Amicus Curiae Brief — Public Utilities Commission v. Federal Communications Commission

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ris: if Supreme Court, U.S.

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Nos. 84-871, 84-889, 84-1

In the Supreme Court of th

October Term, 1984

Louisiana Public Service Commission, Appellan

Vv.

Federal Communications Commission and

United States of America, Appellees

California and Public Utilities Commission

of California, et al., Petitioners

Vv.

Federal Communications Commission and

United States of America, Respondents

Public Utilities Commission of Ohio,

et al., Petitioners

Federal Communications Commission and

United States of America, Respondents

Florida Public Service Commission, Petitioner

Vv.

Federal Communications Commission and

United States of America, Respondents

On Appeal And On Petitions For A Writ Of

Certiorari To The United States Court Of

Appeals For The Fourth Circuit

AMICI CURIAE BRIEF

IN SUPPORT OF APPELLANT AND

PETITIONERS

BEST AVAILABLE COPY

Nos. 84-871, 84-889, 84-1054, and 84-1069

In the Supreme Court of the United States

October Term, 1984

Louisiana Public Service Commission, Appellant

Vv.

Federal Communications Commission and

United States of America, Appellees

California and Public Utilities Commission

of California, et al., Petitioners

Vv.

Federal Communications Commission and

United States of America, Respondents

Public Utilities Commission of Ohio,

et al., Petitioners

Vv.

Federal Communications Commission and

United States of America, Respondents

Florida Public Service Commission, Petitioner

Vv.

Federal Communications Commission and

United. States of America, Respondents

On Appeal And On Petitions For A Writ Of

Certiorari To The United States Court Of

Appeals For The Fourth Circuit

AMICI CURIAE BRIEF

IN SUPPORT OF APPELLANT AND

PETITIONERS

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‘

WILLIAM J. GUSTE, JR.

Attorney General

State of Louisiana

RICHARD M. TROY

Assistant Attorney General

7th Floor, 234 Loyola Avenue

New Orleans, Louisiana 70112

J. DAVID MCNEILL III

COUNSEL OF RECORD

Assistant Attorney General

7434 Perkins Road

Baton Rouge, Louisiana 70808

Telephone: (504) 922-0187

JOHN L. GUBBINS

JEFFREY C. PAULSON

John Gubbins, Ltd.

20 North Clark Street, Suite 2600

Chicago, Illinois 60602

Illinois Citizens Utility Board

108 North State Street

Chicago, Illinois 60602

JOEL BLAU

PHILIP S. SHAPIRO

New York State Consumer Protection

Board, Utility Intervention Unit

99 Washington Avenue, Suite 1020

Albany, New York 12210

BARRY ZITSER

Consumer Counsel of the

Connecticut Division of

Consumer Counsel

One Central Park Plaza, Room 105

New Britian, Connecticut 06051

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CORRINE K. A. WATANABE

Attorney General

State of Hawaii

RONALD SHIGEKANE

Deputy Attorney General

Consumer Advocate, Director of Department

of Commerce and Consumer Affairs

State Capitol

Honolulu, Hawaii 96813

BRIAN BURNETT

Assistant Attorney General

Utah Attorney General's Office

130 State Capitol Building

Salt Lake City, Utah 84114

Utah Committee of Consumer Services

408 Heber M. Wells Building

160 East 300 South

Salt Lake City, Utah 84145

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES. ...ceecceeceees iii

STATEMENT OF INTEREST... cceccccccseeee 1

SUMMARY OF ARGUMENT. ..csccccsccccecssees 9

ARGUMENT. ccccccccccccccccccccccccccsce 6

SECTION 2(b) OF THE ACT PRECLUDES

THE FCC FROM PREEMPTING STATE

AUTHORITY TO SET RATES FOR

INTRASTATE TELEPHONE SERVICE..... 6

A. Preemption Of Powers

Historically Exercised By

States May Not Be

Sustained In The Absence

Of Manifest Evidence Of

Congressional Intent To

Authorize Preemption........ 6

B. States Have Traditionally

- Exercised Their Police

Powers To Regulate The

Intrastate Rates, Charges,

Services and Operations

Of Telephone Companies..... ll

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C. The Terms And History Of

The Communications Act

Conclusively Demonstrate

A Congressional Purpose

To Prevent The FCC From

Displacing Traditional

State Ratemaking

Authority For Intrastate

Telephone Service...csseeeeee 34

ed el a ee) ae ee ee ee 65

APPENDIX: Illinois Universal Telephone

Service Protection Law of

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TABLE OF AUTHORITIES

Page

CASES:

CBS, Inc. v. FCC, 453 U.S. 267

CEOS Ddc-0.0 6066606660 6 666 6660606 64

Cincinnati Bell Telephone Co. v. Public

Utilities Commission of Ohio,

12 Ohio St. 3d 280 (1984)....... 42

Denver v. Denver Union Water Co.,

246 U.S. 178 Cen ihes ene c'adecces 54

Federal Power Comm'n v. Conway Corp.,

426 U.S. 271 ¢, ) Pe re 57

Federal Trade Comm'n. v. Bunte Bros.,

EaGcn. See BoB. O69 4h94L)cecece $2

Fidelity Federal Savings and Loan Assn.

v. De la Cuesta, 458 U.S. 141

fl) PPT TUT TTT PTT TTTrTriree 7

Florida Lime and Avocado Growers, Inc.

VV. Paul, 373 OU.B8. 132 (1963)ccece 8

Grove City College v. Bell, U.S.

, 104 S. Ct. 1211 (1984)..... 64

Houston, East and West Texas Ry. Co.

v. U.S., 234 U.S. 342 (1914).... 48

Illinois Bell Telephone Co. v. Commerce

Commission, 414 Ill. 275,

111 N.E.2d 329 (1953)..ceeeeeeee 19

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4 iF a , ben be i A a . 3 i 7 y . ene, 4 e 7

. ~ a rte ee ans ee eT nS J ~ _ wie} Sihichie ‘ oo —s-!

Jones v. Rath Packing Co., 430 U.S.

519 CIGD PTET CTL Ter TT Terre 8

Lindheimer v. Illinois Bell Telephone

Co., 292 U.S. 151 (1934) 18, 20, 21

Merrill Lynch, Pierce, Fenner & Smith

v. Curran, 456 U.S. 353 (1982).. 64

North Carolina Utilities Commission v.

F.C.C., 537 F.2d 787 (4th Cir.)

cert. denied, 429 U.S. 1027

( BER abebeeesenecoececeeseceacs 61

Pacific Gas and Electric Co. v. State

Energy Resources Conservation

and Development Comm'n, 461

U.S. 190 Ta PCS Pec csteoeseesoses Ve 12

People v. City of Chicago, 349 Ill.

304, 182 N.E. 419 (1932)........ 14

Peoples Gas Light and Coke Co. v.

Slattery, 373 Ill. 31, 25 N.E.2d

482, appeal dismissed 309 U.S.

634 ( 4 0460006000666 SOS SSO CESES 18

Philbrook v. Glodgett, 421 U.S. 707

[Riri hs bb ene Ones 0b8 obo obo eebose 38

Philko Aviation, Inc. v. Shacket, 462

U.S. 406 cB is od 0060400 06666 00 38

Puerto Rico Telephone Co. v. F.C.C.,

553 F.2d 694 (lst Cir. 1977).... 61

Rice v. Santa Fe Elevator Corp., 331

U.S. 218 ERUET Pees eceeeesbecceces 8

Smith v. Illinois %ell Telephone Co.,

262 U.8. 133 :930)cccccccese 18, SO

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foe : lana? So” iar Pi oe vib al ae he 5 > we NS Ea MR jai (a tee YC ; ER, Wigan a :

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Southwestern Bell Telephone Co. v.

Arkansas Public Service Commission,

584 F. Supp. 1087, (E.D. Ark.),

rev'd on other grounds, 738

F.2d 901 (8th Cir. 1984)........ 42

State Public Utilities Comm'n v.

Springfield Gas and Electric Co.,

191 Ill. 209, 125 N.E. 891

CABO dccceddccd ode cboeWecébeosoce 16

Udall v. Tallman, 380 U.S. 1 (1965).. 62

United States v. Missouri Pacific R.R.

Ce. e408. UceB. BED. (AGS9i cactoces Sf

United States v. Southwestern Cable

COee Bee Gabe BSF CARS ccecccee Ba

Zemel Ve Rusk, 381 U.S. Beoeeeseeeses 64

ADMINISTRATIVE DECISIONS

Accounting Rules For Telephone

Companies, 203 I.C.C. 13

CREPE dee ceecesesecoceeceeseeeres 47

Re Colchester Farmer's Telephone Co.,

192356 P.G.R. 23 (E1.CeCedeccccces 2

Depreciation Charges Of Telephone

Companies, 118 I.C.C. 295, 332

CAPES peecceeccecoeeeeseseees 46, 54

Depreciation Charges of Telephone

Companies, 177 I.C.C. 351

CAGES. covdessececesoocoececes 47, 54

Re Illinois Bell Telephone Co., 57

P.U.R. 4th 225 CaFSS dcccccocecce 21

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Re Illinois Bell Telephone Co.,

Proposed Increase In Service

Charges, I1.C.C. Dkt. 81-0115,

(slip op., January 24, 1982).... 24

In the Matter of Amendment of Part 31,

Uniform System of Accounts for

Class A and Class B Telephone

Companies, 89 F.C.C.2d 1094

(1982) rev'd. C.C. Dkt. 79-105

(F.C.C. January 6, 1983)........ 61

Re Ross, 1915D P.U.R. 646 (11.C.C.).. 20

Unrepeated Message Case, 44 I.C.C.

670 (1917), modified 61 I.C.C.

541 Pi ihe oon 6 60666006668 6 44

Re Webster Telephone Company, 1915E

PUR 526 (RB. BDORe )cccccccceceecese 53

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TABLE OF AUTHORITIES

PAGE

STATUTES

United States Constitution

Uscws Geees GEG. Se Glo 2 ecocccococe 30

Citizens Utility Board Act

Ill. Rev. Stat. ch. 111-2/3,

§ 905(a) eeeeeeeeee: 1

Communications Act of 1934

47 U.S.C. §§ 151 et SCG. ceeeeee Sy 34

Gy Cis dacdovcccoce Ste. 62

Oe Ses Se EE bacesécccicccsscs

7 Si cece cecessseoewe OO

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Federal Power Act

16 0.8.6. §§ 824a et seq. eeee@*ee#*ee#*ee#ee#es 57

86 SB 6 O GUE ctv recccvrccveeced BS

16 U.S.C. 7 ne 66 oeeeeeeeeeees 58

Illinois’ Public Utilities Act

Ill. Rev. Stat. ch. 111-2/3,

& 1 et BOG. «ce 13, 26

Ill. Rev. Stat. ch. Iil- Yee

Till. Rev. Stat. ch. 111-2/3, §8 ... 14

Tll. Rev. Stat. ch. 111-2/3,

BPUGs ecovcesece 29

Ill. Rev. Stat. ch. 111-2/3, §9 ... 15

Til. Rev. Stat. ch. 111-2/3,

§10.3(b) ..---- 14

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Ill. Rev. Stat. ch. 111-2/3,

BRE cocccce AFeg 42

Ill. Rev. Stat. ch. 111-2/3,

§§11-19 .....--- 15

Ill. Rev. Stat. ch. 111-2/3,

§§20-29, 31 ... 15

Ill. Rev. Stat. ch. 111-2/3,

§§32, 36 weooee 16

Ill. Rev. Stat. ch. 111-2/3,

§§32-40, 41-43 eeeeeee 15

Ill. Rev. Stat. ch. 111-2/3,

§§48, 49, 50 ...---14, 15

Ill. Rev. Stat. ch. 111-2/3,

§§64-71 eeeeveeeeeeeece@ 15

Ill. Rev. Stat. ch. 111-2/3,

§§72-75 eeeeeeeeeeeeee 15

Interstate Commerce Act

36 Stat. 539, 545 eeee7eseese@e@#ee*e#se7e#se#e#e? 43, 49

Louisiana Constitution, art. 4 §8 ... 2

Mann-Elkins Act

36 Stat. 544 (1910) @eeeeee7n8ee7uee#ee#ee#e#e#e# 43

Moore Universal Telephone Service Act,

Cal. Rev.&Tax Code, §44000, et seq. .28

New York Exec. Law. §§552, 553 «eeeeee 3

Regulatory Agency Sunset Act

Ill. Rev. Stat. ch. 127,

§§1901 et seg. ....-.-- 26

Ill. Rev. Stat. ch. 127, §1904.3 .. 27

Regulatory Reform Act of 1979

Ill. Rev. Stat. ch. 127,

§§1951 et seq. ......-. 26

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Transportation Act of 1920

41 Stat. 456, 493 e@eeeeesee#eessteeeeee 45

Miscellaneous:

78 Cong. Rec. 8823 (1934) .eeeeeee 55

Hearings on S.6 before the Senate

Committee on Interstate Commerce,

7ist Cong., lst and 2d Sess.

