SB-0636, As Passed Senate, December 5, 2013

SUBSTITUTE FOR

SENATE BILL NO. 636

A bill to amend 1991 PA 179, entitled

"Michigan telecommunications act,"

by amending sections 103, 304, 310, 313, 317, 320, and 502 (MCL

484.2103, 484.2304, 484.2310, 484.2313, 484.2317, 484.2320, and

484.2502), sections 103, 304, 313, and 502 as amended by 2011 PA

58, section 310 as amended by 2009 PA 182, section 317 as amended

by 2005 PA 235, and section 320 as added by 1995 PA 216.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 103. (1) Except as otherwise provided in this act, this

act shall not be construed to prevent any person from providing

telecommunication services in competition with another

telecommunication provider.

(2) The commission shall ~~submit an annual report describing~~

~~the status of competition in telecommunication services in this~~

~~state, including, but not limited to, the~~ maintain a publicly

available database of providers in each exchange that are licensed

to or otherwise provide toll and local exchange service ~~markets~~ in

this state. ~~The report required under this section shall be~~

~~submitted to the governor and the house and senate standing~~

~~committees with oversight of telecommunication issues.~~

(3) A provider shall submit to the commission all information

requested by the commission necessary for the preparation and

maintenance of the ~~annual report~~ database under this section.

~~(4) Subsections (2) and (3) do not apply after the commission~~

~~issues its annual report under subsection (2) in 2013.~~

Sec. 304. (1) A call made to a local calling area adjacent to

the caller's local calling area is considered a local call and

shall be billed as a local call. Effective December 31, 2007, a

call made to a called party who is not located within the

geographic area of the caller's local calling area or an adjacent

local calling area as defined by the commission's order in case

numbers U-12515 and U-12528, dated February 5, 2001, is not a local

call if the tariff, service guide, or similar document containing

the terms and conditions of the provider originating the call does

not classify the call as a local call.

(2) A provider of basic local exchange service with less than

10,000 end-users in this state may determine that their total

service long run incremental cost is the same as that of a provider

with more than 250,000 end-users.

Sec. 310. (1) Except as provided by this section, the

commission shall not review or set the rates for toll access

services.

(2) A provider of toll access services shall set the rates for

intrastate switched toll access services at rates that do not

exceed the rates allowed for the same interstate services by the

federal government and shall use the access rate elements for

intrastate switched toll access services that are in effect for

that provider and are allowed for the same interstate services by

the federal government. Eligible providers shall comply with this

subsection as of the date established for the commencement of the

operation of the restructuring mechanism under subsection (9).

Providers other than eligible providers shall not charge intrastate

toll access service rates in excess of those rates in effect as of

July 1, 2009 and shall reduce the differential, if any, between

intrastate and interstate switched toll access service rates in

effect as of July 1, 2009 in no more than 5 steps of at least 20%

each of the differential on the following dates: January 1, 2011;

January 1, 2012; January 1, 2013; January 1, 2014; and January 1,

2015. Providers may agree to a rate that is less than the rate

allowed by the federal government.

(3) Two or more providers that each have less than 250,000

access lines may agree to joint toll access service rates and

pooling of intrastate toll access service revenues.

(4) A provider of toll access services shall make available

for intrastate access services any technical interconnection

arrangements, including colocation required by the federal

government for the identical interstate access services.

(5) A provider of toll access service, whether under tariff or

contract, shall offer the services under the same rates, terms, and

conditions, without unreasonable discrimination, to all providers.

All pricing of special toll access services and switched access

services, including volume discounts, shall be offered to all

providers under the same rates, terms, and conditions.

(6) If a toll access service rate is reduced, then the

provider receiving the reduced rate shall reduce its rate to its

customers by an equal amount. The commission may investigate and

ensure that the provider has complied with this subsection.

(7) In order to restructure intrastate switched toll access

service rates, there is hereby established in the department of

~~energy, labor, and economic growth~~ licensing and regulatory affairs

an intrastate switched toll access rate restructuring mechanism as

a separate interest-bearing fund. The state treasurer shall direct

the investment of the restructuring mechanism. Money in the

restructuring mechanism shall remain in the restructuring mechanism

at the close of the fiscal year and shall not revert to the general

fund.

