draft-proposed-rules.doc

000. LEGAL AUTHORITY (Rule 0). These rules are adopted under the general legal authority of the Telecommunications Act of 1988, chapter 6, title 62, Idaho Code, and the specific authority of Sections 62610A-F, Idaho Code. (________)

001. TITLE AND SCOPE (Rule 1). The title of these rules is Idaho High Cost Fund Rules. Their scope is that they apply to all telephone corporations’ collection of and payment of monies to fund the Idaho High Cost Fund, to all disbursements from the Idaho High Cost Fund, to all actions by the Idaho High Cost Fund Administrator, and to any other matter that may involve the Idaho High Cost Fund. (________)

002. WRITTEN INTERPRETATIONSAGENCY GUIDELINES (Rule 2). For rulemakings conducted before July 1, 1993, written interpretations to these rules in the form of explanatory comments accompanying the order of proposed rulemaking and review of comments submitted in the order adopting these rules are maintained in the files of the Secretary of the Idaho Public Utilities Commission and are available from the office of the Commission Secretary. The Commission Secretary may be contacted in writing at the Idaho Public Utilities Commission, PO Box 83720, Boise, Idaho 837200074, or may be reached by telephone at [phone]. For rulemakings conducted after July 1, 1993, written interpretations to these rules in the form of explanatory comments accompanying the notice of proposed rulemaking that originally proposed the rules and review of comments submitted in the rulemaking decision adopting these rules are published in the issues of the Idaho Administrative Bulletin proposing or adopting the rules. (________)

003. ADMINISTRATIVE APPEALS (Rule 3). Any telephone corporation aggrieved by any decision of the Idaho High Cost Fund Administrator or the Commission Staff under these rules may petition the Commission to review the decision of the Administrator or the Commission Staff by filing a formal petition according to the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq. (________)

004. PUBLIC RECORDS ACT COMPLIANCE (Rule 4). Rule 303.05 details which papers filed with the Commission in connection with the administration of the Idaho High Cost Fund are public records and which are trade secrets exempt from disclosure under Section 9340(2), Idaho Code. (________)

005. DEFINITIONS (Rule 5).
01. Administrator. “Administrator” means the person or entity who administers the Idaho High Cost Fund support mechanisms in accordance with Rule xx. (________)
02. Commission. “Commission” means the Idaho Public Utilities Commission. (________)
03. Eligible Telecommunication Carrier. “Eligible Telecommunication Carrier” means a telecommunications service provider which has been designated by the commission pursuant to Section 62-610D, Idaho Code, as eligible to receive disbursements from the Idaho High Cost Fund and who has the obligation to provide universal service throughout the service area for which the designation is received (________)
04. End User Surcharge. “End user surcharge” means the percentage surcharge established by the commission by Order that is applied to the end-user’s total monthly bill for retail telecommunication services originating and terminating within the state of Idaho, displayed as an identifiable line item on the bill and collected by the telecommunications carrier providing service to the end-user. (________)
05. Facilities. “Facilities” means any physical components of the telecommunications network that are used in the transmission or routing of the services that are designated for support. (________)
06. Idaho High Cost Fund. “Idaho High Cost Fund” means the Idaho telecommunications universal service fund established by the Commission pursuant to Sections 62610A through 62-610F, Idaho Code. (________)
07. Proxy Cost Model. “Proxy Cost Model” means a competitively neutral model adopted by the Commission by Order designed to estimate the forward-looking costs for providing universal services in the state of Idaho. (________)
08. Proxy Costs. “Proxy costs” means a competitively neutral estimate of the forward-looking economic costs for providing universal services in support areas designated by the Commission and derived from the Proxy Cost Model adopted by the Commission by Order.
09. Retail Revenues. “Retail Revenues” means those revenues (net of uncollectables) generated in connection with the sale of intrastate telecommunications services to end-users. For purposes of this definition, “retail revenue” for a wireless telecommunications carrier excludes revenue generated from charges to end users for terminating calls on wireless facilities whether such calls originated on a wireless or non-wireless network. (________)
10. Rural Telephone Company. The term, “rural telephone company,” is used as that term is defined by Section 62-603, Idaho Code. (________)
11. Service Area. “Service Area” means a geographic area in which eligible telecommunications carriers have the obligation to offer universal service. (________)
i. Service Areas for Non-Rural Companies. In the case of a non-rural telephone company, “service area” means a geographic area designated by the commission, pursuant to Section 62-610E, Idaho Code. (________)
ii. Service Areas for Rural Telephone Companies. In the case of a rural telephone company, “service area” means the company’s “study area(s)” as established by the federal communications commission and the commission. (________)
12. State Cost Benchmark. “State Cost Benchmark” means the statewide per line cost benchmark established by Commission Order used to determine the amount of support necessary in support areas. (________)
13. Support Area. “Support area” means a geographic area designated by the commission, pursuant to Section 62-610E, Idaho Code, as a high-cost area for which eligible telecommunications carrier(s) serving such area may receive financial assistance from the Idaho High Cost Fund. (________)
14. Telecommunications Carrier. The term, “Telecommunications Carrier,” is used as that term is defined in Section 62-610B, Idaho Code. (________)
15. Telecommunication Services. The term, “Telecommunications Services,” is used as that term is defined in Section 62-603, Idaho Code. (________)
16. Telephone Corporation. The term, “Telephone Corporation,” is used as that term is defined by Section 62-603, Idaho Code. (________)
17. Universal Service. “Universal Service” means those telecommunication services designated by order by the Commission pursuant Section 62-610C, Idaho Code, which must be made available to consumers by eligible telecommunications carriers. (________)

006. CITATION (Rule 6). The official citation of these rules is IDAPA 31.46.03.000 et seq. For example, this rule is cited as IDAPA 31.46.03.006. In documents submitted to the Commission or issued by the Commission, these rules may be cited by their short title of Idaho High Cost Fund Rules (IHCFR) and the parenthetical rule number. For example, this rule may be cited as IHCFR 6.
(________)

007. EFFECTIVE DATEHISTORY OF RULES (Rule 7). These rules become effective ********_____ (________)

008.  100. (RESERVED).

Rules 101 through 200. General Provisions

101. ESTABLISHMENT AND PURPOSES (Rule 101). Sections 62610A-F, Idaho Code, direct the Commission to establish a competitively and technologically neutral funding mechanism which will operate in coordination with federal universal service support mechanisms. The Idaho High Cost Fund (IHCF) is established pursuant to this statute. The purpose of the Idaho High Cost Fund is to provide comparable access to basic telecommunication services at just and reasonable rates for all consumers in Idaho, without regard to their location. (________)

102. ADMINISTRATOR OF THE IDAHO HIGH COST FUND (Rule 102). The Commission shall contract with an administrator of the Idaho High Cost Fund. The administrator of the IHCF shall receive all monies surcharged by telephone corporations for payment into the IHCF, account for those monies pending their disbursement, disburse those monies to qualifying recipients according to the terms of the administrator’s contract and the Commission’s rules and orders, and comply with the other requirements of these rules or orders. The administrator shall have the authority to hire an attorney approved by the Commission to pursue enforcement action, including initiating civil proceedings, against telephone corporations that violate the IHCF rules. The Commission has a right to audit the books and records of the administrator of the IHCF. (________)

STATEWIDE ENDUSER SURCHARGES (Rule 103). Pursuant to Section 62610F, Idaho Code, the IHCF is funded by a uniform statewide percentage surcharge applied to the end-user’s total monthly bill for retail telecommunications services originating and terminating within the state of Idaho, exclusive of taxes and other surcharges, for all end users of telecommunications services originating and terminating within the state of Idaho. The amount of the percentage surcharge is determined by the Commission pursuant to Rule 104. The percentage surcharge authorized by order of the Commission continue in effect until modified by subsequent order of the Commission. (________)

104. THE COMMISSION’S DETERMINATION OF FUNDING LEVELS (Rule 104). On or before September 1 of each year the Commission shall issue an order in response to the administrator’s report, which will establish a statewide enduser percentage surcharge to be in effect for the twelve months beginning October 1 following issuance of the order. The order prescribing the statewide enduser percentage surcharge for the twelve months beginning October 1 shall contain the Commission’s finding of the funding target for the IHCF for the 12 months beginning October 1 and the statewide enduser percentage surcharge to be imposed for the twelve (12) months beginning October 1 to reach the funding target. (________)

105. TELECOMMUNICATIONS CARRIERS’ AUTHORIZATION TO IMPOSE SURCHARGES (Rule 105). All telecommunications carriers are authorized to impose the surcharge on each end user to whom they are providing the telecommunications services in the amounts set forth in the order issued pursuant to Rule 104 without filing a tariff as required by Section 61-307, Idaho Code, or price list or tariff as required by Section 62-606, Idaho Code. (________)

REMITTANCE OF SURCHARGES (Rule 106). Unless otherwise provided by order of the Commission, the surcharge imposed by these rules is to be remitted monthly to the administrator pursuant to Rule 201. (________)

107. APPLICATIONS FOR FUNDSORDERS FOR FUNDING (Rule 107). Pursuant to Section 62610F, Idaho Code, and Rule 403, an Eligible Telecommunications Carrier may apply for disbursement from the Idaho High Cost Fund for each [subscriber line or primary residential line] to which it provides universal service in a support area designated by the Commission pursuant to Rule 401. (________)

108.  300. (RESERVED).

Rules 201 through 300. Telecommunications Carriers’ Obligations

TELECOMMUNICATIONS CARRIERS’ MONTHLY REMITTANCES OF IDAHO HIGH COST FUND SURCHARGES (Rule 201). Unless otherwise provided by order, all telecommunications carriers providing telecommunications services originating and terminating within the state of Idaho shall remit the end-user percentage surcharge collected pursuant to Rule 105 to the administrator on the first day of the month. Telecommunications carriers’ remittance shall be accompanied by a report on a form supplied by the administrator separately stating the amount of retail revenue billed for intrastate telecommunications service and showing the calculation of the surcharge on those revenues for the period stated in this paragraph. These amounts shall be remitted to the administrator. (________)

202. TELECOMMUNICATIONS CARRIERS’ ANNUAL REPORTING OF INTRASTATE RETAIL REVENUES TO ADMINISTRATOR (Rule 202). Unless otherwise provided by order of the Commission, on or before May 30 of each year all telecommunications carriers providing intrastate telecommunications service in Idaho shall report to the administrator their total intrastate retail revenues derived from providing telecommunications services originating and terminating within the state of Idaho. The administrator shall annually supply forms for these reports on or before May 1 to all telephone corporations for which the administrator has records showing that the telephone corporation provides one or more of these services. The administrator’s failure to supply forms does not relieve any such telecommunications carrier of its reporting requirements under these rules and statute. The reports that this rule requires to be filed with the administrator should not be filed with the Commission. (________)

203. FAILURE TO COMPLY WITH MONTHLY REMITTANCE AND REPORTING (Rule 203). A telecommunications carrier failing to comply with Rules 201-202 is subject to all sanctions provided by Section 62620, Idaho Code. (________)

204. THE ADMINISTRATOR’S COMPLIANCE REPORT (Rule 204). The administrator shall report to the Commission on or before June 15 whether all telecommunications carriers receiving the forms have complied with the reporting requirements of this Rule and Rule 202, specifically identifying telecommunications carriers that have failed to report altogether, those that have incompletely reported, those that have reported late, and those that have failed to remit the monthly percentage surcharge required by Rule 201. The report shall include a summary of the actions taken against the telecommunications carriers not complying with the Idaho High Cost Fund rules. See Rule 203. (________)

205.  300. (RESERVED).

Rules 301 through 400. Eligible Telecommunications Carriers

301. DESIGNATION AS AN ELIGIBLE TELECOMMUNICATIONS CARRIER (Rule 301). For each service area designated by the Commission, it shall upon its own motion or upon application, designate a telecommunications carrier as an Eligible Telecommunications Carrier. Consistent with the requirements of Section 62-610D, Idaho Code, to be designated as an Eligible Telecommunications Carrier, the Commission must ensure that the telecommunications carrier offers the services which are within the definition of universal service adopted by the Commission, using its own facilities or a combination of its own facilities and resale of another telecommunications carrier's services (including the services offered by another eligible telecommunications carrier); advertises the availability of such services and the charges therefor using media of general distribution; and offers low-income telecommunication services pursuant to chapter 9, title 56, Idaho Code. (________)

GENERAL OBLIGATIONS OF AN ELIGIBLE TELECOMMUNICATIONS CARRIER. (Rule 302). Upon request, a telecommunications carrier that has been designated as an Eligible Telecommunications Carrier by Order shall provide universal services to all customers in the service area designated by the Commission consistent with IDAPA 31.41.01, Rules 300 through 400. (________)

303. OBLIGATIONS OF AN ELIGIBLE TELECOMMUNICATIONS CARRIER TO PROVIDE SERVICE WHERE THERE ARE NO EXISTING FACILITIES (Rule 303). An Eligible Telecommunications Carriers obligation to provide universal service includes the obligation to build facilities where there are no facilities. (________)

