HB-4257, As Passed Senate, December 9, 2009
SUBSTITUTE FOR
HOUSE BILL NO. 4257
A bill to amend 1991 PA 179, entitled
"Michigan telecommunications act,"
by amending section 310 (MCL 484.2310), as amended by 2005 PA 235.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 310. (1) Except as provided by this section, the
commission shall not review or set the rates for toll access
services.
(2) A provider of toll access services shall set the rates for
intrastate
switched toll access services .
Access service at rates
and
charges set by a provider that do
not exceed the rates allowed
for
the same interstate services by the federal government are just
and
reasonable and shall use the
access rate elements for
intrastate switched toll access services that are in effect for
that provider and are allowed for the same interstate services by
the federal government. Eligible providers shall comply with this
subsection as of the date established for the commencement of the
operation of the restructuring mechanism under subsection (9).
Providers other than eligible providers shall not charge intrastate
toll access service rates in excess of those rates in effect as of
July 1, 2009 and shall reduce the differential, if any, between
intrastate and interstate switched toll access service rates in
effect as of July 1, 2009 in no more than 5 steps of at least 20%
each of the differential on the following dates: January 1, 2011;
January 1, 2012; January 1, 2013; January 1, 2014; and January 1,
2015. Providers may agree to a rate that is less than the rate
allowed by the federal government.
(3) Two or more providers that each have less than 250,000
access lines may agree to joint toll access service rates and
pooling of intrastate toll access service revenues.
(4) A provider of toll access services shall make available
for intrastate access services any technical interconnection
arrangements, including colocation required by the federal
government for the identical interstate access services.
(5) A provider of toll access service, whether under tariff or
contract, shall offer the services under the same rates, terms, and
conditions, without unreasonable discrimination, to all providers.
All pricing of special toll access services and switched access
services, including volume discounts, shall be offered to all
providers under the same rates, terms, and conditions.
(6) If a toll access service rate is reduced, then the
provider receiving the reduced rate shall reduce its rate to its
customers
by an equal amount. The commission shall may investigate
and ensure that the provider has complied with this subsection.
(7)
This section shall not apply to basic local exchange
providers
that have 250,000 or fewer customers in this state.
(7) In order to restructure intrastate switched toll access
service rates, there is hereby established in the department of
energy, labor, and economic growth an intrastate switched toll
access rate restructuring mechanism as a separate interest-bearing
fund. The state treasurer shall direct the investment of the
restructuring mechanism. Money in the restructuring mechanism shall
remain in the restructuring mechanism at the close of the fiscal
year and shall not revert to the general fund.
(8) An eligible provider is entitled to receive monthly
disbursements from the restructuring mechanism as provided in
subsection (11) in order to recover the lost intrastate switched
toll access service revenues resulting from rate reductions under
subsection (2).
(9) The restructuring mechanism shall be administered by the
commission. The restructuring mechanism shall be established and
shall begin operation within 270 days after the effective date of
the amendatory act that added this subsection. Subject to the
preceding sentence, the commission shall establish the date for
commencing the operation of the restructuring mechanism and shall
notify the participants in the restructuring mechanism at least 30
days in advance of that date. The commission shall recover its
actual costs of administering the restructuring mechanism from
assessments collected for the operation of the restructuring
mechanism.
(10) The commission shall establish the procedures and
timelines for organizing, funding, and administering the
restructuring mechanism. The commission shall report to the
legislature and the governor annually regarding the administration
of the restructuring mechanism. The report shall include the total
amount of money collected from contributing providers, the total
amount of money disbursed from the restructuring mechanism annually
to each eligible provider, the costs of administration, and any
other information considered relevant by the commission. Any
company–specific information pertaining to access lines, switched
toll access services minutes of use, switched toll access demand
quantities, contributions, and intrastate telecommunications
services revenues submitted to the commission under this subsection
are confidential commercial or financial information and exempt
from public disclosure pursuant to section 210.
(11) The initial size of the restructuring mechanism shall be
calculated as follows:
(a) Within 60 days of the effective date of the amendatory act
that added this subsection each eligible provider shall submit to
the commission information and all the supporting documentation
that establishes the amount of the reduction in annual intrastate
switched toll access revenues which will result from the reduction
in rates required in subsection (2). The reduction shall be
calculated for each eligible provider as the difference between
intrastate and interstate switched toll access service rates in
effect as of July 1, 2009, multiplied by the intrastate switched
House Bill No. 4257 (H-6) as amended December 3, 2009
access minutes of use and other switched access demand quantities
for the calendar year 2008.
(b) The commission shall compute the size of the initial
restructuring mechanism disbursements for each eligible provider
and shall inform each eligible provider of that computation within
60 days after receiving the information and supporting
documentation from the eligible providers under subdivision (a).
(12) The restructuring mechanism shall be created and
supported by a mandatory monthly contribution by all providers of
retail intrastate telecommunications services and all providers of
commercial mobile service. Interconnected voice over internet
protocol services shall not be considered an intrastate
telecommunications service for the purposes of this section and
interconnected voice over internet protocol service providers shall
not be required to pay, directly or indirectly, the mandatory
monthly contributions established in this subsection. A provider of
telecommunications services [to a provider of interconnected voice over
internet protocol services shall not pay a mandatory monthly contribution related to those interconnected voice over internet protocol services] or attempt to pass
through any mandatory monthly contributions, directly or
indirectly, to a provider of interconnected voice over internet
protocol services. Nothing in this act grants the commission
authority over commercial mobile service providers or voice over
internet protocol service providers except as is strictly necessary
for administration of the restructuring mechanism.
