As Reported by the Senate Energy and Public Utilities Committee

126th General Assembly Regular Session 2005-2006

Am. Sub. H. B. No. 218

Representatives Daniels, Taylor, McGregor, Bubp, J. Stewart, Gibbs, Raussen, Cassell, Uecker, T. Patton, Buehrer, Webster, Aslanides, Widener, Martin, Seitz, Flowers, Carmichael, G. Smith, Schlichter, Schneider, Coley, White, Reinhard, C. Evans, Collier, Hood, Hartnett, Latta, Strahorn, Distel, Hagan, Wagoner, Calvert, Carano, Peterson, Setzer 

Senators Niehaus, Jacobson, Schuler 

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A BILL

To amend sections 4905.04, 4927.02, 4927.03, and

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4927.04 and to enact sections 4905.041 and

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4905.042 of the Revised Code to revise state

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telecommunications policy, authorize the Public

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Utilities Commission to allow alternative

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regulation of basic local exchange service

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provided by larger companies, and specify the

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scope of Commission authority regarding wholesale

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telecommunications services, advanced services,

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and internet protocol-enabled services.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4905.04, 4927.02, 4927.03, and	11
4927.04 be amended and sections 4905.041 and 4905.042 of the	12
Revised Code be enacted to read as follows:	13

Sec. 4905.04.  (A) The public utilities commission is hereby	14
vested with the power and jurisdiction to supervise and regulate	15
public utilities and railroads, to require all public utilities to	16
furnish their products and render all services exacted by the	17
commission or by law, and to promulgate and enforce all orders	18
relating to the protection, welfare, and safety of railroad	19
employees and the traveling public, including the apportionment	20
between railroads and the state and its political subdivisions of	21
the cost of constructing protective devices at railroad grade	22
crossings.	23

(B) Division Subject to sections 4905.041 and 4905.042 of the	24
Revised Code, division (A) of this section includes such power and	25
jurisdiction as is reasonably necessary for the commission to	26
perform the acts of a state commission pursuant to the	27
"Telecommunications Act of 1996," Pub. L. No. 104-104, 110 Stat.	28
56federal law, including federal regulations, the acts of a state	29
commission as defined in 47 U.S.C. 153.	30

Sec. 4905.041.  (A) The public utilities commission shall not	31
establish any requirements for the unbundling of network elements,	32
for the resale of telecommunications services, or for network	33
interconnection that exceed or are inconsistent with or prohibited	34
by federal law, including federal regulations.	35

(B) The commission shall not establish pricing for such	36
unbundled elements, resale, or interconnection that is	37
inconsistent with or prohibited by federal law, including federal	38
regulations, and shall comply with federal law, including federal	39
regulations, in establishing such pricing.	40

Sec. 4905.042. Regarding advanced services or internet	41
protocol-enabled service as defined by federal law, including	42
federal regulations, the public utilities commission shall not	43
exercise any jurisdiction over those services that is prohibited	44
by, or is inconsistent with its jurisdiction under, federal law,	45
including federal regulations.	46

Sec. 4927.02.  (A) It is the policy of this state to:

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(1) Ensure the availability of adequate basic local exchange	48
service to citizens throughout the state;	49

(2) MaintainRely on market forces, where they are present	50
and capable of supporting a healthy and sustainable, competitive	51
telecommunications market, to maintain just and reasonable rates,	52
rentals, tolls, and charges for public telecommunications service;	53

(3) Encourage innovation in the telecommunications industry;

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(4) Promote diversity and options in the supply of public	55
telecommunications services and equipment throughout the state;	56

(5) Recognize the continuing emergence of a competitive	57
telecommunications environment through flexible regulatory	58
treatment of public telecommunications services where appropriate;	59

(6) Consider the regulatory treatment of competing and	60
functionally equivalent services in determining the scope of	61
regulation of services that are subject to the jurisdiction of the	62
public utilities commission;	63

(7) Not unduly favor or advantage any provider and not unduly	64
disadvantage providers of competing and functionally equivalent	65
services; and	66

(8) Protect the affordability of telephone service for	67
low-income subscribers through the continuation of lifeline	68
assistance programs.	69

(B) The public utilities commission shall consider the policy	70
set forth in this section in carrying out sections 4927.03 and	71
4927.04 of the Revised Code and in reducing or eliminating the	72
regulation of telephone companies under those sections as to any	73
public telecommunications service.	74

