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Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1987 

                        CHAPTER 340-S.F.No. 677 
           An act relating to public utilities; providing for the 
          reduced regulation of certain competitive telephone 
          services, with limitations and procedures; requiring 
          persons providing private shared tenant service to 
          grant certain access; requiring a study and report on 
          universal service assistance; providing for a 
          telephone assistance plan; amending Minnesota Statutes 
          1986, sections 237.01, subdivision 3; 237.081, 
          subdivision 1a; 237.11; 237.12; 237.16, subdivision 1; 
          237.17; and 237.22; proposing coding for new law in 
          Minnesota Statutes, chapter 237; repealing Minnesota 
          Statutes 1986, sections 237.13; 237.41; 237.42; and 
          237.43. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [237.57] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] The terms used in sections 1 to 12 
have the meanings given them in this section.  
    Subd. 2.  [COMPETITIVE SERVICE.] "Competitive service" 
means a service that has been determined to be subject to 
effective competition or emerging competition. 
    Subd. 3.  [EFFECTIVE COMPETITION.] "Effective competition" 
exists when the criteria of section 3, subdivision 5, have been 
satisfied for a service.  
    Subd. 4.  [EMERGING COMPETITION.] "Emerging competition" 
exists when the criteria of section 3, subdivision 5, have not 
been satisfied, but there is a trend toward effective 
competition.  
    Subd. 5.  [LOCAL ACCESS AND TRANSPORT AREA.] "Local access 
and transport area (LATA)" means a geographical area designated 
by the Modification of Final Judgment in U.S. v. Western 
Electric Co., Inc., 552 F. Supp. 131 (D.D.C. 1982). 
    Subd. 6.  [NONCOMPETITIVE SERVICE.] "Noncompetitive 
service" means a service that has not been classified as 
competitive by the commission.  
    Sec. 2.  [237.58] [APPLICABILITY; REGULATION OF 
NONCOMPETITIVE SERVICES.] 
    Subdivision 1.  [APPLICABILITY.] Sections 2, 3, 4, and 6 do 
not apply to a telephone company unless the company notifies the 
commission in writing of its decision to be subject to all of 
those sections.  The company may not revoke its decision to be 
subject to those sections. 
    Subd. 2.  [NONCOMPETITIVE SERVICES; RATE CHANGE 
PROCEDURES.] Except as provided in section 7, a telephone 
company may change its rates and charges for the noncompetitive 
services by complying with section 237.075 and section 6.  The 
commission may also investigate matters related to the provision 
of these services and make orders relating to the services as 
may be appropriate under section 237.081. 
    Subd. 3.  [DISCONTINUANCE OF SERVICE.] A telephone company 
may not discontinue any noncompetitive services without the 
express approval of the commission. 
    Sec. 3.  [237.59] [CLASSIFICATION OF COMPETITIVE SERVICES; 
HEARING.] 
    Subdivision 1.  [EMERGING COMPETITIVE SERVICES.] The 
following services provided by the telephone company are subject 
to emerging competition unless and until reclassified as 
noncompetitive or subject to effective competition under this 
section: 
    (1) apartment door answering services; 
    (2) automatic call distribution; 
    (3) billing and collection services; 
    (4) call waiting, call forwarding, and three-way calling 
services for businesses with three or more lines; 
    (5) central office-based pricing packages providing 
switched business access lines which substitute for private 
branch exchange systems which may or may not share intelligence 
with customer premises equipment; 
    (6) command link-type services for network reconfiguring to 
rearrange cross-connections between channel services; 
    (7) custom network services and special assemblies; 
    (8) digicom switchnet services for full duplex, 
synchronous, information transport; 
    (9) direct customer access services for telephone number 
information services video display; 
    (10) group access bridge services; 
    (11) inter-LATA and intra-LATA message toll service; 
    (12) inter-LATA and intra-LATA private line services; 
    (13) inter-LATA and intra-LATA wide area telephone service; 
    (14) mobile radio services; 
    (15) operator-handled intercept services; 
    (16) public pay telephone services, excluding charges for 
access to the central office; 
    (17) seminars; 
    (18) services not previously offered prior to August 1, 
1987;  
    (19) services which generate an annual revenue equal to or 
less than one-tenth of one percent of a telephone company's 
annual revenues in the year the company elects to be covered by 
this section; 
    (20) special construction of facilities; 
    (21) studies; 
    (22) systems for automatic dialing; and 
    (23) versanet-type service access line involving continuous 
monitoring and transmission of data from customer's premises to 
the central office.  
    Subd. 2.  [PETITION.] A person, or the commission on its 
own motion, may petition to have a service of a telephone 
company classified as subject to effective competition or 
emerging competition.  The petition must be served on the 
commission, the department of public service, the office of the 
attorney general, and any other person designated by the 
commission.  The petition must contain at least: 
    (1) a list of the known alternative providers of the 
service available to the company's customers; 
    (2) an estimate of the company's current market share; 
    (3) identification of barriers to entry or exit from the 
market for the service; and 
    (4) a description of affiliate relationships with any other 
provider of the service in the company's market. 
