Chapter 4901:1-4 Alternative Regulations for Incumbent Local Exchange Carrier (ILEC)

As used within this chapter, these terms denote the following:

(A) “Affiliate” means a person that (directly or indirectly) owns or controls, is owned or controlled by, or is under common ownership or control with, another person. For purposes of these rules, the term “own” means to own an equity interest (or the equivalent thereof) of more than ten per cent.

(B) “Alternative provider” means a provider of competing service(s) to the basic local exchange service offering(s), regardless of the technology and facilities used in the delivery of the services (wireline, wireless, cable, broadband, etc.).

(C) “Basic local exchange service (BLES)” means end user access to and usage of telephone company-provided services that enable a customer, over the primary line serving the customer’s premises, to originate or receive voice communications within a local service area, and that consist of the following:

(1) Local dial tone service.

(2) Touch tone dialing service.

(3) Access to and usage of 9-1-1 services, where such services are available.

(4) Access to operator services and directory assistance.

(5) Provision of a telephone directory and listing in that directory.

(6) Per call, caller identification blocking services.

(7) Access to telecommunications relay service.

(8) Access to toll presubscription, interexchange or toll providers or both, and networks of other telephone companies. BLES also means carrier access to and usage of telephone company-provided facilities that enable end user customers originating or receiving voice grade, data or image communications, over a local exchange telephone company network operated within a local service area, to access interexchange or other networks.

(D) “Commission” means the public utilities commission of Ohio.

(E) “Competitive local exchange carrier (CLEC)” means any facilities-based and nonfacilities-based local exchange carrier that was not an incumbent local exchange carrier on the date of the enactment of the Telecommunications Act of 1996 (1996 Act) or is not an entity that, on or after such date of enactment, became a successor, assign, or affiliate of an incumbent local exchange carrier.

(F) “Elective alternative regulation plan (EARP)” means a plan adopted in case number 00-1532-TP-COI under which an incumbent local exchange carrier receives earnings-free regulation with greater pricing flexibility for services other than BLES in exchange for specific commitments.

(G) “Facilities-based alternative provider” means a provider of competing service(s) to the basic local exchange service offering(s) using facilities that it owns, operates, manages or controls to provide such services, regardless of the technology and facilities used in the delivery of the services (wireline, wireless, cable, broadband, etc.).

(H) “Facilities-based competitive local exchange carrier” means any local exchange carrier that uses facilities it owns, operates, manages or controls to provide service(s) subject to the commission evaluation; and that was not an incumbent local exchange carrier in that exchange on the date of the enactment of the 1996 Act. Such carrier may partially or totally own, operate, manage or control such facilities. Carriers not included in this classification are carriers providing service(s) solely by resale of the incumbent local exchange carrier’s local exchange services.

(I) “Incumbent local exchange carrier (ILEC)” means with respect to any area, any facilities-based local exchange carrier that: (a) on the date of the enactment of the 1996 Act, provided BLES in such area; and (b) (i) on such date of enactment, was deemed to be a member of the exchange carrier association pursuant to 47 C.F.R 69.601(b), as effective on May 1, 2006; or (ii) is a person or entity that, on or after such date of enactment, became a successor or assignee of a member described in clause.

(J) “Large ILEC” means any ILEC serving fifty thousand or more access lines within Ohio.

(K) “Long-run service incremental cost (LRSIC)” represents the forward-looking economic cost for a new or existing product that is equal to the per unit cost of increasing the volume of production from zero to a specified level, while holding all other product and service volumes constant. LRSIC does not include any allocation of forward-looking common overhead costs. Forward-looking common overhead costs are costs efficiently incurred for the benefit of a firm as a whole and are not avoided if individual services or categories of services are discontinued. Further, forward-looking joint costs, which are the forward-looking costs of resources necessary to provide a group or family of services shall be added to or included in the LRSIC of the products or services.

(L) “Small ILEC” means any ILEC serving less than fifty thousand access lines within Ohio.

(M) “Telephone exchange area” means a geographical service area established by an ILEC and approved by the commission, which usually embraces a city, town, or village and a designated surrounding or adjacent area. There are currently seven hundred thirty-eight exchanges in the state.

(N) “Tier one” services include BLES as defined in section 4927.01 of the Revised Code, as well as those services that are not essential but nevertheless retain such a high level of public interest that these services still require regulatory oversight, as set forth in paragraphs (A)(1)(a) and (A)(1)(b) of rule 4901:1-6-20 of the Administrative Code.

