Offered April 9, 1996.

Senate Substitute adopted, April 10, 1996.

Taken up for Perfection April 10, 1996. Bill declared Perfected and Ordered Printed, as amended. TERRY L. SPIELER, Secretary.

S2263.16P

To repeal sections 170.250, 386.020, 392.180, 392.200, 392.220, 392.410, 392.450, and 392.530, RSMo 1994, relating to the regulation of telecommunications companies, and to enact in lieu thereof seventeen new sections, relating to the same subject, with an emergency clause.

Be it enacted by the General Assembly of the State of Missouri, as follows:

Section A. Sections 170.250, 386.020, 392.180, 392.200, 392.220, 392.410, 392.450, and 392.530, RSMo 1994, are repealed and seventeen new sections enacted in lieu thereof, to be known as sections 170.250, 386.020, 392.180, 392.185, 392.200, 392.201, 392.205, 392.220, 392.245, 392.246, 392.248, 392.410, 392.450, 392.451, 392.455, 392.475 and 392.530, to read as follows:

170.250. 1. The Video Instructional Development and Educational Opportunity Program is established to encourage all educational institutions in Missouri to supplement educational opportunities through telecommunications technology and satellite broadcast instruction. The program established by this section is to be administered by the state board of education. The program shall consist of:

(1) Grants to local school districts, state-supported institutions of higher education and public television stations as defined in section 37.205, RSMo, for equipment and instruction;

(2) Instructional programs developed [under] pursuant to this section and transmitted through the airwaves, over telephones lines, or by cable television which are available for all residents of this state without charge as defined in this section; and

(3) Instructional programs developed [under] pursuant to this section which are available to any subscriber according to this section.

2. The Video Instructional Development and Educational Opportunity Fund is established in the state treasury and shall be administered by the department of elementary and secondary education at the direction of the state board of education. Moneys deposited in the fund shall consist of revenues generated from state sales and use tax revenues as provided in chapter 144, RSMo, on the rental of films, records or any type of sound or picture transcriptions as provided in subsection 3 of this section. Moneys in the fund shall be used solely for purposes established by this section, except that the department of revenue shall retain no more than one percent of sales tax revenues collected for its administrative costs and all administrative costs of this program incurred by the department of elementary and secondary education shall be paid from this fund, which costs shall not exceed two percent. The administrative fees of the department of revenue and the department of elementary and secondary education shall be determined annually in the appropriation process. Any unexpended balance in the fund at the end of a fiscal year shall be exempt from the provisions of section 33.080, RSMo, relating to the transfer of unexpended balances to the general revenue fund.

3. Until December 31, 1994, the commissioner of administration shall annually estimate and furnish to the director of the department of revenue the appropriate amount of state tax revenues collected [under] pursuant to chapter 144, RSMo, which are directly attributable to the rental of films, records or any type of sound or picture transcriptions. However, the estimate shall only include state sales and use tax revenues collected [under] pursuant to chapter 144, RSMo, which are normally deposited in the state general revenue fund. The director of revenue shall transfer from state sales tax revenues an amount equal to the estimate to the fund provided in subsection 2 of this section. After December 31, 1994, the seller shall separately report on the return to the department of revenue, the aggregate amount of the gross receipts and the amount of tax collected on the rental of films, records or any type of sound or picture transcriptions. The director of revenue shall annually transfer state sales tax revenues collected on the rental of films, records or other type of sound or picture transcriptions, except revenues allocated to the school district trust fund pursuant to section 144.701, RSMo, to the video instructional development and educational opportunity fund. Beginning January 1, 1999, such revenues shall be deposited to the credit of the general revenue fund.

4. Within the department of elementary and secondary education, there is established an advisory committee which shall make recommendations to the state board of education on the grant program. The committee shall be composed of twenty-nine members. The members of the committee shall consist of one representative of public television stations as defined in section 37.205, RSMo, and one representative of the cable television industry appointed by the state board of education, one representative of public television stations as defined in section 37.205, RSMo, and one representative of the cable television industry appointed by the coordinating board for higher education, three classroom teachers from the elementary and secondary level appointed by the state board of education, three school administrators of elementary or secondary schools appointed by the state board of education, three members of school boards of local public school districts appointed by the state board of education, four representatives from public community college districts appointed by the coordinating board for higher education, four representatives of state-supported institutions of higher education other than community colleges appointed by the coordinating board for higher education, one representative of the regional consortium for education and technology appointed by the state board of education, one representative of the cooperating school districts of the St. Louis suburban area appointed by the state board of education, two representatives of the public appointed by the governor with the advice and consent of the senate, two members of the senate appointed by the senate president pro tem and two members of the house of representatives appointed by the speaker of the house of representatives. Of all members appointed by the state board of education, no more than four shall be from any one congressional district and of all the members appointed by the coordinating board for higher education, no more than four shall be from any one congressional district. The members of the committee shall serve three-year terms and shall not serve more than two terms consecutively. However, committee members having served two consecutive terms may be reappointed after leaving the committee for at least one three-year term. On August 28, 1992, the committee shall designate nine of its members to serve a term of one year, ten of its members to serve a term of two years, and ten of its members to serve a term of three years. All subsequent appointments shall be for three years. All members shall receive no compensation for their services, but shall be reimbursed for the actual and necessary expenses incurred while serving on the committee out of funds appropriated for that purpose. The committee shall meet at least quarterly and shall annually issue a report together with its recommendations to the state board of education and the general assembly.

5. The state board of education may cooperate with existing programs including the University of Missouri, other institutions of higher education, the cooperating school districts of the St. Louis suburban area, or its successor organization, the regional consortium for education and technology or its successor organization, and any statewide organization of public school governing boards and may delegate or contract for the performance or operation of the respective grant programs. The state board of education shall establish appropriate guidelines for participation by the aforementioned entities and by school districts, community college districts, and public television stations as defined in section 37.205, RSMo, in the grant program. Such guidelines shall include application procedures and shall establish policies for awarding grants in the event that more grant applications are received than are funds available to honor the applications in any fiscal year. In allocating funds to applicants, the state board of education may give due consideration to revenues available from all other sources. The state board of education shall accredit courses offered through this program at the elementary and secondary education level. The coordinating board for higher education shall approve courses taught at the postsecondary level.

6. In any fiscal year, moneys in the fund shall be used first to ensure that any and all school districts, community college districts and state institutions of higher education seeking aid under this program shall receive telecommunications equipment including computers and modems necessary to participate in the satellite learning process or instructional television video; second to provide the school districts, community college districts and state institutions of higher education with access to subjects at the advanced level or the remedial level or which are not taught in the schools of the district or the service area or campus, which subjects shall include courses in continuing education necessary for maintenance or renewal of licenses for all such licensed health care providers; and third to provide enrichment classes for all pupils of the district. However, the state board of education may set aside a portion of the funds to be used to contract with state-supported institutions of higher education and public television stations as defined in section 37.205, RSMo, to develop instructional programs for grades kindergarten through twelve and for undergraduate and graduate coursework suitable for broadcast to the school districts, community college districts and state institutions of higher education as appropriate and to develop the capability to transmit programs cited in this section.

7. Participation by a local school district, a community college district or a state institution of higher education in the program established by this section shall be voluntary. No school district, community college district or state institution of higher education receiving funds under this program shall use those funds for any purpose other than that for which they were intended. Any school district, community college district or state institution of higher education shall be eligible to receive funds under this program regardless of its curriculum, local wealth or previous contractual arrangements to receive satellite broadcast instruction.

8. The office of administration on behalf of the state of Missouri may contract with institutions of higher education for the development or operation or both of state employee training programs transmitted by telecommunications technology.

9. Instructional programs developed [under] pursuant to this section which are transmitted one way through the airwaves or by cable television shall be available to all residents of this state without charge or fee to the extent permitted by the Missouri Constitution. Without charge or fee shall not require the providing of equipment to transmit or receive telecommunications instruction or the providing of commercial cable television service. If the instructional program involves two-way, interactive communication between the instructor and the participant, the district or institution operating the program may prescribe academic prerequisites and limit the number of persons who may enroll in the specific program and give preference to residents of the district or institutional attendance area who are age twenty-one or younger but shall not discriminate against any resident on any other basis. A fee may be charged which [will] shall be paid directly by the individual participant, but the fee shall be equal for all participants. If a subscription fee is charged by the originator of the program, the district or institution may pay the subscription fee for all participants from the grant [under] pursuant to this section or from any other public or private fund legally authorized to be used for this purpose. Printed materials designed to facilitate or complement telecommunications programs or electronic reproductions thereof may be made available for loan by the school district, community college or institution of higher education through the public library system subject to the normal rules and regulations of the lending system and in such quantities as may be approved by the governing body of the district or institution. Instructional programs which involve two-way, interactive communication between the instructor and the participant shall also be available to any not for profit organization in this state which is exempt from taxation [under] pursuant to subdivision (19) of subsection 2 of section 144.030, RSMo, upon payment of a reasonable subscription fee as determined by the state board of education. Such fees shall be set on a per-participant, per-course basis. The district or institution or the state board of education may make telecommunication equipment available for purchase at cost by or rental to any not for profit organization in this state which is exempt from taxation [under] pursuant to subdivision (19) of subsection 2 of section 144.030, RSMo.

