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TR's State NewsWire . . .daily intelligence on communications industry news and policy from the editors of Telecommunications Reports. . . ====================================================== *Table of Contents* November 20, 2001 STATES MISSOURI -- Staff backs 'competitive status' for SW Bell LD service NEW JERSEY -- BPU lowers UNE rates MAINE -- OPA calls Verizon 'alt-reg' plan 'unlawful' ILLINOIS -- Bills would update '911' criminal code OREGON -- Prepaid phone card company settles with AG NEW HAMPSHIRE -- Verizon to remove calling-card discount MISSOURI -- SBC LD applications remain pending KENTUCKY -- Nonprimary listings not subject to wholesale discounts IOWA -- Board to hold hearing on Qwest prices FLORIDA -- Workshop to review rate-increase notice plan WISCONSIN -- Gov. McCallum proposes technology zone rules NEVADA -- PUC to hold public comment sessions NEVADA -- Workshop on PUC rules, practices scheduled VIRGINIA -- Milliken to head Warner transition team CONNECTICUT -- OCC to hold meeting on consumer education ALASKA -- GCI closes cable TV transaction CALIFORNIA -- Gov. Davis encourages laid-off workers to teach OHIO -- Adelphia launches video-on-demand service VIRGINIA -- Secretary of Commerce resigns, Lief appointed MICHIGAN -- Gov. Engler appoints new IT director NEVADA -- Tax task force appointees named MINNESOTA -- REA-ALP to use WaveRider fixed wireless services ARKANSAS -- Leap Wireless launches service in Jonesboro REGIONAL Arguss to extend cable TV networks ______________________________________________________ MISSOURI -- Staff backs 'competitive status' for SW Bell LD service The Public Service Commission staff has recommended granting "competitive status" to Southwestern Bell Long Distance's and SBC Long Distance's long distance service. The staff also asked the commission to approve the Southwestern Bell Telephone Co. subsidiaries' applications to provide long distance service and tariffs. The staff originally wanted to deny the subsidiaries competitive status because they had "opportunities to potentially subsidize" their long distance service. (10/19/01) Competitive long distance companies can increase their rates on 10 days' notice and decrease their rates on seven days' notice without filing cost-of-service studies. The staff now believes the FCC's affiliate rules, combined with the commission's ability to suspend and review tariffs, will safeguard against provisioning long distance service priced below cost. The subsidiaries proposed offering businesses long distance service for rates ranging from 8.6 cents to 12 cents per minute, depending on minimum revenue commitments and term length. The subsidiaries will charge residential customers 6-12 cents per minute for long distance service, according to their tariffs. The staff, which estimates the subsidiaries will pay about 5.5 cents per minute in switched-access charges to provide domestic long distance service, concluded that the proposed rates weren't priced below cost. The "shackling" of the subsidiaries with noncompetitive status would thwart the subsidiaries' ability to compete in the long distance market, SW Bell said. There is "absolutely no basis for singling out" the subsidiaries for "disparate regulatory treatment," SW Bell said. A "noncompetitive" classification would subject the companies' tariffs to a 30-day notice requirement and "file and suspend" procedures for tariff changes, which could delay approval of tariff changes for up to 11 months, SW Bell said. Noncompetitive status would also require the subsidiaries to file cost-of-service studies with proposed rate changes. The FCC last week approved SW Bell's application to provide in- region interLATA (local access and transport area) service under section 271 of the federal Telecommunications Act of 1996. The FCC's approval takes effect Nov. 26, but the subsidiaries can't provide service until the state commission approves the companies' applications to provide long distance service. The commission may issue a ruling on the subsidiaries' applications today, the staff told TR. (Case TA-2001-475; TA-99-47) ______________________________________________________ NEW JERSEY -- BPU lowers UNE rates The Board of Public Utilities today reduced the rate competitors must pay Verizon New Jersey, Inc., to lease the unbundled network elements (UNEs) necessary to offer consumers local phone service from $16.21 to $9.52, a difference of about 41%. Ratepayer Advocate Blossom A. Peretz said she was pleased with today's board decision. Ms. Peretz had filed a June 18 brief with the BPU urging the board to reduce the wholesale UNE rate to less than $10 per line per month from the $16.21 price the BPU set in 1997. "The next step is to see whether this new UNE rate actually works and serves as an incentive to telephone companies to come to New Jersey to offer local service in competition to Verizon's near monopoly," said Ms. Peretz. "We should know by next spring whether we will have irreversible competition in the local telephone market," she said, alluding to Verizon's intention to file for section 271 authorization to offer interLATA (local access and transport area) service