A BILL TO BE ENTITLED
AN ACT authoriZing the north carolina utilities commission to determine certain telecommunication service providers to be the universal service provider in certain subdivisions and areas.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 62‑110(f1) reads as rewritten:
"(f1)	Except as provided in subsection (f2) of this section, the Commission is authorized, following notice and an opportunity for interested parties to be heard, to issue a certificate to any person applying to provide local exchange or exchange access services as a public utility as defined in G.S. 62‑3(23) a.6., without regard to whether local telephone service is already being provided in the territory for which the certificate is sought, provided that the person seeking to provide the service makes a satisfactory showing to the Commission that (i) the person is fit, capable, and financially able to render such service; (ii) the service to be provided will reasonably meet the service standards that the Commission may adopt; (iii) the provision of the service will not adversely impact the availability of reasonably affordable local exchange service; (iv) the person, to the extent it may be required to do so by the Commission, will participate in the support of universally available telephone service at affordable rates; and (v) the provision of the service does not otherwise adversely impact the public interest. In its application for certification, the person seeking to provide the service shall set forth with particularity the proposed geographic territory to be served and the types of local exchange and exchange access services to be provided. Except as provided in G.S. 62‑133.5(f), any person receiving a certificate under this section shall, until otherwise determined by the Commission, file and maintain with the Commission a complete list of the local exchange and exchange access services to be provided and the prices charged for those services, and shall be subject to such reporting requirements as the Commission may require.
Any certificate issued by the Commission pursuant to this subsection shall not permit the provision of local exchange or exchange access service until July 1, 1996, unless the Commission shall have approved a price regulation plan pursuant to G.S. 62‑133.5(a) for a local exchange company with an effective date prior to July 1, 1996. In the event a price regulation plan becomes effective prior to July 1, 1996, the Commission is authorized to permit the provision of local exchange or exchange access service by a competing local provider in the franchised area of such local exchange company.
The Commission is authorized to adopt rules it finds necessary (i) to provide for the reasonable interconnection of facilities between all providers of telecommunications services; (ii) to determine when necessary the rates for such interconnection; (iii) to provide for the reasonable unbundling of essential facilities where technically and economically feasible; (iv) to provide for the transfer of telephone numbers between providers in a manner that is technically and economically reasonable; (v) to provide for the continued development and encouragement of universally available telephone service at reasonably affordable rates; and (vi) to carry out the provisions of this subsection in a manner consistent with the public interest, which will include a consideration of whether and to what extent resale should be permitted. In adopting rules to establish an appropriate definition of universal service, the Commission shall consider evolving trends in telecommunications services and the need for consumers to have access to high‑speed communications networks, the Internet, and other services to the extent that those services provide social benefits to the public at a reasonable cost.
Local exchange companies and competing local providers shall negotiate the rates for local interconnection. In the event that the parties are unable to agree within 90 days of a bona fide request for interconnection on appropriate rates for interconnection, either party may petition the Commission for determination of the appropriate rates for interconnection. The Commission shall determine the appropriate rates for interconnection within 180 days from the filing of the petition.
Except as provided in subsections (f4) and (f5) of this section, each local exchange company shall be the universal service provider (carrier of last resort) in the area in which it is certificated to operate on July 1, 1995. In continuing this State's commitment to universal service, the Commission shall, by December 31, 1996, adopt interim rules that designate the person that should be the universal service provider and to determine whether universal service should be funded through interconnection rates or through some other funding mechanism. At a time determined by the Commission to be in the public interest, the Commission shall conduct an investigation for the purpose of adopting final rules concerning the provision of universal services, and whether universal service should be funded through interconnection rates or through some other funding mechanism.
The Commission shall make the determination required pursuant to this subsection in a manner that furthers this State's policy favoring universally available telephone service at reasonable rates."
SECTION 2.  G.S. 62‑110 is amended by adding two new subsections to read:
"(f4)	When any telecommunication service provider enters into an agreement to provide local exchange service for a subdivision or other area where access to right‑of‑way for the provision of local exchange service by other telecommunication service providers has not been granted by the property owner, the telecommunication service provider shall be the universal service provider (carrier of last resort) in the subdivision or other area. If the local exchange company for the franchise area or territory in which the subdivision or other area is located is not a party to the agreement, the local exchange company shall be relieved of any universal service provider obligation for that subdivision or other area. In that case, the local exchange company and all other authorized telecommunication service providers shall retain the option, but not the obligation, to serve customers in such a subdivision or other area. Upon notification by the local exchange company that it no longer wishes to be the universal service provider for a subdivision or other area as provided in this section, the Commission shall take necessary steps to reflect that the local exchange company is no longer the universal service provider for the subdivision or other area identified to the Commission. For a local exchange company that qualifies as a rural local exchange company under the Federal Telecommunications Act of 1996, the Commission, or other appropriate State agency, after notification from the rural local exchange company, shall take necessary steps to reflect that the rural local exchange company is no longer the universal service provider for the subdivision or other area identified to the Commission and shall amend the service area or study area of the rural local exchange company and notify the Federal Communications Commission of such amendment.
(f5)	If the Commission finds that the telecommunications service provider that entered into the agreement is no longer willing or able to fulfill its obligations as universal service provider for the subdivision or other area, the Commission shall  redesignate the local exchange company for the franchise area or territory in which the subdivision or other area is located to be the universal service provider for the area. The costs reasonably incurred by the redesignated universal service provider in extending its facilities into the subdivision or other area shall, subject to Commission approval, be permitted in the form of a surcharge to be spread equitably among all of its customers without having to file a general rate case, and if the designated universal service provider is subject to price regulation or alternative regulation under G.S. 62‑133.5, it may treat these costs as exogenous to such form of regulation and it may adjust its rates so as to recover these costs from its customers whose rates are subject to regulation."
SECTION 3.  This act is effective when it becomes law.