1Amending Title 66 (Public Utilities) of the Pennsylvania
2Consolidated Statutes, in alternative form of regulation of 
3telecommunications services, further providing for 
4definitions, for continuation of commission-approved 
5alternative regulation and network modernization plans, for 
6alternative forms of regulation, for competitive services,
7for access charges, for interexchange telecommunications 
8carriers and for additional powers and duties.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. The definitions of "competitive service,"
12"noncompetitive service" and "protected service" in section 3012
13of Title 66 of the Pennsylvania Consolidated Statutes are
14amended and the section is amended by adding definitions to
15read:

16§ 3012. Definitions.

17The following words and phrases when used in this chapter

1shall have the meanings given to them in this section unless the
2context clearly indicates otherwise:

3* * *

4"Basic calling service." A service, using any technology,
5which provides a residential customer with the ability to
6transmit and receive voice communications, including access to
7E-911.

8* * *

9"Competitive exchange." As follows:

10(1) A nonrural exchange declared competitive under
11section 3016(c)(1) (relating to competitive services).

12(2) A rural exchange declared competitive under section
133016(c)(2).

14(3) A rural exchange declared competitive under section
153019(b.1)(3) (relating to additional powers and duties).

16"Competitive service." A service or business activity
17determined to be competitive by the commission on or prior to
18December 31, [2003] 2013, and a service or business activity
19determined or declared to be competitive pursuant to section
203016 (relating to competitive services).

21* * *

22"Noncompetitive service." A regulated telecommunications
23service or business activity that has not been determined or
24declared to be competitive and is not offered in a competitive 
25exchange.

26* * *

27"Nonrural exchange." An exchange with a population density
28of at least 300 people per square mile, based on the 2010 
29Federal decennial census.

30* * *

1"Over-the-top alternative service provider." An alternative
2service provider that provides voice service over Internet
3protocol or a successor format using the wireline or wireless
4broadband transmission facilities operated by another entity and
5that does not operate its own broadband transmission facilities.
6The term does not include an entity that operates its own
7wireline or wireless broadband transmission facility.

8"Pennsylvania universal service fund." The fund established
9and maintained by the commission under 52 Pa. Code Ch. 63 Subch.
10L (relating to universal service).

11* * *

12"Protected service." The following telecommunications
13services provided by a local exchange telecommunications company
14in an exchange that is not a competitive exchange, unless the
15commission has determined the service to be competitive:

16(1) Service provided to residential consumers or single-
17line business consumers that [is necessary to complete a
18local exchange call] provides the ability to receive and 
19transmit voice communications, including access to E-911.

20[(2) Touch-tone service.]

21(3) Switched access service.

22[(4) Special access service.]

23(5) Ordering, installation, restoration and
24disconnection of these services.

25* * *

26"Rural exchange." An exchange that is not a nonrural
27exchange.

28* * *

29Section 2. Sections 3013(c), 3015(e)(1), (2), (4) and (6),
30(f) and (h) and 3016(b), (c) and (d) of Title 66 are amended to

1read:

2§ 3013. Continuation of commission-approved alternative
3regulation and network modernization plans.

4* * *

5(c) Grandfather provision.--All services [previously
6determined to be competitive as of December 31, 2003,]
7determined or declared to be competitive as of January 1, 2013,
8shall remain competitive services [unless reclassified by the
9commission under section 3016(c) (relating to competitive
10services)].

11* * *

12§ 3015. Alternative forms of regulation.

13* * *

14(e) General filing requirements.--The commission's filing
15and audit requirements for a local exchange telecommunications
16company that is operating under an amended network modernization
17plan shall be limited to the following:

18(1) Network modernization plan reports filed pursuant to
19section 3014(f), except that upon filing the final report 
20following the date of 100% broadband availability elected 
21under section 3014(b), no further reports may be required.

22[(2) An annual financial report consisting of a balance
23sheet and income statement.]

24* * *

25[(4) An annual service report.]

26* * *

27[(6) An annual access line report.]