in the state. Today's decision also established an unbundled network element platform (UNE-P) rate of $13.93, about 38% lower than the existing $22.42 rate, the BPU said. UNE-P's are combinations of the loop and switching elements in one package that the BPU requires incumbent local exchange carriers to offer to competitors. The board first established UNE rates in 1997. (11/19/01) After the U.S. District Court in Newark struck down the UNE pricing regime adopted by the BPU for Verizon New Jersey, Inc., (then Bell Atlantic Corp.), the BPU decided to begin a "proactive" rate review, a spokesman for the BPU told TR. (Docket TO00060356 - In the Matter of the Board's Review of Unbundled Network Elements Rates, Terms and Conditions of Bell Atlantic-New Jersey, Inc.) ______________________________________________________ MAINE -- OPA calls Verizon 'alt-reg' plan 'unlawful' The Public Advocate has asked the state Supreme Court to vacate Verizon Maine, Inc.'s five-year alternative regulation plan, alleging that the plan is "unlawful." The Public Utilities Commission approved the plan last May. The Public Advocate said that plan, which increased residential monthly rates by $1.65 per line, was based on insufficient Verizon cost information, a spokesman for the Public Advocate's office told TR. The plan is expected to produce an additional $12.5 million in annual revenue for Verizon over its five-year term. (5/9/01) The Public Advocate asserted that PUC violated a the statutory requirement which states that "residential and small business ratepayers [should not] be required to pay more for local telephone service than they would have been required to pay under traditional rate-base or rate-of-return regulation." The Public Advocate added that the "commission failed to hold a proper hearing and collect the evidence necessary to make a determination" of whether the alternative regulation plan would cost consumers more than traditional rate-based regulation. The Public Advocate had asked the PUC consider Verizon's revenue requirements early in the proceeding, but the PUC rejected the request. The Public Advocate said Verizon was subsequently permitted to present revenue evidence similar to the evidence the PUC had rejected during the "rebuttal stage of the case." This action violated the state constitution's due process clause, the Public Advocate argued. The Public Advocate also said that the increased local service rates would be used to compensate "Verizon for the loss of certain specific revenues from nonlocal services" instead of the cost of providing local services. (Docket 99-851) ______________________________________________________ ILLINOIS -- Bills would update '911' criminal code Rep. Edward Acevedo (D., District 2) has introduced a pair of bills, HB 3688 and HB 3689, that would amend the Criminal Code of 1961 and the Emergency Telephone System Act to help combat terrorism and false terrorism reports. HB 3688 would make it illegal to make a false report of terrorism or other danger. The bill states that making a false complaint or request by calling the "911" emergency response system would be considered a class two felony. Violators would face imprisonment and $25,000 in fines. The bill also would require violators to pay restitution to public safety agencies for total out-of-pocket expenses incurred during the intentional false alarm. A spokesperson from the Speaker of the House's office told TR that HB 3689 also would delete language in the 1961 code related to making threats over the 911 emergency response system. HB 3688 would then amend the code to impose stronger penalties and to add language about false terrorism. The spokesperson added, "the bills are part of a comprehensive antiterrorism package being pushed" by Chicago. The bills await committee referral. ______________________________________________________ OREGON -- Prepaid phone card company settles with AG Norte.Com., Inc., has entered into an agreement with Attorney General Hardy Meyers that settles charges which stated that the company was selling prepaid phone cards with another company's toll-free number printed on the back. Under the settlement, Norte.Com must provide its customers with new cards or restitution. The Department of Justice was alerted to the problem by Thomas and Ann Taylor, owners of North Star Marine, Inc. The Taylors were concerned about the number of distraught consumers who were attempting to use a prepaid calling to call family in Mexico but instead were reaching the Taylor's business, the AG said. The Taylors said they received up to 12 calls a day. Two "800" numbers were printed on the cards, one that connected callers directly to Mexico and the Taylors' 800 number that was supposed to be used when calling from Mexico to the U.S., the AG said. The Taylors complained to the company, but the calls continued. Under the Assurance of Voluntary Compliance, which was filed in Marion County Circuit Court, Norte.Com must obtain a new 800 number--in addition to providing restitution or new cards to consumers. The agreement admits no violation of law. ______________________________________________________ NEW HAMPSHIRE -- Verizon to remove calling-card discount The