10. (1) In order to facilitate or complement telecommunications, [any] local exchange telecommunications [company may] companies shall file with the public service commission [a tariff] tariffs for provision of local service to public school districts, and may file tariffs for provision of local service to accredited primary or secondary schools owned or operated by private entities[,] and community college districts located within the local exchange telecommunications companies certified area. Such [tariffs may] local exchange telecommunications companies shall seek commission authorization to provide local service at rates [different from] lower than those charged for business and residential service in effect when the tariff is filed, provided that the proposed rates may not be below the actual cost of providing the service. Upon approval of the public service commission, the rates shall not be classified as discriminatory for the purposes of chapter 392, RSMo.

(2) The public service commission may approve the tariff as submitted, or may, after hearing, modify the tariff in the public interest. [The local telecommunications company may withdraw the request at any time before provision of the reduced rate service has started.] The commission may promulgate rules to aid in the implementation of this section.

[11. The provisions of this section are severable. If any provision of this section is found by a court of competent jurisdiction to be unconstitutional, the remaining provisions of this section shall remain in full force and effect.]

386.020. As used in this chapter, the following words and phrases mean:

(1) Alternative local exchange telecommunications company , a local exchange telecommunications company certified by the commission to provide basic or non-basic local telecommunications service or switched exchange access service, or any combination of such services, in a specific geographic area subsequent to December 31, 1995.

(2) Alternative operator services company , any certificated interexchange telecommunications company which receives more than forty percent of its annual Missouri intrastate telecommunications service revenues from the provision of operator services pursuant to operator services contracts with traffic aggregators;

[(2)] (3) Basic interexchange telecommunications service , includes, at a minimum, two-way switched voice service between points in different local calling scopes as determined by the commission and shall include other services as determined by the commission by rule upon periodic review and update;

[(3)] (4) Basic local telecommunications service , two-way switched voice service within a local calling scope as determined by the commission[;] comprised of any of the following services and their recurring and non-recurring charges:

(a) Multiparty, single line, including installation, touchtone dialing, and any applicable mileage or zone charges;

(b) Assistance programs for installation of, or access to, basic local telecommunications services for qualifying economically disadvantaged or disabled customers or both, including, but not limited to, lifeline services and link-up Missouri services for low income customers or dual-party relay service for the hearing impaired and speech impaired;

(c) Access to local emergency services including, but not limited to, 911 service established by local authorities;

(d) Access to basic local operator services;

(e) Access to basic local directory assistance;

(f) Standard intercept service;

(g) Equal access to interexchange carriers consistent with rules and regulations of the Federal Communications Commission;

(h) One standard white pages directory listing.

Basic local telecommunications service does not include optional toll free calling outside a local calling scope but within a community of interest, available for an additional monthly fee or [but does not include] the offering or provision of basic local telecommunications service at private shared tenant service locations;

[(4)] (5) Cable television service , the one-way transmission to subscribers of video programming or other programming service and the subscriber interaction, if any, which is required for the selection of such video programming or other programming service;

(6) Carrier of last resort , any telecommunications company which is obligated to offer basic local telecommunications service to all customers who request service in a geographic area defined by the commission and cannot abandon this obligation without approval from the commission;

[(5)] (7) Commission , the Public Service Commission hereby created;

[(6)] (8) Commissioner , one of the members of the commission;

[(7)] (9) Common carrier includes all railroad corporations, street railroad corporations, express companies, car companies, sleeping car companies, freight companies, freightline companies, steamboat, power boat, vessel boat and ferry companies, and every corporation, company, association, joint stock company or association, partnership, and person, their lessees, trustees, or receivers appointed by any court whatsoever, owning, holding, operating, controlling or managing any such agency for public use in the conveyance of persons or property within this state;

[(8)] (10) Competitive telecommunications company , a telecommunications company which has been classified as such by the commission pursuant to section 392.361, RSMo;

[(9)] (11) Competitive telecommunications service , a telecommunications service which has been classified as such by the commission pursuant to section 392.361, RSMo, or which has become a competitive telecommunications service pursuant to section 392.370, RSMo;

[(10)] (12) Corporation includes a corporation, company, association and joint stock association or company;

(13) Customer owned pay telephone , a privately owned telecommunications device that is not owned, leased or otherwise controlled by a local exchange telecommunications company and which provides telecommunications services for a use fee to the general public;

(14) Effective competition shall be determined by the commission based on:

(a) The extent to which services are available from alternative providers in the relevant market;

(b) The extent to which the services of alternative providers are functionally equivalent or substitutable at comparable rates, terms and conditions;

(c) The extent to which the purposes and policies of chapter 392, RSMo, including the reasonableness of rates, as set out in section 392.185, RSMo, are being advanced;

(d) Existing economic or regulatory barriers to entry; and

(e) Any other factors deemed relevant by the commission and necessary to implement the purposes and policies of chapter 392.

[(11)] (15) Electric plant includes all real estate, fixtures and personal property operated, controlled, owned, used or to be used for or in connection with or to facilitate the generation, transmission, distribution, sale or furnishing of electricity for light, heat or power; and any conduits, ducts or other devices, materials, apparatus or property for containing, holding or carrying conductors used or to be used for the transmission of electricity for light, heat or power;

[(12)] (16) Electrical corporation includes every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, other than a railroad or street railroad corporation generating electricity solely for railroad or street railroad purposes or for the use of its tenants and not for sale to others, owning, operating, controlling or managing any electric plant except where electricity is generated or distributed by the producer solely on or through private property for railroad or street railroad purposes or for its own use or the use of its tenants and not for sale to others;

[(13)] (17) Exchange , a geographical area for the administration of telecommunications services, established and described by the tariff of a telecommunications company providing basic local telecommunications service;

[(14)] (18) Exchange access service , a service provided by a local exchange telecommunications company which enables a telecommunications company or other customer to enter and exit the local exchange telecommunications network in order to originate or terminate interexchange telecommunications service;

[(15)] (19) Express corporation includes every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, engaged in or transacting the business of transporting any freight, merchandise or other property for compensation on the line of any common carrier within this state;

[(16)] (20) Gas corporation includes every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, owning, operating, controlling or managing any gas plant operating for public use under privilege, license or franchise now or hereafter granted by the state or any political subdivision, county or municipality thereof;

[(17)] (21) Gas plant includes all real estate, fixtures and personal property owned, operated, controlled, used or to be used for or in connection with or to facilitate the manufacture, distribution, sale or furnishing of gas, natural or manufactured, for light, heat or power;

[(18)] (22) Heating company includes every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers, appointed by any court whatsoever, owning, operating, managing or controlling any plant or property for manufacturing and distributing and selling, for distribution, or distributing hot or cold water, steam or currents of hot or cold air for motive power, heating, cooking, or for any public use or service, in any city, town or village in this state; provided, that no agency or authority created by or operated pursuant to an interstate compact established under section 70.370, RSMo, shall be a heating company or subject to regulation by the commission;

(23) High cost area , a geographic area, which shall follow exchange boundaries and be no smaller than an exchange nor larger than a local calling scope, where the cost of providing basic local telecommunications service as determined by the commission, giving due regard to recovery of an appropriate share of joint and common costs as well as those costs related to carrier of last resort obligations, exceeds the rate for basic local telecommunications service found reasonable by the commission;

(24) Incumbent local exchange telecommunications company , a local exchange telecommunications company authorized to provide basic local telecommunications service in a specific geographic area as of December 31, 1995, or a successor in interest to such a company;

[(19)] (25) Interexchange telecommunications company , any company engaged in the provision of interexchange telecommunications service [which company does not also provide basic local telecommunications service];

[(20)] (26) Interexchange telecommunications service , telecommunications service between points in two or more exchanges;

(27) InterLATA , interexchange telecommunications service between points in different local access and transportation areas;

(28) IntraLATA , interexchange telecommunications service between points within the same local access and transportation area;

[(21)] (29) Line includes route;

(30) Local access and transportation area or LATA , contiguous geographic area approved by the U.S. District Court for the District of Columbia in United States v. Western Electric, Civil Action No. 82-0192 that defines the permissible areas of operations for the Bell Operating companies;