(O) “Tier two” services include all regulated telecommunications services that do not fall in tier one.

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03

Rule Amplifies: 4927.01, 4927.02, 4927.03, 4927.04

(A) The alternative regulation plan set forth below is available to any ILEC that desires to take advantage of the retail services flexibility for telecommunication services, other than BLES as defined in section 4927.01 of the Revised Code, set forth in the rules for competitive telephone companies but that is not interested in pursuing an individual company-designed application for alternative regulation pursuant to case number 92-1149-TP-COI.

(B) Adoption of the EARP by an ILEC enables the ILEC to operate under the retail service requirements developed for competitive telephone companies.

(C) This EARP does not limit an ILEC’s ability to propose a company-specific plan under the existing alternative regulation guidelines set forth in case number 92-1149-TP-COI, which could also qualify the company for the proposed retail service rules.

(D) The retail service rules established for competitive telephone companies is only an option for an ILEC if the ILEC adopts a qualifying alternative regulation plan.

(E) Although not favored, the commission may upon its own motion, or for good cause shown, waive any requirement, standard, or rule set forth in this chapter.

Replaces: 4901:1-4-01

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03, 4927.04

Rule Amplifies: 4927.01, 4927.02, 4927.03, 4927.04

Prior Effective Dates: 7/18/02

(A) An ILEC can opt into this EARP at anytime by making the appropriate filing with the commission. An appropriate filing is one that includes:

(1) A completed application form, as may be modified from time-to-time by the commission.

(2) An application proposing to cap BLES rates at existing levels as an alternative to rate base/rate-of-return regulation, pursuant to section 4927.04 of the Revised Code, and to price all other telecommunication services pursuant to the provisions of paragraph (C) of rule 4901:1-4-06 of the Administrative Code and section 4927.03 of the Revised Code.

(3) All necessary tariff modifications to implement EARP, to be prefiled with the commission’s staff thirty days before docketing the application.

(4) A plan as to how the ILEC will meet all of the commitments set forth in rule 4901:1-4-06 of the Administrative Code.

(B) An ILEC shall deliver one copy of its application to the office of the Ohio consumers’ counsel at the time the ILEC files the application with the commission.

(C) An ILEC electing alternative regulation pursuant to this chapter agrees to cap its BLES rates for the term of the plan. Accordingly, the commission waives the requirement to file the schedules set forth in divisions (A) to (D) of section 4909.18 of the Revised Code.

(D) Any person may file a request for hearing on the application within twenty days. Absent extraordinary circumstances established through clear and convincing evidence that reasonable grounds for a hearing exist, a hearing will not be held. Unless otherwise ordered, a hearing request not ruled upon by the commission will be automatically denied on the forty-sixth day after the ILEC application was filed.

(E) The ILEC’s application shall be automatically approved on the forty-sixth day, unless otherwise suspended by the commission. In all cases where reasonable grounds for hearing are found and/or a suspension of the approval process is granted, the commission will render a decision on the application within one hundred eighty days of filing.

(F) There is no predetermined termination date for the EARP absent a revocation proceeding outlined in paragraph (H) of this rule.

(G) Once the ILEC has met the commitments set forth in rule 4901:1-4-06 of the Administrative Code, the company may continue under its EARP, terminate the alternative regulation plan and return to traditional rate-of-return regulation, or propose a company-specific alternative regulation plan.

(H) If the commission believes that the ILEC has failed to comply with the terms of the plan, the commission shall give the ILEC notice, including a basis, of such belief and a reasonable period of time to come into compliance. The commission shall not revoke any EARP, unless the commission determines, after further notice to the ILEC and hearing, that the ILEC in fact has failed to materially comply with the terms of the plan and in fact has failed to come into compliance within such reasonable period of time. Prior to any such ruling to revoke any order approving the plan, the commission shall take into consideration consequences of such action on the ILEC as well as the impact on its customers.

(I) In order to terminate or withdraw from an EARP, an ILEC must file a notice with the commission which sets forth the reasons for the withdrawal and informs the commission whether the ILEC is proposing to return to traditional regulation or will be filing a company-specific alternative regulation plan. Such notice shall also be served upon the office of the Ohio consumers’ counsel. A notice of withdrawal will not be approved until another regulatory framework is adopted by the commission. The commission shall order such procedures as it deems necessary in its consideration of the request to withdraw.

