HF 2778

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to telecommunications; requiring the 
  1.3             establishment of a telecommunications special master 
  1.4             in the office of administrative hearings; authorizing 
  1.5             the public utilities commission to order structural 
  1.6             separation of the wholesale and retail operations of a 
  1.7             large incumbent local exchange carrier for repeated 
  1.8             violations; increasing civil and administrative 
  1.9             penalties; amending Minnesota Statutes 2000, sections 
  1.10            237.01, subdivisions 2, 6, by adding subdivisions; 
  1.11            237.081, by adding a subdivision; 237.121; 237.295, 
  1.12            subdivision 5; 237.461, subdivision 3; 237.462, 
  1.13            subdivisions 1, 2, 3, 4; Minnesota Statutes 2001 
  1.14            Supplement, section 237.462, subdivision 6; proposing 
  1.15            coding for new law in Minnesota Statutes, chapter 237. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17                             ARTICLE 1 
  1.18                   TELECOMMUNICATIONS COMPETITION 
  1.19     Section 1.  Minnesota Statutes 2000, section 237.081, is 
  1.20  amended by adding a subdivision to read: 
  1.21     Subd. 1b.  [TELECOMMUNICATIONS SPECIAL MASTER.] (a) The 
  1.22  office of administrative hearings shall appoint an 
  1.23  administrative law judge to act as telecommunications special 
  1.24  master to preside over any competitive service issue 
  1.25  investigations referred to the special master under paragraph 
  1.26  (b). 
  1.27     (b) In order to expedite resolution of competitive service 
  1.28  issues, the commission may refer for investigation any matter 
  1.29  under subdivision 1 or 1a to the telecommunications special 
  1.30  master that involves an allegation of a violation of those 
  2.1   statutes, rules, or orders described in section 237.462, 
  2.2   subdivision 1.  In referring the matter to the special master, 
  2.3   the commission shall direct the special master to use either the 
  2.4   procedures for a contested case action under chapter 14 or the 
  2.5   procedures for an expedited proceeding under section 237.462, 
  2.6   subdivision 6.  
  2.7      Sec. 2.  Minnesota Statutes 2000, section 237.121, is 
  2.8   amended to read: 
  2.9      237.121 [PROHIBITED PRACTICES.] 
  2.10     (a) Subdivision 1.  [BY TELECOMMUNICATIONS SERVICE 
  2.11  PROVIDER, GENERALLY.] A telephone company or telecommunications 
  2.12  carrier service provider may not do any of the following with 
  2.13  respect to services regulated by the commission: 
  2.14     (1) fail to provide a service, product, or facility to an 
  2.15  end-use consumer in accordance with its applicable tariffs, 
  2.16  price lists, or contracts and with the commission's rules and 
  2.17  orders; or 
  2.18     (2) impede the development of competition in any 
  2.19  telecommunications service market by: 
  2.20     (i) refusing or delaying interconnections or providing 
  2.21  inferior connections to another telecommunications service 
  2.22  provider; 
  2.23     (ii) refusing or delaying access by any person to another 
  2.24  telecommunications service provider; 
  2.25     (iii) acting or failing to act in a manner that has a 
  2.26  substantial adverse effect on the ability of another 
  2.27  telecommunications service provider to provide service to its 
  2.28  customers; or 
  2.29     (iv) violating the terms of or delaying implementation of 
  2.30  an interconnection agreement entered into pursuant to section 
  2.31  252 of the federal Telecommunications Act of 1996, Public Law 
  2.32  Number 104-104, in a manner that unreasonably delays, increases 
  2.33  the cost, or impedes the availability of telecommunications 
  2.34  services to consumers. 
  2.35     Subd. 2.  [BY INCUMBENT LOCAL EXCHANGE CARRIER.] An 
  2.36  incumbent local exchange carrier may not do any of the following 
  3.1   with respect to services regulated by the commission: 
  3.2      (1) deny the request of another provider for information 
  3.3   regarding the technical design and features, geographic 
  3.4   coverage, and traffic capabilities of the incumbent's local 
  3.5   exchange network; 
  3.6      (2) upon request, fail to disclose in a timely and uniform 
  3.7   manner information necessary for the design of equipment and 
  3.8   services that will meet the specifications for interconnection; 
  3.9      (2) (3) intentionally impair the speed, quality, or 
  3.10  efficiency of services, products, or facilities offered to a 
  3.11  consumer under a tariff, contract, or price list; 
  3.12     (3) fail to provide a service, product, or facility to a 
  3.13  consumer other than a telephone company or telecommunications 
  3.14  carrier in accordance with its applicable tariffs, price lists, 
  3.15  or contracts and with the commission's rules and orders; 
  3.16     (4) refuse to provide a service, product, or facility to a 
  3.17  telephone company or telecommunications 
  3.18  carrier telecommunications service provider in accordance 
  3.19  with its the incumbent's applicable tariffs, price lists, or 
  3.20  contracts and with the commission's rules and orders; 
  3.21     (5) impose unreasonable or discriminatory restrictions on 
  3.22  the resale of its services, provided that: 
  3.23     (i) it may require that residential service may not be 
  3.24  resold as a different class of service; and 
  3.25     (ii) the commission may prohibit resale of services it has 
  3.26  approved for provision for not-for-profit entities at rates less 
  3.27  than those offered to the general public; or 
  3.28     (6) provide telephone telecommunications service to a 
  3.29  person acting as a telephone company or telecommunications 
  3.30  carrier service provider if the commission has ordered the 
  3.31  telephone company or telecommunications carrier to discontinue 
  3.32  service to be discontinued to that person.; 
  3.33     (7) delay access in connecting any telecommunications 
  3.34  service provider to the incumbent's local exchange network; 
  3.35     (8) fail to offer network elements that the commission or 
  3.36  the Federal Communications Commission has determined must be 
  4.1   offered on an unbundled basis to another telecommunications 
  4.2   service provider in a manner consistent with state or federal 
  4.3   law, rule, or order; or 
  4.4      (9) refuse or delay access to or provision of operation 
  4.5   support systems or other provisioning systems, or provide 
  4.6   inferior operation support systems or other provisioning 
  4.7   systems, to any telecommunications service provider. 
