093_SB0885enr SB885 Enrolled LRB093 07820 JLS 08009 b 1 AN ACT concerning telecommunications. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Public Utilities Act is amended by adding 5 Sections 13-408 and 13-409 as follows: 6 (220 ILCS 5/13-408 new) 7 Sec. 13-408. Unbundled network element rates. This 8 Section applies to and covers certain unbundled network 9 element rates that shall be charged by incumbent local 10 exchange carriers that are subject to regulation under an 11 alternative regulation plan under Section 13-506.1 of this 12 Act. The General Assembly finds and determines that it should 13 provide direction to the Illinois Commerce Commission 14 regarding the establishment of the monthly recurring rates 15 that such incumbent local exchange carriers shall charge 16 other telecommunications carriers for unbundled loops, 17 whether provided on a standalone basis or in combination with 18 other unbundled network elements, in order to ensure (i) that 19 such rates are consistent with the requirements of the 20 federal Telecommunications Act of 1996, the regulations 21 promulgated thereunder, and subsection (g) of Section 13-801 22 of this Act, and (ii) that such incumbent local exchange 23 carriers are able to recover the efficient, forward-looking 24 costs of creating, operating, and maintaining the network 25 outside plant infrastructure capacity and switching and 26 transmission network capacity necessary to permit such 27 incumbent local exchange carriers to meet in a timely and 28 adequate fashion the obligations imposed by Section 8-101 of 29 this Act. 30 In order to ensure recurring unbundled network element 31 rates for loops that accomplish these objectives, the SB885 Enrolled -2- LRB093 07820 JLS 08009 b 1 Illinois Commerce Commission shall set the recurring rates 2 affected incumbent local exchange carriers receive for 3 unbundled loops, whether provided on a standalone basis or in 4 combination with other unbundled network elements, in 5 accordance with the requirements delineated below. 6 (a) Fill factors. The General Assembly directs that the 7 Illinois Commerce Commission shall employ fill factors (the 8 proportion of a facility or element that will be "filled" 9 with network usage) that represent a reasonable projection of 10 actual total usage of the elements in question, in accordance 11 with applicable federal law. The General Assembly finds that 12 existing actual total usage of the elements that affected 13 incumbent local exchange carriers are required to provide to 14 competing local exchange carriers, as reflected in the 15 current actual fill factors for the elements in question, is 16 the most reasonable projection of actual total usage. The 17 Commission, therefore, shall employ current actual fill 18 factors that reflect such existing actual total usage on a 19 going forward basis in establishing cost based rates for such 20 unbundled network elements. In addition, the Commission shall 21 adjust all existing Commission-approved rates for unbundled 22 loops, whether provided on a standalone basis or in 23 combination with other unbundled network elements, that are 24 currently in effect to make such rates consistent with this 25 provision. 26 (b) Depreciation rates. The General Assembly further 27 directs that the Commission shall employ depreciation rates 28 that are forward-looking and based on economic lives as 29 reflected in the incumbent local exchange carrier's books of 30 accounts as reported to the investment community under the 31 regulations of the Securities and Exchange Commission. Use of 32 an accelerated depreciation mechanism shall be required in 33 all cases. Use of a depreciation rate based on historical 34 rate-of-return regulation derived lives of the elements and SB885 Enrolled -3- LRB093 07820 JLS 08009 b 1 facilities in question shall be prohibited. In addition, the 2 Commission shall adjust all existing Commission-approved 3 rates for unbundled loops, whether provided on a standalone 4 basis or in combination with other unbundled network 5 elements, that are currently in effect to make such rates 6 consistent with this provision. 7 (c) The rate adjustments required by subsections (a) and 8 (b) of this Section must be completed within 30 days of the 9 effective date of this Section. In the case of any incumbent 10 local exchange carrier that is subject to an alternative 11 regulation plan under Section 13-506.1 at the time this 12 Section becomes effective, in making these rate adjustments, 13 the Commission shall determine the specific required 14 adjustments with respect to fill factors and depreciation 15 lives by employing the models and methodology used to 16 generate the proposed rates submitted by such an incumbent 17 local exchange carrier in ICC Docket 02-0864. The Commission 18 proceedings initiated to establish such adjusted rates shall 19 be deemed interconnection agreement arbitration and approval 20 proceedings under Sections 252(b) and (e) of the federal 21 Telecommunications Act of 1996. Immediately upon conclusion 22 of such proceedings, all existing interconnection agreements 23 in this State of affected incumbent local exchange carriers 24 shall be deemed amended to contain the adjusted rates 25 established in such proceedings. In addition, immediately 26 upon conclusion of such proceedings, all wholesale tariffs, 27 currently effective in this State, of affected incumbent 28 local exchange carriers shall be deemed amended to contain 29 the adjusted rates established in such proceedings. In 30 accordance with these provisions, immediately upon the 31 establishment by the Commission of the adjusted rates covered 32 hereby, each affected incumbent local exchange carrier shall 33 charge such adjusted rates, to the extent applicable, for all 34 of the network element products that are provided to other SB885 Enrolled -4- LRB093 07820 JLS 08009 b 1 carriers, whether those products are provided under an 2 interconnection agreement or a tariff. The proceeding in ICC 3 Docket 02-0864 is hereby abated as of the effective date of 4 this amendatory Act of the 93rd General Assembly. 