(1929-30) eeeeeeeeeeeeeveseeeeeeeeeee 55

Preliminary Report on Communications

Companies, H.R. Rep, No. 1273,

73d Cong., 2d Sess. (1934) w.cceeeee 44

Report of the Special Joint Committee

to Investigate Public Utilities, 48th

Gen. Ass., 1913 Sen. J. 830..13, 16, 20

S. Rep. No. 781, 73d Cong., 2d Sess.

(1934) e@*eeee#e7e#e7s#e#es 56

Universal Telephone Service Protection

Law of 1985, H.B. 1814, 84th Gen.

Ass. (Appendix) @eeeeevneeoeaeeenee e282 28, 29

1921 Ill. Laws 702, §10.3(a) ....... 14

(1984 Int. Supp.) eesreeeereeeeee 28

Va. Code §§56-481.1, 56-482.1,

56-484.2, 56-484.2 (2985 Supp.) .. 28

ARTICLES

Gabel, The Early Competitive Era in

Telephone Communication, 1893-1920,

34 Law Contemp. Prob. 340 (1969).. 44

-ix-

Goddard, The Interest of Public Utility

Ratepayers in Depreciation,

48 Harv.L.Rev. 721 (1935) eeeeeee 52, 53

Roberts, Depreciation As An Element

In Public Utility Valuation,

1 Mo. Le Rev. 145 (1936) eeeeeeeee8ees 52

Stephan, Federal Regulation of

Communications, 1934 Fed.B.A.J. 87 . 55

Wheat, The Regulation of

Interstate Telephone Rates,

51 Harv.L.Rev. 846 (1938)... ll, 45, 52

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STATEMENT OF INTEREST

The Illinois Citizens Utility

Board (CUB) is a non-profit public

membership organization created to

"represent and protect the interests of

the residential utility consumers of the

State" before the Illinois Commerce

Commission, Federal Communications

Commission, and other appropriate

judicial and administrative bodies.

Tll. Rev. Stat. ch. 111-2/3, § 905(a)

(1983). CUB's activities are intended

to promote the health, welfare, and

prosperity of all the citizens of

Illinois, and this purpose is considered

to be a statewide public interest, not a

private or special concern. CUB has

over 120,000 contributing members and

has participated in regulatory and

legislative proceedings on behalf of

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Illinois customers of telephone and

telecommunications companies.

The Attorney General of

Louisiana is the Chief Legal Officer of

the State of Louisiana and is empowered

to represent the interests of consumers

in the State of Louisiana. La. Const.

art. 4 § 8. Such authority includes the

power to represent citizens of the State

of Louisiana with respect to the rates

and services of telephone companies and

other public utilities.

The New York State Consumer

Protection Board is a New York State

Executive Department Agency authorized

and empowered to represent the interests

of the consumers of the State of New

York. N.Y. Exec. Law §§ 552, 553. Such

authority includes the power to

represent consumers with respect to the

rates and services of telephone

companies and other public utilities.

The Connecticut Consumer

Counsel is the statutory advocate for

the interests of Connecticut utility

consumers.

The Consumer Advocate,

Director of Department of Commerce and

Consumer Affairs, of the State of Hawaii

is designated by statute to represent

the interests of all consumers in the

State of Hawaii.

Under Utah state law, the Utah

Committee of Consumer Services is to

assist and represent residential, small

business, and agricultural consumers of

natural gas, electric, and telephone

utilities before the Utah Public Service

Commission and on appeals.

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As detailed with respect to

Illinois in Section B of the Argument,

CUB and the other amici are interested

in this proceeding for two significant

reasons. First, affirmance of the

Fourth Circuit decision is likely to

have a dramatic and adverse impact on

consumers’ intrastate telephone rates.

Second, the legitimacy of State

regulatory objectives and mechanisms for

telephone rates and services will be

substantially jeopardized by an

affirmance.

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SUMMARY OF ARGUMENT

The purpose of this amicus

brief is to address points not covered,

Or not covered in great detail, by

Petitioners and to bring to the Court's

attention the consequences of its

decision in this case for continued

State regulation of intrastate telephone

companies and their customers. Amici

discuss whether the plain language and

intent of the Federal Communications Act

47 U.S.C. §§ 151 et seg., (Act) deprive

the FCC of the authority to preempt

State ratemaking jurisdiction over

intrastate telephone companies ana

services. Amici emphasize, in

particular, the lengthy history and

pervasive scope of state telephone

regulation, and the continuation of such

regulation in the future in pursuit of

important State public policy objectives

and indicate further that this

traditional exercise of State regulatory

powers creates a strong presumption

against preemption. Further, amici

discuss the provisions and historical

context of Section 2(b) of the Act and

argue that the clear Congressional

intent embodied therein is to protect

state regulatory authority over

intrastate telephone service against

federal encroachment.

ARGUMENT

SECTION 2(b) OF THE ACT PRECLUDES

THE -FCC FROM PREEMPTING STATE

AUTHORITY TO SET RATES FOR

INTRASTATE TELEPHONE SERVICE

A. Preemption Of Powers

Historically Exercised By

States May Not Be Sustained In

The Absence Of Manifest

Evidence Of Congressional

Intent To Authorize

Preemption.

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Express federal preemption of

State law or power has only been upheld

in instances where Congress has

explicitly indicated such an intent.

Sufficiently strong indications may

arise from the plain terms of the

federal law or because the federal

regulatory scheme is so pervasive as to

leave no doubt, in the absence of

statutory exemptions to the contrary,

that Congress intended to preclude State

action in the field. Pacific Gas and

Electric Co. v. State Energy Resources

Conservation and Development Comm'n, 461

U.S. 190, 203-4 (1983); Fidelity Federal

Savings and Loan Assn. v. De la Cuesta,

458 U.S. 141, 153 (1982).

In either instance, however,

if the area to be preempted is one in

which states have traditionally

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exercised their police powers,

preemption will not be presumed lightly;

it will be sustained only where the

Congressional intent to preclude state

action is "unambiguous" and

"unmistakably ordained." Florida Lime

and Avocado Growers, Inc. v. Paul, 373

U.Se 132, 142, 146-7 (1963). In such a

case, analysis must begin with the

assumption that federal law was not

intended to supersede the historic

police powers of the State unless that

was the “clear and manifest purpose of

Congress.” Rice v. Santa Fe Elevator

Corp., 331 U.S. 218, 230 (1947). This

assumption serves to assure that the

balance between federal and state powers

will not be disturbed unintentionally by

Congress or unnecessarily by the courts.

Jones v. Rath Packing Co., 430 U.S. 519,

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525 (1977). Unless Congress has openly

forsaken the critical balance of federal

and state authority in favor of

exclusive federal power, attempts to

preempt the legitimate operation of

state law must therefore be proscribed.

The Fourth Circuit's opinion

ignores this test for measuring the

propriety of preemptive action by the

federal government. In fact, the Court

does not discuss in any significant

fashion the intent of Congress with

respect to the preemptive limitations of

the Act. The Court, instead, skips

immediatély to determine whether state

law or policy “might” frustrate federal

objectives. By so doing, the Court

eliminates any burden on the federal

agency to justify its infringement unon

State authority, and thereby makes it

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easy to find any speculative impediment

attributable to state law sufficient to

warrant preemption, irrespective of

Congressional intent. Such an analysis

effectively circumvents any restrictions

on the federal power to preempt; any

preemptive action could be justified by

"possible" frustration despite

Congressional intent to the contrary, or

in the face of serious doubt as to

whether Congress authorized such action.

This approach exalts deference to

federal agencies and courts at the

expense of Congress and the States,

upsetting the balance of state and

federal powers. Such federal

overreaching is neither compelled nor

justified by the Supremacy Clause or

this Court's decisions. See U.S. Const.

art. 6, cl. 2. The starting point for

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analysis must instead be, as this Court

has consistently held, whether Congress

has evidenced an intent to explicitly

authorize or proscribe the particular

preemptive action at issue, for in the

absence of such authority, preemption

cannot be sustained regardless of

potential "frustration."

B. States Have Traditionally

Exercised Their Police Powers

To Regulate The Intrastate

Rates, Charges, Services and

Operations Of Telephone

Companies.

Modern regulation of electric,

gas and telephone utilities began at the

state level in Wisconsin in 1907. By

1930, all but three states had initiated

fairly extensive regulation of

intrastate telephone rates and services,

Wheat, The Regulation of Interstate

Telephone Rates, 5l Harv. L. Rev. 846,

847 (1938), and all states currently

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have such regulation. Most states did

not distinguish between types of public

utilities in establishing the scope and

nature of their regulatory objectives

and legislation and, as a result,

intrastate state telephone service has

been accorded state regulation to the

same extent as electricity and natural

gas. This Court has recently recognized

the critical importance of state public

utility regulation in the context of

electricity, recognition which should

similarly be extended to state telephone

regulation. Pacific Gas and Electric

Co. v. State Energy Resources

Conservation and Development Comm'n, 461

U.S. 190, 205-6 (1983) and cases cited

therein.

The experience of Illinois is

typical of most states, and may be used

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as an example of the nature and

importance of state telephone

regulation. The Illinois Public

Utilities Act (PUA) was first enacted in

1913 and reenacted without significant

change in 1921. Ill. Rev. Stat. ch.

111-2/3, §§ 1 et seq. In short, the

purpose of the PUA is to assure the

availability of efficient utility

service at reasonable and equitable

rates to as many citizens as possible.

Report of the Special Joint Committee to

Investigate Public Utilities, 48th Gen.

Ass., 1913 Sen. Jl. 830, 862. At the

same time, utilities are to receive a

fair return on their property, including

sufficient income to ensure ongoing

reinvestment in the business. Id. at

955. The means of balancing these

objectives is codified in the PUA and

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the authority to do so is vested in the

Illinois Commerce Commission (ILCC).

The provisions of the PUA

provide plenary power to the ILCC to

regulate Illinois public utilities and

their intrastate activities. People v.

City of Chicago, 349 Ill. 304, 182 N.E.

419 (1932). "Public utilities” subject

to the PUA has always included companies

involved in the transmission of

telephone messages between points within

the State. 1921 I11. Laws 702, §

10.3(a): PUA, § 10.3(b), Ill. Rev. Stat.

ch. 111-2/3, § 10.3(b) (1983). The ILCC

has comprehensive powers over such

companies, including the power to

generally supervise management, PUA,

§ 8, Ill. Rev. Stat. ch. 111-2/3, § 8;

to order construction or alteration of

any utility facilities, Id., §§ 48, 49,

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49, 50; to require accounting and

reporting, Id. §§ 9, 11-19, Ill. Rev.

Stat. ch. 111-2/3, §§ 9, 11-19; to

control financing and intercorporate

relations, Id. §§ 8a, 20-29, 31, Ill.

Rev. Stat. ch. 111-2/3, §§ 8a, 20-29,

31; and to examine and determine utility

rates and services, Id., §§ 32-40,

41-43, Ill. Rev. Stat. ch. 111-2/3,

§§ 32-40, 41-43. The ILCC's

determinations are generally subject to

notice and hearing, PUC, §§ 3, 60-67,

Ill. Rev. Stat. ch. 111-2/3, §§ 3,

64-71, and to full judicial review, Id.,

§§ 68-71, Ill. Rev. Stat. ch. 111-2/3,

§§ 72-75.

Of these various powers, the

most important is the ability to

evaluate and establish utility rates.

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Report of the Special Joint Committee,

supra, at 955. Rates must be just and

reasonable to both the public and the

utility, Id.; State Public Utilities

Comm'n v. Springfield Gas and Electric

Co., 191 Ill. 209, 125 N.E. 891 (1920).

In this respect they must not be

excessive, so that citizens are able to

obtain and afford utility service,

Report of the Special Joint Committee,

supra, at 934, and at the same time must

be sufficient to ensure reinvestment

through depreciation and other means in

order to provide high-quality and

efficient service. Id. at 862, 933-36,

955; PUA §§ 32, 36, Ill. Rev. Stat. ch.

111-2/3, §§ 32, 36. In setting rates

for utility services, including

intrastate telephone services, the ILCC

must constantly wrestle with the

-16-

inherent tension between the objectives

of affordable and reasonable prices, so

as to promote wide availability of

service to the public, and efficient

utility service which can only be

obtained through a sufficient level of

reinvestment.