(J) An ILEC choosing to return to rate-of-return regulation is required to bring its rates and services into compliance with the appropriate regulatory framework for all regulated services. All existing rules, guidelines, and orders that are available for ILECs today, such as case numbers 84-944-TP-COI, 86-1144-TP-COI, 89-564-TP-COI, and 92-1149-TP-COI, will still remain. The rates in effect under elective alternative regulation shall remain in effect until otherwise modified by the ILEC with the commission’s approval. An ILEC returning to rate-of-return regulation bears the total risk of recovery of commitment investments during the period it was under alternative regulation

Replaces: 4901:1-4-02

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03, 4927.04

Rule Amplifies: 4927.01, 4927.02, 4927.03, 4927.04

Prior Effective Dates: 7/18/02

To the extent they do not conflict with the provisions set forth herein and absent a waiver, all commission requirements and policies will apply to the operations of every ILEC adopting elective alternative regulation. Examples of such requirements and policies include, but are not limited to, the minimum telephone service standards (MTSS) codified at Chapter 4901:1-5 of the Administrative Code, lifeline services such as service connection assistance (case numbers 89-45-TP-UNC and 91-564-TP-UNC), discounts for persons with communication disabilities (case number 87-206-TP-COI), blocking of 976 services (case number 86-1044-TP-COI), disconnection of local service rules (case number 96-1175-TP-ORD), 9-1-1 service (case number 86-911-TP-COI), privacy and number disclosure requirements (case number 93-540-TP-COI), alternative operator service provisions (case number 88-560-TP-COI), provisions involving customer-owned, coin-operated telephones (case number 88-452-TP-COI), local competition carrier requirements (case numbers 95-845-TP-COI and 99-998-TP-COI), and carrier access charge policies and orders.

Replaces: 4901:1-4-03

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03, 4927.04

Rule Amplifies: 4927.01, 4927.02, 4927.03, 4927.04

Prior Effective Dates: 7/18/02

Accounting records are required to be maintained in accordance with the uniform system of accounts for local telephone operations by all ILECs.

Replaces: 4901:1-4-04

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03, 4927.04

Rule Amplifies: 4927.01, 4927.02, 4927.03, 4927.04

Prior Effective Dates: 7/18/02

(A) Advanced services

(1) Advanced telecommunications services capability is the availability of high-speed, full broadband telecommunications that enables a customer to originate and receive high-quality data, graphics, and video using any technology (e.g., xDSL, cable, fiber optic, fixed wireless, satellite, or other system) at a minimum rate of two hundred kilobits per second in one direction.

(2) An ILEC electing this alternative regulation plan must commit to provide the following:

(a) High density central offices: No later than twelve months from the effective date of the alternative regulation plan, an ILEC must provide advanced telecommunications service capability from all class five central offices (CO) in its traditional service territories which serve census tracts with a population density of five hundred or more people per square mile as defined by the 2000 census.

(i) No later than twelve months from the effective date of the alternative regulation plan, an ILEC must deploy broadband, advanced telecommunications services upon customer demand within sixty days to any customer within twelve thousand feet from a high density CO.

(ii) No later than twenty-four months from the effective date of the alternative regulation plan, an ILEC must deploy broadband, advanced telecommunications services upon customer demand within sixty days to any customer within eighteen thousand feet from a high density CO.

(b) County seat central offices: For counties that do not meet the population density criterion described in paragraph (A)(2)(a) of this rule, an ILEC must provide advanced telecommunications service capability from all class five COs in its traditional service territories that are within the county seat no later than twelve months from the effective date of the alternative regulation plan.

(i) No later than twelve months from the effective date of the alternative regulation plan, an ILEC must deploy broadband, advanced telecommunications services upon customer demand within sixty days to any customer within twelve thousand feet from a county seat CO.

(ii) No later than twenty-four months from the effective date of the alternative regulation plan, an ILEC must deploy broadband, advanced telecommunications services upon customer demand within sixty days to any customer within eighteen thousand feet from a county seat CO.

(B) Lifeline assistance

(1) The ILEC must implement a lifeline program that provides eligible residential customers with the maximum contribution of federally available assistance. Eligible lifeline service consists of flat-rate monthly access line service with touch-tone service.

(a) Credits: The ILEC shall credit one hundred per cent of all nonrecurring service order charges for commencing service and a monthly amount that will ensure the maximum federal matching contribution.

(b) Other benefits: Lifeline customers shall receive a waiver of the local exchange service establishment deposit requirements, free blocking of toll and 900/976 dialing patterns, an option to purchase call waiting and an option to purchase other features for medical and/or safety reasons. Requests to purchase vertical features must be signed by the customer certifying that the customer has a legitimate need, either for medical or safety reasons, for the optional feature(s) requested.

