S.B. 108 Enrolled

TELECOMMUNICATIONS REVISIONS
2005 GENERAL SESSION
STATE OF UTAH
Sponsor: Curtis S. Bramble

LONG TITLE
General Description:
This bill amends and repeals portions of Title 54, Public Utilities, relevant to pricing
and competition by telecommunications corporations.
Highlighted Provisions:
This bill:
. defines terms;
. exempts certain activities of telecommunications corporations from compliance
with rate schedules;
. exempts certain activities of telecommunications corporations from prohibitions on
rate or service preferences;
. expands pricing flexibility for certain telecommunications corporations and
services;
. addresses the methods of filing price lists;
. eliminates the requirement that a telecommunications corporation petition the
Public Service Commission for pricing flexibility;
. requires an incumbent telephone corporation to provide basic residential service
throughout its service area;
. requires an incumbent telephone corporation to maintain basic residential service
rates at July 1, 2004 levels, except under certain circumstances;
. allows the Public Service Commission to review basic residential service by an
incumbent and others;
. allows the Public Service Commission to exempt an incumbent telephone
corporation from basic residential service provisions if comparable services exist at

comparable prices;
. provides for certain disclosures of competitive contracts;
. allows small incumbent telephone corporations to petition the Public Service
Commission for regulation by price, rather than traditional rate of return regulation;
. allows the Public Service Commission to exempt small incumbent telephone
corporations from certain pricing provisions under certain circumstances;
. allows the Public Service Commission to adjust rates for telephone corporations not
subject to price regulation; and
. makes technical changes.
Monies Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
54-3-7, Utah Code Annotated 1953
54-3-8, as last amended by Chapter 265, Laws of Utah 1998
54-8b-2, as last amended by Chapter 320, Laws of Utah 2002
54-8b-2.3, as last amended by Chapter 291, Laws of Utah 2000
54-8b-3.3, as last amended by Chapter 291, Laws of Utah 2000
54-8b-4.5, as enacted by Chapter 88, Laws of Utah 1997
REPEALS:
54-8b-2.4, as last amended by Chapter 291, Laws of Utah 2000
54-8b-2.5, as last amended by Chapter 279, Laws of Utah 2004

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 54-3-7 is amended to read:
54-3-7. Charges not to vary from schedules -- Refunds and rebates forbidden --

Exceptions.
Except as provided in this chapter [otherwise provided] or Chapter 8b, Public
Telecommunications Law, no public utility shall charge, demand, collect or receive a greater or
less or different compensation for any product or commodity furnished or to be furnished, or for
any service rendered or to be rendered, than the rates, tolls, rentals and charges applicable to such
products or commodity or service as specified in its schedules on file and in effect at the time;
nor shall any such public utility refund or remit, directly or indirectly, in any manner or by any
device, any portion of the rates, tolls, rentals and charges so specified; nor extend to any person
any form of contract or agreement, or any rule or regulation, or any facility or privilege except
such as are regularly and uniformly extended to all corporations and persons; provided, that the
commission may, by rule or order, establish such exceptions from the operation of this
prohibition as it may consider just and reasonable as to any public utility.
Section 2. Section 54-3-8 is amended to read:
54-3-8. Preferences forbidden -- Power of commission to determine facts.
(1) [No] Except as provided in Chapter 8b, Public Telecommunications Law, a public
utility [shall,] may not:
(a) as to rates, charges, service, facilities or in any other respect, make or grant any
preference or advantage to any person, or subject any person to any prejudice or disadvantage[.
No public utility shall]; and
(b) establish or maintain any unreasonable difference as to rates, charges, service or
facilities, or in any other respect, either as between localities or as between classes of service.
(2) The commission shall have power to determine any question of fact arising under this
section.
Section 3. Section 54-8b-2 is amended to read:
54-8b-2. Definitions.
As used in this chapter:
(1) (a) "Aggregator" means any person or entity that:
(i) is not a telecommunications corporation;

