HB 531: "An Act relating to telecommunications."

00HOUSE BILL NO. 531 01 "An Act relating to telecommunications." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. SHORT TITLE. This Act may be known as the "Telecommunications 04 Regulatory Reform Act of 1996." 05 * Sec. 2. PURPOSE. (a) The legislature declares that it remains the policy of the state 06 to maintain universal availability of basic telecommunications service at affordable rates. To 07 the extent that it is in the public interest and consistent with maintaining universal service, it 08 is further the policy of this state to 09 (1) encourage competition in the telecommunications industry; and 10 (2) promote access by the public to advances in telecommunications 11 technology. 12 (b) It is the purpose of this Act to 13 (1) address issues reserved to the states in the federal Telecommunications Act 14 of 1996;

01 (2) provide a regulatory framework that will allow, where appropriate, an 02 orderly transition from a regulated telecommunications industry to a competitive market 03 environment; and 04 (3) clarify that the Alaska Public Utilities Commission has the authority to 05 implement alternative forms of regulation for providers of regulated telecommunications 06 services. 07 * Sec. 3. FINDINGS. The legislature finds that 08 (1) modern, affordable, efficient, and universally available telecommunications 09 service is essential to the people of the state; 10 (2) unreasonable barriers to enter any telecommunications market must be 11 removed; 12 (3) the Alaska Public Utilities Commission should facilitate and encourage the 13 development of efficient intrastate and interstate long distance competition; 14 (4) the commission should ensure that basic telecommunications services are 15 available to all persons at just, reasonable, and affordable rates, and that competition in the 16 provision of local exchange service does not jeopardize that goal; 17 (5) more efficient delivery of educational, health care, public safety, and other 18 public services will be enhanced by allowing telecommunications utilities regulatory flexibility 19 in service offerings; 20 (6) technological innovation, new services, reduced costs, and increased 21 consumer choice for telecommunications service, resulting from the lifting of outdated 22 regulations to allow telecommunications utilities to engage in fair competition, will enhance 23 the state's economic growth, create jobs, and increase productivity; 24 (7) the commission should oversee competition to ensure that the competition 25 is fair and that the benefits of competition are realized. 26 * Sec. 4. AS 42.05.123(c) is amended to read: 27  (c) It is the responsibility of the communications carrier section in its 28 participation in rate or tariff adjudication proceedings to advocate and provide support 29 for just and reasonable rates [THE LOWEST PRACTICABLE RATE] under the 30 circumstances. 31 * Sec. 5. AS 42.05.191 is amended to read:

01  Sec. 42.05.191. FORMAT OF ORDERS. Every formal order of the 02 commission shall be based upon the facts of record. Every order entered pursuant to 03 a hearing must state the commission's findings, the basis of its findings and 04 conclusions, and [TOGETHER WITH] its decision. In the case of a formal order 05 concerning a telecommunications utility, the commission's order must also include 06 conclusions of law. These orders shall be entered of record and a copy of them shall 07 be served on all parties of record in the proceeding. 08 * Sec. 6. AS 42.05.201 is amended to read: 09  Sec. 42.05.201. PUBLICATION OF REPORTS, ORDERS, DECISIONS, AND 10 REGULATIONS. All reports, orders, decisions, and regulations of the commission 11 shall be in writing. The commission shall apprise all affected utilities and interested 12 parties of these reports, orders, decisions, and regulations as they are issued and 13 adopted, and, when appropriate to do so, shall publish them in a manner that will 14 reasonably inform the public or the affected consumers of any public utility service. 15 In publishing orders concerning telecommunications utility cost and marketing 16 information, the commission shall comply with AS 42.05.671(e). The commission 17 may set charges for costs of printing or reproducing and furnishing copies of its 18 reports, orders, decisions, and regulations. The publication requirement, as it pertains 19 to regulations, does not supersede the requirements of AS 44.62 ( [THE] 20 Administrative Procedure Act [(AS 44.62]). 21 * Sec. 7. AS 42.05.221 is amended by adding a new subsection to read: 22  (g) Notwithstanding AS 42.05.411, the commission shall accept or reject an 23 application from a local telephone company to amend its certificate to extend its 24 service area to provide local telephone service to unserved areas within 45 days after 25 the telephone utility files a completed application with the commission. The 26 commission shall approve the application if it finds that the applicant is fit, willing, 27 and able. If the commission fails to act within the 45 days, the application is 28 considered to be granted. 29 * Sec. 8. AS 42.05 is amended by adding new sections to read: 30  Sec. 42.05.243. LOCAL EXCHANGE SERVICES. (a) The commission shall 31 designate a telecommunications carrier that is certificated to provide local exchange