(c) Restrictions: The discount will apply to only one access line per household. Optional features, other than call waiting, are prohibited unless the phone company receives a signed statement from the customer self-certifying that the feature is necessary for medical and/or safety reasons. Existing lifeline customers that have optional features prior to the adoption of this plan will be grandfathered into the lifeline program so long as the customer makes no changes whatsoever to their existing local exchange service. Telephone companies are prohibited from marketing vertical services to existing or new lifeline customers.

(2) Lifeline assistance eligibility shall include:

(a) Home energy assistance program (LIHEAP, HEAP, and E-HEAP).

(b) Ohio energy credit program (OECP).

(c) Food stamps.

(d) Supplemental security income-blind and disabled (SSDI).

(e) Supplemental security income-aged (SSI).

(f) General assistance (including disability assistance [DA]).

(g) Medical assistance (medicaid), including any state program that might supplant medicaid.

(h) Federal public housing/section eight.

(i) Ohio works first (formerly AFDC).

(j) National school lunch’s free lunch program 42 U.S.C. 1751 to 1769h, as effective on May 1, 2006.

(k) Household income at or below one hundred fifty per cent of the poverty level.

(3) Each ILEC participating in the EARP shall offer a lifeline assistance program to eligible customers throughout the traditional service area of that carrier, in conformance with this rule.

(a) ILECs with fifty thousand or more access lines shall automatically enroll customers into lifeline assistance who participate in a qualifying program. Additionally, such companies must also enroll customers who participate in a qualifying program by using on-line company to agency verification or self-certification.

(b) ILECs with less than fifty thousand access lines may use one or any combination of automatic enrollment, on-line company to agency verification and/or self-certification to enroll customers into lifeline assistance who participate in a qualifying program.

(c) All ILECs must verify customer eligibility consistent with the federal communication commission’s requirements in 47 C.F.R. 54, as effective on May 1, 2006, to enroll customers into lifeline assistance who qualify through household income-based requirements.

(4) At no time will the monthly access line discounts cause the local service rates to be less than zero.

(5) Lifeline assistance customers with past due bills for regulated local service charges will be offered special payment arrangements with the initial payment not to exceed twenty-five dollars before service is installed, with the balance for regulated local charges to be paid over six equal monthly payments. Lifeline assistance customers with past due bills for toll service charges will be required to have toll restricted service until such past due toll service charges have been paid or until the customer establishes service with a subsequent toll provider pursuant to the minimum telephone service standards.

(6) Staff will work with the appropriate state agencies, which administer qualifying programs for lifeline assistance, and the ILECs to negotiate and acquire on-line access to the agencies’ electronic databases for the purpose of accessing the information necessary to verify a customer’s participation in an eligible program, and data necessary to automatically enroll customers into the lifeline program. On-line verification and automatic enrollment will be in place within six months after the effective date of a company’s alternative regulation plan.

(7) An ILEC is permitted to perform a verification audit of a customer already on lifeline assistance service.

(8) All lifeline program activities must be coordinated through an advisory board composed of commission staff, the office of the Ohio consumers’ counsel, consumer groups representing low-income constituents, and the company. Commission staff will work with the advisory board to reach consensus. However, where consensus is not possible, the commission’s staff shall make the final determination. Advisory board decisions on how the program is implemented and the lifeline promotional plan are subject to commission review. Companies with less than fifty thousand access lines may join with other such companies to form one advisory board.

(9) The ILEC will establish an annual marketing budget for promoting lifeline and performing outreach using ten cents per access line multiplied by the number of residential access lines the company serves. The ILEC shall work with the advisory board to reach a consensus, where possible, regarding how the marketing budget funds will be spent. The marketing budget funds shall only be spent for the promotion and marketing of lifeline service and not for the administrative costs of implementing and operating the lifeline program.

(C) Retail rate commitments

(1) An ILEC’s offering of in-territory, BLES shall include flat-rate residential calling.

(2) Any measured-rate or optional extended area service plans that are being provided to customers on the effective date of the alternative regulation plan shall continue to be available to customers unless the commission subsequently approves changes to these plans.

(3) Tier one rate caps

(a) Core service rate caps

(i) Tier one core services as used in these rules shall include BLES as defined in section 4927.01 of the Revised Code, and basic caller ID only.