(13) Within 60 days of the effective date of the amendatory
act that added this subsection, each contributing provider shall
report its 2008 intrastate retail telecommunications services
revenues to the commission. [Notwithstanding anything in subsection (12),
House Bill No. 4257 (H-6) as amended December 3, 2009
if the federal communications commission determines that interconnected
voice over internet protocol services may be subject to state regulation
for universal services purposes, the commission may open a proceeding to
determine who is required to participate in a universal service fund.
]
(14) The initial contribution assessment percentage shall be a
uniform percentage of retail intrastate telecommunications services
revenues determined by projecting the total amount necessary to
cover the initial intrastate switched toll access rate
restructuring mechanism disbursement levels for 12 months,
including projected cash reserve requirements, actual and projected
administrative costs, and projected uncollectible contribution
assessments, divided by the 2008 calendar year total retail
intrastate telecommunications services revenues in this state, less
projected uncollectible revenues, reported to the commission. The
commission shall issue an order establishing the initial
calculation of the contribution assessment percentage within 150
days of the effective date of the amendatory act that added this
subsection. The commission may increase or decrease the
contribution assessment on a quarterly or other basis as necessary
to maintain sufficient funds for disbursements.
(15) Each contributing provider shall remit to the commission
on a monthly basis an amount equal to its intrastate retail
telecommunications services revenues, less uncollectible revenues,
multiplied by the contribution assessment percentage determined
under subsection (14), according to a time frame established by the
commission. These contributions shall continue until the end of the
period for which eligible providers are entitled to receive monthly
disbursements from the restructuring mechanism under subsections
(11) and (16).
(16) The commission shall recalculate the size of the
restructuring mechanism for each eligible provider 4 years from the
date the initial restructuring mechanism becomes operational
pursuant to subsection (9) and again 4 years thereafter. The
recalculation process shall be as follows:
(a) The restructuring mechanism shall be recalculated each
time as the difference between the intrastate switched toll access
rates in effect as of July 1, 2009 and the interstate switched toll
access rates in effect at the time of the recalculation, multiplied
by the intrastate switched toll access minutes of use and other
switched access demand quantities for the calendar year 2008.
(b) The recalculated restructuring mechanism shall be further
adjusted during the first recalculation by the percentage change,
if any, in the number of access lines in service for each eligible
provider from December 31, 2008 to December 31 of the year
immediately preceding the year in which the adjustment is made.
(c) The recalculated restructuring mechanism shall be adjusted
during the second recalculation by the percentage change, if any,
in the number of access lines in service for each eligible provider
from December 31 of the year of the first recalculation to December
31 of the year immediately preceding the second recalculation.
(d) Each eligible provider is entitled to receive monthly
disbursements from the restructuring mechanism for a period of no
more than 12 years from the date the restructuring mechanism is
established under subsection (9), at which time the restructuring
mechanism shall cease to exist.
(17) The money received and administered by the commission for
the support and operation of the restructuring mechanism created by
the amendatory act that created this subsection shall not be used
by the commission or any department, agency, or branch of the
government of this state for any other purpose, and that money is
not subject to appropriation, allocation, assignment, expenditure,
or other use by any department, agency, or branch of the government
of this state.
(18) If the federal government adopts intercarrier
compensation reforms or takes any action that causes or requires a
significant change in interstate switched toll access service
rates, the commission may initiate, or any interested party may
file an application for, a proceeding pursuant to section 203
within 60 days of that action to determine whether any
modifications to the size, operation, or composition of the
restructuring mechanism are warranted. During the pendency of that
proceeding, the requirement in subsection (2) for eligible
providers to set intrastate switched toll access service rates
equal to interstate switched toll access service shall be
temporarily suspended by those providers. Intrastate access rates
may not be increased above the levels that exist at the time of the
suspension. Following notice and hearing, upon a showing of good
cause, the commission may stop or place certain conditions on the
temporary suspension.
(19) If the federal government changes the federal universal
service contribution methodology so that it is not based on a
percentage of total interstate telecommunications services
revenues, the commission shall modify the contribution methodology
for the restructuring mechanism to be consistent with the federal
methodology. The commission shall initiate a proceeding to modify
the contribution methodology for the restructuring mechanism and to
establish a reasonable time period for transition to the new
contribution methodology.
(20) Disputes arising under this section may be submitted to
the commission for resolution pursuant to sections 203 and 204.
(21) If any contributing provider subject to this section
fails to make the required contributions or fails to provide
required information to the commission, the commission shall
initiate an enforcement proceeding under section 203. If the
commission finds that a contributing provider has failed to make
contributions or to perform any act required under this section, a
contributing provider shall be subject to the remedies and
penalties under section 601.
(22) Eligible providers and contributing providers shall
provide information to the commission that is required for the
administration of the restructuring mechanism. Company-specific
information pertaining to access lines, switched toll access
services minutes of use, switched toll access demand quantities,
contributions, and intrastate telecommunications services revenues
submitted to the commission under this subsection is confidential
commercial or financial information and exempt from public
disclosure pursuant to section 210.
(23) As used in this section:
(a) "Commercial mobile service" means that term as defined in
section 332(d)(1) of the telecommunications act of 1996, 47 USC
332.
(b) "Contributing provider" means an entity required to pay
into the restructuring mechanism.
(c) "Eligible provider" means an incumbent local exchange
carrier as defined in section 251 of the telecommunications act of
1996, 47 USC 251, that as of January 1, 2009 had rates for
intrastate switched toll access services higher than its rates for
the same interstate switched toll access services, and that
provides the services and functionalities identified by rules of
the federal communications commission described at 47 CFR
54.101(a).
(d) "Interconnected voice over internet protocol service"
means that term as defined in 47 CFR 9.3.
(e) "Restructuring mechanism" means the intrastate switched
toll access rate restructuring mechanism established in this
section.