  4.8      (b) Subd. 3.  [SLAMMING.] A telephone company or 
  4.9   telecommunications carrier service provider may not violate a 
  4.10  provision of section 325F.693, with regard to any of the 
  4.11  services provided by the company or carrier. 
  4.12     Sec. 3.  [237.1611] [INCUMBENT LOCAL EXCHANGE CARRIER; 
  4.13  AFFILIATE REQUIREMENTS.] 
  4.14     An incumbent local exchange carrier providing local 
  4.15  telephone service to more than 250,000 local telephone service 
  4.16  subscribers in Minnesota may provide telecommunications 
  4.17  services, other than local telephone service, in the state, but 
  4.18  only through an affiliate.  The commission shall ensure that 
  4.19  there is a complete separation of accounts, functions, 
  4.20  information, operations, and personnel between the incumbent 
  4.21  carrier and any affiliate providing telecommunications services 
  4.22  in Minnesota. 
  4.23     Sec. 4.  [237.1615] [WHOLESALE SERVICE QUALITY STANDARDS.] 
  4.24     Subdivision 1.  [COMMISSION TO ADOPT STANDARDS.] The 
  4.25  commission shall adopt by order or rule wholesale service 
  4.26  quality standards that establish the minimum level of service 
  4.27  that an incumbent local exchange carrier with more than 250,000 
  4.28  local telephone service subscribers must provide to competitive 
  4.29  local exchange carriers that are wholesale customers of the 
  4.30  incumbent local exchange carrier (ILEC). 
  4.31     Subd. 2.  [PARITY REQUIRED.] At a minimum, an ILEC subject 
  4.32  to commission wholesale service quality standards shall provide, 
  4.33  on a nondiscriminatory basis, its wholesale customers with: 
  4.34     (1) service, network elements, and interconnection of at 
  4.35  least equivalent quality with the services, network elements, or 
  4.36  interconnection as the ILEC provides to itself or to any of its 
  5.1   subsidiaries or affiliates; and 
  5.2      (2) the same level of information regarding the incumbent's 
  5.3   networks and facilities as the ILEC provides to any of its 
  5.4   subsidiaries or affiliates. 
  5.5      Sec. 5.  Minnesota Statutes 2000, section 237.295, 
  5.6   subdivision 5, is amended to read: 
  5.7      Subd. 5.  [ADMINISTRATIVE HEARING COSTS; APPROPRIATION.] 
  5.8   Any amounts billed to the commission or the department by the 
  5.9   office of administrative hearings for contested case hearings 
  5.10  held pursuant to section 237.25, or any proceeding pursuant to 
  5.11  section 237.081, subdivision 1b, shall be assessed by the 
  5.12  commissioner or the department against the parties to the 
  5.13  proceeding.  The assessment shall be paid into the state 
  5.14  treasury within 30 days after a bill, which constitutes notice 
  5.15  of the assessment and demand for payment of it, has been mailed 
  5.16  to the parties.  Money received shall be credited to a special 
  5.17  account and is appropriated to the commissioner or the 
  5.18  department for payment to the office of administrative hearings. 
  5.19     Sec. 6.  Minnesota Statutes 2000, section 237.461, 
  5.20  subdivision 3, is amended to read: 
  5.21     Subd. 3.  [CIVIL PENALTY FOR LOCAL COMPETITION VIOLATIONS.] 
  5.22  Notwithstanding subdivision 2, a person who knowingly and 
  5.23  intentionally commits a violation described in section 237.462, 
  5.24  subdivision 1, clauses (1) to (4), shall forfeit and pay to the 
  5.25  state a penalty, in an amount to be determined by the court, of 
  5.26  at least $100 and not more than $55,000 $100,000 for each day of 
  5.27  each violation.  In determining the amount of the penalty under 
  5.28  this subdivision, the court shall consider the factors in 
  5.29  section 237.462, subdivision 2, paragraph (b). 
