Administrative Code

Virginia Administrative Code
Title 20. Public Utilities and Telecommunications
Agency 5. State Corporation Commission
1/21/2020

Chapter 417. Rules Governing the Certification and Regulation of Competitive Local Exchange Carriers

20VAC5-417-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Attestation" means a written statement regarding compliance with a requirement or condition contained in this chapter, signed by an officer, director, or comparable official of the applicant or new entrant.

"Basic telephone service" means the customer's dial tone line and local usage. Local usage can be purchased on a flat rate, measured, or on a per message basis, or some combination thereof.

"Bundled service" means a designated group of services or products offered to customers at a package or set price. A bundled service may consist of regulated and nonregulated services or products.

"Casual user service" means a local exchange telecommunications service of a competitive local exchange carrier or municipal local exchange carrier that does not require a customer to actively subscribe or contract with the competitive local exchange carrier or municipal local exchange carrier to use the service. For example, these services may require alternate billing arrangements such as a calling card to use the service.

"Commission" means the State Corporation Commission.

"Competitive local exchange carrier" ("CLEC") means an entity, other than a locality, certificated to provide local exchange telecommunications services in Virginia after January 1, 1996, pursuant to § 56-265.4:4 of the Code of Virginia. An incumbent local exchange carrier shall be considered a CLEC in any territory that is outside the territory it was certificated to serve as of December 31, 1995, for which it obtains a certificate to provide local exchange telecommunications services on or after January 1, 1996.

"Customer" means any person, firm, partnership, corporation, or lawful entity that purchases local exchange telecommunications services.

"Incumbent local exchange carrier" or "incumbent" ("ILEC") means a public service company providing local exchange telecommunications services in Virginia on December 31, 1995, pursuant to a certificate of public convenience and necessity, or the successors to any such company.

"Individual customer pricing" means the offering of service or services to a specific customer at rates, terms, or conditions provided through an agreement instead of pursuant to tariff.

"Interconnection" means the point of interface between local exchange carriers' networks. Interconnection can be achieved at different points of the network.

"Interstate service" means service that originates in one state and terminates in another state.

"Intrastate service" means service that originates and terminates within a state.

"Local exchange carrier" ("LEC") means a certificated provider of local exchange telecommunications services, whether an incumbent or new entrant.

"Local exchange telecommunications services" means local exchange telephone service as defined by § 56-1 of the Code of Virginia.

"Locality" means a city, town, county, or authority that operates an electric distribution system in Virginia.

"Municipal local exchange carrier" ("MLEC") means a locality certificated to provide local exchange telecommunications services pursuant to § 56-265.4:4 of the Code of Virginia.

"New entrant" means a CLEC or an MLEC.

"Promotion or promotional rates" means an offering of limited duration that reduces, waives, or otherwise modifies applicable tariffed rates, terms, or conditions.

"Retail local exchange telecommunications service or services" means telecommunications service or services that are offered for sale directly to the public.

"Service charges" means charges associated with work activities performed by the LEC in conjunction with providing service. These include, but are not limited to, charges for installation, activation, order processing, line restoration, maintenance visits, or changes in service.

"Switched access charges" means the per minute rates billed by LECs to IXCs or other LECs for the use of the LEC's network when an end user makes or receives a long distance call.

"Tariff" means schedules on file with the commission that are open to public inspection that detail a local exchange carrier's services, rates, charges, terms, and conditions of service.

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003; Errata, 19:20 VA.R. 2999 June 16, 2003; amended, Virginia Register Volume 24, Issue 4, eff. October 9, 2007; Volume 28, Issue 12, eff. February 1, 2012.

20VAC5-417-20. Application requirements for certification.

A. An original and 15 copies of an application for a certificate of public convenience and necessity shall be filed with the Clerk of the Commission.

1. The applicant shall deliver a copy of the application to the Division of Communications at the same time it is filed with the Clerk of the Commission.

2. A copy of all confidential information filed under seal with the Clerk of the Commission in connection with the application shall be provided by the applicant, at the time of filing, to the Division of Communications and the Office of General Counsel pursuant to 5VAC5-20-170.

3. Any amendment or supplement to the application shall be filed in compliance with this section.

B. Notice of the application shall be given to all certificated local exchange carriers and other interested parties in Virginia in a form to be prescribed by the commission pursuant to an order.

C. The application shall identify the applicant including: (i) its name, address, telephone number, fax number, and website address, if any; (ii) the name, address, telephone number, fax number, type of entity (e.g., corporation, limited liability company), and website address of its parent or parents, if any; (iii) a list of its officers and directors or, if the applicant is not a corporation, a list of its principals or comparable officials; (iv) a toll-free telephone number for customer complaints and inquiries, if available; and (v) the name, address, telephone number, fax number, and e-mail address of the primary in-house regulatory contact.

