2013 South Carolina Code of Laws
Title 58 - Public Utilities, Services and Carriers
CHAPTER 9 - TELEPHONE, TELEGRAPH AND EXPRESS COMPANIES
SECTION 58-9-576. Election by LEC (local exchange carrier); alternative forms of regulation; duties of LEC.

(A) Any LEC may elect to have rates, terms, and conditions determined pursuant to the plan described in subsection (B), if the commission:

(1) has approved a local interconnection agreement in which the LEC is a participant with an entity determined by the commission not to be affiliated with the LEC;

(2) determines that another provider's service competes with the LEC's basic local exchange telephone service; or

(3) determines that at least two wireless providers have coverage generally available in the LEC's service area and that the providers are not affiliates of the LEC. A determination by the commission under subitem (3) of this subsection shall not constitute a determination under Section 58-9-280(E)(3) or (G)(1), or any other applicable provision of law, that a wireless provider is providing services that compete with a local telecommunications service in this State for purposes of participation in the state Universal Service Fund.

(B) Notwithstanding any other provision of this chapter, effective July 1, 1996, any LEC may elect to have its rates, terms, and conditions for its services determined pursuant to the plan described in this subsection, in lieu of other forms of regulation including, but not limited to, rate of return or rate base monitoring or regulation, upon the filing of notice with the commission and providing a copy of any such notice to the Office of Regulatory Staff as follows:

(1) If the provisions of subsection (A) have been complied with, the plan under this subsection becomes effective on the date specified by the electing LEC, but in no event sooner than thirty days after the notice is filed with the commission.

(2) Except as provided in item (8), on the date a LEC notifies the commission of its intent to elect the plan described in this section, existing rates, terms, and conditions for the services provided by the electing LEC contained in the then-existing tariffs and contracts are considered just and reasonable.

(3) The rates for flat-rated local exchange services for residential and single-line business customers on the date of election shall be the maximum rates that the LEC may charge for these local exchange services for a period of two years from the date the election is filed with the commission. During this period, the local exchange company may charge less than the authorized maximum rates for these services. For those small LEC's whose prices are below the statewide average local service rate, weighted by number of access lines, the commission shall waive the requirements of this paragraph until the time as the flat-rated local exchange service rate for residential customers equals the statewide average local residential service rate, weighted by the number of access lines, and the flat-rated local exchange service rate for single-line business customers equals two times the statewide average local residential service rate.

(4) For those companies to which item (3) applies, after the expiration of the period set forth above, the rates for flat-rate local exchange residential and single-line business service provided by a LEC may be adjusted on an annual basis pursuant to an inflation-based index.

(5) The LEC's shall set rates for all other services on a basis that does not unreasonably discriminate between similarly situated customers. All of these rates are subject to a complaint process for abuse of market position. The commission shall resolve any complaint alleging abuse of market position within one hundred eighty days of the date the complaint is filed with the commission. Rates that exceed the total service long run incremental cost of an offering or that satisfy Section 58-9-280(I) do not constitute an "abuse of market position". Other rates constitute an "abuse of market position" if they constitute any anticompetitive pricing action that prohibits a new firm from entering a market or that would cause a firm to exit a market. Additionally, during any given twelve-month period, the aggregate increases in the tariffed rates for other services must not exceed five percent of the aggregate revenues from tariffed other services during the prior twelve-month period.

(6) A LEC subject to this section shall file tariffs in accordance with Section 58-3-140(F) for its local exchange services that set out the terms and conditions of the services and the rates for these services. The LEC also must provide a copy of the tariffs to the regulatory staff. The tariff shall be presumed valid and become effective seven days after filing for price decreases and fourteen days after filing for price increases and new services.

(7) Any incumbent LEC operating under an alternative regulatory plan approved by the commission before the effective date of this section must adhere to the plan until the plan expires or is terminated by the commission, whichever is sooner.