  5.30     Sec. 7.  Minnesota Statutes 2000, section 237.462, 
  5.31  subdivision 1, is amended to read: 
  5.32     Subdivision 1.  [AUTHORITY TO ISSUE PENALTY ORDERS.] After 
  5.33  a proceeding under section 237.081 or subdivision 6, the 
  5.34  commission may issue an order administratively assessing 
  5.35  monetary penalties for knowing and intentional violations of: 
  5.36     (1) sections 237.09, 237.121, and 237.16 and any rules 
  6.1   adopted under those sections; 
  6.2      (2) any standards, limitations, or conditions established 
  6.3   in a commission order pursuant to sections 237.09, 237.121, and 
  6.4   237.16, including any wholesale service quality standards 
  6.5   established by the commission under section 237.1615 or other 
  6.6   commission authority; 
  6.7      (3) an approved interconnection agreement if the violation 
  6.8   is material; and 
  6.9      (4) any duty or obligation of a telephone company, a 
  6.10  telecommunications carrier, or a telecommunications service 
  6.11  provider imposed upon such telephone company, telecommunications 
  6.12  carrier, or telecommunications the provider by section 251, 
  6.13  paragraph (a), (b), or (c) of the Telecommunications Act of 
  6.14  1996, Public Law Number 104-104, that relates to service 
  6.15  provided in the state.  The penalty order must be issued as 
  6.16  provided in this section. 
  6.17     Sec. 8.  Minnesota Statutes 2000, section 237.462, 
  6.18  subdivision 2, is amended to read: 
  6.19     Subd. 2.  [AMOUNT OF PENALTY; CONSIDERATIONS.] (a) The 
  6.20  commission may issue an order assessing a penalty of between 
  6.21  $100 and $10,000 $25,000 per day for each violation.  
  6.22     (b) In determining the amount of a penalty, the commission 
  6.23  shall consider: 
  6.24     (1) the willfulness or intent of the violation; 
  6.25     (2) the gravity of the violation, including the harm to 
  6.26  customers or competitors; 
  6.27     (3) the history of past violations, including the gravity 
  6.28  of past violations, similarity of previous violations to the 
  6.29  current violation to be penalized, number of previous 
  6.30  violations, the response of the person to the most recent 
  6.31  previous violation identified, and the time lapsed since the 
  6.32  last violation; 
  6.33     (4) the number of violations; 
  6.34     (5) the economic benefit gained by the person committing 
  6.35  the violation; 
  6.36     (6) any corrective action taken or planned by the person 
  7.1   committing the violation; 
  7.2      (7) the annual revenue and assets of the company committing 
  7.3   the violation, including the assets and revenue of any 
  7.4   affiliates that have 50 percent or more common ownership or that 
  7.5   own more than 50 percent of the company; 
  7.6      (8) the financial ability of the company, including any 
  7.7   affiliates that have 50 percent or more common ownership or that 
  7.8   own more than 50 percent of the company, to pay the penalty; and 
  7.9      (9) other factors that justice may require, as determined 
  7.10  by the commission.  The commission shall specifically identify 
  7.11  any additional factors in the commission's order. 
  7.12     Sec. 9.  Minnesota Statutes 2000, section 237.462, 
  7.13  subdivision 3, is amended to read: 
  7.14     Subd. 3.  [BURDEN OF PROOF.] (a) The commission may not 
  7.15  shall assess a penalty under this section unless if the record 
  7.16  in the proceeding establishes by a preponderance of the evidence 
  7.17  that the penalty is justified based on the factors identified in 
  7.18  subdivision 2. 
  7.19     (b) To establish a knowing and intentional violation under 
  7.20  this section or section 237.461, the commission or court must 
  7.21  find by a preponderance of the evidence that the 
  7.22  telecommunications service provider was aware of the action or 
  7.23  actions resulting in the violation.  
  7.24     Sec. 10.  Minnesota Statutes 2000, section 237.462, 
  7.25  subdivision 4, is amended to read: 
  7.26     Subd. 4.  [CONTENTS OF ORDER.] An order assessing an 
  7.27  administrative penalty under this section shall include: 
  7.28     (1) a concise statement of the facts alleged to constitute 
  7.29  a violation; 
  7.30     (2) a reference to the section of the statute, rule, or 
  7.31  order that has been violated; 
  7.32     (3) a statement of the amount of the administrative penalty 
  7.33  to be imposed and the factors upon which the penalty is based; 
  7.34  and 
  7.35     (4) a statement of the person's right to review of the 
  7.36  order; and 
  8.1      (5) any additional actions required by the commission to 
  8.2   ensure the telecommunications service provider does not repeat 
  8.3   the violation. 