01 service on the effective date of this section as an eligible telecommunications carrier. 02 The designation as an eligible carrier applies only to the area or areas that the local 03 exchange carrier has been certificated to serve on the effective date of this section. 04  (b) A telecommunications provider that is not designated as an eligible carrier 05 for an area under (a) of this section and that desires to be designated as an eligible 06 carrier under this section for the study area of a rural telephone company shall petition 07 the commission for designation as an additional eligible carrier for the study area. The 08 commission shall hold a hearing to determine whether the telecommunications utility's 09 petition is in the public interest. In determining whether the petition is in the public 10 interest, the commission shall 11  (1) consider whether granting the petitioner's proposal would cause an 12 increase in the cost of universal service or have an unfavorable effect on the 13 availability and affordability of telecommunications services; 14  (2) determine whether the existing rural telephone company is 15 providing universal service; and 16  (3) determine whether the petitioner's proposed services will adversely 17 affect the ability of an existing rural telephone company to construct and operate 18 telecommunications facilities. 19  (c) If the commission determines under (b) of this section that a 20 telecommunications utility's petition for designation as an additional 21 telecommunications carrier is in the public interest, the commission shall set a date on 22 which the designation becomes effective. In establishing the date, the commission 23 shall 24  (1) address the rural telephone company's reliance on universal service 25 funding to provide service to the study area; and 26  (2) provide the rural telephone company with the ability to recover 27 investments that the rural telephone company may have made in reliance on universal 28 service funding through accelerated cost recovery or other mechanisms. 29  Sec. 42.05.244. INTERCONNECTION; EXEMPTIONS, SUSPENSION, AND 30 MODIFICATIONS. (a) A rural telephone company certificated by the commission 31 to provide local exchange service on the effective date of this Act is exempt from the

01 interconnection obligations of 47 U.S.C. 251 to the extent that the company notifies 02 the commission as required by regulation that it intends to be exempt. However, the 03 commission may terminate the exemption if the rural telephone company receives a 04 bona fide request for telecommunications services or network elements. The 05 commission shall conduct a termination proceeding under (b) of this section and 47 06 U.S.C. 251(f)(1). 07  (b) In considering whether to terminate an exemption, the commission shall 08 determine whether the request 09  (1) is bona fide; 10  (2) would not impose an undue economic burden; 11  (3) is technically feasible; 12  (4) is consistent with the universal service principles and requirements 13 of 47 U.S.C. 254; in making a determination required by this paragraph, the 14 commission shall consider whether the interconnection requested would raise the cost 15 of universal service or have an adverse effect on the availability, quality, or 16 affordability of telecommunications services; 17  (5) would not cause a significant adverse effect on users of 18 telecommunications services generally; and 19  (6) is in the public interest. 20  (c) In a proceeding under (b) of this section, the burden of persuasion as to 21 (b)(1) - (4) of this section is on the party seeking interconnection. The burden of 22 persuasion as to (b)(5) and (6) of this section is on the rural telephone company to the 23 extent that the company desires to introduce evidence on these matters; however, the 24 company is not obligated to do so, and no adverse inference may be drawn from an 25 election not to offer evidence. 26  (d) A local exchange carrier certificated by the commission and meeting the 27 criteria of 47 U.S.C. 251(f)(2) may petition the commission for suspension or 28 modification of the application of the requirements of 47 U.S.C. 251(b) and (c) in 29 accordance with 47 U.S.C. 251(b)(2). 30 * Sec. 9. AS 42.05.301 is amended by adding a new subsection to read: 31  (b) It is not an unreasonable preference under this section for a

