Public Act 93-0005

SB885 Enrolled                       LRB093 07820 JLS 08009 b

    AN ACT concerning telecommunications.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section 5.  The Public Utilities Act is amended by adding
Sections 13-408 and 13-409 as follows:

    (220 ILCS 5/13-408 new)
    Sec.  13-408.  Unbundled  network  element  rates.   This
Section  applies  to  and  covers  certain  unbundled network
element rates  that  shall  be  charged  by  incumbent  local
exchange  carriers  that  are  subject to regulation under an
alternative regulation plan under Section  13-506.1  of  this
Act. The General Assembly finds and determines that it should
provide   direction   to  the  Illinois  Commerce  Commission
regarding the establishment of the  monthly  recurring  rates
that  such  incumbent  local  exchange  carriers shall charge
other  telecommunications  carriers  for   unbundled   loops,
whether provided on a standalone basis or in combination with
other unbundled network elements, in order to ensure (i) that
such  rates  are  consistent  with  the  requirements  of the
federal  Telecommunications  Act  of  1996,  the  regulations
promulgated thereunder, and subsection (g) of Section  13-801
of  this  Act,  and  (ii)  that such incumbent local exchange
carriers are able to recover the  efficient,  forward-looking
costs  of  creating,  operating,  and maintaining the network
outside  plant  infrastructure  capacity  and  switching  and
transmission  network  capacity  necessary  to  permit   such
incumbent  local  exchange  carriers  to meet in a timely and
adequate fashion the obligations imposed by Section 8-101  of
this Act.
    In  order  to  ensure recurring unbundled network element
rates  for  loops  that  accomplish  these  objectives,   the
Illinois  Commerce  Commission  shall set the recurring rates
affected  incumbent  local  exchange  carriers  receive   for
unbundled loops, whether provided on a standalone basis or in
combination   with   other  unbundled  network  elements,  in
accordance with the requirements delineated below.
    (a)  Fill factors. The General Assembly directs that  the
Illinois  Commerce  Commission shall employ fill factors (the
proportion of a facility or element  that  will  be  "filled"
with network usage) that represent a reasonable projection of
actual total usage of the elements in question, in accordance
with  applicable federal law. The General Assembly finds that
existing actual total usage of  the  elements  that  affected
incumbent  local exchange carriers are required to provide to
competing  local  exchange  carriers,  as  reflected  in  the
current actual fill factors for the elements in question,  is
the  most  reasonable  projection  of actual total usage. The
Commission,  therefore,  shall  employ  current  actual  fill
factors that reflect such existing actual total  usage  on  a
going forward basis in establishing cost based rates for such
unbundled network elements. In addition, the Commission shall
adjust  all  existing Commission-approved rates for unbundled
loops,  whether  provided  on  a  standalone  basis   or   in
combination  with  other unbundled network elements, that are
currently in effect to make such rates consistent  with  this
provision.
    (b)  Depreciation  rates.  The  General  Assembly further
directs that the Commission shall employ  depreciation  rates
that  are  forward-looking  and  based  on  economic lives as
reflected in the incumbent local exchange carrier's books  of
accounts  as  reported  to the investment community under the
regulations of the Securities and Exchange Commission. Use of
an accelerated depreciation mechanism shall  be  required  in
all  cases.  Use  of  a depreciation rate based on historical
rate-of-return regulation derived lives of the  elements  and
facilities  in question shall be prohibited. In addition, the
Commission  shall  adjust  all  existing  Commission-approved
rates for unbundled loops, whether provided on  a  standalone
basis   or   in  combination  with  other  unbundled  network
elements, that are currently in effect  to  make  such  rates
consistent with this provision.
    (c)  The rate adjustments required by subsections (a) and
(b)  of  this Section must be completed within 30 days of the
effective date of this Section. In the case of any  incumbent
local  exchange  carrier  that  is  subject to an alternative
regulation plan under  Section  13-506.1  at  the  time  this
Section  becomes effective, in making these rate adjustments,
the  Commission  shall  determine   the   specific   required
adjustments  with  respect  to  fill factors and depreciation
lives  by  employing  the  models  and  methodology  used  to
generate the proposed rates submitted by  such  an  incumbent
local  exchange carrier in ICC Docket 02-0864. The Commission
proceedings initiated to establish such adjusted rates  shall
be  deemed interconnection agreement arbitration and approval
proceedings under Sections 252(b)  and  (e)  of  the  federal
Telecommunications  Act  of 1996. Immediately upon conclusion
of such proceedings, all existing interconnection  agreements
in  this  State of affected incumbent local exchange carriers
shall  be  deemed  amended  to  contain  the  adjusted  rates
established in such  proceedings.  In  addition,  immediately
upon  conclusion  of such proceedings, all wholesale tariffs,
currently effective in  this  State,  of  affected  incumbent
local  exchange  carriers  shall be deemed amended to contain
the  adjusted  rates  established  in  such  proceedings.  In
accordance  with  these  provisions,  immediately  upon   the
establishment by the Commission of the adjusted rates covered
hereby,  each affected incumbent local exchange carrier shall
charge such adjusted rates, to the extent applicable, for all
of the network element products that are  provided  to  other
carriers,  whether  those  products  are  provided  under  an
interconnection  agreement or a tariff. The proceeding in ICC
Docket 02-0864 is hereby abated as of the effective  date  of
this amendatory Act of the 93rd General Assembly.
    (d)  Notwithstanding  anything  to the contrary contained
in Section 13-505.1 of this Act,  unbundled  network  element
rates  established  in accordance with the provisions of this
Section shall not require any increase in  any  retail  rates
for any telecommunications service.