Public Utilities Commission has decided to allow Verizon New Hampshire, Inc., to remove a 25% calling-card discount from the Call-Around "603" Optional Toll Calling Plan. The tariff, which was scheduled to take effect Oct. 20, was suspended until Nov. 19 to provide the PUC time to consider the possible harm removing the discount would cause to consumers. PUC staff recommended rejecting the tariff, arguing that customers using the calling cards would see a rate increase while the "revenue effect on the company is, in the company's own worlds, 'negligible.'" The PUC authorized Verizon to increase rates for new customers, but "grandfathered" existing call-around 603 customers. (DT 01-186) ______________________________________________________ MISSOURI -- SBC LD applications remain pending The Public Service Commission won't decide this week whether to approve SBC Communications, Inc.'s long distance subsidiaries' applications for certificates to offer long distance service. The earliest the commission could consider the applications Nov. 27, a commission staff member told TR. Last week, the FCC approved SBC's application to provide in- region interLATA (local access and transport area) service under section 271 of the federal Telecommunications Act of 1996. The FCC's approval takes effect Nov. 26, but SBC can't provide service until the PSC approves the subsidiaries' applications. Southwestern Bell Long Distance and SBC Long Distance are the subsidiaries that applied for the certificates. The commission's review of the applications was delayed by its decision to investigate AT&T Communications of the Southwest, Inc.'s allegations that the tariffs contained in the applications included rates that were predatory because they were priced below cost. (10/19/01) AT&T subsequently withdrew its request for a hearing on the matter after concluding that the PSC's procedural schedule didn't provide sufficient time to conduct "adequate discovery." AT&T said it wasn't "willing to commit its limited resources to a proceeding that denies AT&T an adequate opportunity to be heard on competitively important issues." SBC characterized AT&T's predatory pricing claims as further attempts to delay SBC's entry into the long distance market and dispute the incumbent's access charges. (10/19/01) (Case TA- 2001-475; TA-99-47) ______________________________________________________ KENTUCKY -- Nonprimary listings not subject to wholesale discounts The Public Service Commission has concluded that nonprimary listings aren't a "telecommunications service" and therefore don't qualify for a wholesale discount in interconnection agreements with UNE-P (unbundled network element-platform) competitive local exchange carriers. Brandenburg Telecom LLC asked the commission to require Verizon South, Inc., to charge its wholesale rate for non-primary, or additional, listings. The commission concluded, "additional listings are not network elements necessary to provide telecommunication service." Primary listings qualify for cost- based rates, the PSC said. If Brandenburg was reselling Verizon's service, additional listings would be available at a wholesale discount, the PSC said. Because Bradenburg provides facilities-based service, it must pay Verizon's tariffed retail rates, the PSC added. (Case 2001-224) ______________________________________________________ IOWA -- Board to hold hearing on Qwest prices The Utilities Board has scheduled a Dec. 13 hearing to consider prices Qwest Corp. proposed in June for wholesale services and unbundled network elements (UNEs). The prices would be for new UNEs Qwest intends to offer through its statement of generally available terms (SGAT). In July, the consumer advocate objected to Qwest's proposal, raising issues about whether the proposed prices were cost based and whether the costing methodology Qwest used to derive the proposed prices complied with applicable state and federal law. (08/23/01) (Docket RPU-01-6) ______________________________________________________ FLORIDA -- Workshop to review rate-increase notice plan The Public Service Commission has scheduled a Jan. 15 workshop to review a proposed rule requiring telecom companies to mail customers notices of rate increases at least 30 days before they take effect. Under current rules, telecom companies can implement rate increases by filing tariffs. (6/13/01) In May, the Office of Public Counsel asked the PSC to implement the notification rule. (5/30/01) "Customers should not be forced to pay any higher rates or receive services under different terms and conditions than those they know about and agreed to," the Public Counsel said. (Docket 010774-TP) ______________________________________________________ WISCONSIN -- Gov. McCallum proposes technology zone rules Gov. Scott McCallum (R.) has released proposed emergency rules for the state's new technology zone program. Under the proposed rules, eight zones would be designated technology zones, which would be in effect for 10 years. Up to $5 million in income tax credits would be allocated to each zone. The tax credits would be made available to high-tech businesses locating in or expanding to a designated zone. Comments are due Nov. 28. The rules are