Small business rates
Under current law, as noted above, a price-regulated telecommunications
utility is subject to certain restrictions regarding rate increases. This bill creates an
exception to these restrictions for "small business rates," which the bill defines as
rates for standard business access lines and usage by small businesses with no more
than three access lines.
Under the bill, the PSC must investigate whether to allow price-regulated
telecommunications utilities, including large price-regulated telecommunications
utilities, to increase small business rates in geographic areas specified by the PSC.
The PSC must complete the investigation no later the first day of the 13th month
beginning after the bill's effective date. The PSC may allow such increases only if,
as a result of the investigation, the PSC determines that effective competition exists
in a geographic area. The PSC must promulgate rules defining "effective
competition." If the PSC allows such rate increases, a price-regulated
telecommunications utility may petition the PSC to increase rates. The PSC must
grant the petition if it includes a statement that the price-regulated
telecommunications utility agrees to allow customers to terminate contracts, as
described below. However, the PSC may not grant a petition until after the PSC's
order regarding wholesale service standards (which is described below) goes into
effect.
If the PSC grants a petition by a price-regulated telecommunications utility,
the bill allows a customer who has a contract for small business rates with the utility
to terminate the contract without penalty. However, a customer may terminate such
a contract only if the customer enters into a new contract for small business rates
with another telecommunications provider. In addition, the right to terminate under
the bill expires one year after the effective date of the PSC's order granting the
price-regulated telecommunications utility's petition.
Mandatory credits
The bill requires a large price-regulated telecommunications utility to issue
credits to end-user customers if the utility fails to satisfy requirements regarding
each of the following: 1) disruption of service; 2) failure to install local exchange
service; and 3) failure to keep service or repair appointments. The amount of a credit
depends on the type of requirement and whether a residential or business telephone
line is affected. The bill also allows the PSC, upon complaint or its own motion, to
issue an order requiring telecommunications utilities, in addition to large
price-regulated telecommunications utilities, to issue credits for failing to satisfy
the above requirements. The PSC may issue such an order if it is necessary to protect
the public interest.
The above requirements regarding the credits do not apply after the first day
of the 60th month after the bill's effective date, unless the PSC, after notice and
hearing, issues an order providing the requirements apply after that date. The PSC
may issue such an order if it is necessary to protect the public interest.
Wholesale service standards
Under current law, telecommunications providers are subject to certain
prohibitions regarding their treatment of consumers and other telecommunications
providers. This bill creates an additional prohibition on failing to provide wholesale
services to another telecommunications provider on the same terms and conditions
that the telecommunications provider provides to itself or to any of its affiliates.
"Wholesale services" are defined in the bill to include preordering, ordering and
provisioning, maintenance and repair, network and system performance, unbundled
elements, operator services and directory assistance, service center availability, and
billing. In addition, the bill allows the PSC to issue an order that specifies additional
services that are wholesale services.
The bill also requires the PSC to issue an order that establishes
nondiscriminatory standards that require a telecommunications provider to
provision wholesale services and related facilities, and repair wholesale service
outages, in a timely manner. The order must also require a telecommunications
provider to minimize the number of reports to the provider regarding problems with
its wholesale service. In addition, the order may require a telecommunications
provider that fails to comply with the standards to make payments to another
telecommunications provider who is affected by the failure, or to the PSC, in amounts
and according to schedules specified in the order. The PSC may use any payment
that it receives for any purpose determined by the PSC relating to maintaining or
improving telecommunications service quality, including compensating persons who
are affected by the failure to comply with the PSC's order. The PSC must issue the
order no later than the first day of the fourth month beginning after the bill's effective
date.
In addition, the bill allows the PSC to issue an order that exempts a
telecommunications provider from the order described above or that imposes less
stringent requirements. The PSC may issue such an order only upon finding that
such an order is in the public interest and that the telecommunications provider that
is the subject of the order has not violated any of the following: 1) the order described
above; 2) the prohibitions under current law regarding treatment of consumers and
other telecommunications providers; 3) any provision of the federal
Telecommunications Act of 1996, or an order or regulation issued under that act,
relating to wholesale service; or 4) interconnection agreement approved by the PSC.
