LRB-3964/1
MDK:kjf&wlj:rs
2009 - 2010 LEGISLATURE
January 22, 2010 - Introduced by Senator Plale, cosponsored by Representative
Zepnick. Referred to Committee on Commerce, Utilities, Energy, and Rail.
SB469,2,12 1An Act to repeal 196.09 (9), 196.19 (1m), 196.19 (5), 196.196, 196.198 (2) (b),
2196.20 (1m), 196.20 (2) (am), 196.20 (2r), 196.20 (3), 196.20 (5), 196.20 (6),
3196.203 (3) (b), 196.203 (3) (c), 196.203 (3) (d), 196.203 (3) (dm), 196.203 (3) (e),
4196.203 (4), 196.204 (1), 196.204 (2), 196.204 (3), 196.204 (4), 196.204 (5) (b),
5196.204 (6), 196.205 (2), 196.213, 196.215, 196.26 (4), 196.28 (4), 196.37 (4),
6196.49 (1) (ag), 196.49 (3) (d), 196.50 (1) (b) 1. and 2., 196.50 (2) (g) 3., 196.50
7(2) (h), 196.52 (5) (b), 196.60 (2), 196.77, 196.79 (2) and 196.805; to renumber
8196.50 (1) (b) 3. and 196.52 (5) (a); to renumber and amend 196.198 (2) (a),
9196.203 (1), 196.203 (2), 196.203 (3) (a), 196.204 (5) (ag), 196.204 (5) (ar),
10196.205 (1m) and 196.79 (1); to amend 93.01 (1m), 133.07 (2), 196.02 (2), 196.09
11(1), 196.13 (2), 196.194 (1), 196.195 (1), 196.195 (5), 196.195 (12) (a), 196.195
12(12) (b) 3., 196.198 (3) (intro.), 196.198 (3) (a), 196.198 (3) (b) (intro.), 196.20 (1),
13196.20 (2) (a) (intro.), 196.20 (2m), 196.203 (5), 196.218 (3) (a) 3m., 196.218 (3)
14(f), 196.218 (5r) (title), 196.218 (5r) (a) 4., 196.219 (1) (b), 196.26 (1) (a), 196.31

1(1m), 196.37 (3), 196.49 (3) (b) (intro.), 196.50 (2) (a), 196.50 (2) (f), 196.52 (3)
2(b) 1., 196.52 (3) (c) (intro.), 196.52 (6), 196.52 (9) (e), 196.60 (1) (a), 196.604,
3196.975 (1) and 201.15 (4) (b); to repeal and recreate 196.204 (title) and
4196.218 (4); and to create 20.155 (1) (s), 196.01 (1d) (g), 196.01 (3a), 196.191,
5196.203 (1d), 196.203 (2) (b), 196.203 (2) (c), 196.203 (4m), 196.206, 196.211,
6196.218 (1) (a), 196.218 (3) (a) 3. c., 196.218 (5) (a) 14., 196.218 (5r) (am), 196.50
7(2) (i) and 196.50 (2) (j) of the statutes; relating to: authority of the Public
8Service Commission over certain telecommunications utilities,
9telecommunications access charges, universal service fund contributions based
10on interconnected voice over Internet protocol service, tandem switching
11provider electronic call records, granting rule-making authority, and making
12an appropriation.
Analysis by the Legislative Reference Bureau
This bill: 1) makes changes to the authority of the Public Service Commission
(PSC) over telecommunications utilities; 2) imposes limits on charges for access
services by telecommunications utilities; 3) specifies the PSC's authority over
interconnected voice over Internet protocol (VOIP) service; 4) makes changes to the
PSC's authority for ensuring universal access to telecommunications service; and 5)
requires certain telecommunications providers to make electronic call records
available to other telecommunications providers.
