56-235.5 - Telephone regulatory alternatives.
§ 56-235.5. Telephone regulatory alternatives.
A. As used in this section, "telephone company" means any public servicecorporation or public service company which holds a certificate of publicconvenience and necessity to furnish local exchange telephone service, exceptthat companies which are regulated pursuant to Chapter 16 (§ 56-485 et seq.)or 19 (§ 56-531 et seq.) of this title are not included within thisdefinition.
B. In regulating telephone services of any telephone company, andnotwithstanding any provision of law to the contrary, the Commission, aftergiving notice and an opportunity for hearing, may replace the ratemakingmethodology set forth in § 56-235.2 with any alternative form of regulationwhich: (i) protects the affordability of basic local exchange telephoneservice, as such service is defined by the Commission; (ii) reasonablyensures the continuation of quality local exchange telephone service; (iii)will not unreasonably prejudice or disadvantage any class of telephonecompany customers or other providers of competitive services; and (iv) is inthe public interest. Alternatives may differ among telephone companies andmay include, but are not limited to, the use of price regulation, ranges ofauthorized returns, categories of services, price indexing or otheralternative forms of regulation. A hearing under this section shall includethe right to present evidence and be heard. Prior to any hearing under thissection, the Commission shall provide parties an opportunity to conductdiscovery.
C. Any telephone company or company regulated pursuant to Chapter 16 (§56-485 et seq.) or 19 (§ 56-531 et seq.) of this title may apply to theCommission at any time to obtain an alternative form of regulation. TheCommission shall approve the application if it finds, after notice to allaffected parties and hearing, that the proposal meets the standards for analternative form of regulation set forth in subsection B.
1. A Commission order, including appropriate findings of fact and conclusionsof law, denying or approving, with or without modification, an applicationfor an alternative form of regulation shall be entered no more than 90 daysfrom the filing of the application, except that the Commission, upon noticeto all parties in interest, may extend that period in additional 30-dayincrements not to exceed an additional 90 days in all.
2. If the Commission approves the application with modifications, thetelephone company, or company regulated pursuant to Chapter 16 (§ 56-485 etseq.) or 19 (§ 56-531 et seq.) of this title, may, at its option, withdrawits application and continue to be regulated under the form of regulationthat existed immediately prior to the filing of the application, unless it ismodified for a telephone company by the Commission pursuant to subsection B.
D. The Commission may, after notice and opportunity for hearing, alter, amendor revoke any alternative form of regulation previously implemented if itfinds that (i) the affordability of basic local exchange service, as suchservice is defined by the Commission, is threatened by the alternative formof regulation; (ii) the quality of local exchange telephone service hasdeteriorated or will deteriorate to the point that the public interest willnot be served by continuation of the alternative form of regulation; (iii)the terms ordered by the Commission in connection with approval of acompany's application for alternative form of regulation have been violated;(iv) any class of telephone company customers or other providers ofcompetitive services are being unreasonably prejudiced or disadvantaged bythe alternative form of regulation; or (v) the alternative form of regulationis no longer in the public interest.
E. The Commission shall have the authority, after notice to all affectedparties and an opportunity for hearing, to determine whether any telephoneservice of a telephone company is subject to competition and to provide,either by rule or case-by-case determination, for deregulation, detariffing,or modified regulation determined by the Commission to be in the publicinterest for such competitive services.
F. The Commission may determine telephone services of any telephone companyto be competitive when it finds competition or the potential for competitionin the market place is or can be an effective regulator of the price of thoseservices. Such determination may be made by the Commission on a statewide ora more limited geographic basis, such as one or more political subdivisionsor one or more telephone exchange areas, or on the basis of a category ofcustomers, such as business or residential customers, or customers exceedinga revenue or service quantity threshold, or some combination thereof. TheCommission may also determine bundles composed of a combination ofcompetitive and noncompetitive services to be competitive if thenoncompetitive services are available separately pursuant to tariff orotherwise. In determining whether competition effectively regulates theprices of services, the Commission shall consider: (i) the ease of marketentry, (ii) the presence of other providers reasonably meeting the needs ofconsumers, and (iii) other factors the Commission considers relevant. Forpurposes of this section, the Commission shall consider all wirelesscommunications providers that offer voice communications services to befacilities-based competitors owning wireline network facilities andreasonably meeting the needs of consumers, regardless of whether suchwireless providers own wireline network facilities. In its determination, theCommission shall not exclude as a competitor any affiliate of the telephonecompany. Notwithstanding any other provisions of this subsection, anytelephone services that are the functional equivalent of the services offeredindividually or as part of a bundle of services by a county, city or townpursuant to § 56-265.4:4 or Article 5.1 (§ 56-484.7:1 et seq.) of Chapter 15of this title, either directly or pursuant to a public-private partnership,shall be deemed competitive services in the geographic area where theservices of the county, city or town are offered for purposes of this articleand any alternate regulatory plans approved by the Commission.
G. The Commission shall monitor the competitiveness of any telephone servicepreviously found by it to be competitive under any provision of subsection Fabove and may change that conclusion, if, after notice and an opportunity forhearing, it finds that competition no longer effectively regulates the priceof that service.
H. Whenever the Commission adopts an alternative form of regulation pursuantto subsection B or C above, or determines that a service is competitivepursuant to subsections E and F above, the Commission shall adopt safeguardsto protect consumers and competitive markets. At a minimum these safeguardsmust ensure that there is no cross subsidization of competitive services bymonopoly services.
I. If the Commission determines pursuant to subsections E and F that 75percent or more of residential households or businesses in a telephonecompany's incumbent territory are in areas that have been determined by theCommission to be competitive for a telephone service, the Commission shallexpand, for that telephone service throughout the company's incumbentterritory, its competitive determination and apply the same regulatorytreatment already adopted by the Commission for that telephone service incompetitive areas, including any safeguards under subsection H.
J. If a telephone company provides 90 percent or more of its residential andbusiness lines access to fiber optic or copper-based broadband service, asdefined by the Federal Communications Commission, within an exchange area,the Commission shall expand, for basic and associated telephone services inthat exchange area, its competitive determination and apply the sameregulatory treatment already adopted by the Commission for those services incompetitive areas, including any safeguards under subsection H.
(1993, c. 21; 1996, c. 18; 2002, cc. 479, 489; 2003, c. 711; 2009, c. 788.)