304. OBLIGATIONS OF AN ELIGIBLE TELECOMMUNICATIONS CARRIER WHERE THERE ARE EXISTING FACILITIES OWNED BY ANOTHER ELIGIBLE TELECOMMUNICATIONS CARRIER (Rule 304). If an Eligible Telecommunications Carrier receives a request for universal service in its service area and the Eligible Telecommunications Carrier in receipt of the customer request lacks the facilities to serve the customer but another Eligible Telecommunications Carrier has the facilities in place to serve the customer, the Eligible Telecommunications Carrier receiving the request must serve the customer and the Eligible Telecommunications Carrier with the facilities shall provide interconnection, services for resale at wholesale, avoided cost discount and unbundled network elements at the forward looking economic costs to the Eligible Telecommunications Carrier obliged to serve the customer. (________)

304. ANNUAL VERIFICATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS (Rule 302). In order to continue to be designated as an Eligible Telecommunications Carrier, each Eligible Telecommunications Carrier shall file an annual verification with the Commission indicating that the Eligible Telecommunications Carrier continues to meet the requirements found in Section 62-610D, Idaho Code, and Rule 301. (________)

305. INELIGIBILITY FOR DISBURSEMENT FROM THE IDAHO HIGH COST FUND (Rule 305). Eligible Telecommunications Carriers currently receiving disbursements from the Idaho Universal Service Fund pursuant to Section 62-610, Idaho Code, are not eligible for disbursements from the Idaho High Cost Fund so long as they continue to receive disbursements for the Idaho Universal Service Fund. (________)

306. REMOVAL OF OTHER SUBSIDIES (Rule 306). The amount of support from the IHCF each Eligible Telecommunications Carrier receives monthly shall be reduced by any other amount of support received by such provider or for which such provider is eligible under support mechanisms established by the federal government and/or this state. (________)
307 RELINQUISHMENT OF ELIGIBLE TELECOMMUNICATIONS CARRIER STATUS (Rule 307). Upon Petition, the commission shall permit an eligible telecommunications carrier to relinquish its designation as such a carrier in any area served by more than one (1) eligible telecommunications carrier. An eligible telecommunications carrier that seeks to relinquish its eligible telecommunications carrier designation for an area served by more than one (1) eligible telecommunications carrier shall give no less than thirty (30) days notice to the commission of its intent to relinquish such designation. Prior to permitting a telecommunications carrier designated as an eligible telecommunications carrier to cease providing universal service in an area served by more than one (1) eligible telecommunications carrier, the commission shall require the remaining eligible telecommunications carrier or carriers to ensure that all customers served by the relinquishing carrier will continue to be served. (________)
308.  400. (RESERVED).
Rules 401 through 500. Disbursements from the Idaho High Cost Fund.

401. ESTABLISHING SUPPORT AREAS (Rule 401). The Commission shall designate by Order certain geographic areas as a Support Area eligible for high cost support where the per line Proxy Cost exceeds the State Cost Benchmark by a percentage established by Order. (________)

402. ESTABLISHING THE STATE COST BENCHMARK (Rule 402). By Order, the Commission shall establish a State Cost Benchmark which shall be used to calculate Idaho High Cost Fund support payable to the Eligible Telecommunications Carrier providing service within a Support Area. (________)

403. APPLICATIONS FOR DISBURSEMENT. On the fifteenth (15th) day of the month succeeding the close of each quarter, an Eligible Telecommunications Carrier requesting disbursement from the Idaho High Cost Fund shall file a report with the Administrator certifying the number of [Primary Residential Lines or subscriber lines] that the Eligible Telecommunications Carrier served in each Support Area as of the last day of the quarter.
(________)

404. QUARTERLY DISBURSEMENTS FROM THE HIGH COST FUND (Rule 404). The Administrator shall make the quarterly disbursements from the Idaho High Cost Fund after receipt of the quarterly application filed pursuant to Rule 403. (________)

405. QUARTERLY RECONCILIATION (Rule 405). Following receipt of each Eligible Telecommunications Carriers report to the Administrator pursuant to Rule 403, the Administrator shall reconcile the estimated disbursements previously authorized for such Eligible Telecommunications Carrier for the quarter for which the report provides information to the actual disbursements to which such provider is entitled, and shall send a statement of such reconciliation to each Eligible Telecommunications Carrier within 60 days after the end of the quarter. The statement shall be accompanied by a check in the appropriate amount if the provider is entitled to additional amounts from the Idaho High Cost Fund. If the provider has been credited with, or received more than, the amount of its USF entitlement, it shall remit the deficiency within [ ___ ] days of the date of the statement. (________)
406.  500. (RESERVED).
Rules 501 through 600. The Idaho High Cost Fund Administrator.

501. THE HIGH COST FUND ADMINISTRATOR SELECTION (Rule 501). The Commission shall appoint a neutral third party by means of competitive bidding pursuant to the issuance of a request for proposal. Until such time as an administrator has been appointed, or during times when a third party is not available to act as administrator, the Commission may act as the administrator. (________)

502. QUALIFICATIONS OF THE ADMINISTRATOR (Rule 502) The administrator shall be neutral and impartial; not be an affiliate of any provider of telecommunications services; and not issue a majority of its debt to, nor derive a majority of its revenues from any provider(s) of telecommunications services. If the administrator has a Board of Directors that includes members with direct financial interests in entities that contribute to or receive support from the universal service support programs, no more than a third of the board members may represent any one category (e.g., local exchange carriers, interexchange carriers, wireless carriers, schools, libraries) of contributing carriers or support recipients, and the board's composition must reflect the broad base of contributors to and recipients of universal service. An individual does not have a direct financial interest in entities that contribute to or receive support from the universal service support programs if he or she is not an employee of a telecommunications carrier or of a recipient of universal service support programs funds, does not own equity interests in bonds or equity instruments issued by any telecommunications carrier, and does not own mutual funds that specialize in the telecommunications industry. If a mutual fund invests more than fifty percent (50%) of its money in telecommunications stocks and bonds, then it specializes in the telecommunications industry. (________)

503. EXPENSES OF THE HIGH COST FUND (Rule 503). The reasonable expenses incurred in the administration of the Idaho High Cost Fund shall be a cost of the Idaho High Cost Fund and shall be recovered from the funds contributed to the Idaho High Cost Fund. (________)

504. ADMINSTRATOR ACCESS TO BOOKS OF TELECOMMUNICATIONS CARRIERS (Rule 504). The administrator shall have access to the books of account of all telecommunications service providers to the limited extent necessary to verify the intrastate Retail Revenues and other information used by the administrator in determining assessments and disbursements for the Idaho High Cost Fund. (________)

ADMINSTRATOR DUTIES (Rule 505). The administrator shall maintain a database to track [Primary Residential Lines or subscriber lines] eligible for support based on how the service is provisioned and what carrier is providing the service in each support area. The administrator will develop an appropriate form to be used by all telecommunications service providers and provide a copy of the form on a quarterly basis to those companies for completion.

506. CONFIDENTIALITY OF INFORMATION RECEIVED BY THE ADMINISTRATOR (Rule 506). Any competitive and financial information received by the administrator shall be treated as confidential and proprietary and shall only be released upon order of the Commission. Such information may be aggregated into report form. (________)

507. ANNUAL REVIEW (Rule 507). The Administrator, under the direction of the Commission, shall perform an annual review of Idaho High Cost Fund recipients to verify their continued eligibility and that each Eligible Telecommunications Carrier has received and is projected to receive their entitled amounts from the Idaho High Cost Fund. Subject to such reviews, the administrator will recommend to the Commission any required adjustments to Idaho High Cost Fund assessments, distributions, necessary rule changes and other relevant items that the Commission should consider in connection with the Idaho High Cost Fund. (________)

508. FISCAL YEAR (Rule 508). The administrator shall operate on a fiscal year which runs from [__________] of the succeeding year. (________)

509. AUDIT OF THE IDAHO HIGH COST FUND (Rule 509). The Idaho High Cost Fund records covering both collections and disbursements shall be audited for the fiscal year ending [__________] by an independent external auditor chosen by the Commission. The costs for conducting audits shall be included in the computation of Idaho High Cost Fund requirements. Thereafter, the Idaho High Cost Fund shall be audited in the same manner at least once every other year. (________)

510. ANNUAL REPORT PREPARED BY THE ADMINISTRATOR (Rule 510). An annual report prepared by the administrator shall be filed with the Commission by [___________] of each year. This report shall summarize the preceding fiscal year's activity and contain a statement of Idaho High Cost Fund collections and disbursements, a record of the total cost of administration of the Idaho High Cost Fund, and the most recent audit report. (________)

511. EXEMPTION OF THE IDAHO HIGH COST FUND FROM TAXES (Rule 511). The Idaho High Cost Fund shall be administered in a manner ensuring that it is exempt from state, federal and local taxes. (________)
512.  999. (RESERVED).
6