[BETA] Fortnightly

Now that incumbent LECs must offer all services for resale, state regulators must decide the appropriate level of discount for the new resale tariffs.

Discounts could put incumbent LECs at a disadvantage, since many local exchanges already price below the cost of service, particularly for basic residential access.

On the other hand, resale carriers might lose a fair chance at establishing themselves if resale rates simply reflect the current retail charge minus costs avoided by the LECs in providing the services at wholesale (i.e., individual customer billing, marketing, and customer-service costs). Also, regulators must consider other policy goals, such as encouraging facilities-based competition.

CALIFORNIA

Requires Pacific Bell and GTE California, Inc., to discount wholesale rates 17 and 12 percent, respectively. Also discounts basic service rates by 10 and 7 percent, respectively. Expects smaller approved margins to "spur the development of competing networks." Rejects LEC request for pricing flexibility, citing continuing market advantage. Re Competition for Loc. Exch. Serv., Decision 96-03-020, R. 95-04-043, I. 95-04-044, Mar. 13, 1996, 169 PUR4th 83 (Cal.P.U.C.).

IOWA

Sets rates and terms that U S WEST must offer competing carriers. Authorizes "appropriate markup" as well as contribution toward the shared and common costs of the local loop. Re U S WEST Comm., Inc., Dkt. No. RPU-95-10, May 17, 1996. Approves an experimental facilities-based competition plan but finds that resale options are needed. Re McLeod Telemanagement, Inc., Dkt. No. TCU-94-4, Mar. 31, 1995, 160 PUR4th 473.

MARYLAND

Authorizes AT&T to compete with LECs as a reseller. Expects AT&T to expand offerings to include full range of facilities-based services over time. Opens a new proceeding to set wholesale prices for the components of local exchange services. Re AT&T Communications, Inc., Case No. 8714, Order No. 72432, Feb. 13, 1996, 167 PUR4th 225.

MICHIGAN

Orders Ameritech to unbundle local loops so that newly licensed City Signal Inc. can "hold itself out" to provide service to every customer in the geographic area. Finds transitional rates for unbundled services higher than total service long-run incremental cost and thus free of subsidy. Re City Signal, Inc., Case No. U-10647, Feb. 23, 1995, 159 PUR4th 532.

NEW YORK

Reconsiders existing 5-percent wholesale discount as well as the flat-rate cap from "Open Market Plan." Calls appropriate wholesale/retail rate differential "crucial to the development of competition in the Rochester area." Finds it uneconomical to require resale competitors to invest in facilities before developing a customer base. Re Rochester Tel. Corp., Case 93-C-0103, Feb. 2, 1996.

NORTH CAROLINA

Adopts "minimal" regulatory structure for newly certified providers and revises existing interim rules governing certification, interconnection, number portability, and universal service. Finds resale opportunities necessary, but unclear as to exact nature. Directs parties to include resale issues as part of interconnection negotiations. Re Loc. Exch. and Loc. Exch. Access Competition, Dkt. No. P-100, Sub 133, Feb. 23, 1996, 167 PUR4th 526.

WASHINGTON

Rejects resale discounts "sufficient to permit a feasible margin for entrants." Orders carrier to offer all services for resale at the currently tariffed rate less the LEC's avoided cost. Tariff to provide reasonable financial security and ensure that