PSC authority regarding payments by telecommunications providers
Under current law, the PSC may order a person subject to its authority to take
appropriate action if the PSC determines that the person acted in a manner that is
unjust, unreasonable, insufficient, preferential, unjustly discriminatory, or
otherwise unreasonable or unlawful. The PSC may also issue such an order if the
PSC finds that service is inadequate or cannot reasonably be obtained.
Under this bill, if the PSC issues an order described above against a
telecommunications provider, the PSC may also require the telecommunications
provider to make payments specified in the order to persons affected by the
telecommunications provider's act or service or to the PSC. The PSC may use any
payment that it receives for any purpose determined by the PSC relating to
maintaining or improving telecommunications service quality, including
compensating persons who are affected by the telecommunications provider's act or
service.
Sales practices of telecommunications providers
Current state law prohibits persons who provide telecommunications services
from engaging in certain sales practices such as charging a customer for
telecommunications services provided after the customer has cancelled those
services. The law also prohibits a person who provides telecommunications services
from engaging in advertising practices concerning those services that are false,
misleading, or deceptive. In addition, the law requires that if a person orders
telecommunications services as the result of an oral solicitation, the provider of the
telecommunications services must provide independent confirmation of the order.
This bill provides that a person may request a telecommunications service
orally, in writing, or by electronic means but specifies that a telecommunications
provider may not provide services to a person who orders the service by any electronic
means that simultaneously activates the service.
The bill also imposes additional requirements on persons who provide
telecommunications services. The bill prohibits a person from enrolling a customer
in any telecommunications service in which the customer did not affirmatively
request to be enrolled. The bill specifies that a request to be enrolled in a particular
telecommunications service is an affirmative request to be enrolled only in that
particular service. The bill also prohibits the practice known as "slamming." A
person engages in slamming by making a change in a customer's selection of a
provider of telecommunications services even though the customer did not
affirmatively request that such a change be made.
In addition to the slamming prohibitions created under this bill, federal law
also prohibits slamming. This prohibition against slamming under federal law is
regulated by the federal communications commission (FCC). Under rules
promulgated by the FCC, any state may notify the FCC that it intends to administer
the FCC rules prohibiting slamming including the remedies and penalties specified
under those rules. This bill directs the department of agriculture, trade and
consumer protection (DATCP) to notify the FCC of its intention to administer the
FCC rules. It also requires DATCP to promulgate rules that are consistent with the
FCC regulations rules.
Cross subsidization
Current law prohibits a telecommunications utility from subsidizing the
activities of affiliates that are not subject to the PSC's authority. This prohibition is
referred to as the prohibition on "cross subsidization." The prohibition does not apply
to the retained earnings of a telecommunications utility.
This bill creates two exceptions to the prohibition on cross subsidization for
small telecommunications utilities. The bill defines "small telecommunications
utility" as a telecommunications utility that has less than 50,000 access lines in use
in the state. For a telecommunications utility that is in a holding company, the access
lines of all other telecommunications utilities in the holding company are counted in
determining whether the telecommunications utility is a small telecommunications
utility. (The access lines of any wireless telecommunications provider in the holding
company are not counted.)
The first exception to the prohibition is that a small telecommunications utility
is allowed to guarantee a loan for an affiliate if the loan is made before the first day
of the 60th month beginning after the bill's effective date. Also, the purpose of the
loan must be to partially or completely fund the cost of equipment that the affiliate
will use to provide telecommunications service, cable television service, or both. The
second exception to the prohibition is that a small telecommunications utility may
allow an affiliate free use of the utility's intangible assets, including its name,
goodwill, patents, and trademarks. However, the affiliate must use the intangible
asset to provide telecommunications service, cable television service, or both. In
addition, neither of the bill's two exceptions applies unless the small
telecommunications utility waives its right under current law to object to the PSC
allowing a competitor to provide telecommunications service in the municipality
served by the utility.
A small telecommunications utility that takes advantage of either of the bill's
exceptions is subject to additional requirements if certain actions occur under the
federal Telecommunications Act of 1996. The federal act allows certain rural
telecommunications utilities to petition the PSC to suspend or modify the application
of the act's interconnection requirements. Also, certain rural telecommunications
utilities are exempt from the interconnection requirements until another
telecommunications provider requests interconnection and the PSC determines to
terminate the exemption.
