State of Illinois
92nd General Assembly
Legislation

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92_HB3120

 
                                               LRB9206231JSpc

 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
 5    changing  Section  13-508  and  adding  Section  13-202.5  as
 6    follows:

 7        (220 ILCS 5/13-202.5 new)
 8        Sec.   13-202.5.  Incumbent   local   exchange   carrier.
 9    "Incumbent local exchange carrier" means with respect  to  an
10    area,    the   telecommunications   carrier   that   provided
11    noncompetitive local exchange telecommunications  service  in
12    the  area  on February 8, 1996, and on that date was deemed a
13    member of the exchange carrier  association  pursuant  to  47
14    C.F.R. 69, 601(b), and shall include its successors, assigns,
15    and affiliates.

16        (220 ILCS 5/13-508) (from Ch. 111 2/3, par. 13-508)
17        (Section scheduled to be repealed on July 1, 2001)
18        Sec.   13-508.  Classification   of  retail  services  as
19    competitive and structural separations.
20        (a)  Notwithstanding any of the ratemaking provisions  of
21    this Article or Article IX that are deemed to require rate of
22    return   regulation,   and   notwithstanding   any   plan  of
23    alternative regulation implemented pursuant to 13-506.1,  the
24    Commission  may  classify  all retail service offerings of an
25    incumbent  local  exchange  carrier  as  competitive  if  the
26    Commission makes all of the following findings:
27             (1)  That the incumbent local exchange  carrier  has
28        structurally  separated  its  retail  operations from its
29        wholesale operations consistent with the requirements  of
30        subsection (c).
 
                            -2-                LRB9206231JSpc
 1             (2)  That there is sufficient competition to prevent
 2        the  incumbent local exchange carrier from increasing the
 3        rate for any retail service that is to be  classified  as
 4        competitive.
 5             (3)  That  the  incumbent local exchange carrier has
 6        fully  complied  with  all  relevant  provisions  of  the
 7        Federal Telecommunications Act of  1996  and  orders  and
 8        regulations  of the Federal Communications Commission and
 9        that the incumbent local exchange carrier has  petitioned
10        and  received  approval  from  the Federal Communications
11        Commission to provide inter  LATA  interexchange  service
12        pursuant to Section 271 of the Federal Telecommunications
13        Act of 1996.
14             (4)  That  the  incumbent local exchange carrier has
15        fully complied with all relevant provisions of  this  Act
16        and orders and regulations of the Commission
17        (b)  Any  structural  separation  of  the incumbent local
18    exchange carrier must comply with or be  designed  to  comply
19    with all of the following requirements.
20             (1)  The   incumbent  local  exchange  carrier  must
21        establish at least 2 separate affiliated corporations,  a
22        network affiliate and a retail affiliate.
23             (2)  The  network affiliate must own and operate the
24        essential network elements and related facilities of  the
25        incumbent  local  exchange  carrier  as determined by the
26        Commission.
27             (3)  The retail affiliate must own and  operate  all
28        retail   operations   and   all   non-essential   network
29        facilities  of  the  incumbent  local exchange carrier as
30        determined by the Commission.
31             (4)  The 2 affiliated companies must  have  separate
32        boards  of  directors  and  be  independently managed and
33        directed.  Specifically, there may be no common member of
34        the  boards  of  the  companies.   Further,  no  manager,
 