(ii) in the ordinary course of its business makes operator assisted services available to the
public or to customers and transient users of its business or property through an operator service
provider; and
(iii) receives from an operator service provider by contract, tariff, or otherwise,
commissions or compensation for calls delivered from the aggregator's location to the operator
service provider.
(b) "Aggregator" may include any hotel, motel, hospital, educational institution,
government agency, or coin or coinless telephone service provider so long as that entity qualifies
under Subsection (1)(a).
(2) "Basic residential service" means a local exchange service for a residential customer
consisting of:
(a) a single line with access to the public switched network;
(b) touch-tone or the functional equivalent;
(c) local flat-rate unlimited usage, exclusive of extended area service;
(d) single-party service;
(e) a free phone number listing in directories received for free;
(f) access to operator services;
(g) access to directory assistance;
(h) access to lifeline and telephone relay assistance;
(i) access to 911 and E911 emergency services;
(j) access to long-distance carriers;
(k) access to toll limitations services;
(l) other services as may be determined by the commission; and
(m) no feature.
[(2)] (3) "Certificate" means a certificate of public convenience and necessity issued by
the commission authorizing a telecommunications corporation to provide specified public
telecommunications services within a defined geographic service territory in the state.
[(3)] (4) "Division" means the Division of Public Utilities established in Section 54-4a-1 .

[(4)] (5) "Essential facility or service" means any portion, component, or function of the
network or service offered by a provider of local exchange services:
(a) that is necessary for a competitor to provide a public telecommunications service;
(b) that cannot be reasonably duplicated; and
(c) for which there is no adequate economic alternative to the competitor in terms of
quality, quantity, and price.
(6) (a) "Feature" means a custom calling service available from the central office switch,
including call waiting, call forwarding, three-way calling, and similar services.
(b) "Feature" does not include long distance calling.
[(5)] (7) "Federal Telecommunications Act" means the Federal Telecommunications Act
of 1996, Pub. L. No. 104-104, 110 Stat. 56.
[(6)] (8) "Incumbent telephone corporation" means a telephone corporation, its
successors or assigns, which, as of May 1, 1995, held a certificate to provide local exchange
services in a defined geographic service territory in the state.
[(7)] (9) "Intrastate telecommunications service" means any public telecommunications
service in which the information transmitted originates and terminates within the boundaries of
this state.
[(8)] (10) "Local exchange service" means the provision of telephone lines to customers
with the associated transmission of two-way interactive, switched voice communication within
the geographic area encompassing one or more local communities as described in maps, tariffs,
or rate schedules filed with and approved by the commission.
[(9)] (11) "Mobile telecommunications service" means a mobile telecommunications
service:
(a) that is defined as a mobile telecommunications service in the Mobile
Telecommunications Sourcing Act, 4 U.S.C. Sec. 124; and
(b) in which the information transmitted originates and terminates in one state.
[(10)] (12) (a) "New public telecommunications service" means a service offered by a
telecommunications corporation which that corporation has never offered before.

(b) "New public telecommunications service" does not include:
(i) a tariff, price list, or competitive contract that involves a new method of pricing any
existing public telecommunications service;
(ii) a package of public telecommunications services that includes an existing public
telecommunications service; or
(iii) a public telecommunications service that is a direct replacement for:
(A) a fully regulated service;
(B) an existing service offered pursuant to a tariff, price list, or competitive contract; or
(C) an essential facility or an essential service .
[(11)] (13) "Operator assisted services" means services which assist callers in the
placement or charging of a telephone call, either through live intervention or automated
intervention.
[(12)] (14) "Operator service provider" means any person or entity that provides, for a fee
to a caller, operator assisted services.
[(13)] (15) "Price-regulated service" means any public telecommunications service
governed by Section 54-8b-2.3 .
[(14)] (16) "Public telecommunications service" means the two-way transmission of
signs, signals, writing, images, sounds, messages, data, or other information of any nature by
wire, radio, lightwaves, or other electromagnetic means offered to the public generally.
[(15) "Same or substitutable" with reference to a public telecommunications service
means that the service is comparable to another service in terms of function, price, and quality to
an end user customer.]
[(16)] (17) "Substantial compliance" with reference to a rule or order of the commission
means satisfaction of all material obligations in a manner consistent with the rule or order.
[(17)] (18) "Telecommunications corporation" means any corporation or person, and
their lessees, trustees, receivers, or trustees appointed by any court, owning, controlling,
operating, managing, or reselling a public telecommunications service.
[(18)] (19) (a) "Total service long-run incremental cost" means the forward-looking

