REPORT TITLE:
Public Utilities


DESCRIPTION:
Requires the PUC to replace an existing telecommunications
provider with an alternative provider when it determines that an
area of the State has less than adequate service and the existing
provider fails to satisfy its burden in response to an order to
show cause why the commission should not authorize an alternative
provider for that area.  Allows the alternative provider to
acquire the former provider's property by eminent domain as may
be necessary for the provision of basic local exchange service in
that area.  (SB785 SD1 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           785
TWENTIETH LEGISLATURE, 1999                                S.D. 1
STATE OF HAWAII                                            H.D. 1
                                                        
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC UTILITIES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The purpose of this Act is to expressly restate,
 
 2 reiterate, and declare the intent of the legislature in enacting
 
 3 Act 80, Session Laws of Hawaii 1994, which originally was and now
 
 4 is to empower the public utilities commission to replace the
 
 5 existing telecommunications carrier with an alternative carrier
 
 6 under particular circumstances.  To further clarify and remove
 
 7 doubt as to the legislature's original intent with respect to Act
 
 8 80, Session Laws of Hawaii 1994, the legislature in confirmation
 
 9 of Act 80, intends by this Act to provide that when:
 
10      (1)  The public utilities commission determines that an area
 
11           of the State has less than adequate telecommunications
 
12           service; and
 
13      (2)  The existing telecommunications provider fails to
 
14           satisfy its burden of proof in response to an order to
 
15           show cause as to why the commission should not
 
16           authorize an alternative telecommunications provider
 
17           for that area,
 
18 such a determination and failure, including the determination and
 
19 failure as to the Ka`u area as set forth in the commission's
 

 
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 1 orders 14415 and 14789, mandates the public utilities commission
 
 2 to replace the existing provider with an alternative
 
 3 telecommunications provider for that area.
 
 4      In addition, the existing telecommunications provider shall
 
 5 be decertified by the public utilities commission so that the
 
 6 provider would not be allowed to provide service in that area.
 
 7 In other words, the public utilities commission shall suspend,
 
 8 restrict, or revoke the registration, charter, or certificate of
 
 9 the existing telecommunications provider for providing service in
 
10 that area.  However, the decertified provider shall not be barred
 
11 from reapplying to the commission for the right to serve that
 
12 area in the future, or from competing for selection as the
 
13 alternative telecommunications provider for that area.
 
14      To preserve and promote universal service and protect that
 
15 public safety, this Act confirms, as intended by Act 80, that the
 
16 newly selected alternative telecommunications provider, including
 
17 the alternative telecommunications provider selected pursuant to
 
18 the commission's orders 14415 and 14789 for the Ka`u area, has
 
19 the power to acquire from the decertified provider, by eminent
 
20 domain, any property and rights necessary to provide service in
 
21 the specified area.  However, the new alternative
 
22 telecommunications provider may not exercise the power of eminent
 
23 domain granted under Act 80 until after the public utilities
 

 
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 1 commission has first:
 
 2      (1)  Ordered the replacement of the existing provider with
 
 3           the new alternative telecommunications provider; and
 
 4      (2)  Ordered the decertification of the existing
 
 5           telecommunications provider from providing service in
 
 6           that area on such schedule as the commission determines
 
 7           is appropriate.
 
 8      The new alternative telecommunications provider shall pay
 
 9 just compensation to the former provider for any property taken
 
10 by eminent domain.
 
11      It is also the intent of this legislature to clarify and
 
12 confirm the authority in, and the procedures to be followed by,
 
13 public utilities when exercising the power of eminent domain.
 
14 Before allowing a public utility to exercise the power of eminent
 
15 domain, this Act requires the public utility to first submit its
 
16 intention to exercise the power of eminent domain to the public
 
17 utilities commission in writing and to obtain certain findings
 
18 from the public utilities commission.
 
19      SECTION 2.  Section 101-4, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "101-4 Right of eminent domain granted to public utilities
 
22 and others.  (a)  The right and power of eminent domain is hereby
 
23 granted to every [person, operating a public utility, and engaged
 

 
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 1 in the transportation of passengers or freight or any commodity
 
 2 by rail or bus, or by any other means, or the conveyance or
 
 3 transmission of telephone messages, or the production,
 
 4 conveyance, transmission, delivery, or furnishing of electricity,
 
 5 power, water, gas, or oil, within the State, as well as to
 
 6 corporations designated in section 101-41.] public utility, as
 
 7 defined in section 269-1, operating within the State.  The right
 
 8 and power shall be exercised only in compliance with, and under,
 
 9 the conditions and procedures set forth in this part.
 
