First Substitute H.B. 71

1

TELECOMMUNICATIONS - UNIVERSAL
2 SERVICE AMENDMENTS
3 1997 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Martin R. Stephens
6 AN ACT RELATING TO PUBLIC UTILITIES; PROVIDING DEFINITIONS; DESIGNATING
7 AN EXPIRATION AND TRANSFER OF REMAINING BALANCE; AUTHORIZING THE
8 PUBLIC SERVICE COMMISSION TO ESTABLISH AND ADMINISTER A UNIVERSAL
9 SERVICE FUND.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 54-8b-2, as last amended by Chapter 269, Laws of Utah 1995
13 54-8b-12, as last amended by Chapter 37, Laws of Utah 1992
14 ENACTS:
15 54-8b-15, Utah Code Annotated 1953
16 Be it enacted by the Legislature of the state of Utah:
17 Section 1. Section 54-8b-2 is amended to read:
18 54-8b-2. Definitions.
19 As used in this chapter:
20 (1) (a) "Aggregator" means any person or entity that:
21 (i) is not a telecommunications corporation;
22 (ii) in the ordinary course of its business makes operator assisted services available to the
23 public or to customers and transient users of its business or property through an operator service
24 provider; and
25 (iii) receives from an operator service provider by contract, tariff, or otherwise,
26 commissions or compensation for calls delivered from the aggregator's location to the operator
27 service provider.

1 (b) "Aggregator" may include any hotel, motel, hospital, educational institution,
2 government agency, or coin or coinless telephone service provider so long as that entity qualifies
3 under Subsection (a).
4 (2) "Certificate" means a certificate of public convenience and necessity issued by the
5 commission authorizing a telecommunications corporation to provide specified public
6 telecommunications services within a defined geographic service territory in the state.
7 (3) "Essential facility or service" means any portion, component, or function of the
8 network or service offered by a provider of local exchange services:
9 (a) that is necessary for a competitor to provide a public telecommunications service;
10 (b) that cannot be reasonably duplicated; and
11 (c) for which there is no adequate economic alternative to the competitor in terms of
12 quality, quantity, and price.
13 (4) "Federal Telecommunications Act" means the Federal Telecommunications Act of
14 1996, Pub. L. No. 104-104, 110 Stat. 56.
15 [(4)] (5) "Incumbent telephone corporation" means a telephone corporation, its successors
16 or assigns, which, as of May 1, 1995, held a certificate to provide local exchange services in a
17 defined geographic service territory in the state.
18 [ (5)] (6) "Intrastate telecommunications service" means any public telecommunications
19 service in which the information transmitted originates and terminates within the boundaries of
20 this state.
21 [(6)] (7) "Local exchange service" means the provision of telephone lines to customers
22 with the associated transmission of two-way interactive, switched voice communication within the
23 geographic area encompassing one or more local communities as described in maps, tariffs, or rate
24 schedules filed with and approved by the commission.
25 [(7)] (8) (a) "New public telecommunications service" means a service offered by a
26 telecommunications corporation which that corporation has never offered before.
27 (b) "New public telecommunications service" does not include:
28 (i) a tariff, price list, or competitive contract that involves a new method of pricing any
29 existing public telecommunications service;
30 (ii) a package of public telecommunications services that includes an existing public
31 telecommunications service; or