The intersection of these

ratemaking objectives is the

determination of an appropriate level of

depreciation. The ILCC is specifically

empowered to "require any or all public

utilities to keep such accounts as will

adequately reflect depreciation,

obsolescence and the progress of the

arts" and to fix the proper and adequate

rate of depreciation for utility

property. PUA, § 14, Ill. Rev. Stat.

ch. 111-2/3, § 14. Every public utility

must conform its accounts to the

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depreciation rates determined by the

ILcc. Id. Illinois courts have

sustained the ILCC's authority to

consider evidence of depreciation and

obsolescence, Peoples Gas Light and Coke

Co. v. Slattery, 373 Ill. 31, 25 N.E. 2d

482, appeal dismissed 309 U.S. 634

(1940), and this Court has upheld the

ILCC's authority to establish an

appropriate amount of depreciation

expense for intrastate telephone

ratemaking and the propriety of

including depreciation as an expense

underlying the determination of

reasonable rates. Lindheimer v.

Illinois Bell Telephone Co., 292 U.S.

151 (1934): Smith v. Illinois Bell

Telephone Co., 282 U.S. 133 (1930).

Moreover, courts have interpreted

Illinois law to require the inclusion of

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depreciation expense in setting rates

which are as low as possible for the

public. Illinois Bell Telephone Co. v.

Commerce Commission, 414 Ill. 275, 286,

111 N.E.2d 329, 335 (1953).

Consistent with this

authority, for seventy years the ILCC

has required Illinois telephone

utilities to account for depreciation

and has included an appropriate amount

for annual depreciation expense in the

expenses of such companies for

intrastate ratemaking purposes.1/ See,

1/ Aside from the plain language of

Section 14 of the PUA, there are

other indications that the concept

of depreciation in Illinois utility

law includes the phenomenon of

obsolescence; the retirement,

earlier than originally

anticipated, of property or

equipment replaced by

technologically superior or more

economical machinery. As

emphasized by the General Assembly,

one key goal of the PUA is to

(Footnote Continued On Next Page)

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e.g., Re Ross, 1915D P.U.R. 646

(I1.C.C.): Re Colchester Farmer's

Telephone Co., 1915E P.U.R. 23

(I11.C.C.). Depreciation expense has

always constituted a substantial

percentage of the expenses of Illinois

telephone utilities. For example, even

in the earlier days of regulation,

(Footnote Continued)

ensure that the standard of service

keeps pace with the needs of the

public and with the rapid

improvement in methods and

applications and to make certain

that efficiency of service is a

factor in utility capitalization.

Report of the Special Joint

ommittee, supra, at 933, 935. The

ILCC is supposed to adjust

occasionally as it is forced to

confront recurring, unsettled

questions arising as new methods of

operation and improvements in

machinery are devised. Id.; See,

Lindheimer v. Illinois Bell

Telephone Co., supra, at 167

epreciation embraces wear and

tear, decay, inadequacy, and

obsolescence).

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annual depreciation expense comprised

roughly 13 to 17 percent of Illinois

Bell Telephone's operating expenses.

Lindheimer v. Illinois Bell Telephone

Co., 292 U.S. 151, 174 (1934),

(comparison of note 25 with text). More

recently, annual depreciation expense

for ratemaking purposes exceeded $350

million, approximately 27.6 percent of

Illinois Bell's total expenses,

exclusive of taxes, and is the largest

. Single expense item. Re Illinois Bell

Telephone Co., 57 P.U.R. 4th 225, 261

(1983). Significant increases in annual

depreciation expense also necessarily

result in significant increases in a

telephone utility's revenue requirement

and ultimately its rates for

customers. 2/ Consequently, substantial

2/ Rates are established to recover a

"revenue requirement" which, in

(Footnote Continued On Next Page)

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increases in depreciation expense can

have dramatic impacts upon the

affordability of telephone service and

threaten the achievement of the State

objective to make telephone service as

widely available as possible.

(Footnote Continued)

turn, equals the sum of all

allowable expenses (including

annual depreciation expense) and

the product of the allowed rate of

return and rate base. Rate base,

in its simplest form, is the value

of the company's property minus

accrued depreciation for such

property. An increase in annual

depreciation expense increases

total expenses dollar-for-dollar.

However, the resulting increase in

revenue requirement is partially

offset by the increased addition to

accrued depreciation which

diminishes rate base. Thus,

depending on the precise rate of

return, among other things, a $100

increase in annua: depreciation

expense may result in only an $80

to $90 increase in rates, still a

significant correlation.

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Recent changes in depreciation

policy in Illinois, caused in large part

by FCC decisions, have led to increases

in depreciation expense and telephone

rates for intrastate service,

accompanied by growing pressure on

affordability. For example, Illinois

Bell recently received approval to

shorten the amortization period for the

recovery of embedded station connections

and inside wire costs from ten years to

six years. The effect of Bell's

proposal was to increase annual

depreciation expense by approximately

$65 million and the revenue requirement

by about $50 million. Id., 57 PUR 4th

at 237. Illinois Bell's additional

proposed 1984 changes in depreciation

policy were forecasted to increase

depreciation expense by another $83

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million and revenue requirements by

roughly $63 million. Id., Second

Interim Order at 4, (slip op.

October 30, 1984). The effect of such

rate increases is heightened by the

additional proposal to recover such

costs through increased customer service

charges, thereby imposing additional

inflexible barriers to affordable

service. See Re Illinois Bell

Telephone Co., Proposed Increase In

Service Charges, I1.C.C. Dkt. 81-0115,

(slip op., January 24, 1982). Thus,

recent changes in depreciation policy

have already placed a great deal of

strain upon Illinois regulators as they

continue to try to balance the

conflicting state goals of affordability

and efficiency in the provision of

intrastate telephone service.

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The dramatic transformation of

the telecommunications industry,

therefore, has enhanced, not diminished,

the importance of intrastate telephone

regulation to the States and their

citizens. Certainly, this

transformation was largely occasioned by

factors outside of State control:

improvements in technology opening

certain markets to competition, changes

in FCC policy in pursuit of

deregulation, and the restructuring of

American Telephone and Telegraph Co.

(AT&T). State legislators and

regulators, in acknowledging these

changes and their effects, have chosen

to revamp but not eliminate their

regulation of intrastate telephone

service, in order to ensure the

continued attainment of important state

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policy objectives. Far from being

irrelevant, State telephone regulation

is more critical than ever to the

achievement of efficient and universally

available service, since the balance

between such conflicting goals has been

made more precarious by the introduction

of competition.

Again, the Illinois response

serves as an instructive example of

State reaffirmation of traditional

regulatory objectives in the context of

adapting to a transformed environment.

Pursuant to provisions in Illinois's

"Sunset" laws3/ a special bipartisan

3/ Regulatory Agency Sunset Act, §§ l,

et seq., Ill. Rev. Stat. ch. 127,

150i et seq; Regulatory Reform

Act of 1 §§ 1 et seg., Ill.

Rev. Stat. ch. 127, §§ 5l et # seq.

The first of these Acts provide

for automatic repeal of the

Illinois PUA on December 31, 1985,

unless the General Assembly

(Footnote Continued On Next Page)

-26-

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AP age

committee of legislators and public

members conducted a comprehensive two

year evaluation of public utility .

regulation in Illinois, with a special

emphasis on the nature of future state

telecommunications regulation. The

culmination of the effort, involving

input from companies, government, large

consumers, regulators and the public,

was House Bill 1814 which was passed by

the General Assembly in June, 1985.

A-l. Many other states have undertaken,

Or will be undertaking, similar efforts

and a large number have enacted

legislation with roughly the same

Purposes as HB 1814. See e.g., Moore

(Footnote Continued)

reenacted it or adopted a new

regulatory scheme. Sunset Act,

§ 4.3, Ill. Rev. Stat. ch. 127,

§ 1904.3 (1983).

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Universal Telephone Service Act, Cal.

Rev. & Tax Code § 44000 et seq. (West

Supp. 1985); N.C. Gen. Stat. §§ 62-3,

62-110 (1984 Int. Supp.) Va. Code

§§ 56-481.1, 56-482.1, 56-484.2 (1985

Supp.).

HB 1814, The Universal

Telephone Service Protection Law of 1985

(Universal Service Law), has several

major objectives. The bill recognizes

the importance of universal telephone

service, the need to revise regulatory

practice to respond to changes in the

industry, the potential for competition

as a means of providing service and the

need to continue regulation of

intrastate telephone service to protect

and promote the well-being of all

Illinois citizens. Universal Service

Law, § 1 para. 13-101, A-l. HB 1814

-28-

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establishes as state policy that

telecommunications services should be

"available to all Illinois citizens at

just, reasonable and affordable rates"

and that any modifications to State

regulation should be implemented in a

way which minimizes the possible

disruptions to the system or customers.

Id. § 1, paras. 13-103(a),(c): A-l, 2-3.

To the extent consistent with other

public policy objectives, such as

universal service, competition is to be

utilized as a means of providing

telephone service, where it is also a

more viable and economic mechanism than

regulated monopoly. Id., § l, para.

13-103(b), A-2. Finally, HB 1814

mandates that rates and charges for

noncompetitive telecommunications

services shall not in any way subsidize

-29-

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the provision of competitive services.

Id., § 1, paras, 13-103(d), 13-507, A-3,

21-23.

To achieve these objectives,

the new Act creates a regulatory

mechanism with sufficient flexibility to

accomodate both regulated and

competitive markets for the provision of

services, and is designed to provide

time for an orderly transition between

regulated and competitive services in

those intrastate markets where a switch

from regulated monopoly to competition

is viable and consistent with the public

interest. Those services for which

eummbitton is not viable will continue

to be subject to traditional regulatory

principles. Id., § 1, paras. 13-101,

13-504, A-l, 18-19. Competitive

services and rates therefore will be

-30-

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subject to relatively little regulatory

oversight. In general, local exchange

service, because of its fundamental

importance to universal service and

because it is least susceptible at this

time to widescale competition is more

stringently protected and regulated.

Conversely, the competitive

provision of inter-MSA service is

anticipated much sooner and, if viable,

will be subject to the marketplace

rather than regulatory pressures.

(Compare Id. § 1, para. 13-405 with

para. 13-403; and § 1, para. 13-504 with

para. 13-595. A-11-14, 18-20.) In

short, the Universal Service Law

recognizes the feasibility of

competition without promoting it and

accomodates such competition where it is

demonstrably feasible and not

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inconsistent with the protection and

pursuit of other legitimate state policy

objectives.

HB 1814 recreates an old

balancing act for the ILCC by forcing it

to address, in the context of a changing

industry, the conflicts between

preserving universal service and

reasonable rates and the recovery of

costs incurred in a transition to

competitive service. This task is

inherently complex and controversial,

with serious consequences for all

parties. It cannot be cavalierly

dismissed as irrelevant or adequately

resolved by a presumptous blindness

which typically accompanies rigid

adherence to ideological purity or

textbook economic theory. Instead, the

State of Illinois, as most states, has

-32-

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chosen to responsibly reaffirm its

commitment to fundamental public policy

goals and has dedicated its powers to

the accomplishment of those goals to the

fullest extent possible. State

authority to regulate intrastate rates

is essential to the State's ability to

establish and implement its goals in

this area of critical importance to

citizens. It is vital that this Court

recognize the significance and

legitimacy of State power and activities

in this regard and consequently place a

heavy burden on Respondents to justify

their attempt to displace the States

from their traditional role as

protectors of the public interest in

reasonable and affordable intrastate

telephone rates and services.

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Cc. The Terms And History Of The

Communications Act

Conclusively Demonstrate A

Congressional Purpose To

Prevent The FCC From

Displacing Traditional State

Ratemaking Authority For

Intrastate Telephone Service.

When enacted, the Federal

Communications Act of 1934, 47 U.S.C.

§§ 151 et seq. (Act) was clearly

designed to strengthen and consolidate

federal jurisdiction over the provision

of interstate communications services,

including telephone service. The Act

establishes broad authority on the part

of the FCC to regulate interstate

communications services in pursuit of

statutory Objectives. See Act, § 1, 47

U.S.C. § 151. This Court has also held,

with respect to the broadcasting area,

that the Act confers sufficient

authority and flexibility upon the FCC

to permit adjustment to new and dynamic

-34-

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sovh Boe wee of vaseseuvgds gimieg of

changes in the interstate communications

industry. United States v. Southwestern

Cable Co., 392 U.S. 157 (1958).