28* * *

29(f) Other reports.--

30(1) Notwithstanding any other provision of this title to

1the contrary, no report, statement, filing or other document
2or information, except as specified in subsection (e), shall
3be required of any local exchange telecommunications company.
4[unless the commission, upon notice to the affected local
5exchange telecommunications company and an opportunity to be
6heard, has first made specific written findings supporting
7conclusions in an entered order that:

8(i) The report is necessary to ensure that the local
9exchange telecommunications company is charging rates
10that are in compliance with this chapter and its
11effective alternative form of regulation.

12(ii) The benefits of the report substantially
13outweigh the attendant expense and administrative time
14and effort required of the local exchange
15telecommunications company to prepare it.]

16(2) Nothing in this subsection shall be construed to
17impede the ability of the commission to require the
18submission of further information to support the accuracy of
19or to seek an explanation of the reports specified in
20subsection (e).

21* * *

22(h) Conformance of plan.--Upon approval of a local exchange
23telecommunications company of network modernization plan
24amendments pursuant to section 3014(e), the local exchange
25telecommunications company's alternative form of regulation plan
26shall be deemed amended consistent with this [section] chapter.

27§ 3016. Competitive services.

28* * *

29(b) Declaration of retail nonprotected services as
30competitive.--Notwithstanding the provisions of subsection (a),

1a local exchange telecommunications company may declare any
2retail nonprotected service as competitive by filing its
3declaration with the commission and serving it on the Office of
4Consumer Advocate, Office of Small Business Advocate and each of
5the parties to the commission's proceeding in which the
6company's network modernization plan that was in effect on
7December 31, 2003, was approved by the commission, provided that
8a local exchange telecommunications company may not use this
9declaration process for any service that the commission
10previously has reclassified as noncompetitive under [either
11subsection (c) or] prior law. A declaration of a retail
12nonprotected service as competitive shall be effective upon
13filing by the local exchange telecommunications company with the
14commission.

15(c) [Reclassification.--

16(1) A party may petition the commission for a
17determination of whether a service or other business activity
18previously determined or declared to be competitive is
19noncompetitive. The commission, after notice and hearing,
20shall enter an order deciding the petition within 60 days of
21the filing date or 90 days of the filing date where a protest
22is timely filed, or the petition shall be approved.

23(2) The petitioner shall serve a copy of the petition on
24the affected local exchange telecommunications company if the
25petitioner is not the company, the Office of Consumer
26Advocate, the Office of Small Business Advocate and each of
27the parties to the commission's proceeding in which the
28company's network modernization plan that was in effect on
29December 31, 2003, was approved by the commission.

30(3) In making its determination, the commission shall

1consider all relevant information submitted to it, including
2the availability of like or substitute services or other
3business activities, and shall limit its determination to the
4particular geographic area, exchange or density cell in which
5the service or other business activity has been proved to be
6noncompetitive.

7(4) The burden of proving that a competitive service or
8other business activity should be reclassified as
9noncompetitive rests on the party seeking the
10reclassification.

11(5) If the commission reclassifies a service or other
12business activity as noncompetitive, the commission shall
13determine a just and reasonable rate for the reclassified
14service or business activity in accordance with section 1301
15(relating to rates to be just and reasonable).] Competitive 
16services and exchanges.--

17(1) A local exchange telecommunications company may
18classify any of its nonrural exchanges as a competitive
19exchange by filing a declaration. The declaration shall take
20effect upon filing.

21(2) The following shall apply:

22(i) A local exchange telecommunications company may
23classify any of its rural exchanges as a competitive
24exchange by filing an affidavit and declaration that two
25or more alternative service providers operate in the
26exchange, as demonstrated by local number portability
27records or other relevant information.

28(ii) An affidavit and declaration filed under this
29paragraph shall take effect upon filing, except that for
30a nonrural telecommunications carrier that has filed an

1amended network modernization plan under section
23014(b)(3) (relating to network modernization plans)
3committing to deploy 100% broadband availability by
4December 31, 2015, the affidavit and declaration may not
5take effect before January 1, 2016.

6(iii) For purposes of this paragraph, only one of
7the two alternative service providers may be an over-the-
8top alternative service provider.

9(3) The following shall apply:

10(i) All services, except for switched access,
11offered by a local exchange telecommunications company in
12a competitive exchange shall be deemed competitive
13services.