(ii) An ILEC adopting alternative regulation pursuant to this chapter, shall cap the in-territory rates for tier one core service at the existing rates for so long as the company remains under the EARP. The electing ILEC’s existing rates shall represent the maximum or “ceiling” levels, below which the ILEC may lower or raise rates upon making the appropriate filing with the commission.

(iii) The electing ILEC may not price below the LRSIC of each service plus a common cost allocation. The ILEC may provide a common cost study to the commission’s staff to justify the common cost allocation or the ILEC may use a default allocation of ten per cent for common costs.

(b) Noncore service rate caps

(i) Noncore tier one services shall include:

(a) Second and third local exchange service access lines.

(b) Call waiting.

(c) Call trace (*57).

(d) Centrex access lines.

(e) Private branch exchange (PBX) trunks.

(f) Per line number identification blocking.

(g) Nonpublished number service.

(h) N11 access and usage, unless exempted.

(ii) An electing ILEC shall cap the rates for all in-territory, noncore, tier one services at existing rates for twenty-four months from the effective date of the alternative regulation plan.

(iii) During those twenty-four months, the electing ILEC may lower or raise rates below the cap, upon making the appropriate filing with the commission.

(iv) The electing ILEC may not price below the LRSIC of each service plus a common cost allocation. The ILEC may provide a common cost study to the commission’s staff to justify the common cost allocation or the ILEC may use a default allocation of ten per cent for common costs.

(v) After twenty-four months, upward pricing flexibility for a second local exchange access service line and call waiting shall be limited to no more than a ten per cent increase in price per year for each service, up to a maximum cap for the life of the plan that is double the initial rate for each service.

(vi) After twenty-four months, upward pricing flexibility for all other tier one, noncore services shall be limited to a cap that is double the initial rate for the life of the plan.

(4) Tier two services

(a) Tier two services include all regulated, public telecommunication services that do not fall on tier one.

(b) Tier two service rates are not subject to any rate cap and may be priced at market-based rates.

(c) The rate for any tier two service must recover the LRSIC associated with the service plus a common cost allocation. The ILEC may provide a common cost study to the commission’s staff to justify the common cost allocation or the ILEC may use a default allocation of ten per cent for common costs.

(5) Nothing herein prohibits an electing ILEC from seeking, through an appropriate filing with the commission, the flexibility to discount tier one service rates, on an exchange or on a wire center basis when an exchange has more than one wire center, provided the company demonstrates that the discount is necessary to meet competition and provided the discount is uniformly available to all tier one service customers within the designated exchange(s) or wire center(s).

(6) Notice to customers of any changes in rates must comply with the notice requirements established in the rules for competitive telephone companies.

Replaces: 4901:1-4-05

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03, 4927.04

Rule Amplifies: 4927.01, 4927.02, 4927.03, 4927.04

Prior Effective Dates: 7/18/02

(A) A small ILEC adopting alternative regulation pursuant to this chapter shall be subject to the following provisions:

(1) Advanced services: A small ILEC electing this alternative regulation plan must commit to providing advanced telecommunications service capability no later than twelve months from the effective date of the alternative regulation plan from all class five central offices (COs) in its traditional service territory or to providing such capability through an affiliate provider. A small ILEC electing this alternative regulation plan must also commit to the following:

(a) No later than twelve months from the effective date of the alternative regulation plan, a small ILEC or an affiliate provider must deploy broadband, advanced telecommunications services upon customer demand within sixty days to any customer within twelve thousand feet from a CO.

(b) No later than twenty-four months from the effective date of the alternative regulation plan, a small ILEC or an affiliate provider must deploy broadband, advanced telecommunications services upon customer demand within sixty days to any customer within eighteen thousand feet from a CO.

(2) Lifeline assistance: In lieu of paragraphs (B)(8) and (B)(9) of rule 4901:1-4-06 of the Administrative Code, all lifeline program activities for small ILECs, including how the program is implemented and outreach efforts, shall be subject to commission review and coordinated with commission staff, who will consult with the office of the Ohio consumers’ counsel. Lifeline program activities for small ILECs shall comply with paragraph (B) of rule 4901:1-4-06 of the Administrative Code, in all other respects.

