Recent Changes to State Telecommunications Regulation and Taxation


As part of the firm‘s continuing efforts to keep clients informed of important issues in telecommunications law, we have assembled the following summary of recent state legal developments affecting the telecommunications industry.  We encourage you to review the news briefs below and contact the firm if you have any questions about how the highlighted issues affect your business.

Arkansas – State High-Cost Assessment Set at 2%  

The Arkansas Public Service Commission has ordered an increase in the assessment paid by regulated service providers to fund the state‘s high-cost fund from 1.75% to 2% of intrastate revenues.  The Commission has indicated that the need for increasing the assessment is based on a reduction in compensable revenues.  The assessment will remain applicable through the remainder of 2010.

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California – Commission Establishes State LifeLine Income Limits

The California Public Utilities Commission Communications Division has announced the new California LifeLine Telephone Program Household Income Limitation (“HIL”) requirement for the 2010-2011 fiscal year.

Pursuant to Commission General Order 153, the Communications Division is required to adjust the income limits annually to reflect inflation based on changes in the Federal Consumer Price Index – Urban Area (“CPI-U”) and to notice carriers accordingly.  The General Order further requires the utilities to implement the income adjustments by June 1st of each year by filing revised tariffs.

According to the Communications Division‘s notice, the Household Income Limitation beginning June 1, 2010 through May 31, 2011 will remain the same as the amounts used for the June 1, 2009 to May 31, 2010 period, as follows:

Household Size Income Limitation:

1-2     $24,000
3         $28,200
4         $34,000
Each Additional Member $5,800

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District of Columbia – New Outage Reporting Rules Promulgated

The District of Columbia Public Service Commission has adopted amendments to existing service quality standards and reporting requirements that, among other things, now obligate service providers operating in the District to report incidents involving service disruptions, outages, or death or personal injury within the District.  However, entities not regulated by the Commission are excluded from these rules.

Under the new rules, “service outage” is defined as an outage that “lasts for at least 30 minutes and affects 100 or more customers or 100 or more lines.”   All service outages must be reported by telephone or email to the Commission and the Office of the People’s Counsel as soon as practicable, but not later than one hour following detection of an outage.

Service providers will also be required to report the location of the service outages, estimated total number of customers out of service, a preliminary assessment as to the cause of the outage, and the estimated repair or restoration time.  A written report providing more detailed information would then be due within five days.  And, a final report on the incident is due 30 days following the completion of any investigation or 30 days following the incident if no investigation is conducted.

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Hawaii – Telecommunications Services Deregulated

Governor Linda Lingle (R) has signed SB 2015, a bill to deregulate intrastate telecommunications services in Hawaii, into law.  The law amends Section 269-16.85 of the Hawaii Revised Statutes to make retail intrastate telecommunications a fully competitive service.  Formerly only local exchange services had been classified as competitive.

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Massachusetts – DTC Moves Offices

The Massachusetts Department of Telecommunications and Cable (“DTC”) has announced that it is moving its Boston offices.  Effective April 26, 2010, the DTC‘s new mailing address is 1000 Washington Street, Suite 820, Boston, Massachusetts 02118-6500.  The DTC advises companies that “In order to ensure that your customers receive timely notice of the DTC‘s new address, all bills, notices, letters and written correspondence must be updated to reflect this information as soon as possible, but no later than June 18, 2010.”

The DTC also notes that its new address should also “be used for all regulatory filings made by mail, including overnight mail delivery, or in-person delivery.”  Filings should continue to be addressed to the attention of the DTC‘s Secretary, Catrice Williams.  Electronic filings should continue to be sent to

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New Hampshire – E911 Surcharge Reduced

On March 25, 2010, the New Hampshire Public Utilities Commission announced that the monthly surcharge applicable to emergency 911 services has been reduced, effective April 1, 2010.  Commission Order 25,084 noted that the Enhanced 911 Commission had voted to reduce the surcharge for Enhanced 911 (“E911”) service from 64 cents per month to $0.57 per month pursuant to its authority under RSA 106-H:9.

On March 24, 2010, Commission Staff filed a memo recommending that the Commission waive N.H. Code Admin. Rule PUC 1203.05, requiring that rate changes be implemented on a service rendered basis, in order to allow the rate decrease to be implemented by April 1, 2010.  The current surcharge of 64 cents per month and has been in effect since November 1, 2006.  Local exchange carriers are to begin billing the $0.57 rate per line per month beginning April 1, and are directed to revise rate schedules reflecting the new rate on or before April 25, 2010. (DT 10-054).

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Oklahoma – Statewide Toll Free Calling Draws Sharp Ratepayer Opposition

In an effort to prop up the state‘s declining universal service fund, the Oklahoma Corporation Commission (“OCC”) has proposed an “Oklahoma Statewide Toll Free Calling Fund” to support the program, financed by contributions from all telecom carriers operating in the state at a rate initially set at $2 per month for each assessable number.  Carriers would be able to pass this assessment through to their customers,

Oklahoma ratepayers have overwhelmingly expressed opposition to the OCC‘s plan to adopt mandatory statewide toll free calling.  Sprint also openly opposed the plan, recently stating in comments filed with the Commission, “Any attempt by this commission to require any carrier to subsidize another carrier, other than for contribution to a state universal service fund that complies with the requirements of federal law, constitutes a barrier to entry in violation of federal law.”  Not surprisingly, rural incumbent local exchange carriers support the plan as a way to create parity with competing wireless providers. (Cause No. RM 201000002).

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Oregon – Regulatory Fee Reduced

The Oregon Public Utility Commission approved a reduction of the payment factor to 0.08% the utility’s gross operating revenue in the state, down from 0.25%, for the period June through December 2010.  The reduction was precipitated by the Commission‘s need to reduce its current cash balance. (Docket UM 940, UM 1012).

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West Virginia – Telecommunications Tax Bill Enacted

Governor Joe Manchin (D) has signed SB 345, a bill directing the state tax commissioner to initiate a study of state telecommunications taxes, into law.  Under the new law, the tax commissioner is to review the “feasibility and fiscal implications” on affected governmental entities or political subdivisions of implementing a single uniform statewide telecommunications service tax or sales and use tax on the retail sale of telecommunications services to replace the current tax structure.  Study results are due to the Governor and State Legislature on or before July 1, 2011.

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Clients concerned with how the above-described changes to state-level telecommunications regulation and taxation will impact their business should monitor these proceedings closely.  Clients who have specific questions or concerns should contact Jonathan S. Marashlian directly at or (703) 714-1313.

ATTORNEY ADVERTISING DISCLAIMER: This information may be considered advertising in some jurisdictions under the applicable law and ethical rules. The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers

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