State Retail Rate Regulation of Local Providers: A Communications Daily White Paper

State: District of Columbia Company: CLECs Method Now in Use: Rates Not Reviewed Notes: Rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs and give notice of rate changes, but changes aren’t reviewed. -------------------------------------------------- State: Florida Company: BellSouth, Verizon, Embarq Method Now in Use: Price Caps (1995) Notes: Basic services under caps indexed to GDP-PI minus 1%. Rates for nonbasic services can rise up to 6% a year in noncompetitive markets, up to 20% in competitive ones. Earnings not regulated. No expiration date. A 2003 state law let major rate rebalancing, subject to PSC approval, shift hundreds of millions of dollars from access charges onto local rates. The PSC in Dec. 2003 approved rebalancing plan to give these 3 telcos a total of $344 million in local rate raises. Increases were stayed pending court appeals, but Fla. Supreme Court in July 2005 upheld increases. Carriers imposed first round of rebalancing-related increases in Nov. 2005. Verizon and Embarq plan 2nd round in Nov. BellSouth is expected this fall to file 2nd installment of its rebalancing-related rate changes to take effect early 2007. State: Florida Company: Other Incumbents Method Now in Use: Price Caps (1995) Notes: Other incumbents can elect price cap regulation under same program as for the 3 large telcos. Six of 7 eligible incumbents elected caps. One small incumbent remains under rate-of-return regulation. State: Florida Company: CLECs Method Now in Use: Some Rates Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificates by showing technical, financial and managerial competence. CLEC regulations single out those providing both residential and single-line business basic service for mandate to file price lists. Rate changes by CLECs providing residential and single-line business service require a day’s notice and get PSC staff review but normally aren’t questioned. CLECs not providing residential and single-line business service aren’t rate regulated and need not file price lists; their changes take immediate effect. -------------------------------------------------- State: Georgia Company: BellSouth Method Now in Use: Price Caps (1995) Notes: Basic rates under caps indexed to GDP-PI; access charges capped at interstate rate. Other retail service rates deregulated. Earnings not regulated. No expiration date. BellSouth completed original cap program infrastructure investment requirements in 2000; no new investment mandates have been linked to price caps. State: Georgia Company: Other Incumbents Method Now in Use: Price Caps (1996) Notes: Other incumbents can elect price cap plan like BellSouth’s but without infrastructure investment requirements. About 75% of state’s 34 other independents have elected price caps. Others remain under fully tariffed rate-of-return regulation. State: Georgia Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs get state certificates by showing technical, financial and managerial competence. They must file tariffs and give 30 days’ notice of rate boosts and new services and 7 days’ notice of rate drops. Changes get regulatory staff review but normally aren’t questioned. -------------------------------------------------- State: Hawaii Company: Hawaiian Telcom Method Now in Use: Rate of Return Notes: Company is under standard rate-of-return regulation and hasn’t undergone general rate case since 1997. Formerly Verizon Hawaii, company was sold to N.Y.-based Carlyle Group May 2005 and reorganized as Hawaiian Telcom. PUC sale-approval condition barred new owners from filing general rate case before 2009. State law requires cost-based rates and earnings-based regulation until PUC determines effective local competition exists. State: Hawaii Company: Other Incumbents Method Now in Use: None. State: Hawaii Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. CLECs must file tariffs and give notice of changes. Changes receive regulatory staff review but normally aren’t challenged.-------------------------------------------------- State: Idaho Company: Qwest, Verizon Method Now in Use: Rate Deregulation (1989) Notes: Rates deregulated for all retail services except basic exchange provided to accounts with 5 or fewer lines. A 2005 law ended rate-of-return regulation of basic exchange in favor of temporary price caps limiting annual basic-exchange rate increases to 10%. Caps expire in 2008, unless PUC extends them to 2010. After caps expire, basic exchange rates will be deregulated. Verizon in 2005 was put under same regulatory system as Qwest. State: Idaho Company: Other Incumbents Method Now in Use: Rate of Return Notes: Other incumbents remain under fully tariffed rate-of-return regulation. Companies have option to petition for rate deregulation but none have elected to do so. Mutual companies aren’t under PUC jurisdiction. State: Idaho |Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file price lists and give 10 days’ notice of changes, but changes aren’t reviewed. -------------------------------------------------- State: Illinois Company: AT&T Method Now in Use: Price Caps (1995) Notes: Residential rates and other noncompetitive services under caps indexed to GDP-PI minus 3%. Retail business services statewide and residential services in the Chicago LATA are deemed competitive and are priced flexibly -- but stand-alone basic exchange monthly rises can’t exceed $1 annually. AT&T this year agreed to freeze rates for 3 specific residential packages in Chicago LATA until 2010. Earnings not regulated. Company must meet service quality standards. A 2001 law required price-regulated incumbent telcos to offer 3 grades of flat-rate local service at regulated rates and set additional service quality requirements and penalties. State: Illinois Company: Other Incumbents Method Now in Use: Rate Of Return Notes: Other incumbents remain under rate-of-return regulation. Incumbents under 35,000 lines have broad pricing flexibility for all services, subject to earnings constraints and to regulatory review upon petition by 10% of affected retail customers. State: Illinois Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs must obtain state certificates by showing technical, financial and managerial competence. CLECs must file tariffs. Initial tariffs for new entrants or new services get regulatory staff review. Later tariff changes take effect on a day’s notice, without regulatory review. -------------------------------------------------- State: Indiana Company: AT&T Method Now in Use: Price Caps (2004-2007) Notes: Basic residential and business services to customers below 5 lines under nonindexed caps. Increases for vertical services limited to 38 a feature yearly. All other retail services and service bundles are deemed competitive and rate deregulated, except for floor set at cost plus 10%. Earnings not regulated. Company must meet service quality standards on pain of penalties up to $30 million annually. SBC must make DSL available to 77% of customers by mid-2008, with at least 30% of new deployment rural, and spend $850,000 on consumer education. Under a 2006 law, rates for all AT&T retail services except stand-alone basic exchange will be deregulated when current plan expires July 2007; basic exchange increases will be limited to $1 annually. State: Indiana Company: Verizon Method Now in Use: Price Caps (2004-2007) Notes: Basic local rates under nonindexed caps. Company can make a single 25 increase for