  8.4      Sec. 11.  Minnesota Statutes 2001 Supplement, section 
  8.5   237.462, subdivision 6, is amended to read: 
  8.6      Subd. 6.  [EXPEDITED PROCEEDING.] (a) The commission may 
  8.7   order an expedited proceeding under section 237.61 and this 
  8.8   subdivision, in lieu of a contested case under chapter 14, to 
  8.9   develop an evidentiary record in any proceeding that involves 
  8.10  contested issues of material fact either upon request of a party 
  8.11  or upon the commission's own motion if the complaint alleges a 
  8.12  violation described in subdivision 1, clauses (1) to (4).  The 
  8.13  commission may order an expedited proceeding under this 
  8.14  subdivision if the commission finds an expedited proceeding is 
  8.15  in the public interest, regardless of whether all parties agree 
  8.16  to the expedited proceeding.  In determining whether to grant an 
  8.17  expedited proceeding, the commission may consider any evidence 
  8.18  of impairment of the provision of telecommunications service to 
  8.19  subscribers in the state or impairment of the provision of any 
  8.20  service or network element subject to the jurisdiction of the 
  8.21  commission.  If the commission orders an expedited proceeding, 
  8.22  it may either conduct the proceeding itself or request the 
  8.23  telecommunications special master to conduct the proceeding 
  8.24  pursuant to section 237.081, subdivision 1b.  
  8.25     (b) Any request for an expedited proceeding under this 
  8.26  subdivision must be noted in the title of the first filing by a 
  8.27  party.  The filing shall also state the specific circumstances 
  8.28  that the party believes warrant an expedited proceeding under 
  8.29  this subdivision.  
  8.30     (c) A complaint requesting an expedited proceeding, unless 
  8.31  filed by the department or the attorney general, must set forth 
  8.32  the actions and the dates of the actions taken by the party 
  8.33  filing the complaint to attempt to resolve the alleged 
  8.34  violations with the party against whom the complaint is filed, 
  8.35  including any requests that the party against whom the complaint 
  8.36  is filed correct the conduct giving rise to the violations 
  9.1   alleged in the complaint.  If no such actions were taken by the 
  9.2   complainant, the complaint shall set forth the reasons why no 
  9.3   such actions were taken.  The commission may order an expedited 
  9.4   proceeding even if the filing complaint fails to meet this 
  9.5   requirement if the commission determines that it would be in the 
  9.6   public interest to go forward with the expedited proceeding 
  9.7   without information in the complaint on attempts to resolve the 
  9.8   dispute. 
  9.9      (d) The complaining party shall serve the complaint along 
  9.10  with any written discovery requests by hand delivery and 
  9.11  facsimile on the party against whom the complaint is filed, the 
  9.12  department, and the office of the attorney general on the same 
  9.13  day the complaint is filed with the commission. 
  9.14     (e) The party responding to a complaint that includes a 
  9.15  request for an expedited proceeding under this subdivision shall 
  9.16  file an answer within 15 days after receiving the complaint.  
  9.17  The responding party shall state in the answer the party's 
  9.18  position on the request for an expedited proceeding.  The 
  9.19  responding party shall serve with the answer any objections to 
  9.20  any written discovery requests as well as any written discovery 
  9.21  requests the responding party wishes to serve on the complaining 
  9.22  party.  Except for stating any objections, the responding party 
  9.23  is not required to answer any written discovery requests under 
  9.24  this subdivision until a time established at a prehearing 
  9.25  conference.  The responding party shall serve a copy of the 
  9.26  answer and any discovery requests and objections on the 
  9.27  complaining party, the department, and office of the attorney 
  9.28  general by hand delivery and facsimile on the same day as the 
  9.29  answer is filed with the commission. 
  9.30     (f) Within 15 days of receiving the answer to a complaint 
  9.31  in a proceeding in which a party has requested an expedited 
  9.32  hearing, the commission shall determine whether the filing 
  9.33  warrants an expedited proceeding.  If the commission decides to 
  9.34  grant a request by a party or if the commission orders an 
  9.35  expedited proceeding on its own motion, the commission or 
  9.36  special master shall conduct within seven days of the decision a 
 10.1   prehearing conference to schedule the evidentiary hearing.  
 10.2   During the prehearing conference, the commission or special 
 10.3   master shall establish a discovery schedule that requires all 
 10.4   discovery to be completed no later than three days before the 
 10.5   start of the hearing.  An evidentiary hearing under this 
 10.6   subdivision must commence no later than 45 days after the 
 10.7   commission's decision to order an expedited proceeding.  If the 
 10.8   commission is to conduct the expedited proceeding, a quorum of 
 10.9   the commission shall preside at any evidentiary hearing under 
 10.10  this subdivision unless all the parties to the proceeding agree 
 10.11  otherwise.  
 10.12     (g) All pleadings submitted under this subdivision must be 
 10.13  verified and all oral statements of fact made in a hearing or 
 10.14  deposition under this subdivision must be made under oath or 
 10.15  affirmation. 
 10.16     (h) If the commission conducts the expedited proceeding, 
 10.17  the commission shall issue a written decision and final order on 
 10.18  the complaint within 15 days after the close of the evidentiary 
 10.19  hearing under this subdivision.  On the day of issuance, the 
 10.20  commission shall notify the parties by facsimile that a final 
 10.21  order has been issued and shall provide each party with a copy 
 10.22  of the final order. 