14(ii) On the effective date of a declaration
15specified under this subsection, a local exchange
16telecommunications company shall continue to offer a
17basic calling service to a residential customer who
18subscribes to the service at the same location on the
19effective date of the declaration, until the date the
20customer requests that the service be disconnected or
21January 1, 2018, whichever is earlier.

22(4) The following shall apply:

23(i) A residential customer of a local exchange
24telecommunications company in an exchange declared
25competitive may petition the commission to order the
26local exchange telecommunications company to provide
27service, if the customer establishes that service is not
28available to the customer's location from another
29provider.

30(ii) In resolving a petition under subparagraph (i),

1the commission may not prohibit, require or otherwise
2direct:

3(A) The choice of technology used to provide the
4service.

5(B) That the service be provided at a different
6rate than the rates offered to other customers within
7the exchange.

8(C) The use of joint ventures to provide service
9under this paragraph.

10(D) That the local telecommunications company
11provide anything other than service as defined under
12subparagraph (iii).

13(iii) For purposes of this paragraph, "service"
14shall mean basic calling service, which may be bundled
15with other services, at the provider's option.

16(d) Additional requirements.--

17[(1) The prices which a local exchange
18telecommunications company charges for competitive services
19shall not be less than the costs to provide the services.]

20(2) The commission may not require [tariffs for
21competitive service offerings to be filed with the
22commission.] a telecommunications carrier to file a tariff 
23for a telecommunications service offering, except for 
24switched access. A contract for telecommunications service 
25may not be required to be filed or approved under section 507 
26(relating to contracts between public utilities and 
27municipalities).

28(3) A [local exchange telecommunications company]
29telecommunications carrier at its option may tariff its rates
30subject to rules and regulations applicable to the provision

1of [competitive] the services. Rate changes that are filed in 
2a telecommunications carrier's tariff for competitive 
3services may go into effect on a one-day notice.

4(4) [The commission may require a local exchange
5telecommunications company to maintain price lists with the
6commission applicable to its competitive services. Price
7changes that are filed in a company's tariff for competitive
8services will go into effect on a one-day notice.] The 
9following shall apply:

10(i) A telecommunications carrier shall make the
11rates, terms and conditions applicable to its service
12available to the public on an Internet website or by
13providing other written notice to a customer upon
14request.

15(ii) An increase in the rate for a protected service
16may not take effect without approval of the commission.
17The commission shall provide approval unless the
18commission finds that the rate increase violates section
191301 (relating to rates to be just and reasonable), this
20chapter or the company's applicable alternative
21regulation plan.

22(iii) The commission's review of a proposed
23protected service rate increase must conform to the time
24requirements of section 1308 (relating to voluntary
25changes in rates) and any applicable alternative
26regulation plan.

27* * *

28Section 3. Section 3017(b) of Title 66 is amended and the
29section is amended by adding subsections to read:

30§ 3017. Access charges.

1* * *

2(b) Refusal to pay access charges prohibited.--No person or
3entity may refuse to pay tariffed intrastate access charges for
4interexchange access services provided by a local exchange
5telecommunications company, unless it is mutually agreed to in 
6writing in an interconnection or other commercial agreement 
7between the parties.

8* * *

9(d) Resolution.--Prior to the filing of a complaint alleging
10a violation of subsection (b), the disputing parties shall
11attempt, in good faith, to resolve an access charge payment
12dispute.

13(e) Complaint proceeding.--Notwithstanding any other
14provision of this title, the commission shall make a final
15decision and order granting or denying a complaint that alleges
16a violation of subsection (b) within 180 calendar days of the
17filing of the complaint. If the respondent continues to utilize
18the interexchange services of the complainant during the
19pendency of the complaint, the commission shall require
20financial security for good cause shown.

21Section 4. Section 3018(b)(3), (c) and (d) of Title 66 are
22amended to read:

23§ 3018. Interexchange telecommunications carriers.

24* * *

25(b) Rate regulation.--

26* * *

27(3) Nothing in this chapter shall be construed to limit
28the authority of the commission to regulate the privacy of
29interexchange service [and the ordering, installation,
30restoration and disconnection of interexchange service to

1customers].