vertical services in 2006. All other retail services and all service bundles are deemed competitive and rate deregulated except for floor set at cost plus 10%. Earnings not regulated. Company must make DSL available to 75% of customers before 2008, with 45% of new infrastructure rural. Under a 2006 law, rates for all Verizon retail services except stand-alone basic exchange will be deregulated when current plan expires at the end of 2007; basic exchange increases will be limited to $1 annually. State: Indiana Company: Embarq Method Now in Use: Price Caps (2004-2008) Notes: Basic residential and small business services under nonindexed caps. Cumulative annual rises for vertical services limited to 8.75% of annual revenue for services in this basket, and services must be priced at least 10% above cost. All other retail services and all service bundles are deemed competitive and rate deregulated except for floor set at cost plus 10%. Earnings not regulated. Company must meet service quality standards or risk losing pricing flexibility. Sprint must make DSL available to 70% of customers by end of 2008. Under a 2006 law, rates for all Embarq retail services except stand-alone basic exchange will be deregulated when current plan expires at end of 2008; basic exchange increases will be limited to $1 annually. State: Indiana Company: Other Incumbents Method Now in Use: Rate Deregulation (2006) Notes: Under a law taking effect Jan. 1, 2007, other incumbents’ retail rates except for stand-alone basic exchange will be deregulated. Basic exchange rises limited to $1 annually. State: Indiana Company: CLECs Method Now in Use: Rate Deregulation (2006) Notes: Under a law that takes effect Jan. 1, all CLEC rates are presumed competitive and deregulated. CLECs get state certificate by showing technical, financial and managerial competence. -------------------------------------------------- State: Iowa Company: Qwest, Iowa Telecom Services, Frontier Communications Method Now in Use: Rate Deregulation (2005) Notes: A 2005 law deregulated all retail rates except single-line basic exchange service. Basic exchange remains under caps but can rise $1 yearly residential or $2 business to a statewide cap of $19 monthly for residential service and $38 for business service. Earnings not regulated. Full rate deregulation allowed in any market with competitive alternatives. Twenty markets are designated competitive and others are under consideration. State: Iowa Company: Other Incumbents Method Now in Use: Rate DeregulationRates Not Reviewed Notes: Rates and earnings of all other incumbents have been deregulated since 1983. Companies must keep current tariffs on file and give 30 days’ notice of changes. Rate changes aren’t reviewed, but changes to other terms and conditions of service get regulatory staff review and may be questioned. State: Iowa Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, managerial and financial competence. CLECs must file tariffs and give 30 days’ notice of rate increases and 15 days’ notice for decreases. Changes get regulatory staff review but normally aren’t challenged. CLEC local calling areas are supposed to coincide with incumbent’s, but CLECs can petition for waiver of this rule. -------------------------------------------------- State: Kansas Company: AT&T, Embarq Method Now in Use: Rate Deregulation (2006) Notes: A 2006 law deregulated retail service bundles and stand-alone services in markets over 75,000 population, except for single-line residential basic exchange and business basic exchange to customers under 5 lines, which remain under indexed price caps. Deregulation can be extended to any smaller market where a facilities-based and at least one other kind of local competitor operate. VoIP, resellers and prepaid providers don’t count as competitors. Reregulation allowed if market can’t sustain at least 2 rivals to incumbent, or if incumbent has chronic major service quality violations. State: Kansas Company: Other Incumbents Method Now in Use: Rate of Return Notes: Other incumbents remain under fully tariffed rate-of-return regulation, but can opt out of it in favor of rate deregulation if they can meet 2-competitor market test. State: Kansas Company: CLECs Method Now in Use: Rates Not ReviewedNotes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs. Changes to terms and conditions of service get regulatory staff review but normally aren’t questioned. Rate changes aren’t reviewed and take immediate effect. -------------------------------------------------- State: Kentucky Company: BellSouth, Cincinnati Bell, Windstream Method Now in Use: Rate Deregulation (2006) Notes: A July 2006 state law let incumbent telcos choose rate deregulation of retail services other than stand-alone, single-line basic exchange service. Basic exchange rates frozen for 5 years; after that rates can rise in line with national CPI. BellSouth, Cincinnati Bell and Windstream elected deregulation. PSC keeps authority over service quality and consumer protection. State: Kentucky Company: Other Incumbents Method Now in Use: Rate Of Return Notes: State’s 15 other incumbents can choose rate deregulation under 2006 state law, but with only one-year basic exchange rate freeze, or propose price caps or other alternative regulation. State: Kentucky Company: CLECs Method Now in Use: Rate Deregulation (2006) Notes: Under a 2006 phone law, CLEC retail rates are presumed competitive and deregulated. CLECs must register with PSC before doing business in state. They may file tariffs, but rates and terms in them not subject to PSC review. -------------------------------------------------- State: Louisiana Company: BellSouth Method Now in Use: Price Caps (1996) Notes: Rates for residential and single-line business basic services under nonindexed caps, except for series of rate changes made to reduce 8 local rate groups to one before next year. After 2006, BellSouth will have option to raise basic service rates up to 10% a year in urban markets where competition exists. Rates for competitive services deregulated. Earnings not regulated. Plan was to expire in April, but PSC in Dec. 2003 extended it indefinitely after splitting service quality, universal service and access service issues off into separate dockets. Future reviews will be at PSC discretion. Telco completed infrastructure investment requirements by making DSL available throughout their service areas. State: Louisiana Company: Other Incumbents Method Now in Use: Price Caps (1997) Notes: Basic and access services under nonindexed caps. Other services flexibly priced. Earnings not regulated. No expiration. State’s 11 other incumbent telcos have opted for caps at various times since 1997, with conditions for price cap regulation varying by carrier. State: Louisiana Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs get state certificates by showing technical, financial and managerial competence. CLECs must file tariffs and give 1-10 days’ notice of changes, depending on type of change and services affected. Increases exceeding 5% require 30 days’ notice to customers. CLEC changes get regulatory staff review, normally aren’t questioned. -------------------------------------------------- State: Maine Company: Verizon Method Now in Use: Price Caps (1995-2006) Notes: Basic residential and business service rates frozen; nonbasic and competitive services flexibly priced except for operator services, capped at May 2002 levels. Verizon in 2003 completed local rate increases, toll rate cuts plan provided