Sec. 4927.03.  (A)(1) Except as provided in division (B) of	75
this section, theThe public utilities commission, upon its own	76
initiative or the application of a telephone company or companies,	77
after notice, after affording the public and any affected	78
telephone company a period for comment, and after a hearing if it	79
considers one necessary, may, by order, exempt any such telephone	80
company or companies, as to any public telecommunications service	81
except, including basic local exchange service, from any provision	82
of Chapter 4905. or 4909., or sections 4931.01 to 4931.35 of the	83
Revised Code or any rule or order adopted or issued under those	84
chaptersprovisions, or establish alternative regulatory	85
requirements to apply to such public telecommunications service	86
and company or companies; provided the commission finds that any	87
such measure is in the public interest and either of the following	88
conditions exists:	89

(a) The telephone company or companies are subject to	90
competition with respect to such public telecommunications	91
service;	92

(b) The customers of such public telecommunications service	93
have reasonably available alternatives.	94

(2) In determining whether the conditions in division	95
(A)(1)(a) or (b) of this section exist, factors the commission	96
shall consider include, but are not limited to:	97

(a) The number and size of alternative providers of services;

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(b) The extent to which services are available from	99
alternative providers in the relevant market;	100

(c) The ability of alternative providers to make functionally	101
equivalent or substitute services readily available at competitive	102
rates, terms, and conditions;	103

(d) Other indicators of market power, which may include	104
market share, growth in market share, ease of entry, and the	105
affiliation of providers of services.	106

(3) To authorize an exemption or establish alternative	107
regulatory requirements under division (A)(1) of this section with	108
respect to basic local exchange service, the commission	109
additionally shall find that there are no barriers to entry.	110
Further, as to an exemption with respect to basic local exchange	111
service, the commission shall not exempt a telephone company from	112
sections 4905.20, 4905.21, 4905.22, 4905.231, 4905.24, 4905.241,	113
4905.242, 4905.243, 4905.244, 4905.25, 4905.26, 4905.30, 4905.32,	114
4905.33, 4905.35, and 4905.381 of the Revised Code.	115

(B) As used in this division, "basic local exchange service"	116
has the same meaning as in section 4927.01 of the Revised Code,	117
but excludes within a local service area exchange areas to which	118
extended area service is provided.	119

The public utilities commission shall not approve or	120
authorize any exemption from or modification of any provision of	121
Chapter 4905. or 4909. of the Revised Code or any rule or order	122
issued under them which would impair the exclusive right of any	123
telephone company under those chapters, rules, or orders to	124
provide basic local exchange service in the local service areas in	125
which such service is provided by the company on the effective	126
date of this section. Nothing in this division, however, shall be	127
construed to require the withdrawal or prevent the offering by any	128
telephone company of interexchange inward calling services	129
terminating on a local exchange access line or interexchange	130
services that employ dedicated access between the customer's	131
premises and the telephone company's facilities merely because	132
incidental use of such services by the customer for basic local	133
exchange service is possible. Such offering shall not be promoted	134
or marketed as basic local exchange service. Nothing in this	135
division affects the commission's authority and duties under	136
sections 4905.241 to 4905.25 of the Revised Code.	137

(C) In carrying out this section, the public utilities	138
commission may prescribe different classifications, procedures,	139
terms, or conditions for different telephone companies and for the	140
public telecommunications services they provide, provided they are	141
reasonable and do not confer any undue economic, competitive, or	142
market advantage or preference upon any telephone company.	143

(D)(C) The public utilities commission has jurisdiction over	144
every telephone company providing a public telecommunications	145
service that has received an exemption or for which alternative	146
regulatory requirements have been established pursuant to this	147
section. As to any such company, the commission, after notice and	148
hearing, may abrogate or modify any order so granting an exemption	149
or establishing alternative requirements if it determines that the	150
findings upon which the order was based are no longer valid and	151
that the abrogation or modification is in the public interest. No	152
such abrogation or modification shall be made more than eightfive	153
years after the date an order granting an exemption or	154
establishing alternative requirements under this section was	155
entered upon the commission's journal, unless the affected	156
telephone company or companies consent.	157

(E)(D) The public utilities commission shall adopt such rules	158
as it finds necessary to carry out this section. It shall adopt	159
rules initially implementing the amendment of this section by H.B.	160
No. 218 of the 126th general assembly within one hundred twenty	161
days after the effective date of the amendment. In adopting those	162
rules, the commission shall consider the establishment of elective	163
alternative regulation specific to a telephone company that is an	164
incumbent local exchange carrier as defined in 47 U.S.C. 252(h)	165
having fewer than fifty thousand access lines.	166