(8) An eligible provider is entitled to receive monthly

disbursements from the restructuring mechanism as provided in

subsection (11) in order to recover the lost intrastate switched

toll access service revenues resulting from rate reductions under

subsection (2).

(9) The restructuring mechanism shall be administered by the

commission. The restructuring mechanism shall be established and

shall begin operation ~~within 270 days after the effective date of~~

~~the amendatory act that added this subsection.~~ by September 13,

2010. Subject to the preceding sentence, the commission shall

establish the date for commencing the operation of the

restructuring mechanism and shall notify the participants in the

restructuring mechanism at least 30 days in advance of that date.

The commission shall recover its actual costs of administering the

restructuring mechanism from assessments collected for the

operation of the restructuring mechanism.

(10) The commission shall establish the procedures and

timelines for organizing, funding, and administering the

restructuring mechanism. The commission shall report to the

legislature and the governor annually regarding the administration

of the restructuring mechanism. The report shall include the total

amount of money collected from contributing providers, the total

amount of money disbursed from the restructuring mechanism annually

to each eligible provider, the costs of administration, and any

other information considered relevant by the commission. The report

shall also identify any duplicative costs or revenues that are

already being recovered by eligible providers through federal

access recovery charges or the connect America fund. If the

commission identifies duplicative recovery, the commission shall

notify the federal communications commission and all contributing

providers. Any duplicative recovery identified by the commission is

not exempt from public disclosure under section 210.

Any company-specific information pertaining to access lines,

switched toll access services minutes of use, switched toll access

demand quantities, contributions, and intrastate ~~telecommunications~~

telecommunication services revenues submitted to the commission

under this subsection are confidential commercial or financial

information and exempt from public disclosure ~~pursuant to~~ under

section 210.

(11) The initial size of the restructuring mechanism shall be

calculated as follows:

(a) ~~Within 60 days of the effective date of the amendatory act~~

~~that added this subsection~~ By February 15, 2010 each eligible

provider shall submit to the commission information and all the

supporting documentation that establishes the amount of the

reduction in annual intrastate switched toll access revenues ~~which~~

that will result from the reduction in rates required in subsection

(2). The reduction shall be calculated for each eligible provider

as the difference between intrastate and interstate switched toll

access service rates in effect as of July 1, 2009, multiplied by

the intrastate switched access minutes of use and other switched

access demand quantities for the calendar year 2008.

(b) The commission shall compute the size of the initial

restructuring mechanism disbursements for each eligible provider

and shall inform each eligible provider of that computation within

60 days after receiving the information and supporting

documentation from the eligible providers under subdivision (a).

(12) The restructuring mechanism shall be created and

supported by a mandatory monthly contribution by all providers of

retail intrastate ~~telecommunications~~ telecommunication services and

all providers of commercial mobile service. Interconnected voice

over internet protocol services shall not be considered an

intrastate ~~telecommunications~~ telecommunication service for the

purposes of this section and interconnected voice over internet

protocol service providers shall not be required to pay, directly

or indirectly, the mandatory monthly contributions established in

this subsection. A provider of ~~telecommunications~~ telecommunication

services to a provider of interconnected voice over internet

protocol services shall not pay a mandatory monthly contribution

related to those interconnected voice over internet protocol

services or attempt to pass through any mandatory monthly

contributions, directly or indirectly, to a provider of

interconnected voice over internet protocol services. Nothing in

this act grants the commission authority over commercial mobile

service providers or voice over internet protocol service providers

except as is strictly necessary for administration of the

restructuring mechanism.

(13) ~~Within 60 days of the effective date of the amendatory~~

~~act that added this subsection,~~ By February 15, 2010, each

contributing provider shall report its 2008 intrastate retail

~~telecommunications~~ telecommunication services revenues to the

commission. Notwithstanding anything in subsection (12), if the

federal communications commission determines that interconnected

voice over internet protocol services may be subject to state

regulation for universal services purposes, the commission may open

a proceeding to determine who is required to participate in a

universal service fund.