D. An incorporated CLEC applicant shall demonstrate that it is organized under the laws of Virginia as a public service company by providing (i) a true and correct copy of its articles of incorporation and all amendments thereto, and (ii) a copy of the certificate and order issued by the commission.

E. An unincorporated CLEC applicant shall demonstrate that it is authorized to do business in the Commonwealth of Virginia by providing the following:

1. In the case of an unincorporated entity formed under the laws of Virginia: (i) a true and correct copy of its articles of organization, certificate of limited partnership, or other organizational document or documents, and all amendments thereto; and (ii) a copy of the certificate and order issued by the commission.

2. In the case of an unincorporated entity formed under the laws of a jurisdiction other than Virginia: (i) a copy of the certificate or statement of registration to do business in Virginia issued to it by the commission, and (ii) a true and correct copy of its articles of organization, certificate of limited partnership, or other organizational document or documents, and all amendments thereto.

F. An MLEC applicant shall include a copy of its applicable city, town, or county charter.

G. An applicant shall be required to show its financial, managerial, and technical ability to render local exchange telecommunications services.

1. To demonstrate financial ability, each CLEC applicant shall, at a minimum, provide the following:

a. The per books balance sheet, income statement, and statement of changes in financial position of the applicant or the entity responsible for the financing of the applicant, for the two most recent annual periods. Audited financial statements shall be provided, if available, including notes to the financial statements and auditor's letter. Published financial information that includes Securities and Exchange Commission forms 10K and 10Q shall be provided, if available.

b. A continuous performance or surety bond in a minimum amount of $50,000, in a form to be prescribed by the commission staff. The bond shall be provided to the Division of Communications within 30 days of the issuance of the Order for Notice and Comment.

2. To demonstrate financial ability, each MLEC applicant shall, at a minimum, provide the following information:

a. The two most recent annual financial statements for the entity responsible for financing. Financial statements shall include a balance sheet, income statement, statement of changes in financial position, notes to the financial statements, and auditor's letter.

b. Proof of a minimum bond (or other senior debt) rating of "BB" or an equivalent rating by a major rating agency, or a guarantee by a guarantor possessing a credit rating of "BB" or higher from a major rating agency. In lieu of such minimum bond rating or guarantee, the applicant shall submit other evidence that will demonstrate financial responsibility. This evidence may include, but not necessarily be limited to, letters of credit, irrevocable lines of credit, and surety or performance bonds.

3. To demonstrate managerial and technical ability, each CLEC applicant shall, at a minimum, provide the following information:

a. A description of its or its parent's history and experience of providing telecommunications or other relevant services, if any; and

b. The managerial and technical experience of each principal officer or member and appropriate senior management and technical personnel.

4. To demonstrate managerial and technical ability, each MLEC applicant shall, at a minimum, provide the following information:

a. A description of the locality's history of providing electric distribution services and other utility services, if any;

b. A description of its experience in providing telecommunications or other relevant services, if any;

c. A list of the geographic areas in which it has provided and is currently providing utility, telecommunications, or other relevant services; and

d. The managerial and technical experience of senior management and technical personnel.

5. The applicant shall provide a list of the states where the applicant, parent, or any affiliate holds authority to provide local exchange telecommunications services and where service is actually being provided, including the date service was commenced for each.

6. The applicant shall also provide a list of any state where authorization was previously held or service was provided and subsequently discontinued and the applicable dates.

7. The applicant shall provide a list of the states where applicant, parent, or any affiliate has had certification or authorization denied, suspended, terminated, or revoked. The list shall include the reason for such denial, suspension, or revocation and copies of any orders issued by a state commission or regulatory authority addressing such action.

H. Each application shall include the applicant's proposed form of regulation for its services if such form of regulation differs from that set forth in 20VAC5-417-50.

I. A CLEC application shall be for statewide authority unless otherwise requested by the CLEC. If less than statewide authority is being requested, the CLEC shall identify the geographic area or areas for which the CLEC is requesting authority to provide service.

J. An MLEC application shall identify the geographic area or areas for which the MLEC is requesting authority to provide service. The applicant should consult § 15.2-2160 A of the Code of Virginia for determining the limits of its proposed service area.

K. The MLEC applicant shall provide a map of its electric distribution facilities in place as of March 1, 2002. The map should be in sufficient detail to identify the city, town, and county boundaries.

L. Upon request of the commission staff, an applicant shall provide such information with respect to any of its services or practices as may be relevant to the review of the application.

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003; amended, Virginia Register Volume 28, Issue 12, eff. February 1, 2012.

20VAC5-417-30. (Repealed.)

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003; repealed, Virginia Register Volume 28, Issue 12, eff. February 1, 2012.

20VAC5-417-40. MLEC requirements.