Under this bill, if a small telecommunications utility guarantees a loan for an
affiliate under the bill's first exception and the utility petitions the PSC to suspend
or modify the federal act's interconnection requirements, the affiliate must annually
pay the utility an amount equal to one-quarter of 1% of the outstanding balance of
the loan. The affiliate must also make such payments if another telecommunications
provider requests interconnection and the PSC determines not to terminate the
small telecommunications utility's exemption under the federal act. In addition, if
a small telecommunications utility allows an affiliate free use of an intangible asset
under the bill's second exception and the utility petitions the PSC to suspend or
modify the federal act's interconnection requirements, the affiliate must annually
pay the utility an amount equal to one-quarter of 1% of the affiliate's gross sales.
The affiliate must also make such payments if another telecommunications provider
requests interconnection and the PSC determines not to terminate the small
telecommunications utility's exemption under the federal act.
Current law also requires the PSC to establish the minimum accounting and
reporting requirements that are necessary for the PSC to, among other things,
enforce the prohibition on cross subsidization. Under this bill, the accounting and
reporting requirements that apply to transactions between small
telecommunications utilities and their affiliates must conform with certain federal
accounting and reporting requirements. The PSC must promulgate rules regarding
such requirements.
PSC report on telecommunications competition
The bill requires the PSC to investigate competition among intrastate
telecommunications providers, including those that provide Internet access service,
during the five-year period after the bill's effective date and to submit a report to the
legislature that assesses the relationship between the regulatory and competitive
status of such providers. The report must assess specified aspects of such
competition, including: 1) the number of different providers in different product and
geographic markets; 2) the prices of telecommunications services offered by the
providers; 3) the provider's market power; 4) the different levels of regulation
applicable to the providers; 5) the different retail service quality credit plans offered
by the providers; 6) the barriers to effective competition; 7) the number and types of
complaints by residential customers regarding the providers; and 8) certain
information regarding the unbundled network elements, interconnection, and
collocation offered by the providers.
The report must also include proposals for legislation recommended by the
PSC, including recommendations for remedying anticompetitive behavior of
intrastate telecommunications providers. If the proposals do not include requiring
providers to structurally separate wholesale and retail operations into
independently operated affiliates, the report must indicate the PSC's reasons for not
making such a recommendation.
Definition of "effective competition"
Under current law, the PSC is allowed to suspend certain requirements
regarding telecommunications providers in order to establish a degree of regulation
that is less than the degree under current law. The PSC may suspend the
requirements if, after a hearing, the PSC makes certain determinations, including
determining that effective competition exists in a market for telecommunications
services and that the competition justifies a lesser degree of regulation. Current law
does not define "effective competition." This bill requires the PSC to promulgate
rules that provide such a definition.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB451, s. 1
1Section
1. 20.155 (1) (Ls) of the statutes is created to read:
SB451,9,52
20.155
(1) (Ls)
Telecommunications provider payments. All moneys received
3from payments by telecommunications providers under ss. 196.219 (3m) (c) and
4196.37 (2) for purposes determined by the commission under ss. 196.219 (3m) (c) and
5196.37 (2).
SB451, s. 2
6Section
2. 100.207 (3) (a) of the statutes is amended to read:
SB451,9,107
100.207
(3) (a) A person may not engage in negative option billing or negative
8enrollment of telecommunications services, including unbundled
9telecommunications services. A person may not bill a customer for
, or enroll a
10customer in, any telecommunications service that the customer did not affirmatively
1order unless that service is required to be provided by law, the federal
2communications commission
, or the public service commission. A customer's failure
3to refuse a person's proposal to provide a telecommunications service is not an
4affirmative request for that telecommunications service.
A customer's request to be
5enrolled in a particular telecommunications service is an affirmative request to be
6enrolled only in that particular telecommunications service.
SB451, s. 3
7Section
3. 100.207 (3) (d) of the statutes is created to read:
SB451,10,108
100.207
(3) (d) A person may not make a change in a customer's selection of a
9telecommunications service provider unless the customer affirmatively requests
10that the person take such action.
SB451, s. 4
11Section
4. 100.207 (3m) of the statutes is created to read:
SB451,10,1312
100.207
(3m) Requests for service. (a) A customer may affirmatively request
13a telecommunications service orally, in writing, or by electronic means.
