House Bill 998 (AS PASSED HOUSE AND SENATE)
By: Representatives Leverett of the 123rd, Camp of the 135th, Powell of the 33rd, Jasperse of
the 11th, Williams of the 168th, and others
A BILL TO BE ENTITLED
AN ACT
To amend Article 4 of Chapter 5 of Title 46 of the Official Code of Georgia Annotated,
relating to telecommunications and competition development, so as to authorize certain
Tier 2 local exchange companies to elect to become subject to rate of return regulation; to
extend the period of time certain distributions can be made from the Universal Access Fund;
to require certain information from local exchange companies seeking reimbursement from
the fund; to require the total amount of distributions not to exceed $50 million in the
aggregate during any single fund year; to provide annual monetary limitations on certain
distributions; to require annual reports on the Universal Access Fund; to provide for contents
of such report; to provide for a definition; to provide for related matters; to repeal conflicting
laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 4 of Chapter 5 of Title 46 of the Official Code of Georgia Annotated, relating to
telecommunications and competition development, is amended by revising Code
Section 46-5-165, relating to alternative regulation of rates, terms, and conditions, as follows:
"46-5-165.
(a) Any Tier 1 local exchange company may elect to have its rates, terms, and conditions
for its services determined pursuant to the alternative regulation described in this article,
in lieu of other forms of regulation, including, but not limited to, rate of return or rate base
monitoring or regulation, upon the filing of notice with the commission and committing to
provide basic local exchange services upon reasonable request and to invest $500 million
per year for five years to improve and strengthen telecommunications services in <del>Georgia
</del> <ins>this state;</ins> provided, however, that, after the expiration of three years of such investments,
the commission shall determine, after notice and opportunity for a Tier 1 local exchange
company or other interested parties to be heard, whether such investment commitment
should be continued for the remaining two years or whether such commitment should be
reduced.
(b) Any Tier 2 local exchange company may elect to have the rates, terms, and conditions
for its services determined pursuant to the alternative regulation described in this article
upon the filing of notice with the commission and committing to provide basic local
exchange services upon reasonable request.
(c) The alternative regulation under this article shall become effective on the date specified
by the electing company but in no event sooner than 30 days after such notice is filed with
the commission.
(d) On the date a telecommunications company elects the alternative regulation described
in this article, all existing rates, terms, and conditions for the services provided by the
electing company contained in the then existing tariffs and contracts <del>are</del> <ins>shall be</ins> deemed
just and reasonable.
<ins>(e)(1) As used in this subsection, the term 'eligible Tier 2 local exchange company'
means a Tier 2 local exchange company that:
(A) Is not affiliated, directly or indirectly, with any provider serving more than 50,000
access lines nation wide; and
</ins>
<ins>(B) Is responsible for providing basic local exchange services upon reasonable request.
(2) Any eligible Tier 2 local exchange company that is an electing company may elect
to become subject to rate of return regulation by certification to the commission of such
election no later than August 1, 2026. An eligible Tier 2 local exchange company
making such election shall be prohibited from making a subsequent election to have the
rates, terms, and conditions for its services determined pursuant to the alternative
regulation described in subsection (b) of this Code section prior to August 1, 2031.
(3) Nothing in this subsection shall be construed to limit any election to become subject
to rate of return regulation made prior to July 1, 2026."
</ins> SECTION 2.
Said article is further amended in Code Section 46-5-166, relating to rates for switched
access, by revising subsection (c) as follows:
"(c) Beginning January 1, 2011, and ending December 31, 2015, each Tier 2 local
exchange company shall adjust in equal annual increments its intrastate switched access
charges to parity with its similar interstate switched access rates. The commission shall
have authority to govern the transition of Tier 2 local exchange company switched access
rates to their corresponding interstate levels and the commission shall allow adjustment of
basic local exchange services or universal access funds, as necessary to recover those
revenues, based on calendar year 2008, lost through the concurrent reduction of the
intrastate switched access rates. In the event that the rates for switched access cannot be
negotiated in good faith between the parties, the commission shall determine the reasonable
rates for switched access in accordance with the procedures provided in subsection (b) of
this Code section. <del>Any Tier 2 local exchange company that is an electing company may
elect to become subject to rate of return regulation by certification to the commission of
this election no later than December 31, 2010. A Tier 2 local exchange company making
this election is prohibited from making a subsequent election to have the rates, terms, and
</del>
<del>conditions for its services determined pursuant to the alternative regulation described in
subsection (b) of Code Section 46-5-165 prior to January 1, 2016."
