093_HB3077 LRB093 08485 JLS 08709 b 1 AN ACT concerning telecommunications. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Public Utilities Act is amended by adding 5 Sections 13-306 and 13-519 and Article XIIIE as follows: 6 (220 ILCS 5/13-306 new) 7 (Section scheduled to be repealed on July 1, 2005) 8 Sec. 13-306. Infrastructure reports. 9 (a) A telecommunications carrier that provides both 10 competitive and noncompetitive services must file a network 11 infrastructure report with the Commission no later than the 12 15th day of each month. The report must contain detailed 13 information sufficient to enable the Commission to determine 14 if the carrier is engaged in redlining in the provision of 15 services, particularly focusing on the provision of advanced 16 telecommunications services. The report must contain 17 information, detailed by exchange, on investments, upgrades, 18 outages, services provided, and any other matter that the 19 Commission deems relevant. 20 (b) The Commission must perform an annual network 21 infrastructure audit of all telecommunications carriers 22 providing both competitive and noncompetitive services. The 23 Commission shall report its network infrastructure findings 24 to the General Assembly by January 15 of each year. The 25 Commission's annual network infrastructure report shall 26 include any findings of redlining and shall compare the 27 investments in and quality of the networks owned by carriers 28 providing both competitive and noncompetitive services in 29 Illinois to those in other States. 30 (220 ILCS 5/13-519 new) -2- LRB093 08485 JLS 08709 b 1 (Section scheduled to be repealed on July 1, 2005) 2 Sec. 13-519. Dividend limitations. A telecommunications 3 carrier that is an incumbent local exchange carrier may not 4 declare any cash, stock, bond, or scrip dividend or 5 distribution or divide the proceeds of the sale of any stock, 6 bond, or scrip among its stockholders while the carrier is in 7 violation of a Commission order or while there exists against 8 the carrier a Commission finding of failure to meet 9 structural separation obligations under this Act, except upon 10 Commission approval after notice and hearing. 11 (220 ILCS 5/Art. XIIIE heading new) 12 ARTICLE XIIIE. STRUCTURAL SEPARATION 13 (220 ILCS 5/13E-101 new) 14 Sec. 13E-101. Definitions. In this Article the terms 15 defined in this Section have the meanings indicated. 16 "Competitive local exchange carrier" means a telephone 17 company authorized by the Commission to provide retail local 18 telecommunications services that was not an incumbent local 19 exchange carrier in this State on the effective date of the 20 federal Telecommunications Act of 1996. 21 "Incumbent local exchange carrier" means a telephone 22 company that provided local exchange telephone services to a 23 majority of the access lines in the State on the effective 24 date of the federal Telecommunications Act of 1996. 25 "Retail affiliate" means a telephone company created by 26 the structural separation of the incumbent local exchange 27 carrier required under Section 13E-110 of this Article to 28 provide retail local telecommunications services. 29 "Wholesale affiliate" means a telephone company created 30 by the structural separation of the incumbent local exchange 31 carrier required under Section 13E-110 of this Article to 32 provide wholesale telecommunications services to competitive -3- LRB093 08485 JLS 08709 b 1 local exchange carriers and to the retail affiliate. 2 (220 ILCS 5/13E-105 new) 3 Sec. 13E-105. Findings. The General Assembly finds and 4 declares that: 5 (1) action is needed to develop and maintain 6 vibrant and irreversible competition in all intrastate 7 telecommunications markets throughout Illinois; 8 (2) development of fully competitive Illinois 9 telecommunications markets will ensure that consumers 10 receive the widest possible array of services at 11 competitively determined prices; and 12 (3) competition will promote and enhance economic 13 development opportunities in rural, urban, and suburban 14 areas of this State. 15 (220 ILCS 5/13E-110 new) 16 Sec. 13E-110. Structural separation of operations. 17 (a) In addition to any other requirements of law, an 18 incumbent local exchange carrier must structurally separate 19 its retail operations from its wholesale operations by 20 creating a retail affiliate and a wholesale affiliate, 21 consistent with proceedings of the Commission to implement 22 this Article. 