(14) The initial contribution assessment percentage shall be a

uniform percentage of retail intrastate ~~telecommunications~~

telecommunication services revenues determined by projecting the

total amount necessary to cover the initial intrastate switched

toll access rate restructuring mechanism disbursement levels for 12

months, including projected cash reserve requirements, actual and

projected administrative costs, and projected uncollectible

contribution assessments, divided by the 2008 calendar year total

retail intrastate ~~telecommunications~~ telecommunication services

revenues in this state, less projected uncollectible revenues,

reported to the commission. The commission shall issue an order

establishing the initial calculation of the contribution assessment

percentage ~~within 150 days of the effective date of the amendatory~~

~~act that added this subsection.~~ by May 16, 2010. The commission may

increase or decrease the contribution assessment on a quarterly or

other basis as necessary to maintain sufficient funds for

disbursements.

(15) Each contributing provider shall remit to the commission

on a monthly basis an amount equal to its intrastate retail

~~telecommunications~~ telecommunication services revenues, less

uncollectible revenues, multiplied by the contribution assessment

percentage determined under subsection (14), according to a time

frame established by the commission. These contributions shall

continue until the end of the period for which eligible providers

are entitled to receive monthly disbursements from the

restructuring mechanism under subsections (11) and (16).

(16) The commission shall recalculate the size of the

restructuring mechanism for each eligible provider ~~4 years from the~~

~~date the initial restructuring mechanism becomes operational~~

~~pursuant to subsection (9) and again 4 years thereafter.~~ on March

13, 2018. The recalculation process shall be as follows:

(a) The restructuring mechanism shall be recalculated ~~each~~

~~time~~ as the difference between the intrastate switched toll access

rates in effect as of July 1, 2009 and the interstate switched toll

access rates in effect at the time of the recalculation, multiplied

by the intrastate switched toll access minutes of use and other

switched access demand quantities for the calendar year 2008.

(b) The recalculated restructuring mechanism shall be further

adjusted during the ~~first~~ recalculation by the percentage change,

if any, in the number of access lines in service for each eligible

provider from December 31, 2008 to December 31 of the year

immediately preceding the year in which the adjustment is made.

~~(c) The recalculated restructuring mechanism shall be adjusted~~

~~during the second recalculation by the percentage change, if any,~~

~~in the number of access lines in service for each eligible provider~~

~~from December 31 of the year of the first recalculation to December~~

~~31 of the year immediately preceding the second recalculation.~~

disbursements from the restructuring mechanism for a period of no

more than 12 years from the date the restructuring mechanism is

established under subsection (9), at which time the restructuring

mechanism shall cease to exist.

(d) The commission shall reduce the amount of the monthly

disbursement to an eligible provider from the restructuring

mechanism on a pro rata basis for each exchange in which the

provider discontinues basic local exchange service under section

313. A reduction under this subsection is effective on the date of

the discontinuance of service.

(17) The money received and administered by the commission for

the support and operation of the restructuring mechanism created by

~~the amendatory act that created this subsection~~ 2009 PA 182 shall

not be used by the commission or any department, agency, or branch

of the government of this state for any other purpose, and that

money is not subject to appropriation, allocation, assignment,

expenditure, or other use by any department, agency, or branch of

the government of this state.

(18) If the federal government adopts intercarrier

compensation reforms or takes any action that causes or requires a

significant change in interstate switched toll access service

rates, the commission may initiate, or any interested party may

file an application for, a proceeding ~~pursuant to~~ under section 203

within 60 days of that action to determine whether any

modifications to the size, operation, or composition of the

restructuring mechanism are warranted. During the pendency of that

proceeding, the requirement in subsection (2) for eligible

providers to set intrastate switched toll access service rates

equal to interstate switched toll access service shall be

temporarily suspended by those providers. Intrastate access rates

may not be increased above the levels that exist at the time of the

suspension. Following notice and hearing, upon a showing of good

cause, the commission may stop or place certain conditions on the

temporary suspension.

(19) If the federal government changes the federal universal

service contribution methodology so that it is not based on a

percentage of total interstate ~~telecommunications~~ telecommunication

services revenues, the commission shall modify the contribution

methodology for the restructuring mechanism to be consistent with

the federal methodology. The commission shall initiate a proceeding

to modify the contribution methodology for the restructuring

mechanism and to establish a reasonable time period for transition

to the new contribution methodology.

(20) Disputes arising under this section may be submitted to

the commission for resolution ~~pursuant to~~ under sections 203 and

204.