2[(c) Reclassification.--The commission may reclassify
3telecommunications services provided by an interexchange
4telecommunications carrier as noncompetitive if, after notice
5and hearing, it determines, upon application of the criteria set
6forth in this chapter, that sufficient competition is no longer
7present.]

8(d) Construction.--Nothing in this chapter shall be
9construed:

10[(1) To limit the authority of the commission to resolve
11complaints regarding the quality of interexchange
12telecommunications carrier service.]

13(2) To limit the authority of the commission to
14determine whether an interexchange telecommunications carrier
15should be extended the privilege of operating within this
16Commonwealth [or to order the filing of such reports,
17documents and information as may be necessary to monitor the
18market for and competitiveness of interexchange
19telecommunications services].

20Section 5. Section 3019(b), (c), (f)(1), (4) and (6) of
21Title 66 are amended and the section is amended by adding a
22subsection to read:

23§ 3019. Additional powers and duties.

24* * *

25(b) Powers and duties retained.--The commission shall retain
26the following powers and duties relating to the regulation of
27all telecommunications carriers and interexchange
28telecommunications carriers, including the power to seek
29information necessary to facilitate the exercise of these powers
30and duties:

1[(1) To audit the accounting and reporting systems of
2telecommunications carriers relating to their transactions
3with affiliates pursuant to Chapter 21 (relating to relations
4with affiliated interests). A telecommunications carrier
5shall file affiliated interest and affiliated transaction
6agreements unless such agreements involve services declared
7to be competitive. The filings shall constitute notice to the
8commission only and shall not require approval by the
9commission.]

10(2) [To review and revise quality of service standards
11contained in 52 Pa. Code (relating to public utilities) that
12address the safety, adequacy, reliability and privacy of
13telecommunications services and the ordering, installation,
14suspension, termination and restoration of any
15telecommunications service. Any review or revision shall take
16into consideration the emergence of new industry
17participants, technological advancements, service standards
18and consumer demand.] To modify service quality standards as 
19follows:

20(i) The following shall apply:

21(A) To review and revise quality of service
22standards contained in 52 Pa. Code (relating to
23public utilities) that address the following:

24(I) the safety, adequacy, reliability and
25privacy of protected services; and

26(II) the ordering, installation, suspension,
27termination and restoration of a protected
28service.

29(B) A review or revision under clause (A) shall
30take into consideration the emergence of new industry

1participants, technological advancements, service
2standards and consumer demand.

3(ii) To hear and resolve retail customer complaints
4relating to the provision of protected services if the
5complaint is based on one of the following:

6(A) Truth-in-Billing regulations established by
7the Federal Communications Commission at 47 CFR 64,
8Subpt. Y (relating to Truth-in-Billing requirements
9for common carriers; billing for unauthorized
10charges).

11(B) An alleged failure to comply with the
12provisions of an applicable tariff or the rate, term
13or condition of a protected service posted on an
14Internet website under section 3016(d)(3) (relating
15to competitive services).

16(C) An alleged failure to comply with an
17applicable service quality standard.

18[(3) Subject to the provisions of section 3015(e)
19(relating to alternative forms of regulation), to establish
20such additional requirements as are consistent with this
21chapter as the commission determines to be necessary to
22ensure the protection of customers.]

23(4) To condition the sale, merger, acquisition or other
24transaction required to be approved under section 1102(a)(3)
25(relating to enumeration of acts requiring certificate) of a
26local exchange telecommunications company or any facilities
27used to provide telecommunications services to ensure that
28there is no reduction in the advanced service or broadband
29deployment obligations for the affected property or
30facilities.

1(5) In regard to a sale, merger, acquisition or other
2transaction required to be approved under section 1102(a)(1),
3(2), (3) and (4), the commission's review and approval of an
4application shall conform to the following:

5(i) The commission shall, after the filing of the
6application, approve or disapprove the application by a
7final order entered within 90 calendar days. The 90-day
8period may be extended by a commission order for a period
9not to exceed an additional 90 calendar days. The
10application shall be deemed approved if the commission
11fails to enter a final order within 90 calendar days of
12filing of the application or the extended period ordered
13by the commission.