[(22)] (31) Local exchange telecommunications company , any company engaged in the provision of local exchange telecommunications service. A local exchange telecommunications company shall be considered a large local exchange telecommunications company if it has at least one hundred thousand access lines in Missouri and a small local exchange telecommunications company if it has less than one hundred thousand access lines in Missouri;

[(23)] (32) Local exchange telecommunications service , telecommunications service between points within an exchange;

(33) Long run incremental cost , the change in total costs of the company of producing an increment of output in the long run when the company uses least cost technology, and excluding any costs that, in the long run, are not brought into existence as a direct result of the increment of output. The relevant increment of output shall be the level of output necessary to satisfy total current demand levels for the service in question, or, for new services, demand levels that can be demonstrably anticipated;

[(24)] (34) Municipality includes a city, village or town;

(35) Non-basic telecommunications services shall be all regulated telecommunications services other than basic local and exchange access telecommunications services, and shall include the services identified in paragraphs (d) and (e) of subdivision (4) of this section. Any retail telecommunications service offered for the first time after August 28, 1996, shall be classified as a non-basic telecommunications service, including any new service which does not replace an existing service;

[(25)] (36) Noncompetitive telecommunications company , a telecommunications company other than a competitive telecommunications company or a transitionally competitive telecommunications company;

[(26)] (37) Noncompetitive telecommunications service , a telecommunications service other than a competitive or transitionally competitive telecommunications service;

[(27)] (38) Operator services , operator-assisted interexchange telecommunications service by means of either human or automated call intervention and includes, but is not limited to, billing or completion of calling card, collect, person-to-person, station-to-station or third number billed calls;

[(28)] (39) Operator services contract , any agreement between a traffic aggregator and a certificated interexchange telecommunications company to provide operator services at a traffic aggregator location;

[(29)] (40) Person includes an individual, and a firm or copartnership;

[(30)] (41) Private shared tenant services includes the provision of telecommunications and information management services and equipment within a user group located in discrete private premises as authorized by the commission by a commercial shared services provider or by a user association, through privately owned customer premises equipment and associated data processing and information management services and includes the provision of connections to the facilities of local exchange telecommunications companies and to interexchange telecommunications companies;

[(31)] (42) Private telecommunications system , a telecommunications system controlled by a person or corporation for the sole and exclusive use of such person, corporation or legal or corporate affiliate thereof;

[(32)] (43) Public utility includes every common carrier, pipeline corporation, gas corporation, electrical corporation, telecommunications company, water corporation, heat or refrigerating corporation, and sewer corporation, as these terms are defined in this section, and each thereof is hereby declared to be a public utility and to be subject to the jurisdiction, control and regulation of the commission and to the provisions of this chapter;

[(33)] (44) Railroad includes every railroad and railway, other than street railroad, by whatsoever power operated for public use in the conveyance of persons or property for compensation, with all bridges, ferries, tunnels, equipment, switches, spurs, tracks, stations, real estate and terminal facilities of every kind used, operated, controlled or owned by or in connection with any such railroad;

[(34)] (45) Railroad corporation includes every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, owning, holding, operating, controlling or managing any railroad or railway or any cars or other equipment used thereon or in connection therewith;

[(35)] (46) Rate , every individual or joint rate, fare, toll, charge, reconsigning charge, switching charge, rental or other compensation of any corporation, person or public utility, or any two or more such individual or joint rates, fares, tolls, charges, reconsigning charges, switching charges, rentals or other compensations of any corporation, person or public utility or any schedule or tariff thereof;

[(36)] (47) Resale of telecommunications service , the offering or providing of telecommunications service primarily through the use of services or facilities owned or provided by a separate telecommunications company, but does not include the offering or providing of private shared tenant services;

[(37)] (48) Service includes not only the use and accommodations afforded consumers or patrons, but also any product or commodity furnished by any corporation, person or public utility and the plant, equipment, apparatus, appliances, property and facilities employed by any corporation, person or public utility in performing any service or in furnishing any product or commodity and devoted to the public purposes of such corporation, person or public utility, and to the use and accommodation of consumers or patrons;

[(38)] (49) Sewer corporation includes every corporation, company, association, joint stock company or association, partnership or person, their lessees, trustees or receivers appointed by any court, owning, operating, controlling or managing any sewer system, plant or property, for the collection, carriage, treatment, or disposal of sewage anywhere within the state for gain, except that the term shall not include sewer systems with fewer than twenty-five outlets;

[(39)] (50) Sewer system includes all pipes, pumps, canals, lagoons, plants, structures and appliances, and all other real estate, fixtures and personal property, owned, operated, controlled or managed in connection with or to facilitate the collection, carriage, treatment and disposal of sewage for municipal, domestic or other beneficial or necessary purpose;

[(40)] (51) Street railroad includes every railroad by whatsoever type of power operated, and all extensions and branches thereof and supplementary facilities thereto by whatsoever type of vehicle operated, for public use in the conveyance of persons or property for compensation, mainly providing local transportation service upon the streets, highways and public places in a municipality, or in and adjacent to a municipality, and including all cars, buses and other rolling stock, equipment, switches, spurs, tracks, poles, wires, conduits, cables, subways, tunnels, stations, terminals and real estate of every kind used, operated or owned in connection therewith; and the term street railroad when used in this chapter, shall also include all motor bus and trolley bus lines and routes and similar local transportation facilities, and the rolling stock and other equipment thereof and the appurtenances thereto, when operated as a part of a street railroad or trolley bus local transportation system, or in conjunction therewith or supplementary thereto, but such term shall not include a railroad constituting or used as part of a trunk line railroad system and any street railroad as defined above which shall be converted wholly to motor bus operation shall nevertheless continue to be included within the term street railroad as used herein;

[(41)] (52) Street railroad corporation includes every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, owning, holding, operating, controlling or managing any street railroad as herein defined; and any such street railroad, and all of its cars, buses, other equipment, instrumentalities, property and operations, shall be governed by and subject to the provisions of this chapter applicable to street railroads and street railroad corporations and not by the provisions applicable to other types of carriers;

[(42)] (53) Telecommunications company includes telephone corporations as that term is used in the statutes of this state and every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, owning, operating, controlling or managing any facilities used to provide telecommunications service for hire, sale or resale within this state;

[(43)] (54) Telecommunications facilities includes lines, conduits, ducts, poles, wires, cables, crossarms, receivers, transmitters, instruments, machines, appliances and all devices, real estate, easements, apparatus, property and routes used, operated, controlled or owned by any telecommunications company to facilitate the provision of telecommunications service;

[(44)] (55) Telecommunications service , the transmission of information by wire, radio, optical cable, electronic impulses, or other similar means. As used in this definition, information means knowledge or intelligence represented by any form of writing, signs, signals, pictures, sounds, or any other symbols. Telecommunications service does not include:

(a) The rent, sale, lease, or exchange for other value received of customer premises equipment except for customer premises equipment owned by a telephone company certificated or otherwise authorized to provide telephone service prior to September 28, 1987, and provided under tariff or in inventory on January 1, 1983, which must be detariffed no later than December 31, 1987, and thereafter the provision of which shall not be a telecommunications service, and except for customer premises equipment owned or provided by a telecommunications company and used for answering 911 or emergency calls;

(b) Answering services and paging services;

(c) The offering of radio communication services and facilities when such services and facilities are provided under a license granted by the Federal Communications Commission under the [public] commercial mobile radio services rules and regulations;

(d) Services provided by a hospital, hotel, motel, or other similar business whose principal service is the provision of temporary lodging through the owning or operating of message switching or billing equipment solely for the purpose of providing at a charge telecommunications services to its temporary patients or guests;

(e) Services provided by a private telecommunications system;

(f) Cable television service; [or]

(g) The installation and maintenance of inside wire within a customer s premises;

(h) Electronic publishing services; or

(i) Services provided pursuant to a broadcast radio or television license issued by the Federal Communications Commission;

[(45)] (56) Telephone cooperative , every corporation defined as a telecommunications company in this section, in which at least ninety percent of those persons and corporations subscribing to receive local telecommunications service from the corporation own at least ninety percent of the corporation s outstanding and issued capital stock and in which no subscriber owns more than two shares of the corporation s outstanding and issued capital stock;

[(46)] (57) Traffic aggregator , any person, firm, partnership or corporation which furnishes a telephone for use by the public and includes, but is not limited to, telephones located in rooms, offices and similar locations in hotels, motels, hospitals, colleges, universities, airports and public or customer-owned pay telephone locations, whether or not coin operated;

[(47)] (58) Transitionally competitive telecommunications company , an interexchange telecommunications company which provides any noncompetitive or transitionally competitive telecommunications service, except for an interexchange telecommunications company which provides only noncompetitive telecommunications service;

[(48)] (59) Transitionally competitive telecommunications service , a telecommunications service offered by a noncompetitive or transitionally competitive telecommunications company and classified as transitionally competitive by the commission pursuant to section 392.361 or 392.370, RSMo;

[(49)] (60) Transportation of persons includes every service in connection with or incidental to the safety, comfort or convenience of the person transported and the receipt, carriage and delivery of such person and his baggage;

[(50)] (61) Transportation of property includes any service in connection with the receiving, delivery, elevation, transfer in transit, ventilation, refrigeration, icing, storage, and handling of the property transported;

[(51)] (62) Water corporation includes every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees, or receivers appointed by any court whatsoever, owning, operating, controlling or managing any plant or property, dam or water supply, canal, or power station, distributing or selling for distribution, or selling or supplying for gain any water;

[(52)] (63) Water system includes all reservoirs, tunnels, shafts, dams, dikes, headgates, pipes, flumes, canals, structures and appliances, and all other real estate, fixtures and personal property, owned, operated, controlled or managed in connection with or to facilitate the diversion, development, storage, supply, distribution, sale, furnishing or carriage of water for municipal, domestic or other beneficial use.

