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.".