01 telecommunications utility to offer a new service on a trial basis to selected customers. 02 * Sec. 10. AS 42.05.306 is amended by adding a new subsection to read: 03  (b) A telecommunications utility may offer a discounted service or reduced 04 rate for telecommunications services provided to schools, universities, libraries, health 05 care facilities, museums, public broadcast stations, public safety facilities, and other 06 public institutional communications users. The commission may not require a 07 telecommunications utility to offer a discounted service or reduced rate or to incur 08 uncompensated costs or administrative burdens for services provided under this 09 subsection. 10 * Sec. 11. AS 42.05.361(a) is amended to read: 11  (a) Except as provided under AS 42.05.416(a), under [UNDER] regulations 12 the commission shall adopt, every public utility shall file with the commission, within 13 the time and in the form the commission designates, its complete tariff showing all 14 rates, including joint rates, tolls, rentals, and charges collected and all classifications, 15 rules, regulations, and terms and conditions under which it furnishes its services and 16 facilities to the general public, or to a regulated or municipally owned utility for resale 17 to the public, together with a copy of every special contract with customers that 18 [WHICH] in any way affects or relates to the serving utility's rates, tolls, charges, 19 rentals, classifications, services, or facilities. However, a telecommunications utility 20 is not required to file a copy of a special contract concerning a 21 telecommunications service subject to competition unless specifically requested to 22 do so by the commission. The public utility shall clearly print, or type, its complete 23 tariff and keep an up-to-date copy of it on file at its principal business office and at 24 a designated place in each community served. The tariffs shall be made available to, 25 and subject to inspection by, the general public on demand. 26 * Sec. 12. AS 42.05.381(a) is amended to read: 27  (a) All rates demanded or received by a public utility, or by any two or more 28 public utilities jointly, for a service furnished or to be furnished shall be just and 29 reasonable; however, a rate may not include an allowance for costs of political 30 contributions, or public relations except for reasonable amounts spent for 31  (1) energy conservation efforts;

01  (2) public information designed to promote more efficient use of the 02 utility's facilities or services or to protect the physical plant of the utility; 03  (3) informing shareholders and members of a cooperative of meetings 04 of the utility and encouraging attendance; [OR] 05  (4) emergency situations to the extent and under the circumstances 06 authorized by the commission for good cause shown; 07  (5) regulatory advocacy before the commission or the Federal 08 Communications Commission on regulatory issues affecting the state's local 09 telephone companies in the case of telecommunications utilities only; or 10  (6) marketing expenses incurred to inform customers of new service 11 offerings in the case of telecommunications utilities only. 12 * Sec. 13. AS 42.05.391 is amended by adding a new subsection to read: 13  (e) It is not an unreasonable preference or advantage for a telecommunications 14 utility to 15  (1) offer a service subject to competition at or above the incremental 16 cost of providing the service; 17  (2) offer a new service at or above the incremental cost of providing 18 the service; 19  (3) waive the nonrecurring charges for a nonessential or competitive 20 service as part of a promotional offering; 21  (4) offer a new service on a trial basis to selected customers. 22 * Sec. 14. AS 42.05.411(a) is amended to read: 23  (a) Except as provided in AS 42.05.416, a [A] public utility may not establish 24 or place in effect any new or revised rates, charges, rules, regulations, conditions of 25 service, or practices except after 45 days' notice to the commission and 30 days' 26 notice to the public. Notice shall be given to the commission by filing with the 27 commission and keeping open for public inspection the revised tariff provisions that 28 [WHICH] shall plainly indicate the changes to be made in the schedules then in force 29 and the time when the changes will go into effect. The commission shall prescribe 30 means by regulation whereby notice is given to the public before or no later than 15 31 days after the filing that is reasonably adequate to notify customers affected by the

