# Tenn. Code Ann. § 65-5-108: Classification of services - Exempt services - Price floor - Maximum rates for non-basic services > Tennessee · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-108 ## Section - **Citation:** Tenn. Code Ann. § 65-5-108 - **Heading:** Classification of services - Exempt services - Price floor - Maximum rates for non-basic services - **Jurisdiction:** Tennessee - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** TN Code / Title 65 / Chapter 5 / Section 65-5-108 ## Text (a) Services of incumbent local exchange telephone companies who apply for price regulation under § 65-5-109 are classified as follows: (1) "Basic local exchange telephone services" are telecommunications services which are comprised of an access line, dial tone, touch-tone and usage provided to the premises for the provision of two-way switched voice or data transmission over voice grade facilities of residential customers or business customers within a local calling area, Lifeline, Link-Up Tennessee, 911 Emergency Services and educational discounts existing on June 6, 1995, or other services required by state or federal statute. These services shall, at a minimum, be provided at the same level of quality as is being provided on June 6, 1995. Rates for these services shall include both recurring and nonrecurring charges; (2) "Nonbasic services" are telecommunications services which are not defined as basic local exchange telephone services and are not exempted under subsection (b). Rates for these services shall include both recurring and nonrecurring charges. (b) The commission, after notice and opportunity for hearing, may find that the public interest and the policies set forth in this part are served by exempting a service or group of services from all or a portion of the requirements of this part. Upon making such a finding, the commission may exempt telecommunications service providers from such requirements as appropriate. The commission shall in any event exempt a telecommunications service for which existing and potential competition is an effective regulator of the price of those services. (c) Effective January 1, 1996, an incumbent local exchange telephone company shall adhere to a price floor for its competitive services subject to such determination as the commission shall make pursuant to § 65-5-107 . The price floor shall equal the incumbent local exchange telephone company's tariffed rates for essential elements utilized by competing telecommunications service providers plus the total long-run incremental cost of the competitive elements of the service. When shown to be in the public interest, the commission shall exempt a service or group of services provided by an incumbent local exchange telephone company from the requirement of the price floor. The commission shall, as appropriate, also adopt other rules or issue orders to prohibit cross-subsidization, preferences to competitive services or affiliated entities, predatory pricing, price squeezing, price discrimination, tying arrangements or other anticompetitive practices. (d) The maximum rate for any new nonbasic service first offered after June 6, 1995, shall not exceed the stand-alone cost of the service. Acts 1995, ch. 408, § 9; T.C.A. § 65-5-208. (a) Services of incumbent local exchange telephone companies who apply for price regulation under § 65-5-109 are classified as follows: (1) "Basic local exchange telephone services" are telecommunications services which are comprised of an access line, dial tone, touch-tone and usage provided to the premises for the provision of two-way switched voice or data transmission over voice grade facilities of residential customers or business customers within a local calling area, Lifeline, Link-Up Tennessee, 911 Emergency Services and educational discounts existing on June 6, 1995, or other services required by state or federal statute. These services shall, at a minimum, be provided at the same level of quality as is being provided on June 6, 1995. Rates for these services shall include both recurring and nonrecurring charges; (2) "Nonbasic services" are telecommunications services which are not defined as basic local exchange telephone services and are not exempted under subsection (b). Rates for these services shall include both recurring and nonrecurring charges. provided at the same level of quality as is being provided on June 6, 1995. Rates for these services shall include both recurring and nonrecurring charges; (2) "Nonbasic services" are telecommunications services which are not defined as basic local exchange telephone services and are not exempted under subsection (b). Rates for these services shall include both recurring and nonrecurring charges. (1) "Basic local exchange telephone services" are telecommunications services which are comprised of an access line, dial tone, touch-tone and usage provided to the premises for the provision of two-way switched voice or data transmission over voice grade facilities of residential customers or business customers within a local calling area, Lifeline, Link-Up Tennessee, 911 Emergency Services and educational discounts existing on June 6, 1995, or other services required by state or federal statute. These services shall, at a minimum, be provided at the same level of quality as is being provided on June 6, 1995. Rates for these services shall include both recurring and nonrecurring charges; (2) "Nonbasic services" are telecommunications services which are not defined as basic local exchange telephone services and are not exempted under subsection (b). Rates for these services shall include both recurring and nonrecurring charges. (b) The commission, after notice and opportunity for hearing, may find that the public interest and the policies set forth in this part are served by exempting a service or group of services from all or a portion of the requirements of this part. Upon making such a finding, the commission may exempt telecommunications service providers from such requirements as appropriate. The commission shall in any event exempt a telecommunications service for which existing and potential competition is an effective regulator of the price of those services. (c) Effective January 1, 1996, an incumbent local exchange telephone company shall adhere to a price floor for its competitive services subject to such determination as the commission shall make pursuant to § 65-5-107 . The price floor shall equal the incumbent local exchange telephone company's tariffed rates for essential elements utilized by competing telecommunications service providers plus the total long-run incremental cost of the competitive elements of the service. When shown to be in the public interest, the commission shall exempt a service or group of services provided by an incumbent local exchange telephone company from the requirement of the price floor. The commission shall, as appropriate, also adopt other rules or issue orders to prohibit cross-subsidization, preferences to competitive services or affiliated entities, predatory pricing, price squeezing, price discrimination, tying arrangements or other anticompetitive practices. (d) The maximum rate for any new nonbasic service first offered after June 6, 1995, shall not exceed the stand-alone cost of the service. Acts 1995, ch. 408, § 9; T.C.A. § 65-5-208. ## Nearby sections - [Tenn. Code Ann. § 65-5-101 Power to fix rates of public utilities](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-101.md) - [Tenn. Code Ann. § 65-5-102 Commission may require filing of schedules](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-102.md) - [Tenn. Code Ann. § 65-5-103 Changes in utility rates, fares, schedules - Implementation of alternative regulatory methods to allow for public utility rate reviews and cost recovery in lieu of a general rate case proceeding](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-103.md) - [Tenn. Code Ann. § 65-5-104 Unjust rate, fare, schedule or classification prohibited](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-104.md) - [Tenn. Code Ann. § 65-5-105 Intrastate rate reductions reflecting tax savings](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-105.md) - [Tenn. 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Code Ann. § 65-5-112 Small and minority-owned telecommunications business participation plan](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-112.md) - [Tenn. Code Ann. § 65-5-113 Assistance program for small and minority-owned businesses](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-113.md) - [Tenn. Code Ann. § 65-5-114 Tennessee Natural Gas Innovation Act](https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-114.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_TN_T65_C5_S65-5-108. Check the current official text before relying on it. Not legal advice.