10      (b)  Any public utility having the power of eminent domain
 
11 under subsection (a) may exercise the power; provided that prior
 
12 to the exercise of the power:
 
13      (1)  The public utility submits in writing to the public
 
14           utilities commission its intention to exercise the
 
15           power, with a description of the property to be
 
16           condemned; and
 
17      (2)  The public utilities commission finds that:
 
18           (A)  The proposed condemnation is in the public
 
19                interest;
 
20           (B)  The proposed condemnation is necessary; and
 
21           (C)  The public utility will use the property for its
 
22                operations as a utility."
 

 
 
 
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 1      SECTION 3.  Section 269-16.9, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "269-16.9  Telecommunications providers and services.(a)
 
 4 Notwithstanding any provision of this chapter to the contrary,
 
 5 the commission, upon its own motion or upon the application of
 
 6 any person, and upon notice and hearing, may exempt a
 
 7 telecommunications provider or a telecommunications service from
 
 8 any or all of the provisions of this chapter, except [the
 
 9 provisions of] section 269-34, upon a determination that the
 
10 exemption is in the public interest.  In determining whether an
 
11 exemption is in the public interest, the commission shall
 
12 consider whether the exemption promotes state policies in
 
13 telecommunications, the development, maintenance, and operation
 
14 of effective and economically efficient telecommunications
 
15 services, and the furnishing of telecommunications services at
 
16 just and reasonable rates and in a fair manner in view of the
 
17 needs of the various customer segments of the telecommunications
 
18 industry.  Among the specific factors the commission may consider
 
19 are:
 
20      (1)  The responsiveness of the exemption to changes in the
 
21           structure and technology of the State's
 
22           telecommunications industry;
 

 
 
 
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 1      (2)  The benefits accruing to the customers and users of the
 
 2           exempt telecommunications provider or service;
 
 3      (3)  The impact of the exemption on the quality, efficiency,
 
 4           and availability of telecommunications services;
 
 5      (4)  The impact of the exemption on the maintenance of fair,
 
 6           just, and reasonable rates for telecommunications
 
 7           services;
 
 8      (5)  The likelihood of prejudice or disadvantage to
 
 9           ratepayers of basic local exchange service resulting
 
10           from the exemption;
 
11      (6)  The effect of the exemption on the preservation and
 
12           promotion of affordable, universal, basic
 
13           telecommunications services as those services are
 
14           determined by the commission;
 
15      (7)  The resulting subsidization, if any, of the exempt
 
16           telecommunications service or provider by nonexempt
 
17           services;
 
18      (8)  The impact of the exemption on the availability of
 
19           diversity in the supply of telecommunications services
 
20           throughout the State;
 
21      (9)  The improvements in the regulatory system to be gained
 
22           from the exemption, including the reduction in
 
23           regulatory delays and costs;
 

 
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 1     (10)  The impact of the exemption on promoting innovations in
 
 2           telecommunications services;
 
 3     (11)  The opportunity provided by the exemption for
 
 4           telecommunications providers to respond to competition;
 
 5           and
 
 6     (12)  The potential for the exercise of substantial market
 
 7           power by the exempt provider or by a provider of the
 
 8           exempt telecommunications service.
 
 9      (b)  The commission shall expedite, where practicable, the
 
10 regulatory process with respect to exemptions and shall adopt
 
11 guidelines under which each provider of an exempted service shall
 
12 be subject to similar terms and conditions.
 
13      (c)  The commission may condition or limit any exemption
 
14 [as] that the commission deems necessary in the public interest.
 
15 The commission may provide a trial period for any exemption and
 
16 may terminate the exemption or continue it for [such] a period
 
17 and under [such] conditions and limitations [as] that it deems
 
18 appropriate.
 
19      (d)  The commission may require a telecommunications
 
20 provider to apply for a certificate of public convenience and
 
21 necessity pursuant to section 269-7.5; provided that the
 
22 commission may waive any application requirement whenever it
 
23 deems the waiver to be in furtherance of the purposes of this
 

 
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 1 section.  The exemptions under this section may be granted in a
 
 2 proceeding for certification or in a separate proceeding.
 