392.180. The provisions of section 386.020, RSMo, defining words, phrases and terms, shall apply to and determine the meaning of all such words, phrases and terms as used in sections 392.190 to [392.360] 392.530.

392.185. The provisions of this chapter shall be construed to:

(1) Promote universally available and widely affordable telecommunications services;

(2) Maintain and advance the efficiency and availability of telecommunications services;

(3) Promote diversity in the supply of telecommunications services and products throughout the state of Missouri;

(4) Ensure that customers pay only reasonable charges for telecommunications service;

(5) Permit flexible regulation of competitive telecommunications companies and competitive telecommunications services; and

(6) Allow full and fair competition to function as a substitute for regulation when consistent with the protection of ratepayers and otherwise consistent with the public interest;

(7) Promote parity of urban and rural telecommunications services;

(8) Promote economic, educational, health care and cultural enhancements; and

(9) Protect consumer privacy.

392.200. 1. Every telecommunications company shall furnish and provide with respect to its business such instrumentalities and facilities as shall be adequate and in all respects just and reasonable. All charges made and demanded by any telecommunications company for any service rendered or to be rendered in connection therewith shall be just and reasonable and not more than allowed by law or by order or decision of the commission. Every unjust or unreasonable charge made or demanded for any such service or in connection therewith or in excess of that allowed by law or by order or decision of the commission is prohibited and declared to be unlawful.

2. No telecommunications company shall directly or indirectly or by any special rate, rebate, drawback or other device or method charge, demand, collect or receive from any person or corporation a greater or less compensation for any service rendered or to be rendered with respect to telecommunications or in connection therewith, except as authorized in this chapter, than it charges, demands, collects or receives from any other person or corporation for doing a like and contemporaneous service with respect to telecommunications under the same or substantially the same circumstances and conditions. Promotional programs for [competitive or transitionally competitive] telecommunications [service] services may be offered by telecommunications companies for periods of time so long as the offer is otherwise consistent with the provisions of this chapter and approved by the commission. Neither this subsection nor subsection 3 of this section shall be construed to prohibit an economy rate telephone service offering. This section and section 392.220 to the contrary notwithstanding, the commission is authorized to approve tariffs filed by local exchange telecommunications companies which elect to provide reduced charges for residential telecommunications connection services pursuant to the lifeline connection assistance plan as promulgated by the federal communications commission. Eligible subscribers for such connection services shall be those as defined by participating local exchange telecommunications company tariffs.

3. No telecommunications company shall make or give any undue or unreasonable preference or advantage to any person, corporation or locality, or subject any particular person, corporation or locality to any undue or unreasonable prejudice or disadvantage in any respect whatsoever except that telecommunications messages may be classified into such classes as are just and reasonable, and different rates may be charged for the different classes of messages.

4. (1) No telecommunications company may define a telecommunications service as a different telecommunications service based on the geographic area or other market segmentation within which such telecommunications service is offered or provided, unless the telecommunications company makes application and files a tariff or tariffs which propose relief from this subsection. Any such tariff shall be subject to the provisions of sections 392.220 and 392.230 and in any hearing thereon the burden shall be on the telecommunications company to show, by clear and convincing evidence, that the definition of such service based on the geographic area or other market within which such service is offered is reasonably necessary to promote the public interest and the purposes and policies of this chapter.

(2) It is the intent of this act to bring the benefits of competition to all customers and to ensure that incumbent and alternative local exchange telecommunications companies have the opportunity to price and market telecommunications services to all prospective customers in any geographic area in which they compete. To promote the goals of the federal Telecommunications Act of 1996, for an incumbent local exchange telecommunications company in any exchange where an alternative local exchange telecommunications company has been certified and is providing basic local telecommunications services or switched exchange access services, or for an alternative local exchange telecommunications company, the commission shall review and approve or reject, within forty-five days of filing, tariffs for proposed different services as follows:

(a) For services proposed on an exchange-wide basis, it shall be presumed that a tariff which defines and establishes prices for a local exchange telecommunications service or exchange access service as a different telecommunications service in the geographic area, no smaller than an exchange, within which such local exchange telecommunications service or exchange access service is offered is reasonably necessary to promote the public interest and the purposes and policies of this chapter;

(b) For services proposed in a geographic area smaller than an exchange or other market segmentation within which or to whom such telecommunications service is proposed to be offered, a local exchange telecommunications company may petition the commission to define and establish a local exchange telecommunications service or exchange access service as a different local exchange telecommunications service or exchange access service. The commission shall approve such a proposal if it finds, based upon clear and convincing evidence, that such service in a smaller geographic area or such other market segmentation is in the public interest and is reasonably necessary to promote competition and the purposes of this chapter. Upon approval of such a smaller geographic area or such other market segmentation for a different service for one local exchange telecommunications company, all other local exchange telecommunications companies certified to provide service in that exchange may file a tariff to use such smaller geographic area or such other market segmentation to provide that service;

(c) For proposed different services described in paragraphs (a) and (b) of this subdivision, the local exchange telecommunications company which files a tariff to provide such service shall provide the service to all similarly situated customers, upon request in accordance with that company s approved tariff, in the exchange or geographic area smaller than an exchange or such other market segmentation for which the tariff was filed, and no price proposed for such service by an incumbent local exchange telecommunications company, other than for a competitive service, shall be lower than its long run incremental cost, as defined in section 386.020, RSMo.

(3) The commission, on its own motion or upon motion of the public counsel, may by order, after notice and hearing, define a telecommunications service offered or provided by a telecommunications company as a different telecommunications service dependent upon the geographic area or other market within which such telecommunications service is offered or provided and apply different service classifications to such service only upon a finding, based on clear and convincing evidence, that such different treatment is reasonably necessary to promote the public interest and the purposes and policies of this chapter.

5. No telecommunications company may charge a different price per minute or other unit of measure for the same, substitutable, or equivalent interexchange telecommunications service provided over the same or equivalent distance between two points without filing a tariff for the offer or provision of such service pursuant to sections 392.220 and 392.230. In any proceeding under sections 392.220 and 392.230 wherein a telecommunications company seeks to charge a different price per minute or other unit of measure for the same, substitutable, or equivalent interexchange service, the burden shall be on the subject telecommunications company to show that such charges are in the public interest and consistent with the provisions and purposes of this chapter. The commission may modify or prohibit such charges if the subject telecommunications company fails to show that such charges are in the public interest and consistent with the provisions and purposes of this chapter. This subsection shall not apply to reasonable price discounts based on the volume of service provided, so long as such discounts are nondiscriminatory and offered under the same rates, terms, and conditions throughout a telecommunications company s certificated or service area.

6. Every telecommunications company operating in this state shall receive, transmit and deliver, without discrimination or delay, the conversations and messages of every other telecommunications company with whose facilities a connection may have been made.

7. The commission shall have power to provide the limits within which telecommunications messages shall be delivered without extra charge.

8. Customer specific pricing is authorized for dedicated, non-switched, private line and special access services and for central office based switching systems which substitute for customer premise, private branch exchange (PBX) services, provided such customer specific pricing shall be equally available to incumbent and alternative local exchange telecommunications companies.

9. This act shall not be construed to prohibit the commission, upon determining that it is in the public interest, from altering local exchange boundaries, provided that the incumbent local exchange telecommunications company or companies serving each exchange for which the boundaries are altered provide notice to the commission that the companies approves the alteration of exchange boundaries.

392.201. 1. Prior to February 7, 2000, no incumbent local exchange telecommunications company may engage in the provision of electronic publishing services, on an intrastate basis, which services are disseminated by means of such telecommunications company s or any of its affiliates telecommunications services; except that nothing in this section shall prohibit a separated affiliate or electronic publishing joint venture operated in accordance with this section from engaging in the provision of intrastate electronic publishing services.

