Regulation of telecommunications utilities and alternative telecommunications utilities, and public utility accounting filing requirements

Under current law, the Public Service Commission (PSC) may approve the filing of a tariff by a TU that allows the TU to enter into an individual contract with a customer only if substitute telecommunications services are available to the TU's customers and, if the tariff is not approved, the TU will be disadvantaged in competing for business. To qualify for approval, a tariff must include a condition that the contract is compensatory, and must include any other conditions or procedures that the PSC determines are in the public interest. In addition, current law includes requirements for a TU for which a tariff is approved to notify the PSC about the execution and amendment of contracts allowed under the tariff. Current law also allows the PSC to adjust the TU's rates or tariff if the PSC subsequently determines that a contract under an approved tariff is not compensatory. This bill eliminates all of the foregoing requirements and instead allows the PSC to approve a tariff with general terms and conditions allowing a TU to enter into a contract with an individual customer.

ATU certification and regulation.

Under current law, a TU is generally exempt from PSC regulation if the PSC certifies that the TU is an ATU. The following four types of TUs may qualify for certification as an ATU: 1) certain cable television operators who also provide telecommunications service; 2) pay telephone service providers; 3) telecommunications resellers; and 4) any other telecommunications provider who offers service that the PSC finds is available from other telecommunications providers within this state. Except for a TU that is a municipality, this bill requires certification as an ATU to be on a statewide basis, and provides that a certification issued before the bill's effective date is considered amended to be a statewide certification. Notwithstanding the requirement for statewide certification, the bill requires the parties to a specified proceeding before the PSC to comply with a settlement agreement regarding an ATU's proposed expansion of service into areas serviced by other TUs.

Although an ATU is generally exempt from regulation, current law allows the PSC, on its own motion or in response to a petition by an interested person, to impose an otherwise inapplicable requirement on an ATU, but only if the PSC determines that imposing the requirement is in the public interest. Under this bill, if an ATU is the fourth type of TU described above, the PSC may not impose an otherwise inapplicable requirement unless the requirement is consistent with a federal law that does the following: 1) prohibits the state from effectively prohibiting a person's ability to provide interstate or intrastate telecommunications service; and 2) allows the state to impose, on a competitively neutral basis, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers. In addition, the bill allows the PSC to deny certification as the fourth type of ATU described above if the PSC finds that the applicant for certification does not have the financial, managerial, or technical capabilities to provide its proposed service or comply with an otherwise inapplicable requirement that the bill allows the PSC to impose.

Local exchange service competitors.

Under current law, with certain exceptions, if a TU is providing local exchange telecommunications service in a municipality, the PSC may not grant a certificate, license, permit, or franchise, to own, operate, manage or control any plant or equipment for furnishing such service, including a certification as an ATU, unless certain requirements are satisfied. The bill eliminates the prohibition, except that the bill requires compliance with the settlement agreement described above.

Subsidization of nonregulated and deregulated activities.

Current law generally prohibits a TU from subsidizing an activity that is not subject to PSC regulation or is subject to partial deregulation by the PSC, including an activity of an affiliate. Under this bill, the prohibition does not apply to a TU, or an affiliated interest, that offers services in bundles or packages. The bill defines "bundle" as a multiservice retail offering that combines one or more telecommunications services provided by the TU with one or more services provided by an affiliated interest or an unaffiliated third person. The bill define "package" as a multiservice retail offering that combines a telecommunications service provided by the TU with one or more other telecommunications or other services provided by the TU.

Rate increases.

Current law imposes requirements for certain TUs with less than 50,000 access lines in use in this state to notify consumers about rate increases and for the PSC to approve such increases. Under this bill, the requirements do not apply to a rate increase for a bundle or package, which are defined as described above.

Affiliated interest contracts.

Under current law, the PSC has supervisory jurisdiction over contracts between TUs and affiliated interests as necessary to enforce certain provisions under current law regarding access services, interconnection, and other requirements for protecting consumers and other telecommunications providers. Under this bill, the PSC's jurisdiction over such contracts is limited to TUs and affiliated interests that do not offer a bundle or package, as defined as described above. However, the bill requires a TU that offers a bundle or package to provide copies of contracts with affiliated interests if the PSC requests the copies in a complaint proceeding and if the copies are necessary to investigate violations of the foregoing provisions. In addition, the bill requires any contract between a TU and an affiliated interest to specify certain information, including the services furnished under the contract; the properties or rights purchased, leased, or exchanged under the contract; and the contract's rates, terms, and conditions. Also, the bill requires a TU retain a copy of such contracts for three years.

Finally, the bill changes the deadline by which public utilities must file annual accounting balance sheets with the PSC. This requirement generally applies to any type of public utility, including a TU that is not an ATU. The bill changes the deadline from April 1 to May 1.