PSC regulation of telecommunications utilities
Under current law, a telecommunications provider that provides basic local
exchange service is defined to be a telecommunications utility. The PSC's authority
over a telecommunications utility depends on whether the PSC has certified the
telecommunications utility as a telecommunications utility (TU) or an alternative
telecommunications utility (ATU). In general, the PSC has certified as TUs those
telecommunications providers that are incumbent local exchange carriers (ILECs)
under federal law, which are telecommunications providers that resulted from the
breakup of the Bell System pursuant to a federal antitrust action. In general, the
PSC has certified as ATUs those telecommunications providers that are competitive
local exchange carriers (CLECs) under federal law, which are telecommunications
providers that compete with ILECs to provide basic local exchange service.

Under current law, TUs are subject to varying degrees of regulation by the PSC,
depending on certain factors, such as whether the TU has elected price regulation,
under which the PSC regulates the rates charged by a TU, but not the TU's rate of
return. The degree of PSC regulation also depends on whether a TU is a cooperative
association, or whether the TU is a "small TU," which is a TU that had fewer than
50,000 access lines in this state on January 1, 1984. With certain exceptions, current
law exempts an ATU from PSC regulation, except that, if certain conditions are
satisfied, the PSC may impose on an ATU a requirement that otherwise applies to
a TU or other public utility.
With respect to ATUs, the bill limits the requirements that the PSC may
impose. Under the bill, the PSC may impose requirements on an ATU that relate
only to the following: 1) submission of stockholder and other business management
information; 2) PSC examination of accounting and other business records; 3) use of
and connection to transmission equipment and property by other
telecommunications providers; 4) confidential treatment of records by the PSC; 5)
rates and costs of unbundled network elements; 6) interconnection agreements and
other interconnection requirements; 7) telephone caller identification, pay-per-call,
and toll-free services; 8) PSC privacy rules; 9) universal service and contributions
to the state universal service fund; 10) impairment of speed, quality or efficiency of
services, products, or facilities offered to consumers; 11) access to
telecommunications emergency services; 12) compliance with price lists, contracts,
and PSC rules and orders regarding providing consumers with service, products, or
facilities; 13) discrimination in favor of affiliates and other entities; 14) restrictions
on resale or sharing certain services, products, and facilities; 15) violations of rules
of the Department of Agriculture, Trade and Consumer Protection regarding
advertising and sales and collection practices; 16) transfer of local exchange
customers to other telecommunications providers; 17) late payment charges; 18) PSC
questionnaires and other information requests; 19) PSC hearings on consumer
complaints; 20) changes to PSC orders and reopening PSC cases; 21) PSC-required
tests; 22) conditional, emergency, and supplemental PSC orders; 23) timing of effect
of PSC orders; 24) court review of PSC orders; 25) injunction procedures; 26)
enforcement duties of the PSC, the attorney general, and district attorneys and
related court venues; 27) penalties related to information and record requests; 28)
forfeitures; 29) abandonment or discontinuance of lines, services, and
rights-of-way; 30) assessments for reimbursement of PSC expenses; 31)
assessments for telephone relay service; and 32) issuance of securities. The bill also
provides that if the PSC imposes any of the foregoing requirements on an ATU, the
PSC must impose the same requirement at the same level of regulation on all other
ATUs, as well as all other TUs.
The bill also provides that certification as an ATU is on a statewide basis and
that any ATU certification issued by the PSC before the bill's effective date is
considered amended to be a statewide certification. However, the foregoing does not
apply to an ATU owned or operated by a city, village, or town. In addition, with
certain exceptions, the bill allows the PSC to deny certification as an ATU if the PSC
finds that the applicant for certification does not have the financial, managerial, or

technical capabilities to provide service or comply with requirements imposed by the
PSC.