(8) On the date a LEC notifies the commission of its intent to elect the plan described in this section under the criteria established by the provisions of subsection (A)(3), existing rates, terms, and conditions for the services provided by the electing LEC contained in the then-existing tariffs and contracts are considered just and reasonable; however, a LEC's election to be regulated pursuant to the plan described in this section under the criteria established by the provisions of subsection (A)(3) must not be used as the basis for dismissing or not adjudicating a pending complaint relating to the LEC's rates, terms, or conditions.

(C) Notwithstanding any other provision of this chapter, upon the effective date of this subsection, a LEC that is operating pursuant to subsection (B) based on having complied with subsection (A)(1) or (A)(2), or a LEC that complies with subsection (A)(1) or (A)(2), may elect to have its rates, terms, and conditions for its services determined pursuant to the plan described in this subsection. If at the time of this election the LEC is operating pursuant to subsection (B) based on having complied with subsection (A)(1) or (A)(2), the election becomes effective five days after the notice of the election is filed with the commission. Otherwise, the election becomes effective in the same manner as provided for in subsection (B)(1).

(1) As used in this subsection:

(a) "Single-line basic residential service" means single-line residential flat rate basic voice grade local service with touch tone within a traditional local calling area that provides access to available emergency services and directory assistance, the capability to access interconnecting carriers, relay services, access to operator services, and one annual local directory listing (white pages or equivalent).

(b) "Stand-alone basic residential line" means single-line basic residential service that is billed on a billing account that does not also contain another service, feature, or product that is sold by the LEC or an affiliate of the LEC and that is billed on a recurring basis on the LEC's bill.

(c) "Preelection date" means the date immediately before the effective date of the LEC's election under this subsection.

(d) "LEC's preelection state USF withdrawal" means the amount of annual distributions or payments the LEC receives from the state USF as of the preelection date.

(e) "LEC's state USF reduction" means an amount equal to twenty percent of the LEC's preelection state USF withdrawal.

(f) "LEC's preelection Interim LEC fund withdrawal" means the amount of annual distributions or payments the LEC receives from the Interim LEC Fund as of the preelection date.

(g) "LEC's Interim LEC fund reduction" means twenty percent of the LEC's preelection Interim LEC fund withdrawal.

(h) "LEC" has the same meaning as provided for in Section 58-9-10(12).

(2) Beginning on the date that the LEC's election, pursuant to this subsection, becomes effective, the LEC may increase its rates for its stand-alone basic residential lines that were in service on the preelection date on an annual basis by a percentage that does not exceed the percentage increase over the prior year in the Gross Domestic Product Price Index, as reported by the United States Department of Labor, Bureau of Labor Statistics. If the customer of record for a stand-alone basic residential line that was in service on the preelection date dies or moves from the residence, the provisions of this subitem will continue to apply to the stand-alone basic residential line at the residence if a spouse, family member, or co-tenant of that customer of record provides documentation showing that he resided at the location and requests to have the stand-alone basic residential line continued in his name. With the sole exception of ensuring the LEC's compliance with the preceding sentences, the commission must not:

(a) impose any requirements related to the terms, conditions, rates, or availability of any of the LEC's stand-alone basic residential lines that were in service on the preelection date; or

(b) otherwise regulate any of the LEC's stand-alone basic residential lines that were in service on the preelection date.

(3) Except to the extent provided for in item (2), beginning on the date that the LEC's election, pursuant to this subsection, becomes effective, the commission must not:

(a) impose any requirements related to the terms, conditions, rates, or availability of any of the LEC's retail services; or

(b) otherwise regulate any of the LEC's retail services, including without limitation any stand-alone basic residential lines put into service after the preelection date.

(4) Beginning on the date that the LEC's election, pursuant to this subsection, becomes effective, the commission must not:

(a) impose any requirements related to the terms, conditions, rates, or availability of any retail interexchange services offered by the LEC or any of its affiliated entities; or

(b) otherwise regulate any of the retail interexchange services of the LEC or any of its affiliates.

(5) Beginning on the date that the LEC's election, pursuant to this subsection, becomes effective, the LEC is not required to file schedules as required by Section 58-9-230 for any of its billing and collection services. Nothing in this subsection otherwise diminishes, and nothing in this subsection expands the commission's jurisdiction as it exists on the effective date of this subsection over wholesale services, including without limitation switched access services, carrier-to-carrier agreements, and carrier-to-carrier complaints regarding nonretail services.

