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PA Bulletin, Doc. No. 98-914


Updating and Revising Existing Filing Requirement Regulations at 52 Pa. Code §§ 53.52 and 53.53--Telecommunication Utilities; Doc. No. L-00940095

[28 Pa.B. 2631]

Public Meeting held
April 9, 1998

Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice Chairperson; John Hanger; David W. Rolka, Concurring--Statement follows; Nora Mead Brownell


By the Commission:

   On October 18, 1994, this Commission entered an Order at the above-docketed number to initiate rulemaking proceedings for each utility industry to revise and streamline existing filing requirement regulations at 52 Pa. Code § 53.53 for general rate increases in excess of $1 million. At the June 12, 1997 Public Meeting, we directed that the rulemaking in the above-captioned docket be re-focused and expanded to include the filing requirements at 52 Pa. Code § 53.52 for all other tariff changes that are proposed by local exchange telecommunications service providers. This docket's focus, therefore, was to review existing Commission rules and to formulate revisions to those rules that would lessen the regulatory burdens on all telecommunications providers, thereby promoting competition, to the extent consistent with the public interest and the doctrine of ''regulatory parity.''

   In the intervening years since this docket was opened, many significant events have occurred to effectuate the deregulation of the telecommunications industry and the promotion of competition in its stead. The most significant of these events has been the enactment of the Federal Telecommunications Act of 1996 (TA-96), 47 U.S.C. §§ 251--276. Our review of the impact of these events, the actions of other state utility commissions around the country in opening up their telecommunications markets to competition, and the numerous comments filed in the instant proceeding have led this Commission to conclude that we cannot ignore the issue of ''market power'' as we strive to structure telecommunications regulation in a manner that achieves a transition to a fully competitive telecommunications market. To that end, while we seek ''regulatory parity,'' that is, all providers should share the benefits and burdens of regulation equally, we understand that parity in all cases is not possible until the playing field is level for all market participants.

   The Commission, therefore, is prepared to propose regulations to amend the filing requirements at 52 Pa. Code § 53.52 for local exchange telecommunications providers that will reflect the principle that ''regulatory parity'' with respect to rate regulation between ILECs and CLECs is not appropriate until the ILEC no longer possesses market power. In determining when regulatory parity should apply in the future, the Commission will propose utilizing the same criteria contained in 66 Pa.C.S. § 3005(a)(1) for determining whether or not a telecommunications service should be declared ''competitive.''

   Specifically, the proposed rulemaking we contemplate adopting will reflect the principle that the services which have been classified as competitive for ILECs under Chapter 30 of the Public Utility Code, 66 Pa.C.S. §§ 3001--3009, can also be offered by CLECs as competitive services without a prior competitive determination and classification by this Commission for each CLEC on a case-by-case basis. The offering of such services by the CLECs on a competitive basis will be limited to the areas the respective CLECs have been certified to serve, and to the exchanges of those ILECs that have obtained the competitive classification for these services under a Chapter 30 proceeding.

   Moreover, in the interim until there is a formal finding by this Commission that a particular service is ''competitive,'' the proposed regulation would be streamlined so that a CLEC will be relieved from any automatic obligation to provide cost support documentation whenever the rate is at or below the rate charged by the ILEC for the same service. Cost support documentation will generally not be necessary from a CLEC where its rates are the same or lower than the ILEC's, because it can be presumed that the CLEC's rates are ''just and reasonable.'' Where the CLEC's rates are higher than the ILEC's rates, the regulation should oblige the CLEC to provide certain additional summary documentation for the affected services. Notwithstanding these streamlined filing requirements for CLECs, the Commission would retain the ability to continue to request, when it believes it is appropriate, relevant documentary support, including cost support documentation, from CLECs for their tariff filings and proposed rate changes.

   In regard to the last three rulemaking issues raised in our August 1, 1997 Second Advance Notice of Proposed Rulemaking Order--local exchange carrier intraLATA toll rates, tariff filings for service packages and supporting documentation, and promotional offering tariff filings--we are prepared to propose that the principle of regulatory parity should guide the Commission with certain modifications.

   Because the Commission believes that the tariff filing changes it is prepared to propose are critically important in promoting competition in the local exchange telecommunications industry, we have opened a related docket, L-00940095.F0002, to consider the proposed rulemaking changes as Interim Guidelines until the rulemaking process is completed. To accord interested parties all due process rights in that related proceeding, one or more on-the-record technical conferences will be held--the first one is scheduled for Friday, June 26, 1998. The parties will also be given the opportunity to submit written comments, including reply comments, before any such guidelines are adopted.

   In the Commission's judgment, this Third Advance Notice of Proposed Rulemaking will provide an appropriate forum for all providers of local exchange telecommunications service--incumbents and new entrants--to address the contemplated proposed filing requirement changes that will streamline our existing regulations at 52 Pa. Code §§ 53.52 and 53.53; Therefore,

It Is Ordered:

   1.  That the Pennsylvania Public Utility Commission, through the Law Bureau, has drafted a proposed regulation pertaining to updating and revising existing tariff filing requirements for local exchange telecommunications providers. The proposed regulation, as drafted, would modify the existing regulation at 52 Pa. Code § 53.52.

   2.  That this Third Advance Notice of Proposed Rulemaking Order be published in the Pennsylvania Bulletin.

   3.  That a draft of the proposed regulation be made available to the public for review and comment. Anyone wishing to review the draft should contact Shirley Leming, Regulatory Coordinator, Law Bureau, Pennsylvania Public Utility Commission, North Office Building, P.  O. Box 3265, Harrisburg, PA 17105-3265, (717) 772-4597. Any written comments must be received forty-five (45) days after the date the notice was published in the Pennsylvania Bulletin.

   4.  That an original and 15 copies of comments be served upon the Secretary, Pennsylvania Public Utility Commission, P. O. Box 3265, Harrisburg, PA 17105-3265.

   5.  That the contact persons for this rulemaking are C. Barney Glunz, Supervisor, Bureau of Fixed Utility Services, (717) 783-6163 (technical), and Carl S. Hisiro, Assistant Counsel, Law Bureau (717) 783-2812 (legal).

   6.  That a copy of this Order shall be served upon the Pennsylvania Telephone Association, all jurisdictional telecommunication utilities, the Office of Trial Staff, the Office of Consumer Advocate, and the Office of Small Business Advocate. A copy of the proposed regulation will be sent to the Office of Consumer Advocate and the Office of Small Business Advocate.


Statement of Commissioner David W. Rolka

   I concur in the proposed Motion of Commissioner Bloom. In my opinion the Commission has the authority to issue and implement interim guidelines pending the adoption of permanent regulations. Very few cases come to mind that are clearer on this point than the Commission's own ad hoc development of procedures and policies when it first considered Bell Atlantic-Pa's Petition to classify services as competitive prior to the adoption of regulations. Our authority there has only recently been affirmed by the Pennsylvania Supreme Court. The real issue here is a referendum on the issue of regulatory parity between ILECs and CLECs.

   In my opinion, adherence to a policy of parity is a substantial contributing factor to the perception of this Commission as hostile to a competitive telecom industry. The market share of the CLEC industry, based on the information provided during the recent en banc hearing on the status of competition is less than the growth rate in the number of access lines served by Bell Atlantic-Pa. Regulatory parity in this circumstance would be an abuse of discretion by this Commission. I support the directive for an expedited process to update our interim guidelines and urge that they be reconsidered by the Commission in less than the proposed six months if possible.

[Pa.B. Doc. No. 98-914. Filed for public inspection June 5, 1998, 9:00 a.m.]

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