Perhaps in recognition of the

expansive powers which it was creating

in the FCC and the dangers inherent

therein, Congress expressly and

emphatically enacted limitations upon

such powers beyond which it did not wish

the agency to act. As a general matter,

the Act throughout its entirety operates

only to create jurisdiction over

interstate communications. "Interstate

communications," in turn, is defined to

mean only transmissions or

communications between states or, to

some extent outside the United States,

but does not, with respect to telephone

messages, include communications

"between points in the same State... or

-35-

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the District of Columbia, through any

place outside thereof, if such

communication is regulated by a State

commission." Act, § 3(e), 47 U.S.C.

153(e). “State Commission" means any

commission or organization which has

regulatory jurisdiction with respect to

the intrastate operations of carriers.

Id., § 3(t), 47 U.S.C. § 153(t). These

provisions, taken together, manifest the

intention of Congress to restrict the

scope of the FCC's expansive powers to

interstate communications and to

proscribe the exercise of such powers

over intrastate telephone service

regulated by States.

As if its intent were not

sufficiently apparent Congress also

included Section 2(b) which more

explicitly reserves to the States their

@36-

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ability to regulate intrastate telephone

services. Act, § 2(b), 47 U.SsC.

§ 152(b). Section 2(b) provides, in

pertinent part, that:

[N]othing in this chapter shall be

construed to apply or to give the

Commission jurisdiction with

respect to (1) charges,

classifications, practices,

services, facilities, or

regulations for or in connection

with intrastate communications

service by wire or radio of any

carrier ...

47 U.S.C. § 152(b). On its face, then,

the Act is unambiguous as to the intent

of Congress to deprive the FCC of

jurisdiction over intrastate matters

traditionally regulated by the States,

including the determination of "charges"

for intrastate services, of which

depreciation expense is a part.

This Court has repeatedly held

that where, as here, the language of a

statute is clear and the construction

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thereof does not lead to absurd

consequences, the statutory terms are to

be considered to mean what they say.

United States v. Missouri Pacific R.R.

Co., 278 U.S. 269, 278 (1929). Although

the Court has recently taken exception

to this rule even where statutory

language has appeared plain, the

circumstances justifying such

exceptional investigations are not

present in this case. See Philbrook v.

Glodgett, 421 U.S. 707, 714 (1975). And

the Court has indicated that it will not

cast aside common sense in statutory

interpretation to reach a convoluted

result at cross-purposes with

Congressional intent. See Philko

Aviation, Inc. v. Shacket, 462 U.S. 406

(1983). In this case, the FCC's

interpretation of the Act defies common

-38-

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sense and is openly inconsistent with

Congress's evident intent to preserve

State ratemaking authority. The

application of the “plain meaning” of

Section 2(b) is unambiguous and the

consequences are sensible and consistent

with the entirety of the Act.

Section 20(b) of the Act,

47 U.S:C. § 220(b), relied upon by

Respondents, does not detract from

amici's interpretation. That section

grants the FCC the power to prescribe

the accounts and records which must be

maintained “by carriers subject to this

chapter" and requires, in particular,

that the FCC prescribe for “such

carriers” appropriate depreciation

expenses. In addition, such carriers

are prohibited from including in any

form a depreciation schedule or expense

-39-

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which might be included elsewhere as a

depreciation charge or expense. Id.

Respondents argue that this language not

just permits, but requires preemption of

State depreciation policies.

The meaning of these

provisions of Section 20(b) is easily

ascertained and fully consistent with

amici's reading of Section 2(b) when

read in the context of the entire Act.

Since the carriers “subject to this Act"

are only those which provide interstate

communication services, and only to the

extent they provide such services, the

FCC's authority to prescribe

depreciation charges applies only to

such interstate services for the purpose

of interstate ratemaking. When

submitting data or forms to the FCC in

connection with interstate regulation or

-40-

ratemaking, carriers are not to submit

information relating to depreciation

charges used for any purpose other than

FCC regulation, thereby simplifying FCC

reporting and eliminating the

possibility of confusion or deception at

the FCC. Far from preventing the use of

other depreciation schedules or charges,

such as for tax or state regulatory

purposes, the Section recognizes the

likelihood that differing schedules will

exist and accomodates that prospect in a

manner which ensures accuracy in carrier

compliance with FCC requirements for

interstate. regulatory purposes. This

straightforward reading of the Act is

most palatable with its context and

purposes; such a simple

"accuracy-in-reporting” provision cannot

justify the FCC's far reaching attempt

-41-

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at preemption in this case.

Southwestern Bell Telephone Co. v.

Arkansas Public Service Commission, 584

F. Supp. 1087, 1089 (E.D. Ark.), rev'd

on other grounds, 738 F.2d 901 (8th Cir.

1984): Cincinnati Bell Telephone Co. v.

Public Utilities Commission of Ohio, 12

Ohio St. 3d 280, 283-4 (1984).4/

While the statute on its face,

therefore, provides sufficient evidence

to conclude that Congress never intended

to preempt state regulatory authority

4/ As noted above, the Illinois PUA

includes similar language with

respect to the ILCC’s authority to

establish accounts for depreciation

and prohibits inconsistent

reporting by Illinois public

utilities. The provisions have

never been interpreted as

precluding different accounting or

reporting treatment for tax or

regulatory purposes outside the

scope of the PUA. PUA, § 14, Ill.

Rev. Stat. ch. 111-2/3, § 14.

’

;

~42-

over intrastate telephone companies, the

legislative history corroborates the

fact that Congress intended, in fact, to

Clarify, preserve and expand then

existing state jurisdiction. As

outlined in detail, supra, states had

been very active in regulating

intrastate telephone companies from the

inception of modern public utility

regulation. The federal government

first initiated its regulatory efforts

over interstate telephone service with

the passage of the Mann-Elkins Act,

amending the Interstate Commerce Act.

Mann-Elkins Act, ch. 309, § 7, 36 Stat.

544 (1910). There is little legislative

history behind the amendment, but the

effect was to subject telephone

companies to the jurisdiction of the

Interstate Commerce Commission (ICC) and

-43-

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terms of the Interstate Commerce Act

with respect to their interstate

operations. Gabel, The Early

Competitive Era in Telephone

Communication, 1893-1920, 34 Law &

Contemp. Prob. 340, 357 (1969).

Between 1910 and 1934 the ICC

made little or no effort to regulate

even interstate telephone services, let

alone intrastate activities. The ICC

only handled four rate cases, each of

little significance, each initiated by

complaint. Id. Further, the ICC felt

initially that it lacked jurisdiction

over the filing of interstate telephone

rates. Unrepeated Message Case, 44

I.C.C. 670, 673-4 (1 17), modified 61

I.C.C. 541 (1921). See Preliminary

Report on Communication Companies, H.R.

Rep. No. 1272, 73d Cong. 2d Sess. (1934)

-44-

oo nest Bait ps

at xvi. Necessarily, the ICC initially

felt incapable of establishing

depreciation expenses even for

interstate ratemaking purposes as well,

and the responsibility for intrastate

ratemaking, including the establishment

of appropriate depreciation expenses,

remained with the States.

The ICC did, however, consider

its jurisdiction sufficient to establish

accounting and reporting requirements.

See Wheat, The Regulation of Interstate

Telephone Rates, 51 Harv. L. Rev. 846,

847 n.5 (1938). In particular, the

Transportation Act of 1920 amended the

Interstate Commerce Act and provided the

ICC with the authority and duty to

prescribe appropriate depreciation

charges “for carriers subject to this

Act."2/ 41 Stat. 456, 493 ‘/1920).

5/ Section 20(5) of the Interstate

Commerce Act was the immediate

(Footnote Continued On Next Page)

-45-

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Relying on this provision the ICC

initiated proceedings to ascertain

appropriate depreciation policies for

telephone companies. Over the

objections of State commissions, the ICC

concluded that Section 20(5) empowered

it to prescribe depreciation policy and

expenses for property used "almost

exclusively” in intrastate service.

Depreciation Charges Of Telephone

Companies, 118 I.C.C. 295, 332 (1926).

The ICC, however, did not seek to act

upon such asserted jurisdiction and

emphasized that it intended to continue

to rely upon state commissions for

intrastate depreciation determinations.

Id. at 374.6/ The ICC continued to

(Footnote Continued) P

predecessor of Section 20(b) of the

Communications Act, 47 U.S.C.

§ 220(b).

6/ The rationale for permitting

continued State jurisdiction

(Footnote Continued On Next Page)

paw

assert, while never exercising,

jurisdiction over intrastate

depreciation practices and related

matters until the creation of the FCC.

See Depreciation Charges of Telephone

Companies, 177 I.C.C. 351 (1931);

Accounting Rules For Telephone

Companies, 203 I.C.C. 13 (1934).2/

(Footnote Continued)

included a recognition that States

were better informed and equipped

than the ICC to determine

appropriate depreciation policies

for intrastate service. This

reasoning reflects both an

awareness of extensive State

experience and expertise and a lack

of reSources on the part of the ICC

to adequately perform such

activities. Id. at 374-5. See,

Preliminary Report on

Communications Companies, supra, at

xvi.

Issued July 9, 1934, after the

effective date of the

Communications Act, Id., 203 I.C.C.

at 14,

-47-

* s ———

——S= aw : “e

’ a4 - 8 om —e . ns —* — :

oT jaa eS Fi nee ee Se Ne t= ee ee

= oe ~~ ¥ iw = and i ee 4

<7 . a * ala ~~ - =

Contemporaneous United States

Supreme Court decisions also implied

strongly that State jurisdiction over

intrastate telephone service might be in

jeopardy. In Houston, East and West

Texas Ry. Co. v. U.S., 234 U.S. 342

(1914) ("Shreveport Cases"), the ICC

determined that carrier rates between

points within Texas were

discriminatorily low relative to rates

for interstate service between

Shreveport and Texas. The ICC ordered

that rates for the interstate service

should be set no higher than rates for

comparable-intrastate service. The

Court, in upholding the ICC order,

strongly held that Congress could

authorize such action in order to

protect interstate commerce despite any

incidental encroachment upon State

-48-

authority which might necessarily

result. Id. at 353-5. The Court

further held that the relevant

provisions of the Interstate Commerce

Act manifested Congressional intent to

endow the ICC with such authority,

notwithstanding a general proviso in the

federal law purporting to preserve State

jurisdiction over intrastate traffic.

Id. at 355-7. While the proviso was not

thereby rendered meaningless,8/ the

Court's opinion substantially restricted

its applicability.

8/ The Court found that the proviso,

Interstate Commerce Act, § 3, 36

Stat. 539, 545 (1910), although not

referring specifically to State

power to determine intrastate

rates, did at a minimum reserve

such authority exclusively to the

States. Congress "did not

undertake to authorize the [ICC] to

prescribe intrastate rates" but

left such rates subject to the

authority of the States. Id. at

337.

-49-

In addition, in Smith v.

Illinois Bell Telephone Co., 282 U.S.

133 (1930) the Court reviewed an order

of the Illinois Commerce Commission

(ILCC) with respect to intrastate

telephone rates for Illinois Bell. In

challenging the order, Bell asserted

that Section 20(5) of the Interstate

Commerce Act, supra, deprived the ILCC

of the authority to establish

depreciation expense for intrastate

ratemaking by vesting exclusive power

over depreciation in the ICC. The Court

refused to so hold, at least until the

ICC had taken some action indicating

that it would attempt to exercise such

exclusive jurisdiction. Id. at 159-60.

In another portion of the opinion,

however, the Court stressed the

importance of properly maintaining the

-50-

boundaries between state and federal

jurisdiction, and found that the ILCC

had no authority to rule on the

propriety of interstate telephone rates,

since such power had been placed in the

Icc. Id. at 148-9. The Court,

therefore, recognized the ICC's

exclusive authority over interstate

telephone services and implied that, if

the ICC took the requisite steps, its

jurisdiction over intrastate

depreciation policies and rates might

also be upheld.

The point of this historical

discussion is to place in context the

subsequent actions and statements of

Congress in its deliberations on, and

drafting of, the Communications Act. By

1934, the ICC had emphatically stated

that it already had jurisdiction over

@8j-

intrastate depreciation policies and

practices and implied with equal

strength that given sufficient resources

it might seek to assert such authority.

The Supreme Court had demonstrated that

the existing law might sustain such

action, despite prior Congressional

attempts to protect State jurisdiction

over intrastate matters. Moreover,

depreciation policy was a controversial

regulatory issue of major importance at

the time with respect to all utilities,

awaiting and inviting definitive

resolution.2/ Thus, the creation of a

=_—y=

9/ For example, a large number of law

review articles were written in the

late 1920's and early 1930's

analyzing the confusion surrounding

depreciation law and policy. See,

e.g., Wheat, The Regulation of

Interstate Telephone Rat 2

’ )3

Roberts, Depreciation As An Element

iblic ty Valuation, 1 Mo.