(6) A LEC's election, pursuant to this subsection, does not affect obligations of an incumbent local exchange carrier, as defined by Section 251(h) of the federal Telecommunications Act of 1996, pursuant to Sections 251 and 252 of the federal act or any Federal Communications Commission regulation relating to Sections 251 and 252 of the federal act.

(7) A LEC's election, pursuant to the provisions of this subsection, does not affect the commission's jurisdiction to enforce federal requirements on the LEC's marketing activities. The commission must not adopt, impose, or enforce other requirements on the LEC's marketing activities, including without limitation any requirements of Orders No. 2001-1036 and 2002-2 the South Carolina Public Service Commission entered in Docket No. 2000-378C.

(8) Nothing in this section affects the commission's certification authority pursuant to Section 58-9-280 (A) or (B), or the commission's authority under federal or state law to make appropriate determinations with respect to market entry or other matters in areas served by small LECs.

(9) Nothing in this subsection affects any obligation of the LEC and its affiliates to provide contributions to the state USF and Interim LEC fund, and the commission must ensure that contributions to the state USF and Interim LEC fund, pursuant to the provisions of Section 58-9-280(E), (L), and (M), are maintained at appropriate levels.

(a) For the one-year period beginning on the date that the LEC's election, pursuant to this subsection, becomes effective, the LEC is entitled to withdraw from the Interim LEC fund an amount equal to the LEC's preelection Interim LEC fund withdrawal less the LEC's Interim LEC fund reduction. For the subsequent one-year period, the amount the LEC is entitled to withdraw from the Interim LEC fund is reduced by the LEC's Interim LEC fund reduction. Beginning at the expiration of the second year after the date that the LEC's election, pursuant to this subsection, becomes effective, the LEC is no longer entitled to withdraw any funds from the Interim LEC fund.

(b) Except as otherwise provided in subitem (c) of this item, for the one-year period beginning on the date that the LEC's election, pursuant to this subsection, becomes effective, the LEC is entitled to withdraw from the state USF an amount equal to the LEC's preelection state USF withdrawal less the LEC's state USF reduction. For the subsequent one-year period, the amount the LEC is entitled to withdraw from the state USF is reduced by the LEC's state USF reduction amount. At the end of the second year after the date that the LEC's election, pursuant to this subsection, becomes effective, the LEC is no longer entitled to withdraw any funds from the state USF.

(c) Before the end of the second year after the date that the LEC's election, pursuant to this subsection, becomes effective, the LEC may petition the commission to withdraw from the state USF an amount that differs from the amount determined pursuant to subitem (b) of this item. Upon the filing of this petition, the commission, after notice and opportunity for a hearing, must determine the amount of distributions or payments from the state USF the LEC is entitled to receive, based only on the LEC's stand-alone basic residential lines that were in service on the preelection date and that remain in service as of the date of the LEC's petition. The commission also must establish a process for annually reducing the amount of distributions or payments from the state USF based on the LEC's stand-alone basic residential lines that were in service on the preelection date and that remain in service as of the adjustment date.

(d) In addition to any amounts the LEC is entitled to withdraw pursuant to subitems (a), (b), and (c) of this item, the LEC also is entitled to withdraw from the state USF all amounts needed to fund any state Lifeline match that is necessary to ensure that persons enrolled in the Lifeline program receive the maximum federally funded Lifeline credit amounts available, including without limitation, federal baseline credit amounts and federal supplemental credit amounts.

(10) For those LECs that have not elected to have rates, terms, and conditions for their services determined pursuant to the plan described in this subsection, the Interim LEC fund and state USF shall continue to operate in accordance with Sections 58-9-280(E), (L), and (M).

(11) For those LECs that have not elected to operate under this section, nothing contained in this section or any subsection shall affect the current administration of the state USF nor does any provision thereof constitute a determination or suggestion that only stand-alone basic residential lines should be entitled to support from the state USF.