    Subd. 3.  [EXPEDITED PROCEEDING.] A person who files a 
petition under subdivision 2 may request that the commission 
determine the classification of the service through an expedited 
proceeding under section 5 or a contested case hearing.  If an 
expedited proceeding is requested, the commission must provide 
interested persons an opportunity to comment on the 
appropriateness of the process and the merits of the petition. 
    When an expedited proceeding is requested, the commission 
must make a final determination within 60 days of the date on 
which all required information required pursuant to subdivision 
2 is filed, unless during the 60 days the commission finds that 
a material issue of fact is in dispute in which case it must 
order a contested case hearing be conducted to evaluate the 
petition. 
    Subd. 4.  [CONTESTED CASE HEARING.] If a contested case 
hearing is held under this section, the commission shall make a 
final determination on the petition within eight months from the 
date the petitioning party requests a contested case hearing or 
from the date the commission orders a contested case hearing 
under subdivision 3.  When a contested case hearing is requested 
in the petition or when the commission acts on its own motion, 
this deadline may be extended for no more than 60 days by 
agreement of all parties or by order of the commission if the 
commission finds that the case cannot be completed within the 
required time and that without an extension there is substantial 
probability that the public interest will be harmed. 
    Subd. 5.  [CRITERIA.] (a) In determining whether a service 
is subject to either effective competition or emerging 
competition from available alternative services, the commission 
shall consider and make findings on the following factors:  
    (1) the number and sizes of alternative providers of 
service and affiliation to other providers; 
    (2) the extent to which services are available from 
alternative providers in the relevant market; 
    (3) the ability of alternative providers to make 
functionally equivalent or substitute services readily available 
at competitive rates, terms, and conditions of service; 
    (4) the market share, the ability of the market to hold 
prices close to cost, and other economic measures of market 
power; and 
    (5) the necessity of the service to the well-being of the 
customer.  
    (b) In order for the commission to find a service subject 
to effective competition alternative services must be available 
to over 50 percent of the company's customers for that service. 
    (c) In order for the commission to find a service subject 
to emerging competition alternative services must be available 
to over 20 percent of the company's customers for that service. 
    Subd. 6.  [BURDEN OF PROOF.] The person that files the 
petition under subdivision 2 has the burden of proving that 
competition exists and that classifying the service as other 
than noncompetitive will serve the public interest.  
    Subd. 7.  [INTER-LATA LONG-DISTANCE SERVICE.] A petition 
filed under subdivision 2 to have an inter-LATA long-distance 
service classified as subject to effective competition shall be 
accepted by the commission as a petition to classify the 
inter-LATA long-distance service provided by all telephone 
companies as subject to effective competition.  The commission 
may not find that a telephone company's inter-LATA long-distance 
service is subject to effective competition without a finding 
that the service is subject to effective competition for each 
telephone company providing that service in the state. 
    Subd. 8.  [INTERIM RELIEF.] A telephone company that has a 
petition pending before the commission under this section to 
declare a service competitive may decrease its price for that 
service without notice while the commission considers the 
petition.  A company must provide an incremental cost study if 
requested by the commission.  The commission shall suspend a 
company's right under this subdivision to decrease rates if, 
after an expedited hearing conducted under section 5, the 
commission finds that the service is being priced below cost, or 
that the company has within the previous 12 months charged 
customers interim rates under this subdivision for the same 
service, and that service was determined by the commission to be 
noncompetitive. 
    Subd. 9.  [REPORTING REQUIREMENTS; EXCEPTION.] A telephone 
company that offers only competitive services is not subject to 
the accounting and reporting requirements of this chapter unless 
otherwise ordered by the commission for good cause.  A telephone 
company that offers both competitive and noncompetitive services 
is not subject to the reporting requirements with regard to its 
effective competition services unless otherwise ordered by the 
commission for good cause. 
    Subd. 10.  [REGULATION REINSTATED.] The commission, on its 
own motion or upon complaint, shall reclassify a service as 
noncompetitive or as subject to emerging competition and 
reinstate, in whole or in part, rate regulation of the service, 
if, after notice and hearing, the commission finds either: 
    (1) that the competitive market for that service, on review 
of the criteria found in subdivision 5, has failed so that rate 
regulation of that service is necessary to protect the interest 
of consumers, that it has considered the alternatives to rate 
regulation, and that the benefits of rate regulation outweigh 
the burdens of rate regulation; or 
    (2) that unreasonable discrimination has occurred between 
different areas of the state. 
     In any proceeding to reclassify a service the person 
initiating the complaint has the burden of proving that the 
existing classification is inappropriate, except the telephone 
company providing the service has the burden of proving that the 
classification is appropriate when the proceeding is commenced 
by the commission on its own motion or when the complainant is 
the department or the attorney general. 
    Sec. 4.  [237.60] [RATES; COMPETITIVE SERVICES.] 
    Subdivision 1.  [EFFECTIVE COMPETITION.] A company whose 
service has been determined by the commission to be subject to 
effective competition may decrease the rate for that service 
effective without notice to its customers or the commission, and 
may increase the rate for that service effective upon notice to 
its customers at least 30 days in advance of the increase.  A 
company whose service is declared subject to effective 
competition is not subject to the requirements of section 237.07 
for that service.  