SB451,10,1614
(b) Notwithstanding par. (a), a person may not provide a telecommunications
15service to a customer who orders the service by an electronic means that
16simultaneously activates that service.
SB451, s. 5
17Section
5. 100.207 (5) of the statutes is amended to read:
SB451,10,1918
100.207
(5) Territorial application.
Subsections (2) to (4) apply This
19subsection applies to any practice directed to any person in this state.
SB451, s. 6
20Section
6. 100.207 (6) (b) 1. of the statutes is amended to read:
SB451,11,1021
100.207
(6) (b) 1. The department of justice, after consulting with the
22department of agriculture, trade and consumer protection, or any district attorney
23upon informing the department of agriculture, trade and consumer protection, may
24commence an action in circuit court in the name of the state to restrain by temporary
25or permanent injunction any violation of this section. Injunctive relief may include
1an order directing telecommunications providers, as defined in s. 196.01 (8p), to
2discontinue telecommunications service provided to a person violating this section
3or ch. 196.
Temporary injunctive relief may include an order requiring that a person
4who provides telecommunications services deposit in an escrow account any
5payments that the provider has received or is expected to receive from customers as
6a result of practices that may violate this section or ch. 196. Before entry of final
7judgment, the court may make such orders or judgments as may be necessary to
8restore to any person any pecuniary loss suffered because of the acts or practices
9involved in the action if proof of these acts or practices is submitted to the satisfaction
10of the court.
SB451, s. 7
11Section
7. 100.207 (6) (c) of the statutes is amended to read:
SB451,11,1712
100.207
(6) (c) Any person who violates
subs. (2) to (4) this section shall be
13required to forfeit not less than $25 nor more than
$5,000 $10,000 for each offense.
14Each day of violation constitutes a separate offense. Forfeitures under this
15paragraph shall be enforced by the department of justice, after consulting with the
16department of agriculture, trade and consumer protection, or, upon informing the
17department, by the district attorney of the county where the violation occurs.
SB451, s. 8
18Section
8. 100.207 (6) (em) 1. of the statutes is amended to read:
SB451,11,2419
100.207
(6) (em) 1. Before preparing any proposed rule under
this section par.
20(e), the department shall form an advisory group to suggest recommendations
21regarding the content and scope of the proposed rule. The advisory group shall
22consist of one or more persons who may be affected by the proposed rule, a
23representative from the department of justice
, and a representative from the public
24service commission.
SB451, s. 9
25Section
9. 100.207 (6) (g) of the statutes is created to read:
SB451,12,4
1100.207
(6) (g) Nothing in this subsection precludes the department from
2seeking a remedy or penalty in accordance with the rules promulgated under sub.
3(7). Practices in violation of sub. (3) may also constitute a violation of the rules
4promulgated under sub. (7).
SB451, s. 10
5Section
10. 100.207 (7) of the statutes is created to read:
SB451,12,136
100.207
(7) Administration of federal communications commission rules. 7The department shall administer and enforce the federal communications
8commission's unauthorized carrier change rules and remedies under
47 CFR 64.1110 9to
64.1190 and shall notify the federal communications commission, in accordance
10with
47 CFR 64.1110 (a), of its intention to administer and enforce those rules and
11remedies. In addition to the rules promulgated under sub. (6) (e), the department
12shall promulgate rules that are consistent with the commission's unauthorized
13carrier change rules and remedies under
47 CFR 64.1110 to
64.1190.
SB451, s. 11
14Section
11. 196.01 (8) of the statutes is amended to read:
SB451,12,1915
196.01
(8) "Small telecommunications utility" means
, except as provided in s.
16196.204 (1r) (a) 5. and (3) (b), any telecommunications utility or a successor in
17interest of a telecommunications utility that provided landline local and access
18telecommunications service as of January 1, 1984, and that has less than 50,000
19access lines in use in this state.
SB451, s. 12
20Section
12. 196.025 (6) of the statutes is created to read:
SB451,12,2321
196.025
(6) (a) In this subsection, "intrastate telecommunications service
22provider" means any telecommunications provider that provides intrastate
23telecommunications service or Internet access service.