14(ii) If the commission approves the application with
15a condition, the commission may impose the condition to
16the extent necessary to ensure that the rates for
17protected services provided to a retail consumer by the
18applicant is just and reasonable.

19(b.1) Pennsylvania universal service fund.--

20(1) The commission shall continue to administer the
21Pennsylvania universal service fund until January 1, 2019, on
22the same terms and conditions as set forth in regulations and
23orders, in existence on the effective date of this paragraph,
24except that the following shall apply:

25(i) Distribution of funds from the Pennsylvania
26universal service fund shall be limited to a local
27exchange telecommunications company that:

28(A) received funds from the Pennsylvania
29universal service fund on or before January 1, 2013,
30and that continues to offer basic calling service in

1the local exchange telecommunications company's
2service territory pursuant to a tariff; or

3(B) makes the rates, terms and conditions of the
4local exchange telecommunications company's service
5offerings available to the public on an Internet
6website under section 3016(d)(3) during the period
7for which the funds are received.

8(ii) The following shall apply:

9(A) Except as provided under clause (B),
10receipts from the Pennsylvania universal service fund
11by a local exchange telecommunications company may
12not be reduced below 2012 funding levels prior to
13January 1, 2019.

14(B) A local exchange telecommunications company
15declaring one or more of its exchanges competitive
16under section 3016(c) shall have its total receipts
17from the Pennsylvania universal service fund reduced
18by 5% each year, up to a total maximum reduction of
1915% over a three year period. Each reduction shall be
20calculated based on 2012 receipts and shall be
21utilized to reduce the size of the Pennsylvania
22universal service fund. Except as provided under this
23clause, the designation of an exchange as competitive
24under section 3016(c) shall not affect the local
25exchange service telecommunications company's
26receipts from the Pennsylvania universal service
27fund.

28(iii) The commission may not prohibit contributing
29carriers from recovering Pennsylvania universal service
30fund contributions through an end-user charge, except if

1the commission finds that the surcharge recovers more
2than a carrier's contributions to the Pennsylvania
3universal service fund.

4(iv) The commission may reset the assessment rate
5imposed on telecommunications service providers to ensure
6sufficient funds, except that the commission may not
7increase the size of the Pennsylvania universal service
8fund as set in 2012 or expand the base of contributors.

9(v) Except as provided under subparagraphs (i),
10(ii), (iii) and (iv), the commission may not implement
11any other revision or change to the Pennsylvania
12universal service fund or its implementing regulations
13until January 1, 2019.

14(vi) The listing of the associated dollar
15contributions and receipts of Pennsylvania universal
16service fund contributors and recipients shall be
17considered a public record under the act of February 14,
182008 (P.L.6, No.3), known as the Right-to-Know Law, and
19shall be made available on the commission's Internet
20website.

21(2) The following shall apply:

22(i) The commission shall initiate an investigation
23of the Pennsylvania universal service fund and associated
24regulations and shall enter a final order determining, at
25a minimum, whether the Pennsylvania universal service
26fund should be continued. If the commission determines
27that the Pennsylvania universal service fund should
28continue, the commission shall make necessary changes
29which shall take effect on January 1, 2019.

30(ii) The investigation under subparagraph (i) shall

1be undertaken in an on-the-record evidentiary proceeding
2and shall comply with paragraph (1)(i), (iii), (iv) and
3(vi).

4(iii) The Pennsylvania universal service fund may be
5continued only if the commission determines that it is
6necessary to enable the continued provision of reliable
7basic voice calling service at affordable and reasonable
8rates by local exchange telecommunications companies. If
9the commission determines that the Pennsylvania universal
10service fund should be continued, it may not expand the
11base of Pennsylvania universal service fund contributors
12and may not expand the size of the Federal Universal
13Service Fund above the level existing on December 31,
142018.

15(3) Notwithstanding section 3016(c)(2), a local exchange
16telecommunications company may declare an exchange
17competitive after January 1, 2019, under section 3016(c)(1).
18The following shall apply:

19(i) A local exchange company that declares an
20exchange competitive under this paragraph shall
21relinquish all support received from the Pennsylvania
22universal service fund and shall not be eligible to
23receive future support.