(21) If any contributing provider subject to this section

fails to make the required contributions or fails to provide

required information to the commission, the commission shall

initiate an enforcement proceeding under section 203. If the

commission finds that a contributing provider has failed to make

contributions or to perform any act required under this section, a

contributing provider ~~shall be~~ is subject to the remedies and

penalties under section 601.

(22) Eligible providers and contributing providers shall

provide information to the commission that is required for the

administration of the restructuring mechanism. Company-specific

information pertaining to access lines, switched toll access

services minutes of use, switched toll access demand quantities,

contributions, and intrastate ~~telecommunications~~ telecommunication

services revenues submitted to the commission under this subsection

is confidential commercial or financial information and exempt from

public disclosure ~~pursuant to~~ under section 210.

(23) As used in this section:

(a) "Commercial mobile service" means that term as defined in

section 332(d)(1) of the telecommunications act of 1996, 47 USC

332.

(b) "Contributing provider" means an entity required to pay

into the restructuring mechanism.

carrier as defined in section ~~251~~ 251(h) of the telecommunications

act of 1996, 47 USC 251, that as of January 1, 2009 had rates for

intrastate switched toll access services higher than its rates for

the same interstate switched toll access services, and that

provides the services and functionalities identified by rules of

the federal communications commission described at 47 CFR

54.101(a).

(d) "Interconnected voice over internet protocol service"

means that term as defined in 47 CFR 9.3.

(e) "Restructuring mechanism" means the intrastate switched

toll access rate restructuring mechanism established in this

section.

Sec. 313. (1) A telecommunication provider that provides

either basic local exchange or toll service, or both, shall not

discontinue either service to an exchange unless 1 or more

alternative providers for toll service, or 2 or more alternative

providers for basic local exchange service, are furnishing a

comparable voice service to the customers in the exchange. A

comparable voice service includes any 2-way voice service offered

through any form of technology that is capable of placing and

receiving calls from a provider of basic local exchange service,

including voice over internet protocol services and wireless

services.

(2) A telecommunication provider proposing to discontinue a

regulated service to an exchange shall file a notice of the

discontinuance of service with the commission, publish the notice

in a newspaper of general circulation within the exchange, provide

notice to each of its customers within the exchange by first-class

mail or within customer bills, and provide other reasonable notice

as required by the commission.

(3) Within 60 days after the date of publication or receipt of

the notice required by subsection (2), a person or other

telecommunication provider affected by a discontinuance of services

by a telecommunication provider may apply to the commission to

determine if the discontinuance of service is authorized under this

act. Within 90 days after the date of publication of the notice

required by subsection (2), the commission may, in response to a

request or on its own initiative, commence a proceeding to

determine if the discontinuance of service is authorized under this

act. The commission has 180 days from the date any proceeding is

initiated under this subsection to issue its final order. A

provider shall not discontinue service unless it has provided at

least 60 days' notice to each customer after a commission order has

been issued under this subsection or after the last day for

initiating a proceeding under this subsection.

(4) Discontinuance of basic local exchange service under this

section by an incumbent local exchange carrier does not affect the

requirements of that incumbent local exchange carrier under federal

law and this act. As used in this subdivision, "incumbent local

exchange carrier" means that term as defined in section 251(h) of

the telecommunications act of 1996, 47 USC 251. This section does

not create, restrict, or expand the commission's jurisdiction and

authority for any of the following:

(a) The jurisdiction and authority established under section

201.

(b) The jurisdiction and authority to carry out the

commission's obligations to enforce the rights, duties, and

obligations of an entity that are established in sections 251 and

252 of the telecommunications act of 1996, 47 USC 251 and 252, any

applicable agreement or wholesale tariff or state law, rule,

regulation, or order related to wholesale rights, duties, and

obligations, including, but not limited to, interconnection and

exchange voice traffic.

rates, terms, and conditions, including the implementation of

federal or state law concerning intercarrier compensation.

(5) Subsections (1) to (3) do not apply after December 31,

2016. Beginning January 1, 2017, a telecommunication provider that

provides basic local exchange or toll service may discontinue that

service in an exchange by doing each of the following:

(a) At the same time as filing a petition under section 214 of

the telecommunications act of 1996, 47 USC 214, all of the

following:

(i) File a notice of the proposed discontinuance of service

with the commission.