SB451,13,424
(b) The commission shall investigate competition among intrastate
25telecommunications service providers during the 5-year period after the effective
1date of this paragraph .... [revisor inserts date], and submit a report to the
2appropriate standing committees of the legislature under s. 13.172 (3) that assesses
3the relationship between the regulatory and competitive status of all intrastate
4telecommunications providers, including an assessment of all of the following:
SB451,13,65
1. The status of competition among intrastate telecommunications service
6providers, including all of the following:
SB451,13,87
a. The number of different intrastate telecommunications providers in
8different product and geographic markets in this state as compared to national data.
SB451,13,119
b. The prices of all telecommunications services offered by the different
10intrastate telecommunications service providers in this state as compared to
11national averages.
SB451,13,1312
c. The market power of the different intrastate telecommunications providers
13in this state as compared to national data.
SB451,13,1514
2. The differences in the level of regulation applicable to the different intrastate
15telecommunications service providers in this state.
SB451,13,1816
3. A comparison of the retail service quality credit plans offered by the different
17intrastate telecommunications service providers in this state and a comparison
18between such plans that are offered in this state and elsewhere in the nation.
SB451,13,2419
4. The barriers to effective competition, as defined in rules promulgated by the
20commission, in markets for telecommunications services offered by intrastate
21telecommunications providers, including the barriers to entry into different product
22and geographic markets, and including of whether the barriers are unreasonable
23and whether any barrier results from anticompetitive behavior of any intrastate
24telecommunications provider.
SB451,14,3
15. The total number of different types of complaints by residential customers
2to the commission or the department of agriculture, trade and consumer protection
3regarding each intrastate telecommunications provider.
SB451,14,74
6. For each intrastate telecommunications provider, of the total number of
5different types of complaints under subd. 1., the number of different types of
6complaints that are due to circumstances that are the fault of the intrastate
7telecommunications provider.
SB451,14,108
7. The availability, price, and quality of unbundled network elements,
9interconnection, and collocation provided by the different intrastate
10telecommunications providers.
SB451,14,1211
8. The effectiveness of the compliance plans established in the order under s.
12196.1995 (5) (a).
SB451,14,1413
9. Any other factor that the commission determines is relevant to competition
14among intrastate telecommunications providers.
SB451,14,2115
(c) The report under par. (b) shall include any proposals for legislation
16recommended by the commission, including any proposals for remedying
17anti-competitive behavior of intrastate telecommunications providers. If the
18proposals do not include recommendations for requiring intrastate
19telecommunications providers to structurally separate wholesale and retail
20operations into separate, independently operated affiliates, the report shall indicate
21the commission's reasons for not making such a recommendation.
SB451, s. 13
22Section
13. 196.195 (1) of the statutes is renumbered 196.195 (1r).
SB451, s. 14
23Section
14. 196.195 (1g) of the statutes is created to read:
SB451,14,2524
196.195
(1g) Definition. In this section, "effective competition" has the
25meaning given in rules promulgated by the commission.
SB451, s. 15
1Section
15. 196.196 (1) (c) 1. of the statutes is amended to read:
SB451,16,72
196.196
(1) (c) 1. A price-regulated telecommunications utility may not
3increase its rates for services under par. (a), except for basic message
4telecommunications service, for a period of 3 years after electing to become price
5regulated. Following the initial 3-year period for services under par. (a), except for
6basic message telecommunications service, and at any time for basic message
7telecommunications service, a price-regulated telecommunications utility may
8increase its rates for those services to the extent that the change in the revenue
9weighted price indices does not exceed 2 percentage points less than the most recent
10annual change in the gross domestic product price index, as published by the federal
11government. The commission shall, by rule, create a penalty mechanism for up to
12a one percentage point increase in the percentage offset for inadequate service
13provided by or insufficient investment made by a price-regulated
14telecommunications utility. The commission shall, by rule, create an incentive
15mechanism for up to a one percentage point decrease in the percentage offset to
16encourage infrastructure investment by the price-regulated telecommunications
17utility. For a telecommunications utility with more than 500,000 access lines in use
18in this state at the time of electing to become price regulated, the percentage offset
19to the change in the gross domestic product price index shall be 3 percentage points
20and, the penalty mechanism
shall be up to a 10 percentage point increase, and
the 21incentive mechanism shall be up to
a 2 percentage
points point decrease. No earlier
22than 6 years after September 1, 1994, and no more frequently than every 3 years
23thereafter, the commission may, following notice and an opportunity for hearing, by
24rule increase or decrease the gross domestic product price index percentage offset by
25a maximum of one percentage point in any 12-month period to reflect any statewide
1changes in the productivity experience of the telecommunications industry. The
2commission shall promulgate rules to identify the factors that the commission may
3consider in determining changes in the productivity experience of the
4telecommunications industry. If application of the price regulation index formula
5achieves a negative result, prices shall be reduced so that the cumulative price
6change for services under par. (a), including prior price reductions in these services,
7achieves the negative result.
