1.1                          A bill for an act 
  1.2             relating to telecommunications; providing for 
  1.3             regulation of small telephone companies; limiting 
  1.4             discriminatory practices, services, rates, and 
  1.5             pricing; providing for investigation, hearings, and 
  1.6             appeals regarding telecommunications services; 
  1.7             delineating telecommunications practices allowed; 
  1.8             providing penalties and remedies; amending Minnesota 
  1.9             Statutes 1994, section 237.01, subdivision 2, and by 
  1.10            adding a subdivision; proposing coding for new law in 
  1.11            Minnesota Statutes, chapter 237. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  [TITLE.] 
  1.14     This act shall be referred to as the "Small Telephone 
  1.15  Company Regulatory Clarification Act." 
  1.16     Sec. 2.  Minnesota Statutes 1994, section 237.01, 
  1.17  subdivision 2, is amended to read: 
  1.18     Subd. 2.  [TELEPHONE COMPANY.] "Telephone company," means 
  1.19  and applies to any person, firm, association or any corporation, 
  1.20  private or municipal, owning or operating any telephone line or 
  1.21  telephone exchange for hire, wholly or partly within this state, 
  1.22  or furnishing any telephone service to the public. 
  1.23     A "telephone company" does not include a radio common 
  1.24  carrier as defined in subdivision 4.  A telephone company which 
  1.25  also conforms with the definition of a radio common carrier is 
  1.26  subject to regulation as a telephone company.  However, none of 
  1.27  chapter 237 applies to telephone company activities which 
  1.28  conform to the definition of a radio common carrier. 
  2.1      A "telephone company" does not include a telecommunications 
  2.2   carrier as defined in subdivision 6, except that a 
  2.3   telecommunications carrier is a telephone company for the 
  2.4   purposes of section 222.36.  A telephone company is not subject 
  2.5   to section 237.74. 
  2.6      A "telephone company" does not include a small telephone 
  2.7   company as defined in subdivision 7, except that a small 
  2.8   telephone company is a telephone company for the purposes of 
  2.9   section 222.36.  A telephone company is not subject to section 
  2.10  237.76. 
  2.11     Sec. 3.  Minnesota Statutes 1994, section 237.01, is 
  2.12  amended by adding a subdivision to read: 
  2.13     Subd. 7.  [SMALL TELEPHONE COMPANY.] "Small telephone 
  2.14  company" means a municipal telephone company, a cooperative 
  2.15  telephone association, or an independent telephone company 
  2.16  organized and operating under chapter 301 or 302A or authorized 
  2.17  to do business in Minnesota under chapter 303 and providing 
  2.18  local exchange service to fewer than 50,000 subscribers within 
  2.19  the state. 
  2.20     Sec. 4.  [237.036] [SMALL TELEPHONE COMPANY EXEMPTION.] 
  2.21     Small telephone companies are not subject to regulation 
  2.22  under this chapter, except that small telephone companies and 
  2.23  localities and territories served by small telephone companies 
  2.24  are subject to sections 237.065; 237.16; 237.161; 237.52; 
  2.25  237.70; and 403.11 pursuant to sections 237.49 and 237.76. 
  2.26     Sec. 5.  [237.76] [SMALL TELEPHONE COMPANY REGULATION.] 
  2.27     Subdivision 1.  [UNIVERSAL SERVICE PROVIDER AND SERVICE 
  2.28  TERRITORIES.] It is the duty of every small telephone company as 
  2.29  the universal service provider to furnish service and provide 
  2.30  facilities for the telecommunications needs of the public 
  2.31  throughout the entire territory for which the small telephone 
  2.32  company has previously filed exchange boundary maps under 
  2.33  section 237.16.  In fulfilling this duty, a small telephone 
  2.34  company shall be referred to as the "universal service 
  2.35  provider."  So long as a small telephone company performs the 
  2.36  duties of the universal service provider, the localities and 
  3.1   territories served by that small telephone company remain 
  3.2   subject to section 237.16, and the small telephone company is 
  3.3   entitled to maintain the certificates of territorial authority 
  3.4   granted pursuant to section 237.16. 