01 filing. The commission, for good cause shown, may allow changes to take effect on 02 less than 45 days' notice to the commission or 30 days' notice to the public under 03 conditions the commission prescribes. 04 * Sec. 15. AS 42.05 is amended by adding new sections to read: 05  Sec. 42.05.416. TELECOMMUNICATIONS SERVICES SUBJECT TO 06 COMPETITION. (a) A telecommunications utility whose services are subject to 07 competition may not establish or put into effect an initial rate, charge, rule, regulation, 08 condition of service, or practice until the utility has given 30 days' notice to the 09 commission and 15 days' notice to the public. The commission may, for good cause 10 shown, allow charges to take effect after fewer than 30 days' notice to the commission 11 or 15 days' notice to the public. 12  (b) The rates charged for a tariffed telecommunications service that is subject 13 to competition may be changed if the utility gives at least 10 days' notice to the 14 commission. 15  (c) A telecommunications utility shall, within 10 days after the effective date 16 of a special contract concerning telecommunications services subject to competition, 17 file a notice with the commission describing the special contract. 18  (d) A new special contract concerning telecommunications services subject to 19 competition may not take effect until after the commission determines that the 20 telecommunications services that are the subject of the contract are subject to 21 competition. 22  Sec. 42.05.417. CROSS SUBSIDIES PROHIBITED. (a) To avoid cross 23 subsidization of competitive services by noncompetitive telecommunications services, 24 prices or rates charged for a competitive telecommunications service shall cover the 25 incremental cost for the provision of the service. In a proceeding held under this 26 section, the utility providing the service bears the burden of proving that the price 27 charged for a competitive telecommunications service covers its cost. 28  (b) Even if a telecommunications utility is exempt from some or all of the 29 sections in this chapter, the commission may review financial information of the 30 telecommunications utility relating to the provision of a telecommunications service 31 for the purpose of enforcing this section. Information provided to the commission

01 under this section is confidential and is not a public record under AS 09.25. 02  Sec. 42.05.418. REGULATION OF NONCOMPETITIVE SERVICES. (a) 03 Even if a telecommunications utility is exempt from some or all of the sections of this 04 chapter, the commission may regulate a telecommunications service that the 05 commission has not determined to be competitive. 06  (b) The commission shall review and approve an application if it finds, after 07 notice and hearing, that granting the application 08  (1) will not degrade the quality or availability of efficient 09 telecommunications services; 10  (2) will produce fair, just, and reasonable rates for telecommunications 11 services; and 12  (3) will result in the improvement of the telephone infrastructure in the 13 state. 14  (c) The commission shall issue a final order approving, modifying, or rejecting 15 an application made under this section within 60 days after its filing with the 16 commission. If the commission does not issue a final order within the 60-day period, 17 the application is considered to be approved as filed. 18  (d) If, during the commission's consideration of an application for regulation 19 under this section, the commission materially alters the plan as filed in the application, 20 the local exchange telecommunications utility that applied for regulation may notify 21 the commission in writing that it elects not to be rate or price regulated as approved 22 by the order. This notification may be filed at any time so long as it is filed before 23 the date 60 days after the final commission order is issued. If the utility notifies the 24 commission of an election to forego regulation under the application, the utility's rates 25 are then subject to regulation to the extent that they were subject to regulation before 26 the filing of the application. 27 * Sec. 16. AS 42.05.421(a) is amended to read: 28  (a) Except as provided in AS 42.05.426, when [WHEN] a tariff filing is 29 made containing a new or revised rate, classification, rule, regulation, practice, or 30 condition of service the commission may, either upon written complaint or upon its 31 own motion, after reasonable notice, conduct a hearing to determine the reasonableness

01 and propriety of the filing. Pending the hearing, the commission may, by order stating 02 the reasons for its action, suspend the operation of the tariff filing. For a tariff filing 03 that does not change the utility's revenue requirement or rate design, the suspension 04 may last for a period not longer than six months beyond the effective date established 05 in the tariff filing unless the commission extends the period for good cause. In the 06 case of a tariff filing of a telecommunications utility, whether or not the filing 07 changes the utility's revenue requirement or rate design, the commission may not 08 extend the period of suspension. For a tariff filing that changes the utility's revenue 09 requirement or rate design, the suspension may last, unless the commission extends the 10 period for good cause, for a period not longer than 11  (1) six months before an interim rate equal to the requested rate goes 12 into effect and not longer than 12 months before a permanent rate goes into effect if 13 the annual gross revenues of the utility making the filing are more than $3,000,000; 14 and 15  (2) 150 days before an interim rate equal to the requested new rate goes 16 into effect and not longer than one year before a permanent rate goes into effect if the 17 annual gross revenues of the utility making the filing are $3,000,000 or less. 18 * Sec. 17. AS 42.05 is amended by adding a new section to read: 19  Sec. 42.05.426. NEW OR COMPETITIVE TELECOMMUNICATIONS 20 SERVICES. (a) A telecommunications utility may ask the commission to determine 21 that a telecommunications service is a service subject to competition. The commission 22 shall make a determination and accept or reject a request that a service be treated as 23 subject to competition within 30 days after receipt of a filing making the request. If 24 the commission does not act within the 30 days, the request is considered to be 25 granted. 26  (b) If the commission finds that a service is subject to competition under (a) 27 of this section, the commission shall modify the regulatory requirements that apply to 28 the providers of comparable public telecommunications services in that market to 29 achieve parity of regulatory standards and requirements for all providers of 30 telecommunications services in the competitive market. 31  (c) Commission order changes to new telecommunications services or to

01 telecommunications services that are subject to competition may only take effect 02 prospectively. 03  (d) A telecommunications utility may file a request to offer a service that is 04 subject to competition as a deregulated service that is no longer subject to the 05 commission's jurisdiction. The commission shall adopt regulations governing the 06 filing requirements for a reclassification of a service from regulated to deregulated to 07 ensure that the costs and revenue are accounted for appropriately. The commission 08 shall review reclassification filings within 60 days after receipt of the filing and issue 09 findings that either accept or reject the filing. If the commission fails to act within the 10 60 days, the filing takes effect. A determination that a utility may offer a deregulated 11 service does not affect the utility's status as a regulated utility or an exempt utility 12 under AS 42.05.254. 13  (e) For a new service or a competitive service subject to competition, a just 14 and reasonable rate is a rate at or above the incremental cost of providing the service. 15 If the commission, after investigation and hearing, finds that a rate is below the 16 incremental cost of providing the service, it shall 17  (1) determine the incremental cost of providing the service and 18 establish it by order; and 19  (2) require the utility to show cause why it should not be subject to 20 AS 42.05.571 and 42.05.581 for each day that a customer received a service at a rate 21 below the incremental cost. 22  (f) If the commission fails to make its rate findings within six months after the 23 filing date, the rate is considered to be just and reasonable. 24 * Sec. 18. AS 42.05.441(a) is amended to read: 25  (a) In the case of a public utility other than a telecommunications utility, 26 and in the case of a telecommunications utility when the traditional form of 27 regulation is in effect, the [THE] commission may, after providing reasonable notice 28 and opportunity to be heard, ascertain and set the fair value of the whole or any part 29 of the property of a public utility, insofar as it is material to the exercise of the 30 jurisdiction of the commission. The commission may make revaluations from time to 31 time and ascertain the fair value of all new construction, extensions, and additions to