SB451, s. 16
8Section
16. 196.196 (1) (em) of the statutes is created to read:
SB451,16,119
196.196
(1) (em) 1. In this paragraph, "small business rates" means rates for
10standard business access lines and usage by small businesses with no more than 3
11access lines.
SB451,17,212
2. Notwithstanding pars. (c), (d), and (e), the commission shall investigate
13whether to allow price-regulated telecommunications utilities to increase small
14business rates in geographic areas specified by the commission. The commission
15shall complete the investigation no later than the first day of the 13th month
16beginning after the effective date of this subdivision .... [revisor inserts date]. The
17commission may allow such an increase in a geographic area only if, as a result of the
18investigation, the commission determines that effective competition, as defined in
19rules promulgated by the commission, exists in the geographic area. If the
20commission makes such a determination, a price-regulated telecommunications
21utility may petition the commission to increase small business rates in the
22geographic area. If a price-regulated telecommunications utility includes with a
23petition a statement that, if the petition is granted, the utility agrees to allow
24customers with whom the utility has contracts for small business rates to terminate
25the contracts as provided in subd. 3., the commission shall grant the petition, except
1that the commission may not grant a petition until after the commission's order
2under s. 196.219 (3m) (b) goes into effect.
SB451,17,123
3. Notwithstanding any provision in a tariff filed under s. 196.194 (1), if the
4commission grants a petition filed by a price-regulated telecommunications utility
5under subd. 2., a customer of the utility may, no later than one year after the effective
6date of the commission's order granting the petition, terminate, without penalty, a
7contract with the utility for small business rates before the expiration of the contract
8if the customer terminates the contract for the purpose of entering into a new
9contract for small business rates with another telecommunications provider.
10Termination of a contract under this subdivision is effective when the
11price-regulated telecommunications utility receives oral or written notice from a
12customer.
SB451,17,2113
4. If the commission grants a petition filed by a price-regulated
14telecommunications utility under subd. 2., the utility shall give notice to its
15customers that are subject to small business rates that describes the small business
16rate increase approved by the commission and the right of customers to terminate
17contracts under subd. 3. The notice shall be published in a newspaper of general
18circulation in the affected geographic area within a reasonable time period after the
19commission grants the petition, and shall be included in or on the bill of each
20customer that is subject to small business rates in the billing first following the
21commission's granting of the petition.
SB451, s. 17
22Section
17. 196.196 (1) (g) 1. (intro.) of the statutes is amended to read:
SB451,18,623
196.196
(1) (g) 1. (intro.) Five years after a telecommunications utility elects
24to become a price-regulated telecommunications utility or, if subd. 4. applies, within
25the dates specified in that subdivision, the commission shall hold a hearing, and at
1any time thereafter, upon complaint or on the commission's own motion, the
2commission may hold a hearing, to determine whether it is in the public interest to
3suspend one or more of the provisions of this subsection
, except par. (em), as it applies
4to a price-regulated telecommunications utility or to approve an alternative
5regulatory method for that utility. In making a determination under this
6subdivision, the commission shall identify all of the following:
SB451, s. 18
7Section
18. 196.196 (3) (a) of the statutes is amended to read:
SB451,18,128
196.196
(3) (a) Except to the extent expressly permitted by this section and ss.
9196.19 (1m), 196.194, 196.195,
196.1995, 196.20 (1m), 196.204, 196.209
, and
10196.219, the commission may not have jurisdiction over the prices or terms and
11conditions for the offering of any other services, including new telecommunications
12services, offered by a price-regulated telecommunications utility.
SB451, s. 19
13Section
19. 196.196 (6) (title) of the statutes is created to read:
