An Act To Clarify Telecommunications Regulation Reform
Maine Legislature, Session 126, LD 1479
Committee: Energy, Utilities and Technology
Amends: 35-A MRSA §116, 35-A MRSA §7104, 35-A MRSA §7221, 35-A MRSA §7222

Legislative Document 
No. 1479 
H.P. 1060 
House of Representatives, April 30, 2013 
An Act To Clarify Telecommunications Regulation Reform 
Reported by Representative HOBBINS of Saco for the Joint Standing Committee on 
Energy, Utilities and Technology pursuant to Public Law 2011, chapter 623, Part A, section 25 
and Part D, section 7. 
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed pursuant to Joint Rule 218. 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  35-A MRSA §116, sub-§1, as amended by PL 2011, c. 623, Pt. B, §1, is 
further amended to read: 
1.  Entities subject to assessments.  Every transmission and distribution, gas, 
telephone and water utility and ferry subject to regulation by the commission and every 
qualified telecommunications provider is subject to an assessment on its intrastate gross 
operating revenues to produce sufficient revenue for expenditures allocated by the 
Legislature for the Public Utilities Commission Regulatory Fund established pursuant to 
this section.  The budget for the Public Utilities Commission Regulatory Fund is subject 
to legislative review and approval in accordance with subsection 2.  The portion of the 
total assessment applicable to each category of public utility or qualified 
telecommunications provider is based on an accounting by the commission of the portion 
of the commission's resources devoted to matters related to each category.  The 
commission shall develop a reasonable and practicable method of accounting for 
resources devoted by the commission to matters related to each category of public utility 
or qualified telecommunications provider.  Assessments on each public utility or qualified 
telecommunications provider within each category must be based on the utility's or 
qualified telecommunications provider's gross intrastate operating revenues.  The 
commission shall determine the assessments annually prior to May 1st and assess each 
utility or qualified telecommunications provider for its pro rata share for expenditure 
during the fiscal year beginning July 1st.  Each utility or qualified telecommunications 
provider shall pay the assessment charged to the utility or qualified telecommunications 
provider on or before July 1st of each year.  Any increase in the assessment that becomes 
effective subsequent to May 1st may be billed on the effective date of the act authorizing 
the increase. 
A.  The assessments charged to utilities and qualified telecommunications providers 
under this section are just and reasonable operating costs for rate-making purposes. 
B.  For the purposes of this section, "intrastate gross operating revenues" means 
intrastate revenues derived from filed rates and rates charged by a qualified 
telecommunications provider, except revenues derived from sales for resale.: 
(1) In the case of all utilities except telephone utilities, revenues derived from 
filed rates; 
(2) In the case of a telephone utility, all intrastate revenues, whether or not such 
rates are required to be filed pursuant to this Title; and 
(3) In the case of a qualified telecommunications provider, all intrastate revenues 
except revenues derived from sale or resale. 
C.  Gas utilities subject to the jurisdiction of the commission solely with respect to 
safety are not subject to any assessment. 
D.  The commission may correct any errors in the assessments by means of a credit or 
debit to the following year's assessment rather than reassessing all utilities or 
qualified telecommunications providers in the current year. 
E.  The commission may exempt utilities or qualified telecommunications providers 
with annual intrastate gross operating revenues under $50,000 from assessments 
under this section. 
For purposes of this section, "qualified telecommunications provider" means a provider 
of person that provides interconnected voice over Internet protocol service that paid any 
assessment under this subsection, whether voluntarily, by agreement with the commission 
or otherwise, prior to March 1, 2012 over facilities that it, or an affiliated company, owns 
or leases. 
Sec. 2.  35-A MRSA §7104, sub-§3, ¶D, as amended by PL 2011, c. 623, Pt. B, 
§14, is further amended to read: 
D.  Ensure that any requirements regarding contributions to a state universal service 
fund be are nondiscriminatory and competitively neutral; and 
Sec. 3.  35-A MRSA §7104, sub-§3, ¶G, as enacted by PL 2011, c. 623, Pt. B, 
§14, is amended to read: 
G.  Require, if a voice network service provider recovers its contributions under this 
section by means of a charge placed on a bill issued to a customer, explicit 
identification on that bill of any charge imposed under this section.; and 
Sec. 4.  35-A MRSA §7104, sub-§3, ¶H is enacted to read: 
H.  Ensure that the total amount distributed for support to providers of provider of 
last resort service does not exceed $7,500,000. 
Sec. 5.  35-A MRSA §7104, sub-§9 is enacted to read: 
9.  Increase of universal service fund support.  If the commission determines 
through an expedited emergency rate case under section 7222, subsection 3 or an 
investigation into a general increase in rates under chapter 3 that a provider of provider of 
last resort service requires support greater than the amounts permitted under subsection 3, 
paragraph H, the commission shall submit a report regarding the amount needed to the 
joint standing committee of the Legislature having jurisdiction over energy, utilities and 
technology matters. The joint standing committee of the Legislature having jurisdiction 
over energy, utilities and technology matters may submit legislation based on the report. 
Sec. 6.  35-A MRSA §7221, sub-§2, ¶A is enacted to read: 
A.  The commission may not assign the provider of last resort service obligation for a 
given geographic area to another voice service provider without the consent of the 
service provider unless the commission finds through an investigation that the service 
provider is unable to provide provider of last resort service in accordance with this 
chapter. 
Sec. 7.  35-A MRSA §7222, as enacted by PL 2011, c. 623, Pt. A, §18, is amended 
to read: 
§7222.  Revenue requirements of service providers 
The initial rates for provider of last resort service are those rates in effect for basic 
local exchange service for each incumbent local exchange carrier in the service area of 
that carrier as of January 1, 2012. 
1.  Change in rates.  A service provider may file for a rate increase in accordance 
with chapter 3. 
2.  Establishment of rates; requirements.  In addition to the requirements of 
chapter 3, when establishing the revenue requirements for a service provider and the rates 
for provider of last resort service, the commission shall ensure that the rates for provider 
of last resort service are: 
A.  Uniform throughout the State for that service provider; 
B.  At the time the rate is set by the commission, within 2 standard deviations of the 
national average price for voice service as determined by the Federal 
Communications Commission; and 
C.  Not set at a level that will jeopardize the receipt of federal funds to support 
telecommunications services. 
3.  Emergency rate case.  A service provider may petition the commission for 
expedited approval of an emergency rate increase in accordance with this subsection. 
A.  The service provider must provide the following information to the commission 
when submitting the petition: 
(1)  An annual report for the test year; 
(2)  Expenses, revenues and rate base during the test year, itemized by account 
number or functional grouping; 
(3)  Uncollectible revenues for the test year, including bad debt expenses, gross 
write-offs and recoveries of prior write-offs; 
(4)  The number of units of service billed for each rate element of service; 
(5)  Local service revenues, all toll service revenues and miscellaneous revenues 
for the test year; 
(6)  A statement of the service provider's revenue requirement for the test year; 
and 
(7)  A proposed schedule of provider of last resort service rates that meet the 
requirements of subsection 2. 
For the purposes of this paragraph, "test year" means the most recent complete 
calendar year. 
B.  The commission may approve an emergency rate increase if the commission 
determines that the revenue requirement pursuant to paragraph A, subparagraph (6) is 
reasonably likely to be equal to or less than the revenue requirement that would be 
identified through a full investigation under section 310.  The commission shall 
complete the emergency rate case within 60 days of the submission of the petition 
under paragraph A. 
C.  The commission may determine that immediately raising the rates of a service 
provider is not in the public interest and may establish a method to incrementally 
collect the amount of the emergency rate increase over an extended period of time. 
D.  The emergency rate increase expires 3 months after the completion of the 
emergency rate case unless the service provider files a schedule for a general rate 
increase under chapter 3. If the service provider files a schedule for a general increase 
in rates under chapter 3 within 3 months after the completion of the emergency rate 
case, the emergency rate increase expires upon the completion of any investigation 
initiated by the commission in response to that filing. 
E.  If the commission determines after an investigation in response to a general rate 
increase filing under chapter 3 that the service provider's revenue requirement is less 
than the revenue requirement approved through the emergency rate case, any excess 
revenue must be returned to the service provider's ratepayers in the form of a bill 
credit. 
F.  If the commission determines after an investigation in response to a general rate 
increase filing under chapter 3 that the service provider's revenue requirement is 
greater than the revenue requirement approved through the emergency rate case, the 
provider may not recover the difference in future provider of last resort service rates. 
SUMMARY 
This bill limits the amount of funds a provider of provider of last resort service can 
receive from the state universal service fund. The bill establishes a procedure for the 
Public Utilities Commission to conduct an emergency rate case in response to a petition 
for a temporary increase in rates. 
This bill provides that the Public Utilities Commission may not reassign the provider 
of last resort service obligation without the consent of the current service provider unless 
that provider is unable to provide the service in accordance with state law. This bill 
provides that the rate charged to customers for provider of last resort service must be 
uniform throughout the State for a service provider, must be within 2 standard deviations 
of the national average and may not be set at a level that will jeopardize the receipt of 
federal funding to support telecommunications services. 
This bill amends the section of law related to the assessment to fund the Public 
Utilities Commission and the Office of the Public Advocate to include all utilities that 
were included prior to the enactment of Public Law 2011, chapter 623. It expands the 
assessment to include a person that provides voice over Internet protocol service over 
facilities that it, or an affiliated company, owns or leases, regardless of whether that 
service provider paid the assessment prior to March 1, 2012. 
This bill is reported out by the Joint Standing Committee on Energy, Utilities and 
Technology pursuant to Public Law 2011, chapter 623, Part A, section 25 and Part D, 
section 7.  As required by the public law, the Public Utilities Commission submitted to 
the committee a report to create a framework for establishing rates for provider of last 
resort service and a report regarding assessments paid by voice service providers on 
January 15, 2013. 
The Joint Standing Committee on Energy, Utilities and Technology has not taken a 
position on the substance of this bill and by reporting this bill out the committee is not 
suggesting and does not intend to suggest that it agrees or disagrees with any aspect of 
this bill.   The committee is reporting the bill out for the sole purpose of turning the issues 
raised in the Public Utilities Commission's reports into a printed bill that can be referred 
to the committee for an appropriate public hearing and subsequent processing in the 
normal course.  The committee is taking this action to ensure clarity and transparency in 
the legislative review of the framework for setting the rates for provider of last resort 
service.