Telecommunications Regulation in North Dakota

1. Telecommunications Regulationin North Dakota Rep. Blair Thoreson- ND House of Representatives Chairman, House Appropriations Committee (Gov’t. Operations Division)

2. Over two decades of change… • Prior to 1983, the ND Public Service Commission regulated most aspects of telecommunications on the state as “traditional” public utilities. 1983 Legislative Assembly removed cooperatives and small telcos from PSC regulation. • 1985 Legislative Assembly required the PSC to begin process of deregulating telecommunications.

3. SB 2320 (1989)– the beginning of major reform • Bill removed PSC authority from “rate of return” regulations, unless a telecommunications company informed the commission it wanted to be regulated this way. • For any company with over 50,000 end users, the election not to be exempt from rate or rate of return regulation was a one-time, irrevocable decision

4. SB 2320 (1989)– the beginning of major reform • Although the legislative assembly exempted essential telecommunications service and non-essential telecommunications service from rate-of-return regulation by the PSC, essential telecommunications service was still subject to a price cap under the essential telecommunications price factor • Included service necessary for switched access to interexchange telecommunications companies necessary for two-way switched communications within a local exchange area

5. Telecommunications in ND since SB 2320… • Additional reforms enacted by Legislature: • HB 1459 (1995): increased the size of a telecommunications company not requiring PSC regulation from 3,000 to 8,000 subscribers

6. Telecommunications in ND since SB 2320… • SB 2420 (1999): legislation rebalanced rates in an “revenue neutral” manner. A telecommunications company with over 50,000 subscribers must submit a report to the PSC prohibited certain acts to promote or regulate competition. The bill provided that a telecommunications company may not be required to construct facilities at the request or for the use of another telecommunications company except to the extent required by the federal Act. The bill clarified that if a telecommunications company is required to incur nonreoccurring costs in excess of the normal course of business and for the benefit of another company or a customer, the Public Service Commission generally must allow the burdened company to recover the cost in advance. The bill prohibited a telecommunications company from discriminating against another company by refusing to provide or delaying access to the company's services or essential facilities, providing access on terms that are less favorable than those the company provides to itself, or by degrading the quality of access or service provided to another company. The bill identified those sections of law which competitive local exchange carriers are required to meet and established the Public Service Commission's jurisdiction over those telecommunications companies regardless of size. The bill repealed the Public Service Commission's authority to exempt a company, transaction, or service from regulation if there is sufficient competition.

7. Outcomes • More communications options for consumers:

8. Outcomes • More consumer choice makes ND an attractive location for technology-driven businesses to grow:

9. The future… • Legislature continues to review the ever-changing world of telecommunications • No regular session in 2012, but several legislators may be looking at additional reforms in 2013 • Watching what other states have done, and how it affects the consumers of communications services • PSC will continue to play a significant role in helping shape our state’s communications services