§ 62-133.5. Alternative regulation, tariffing, and deregulation of telecommunications utilities. - North Carolina Statutes

§ 62‑133.5.  Alternativeregulation, tariffing, and deregulation of telecommunications utilities.

(a)        Any local exchangecompany, subject to the provisions of G.S. 62‑110(f1), that is subject torate of return regulation pursuant to G.S. 62‑133 or a form ofalternative regulation authorized by subsection (b) of this section may electto have the rates, terms, and conditions of its services determined pursuant toa form of price regulation, rather than rate of return or other form ofearnings regulation. Under this form of price regulation, the Commission shall,among other things, permit the local exchange company to determine and set itsown depreciation rates, to rebalance its rates, and to adjust its prices in theaggregate, or to adjust its prices for various aggregated categories ofservices, based upon changes in generally accepted indices of prices. Uponapplication, the Commission shall, after notice and an opportunity forinterested parties to be heard, approve such price regulation, which may differbetween local exchange companies, upon finding that the plan as proposed (i)protects the affordability of basic local exchange service, as such service isdefined by the Commission; (ii) reasonably assures the continuation of basiclocal exchange service that meets reasonable service standards that theCommission may adopt; (iii) will not unreasonably prejudice any class oftelephone customers, including telecommunications companies; and (iv) isotherwise consistent with the public interest. Upon approval, and except asprovided in subsection (c) of this section, price regulation shall thereafterbe the sole form of regulation imposed upon the electing local exchangecompany, and the Commission shall thenceforth regulate the electing localexchange company's prices, rather than its earnings. The Commission shall issuean order denying or approving the proposed plan for price regulation, with orwithout modification, not more than 90 days from the filing of the application.However, the Commission may extend the time period for an additional 90 days atthe discretion of the Commission. If the Commission approves the applicationwith modifications, the local exchange company subject to such approval mayaccept the modifications and implement the proposed plan as modified, or may,at its option, (i) withdraw its application and continue to be regulated underthe form of regulation that existed immediately prior to the filing of theapplication; (ii) file another proposed plan for price regulation; or (iii) filean application for a form of alternative regulation under subsection (b) ofthis section. If the initial price regulation plan is approved withmodifications and the local exchange company files another plan pursuant topart (ii) of the previous sentence, the Commission shall issue an order denyingor approving the proposed plan for price regulation, with or withoutmodifications, not more than 90 days from that filing by the local exchangecompany.

(b)        Any local exchangecompany that is subject to rate of return regulation pursuant to G.S. 62‑133and which elects not to file for price regulation under the provisions ofsubsection (a) above may file an application with the Commission for forms ofalternative regulation, which may differ between companies and may include, butare not limited to, ranges of authorized returns, categories of services, andprice indexing. Upon application, the Commission shall approve such alternativeregulatory plan upon finding that the plan as proposed (i) protects the affordabilityof basic local exchange service, as such service is defined by the Commission;(ii) reasonably assures the continuation of basic local exchange service thatmeets reasonable service standards established by the Commission; (iii) willnot unreasonably prejudice any class of telephone customers, includingtelecommunications companies; and (iv) is otherwise consistent with the publicinterest. The Commission shall issue an order denying or approving the proposedplan with or without modification, not more than 90 days from the filing of theapplication. However, the Commission may extend the time period for anadditional 90 days at the discretion of the Commission. If the Commissionapproves the application with modifications, the local exchange company subjectto such approval may, at its option, accept the modifications and implement theproposed plan as modified or may, at its option, (i) withdraw its applicationand continue to be regulated under the form of regulation that existed at thetime of filing the application; or (ii) file an application for another form ofalternative regulation. If the initial plan is approved with modifications andthe local exchange company files another plan pursuant to part (ii) of theprevious sentence, the Commission shall issue an order denying or approving theproposed plan, with or without modifications, not more than 90 days from thatfiling by the local exchange company.

(c)        Any local exchangecompany subject to price regulation under the provisions of subsection (a) ofthis section may file an application with the Commission to modify such form ofprice regulation or for other forms of regulation. Any local exchange companysubject to a form of alternative regulation under subsection (b) of thissection may file an application with the Commission to modify such form ofalternative regulation. Upon application, the Commission shall approve suchother form of regulation upon finding that the plan as proposed (i) protectsthe affordability of basic local exchange service, as such service is definedby the Commission; (ii) reasonably assures the continuation of basic localexchange service that meets reasonable service standards established by theCommission; (iii) will not unreasonably prejudice any class of telephone customers,including telecommunications companies; and (iv) is otherwise consistent withthe public interest. If the Commission disapproves, in whole or in part, alocal exchange company's application to modify its existing form of priceregulation, the company may elect to continue to operate under its thenexisting plan previously approved under this subsection or subsection (a) ofthis section.

