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States Promote Local Telephone Competition

Fortnightly Magazine - August 1996

The Iowa Utilities Board (IUB) has set rates and terms for unbundled interconnection services that U S WEST Communications, Inc., a local exchange carrier (LEC), must provide to other carriers seeking to provide competitive local service. The IUB ruled that U S WEST must use the Total Service Long Run Incremental Cost method to set prices for the use of its facilities. It also ruled that the LEC may include "an appropriate markup" in the rates as well as a contribution to shared and common costs of the local loop. The LEC was also authorized to develop charges for directory assistance and interim number portability services. It rejected a proposal by U S WEST to establish a system of cost-based charges for termination of local calls on its network in favor of inkind exchange of traffic without cash payments, known as "bill and keep." The IUB also found an interim universal service charge not warranted at the current time. Re U S WEST Communications, Inc., Docket No. RPU-95-10, May 17, 1996 (Iowa.U.B.).

In a separate decision, the IUB deregulated a number of telecommunications services offered by LECs and interexchange carriers (IXCs) operating in the state, including most intrastate long-distance and voice-messaging services. It found no competitive market for, and thus no basis for deregulating, intraLATA 1+ toll services. According to the IUB, customers have no alternatives in making long-distance calls without dialing extra digits. Re Deregulation of Competitive IntraLATA Interexchange Services, Docket No. INU-95-3, May 20, 1996 (Iowa U.B.).

The Florida Public Service Commission (PSC) has issued a final order establishing rates, terms, and conditions for LEC interconnection services. A new law approved by the state legislature in 1995 requires each LEC to provide interconnection with its facilities to any other LEC. The PSC said mutual traffic exchange "appears to be the most efficient, least-cost method of interconnection and should provide the lowest barrier of entry of any method presented." It warned, however, that a significant imbalance in traffic might precipitate a usage-based rate. The PSC also required LECs to provide directory, billing and collection, and enhanced 911 services. Re Interconnection Involving Local Exchange Companies and Alternative Local Exchange Companies, Docket No. 950985-TP, Order No. PSC-96-0668-FOF-TP, May 20, 1996 (Fla.P.S.C.).


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