incremental cost to a telecommunications corporation caused by providing the entire quantity of
a public telecommunications service, network function, or group of public telecommunications
services or network functions, by using forward-looking technology, reasonably available,
without assuming relocation of existing plant and equipment.
(b) The "long-run" means a period of time long enough so that cost estimates are based
on the assumption that all inputs are variable.
Section 4. Section 54-8b-2.3 is amended to read:
54-8b-2.3. Pricing flexibility.
(1) (a) A telecommunications corporation that obtains a certificate to compete with the
incumbent telephone corporation in a defined geographic area pursuant to Section 54-8b-2.1 may
price any public telecommunications services it is authorized to offer, or any new public
telecommunications service, by means of a price list or competitive contract.
(b) Before the telecommunications corporation begins providing any authorized public
telecommunications service, it shall notify the commission of:
(i) its intent to begin providing the service; and
(ii) the defined geographic area in which it will provide the service.
(2) (a) Notwithstanding other requirements of this chapter relating to pricing flexibility,
beginning on May 2, 2005, an incumbent telephone corporation may offer retail end user public
telecommunications services by means of a price list or competitive contract in the same manner
as a competing telecommunications corporation as provided in [Subsections (2)(b) and (c).]
Subsection (1):
(i) if the incumbent telephone corporation:
(A) is in substantial compliance with rules and orders of the commission issued under
Section 54-8b-2.2 ; and
(B) has more than 30,000 access lines; and
(ii) except as provided in Subsection (2)(b).
[(b) (i) An incumbent telephone corporation may petition the commission for pricing
flexibility in:]

[(A) any proceeding in which another telecommunications corporation has petitioned the
commission for a certificate to provide specified public telecommunications services in a defined
geographic area that is within the incumbent telephone corporation's service territory; or]
[(B) an independent proceeding after the other telecommunications corporation has been
certificated to provide specified public telecommunications services in a defined geographic area
that is within the incumbent telephone corporation's service territory.]
[(ii) In the proceeding, the commission shall, by order, grant pricing flexibility to the
incumbent telephone corporation for the same or substitutable public telecommunications
services in the same defined geographic area.]
[(iii) Pricing flexibility for any public telecommunications service shall become effective
in accordance with the procedure in Subsection (2)(b)(iv) when the following conditions are
met:]
[(A) the commission has issued a certificate to the competing telecommunications
corporation;]
[(B) the competing telecommunications corporation has begun providing the authorized
public telecommunications service in the defined geographic area;]
[(C) the incumbent telephone corporation, by written agreement, stipulation, or pursuant
to an order of the commission, has allowed the competing telecommunications corporation to
interconnect with the essential facilities and to purchase essential services of the incumbent
telephone corporation; and]
[(D) the incumbent telephone corporation is in substantial compliance with the rules and
orders of the commission adopted or issued under Section 54-8b-2.2 .]
[(iv) (A) The commission shall enter its final order either granting or denying a petition
for pricing flexibility under Subsection (2)(b) within 90 days of the date the incumbent telephone
corporation files its petition seeking pricing flexibility.]
[(B) If the commission has not entered an order within 90 days of the date the petition is
filed, the petition shall be considered granted.]
[(C) Pricing flexibility shall be effective 45 days following the granting of a petition for