2. The state of Missouri hereby adopts and incorporates in total the electronic publishing provisions of Section 274 of the federal Telecommunications Act of 1996 for the purpose of governing the provision of electronic publishing services on an intrastate basis; provided that said provisions shall be fully applicable to and binding on all incumbent local exchange telecommunications companies operating in the state of Missouri until February 7, 2000.

3. The public service commission is hereby granted all primary and concurrent jurisdiction and powers necessary and proper to administer the provisions of this section consistent with the federal Telecommunications Act of 1996, as incorporated herein, and otherwise consistent with the public service commission law.

4. Other provisions of law to the contrary notwithstanding, the provisions of this section shall not be construed to affect or prohibit incumbent local exchange telecommunications companies from providing international networking (Internet) services, electronic bulletin board and related services which are offered primarily as a community or public service.

392.205. The public service commission shall ensure that all public school districts have access to substantially reduced telecommunications rates and may approve the tariff as submitted, or may, after hearing, modify the tariff in the public interest.

392.220. 1. Every telecommunications company shall print and file with the commission schedules showing the rates, rentals and charges for service of each and every kind by or over its facilities between points in this state and between each point upon its facilities and all points upon all facilities leased or operated by it and between each point upon its facilities or upon any facility leased or operated by it and all points upon the line of any other telecommunications company whenever a through service or joint rate shall have been established between any two points. If no joint rate over through facilities has been established, the several companies joined over such through facilities shall file with the commission the separately established rates and charges applicable where through service is afforded. Such schedule shall plainly state the places between which telecommunications service will be rendered and shall also state separately all charges and all privileges or facilities granted or allowed and any rules or regulations or forms of contract which may in any wise change, affect or determine any or the aggregate of the rates, rentals or charges for the service rendered. Such schedule shall be plainly printed and kept open to public inspection. The commission shall have the power to prescribe the form of every such schedule and may from time to time prescribe, by order, changes in the form thereof. The commission shall also have power to establish rules and regulations for keeping such schedules open to public inspection and may from time to time modify the same. Every telecommunications company shall file with the commission as and when required by it a copy of any contract, agreement or arrangement in writing with any other telecommunications company or with any other corporation, association or person relating in any way to the construction, maintenance or use of telecommunications facilities or service by or rates and charges over or upon any facilities.

2. Unless the commission otherwise orders, and [until September 30, 1996,] except for the rates charged by a telephone cooperative for providing telecommunications service within an exchange or within a local calling scope as determined by the commission other than the rates for exchange access service, no change shall be made in any rate, charge or rental, or joint rate, charge or rental which shall have been filed by a telecommunications company in compliance with the requirements of sections 392.190 to 392.530, except after thirty days notice to the commission, which notice shall plainly state the changes proposed to be made in the schedule then in force and the time when the changed rate, charge or rental shall go into effect; and all proposed changes shall be shown by filing new schedules or shall be plainly indicated upon the schedules filed and in force at the time and kept open to public inspection. The commission for good cause shown may allow changes in rates, charges or rentals without requiring the thirty days notice, under such conditions as it may prescribe. All such changes shall be immediately indicated upon its schedules by such telecommunications company. No telecommunications company shall charge, demand, collect or receive a different compensation for any service rendered or to be rendered than the charge applicable to such service as specified in its schedule on file and in effect at that time. No telecommunications company shall refund or remit directly or indirectly any portion of the rate or charge so specified, nor extend to any person or corporation any form of contract or agreement, or any rule or regulation, or any privilege or facility other than such privileges and facilities as are contemplated by sections 392.200, 392.245, and 392.455, except such as are specified in its schedule filed and in effect at the time and regularly and uniformly extended to all persons and corporations under like circumstances for a like or substantially similar service.

3. No telecommunications company subject to the provisions of this law shall, directly or indirectly, give any free or reduced service, or any free pass or frank for the provision of telecommunications services between points within this state, except to its officers, employees, agents, surgeons, physicians, attorneys at law and their families; to persons or corporations exclusively engaged in charitable and eleemosynary work and ministers of religions; to officers and employees of other telegraph corporations and telephone corporations, railroad corporations and street railroad corporations; public education institutions, public libraries and not-for-profit health care institutions. This subsection shall not apply to state, municipal or federal contracts.

4. Any proposed rate or charge for any new telecommunications service which has not previously been provided by a telecommunications company to its Missouri customers may be suspended by the commission for a period not to exceed sixty days from the proposed effective date of such proposed rate or charge. This subsection shall not be applicable to any new price or method of pricing for a service presently being offered by any telecommunications company to its Missouri customers. Upon proposing a rate or charge for a telecommunications service which has not previously been provided by a telecommunications company to its Missouri customers, the offeror must file with the commission its justification for considering such offering a new service and such other information as may be required by rule or regulation, and must identify that service as being noncompetitive, transitionally competitive or competitive. If the offeror is a noncompetitive or transitionally competitive telecommunications company and it proposes such service as a transitionally competitive or competitive telecommunications service, the telecommunications service shall be treated as a transitionally competitive telecommunications service until such time as the commission finally determines the appropriate classification. If the offeror is a competitive telecommunications company and it proposes such service as a competitive service, the competitive classification proposed by the offeror of the service shall apply until such time as the commission finally determines the appropriate classification. Such final determination by the commission of the appropriate classification of such service may be made by the commission after the end of the maximum sixty-day suspension period, but any such decision by the commission issued after the maximum sixty-day suspension period shall be prospective in nature. The commission shall expedite proceedings under this subsection in order to facilitate the rapid introduction of new telecommunications products and services into the marketplace. [Until September 30, 1996,] The commission shall not suspend any proposed rate or charge for any telecommunications service which a telephone cooperative proposes to provide within an exchange or within a local calling scope as determined by the commission other than charges for exchange access service.

5. Unless the commission otherwise orders, any change in rates or charges, or change in any classification or tariff resulting in a change in rates or charges, for any telephone cooperative shall be filed, on an informational basis, with the commission at least thirty days prior to the date for implementation of such change. [Provided, however,] Nothing contained in this section shall be construed as conferring jurisdiction upon the commission over the rates charged by a telephone cooperative for providing telecommunications service within an exchange or within a local calling scope as determined by the commission, except for exchange access service.

6. If after notice and hearing, the commission determines that a telecommunications company has violated the requirements of section 392.200 or this section, it may revoke the certificate of service authority under which that telecommunications company operates and shall direct its general counsel to initiate an action under section 386.600, RSMo, to recover penalties from such telecommunications company in an amount not to exceed the revenues received as a result of such violation multiplied by three or the gross jurisdictional operating revenues of that company for the preceding twelve months, the provisions of section 386.570, RSMo, notwithstanding.

392.245. 1. The commission shall have the authority to ensure that rates, charges, tolls and rentals for telecommunications services are just, reasonable and lawful by employing price cap regulation. As used in this chapter, price cap regulation shall mean establishment of maximum allowable prices for telecommunications services offered by an incumbent local exchange telecommunications company, which maximum allowable prices shall not be subject to increase except as otherwise provided in this section.

2. A large incumbent local exchange telecommunications company shall be subject to regulation under this section upon a determination by the commission that an alternative local exchange telecommunications company has been certified to provide basic local telecommunications service and is providing such service in any part of the large incumbent company s service area. A small incumbent local exchange telecommunications company may elect to be regulated under this section upon providing written notice to the commission if an alternative local exchange telecommunications company has been certified to provide basic local telecommunications service and is providing such service in any part of the small incumbent company s service area, and the incumbent company shall remain subject to regulation under this section after such election.

3. Except as otherwise provided in this section, the maximum allowable prices established for a company under subsection 1 of this section shall be those in effect on December thirty-first of the year preceding the year in which the company is first subject to regulation under this section. Tariffs authorized under subsection 9 of this section shall be phased in as provided under such tariffs as approved by the commission.

4. (1) Except as otherwise provided in subsections 8 and 9 of this section and section 392.248, the maximum allowable prices for exchange access and basic local telecommunications services of a small, incumbent local exchange telecommunications company regulated under this section shall not be changed for a period of twelve months after the date the company is subject to regulation under this section. Except as otherwise provided in subsections 8 and 9 of this section and section 392.248, the maximum allowable prices for exchange access and basic local telecommunications services of a large, incumbent local exchange telecommunications company regulated under this section shall not be changed prior to January 1, 2000. Thereafter, the maximum allowable prices for exchange access and basic local telecommunications services of an incumbent local exchange telecommunications company shall be annually changed by one of the following methods:

(a) By the change in the telephone service component of the Consumer Price Index (CPI-TS), as published by the United States Department of Commerce or its successor agency for the preceding twelve months, or

(b) Upon request by the company and approval by the commission, by the change in the Gross Domestic Product Price Index (GDP-PI), as published by the United States Department of Commerce or its successor agency for the preceding twelve months, minus the productivity offset established for telecommunications service by the Federal Communication Commission and adjusted for exogenous factors.