</del> SECTION 3.
Said article is further amended in Code Section 46-5-167, relating to Universal Access Fund,
by revising subparagraph (d)(2)(B) and subsection (e) and by adding new subsections to read
as follows:
"(B) Except for those distributions to Tier 2 local exchange companies that have
reduced intrastate switched access charges pursuant to subsection (c) of Code
Section 46-5-166, distributions to a Tier 2 local exchange carrier subject to rate of
return regulation shall also be reduced by the amount per access line, which if added
to the carrier's basic local exchange service rate, in accordance with a schedule
established by the commission, results in an amount that would be equal to 110 percent
of the July 1, 2009, residential state-wide weighted average rate for basic local
exchange services imputed across all access lines and adjusted annually for inflation
measured by the change in GDP-PI. The commission shall determine any such
distributions upon application, demonstration, and good cause shown that the
reasonable actual costs to provide basic local exchange services exceed the maximum
fixed price permitted for such basic local exchange services; <del>any distributions pursuant
to this subparagraph shall be limited to a period of no more than 20 years.
</del> (e) The commission shall require any local exchange company seeking reimbursement
from the fund pursuant to subparagraph (d)(2)(B) of this Code section to file the
information reasonably necessary to determine the actual and reasonable costs of providing
basic local exchange services. <ins>Such information shall include, but not be limited to, the
most recent unredacted audited financial reports with any accompanying notes for each
company and its parent company. No distribution pursuant to this subsection shall be made
for any expense incurred after December 31, 2040."
</ins>
<ins>"(h)(1) Beginning with distributions made for approved costs incurred on or after July
1, 2026, the total amount of distributions from the fund pursuant to this Code section
shall not exceed $50 million in the aggregate during any single fund year; provided,
however, that, if the total amount of distributions authorized by the commission exceeds
the annual monetary limitation, the commission shall reduce distributions on a
proportional, pro rata basis so that the total distributions do not exceed such monetary
limitation.
(2) For purposes of this subsection, the annual monetary limitation on distributions shall
apply only to distributions attributable to costs incurred during fund years beginning on
or after July 1, 2026, regardless of the date such distributions are disbursed.
(3) The commission shall continue to administer, review, approve, and disburse
distributions as reimbursements for eligible costs incurred prior to July 1, 2026, in
accordance with this Code section, without regard to the limitation established in
paragraph (1) of this subsection.
(4) Nothing in this subsection shall be construed to impair or delay the payment of any
distributions lawfully approved for costs incurred prior to July 1, 2026.
(i) The commission shall submit a written report on December 31, 2026, and every other
year thereafter, concerning the Universal Access Fund to the Governor, the Lieutenant
Governor, and the Speaker of the House of Representatives. Such report shall be submitted
no later than December 31 of every even-numbered year and shall include the following
information for the most recently completed Universal Access Fund year:
(1) The total amount of contributions collected for the Universal Access Fund, including
the percentage rate charged to consumers for such contributions and the remaining
balance of the fund as of the end of the reporting period;
(2) The total amount of fund requests and disbursements made from the Universal
Access Fund and notable findings from annual audits;
</ins>
<ins>(3) The total number of access lines providing basic local exchange service in the State
of Georgia;
(4) The total number of access lines receiving support from the Universal Access Fund;
(5) The number of eligible local exchange companies receiving distributions from the
Universal Access Fund; and
(6) Any other information determined by the commission to be material to describing the
financial condition and operation of the Universal Access Fund, so long as such
information does not disclose any trade secret or proprietary information of any specific
provider."
</ins> SECTION 4.
All laws and parts of laws in conflict with this Act are repealed.