pricing flexibility under Subsection (2)(b) unless the commission orders an earlier effective date.]
[(c) An incumbent telephone corporation may price any new public telecommunications
service by means of a price list or competitive contract.]
[(3) The commission may review any new public telecommunications service offered by
an incumbent telephone corporation after the applicable tariff, price list, or competitive contract
has taken effect.]
(b) (i) The incumbent telephone corporation's pricing flexibility shall be the same as a
competing telecommunications corporation's pricing flexibility for all public telecommunications
services except basic residential service.
(ii) The incumbent telephone corporation shall offer basic residential service throughout
the area in which the incumbent telephone corporation is authorized by certificate to provide
basic residential service.
(iii) Except as provided in Subsections (2)(b)(iv) and (v), and (2)(c), the incumbent
telephone corporation may not increase the price of basic residential service above the price as of
July 1, 2004.
(iv) The incumbent telephone corporation may make revenue neutral adjustments to the
price of basic residential service to reduce or eliminate differences in the price of basic
residential service in different portions of its service area.
(v) The incumbent telephone corporation may increase the price of basic residential
service based:
(A) on changes in local calling areas approved by the commission;
(B) on changes in access charges approved by the commission; or
(C) on other changes affecting basic residential service approved by the commission.
(c) (i) Upon request by the incumbent telephone corporation, but in any event no later
than May 2, 2007, the commission shall review whether any person is offering a service that
includes the essential components of basic residential service at a price comparable to the
incumbent telephone corporation's price for basic residential service in the area served by a
central office of the incumbent telephone corporation.

(ii) If, under Subsection (2)(c)(i), the commission determines that any person is offering
a service that includes the essential components of basic residential service at a price comparable
to the incumbent telephone corporation's price for basic residential service in the area served by a
central office of the incumbent telephone corporation, Subsection (2)(b) does not apply in the
area served by that central office.
[(4)] (3) Each price list shall:
(a) be filed with the commission[;]:
(i) electronically; or
(ii) by paper copies only if permitted by commission rule;
(b) describe the public telecommunications service;
(c) set forth the basic terms and conditions upon which the public telecommunications
service is offered; and
(d) list the prices to be charged for the public telecommunications service or the basis on
which the services will be priced.
[(5)] (4) Prices, terms, and conditions offered under price lists or competitive contracts
that are different from tariff prices, terms, and conditions for the same services are not considered
discriminatory under Section 54-3-8 and Subsection 54-8b-3.3 (2).
[(6)] (5) A price list filed with the commission under this section shall take effect five
days after it is filed with the commission.
[(7)] (6) (a) [The] Except as provided in Subsection (6)(b), the prices, terms, and
conditions of a public telecommunications service offered by a telecommunications corporation
pursuant to a competitive contract with a retail customer [shall] need not be filed with the
commission.
(b) Notwithstanding Subsection (6)(a), a copy of a competitive contract shall be provided
to the commission or division of public utilities if the commission or division of public utilities,
pursuant to general investigatory powers, requests a copy of the competitive contract.
[(8)] (7) (a) [The] Subject to Subsection (7)(b), the commission may, as determined
necessary to protect the public interest, set an upper limit on the price that may be charged by

