ORDER NO.99-497

ENTERED AUG 03 1999

This is an electonic copy and appendices and footnotes may not appear.

AR 353

DISPOSITION: RULE AMENDMENT ADOPTED AS PROPOSED

At its public meeting of July 21, 1998, the Commission opened this rulemaking. Notice of the proposed rulemaking was filed with the Secretary of State on August 25, 1998, and published in the Oregon Bulletin on September 1, 1998. Notice was served on the list of persons interested in such matters on August 26, 1998. Comments and requests for hearing were due by September 22, 1998.

U S WEST Communications, Inc. (USWC) filed a timely request for hearing. USWC and GTE Northwest Incorporated (GTE) filed comments. On December 15, 1998, notice of the proposed rulemaking, with hearing information, was filed with the Secretary of State and published in the Oregon Bulletin on January 1, 1999. The hearing was set for February 2, 1999. On February 1, 1999, USWC filed a letter with the Commission withdrawing its request for hearing.

Summary of the Rule. This rule, OAR 860-032-0200(6), lists essential telecommunications services for the purposes of ORS 759.195. The statute authorizes the Commission to approve alternative form of regulation (AFOR) plans. Under these plans, essential services are provided greater regulatory protection than nonessential services. ORS 759.195 specifically directs the Commission to establish a list of essential services by rule. The Federal Communications Commission (FCC) deregulated pay telephone services effective October 1997, pursuant to FCC authority under the Telecommunications Act of 1996 (the Act). As a result, the telecommunications utilities removed semi-public and public coin services from their tariffs. These services should be removed from the list of essential services, since deregulated services cannot be regulated as essential services under a plan filed pursuant to ORS 759.195.

Participants’ Comments. GTE agrees with removal of semi-public and public coin services from the list of essential services in OAR 860-032-0200.

USWC also agrees with the removal of semi-public and public coin services from the list of essential services. In its initial comments, USWC argues, however, that the Commission should also remove residential multiparty, suburban, and farmer lines from the rule. According to USWC, those services should not be considered essential because USWC has already stopped offering such services in Oregon, and because telecommunications carriers could not receive federal universal service support for those services under FCC regulations implementing the Act. USWC’s underlying position is that by defining the services USWC wishes removed from the rule as essential, the Commission would require telecommunications providers authorized under ORS 759.195 to provide those services and relinquish federal universal service support for them. USWC argues that this consequence places the rule in conflict with federal law and Commission policy.

In its letter of February 1, 1999, withdrawing its request for hearing, USWC stated its understanding that a telecommunications carrier is not obligated to offer each of the services listed at Section 6 of the rule. USWC continues to believe that the Act makes multi party services nonessential but does not believe a hearing on this issue is necessary.

Discussion. USWC is correct that the list of essential services under Section 6 of the rule need not be provided by a telecommunications carrier. The rule concerns an AFOR under ORS 759.195. OAR 860-032-0200(6) lists essential services that a petitioning company may have to provide. Neither the rule nor the statute requires that all essential services must be provided. In fact, some of the services listed in Section 6 are mutually exclusive; a company could not concurrently provide each of them.

If a carrier wishes to be regulated under an AFOR pursuant to ORS 759.195, the company could avoid providing all the Section 6 services in one of two ways. First, if the company is providing a service at the time the AFOR is adopted, the company can petition to drop the service as provided in Section 5 of the rule. Second, the carrier can drop a service before coming under an AFOR.

We conclude that the rule amendment should be adopted as proposed.

IT IS ORDERED that the amended rule, OAR 860-032-0020, attached to this order as Appendix A and incorporated herein by reference, is adopted.

Made, entered, and effective _____________________.

 BY THE COMMISSION:

 _____________________________

Vikie Bailey-Goggins

Commission Secretary

 A person may petition the Commission for the amendment or repeal of a rule pursuant to ORS 183.390. A person may petition the Court of Appeals to determine the validity of a rule pursuant to ORS 183.400.

(1) For purposes of ORS 759.195, a local exchange service is essential if customers require it to efficiently establish, sustain, or discontinue a telecommunications service by means of the public network. The public network is comprised of a system of interconnected telecommunications channels held out by a local exchange carrier for use by the general public.

(2) A local exchange service is essential if the service is essential for one or more local customer classes.

(3) If essential and potentially price-listed services are packaged together, the entire package is eligible to be considered for price listing if each essential service in the package is readily available to customers on a separate basis and the package price is equal to or greater than the tariffed rate(s) for the essential service(s) plus the long-run incremental cost(s) of the price-listed service(s).

(c) Residential Multiparty;

(d) Suburban;

(g) Business Complex;

(i) Public Coin;

(j)(h) Public Access Line;

(o)(m) Intercept Announcement and Referral;

(p)(n) Directory Listing (White and Yellow Pages);

Stat. Auth.: ORS Ch. 183, 756 & 759

Stats. Implemented: ORS 756.040 & 759.1905

Hist.: PUC 18-1988, f. & cert. ef. 12-29-88 (Order No. 88-1522); PUC 1-1994, f. & ef. 1-5-94 (Order No. 94-040); PUC 10-1998, f. & ef. 4-28-98 (Order No. 98-170)