    Subd. 2.  [EMERGING COMPETITION.] (a) A telephone company 
whose service has been determined to be subject to emerging 
competition must file a price list with the commission and the 
department.  The price list must contain the rates, tolls, and 
charges for the service together with the rules, regulations, 
and classifications used in providing that service.  This 
chapter does not prohibit a telephone company from including 
limitations on liability as terms or conditions in the price 
lists.  
    (b) A company may decrease the rate for a service subject 
to emerging competition that is listed in the price list, 
effective ten days after filing a new price list with the 
commission.  A company may increase the rate for a service 
subject to emerging competition effective 30 days after notice 
is given to affected customers, the commission, and the 
department.  The notice to the commission and the department for 
a rate increase must include an incremental, or other acceptable 
cost study as determined by the commission, supporting the 
increase.  The department shall investigate an increase or 
decrease in rates for services subject to emerging competition, 
and report its findings to the commission.  The commission may, 
after a contested case hearing or an expedited hearing under 
section 5 if there are no material facts in dispute, order the 
company to adjust its rates or charges for a service subject to 
emerging competition if the commission finds that the price 
charged is excessive.  The commission may, within ten months of 
the date a price change went into effect, order price 
adjustments retroactive to the date the change went into effect 
and order the company to make any necessary refunds to affected 
customers. 
    Subd. 3.  [DISCRIMINATION.] No telephone company shall 
offer telecommunications service within the state upon terms or 
rates that are unreasonably discriminatory.  No telephone 
company shall unreasonably limit its service offerings to 
particular geographic areas unless facilities necessary for the 
service are not available and cannot be made available at 
reasonable costs.  The rates of a telephone company must be the 
same in all geographic locations of the state unless for good 
cause the commission approves different rates.  A company that 
offers long-distance services shall charge uniform rates and 
charges on all long-distance routes and in all geographic areas 
in the state where it offers the services.  However, a company 
may offer or provide volume discounts in connection with 
intrastate long-distance services and may pass through any 
state, municipal, or local taxes in the specific geographic 
areas from which the taxes originate.  Nothing in this 
subdivision authorizes a telephone company to provide service 
outside of its authorized service area except as provided in 
section 237.16. 
    Subd. 4.  [COST OF SERVICE.] Prices or rates charged for 
competitive services must cover the incremental costs of 
providing the service.  If a telephone company provides both 
local service and long-distance services, that company shall, in 
determining the cost of the long-distance service, include at 
least the same level of contribution to common and joint costs 
as is contained in the access charges to other telephone 
companies.  The company may do so on an aggregate basis, instead 
of on a time or mileage band basis. 
    Subd. 5.  [COMPLAINTS.] Competitive services are subject to 
the complaint procedures of section 237.081.  In a complaint 
proceeding, the company providing the service bears the burden 
of proving that the prices charged cover its incremental costs 
and a reasonable contribution to the common and joint costs of 
the company and are fair, just, and reasonable. 
    Sec. 5.  [237.61] [EXPEDITED PROCEEDINGS.] 
    Notwithstanding chapter 14, the commission may conduct an 
expedited proceeding when authorized under this chapter.  In an 
expedited proceeding, the commission shall give prior notice to 
interested persons and provide them with an opportunity to 
present statements of fact and argument and to reply, either 
orally or in writing or both.  In an expedited proceeding, the 
pleadings must be verified, and oral statements of fact must be 
made under oath or affirmation.  The commission shall make a 
decision in an expedited proceeding based on the record. 
    Sec. 6.  [237.62] [GENERAL RATE PROCEEDINGS; JOINT COSTS; 
NONCOMPETITIVE SERVICES.] 
    Subdivision 1.  [FINANCIAL REQUIREMENTS.] Paragraph (a) or 
(b) governs a proceeding initiated under section 237.075 or 
237.081 to change the rates for noncompetitive services.  The 
company shall elect that rate changes be made in accordance with 
either paragraph (a) or (b) and that election is binding on the 
commission in all respects.  
    (a) The company may demonstrate the revenue requirement for 
its noncompetitive services by providing: 
    (1) revenues, expenses, and embedded investments directly 
related to the provision of the noncompetitive services; 
    (2) a reasonable portion of the net income generated 
jointly or arising from jointly competitive and noncompetitive 
services, and net income received by a telephone company as a 
result of the sale of telephone number listings, charges and 
advertising for use in white pages, yellow pages, other 
directory and other related services, must be treated as arising 
jointly from competitive and noncompetitive services; and 
    (3) a reasonable portion of the company's total joint and 
common costs to be attributable to the provision of the 
noncompetitive services. 
    (b) Alternatively, the company may demonstrate the revenue 
requirement for its noncompetitive services by providing: 
    (1) revenues, expenses, and embedded investments related to 
all of its services; and 
    (2) to the extent that the company's embedded costs for 
competitive services, and a reasonable portion of the joint and 
common costs attributable to the competitive services, exceed 
the revenues produced by those competitive services, the 
difference must be added to the company's total revenues.  