01 the property of a public utility. If, under this subsection, a public utility furnishes 02 more than one classification of utility service, the utility shall allocate the investment 03 and expenses associated with the property used and useful in furnishing service among 04 the utility services and it may not solely consider the utility's total investment and 05 expenses in fixing rates for a particular service. 06 * Sec. 19. AS 42.05.441 is amended by adding new subsections to read: 07  (d) The commission shall presume, subject to rebuttal, that, if property has 08 been included in rates for a telecommunications utility, it continues to be allowable for 09 rate making purposes. 10  (e) Property of a telecommunications utility is presumed to be "used and 11 useful" if its acquisition and installation arise out of 12  (1) reasonable technological or engineering designs that benefit 13 consumers, or are reasonably anticipated to benefit consumers in the future; 14  (2) implementation of prevailing national or industry engineering 15 standards; 16  (3) reasonable planning for future needs; or 17  (4) modernization of the public utility's network. 18 * Sec. 20. AS 42.05.471 is amended by adding a new subsection to read: 19  (c) The commission shall presume, subject to rebuttal, that the depreciation 20 rates and methodologies accepted by the Federal Communications Commission 21 establish a reasonable range of depreciation rates and methodologies for 22 telecommunications utilities. 23 * Sec. 21. AS 42.05.671 is amended by adding a new subsection to read: 24  (e) Cost and marketing information associated with new telecommunications 25 services or telecommunications services subject to competition is confidential and not 26 open to the public for inspection. The commission shall remove confidential 27 information from its publicly issued orders. The commission shall adopt regulations 28 to implement this subsection. 29 * Sec. 22. AS 42.05.800 is amended to read: 30  Sec. 42.05.800. FINDINGS. The legislature finds that 31  (1) modern, affordable, efficient, and universally available local and

01 long distance telephone service is essential to the people of the state; 02  (2) [FACILITIES BASED,] long distance telephone service should be 03 provided competitively wherever possible; 04  (3) technological advances, reduced costs, and increased consumer 05 choices for long distance telephone service, resulting from the adoption of an 06 appropriate competitive market structure, will enhance the state's economic 07 development; 08  (4) the benefits of competition in long distance telephone service should 09 be shared by consumers throughout the state; 10  (5) the commission should oversee competition in long distance 11 telephone service to ensure that the competition is fair to consumers and competitors; 12  (6) the commission should provide for competition in a timely manner 13 and should adopt regulations that eliminate inappropriate impediments to entry for 14 [LONG DISTANCE] carriers fit, willing, and able to provide service. 15 * Sec. 23. AS 42.05 is amended by adding a new section to read: 16  Sec. 42.05.805. DUTIES OF INTEREXCHANGE CARRIERS. (a) An 17 interexchange carrier shall interconnect directly or indirectly with the facilities and 18 equipment of other telecommunications carriers. 19  (b) An interexchange facility based carrier that has more than 25 percent of 20 the state message toll traffic as determined by the commission shall offer for resale 21 any intrastate telecommunications service that the carrier provides at retail to 22 subscribers who are not telecommunications carriers. The commission shall determine 23 the wholesale rate at which the intrastate telecommunications services shall be offered 24 by excluding from the retail rate charged to subscribers for the telecommunications 25 service requested the portion of the retail rate attributable to marketing, billing, 26 collection, and other costs that will not have to be paid by the interexchange carrier 27 in making a wholesale sale. An interexchange facility based carrier may not prohibit 28 or impose unreasonable or discriminatory conditions or limitations on the resale of 29 telecommunications services under this subsection. 30  (c) A telecommunications carrier that has more than 25 percent of the state 31 message toll traffic as determined by the commission may request an interexchange