(3) Retail rate commitments: Notwithstanding paragraph (C)(3) of rule 4901:1-4-06 of the Administrative Code, a small ILEC may petition the commission for an adjustment to tier one rates during the term of the plan, if a mandated federal or state legislative or regulatory action significantly impairs the company’s ability to maintain the availability of adequate tier one services to its customers. Requests for such an adjustment will be governed by the alternative ratemaking process specified in case number 89-564-TP-COI for increases in BLES rates. Pending a commission decision on the request of the affected small ILEC, the alternative regulation plan of the affected small ILEC shall remain in effect for tier two services. An affected small ILEC also has the right to terminate its alternative regulation plan and return to rate-of-return regulation or propose a company-specific alternative regulation plan under paragraph (G) of rule 4901:1-4-03 of the Administrative Code.

(B) To the extent that the specific provisions for small ILECs contained in paragraph (A) of this rule conflict with other elective alternative regulation provisions in this chapter, these provisions control. In all other respects, a small ILEC shall be subject to the elective alternative regulation rules contained in this chapter.

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.04

Rule Amplifies: 4927.04

(A) Any ILEC with an approved qualifying EARP set forth in rules 4901:1-4-01 to 4901:1-4-07 of the Administrative Code, may request, pursuant to section 4927.03 of the Revised Code, alternative regulation of BLES and other tier one services.

(B) An ILEC is not eligible to apply for alternative regulation of BLES and other tier one services until it has fully complied with the advanced services and lifeline commitments set forth in paragraphs (A) and (B) of rule 4901:1-4-06 of the Administrative Code for large ILECs and set forth in rule 4901:1-4-07 of the Administrative Code for small ILECs. An ILEC may apply for EARP and alternative regulation for BLES and other tier one services, contemporaneously, if the applicant can demonstrate that it fully meets the applicable EARP commitments on the day of filing of both applications.

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03

Rule Amplifies: 4927.03

(A) An application and all required exhibits shall be made in the form provided by the commission.

(B) Exhibits to an application

(1) An affidavit from an officer of the ILEC verifying that the applicant fully complies with the elective alternative regulation commitments as required by paragraphs (A) and (B) of rule 4901:1-4-06 of the Administrative Code for large ILECs and as required by rule 4901:1-4-07 of the Administrative Code for small ILECs.

(2) An identification of the telephone exchange area(s) for which the ILEC seeks alternative regulation for BLES and other tier one services and the competitive market test proposed by the applicant for each telephone exchange area.

(3) Supporting information and detailed analysis demonstrating that the applicant meets, on a telephone exchange area basis, at least one of the competitive market tests, as set forth in paragraph (C) of rule 4901:1-4-10 of the Administrative Code. This information should be contained within an affidavit filed by an officer of the ILEC attesting to the veracity of the data upon which the application is premised.

(4) Any proposed tariff modifications necessary to implement the pricing flexibility rules set forth in paragraph (A) of rule 4901:1-4-11 of the Administrative Code.

(5) Copy of proposed legal notice notifying the public of the filing of the application and stating that objections can be filed with the commission consistent with paragraph (F) of this rule. The public notice should occur within seven days of the filing of the application and should be printed in the legal notice section of a newspaper of general circulation in each county corresponding to the exchanges for which BLES alternative regulation is being requested. The requesting ILEC should confer with the commission staff regarding the content of the legal notice prior to commencing with the publication of the public notice.

(C) The application shall be designated by the commission’s docketing division using the case purpose code “BLS”. On the same day that the ILEC files its complete application with the commission, the ILEC shall deliver one copy of its application to the office of the Ohio consumers’ counsel.

(D) All persons seeking intervention in order to be considered as a party in the proceeding must file the appropriate motion to intervene within fourteen calendar days of the filing of the ILEC’s application.

(E) Confidential information filed by the ILEC will be eligible for proprietary treatment in accordance with rule 4901-1-24 of the Administrative Code. Parties shall be afforded access to all confidential information and supporting data addressed within an application by entering into a protective agreement with the ILEC. The ILEC has the duty to negotiate such agreements in good faith with the parties in a timely manner and the commission will decide any issues that the parties are unable to resolve regarding the protective agreement.

(F) Any person or party who can show good cause why such application should not be granted must file with the commission a written statement detailing the reasons within forty-five calendar days after the application is docketed.

(G) With respect to the four tests identified in paragraph (C) of rule 4901:1-4-10 of the Administrative Code, an ILEC’s application shall be approved automatically and become effective on the one hundred twenty-first day after the initial filing, unless suspended by the commission, the legal director, or an attorney examiner. A suspension may be granted at any time if deemed appropriate. A hearing will not be held absent extraordinary circumstances established through clear and convincing evidence, satisfying the commission, that a hearing is needed. Where the commission determines a hearing is necessary and/or a suspension is ordered, the commission will render a decision on the application within two hundred seventy days of filing.