  3.5      Subd. 2.  [FILING REQUIREMENTS.] Every small telephone 
  3.6   company shall keep on file with the department a current price 
  3.7   list containing the rules, rates, and classifications used by it 
  3.8   in conducting the telephone business, including limitations on 
  3.9   liability.  The filings are governed by chapter 13.  Each small 
  3.10  telephone company shall keep these price lists open for public 
  3.11  inspection at designated offices. 
  3.12     Subd. 3.  [DISCRIMINATION PROHIBITED; PRACTICES, SERVICES, 
  3.13  RATES.] No small telephone company shall offer 
  3.14  telecommunications service within the state upon terms or rates 
  3.15  that are unreasonably discriminatory.  The small telephone 
  3.16  company's costs or rate of return must not be considered to 
  3.17  determine whether the terms or rates are unreasonably 
  3.18  discriminatory.  Individual pricing for services may be allowed 
  3.19  when a uniform price should not be required because of market 
  3.20  conditions.  Unique or individual prices for services or service 
  3.21  elements in effect before the effective date of this section are 
  3.22  deemed to be lawful under this section. 
  3.23     Subd. 4.  [INVESTIGATIONS.] (a) Upon a complaint made 
  3.24  against a small telephone company by a customer, another small 
  3.25  telephone company, a telephone company, or a telecommunications 
  3.26  carrier, that any of the rates, tolls, price lists, charges, or 
  3.27  schedules is in any respect unjustly discriminatory, or that a 
  3.28  service is inadequate or cannot be obtained, the commission, 
  3.29  after notice to the small telephone company, shall investigate 
  3.30  the matters raised by the complaint.  However, small telephone 
  3.31  companies are not subject to rate or rate of return regulation 
  3.32  and neither the commission nor the department may investigate 
  3.33  any matter relating to a small telephone company's costs, rates, 
  3.34  or rate of return.  A small telephone company may also make 
  3.35  complaints against telephone companies and telecommunications 
  3.36  carriers to the commission pursuant to sections 237.081 and 
  4.1   237.74. 
  4.2      (b) If, after making an investigation under paragraph (a), 
  4.3   the commission finds that a significant factual issue has not 
  4.4   been resolved to its satisfaction, the commission may order that 
  4.5   a contested case hearing be conducted under chapter 14 unless 
  4.6   the complainant, the small telephone company, and the commission 
  4.7   agree that an expedited hearing under section 237.61 is 
  4.8   appropriate. 
  4.9      (c) In a complaint proceeding authorized under this 
  4.10  section, small telephone companies bear the burden of proof 
  4.11  consistent with the allocation of the burden of proof to 
  4.12  telephone companies in sections 237.01 to 237.73. 
  4.13     (d) The commission shall keep a full and complete record of 
  4.14  all proceedings before it upon any formal investigation or 
  4.15  hearing.  All testimony received or offered must be taken down 
  4.16  by the stenographer appointed by the commission and a 
  4.17  transcribed copy of the record furnished to any party to the 
  4.18  investigation upon paying the expense of furnishing the 
  4.19  transcribed copy. 
  4.20     If the commission finds by a preponderance of the evidence 
  4.21  presented during the complaint proceeding that existing rates, 
  4.22  tolls, price lists, charges, or schedules are unjustly 
  4.23  discriminatory, or that a service is inadequate or cannot be 
  4.24  obtained, the commission may issue its order requiring 
  4.25  termination of the discrimination or making the service adequate 
  4.26  or obtainable. 
  4.27     (e) A copy of an order issued under this section must be 
  4.28  served upon the person against whom it applies or the person's 
  4.29  attorney, and notice of the order must be given to the other 
  4.30  parties to the proceedings or their attorneys. 
  4.31     (f) Any party to a proceeding before the commission or the 
  4.32  attorney general may make and perfect an appeal from the order 
  4.33  in accordance with chapter 14. 
  4.34     If the court finds from an examination of the record that 
  4.35  the commission erroneously rejected evidence that should have 
  4.36  been admitted, it shall remand the proceedings to the commission 
  5.1   with instructions to receive the evidence rejected and any 
  5.2   rebutting evidence and to make new findings and return them to 
  5.3   the court for further review.  Then the commission, after notice 
  5.4   to the parties in interest, shall proceed to rehear the matter 
  5.5   in controversy and receive the wrongfully rejected evidence and 
  5.6   any rebutting evidence offered and make new findings, as upon 
  5.7   the original hearing, and transmit it and the new record 
  5.8   properly certified to the court of appeals, when the matter must 
  5.9   be again considered by the court in the same manner as in an 
  5.10  original appeal. 
