Amicus Curiae Brief — Florida Public Service Commission v. Federal Communications Commission
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if Supreme Court, U.S.
eu 1" | FILED
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Nos. 84-871, 84-889, 84-1054, app O4499g69
JOSEPH F. -SPANIOL, UR.
In the Supreme Court of th
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
~ 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
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES. ..cceeseeeeseese iii
STATEMENT OF INTEREST. ...esceesccscces 1
SUMMARY OF ARGUMENT. ..ccesecceseseeeee 9
ARGUMENT. wccccccccccccccccccsccccscccs 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
yy F
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...eeseeee 34
CONCLUSION. coccceccecceeeceseeeeceees 65
APPENDIX: Illinois Universal Telephone
Service Protection Law of
BPE Be 0600660600666 00000006 awl
-ii-
TABLE OF AUTHORITIES
Page
CASES:
CBS, Inc. v. FCC, 453 U.S. 267
Oo ff a rrrrrrrry TTT TT TT rTrrTrTT ey 64
Cincinnati Bell Telephone Cv. v. Public
Utilities Commission of Ohio,
12 Ohio St. 3d 280 (1984)....... 42
Denver v. Denver Union Water Co.,
246 U.S. 178 CBOE O Pec cecedececes 54
Federal Power Comm'n v. Conway Corp.,
426 U.S. 271 CASTS) coccovde ceccec 57
Federal Trade Comm'n. v. Bunte Bros.,
Ene<, 342 Gao B.. BD CA9EL)corcece 62
Fidelity Federal Savings and Loan Assn.
v. De la Cuesta, 458 U.S. 141
CAPSS cee eeeeeseeeseseeseesececece 7
Florida Lime and Avocado Growers, Inc.
v. Paul, Bee Gebe BFS CESSSPcocee G
Grove City College v. Bell, U.S.
» BBO GG. Gis BERR CAPelcccee 0
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) .ccccccceee 19
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P- ,ers ‘> , wo teeteme> a
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Ci esau rw pees CECE). SSE-R Ae ECL -
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al
Jones v. Rath Packing Co., 430 U.S.
519 CLIgS PRETTTUTITITITiTrriirs 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
OL) PPPPPrrrTTrTrIeTrTerrrer+espirrr?. 61
Pacific Gas and Electric Co. v. State
Energy Resources Conservation
and Development Comm'n, 461
U.S. 190 C6) >) Pr Prrr rire 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 ( 94 Peeceeeceseeeeeeeeeeees 18
Philbrook v. Glodgett, 421 U.S. 707
TAPP 16 6600660060060 C8006 0CbSb8 38
Philko Aviation, Inc. v. Shacket, 462
U.S. 406 TRO 0oeeceeeeeeeseeecs 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 TEOST Peococececoceceseceeee 8
Smith v. Illinois Bell Telephone Co.,
282 U.S. 133 (1930)......... 18, 50
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| Lee 6 eee idisvelS «9 SING2 a¥ SEER
8 eS te ele O24. Fn CORE eit. wer 6
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oP ra ay i cteeweee wt Qh@ty £EF 2.0 fee Pi ae
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na ‘ ; : _- . hy ; CZ wa Pos
sy - FP) - . ; A na ex — ot ho ae F = 7 ; ; sw
a)! . oy mars tC Bree Piadc ed iy
a - - -
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
ERO NoSeeddeskod cobeesesbesdece 16
Udall v. Tallman, 380 U.S. 1 (1965).. 62
United States v. Missouri Pacific R.R.
Co., 278 U.S. 269 (1929)........ 38
United States v. Southwestern Cable
Co., 392 U.8. AS7 (19SS) cccccee 35
Zemel Ve Rusk, 381 U.S. Be oeeseeceses 64
ADMINISTRATIVE DECISIONS
Accounting Rules For Telephone
Companies, 203 I.C.C. 13
PR eeeseesecebeseececececoecece 47
Re Colchester Farmer's Telephone Co.,
1915E P.U.R. 23 feb oGoGe Decescocs 20
Depreciation Charges Of Telephone
Companies, 118 I.C.C. 295, 332
| | rrr TT Tr TrTrTre+TyTTrTrr 46, 54
Depreciation Charges of Telephone
Companies, 177 I.C.C. 351
PR 96606566006086006006600 47, 54
Re Illinois Bell Telephone Co., 57
P.U.R. 4th 225 EROS Pecceeseeces 21
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Re Illinois Bell Telephone Co.,
Proposed Increase In Service
Charges, I11.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 (I11.C.C.).. 20
Unrepeated Message Case, 44 I.C.C.
670 (1917), modified 61 I.C.C.