    Subd. 2.  [CROSS-SUBSIDIZATION.] A telephone company shall 
not subsidize its competitive services from its noncompetitive 
services through allocations of costs, cost-sharing agreements, 
or by other means, direct or indirect.  When an investment is 
for both noncompetitive and competitive services, the company 
shall demonstrate that the benefits received by the 
noncompetitive customers justify the allocation of costs 
proposed by the company.  Allocations and cost assignments must 
be reviewed at least every five years and a report detailing the 
methods and results must be filed with the department and the 
commission.  An independent telephone company or a municipality 
or cooperative telephone association is not required to file a 
report as required by this subdivision provided that its 
allocations and cost assignments are subject to review upon 
order of the commission.  If the commission determines that the 
methods chosen by the company are not satisfactory, the 
commission may order changes in the methods used and make 
necessary prospective adjustments in noncompetitive rates being 
charged to reflect the changes in cost. 
    Subd. 3.  [ADDITIONAL INFORMATION.] The commission may 
require a telephone company to provide information regarding the 
revenues, expenses, investments, and costs for all of its 
services.  
    Sec. 7.  [237.63] [MISCELLANEOUS TARIFFS.] 
    Subdivision 1.  [GENERAL.] Notwithstanding section 237.075, 
rates for noncompetitive services may be set or changed subject 
to this section.  
    Subd. 2.  [LANGUAGE CHANGES.] If language describing a 
rate, term, or condition of service in a tariff is changed, 
without substantially altering the application of the tariff, 
the change may take effect upon one-day notice to the public 
utilities commission.  
    Subd. 3.  [COST INCREASES.] If the actual costs of 
providing a particular service have increased since the last 
proceeding under section 237.075, the rate for that service may 
be increased to recover those costs.  The company requesting 
this rate increase shall file with its request the cost data it 
relies upon for the increase.  The department shall review the 
request and make a recommendation to the commission regarding 
the appropriateness of the request within 20 calendar days of 
filing the request by the telephone company.  If the department 
notifies the company within 15 days of the filing that 
additional information is required, the department shall make 
its recommendation to the commission within 20 calendar days 
after receipt of that additional information.  If the company 
fails to provide adequate information within 20 calendar days of 
the department request, the department shall recommend denial of 
the company request on the basis of failure to provide adequate 
information.  The commission shall either approve or reject the 
request under this subdivision within 20 calendar days of the 
receipt of the department recommendation.  In order to qualify 
as a change in costs, it must be a cost change related to a 
particular service rather than a general overall increase 
applicable to most of the company's services, and an actual 
change in costs must have occurred rather than the discovery of 
a change in costs as a result of conducting a new cost study.  
    Subd. 4.  [REDUCING RATES.] A company may reduce its rates 
for one or more services effective 20 days after filing the 
rates with the commission.  
    Subd. 5.  [BURDEN OF PROOF.] The burden of proof that the 
requested rates are reasonable under this section is on the 
telephone company providing the service.  
     Subd. 6.  [FILING OF DOCUMENTS.] A copy of filings made 
under this section must be served on the commission, the 
department, and the attorney general.  
     Subd. 7.  [COMMISSION REVIEW.] Nothing in this section 
prevents the commission from ordering that a requested change 
not take effect, or from subsequently amending the rates either 
through a complaint proceeding, a commission investigation, or 
through a proceeding conducted under section 237.075.  
    Sec. 8.  [237.64] [REGISTRATION; BOND.] 
    Subdivision 1.  [REGISTRATION.] A person, firm, or 
corporation seeking to offer a telephone service to the public 
that is classified as competitive shall register with the 
department and the commission 30 days before beginning operation 
in the state.  A telephone company that has been authorized by 
the commission to provide telephone services in this state prior 
to August 1, 1987, is not required to register under this 
subdivision.  A person, firm, or corporation seeking to offer a 
noncompetitive service to the public must obtain authority from 
the commission under section 237.16.  
     Subd. 2.  [BOND.] Telephone companies offering services 
that have been found to be competitive shall maintain a bond if 
the company requires advance payments or deposits from its 
customers, unless waived by the commission.  The bond must be 
issued by a surety company admitted to do business in this state 
in the principal sum of all deposits and advance payments to be 
held by the company.  The department shall determine the amount 
of the bond and may require the company to supply information to 
determine the appropriate amount of the bond.  The bond must be 
in favor of the state for the benefit of any customer who 
suffers the loss of a deposit or advance payment due to 
insolvency, cessation of business, or failure to return any 
unused portion of the deposit or advance payment.  The bond must 
be filed with the department. 
    Sec. 9.  [237.65] [AFFILIATED TRANSACTIONS.] 
    Subdivision 1.  [DEFINITION.] For the purposes of this 
section, "affiliated company" means a person, company, 
corporation, or other entity in which the telephone company has 
an affiliated interest as defined under section 216B.48, 
subdivision 1.  
    Subd. 2.  [RECORDS.] Telephone companies, except companies 
that provide only services that have been found to be 
competitive, shall maintain records for a period of three years 
documenting transactions in excess of $50,000 with an affiliated 
company.  The documentation must contain: 
    (1) the name of the affiliate; 
    (2) a description of the transaction or contract; 
    (3) the dollar value of the transaction or contract; 
    (4) in the case of goods and services purchased from an 
affiliate, any evidence of efforts made by the telephone company 
to secure the same or functionally equivalent goods or services 
from a nonaffiliated supplier; and 
    (5) in the case of services provided to an affiliate, any 
evidence of the fair market value of those goods or services. 
