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                  TR's State NewsWire

      . . .daily intelligence on communications
      industry news and policy from the editors
      of Telecommunications Reports. . .

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*Table of Contents*
November 20, 2001 

STATES
MISSOURI -- Staff backs 'competitive status' for SW Bell LD 
service
NEW JERSEY -- BPU lowers UNE rates
MAINE -- OPA calls Verizon 'alt-reg' plan 'unlawful'
ILLINOIS -- Bills would update '911' criminal code
OREGON -- Prepaid phone card company settles with AG
NEW HAMPSHIRE -- Verizon to remove calling-card discount
MISSOURI -- SBC LD applications remain pending
KENTUCKY -- Nonprimary listings not subject to wholesale 
discounts
IOWA -- Board to hold hearing on Qwest prices
FLORIDA -- Workshop to review rate-increase notice plan
WISCONSIN -- Gov. McCallum proposes technology zone rules
NEVADA -- PUC to hold public comment sessions
NEVADA -- Workshop on PUC rules, practices scheduled
VIRGINIA -- Milliken to head Warner transition team
CONNECTICUT -- OCC to hold meeting on consumer education
ALASKA -- GCI closes cable TV transaction
CALIFORNIA -- Gov. Davis encourages laid-off workers to teach
OHIO -- Adelphia launches video-on-demand service
VIRGINIA -- Secretary of Commerce resigns, Lief appointed
MICHIGAN -- Gov. Engler appoints new IT director
NEVADA -- Tax task force appointees named
MINNESOTA -- REA-ALP to use WaveRider fixed wireless services
ARKANSAS -- Leap Wireless launches service in Jonesboro

REGIONAL
Arguss to extend cable TV networks

______________________________________________________

MISSOURI -- Staff backs 'competitive status' for SW Bell LD 
service

The Public Service Commission staff has recommended granting 
"competitive status" to Southwestern Bell Long Distance's and SBC 
Long Distance's long distance service.  The staff also asked the 
commission to approve the Southwestern Bell Telephone Co. 
subsidiaries' applications to provide long distance service and 
tariffs.  The staff originally wanted to deny the subsidiaries 
competitive status because they had "opportunities to potentially 
subsidize" their long distance service.  (10/19/01)  Competitive 
long distance companies can increase their rates on 10 days' 
notice and decrease their rates on seven days' notice without 
filing cost-of-service studies.

The staff now believes the FCC's affiliate rules, combined with 
the commission's ability to suspend and review tariffs, will 
safeguard against provisioning long distance service priced below 
cost.  The subsidiaries proposed offering businesses long 
distance service for rates ranging from 8.6 cents to 12 cents per 
minute, depending on minimum revenue commitments and term length.  

The subsidiaries will charge residential customers 6-12 cents per 
minute for long distance service, according to their tariffs.  
The staff, which estimates the subsidiaries will pay about 5.5 
cents per minute in switched-access charges to provide domestic 
long distance service, concluded that the proposed rates weren't 
priced below cost.

The "shackling" of the subsidiaries with noncompetitive status 
would thwart the subsidiaries' ability to compete in the long 
distance market, SW Bell said.  There is "absolutely no basis for 
singling out" the subsidiaries for "disparate regulatory 
treatment," SW Bell said.  A "noncompetitive" classification 
would subject the companies' tariffs to a 30-day notice 
requirement and "file and suspend" procedures for tariff changes, 
which could delay approval of tariff changes for up to 11 months, 
SW Bell said.  Noncompetitive status would also require the 
subsidiaries to file cost-of-service studies with proposed rate 
changes. 

The FCC last week approved SW Bell's application to provide in-
region interLATA (local access and transport area) service under 
section 271 of the federal Telecommunications Act of 1996.  The 
FCC's approval takes effect Nov. 26, but the subsidiaries can't 
provide service until the state commission approves the 
companies' applications to provide long distance service.  The 
commission may issue a ruling on the subsidiaries' applications 
today, the staff told TR.  (Case TA-2001-475; TA-99-47)

______________________________________________________

NEW JERSEY -- BPU lowers UNE rates

The Board of Public Utilities today reduced the rate competitors 
must pay Verizon New Jersey, Inc., to lease the unbundled network 
elements (UNEs) necessary to offer consumers local phone service 
from $16.21 to $9.52, a difference of about 41%.

Ratepayer Advocate Blossom A. Peretz said she was pleased with 
today's board decision.  Ms. Peretz had filed a June 18 brief 
with the BPU urging the board to reduce the wholesale UNE rate to 
less than $10 per line per month from the $16.21 price the BPU 
set in 1997.  