for. System lets Verizon seek basic service rate increases due to exogenous factors, and rate deregulation of business services to customers over 10 lines in markets with sufficient competition. Verizon must meet service quality standards or face $12.5 million annual penalties. Plan vacated by state courts early 2003, reinstated by PUC late that year on public interest grounds. Current plan was to expire in July 2006 but was extended pending adoption of successor plan. PUC docket on successor plan open since March 2005. State: Maine Company: Other Incumbents Method Now in Use: Rate of Return Notes: Remain under rate-of-return regulation but can petition for pricing flexibility. All had rate rebalancing cases in 2003 to bring intrastate access charges down to interstate levels. PUC in Jan. 2006 granted pricing flexibility to Pine Tree Telephone and Saco River Telephone, affiliates of Country Road Communications, for basic and contracted services. In response to 2006 legislative directive, PUC and industry are streamlining process for establishing alternative regulation of incumbents other than Verizon. State: Maine Company: CLECs Method Now in Use: Rates Not Reviewed Notes: Rates presumed competitive. CLECs need certification of technical, financial and managerial competence. CLECs must file tariffs and give 30 days’ notice of rate changes, but changes normally aren’t reviewed. -------------------------------------------------- State: Maryland Company: Verizon Method Now in Use: Price Caps (1996-2007) Notes: Basic residential services under nonindexed caps through 2007. Other noncompetitive services under caps indexed to GDP-PI. Competitive service rates deregulated. Earnings unregulated. Nov. 2005 PSC price cap order erased productivity adjustments, reclassified toll service as competitive and set directory listing services as discretionary. State: Maryland Company: Other Incumbents Method Now in Use: Rate of Return Notes: State’s only other incumbent telco remains under fully tariffed rate-of-return regulation. No pending proceeding to change that. State: Maryland Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: Rates presumed competitive. CLECs need certification of technical, financial and managerial competence. Must file tariffs, give 30 days’ notice of rate changes. CLEC changes get regulatory staff review but normally aren’t questioned. -------------------------------------------------- State: Massachusetts Company: Verizon Method Now in Use: Price Caps (2003) Notes: Basic residential local service and analog private lines under nonindexed caps. Other retail services flexibly priced; rates subject only to wholesale floor. Earnings unregulated. No expiration. Verizon must meet service quality standards on pain of maximum annual penalty equal to 1% of intrastate retail revenues. State: Massachusetts Company: Other Incumbents Method Now in Use: Rate of ReturnNotes: Fully-tariffed rate-of-return regulation. No proceedings to change that. State: Massachusetts Company: CLECs Method Now in Use: Rates Not Reviewed Notes: Rates presumed competitive. CLECs must register with Dept. of Telecom & Energy and file tariffs. Must give 30 days’ notice of rate changes, but changes normally aren’t reviewed.-------------------------------------------------- State: Michigan Company: All Incumbents Method Now in Use: Rate Deregulation (2005) Notes: A November 2005 law deregulated rates for all retail services except for stand-alone, single-line residential basic exchange service. Incumbents must offer regulated basic at “just and reasonable” price. State: Michigan Company: CLECs Method Now in Use: Rate Deregulation (2005) Notes: Under a Nov. 2005 state law, CLEC rates for single-line, stand-alone residential basic exchange service presumed competitive. All other CLEC retail rates deregulated. CLECs get state license by attesting to technical, managerial and financial competence; statements presumed true. -------------------------------------------------- State: Minnesota Company: Qwest Method Now in Use: Price Caps (1999-2009) Notes: Residential and business basic exchange under nonindexed caps through 2008, can rise $1 monthly in final year. Other basic and emerging competitive services flexibly priced. Rates for fully competitive services deregulated. Qwest must file tariffs or price lists and meet service quality standards. Rate changes for services not fully competitive must be “affordable” and may be subject to PUC review upon filing of complaints. Earnings not regulated. Plan modified in Dec. 2005, extended until 2009. Wholesale rate issues shifted to separate docket, now pending. A 2004 law deregulated business rates in 3 major metro areas. State: Minnesota Company: Embarq, Frontier Method Now in Use: Price Caps (1996-2007)Notes: Basic services under nonindexed caps. Nonbasic and emerging competitive services flexibly priced. Rates deregulated for fully competitive services. Earnings not regulated. Carriers must meet infrastructure investment requirements. Embarq’s plan was due to expire in Dec. 2006 but was extended through December 2007. Frontier’s plan due to expire in Aug. 2007. State: Minnesota Company: Citizens Telecom Method Now in Use: Rate of Return Notes: Citizens properties bought from former GTE in 1999 remain under fully tariffed rate-of-return regulation. Company can seek alternative regulation but hasn’t. State: Minnesota Company: Other Incumbents Method Now in Use: Pricing Flexibility Notes: Other incumbents, all under 50,000 lines, can elect flexible pricing system letting them price basic services to market unless greater of 500 or 5% of ratepayers seek PUC review of rate change. Nonbasic, emerging competitive services flexibly priced. Rates deregulated for fully competitive services. Earnings not regulated. No expiration. Some 67 of 83 eligible small incumbents have chosen flexible pricing. State: Minnesota Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs must obtain state certificate by showing technical, financial and managerial competence. They must file tariffs and give notice of changes, with notice period varying by type of change. Changes get regulatory staff review, normally aren’t questioned. -------------------------------------------------- State: Mississippi Company: BellSouth Method Now in Use: Rate Deregulation (2006)Notes: A 2006 law deregulated rates for all BellSouth retail services other than stand-alone, single-line basic exchange service, capped at 2006 level through 2009. The PSC retains jurisdiction over customer complaints and contract disputes. State: Mississippi Company: Other Incumbents Method Now in Use: Rate of Return Notes: Other incumbents remain under fully tariffed rate-of-return regulation. The 2006 law puts other incumbents under same deregulation regime as BellSouth if they can show PSC they face 2 or more active local competitors or have substantial business losses to competitors. None were deregulated as of Sept. State: MississippiCompany: CLECs Method Now in Use: Rate Deregulation (2006) Notes: Under a 2006 state law, CLEC rates for stand-alone, single-line basic exchange service are presumed competitive. All other CLEC retail rates deregulated. CLECs get state certificate by showing technical, financial and managerial competence. -------------------------------------------------- State: Missouri Company: AT&T, Embarq, CenturyTel, Spectra, Windstream Method Now in Use: Price Caps (1997) Notes: Basic services under caps indexed to telecom component of CPI. Nonbasic services can rise up to 5% annually. Earnings not regulated. No expiration. A 2005 state law deregulated rates for bundled services and provides for rate deregulation of stand-alone services in any market with one wireline rival and one other type of competitor operating. By this month, 82 AT&T, 13 Embarq, 8 CenturyTel and 5 Spectra exchanges representing about 14% of the state’s exchanges had been deregulated under the law. State: Missouri Company: Other Incumbents Method Now in Use: Rate of Return Notes: State’s 39 other investor-owned incumbents are under fully tariffed rate of return regulation. A 2005 law allows them pricing flexibility for bundled services and lets them seek rate deregulation in any exchange where 2 or more local competitors operate. State: Missouri Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive except for access charges, capped at incumbent’s rate. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs and give 10 days’ notice of increases and one day’s notice of reductions. CLEC changes get regulatory staff review but normally aren’t challenged. -------------------------------------------------- State: MontanaCompany: Investor-Owned Incumbents Method Now in Use: Rate of Return Notes: All investor-owned incumbents operate under rate-of-return regulation. Rural telephone cooperatives are fully deregulated. Investor-owned incumbents under 12,000 lines have full pricing flexibility but earnings still count in rate-of-return calculations. Qwest can request pricing flexibility to match competitor rates in exchanges where competitors operate, but earnings still count in rate-of-return calculations. The Bell also can request full deregulation of services subject to effective local competition. Qwest this month sought deregulation for vertical services, directory listing options and certain service bundles. PSC in July 2003 said Qwest earnings reports indicated substantial excess earnings and asked Qwest to respond. Qwest appealed to state courts, claiming PSC exceeded its statutory authority by filing a rate case forcing burden of proof on carrier, not agency. Lower courts upheld Qwest but PSC appealed further; case is pending in Mont. Supreme Court. Group of Qwest customers in Oct. 2006 filed complaint alleging Qwest since 2001 has had $85 million in excess earnings. State: Montana Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs must register with PSC and attest to their competence to serve; affidavits presumed truthful. CLECs are exempt from tariff filing requirements and their rate changes aren’t reviewed. -------------------------------------------------- State: Nebraska Company: All Incumbents Method Now in Use: Rate Deregulation (1986) Notes: Retail telecom service rates and earnings not regulated since 1986 -- but PSC can roll back excessive residential local rate increases in exchanges without competition upon petition by affected ratepayers. Percentage of ratepayers triggering review varies from 2% to 5%, depending on telco size. Residential basic exchange rate increases exceeding 10% automatically get regulatory review unless incumbent has under 5% of statewide access lines, in which case review threshold is 30%. Telcos must give 10 days’ notice of rate changes. Companies getting universal service support may be affected by PSC-set monthly benchmark rates of $17.50 residential and $27.50 business and benchmark earnings of 12%. Incumbents are free to change rates at will, upon 10 days’ notice, but those setting rates below benchmarks or posting earnings above 12% would see reduced support from state universal service fund. State: Nebraska Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs and give 10 days’ notice of changes. New services and changes to terms other than price get regulatory staff review, normally aren’t questioned. Rate changes aren’t reviewed -- except the basic exchange increases over 30% that get automatic review. CLECs choosing to participate in state universal service fund are subject to fund’s rate benchmarking rules. -------------------------------------------------- State: Nevada Company: Embarq Method Now in Use: Price Caps (1996-2007) Notes: Basic services of state’s largest incumbent under nonindexed caps. Rate cuts allowed but not increases. Nonbasic services can increase up to 5% annually, to 20% total. Competitive services flexibly priced. Broadband services and business services provided under customer-specific contracts deregulated under 2003 state law. Earnings not regulated. Expires mid-2007. Spinoff of former Sprint local exchange operation to Embarq in late 2005 didn’t change nature or duration of regulatory plan. State: Nevada Company: AT&T Method Now in Use: Price Caps (1997-2008) Notes: Basic services under nonindexed caps, access charges capped at interstate rate. Other services can be priced at any point above cost floor. Earnings not regulated. Expires mid-2008. Broadband services and business services provided under customer-specific contracts deregulated under 2003 law. Current cap program authorized for this carrier by 1999 law to replace PUC-authorized cap program dating back to 1997. State: Nevada Company: Other Incumbents Method Now in Use: Rate of Return Notes: Other incumbents operate under fully tariffed rate-of-return regulation, with no pending petitions to change that. State: Nevada Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file lists with terms and conditions of service but not rates. Changes to terms normally aren’t reviewed and can take immediate affect. CLEC rates are deregulated and don’t have to be filed. -------------------------------------------------- State: New Hampshire Company: All Incumbents Method Now in Use: Rate of Return Notes: Verizon and the others under rate-of-return regulation. General guidelines for alternative regulation adopted 1996. 2005 law gives incumbents other than Verizon choice of same regulation as CLECs if they can prove wireline, wireless or IP-based service providers compete for most of the incumbents’ customers. Verizon in spring 2006 proposed price cap plan for basic services, negotiated with PUC staff, that also would have deregulated most nonbasic, optional and discretionary retail service rates. Verizon withdrew proposal in Sept. when critics questioned whether plan complies with N.H. alternative regulation law. Verizon indicated it may try for deregulation through revised proposal or change of state law in 2007. State: New Hampshire Company: CLECS Method Now in Use: Rates Not Reviewed Notes: Rates presumed competitive. CLECs must register with PUC and attest to competence to serve and lack of criminal record. Must file price schedules and give day’s notice of price changes; changes normally aren’t reviewed. -------------------------------------------------- State: New Jersey Company: Verizon Method Now in Use: Price Caps (2005) Notes: Statewide basic residential and business caps restructured in 2005. Fixed at $8.95 (residential) and $15.00 (business). Business rates deregulated for customers with 2 or more lines. Other competitive service rates deregulated. Earnings not regulated. No expiration date. Restructured plan continued service quality commitments of 2002 cap plan, plus mandate that Verizon put $55 million into advanced services to public schools and libraries, discounting their monthly rates for high-speed Internet access until 2014. State: New Jersey Company: Embarq Method Now in Use: Price Caps (2006) Notes: As part of spinoff agreement transferring Sprint’s United Telephone