House Study Bill 50


                                     HOUSE FILE       
                                     BY  (PROPOSED COMMITTEE ON COMMERCE,
                                          REGULATION AND LABOR BILL
                                          BY CHAIRPERSON JENKINS)


       Passed House, Date                Passed Senate,  Date             
       Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                    Approved                            

                                         A BILL FOR

     1 An Act relating to the deregulation of communications services
     2    including determining comparable services, considering market
     3    forces, providing for expedited deregulation proceedings,
     4    eliminating accounting plan requirements, eliminating
     5    reporting requirements to the general assembly, and providing
     6    effective and retroactive applicability dates.
     7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
     8 TLSB 1748HC 81
     9 kk/sh/8

PAG LIN



  1  1    Section 1.  Section 476.1D, subsections 1, 2, and 3, Code
  1  2 2005, are amended to read as follows:
  1  3    1.  Except as provided in this section, the jurisdiction of
  1  4 the board as to the regulation of communications services is
  1  5 not applicable to a service or facility that is provided or is
  1  6 proposed to be provided by a telephone utility that is or
  1  7 becomes subject to effective competition, as determined by the
  1  8 board.
  1  9    a.  In determining whether a service or facility is or
  1 10 becomes subject to effective competition, the board shall
  1 11 consider, among other factors, whether a comparable service or
  1 12 facility is or may reasonably be expected to become available
  1 13 from a supplier other than the telephone utility in the
  1 14 geographic market being considered by the board and whether
  1 15 market forces in that market are sufficient to assure just and
  1 16 reasonable rates without regulation.
  1 17    b.  The board shall consider all of the following services
  1 18 as comparable services or facilities to wireline
  1 19 communications services:
  1 20    (1)  Wireless communications services.
  1 21    (2)  Cable telephony services.
  1 22    (3)  Voice over internet protocol services.
  1 23    c.  When considering market forces in the market proposed
  1 24 to be deregulated, the board shall consider factors including
  1 25 but not limited to the presence or absence of all of the
  1 26 following:
  1 27    (1)  Wireless communications services.
  1 28    (2)  Cable telephony services.
  1 29    (3)  Voice over internet protocol services.
  1 30    (4)  Economic barriers to the entry of competitors or
  1 31 potential competitors in that market.
  1 32    d.  If one or more telephone utilities providing wireline
  1 33 or cable telephony services, other than an incumbent telephone
  1 34 utility, offers services using the utility's own switching or
  1 35 loop facilities in at least two=thirds of a given geographic
  2  1 market served by an incumbent telephone utility, a rebuttable
  2  2 presumption is established that effective competition exists
  2  3 for that geographic market and the incumbent utility may file
  2  4 a request for expedited deregulation proceedings for the
  2  5 geographic markets affected.  The request for expedited
  2  6 deregulation shall describe the geographic markets alleged to
  2  7 be affected.  Within thirty days after the request is filed
  2  8 and after opportunity for a hearing, the board shall issue an
  2  9 order granting or denying the request.
  2 10    e.  In addition to other services or facilities previously
  2 11 deregulated, effective March 1, 2005, the jurisdiction of the
  2 12 board is not applicable to the regulation of any of the
  2 13 following services:
  2 14    (1)  Business local exchange services provided throughout
  2 15 the state.
  2 16    (2)  Residential additional line services provided
  2 17 throughout the state.
  2 18    (3)  Except as regulation may be reimposed pursuant to
  2 19 subsection 6, residential local exchange services provided in
  2 20 the cities of Ames, Ankeny, Burlington, Cedar Falls, Cedar
  2 21 Rapids, Clinton, Council Bluffs, Davenport, Des Moines,
  2 22 Dubuque, Fort Dodge, Iowa City, Marshalltown, Mason City,
  2 23 Muscatine, Ottumwa, Sioux City, and Waterloo, as those cities
  2 24 are reflected in territory maps of the incumbent
  2 25 telecommunications provider for the applicable exchange.