L. Rev. 145 (1936); Goddard, The

(Footnote Continued On Next Page)

-§2-

federal regulatory commission with

statutory powers equal to those of the

ICC, and substantial resources as well,

would pose a direct threat to States’

ability to continue regulating

intrastate telephone services, and

related depreciation policy in

particular.20/

(Footnote Continued)

Interest Of Public Ubility .

atepayers n Pree ation, 48

atVs be ev.

10/ It is significant to note that the

problems of rapid technological

change and the need to determine

how to account for the

undepreciated portion of obsolete

plants are not recent or

unprecedented issues in telephone

regulation. From the first days of

state regulation, commissions were

cognizant of technological change

and defined depreciation to include

the effects of such obsolescence.

include obsolescence due to a

change or development in the art

(Footnote Continued On Next Page)

-53-

Congress was very much aware

of the potential conflict between

federal and state powers and resolved it

in favor of the States through the

adoption of Section 152(b).11/ As

(Footnote Continued)

requiring new and improved

apparatus); and note at pages

19-20, supra. The ICC repeatedly

recognized the effect on

depreciation caused by

technological improvements in

equipment and efficiency.

Depreciation Charges Of Telephone

Sth Les, ’

( ) and 177 I. C.C. 351, 358,

401, 420-1 (1931). See also Denver

v. Denver Union Water fc CO4, 246 U.S.

determining sor iedietionsl

boundaries with respect to

"depreciation" it is a reasonable

assumption that Congress understood

the concept to include the

phenomenon of “obsolescence” which

is essentially the underlying

concern of the FCC in its order on

review in this case.

In 1929, Congress had already

conducted hearings on a bill to

create a federal commission to

regulate telephone services, at

(Footnote Continued On Next Page)

stated by the Senate sponsor, Mr. Dill:

We have attempted in Title I to

reserve to the State Commissions

the control of intrastate telephone

traffic. We have kept in mind the

fact that the Interstate Commerce

Commission, through the Shreveport

decision and the decisions in

similar cases, has gone so far in

the regulation of railroads that

the so-called "State regulation”

amounts to very little.

We have attempted in this proposed

legislation, to safeguard State

regulation by certain provisions to

the effect that where existing

intrastate telephone business is

being regulated by a State

commission, the provisions of the

bill shall not apply.

78 Cong. Rec. 8823 (1934). Similarly,

(Footnote Continued)

which time states expressed their

concerns and sought Congressional

protection for their ability to

exercise jurisdiction over

intrastate services and

depreciation policies. Hearings on

S.6 before the Senate Committee _on

Interstate Commerce, ?lst Cong. Ist

and 2d Sess. (1935-30). See

Stephan, Federal Regulation of

Communications, Ped. B.A.J.

pata areca cata

the Senate Report on the bill states

that Section 2 (47 U.S.C. § 152)

"reserves to the States exclusive

jurisdiction over intrastate telephone

and telegraph communication." S.R. No.

781, 73d Cong., 2d Sess. at 3 (1934).

The language of Section 2(b), then,

strengthened from the proviso in the

Interstate Commerce Act, was designed to

cut back upon the scope of the federal

powers upheld in Shreveport, thereby, at

a minimum, preserving State intrastate

ratemaking authority intact. Senator

Dill's remarks also explain that Section

2(b) was intended to address State

concerns over jurisdiction, which, at

this period of time, centered most

prominently on the ability to regulate

depreciation. Further, States were then

regulating intrastate depreciation;

-56-

therefore the provisions of the proposed

Act were "not to apply” to such

regulation. The only conclusion which

can reasonably be supported from an

analysis of the statute and its

legislative history is that Congress

specifically meant to deprive the FCC of

jurisdiction over intrastate rates and

services, including depreciation,

thereby eliminating any federal threat

to the traditional exercise of State

regulatory powers.

Such a conclusion is supported

by this Court's decision in Federal

Power Comm'n v. Conway Corp., 426 U.S.

271 (1976), interpreting similar

provisions in the Federal Power Act, 16

U.S.C. 824a et seq. The Federal Power

Commission (FPC) in that case had

conducted proceedings to determine the

o8Jo

reasonableness of a requested wholesale

rate increase. Intervenors challenged

the wholesale increase on the grounds

that it would create an “unreasonable

difference” between the utility's

wholesale and retail rates, in

contravention of Section 205(b) of the

Power Act, 16 U.SvC. 824d(b). The FPC

refused to address intervenor's claim,

finding instead that the relief sought

was beyond that granted to the FPC by

the Act. Id. at 274-5.

In analyzing the issue of the

extent of the FPC's authority, the Court

noted that the Act only vested federal

jurisdiction over wholesale electric

sales, based on the plain language of

Section 206(a), 16 U.S.C. 824e(a). The

Court unanimously found that the FPC has

no authority to prescribe the rates for

-58-

retail sales of electric companies or to

remedy any discrimination between

wholesale and retail rates by adjusting

retail rates. Id. at 426. In so

finding, the Court expressly relied upon

the legislative history of Section 205

recognizing that the Section was drafted

to avoid the result in Shreveport Cases

and to foreclose the possibility of the

FPC seeking to rectify alleged

discrimination by regulating in any

fashion the retail rate. Id. at 277 and

note 5. As a result, the FPC's

authority was restricted solely to

wholesale rates.

‘Conway is analogous to this

case, and supports amici's

interpretation of the FCC's power.

Section 2(b) of the Communications Act

is intended to preserve state ratemaking

-59-

power over intrastate telephone service

in the same manner and for the same

purposes underlying Section 205(b) of

the Power Act, as indicated by the

reference to the Shreveport Cases in

Conway, and the discussion at pages

56-57, supra. The effect of the two

provisions is also identical: to

preserve to the states the regulatory

authority over telephone and electric

utilities which they were exercising

prior to the passage of the federal Acts

in 1934 and 1935. For electric

utilities this means retail rates and

services; for telephone utilities,

intrastate rates and services.

The FCC has, until the order

on review in this case, acquiesced in

State regulation of intrastate telephone

rates, including the determination of

@60<

proper depreciation expense for

intrastate property, even when such

State regulation was inconsistent with

its own policies and practices. The

agency has also conceded the

reasonableness of amici's statutory

interpretation. In the Matter of

Amendment of Part 31, Uniform System of

Accounts for Class A and Class B

Telephone Companies, 89 F.C.C.2d 1094

(1982) rev'd. C.C. Dkt. 79-105 (F.C.C.

January 6, 1983). Such consistent FCC

action with respect to its jurisdiction

is persuasive in ascertaining the proper

scope and-intent of the Act. Puerto

Rico Telephone Co. v. F.C.C., 553 F.2d

694, 699 (lst Cir. 1977): North

Carolina Utilities Commission v. F.C.C.,

537 *.2d 787, 794 (4th Cir.) cert.

denied 429 U.S? 1027 (1976). An

agency's long-standing interpretation of

its enabling legislation deserves

considerable deference in the absence of

legislative action to the contrary.

Udall v. Tallman, 380 U.S. 1, 16 (1965).

In particular, nonaction by the FCC for

such a long period of time is indicative

of a lack of statutory power. As stated

in Federal Trade Comm'n. v. Bunte Bros.,

Inc., 312 U.S. 349, 352 (1941),

{[J)ust as established practice may

shed light on the extent of power

conveyed by general statutory

language, so the want of assertion

of power by those who presumably

would be alert to exercise it, is

equally significant in determining

whether such power was actually

conferred.

Moreover, it is likely that

Congress was aware of the FCC's failure

to exercise jurisdiction over intrastate

depreciation and continued state

regulation thereof, especially in the

years immediately after the Act took

effect when the treatment of

depreciation was still a hotly disputed

issue. If Congress had intended for the

FCC to displace state regulation in this

respect, it could have amended the Act

to clarify its intent. Congress has, on

three occasions, already amended Section

2(b) of the Act to alter the appropriate

scope of state jurisdiction. See 47

U.S.C.A. § 152(b) (1985). The FCC's

interpretation through acquiescence in

state regulation for almost 50 years

belies its subsequent position on review

here, and.Congress' “failure to repeal

or revise [the Act or relevant

provisions] in the face of such

administrative interpretation [is]

persuasive evidence that the

interpretation is the one intended by

=£3=<

Congress." CBS, Inc. v. FCC, 453 U.S.

267, 285 (1981) (quoting Zemel v. Rusk,

381 U.S. 1, 11 (1965)). See, Grove City

College v. Bell, U.S. , 104 S.

Ct. 1211 (1984); Merrill Lynch, Pierce,

Fenner & Smith v. Curran, 456 U.S. 353

(1982).

CONCLUSION

For these reasons, as well as

for the reasons set forth in

Petitioners’ brief, amici request this

Court to reverse the decision below.

Respectfully g

Assistant grcorney General

7434 Perkins Road

Baton Rouge, Louisiana 70808

Telephone: (504) 922-0187

JOHN L. GUBBINS

JEFFREY C. PAULSON

John Gubbins, Ltd.

20 North Clark Street, Suite 2600

Chicago, Illinois 60602

Illinois Citizens Utility Board

108 North State Street

Chicago, Illinois 60602

-64-

JOEL BLAU

PHILIP S. SHAPIRO

New York State Consumer Protection

Board, Utility Intervention Unit

99 Washington Avenue, Suite 1020

Albany, New York 12210

BARRY ZITSER

Consumer Counsel of the

Connecticut Division of

Consumer Counsel

One Central Park Plaza, Room 105

New Britian, Connecticut 06051

CORRINE K. A. WATANABE

Attorney General

State of Hawaii

RONALD SHIGEKANE

Deputy Attorney General

Consumer Advocate, Director of

Department of Commerce

and Consumer Affairs

State Capitol

Honolulu, Hawaii 96813

BRIAN BURNETT

Assistant Attorney General

Utah Attorney General's Office

130 State Capitol Building

Salt Lake City, Utah 84114

Utah Committee of Consumer Services

408 Heber M. Wells Building

160 East 300 South

Salt Lake City, Utah 84145

-65-

A-1

APPENDIX

AN ACT to add Article XIII to “An Act concerning public

utilities”, approved June 29, 1921, as amended, and to amend

Section 4.3 of the “Regulatory Agency Sunset Act”, approved

September 22, 1979, as amended.

Be it enacted by the People of the State of Illinois, repre-

sented in the General Assembly:

Section 1. Article XIII is added to “An Act concerning

public utilities”, approved June 29, 1921, as amended, the

added Article to read as follows:

ARTICLE Xill. TELECOMMUNICATIONS

(Ch. 111 2/8, new par. 13-100)

Sec. 18-100. This Article shall be known and may be cited

as the Universal Telephone Service Protection Law of 1985.

(Ch. 111 2/8, new par. 13-101)

Sec. 18-101. Except to the extent modified or supple-

mented by the specific provisions of this Article, the Sec-

tions of this Act pertaining ‘o public utilities, public utility

rates and services, and the regulation thereof, are fully and

equally applicable to noncompetitive telecommunications rates

and services, and the regulation thereof, except where the

context clearly renders such provisions inapplicable. Except

to the extent modified or supplemented by the epecific pro-

visions of this Article, Articles I through V, Sections 9-221,

9-222 and 9-250, Articles X and XI of this Act are fully and

equally applicable to competitive telecommunications service,

competitive telecommunications rates and services, and the

regulation thereof.

(Ch. 111 2/8, new par. 13-'%?)

Sec. 18-102. With respect to telecommunications services,

as herein defined, the General Assembly finds that:

A-2

(a) universally available and widely affordable telecom-

munications services are essential to the health, welfare and

prosperity of all Illinois citizens;

(b) recent federal regulatory and judicial rulings have

caused a restructuring of the telecommunications industry and

have opened some aspects of the industry to competitive entry,

thereby necessitating revision of State telecommunications

regulatory policies and practices;

vices may create the potential for increased innovation and

efficiency in the provision of telecommunications services and

reduced prices for consumer; and

(d) protection of the public interest requires continued

regulation of telecommunications carriers and services for the

foreseeable future.

