2010 Pennsylvania Code
Title 66 - PUBLIC UTILITIES
Chapter 30 - Alternative Form of Regulation of Telecommunications Services
3015 - Alternative forms of regulation.

     § 3015.  Alternative forms of regulation.
        (a)  Inflation offset.--
            (1)  Except as otherwise provided in paragraphs (2) and
        (3), a local exchange telecommunications company with an
        alternative form of regulation containing a price stability
        mechanism that files an amended network modernization plan
        under section 3014(b)(1), (2) or (3) (relating to network
        modernization plans) shall be subject to a modified inflation
        offset in its price stability mechanism in adjusting its
        rates for noncompetitive services, effective upon the filing
        of an amended network modernization plan under section
        3014(e), as follows:
                (i)  If a nonrural telecommunications carrier files
            an amended network modernization plan under section
            3014(b)(3) that commits to deploy 100% broadband
            availability by December 31, 2013, then the carrier's
            inflation offset shall be zero.
                (ii)  If a nonrural telecommunications carrier files
            an amended network modernization plan under section
            3014(b)(3) that commits to deploy 100% broadband
            availability by December 31, 2015, then the carrier's
            inflation offset shall be equal to 0.5%.
                (iii)  If a rural telecommunications carrier files an
            amended network modernization plan under section
            3014(b)(1) that commits to deploy 100% broadband
            availability by December 31, 2008, or under section
            3014(b)(2)(ii)(A) that commits to deploy 100% broadband
            availability by December 31, 2013, then the carrier's
            inflation offset shall be zero.
                (iv)  If a rural telecommunications carrier files an
            amended network modernization plan under section
            3014(b)(2)(ii)(B) that commits to deploy 100% broadband
            availability by December 31, 2015, then the carrier's
            inflation offset shall be equal to 0.5%.
            (2)  Utilizing network modernization plan reports filed
        with the commission by local exchange telecommunications
        companies under section 3014(f), the commission shall monitor
        and enforce companies' compliance with their interim and
        final 100% commitments for broadband availability in their
        amended network modernization plans. In the event that a
        local exchange telecommunications company is found by the
        commission, after notice and evidentiary hearings held on an
        expedited basis, to have failed to meet such an interim or
        final 100% commitment, then the commission shall require the
        local exchange telecommunications company to refund to
        customers in its next price stability filing an amount that
        is just and reasonable under the circumstances. Such amount
        shall not exceed an amount determined by multiplying the
        percentage shortfall of the broadband availability commitment
        on an access-line basis required to be met during the period
        from the start of the amended plan or from the date of the
        last prior interim commitment, as applicable, times the
        increased revenue that was obtained during this period as a
        result of the modified inflation offset provided in this
        section that reduced the inflation offset applicable in the
        local exchange telecommunications company's alternative
        regulation plan in effect on the effective date of this
        section, plus interest calculated under section 1308(d)
        (relating to voluntary changes in rates). Any such refund
        required under this subsection shall be separate from and in
        addition to any civil or other penalties that the commission
        may impose on a local exchange telecommunications company
        under Chapter 33 (relating to violations and penalties).
            (3)  Where annual rate adjustments made under a nonrural
        telecommunications carrier's price stability mechanism are
        calculated using revenues from protected services, an average
        rate adjustment for protected residential customer local
        exchange telecommunications service lines shall be determined
        by dividing the total protected service revenues associated
        with such lines, as adjusted by the price stability formula,
        by the number of such lines, and the rate adjustment for any
        individual line shall not vary from this average rate
        adjustment by more than 20%.
        (b)  Rate changes for rural telecommunications carriers.--
            (1)  In addition to the rate change provisions in its
        alternative form of regulation plan, a rural
        telecommunications carrier operating without a price
        stability mechanism that files with the commission an amended
        network modernization plan under section 3014(b)(1) or (2)
        shall be permitted at any time to file proposed tariff
        changes with the commission, effective 45 days after filing,
        setting forth miscellaneous changes, including increases and
        decreases, in rates for noncompetitive services, excluding
        basic residential and business rates, provided such rate
        changes do not increase the rural telecommunications
        carrier's annual intrastate revenues by more than 3%.
            (2)  The commission tariff filing requirements and review
        associated with such proposed rate changes shall be limited
        to schedules submitted by the rural telecommunications
        carrier detailing the impact of the rate changes on the
        carrier's annual intrastate revenues.