(2) The commission shall approve a change to a maximum allowable price filed pursuant to paragraph (a) of subdivision (1) of this subsection within forty-five days of filing of notice by the local exchange telecommunications company. An incumbent local exchange telecommunications company shall file a tariff to reduce the rates charged for any service in any case in which the current rate exceeds the maximum allowable price established under this subsection.

(3) As a part of its request under paragraph (b) of subdivision (1) of this subsection, a company may seek commission approval to use a different productivity offset in lieu of the productivity offset established by the Federal Communication Commission. An adjustment under paragraph (b) of subdivision (1) of this subsection shall not be implemented if the commission determines, after notice and hearing to be conducted within forty-five days of the filing of the notice of a change to a maximum allowable price, that it is not in the public interest. In making such a determination, the commission shall consider the relationship of the proposed price of service to its cost and the impact of competition on the incumbent local exchange telecommunications company s intrastate revenues from regulated telecommunications services. Any adjustments for exogenous factors shall be allocated to the maximum allowable prices for exchange access and basic local telecommunications service in the same percentage as the revenues for such company bears to such company s total revenues from basic local, non-basic and exchange access services for the preceding twelve months.

(4) For the purposes of this section, the term exogenous factor shall mean a cumulative impact on a local exchange telecommunications company s intrastate regulated revenue requirement of more than three percent, which is attributable to federal, state or local government laws, regulations or policies which change the revenue, expense or investment of the company, and the term exogenous factor shall not include the effect of competition on the revenues, expense or investment of the company nor shall the term include any assessment made under section 392.248.

(5) An incumbent local exchange telecommunications company may change the rates for its services, consistent with the provisions of section 392.200, but not to exceed the maximum allowable prices, by filing tariffs which shall be approved by the commission within thirty days, provided that any such rate is not in excess of the maximum allowable price established for such service under this section.

5. Each telecommunications service of an incumbent local exchange telecommunications company shall be classified as competitive in any exchange in which at least one alternative local exchange telecommunications company has been certified under section 392.455 and has provided basic local telecommunications service in that exchange for at least five years, unless the commission determines, after notice and a hearing, that effective competition does not exist in the exchange for such service. The commission shall, from time to time, on its own motion or motion by an incumbent local exchange telecommunications company, investigate the state of competition in each exchange where an alternative local exchange telecommunication company has been certified to provide local exchange telecommunications service and shall determine, no later than five years following the first certification of an alternative local exchange telecommunication company in such exchange, whether effective competition exists in the exchange for the various services of the incumbent local exchange telecommunications company. If the commission determines that effective competition exists in the exchange, the local exchange telecommunications company may thereafter adjust its rates for such competitive services upward or downward as it determines appropriate in its competitive environment. If the commission determines that effective competition does not exist in the exchange, the provisions of paragraph (c) of subdivision (2) of subsection 4 of section 392.200 and the maximum allowable prices established by the provisions of subsections 4 and 11 of this section shall continue to apply. The commission shall from time to time, but no less than every five years, review the state of competition in those exchanges where it has previously found the existence of effective competition, and if the commission determines, after hearing, that effective competition no longer exists for the incumbent local exchange telecommunications company in such exchange, it shall reimpose upon the incumbent local exchange telecommunications company, in such exchange, the provisions of paragraph (c) of subdivision (2) of subsection 4 of section 392.200 and the maximum allowable prices established by the provisions of subsections 4 and 11 of this section, and, in any such case, the maximum allowable prices established for the telecommunications services of such incumbent local exchange telecommunications company shall reflect all index adjustments which were or could have been filed from all preceding years since the company s maximum allowable prices were first adjusted pursuant to subsections 4 or 11 of this section.

6. Nothing in this section shall be interpreted to alter the commission s jurisdiction over quality and conditions of service or to relieve telecommunications companies from the obligation to comply with commission rules relating to minimum basic local and interexchange telecommunications service.

7. A company regulated under this section shall not be subject to regulation under subsection 1 of section 392.240.

8. An incumbent local exchange telecommunications company regulated under this section may reduce intrastate access rates, including carrier common line charges, subject to the provisions of subsection 9 of this section, to a level not to exceed one hundred and fifty percent of the company s interstate rates for similar access services in effect as of December thirty-first of the year preceding the year in which the company is first subject to regulation under this section. Absent commission action under subsection 10 of this section, an incumbent local exchange telecommunications company regulated under this section shall have four years from the date the company becomes subject to regulation under this section to make the adjustments authorized under this subsection and subsection 9 of this section. Nothing in this subsection shall preclude an incumbent local exchange telecommunications company from establishing its intrastate access rates at a level lower than one hundred and fifty percent of the company s interstate rates for similar access services in effect as of December thirty-first of the year preceding the year in which the company is first subject to regulation under this section.

9. Other provisions of this section to the contrary notwithstanding and no earlier than January 1, 1997, the commission shall allow an incumbent local exchange telecommunications company regulated under this section which reduces its intrastate access service rates pursuant to subsection 8 of this section to offset the revenue loss resulting from the first year s access service rate reduction by increasing its monthly maximum allowable prices applicable to basic local exchange telecommunications services by an amount not to exceed one dollar and fifty cents. A large incumbent local exchange telecommunications company shall not increase its monthly rates applicable to basic local telecommunications service under this subsection unless it also reduces its rates for intraLATA interexchange telecommunications services by at least ten percent. No later than one year after the date the incumbent local exchange telecommunications company becomes subject to regulation under this section, the commission shall complete an investigation of the cost justification for the reduction of intrastate access rates and the increase of maximum allowable prices for basic local telecommunications service. If the commission determines that the company s monthly maximum allowable average statewide prices for basic local telecommunications service after adjustment pursuant to this subsection will be equal to or less than the long run incremental cost, as defined in section 386.020, RSMo, of providing basic local telecommunications service and that the company s intrastate access rates after adjustment pursuant to this subsection will exceed the long run incremental cost, as defined in section 386.020, RSMo, of providing intrastate access services, the commission shall allow the company to offset the revenue loss resulting from the remaining three-quarters of the total needed to bring that company s intrastate access rates to one hundred and fifty percent of the interstate level by increasing the company s monthly maximum allowable prices applicable to basic local telecommunications service by an amount not to exceed one dollar and fifty cents on each of the next three anniversary dates thereafter; otherwise, the commission shall order the reduction of intrastate access rates and the increase of monthly maximum allowable prices for basic local telecommunications services to be terminated at the levels the commission determines to be cost-justified. The total revenue increase due to the increase to the monthly maximum allowable prices for basic local telecommunications service shall not exceed the total revenue loss resulting from the reduction to intrastate access service rates.

10. Any telecommunications company whose intrastate access costs are reduced pursuant to subsections 8 and 9 of this section shall decrease its rates for intrastate toll telecommunications service to flow through such reduced costs to its customers. The commission may permit a telecommunications company to defer a rate reduction required by this subdivision until such reductions, on a cumulative basis, reach a level that is practical to flow through to its customers.

11. The maximum allowable prices for non-basic telecommunications services of a small, incumbent local exchange telecommunications company regulated under this section shall not be changed until twelve months after the date the company is subject to regulation under this section or, on an exchange-by-exchange basis, until an alternative local exchange telecommunications company is certified and providing basic local telecommunications service in such exchange, whichever is earlier. The maximum allowable prices for non-basic telecommunications services of a large, incumbent local exchange telecommunications company regulated under this section shall not be changed until January 1, 1999 or, on an exchange-by-exchange basis, until an alternative local exchange telecommunications company is certified and providing basic local telecommunications service in such exchange, whichever is earlier. Thereafter, the maximum allowable prices for non-basic telecommunications services of an incumbent local exchange telecommunications company may be annually increased by up to eight percent for each of the following twelve-month periods upon providing notice to the commission and filing tariffs establishing the rates for such services in such exchanges at such maximum allowable prices. This subsection shall not preclude an incumbent local exchange telecommunications company from proposing new telecommunications services and establishing prices for such new services. An incumbent local exchange telecommunications company may change the rates for its services, consistent with the provisions of section 392.200, but not to exceed the maximum allowable prices, by filing tariffs which shall be approved by the commission within thirty days, provided that any such rate is not in excess of the maximum allowable price established for such service under this section.

12. The commission shall permit an incumbent local exchange telecommunications company regulated under this section to determine and set its own depreciation rates which shall be used for all intrastate regulatory purposes. Provided, however, that such a determination is not binding on the commission in determining eligibility for or reimbursement under the universal service fund established under section 392.248.