(c1)      In determiningwhether a price regulation plan is otherwise consistent with the publicinterest, the Commission shall not consider the local exchange company's pastor present earnings or rates of return.

(d)        Any local exchangecompany subject to price regulation under the provisions of subsection (a) ofthis section, or other alternative regulation under subsection (b) of thissection, or other form of regulation under subsection (c) of this section shallfile tariffs for basic local exchange service and toll switched access servicesstating the terms and conditions of the services and the applicable rates. However,fees charged by such local exchange companies applicable to charges forreturned checks shall not be tariffed or otherwise regulated by the Commission.The filing of any tariff changing the terms and conditions of such services orincreasing the rates for such services shall be presumed valid and shall becomeeffective, unless otherwise suspended by the Commission for a term not toexceed 45 days, 14 days after filing. Any tariff reducing rates for basic localexchange service or toll switched access service shall be presumed valid andshall become effective, unless otherwise suspended by the Commission for a termnot to exceed 45 days, seven days after filing. Any local exchange companysubject to price regulation under the provisions of subsection (a) of thissection, or other alternative regulation under subsection (b) of this section,or other form of regulation under subsection (c) of this section may filetariffs for services other than basic local exchange services and toll switchedaccess services. Any tariff changing the terms and conditions of such servicesor increasing the rates for an existing service or establishing the terms,conditions, or rates for a new service shall be presumed valid and shall becomeeffective, unless otherwise suspended by the Commission for a term not toexceed 45 days, 14 days after filing. Any tariff reducing the rates for suchservices shall be presumed valid and shall become effective, unless otherwisesuspended by the Commission for a term not to exceed 45 days, seven days afterfiling. In the event of a complaint with regard to a tariff filing under thissubsection, the Commission may take such steps as it deems appropriate toassure that such tariff filing is consistent with the plan previously adoptedpursuant to subsection (a) of this section, subsection (b) of this section, orsubsection (c) of this section.

(e)        Any allegation ofanticompetitive activity by a competing local provider or a local exchangecompany shall be raised in a complaint proceeding pursuant to G.S. 62‑73.

(f)         Notwithstandingthe provisions of G.S. 62‑140, or any Commission rule or regulations: (i)the Commission shall permit a local exchange company or a competing localprovider to offer competitive services with flexible pricing arrangements tobusiness customers pursuant to contract and shall permit other flexible pricingoptions; and (ii) local exchange companies and competing local providers mayprovide a promotional offering for any tariffed service or tariffed offering bygiving one day's notice to the Commission, but no Commission approval of thenotice is required. Promotional offerings of any nontariffed service may beimplemented without notice to the Commission or Commission approval. Carriersoffering promotions of regulated services that are available for resale mustprovide a means for interested parties to receive notice of each promotionaloffering of regulated service, including the duration of the offering, at leastone business day prior to the effective date of the promotional offering.Furthermore, local exchange companies and competing local providers may offerspecial promotions and bundles of new or existing service or products withoutthe obligation to identify or convert existing customers who subscribe to thesame or similar services or products. The Commission's complaint authorityunder G.S. 62‑73 and subsection (e) of this section is applicable to anypromotion or bundled service offering filed or offered under this subsection.

(g)        The followingsections of Chapter 62 of the General Statutes shall not apply to localexchange companies subject to price regulation under the terms of subsection(a) of this section: G.S. 62‑35(c), 62‑45, 62‑51, 62‑81,62‑111, 62‑130, 62‑131, 62‑132, 62‑133, 62‑134,62‑135, 62‑136, 62‑137, 62‑139, 62‑142, and 62‑153.

(h)        Notwithstanding anyother provision of this Chapter, a local exchange company that is subject torate of return regulation or subject to another form of regulation authorizedunder this section and whose territory is open to competition from competinglocal providers may elect to have its rates, terms, and conditions for itsservices determined pursuant to the plan described in this subsection by filingnotice of its intent to do so with the Commission. The election is effectiveimmediately upon filing. A local exchange company shall not be permitted tomake the election under this section unless it commits to provide stand‑alonebasic residential lines to rural customers at rates comparable to those ratescharged to urban customers for the same service.

(1)        Definitions. – Thefollowing definitions apply in this subsection:

a.         Local exchangecompany. – The same meaning as provided in G.S. 62‑3(16a).

b.         Open to competitionfrom competing local providers. – Both of the following apply:

1.         G.S. 62‑110(f1)applies to the franchised area and to local exchange and exchange accessservices offered by the local exchange company.

