Section 484.2304 - Alteration of primary basic local exchange rates; requirements.
MICHIGAN TELECOMMUNICATIONS ACT (EXCERPT)
Act 179 of 1991
484.2304 Alteration of primary basic local exchange rates; requirements.
Sec. 304.
(1) The rates for primary basic local exchange service shall be just and reasonable. Each provider shall set the initial rates for primary basic local exchange service to be effective no later than April 1, 2006. Except as provided under section 310a or a higher rate approved by the commission under subsection (2)(d), the initial rates may not exceed the rates for the lowest cost calling plan that includes a limited number of outgoing calls of the provider in place before the rates are set under this subsection. If a provider does not offer a calling plan with a limited number of outgoing calls, the provider shall set the initial rate for primary basic local exchange service which shall be just and reasonable and may be subject to commission review.
(2) A provider may alter its rates for primary basic local exchange services by 1 or more of the following:
(a) Filing with the commission notice of a reduction in a primary 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 primary basic local exchange rate to a level not to exceed the rate established under subsection (1) or subdivisions (c) and (d). A rate alteration under this subdivision is effective without commission review or approval.
(c) Filing with the commission notice of an 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 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 an application to increase a primary basic local exchange rate in an amount greater than that allowed under subsection (1) or subdivision (c). 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)(c) or (d) and shall be included in or on the bill of each affected customer of the provider at least 1 billing cycle 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 primary basic local exchange rate shall take effect 90 days from the date of the notice required by subsection (3).
(6) Upon receiving a complaint or pursuant to a determination under subsection (2)(d), the commission may require a filing under section 203 to review a proposed rate alteration under subsection (2)(d). The commission's final order may approve, modify, or reject the rate alteration.
(7) In reviewing a rate alteration under subsection (6), 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) Comparison of the proposed rate to the rates charged by other providers in this state for the same service.
(c) Whether a new function, feature, or capability is being offered as a component of basic local exchange service.
(d) Whether there has been an increase in the costs to provide basic local exchange service in the geographic area of the proposed rate.
(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.
(8) A provider shall be allowed only 1 rate increase for each regulated service during any 12-month period.
(9) A call made to a local calling area adjacent to the caller's local calling area shall be considered a local call and shall be billed as a local call. Effective December 31, 2007, a call made to a called party who is not located within the geographic area of the caller's local calling area or an adjacent local calling area as defined by the commission's order in case numbers U-12515 and U-12528, dated February 5, 2001, is not a local call if the tariff of the provider originating the call does not classify the call as a local call. The commission shall convene a workgroup of interested parties for the purpose of resolving issues surrounding virtual NXX. Virtual NXX is the assignment of a telephone number to customers who are not physically located in the exchange to which the NXX is assigned. The workgroup shall consider the utilization of virtual NXX services to transport interexchange traffic and the associated inter-carrier compensation. Prior to July 1, 2006, the commission shall submit a report to the governor and the house and senate standing committees with oversight of telecommunication issues on the progress of workgroup discussions. The report shall include a commission policy statement relating to the provision of virtual NXX services, and recommendations for legislation, if any.
(10) A provider not in compliance with subsection (9), or not already the subject of a commission order on adjacent local calling, shall submit to the commission an adjacent local calling plan to implement subsection (9) no later than October 1, 2006. In reviewing the plan, the commission shall give consideration to the revenues lost and additional cost incurred by the provider in implementing the plan and shall approve or modify the plan or find that the plan is not required because a cost benefit analysis demonstrates that the plan is not in the best interest of the customers.
(11) An alteration by a provider to the rate of a package, combination, or bundle of telecommunication or other services which includes primary basic local exchange service is not subject to this section as long as the primary basic local exchange service component of the package, combination, or bundle is available for purchase on a stand-alone basis.
(12) A provider shall offer its unregulated calling features on a stand-alone basis to its primary basic local exchange service customers. The purchase of a calling feature under this subsection shall not affect the regulated rate of the primary basic local exchange service.
(13) A person with disabilities or who is voluntarily providing a service for an organization classified by the internal revenue service as a section 501(c)(3) or (19) organization, or a person who provides a service for a congressionally chartered veterans organization or their duly authorized foundations, is exempt from the 100 calls per month limitation and shall receive a flat rate allowing unlimited calls per month. A person exempt from the call cap under this subsection shall not be charged a rate greater than the flat rate charged residential customers for primary basic local exchange service.
(14) Except as provided in subsection (15), for the purposes of this section and the act, providers who, together with any affiliated providers, provide basic local exchange service or basic local exchange and toll service to less than 250,000 end-users in this state may determine total service long run incremental cost through preparation of a cost study or may determine that their total service long run incremental cost is the same as that of a provider with more than 250,000 end-users.
(15) A provider of basic local exchange service with less than 15,000 end-users in this state may determine that their total service long run incremental cost is the same as that of a provider with more than 250,000 end-users.
(16) A provider shall file with the commission for review and approval a tariff for the rates and charges for calls made that exceed the 100-call limit of primary basic local exchange service.
History: 1991, Act 179, Eff. Jan. 1, 1992 ;-- Am. 1995, Act 216, Imd. Eff. Nov. 30, 1995 ;-- Am. 2000, Act 295, Imd. Eff. July 17, 2000 ;-- Am. 2005, Act 235, Imd. Eff. Nov. 22, 2005