operation to Embarq, required by Sprint-Nextel merger, local rates frozen until 2008. Currently regulated services can’t shift to rate-deregulated competitive category until end of 2007. Carrier must widen broadband availability, establish discounts for schools and libraries, expand Lifeline eligibility. State: New Jersey Company: Other Incumbents Method Now in Use: Rate of Return Notes: Fully-tariffed rate-of-return regulation. No proceedings to change that. State: New Jersey Company: CLECs Method Now in Use: Some Rates Regulated Notes: Rates presumed competitive except for rate regulated services, including basic exchange, vertical services and switched access, which can’t rise without cost justification. CLECs need certification of technical, financial and managerial competence, and must file tariffs. First tariffs presumed reasonable. Increases in rates for basic exchange, vertical services and switched access need cost justification. For other services, CLEC rate changes normally not reviewed. CLECs must give day’s notice of rate reductions, 5 days’ for increases. -------------------------------------------------- State: New Mexico Company: Qwest Method Now in Use: Price Caps (2001)Notes: Basic services under nonindexed caps. Qwest’s nonbasic services capped at average of rates in Qwest’s 14-state home region. Earnings not regulated. Carrier must meet service quality standards. Plan was to have expired this year but was extended until replacement is approved. PRC in 2005 concluded Qwest fell $224 million short of investment requirement in this plan and ordered refund. Qwest appealed, lost, sought Supreme Court rehearing. Qwest dropped case to pursue $265 million settlement with the PRC under which Qwest would expand broadband to most of state and support advanced telecom in public schools. Settlement offer getting PRC review. State: New Mexico Company: Windstream Method Now in Use: Price Caps (2006-2010) Notes: Basic exchange under caps indexed to inflation rate for telecom services. Nonbasic service rates can rise 5% yearly. Bundled service rates deregulated but must stay above cost floor. Vertical services can rise up to 20% a year combined, exact amount allowed each year determined by formula. Company must meet service quality and customer service standards. State: New Mexico Company: Other Incumbents Method Now in Use: Rates Not Reviewed Notes: Rates for other incumbents, all under 50,000 lines, were deregulated by 1999 state law, with basic residential rate rises subject to regulatory review if 2.5% of affected ratepayers or PRC staff protest. Companies must give 60 days’ notice of residential rate increases. State: New Mexico Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs and give 30 days’ notice of changes. All changes receive regulatory staff review but normally aren’t questioned. -------------------------------------------------- State: New York Company: Verizon, Frontier of Rochester Method Now in Use: Price Caps (2006) Notes: Verizon unlimited local service rate can rise in annual increments of $2 to absolute cap of $23 monthly. Frontier’s unlimited local rate can rise $2 monthly for 2 years, PSC approval required for local increases from 2008 on. Dial-tone charge in measured local service can rise up to $2 for both telcos for 2 years, with PSC approval needed for measured-rate increases in 2008 and beyond. Rates for nonbasic, optional, discretionary and competitive services are deregulated. PSC’s April 2006 cap order set up pending Phase 2 docket to study service quality, customer information and network reliability standards and reporting requirements. State: New York Company: Other Incumbents Method Now in Use: Rate of Return Notes: Other incumbent telcos remain under rate-of-return regulation but PSC in April 2006 let them petition for price cap plan like Verizon’s and Frontier’s by showing they face similar competitive pressures. State: New York Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: Rates presumed competitive. CLECs get state certificate by showing technical, managerial and financial competence. Must file tariffs and give 30 days’ notice of rate changes. CLEC changes get regulatory staff review, normally aren’t questioned. -------------------------------------------------- State: North Carolina Company: BellSouth Method Now in Use: Price Caps (2005) Notes: Cap plan adopted in April 2005 to replace expired plan dating from 1996. Basic service rates can rise up to 10%, subject to revenue cap for moderate-price-flexibility basket equal to 1.5 times annual GDP-PI. Vertical and nonbasic residential services can rise up to 20%, subject to basket revenue cap equal to 2.5 times annual GDP-PI. BellSouth business services other than basic exchange and installation were classified starting Dec. 2005 as competitive, detariffed and given total pricing flexibility. Basic business and installation remain in moderate-flexibility basket. Earnings not regulated. No expiration date. BellSouth in Aug. 2006 petitioned for rate deregulation of residential and basic business services, but regulators put petition on hold pending completion of BellSouth’s merger with AT&T. State: North Carolina Company: Embarq, Verizon Method Now in Use: Price Caps (2005) Notes: New cap plans adopted in spring 2005. Embarq basic services can rise up to 12% subject to basic-basket revenue cap equal to annual GDP-PI. Verizon basic services can rise up to 10% subject to moderate-price-flexibility basket revenue cap of 1.5 times annual GDP-PI. Rate regulation for vertical, non-basic and competitive services of Embarq and Verizon same as for BellSouth. State: North Carolina Company: Other Incumbents Method Now in Use: Price Caps (1996) Notes: State has price-cap system putting basic services under caps indexed to GDP-PI minus 2%, grouping other services in baskets with service-specific caps. Earnings not regulated. No expiration date. Sept. 2005-March, Concord Telephone, Randolph Telephone and Windstream came under price-based plans similar to programs for BellSouth, Embarq and Verizon. MebTel has similar petition pending. Seven small incumbents remain under fully tariffed rate-of-return regulation. State: North Carolina Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs must get state certificates by showing technical, financial and managerial competence. They don’t have to file tariffs or price lists, and their rate changes normally aren’t reviewed. -------------------------------------------------- State: North Dakota Company: Qwest Method Now in Use: Price Caps (2003) Notes: Residential flat-rate basic exchange on primary line and switched access under nonindexed caps. Rate decreases allowed but no increases save when govt. action boosts service costs. All other retail services flexibly priced. Earnings not regulated. No expiration. System set by law in effect since Aug. 2003. A state law amended system in August 2005 to remove business basic exchange and additional residential lines from nonindexed caps. State: North Dakota Company: North Dakota Telephone Method Now in Use: Rate of Return Notes: State’s 2nd-largest investor-owned incumbent operates under fully tariffed rate-of-return regulation with no pending proceeding to change that. State: North Dakota Company: Other Incumbents Method Now in Use: Rates Not Reviewed Notes: Retail rates for investor-owned incumbents under 8,000 lines and of all phone cooperatives deregulated since 1993. Telcos can put their intrastate carrier access charges under PSC rate regulation, and