Allows the PUC to decertify an existing telecommunications
provider for a specific area under certain conditions.  Upon PUC
decertification and replacement of the existing provider with an
alternative provider for that area, allows the new provider to
acquire from the former provider, by eminent domain, any property
or rights to provide basic local exchange service in the area.

THE SENATE                              S.B. NO.           691
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The purpose of this Act is to clarify and
 2 confirm the legislature's intent in enacting Act 80, Session Laws
 3 of Hawaii 1994.  Specifically, this Act provides that when:
 4      (1)  The public utilities commission determines that an area
 5           of the State has less than adequate telecommunications
 6           service; and
 7      (2)  The existing telecommunications provider fails to
 8           satisfy its burden of proof in response to an order to
 9           show cause as to why the commission should not
10           authorize an alternative telecommunications provider
11           for that area,
12 the public utilities commission shall replace the existing
13 provider with an alternative telecommunications provider for that
14 area.
15      In addition, the existing telecommunications provider shall
16 be decertified by the public utilities commission so that the
17 provider would not be allowed to provide service in that area.
18 In other words, the public utilities commission shall suspend,
19 restrict, or revoke the registration, charter, or certificate of

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 1 the existing telecommunications provider for providing service in
 2 that area.  However, the decertified provider shall not be barred
 3 from reapplying to the commission for the right to serve that
 4 area in the future.
 5      To preserve and promote universal service, protect the
 6 public safety, and carry out the intent of Act 80, the new
 7 telecommunications provider may acquire from the decertified
 8 provider by eminent domain, any property and rights necessary to
 9 provide service in the specified area.  However, the new
10 telecommunications provider may not exercise the power of eminent
11 domain granted under Act 80 until after the public utilities
12 commission has first:
13      (1)  Replaced the existing provider with the new
14           telecommunications provider; and
15      (2)  Decertified the existing telecommunications provider
16           for providing service in that area.
17      The new telecommunications provider shall pay just
18 compensation to the former provider for any property taken by
19 eminent domain.
20      It is also the intent of this legislature to clarify and
21 confirm the authority in, and the procedures to be followed by,
22 public utilities when exercising the power of eminent domain.
23 Before allowing a public utility to exercise the power of eminent

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 1 domain, this Act requires the public utility to first submit its
 2 intention to exercise the power of eminent domain to the public
 3 utilities commission in writing and to obtain certain findings
 4 from the public utilities commission. 
 5      SECTION 2.  Section 101-4, Hawaii Revised Statutes, is
 6 amended to read as follows:
 7      "101-4 Right of eminent domain granted to public utilities
 8 and others.  (a)  The right and power of eminent domain is hereby
 9 granted to every [person, operating a public utility, and engaged
10 in the transportation of passengers or freight or any commodity
11 by rail or bus, or by any other means, or the conveyance or
12 transmission of telephone messages, or the production,
13 conveyance, transmission, delivery, or furnishing of electricity,
14 power, water, gas, or oil, within the State, as well as to
15 corporations designated in section 101-41.] public utility, as
16 defined in section 269-1, operating within the State.  The right
17 and power shall be exercised only in compliance with, and under,
18 the conditions and procedures set forth in this part.
19      (b)  Any public utility having the power of eminent domain
20 under subsection (a) may exercise the power; provided that prior
21 to the exercise of the power:
22      (1)  The public utility submits in writing to the public
23           utilities commission its intention to exercise the

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                                     S.B. NO.           691

 1           power, with a description of the property to be
 2           condemned; and
 3      (2)  The public utilities commission finds that:
 4           (A)  The proposed condemnation is in the public
 5                interest;
 6           (B)  The proposed condemnation is necessary; and
 7           (C)  The public utility will use the property for its
 8                operations as a utility."
 9      SECTION 3.  Section 269-16.9, Hawaii Revised Statutes, is
10 amended to read as follows:
11      "269-16.9  Telecommunications providers and services.(a)
12 Notwithstanding any provision of this chapter to the contrary,
13 the commission, upon its own motion or upon the application of
14 any person, and upon notice and hearing, may exempt a
15 telecommunications provider or a telecommunications service from
16 any or all of the provisions of this chapter, except the
17 provisions of section 269-34, upon a determination that the
18 exemption is in the public interest.  In determining whether an
19 exemption is in the public interest, the commission shall
20 consider whether the exemption promotes state policies in
21 telecommunications, the development, maintenance, and operation
22 of effective and economically efficient telecommunications
23 services, and the furnishing of telecommunications services at

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                                     S.B. NO.           691

 1 just and reasonable rates and in a fair manner in view of the
 2 needs of the various customer segments of the telecommunications
 3 industry.  Among the specific factors the commission may consider
 4 are:
 5      (1)  The responsiveness of the exemption to changes in the
 6           structure and technology of the State's
 7           telecommunications industry;
 8      (2)  The benefits accruing to the customers and users of the
 9           exempt telecommunications provider or service;
10      (3)  The impact of the exemption on the quality, efficiency,
11           and availability of telecommunications services;
12      (4)  The impact of the exemption on the maintenance of fair,
13           just, and reasonable rates for telecommunications
14           services;
15      (5)  The likelihood of prejudice or disadvantage to
16           ratepayers of basic local exchange service resulting
17           from the exemption;
18      (6)  The effect of the exemption on the preservation and
19           promotion of affordable, universal, basic
20           telecommunications services as those services are
21           determined by the commission;
22      (7)  The resulting subsidization, if any, of the exempt
23           telecommunications service or provider by nonexempt

