093_SB0885ham001











                                     LRB093 07820 LRD 15570 a

 1                    AMENDMENT TO SENATE BILL 885

 2        AMENDMENT NO.     .  Amend Senate Bill 885 as follows:

 3    by replacing everything after the enacting  clause  with  the
 4    following:

 5        "Section  5.  The  Public  Utilities  Act  is  amended by
 6    adding Sections 13-408 and 13-409 as follows:

 7        (220 ILCS 5/13-408 new)
 8        Sec.  13-408.  Unbundled  network  element  rates.   This
 9    Section applies  to  and  covers  certain  unbundled  network
10    element  rates  that  shall  be  charged  by  incumbent local
11    exchange carriers that are subject  to  regulation  under  an
12    alternative  regulation  plan  under Section 13-506.1 of this
13    Act. The General Assembly finds and determines that it should
14    provide  direction  to  the  Illinois   Commerce   Commission
15    regarding  the  establishment  of the monthly recurring rates
16    that such incumbent  local  exchange  carriers  shall  charge
17    other   telecommunications   carriers  for  unbundled  loops,
18    whether provided on a standalone basis or in combination with
19    other unbundled network elements, in order to ensure (i) that
20    such rates  are  consistent  with  the  requirements  of  the
21    federal  Telecommunications  Act  of  1996,  the  regulations
 
                            -2-      LRB093 07820 LRD 15570 a
 1    promulgated  thereunder, and subsection (g) of Section 13-801
 2    of this Act, and (ii)  that  such  incumbent  local  exchange
 3    carriers  are  able to recover the efficient, forward-looking
 4    costs of creating, operating,  and  maintaining  the  network
 5    outside  plant  infrastructure  capacity  and  switching  and
 6    transmission   network  capacity  necessary  to  permit  such
 7    incumbent local exchange carriers to meet  in  a  timely  and
 8    adequate  fashion the obligations imposed by Section 8-101 of
 9    this Act.
10        In order to ensure recurring  unbundled  network  element
11    rates   for  loops  that  accomplish  these  objectives,  the
12    Illinois Commerce Commission shall set  the  recurring  rates
13    affected   incumbent  local  exchange  carriers  receive  for
14    unbundled loops, whether provided on a standalone basis or in
15    combination  with  other  unbundled  network   elements,   in
16    accordance with the requirements delineated below.
17        (a)  Fill  factors. The General Assembly directs that the
18    Illinois Commerce Commission shall employ fill  factors  (the
19    proportion  of  a  facility  or element that will be "filled"
20    with network usage) that represent a reasonable projection of
21    actual total usage of the elements in question, in accordance
22    with applicable federal law. The General Assembly finds  that
23    existing  actual  total  usage  of the elements that affected
24    incumbent local exchange carriers are required to provide  to
25    competing  local  exchange  carriers,  as  reflected  in  the
26    current  actual fill factors for the elements in question, is
27    the most reasonable projection of  actual  total  usage.  The
28    Commission,  therefore,  shall  employ  current  actual  fill
29    factors  that  reflect  such existing actual total usage on a
30    going forward basis in establishing cost based rates for such
31    unbundled network elements. In addition, the Commission shall
32    adjust all existing Commission-approved rates  for  unbundled
33    loops,   whether   provided  on  a  standalone  basis  or  in
34    combination with other unbundled network elements,  that  are
 
                            -3-      LRB093 07820 LRD 15570 a
 1    currently  in  effect to make such rates consistent with this
 2    provision.
 3        (b)  Depreciation rates.  The  General  Assembly  further
 4    directs  that  the Commission shall employ depreciation rates
 5    that are forward-looking  and  based  on  economic  lives  as
 6    reflected  in the incumbent local exchange carrier's books of
 7    accounts as reported to the investment  community  under  the
 8    regulations of the Securities and Exchange Commission. Use of
 9    an  accelerated  depreciation  mechanism shall be required in
10    all cases. Use of a depreciation  rate  based  on  historical
11    rate-of-return  regulation  derived lives of the elements and
12    facilities in question shall be prohibited. In addition,  the
13    Commission  shall  adjust  all  existing  Commission-approved
14    rates  for  unbundled loops, whether provided on a standalone
15    basis  or  in  combination  with  other   unbundled   network
16    elements,  that  are  currently  in effect to make such rates
17    consistent with this provision.
18        (c)  The rate adjustments required by subsections (a) and
19    (b) of this Section must be completed within 30 days  of  the
20    effective  date of this Section. In the case of any incumbent
21    local exchange carrier that  is  subject  to  an  alternative
22    regulation  plan  under  Section  13-506.1  at  the time this
23    Section becomes effective, in making these rate  adjustments,
24    the   Commission   shall   determine  the  specific  required
25    adjustments with respect to  fill  factors  and  depreciation
26    lives  by  employing  the  models  and  methodology  used  to
27    generate  the  proposed  rates submitted by such an incumbent
28    local exchange carrier in ICC Docket 02-0864. The  Commission
29    proceedings  initiated to establish such adjusted rates shall
30    be deemed interconnection agreement arbitration and  approval
31    proceedings  under  Sections  252(b)  and  (e) of the federal
32    Telecommunications Act of 1996. Immediately  upon  conclusion
33    of  such proceedings, all existing interconnection agreements
34    in this State of affected incumbent local  exchange  carriers
 