some have. State: North Dakota Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. Facilities-based CLECs get state certificate by showing technical, financial and managerial competence. Local resellers need only register with PSC. CLECs and resellers must file tariffs, but changes normally aren’t reviewed and take immediate effect. -------------------------------------------------- State: Ohio Company: AT&T, Verizon, Embarq, Cincinnati Bell, Century Tel, Alltel, Chillicothe Tel, Western Reserve Tel, Champaign Tel, TSC Method Now in Use: Price Caps (2002) Notes: Ten telcos opted for generic alternate price control framework PUC adopted in April 2002. Plan indefinitely freezes basic local rates unless PUC finds markets competitive. Rates for certain vertical services and specialty business services frozen for 2 years from effective date of each individual telco’s plan, then can rise to cap set at double the initial rate. All other retail rates deregulated. Earnings not regulated. No expiration. Telcos must meet company-specific commitments for wider availability of advanced services and Lifeline. Companies can petition for basic local pricing flexibility, rate deregulation of capped vertical and specialty business services -- or both -- if they can show effective competition exists. Cincinnati Bell has such a petition pending. State: Ohio Company: Other Incumbents Method Now in Use: Rate-of-Return Notes: State’s 33 other incumbent telcos remain under traditional or streamlined rate-of-return regulation. They can opt to switch to PUC generic alternative cap system or propose company-specific alternative regulation plan. State: Ohio Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs must get state certificate by showing technical, financial and managerial competence. They must file tariffs with maximum prices for basic local service, certain vertical services and specialty business services. Rate changes below maximum aren’t reviewed and take immediate effect. Changes beyond maximum or changes to maximum need 30 days’ notice, get regulatory staff review. -------------------------------------------------- State: Oklahoma Company: AT&T Method Now in Use: Rate Deregulation (2005) Notes: Regulators in July 2005 approved plan letting AT&T set retail rates at any point above cost floor -- except in rural areas, where local rate increases were limited to $2 per year. Order required SBC to expand DSL availability in rural areas. Order was stayed pending outcome of CLEC appeals to state Supreme Court, where case is pending. State: Oklahoma Company: Other Incumbents Method Now in Use: Streamlined Rate of Return Notes: Other incumbents are under streamlined form of rate-of-return. They can raise monthly basic exchange rates up to $2 annually, but boosts are subject to investigation and possible rollback if 15% of customers protest. Competitive services flexibly priced above cost floor. State: Oklahoma Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. CLEC services are flexibly priced above cost floor. All changes get regulatory staff review but normally aren’t questioned. -------------------------------------------------- State: Oregon Company: Qwest Method Now in Use: Price Caps (2000) Notes: Residential and small-business basic exchange, PBX trunks and payphone access services frozen but can be changed by PUC for good cause. Other services under nonindexed caps, with cost floors. Carrier can cut rates without prior PUC approval. Earnings not regulated. No expiration date. State: Oregon Company: Verizon, Sprint, CenturyTel Method Now in Use: Rate of Return Notes: These midsized incumbents are under traditional rate-of-return regulation. They can lower rates without PUC approval but earnings still count in rate-of-return calculations. State: Oregon Company: Other Incumbents Method Now in Use: Rates Not Reviewed Notes: Retail rates and earnings of other incumbents, all under 50,000 lines, deregulated since 1983. PUC can review rate changes if 10% of affected customers petition for review. State: Oregon Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. Tariffs or price lists not required. CLEC rate and service changes aren’t reviewed. -------------------------------------------------- State: Pennsylvania Company: All Incumbents Method Now in Use: Price Caps (2002) Notes: Moved to price-based regulation under a 2002 law; some had been under cap plans under 1993 law. In general: Basic and noncompetitive services are under indexed caps and competitive services are flexibly priced. Earnings not regulated. No expiration. Revenue-neutral rate rebalancing permitted. All telcos required to restructure access charges to recover fixed costs through flat rates. Dec. 2004 law ended productivity offsets in price cap indexing formulas for companies other than Verizon if telcos agreed to move a 2015 broadband deployment deadline to 2008. Most companies agreed. Windstream and Embarq negotiated alternative broadband commitment of 80% availability by 2010 and 100% by 2013. Verizon retained 0.05% productivity offset and 2015 broadband deadline. Law let incumbents certify a service is competitive, and exempted rural telcos under 50,000 lines from many competition obligations through 2008, effectively limiting rural competition to facilities-based providers. State: Pennsylvania Company: CLECs Method Now in Use: Rates Usually Not Reviewed Notes: Rates presumed competitive if they don’t exceed incumbents’. CLECs get state certificate by showing technical, financial and managerial competence. CLECs must file tariffs and give 30 days’ notice of rate increases and day’s notice of reductions. Rate changes below incumbent’s levels normally aren’t reviewed, but rates above the incumbents may have to be justified. A Dec. 2004 law capped CLEC access charges at incumbents’ level, freeing CLECs from Lifeline and residential service obligations unless they get federal universal service subsidies. -------------------------------------------------- State: Rhode Island Company: Verizon Method Now in Use: Rate Deregulation (2006) Notes: All retail rates can be set anywhere above cost floor set at long run incremental cost. Telco must file tariffs, give 30 days’ notice of rate changes. Rate levels and rate structures are entirely at Verizon’s discretion, subject only to cost floor. Earnings not regulated. No expiration date. State: Rhode Island Company: Other Incumbents Method Now in Use: None. State: Rhode Island Company: CLEC Method Now in Use: Rates Not Reviewed Notes: Rates presumed competitive. CLECs need annual certification of technical, financial and managerial competence. Must file tariffs, give 30 days notice of rate changes. CLEC changes get regulatory staff review but normally aren’t questioned. --------------------------------------------------- State: South Carolina Company: BellSouth Method Now in Use: Price Caps (1999) Notes: Basic services under nonindexed caps. Other services flexibly priced -- but cumulative effect of all rate changes for all other services can’t boost total revenues more than 5% per year. Earnings not regulated. No expiration. A 2005 law deregulated rates for all retail service bundles offered by price-regulated incumbents, regardless of bundle elements. State: South Carolina Company: Embarq, Verizon Method Now in Use: Price Caps (1999) Notes: Basic services under caps indexed to CPI. Other services flexibly priced -- but rate changes for all other services can’t boost total revenues more than 5% a year. Earnings not regulated. No