2.         The local exchangecompany is open to interconnection with competing local providers that possessa certificate of public convenience and necessity issued by the Commission. TheCommission is authorized to resolve any disputes concerning whether a localexchange company is open to interconnection under this section.

c.         Single‑linebasic residential service. – Single‑line residential flat rate basicvoice grade local service with touch tone within a traditional local callingarea that provides access to available emergency services and directoryassistance, the capability to access interconnecting carriers, relay services,access to operator services, and one annual local directory listing (whitepages or the equivalent).

d.         Stand‑alonebasic residential line. – Single‑line basic residential service that isbilled on a billing account that does not also contain another service,feature, or product that is sold by the local exchange company or an affiliateof the local exchange company and is billed on a recurring basis on the localexchange company's bill.

(2)        Beginning on thedate that the local exchange company's election under this subsection becomeseffective, the local exchange company shall continue to offer stand‑alonebasic residential lines to all customers who choose to subscribe to thatservice, and the local exchange company may increase rates for those linesannually by a percentage that does not exceed the percentage increase over theprior year in the Gross Domestic Product Price Index as reported by the UnitedStates Department of Commerce, Bureau of Economic Analysis, unless otherwiseauthorized by the Commission. With the sole exception of ensuring the localexchange company's compliance with the preceding sentence, the Commission shallnot:

a.         Impose anyrequirements related to the terms, conditions, rates, or availability of any ofthe local exchange company's stand‑alone basic residential lines.

b.         Otherwise regulateany of the local exchange company's stand‑alone basic residential lines.

(3)        Except to the extentprovided in subdivision (2) of this subsection, beginning on the date the localexchange company's election under this subsection becomes effective, theCommission shall not do either of the following:

a.         Impose anyrequirements related to the terms, conditions, rates, or availability of any ofthe local exchange company's retail services.

b.         Otherwise regulateany of the local exchange company's retail services.

(4)        A local exchangecompany's election under this subsection does not affect the obligations orrights of an incumbent local exchange carrier, as that term is defined bysection 251(h) of the Federal Telecommunications Act of 1996 (Act), undersections 251 and 252 of the Act or any Federal Communications Commissionregulation relating to sections 251 and 252 of the Act, nor does it affect anyauthority of the Commission to act in accordance with federal or State laws orregulations, including those granting authority to set rates, terms, andconditions for access to unbundled network elements and to arbitrate andenforce interconnection agreements.

(5)        A local exchangecompany's election under this subsection does not prevent a consumer fromseeking the assistance of the Public Staff of the North Carolina UtilitiesCommission to resolve a complaint with that local exchange company, as providedin G.S. 62‑73.1.

(6)        A local exchange company'selection under this subsection does not affect the Commission's jurisdictionconcerning the following:

a.         Enforce federalrequirements on the local exchange company's marketing activities. However, theCommission may not adopt, impose, or enforce other requirements on the localexchange company's marketing activities.

b.         Thetelecommunications relay service pursuant to G.S. 62‑157.

c.         The Life Line orLink Up programs consistent with Federal Communications Commission rules,including, but not limited to, 47 C.F.R. § 54.403(a)(3), as amended from timeto time, and relevant orders of the North Carolina Utilities Commission.

d.         Universal servicefunding pursuant to G.S. 62‑110(f1).

e.         Carrier of lastresort obligations pursuant to G.S. 62‑110.

f.          The authoritydelegated to it by the Federal Communications Commission to manage thenumbering resources involving that local exchange company.

(i)         To the extentapplicable, a competing local provider authorized by the Commission to dobusiness under the provisions of G.S. 62‑110(f1) may also elect to haveits rates, terms, and conditions for its services determined pursuant to theplan described in subsection (h) of this section.

(j)         Notwithstandingany other provision of this Chapter, the Commission has jurisdiction overmatters concerning switched access and intercarrier compensation of a localexchange company that has elected to operate under price regulation, as well asa local exchange carrier or competing local provider operating under any formof regulation covered under this Article or G.S. 62‑110(f1).

(k)        To evaluate theaffordability and quality of local exchange service provided to consumers inthis State, a local exchange company or competing local provider offering basiclocal residential exchange service that elects to have its rates, terms, andconditions for its services determined pursuant to the plan described insubsection (h) of this section shall make an annual report to the GeneralAssembly on the state of its company's operations. The report shall be due 30days after the close of each calendar year and shall cover the period fromJanuary 1 through December 31 of the preceding year. The Joint LegislativeUtility Review Committee must review the annual reports and decide whether torecommend that the General Assembly take corrective action in response to thosereports. The report shall include the following:

(1)        An analysis oftelecommunications competition by the local exchange company or competing localprovider, including access line gain or loss and the impact on consumer choicesfrom enactment of the Consumer Choice and Investment Act of 2009.

(2)        An analysis ofservice quality based on customer satisfaction studies from enactment of theConsumer Choice and Investment Act of 2009.

(3)        An analysis of thelevel of local exchange rates from enactment of the Consumer Choice andInvestment Act of 2009.  (1995, c. 27, s. 6; 2003‑91, s. 2; 2007‑157, s. 1; 2009‑238,ss. 1‑4; 2009‑570, s. 36.)