392.246. Notwithstanding the provisions of subsection 2 of section 392.245, an incumbent local exchange telecommunications company regulated under section 392.245 may petition the commission for rate relief under the provisions of sections 392.220 and 392.230, and the commission may grant such rate relief if it determines that the financial condition of such incumbent local exchange telecommunications company s Missouri jurisdictional operations is such that the company cannot attract capital on reasonable terms or that the ability of that incumbent local exchange telecommunications company to continue to provide safe and adequate universal telecommunications service is threatened. If the commission shall be of the opinion that the maximum rates, charges or rentals chargeable by such telecommunications company are insufficient to yield reasonable compensation for the service rendered, the commission shall with due regard, among other things, to a reasonable average return upon the value of the property actually used in the public service and of the necessity of making reservation out of income for surplus and contingencies, determine the just and reasonable rates, charges and rentals to be thereafter observed and in force as the maximum to be charged, demanded, exacted or collected for the performance or rendering of the service specified and shall fix the same by order served upon such incumbent local exchange telecommunications company, and thereafter no increase in any rate, charge or rental so fixed shall be made without the consent of the commission.

392.248. 1. In order to ensure just, reasonable, and affordable rates for reasonably comparable essential local telecommunications services throughout the state, there is hereby established the Universal Service Board which shall consist of the members of the public service commission and the public counsel, and which shall be incorporated as a not-for-profit, public benefit corporation in the manner provided pursuant to chapter 355, RSMo, except as otherwise provided in this section. Consistent with rules adopted by the commission, the universal service board shall create a universal service fund. The universal service board shall supervise the management of the universal service fund. Funds deposited in the universal service fund are not state funds. The commission shall adopt rules governing the operations of the state universal service fund within three months of the adoption of the rules adopted by the Federal Communication Commission for the federal universal service fund. Nothing in the rules adopted by the commission shall be inconsistent with the support mechanisms established for the federal universal service fund, but the commission may adopt any additional definitions and standards it believes are necessary to preserve and advance universal service in the state of Missouri. The commission shall adopt rules governing the operations of the universal service fund and the operation of the universal service board. Meetings of the universal service board shall be open meetings pursuant to chapter 610, RSMo. The universal service board shall also retain an independent neutral fund administrator who will be responsible for the day-to-day operations of the universal service fund. The fund administrator shall be a fiduciary with trust company powers. The universal service board shall provide for periodic review of the fund administrator and the opportunity for selection of an alternate fund administrator no less frequently than every four years. The agency, individual, firm, partnership, or corporation that is selected by the commission as the neutral administrator of the universal service fund may neither contribute to nor receive disbursements from the universal service fund, except as provided in subsection 2 of this section. The administrator may not have any financial interest in a telecommunications company, as defined in section 386.020, RSMo. The commission shall cause the books and records of the universal service fund administrator to be independently audited on an annual basis. The independent audit shall be paid for from funds held in the universal service fund.

2. The commission shall adopt and enforce rules to be implemented by the universal service board, governing the system of funding and disbursing funds from the universal service fund in a manner that does not grant a preference or competitive advantage to any telecommunications company or subject a telecommunications company to prejudice or disadvantage. Funds from the universal service fund shall only be used:

(1) To ensure the provision of reasonably comparable essential local telecommunications service, as that definition may be updated by the commission by rule, throughout the state including high cost areas, at just, reasonable and affordable rates;

(2) To assist low-income customers and disabled customers in obtaining affordable essential telecommunications services; and

(3) To pay the reasonable, audited costs of administering the universal service fund.

3. The universal service fund shall be funded through assessments on all telecommunications companies in the state which shall be based on Missouri jurisdictional telecommunications services revenue and other nondiscriminatory factors as determined by the commission. Such assessments shall be paid to the universal service board. A telecommunications company regulated under section 392.245 may, upon providing written notice to the commission, increase the maximum allowable prices for any or all of its telecommunications services except residential basic local telecommunications services above those maximum allowable prices otherwise established in section 392.245 by an amount not to exceed the amount required to recover fifty percent of its assessment under this section. Any increases in the maximum allowable prices for exchange access and basic local telecommunications services other than residential basic local telecommunications services shall be calculated to recover revenues in the same percentage as the revenues from such services bear to such company s total revenues for non-basic, exchange access and basic local other than residential telecommunications services for the preceding twelve months. A telecommunications company regulated under section 392.245 may seek to have the remaining fifty percent of its assessment under this section included in its funding requirements under this section. The commission shall establish the level of the universal service fund funding requirement necessary to fund the purposes set forth in subsection 2 of this section. The universal service fund funding requirements shall be paid by the universal service board in accordance with procedures approved by the commission. A telecommunications company that fails to pay an assessment that is due and payable pursuant to this section may have its certificate revoked or be required to pay appropriate penalties under chapter 386, RSMo, after notice and hearing.

4. To facilitate provision of essential local telecommunications service, the commission shall determine whether and to what extent any telecommunications company in the state providing essential local telecommunications service in any part of the state, shall be eligible to receive funding. Eligibility shall be determined as follows:

(1) A telecommunications company s eligibility to receive support for high cost areas from the universal service fund shall be conditioned upon: (a) the telecommunications company offering essential local telecommunications service, using its own facilities, in whole or in part, throughout an entire high cost area and having carrier of last resort obligations in that high cost area, and (b) the telecommunications company charging a rate not in excess of that set by the commission for essential services in a particular geographic area; and

(2) A telecommunications company s eligibility to receive support to assist low income customers and disabled customers shall be conditioned on the company s providing essential local telecommunications services to such customers pursuant to the discounted rate established by the commission for such customers. Distributions from the universal service fund shall be made by the universal service board in accordance with rules approved by the commission.

5. In local exchange areas subject to competition for essential local telecommunications service, the incumbent local exchange telecommunications company shall be designated as a carrier of last resort for essential local telecommunications service. The commission may, consistent with section 214(e)(2) of the federal Telecommunications Act of 1996, after notice and hearing, designate one or more additional carriers of last resort for any exchange or other area designated by the commission upon a finding that such designation is in the public interest. In exchanges where the commission has designated more than one carrier of last resort, the commission may permit a local exchange telecommunications company to relinquish such obligation, consistent with section 214(e)(4) of the federal Telecommunications Act of 1996, upon a finding that at least one carrier of last resort will continue to serve that area. In local exchange areas not subject to competition for essential local telecommunications service, the incumbent local exchange telecommunications company shall continue to act as the carrier of last resort.

6. In determining whether, and to what extent, universal service fund funding is required to facilitate provision of essential local telecommunications service, the commission shall:

(1) Determine the definition of essential local telecommunications service no later than three months after the adoption of the essential local exchange telecommunications service definition for the federal universal service fund, and consider revision of the definition on a periodic basis not to exceed every three years thereafter, with the goal that every citizen of this state shall have access to a wider range of services, that are reasonably comparable between urban and rural areas, at rates that are reasonably comparable between urban and rural areas;

(2) Upon request from an eligible telecommunications company for assistance from the universal service fund for a high cost area, determine if the high cost area qualifies for assistance from the universal service fund. The commission shall review its determination that a high cost area qualifies for assistance from the universal service fund no less frequently than once every five years;

(3) Determine for each requesting, eligible local exchange telecommunications company, by high cost area, the costs of providing essential local telecommunications services in those high cost areas and establish support payments necessary to such companies to ensure just, reasonable and affordable rates for essential telecommunications service. The commission shall review such support payments no less frequently than once every five years; provided, however, that if the commission adopts a different definition of essential local telecommunications service, pursuant to subdivision (1) of this subsection, then the commission shall review and adjust accordingly the previously authorized support payments in order to ensure just, reasonable and affordable rates for essential telecommunications service, as revised by commission rule. In determining and reviewing such support payments, the commission shall ensure that no telecommunications company receives more or less support than necessary to further the purposes established in subsection 2 of this section;

(4) Establish a standard to determine whether and to what extent particular end-user customers, without regard to location within the state, may be eligible for assistance in paying for essential local telecommunications service.

7. The commission shall arrange for the time and place for the initial organizational meeting of the universal service board.

8. The universal service board shall submit to the commission a plan of operation. After notice and hearing, the commission shall approve the plan of operation, provided that it does not grant a preference or competitive advantage to any telecommunications company or subject a telecommunications company to prejudice or disadvantage. In its plan, the universal service board shall establish procedures for the handling and accounting of assets and establish procedures for the collection of assessments from all telecommunications companies to provide for universal service payments and for administrative expenses.

9. The universal service board shall have authority to: (1) enter into contracts as are necessary or proper to carry out the provisions of this section, and (2) sue or be sued, including taking any legal actions necessary or proper for recovery of any assessments.