available at www.commerce.state.wi.us. ______________________________________________________ NEVADA -- PUC to hold public comment sessions The Public Utilities Commission has scheduled public comment sessions for Dec. 5 in Washoe County and Dec.13 in Clark County. The commission must hold at least one general consumer session in the county with the largest population and the county with the second largest population each year. Clark County has the largest population and Washoe County has the second largest population. The telecom portion of the Dec. 5 Washoe meeting will run from 5- 6 p.m. The commission will hold two sessions in Clark County on Dec. 13. The telecom portion of the first meeting in Henderson will run from 10-11 a.m., and the telecom portion of the second in Las Vegas will run from 5-6 p.m. ______________________________________________________ NEVADA -- Workshop on PUC rules, practices scheduled The Public Utilities Commission has scheduled a Dec. 14 workshop to discuss simplifying commission practices, increasing administrative efficiency, and encouraging public participation. The workshop will continue Dec. 17. The commission has asked for comments on these issues by Nov. 28; the comments will then be discussed at the workshop. The comments should address issues like (1) how the PUC should evaluate coalition and association petitions to intervene with regard to the "direct and substantial interest" standard, (2) how the PUC should best use issues lists or position papers, (3) how the PUC could refine the discovery process, (4) whether the PUC should create an informal hearing process, and (5) whether the PUC should use binding arbitration. (Docket 00-10039, In re investigation into rules of practice and procedure before the Commission and proposed rulemaking to amend, adopt, and/or repeal Nevada Administrative Code Chapters 703 and 704 to address such issues) ______________________________________________________ VIRGINIA -- Milliken to head Warner transition team John Milliken, a McLean attorney, has been named to head Gov.- elect Mark Warner's (D.) transition team. As director, Mr. Milliken will be responsible for ensuring that Gov.-elect Warner's cabinet, agenda, and budget are in place as soon as he assumes the governor's office Jan. 12, 2002. Mr. Milliken is a partner in the law firm of Venable, Baetjer and Howard's McLean office. He serves as co-chairman of the firm's state and local government practice group, and was the state's Secretary of Transportation from March 1990-December 1993. ______________________________________________________ CONNECTICUT -- OCC to hold meeting on consumer education The Telecommunications Consumer Education Advisory Council (TCEAC) of the Office of Consumer Council has scheduled a Nov. 29 meeting to discuss consumer education issues. The TCEAC is part of a community outreach program, which conducts open forums on utility issues throughout the state. The meeting will begin at 1:00 p.m. at the OCC's offices in New Britain. ______________________________________________________ ALASKA -- GCI closes cable TV transaction General Communication, Inc., has closed its transaction with Rogers Cable, Inc., acquiring 100% of Rogers's subsidiary Rogers American Cablesystems, Inc., a cable TV provider in Alaska. "We believe this transaction will allow us to offer a broader package of advanced services to our customers in the Mat-Su Valley," said Riley Snell, GCI vice president and general manager-cable and entertainment. He added, "We have already made significant progress in tying the networks together and have plans to invest more than $3 million over the next two years to upgrade the plan and significantly increase the products available to our customers." The newly acquired properties serve the Palmer and Wasilla area, which Mr. Snell said is the state's "fastest growing region." The final purchase price was $19 million. ______________________________________________________ CALIFORNIA -- Gov. Davis encourages laid-off workers to teach Gov. Gray Davis (D.) has announced $38.9 million in grants to help Californians who have lost their jobs find new employment. The governor also unveiled an initiative aimed at encouraging high-tech workers to become educators. The education initiative will enable laid-off workers to enter the education workforce by becoming math or science teachers and chief information officers. The program would pay for the education courses necessary for teacher certification as well as books, testing fees, support services, case management, counseling, and overall project management for dislocated technology workers interested in becoming educators. The initiative will also train "dot-commers" who have a job but are interested in a switching to teaching. Gov. Davis said the initiative would help ease the state's digital divide while providing teachers to educate students in technology-related subjects to meet the state's future workforce needs. The program will train up to 200 new science and math teachers at a cost of about $1.6 million in Workforce Investment Act funds. The statewide rapid response grants, totaling $24.7 million, will be administered by the California Employment Development