    (220 ILCS 5/13-409 new)
    Sec.   13-409.  Application   of  Sec.  13-408  unbundled
network element rates.
    (a)  During the first 2  years  following  the  effective
date  of  Section  13-408,  for  the first 35,000 voice grade
equivalent access lines used  by  an  individual  carrier  to
provide  local  exchange  service  to  end users, the monthly
recurring rate for the unbundled network elements  associated
with  those lines and leased from an incumbent local exchange
carrier to which Section 13-408 applies shall  be  frozen  at
the  levels in effect immediately prior to the effective date
of Section 13-408.
    (b)  Thereafter, the  monthly  recurring  rates  for  all
unbundled  network  elements  provided by any incumbent local
exchange carrier to which Section 13-408 applies shall be the
rates established by the Commission in  accordance  with  the
provisions of Section 13-408.
    (c)  If,  as  of the effective date of Section 13-408 and
this Section, an individual telecommunications  carrier  uses
unbundled  network  elements leased from a specific incumbent
local exchange carrier to provide local exchange service over
more than 35,000 voice grade equivalent  access  lines,  that
carrier  must  designate  the  35,000  voice grade equivalent
access lines to which the provisions of subsections  (a)  and
(b) of this Section apply. If subsequent to such designation,
the  individual  carrier  loses  the  customer  served  by  a
designated  access  line,  and therefore no longer leases the
unbundled network elements associated  with  that  line,  the
individual  carrier may not designate a different access line
to substitute  for  the  lost  line.  All  unbundled  network
elements  leased  to  provide service over undesignated voice
grade equivalent access lines shall be subject  to  the  full
monthly  recurring  rates  established  by  the Commission in
accordance with the provisions of Section 13-408.
    (d)  If, as of the effective date  of  this  Section,  an
individual  carrier  uses  unbundled  network elements leased
from a specific  local  exchange  carrier  to  provide  local
exchange   service   over   fewer  than  35,000  voice  grade
equivalent access lines,  that  carrier  must  designate  the
access  lines  to which the provisions of subsections (a) and
(b) of this Section apply. If subsequent to such designation,
the  individual  carrier  loses  the  customer  served  by  a
designated access line, and therefore no  longer  leases  the
unbundled  network  elements  associated  with that line, the
individual carrier may not designate a different access  line
to   substitute   for   the   lost  line.  Subject  to  these
limitations,  subsequent  to  the  effective  date  of   this
Section,  such a carrier may designate additional voice grade
equivalent access lines to which it wishes the provisions  of
subsections  (a)  and (b) of this Section to apply, until the
total  designated  lines  equal  35,000.  If  a  subsequently
designated line is lost, the carrier will not be permitted to
designate a different line to substitute for that lost  line.
All unbundled network elements leased to provide service over
undesignated  voice  grade  equivalent  access lines shall be
subject to the full monthly recurring  rates  established  by
the  Commission  in accordance with the provisions of Section
13-408.
    (e)  For purposes of this Section, in determining when an
individual  telecommunications  carrier  has  reached  35,000
voice grade equivalent access lines, a specific carrier,  any
affiliate  of that carrier, any carrier serving as a sales or
marketing agent for that carrier, and any carrier  with  whom
that carrier has a cooperative sales or marketing arrangement
all shall be treated as a single individual carrier.
    (f)  Notwithstanding   any   other   provisions  of  this
Section, access lines provided to payphone service  providers
are  not  eligible for the freeze or discount provided for in
subsections (a) and (b) of  this  Section.  Accordingly,  the
provisions  of  subsections  (a)  and  (b) shall not apply to
unbundled network elements  that  are  leased  by  individual
telecommunications carriers to provide local exchange service
to payphone service providers.

    Section  99.  Effective  date. This Act takes effect upon
becoming law.