(12)(a) In order to transition to the changes effectuated by items (2), (3), and (4), the rates, terms, and conditions for products and services no longer subject to regulation by the commission, which were in effect with a specific term on the preelection date, remain in effect for the duration of the specific term as to customers who subscribed to those products or services on or before the preelection date. If no term applied to the products or services as of the preelection date, then the rates, terms, and conditions governing those products or services remain in effect until a written customer service agreement becomes effective as provided for in subitem (b) of this item.

(b) Except as provided in subitem(a) of this item, the LEC and the LEC's affiliates offering interexchange services must offer existing and new customers a written customer service agreement, which in the case of new customers must be delivered no later than thirty days after the initiation of service. The customer service agreement must include a provision advising the customer that he has thirty days from receipt in which to elect to:

(i) terminate service with the LEC or the LEC's affiliates offering interexchange services by contacting the entity within the thirty-day time period, in which case the customer has the right to pay off the account in the same manner and under the same rates, terms, and conditions as set forth in the written customer service agreement provided to the customer, which written customer service agreement must relate back in its entirety to the date of a new customer's request for service or the date the agreement was sent to an existing customer, as applicable, and is in effect until termination through pay off. The written customer service agreement must not impose termination charges, transfer charges, or similar charges or limitations that did not apply to the customer's service on the preelection date; or

(ii) use the services of the LEC or the LEC's affiliates offering interexchange services, or to otherwise continue the account with the LEC or the LEC's affiliates offering interexchange services after the thirty-day time period has elapsed, either of which constitutes the customer's assent to all the rates, terms, and conditions of the written customer service agreement. The written customer service agreement must not impose a term commitment, termination charges, transfer charges, or similar charges or limitations that did not apply to the customer's service on the preelection date. The customer service agreement is deemed received three business days after deposit in the United States mail, first-class delivery.

(13) The LEC's assessments pursuant to Sections 58-3-100, 58-3-540, and 58-4-60, and the assessments of the LEC's affiliates offering interexchange services pursuant to Sections 58-3-100, 58-3-540, and 58-4-60, continue to be based upon gross income from operation in this State in the same manner as such assessments were calculated before the effective date of this subsection.

(14) With respect to electing LECs, the Office of Regulatory Staff must maintain copies of all written complaints it receives regarding the following: (a) allegations regarding the inability of residential and business customers to obtain the functional equivalent of basic local exchange service; (b) allegations of anticompetitive practices; and (c) allegations regarding violations of contract terms and conditions by an electing LEC.

(15) No later than five years from the effective date of this act and every five years following the submission of the first report, the Office of Regulatory Staff must submit to the General Assembly a report examining the effect of this act on residential and business consumers in areas served by the LECs that elect to operate under this subitem. These reports shall include details of any pattern or practice by the electing LEC of violating the terms and conditions of its contract with residential or commercial customers or engaging in anticompetitive activities. These reports must be based on all records in the possession of the Office of Regulatory Staff, including without limitation, information obtained by the Office of Regulatory Staff pursuant to Section 58-4-55. The reports must not disclose any proprietary or confidential information about individual providers.

(16) When considered in the public interest by the Executive Director of the Office of Regulatory Staff, the Office of Regulatory Staff may file an action, in the name of the State and in any court of competent jurisdiction, against a LEC that elects to have its rates, terms, and conditions for its services determined pursuant to the plan described in Section 58-9-576(C), seeking to restrain by temporary restraining order, temporary injunction, or permanent injunction, a pattern or practice by the electing LEC of violating the terms and conditions of its contract with residential or business customers or of engaging in anticompetitive activities.

HISTORY: 1996 Act No. 354, Section 3, eff May 29, 1996; 2005 Act No. 5, Section 4, eff July 1, 2004 [subsections (B)(1) and (B)(4) to (7)] and October 1, 2004 [subsections (A) and (B)(2), (3) and (8)]; 2006 Act No. 318, Section 47, eff May 24, 2006; 2009 Act No. 7, Section 1, eff May 6, 2009.