5 (d) Notwithstanding anything to the contrary contained 6 in Section 13-505.1 of this Act, unbundled network element 7 rates established in accordance with the provisions of this 8 Section shall not require any increase in any retail rates 9 for any telecommunications service. 10 (220 ILCS 5/13-409 new) 11 Sec. 13-409. Application of Sec. 13-408 unbundled 12 network element rates. 13 (a) During the first 2 years following the effective 14 date of Section 13-408, for the first 35,000 voice grade 15 equivalent access lines used by an individual carrier to 16 provide local exchange service to end users, the monthly 17 recurring rate for the unbundled network elements associated 18 with those lines and leased from an incumbent local exchange 19 carrier to which Section 13-408 applies shall be frozen at 20 the levels in effect immediately prior to the effective date 21 of Section 13-408. 22 (b) Thereafter, the monthly recurring rates for all 23 unbundled network elements provided by any incumbent local 24 exchange carrier to which Section 13-408 applies shall be the 25 rates established by the Commission in accordance with the 26 provisions of Section 13-408. 27 (c) If, as of the effective date of Section 13-408 and 28 this Section, an individual telecommunications carrier uses 29 unbundled network elements leased from a specific incumbent 30 local exchange carrier to provide local exchange service over 31 more than 35,000 voice grade equivalent access lines, that 32 carrier must designate the 35,000 voice grade equivalent 33 access lines to which the provisions of subsections (a) and SB885 Enrolled -5- LRB093 07820 JLS 08009 b 1 (b) of this Section apply. If subsequent to such designation, 2 the individual carrier loses the customer served by a 3 designated access line, and therefore no longer leases the 4 unbundled network elements associated with that line, the 5 individual carrier may not designate a different access line 6 to substitute for the lost line. All unbundled network 7 elements leased to provide service over undesignated voice 8 grade equivalent access lines shall be subject to the full 9 monthly recurring rates established by the Commission in 10 accordance with the provisions of Section 13-408. 11 (d) If, as of the effective date of this Section, an 12 individual carrier uses unbundled network elements leased 13 from a specific local exchange carrier to provide local 14 exchange service over fewer than 35,000 voice grade 15 equivalent access lines, that carrier must designate the 16 access lines to which the provisions of subsections (a) and 17 (b) of this Section apply. If subsequent to such designation, 18 the individual carrier loses the customer served by a 19 designated access line, and therefore no longer leases the 20 unbundled network elements associated with that line, the 21 individual carrier may not designate a different access line 22 to substitute for the lost line. Subject to these 23 limitations, subsequent to the effective date of this 24 Section, such a carrier may designate additional voice grade 25 equivalent access lines to which it wishes the provisions of 26 subsections (a) and (b) of this Section to apply, until the 27 total designated lines equal 35,000. If a subsequently 28 designated line is lost, the carrier will not be permitted to 29 designate a different line to substitute for that lost line. 30 All unbundled network elements leased to provide service over 31 undesignated voice grade equivalent access lines shall be 32 subject to the full monthly recurring rates established by 33 the Commission in accordance with the provisions of Section 34 13-408. SB885 Enrolled -6- LRB093 07820 JLS 08009 b 1 (e) For purposes of this Section, in determining when an 2 individual telecommunications carrier has reached 35,000 3 voice grade equivalent access lines, a specific carrier, any 4 affiliate of that carrier, any carrier serving as a sales or 5 marketing agent for that carrier, and any carrier with whom 6 that carrier has a cooperative sales or marketing arrangement 7 all shall be treated as a single individual carrier. 8 (f) Notwithstanding any other provisions of this 9 Section, access lines provided to payphone service providers 10 are not eligible for the freeze or discount provided for in 11 subsections (a) and (b) of this Section. Accordingly, the 12 provisions of subsections (a) and (b) shall not apply to 13 unbundled network elements that are leased by individual 14 telecommunications carriers to provide local exchange service 15 to payphone service providers. 16 Section 99. Effective date. This Act takes effect upon 17 becoming law.