    Subd. 3.  [COMMISSION REVIEW.] In a proceeding for the 
approval of rates for noncompetitive services, the burden is on 
the company to prove that goods or services acquired from or 
sold to affiliates were transferred at reasonable value.  The 
determination of reasonable value shall include but not be 
limited to durability, quality, service, and price. 
    Sec. 10.  [237.66] [DISCLOSURE.] 
    Subdivision 1.  [NOTICE OF SERVICE OPTIONS.] A telephone 
company, when a residential customer initially requests service 
or requests a change of service, and annually in the form of a 
bill insert, shall advise each residential customer of the price 
of all service options available to that customer.  The 
requirement of an annual notice through a bill insert does not 
apply to long-distance service. 
    Subd. 2.  [FILING.] Copies of both the written notices and 
information provided to customer service representatives 
concerning the disclosure required under subdivision 1 must be 
filed once every 12 months with the commission and the 
department.  Independent telephone companies, municipalities, 
and cooperative telephone associations are exempt from the 
requirements of this subdivision unless otherwise ordered by the 
commission.  
    Subd. 3.  [ENFORCEMENT.] If, after an expedited procedure 
conducted under section 5, the commission finds that a telephone 
company is failing to provide disclosure as required under 
subdivision 1, it shall order the company to take corrective 
action as necessary. 
    Sec. 11.  [237.67] [LEGISLATIVE REPORTS.] 
    Beginning January 1, 1988, the commission and the 
department shall annually report to the legislature on the 
implementation of this act and recommend changes necessary to 
assure high quality and affordable telephone services for the 
residents of the state.  
    Sec. 12.  [237.68] [PRIVATE SHARED TELECOMMUNICATIONS 
SERVICE.] 
    Subdivision 1.  [DEFINITION.] For the purposes of this 
section, "private shared telecommunications services" means the 
provision of telephone services and equipment within a user 
group located in discrete private premises, in building 
complexes, campuses, or high-rise buildings, by a commercial 
shared services provider or by a user association, through 
privately owned customer premises equipment and associated data 
processing and information management services and includes the 
provision of connections to the facilities of a local exchange 
and to long-distance telephone companies.  
    Subd. 2.  [REQUIREMENTS.] A person who owns or operates a 
building, property, complex, or other facility where a private 
shared telecommunications system is operated shall establish a 
single demarcation point for services and facilities provided by 
the telephone company providing local exchange service in the 
area that is mutually agreeable to the property owner or 
operator and the telephone company.  The obligation of a 
telephone company to provide service to a customer at a location 
where a private shared telecommunications system is operated is 
limited to providing telephone company service and facilities up 
to the demarcation point established for the property where the 
private shared telecommunications system is located. 
    Subd. 3.  [ACCESS TO ALTERNATIVE PROVIDERS.] A tenant of a 
building, property, complex, or other facility where a private 
shared telecommunications system is operated may establish a 
direct connection to and receive telephone service from the 
telephone company providing local exchange service in the area 
where the private shared telecommunications system is located.  
At the request of a tenant where a private shared 
telecommunications system is operated, the owner or manager of 
the property shall make facilities or conduit space available to 
the tenant to allow the tenant to make separate connection to 
and to receive telephone service directly from the telephone 
company operating local exchange service in the area.  The 
tenant has the choice of installing the tenant's own facilities 
or using the existing facilities.  The facilities or conduit 
space must be provided by the owner or operator to the tenant at 
a reasonable rate and on reasonable terms and conditions.  It is 
the obligation of the tenant to arrange for premises wire, 
cable, or other equipment necessary to connect the tenant's 
telephone equipment with the facilities of the telephone company 
operating local exchange service at the location of the 
demarcation point.  
    Subd. 4.  [ENFORCEMENT.] If the commission finds that the 
owner or operator of a private shared telecommunications system 
has failed to comply with a request under this section, the 
commission may order the owner or operator to make facilities or 
conduit space available sufficient to allow the tenant to make 
separate connection with the telephone company, and provide the 
services at reasonable prices and on reasonable terms and 
conditions.  
    Subd. 5.  [EXEMPTION.] A provider of private shared 
telecommunications services is exempt from section 237.16 if the 
telecommunications services are only provided to tenants or for 
the provider's own use.  
    Subd. 6.  [SERVICE BY LOCAL TELEPHONE COMPANY.] The 
telephone company providing local exchange service shall provide 
service to anyone located within a shared services building at 
the demarcation point within a reasonable time upon request.  
    Sec. 13.  [237.69] [TELEPHONE ASSISTANCE PLAN; 
DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] The terms used in sections 13 to 
16 have the meanings given them in this section. 
    Subd. 2.  [COMMISSION.] "Commission" means the Minnesota 
public utilities commission. 
    Subd. 3.  [DEPARTMENT.] "Department" means the Minnesota 
department of public service. 
    Subd. 4.  [TELEPHONE COMPANY.] "Telephone company" has the 
meanings given it in section 237.01, subdivisions 2 and 3, that 
provides local exchange telephone service. 