                            -4-      LRB093 07820 LRD 15570 a
 1    shall  be  deemed  amended  to  contain  the  adjusted  rates
 2    established  in  such  proceedings.  In addition, immediately
 3    upon conclusion of such proceedings, all  wholesale  tariffs,
 4    currently  effective  in  this  State,  of affected incumbent
 5    local exchange carriers shall be deemed  amended  to  contain
 6    the  adjusted  rates  established  in  such  proceedings.  In
 7    accordance   with  these  provisions,  immediately  upon  the
 8    establishment by the Commission of the adjusted rates covered
 9    hereby, each affected incumbent local exchange carrier  shall
10    charge such adjusted rates, to the extent applicable, for all
11    of  the  network  element products that are provided to other
12    carriers,  whether  those  products  are  provided  under  an
13    interconnection agreement or a tariff. The proceeding in  ICC
14    Docket  02-0864  is hereby abated as of the effective date of
15    this amendatory Act of the 93rd General Assembly.
16        (d)  Notwithstanding anything to the  contrary  contained
17    in  Section  13-505.1  of this Act, unbundled network element
18    rates established in accordance with the provisions  of  this
19    Section  shall  not  require any increase in any retail rates
20    for any telecommunications service.

21        (220 ILCS 5/13-409 new)
22        Sec.  13-409.  Application  of  Sec.   13-408   unbundled
23    network element rates.
24        (a)  During  the  first  2  years following the effective
25    date of Section 13-408, for  the  first  35,000  voice  grade
26    equivalent  access  lines  used  by  an individual carrier to
27    provide local exchange service  to  end  users,  the  monthly
28    recurring  rate for the unbundled network elements associated
29    with those lines and leased from an incumbent local  exchange
30    carrier  to  which  Section 13-408 applies shall be frozen at
31    the levels in effect immediately prior to the effective  date
32    of Section 13-408.
33        (b)  Thereafter,  the  monthly  recurring  rates  for all
 
                            -5-      LRB093 07820 LRD 15570 a
 1    unbundled network elements provided by  any  incumbent  local
 2    exchange carrier to which Section 13-408 applies shall be the
 3    rates  established  by  the Commission in accordance with the
 4    provisions of Section 13-408.
 5        (c)  If, as of the effective date of Section  13-408  and
 6    this  Section,  an individual telecommunications carrier uses
 7    unbundled network elements leased from a  specific  incumbent
 8    local exchange carrier to provide local exchange service over
 9    more  than  35,000  voice grade equivalent access lines, that
10    carrier must designate  the  35,000  voice  grade  equivalent
11    access  lines  to which the provisions of subsections (a) and
12    (b) of this Section apply. If subsequent to such designation,
13    the  individual  carrier  loses  the  customer  served  by  a
14    designated access line, and therefore no  longer  leases  the
15    unbundled  network  elements  associated  with that line, the
16    individual carrier may not designate a different access  line
17    to  substitute  for  the  lost  line.  All  unbundled network
18    elements leased to provide service  over  undesignated  voice
19    grade  equivalent  access  lines shall be subject to the full
20    monthly recurring rates  established  by  the  Commission  in
21    accordance with the provisions of Section 13-408.
22        (d)  If,  as  of  the  effective date of this Section, an
23    individual carrier uses  unbundled  network  elements  leased
24    from  a  specific  local  exchange  carrier  to provide local
25    exchange  service  over  fewer  than   35,000   voice   grade
26    equivalent  access  lines,  that  carrier  must designate the
27    access lines to which the provisions of subsections  (a)  and
28    (b) of this Section apply. If subsequent to such designation,
29    the  individual  carrier  loses  the  customer  served  by  a
30    designated  access  line,  and therefore no longer leases the
31    unbundled network elements associated  with  that  line,  the
32    individual  carrier may not designate a different access line
33    to  substitute  for  the  lost   line.   Subject   to   these
34    limitations,   subsequent  to  the  effective  date  of  this
 
                            -6-      LRB093 07820 LRD 15570 a
 1    Section, such a carrier may designate additional voice  grade
 2    equivalent  access lines to which it wishes the provisions of
 3    subsections (a) and (b) of this Section to apply,  until  the
 4    total  designated  lines  equal  35,000.  If  a  subsequently
 5    designated line is lost, the carrier will not be permitted to
 6    designate  a different line to substitute for that lost line.
 7    All unbundled network elements leased to provide service over
 8    undesignated voice grade equivalent  access  lines  shall  be
 9    subject  to  the  full monthly recurring rates established by
10    the Commission in accordance with the provisions  of  Section
11    13-408.
12        (e)  For purposes of this Section, in determining when an
13    individual  telecommunications  carrier  has  reached  35,000
14    voice  grade equivalent access lines, a specific carrier, any
15    affiliate of that carrier, any carrier serving as a sales  or
16    marketing  agent  for that carrier, and any carrier with whom
17    that carrier has a cooperative sales or marketing arrangement
18    all shall be treated as a single individual carrier.
19        (f)  Notwithstanding  any  other   provisions   of   this
20    Section,  access lines provided to payphone service providers
21    are not eligible for the freeze or discount provided  for  in
22    subsections  (a)  and  (b)  of this Section. Accordingly, the
23    provisions of subsections (a) and  (b)  shall  not  apply  to
24    unbundled  network  elements  that  are  leased by individual
25    telecommunications carriers to provide local exchange service
26    to payphone service providers.

27        Section 99. Effective date. This Act  takes  effect  upon
28    becoming law.".