S.B. 13

1

TELECOMMUNICATION AMENDMENTS
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: David H. Steele
5 AN ACT RELATING TO PUBLIC UTILITIES; MODIFYING EFFECTIVE DATES
6 RELATING TO TELECOMMUNICATIONS DEREGULATION; AND MAKING
7 TECHNICAL CORRECTIONS.
8 This act affects sections of Utah Code Annotated 1953 as follows:
9 AMENDS:
10 54-8b-2.4, as enacted by Chapter 269, Laws of Utah 1995
11 Be it enacted by the Legislature of the state of Utah:
12 Section 1. Section 54-8b-2.4 is amended to read:
13 54-8b-2.4. Price regulation -- Maximum prices.
14 (1) The Legislature finds that:
15 (a) traditional rate of return regulation cannot guarantee that customers who do not have
16 the choice of alternative providers will be protected from the economic responsibility for making
17 up for an incumbent telephone corporation's competitive losses or from providing for the recovery
18 of past, regulated investments;
19 (b) the method of regulation set forth in this section will provide better protection to
20 customers who lack competitive choices than does traditional rate of return regulation; and
21 (c) before moving from traditional rate of return regulation, it is essential the commission
22 address issues relating to the movement of prices towards cost and removing subsidies in the
23 existing price structure of incumbent telephone corporations to encourage competition for all
24 telecommunications services.
25 (2) (a) Effective May 1, [1997] 1998, any incumbent telephone corporation with more than
26 30,000 access lines in the state shall be regulated pursuant to this section and may not be regulated
27 on the basis of rate of return or any similar method of regulation that is based on the earnings of

1 the incumbent telephone corporation, except as provided in this section.
2 (b) Any incumbent telephone corporation serving fewer than 30,000 access lines in the
3 state may petition the commission to be regulated under price regulation rather than traditional
4 rate of return regulation. In adopting price regulation for incumbent telephone corporations with
5 fewer than 30,000 access lines, the commission may modify the provisions of this section taking
6 into consideration the individual circumstances of the incumbent telephone corporation seeking
7 price regulation.
8 (3) Any general rate proceeding for an incumbent telephone corporation with more than
9 30,000 access lines in the state initiated before May 1, [1997] 1998, shall be conducted under the
10 principles of traditional rate of return regulation, even though the final order in the case is not
11 issued until May 1, [1997] 1998, or thereafter.
12 (4) (a) The prices of tariffed telecommunications services offered by an incumbent
13 telephone corporation with more than 30,000 access lines in the state may not increase during the
14 [three-year] two-year period commencing with the date of the final order in the last rate case
15 initiated before May 1, [1997] 1998. The prices of services offered pursuant to a price list or
16 competitive contract shall be governed by Section 54-8b-2.3.
17 (b) Notwithstanding Subsection (4)(a), prices may increase pursuant to any prices
18 established in a final order of the commission for a general rate proceeding initiated before May
19 1, [1997] 1998, or the adjustment of those prices as a result of an appeal or remand of the final
20 order.
21 (5) Effective at the end of the [three-year] two-year period specified in Subsection (4), the
22 commission shall regulate the maximum prices for the tariffed public telecommunications services
23 of the incumbent telephone corporation according to an aggregate price index or price indices
24 associated with groups of services. The aggregate price index or price indices shall be adjusted
25 annually to reflect the effects of inflation, productivity, and exogenous factors and to maintain an
26 appropriate level of service quality. The precise manner of annual adjustment shall be developed
27 by the commission after notice and a hearing and before the end of the [three-year] two-year
28 period.
29 (6) (a) The incumbent telephone corporation may decrease the price of a tariffed
30 telecommunications service subject to the limitation in Section 54-8b-3.3.
31 (b) Any decrease in price shall be made by filing a tariff with the commission. The

- 2 -

1 decrease shall become effective 30 days after filing.




Legislative Review Note
as of 12-27-96 9:49 AM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

- 3 -