(Ch. 111 2/3, new par. 13-103)

Sec. 18-108. Consistent with its findings, the General As-

sembly declares that it is the policy of the State of [inots

that

(a) telecommunicetions services should be available to all

Illinoia citizens at just, reasonable and affordable rates and

that such services should be provided as widely and econom-

ically as possible in sufficient variety, quality, quantity and

reliability to satisfy the public interest;

(db) when consistent with the protection of consumers of

telecommunications services and the furtherance of other pub-

lic interest goals, competition should be permitted to function

as a substitute for certain aspects of regulation in determining

the variety, quality and price of telecommunications services

and that the economic burdens of regulation should be reduced

to the extent possible consistent with protection of the public

interest;

A-3

(ec) all necessary and appropriate modifications to State

regulation of telecommunications carriers and services should

be implemented without unnecessary disruption to the tele-

communications system or to consumers of telecommunica-

tions services and that it is necessary and appropriate to es-

tablish a reasonable period of time to permit preparation for

orderly transitions in the provision of telecommunications

services;

(d) the consumers of telecommunications services and

facilities provided by persons or companies subject to regula-

tion pursuant to this Act and Article should be required to

pay only reasonable and non-discriminatory rates or charges

and that in no case should rates or charges for non-competi-

tive telecommunications services include any portion of the

cost of providing competitive telecommunications services, as

herein defined;

(e) the regulatory policies and procedures provided in this

Article are established in recognition of the changing nature

of the telecommunications industry and therefore should be

subject to systematic legislative review to ensure that the

public benefits intended to result from such policies and pro-

cedures are fully realized.

(Ch. 111 2/8, new par. 13-201)

Sec. 18-201. Unless otherwise specified, the terms set

forth in Section 13-202 through 18-211 of this Article are used

in this Act and Article as herein defined.

(Ch. 111 2/3, new par. 18-202)

Sec. 13-202. “Telecommunications carrier” means and in-

cludes every corporation, company, association, joint stock

company or association, firm, partnership or individual, their

lessees, trustees or receivers appointed by any court whatso-

ever that owns, controls, operates or manages, within this

State, directly or indirectly, for public use, eny plant, equip-

ment or property used or to be used for or in connection with,

or owns or controle any franchise, license, permit or right to

engage in the provision of, telecommunications services be-

tween points within the State which are epecified by the user.

Telecommunications carrier does not include, however:

(a) telecommunications carriers that are owned and op-

erated by any political subdivision, public or private institu-

tion of higher education or municipal corporation of this

State, for their own use, or telecommunications carriers that

are owned by such political eubdivision, public or private in-

stitution of higher education, or municipal corporation and

operated by any of its lessees or operating agents, for their

Own use;

(b) telecommunications carriers which ere purely mutual

concerns, having no rates or charges for services, bul paying

the operating expenses by assessment upon the members of

euch a company and no other person but does include telephone

er telecommunications cooperatives as defined in Section

13-212;

(e) @ company or person which provides telecommunica-

tions services solely to itself and ite affiliates or members or

between pointe in the same building, or between closely

located buildings, affiliated through substantial common own-

ership, control or development.

(Ch. 111 2/8, new par. 13-208)

Sec. 18-208. “Telecommunications service” means the pro-

vision or offering for rent, sale or lease, or in exchange for

other value received, of the transmittal of information, by

A-5

(including the collection, storage, forwarding, ewitching, and

delivery of such information) used to provide such trans-

mission.

“Telecommunications service” does not include, however:

(a) the rent, sale, or lease, or exchange for other value

received, of customer premises equipment;

(b) telephone or telecommunications answering services,

paging services, and physical pickup and delivery incidental

to the provision of information transmitted through electro-

magnetic, including light, transmission ;

(¢) community antenna television service which is oper-

ated to perform for hire the service of receiving and distribut-

ing video and audio program signals by wire, cable or other

means to members of the public who subscribe to such service,

to the extent that such service is utilized solely for the one-

way distribution of such entertainment services with no more

than incidental subscriber interaction required for the selec-

tion of such entertainment service.

The Commission may, by rulemaking, exclude (1) private

line service which is not directly or indirectly used for the

origination or termination of switched telecommunications

service, (2) cellular radio service, (3) high-speed point-to-

point data transmission at or above 9.6 kilobits, or (4) the

provision of telecommunications service by a company or

person otherwise subject to Section 18-202 (c) to a telecom-

munications carrier, which is incidental to the provision of

service subject to Section 18-202 (c), from active regulatory

oversight to the extent it finds, after notice, hearing and

comment that such exclusion is consistent with the public

interest and the purposes and policies of thie Article.

(Ch. 111 2/8, new par. 18-204)

Sec. 18-204. “Local Exchange Telecommunications Ser-

vice” means telecommunications service between points with-

A-6

in an exchange, as defined in Section 18-206, or the provision

of telecommunications service for the origination or termina-

tion of switched telecommunications services.

(Ch. 111 2/8, new par. 13-205)

Sec. 18-205. “Interexchange Telecommunications Service”

means telecommunications service between points in two or

more exchanges.

(Ch. 111 2/8, new par. 13-206)

Sec. 18-206. “Exchange” means a geographical area for

the administration of telecommunications services, established

and described by the tariff of a telecommunications carrier

providing local exchange telecommunications service, and con-

sisting of one or more contiguous central offices, together

with associated facilities used in providing such local exchange

telecommunications service. To the extent practicable, a mu-

nicipality, city or village shall not be located in more than one

exchange.

(Ch. 111 2/3, new par. 13-207)

Sec. 18-207. “Local Access and Transport Area (LATA)”

means a geographical area designated by the Modification of

Final Judgment in U.S. v. Western Electric Co., Inc., 552

F. Supp. 181 (D.D.C. 1982), as modified from time to time.

(Ch. 111 2/8, new par. 13-208)

Sec. 13-208. “Market Service Area (MSA)” means a geo-

graphical area consisting of one or more exchanges, defined

by the Commission for the administration of tariffs, services

and other regulatory obligations. The term Market Service

Area includes those areas previously designated by the Com-

mission.

(Ch. 111 2/8, new par. 13-209)

Sec. 13-209. “Competitive Telecommunications Service”

means a telecommunications service, its functional equivalent

A-7

or a substitute service, which, for some identifiable class or

group of customers in an exchange, group of exchanges, or

some other clearly defined geographical area, is reasonably

available from more than one provider, whether or not such

provider is a telecommunications carrier subject to regulation

under this Act. A telecommunications service may be competi-

tive for the entire state, some geographical area therein, in-

cluding an exchange or set of exchanges, or for a specific

customer or class or group of customers, but only to the ez-

tent consistent with this definition.

(Ch. 111 2/8, new par. 13-210)

Sec. 18-210. “Noncompetitive Telecommunications Ser-

vice” means a telecommunications service other than a com-

petitive service as defined in Section 18-209.

(Ch. 111 2/8, new par. 18-211)

Sec. 18-211. “Resale of Telecommunications Service”

means the offering or provision of telecommunications service

primarily through the use of services or facilities owned or

provided by a separate telecommunications carrier.

(Ch. 111 2/8, new par. 13-212)

Sec, 18-212. “Telephone or Telecommunications Coopera-

tive” means any Illinois corporation organized on a coopera-

tive basis for the furnishing of telephone or telecommunica-

tions service.

(Ch. 111 2/8, new par. 18-301)

Sec. 18-801. Consistent with the findings and policy estab-

lished in paragraph (a) of Section 13-102 and paragraph (a)

of Section 18-108, and in order to ensure the attainment of

such policies, the Commission shall

(a) participate in all federal programs intended to pre-

serve or extend universal telecommunications service, unless

such programs would place cost burdens on Illinois customers

A-38

of telecommunications services in excess of the benefits they

would receive through participation; and shall report on such

programs together with an assessment of their adequacy and

the advisability of participating therein in its annual report

to the General Assembly, or more often as necessary;

(b) establish a program to monitor the level of telecom-

munications subscriber connection within each exchange in

Illinois, and shall report the results of such monitoring and

any actions it has taken or recommends be taken to maintain

and increase such levels in its annual report to the General

Assembly, or more often if necessary;

viding local exchange telecommunications service to propose

low-cost or budget service tariffs and any other rate design

or pricing mechanisms designed to facilitate customer access

to such telecommunications service, and shall after notice and

hearing, implement any such proposals which it finds likely

to achieve such purpose;

(d) investigate the necessity and feasibility of establish-

ing a fund from which telecommunications carriers offering

or providing local erchange telecommunications service, whose

costs of providing such service exceed the average cost of

providing such service in [Uinois, could receive revenues in-

tended to mitigate the price impact on customers resulting

from the high or rising cost of such service; and shall include

the results and findings of such investigation together with

any recommendations for legislative action in its first annual

report to the General Assembly in 1986;

(e) Any telecommunications carrier providing local ez-

change telecommunications service which offers to ite local

exchange customers a choice of two or more local exchange

telecommunications service offerings shall provide, to any

A-9

such customer requesting it, once a year without charge, a

report describing which local exchange telecommunications

service offering would result in the lowest bill for such cus-

tomer’s local exchange service, based on such customer’s call-

ing pattern and usage for the previous 6 months. At least

once a year, each such carrier shall provide a notice to each

of its local exchange telecommunications service customers

describing the availability of this report and the specific pro-

cedures by which customers may receive it. Such report shall

only be available to current and future customers who have

received at least 6 months of continuous local exchange service

from such carrier.

(Ch. 111 2/3, new par. 13-401)

Sec. 18-401. (a) No telecommunications carrier not pos-

sessing a certificate of public convenience and necessity or

certificate of authority from the Commission at the time this

Article goes into effect shall transact any business in this

State until it shall have obtained a certificate of service au-

thority from the Commission pursuant to the provisions of

this Article.

No telecommunications carrier offering or providing, or

seeking to offer or provide, any interexchange telecommuni-

cations service shall do so until it has applied for and received

a Certificate of Intererchange Service Authority pursuant

to the provisions of Section 13-403. No telecommunications

carrier offering or providing, or seeking to offer or provide,

any local exchange telecommunications service shall do 80 un-

til it has applied for and received a Certificate of Exchange

Service Authority pursuant to the provisions of Section 13-

405.

No Certificate of Service Authority issued by the Commis-

sion shall be construed as granting a monopoly or exclusive

A-10

privilege, immunity or franchise. The issuance of a Certificate

of Service Authority to any telecommunications carrier shall

not preclude the Commission from issuing additional Certifi-

cates of Service Authority to other telecommunications car-

riers providing the same or equivalent service or serving the

same geographical area or customers as any previously cer-

tified carrier, except to the extent otherwise provided by Sec-

tions 18-403 and 13-405.

Any certificate of public convenience and necessity granted

by the Commission to a telecommunications carrier prior to

the effective date of this Article shall remain in full force

and effect, and such carriers need not apply for a Certificate

of Service Authority in order to continue offering or providing

service to the extent authorized in such certificate of public

convenience and necessity. Any such carrier, however, prior

to substantially altering the nature or scope of services pro-

vided under a certificate of public convenience and necessity,

or adding or expanding services beyond the authority con-

tained in such certificate, must apply for a Certificate of

Service Authority for such alterations or additions pursuant

to the provisions of this Article.

The Commission shall review and modify the terms of any

certificate of public convenience and necessity issued to a

telecommunications carrier prior to the effective date of this

Article in order to ensure its conformity with the require-

ments and policies of this Article. Any Certificate of Service

Authority may be altered or modified by the Commission,

after notice and hearing, upon its own motion or upon appli-

cation of the person or company affected. Unless exercised

within a period of two years from the issuance thereof, au-

thority conferred by a Certificate of Service Authority shall

be null and void.

A-11

(6) The Commission may issue a temporary Certificate

which shall remain in force not to exceed one year in cases

of emergency, to assure maintenance of adequate service or

to serve particular customers, without notice and hearing,

pending the determination of an application for a Certificate,

and may by regulation exempt from the requirements of this

Section temporary acts or operations for which the issuance

of a certificate is not necessary in the public interest and

which will not be required therefor.

(Ch. 111 2/8, new par. 13-402)

Sec. 18-402. The Commission is authorized, in connection

with the issuance or modification of a Certificate of Inter-

exchange Service Authority or the modification of a certifi-

cate of public convenience and necessity for interexchange

telecommunications service, to waive or modify the applica-

tion of its rules, general orders, procedures or notice require-

ments when such action will reduce the economic burdens of

regulation and such waiver or modification is not inconsistent

with the inw or the purposes and policies of this Article.

Any such waiver or modification granted to any interez-

change telecommunications carrier which has, or any group of

such carriers any one of which has annual revenues exceeding

$10,000,000 shall be automatically applied fully and equally to

all such carriers with annual revenues exceeding $10,000,000

unless the Commission specifically finds, after notice to all

such carriers and a hearing, that restricting the application

of such waiver or modification to only one such carrier or

some group of such carriers is consistent with and would pro-

mote the purposes and policies of this Article and the protec-

tion of telecommunications customers.

(Ch. 111 2/8, new par. 13-403)

Sec. 13-403. The Commission shall approve an application

for a Certificate of Interexchange Service Authority only

A-12

upon a showing by the applicant, and a finding by the Com-

mission, after notice and hearing, that the applicant possesses

sufficient technical, financial and managerial resources and

abilities to provide interexchange telecommunications service.