"The next step is to see whether this new UNE rate actually works 
and serves as an incentive to telephone companies to come to New 
Jersey to offer local service in competition to Verizon's near 
monopoly," said Ms. Peretz.  "We should know by next spring 
whether we will have irreversible competition in the local 
telephone market," she said, alluding to Verizon's intention to 
file for section 271 authorization to offer interLATA (local 
access and transport area) service in the state.

Today's decision also established an unbundled network element 
platform (UNE-P) rate of $13.93, about 38% lower than the 
existing $22.42 rate, the BPU said.  UNE-P's are combinations of 
the loop and switching elements in one package that the BPU 
requires incumbent local exchange carriers to offer to 
competitors.

The board first established UNE rates in 1997.  (11/19/01)  After 
the U.S. District Court in Newark struck down the UNE pricing 
regime adopted by the BPU for Verizon New Jersey, Inc., (then 
Bell Atlantic Corp.), the BPU decided to begin a "proactive" rate 
review, a spokesman for the BPU told TR.  (Docket TO00060356 - In 
the Matter of the Board's Review of Unbundled Network Elements 
Rates, Terms and Conditions of Bell Atlantic-New Jersey, Inc.)

______________________________________________________

MAINE -- OPA calls Verizon 'alt-reg' plan 'unlawful' 

The Public Advocate has asked the state Supreme Court to vacate 
Verizon Maine, Inc.'s five-year alternative regulation plan, 
alleging that the plan is "unlawful."  The Public Utilities 
Commission approved the plan last May.  The Public Advocate said 
that plan, which increased residential monthly rates by $1.65 per 
line, was based on insufficient Verizon cost information, a 
spokesman for the Public Advocate's office told TR.  The plan is 
expected to produce an additional $12.5 million in annual revenue 
for Verizon over its five-year term.  (5/9/01)

The Public Advocate asserted that PUC violated a the statutory 
requirement which states that "residential and small business 
ratepayers [should not] be required to pay more for local 
telephone service than they would have been required to pay under 
traditional rate-base or rate-of-return regulation."  The Public 
Advocate added that the "commission failed to hold a proper 
hearing and collect the evidence necessary to make a 
determination" of whether the alternative regulation plan would 
cost consumers more than traditional rate-based regulation.

The Public Advocate had asked the PUC consider Verizon's revenue 
requirements early in the proceeding, but the PUC rejected the 
request.  The Public Advocate said Verizon was subsequently 
permitted to present revenue evidence similar to the evidence the 
PUC had rejected during the "rebuttal stage of the case."  This 
action violated the state constitution's due process clause, the 
Public Advocate argued.

The Public Advocate also said that the increased local service 
rates would be used to compensate "Verizon for the loss of 
certain specific revenues from nonlocal services" instead of the 
cost of providing local services.  (Docket 99-851)

______________________________________________________

ILLINOIS -- Bills would update '911' criminal code

Rep. Edward Acevedo (D., District 2) has introduced a pair of 
bills, HB 3688 and HB 3689, that would amend the Criminal Code of 
1961 and the Emergency Telephone System Act to help combat 
terrorism and false terrorism reports.

HB 3688 would make it illegal to make a false report of terrorism 
or other danger.  The bill states that making a false complaint 
or request by calling the "911" emergency response system would 
be considered a class two felony.  Violators would face 
imprisonment and $25,000 in fines.  The bill also would require 
violators to pay restitution to public safety agencies for total 
out-of-pocket expenses incurred during the intentional false 
alarm.

A spokesperson from the Speaker of the House's office told TR 
that HB 3689 also would delete language in the 1961 code related 
to making threats over the 911 emergency response system.  HB 
3688 would then amend the code to impose stronger penalties and 
to add language about false terrorism.

The spokesperson added, "the bills are part of a comprehensive 
antiterrorism package being pushed" by Chicago.  The bills await 
committee referral.

______________________________________________________

OREGON -- Prepaid phone card company settles with AG

Norte.Com., Inc., has entered into an agreement with Attorney 
General Hardy Meyers that settles charges which stated that the 
company was selling prepaid phone cards with another company's 
toll-free number printed on the back.  Under the settlement, 
Norte.Com must provide its customers with new cards or 
restitution.

The Department of Justice was alerted to the problem by Thomas 
and Ann Taylor, owners of North Star Marine, Inc.  The Taylors 
were concerned about the number of distraught consumers who were 
attempting to use a prepaid calling to call family in Mexico but 
instead were reaching the Taylor's business, the AG said.  The 
Taylors said they received up to 12 calls a day.