541 PRUE Deb eaceSecocececoccoces 44
Re Webster Telephone Company, 1915€
PUR 526 | PPTL 53
-vi-
TABLE OF AUTHORITIES
PAGE
STATUTES
United States Constitution
U.S. Const. art. 6, cl. 2 e*e*eee5nseeee#*e 10
Citizens Utility Board Act
oh Rev. Stat. ch, 111-2/3,
§ 905(a) eeeeeeeeee 1
Communications Act of 1934
47 U.S.C. §§ 151 et Seg. weeeee- 5, 34
OF Gis ee EE Eccdscceesee Ste G2
SU Gals BD EEE sectecscescoccss
SS BAe.. B See, avesceveeovecece
i? Dain CED icbecococcece BOs
Federal Power Act
16 U.S.C. §§ 824a et seq. eeeeveveeee 57
16 U.S.C. § ST «440 bbe vd vo eds ob 58
16 U.S.C. § S2EG (BE) cocceccesesecese 58
Illinois’ Public Utilities Act
Ill. Rev. Stat. ch. 111-2/3,
§ 1 et seq. ... 13, 26
Ill. Rev. Stat. ch. 111-273, §3 ... 15
Ill. Rev. Stat. ch. 111-2/3, §8 ... 14
ohm Rev. Stat. ch. 111-2/3,
SEB) cccccecee AS
Ill. Rev. Stat. ch. 111-2/3, §9 ... 15
Tll. Rev. Stat. ch. 111-2/3,
§10.3(b) ...--- 14
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Ill. Rev. Stat. ch. 111-2/3,
§14 wccceee LT, 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 @®eeeeseeeeeeees 15
Ill. Rev. Stat. ch. 111-2/3,
§§72-75 eeeeeeeeeeeee 15
Interstate Commerce Act
36 Stat. 539, 545 eeeeeneeeeee 43, 49
Louisiana Constitution, art. 4 §8 ... 2
Mann-Elkins Act
36 Stat. 544 (1910) @eeeeeeeseeeee7#ee#s#8e?es 43
Moore Universal Telephone Service Act,
Cal. Rev.&Tax Code, §44000, et seg. .28
«
New York Exec. Law. §§552, 553 .eeeee 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 seg. ......-. 26
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Transportation Act of 1920
41 Stat. 456, 493 @eeeeeoeeeeeeeaeeenes 45
Miscellaneous:
78 Cong. Rec. 8823 (1934) .eeeeees 55
Hearings on S.6 before the Senate
Committee on Interstate Commerce,
71st Cong., lst and 2d Sess.
(1929-30) eeeeeeeeeeeeeeeseeeeeeeeese 55
Preliminary Report on Communications
Companies, H.R. Rep, No. 1273,
73d Cong., 2d Sess. (1934) .weccceeee 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) wecccecee 56
Universal Telephone Service Protection
Law of 1985, H.B. 1814, 84th Gen.
Ass. (Appendix) eeeeeveaeeoeaee ee ees 28, 29
1921 Ill. Laws 702, §10.3(a) .weoeeee 14
N.C. Gen. Stat. §§62-3, 62-110
(1984 Int. Supp.) eeeeeeeeeeees 28
Va. Code §§56-481.1, 56-482.1,
~~ 56-484.2, 56-484.2 (1985 Supp.) .. 28
ARTICLES
Gabel, The Early Competitive Era ae
Telephone Communication, 1893-
34 Law Contemp. Prob. 340 sesh 44
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Goddard, The Interest of Public Utility
Ratepayers in Depreciation,
48 Harv.L.Rev. 721 (1935) ceeeees 52, 53
Roberts, Depreciation As An Element
In Public Utility Valuation,
I Mo. L. Rev. ids (13: nh. Aaeassececs SS
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
-xX—=
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.
Ill. 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
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
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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 and
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
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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.
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.S» 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 upon
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 Ill. 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,
to order construction or alteration of
any utility facilities, Id., §§ 48, 49,
oi ge
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.
-15-
m f ww At
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
oi 6=
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9? 4
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
ILCcC. 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
-18-
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- _ - 5
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= ae = lee . ~ + ~* _ a onli ws r Ses. 3 ==
* ge alge i emt nn Ta ee ees ale — a 2 ne ng, Tae — : - e ee ae wg a a — ae ee ea a
— rage * La ed =! an i ee ee an ee TT a in OR ee Pe eS ee - ss Ag So a BS ee —- -
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ee mnt Clg ee oe <7 Lele = a SEs . 4 s Pind 5 es ee a — = —s te 4 - Se . =
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.l/ 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)
-19-
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= - —~ -— —— << e eee
oy - —. ~ a — ee _——
” = oe sme oe re oe
- - — el tte eer sin ee ——
> = " oo = _ i) ea oe a <=
- a — a = . —
nigga «etn ape n= Same i -
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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
(11.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
Committee, 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
(depreciation embraces wear and
tear, decay, inadequacy, and
obsolescence).