(H) An application containing an alternative competitive market test (i.e., a test not found in paragraphs (C)(1) to (C)(4) of rule 4901:1-4-10 of the Administrative Code) will not be subject to the automatic time frames set forth in paragraph (G) of this rule. The commission will establish the appropriate process and time frames for consideration of such application after reviewing each relevant application.

(I) All parties shall electronically serve their discovery requests. All discovery responses are to be electronically served within ten days of being initially served with the discovery request.

(J) The commission, legal director, or attorney examiner may modify the time frames stated herein based upon a material modification filed subsequent to the initial application.

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03

Rule Amplifies: 4927.03

(A) In order to qualify for pricing flexibility for BLES and other tier one services, the applicant has the burden to demonstrate that as of the date of the application, the ILEC meets at least one of the competitive market tests set forth in paragraph (C) of this rule in each of the requested telephone exchange area(s). Thus, an application for alternative regulation of BLES and other tier one services may contain more than one telephone exchange area, but the test(s) must be applied to each telephone exchange area individually within that application.

(B) For any telephone exchange area(s) in which the ILEC is not granted alternative regulation for BLES and other tier one services, the ILEC’s BLES and other tier one services remain subject to all the requirements of EARP, including the pricing requirements pursuant to paragraph (C) of rule 4901:1-4-06 of the Administrative Code. For any telephone exchange area(s) in which the ILEC is granted alternative regulation for BLES and other tier one services, pricing flexibility for the ILEC’s BLES and other tier one services will not be subject to paragraph (C)(3) of rule 4901:1-4-06 of the Administrative Code. All of the remaining requirements of EARP will continue to apply to the ILEC’s retail service offerings.

(C) If the applicant can demonstrate that at least one of the following competitive market tests is satisfied in a telephone exchange area, the applicant will be deemed to have met the statutory criteria found in division (A) of section 4927.03 of the Revised Code for BLES and other tier one services in that telephone exchange area. These competitive market tests do not preclude an ILEC from proposing to demonstrate the statutory criteria are satisfied through an alternative competitive market test.

(1) An applicant must demonstrate in each requested telephone exchange area that at least twenty-five per cent of total residential access lines are provided by unaffiliated CLECs, and at least twenty per cent of total company access lines have been lost since 1996 as reflected in the applicant’s annual report filed with the commission for 1996.

(2) An applicant must demonstrate in each requested telephone exchange area that at least twenty per cent of total residential access lines are provided by unaffiliated CLECs, and the presence of at least two unaffiliated facilities-based CLECs providing BLES to residential customers.

(3) An applicant must demonstrate in each requested telephone exchange area that at least fifteen per cent of total residential access lines are provided by unaffiliated CLECs, the presence of at least two unaffiliated facilities-based CLECs providing BLES to residential customers, and the presence of at least five alternative providers serving the residential market.

(4) An applicant must demonstrate that in each requested telephone exchange area that at least fifteen per cent of total residential access lines have been lost since 2002 as reflected in the applicant’s annual report filed with the commission in 2003, reflecting data for 2002; and the presence of at least five unaffiliated facilities-based alternative providers serving the residential market.

(D) For purposes of demonstrating that a competitive market test is satisfied under this rule, the applicant may, in its competitive market test, count as a CLEC or an alternative provider, any affiliate of an ILEC other than the applicant, serving the residential market in the requested telephone exchange areas.

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03

Rule Amplifies: 4927.03

(A) In each telephone exchange area where an ILEC meets at least one of the competitive market tests set forth in paragraph (C) of rule 4901:1-4-10 of the Administrative Code, the ILEC will be granted pricing flexibility, as set forth below, for tier one core and noncore services in lieu of the EARP pricing rules set forth in paragraph (C)(3) of rule 4901:1-4-06 of the Administrative Code. An ILEC will be granted, in those telephone exchange areas, tier two pricing flexibility for all tier one noncore services. BLES and basic caller ID will also be subject to pricing flexibility in those telephone exchange areas. Subject to the pricing flexibility in this rule, the rate for BLES and basic caller ID may be lowered or raised upon making the appropriate tier two filing with the commission. For the twelve months following approval of alternative regulation for BLES in the relevant telephone exchange areas, the ILEC’s initial upward pricing flexibility for BLES and basic caller ID shall be limited to an annual increase of no more than one dollar twenty-five cents above the BLES rate at the time that the ILEC is granted BLES alternative regulation and an annual increase of no more than fifty cents above the basic caller ID rate in existence at the time that the ILEC is granted BLES alternative regulation. In subsequent years, the ILEC’s upward pricing flexibility for BLES and basic caller ID shall be limited to an annual increase of no more than one dollar twenty-five cents above the BLES rate in effect at the end of the preceding twelve months and an annual increase of no more than fifty cents above the basic caller ID rate in effect at the end of the preceding twelve months. No banking of increases will be allowed.