 10.23     (i) If the proceeding is conducted by the 
 10.24  telecommunications special master, the special master shall 
 10.25  present a copy of its proposed decision on the complaint, 
 10.26  including any recommended penalty, in writing to the commission 
 10.27  and the parties, within 15 days after the close of the 
 10.28  evidentiary hearing under this subdivision.  The commission then 
 10.29  has ten days to review the proposed decision of the special 
 10.30  master and to decide whether the commission should consider the 
 10.31  proposed decision.  Unless a majority of the commissioners 
 10.32  decide to consider the proposed decision of the special master 
 10.33  within that period, the special master's proposed decision must 
 10.34  stand as the final decision of the commission on the matter and 
 10.35  the commission shall issue a final order to that affect.  If the 
 10.36  commission chooses to consider the proposed decision, the 
 11.1   commission shall issue its final decision on the complaint 
 11.2   within 30 days.  The commission shall adopt the proposed 
 11.3   decision unless it determines that the proposed decision is 
 11.4   arbitrary and capricious or contrary to law.  
 11.5      (j) The commission may extend any time periods under this 
 11.6   subdivision if all parties to the proceeding agree to the 
 11.7   extension or if the commission finds the extension is necessary 
 11.8   to ensure a just resolution of the complaint. 
 11.9      (j) (k) Except as otherwise provided in this subdivision, 
 11.10  an expedited proceeding under this subdivision shall be governed 
 11.11  by the following procedural rules: 
 11.12     (1) the parties shall have the discovery rights provided in 
 11.13  Minnesota Rules, parts 1400.6700 to 1400.7000; 
 11.14     (2) the parties shall have the right to cross-examine 
 11.15  witnesses as provided in section 14.60, subdivision 3; 
 11.16     (3) the admissibility of evidence and development of record 
 11.17  for decision shall be governed by section 14.60 and Minnesota 
 11.18  Rules, part 1400.7300; and 
 11.19     (4) the commission or special master may apply other 
 11.20  procedures or standards included in the rules of the office of 
 11.21  administrative hearings, as necessary to ensure the fair and 
 11.22  expeditious resolution of disputes under this section. 
 11.23     Sec. 12.  [237.463] [STRUCTURAL SEPARATION.] 
 11.24     Subdivision 1.  [DEFINITIONS.] The terms used in this 
 11.25  section have the meanings given them in this subdivision. 
 11.26     (a) "Large incumbent carrier" means an incumbent local 
 11.27  exchange carrier with over 250,000 local telephone service 
 11.28  subscribers in Minnesota. 
 11.29     (b) "Retail affiliate" means a local telephone service 
 11.30  provider created by the structural separation of the incumbent 
 11.31  local exchange carrier to provide retail local telephone service.
 11.32     (c) "Retail operations" means the provision of 
 11.33  telecommunication services to end users. 
 11.34     (d) "Wholesale affiliate" means a wholesale local telephone 
 11.35  service provider created by the structural separation of the 
 11.36  incumbent local exchange carrier to own and operate all network 
 12.1   facilities of the incumbent local exchange carrier as it existed 
 12.2   before the effective date of structural separation. 
 12.3      (e) "Wholesale operations" means the provision to other 
 12.4   telecommunications service providers of facilities and services 
 12.5   that become components, elements, parts, or segments of the 
 12.6   retail operations of those other providers, and includes without 
 12.7   limitation the provision of interconnection, access, unbundled 
 12.8   network elements alone or in combination, or resale services. 
 12.9      Subd. 2.  [MANDATORY SEPARATION.] (a) The commission shall 
 12.10  order a large incumbent carrier to separate its wholesale and 
 12.11  retail operations as described in subdivisions 4 through 6, if 
 12.12  it finds that: 
 12.13     (1) the large incumbent carrier has engaged in a pattern of 
 12.14  anticompetitive or discriminatory conduct, or has otherwise 
 12.15  engaged in persistent behavior that violates any provision 
 12.16  described in section 237.462, subdivision 1, clauses (1) through 
 12.17  (4); 
 12.18     (2) the conduct described in clause (1) is an unreasonable 
 12.19  barrier to the development of an effectively competitive retail 
 12.20  local telephone service market; and 
 12.21     (3) the penalties imposed under section 237.461 or 237.462 
 12.22  were insufficient to deter the large incumbent carrier from 
 12.23  conduct described in clause (1).  
 12.24     (b) If the commissioner finds that this degree of 
 12.25  separation would be insufficient to deter future misconduct by 
 12.26  the carrier, the commission may order the carrier to divest 
 12.27  itself of some or all of its wholesale operations.  The 
 12.28  resulting wholesale service provider would be operated according 
 12.29  to subdivision 6, except that the wholesale service provider 
 12.30  would not be an affiliate of the large incumbent carrier.  
 12.31     Subd. 3.  [VOLUNTARY SEPARATION.] The commission, by order, 
 12.32  may approve, or approve as modified, the voluntary structural 
 12.33  separation plan of any incumbent local exchange carrier if the 
 12.34  commission finds the plan to be consistent with the requirements 
 12.35  of subdivisions 4 through 6. 
 12.36     Subd. 4.  [GENERAL REQUIREMENTS.] (a) Upon issuance of a 
 13.1   commission order under subdivision 2 or 3, an incumbent local 
 13.2   exchange carrier shall structurally separate its retail 
 13.3   operations from its wholesale operations by creating a retail 
 13.4   affiliate and a wholesale affiliate consistent with this 
 13.5   subdivision and subdivisions 5 and 6.  All transactions and 
 13.6   agreements between the retail affiliate and the wholesale 
 13.7   affiliate: 
 13.8      (1) must be negotiated at arm's length; 
 13.9      (2) must be reduced to writing; 
 13.10     (3) must be available for public inspection; and 
 13.11     (4) do not take effect until approved by the commission. 