With respect to TUs, the bill exempts TUs from requirements relating to all of
the following: 1) PSC classification of public utility service; 2) PSC valuation of
utility property; 3) accounting requirements, including depreciation rates and new
construction accounting; 4) reporting of expenses, profit, and other items; 5) PSC
reports of utility property values and other financial data; 6) filing of rates and PSC
approval of rates (except for access service charges, as described below); 7) PSC
investigations of rates and services; 8) construction, installation, or operation of new
facilities; 9) PSC approval of certain contracts; 10) certain municipal authority to
regulate public utilities; and 11) dissolution and reorganization. The bill makes
changes to current law to ensure that small TUs, and TUs that are cooperatives, are
subject to the foregoing exemptions. In addition, the bill repeals the requirements
that apply to TUs under current law that apply to the following: 1) offering new
telecommunications services, or services jointly offered with other TUs; 2)
classification of TU service; 3) promotional rates; and 4) consolidations and mergers.
Also, the bill repeals price regulation of TUs and terminates any requirements
imposed by the PSC on price-regulated TUs.
The bill also allows a TU to terminate its certification as a TU and require the
PSC to certify the TU as an ATU. The PSC must issue an order certifying a TU as
an ATU no later than 30 days after receiving notice from the TU to terminate its TU
certification. The order must also terminate all regulatory requirements related to
the TU certification. Upon certification as an ATU, the formerly certified TU is
subject to the same requirements as an ATU, as described above. In addition, the bill
allows a TU to retain its certification as a TU but require the PSC to regulate the TU
in the same manner as an ATU. The PSC must issue an order that accomplishes this
result no later than 30 days after receiving notice from the TU.
Access service charges
The bill creates requirements that apply to access charges, which the bill
defines as dedicated access charges and switched access charges. "Dedicated access
charges" is defined as the rates and rate elements that a local exchange carrier
charges a telecommunications provider for wholesale access service to a local
exchange network for the purpose of enabling the telecommunications provider to
originate or terminate telecommunications service within the local exchange.
"Switched access charges" is defined as the rate and rate elements that a local
exchange carrier charges a telecommunications provider for the provision of
switched access to a local exchange network for the purpose of enabling the
telecommunications provider to originate or terminate telecommunications service
within the local exchange.
The bill prohibits an ILEC from increasing its intrastate access charges so that
they exceed the ILEC's interstate access charges allowed under federal law. Also, no
later than six months after the bill's effective date, an ILEC must make any
reductions in its intrastate access charges that are necessary to ensure that they do
not exceed the ILEC's interstate access charges allowed under federal law. The bill
creates requirements for an ILEC to recover from the state universal service fund

certain portions of the reduction in revenues that result from making the required
reductions in intrastate access rates. During the first year following the reductions,
an ILEC must recover 95 percent of its reduction in revenues each month; during the
second year following the reductions, an ILEC must recover 85 percent of its
reduction in revenues each month; and, except as described below, during the third
year following the reductions and each year thereafter, an ILEC must recover 75
percent of its reduction in revenues each month. The exception applies if an ILEC
fails to provide access to broadband service to at least 85 percent of its customers in
any month during the sixth year following the reductions and in any year thereafter.
If the exception applies, an ILEC must recover 50 percent of its reduction in revenues
in the relevant month, rather than 75 percent as required above. The bill defines
"broadband service" for purposes of the exception as a service that provides access
to the Internet that is capable of transmitting data packets or Internet signals at
upstream or downstream average minimum speeds of 200 kilobits per second, except
that the PSC may promulgate rules specifying greater upstream or downstream
average minimum speeds if such speeds are consistent with any definition
established by the Federal Communications Commission (FCC).
The bill requires the PSC to make disbursements from the state universal
service fund for ILECs to make the recoveries described above. The bill also includes
requirements for determining the reductions in revenues. In addition, the bill allows
an ILEC to increase its monthly non-access service rates in order to recover
reductions in revenues that are not recovered from the state universal service fund
as described above.