    Subd. 5.  [ACCESS LINE.] "Access line" means telephone 
company-owned facilities furnished to permit switched access to 
the telecommunications network that extend from a central office 
to the demarcation point on the property where the subscriber is 
served.  The term includes access lines provided to residential 
and business subscribers, includes centrex access lines on a 
trunk-equivalent basis, but does not include private nonswitched 
or wide area telephone service access lines. 
    Subd. 6.  [FEDERAL MATCHING PLAN.] "Federal matching plan" 
means the telephone assistance plan formulated by the Federal 
Communications Commission that provides federal assistance to 
local telephone subscribers. 
    Subd. 7.  [TELEPHONE ASSISTANCE PLAN.] "Telephone 
assistance plan" means the plan to be adopted by the commission 
and to be jointly administered by the commission, the department 
of human services, and the telephone companies, as required by 
sections 13 to 16. 
    Subd. 8.  [INCOME.] For purposes of sections 13 to 16, 
income has the meaning given it in section 290A.03, subdivision 
3. 
    Sec. 14.  [237.70] [DEVELOPMENT OF TELEPHONE ASSISTANCE 
PLAN.] 
    Subdivision 1.  [COMMISSION RESPONSIBILITY.] The commission 
shall develop a telephone assistance plan under this section.  
    Subd. 2.  [SCOPE.] The telephone assistance plan must be 
statewide and apply to telephone companies that provide local 
exchange service in Minnesota.  
    Subd. 3.  [FEDERAL MATCHING PLAN.] The telephone assistance 
plan must contain adequate provisions to enable telephone 
companies to qualify for assistance under the federal matching 
plan. 
    Subd. 4.  [HOUSEHOLDS ELIGIBLE FOR CREDITS.] The telephone 
assistance plan must provide telephone assistance credit for a 
residential household in Minnesota that: 
    (1) does not receive aid for telephone service under any 
other program other than the federal matching plan or the 
telephone assistance plan; 
    (2) has a household member who subscribes to local exchange 
telephone service and who is 65 years of age or older; and 
    (3) has a maximum total annual household income level that 
does not exceed: 
    (i) when the size of the household is 1, $7,862; 
    (ii) when the size of the household is 2, $10,281; 
    (iii) when the size of the household is 3, $12,699; 
    (iv) when the size of the household is 4, $15,118; 
    (v) when the size of the household is more than 4, $15,118 
plus for each additional household member, $2,419. 
    Subd. 5.  [NATURE AND EXTENT OF CREDITS.] The telephone 
assistance plan may provide for telephone assistance credits to 
eligible households up to the amounts available under the 
federal matching plan.  However, the credits available under the 
telephone assistance plan may not exceed: 
    (1) more than 50 percent of the local exchange rate charged 
for the local exchange service provided to the household by that 
household's telephone company; and 
    (2) the level of credits that can actually be funded in 
accordance with the limitations contained in subdivision 6. 
    Subd. 6.  [FUNDING.] The commission shall provide for the 
funding of the telephone assistance plan by assessing a uniform 
recurring monthly surcharge applicable to all classes and grades 
of access lines provided by each telephone company in the 
state.  The revenue generated by the surcharge must not exceed 
$2,500,000 on a statewide basis.  This statewide $2,500,000 
limitation must be apportioned between telephone companies based 
on their relative number of access lines. 
    Subd. 7.  [ADMINISTRATION.] The telephone assistance plan 
must be administered jointly by the commission, the department 
of human services, and the telephone companies in accordance 
with the following guidelines: 
    (a) The commission and the department of human services 
shall develop eligibility certification forms that must be 
completed at least annually by the subscriber residing in a 
household for the purposes of certifying eligibility for 
telephone assistance plan credits to the telephone companies.  
    (b) The department of human services, through its various 
offices and agencies, shall determine the eligibility for 
telephone assistance plan credits on an annual basis according 
to the criteria contained in subdivision 4, based upon 
consideration of documentation made available to the department 
of human services by the subscriber, and shall provide the 
necessary certification forms to eligible households for 
provision by the households to the telephone company. 
    (c) The telephone company shall provide telephone 
assistance plan credits against monthly charges in the month 
following receipt of an eligibility certification form and shall 
continue to provide credits for 12 months after, unless notified 
that eligibility has terminated earlier.  At the end of every 
12-month period, telephone assistance plan credits cease unless 
the telephone company has been provided with a new eligibility 
certification form. 
    (d) The commission shall serve as the administrator of a 
statewide surcharge revenue pool and be reimbursed for its 
administrative expenses from the surcharge revenue pool.  As the 
administrator, the commission shall: 
    (1) establish a uniform statewide surcharge in accordance 
with subdivision 6; 
    (2) establish a uniform statewide level of telephone 
assistance plan credit that each telephone company shall extend 
to each eligible household in its service area; 
    (3) require each telephone company to account to the 
commission on a periodic basis for surcharge revenues collected 
by the company, expenses incurred by the company, and credits 
extended by the company under the telephone assistance plan; 
    (4) require each telephone company to remit excess 
surcharge revenues to the commission for administration as part 
of the pool; and 
    (5) remit to each telephone company from the surcharge 
revenue pool the amount necessary to compensate the company for 
expenses and telephone assistance plan credits that are not 
covered by the surcharge revenue collected by the company.  When 
it appears that the revenue generated by the maximum surcharge 
permitted under subdivision 6 will be inadequate to fund any 
particular established level of telephone assistance plan 
credits, the commission shall reduce the credits to a level that 
can be adequately funded by the maximum surcharge.  Similarly, 
the commission may increase the level of the telephone 
assistance plan credit that is available or reduce the surcharge 
to a level and for a period of time that will prevent an 
unreasonable overcollection of surcharge revenues. 