(ii) Publish a notice of the proposed discontinuance of service

in a newspaper of general circulation within the exchange.

(iii) Provide notice of the proposed discontinuance of service

to each of the telecommunication provider's customers within the

exchange by first-class mail or within customer bills.

(iv) Provide notice of the proposed discontinuance of service

to any interconnecting telecommunication providers by first-class

mail or other notice permitted under the terms of the

interconnection agreement between the providers.

(b) Upon approval of the federal communications commission to

discontinue service, at least 90 days before discontinuing service,

all of the following:

(i) File a notice of the discontinuance of service with the

commission.

(ii) Publish a notice of the discontinuance of service in a

newspaper of general circulation within the exchange.

(iii) Provide notice of the discontinuance of service to each of

the telecommunication provider's customers within the exchange by

first-class mail or within customer bills.

(iv) Provide notice to any interconnecting telecommunication

providers by first-class mail or other notice permitted under the

terms of the interconnection agreement between the providers.

(6) After January 1, 2017, and only in an area in which a

telecommunication provider either has given notice of a proposed

discontinuance of service under subsection (5) or has discontinued

service within the previous 90 days, a customer of that provider or

any interconnecting telecommunication provider may request the

commission to investigate the availability of comparable voice

service with reliable access to 9-1-1 and emergency services to

that customer or a customer of an interconnecting telecommunication

provider. If the commission, after conducting an investigation to

last no longer than 180 days regarding the availability of

comparable voice service with reliable access to 9-1-1 and

emergency services, determines that the federal communications

commission failed to make a finding that the present and future

public convenience and necessity is not adversely affected or has

not adequately addressed the issue, the commission shall declare by

order that an emergency exists in an area in this state that is not

served by at least 1 voice service provider offering comparable

voice service with reliable access to 9-1-1 and emergency services

through any technology or medium and shall conduct a request for

service process to identify a willing provider of comparable voice

service with reliable access to 9-1-1 and emergency services in

that area, including the current provider. A provider shall not be

required to participate in the request for service process. The

willing provider may utilize any form of technology that is capable

of providing comparable voice service with reliable access to 9-1-1

and emergency services, including voice over internet protocol

services and wireless services. If the commission determines that

another provider is not capable of providing comparable voice

service with reliable access to 9-1-1 and emergency services in

that area, the commission shall issue an order requiring the

current telecommunication provider to provide comparable voice

service with reliable access to 9-1-1 and emergency services in

that area utilizing any form of technology that the commission

determines is capable of providing comparable voice service with

reliable access to 9-1-1 and emergency services, including voice

over internet protocol services and wireless services, until

another willing provider is available. An intrastate universal

service fund under section 316a shall not be created or used to

compensate or fund a willing provider or current telecommunication

provider to provide service under this section. As used in this

subsection:

(a) "Comparable voice service" includes any 2-way voice

service offered through any form of technology, including voice

over internet protocol services and wireless services, that is

capable of placing calls to and receiving calls from a provider of

basic local exchange service.

(b) "Reliable access to 9-1-1" means access to 9-1-1 which is

provided in compliance with the emergency 9-1-1 service enabling

act, 1986 PA 32, MCL 484.1101 to 484.1717, and the requirements of

the federal communications commission.

participates in the request for service process.

Sec. 317. (1) An operator service provider shall not provide

operator services in this state without first registering with the

commission. The registration shall include the following

information:

(a) The name of the provider.

(b) The address of the provider's principal office.

of the registered office and the name of the registered agent

authorized to receive service of process in this state.

(d) Any other information that the commission may require.

(2) The registration shall be accompanied with a registration

fee of $100.00.

(3) The registration is effective immediately upon filing with

the commission and the payment of the registration fee. ~~and shall~~

~~remain in effect for 1 year from its effective date.~~

~~(4) A registration may be renewed for 1 year by filing with~~

~~the commission a renewal registration on a form provided by the~~

~~commission and the payment of a renewal fee of $100.00.~~

(4) ~~(5)~~ At no charge, an operator service provider shall

immediately connect a person making an emergency call to an

emergency responder service.

