REGULATORY REFORM BILLS ADVANCE IN 6 STATES

Wis. Gov. Jim Doyle (D) signed a bill imposing time limits on the Wis. PSC for deciding on proposed wholesale service or UNE rate increases. The new law (AB-729) gives the PSC 180-270 day limits to decide wholesale rate cases, after a 30-day period for determining a proposal’s completeness. The law allows the agency to petition the state courts for a one-time 60-day extension of the 180-day deadline for deciding cases involving fewer than 100 rates or rate elements. On large-scale wholesale rate increases involving more than 100 rates or elements, the law allows the PSC 270 days for decision. But the agency can ask the courts for a 90-day extension. The original Assembly bill would have allowed a flat 180 days in all wholesale rate cases, but CLECs objected strongly, saying that wouldn’t give the PSC time for thorough consideration of rate increases. CLECs said they weren’t thrilled with the new law but were glad it was less restrictive than the original bill had been. Doyle said the legislation would reduce average approval time 75% and help companies grow and provide better service.

The N.M. legislature passed a bill to require the N.M. Public Regulation Commission (PRC) to establish a new price- based regulation regime for midsized local exchange providers. Under the act (HB-24) sent to Gov. Bill Richardson (D), midsized carriers had 50,000-375,000 lines. Valor Telecom, the state’s 2nd largest incumbent telco, is included. The measure would direct the PRC to adopt “reasonable” price caps for basic services and ways to change rates under those caps. Rates for nonbasic services would be deregulated, except for a ban on below-cost rates. Companies could introduce services or change rates on 10 days’ notice with no prerequisites. The PRC also would create distinct service quality standards and consumer protection rules for those telcos. Valor has been under a price capping system that bars rate increases on basic services; rate increases for nonbasic services are limited to 5% per year. That plan would run to expiration in 2005 before HB-24’s provisions kicked in.

The N.M. Senate Judiciary Committee advanced SB-168, which would cut all local exchange carriers’ intrastate access charges to interstate levels by 2007. Carriers could raise local exchange rates so the net change would be revenue-neutral. The bill also would overhaul state universal service program funding and set new standards for affordability of basic service.

The Va. legislature passed a greatly weakened telecom deregulation bill after Verizon withdrew its backing for a much more sweeping measure. The bill (HB-938) sent to Gov. Mark Warner (D) directs the Va. Corporation Commission (VCC) to treat telecom carriers equally, promote competition and innovation and mitigate or eliminate wholesale and retail rates set below cost. A VCC spokesman said the agency already did the things specified in the bill so it shouldn’t see any meaningful impact. But CLEC interests said courts might interpret the language differently, leading to major unintended consequences. The CLECs said everything the bill would require already was done under existing law. The original version of the bill would have let an incumbent telcos elect a rate deregulation regime that would have allowed basic exchange rate increases of up to 10% per year and would have deregulated all other rates. Stiff opposition to the bill prompted Verizon to drop its support for the original language and propose the weakened substitute language.

An Idaho House bill that would allow incumbent telcos to elect rate deregulation cleared the House committee process and headed to the floor. Now, all incumbent telcos except Qwest are under rate-of-return regulation. Qwest in its southern region operates under an alternate regulation scheme that deregulated rates for all services except residential and small-business basic exchange service, which remains under rate-of-return. Under HB-502, incumbent telcos could elect rate deregulation for all services simply by giving the PUC 30 days’ advance notice. The PUC would retain authority to impose regulations needed to regulate service quality or carry out state duties under the federal Telecom Act. But the PUC no longer could return an offending telco to rate-of- return regulation as a sanction. Action on the bill will be delayed until a companion measure (HB-624) reaches the House floor. That bill would specify that deregulation didn’t shield telcos from state enforcement of antitrust laws and would prohibit below-cost rates. It would allow the PUC to raise rates back to cost upon verified complaint of below- cost rates by competing carriers.

A bill that would deregulate SBC in Okla. cleared the state Senate committee process and headed for the chamber floor. The legislation (SB-1119) would redefine telecom carriers to exclude SBC. SBC and supporters in the Senate said it would bring parity to the state’s telecom marketplace and spur network investment by SBC and its rivals. But CLECs and cable companies opposed the bill, saying deregulation was totally inappropriate as long as SBC continued to enjoy overwhelming dominance in the local exchange market. The opponents said the bill would lead to higher rates for consumers and small business customers that have the fewest alternatives.

The S.C. legislature approved a compromise for overhauling the process of selecting members of the PSC. If the compromise is approved by Gov. Mark Sanford (R), the legislature could elect a new slate of PSC members March 3. Election of the 7 PSC members was delayed 2 years because House and Senate disagreed sharply on qualifications for PSC members. Under the compromise, PSC members must be college graduates and can’t be dependents of state legislators or live in a lawmaker’s household. The 23 candidates on the nomination list for PSC seats are exempt from the new standards.