23 (b) The retail affiliate and the wholesale affiliate 24 must conduct their respective operations in accordance with 25 this Section. 26 (c) The retail affiliate must operate as a competitive 27 local exchange carrier. 28 (d) The wholesale affiliate must own and operate all 29 network facilities of the incumbent local exchange carrier as 30 it existed before the effective date of the structural 31 separation. 32 (e) The wholesale affiliate must operate completely -4- LRB093 08485 JLS 08709 b 1 independently from the retail affiliate. The retail affiliate 2 may not jointly own with the wholesale affiliate, or 3 otherwise control, any network facilities or the land, 4 buildings, poles, conduits, or rights-of-way on or in which 5 network facilities are located. 6 (f) (1) All transactions and agreements between the 7 retail affiliate and the wholesale affiliate: 8 (A) must be at arm's length; 9 (B) must be reduced to writing and be 10 available for public inspection; and 11 (C) may not take effect until approved by the 12 Commission. 13 (2) The Commission may not approve a transaction 14 between the wholesale affiliate and the retail affiliate 15 until all interested parties have had an opportunity to 16 be heard and unless the Commission affirmatively finds 17 that the transaction: 18 (A) does not discriminate against competitive 19 local exchange carriers; and 20 (B) will not result in any cross-subsidization 21 between the wholesale affiliate and the retail 22 affiliate. 23 (g) The retail affiliate and wholesale affiliate must: 24 (1) maintain separate books, records, and accounts; 25 and 26 (2) have separate officers, directors, and 27 employees. 28 (h) The wholesale affiliate may not discriminate in 29 favor of the retail affiliate, and the retail affiliate may 30 not discriminate in favor of the wholesale affiliate. 31 (i) The wholesale affiliate must make all products, 32 services, and service functions, including network elements, 33 facilities, interfaces, and systems, available to each 34 competitive local exchange carrier at the prices, terms, and -5- LRB093 08485 JLS 08709 b 1 conditions at which they are available to the retail 2 affiliate. The wholesale affiliate may make all of those 3 products, services, and service functions available to an 4 affiliated or unaffiliated competitive local exchange carrier 5 only through a tariff or an interconnection agreement 6 approved by the Commission. 7 (220 ILCS 5/13E-115 new) 8 Sec. 13E-115. Procedure and enforcement under Article. 9 (a) The Commission may adopt: 10 (1) streamlined procedures for review of 11 transactions between the retail affiliate and the 12 wholesale affiliate; 13 (2) enforcement measures for violations of this 14 Article, including auditing requirements; and 15 (3) any other requirement or procedure necessary or 16 appropriate for implementation of this Article. 17 (b) The Commission may enforce the requirements of this 18 Article under the provision of Article X. 19 (220 ILCS 5/13E-205 new) 20 Sec. 13E-205. Commencement of proceedings. 21 (a) On or before August 1, 2003, the Commission shall 22 begin proceedings to implement this Article. The Commission 23 shall conclude the proceedings on or before February 1, 24 2004. 25 (b) As part of its proceedings to implement this 26 Article, the Commission, after providing all interested 27 parties a full opportunity to submit proposals, offer 28 comments, and participate in hearings, shall by order or 29 rule, establish a code of conduct governing the relationship 30 between the retail affiliate and the wholesale affiliate to 31 ensure that: 32 (1) the retail affiliate is not given any undue -6- LRB093 08485 JLS 08709 b 1 preference or advantage in its relationship with the 2 wholesale affiliate; and 3 (2) all services provided by the wholesale 4 affiliate to the retail affiliate are provided in a 5 nondiscriminatory manner as required under this Article 6 and other applicable law. 7 (220 ILCS 5/13E-210 new) 8 Sec. 13E-210. Report to the General Assembly. On or 9 before January 14, 2004, the Commission shall report to the 10 General Assembly on the status of competition in local 11 exchange telephone service in this State and on the 12 implementation of this Article. 13 Section 99. Effective date. This Act takes effect upon 14 becoming law.