Department. Those funds will be used to pay for worker retraining and tuition. Two job-training grants totaling $14.2 million will go to the Silicon Valley region to provide regional employment and training services to laid-off high-technology and electronic commerce workers. The funds will be used to "retool" the workers' skills for high-growth industries. ______________________________________________________ OHIO -- Adelphia launches video-on-demand service Adelphia Communications Corp. has launched SeaChange International Inc.'s interactive TV system, which will provide video-on-demand (VOD) movies. The service will allow Adelphia's Cleveland customers to subscribe to HBO On Demand, Showtime On Demand, and Starz On Demand. SeaChange said Adelphia is the first cable TV operator to use a single video server to launch three major subscription VOD services. ______________________________________________________ VIRGINIA -- Secretary of Commerce resigns, Lief appointed Gov. Jim Gilmore (R.) yesterday said Secretary of Commerce and Trade Barry E. DuVal has resigned his position to become the president and chief executive officer of the consulting firm Kaufman & Canoles Consulting LLC. Mr. DuVal's resignation takes effect Dec. 3. Joshua N. Lief, who has been the deputy secretary of commerce and trade since 1998, will succeed Mr. DuVal next month. ______________________________________________________ MICHIGAN -- Gov. Engler appoints new IT director Gov. John Engler (R.) yesterday appointed Jacque Passino as director of Information Technology. Mr. Passino will succeed George Boersma who has been acting director since Oct. 12. Gov. Engler described Mr. Passino's position as being similar to a "chief information officer." He said Mr. Passino will "lead this department as it establishes a long-term strategy that allows for better management of technology investments, improved information management, and more efficient services to Michigan citizens." The governor created the IT department by an executive order issued in August 2001. ______________________________________________________ NEVADA -- Tax task force appointees named Gov. Kenny Guinn (R.), Senate Majority Leader Bill Raggio (R., District 3), and Assembly Speaker Richard Perkins (D., District 23) have named eight members to the Governor's Task Force on Tax Policy, which was mandated by the 2001 Legislature. The task force is charges with reviewing the state's tax structure, specifically gross receipts from mining, property, sales or services, business profits, employees of business, slot route operators, and car rental companies. Guy Hobbs, partner in the consulting firm Hobbs, Ong, and Associations and former Clark County finance director, was appointed by the governor to head the task force. The other seven appointees represent various parts of Nevada's business community. ______________________________________________________ MINNESOTA -- REA-ALP to use WaveRider fixed wireless services REA-ALP Internet Services has added WaveRider Communications, Inc.'s non-line-of-sight "last-mile" solution as an option to its high-speed Internet access service. Wireless Internet users using the new WaveRider service can access the Internet at speeds up to 1.4 megabits per second via a wireless modem and indoor antenna. REA-ALP is a collaboration between Runestone Electric Association and Alexandria Light and Power. ______________________________________________________ ARKANSAS -- Leap Wireless launches service in Jonesboro Leap Wireless International, Inc., is offering its PCS (personal communications service) to residential and business customers in Jonesboro. Leap also recently added Pine Bluff to its central Arkansas market, which already included Little Rock and Hot Springs. ______________________________________________________ CONNECTICUT, MAINE, MASSACHUSETTS, NEW HAMPSHIRE, VERMONT -- Arguss to extend cable TV networks Arguss Communications, Inc., has entered into agreements to install about 6,000 miles of aerial and underground infrastructure for cable TV providers Adelphia Communications, Charter Communications and MetroCast Cablevision. The move expands the companies' networks, enabling them to support advanced services. The project will be completed by the year-end 2002, a spokesman for Arguss told TR. ======================== END ========================= To view this issue online, go to http://www.tr.com/statenews/. Federal law prohibits duplication in any form, including electronic, without permission of the publisher. TR's State NewsWire Copyright 2000, 2001 Telecommunications Reports International, Inc. (ISSN 1082-9350) is transmitted each business day, except holidays. Telecommunications Reports International, Inc. 1333 H St. NW, Suite 100-E Washington, DC 20005-4707 Gayle Kansagor, E-mail: mailto:gkansagor@tr.com Editor Susan McGovern, E-mail: mailto:smcgovern@tr.com Associate Editor Victoria Curtis, E-mail: mailto:vcurtis@tr.com Senior Research Analyst Michael Johnson, E-mail: mailto:mjohnson@tr.com Senior Telecommunications Analyst Account Services: Christy Iredell (202) 312-6051, (202) 312-6065 (fax), E-mail: mailto:ciredell@tr.com
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