            (3)  A rural telecommunications carrier that implements
        noncompetitive rate changes consistent with the procedure set
        forth in its alternative form of regulation plan shall be
        required only to file such financial and cost data with the
        commission to justify such changes as is required under its
        commission-approved alternative form of regulation plan.
            (4)  Notwithstanding the provisions of paragraph (1), (2)
        or (3), for any rural telecommunications carrier serving less
        than 50,000 access lines in this Commonwealth and operating
        under an alternative form of regulation plan, a formal
        complaint to deny rate changes for noncompetitive services
        unless signed by at least 20 customers of the rural
        telecommunications carrier shall not prevent implementation
        of the rate changes pending the adjudication of the formal
        complaint by the commission.
        (c)  Broadband Outreach and Aggregation Fund.--
            (1)  There is hereby established within the State
        Treasury a special fund to be known as the Broadband Outreach
        and Aggregation Fund for the purposes enumerated in section
        3014(i).
            (2)  A local exchange telecommunications company that
        files an amended network modernization plan under section
        3014(b)(2) or (3) shall be assessed by the commission for
        contribution to the fund and to the E-fund established under
        subsection (d) an amount of 20% of the first year's annual
        revenue effect:
                (i)  of any rate increase permitted by the
            elimination or reduction of the offset under subsection
            (a) and placed into effect; or
                (ii)  of any rate increase placed into effect under
            subsection (b)(1) if the local exchange
            telecommunications company is operating without a price
            stability mechanism.
        For purposes of this paragraph, the term "first year's annual
        revenue effect" means the projected or actual increased
        revenues received by the local exchange telecommunications
        company during the one-year period from the effective date of
        its rate increase. The commission shall begin the assessments
        provided for in this paragraph on June 30, 2005, and
        thereafter shall make such assessments annually on June 30
        until June 30, 2010, for assessments that include amounts for
        the fund and the e-fund and until June 30, 2015, for
        assessments that include amounts for only the fund. Each
        assessment shall be based on the first year's annual revenue
        effect of any covered rate increase effective after the date
        of the last annual assessment.
            (3)  An amount not to exceed 50% of such assessment shall
        be allocated to the fund. The remainder of the assessment
        shall be allocated to the E-fund provided for under
        subsection (d) until its termination on June 30, 2011. After
        the E-fund termination, the maximum assessment percentage
        shall be reduced from 20% to 10%, and contributions shall be
        made only to the fund until the local exchange
        telecommunications company achieves 100% broadband
        availability. Contributions of allocated amounts shall be
        paid to the fund and the E-fund by the local exchange
        telecommunications company in equal quarterly installments.
            (4)  In no event shall the total amount of the fund
        exceed $5,000,000 annually, and in the event of such
        overfunding the department shall credit the overcollection to
        the next year's contribution amount.
            (5)  A local exchange telecommunications company that
        elects to amend its network modernization plan pursuant to
        section 3014 (b)(1) shall not be required to contribute to
        the fund.
            (6)  The moneys in the Broadband Outreach and Aggregation
        Fund are hereby appropriated upon approval of the Governor to
        the department for the purposes enumerated in paragraph (1).
        The department may use up to 3% of the money in the fund for
        administration.
            (7)  The fund shall continue until July 1, 2016, at which
        time the fund shall terminate, and the department shall
        return any funds remaining in the fund on a pro rata basis to
        the local exchange telecommunications companies that
        contributed to the fund.
        (d)  Education Technology Fund (E-Fund).--
            (1)  There is hereby established within the State
        Treasury a special fund to be known as the Education
        Technology Fund (E-Fund) for the purposes enumerated in
        paragraph (4).
            (2)  All E-fund assessments imposed by the commission
        under subsection (c)(2) and paragraph (3), moneys
        specifically appropriated by the General Assembly for the
        purposes of this subsection and any funds, contributions or
        payments which may be made available to the fund by the
        Federal Government, another State agency or any public or
        private source for the purpose of implementing this
        subsection shall be deposited in the E-Fund.