-20-
annual derreciation 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 ina
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)
ete aA
RR a
_— —
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. e2preciation
expense may result in only an $80
to $90 increase in rates, still a
significant correlation.
-22-
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 cuanges in depreciation
policy were forecasted to increase
depreciation expense by another $83
=239-
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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.
-24-
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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 ent 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
-25-
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eS
eee en ton aac ag gre, San
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 reas Ill. Rev. Stat. ch. 127,
$s et seq; Regulatory Reform
Act of 1979, §§ 1 et seg., Il).
Rev. Stat. ch. 127, §§ 1951 et seq.
The first of these Acts provided
for automatic repeal of the
Illinois PUA on December 31, 1985,
unless the General Assembly
(Footnote Continued On Next Page)
-26-
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).
=2J-
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&7A9CE ’
;
. - ; | ‘ a2 ow .
& : -,@ &{6{ 4 es Beecg ice
aT
? a ae
ipiped
. Liew) ane Poko)
~~ a
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
=29<
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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., § 1, 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-
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
competition 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. 13-505. 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
#3l-
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@
——
'
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.
=33@
Ce 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-
» 2 ic a¢ nai Tur
uo
cw vsilficisel? tae y2taedses
rst 24 sremtavtte I2aIcs° 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
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“tie .
a
jog «abswied
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
8? eh. te wnat nln + otal tll its Met tn tein Seal nat OS ph oe
over intrastate telephone service
regulated by States.
Bie i hin Aetie Sie Been
As if its intent were not
sufficiently apparent Congress also
included Section 2(b) which more
explicitly reserves to the States their
=36-
lat” ow
&
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ability to regulate intrastate telephone
services. Act, § 2(b), 47 U.SésC.
§ 152(b). Section 2(b) provides, in
pertinent part, that:
[NJothing 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
@37o-
ene t ond
-t
mae
= 7
Hs
a
a
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-
++
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-
‘2
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4 | ry
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o;
; ‘ . rT we
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m6
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df « c 7.
° c in y"
- ‘ i nd -s
° ~
7 * '' = G @
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° w ad y=
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and — oe ee ee bitte! 5
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See ae et, Phage pa hey gy ae I) ae alr eee er ere ee ee eee POLIT A TI
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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‘cola *& dowe (eeetog 129
NGQPBA WH zi ois 1eqes~hi-YosIecnrs*
‘We onidvess 16% a' DOF eff Ytiseot
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.
af Qe
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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 (1917), modified 61
I.C.C. 541 (1921). See Preliminary
Report on Communication Companies, H.Rs
Rep. No. 1272, 73d Cong. 2d Sess. (1934)
-44-
Sit mS
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——
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 Contirved On Next Page)
7.
_—_—
~<
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 374.8/ The ICC continued to
(Footnote Continued)
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)
‘
:
4
}
,
1
a5
eee a ie la ca fT ans SNe e_rrigae
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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-
oe. oem aaa ee = ea -
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-
Bete,
oo #
‘.
“4
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
357.
-49-
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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-
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cy
—_ sige Os i 2 ate tan ae.
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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
-5l-
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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
— =
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 Rates, 51
Harv. L. Rev. » 859 (1938);
Roberts, Depreciation As An Element
In Public Utility Valuation, 1 Mo.
L. Rev. 145 (1556); Goddard, The
(Footnote Continued On Next Page)
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.19/
(Footnote Continued)
Interest Of Public Utility
Ratepayers In Depreciation, 48
Harv. L. Rev. 771 (1935).
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.
See, for example, Re Webster
Telephone Company, 1915E PUR 526
(S.Dak.) (depreciation defined to
include obsolescence due to a
change or development in the art
(Footnote Continued On Next Page)
_—!.
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
Companies, 118 I.C.C. 355-303
(1926) and 177 I.C.C. 351, 358,
401, 420-1 (1931). See also Denver
v. Denver Union Water Co., 246 U.S.
178, 191 (1918). Thus, in
determining jurisdictional
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)
-54-
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, 7lst Cong. ist
and 2d Sess. (1929-30). See
Stephan, Federal Regulation of
Communications, 4 Fed. B.A.J.
-55-
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 conciusion 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
o87-
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.SsC. 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
=$9-
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
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 F.2d 787. 794 (4th Cir.) cert.
&
denied 429 U0.Sr 1027 (1976). An
-6l-
iil
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
~£2<
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. » 206 §.
Ct. 1211 (1984); Merrill Lynch, Pierce,
Fenner & Smith v. Curran, 456 U.S. 353
(1982).
CONC LUS ION
For these reasons, as well as
for the reasons set forth in
Petitioners’ brief, amici request this
Court to reverse the decision below.
- Cour
Assistant Seeeyney 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 Xlll. TELECOMMUNICATIONS
(Ch. 111 2/8, new par. 18-100)
Sec. 13-100. This Article shall be known and may be cited
as the Universal Telephone Service Protection Law of 1985.