Two "800" numbers were printed on the cards, one that connected 
callers directly to Mexico and the Taylors' 800 number that was 
supposed to be used when calling from Mexico to the U.S., the AG 
said.  The Taylors complained to the company, but the calls 
continued.

Under the Assurance of Voluntary Compliance, which was filed in 
Marion County Circuit Court, Norte.Com must obtain a new 800 
number--in addition to providing restitution or new cards to 
consumers.  The agreement admits no violation of law.

______________________________________________________

NEW HAMPSHIRE -- Verizon to remove calling-card discount

The Public Utilities Commission has decided to allow Verizon New 
Hampshire, Inc., to remove a 25% calling-card discount from the 
Call-Around "603" Optional Toll Calling Plan.  The tariff, which 
was scheduled to take effect Oct. 20, was suspended until Nov. 19 
to provide the PUC time to consider the possible harm removing 
the discount would cause to consumers.

PUC staff recommended rejecting the tariff, arguing that 
customers using the calling cards would see a rate increase while 
the "revenue effect on the company is, in the company's own 
worlds, 'negligible.'"  The PUC authorized Verizon to increase 
rates for new customers, but "grandfathered" existing call-around 
603 customers.  (DT 01-186)

______________________________________________________

MISSOURI -- SBC LD applications remain pending

The Public Service Commission won't decide this week whether to 
approve SBC Communications, Inc.'s long distance subsidiaries' 
applications for certificates to offer long distance service.  
The earliest the commission could consider the applications Nov. 
27, a commission staff member told TR.

Last week, the FCC approved SBC's application to provide in-
region interLATA (local access and transport area) service under 
section 271 of the federal Telecommunications Act of 1996.  The 
FCC's approval takes effect Nov. 26, but SBC can't provide 
service until the PSC approves the subsidiaries' applications.  
Southwestern Bell Long Distance and SBC Long Distance are the 
subsidiaries that applied for the certificates.

The commission's review of the applications was delayed by its 
decision to investigate AT&T Communications of the Southwest, 
Inc.'s allegations that the tariffs contained in the applications 
included rates that were predatory because they were priced below 
cost.  (10/19/01)  

AT&T subsequently withdrew its request for a hearing on the 
matter after concluding that the PSC's procedural schedule didn't 
provide sufficient time to conduct "adequate discovery."  AT&T 
said it wasn't "willing to commit its limited resources to a 
proceeding that denies AT&T an adequate opportunity to be heard 
on competitively important issues."  

SBC characterized AT&T's predatory pricing claims as further 
attempts to delay SBC's entry into the long distance market and 
dispute the incumbent's access charges.  (10/19/01)  (Case TA-
2001-475; TA-99-47)

______________________________________________________

KENTUCKY -- Nonprimary listings not subject to wholesale 
discounts

The Public Service Commission has concluded that nonprimary 
listings aren't a "telecommunications service" and therefore 
don't qualify for a wholesale discount in interconnection 
agreements with UNE-P (unbundled network element-platform) 
competitive local exchange carriers.  

Brandenburg Telecom LLC asked the commission to require Verizon 
South, Inc., to charge its wholesale rate for non-primary, or 
additional, listings.  The commission concluded, "additional 
listings are not network elements necessary to provide 
telecommunication service."  Primary listings qualify for cost-
based rates, the PSC said.  

If Brandenburg was reselling Verizon's service, additional 
listings would be available at a wholesale discount, the PSC 
said.  Because Bradenburg provides facilities-based service, it 
must pay Verizon's tariffed retail rates, the PSC added.  (Case 
2001-224)

______________________________________________________

IOWA -- Board to hold hearing on Qwest prices

The Utilities Board has scheduled a Dec. 13 hearing to consider 
prices Qwest Corp. proposed in June for wholesale services and 
unbundled network elements (UNEs).  The prices would be for new 
UNEs Qwest intends to offer through its statement of generally 
available terms (SGAT).  

In July, the consumer advocate objected to Qwest's proposal, 
raising issues about whether the proposed prices were cost based 
and whether the costing methodology Qwest used to derive the 
proposed prices complied with applicable state and federal law.  
(08/23/01)  (Docket RPU-01-6)

______________________________________________________

FLORIDA -- Workshop to review rate-increase notice plan

The Public Service Commission has scheduled a Jan. 15 workshop to 
review a proposed rule requiring telecom companies to mail 
customers notices of rate increases at least 30 days before they 
take effect.  Under current rules, telecom companies can 
implement rate increases by filing tariffs.  (6/13/01)

In May, the Office of Public Counsel asked the PSC to implement 
the notification rule.  (5/30/01)  "Customers should not be 
forced to pay any higher rates or receive services under 
different terms and conditions than those they know about and 
agreed to," the Public Counsel said.  (Docket 010774-TP)

______________________________________________________

WISCONSIN -- Gov. McCallum proposes technology zone rules

Gov. Scott McCallum (R.) has released proposed emergency rules 
for the state's new technology zone program.