    (e) Each telephone company shall maintain adequate records 
of surcharge revenues, expenses, and credits related to the 
telephone assistance plan and shall, as part of its annual 
report or separately, provide the commission and the department 
with a financial report of its experience under the telephone 
assistance plan for the previous year.  That report must also be 
adequate to satisfy the reporting requirements of the federal 
matching plan.  
    (f) The department shall investigate complaints against 
telephone companies with regard to the telephone assistance plan 
and shall report the results of its investigation to the 
commission. 
    Sec. 15.  [237.71] [RULES.] 
    The commission shall adopt rules under the administrative 
procedure act necessary or appropriate to establish the 
telephone assistance plan in accordance with this chapter so 
that the telephone assistance plan is effective as of January 1, 
1988, or as soon after that date as Federal Communications 
Commission approval of the telephone assistance plan is obtained.
    Sec. 16.  [237.72] [PARTICIPATION OF DEPARTMENT OF HUMAN 
SERVICES.] 
    The department of human services shall participate in the 
implementation and administration of the telephone assistance 
plan in accordance with sections 13 to 16. 
    Sec. 17.  [LEGISLATIVE REPORT.] 
    By January 1, 1989, the commission shall submit a report to 
the legislature with regard to the implementation, 
administration, and effectiveness of the telephone assistance 
plan and shall make any recommendations the commission believes 
are appropriate with regard to eligibility, funding, and 
administration of the telephone assistance plan. 
    Sec. 18.  Minnesota Statutes 1986, section 237.01, 
subdivision 3, is amended to read: 
    Subd. 3.  [INDEPENDENT TELEPHONE COMPANY.] "Independent 
telephone company" means a telephone company organized and 
operating under chapter 301 or 302A or authorized to do business 
in Minnesota under chapter 303 as of January 1, 1983, and 
providing local exchange service to fewer than 15,000 30,000 
subscribers within the state. 
    Sec. 19.  Minnesota Statutes 1986, section 237.081, 
subdivision 1a, is amended to read:  
    Subd. 1a.  Upon a complaint made against any cooperative 
telephone association, independent telephone company, or a 
municipal telephone utility by any other provider of telephone 
service, the governing body of any political subdivision, or by 
no fewer than five percent or 100, whichever is the lesser 
number, of the subscribers or spouses of subscribers of the 
particular cooperative telephone association, independent 
telephone company, or municipal telephone utility, that any of 
the rates, tolls, tariffs, charges or schedules or any 
regulation, measurement, practice, act or omission affecting or 
relating to the production, transmission, delivery or furnishing 
of telephone service or any service in connection therewith is 
in any respect unreasonable, insufficient or unjustly 
discriminatory, or that any service is inadequate or cannot be 
obtained, the commission shall proceed to make an 
investigation as it may deem necessary.  If the commission may 
dismiss any complaint without a hearing if in its opinion a 
hearing is not in the public interest finds that all significant 
issues raised have not been resolved to its satisfaction, it 
shall order a hearing. 
    Sec. 20.  Minnesota Statutes 1986, section 237.11, is 
amended to read:  
    237.11 [INSPECTION OF BOOKS OF TELEPHONE COMPANIES IN CASE 
OF FAILURE TO MAKE REPORTS.] 
    Every telephone company subject to the provisions of this 
chapter, wherever organized, shall keep an office in this state, 
and make such reports to the department as it shall from time to 
time require.  All books, records, and files, whether they 
relate to competitive or noncompetitive services, and all of its 
property shall be at all times subject to inspection by 
the commission and the department.  It shall close its accounts 
and take therefrom a balance sheet on December 31 of each year, 
and on or before May 1 following, such balance sheet, together 
with such other information as the department shall require, 
verified by an officer of the telephone company, shall be filed 
with the commission and the department. 
    In the event that any telephone company shall fail to file 
its annual report, as provided by this section, the department 
is authorized to make such an examination of the books, records, 
and vouchers of the company as is necessary to procure the 
necessary data for the annual report and cause the same to be 
prepared.  The expense of procuring this data and preparing this 
report shall be paid by the telephone company failing to report, 
and the amount paid shall be credited by the state treasurer to 
funds appropriated for the expense of the department.  
    The department is authorized to force collection of such 
sum by an action at law in the name of the department.  
    Sec. 21.  Minnesota Statutes 1986, section 237.12, is 
amended to read:  
    237.12 [CONNECTIONS BETWEEN TELEPHONE COMPANIES 
DISCONTINUED ONLY ON ORDER.] 