24(ii) All service, except switched access, offered by
25a local exchange company in an exchange declared
26competitive shall be deemed a competitive service.

27(4) Nothing under this chapter shall be construed to
28affect or modify:

29(i) a right or obligation of a carrier under section
30251 or 252 of the Communications Act of 1934 (48 Stat.

11105, 47 U.S.C. § 251 or § 252) and Federal
2Communications Commission regulations implementing
3section 251 or 252 of the Communications Act of 1934; or

4(ii) the commission's authority to act under section
5251 or 252 of the Communications Act of 1934.

6(5) Within two years of the effective date of this
7paragraph, the commission shall review and eliminate all
8regulations, policies and orders that are contrary to this
9chapter. In conducting the review, the commission shall, to
10the greatest extent possible consistent with this chapter,
11ensure that a local exchange telecommunications company is
12not subjected to a greater regulatory burden than applies to
13a competing alternative service provider.

14(c) [(Reserved).] Limitations.--

15(1) Notwithstanding any other provision of this title,
16the commission shall not have any of the following powers and
17duties relating to the regulation of a telecommunications
18carrier, interexchange telecommunications carrier or
19alternative service provider:

20(i) To prohibit, require or direct a 
21telecommunications carrier's, interexchange 
22telecommunications carrier's or alternative service 
23provider's choice of technology for any purpose. The 
24commission shall have no authority to regulate any
25technology utilized or service provided by a 
26telecommunications carrier or interexchange 
27telecommunications carrier that the commission did not 
28actively regulate on January 1, 2013.

29(ii) To approve under section 1102(a)(3) and (4)
30either of the following:

1(A) A reorganization of or transaction between a
2telecommunications carrier and a parent, subsidiary
3or an affiliated entity of which at least 20% of the
4beneficial ownership is held directly or indirectly
5by the same person or entity.

6(B) A sale, transfer of stock, consolidation,
7merger, acquisition, conveyance or lease of realty or
8personalty that does not involve the transfer of a
9customer of a retail service classified as protected,
10noncompetitive or competitive under this chapter.

11(iii) To impose upon competitive services any new or
12existing quality of service standards, including
13standards contained in 52 Pa. Code Ch. 63 (relating to
14telephone service).

15(iv) To impose upon competitive services any new or
16existing standards on billing practices or other
17communications with retail customers, including standards
18contained in 52 Pa. Code Ch. 64 (relating to standards
19and billing practices for residential telephone service).

20(v) To regulate competitive services or facilities,
21including regulating the services under section 1102(a)
22(2) or Chapter 15 (relating to service and facilities).

23(vi) To audit the accounting and reporting system of
24a telecommunications carrier relating to its transactions
25with an affiliate under Chapter 21 (relating to relations
26with affiliated interests) or to require the filing or
27commission approval of affiliated interest and affiliated
28transaction agreement of a telecommunications carrier.

29(2) If a provision of this chapter or other law, that
30establishes a power or duty for the commission that is

1prohibited under paragraph (1), conflicts with paragraph (1),
2the provisions of paragraph (1) shall control.

3* * *

4(f) Lifeline service.--

5(1) All eligible telecommunications carriers
6certificated to provide local exchange telecommunications
7service shall provide Lifeline service to all eligible
8telecommunications customers who subscribe to such service. A 
9telecommunications carrier may use any available technology 
10to provide Lifeline service without subjecting the technology 
11to greater commission regulation than would apply if the 
12service were provided by a company not subject to the 
13commission's jurisdiction.

14* * *

15[(4) Eligible telecommunications carriers shall inform
16existing customers of the availability of Lifeline service
17twice annually by bill insert or message. The notice shall be
18conspicuous and shall provide appropriate eligibility,
19benefits and contact information for customers who wish to
20learn of the Lifeline service subscription requirements.]

21* * *

22(6) No eligible telecommunications carrier shall be
23required to provide [after the effective date of this section
24any new] a Lifeline service discount that is not fully
25subsidized by the Federal Universal Service Fund.

26* * *

27Section 6. This act shall take effect in 60 days.