Under the proposed rules, eight zones would be designated 
technology zones, which would be in effect for 10 years.  Up to 
$5 million in income tax credits would be allocated to each zone.  
The tax credits would be made available to high-tech businesses 
locating in or expanding to a designated zone.  

Comments are due Nov. 28.  The rules are available at 
www.commerce.state.wi.us.  

______________________________________________________

NEVADA -- PUC to hold public comment sessions

The Public Utilities Commission has scheduled public comment 
sessions for Dec. 5 in Washoe County and Dec.13 in Clark County.  
The commission must hold at least one general consumer session in 
the county with the largest population and the county with the 
second largest population each year.  Clark County has the 
largest population and Washoe County has the second largest 
population.

The telecom portion of the Dec. 5 Washoe meeting will run from 5-
6 p.m.  The commission will hold two sessions in Clark County on 
Dec. 13.  The telecom portion of the first meeting in Henderson 
will run from 10-11 a.m., and the telecom portion of the second 
in Las Vegas will run from 5-6 p.m.

______________________________________________________

NEVADA -- Workshop on PUC rules, practices scheduled

The Public Utilities Commission has scheduled a Dec. 14 workshop 
to discuss simplifying commission practices, increasing 
administrative efficiency, and encouraging public participation.  
The workshop will continue Dec. 17.

The commission has asked for comments on these issues by Nov. 28; 
the comments will then be discussed at the workshop.  The 
comments should address issues like (1) how the PUC should 
evaluate coalition and association petitions to intervene with 
regard to the "direct and substantial interest" standard, (2) how 
the PUC should best use issues lists or position papers, (3) how 
the PUC could refine the discovery process, (4) whether the PUC 
should create an informal hearing process, and (5) whether the 
PUC should use binding arbitration.  

(Docket 00-10039, In re investigation into rules of practice and 
procedure before the Commission and proposed rulemaking to amend, 
adopt, and/or repeal Nevada Administrative Code Chapters 703 and 
704 to address such issues)

______________________________________________________

VIRGINIA -- Milliken to head Warner transition team

John Milliken, a McLean attorney, has been named to head Gov.-
elect Mark Warner's (D.) transition team.  As director, Mr. 
Milliken will be responsible for ensuring that Gov.-elect 
Warner's cabinet, agenda, and budget are in place as soon as he 
assumes the governor's office Jan. 12, 2002.

Mr. Milliken is a partner in the law firm of Venable, Baetjer and 
Howard's McLean office.  He serves as co-chairman of the firm's 
state and local government practice group, and was the state's 
Secretary of Transportation from March 1990-December 1993.

______________________________________________________

CONNECTICUT -- OCC to hold meeting on consumer education

The Telecommunications Consumer Education Advisory Council 
(TCEAC) of the Office of Consumer Council has scheduled a Nov. 29 
meeting to discuss consumer education issues.  The TCEAC is part 
of a community outreach program, which conducts open forums on 
utility issues throughout the state.  The meeting will begin at 
1:00 p.m. at the OCC's offices in New Britain.

______________________________________________________

ALASKA -- GCI closes cable TV transaction

General Communication, Inc., has closed its transaction with 
Rogers Cable, Inc., acquiring 100% of Rogers's subsidiary Rogers 
American Cablesystems, Inc., a cable TV provider in Alaska.  "We 
believe this transaction will allow us to offer a broader package 
of advanced services to our customers in the Mat-Su Valley," said 
Riley Snell, GCI vice president and general manager-cable and 
entertainment.

He added, "We have already made significant progress in tying the 
networks together and have plans to invest more than $3 million 
over the next two years to upgrade the plan and significantly 
increase the products available to our customers."  The newly 
acquired properties serve the Palmer and Wasilla area, which Mr. 
Snell said is the state's "fastest growing region."

The final purchase price was $19 million.  

______________________________________________________

CALIFORNIA -- Gov. Davis encourages laid-off workers to teach

Gov. Gray Davis (D.) has announced $38.9 million in grants to 
help Californians who have lost their jobs find new employment.  
The governor also unveiled an initiative aimed at encouraging 
high-tech workers to become educators.

The education initiative will enable laid-off workers to enter 
the education workforce by becoming math or science teachers and 
chief information officers.  The program would pay for the 
education courses necessary for teacher certification as well as 
books, testing fees, support services, case management, 
counseling, and overall project management for dislocated 
technology workers interested in becoming educators.