expiration date. Sprint went under caps in 1999; Verizon, in 2000. A 2005 law deregulated rates for all retail service bundles offered by price-regulated incumbents, regardless of bundle elements. State: South Carolina Company: Other Incumbents Method Now in Use: Price Caps (2004) Notes: A 2004 state law set optional price cap system for other incumbents capping basic residential and business services at statewide average rates. Nonbasic services under caps indexed to national CPI. Competitive services flexibly priced, subject to revenue cap for competitive basket equal to 5% annually; 13 companies have opted for this system. Other incumbents are under rate-of-return regulation. A 2005 law deregulated rates for all retail service bundles offered by price-regulated incumbents, regardless of services in bundle. State: South Carolina Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLECs must get state certificates by showing technical, financial and managerial competence, must file tariffs. On certification, CLECs wanting minimal regulation must request “presumptively valid” tariffing status. This means their tariffed rates are presumed competitive on 14 days’ notice for rises or new services, 5 days’ notice for cuts. Regulatory review of changes not required. CLECs not seeking presumptively valid status must give 30 days’ notice of tariff changes and all changes undergo formal regulatory review. To date, CLECs entering S.C. markets have chosen presumptively valid status. -------------------------------------------------- State: South Dakota Company: All Incumbents Method Now in Use: Rate Deregulation (2003) Notes: Retail service rates for all incumbents deregulated. Qwest won statewide retail rate deregulation from PUC in Oct. 2003 on competition grounds. Other incumbents have been rate deregulated since 1987. For incumbents other than Qwest, law allows for reregulation if majority of customers petition for it, but that power hasn’t been used. State: South Dakota Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs and notify customers of rate and service changes. CLECs’ changes normally aren’t reviewed. -------------------------------------------------- State: Tennessee Company: BellSouth, Embarq, Citizens Telecom Method Now in Use: Price Caps (1996) Notes: All services under caps indexed to lesser of one-half GDP-PI or GDP-PI minus 2%. Rate changes exceeding caps allowed as part of revenue-neutral rate rebalancing, expansion of local calling areas or rate group changes. A 2005 law deregulated retail rates for bundled services and customer-specific service contracts of price-regulated incumbents. Regulators in 2005 approved rate deregulation for business toll and high-speed digital services for businesses. Earnings not regulated. No expiration date. State: Tennessee Company: Other Incumbents Method Now in Use: Rate of Return Notes: Other incumbents remain under fully tariffed rate-of-return regulation. State law lets them opt into same price cap system as big incumbents or propose alternate form of regulation. State: Tennessee Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificates by showing technical, financial and managerial competence. They must file tariffs, give 14 days’ notice of rate rises; cuts take immediate effect. CLEC rate changes normally aren’t reviewed. -------------------------------------------------- State: TexasCompany: All Incumbents Method Now in Use: Rate Deregulation (2005) Notes: A 2005 state law gives incumbents option of new program deregulating retail rates of all providers in cities over 100,000 population as of Jan. 2006. Old system that capped residential basic, 911, Lifeline and carrier access will apply to telcos electing to stay with it. Law deregulated rates in 18 communities of 30,000 to 100,000 population in Jan. because there were 2 landline and 1 wireless carrier competing against incumbent. Noncompetitive markets remained under old cap system. Rates in communities under 30,000 to be deregulated Jan. 1, except where PUC decides meaningful competition is lacking. Carriers have proposed 17 small communities for rate deregulation with decision this year. Intrastate access charges to fall to interstate levels. Law also vests video franchising authority with state, not municipalities. Law is being challenged in state courts. State: Texas Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs, but changes normally aren’t reviewed and take immediate effect.-------------------------------------------------- State: Utah Company: Qwest Method Now in Use: Rate Deregulation (2005) Notes: A 2005 state law replaced a price cap regime established in 1997 with a new system capping residential basic exchange at current rates through 2007 while deregulating all other retail service rates. After 2007, PSC must lift residential cap in exchanges where local competitors offer residential basic exchange. Earnings not regulated. Qwest under previous laws won retail rate deregulation between 2001-2005 covering about 85% of business lines and 50% of residential lines because of competition in the state’s more-populated areas. State: Utah Company: Other Incumbents Method Now in Use: Rate of ReturnNotes: Other incumbents, all with fewer than 30,000 lines, get speedy administrative review of rates and earnings through expedited process, but companies or state Div. of Public Utilities can request full rate case. These incumbents can switch to deregulation regime set for Qwest in 2005 law. State: Utah Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. They must file price lists and give 5 days’ notice of changes. Price list changes get regulatory staff review but normally aren’t questioned. -------------------------------------------------- State: Vermont Company: Verizon Method Now in Use: Price Caps (2000-2010)Notes: All noncompetitive services under nonindexed caps set at April 2000 rates. Service bundles and stand-alone nonbasic services introduced after April 2000 flexibly priced. Verizon must meet service quality goals. Earnings unregulated. Regulators in Sept. 2005 extended plan through 2008, with $8.1 million in rate cuts first year and $2 million annually after. Cuts waived if Verizon elected to invest same sums to extend DSL service to unserved areas. Regulators in April 2006 amended plan and extended it through 2010. Rate reductions, specific investment dollar amounts eliminated in return for Verizon committing to make all central offices DSL capable and make DSL available to 80% of subscribers by 2010. Verizon progress toward plan goals will be reviewed mid-2008. State: Vermont Company: Other Incumbents Method Now in Use: Streamlined Rate Of Return (2005-2008) Notes: 2005 state law allows state’s 9 other incumbents to raise rates 9% total next 3 years without rate case -- but basic service rates can’t rise before 2006. Carriers can seek approval for more increases from regulators to cover exogenous cost increases such as tax hikes or weather disasters. Earnings remain subject to regulatory review. Law sunsets July 2008. State: Vermont Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: Rates presumed competitive except for operator services capped at Verizon rate. CLECs must obtain state certificate by showing technical, financial and managerial competence. CLECs must file tariffs, with 45 days’ notice of rate rises and 5 days’ notice of reductions. Rate changes get regulatory staff review but normally aren’t questioned. -------------------------------------------------- State: Virginia Company: