alignment of prices and/or cost recovery with costs, and
consistent with applicable federal policies, the commission shall establish
a universal service fund (USF) for distribution to a carrier(s) of last
resort. The commission shall issue its final order adopting such
guidelines as may be necessary for the funding and management of the
USF within twelve months of the effective date of this section except that
the commission, upon notice, may extend that period up to an additional
ninety days. These guidelines must not be inconsistent with applicable
federal law and shall address, without limitation, the following:
(1) The USF shall be administered by the commission or a third
party designated by the commission under guidelines to be adopted by
the commission.
(2) The commission shall require all telecommunications companies
providing telecommunications services within South Carolina to
contribute to the USF as determined by the commission.
(3) The commission also shall require any company providing
telecommunications service to contribute to the USF if, after notice and
opportunity for hearing, the commission determines that the company is
providing private local exchange services or radio-based local exchange
services in this State that compete with a local telecommunications
service provided in this State.
(4) The size of the USF shall be determined by the commission and
shall be the sum of the difference, for each carrier of last resort, between
its costs of providing basic local exchange services and the maximum
amount it may charge for the services. The commission may use
estimates to establish the size of the USF on an annual basis, provided it
establishes a mechanism for adjusting any inaccuracies in the
estimates.
(5) Monies in the USF shall be distributed to a carrier of last resort
upon application and demonstration of the amount of the difference
between its cost of providing basic local exchange services and the
maximum amount it may charge for such services.
(6) The commission shall require any carrier of last resort seeking
reimbursement from the fund to file the information necessary to
determine the costs of providing basic local exchange telephone services.
In the event that a carrier of last resort does not currently conduct
detailed cost studies relating to such services, the commission shall allow
for an appropriate surrogate for such study.
(7) The commission shall have the authority to make adjustments to
the contribution or distribution levels based on yearly reconciliations and
to order further contributions or distributions as needed.
(8) After notice and an opportunity for hearing to all affected
carriers, the commission by rule may expand the set of services within
the definition of universal service based on a finding that the uniform
statewide demand for such additional service is such that including the
service within the definition of universal service will further the public
interest; provided, however, that before implementing any such finding,
the commission shall provide for recovery of unrecovered costs through
the USF of such additional service by the affected carrier of last
resort.
(F) Nothing in this chapter shall be interpreted to limit or restrict any
right that any local exchange carrier may have under federal law.
(G) Competition exists for a particular service if, for an identifiable
class or group of customers in an exchange, group of exchanges, or other
clearly defined geographical area, the service, its functional equivalent, or
a substitute service is available from two or more providers. The
commission shall not regulate a service for which competition exists if
the market for that service is sufficiently competitive to protect the public
interest. If the commission finds that competition exists for a particular
service, but that service is not sufficiently competitive to protect the
public interest, the commission shall provide appropriate regulatory and
pricing flexibility to all providers of the service.
(H) Any local exchange carrier, upon a showing of changed
circumstances or that it is necessary or appropriate to realign rates with
the costs of various telecommunications components, may petition the
commission to reexamine any rates that have been capped pursuant to the
provisions of this chapter and to set new price caps.
(I) The incumbent LEC's subject to this section shall be authorized to
meet the offerings of any local exchange carrier serving the same area by
packaging services together, using volume discounts and term discounts,
and by offering individual contracts for services, except as restricted by
federal law. Individual contracts for services or contracts with other
providers of telecommunications services shall not be filed with the
commission, except as required by federal law, provided that
telecommunications carriers shall provide access to such contracts to the
commission as required.
(J) Subject to the requirements of applicable federal law, a small LEC
may define the term `cost', as used within this section and where
applicable to a small LEC, to include all embedded costs as well as a
reasonable contribution to universal local service, where applicable, until
such time as these costs are recovered from other sources.
(K) Subject to federal law, if the commission finds that the resale of
any service or unbundled capability, element, feature, or function in a
small LEC area is in the public interest, then the small LEC shall not be
required to offer its services at a price below its cost.
(L) Upon enactment of this section and the establishment of the
Interim LEC Fund, as specified in subsection (M) of this section, the
commission shall, subject to the requirements of federal law, require any
electing incumbent LEC, other than an incumbent LEC operating under
an alternative regulation plan approved by the commission before the
effective date of this section, to immediately set its toll switched access
rates at levels comparable to the toll switched access rate levels of the
largest LEC operating within the State. To offset the adverse effect on
the revenues of the incumbent LEC, the commission shall allow
adjustment of other rates not to exceed statewide average rates, weighted
by the number of access lines, and shall allow distributions from the
Interim LEC Fund, as may be necessary to recover those revenues lost
through the concurrent reduction of the intrastate switched access
rates.
(M) The commission shall, not later than December 31, 1996,
establish an Interim LEC Fund. The Interim LEC Fund shall initially be
funded by those entities receiving an access or interconnection rate
reduction from LEC's pursuant to subsection (L) in proportion to the
amount of the rate reduction. To the extent that affected LEC's are
entitled to payments from the USF, the Interim LEC Fund must transition
into the USF as outlined in Section 58-9-280(E) when funding for the
USF is finalized and adequate to support the obligations of the Interim
LEC Fund.