10. No member of the universal service board shall be civilly liable, either jointly or separately, as a result of any act, omission or decision in performance of the member s duties as specifically required by this section. Such immunity shall not attach for any intentional or reckless act affecting the property or rights of any person.

11. Nothing in this section shall require the commission, the universal service board, the universal service fund administrator, or any other person or agency to take any actions that are inconsistent with federal statutes, administrative rules, or court decisions concerning provision of essential local telecommunications service.

12. The commission and the universal service board may do all things necessary and convenient to implement and administer the universal service fund.

13. In the event of a Federal Communications Commission order, rule or policy announced no later than December 31, 1997 pursuant to section 254(a)(2) of the federal Telecommunications Act of 1996, the effect of which is to change the federal universal service fund revenues of an incumbent local exchange telecommunications company, the commission shall either increase the maximum allowable prices for basic local telecommunications service or increase the company s recovery from the state universal service fund or a combination thereof to replace the reasonably projected change in revenues. The commission shall review the continuing need for such revenues in its periodic reviews pursuant to subdivision 3 of subsection 6 of this section.

392.410. 1. A telecommunications company not possessing a certificate of public convenience and necessity from the commission at the time this section goes into effect shall have not more than ninety days in which to apply for a certificate of service authority from the commission pursuant to this chapter unless a company holds a state charter issued in or prior to the year 1913 which charter authorizes a company to engage in the telephone business. No telecommunications company not exempt from this subsection shall transact any business in this state until it shall have obtained a certificate of service authority from the commission pursuant to the provisions of this chapter, except that any telecommunications company which is providing telecommunications service on September 28, 1987, and which has not been granted or denied a certificate of public convenience and necessity prior to September 28, 1987, may continue to provide that service exempt from all other requirements of this chapter until a certificate of service authority is granted or denied by the commission so long as the telecommunications company applies for a certificate of service authority within ninety days from September 28, 1987.

2. No telecommunications company offering or providing, or seeking to offer or provide, any interexchange telecommunications service shall do so until it has applied for and received a certificate of interexchange service authority pursuant to the provisions of subsection 1 of this section. No telecommunications company offering or providing, or seeking to offer or provide, any local exchange telecommunications service shall do so until it has applied for and received a certificate of local exchange service authority pursuant to the provisions of section 392.420.

3. No certificate of service authority issued by the commission[, except a grant of authority to provide basic local telecommunications service,] shall be construed as granting a monopoly or exclusive privilege, immunity or franchise. The issuance of a certificate of service authority to any telecommunications company shall not preclude the commission from issuing additional certificates of service authority to another telecommunications company providing the same or equivalent service or serving the same geographical area or customers as any previously certified company, except to the extent otherwise provided by section 392.450.

4. Any certificate of public convenience and necessity granted by the commission to a telecommunications company prior to September 28, 1987, shall remain in full force and effect unless modified by the commission, and such companies need not apply for a certificate of service authority in order to continue offering or providing service to the extent authorized in such certificate of public convenience and necessity. Any such carrier, however, prior to substantially altering the nature or scope of services provided under a certificate of public convenience and necessity, or adding or expanding services beyond the authority contained in such certificate, must apply for a certificate of service authority for such alterations or additions pursuant to the provisions of this section.

5. The commission may review and modify the terms of any certificate of public convenience and necessity issued to a telecommunications company prior to September 28, 1987, in order to ensure its conformity with the requirements and policies of this chapter. Any certificate of service authority may be altered or modified by the commission after notice and hearing, upon its own motion or upon application of the person or company affected. Unless exercised within a period of one year from the issuance thereof, authority conferred by a certificate of service authority or a certificate of public convenience and necessity shall be null and void.

6. The commission may issue a temporary certificate which shall remain in force not to exceed one year to assure maintenance of adequate service or to serve particular customers, without notice and hearing, pending the determination of an application for a certificate.

392.450. 1. The commission shall approve an application for a certificate of local exchange service authority to provide basic local telecommunications service or for the resale of basic local telecommunications service only upon a showing by the applicant, and a finding by the commission, after notice and hearing that[:

(1) The applicant possesses sufficient technical, financial and managerial resources and abilities to provide basic local telecommunications service; and

(2) Reasonably safe and adequate service is not being offered by the principal provider of basic local telecommunications service.] the applicant has complied with the certification process established pursuant to section 392.455.

2. In addition, the commission shall adopt such rules, consistent with section 253(b) of the federal Telecommunications Act of 1996 to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers. Such rules, at a minimum, shall require that all applicants seeking a certificate to provide basic local telecommunications services under this section:

(1) File and maintain tariffs with the commission in the same manner and form as the commission requires of the incumbent local exchange telecommunications company with which the applicant seeks to compete; and

(2) Meet the minimum service standards, including quality of service and billing standards, as the commission requires of the incumbent local exchange telecommunications company with which the applicant seeks to compete.

392.451. 1. Notwithstanding any provisions of this act to the contrary, and consistent with section 253(f) of the federal Telecommunications Act of 1996, the commission shall approve an application for a certificate of local exchange service authority to provide basic local telecommunications service or for the resale of basic local telecommunications service in an area that is served by a small incumbent local exchange telecommunications company only upon a showing by the applicant, and a finding by the commission, after notice and hearing, that:

(1) The applicant shall, throughout the service area of the incumbent local exchange telecommunication company, offer all telecommunications services which the commission has determined are essential for purposes of qualifying for state universal service fund support; and

(2) The applicant shall advertise the availability of such essential services and the charges therefor using media of general distribution.

2. In addition, the commission shall adopt such rules, consistent with section 253(b) of the federal Telecommunications Act of 1996 to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers. Such rules, at a minimum, shall require that all applicants seeking a certificate to provide basic local telecommunications services under this section:

(1) File and maintain tariffs with the commission in the same manner and form as the commission requires of the incumbent local exchange telecommunications company with which the applicant seeks to compete;

(2) Meet the minimum service standards, including quality of service and billing standards, as the commission requires of the incumbent local exchange telecommunications company with which the applicant seeks to compete;

(3) Make such reports to and other information filings with the commission as is required of the incumbent local exchange telecommunications company with which the applicant seeks to compete; and

(4) Comply with all of the same rules and regulations as the commission may impose on the incumbent local exchange telecommunications company with which the applicant seeks to compete.

3. The state of Missouri hereby adopts and incorporates in total the provisions of Section 251(f)(1) of the federal Telecommunications Act of 1996 providing exemption for certain rural telephone companies.

392.455. Upon enactment of this section, the commission shall immediately begin a proceeding to establish a basic local telecommunications certification process. The commission may grant certificates to new entrants to provide basic local telecommunications service on a common carriage basis, subject to the provisions of sections 392.380 and 392.390. In order to preserve and advance universal service, protect the public safety and welfare, insure the continued quality of telecommunications services and safeguard the rights of consumers, such process shall include, but not be limited to:

(1) A requirement that the applicant possess sufficient technical, financial and managerial resources and abilities to provide basic local telecommunications service;

(2) A requirement that the applicant demonstrate that the services it proposes to offer satisfy the minimum standards established by the commission;

(3) A requirement that the applicant set forth the geographic area in which it proposes to offer service and demonstrate that such area follows exchange boundaries of the incumbent local exchange telecommunications company and is no smaller than an exchange;

(4) A requirement that all providers must offer basic local telecommunications service as a separate and distinct service;

(5) A requirement that the commission give due consideration to the equitable access for all Missourians, regardless of where they live or their income, to affordable telecommunications services.

392.475. Consistent with the federal Telecommunications Act of 1996, including implementing regulations, the commission shall prohibit the resale of a telecommunications service available at retail only to designated categories of subscribers to different categories of subscribers, including a prohibition on the resale of services provided to residential customers to business customers.

392.530. [1. The provisions of this chapter shall be construed to:

(1) Promote universally available and widely affordable telecommunications services;

(2) Maintain and advance the efficiency and availability of telecommunications services;

(3) Promote diversity in the supply of telecommunications services and products throughout the state of Missouri;

(4) Ensure that customers pay only reasonable charges for telecommunications service;

(5) Permit flexible regulation of competitive telecommunications companies and competitive telecommunications services; and

(6) Allow full and fair competition to function as a substitute for regulation when consistent with the protection of ratepayers and otherwise consistent with the public interest.

2.] Sections 392.361 to 392.520 are enacted in part to clarify and specify the law existing prior to September 28, 1987. Any specific grant of authority to the commission contained in those provisions shall not be construed as indicating or meaning that the commission did not possess such authority under the law existing prior to September 28, 1987.

Section B. Because of the immediate need to properly provide for competition in the local telecommunications service market as provided by the federal Telecommunications Act of 1996 which became effective on February 8, 1996, this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and this act shall be in full force and effect upon its passage and approval.