The bill also creates requirements for telecommunications providers that are
not ILECs. Under the bill, such a telecommunications provider's intrastate access
charges for a local exchange may not exceed the intrastate access charges of the ILEC
that provides telecommunications service in the local exchange. However, if the
telecommunications provider's intrastate access charges on the bill's effective date
exceed the ILEC's intrastate access charges that were in effect on October 1, 2009,
the bill requires the telecommunications provider to reduce its intrastate access
charges over a five-year period as follows: 1) no later than two months after the bill's
effective date, the telecommunications provider must reduce its intrastate access
charges by 20 percent of the difference between its charges in effect on the effective
date of the bill and the ILEC's charges in effect on October 1, 2009; 2) no later than
24 months after the bill's effective date, the telecommunications provider must
reduce its charges by 40 percent of such difference; 3) no later than 36 months after
the bill's effective date, the telecommunications provider must reduce its charges by
60 percent of such difference; 4) no later than 48 months after the bill's effective date,
the telecommunications provider must reduce its charges by 80 percent of the
difference; and 5) no later than 60 months after the bill's effective date, the
telecommunications provider must reduce its charges by 100 percent of the
difference. In addition, at the end of the five-year period, the telecommunications
provider's intrastate access charges may not exceed the ILEC's intrastate access
charges. As a result, the telecommunications provider may have to make additional

reductions to ensure that the telecommunications provider complies with the
prohibition.
Interconnected VOIP service
With two exceptions, the bill provides that interconnected VOIP service is
exempt from PSC regulation. The bill provides that interconnected VOIP has the
same meaning as under federal law, which is a service requiring a broadband
connection and Internet protocol-compatible customer premises equipment that
allows the user to engage in real-time, two-way communication over the public
switched telephone network. The first exception to the exemption is that a
telecommunications provider that provides interconnected VOIP service must make
contributions to the state universal service fund based on its revenues from
providing the service. The bill specifies the methods for calculating the revenues.
The second exception is that, unless otherwise provided under federal law, access
charges for interconnected VOIP service are subject to the access service charge
requirements described above.
Universal service
Current law requires the PSC to promulgate rules that define a basic set of
essential telecommunications services that must be available to all customers at
affordable prices and that are a necessary component of universal service. Current
law also requires the PSC to promulgate rules that define a set of advanced service
capabilities that must be available to all areas of this state at affordable prices within
a reasonable time and that are a necessary component of universal service. The
essential services and advanced service capabilities must be based on market, social,
economic development, and infrastructure development principles rather than on
specific technologies or providers.
This bill repeals the foregoing requirements and requires instead that certain
telecommunications providers must make available to their customers all essential
telecommunications services. The bill defines "essential telecommunications
services" as services or functionalities determined by the FCC to be eligible for
support by federal universal service support mechanisms. The bill's requirement
applies to a telecommunications provider that provides basic local exchange service
or that is designated under federal law as a telecommunications carrier eligible to
receive support from the federal universal service fund. Also, the bill provides that
a telecommunications provider may provide essential telecommunications services
itself or through an affiliate or through the use of any available technology or mode.
Electronic call detail records
The bill requires a telecommunications provider that provides tandem
switching service (tandem switching provider) to make certain electronic call detail
records available to other telecommunications providers. The requirement applies
to calls originated by wireless providers (which are referred to as commercial mobile
radio service providers) and CLECs, and subsequently routed by the tandem
switching provider to another telecommunications provider's network for
termination. A tandem switching provider must make the electronic call detail
records available no later than 24 months after the bill's effective date. The bill
provides that a tandem switching provider complies with the foregoing requirements

if an electronic call detail record that is made available contains the information
provided by the telecommunications provider that originated the call. The bill also
provides that it does not otherwise change the record creation, record exchange, or
billing processes for traffic carried by interexchange carriers that are in effect on the
bill's effective date.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB469, s. 1 1Section 1. 20.155 (1) (s) of the statutes is created to read:
SB469,7,42 20.155 (1) (s) Incumbent local exchange carrier disbursements. From the
3universal service fund, a sum sufficient to make disbursements to incumbent local
4exchange carriers under s. 196.191 (3) (d) 2.