01 facility based carrier to provide the requesting telecommunications carrier with 02 nondiscriminatory access to network elements so that the requesting carrier may 03 provide telecommunications service. The facility based carrier shall provide the access 04 on an unbundled basis at any technically feasible point at rates, terms, and conditions 05 that are just, reasonable, and nondiscriminatory and in a manner that allows the 06 requesting carrier to combine the elements in order to provide the telecommunications 07 services. 08  (d) An interexchange carrier that has more than 25 percent of the state 09 message toll traffic as determined by the commission shall provide 10  (1) at wholesale rates message toll and other information that resellers 11 may need to rate and process customer billings; 12  (2) access to right-of-way; 13  (3) reasonable public notice of changes that may affect the availability, 14 quality, or pricing of these services; 15  (4) for actual collocation of equipment necessary for interconnection 16 or access to unbundled network elements at the premises of the interexchange carrier; 17 however, the interexchange carrier may provide for virtual collocation if the 18 interexchange carrier demonstrates to the commission that actual collocation is not 19 practical for technical reasons or because of space limitations; the interexchange carrier 20 shall provide the collocation at rates, terms, and conditions that are just, reasonable, 21 and nondiscriminatory; 22  (5) nondiscriminatory access to operator services at wholesale rates; 23  (6) interconnection at any technically feasible point within the 24 interexchange carrier's network; 25  (7) interconnection and other services that are at least equal in quality 26 to those services provided by the interexchange carrier to itself or to a subsidiary, 27 affiliate, or other party to which the carrier provides interconnection. 28 * Sec. 24. AS 42.05.810 is amended by adding new subsections to read: 29  (d) For intrastate telecommunications services, a telecommunications utility 30 may designate the first point of switching where the utility elects to provide equal 31 access through a centralized equal access arrangement.

01  (e) A local exchange carrier may also apply to provide competitive long 02 distance service on the same basis as other applicants under this section. 03  (f) In this section, "centralized equal access arrangement" means an 04 arrangement in which communications traffic is routed to a centralized equal access 05 switch, thereby fostering competition among interexchange carriers. 06 * Sec. 25. AS 42.05.840 is amended to read: 07  Sec. 42.05.840. MECHANISMS TO PRESERVE AND ADVANCE 08 UNIVERSAL SERVICE [FUND]. The commission may establish a universal service 09 fund [OR OTHER MECHANISM TO BE USED] to ensure the provision of basic 10 local and long distance telephone service at reasonable rates throughout the state 11 [AND TO OTHERWISE PRESERVE UNIVERSAL SERVICE]. 12 * Sec. 26. AS 42.05.840 is amended by adding a new subsection to read: 13  (b) In this section, "basic telephone service" means local and long distance 14 telephone service of a quality consistent with commission regulations and standards. 15 * Sec. 27. AS 42.05.990 is amended by adding new paragraphs to read: 16  (9) "network element" means a facility or equipment used in the 17 provision of a telecommunications service; the term includes features, functions, and 18 capabilities that are provided by means of the facility or equipment, including 19 subscriber numbers, databases, signaling systems, and information sufficient for billing 20 and collection or used in the transmission, routing, or other provision of a 21 telecommunications service; 22  (10) "nontraditional regulation" means price caps, incentive regulation, 23 or other regulation that is not based on traditional regulation; 24  (11) "rural telephone company" means a local exchange carrier 25 operating entity to the extent that the entity 26  (A) provides common carrier service to any local exchange 27 carrier study area that does not include either 28  (i) an incorporated place of 10,000 inhabitants or more, 29 or any part of the incorporated place, based on the most recently 30 available population statistics of the Bureau of Census; or 31  (ii) any territory, incorporated or unincorporated,

01 included in an urbanized area; 02  (B) provides telephone exchange service, including exchange 03 access, to fewer than 50,000 access lines; 04  (C) provides telephone exchange service to any local exchange 05 carrier study area with fewer than 100,000 access lines; or 06  (D) has less than 15 percent of its access lines in communities 07 of more than 50,000; 08  (12) "service subject to competition" means a utility service for which 09 another entity has made available, or has the capacity to make available, a substitute 10 service to customers or a service that customers may supply for themselves; 11  (13) "traditional regulation" means rate base, rate of return regulation. 12 * Sec. 28. NONPREEMPTION. The amendments to AS 42.05 made by this Act are not 13 intended to preempt, abrogate, or otherwise affect any right, liability, or obligation arising 14 from a state or federal law regarding unfair business practices or anticompetitive activity.