    Subdivision 1.  [INTERCONNECTION.] When public convenience 
requires the same, every telephone company shall, for a 
reasonable compensation, permit a physical connection or 
connections to be made, and telephone service to be furnished 
between any telephone exchange system operated by it, and the 
telephone toll line or lines operated by another company, or 
between its telephone toll line or lines and the telephone 
exchange system of another telephone company, or between its 
toll line and the toll line of another company, whenever such 
physical connection or connections are practicable and will not 
result in irreparable injury to the telephone system so 
compelled to be connected.  The term "physical connection," as 
used in this section, means such number of trunk lines or 
complete wire circuits and connections as may be required to 
furnish reasonable and adequate service between such telephone 
lines and exchanges and shall not be deemed to provide for any 
connection whereby one line or circuit is to be bridged upon 
another line or circuit.  In case of failure of the telephone 
companies concerned to allow or agree upon such physical 
connection or connections, or the terms and conditions upon 
which the same shall be made, application may be made to the 
department commission for an order requiring such connection and 
fixing the compensation, terms and conditions thereof, and if 
after investigation and hearing the department commission shall 
find that such physical connections will not result in 
irreparable injury to such telephone properties, it the 
commission shall by order direct that such connections be made, 
and prescribe reasonable conditions and compensation therefor 
and for the joint use thereof, and by whom the expense of making 
and maintaining such connection or connections shall be paid.  
When application is made to the department requesting physical 
connection it shall be presumed that such connection is 
necessary, and that the public convenience will be promoted 
thereby, and the burden of overcoming such presumption shall be 
upon the party resisting such application.  The telephone 
companies so connecting shall give service over the connecting 
line or lines without preference to or discrimination against 
any service or telephone company whatever. 
    Subd. 2.  [DISCONTINUANCE.] Wherever a physical connection 
or connections exist between any telephone exchange system 
operated by a telephone company and the toll line or lines 
operated by another telephone company or between its toll line 
or lines and the telephone exchange system of another telephone 
company, or between its toll line and the toll line of another 
telephone company, neither of the companies shall cause such 
connection to be severed or the service between the companies to 
be discontinued without first obtaining an order from the 
department commission upon an application for permission to 
discontinue such physical connection.  Upon the filing of an 
application for discontinuance of such a connection, the 
department shall investigate and ascertain whether public 
convenience requires the continuance of such physical 
connection, and if the department so finds, the commission shall 
fix the compensation, terms and conditions of the continuance of 
the physical connection and service between the telephone 
companies. 
    Subd. 3.  [COMPENSATION.] Telephone companies providing 
long-distance telephone services shall pay compensation to 
telephone companies providing local telephone services that 
includes a fair and reasonable portion of:  
    (1) the costs of local exchange facilities used in 
connection with long-distance telephone services, including 
facilities connecting a customer to local switching facilities; 
and 
    (2) the common costs of companies providing local telephone 
services.  
    Sec. 22.  Minnesota Statutes 1986, section 237.16, 
subdivision 1, is amended to read:  
    Subdivision 1.  For the purpose of bringing about 
uniformity of practice, the commission shall have the exclusive 
right to grant authority to any telephone company to construct 
telephone lines or exchanges for furnishing local service to 
subscribers in any municipality of this state, and to prescribe 
the terms and conditions upon which construction may be carried 
on, and whenever the commission grants such authority, it shall 
be in the form of a permit of indeterminate duration -- coupled 
with the right to the municipality to purchase the telephone 
plant within the city, as hereinafter provided.  No lines or 
equipment shall be constructed or installed for the purpose of 
furnishing local rural or toll telephone service to the 
inhabitants or telephone users in any locality in this state, 
where there is then in operation in the locality or territory 
affected thereby another telephone company already furnishing 
such service, without first securing from the commission a 
declaration, after a public hearing, that public convenience 
requires such proposed telephone lines or equipment; but the 
governing body of any municipality shall have the same powers of 
regulation which it now possesses with reference to the location 
of poles and wires so as to prevent any interference with the 
safe and convenient use of streets and alleys by the public.  
    Sec. 23.  Minnesota Statutes 1986, section 237.17, is 
amended to read:  
    237.17 [EXTENSION OF LONG DISTANCE LINES.] 
    Any telephone company may extend its long distance lines 
into or through any city of this state for the furnishing of 
long distance service only, subject to the regulation of the 
governing body of such city relative to the location of the 
poles and wires and the preservation of the safe and convenient 
use of such streets and alleys to the public, provided that if 
such lines are to furnish service between communities or 
localities then served by another company, a certificate of 
public convenience must first be obtained as required by section 
237.16.  
    Sec. 24.  Minnesota Statutes 1986, section 237.22, is 
amended to read:  
    237.22 [DEPRECIATION; AMORTIZATION.] 
    The commission shall fix proper and adequate rates and 
methods of depreciation and amortization with respect to 
telephone company property and every telephone company shall 
conform its depreciation accounts for property used in whole or 
in part to provide noncompetitive services to the rates and 
methods fixed by the commission. 
    Sec. 25.  [REPEALER.] 
    Minnesota Statutes 1986, sections 237.13, 237.41, 237.42, 
and 237.43, are repealed.  
    Sec. 26.  [EFFECTIVE DATE.] 
    Sections 1 to 12 are effective August 1, 1987, and are 
repealed effective August 1, 1992. 
    Approved June 1, 1987