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                                     S.B. NO.           691

 1           services;
 2      (8)  The impact of the exemption on the availability of
 3           diversity in the supply of telecommunications services
 4           throughout the State;
 5      (9)  The improvements in the regulatory system to be gained
 6           from the exemption, including the reduction in
 7           regulatory delays and costs;
 8     (10)  The impact of the exemption on promoting innovations in
 9           telecommunications services;
10     (11)  The opportunity provided by the exemption for
11           telecommunications providers to respond to competition;
12           and
13     (12)  The potential for the exercise of substantial market
14           power by the exempt provider or by a provider of the
15           exempt telecommunications service.
16      (b)  The commission shall expedite, where practicable, the
17 regulatory process with respect to exemptions and shall adopt
18 guidelines under which each provider of an exempted service shall
19 be subject to similar terms and conditions.
20      (c)  The commission may condition or limit any exemption
21 [as] that the commission deems necessary in the public interest.
22 The commission may provide a trial period for any exemption and
23 may terminate the exemption or continue it for [such] a period

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                                     S.B. NO.           691

 1 and under [such] conditions and limitations [as] that it deems
 2 appropriate.
 3      (d)  The commission may require a telecommunications
 4 provider to apply for a certificate of public convenience and
 5 necessity pursuant to section 269-7.5; provided that the
 6 commission may waive any application requirement whenever it
 7 deems the waiver to be in furtherance of the purposes of this
 8 section.  The exemptions under this section may be granted in a
 9 proceeding for certification or in a separate proceeding.
10      (e)  The commission may waive other regulatory requirements
11 under this chapter applicable to telecommunications providers
12 when it determines that competition will serve the same purpose
13 as public interest regulation.
14      (f)  If any provider of an exempt telecommunications service
15 or any exempt telecommunications provider elects to terminate its
16 service, it shall provide a notice of [this] termination to its
17 customers, the commission, and every telephone public utility
18 providing basic local exchange service in this State.  The notice
19 shall be in writing and given not less than six months before the
20 intended termination date.  Upon termination of service by a
21 provider of an exempt service or by an exempt provider, the
22 appropriate telephone public utility providing basic local
23 exchange service shall ensure that all customers affected by the

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                                     S.B. NO.           691

 1 termination receive basic local exchange service.  The commission
 2 [shall], upon notice and hearing or by rule, shall determine the
 3 party or parties who shall bear the cost, if any, of access to
 4 the basic local exchange service by the customers of the
 5 terminated exempt service.
 6      (g)  Upon the petition of any person or upon its own motion,
 7 the commission may rescind any exemption or waiver granted under
 8 this section if, after notice and hearing, it finds that the
 9 conditions prompting the granting of the exemption or waiver no
10 longer apply, or that the exemption or waiver is no longer in the
11 public interest, or that the telecommunications provider has
12 failed to comply with one or more of the conditions of the
13 exemption or applicable statutory or regulatory requirements.
14      (h)  For purposes of this section, the commission, upon
15 determination that any area of the State has less than adequate
16 telecommunications service, shall require the existing
17 telecommunications provider to show cause as to why the
18 commission should not authorize an alternative telecommunications
19 provider for that area under the terms and conditions of this
20 section. 
21      (i)  If the existing telecommunications provider fails to
22 show cause as required by subsection (h), the commission shall:
23      (1)  Select an alternative telecommunications provider to

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                                     S.B. NO.           691

 1           replace the existing telecommunications provider for
 2           that area; and
 3      (2)  Decertify the existing telecommunications provider for
 4           providing service in that area.
 5      A telecommunications provider that has been decertified
 6 pursuant to this subsection shall not be barred from reapplying
 7 for the right to serve that area in the future.
 8      (j)  A telecommunications provider that has been selected by
 9 the commission to replace an existing telecommunications provider
10 pursuant to subsection (i) may acquire from the former
11 telecommunications provider, by eminent domain pursuant to
12 section 101-4, any real property, personal property, or other
13 rights of any nature necessary for the provision of basic local
14 exchange service in that area.
15      The alternative telecommunications provider shall pay the
16 former telecommunications provider just compensation for all
17 property taken by eminent domain.
18      (k)  As used in this section, "decertify" means to suspend,
19 restrict, or revoke the registration, charter, or certificate of
20 a telecommunications provider following a determination by the
21 commission pursuant to subsection (h) that an alternative
22 telecommunications provider should be authorized for an area of
23 the State that has less than adequate telecommunications

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                                     S.B. NO.           691

 1 service."
 2      SECTION 4.  Section 101-43, Hawaii Revised Statutes, is
 3 repealed.
 4      ["101-43  Requirements prior to exercise of power.  Any
 5 corporation having the power of eminent domain under section
 6 101-41 may continue to exercise the power, provided that prior to
 7 the exercise of the power:
 8      (1)  The corporation submits to the public utilities
 9           commission its intention to exercise the power, with a
10           description of the property to be condemned; and
11      (2)  The public utilities commission finds that the proposed
12           condemnation is in the public interest, that the
13           proposed condemnation is necessary, and that the
14           corporation will use the property for its operations as
15           a public utility."]
16      SECTION 5.  This Act shall be applied retroactively to all
17 alternative telecommunications providers selected pursuant to
18 section 269-16.9(i), Hawaii Revised Statutes.
19      SECTION 6.  Statutory material to be repealed is bracketed.
20 New statutory material is underscored.
21      SECTION 7.  This Act shall take effect upon its approval.
23                           INTRODUCED BY:  _______________________