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News Digest

Fortnightly Magazine - July 15 1998

the ruling even though using the GCA would impose costs on the broader class of bundled sales and transportation customers. Case No. U-11062-R, April 14, 1998 (Mich.P.S.C.).

TELCO ACCESS CHARGES. The Utah Public Service Commission set the price of an unbundled local network at its estimated cost of $20. It identified the cost of the "loop" portion of the telecommunications network connecting the end-user to the central office using incremental cost studies as a starting points and embedded cost evidence as "a cross-check" to a cost-modeling exercise premised on a hypothetical network model. It deferred action on whether to adopt a specific variation of the total element long-run incremental cost model and various related values of input assumptions. Docket No. 94-999-01, Phase II, April 8, 1998 (Utah P.S.C.).

PRICE-CAP PLAN. Under a newly approved price-cap plan for alternative regulation, the Ohio Public Utilities Commission excused Cincinnati Bell Telephone Co. from any duty to report earnings monitoring data to the PUC during the 3 and one-half year life of the plan. However, the PUC will still prescribe depreciation rates for the carrier. The plan affords significant pricing flexibility for most services except residential basic exchange service, subject to price floors based on a new long-run incremental cost study, but rate packages must contain a mark-up of at least 13 percent to cover common costs. Case No. 96-899-TP-ALT, April 9, 1998 (Ohio P.U.C.).

TELCO MERGERS. Regulators in Minnesota, Vermont, and Virginia approved the merger of WorldCom Inc. and MCI Telecommunications Corp., two of the nation's largest interexchange telecommunications carriers. In all three states, proponents of the merger had argued that the combination of the two companies would accelerate competition, especially in local markets, by creating an enterprise with the capital marketing abilities and network to compete against incumbent carriers.

Each PUC rejected claims that the combination of the two companies would reduce competition in local markets. Minnesota said GTE Corp., a competitor, would have stood to gain from stopping the merger. Docket No. P-443,3012/ PA-97- 1532, Apr. 9, 1998 (Minn.P.U.C.). Vermont saw "no evidence to suggest either company will become dominant in Vermont as a result of the merger." Docket No. 6037, Apr. 2, 1998 (Vt.P.S.B.). The Virginia commission rejected claims that the merger would diminish job growth in the state or harm the intrastate Internet market "by creating an entity with more than 63 percent control of the Internet backbone." Case No. PUA970052, Apr. 17, 1998 (Va.S.C.C.).

RETAIL ELECTRIC CHOICE. Consumers Energy submitted a draft plan to the staff of the Michigan PSC staff to allow its electric customers to participate in a bidding process to choose a power supplier. The plan conforms to a January 1998 PSC order calling for a phase-in of retail open access, leading to full customer choice by Jan. 1, 2002. Under the proposed schedule, Consumers Energy will open 300 megawatts of retail electricity for bidding this year, and another 150 MW each year from 1999 to 2001.

Generating Plants

BOSTON EDISON. Boston Edison Co. and Sithe Energies announced on May 15 that they had completed the nation's