The initiative will also train "dot-commers" who have a job but 
are interested in a switching to teaching.  Gov. Davis said the 
initiative would help ease the state's digital divide while 
providing teachers to educate students in technology-related 
subjects to meet the state's future workforce needs.  The program 
will train up to 200 new science and math teachers at a cost of 
about $1.6 million in Workforce Investment Act funds.

The statewide rapid response grants, totaling $24.7 million, will 
be administered by the California Employment Development 
Department.  Those funds will be used to pay for worker 
retraining and tuition.  

Two job-training grants totaling $14.2 million will go to the 
Silicon Valley region to provide regional employment and training 
services to laid-off high-technology and electronic commerce 
workers.  The funds will be used to "retool" the workers' skills 
for high-growth industries.  

______________________________________________________

OHIO -- Adelphia launches video-on-demand service

Adelphia Communications Corp. has launched SeaChange 
International Inc.'s interactive TV system, which will provide 
video-on-demand (VOD) movies.  The service will allow Adelphia's 
Cleveland customers to subscribe to HBO On Demand, Showtime On 
Demand, and Starz On Demand.  

SeaChange said Adelphia is the first cable TV operator to use a 
single video server to launch three major subscription VOD 
services.

______________________________________________________

VIRGINIA -- Secretary of Commerce resigns, Lief appointed

Gov. Jim Gilmore (R.) yesterday said Secretary of Commerce and 
Trade Barry E. DuVal has resigned his position to become the 
president and chief executive officer of the consulting firm 
Kaufman & Canoles Consulting LLC.  Mr. DuVal's resignation takes 
effect Dec. 3.

Joshua N. Lief, who has been the deputy secretary of commerce and 
trade since 1998, will succeed Mr. DuVal next month.

______________________________________________________

MICHIGAN -- Gov. Engler appoints new IT director

Gov. John Engler (R.) yesterday appointed Jacque Passino as 
director of Information Technology.  Mr. Passino will succeed 
George Boersma who has been acting director since Oct. 12.  

Gov. Engler described Mr. Passino's position as being similar to 
a "chief information officer."  He said Mr. Passino will "lead 
this department as it establishes a long-term strategy that 
allows for better management of technology investments, improved 
information management, and more efficient services to Michigan 
citizens."  

The governor created the IT department by an executive order 
issued in August 2001.

______________________________________________________

NEVADA -- Tax task force appointees named

Gov. Kenny Guinn (R.), Senate Majority Leader Bill Raggio (R., 
District 3), and Assembly Speaker Richard Perkins (D., District 
23) have named eight members to the Governor's Task Force on Tax 
Policy, which was mandated by the 2001 Legislature.  The task 
force is charges with reviewing the state's tax structure, 
specifically gross receipts from mining, property, sales or 
services, business profits, employees of business, slot route 
operators, and car rental companies.

Guy Hobbs, partner in the consulting firm Hobbs, Ong, and 
Associations and former Clark County finance director, was 
appointed by the governor to head the task force.  The other 
seven appointees represent various parts of Nevada's business 
community.

______________________________________________________

MINNESOTA -- REA-ALP to use WaveRider fixed wireless services

REA-ALP Internet Services has added WaveRider Communications, 
Inc.'s non-line-of-sight "last-mile" solution as an option to its 
high-speed Internet access service.  Wireless Internet users 
using the new WaveRider service can access the Internet at speeds 
up to 1.4 megabits per second via a wireless modem and indoor 
antenna.  

REA-ALP is a collaboration between Runestone Electric Association 
and Alexandria Light and Power.  

______________________________________________________

ARKANSAS -- Leap Wireless launches service in Jonesboro

Leap Wireless International, Inc., is offering its PCS (personal 
communications service) to residential and business customers in 
Jonesboro.  Leap also recently added Pine Bluff to its central 
Arkansas market, which already included Little Rock and Hot 
Springs. 

______________________________________________________

CONNECTICUT, MAINE, MASSACHUSETTS, NEW HAMPSHIRE, VERMONT -- 
Arguss to extend cable TV networks

Arguss Communications, Inc., has entered into agreements to 
install about 6,000 miles of aerial and underground 
infrastructure for cable TV providers Adelphia Communications, 
Charter Communications and MetroCast Cablevision.  The move 
expands the companies' networks, enabling them to support 
advanced services.

The project will be completed by the year-end 2002, a spokesman 
for Arguss told TR.


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Senior Research Analyst

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Senior Telecommunications Analyst

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