  2 26    2.  Deregulation Except as provided in subsection 1,
  2 27 paragraph "e", deregulation of a service or facility for a
  2 28 utility is effective only after all of the following:
  2 29    a.  A finding of effective competition by the board.
  2 30    b.  Election by a utility providing the service or facility
  2 31 to file a deregulation accounting plan but only if the utility
  2 32 providing the service or facility is subject to rate=of=return
  2 33 regulation at the time deregulation becomes effective.  A
  2 34 deregulation accounting plan shall not be required for a
  2 35 utility operating under a price plan for the service or
  3  1 facility proposed to be deregulated.
  3  2    c.  Approval of a utility's deregulation accounting plan by
  3  3 the board, if a plan is required.
  3  4    3.  If the board determines a service or facility is
  3  5 subject to effective competition and approves the utility's
  3  6 deregulation accounting plan, if a plan is required, the board
  3  7 shall deregulate the service or facility within a reasonable
  3  8 time.
  3  9    Sec. 2.  Section 476.98, Code 2005, is repealed.
  3 10    Sec. 3.  EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
  3 11 This Act, being deemed of immediate importance, takes effect
  3 12 upon enactment and is retroactively applicable to March 1,
  3 13 2005.
  3 14                           EXPLANATION
  3 15    This bill relates to the deregulation of communications
  3 16 services by the utilities board of the utilities division of
  3 17 the department of commerce.
  3 18    Under current law, before deregulating communications
  3 19 services, the board must determine whether the communications
  3 20 service or facility provided is subject to effective
  3 21 competition by considering whether a comparable service is
  3 22 being provided by another supplier in the same geographic
  3 23 market and whether market forces in that market are sufficient
  3 24 to assure just and reasonable rates without regulation.  The
  3 25 bill requires the board to consider whether a comparable
  3 26 service may reasonably be expected to become available from
  3 27 another supplier rather than only whether the service is
  3 28 actually available from another supplier.  The bill also
  3 29 directs the board to consider wireless communications
  3 30 services, cable telephony services, and voice over internet
  3 31 protocol services to be services or facilities comparable to
  3 32 wireline communications services.  The bill directs the board
  3 33 to consider, when considering market forces in a market
  3 34 proposed to be deregulated, the presence or absence of
  3 35 wireless communications services, cable telephony services,
  4  1 voice over internet protocol services, and economic barriers
  4  2 to the entry of competitors or potential competitors in that
  4  3 market.  The bill creates a rebuttable presumption of
  4  4 effective competition where a wireline or cable telephony
  4  5 provider other than an incumbent provider offers service using
  4  6 its own switching or loop facilities in two=thirds of a
  4  7 geographic market of an incumbent telephone utility.  Where
  4  8 such a rebuttable presumption exists, the incumbent telephone
  4  9 utility can request an expedited deregulation proceeding
  4 10 before the board.
  4 11    The bill provides that effective March 1, 2005, all
  4 12 business local exchange services, residential additional line
  4 13 services, and residential local exchange services provided in
  4 14 certain exchanges shall no longer be regulated by the board.
  4 15    The bill provides that a deregulation accounting plan shall
  4 16 be filed only if the utility is subject to rate=of=return
  4 17 regulation.  A deregulation accounting plan is not required
  4 18 for a utility operating under a price plan for the service or
  4 19 facility proposing to be deregulated.
  4 20    The bill repeals Code section 476.98 requiring the consumer
  4 21 advocate to calculate an estimate of the return of a local
  4 22 exchange carrier operating under price regulation as if the
  4 23 carrier were subject to rate=of=return regulation, and to
  4 24 provide a report to the general assembly regarding the results
  4 25 of the calculation and a recommendation as to requiring a
  4 26 different form of rate regulation.
  4 27    The bill takes effect upon enactment and is retroactively
  4 28 applicable to March 1, 2005.
  4 29 LSB 1748HC 81
  4 30 kk:nh/sh/8