            (3)  Beginning in 2005 and continuing through 2010, the
        commission shall, no later than June 30, annually assess each
        nonrural telecommunications carrier that files an amended
        network modernization plan under section 3014(b)(3) an amount
        to be deposited in the E-Fund. Each carrier's annual
        assessment shall be payable in two equal installments due on
        October 31 of each year and January 31 of the following year
        and shall be based on the relative proportion of the retail
        access lines served by the nonrural telecommunications
        carrier in relation to the number of retail access lines
        served by all nonrural telecommunications carriers that have
        filed an amended network modernization plan under section
        3014(b)(3). For fiscal years 2005-2006 and 2006-2007, the
        total annual assessment amount shall be $7,000,000. For
        fiscal years 2007-2008, 2008-2009, 2009-2010 and 2010-2011,
        the total annual assessment amount shall be the difference
        between $7,000,000 and any amount remaining in the E-Fund
        from prior fiscal years which remains unencumbered or
        unexpended. A nonrural telecommunications carrier's
        assessments required under this paragraph may not be
        recovered via a surcharge on customers' bills or in rates for
        noncompetitive services as exogenous change adjustment under
        the provisions of the carrier's price stability mechanism and
        subsection (a)(3) where applicable.
            (4)  Additional local exchange telecommunications company
        contributions to the E-fund shall be made pursuant to the
        provisions of subsections (c)(2) and (3).
            (5)  The Department of Education shall expend the moneys
        of the E-Fund for the purpose of providing grants to school
        entities as prescribed by section 3014(j).
            (6)  The moneys of the Education Technology Fund are
        hereby appropriated upon approval of the Governor to the
        Department of Education for the purposes enumerated in
        paragraph (5). The Department of Education may use up to 3%
        of the money for administration. Appropriations by the
        General Assembly to the fund shall be continuing
        appropriations and shall not lapse at the close of any fiscal
        year.
            (7)  The E-Fund shall continue until June 30, 2011, at
        which time the fund shall terminate and the Department of
        Education shall return any funds remaining therein on a pro
        rata basis to the local exchange telecommunications companies
        that contributed to the fund.
        (e)  General filing requirements.--The commission's filing
     and audit requirements for a local exchange telecommunications
     company that is operating under an amended network modernization
     plan shall be limited to the following:
            (1)  Network modernization plan reports filed pursuant to
        section 3014(f).
            (2)  An annual financial report consisting of a balance
        sheet and income statement.
            (3)  An annual deaf, speech-impaired and hearing-impaired
        relay information report.
            (4)  An annual service report.
            (5)  Universal service reports.
            (6)  An annual access line report.
            (7)  An annual statement of gross intrastate operating
        revenues for purposes of calculating assessments for
        regulatory expenses.
            (8)  An annual State tax adjustment computation for years
        in which a tax change has occurred, if applicable.
            (9)  For those companies with a bona fide retail request
        program, a bona fide retail request report under section
        3014(c)(9). These reports shall be submitted in the form
        determined by the commission.
        (f)  Other reports.--
            (1)  Notwithstanding any other provision of this title to
        the contrary, no report, statement, filing or other document
        or information, except as specified in subsection (e), shall
        be required of any local exchange telecommunications company
        unless the commission, upon notice to the affected local
        exchange telecommunications company and an opportunity to be
        heard, has first made specific written findings supporting
        conclusions in an entered order that:
                (i)  The report is necessary to ensure that the local
            exchange telecommunications company is charging rates
            that are in compliance with this chapter and its
            effective alternative form of regulation.
                (ii)  The benefits of the report substantially
            outweigh the attendant expense and administrative time
            and effort required of the local exchange
            telecommunications company to prepare it.
            (2)  Nothing in this subsection shall be construed to
        impede the ability of the commission to require the
        submission of further information to support the accuracy of
        or to seek an explanation of the reports specified in
        subsection (e).
        (g)  Rate change limitations.--Nothing in this chapter shall
     be construed to limit the requirement of section 1301 (relating
     to rates to be just and reasonable) that rates shall be just and
     reasonable. The annual rate change limitations set forth in a
     local exchange telecommunications company's effective
     commission-approved alternative form of regulation plan or any
     other commission-approved annual rate change limitation shall
     remain applicable and shall be deemed just and reasonable under
     section 1301.
        (h)  Conformance of plan.--Upon approval of a local exchange
     telecommunications company of network modernization plan
     amendments pursuant to section 3014(e), the local exchange
     telecommunications company's alternative form of regulation plan
     shall be deemed amended consistent with this section.
     (Nov. 30, 2004, P.L.1398, No.183, eff. imd.)

        2004 Amendment.  Act 183 added section 3015.
        Cross References.  Section 3015 is referred to in sections
     3012, 3014, 3019 of this title.