The Commission shall not issue a Certificate of Interexchange

Service Authority to more than one facilities-based, interex-

change telecommunications carrier for the offer or provision

of any intra-Market Service Area interexchange telecommu-

nications service prior to January 1, 1987.

The Commission shall not permit any telecommunications

carrier providing interexchange telecommunications service

to use intra-Market Service Area dialing arrangements in

place July 1, 1985 which do not require the use of telecom-

munications carrier-specific access codes unless such carrier

is also properly certified to offer or provide facilities-based

local exchange telecommunications service, prior to a legis-

lative determination te the contrary. The Commission shall

conduct a study, and, after notice and hearing, issue a report

with findings and recommendations concerning the advisa-

bility of permitting a change in the use of such dialing ar-

rangements. Such report shall be submitted to the General

Assembly on October 1, 1988.

The Commission shall have authority to alter the boundaries

of Market Service Areas when such alteration is consistent

with the public interest and the purposes and policies of this

Article, provided however, that no significant alteration in

such boundaries shall take place prior to January 1, 1987

and no such alteration shall affect the dialing arrangements

specified in the immediately preceding paragraph of this

Section. A determination by the Commission with respect

to Market Service Area boundaries shall not modify or affect

the rights or obligations of any telecommunications carrier

A-13

with respect to any consent decree or agreement with the

United States Department of Justice, including, but not limited

to, the Modification of Final Judgment in United States v.

Western Electric Co., 552 F. Supp. 181 (D.C.C. 1982), as

modified from time to time.

(Ch. 111 2/3, new par. 13-404)

Sec. 18-404. Any telecommunications carrier offering or

providing the resale of either local exchange or interexchange

telecommunications service must first obtain a Certificate of

Service Authority. The Commission shall approve an applica-

tion for a Certificate for the resale of local exchange or inter-

exchange telecommunications service upon a showing by the

applicant, and a finding by the Commission, after notice and

hearing, that the applicant possesses sufficient technical, fi-

nancial and managerial resources and abilities to provide the

resale of telecommunications service.

(Ch. 111 2/8, new par. 13-405)

Sec. 13-405. The Commission shall approve an application

for a Certificate of Exchange Service Authority only upon a

showing by the applicant, and a finding by the Commission,

after notice and hearing, that

(a) the applicant possesses sufficient technical, financial

and managerial-resources and abilities to provide local ez-

change telecommunications service;

(b) that the exercise of the Certificate’s authority by the

applicant would not adversely affect prices, network design,

or the financial viability of the principal provider of local

exchange telecommunications service.

The Commission shall not approve or issue a Certificate of

Exchange Service Authority to more than one telecommunica-

tions carrier for any exchange prior to January 1, 1989; pro-

vided, however, that a Certificate of Exchange Service Au-

A-14

thority may be issued before such time, subject to appropriate

Commission approval, pursuant to this Section, to any tele-

communications carrier providing predominantly direct non-

switched access service between a customer or user and any

telecommunications carrier providing inter-MSA, inter-LATA

or inter-state telecommunications service, or between such

telecommunications carriers, for the purpose of providing

such direct access service.

(Ch. 111 2/3, new par. 13-406)

Sec. 18-406. No telecommunications carrier offering or

providing noncompetitive telecommunications service pursu-

ant to a valid Certificate of Service Authority or certificate

of public convenience and necessity shall discontinue or aban-

don such service once initiated until and unless it shall demon-

strate, and the Commission finds, after notice and hearing,

that such discontinuance or abandonment will not deprive

customers of any necessary or essential telecommunications

service or access thereto and is not otherwise contrary to the

public interest. No telecommunications carrier offering or

providing competitive telecommunications service shall dis-

continue or abandon such service once initiated except upon

30 days notice to the Commission and affected customers. The

Commission may, upon its own motion or upon complaint,

investigate the proposed discontinuance or abandonment of a

competitive telecommunications service and may, after notice

and hearing, prohibit such proposed discontinuance or aban-

donment if the Commission finds that it would be contrary to

the public interest.

(Ch. 111 2/3, new par. 13-407)

Sec. 13-407. The Commission shall monitor and analyze

patterns of entry and exit, and applications for entry and

exit, for each relevant market for telecommunications services

A-15

and shall include its findings together with appropriate recom-

mendations for legislative action in its annual report to the

General Assembly.

(Ch. 111 2/8, new par. 13-501)

Sec. 18-501. No telecommunications carrier shall offer

or provide telecommunications service unless and until a tariff

is filed with the Commission which describes the nature of

the service, applicable rates and other charges, terms and

conditions of service, and the exchange, exchanges or other

geographical area or areas in which the service shall be of-

fered or provided. The Commission may prescribe the form

of such tariff and any additional data or information which

shall be included therein.

(Ch. 111 2/3, new par. 13-502)

Sec. 18-502. (a) All telecommunications services offered

or provided under tariff by telecommunications carriers shall

be classified as either competitive or noncompetitive. A tele-

communications carrier may offer or provide either competi-

tive or noncompetitive telecommunications services, or both,

subject to proper certification and other applicable provisions

of this Article. Any tariff filed with the Commission as re-

quired by Section 18-501 shall indicate whether the service

to be offered or provided is competitive or noncompetitive.

(>) A service shall be classified as competitive only if,

and only to the extent that, for some identifiable class or group

of customers in an exchange, group of exchanges, or some

other clearly defined geographical area, such service, or its

functional equivalent, or a substitute service, is reasonably

available from more than one provider, whether or not any

such provider is a telecommunications carrier subject to reg-

ulation under this Act. All telecommunications services not

properly classified as competitive shall be classified as non-

A-16

competitive. The Commission shall have the power to investi-

gate the classification of telecommunication service, on its

own motion or upon complaint, and to modify such classifica-

tion or reclassify any service, in whole or in part, after notice

and hearing. If, upon such motion or complaint, the Commis-

sion enters into a hearing or investigation upon the propriety

of any service classification pursuant to this Section, the

Commission shall make its determination and issue its final

order no later than 120 days from the date such hearing or

investigation is initiated.

as competitive or reclassifying a previously noncompetitive

telecommunications service as competitive, which is filed by

a telecommunications carrier which also offers or provides

noncompetitive telecommunications service, shall be effective

unless and until such telecommunications carrier offering or

providing, or seeking to offer or provide, such proposed com-

petitive service prepares and files a study of the long-run

marginal cost underlying such service. Such study shall be

given proprietary treatment by the Commission at the request

of such carrier if any other provider of the competitive ser-

vice, its functional equivalent, or a substitute service in the

geographical area described by the proposed tariff has not

filed, or has not been required to file, such a study.

(d) Inthe event any telecommunications service has been

classified and filed as competitive by the telecommunications

carrier, and has been offered or provided on such basis, and

the Commission subsequently determines after investigation

that such classification improperly included services which

were in fact noncompetitive, the Commission shall have the

power to determine and order refunds to customers for any

overcharges which may have resulted from the improper

A-17

classification, or to order such other remedies provided to

it under this Act, or to seek an appropriate remedy or relief

in a court of competent jurisdiction.

(e) Any telecommunications carrier which seeks to file a

tariff classifying a new telecommunications service as com-

petitive or reclassifying a previously noncompetitive telecom-

munications service as competitive may, instead of filing such

new tariff and offering and providing such service as com-

petitive subject to refund, apply to the Commission, prior to

offering or providing such service as competitive, for an

order finding that the proposed tariff is proper and consistent

with law. Provided, however, that prior to August 1, 1987

any telecommunications carrier which seeks to file a tariff

classifying a new interexchange telecommunications service

as competitive or reclassifying a previously noncompetitive

intererchange telecommunications service as competitive shall

apply for prior Commission approval of such tariff pursuant

to the procedures of this paragraph (e). Any telecommunica-

tions carrier applying for Commission approval pursuant to

this paragraph (e) shail provide timely and effective notice

of its application and proposed tariff to potentially affected

providers and customers in a manner to be determined by the

Commission. <

Upon such application and notice, the Commission may

make its findings without hearing within 21 days of the filing

of the application and may allow such tariff to take immediate

effect thereafter if there is no request for hearing by poten-

tially affected providers or customers. The Commission shall,

however, enter into hearings to determine the propriety and

legality of the proposed tariffs upon such request or if the

Commission, in its discretion, believes such hearings are

necessary.

A-18

If the Commission enters into hearings upon the applica-

tion, it shall issue a final order within 120 days of such appli-

cation, and, if the Commission fails to issue an order within

such period, the application shall be deemed granted, unless,

however, the Commission, the applicant and all parties to the

hearing agree to extend such time period. The Commission

shall have the power to issue an interim order allowing the

proposed tariff to take effect during the 120 day period sub-

ject to refund and such other conditions as the Commission

may provide. ,

(Ch. 111 2/3, new par. 13-503)

Sec. 13-508. With respect to rates or other charges made,

demanded or received for any telecommunications service of-

fered, provided or to be provided, whether such service is

competitive or noncompetitive, telecommunications carriers

shall comply with the publication and filing provisions of Sec-

tions 9-101, 9-102, and 9-103.

(Ch. 111 2/3, new par. 13-504)

Sec. 13-504. Except where the contert clearly renders such

provisions inapplicable, the ratemaking provisions of Article

1X of this Act relating to public utilities are fully and equally

applicable to the rates, charges, tariffs and classifications for

the offer or provision of noncompetitive telecommunications

services. Provided, however, that such ratemaking provisions

do not apply to any proposed change in rates or charges, or

proposed change in any classification or tariff resulting in a

change in rates or charges, for a noncompetitive local ez-

change telecommunications service offered or provided by a

local exchange telecommunications carrier with no more than

15,000 subscriber access lines, where such carrier is also not

a subsidiary of a holding company incorporated outside [ll-

nois. Proposed changes in rates, charges, classifications, or

A-19

tariffs meeting these criteria shall be permitted upon the

filing of the proposed tariff and 30 days notice to the Com-

mission and all potentially affected customers; such proposed

changes shall not be subject to suspension, but the Commis-

sion may, upon its own motion or upon complaint, investigate

whether such proposed change is just and reasonable and if

it finds, after notice and hearing, that such changes are un-

just or unreasonable, in whole or in part, the Commission

shall have the power and duty to establish the rates, charges,

classifications, or tariffs it finds to be just and reasonable.

The Commission shall investigate whether any such proposed

change is just and reasonable if 5 percent or more of the

potentially affected access line subscribers of the telecom-

munications carrier file a petition or complaint requesting

such investigation.

(Ch. 111 2/8, new par. 13-505)

Sec. 13-505. Proposed changes in rates or charges, or any

classification or tariff provision affecting rates or charges,

for any competitive telecommunications service, shall be

treated pursuant to this Section as follows;

(a) any proposed decrease in rates or charges, or pro-

posed change in any classification or tariff resulting in «4

decrease in rates or charges, for competitive local exchange

or interexchange telecommunications service shall be per-

mitted upon the filing of the proposed rate, charge, classifica-

tion or tariff;

(b) any proposed increase in rates or charges, or proposed

change in any classification or tariff resulting in an increase

in rates or charges, for a competitive interexchange tele-

communications service shall be permitted only upon the filing

of the proposed rate, charge, classification or tariff and upon

notice to all potentially affected customers through a notice

A-20

in each such customer’s bill prior to the date for implementa-

tion of such increase or change, or, where such customers are

not billed, by an equivalent means of prior notice;

(ce) any proposed increase in rates or charges, or pro-

posed change in any classification or tariff resulting in an

increase in rates or charges, for a competitive local exchange

telecommunications service shall be treated as though such

service were noncompetitive, pursuant to the applicable pro-

visions of Section 13-504.

(Ch. 111 2/3, new par. 13-506)

Sec. 18-506. (a) Telecommunications carriers may file

proposed tariffs for any competitive local exchange telecom-

munications service, which includes and specifically describes

a range, band, formula, or standard within or by which a

change in rates or charges for such telecommunications service

could be made without prior notice or prior Commission ap-

proval. The Commission shall approve such a proposed tariff

only if the telecommunications carrier demonstrates, and the

Commission finds, that any and all rates or charges within

the band or range, or determinable by the operation of the

formula or standard, are consistent with the public interest

and the purposes and policies of this Article and Act, and are

likely to remain so for the foreseeable future. To the extent

any proposed band or range encompasses rates or charges

which are not consistent with the public interest and the pur-

poses and policies of this Article and Act or otherwise fully

proper, or any proposed formula or standard determines rates

or charges which are not consistent with the purposes and

policies of this Article and Act or fully proper, the Commis-

sion shall have the power to modify the level, scope or limits

of such band or range, and to modify or limit the operation

of such formula or standard, as necessary, to ensure that

A-21

rates or charges resulting therefrom are consistent with the

purposes and policies of this Article and Act and fully proper,

and likely to remain so in the foreseeable future.