telecommunications corporations for public telecommunications services that may be priced by
means of a price list or competitive contract in a defined geographic area.
(b) The upper limit on price imposed under Subsection (7)(a) shall be applied to all
telecommunications corporations holding a certificate to provide the public telecommunications
services in the defined geographic area in a competitively neutral manner.
[(9)] (8) (a) The commission may revoke the authority of a telecommunications
corporation to offer a public telecommunications service pursuant to a price list or competitive
contract or the commission may adopt conditions or restrictions on the telecommunications
corporation's pricing flexibility if the commission finds:
(i) (A) the telecommunications corporation has materially violated statutes or rules
applicable to the specific service;
(B) there has been or there is an imminent threat of a material and substantial [change]
diminution in the level of competition; or
(C) competition has not developed; and
(ii) revocation or conditions or restrictions on the telecommunications corporation's
pricing flexibility is in the public interest.
(b) The party asserting that revocation or conditions or restrictions on the
telecommunications corporation's pricing flexibility should [occur] be imposed shall bear the
burden of proof.
[(10)] (9) The commission shall establish rules or procedures to protect confidential,
proprietary, and competitively sensitive information provided to the commission or the division
pursuant to this section.
(10) (a) An incumbent telephone corporation serving fewer than 30,000 access lines in
the state may petition the commission to be regulated under price regulation rather than
traditional rate of return regulation.
(b) In implementing price regulation for an incumbent telephone corporation serving
fewer than 30,000 access lines, the commission may modify the requirements of any provision of
this section if necessary to the individual circumstances of the incumbent telephone corporation.

Section 5. Section 54-8b-3.3 is amended to read:
54-8b-3.3. Services that must be offered on a nondiscriminatory basis -- Public
telecommunications to be cost-based -- Packaged services -- Quality of service standards.
(1) (a) As used in this section, "cost-based" means that the prices for the
telecommunications services shall be established after taking into consideration the total service
long-run incremental cost of providing the service.
(b) The term "cost-based" does not prevent the establishment of prices:
(i) that promote the universal availability of service in the state[.]; or
(ii) that are offered by a telecommunications corporation for a public
telecommunications service in a promotional offer, or market trial, or to meet competition.
(2) [Notwithstanding] Except with respect to a price regulated service offered in a
promotional offer, or market trial, or to meet competition and notwithstanding any other
provision of this chapter:
(a) [no] a telecommunications corporation with more than 30,000 access lines in the state
[and which] that provides a [tariffed] public telecommunications service [or a price-regulated
service shall] may not:
(i) as to the pricing and provisioning of the [tariffed] public telecommunications service
[or price-regulated service], make or grant any undue or unreasonable preference or advantage to
any person, corporation, or locality; or
(ii) in providing services [which] that utilize the local exchange network:
(A) make or give any undue or unreasonable preference or advantage to any person,
corporation, or locality; or
(B) subject any person, corporation, or locality to any undue or unreasonable prejudice or
disadvantage;
(b) [tariffed] public telecommunications services [and price-regulated services] provided
by a telecommunications corporation with more than 30,000 access lines in the state shall be
nondiscriminatory, cost-based, and subject to resale as determined by the commission; and
(c) [tariffed] public telecommunications services [and price-regulated services] may be

packaged with other services, so long as they are also offered on a separate, unbundled basis.
[(3) An incumbent telephone corporation may not price any public telecommunications
service at a level which is less than the sum of:]
[(a) the total service long-run incremental cost of nonessential facilities used to provide
the public telecommunications service in a particular geographic area; and]
[(b) the price of essential facilities used to provide the public telecommunications service
in a particular defined geographic area.]
[(4) Subsection (3) does not require that the price of residential telephone service which
is priced below its total service long-run incremental cost on May 1, 1995, be increased.
However, the price of any service that is below its total service long-run incremental cost may be
increased annually as provided in Section 54-8b-2.4 .]
[(5) The commission shall examine the total service long-run incremental cost studies of
an incumbent telephone corporation's public telecommunications services as needed to insure
compliance with this section.]
[(6)] (3) (a) In order to promote continued investment in the public telecommunications
network [by incumbent telephone corporations] and to improve the quality of service for end
users [in areas where competition has not developed, by September 30, 2000], the commission
[shall] may adopt rules governing service quality standards to end users for all [tariffed] public
telecommunications services.
(b) The commission shall have the authority to enforce the rules adopted under this
Subsection [(6)] (3) by granting billing credits to the affected end user where the noncompliance
is for reasons within the [incumbent telephone] telecommunications corporation's control.
[(c) The commission shall report annually to the Legislature concerning investment by
incumbent telephone corporations in the public telecommunications network in their service
areas and the quality of service to end users of tariffed public telecommunications services.]
(c) Rules adopted under this Subsection (3) on or after January 1, 2005, shall impose no
greater requirements or obligations on any telecommunications corporation:
(i) than were applicable to that telecommunications corporation under rules adopted