                            -3-                LRB9206231JSpc
 1        director, or other corporate officer of one  company  may
 2        be  a  manager,  director,  or  corporate  officer of the
 3        affiliate.
 4             (5)  No employee of one affiliate  may  also  be  an
 5        employee of the other affiliate.
 6             (6)  The  2  affiliated  companies  must  maintain 2
 7        separate books of account.
 8             (7)  The compensation of the managers and  directors
 9        of  the  affiliate  companies  must be based, at least in
10        part, on the  financial  performance  of  the  affiliates
11        pursuant to a plan to be filed with the Commission.
12             (8)  The   network   affiliate   must  be  partially
13        publicly owned in an amount not less than 20%.
14             (9)  The  network  affiliate  may  not  design   its
15        network, interfaces, support systems, databases, or other
16        systems  or  implement  technology  into its network in a
17        manner that unfairly favors its  retail  affiliate.   The
18        network  affiliate  may not share or disclose information
19        about network deployment to its retail  affiliate  unless
20        the   information   is   simultaneously  filed  with  the
21        Commission   and    made    available    to    requesting
22        telecommunications  carriers.   The network affiliate may
23        not  discriminate  against  competitive  local   exchange
24        providers in any manner in favor of its retail affiliate.
25             (10)  All   transactions   or   agreements   between
26        affiliate shall be in writing, filed with the Commission,
27        and available for review by interested parties.
28             (11)  The  network  affiliate  may  not offer retail
29        services  and  any  non-essential  facilities  owned  and
30        operated by the retail affiliate.
31             (12)  To the  extent  the  retail  affiliate  leases
32        network facilities from the network affiliate, the retail
33        affiliate   must  utilize  the  same  operations  support
34        systems  for  those  facilities  as  used  by  requesting
 
                            -4-                LRB9206231JSpc
 1        telecommunications carriers and must lease those elements
 2        on the same terms and  conditions  (including  price  and
 3        non-price   terms)   as   provided  to  other  requesting
 4        telecommunication carriers.
 5             (13)  To the extent the requirements of the  federal
 6        Telecommunications  Act  of  1996  apply to the incumbent
 7        local exchange carrier as of the effective date  of  this
 8        amendatory  Act  of  the  92nd  General  Assembly,  those
 9        requirements shall apply to the relevant affiliate.
10             (14)  The  network  affiliate  shall be regulated by
11        the Commission to  ensure  that  the  rates,  terms,  and
12        conditions of the services and elements offered are just,
13        reasonable,  and  in accordance with all applicable State
14        and federal law.  Further, the Commission shall have  all
15        necessary  authority to ensure that the network affiliate
16        provides     reasonable     service     to     requesting
17        telecommunications carriers.
18             (15)  The   non-retail   services,   elements,   and
19        operations of the retail affiliate shall continue  to  be
20        regulated  by  the  Commission  to ensure that the rates,
21        terms,  and  conditions  of  the  services  and  elements
22        offered are just, reasonable, and in accordance with  all
23        applicable   State   and   federal  law.    Further,  the
24        Commission shall have all necessary authority  to  ensure
25        that   the   retail  affiliate  provides  its  non-retail
26        services,  elements,  and  operations  in  a   reasonable
27        manner.
28        (c)  Prior   to  the  implementation  of  any  structural
29    separation pursuant to  this  Section,  the  incumbent  local
30    exchange  carrier  must  file  with the Commission a detailed
31    plan  of  implementation.   After  notice  and  hearing,  the
32    Commission shall  review,  reject,  or  modify  the  plan  as
33    necessary to comply with the requirements of this Section.
34        (d)  Notwithstanding  any other provision, the Commission
 
                            -5-                LRB9206231JSpc
 1    on its own motion or upon petition of any party may order  an
 2    incumbent  local  exchange  carrier to implement a structural
 3    separation consistent with subsection  (b).   The  Commission
 4    shall  order  such  a  structural separation after notice and
 5    hearing after  finding  that  the  incumbent  local  exchange
 6    carrier  has  failed to comply with the obligations contained
 7    in:
 8             (1)  Sections 251 and 252 of the Communications  Act
 9        of 1934;
10             (2)  orders   and   regulations   of   the   Federal
11        Communications Commission;
12             (3)  the obligations contained in this Act; or
13             (4)  the  obligations  contained in orders and rules
14        of the Commission. The Commission  is  authorized,  after
15        notice and hearing, to order a telecommunications carrier
16        which   offers   or   provides   both   competitive   and
17        noncompetitive  telecommunications service to establish a
18        fully separated subsidiary to provide all or part of such
19        competitive service where:
20        (a)  no less costly means is available and  effective  in
21    fully  and  properly identifying and allocating costs between
22    such     carrier's     competitive     and     noncompetitive
23    telecommunications services; and
24        (b)  the incremental cost of establishing and maintaining
25    such subsidiary would  not  require  increases  in  rates  or
26    charges  to levels which would effectively preclude the offer
27    or provision of the affected  competitive  telecommunications
28    service.
29    (Source: P.A. 84-1063.)

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