Sec. 320. (1) A person shall not provide payphone service in

this state without first registering with the commission. The

registration shall include all of the following information:

(a) The name of the provider.

(b) The address and telephone number of the provider's

principal office.

and telephone number of the registered office and the name and

telephone number of the registered agent authorized to receive

service of process in this state.

(d) The specific location of each payphone in this state owned

or operated by the provider. Information required under this

subdivision shall be made available to the local unit of government

solely for the enforcement of the reporting, repairing, and

replacement standards under subsection (8). The information

required to be provided under this subsection ~~shall be~~ is

considered commercial information under section 210, and the

information submitted ~~shall be~~ is exempt from the freedom of

information act, ~~Act No. 442 of the Public Acts of 1976, being~~

~~sections 15.231 to 15.246 of the Michigan Compiled Laws.~~1976 PA

442, MCL 15.231 to 15.246.

(2) The registration shall be accompanied by a registration

fee of $100.00.

(3) The registration is effective immediately upon filing with

the commission and the payment of the registration fee. ~~and shall~~

~~remain in effect for 1 year from its effective date.~~

~~(4) A registration may be renewed for 1 year by filing with~~

~~the commission a renewal registration on a form provided by the~~

~~commission and the payment of a renewal fee of $100.00.~~

(4) ~~(5)~~ The commission shall establish a toll-free number that

can be dialed to report to the commission a payphone that is

inoperative. The toll-free number shall be conspicuously displayed

by the provider on or near each payphone.

(5) ~~(6)~~ If the commission receives a report ~~pursuant to~~ under

subsection ~~(5),~~ (4), it shall immediately notify the provider of

the inoperative payphone.

(6) ~~(7)~~ After consulting with providers of payphone service,

local units of government, and other interested parties, the

commission shall promulgate rules or issue orders under section 213

to establish and enforce quality standards in the providing of

payphone service.

(7) ~~(8)~~ Except as provided in subsection ~~(9),~~ (8), a local

unit of government shall not regulate payphone service.

(8) ~~(9)~~ A local unit of government may enforce the reporting,

repairing, and replacement of inoperative payphones within its

jurisdiction by adopting an ordinance that conforms to the

standards established by the commission under subsection ~~(7).~~ (6).

A local unit of government shall not impose standards greater than

~~these~~ those established by the commission.

Sec. 502. (1) A provider of a basic local exchange service

shall not do any of the following:

(a) Make a statement or representation, including the omission

of material information, regarding the rates, terms, or conditions

of providing a service that is intentionally false, misleading, or

deceptive. As used in this subdivision, "material information"

includes, but is not limited to, a good faith estimate of all

applicable fees, taxes, and charges that will be billed to the end-

user, regardless of whether the fees, taxes, or charges are

authorized by state or federal law.

(b) Charge an end-user for a subscribed service for which the

end-user did not make an initial affirmative order. Failure to

refuse an offered or proposed subscribed service is not an

affirmative order for the service.

for service provided after the effective date the service was

canceled.

(d) Cause a probability of confusion or a misunderstanding as

to the legal rights, obligations, or remedies of a party to a

transaction by making an intentionally false, deceptive, or

misleading statement or by failing to inform the customer of a

material fact, the omission of which is deceptive or misleading.

(e) Represent or imply that the subject of a transaction will

be provided promptly, or at a specified time, or within a

reasonable time, if the provider knows or has reason to know it

will not be so provided.

(f) Require the purchase of a regulated service of the

provider as a condition of purchasing an unregulated service.

(g) If a bona fide dispute exists between a customer and the

provider, disconnect the service to the customer ~~before the~~

~~resolution of that dispute.~~for nonpayment of that disputed amount.

(2) When the commission has authority to bring a proceeding

for a violation of this section, the commission may accept an

assurance of discontinuance of a method, act, or practice that is

alleged to be unlawful under this section from the person who is

alleged to have engaged, be engaging, or be about to engage in the

method, act, or practice. The assurance of discontinuance is not an

admission of guilt and shall not be introduced in any other

proceeding. Unless rescinded by the parties or voided by the court

for good cause, the parties to the assurance of discontinuance may

enforce the assurance in circuit court. The assurance of

discontinuance may include a stipulation for any of the following:

(a) The voluntary payment by the person for the cost of