before January 1, 2005; or
(ii) than were imposed on telecommunications corporations that were not incumbent
telephone corporations, if the telecommunications corporation is not an incumbent telephone
corporation.
(d) An incumbent telephone corporation with less than 30,000 access lines in the state is
exempt from this Subsection [(6)] (3).
Section 6. Section 54-8b-4.5 is amended to read:
54-8b-4.5. Commission order -- Negotiated provisions of services -- Contracts
under this section.
(1) (a) The commission may enter an order partially or wholly exempting any public
telecommunications service from any requirement of this title relating to rates, tariffs, or fares.
(b) The commission may authorize the provision of all or any portion of a public
telecommunications service under stated or negotiated terms to any person that is committed to
the acquisition of comparable telecommunications services from an alternative source of supply
through construction, lease, or any other form of acquisition.
(2) An incumbent telephone corporation may negotiate with the person or entity within
the incumbent telephone corporation's service territory for the provision of retail end user public
telecommunications services without regard to the provisions of any tariffs on file and approved
by the commission, or any price list or competitive contract filed under Section 54-8b-2.3 with
the commission but any rate, toll, fare, rental, charge, or classification of service in such contracts
shall comply with [Subsection] Section 54-8b-3.3 [(3)].
(3) (a) Within ten days after the conclusion of the negotiations and prior to the execution
of a contract under this section, the incumbent telephone corporation shall file with the
commission the proposed final agreements and other evidence of the public telecommunications
services to be provided, together with the charges and other conditions of the service.
(b) (i) The commission may approve or deny an application, or begin adjudicative
proceedings to consider approval of a contract under this section within 30 days of the filing of
the application by the incumbent telephone corporation.

(ii) If the commission begins adjudicative proceedings, the contract is effective when the
commission orders that it is effective.
(iii) If the commission fails to approve a contract under this section, or fails to begin
adjudicative proceedings within 30 days, the final contract is effective.
(c) In determining whether or not to approve a contract under this section, the
commission shall consider all relevant factors, including, whether or not the contract for any rate,
toll, fare, rental, charge, or classification of service:
(i) complies with [Subsection] Section 54-8b-3.3 [(3)];
(ii) provides for adequate service at just and reasonable rates.
(d) After a contract under this section has become effective, [if the incumbent telephone
corporation is not subject to maximum price regulation for tariffed public telecommunications
services under Section 54-8b-2.4 ,] the commission shall in the next general rate case for that
incumbent telephone corporation:
(i) review the contract for consistency with the factors stated in this Subsection (3); and
(ii) make any adjustment in its rate order, including retroactive adjustments, that are
necessary to avoid cross subsidization from other regulated intrastate telecommunications
services.
(e) Subsection (3) does not apply to an incumbent telephone corporation subject to price
regulation for public telecommunications services under Section 54-8b-2.3 .
(4) Any incumbent telephone corporation that provides public telecommunications
services pursuant to a contract under this section may not offer the services under contract in a
manner that unfairly discriminates between similarly situated customers.
(5) Subject to Subsection (4), terms and conditions offered in contracts under this section
that are different from tariff terms and conditions for the same services are not considered
discriminatory under Section 54-3-8 and Subsection 54-8b-3.3 (2).
Section 7. Repealer.
This bill repeals:
Section 54-8b-2.4, Price regulation -- Price index -- Maximum prices.

Section 54-8b-2.5, Report to governor and Legislature.