1.1 	A bill for an act
1.2 	relating to telecommunications; providing for basic
1.3 	services regulation of telephone companies; proposing
1.4 	coding for new law in Minnesota Statutes, chapter 237.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. [237.85] DEFINITIONS.
1.7 		Subdivision 1.Scope. The definitions in this section
1.8 	apply to sections 237.85 to 237.88.
1.9 		Subd. 2.Basic services. "Basic services" means one
1.10 	unbundled, single line, unlimited usage, residential voice local
1.11 	exchange telephone services or unbundled, single line, unlimited
1.12 	usage, business voice local exchange telephone services.  "Basic
1.13 	services" does not include any state or federally authorized or
1.14 	mandated services.
1.15 		Subd. 3.Basic services regulated company. "Basic
1.16 	services regulated company" means a telephone company that
1.17 	chooses to operate under basic service regulation under section
1.18 	237.86.
1.19 		Subd. 4.Commission. "Commission" means the Public
1.20 	Utilities Commission.
1.21 		Subd. 5.Retail. "Retail" means provision of local
1.22 	exchange service or interexchange telephone service, or both, to
1.23 	an end user.

1.24 	Sec. 2. [237.86] BASIC SERVICES REGULATION.
1.25 	A form of alternative regulation known as "basic services
2.1 	regulation" is available to a telephone company that provides
2.2 	local exchange service in Minnesota.  A telephone company may
2.3 	opt into basic services regulation by giving the commission at
2.4 	least 30 days written notice of its election.  Under basic
2.5 	services regulation a telephone company offering local exchange
2.6 	telephone service must file tariffs for basic services.  These
2.7 	tariffs must be filed, initially, at least 30 days in advance to
2.8 	become effective on the date the election becomes effective.

2.9 	Sec. 3. [237.87] COMMISSION AUTHORITY.
2.10 	(a) The commission has the following authority over a basic
2.11 	services regulated company:
2.12 	(1) receive and investigate complaints against telephone
2.13 	companies to the extent the complaints relate to the authority
2.14 	retained by the commission in this section;
2.15 	(2) adopt necessary rules that are equally applicable to
2.16 	all providers of telecommunications services that:
2.17 	(i) require customer notice of tariff rate changes or
2.18 	withdrawal of tariffed service offerings;
2.19 	(ii) provide for disconnection of basic services customers
2.20 	for nonpayment of local exchange service, late payment fees, and
2.21 	deposits for customers, including the payment of interest on
2.22 	customer deposits; and 
2.23 	(iii) establish service quality standards; and 
2.24 	(3) administer the telecommunications relay service and
2.25 	telephone assistance plan, including the assessment to telephone
2.26 	companies pursuant to sections 237.49, 237.50 to 237.56, and
2.27 	237.69 to 237.711.
2.28 	(b) Notwithstanding any other provision of law, basic
2.29 	services regulation exempts all retail telephone services,
2.30 	including their rates, types, and manner of offering, and
2.31 	service quality, from the jurisdiction of the commission except
2.32 	to the extent specifically provided in this section.  The
2.33 	commission retains all authority contained elsewhere in this
2.34 	chapter.

2.35 	Sec. 4. [237.88] IMPLEMENTATION PROCEDURES; DUTIES.
2.36 	(a) A basic services regulated company must file and
3.1 	maintain on file with the commission tariffs for its basic
3.2 	services that contain service descriptions and the terms and
3.3 	conditions, including rates, under which the services are
3.4 	offered to the public.  No telephone company or
3.5 	telecommunications carrier is prohibited from offering customer
3.6 	incentives of the type offered by other telephone companies,
3.7 	telecommunications carriers, or providers of voice or data
3.8 	services.
3.9 	(b) A basic services regulated company offering local
3.10 	exchange telephone service must tariff its monthly rates for
3.11 	each basic service.  The basic services regulated company must
3.12 	provide its basic services at its current monthly tariffed
3.13 	rates, except during any transition period described in this
3.14 	section.  A basic services regulated company may not increase
3.15 	its rates for each basic service offering by more than 50 cents
3.16 	per month per line during the first calendar year, or portion of
3.17 	a year, it opts into basic services regulation.  A basic
3.18 	services regulated company may increase its rates by up to 50
3.19 	cents per line per month for each of the following five calendar
3.20 	years.
3.21 	(c) After five years, the commission shall use the gross
3.22 	domestic Product Price Index, as published by the federal
3.23 	government, for an inflation measure to determine the amount a
3.24 	basic services regulated telephone company may increase its
3.25 	monthly per line prices for its basic service offerings.  The
3.26 	commission may adopt by rule a more current measure of inflation
3.27 	for communications services.
3.28 	(d) The initial rates for each basic service of a basic
3.29 	service regulated company may not exceed the highest tariffed
3.30 	rate in effect in its service territory for the corresponding
3.31 	basic service prior to opting into basic service regulation.
3.32 	The rates shall remain in effect for a minimum of one year from
3.33 	its initial effective date.  Any subsequent increases in the
3.34 	rates may not be effective until a minimum of 12 months have
3.35 	passed since any previous increase.
3.36 	(e) Nothing in this section prohibits a telephone company
4.1 	or a telecommunications carrier from decreasing its basic
4.2 	service rates.  A basic services regulated telephone company or
4.3 	telecommunications carrier may subsequently increase rates, but
4.4 	may not exceed the authorized transitional or inflation adjusted
4.5 	monthly rates.  Except as necessary to comply with this section,
4.6 	no basic service may be priced below the total service long-run
4.7 	incremental cost for the service.

4.8 	Sec. 5. EFFECTIVE DATE.
 4.9 	Sections 1 to 4 are effective the day following final
4.10 	enactment.