(b) The Commission may require a telecommunications

carrier to file a variable tariff as described in paragraph (a)

for any or all competitive local exchange telecommunications

service which is offered or provided by such carrier, if the

Commission finds, after notice and hearing, that the deter-

mination of rates or charges for such service by such a tariff

would improve the Commission’s ability to effectively regulate

such rates or charges and that such improvement is required

by the public interest. Any such tariff required by the Com-

mission shall be approved only if it is also consistent with

the provisions of paragraph (a) of this Section.

suant to this Section, as proposed or modified, the telecom-

munications carrier shall place such tariff in effect thereafter

and shall determine rates or charges according to the provi-

sions thereof.

(Ch. 111 2/3, new par. 13-507)

Sec. 13-507. In permitting, approving, investigating or

establishing rates, charges, classifications or tariffs for non-

competitive services offered or provided by a telecom munica-

tions carrier which also offers or provides competitive ser-

vices, the Commission shall not allow or establish rates,

charges, classifications or tariffs which in any way, directly

or indirectly, include or reflect:

(a) the value of investment in facilities used, jointly or

separately, to provide competitive service, to the extent such

facilities are used to provide competitive service;

(b) expenses incurred for the provision of competitive

service, including, but not limited to, the salaries or wages,

A-22

or portion thereof, of employees whose employment activities

are directed, in whole or in part, to the provision of competi-

tive service, to the extent such expenses are incurred to

provide competitive service;

is associated with or attributable to the competitive portion

of such carrier’s business.

In the event that facilities are utilized or expenses are in-

curred for the provision of both competitive and noncompeti-

tive services, the Commission shall allow or establish rates or

charges for the noncompetitive services which reflect only that

portion of such facilities or expenses properly and reasonably

allocable to the noncompetitive services. Every telecommuni-

cations carrier shall, to the fullest extent practicable, identify

such common facilities and expenses in its books and accounts

and shall clearly describe any means used to allocate such

common facilities or expenses between noncompetitive and

competitive services and related rates or charges. If the Com-

mission determines that such accounting and reporting re-

quirements alone are insufficient to permit the Commission

to meet the ratemaking and tariff supervision obligations of

this Section, it shall have the power to take or require such

additional action as necessary to ensure that rates or charges

for noncompetitive services reflect only the value of facilities,

or portion thereof, used and useful, and the expenses or por-

tion thereof reasonably and prudently incurred, for the pro-

vision of such noncompetitive services. The Commission shall,

in such event, also establish, by rule, any additional accounting

or reporting procedures, rules, regulations or mechanisms

necessary to identify and properly allocate the value or amount

of such facilities or expenses.

For the purposes of this Section, the Commission shall not

allocate to any competitive service all or part of the value of

A-23

investment in facilities utilized, or expenses incurred, in con-

nection with providing noncompetitive service.

The Commission may establish, by rule, appropriate meth-

ods for calculating the long-run marginal costs of providing

any telecommunications service, and for determining whether

the rates or charges for telecommunications service are at a

level equal to or greater than such long-run marginal cost. The

Commission may order any telecommunications carrier to

conduct a long-run marginal cost study and to provide the

results thereof to the Commission. Any cost study provided

to the Commission pursuant to the provisions of this Section

may, in the Commission's discretion, be accorded proprietary

treatment.

(Ch. 111 2/3, new par. 13-508)

Sec. 18-508. The Commission is authorized, after notice

and hearing, to order a telecommunications carrier which

offers or provides both competitive and noncompetitive tele-

communications service to establish a fully separated subsid-

iary to provide all or part of such competitive service where:

(a) no less costly means is available and effective in fully

and properly identifying and allocating costs between such

carrier’s competitive and noncompetitive telecommunications

services;and ~

(5) the incremental cost of establishing and maintaining

such subsidiary would not require increases in rates or charges

to levels which would effectively preclude the offer or provi-

sion of the affected competitive telecommunications service.

(Ch. 111 2/3, new par. 138-509)

Sec. 13-509. A telecommunications carrier offering or pro-

viding competitive telecommunications service may negotiate

with customers or prospective customers for the provision by

it of such service, and in so doing, may offer or agree to pro-

A-24

vide such service on such terms and for such rates or charges

as it deems reasonable, without regard to any tariffs it may

have filed with the Commission with respect to such services.

Within 1¢ Jays after concluding any such agreement, the tele-

communications carrier shall file any contract or memoran-

dum of understanding for the provision of telecommunications

service, which shall include the rates or other charges, prac-

tices, rules or regulations applicable to the agreed provision

of such service. Upon filing its contract or memorandum the

telecommunications carrier shall thereafter provide service

according to the terms thereof, unless the Commission finds,

after notice and hearing, that the continued provision of ser-

vice pursuant to such contract or memorandum would substan-

tially and adversely affect the financial integrity of the tele-

communications carrier or would cause the cross-subsidization

of any competitive service by any noncompetitive service.

Any contract or memorandum entered into and filed pur-

suant to the provisions of this Section may, in the Commis-

sion’s discretion, be accorded proprietary treatment.

(Ch. 111 2/3, new par. 13-601)

Sec. 13-601. The provisions of Article VII of this Act are

fully applicable only to telecommunications carriers offering

or providing noncompetitive telecommunications service, and

the Commission’s regulation thereof, except that the approval

of contracts and arrangements with affiliated interests re-

quired by paragraph (3) of Section 7-101 shall not apply to

such contracts or arrangements by such telecommunications

carriers where the total obligation thereunder does not exceed

the lesser of 1 million dollars or 5 percent of such carrier’s

prior annual revenue from noncompetitive services.

(Ch. 111 2/8, new par. 13-701)

Sec. 13-701. Notwithstanding any other provision of this

Act to the contrary, the Commission has no power to super-

A-25

vise or control any telephone cooperative as respects assess-

ment schedules or local service rates made or charged by such

@ cooperative on a nondiscriminatory basis. In addition, the

Commission has no power to inquire into, or require the

submission of, the terms, conditions or agreements by or

under which telephone cooperatives are financed. A telephone

cooperative shall file with the Commission either a copy of

the annual financial report required by the Rural Electrifica-

tion Administration, or the annual financial report required

of other public utilities.

(Ch. 111 2/3, new par. 13-702)

Sec. 18-702. Every telecommunications carrier operating

in this State shall receive, transmit and deliver, without dis-

crimination or delay, the conversations, messages or other

transmissions of every other telecommunications carrier with

which a joint rate has been established or with whose line a

physical connection may have been made.

(Ch. 111 2/3, new par. 13-703)

Sec. 13-703. (a) The Commission shall design and imple-

ment a program whereby each telecommunications carrier

providing local exchange service shall provide a telecommu-

nicotions device capable of servicing the needs of the deaf

or severely hearing-impaired together with a single party

line, at no charge additional to the basic exchange rate, to

any subscriber who is certified as deaf or severely hearing-

impaired by a licensed physician, audiologist or a qualified

State agency and to any subscriber which is an organization

representing the deaf or severely hearing-impaired as de-

termined and specified by the Commission pursuant to sub-

section (d).

(6) The Commission shall design and implement a pro-

gram, whereby each telecommunications carrier providing

A-26

local exchange service shall provide a dual party system, using

third party intervention to connect deaf or severely hearing-

impaired persons and offices of organizations representing

the deaf or severely hearing-impaired as determined and spec-

ified by the Commission pursuant to subsection (d) with per-

sons of normal hearing by way of intercommunications devices

for the deaf or severely hearing-impaired and the telephone

system, making available reasonable access to all phases of

public telephone service to deaf or severely hearing-impaired

telephone subscribers. In order to design a dual party relay

system which will meet the requirements of deaf and severely

hearing-impaired persons available at a reasonable cost the

Commission shall initiate an investigation and conduct public

hearings to determine the most cost-effective method of pro-

viding dual party relay service to the deaf or severely hearing-

impaired when using telecommunications devices and therein

solicit the advice, counsel, and physical assistance of State-

wide nonprofit consumer organizations of the deaf in such

hearings and during the development and implementation of

the system. The Commission shall phase in this program,

on a geographical basis, over a 3-year period ending January

1,1989.

(ce) The commission shall establish a rate recovery mech-

anism, which shall not exceed 3¢ per month for each line of a

subscriber to allow telecommunications carriers providing local

exchange service to recover costs as they are incurred under

this Section.

(d) The Commission shall determine and specify those

Statewide organizations representing the deaf or severely

hearing-impaired which shall receive a telecommunications

device pursuant to subsection (a) or a dual party relay system

pursuant to subsection (b), or both, and in which offices the

A-27

equipment shall be installed in the case of an organization

having more than one office. The Commission shall direct the

telecommunications carriers subject to its jurisdiction and this

Section to comply with its determinations and specifications

in this regard.

(Ch. 111 2/8, new par. 18-704)

Sec. 13-704. Each page of a billing statement which sets

forth charges assessed against a customer by a telecommunica-

tions carrier for telecommunications service shall reflect the

telephone number or customer account number to which the

charges are being billed.

(Ch. 111 2/3, new par. 13-801)

Sec. 13-801. The Commission shall prepare and issue an

annual report on the status of the telecommunications industry

and IUinois regulation thereof on January $1 of each year

beginning in 1986. Such report shall include:

(a) A review of regulatory decisions and actions from

the preceding year and a description of pending cascs involv-

ing significant telecommunications carriers or issues;

(b) a description of the telecommunications industry and

changes or trends therein, including the number, type and

size of firms offering telecommunications services, whether

or not such firms are subject to State regulation, telecom-

munications technologies in place and under development,

variations in the geographic availability of services and in

prices for services, and penetration levels of subscriber access

to local exchange service in each exchange and trends related

thereto;

sion with the requirements of this Article;

(d) the effects, and likely effects of IUinois regulatory

policies and practices, including those described in this Article,

on telecommunications carriers, services and customers;

A-28

(e) any recommendations for legislative change which are

adopted by the Commission and which the Commission be-

lieves are in the interest of Illinois telecommunications cus-

tomers;

(f) any other information or analysis which the Commis-

sion is required to provide by this Article or deems necessary

to provide.

The Commission's report shall be filed with the Joint Com-

mittee on Legislative Support Services, the Governor, and the

Public Counsel and shall be publicly available. The Joint Com-

mittee on Legislative Support Services shall conduct public

hearings on the report and any recommendations therein.

(Ch. 111 2/3, new par. 13-802).

Sec. 13-802. The Commission shall study the effects on

telecommunications carriers, providers and customers and on

telecommunications services and prices likely to result from

the issuance of multiple Certificates of Service Authority for

Intra-Market Service Area and local exchange service.

The Commission shall also study the need to retain manda-

tory prior Commission approval of tariffs classifying a new

interex: hange telecommunication service as competitive or

reclassifying a previously noncompetitive interexchange tele-

communications service as competitive as provided in Section

13-502(a), and the effects of eliminating such mandatory prior

approval. Such studies shail include notice and an opportunity

for participation and comment by all interested and potentially

affected parties. Such studies shall be completed by January,

1987 and a summary thereof, together with any legislative

recommendations, shall be included in the Commission’s An-

nual Report due on January 31, 1987.

A-29

(Ch. 111 2/8, new par. 13-803)

Sec. 18-808. The provisions of this Article, Sections 18-101

through 13-803 of this Act, are repealed effective December

$1, 1991.

Section 2. Section 4.3 of the “Regulatory Agency Sunset

Act”, approved September 22, 1979, as amended, is amended

to read as follows:

(Ch. 127, par. 1904.3)

Sec. 4.8. The following Acts are repealed December 31,

1985:

(Ch. 111, rep. pars. 1601 through 1670)

(1) The “Illinois Barber Law”, approved July 18, 1947, as

amended.

(Ch. 111, rep. pars. 1801 through 1839)

(2) “The Illinois Beauty Culture Act”, approved June 30,

1925, as amended.

((CH. 111 2/8, REP. PARS. 1 THROUGH 95))

((3) “AN ACT CONCERNING PUBLIC UTILITIES”,

APPROVED JUNE 29, 1924, AS AMENDED.)

(Ch. 111, rep. pars. 2001 through 2040)

(3) ((4)) The “Collection Agency Act”, approved Sep-

tember 8, 1974, as amended.

Section 3. This Act takes effect January 1, 1986, except

Section 2 and this Section takes effect upon this Act becoming

a law.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.