(N) The commission shall ensure that any requirements implemented
under Section 58-9-280(C) are appropriate for the service territory of the
small LEC and may implement such alternative requirements necessary to
protect the public interest in such service area. Specifically, the
commission shall ensure for small LEC's that telecommunications
services that are available at retail to a specific category of subscribers
only shall not be offered for resale to a different category of subscribers.
Additionally, consistent with the federal Telecommunications Act of
1996, LEC's shall not be required to offer for resale services which they
do not make available on a retail basis.
(O) If any provision or section of this chapter is held invalid or held
not to apply to a particular local exchange carrier, such holding shall not
affect the remaining provisions of this chapter or their application to any
local exchange carrier to which they might apply."
Election by LEC; alternative forms of regulation; etc.
SECTION 3. The 1976 Code is amended by adding:
"Section 58-9-576. (A) Any LEC may elect to have rates,
terms, and conditions determined pursuant to the plan described in
subsection (B), provided the commission has approved a local
interconnection agreement in which the LEC is a participant with an
entity determined by the commission not to be affiliated with the LEC or
the commission determines that another provider's service competes with
the LEC's basic local exchange telephone service.
(B) Notwithstanding any other provision of this chapter, effective July
1, 1996, any LEC may elect to have its rates, terms, and conditions for
its services determined pursuant to the plan described in this subsection,
in lieu of other forms of regulation including, but not limited to, rate of
return or rate base monitoring or regulation, upon the filing of notice
with the commission as follows:
(1) If the provisions of (A) have been met, the plan under this
subsection becomes effective on the date specified by the electing LEC
but in no event sooner than thirty days after such notice is filed with the
commission.
(2) On the date a LEC notifies the commission of its intent to elect
the plan described in this section, existing rates, terms, and conditions for
the services provided by the electing LEC contained in the then-existing
tariffs and contracts are considered just and reasonable.
(3) The rates for flat-rated local exchange services for residential
and single-line business customers on the date of election shall be the
maximum rates that such LEC may charge for these local exchange
services for a period of two years from the date the election is filed with
the commission. During such period, the local exchange company may
charge less than the authorized maximum rates for these services. For
those small LEC's whose prices are below the statewide average local
service rate, weighted by number of access lines, the commission shall
waive the requirements of this paragraph.
(4) For those companies to which item (3) applies, after the
expiration of the period set forth above, the rates for flat-rate local
exchange residential and single-line business service provided by a LEC
may be adjusted on an annual basis pursuant to an inflation-based
index.
(5) The LEC's shall set rates for all other services on a basis that
does not unreasonably discriminate between similarly situated customers;
provided, however, that all such rates are subject to a complaint process
for abuse of market position in accordance with guidelines to be adopted
by the commission.
(6) A LEC subject to this section shall file tariffs for its local
exchange services that set out the terms and conditions of the services
and the rates for such services. The tariff shall be presumed valid and
become effective seven days after filing for price decreases and fourteen
days after filing for price increases and new services.
(7) Any incumbent LEC operating under an alternative regulatory
plan approved by the commission before the effective date of this section
must adhere to such plan until such plan expires or is terminated by the
commission, whichever is sooner.
Section 58-9-577. Notwithstanding Sections 58-9-575 and 58-9-576,
any small LEC may elect to have the rates, terms, and conditions of its
services determined pursuant to alternative forms of regulation, which
may differ among companies and may include, but not be limited to,
price regulation, rather than rate of return or other forms of earning
regulation. Upon application, the commission shall approve such
alternative regulation or price regulation, which may differ among local
exchange companies, upon finding that the plan as proposed:
(1) protects the affordability of basic local exchange telephone
service, as such service is defined by the commission;
(2) reasonably assures the continuation of basic local exchange
telephone service that meets reasonable service standards that the
commission may adopt;
(3) will not unreasonably prejudice any class of telephone
customers, including telecommunications companies;
(4) is not inconsistent with the federal Telecommunications Act of
1996; and
(5) is otherwise consistent with the public interest.
Upon approval of a price regulation plan, price regulation shall be the
sole form of regulation imposed upon the electing local exchange carrier,
and the commission shall regulate the electing local exchange carrier's
prices rather than its earnings. The small LEC shall file a tariff for its
local exchange services that sets out the terms and conditions of the
services and the rates for these services. The tariff shall be presumed
valid and shall become effective seven days after filing for price
decreases and fourteen days after filing for price increases and new
services, subject to a complaint process in accordance with guidelines to
be adopted by the commission. The commission shall issue an order
denying or approving the proposed plan for alternative regulation or price
regulation, with or without modification, not more than ninety days from
the filing of the application. However, the commission may extend the
time period for an additional sixty days, in the discretion of the
commission. If the commission approves the application with
modifications, the local exchange carrier, subject to such approval, may
accept the modifications and implement the proposed plan as modified or
may at its option:
(1) withdraw its application and continue to be regulated under the
form of regulation that existed immediately before the filing of the
application, or
(2) file another proposed plan for price regulation."
Time effective
SECTION 4. This act takes effect upon approval by the Governor.
Approved the 29th day of May, 1996. |