  5.11     (g) When an appeal is taken from an order of the commission 
  5.12  under this section, the commission shall, without delay, have a 
  5.13  certified transcript made of all proceedings, pleadings and 
  5.14  filings, and testimony taken or offered before it upon which the 
  5.15  order was based, showing particularly what evidence offered, if 
  5.16  any, was excluded.  The transcript must be made and filed with 
  5.17  the court administrator of the district court where the appeal 
  5.18  is pending. 
  5.19     Subd. 5.  [EXTENSION OF FACILITIES.] A small telephone 
  5.20  company may extend any interexchange facility that is owned by 
  5.21  the small telephone company or an affiliate of the small 
  5.22  telephone company and that is used to provide service to 
  5.23  customers within its territories or to connect customers within 
  5.24  its territories to other telephone companies, small telephone 
  5.25  companies, or telecommunications carriers, which may be located 
  5.26  inside or outside of its territories.  The small telephone 
  5.27  company or its affiliate may make the extension without further 
  5.28  proceeding, order, or determination of current or future public 
  5.29  convenience, and necessity relating to the facility or entity.  
  5.30  The extension is subject to regulation by the governing body of 
  5.31  the county, statutory or home rule charter city, or town 
  5.32  relative to the location of poles and wires and the preservation 
  5.33  of the safe and convenient use of highways, roads, streets, and 
  5.34  alleyways by the public.  
  5.35     Subd. 6.  [TERMINATING CONNECTION OR SERVICE.] (a) If a 
  5.36  physical connection exists between a telephone exchange system 
  6.1   operated by a small telephone company and: 
  6.2      (1) the toll line or lines operated by a telecommunications 
  6.3   carrier; 
  6.4      (2) the telephone exchange system operated by another small 
  6.5   telephone company or a telephone company; or 
  6.6      (3) the system of a radio common carrier; 
  6.7   neither of the companies shall have the connection severed or 
  6.8   the service between the companies discontinued without first 
  6.9   obtaining an order from the commission, unless the companies 
  6.10  mutually consent. 
  6.11     (b) If the companies mutually consent to terminating the 
  6.12  connection or service between them, the approval of the 
  6.13  commission is not required. 
  6.14     (c) Termination of a connection or service does not require 
  6.15  commission approval if: 
  6.16     (1) the termination is for nonpayment by a 
  6.17  telecommunications carrier or radio common carrier and there is 
  6.18  available to the customers of the small telephone company equal 
  6.19  access to alternative telecommunication carriers, or access to 
  6.20  another radio common carrier; 
  6.21     (2) end users would not be totally deprived of service 
  6.22  because of the disconnection; and 
  6.23     (3) at least five days prior written notice is provided. 
  6.24     (d) The commission shall require maintenance of the 
  6.25  connection or service if it finds that the maintenance of the 
  6.26  connection or service is in the public interest. 
  6.27     Subd. 7.  [ENFORCEMENT; PENALTIES AND REMEDIES.] (a) This 
  6.28  section and orders of the commission adopted or issued under 
  6.29  this section may be enforced by criminal prosecution, action to 
  6.30  recover civil penalties, injunction, action to compel 
  6.31  performance, other appropriate action, or any combination of 
  6.32  penalties and remedies. 
  6.33     (b) A person who knowingly and intentionally violates this 
  6.34  section or order of the commission adopted or issued under this 
  6.35  section shall forfeit and pay to the state a penalty, in an 
  6.36  amount to be determined by the court, of at least $100 and not 
  7.1   more than $1,000 for each day of each violation.  The civil 
  7.2   penalties provided for in this subdivision may be recovered by a 
  7.3   civil action brought by the attorney general in the name of the 
  7.4   state.  Amounts recovered under this subdivision must be paid 
  7.5   into the state treasury. 
  7.6      Sec. 6.  [EFFECTIVE DATE.] 
  7.7      Sections 1 to 5 are effective the day following final 
  7.8   enactment.