Sec. 4927.04.  (A)(1) In considering an application pursuant	167
to section 4909.18 of the Revised Code, the rates and charges for	168
basic local exchange service or any other public	169
telecommunications service for which the public utilities	170
commission has not provided an exemption or alternative regulatory	171
requirements under section 4927.03 of the Revised Code may be	172
established by the commission, upon its own initiative or the	173
request of thean applicant telephone company, by a method other	174
than that specified in section 4909.15 of the Revised Code,	175
provided the commission finds the use of the alternative method of	176
establishing rates and charges to be in the public interest and	177
provided, in instances where the alternative method is proposed by	178
the commission, the applicant consents. Alternative methods may	179
include, but are not limited to, methods that maintain universal	180
telephone service in the state; minimize the costs and time	181
expended in the regulatory process; tend to assess the costs of	182
any telecommunications service to the entity or service that	183
causes such costs to be incurred; afford rate stability; promote	184
and reward efficiency, quality of service, or cost containment by	185
telephone companies; or provide sufficient flexibility and	186
incentives to the telecommunications industry to achieve high	187
quality, technologically advanced, and universally available	188
telecommunications services at just and reasonable rates and	189
charges.	190

(2) An application whichthat proposes an alternative method	191
of establishing rates and charges whichthat could result in an	192
increase in any rate or charge for basic local exchange service or	193
any other public telecommunications service for which the public	194
utilities commission has not provided an exemption or alternative	195
regulatory requirements under section 4927.03 of the Revised Code	196
without further action by the commission shall be deemed, without	197
further action by the commission, to be an application for an	198
increase in rates and charges under section 4909.18 of the Revised	199
Code, notwithstanding whether an immediate increase in rates and	200
charges is proposed.	201

(3) An application pursuant to section 4909.18 of the Revised	202
Code whichthat is not for an increase in rates and charges, but	203
whichthat proposes an alternative method of establishing rates	204
and charges for basic local exchange service or any other public	205
telecommunications service for which the public utilities	206
commission has not provided an exemption or alternative regulatory	207
requirements under section 4927.03 of the Revised Code, shall	208
include the exhibits specified in divisions (A) to (D) of section	209
4909.18 of the Revised Code, unless otherwise ordered by the	210
commission. Notwithstanding any provision of section 4909.18 of	211
the Revised Code to the contrary, after the date such application	212
is filed, any person may file a request for hearing on the	213
application. If it appears to the commission that the request sets	214
forth reasonable grounds for holding a hearing, the commission	215
shall set the matter for hearing and shall give notice of such	216
hearing as provided in section 4909.18 of the Revised Code.	217

(B) Upon the application of any telephone company that is an	218
incumbent local exchange carrier as defined in 47 U.S.C. 252(h)	219
having fewer than fifteenfifty thousand access lines, the public	220
utilities commission, by order, may exempt such company, with	221
respect to any public telecommunications service it provides, from	222
any provision of Chapter 4905. or 4909. of the Revised Code that	223
is specified and requested in such application, except sections	224
4905.20, 4905.21, 4905.22, 4905.231, 4905.24, 4905.241, 4905.242,	225
4905.243, 4905.244, 4905.25, 4905.26, 4905.30, 4905.32, 4905.33,	226
4905.35, and 4905.381 of the Revised Code; or may establish	227
alternative regulatory requirements to apply to such company and	228
service, provided the commission finds that the alternative	229
requirements are in the public interest.	230

(C) In carrying out this section, the public utilities	231
commission may use different methods of establishing the rates and	232
charges of different telephone companies, provided that the	233
methods are reasonable and do not confer any undue economic,	234
competitive, or market advantage or preference upon any telephone	235
company.	236

(D) The public utilities commission shall adopt such rules as	237
it finds necessary to carry out this section.	238

Section 2. That existing sections 4905.04, 4927.02, 4927.03,	239
and 4927.04 of the Revised Code are hereby repealed.	240

Section 3. The amendment of sections 4927.03 and 4927.04 of	241
the Revised Code by this act does not invalidate any rule adopted	242
or order issued by the Public Utilities Commission under those	243
sections and in effect prior to the effective date of the act.	244