Verizon Va. & Verizon South Method Now in Use: Price Caps (2005) Notes: Basic service rates capped at 1994 levels, adjusted yearly with GDP-PI. Nonbasic rates can rise up to 10% yearly. Revenue-neutral price changes can be sought any time, but no single increase can exceed 25% and there must be a year between rises. Price cuts subject to cost floor. Earnings not regulated. No expiration date. State: Virginia Company: Sprint Telcos Method Now in Use: Price Caps (1995) Notes: Basic services under cap indexed to 1/2 GDP-PI. Discretionary services indexed to GDP-PI. Competitive services flexibly priced. Earnings not regulated. No expiration date. State: Virginia Company: Other Incumbents Method Now in Use: Rate Deregulation (2000) Notes: Rates of phone cooperatives deregulated. Rates of investor-owned small telcos partly deregulated by law. Telcos free to move rates up or down if rises are advertised and Corporation Commission doesn’t receive excessive complaints. State: Virginia Company: CLECs Method Now in Use: Some Rates RegulatedNotes: Rates capped at incumbent’s unless regulatory waiver obtained. CLECs get state certificate by showing technical, financial and managerial competence. They must file tariffs. Rate decreases take effect next day and normally aren’t reviewed. Rate increases require 30 days’ notice to customers and Commission. -------------------------------------------------- State: Washington Company: All Incumbents Method Now in Use: Rate of Return Notes: All incumbents under rate-of-return regulation, with no pending proceedings to change that situation. Companies can petition for rate deregulation of competitive services, but revenues continue to be accounted for on the regulated side and in rate-of-return calculations. Rate deregulation has been granted on large incumbents’ toll, directory assistance and business services to large customers in markets where competitors operate. Qwest in late 2003 got statewide rate deregulation for some specialty business services and in 2004 won statewide rate deregulation for all business telecom services. Verizon in April 2005 settled a rate case, getting $38.6 million of the $240 million increase it sought. A 2006 law ended mandates that carriers file price lists for competitive services. Carriers in future will use contracts or service agreements for their competitive services. Qwest in Oct. 2006 petitioned for end to RoR and switch to price cap regulation system that would cap residential basic service rates and deregulate all other retail rates. State: Washington Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs must register with state and attest to their competence to serve; affidavits presumed truthful. A 2006 state law ended requirements that carriers file price lists. CLECs in future will use contracts or service agreements for their competitive services. -------------------------------------------------- State: West Virginia Company: Verizon Method Now in Use: Caps with Incentive Regulation (1994-2006) Notes: Basic rates under nonindexed caps; vertical services allowed to rise by rate of inflation (GDP-PI); competitive service rates deregulated. No rate case during program. Verizon required to invest at least $75 million a year in network, cut intrastate access charges to interstate levels, put $15 million toward state E-911 mapping/addressing project, and give $8.5 million to public benefit projects approved by a State Telecom Users Council. Verizon in 2004 got approval to add several business digital data services to deregulated list. Plan extended through 2006 pending replacement. Verizon proposed renewal with amendment that would deregulate rates for all retail business services and local directory assistance, but hearing officer in Sept. 2006 recommended rejection on grounds of insufficient competition. State: West Virginia Company: Frontier Communications Method Now in Use: Caps with Incentive Regulation (1994-2012) Notes: Basic rates capped; vertical services allowed to rise by rate of inflation (GDP-PI); company can request rate deregulation for competitive services. No rate case during program. Plan extended in May 2005 until end of 2012. Under extension order Frontier must invest at least $95 per access line yearly in infrastructure ($116 million 2006-2013), put $132,000 a year into to State Telecom Users Council-approved public benefit projects and cut intrastate access charges to interstate levels. State: West Virginia Company: Other Incumbents Method Now in Use: Rate of Return Notes: Other incumbents remain under fully-tariffed rate-of-return regulation. No pending proceedings to change that. State: West Virginia Company: CLECs Method Now in Use: Rates Flexibly Regulated Notes: Rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence. Must file tariffs, give 14 days’ notice of rate changes. CLEC changes get regulatory staff review, normally aren’t questioned. -------------------------------------------------- State: WisconsinCompany: AT&T Method Now in Use: Price Caps (1994) Notes: Noncompetitive services under caps indexed to GDP-PI minus 3%. Competitive services flexibly priced. Earnings not regulated. No expiration date. Program was reviewed in 1999 and again in 2002, continued without major change. Future reviews are at PSC discretion. No full-scale review of cap program planned. In late 2004, regulators reclassified basic business service as competitive. In late 2005, regulators reclassified AT&T’s basic residential service as competitive in 17 city and suburban market areas. State: Wisconsin Company: Verizon Method Now in Use: Price Caps (1995)Notes: Noncompetitive services under caps indexed to GDP-PI minus 2%. Competitive services flexibly priced. Earnings not regulated. No expiration. Plan was reviewed in 1999, then in 2002, continued without change. Future reviews are at PSC discretion. There are no plans to review cap program. State: Wisconsin Company: Other Incumbents Method Now in Use: Flexible Regulation Notes: State’s 82 other incumbents regulated by various methods. Currently, 26 are under some form of price-based alternate regulation. Another 42 are under streamlined rate-of-return with some degree of pricing flexibility but no earnings review unless they seek rates above statewide averages. Two telcos are under traditional fully tariffed rate-of-return. State’s 12 telephone cooperatives aren’t rate regulated. State: Wisconsin Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs must register with PSC, need not make any showings or file tariffs or price lists. CLECs must give customers 30 days’ notice of rate changes but changes normally aren’t reviewed. -------------------------------------------------- State: Wyoming Company: All Incumbents Method Now in Use: Rate Deregulation (2003) Notes: All incumbents free to set rates for retail services at any point above TSLRIC cost floor. But an incumbent pricing basic local service above statewide benchmark rate of $32.34 monthly may face review of its state universal service support. Earnings not regulated. No expiration date. State: Wyoming Company: CLECs Method Now in Use: Rates Not Reviewed Notes: CLEC rates presumed competitive. CLECs get state certificate by showing technical, financial and managerial competence and must file tariffs. Changes can take effect on one day’s notice and normally aren’t reviewed. Rate changes of fully facilities-based CLECs could be subject to regulatory staff review, but such carriers aren’t operating in Wyo. Source: State regulatory commissions