(Ch. 111 2/3, new par. 138-101)
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 to 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 specific 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. 13-102)
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;
(c) the competitive offering of telecommunications ser-
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 lUinois
that
(a) telecommunications services should be available to all
Illinois 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;
(b) 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
(c) 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. 18-201)
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. 18-202. “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
A4
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 specified 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 subdivision, 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;
(bd) telecommunications carriers which ere purely mutual
concerns, having no rates or charges for services, but paying
the operating expenses by assessment upon the members of
such a company and no other person but does include telephone
or telecommunications cooperatives as defined in Section
13-212;
(ce) «@ company or person which provides telecommunica-
tions services solely to itself and its affiliates or members or
between points in the same building, or between elosely
located buildings, affiliated through substantial common own-
ership, control or development.
(Ch. 111 2/8, new par. 13-203)
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
means of electromagnetic, including light, transmission with
or without benefit of any closed transmission medium, includ-
ing all instrumentalities, facilities, appceratus, end services
A-5
(including the collection, storage, forwarding, switching, 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;
(6) 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;
(ce) 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 this Article.
(Ch. 111 2/8, new par. 18-204)
Sec. 13-204. “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 2/3, new par. 13-205)
Sec. 13-205. “Interexchange Telecommunications Service”
means telecommunications service between points in two or
more exchanges.
(Ch. 111 2/38, new par. 13-206)
Sec. 13-206. “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. 18-208. “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 ~easonably
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 2/3, 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 12-209.
(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 2/3, new par. 13-212)
Sec. 13-212. “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 2/3, new par. 18-301)
Sec. 13-301. Consistent with the findings and policy estab-
lished in paragraph (a) of Section 13-102 and paragraph (a)
of Section 13-103, 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-8
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
IUinois, 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;
(c) order all telecommunications carriers offering or pro-
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 exchange 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 ex-
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 rer ‘It 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 2/8, new par. 18-401)
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 Interexchange Service Authority pursuant
to the provisions of Section 13-408. 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
(¢) 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. 13-402. 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 law 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 shail 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. 18-403. The Commission shall approve ar ~pplication
for a Certificate of Interexchange Service Ar rity 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 shell 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 to 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 2/8, new par. 18-404)
Sec. 18-404. Any telecommunications carrier offering or
providing the resale of either locai «xchange 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. 18-405)
Sec. 18-405. 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 ex-
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 + 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 er 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. 18-501)
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. 13-502. (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.
(b) 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 finc!
order no later than 120 days from the date such hearing or
investigation is initiated.
(c) No tariff classifying a new telecommunications service
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
interexchange 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 2/8, 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 2/8, new par. 13-504)
Sec. 18-504. Except where the context 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 Illi-
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. 18-505. 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 a
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;
(c) 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 wu! 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.
(c) When the Commission approves a variable tariff pur-
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 2/8, new par. 18-507)
Sec. 13-507. In permitting, approving, investigating or
establishing rates, charges, classifications or tariffs for non-
competitive services offered or provided by a telecommunica-
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;
(6) 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;
(c) any incremental risk or increased cost of capital which
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 ~f 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 accountiny 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 tc 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. 13-508. 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
(b) 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. 13-509)
Sec. 18-509. 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 10 days 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 2/3, new par. 13-701)
Sec. 18-701. Notwithstanding any other provision of this
Act to the contrary, the Commission has no power to super-
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vise or control any telephone cooperative as respects assess-
ment schedules or local service rates made or charged by such
a 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 2/8, 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 2/38, new par. 13-703)
Sec. 18-708. (a) The Commission shall design and imple-
ment a program whereby each telecommunications carrier
providing local exchange service shall provide a telecommu-
nications 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).
(b) The Commission shall design and implement a pro-
gram, whereby each telecommunications carrier providing
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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 2 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.
(c) 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
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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 2/3, 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 cases involv-
ing significant telecommunications carriers or issues;
(6b) 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;
(ce) the status of compliance by carriers and the Commis-
sion with the requirements of this Article;
(d) the effects, and likely effects of IUinois regulatory
pclicies and practices, including those described in this Article,
on telecommunications carriers, services and customers;
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(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
interexchange telecommunication service as competitive or
reclassifying a previously noncompetitive intererchange tele-
communications service as competitive as provided in Section
13-502(a), and the effects of eliminating such mandatory prior
approval. Such studies shall include notice and an opportunity
for participation and comment by all interested and poter.tially
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 $1, 1987.
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(Ch. 111 2/8, new par. 13-803)
Sec. 18-808. The provisions of this Article, Sections 13-101
through 18-808 of this Act, are repealed effective December
31,1991.
Section 2. Section 4.8 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 $1,
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 8. 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.