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1 (iii) a public telecommunications service that is a direct replacement for:
2 (A) a fully regulated service;
3 (B) an existing service offered pursuant to a tariff, price list, or competitive contract; or
4 (C) an essential facility or an essential service as defined in Subsection 54-8b-2(3).
5 [(8)] (9) "Operator assisted services" means services which assist callers in the placement
6 or charging of a telephone call, either through live intervention or automated intervention.
7 [(9)] (10) "Operator service provider" means any person or entity that provides, for a fee
8 to a caller, operator assisted services.
9 [(10)] (11) "Price-regulated service" means any public telecommunications service
10 governed by Section 54-8b-2.3.
11 [(11)] (12) "Public telecommunications service" means the two-way transmission of signs,
12 signals, writing, images, sounds, messages, data, or other information of any nature by wire, radio,
13 lightwaves, or other electromagnetic means offered to the public generally.
14 [(12)] (13) "Telecommunications corporation" means any corporation or person, and their
15 lessees, trustees, receivers, or trustees appointed by any court, owning, controlling, operating,
16 managing, or reselling a public telecommunications service.
17 [(13)] (14) "Total service long-run incremental cost" means the forward-looking
18 incremental cost to a telecommunications corporation caused by providing the entire quantity of
19 a public telecommunications service, network function, or group of public telecommunications
20 services or network functions, by using forward-looking technology, reasonably available, without
21 assuming relocation of existing plant and equipment. The "long-run" means a period of time long
22 enough so that cost estimates are based on the assumption that all inputs are variable.
23 Section 2. Section 54-8b-12 is amended to read:
24 54-8b-12. Trust fund established -- Requirements -- Expiration -- Transfer of
25 balance.
26 (1) The commission may establish an expendable trust fund for the purpose of maintaining
27 the universal availability of intrastate telecommunications services at just and reasonable rates.
28 (2) The fund established under this section shall meet the following requirements:
29 (a) Fund revenues shall be generated by statewide surcharges to the providers and users
30 of intrastate telecommunications services. The surcharges shall be determined by the commission
31 in accordance with Section 54-8b-11 and subject to the following restrictions:

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1 (i) No more than 50% of the fund revenues may be derived from surcharges to local
2 exchange services.
3 (ii) The surcharge for local exchange services may not exceed $.07 per month.
4 (iii) The surcharge for all long distance type services may not exceed $.005 per minute.
5 (b) Only telecommunications corporations that provide local exchange service and hold
6 a certificate of public convenience and necessity from the commission shall be eligible for
7 receiving distributions from the fund.
8 (3) Rules governing the administration of the fund shall be made by the commission.
9 (4) All telecommunications corporations, persons, or entities, including corporations,
10 persons, and entities which provide fixed or mobile radio services having direct or automated user
11 access to the local exchange service networks, that provide and bill intrastate local or long distance
12 type public telecommunications services, shall bill, collect and submit surcharges, whether or not
13 the corporation, person, or entity is otherwise regulated by the commission.
14 (5) The commission may direct any telecommunications corporation, person, or entity to
15 make available its books and records or other information for inspection by the commission or the
16 Division of Public Utilities in a form required by the commission to ensure that surcharges as
17 authorized under this section and determined by the commission have been billed, collected, and
18 submitted.
19 (6) Any telecommunications corporation, person, or entity which fails to bill, collect, and
20 submit surcharges or which fails to obey the directive of the commission concerning its books and
21 records or other information pursuant to this subsection is subject to a penalty of not less than $500
22 nor more than $2,000 for each offense.
23 (7) (a) Each violation of this section by a telecommunications corporation, person, or
24 entity is a separate offense.
25 (b) In the case of a continuing failure to comply, each day the violation continues is a
26 separate offense.
27 (8) In construing and enforcing the provisions of this section relating to penalties, the act,
28 commission, or failure of an officer, agent, or employee of the telecommunications corporation,
29 person, or entity, acting within the scope of his official duties or employment, shall in each case
30 be considered the act, commission, or failure of that telecommunications corporation, person, or
31 entity.