 13.12     (b) In addition, the retail and wholesale affiliate: 
 13.13     (1) shall maintain separate books, records, and accounts; 
 13.14     (2) must have separate officers, directors, and employees; 
 13.15     (3) shall operate in separate office locations, subject to 
 13.16  an appropriate collocation agreement or agreements approved by 
 13.17  the commission pursuant to this section; and 
 13.18     (4) shall not discriminate in favor of the other. 
 13.19     Subd. 5.  [RETAIL AFFILIATE REQUIREMENTS.] A structurally 
 13.20  separated retail affiliate: 
 13.21     (1) shall operate and be regulated as a competitive local 
 13.22  exchange carrier, to the extent the commission finds this 
 13.23  consistent with the public interest; and 
 13.24     (2) shall not own or control, jointly with the wholesale 
 13.25  affiliate or otherwise, any of the network facilities of the 
 13.26  incumbent local exchange carrier or the land, buildings, poles, 
 13.27  conduits, or rights-of-way on or in which the network facilities 
 13.28  are located. 
 13.29     Subd. 6.  [WHOLESALE AFFILIATE REQUIREMENTS.] A 
 13.30  structurally separated wholesale affiliate: 
 13.31     (1) shall own and operate all network facilities of the 
 13.32  incumbent local exchange carrier as it existed before the 
 13.33  effective date of the structural separation order; 
 13.34     (2) is subject to rate of return regulation and is 
 13.35  prohibited from implementing or operating under an alternative 
 13.36  form of regulation under sections 237.76 to 237.774; 
 14.1      (3) shall provide adequate service at reasonable rates and 
 14.2   in accordance with any terms and conditions established by the 
 14.3   commission; 
 14.4      (4) shall offer bundled and unbundled wholesale services; 
 14.5      (5) shall make all products, services, and service 
 14.6   functions, including network elements, facilities, interfaces, 
 14.7   and systems, available to each competitive local exchange 
 14.8   carrier at the prices, terms, and conditions at which they are 
 14.9   available to the retail affiliate; 
 14.10     (6) may make all products, services, and service functions 
 14.11  available to an affiliated or unaffiliated competitive local 
 14.12  exchange carrier only through a tariff or an interconnection 
 14.13  agreement approved by the commission; 
 14.14     (7) is prohibited from providing retail service to 
 14.15  customers in Minnesota; and 
 14.16     (8) shall operate completely independently from the retail 
 14.17  affiliate. 
 14.18     Subd. 7.  [IMPLEMENTATION AND ENFORCEMENT PROCEEDINGS.] The 
 14.19  commission shall adopt procedures for reviewing transactions 
 14.20  between the retail affiliate and the wholesale affiliate; 
 14.21  enforcement measures for violations under this section, 
 14.22  including auditing requirements; and any other rule, 
 14.23  requirement, or order necessary or appropriate for implementing 
 14.24  this section.  In addition, the commission shall, by order or 
 14.25  rule, establish, monitor, enforce, and update standards of 
 14.26  conduct in accordance with this section, governing the 
 14.27  relationship between the retail affiliate and the wholesale 
 14.28  affiliate.  In establishing these standards of conduct, the 
 14.29  commission shall provide for an informal dispute resolution 
 14.30  procedure and a procedure for monitoring and enforcing 
 14.31  compliance with the standards of conduct, together with a system 
 14.32  of penalties for noncompliance, consistent with existing 
 14.33  commission rules.  In adopting standards of conduct under this 
 14.34  section, the commission may not prohibit the retail and 
 14.35  wholesale operations of an incumbent local exchange carrier from 
 14.36  using or sharing similar corporate names, trademarks, trade 
 15.1   dress, or service marks. 
 15.2                              ARTICLE 2 
 15.3                             DEFINITIONS 
 15.4      Section 1.  Minnesota Statutes 2000, section 237.01, 
 15.5   subdivision 2, is amended to read: 
 15.6      Subd. 2.  [TELEPHONE COMPANY.] (a) "Telephone company," 
 15.7   means and applies to any person, firm, association or any 
 15.8   corporation, private or municipal, owning or operating any 
 15.9   telephone line or telephone exchange for hire, wholly or partly 
 15.10  within this state, or furnishing any telephone service to the 
 15.11  public an incumbent local exchange carrier. 
 15.12     (b) A "telephone company" does not include a radio common 
 15.13  carrier as defined in subdivision 4.  A telephone company which 
 15.14  also conforms with the definition of a radio common carrier is 
 15.15  subject to regulation as a telephone company.  However, none of 
 15.16  chapter 237 applies to telephone company activities which 
 15.17  conform to the definition of a radio common carrier. 
 15.18     (c) A "telephone company" does not include a 
 15.19  telecommunications carrier as defined in subdivision 6, except 
 15.20  that a telecommunications carrier is a telephone company for the 
 15.21  purposes of section 222.36.  A telephone company is not subject 
 15.22  to section 237.74. 