(B) Rates for intrastate carrier access, 9-1-1 service, pole attachments and conduit occupancy, pay telephone services, toll presubscription, and telecommunications relay service are not affected by this rule and shall continue to be subject to the applicable laws, rules and orders of the commission and the federal communications commission. In addition, the commission may, in the future, add additional regulated new services to this list of exempted services for which the commission determines that a specific public policy interest exists.

(C) In those telephone exchange areas where an ILEC is granted pricing flexibility for BLES and other tier one services, an ILEC is not permitted to price its tier one retail service(s) below the LRSIC of each service plus a common cost allocation. A telephone company may allocate common costs using a fixed allocator of ten per cent. In the event the ILEC chooses to use a different common cost allocator, the ILEC will have the burden of establishing the reasonableness of the chosen common cost allocator. Upon request of the commission staff, the ILEC shall provide cost support to the staff.

(D) In those telephone exchange areas where an ILEC is granted pricing flexibility for BLES and other tier one services, it must continue to offer to qualifying lifeline customers BLES, including any nonrecurring charges for service establishment, service connection and service change orders associated with establishing a single BLES access line, at the rates in existence at the time the ILEC files an application under this chapter. If rates for a lifeline customer’s BLES increase pursuant to paragraph (A) of this rule, the lifeline discount shall be adjusted to ensure there is no net rate increase to qualifying lifeline customers. The commission reserves the right to modify this restriction based on changes made by the federal communications commission to the lifeline or universal service funding programs.

(E) In those telephone exchange areas where an ILEC is granted pricing flexibility for BLES and other tier one services, the ILEC shall utilize the processes set forth in rule 4901:1-6-21 of the Administrative Code for the filing of all subsequent tariff applications for BLES and other tier one services. In those telephone exchange areas where an ILEC is granted pricing flexibility for BLES and other tier one services, the ILEC shall provide prior actual customer notice to the affected customers by bill insert, bill message, direct mail, or, if the customer consents, electronic mail, a minimum of thirty days prior to any increase in rates. The application, when filed with the commission, must include a copy of the actual notice that was sent to affected customers and an affidavit verifying that such notice was given to customers. The customer notice shall comply with the customer notice requirements set forth in paragraphs (B) and (C) of rule 4901:1-6-17 of the Administrative Code. All of the remaining rules for ILECs operating pursuant to EARP found in Chapters 4901:1-4 and 4901:1-6 of the Administrative Code will continue to apply.

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03

Rule Amplifies: 4927.03

(A) The EARP rules set forth in paragraphs (F), (H), (I) and (J) of rule 4901:1-4-03 of the Administrative Code also apply to the term, revocation and withdrawal of the plan for alternative regulation of BLES and other tier one services.

(B) If the commission has reason to believe, based on a change in the telecommunications market in a telephone exchange area(s) or based on the motion of an interested stakeholder setting forth reasonable grounds, that the market in a telephone exchange area(s) has changed such that it may no longer meet one of the competitive market tests set forth in paragraph (C) of rule 4901:1-4-10 of the Administrative Code, the commission shall notice the ILEC and require it to show cause as to why alternative regulation for BLES and other tier one services in the involved telephone exchange area(s) should not be revoked. Based on that review, the commission will take whatever action it deems necessary, if any, including initiating an investigation or scheduling a hearing, to consider revocation of the alternative regulation for BLES and other tier one services in a telephone exchange area(s). Consistent with division (C) of section 4927.03 of the Revised Code, the commission may modify or revoke any order granting the ILEC alternative regulation for BLES and other tier one services in a telephone exchange area(s). Pending any review of alternative regulation of BLES, the ILEC will maintain the pricing flexibility previously granted until or unless otherwise modified by the commission.

Effective: 08/07/2006

R.C. 119.032 review dates: 05/31/2011

Promulgated Under: 111.15

Statutory Authority: 4927.03

Rule Amplifies: 4927.03