SB469, s. 2 5Section 2. 93.01 (1m) of the statutes is amended to read:
SB469,7,146 93.01 (1m) "Business" includes any business, except that of banks, savings
7banks, credit unions, savings and loan associations, and insurance companies.
8"Business" includes public utilities and telecommunications carriers to the extent
9that their activities, beyond registration, notice, and reporting activities, are not
10regulated by the public service commission and includes public utility and
11telecommunications carrier methods of competition or trade and advertising
12practices that are exempt from regulation by the public service commission under s.
13196.195, 196.196, 196.202, 196.203, 196.219, or 196.499 or by other action of the
14commission.
SB469, s. 3 15Section 3. 133.07 (2) of the statutes is amended to read:
SB469,8,516 133.07 (2) This chapter does not prohibit activities of any public utility, as
17defined in s. 196.01 (5), or telecommunications carrier, as defined in s. 196.01 (8m),
18which are required by ch. 196 or rules or orders under ch. 196, activities necessary

1to comply with that chapter or those rules or orders or activities that are actively
2supervised by the public service commission. This subsection does not apply to
3activities of a public utility or telecommunications carrier that are exempt from
4public service commission regulation under s. 196.195, 196.196, 196.202, 196.203,
5196.219 or 196.499 or by other action by the commission.
SB469, s. 4 6Section 4. 196.01 (1d) (g) of the statutes is created to read:
SB469,8,87 196.01 (1d) (g) A telecommunications utility that provides notice to the
8commission under s. 196.50 (2) (j) 1.
SB469, s. 5 9Section 5. 196.01 (3a) of the statutes is created to read:
SB469,8,1110 196.01 (3a) "Interconnected voice over Internet protocol service" has the
11meaning given in 47 CFR 9.3.
SB469, s. 6 12Section 6. 196.02 (2) of the statutes is amended to read:
SB469,8,2113 196.02 (2) Definition; classification. In this subsection, "public utility" does
14not include a telecommunications cooperative, an unincorporated
15telecommunications cooperative association, or a small telecommunications utility
16except as provided under s. 196.205 or 196.215 (2) and does not include an alternative
17telecommunications utility.
The commission shall provide for a comprehensive
18classification of service for each public utility. The classification may take into
19account the quantity used, the time when used, the purpose for which used, and any
20other reasonable consideration. Each public utility shall conform its schedules of
21rates, tolls and charges to such classification.
SB469, s. 7 22Section 7. 196.09 (1) of the statutes is amended to read:
SB469,9,823 196.09 (1) In this section, "public utility" does not include a
24telecommunications cooperative or an unincorporated telecommunications
25cooperative association except as provided under s. 196.205. In subs. (2) to (7),

1"public utility" does not include a telecommunications utility. Subsection (9) only
2applies to a telecommunications utility.
Every public utility shall file with the
3commission, within such time as may be required by the commission, its estimate of
4the annual rate of depreciation required for each of its classes of fixed capital used
5for public utility purposes, and of the composite annual rate of depreciation required
6for such fixed capital as an aggregate, which shall constitute the public utility's
7estimates of the amount which should be returned to it out of its rates for service, to
8meet the depreciation of its property.
SB469, s. 8 9Section 8. 196.09 (9) of the statutes is repealed.
SB469, s. 9 10Section 9. 196.13 (2) of the statutes is amended to read:
SB469,9,1511 196.13 (2) The commission shall publish in its reports the value of all the
12property actually used and useful for the convenience of the public of a public utility,
13other than a telecommunications utility,
if the commission has held a hearing on the
14public utility's rates, charges, service or regulations or if the commission has
15otherwise determined the value of the public utility's property.
SB469, s. 10 16Section 10. 196.19 (1m) of the statutes is repealed.
SB469, s. 11 17Section 11. 196.19 (5) of the statutes is repealed.
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