 15.23     Sec. 2.  Minnesota Statutes 2000, section 237.01, 
 15.24  subdivision 6, is amended to read: 
 15.25     Subd. 6.  [TELECOMMUNICATIONS CARRIER.] "Telecommunications 
 15.26  carrier" means a person, firm, association, or corporation 
 15.27  authorized to furnish one or more of the following telephone 
 15.28  services to the public, but not otherwise authorized to furnish 
 15.29  local exchange service:  (1) interexchange telephone service; 
 15.30  (2) local telephone service pursuant to a certificate granted 
 15.31  under the authority of section 237.16, subdivision 4, before 
 15.32  August 1, 1995; or (3) local service pursuant to a certificate 
 15.33  granted under section 237.16, for the first time after August 1, 
 15.34  1995, except if granted to a successor to a telephone company 
 15.35  otherwise authorized to furnish local exchange service 
 15.36  competitive local exchange carrier or long distance service 
 16.1   provider.  Telecommunications carrier does not include entities 
 16.2   that derive more than 50 percent of their revenues from operator 
 16.3   services provided to transient locations such as hotels, motels, 
 16.4   and hospitals.  In addition, telecommunications carrier does not 
 16.5   include entities that provide centralized equal access services. 
 16.6      Sec. 3.  Minnesota Statutes 2000, section 237.01, is 
 16.7   amended by adding a subdivision to read: 
 16.8      Subd. 7.  [AFFILIATE.] "Affiliate" means an individual or 
 16.9   corporate person or other entity, however organized, that 
 16.10  directly or indirectly owns or controls, is owned or controlled 
 16.11  by, or is under common ownership or control with another person 
 16.12  or entity. 
 16.13     Sec. 4.  Minnesota Statutes 2000, section 237.01, is 
 16.14  amended by adding a subdivision to read: 
 16.15     Subd. 8.  [BASIC LOCAL TELEPHONE SERVICE.] "Basic local 
 16.16  telephone service" means: 
 16.17     (1) single party voice-grade service and touch-tone 
 16.18  capability; 
 16.19     (2) 911 or enhanced 911 access; 
 16.20     (3) 1 + intraLATA and interLATA presubscription and 
 16.21  code-specific equal access to interexchange carriers subscribing 
 16.22  to its switched access service; 
 16.23     (4) access to directory assistance, directory listings, and 
 16.24  operator services; 
 16.25     (5) toll and information service-blocking capability 
 16.26  without recurring monthly charges; 
 16.27     (6) one white pages directory per year except where an 
 16.28  offer is made and explicitly refused by the customer; 
 16.29     (7) a white pages and directory assistance listing, or upon 
 16.30  customer request, a private listing that allows the customer to 
 16.31  have an unlisted or unpublished telephone number; 
 16.32     (8) call-tracing capability; 
 16.33     (9) call-blocking capability; 
 16.34     (10) telecommunications relay service capability or access 
 16.35  necessary to comply with state and federal rules and 
 16.36  regulations; and 
 17.1      (11) any other services or terms determined by the 
 17.2   commission to be integral to the basic communications, health, 
 17.3   privacy, or safety needs of customers. 
 17.4      Sec. 5.  Minnesota Statutes 2000, section 237.01, is 
 17.5   amended by adding a subdivision to read: 
 17.6      Subd. 9.  [COMMISSION.] "Commission" means the public 
 17.7   utilities commission. 
 17.8      Sec. 6.  Minnesota Statutes 2000, section 237.01, is 
 17.9   amended by adding a subdivision to read: 
 17.10     Subd. 10.  [COMPETITIVE LOCAL EXCHANGE 
 17.11  CARRIER.] "Competitive local exchange carrier" or "CLEC" means a 
 17.12  telecommunications service provider that is certified by the 
 17.13  commission to provide local telephone service or a telephone 
 17.14  company to the extent it provides local telephone service in an 
 17.15  exchange area for which neither the company nor any of its 
 17.16  predecessors was certified on August 1, 1995. 
 17.17     Sec. 7.  Minnesota Statutes 2000, section 237.01, is 
 17.18  amended by adding a subdivision to read: 
 17.19     Subd. 11.  [DEPARTMENT.] "Department" means the department 
 17.20  of commerce. 
 17.21     Sec. 8.  Minnesota Statutes 2000, section 237.01, is 
 17.22  amended by adding a subdivision to read: 
 17.23     Subd. 12.  [INCUMBENT LOCAL EXCHANGE CARRIER.] "Incumbent 
 17.24  local exchange carrier" or "ILEC" means a telephone company to 
 17.25  the extent it is providing any local telephone service in an 
 17.26  exchange area for which either it or one of its predecessors was 
 17.27  certified to provide local service on August 1, 1995. 