 3      (e)  The commission may waive other regulatory requirements
 
 4 under this chapter applicable to telecommunications providers
 
 5 when it determines that competition will serve the same purpose
 
 6 as public interest regulation.
 
 7      (f)  If any provider of an exempt telecommunications service
 
 8 or any exempt telecommunications provider elects to terminate its
 
 9 service, it shall provide a notice of [this] termination to its
 
10 customers, the commission, and every telephone public utility
 
11 providing basic local exchange service in this State.  The notice
 
12 shall be in writing and given not less than six months before the
 
13 intended termination date.  Upon termination of service by a
 
14 provider of an exempt service or by an exempt provider, the
 
15 appropriate telephone public utility providing basic local
 
16 exchange service shall ensure that all customers affected by the
 
17 termination receive basic local exchange service.  The commission
 
18 [shall], upon notice and hearing or by rule, shall determine the
 
19 party or parties who shall bear the cost, if any, of access to
 
20 the basic local exchange service by the customers of the
 
21 terminated exempt service.
 
22      (g)  Upon the petition of any person or upon its own motion,
 
23 the commission may rescind any exemption or waiver granted under
 

 
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 1 this section if, after notice and hearing, it finds that the
 
 2 conditions prompting the granting of the exemption or waiver no
 
 3 longer apply, or that the exemption or waiver is no longer in the
 
 4 public interest, or that the telecommunications provider has
 
 5 failed to comply with one or more of the conditions of the
 
 6 exemption or applicable statutory or regulatory requirements.
 
 7      (h)  For purposes of this section, the commission, upon
 
 8 determination that any area of the State has less than adequate
 
 9 telecommunications service, shall require the existing
 
10 telecommunications provider to show cause as to why the
 
11 commission should not authorize an alternative telecommunications
 
12 provider for that area under the terms and conditions of this
 
13 section.
 
14      (i)  If the existing telecommunications provider fails to
 
15 show cause as required by subsection (h), the commission shall:
 
16      (1)  Select an alternative telecommunications provider to
 
17           replace the existing telecommunications provider for
 
18           that area; and
 
19      (2)  Decertify the existing telecommunications provider for
 
20           providing service in that area.
 
21      A telecommunications provider that has been decertified
 
22 pursuant to this subsection shall not be barred from reapplying
 
23 for the right to serve that area in the future.
 

 
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 1      (j)  A telecommunications provider that has been selected by
 
 2 the commission to replace an existing telecommunications provider
 
 3 pursuant to subsection (i) may acquire from the former
 
 4 telecommunications provider, by eminent domain pursuant to
 
 5 section 101-4, any real property, personal property, and any
 
 6 rights appurtenant thereto for the provision of
 
 7 telecommunications service in that area.
 
 8      A telecommunications carrier that is the subject of such an
 
 9 action of eminent domain shall receive just compensation.
 
10      (k)  As used in this section, "decertify" means to modify,
 
11 amend, or revoke the registration, charter, or certificate of a
 
12 telecommunications provider for a particular area of the State
 
13 following a determination by the commission pursuant to
 
14 subsection (h) that an alternative telecommunications provider
 
15 should be authorized for that area of the State because it has
 
16 less than adequate telecommunications service, such that the
 
17 "decertified" provider is no longer authorized to provide service
 
18 in that area."
 
19      SECTION 4.  Section 101-43, Hawaii Revised Statutes, is
 
20 repealed.
 
21      ["101-43  Requirements prior to exercise of power.  Any
 
22 corporation having the power of eminent domain under section
 
23 101-41 may continue to exercise the power, provided that prior to
 

 
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 1 the exercise of the power:
 
 2      (1)  The corporation submits to the public utilities
 
 3           commission its intention to exercise the power, with a
 
 4           description of the property to be condemned; and
 
 5      (2)  The public utilities commission finds that the proposed
 
 6           condemnation is in the public interest, that the
 
 7           proposed condemnation is necessary, and that the
 
 8           corporation will use the property for its operations as
 
 9           a public utility."]
 
10      SECTION 5.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 6.  This Act shall take effect upon its approval.
 
13