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1 (9) On or before December 31, 1999, the commission shall dissolve this fund and any
2 remaining balance shall be transferred to the Universal Public Telecommunications Service
3 Support Fund established in Section 54-8b-15.
4 Section 3. Section 54-8b-15 is enacted to read:
5 54-8b-15. Universal Public Telecommunications Service Support Fund -- Established.
6 (1) For purposes of this section:
7 (a) "Basic telephone service" means local exchange service and may include such other
8 functions and elements, if any, as the commission determines to be eligible for support by the fund.
9 (b) "Fund" means the Universal Public Telecommunications Service Support Fund
10 established in this section.
11 (2) The commission shall establish an expendable trust fund known as the Universal
12 Public Telecommunications Service Support Fund, which is to be implemented by January 1,
13 1998.
14 (3) The commission shall:
15 (a) institute a proceeding within 30 days of the effective date of this section to establish
16 rules governing the administration of the fund; and
17 (b) issue those rules by October 1, 1997.
18 (4) The rules in Subsection h [(2) ] (3) h shall:
19 (a) include rules governing the mechanics of phasing out the trust fund established under
20 Section 54-8b-12;
21 (b) specify the relationship between the payments made to the trust fund in Section
22 54-8b-12 and the payments made to the fund established in this section; and
23 (c) be consistent with the Federal Telecommunications Act.
24 (5) Operation of the fund shall be nondiscriminatory and competitively and
25 technologically neutral in the collection and distribution of funds, neither providing a competitive
26 advantage for, nor imposing a competitive disadvantage upon, any telecommunications provider
27 operating in the state.
28 (6) The fund shall be designed to:
29 (a) promote equitable cost recovery of basic telephone service through the imposition of
30 just and reasonable rates for telecommunications access and usage; and
31 (b) preserve and promote universal service within the state by ensuring that customers

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1 have access to affordable basic telephone service.
2 (7) To the extent not funded by a federal universal service fund or other federal
3 jurisdictional revenues or by the fund established pursuant to Section 54-8b-12, the fund shall be
4 used to defray the costs, as determined by the commission, of any qualifying h [ certificated ] h
5 telecommunications corporation in providing public telecommunications services to:
6 (a) customers that qualify for a commission-approved lifeline program; and
7 (b) customers, where the basic telephone service rate considered affordable by the
8 commission in a particular geographic area is less than the costs, as determined by the commission
9 for that geographic area, of basic telephone service.
10 (8) The fund shall be portable among qualifying h [local exchange providers ]
10a TELECOMMUNICATIONS CORPORATIONS h . Requirements
11 to qualify for funds under this section shall be defined by rules established by the commission.
12 (9) As necessary to accomplish the purposes of this section, the fund shall provide a
13 mechanism for specific, predictable, and sufficient funds in addition to those provided under the
14 federal universal service fund.
15 (10) (a) Each telecommunications corporation that provides intrastate public
16 telecommunication service shall contribute to the fund on an equitable and nondiscriminatory
17 basis.
18 (b) For purposes of funding the fund, the commission shall have the authority to require
19 all corporations that provide intrastate telecommunication services in this state to contribute
20 monies to the fund through explicit charges determined by the commission.
21 (c) Any charge in Subsection (b) shall not apply to wholesale services, including access
22 and interconnection. Charges associated with being a provider of public telecommunications
23 service shall be in the form of end-user surcharges applied to intrastate retail rates.
24 (d) In establishing any surcharge under this section, the commission is not limited by the
25 restrictions in Subsection 54-8b-12(2).
26 h [ (e) Except for end-user retail rates for basic telephone service, and coincident with the
27 formal implementation of the fund, the charges established under this section shall eliminate h , ON OR
27a BEFORE DECEMBER 31, 2002, h any
28 and all other implicit or explicit Utah-jurisdictional, basic telephone service cost recovery or
29 revenue sources, except for the surcharges in Section 54-8b-12, which shall be eliminated in
30 accordance with Subsections 54-8b-12(9) and 54-8b-15(4)(a). ] h
31 (11) Nothing in this section shall be construed to enlarge or reduce the commission's

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1 jurisdiction or authority, as provided in other provisions of this title.
2 (12) Any telecommunications corporation failing to make contributions to this fund or
3 failing to comply with the directives of the commission concerning its books, records, or other
4 information required to administer this section shall be subject to applicable penalties.
4a h (13) THE COMMISSION SHALL HAVE A BILL PREPARED FOR THE 1998 GENERAL
4b SESSION OF THE LEGISLATURE TO PLACE IN STATUTE AS MUCH OF THE REGULATION
4c IMPLEMENTED BY RULE PURSUANT TO THE ACT THE COMMISSION BELIEVES IS PRACTICABLE. h


















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