 17.28     Sec. 9.  Minnesota Statutes 2000, section 237.01, is 
 17.29  amended by adding a subdivision to read: 
 17.30     Subd. 13.  [LOCAL TELEPHONE SERVICE.] "Local telephone 
 17.31  service" includes: 
 17.32     (1) basic local telephone service within a local calling 
 17.33  area; 
 17.34     (2) any related ancillary or enhanced services such as 
 17.35  voice messaging, caller identification, and call waiting; and 
 17.36     (3) any other non-long-distance telecommunications services 
 18.1   under the jurisdiction of the commission including high-speed 
 18.2   data transport.  
 18.3   Local telephone service does not include mobile service or 
 18.4   cellular service. 
 18.5      Sec. 10.  Minnesota Statutes 2000, section 237.01, is 
 18.6   amended by adding a subdivision to read: 
 18.7      Subd. 14.  [LOCAL TELEPHONE SERVICE PROVIDER.] "Local 
 18.8   telephone service provider" means any person who provides local 
 18.9   telephone service pursuant to a certificate of authority granted 
 18.10  by the commission and may also provide other telecommunications 
 18.11  services. 
 18.12     Sec. 11.  Minnesota Statutes 2000, section 237.01, is 
 18.13  amended by adding a subdivision to read: 
 18.14     Subd. 15.  [LONG DISTANCE SERVICE.] "Long distance service" 
 18.15  means telecommunications service connecting calls to exchanges 
 18.16  outside the caller's local calling area for which a toll charge 
 18.17  generally applies. 
 18.18     Sec. 12.  Minnesota Statutes 2000, section 237.01, is 
 18.19  amended by adding a subdivision to read: 
 18.20     Subd. 16.  [LONG DISTANCE SERVICE PROVIDER.] "Long distance 
 18.21  service provider" means a provider of interLATA long distance 
 18.22  service pursuant to a certificate of authority issued by the 
 18.23  commission. 
 18.24     Sec. 13.  Minnesota Statutes 2000, section 237.01, is 
 18.25  amended by adding a subdivision to read: 
 18.26     Subd. 17.  [NETWORK ELEMENT.] "Network element" means a 
 18.27  functional capability of a network, disaggregated from other 
 18.28  network capabilities and made available to other carriers and 
 18.29  end users separately from all other network capabilities.  
 18.30  Network elements include, but are not limited to, the local 
 18.31  loop, switching functions, ports, and trunks. 
 18.32     Sec. 14.  Minnesota Statutes 2000, section 237.01, is 
 18.33  amended by adding a subdivision to read: 
 18.34     Subd. 18.  [RATE.] "Rate" means every compensation, charge, 
 18.35  fare, toll, tariff, rental, or classification, or any 
 18.36  combination of them, demanded, observed, charged, or collected 
 19.1   for services and all terms, conditions, requirements, or 
 19.2   policies relating to the service, whether or not included in a 
 19.3   tariff filed with the commission. 
 19.4      Sec. 15.  Minnesota Statutes 2000, section 237.01, is 
 19.5   amended by adding a subdivision to read: 
 19.6      Subd. 19.  [TELECOMMUNICATIONS.] "Telecommunications" means 
 19.7   any transmission, between or among points specified by the user, 
 19.8   of information of the user's choosing, without change in the 
 19.9   form or content of the information as sent and received. 
 19.10     Sec. 16.  Minnesota Statutes 2000, section 237.01, is 
 19.11  amended by adding a subdivision to read: 
 19.12     Subd. 20.  [TELECOMMUNICATIONS 
 19.13  SERVICE.] "Telecommunications service" means the offering of 
 19.14  telecommunications for a fee directly to the public or to those 
 19.15  classes of users as to be effectively available directly to the 
 19.16  public regardless of the facilities used and includes high-speed 
 19.17  data transport. 
 19.18     Sec. 17.  Minnesota Statutes 2000, section 237.01, is 
 19.19  amended by adding a subdivision to read: 
 19.20     Subd. 21.  [TELECOMMUNICATIONS SERVICE PROVIDER.] 
 19.21  "Telecommunications service provider" means any provider of 
 19.22  local telephone service or long distance service subject to the 
 19.23  jurisdiction of the commission except that telecommunications 
 19.24  service provider does not include a radio common carrier or any 
 19.25  other provider of cellular or mobile service.  A 
 19.26  telecommunications carrier does not include an entity that 
 19.27  derives more than 50 percent of its revenues from operator 
 19.28  services provided to transient locations such as hotels, motels, 
 19.29  and hospitals.  In addition, telecommunications carrier does not 
 19.30  include an entity that provides centralized equal access. 
 19.31     Sec. 18.  Minnesota Statutes 2000, section 237.01, is 
 19.32  amended by adding a subdivision to read: 
 19.33     Subd. 22.  [END USER.] "End user" or "end-use customer" 
 19.34  means a person requesting, receiving, or using 
 19.35  telecommunications service on a retail basis. 
 19.36     Sec. 19.  Minnesota Statutes 2000, section 237.01, is 
 20.1   amended by adding a subdivision to read: 
 20.2      Subd. 23.  [WHOLESALE CUSTOMER.] "Wholesale customer" means 
 20.3   a person who purchases telecommunications services or related 
 20.4   enhanced services from an incumbent local exchange carrier for 
 20.5   purposes of providing retail telecommunications services to 
 20.6   end-use customers.