House Introduced Bill 5721

HOUSE BILL No. 5721

May 2, 2000, Introduced by Rep. Middaugh and referred to the Committee on Energy and Technology.

A bill to amend 1991 PA 179, entitled

"Michigan telecommunications act,"

by amending sections 101 and 304 (MCL 484.2101 and 484.2304), as

amended by 1995 PA 216, and by adding section 214.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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Sec. 101. (1) This act shall be known and may be cited as

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the "Michigan telecommunications act".

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(2) The purpose of this act is to do all of the following:

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(a) Ensure that every person has access to AFFORDABLE basic

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residential telecommunication service.

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(b) Allow and encourage competition to determine the avail-

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ability, prices, terms, and other conditions of providing tele-

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communication services.

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(c) Restructure regulation to focus on price and quality of

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service and not on the provider. Rely more on SUPPLEMENT

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existing state and federal law regarding antitrust, consumer

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protection, and fair trade to provide ADDITIONAL safeguards for

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competition and consumers.

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(d) Encourage the introduction of new services, the entry of

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new providers, the development of new technologies, and increase

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investment in the telecommunication infrastructure in this state

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through incentives to providers to offer the most efficient serv-

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ices and products.

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(e) Improve the opportunities for economic development and

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the delivery of essential services including education and health

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care.

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(f) Streamline the process for setting and adjusting the

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rates for regulated services that will ensure effective rate

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review and reduce the costs and length of hearings

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traditionally associated with rate cases.

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(g) Encourage the use of existing educational telecommunica-

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tion networks and networks established by other commercial pro-

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viders as building blocks for a cooperative and efficient state-

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wide educational telecommunication system.

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(h) Ensure effective review and disposition of disputes

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between telecommunication providers.

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(I) AUTHORIZE ACTIONS TO ENCOURAGE THE DEVELOPMENT OF A COM-

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PETITIVE TELECOMMUNICATION INDUSTRY.

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SEC. 214. (1) NOTWITHSTANDING ANY OTHER PROVISION OF THIS

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ACT AND EXCEPT AS PROVIDED UNDER SECTION 321, THE COMMISSION MAY

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REVIEW AND INVESTIGATE ANY RATE TO DETERMINE THE EFFECT THE RATE

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HAS ON THE DEVELOPMENT OF A COMPETITIVE MARKET IN THIS STATE.

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(2) IF AFTER NOTICE AND HEARING HELD UPON A COMPLAINT OR ITS

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OWN MOTION THE COMMISSION FINDS THAT A RATE IS NONCOMPETITIVE,

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EXCESSIVE, OR DISCRIMINATORY, IT SHALL ISSUE AN ORDER PROVIDING

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FOR SUCH REMEDIES AS ARE CONSISTENT WITH THIS ACT AND ALLOWED

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UNDER SECTION 601.

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(3) IN ANY HEARING HELD UNDER SUBSECTION (2), THE PROVIDER

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SHALL HAVE THE BURDEN OF PROVING THAT THE RATE IS NOT NONCOMPETI-

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TIVE, EXCESSIVE, OR DISCRIMINATORY.

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Sec. 304. (1) Except as provided in section 304a, the rates

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for basic local exchange service shall be just and reasonable.

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(2) A provider may alter its rates for basic local exchange

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services by 1 or more of the following:

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(a) Filing with the commission notice of a decrease, dis-

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count, or other rate reduction in a basic local exchange rate. A

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rate alteration under this subdivision shall become effective

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without commission review or approval.

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(b) Filing with the commission notice of an increase in a

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basic local exchange rate that does not exceed 1% less than the

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consumer price index. Unless the commission determines that the

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rate alteration exceeds the allowed increase under this subdivi-

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sion, the rate alteration shall take effect 90 days from the date

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of the notice required under subsection (3). As used in this

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subdivision, "consumer price index" means the most recent

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reported annual average percentage increase in the Detroit con-

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sumer price index for all items for the prior 12-month period by

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the United States department of labor.

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(c) Filing with the commission an application to increase a

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basic local exchange rate in an amount greater than that allowed

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under subdivision (b). The application shall be accompanied with

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sufficient documentary support that the rate alteration is just

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and reasonable. The commission shall make a determination within

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the 90-day period provided for in subsection (5) of 1 of the

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following:

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(i) That the rate alteration is just and reasonable.

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(ii) That a filing under section 203 is necessary to review

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the rate alteration.

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(3) Notice to customers of a rate alteration is required for

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a rate alteration under subsection (2)(b) or (c) and section 304a

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and shall be included in or on the bill of each affected customer

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of the provider before the effective date of the rate

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alteration.

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(4) The notice required under subsection (3) shall contain

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at least all of the following information:

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(a) A statement that the customer's rate may change.

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(b) An estimate of the amount of the annual change for the

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typical residential customer that would result by the rate

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change.

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(c) A statement that a customer may comment on or receive

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complete details of the rate alteration by calling or writing the

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commission. The statement shall also include the telephone

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number and address of the commission. Complete details of the

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rate alteration will SHALL be provided free of charge to the

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customer at the expense of the provider.

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(5) Except as otherwise provided in subsections (2) and (6),

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an altered basic local exchange rate shall take effect 90 days

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from the date of the notice required by subsection (3).

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(6) Upon receiving a complaint or pursuant to a determina-

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tion under subsection (2)(c), the commission may require a filing

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under section 203 to review a proposed rate alteration under

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subsection (2)(c). The commission's final order may approve,

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modify, or reject the rate alteration.

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(7) In reviewing a rate alteration under subsection (6), the

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commission shall consider only 1 or more of the following factors

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if relevant to the rate alteration as specified by the provider:

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(a) Total service long run incremental cost of basic local

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exchange services.

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(b) Comparison of the proposed rate to the rates charged by

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other providers in this state for the same service.

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(c) Whether a new function, feature, or capability is being

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offered as a component of basic local exchange service.

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(d) Whether there has been an increase in the costs to pro-

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vide basic local exchange service in the geographic area of the

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proposed rate.

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(e) Whether the provider's further investment in the network

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infrastructure of the geographic area of the proposed rate is

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economically justifiable without the proposed rate.

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(8) A provider shall be allowed only 1 rate increase for

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each class or type of service during any 12-month period.

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(9) A provider shall not make a rate alteration under this

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section until the rate has been restructured under section 304a.

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(10) THE COMMISSION SHALL EXEMPT A PROVIDER FROM THIS

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SECTION AND SECTION 310(2) IF IT FINDS BOTH OF THE FOLLOWING:

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(A) THE PROVIDER PROVIDED BASIC LOCAL EXCHANGE SERVICE TO

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LESS THAN 15,000 END-USERS UNDER A PERMANENT OR TEMPORARY LICENSE

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ISSUED BEFORE JANUARY 1, 1993.

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(B) THE PROVIDER OFFERS TO END-USERS SINGLE-PARTY BASIC

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LOCAL EXCHANGE SERVICE, TONE DIALING, TOLL ACCESS SERVICE,

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INCLUDING END-USER COMMON LINE SERVICES AND DIALING PARITY, AND

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ACCESS TO OPERATOR, TELECOMMUNICATIONS RELAY, AND EMERGENCY SERV-

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ICES AT A TOTAL PRICE, INCLUDING REQUIRED SURCHARGES, OF NO

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HIGHER THAN THE AMOUNT CHARGED AS OF APRIL 1, 2000.

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Enacting section 1. This amendatory act does not take

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effect unless House Bill No. 4804 of the 90th Legislature is

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enacted into law.

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