A. An MLEC that is a city, town, or county shall file data annually with the Division of Communications to demonstrate that, in the aggregate, revenues associated with intrastate telecommunications services cover the incremental and any required imputed or allocated costs of providing such telecommunications services except in circumstances where permitted by § 56-265.4:4 B 3 of the Code of Virginia. The first filing shall be 60 days after the end of the city, town, or county's calendar or fiscal year during which the city, town, or county began providing intrastate telecommunications services and shall continue annually thereafter.

B. An MLEC that is a city, town, or county shall maintain incremental cost studies for each service offered demonstrating that the associated charges: (i) do not include any subsidies, unless approved by the commission; and (ii) take into account, by imputation or allocation, equivalent charges for all taxes, pole rentals, rights-of-way, licenses, and similar costs incurred by for-profit providers. The applicable study or studies shall be filed with the commission and the Division of Communications within 30 days of a complaint alleging that an individual local exchange service offering or offerings of a city, town, or county fails to comply with these requirements.

C. An MLEC that is a city, town, or county shall maintain accounting records for the revenues, expenses, property, and source of investment dollars pertaining to its telecommunications services that are separate from the accounting records of its affiliated county, city, or town.

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003; amended, Virginia Register Volume 28, Issue 12, eff. February 1, 2012.

20VAC5-417-50. Regulation of new entrants providing local exchange telecommunications services.

A. Tariffs are permitted but not required for any or all terms, conditions, or rates of a new entrant's retail local exchange telecommunications service offerings. Unless otherwise allowed by the commission, tariffs are required for nonretail telecommunications services, such as switched access charges.

1. A new entrant electing not to tariff any or all of its retail service or services shall provide customers with access to adequate and complete information regarding the applicable terms, conditions, and rates of its nontariffed retail service or services. The form of such information is not limited to, but may be provided through, individual contracts, online website access to service guides, or other user documents. A new entrant shall provide the Division of Communications with link information to any online website information.

2. A new entrant shall advise the Division of Communications in writing if it elects not to submit tariffs for any of its retail services. The notification shall include the extent of the nontariffing, i.e., whether all retail services will not be tariffed or only some services or some terms, conditions, or rates will not be tariffed.

3. A new entrant that has tariffs on file with the Division of Communications may elect to eliminate the tariff of any or all terms, conditions, or rates of its retail services as an administrative or nonprice tariff change as prescribed by subdivision F 4 of this section.

B. A new entrant that has received certification to provide local exchange telecommunications services shall not offer any local exchange telecommunications services until such time as:

1. The new entrant has complied with notifying the Division of Communications pursuant to subdivision A 2 of this section, for terms, conditions, or rates of retail services it elects not to tariff.

2. The new entrant has submitted initial tariffs to the Division of Communications for nonretail services and for any retail services that it elects to tariff, and the tariffs have been reviewed and accepted by the Division of Communications.

C. A new entrant that elects not to tariff any or all terms, conditions, or rates of its retail local exchange telecommunications service offerings may determine subsequently to submit tariffs to the Division of Communications for any such retail local exchange telecommunications services. Any subsequent filings shall be submitted to the Division of Communications for review and acceptance. A new entrant shall continue offering its retail services on a nontariffed basis until such time as the tariffs are reviewed and accepted by the Division of Communications, and on a tariffed basis thereafter.

D. 1. Unless otherwise allowed by the commission, prices for a new entrant's intrastate access services shall not exceed the highest of the following:

a. The new entrant's comparable interstate switched access charge rates.

b. The aggregate intrastate switched access charge rates of the ILEC in whose service territory the new entrant is providing service. A new entrant may utilize a blended or composite rate to reflect applicable price ceilings of more than one ILEC or to reflect an alternative rate structure to the ILEC.

2. A new entrant may be required to submit supporting documentation to justify its switched access rates, structure, and appropriate functions to the Division of Communications.

3. Unless otherwise ordered by the commission, if an ILEC lowers its switched access charges on its own, such reductions shall not be reflected in applicable price ceilings and a new entrant is not required to adjust its rates in such circumstances.

4. If an ILEC lowers switched access charges pursuant to a commission order, a new entrant shall have 90 days to adjust and implement its switched access rates to correspond to the new applicable price ceiling. Applicable access tariffs shall be filed with the Division of Communications at least 10 days prior to the effective date. The commission may approve an alternative implementation schedule for a new entrant or new entrants to adjust their switched access rates.

E. Any price increase for retail local exchange telecommunications services of new entrants shall become effective after at least 30 days' written notice is provided to affected customers.

1. Written notice to affected customers shall be provided through bill inserts, bill messages, direct mail, or electronic mail or other forms of electronic communications when the customer has requested or authorized electronic bill delivery or other electronic communications.

2. Notice for price increases for a casual user or nonsubscriber service shall be provided through publication once as display advertising in newspapers having general circulation in the areas served by the new entrant. Display advertising shall only be used for notice for casual user or nonsubscriber services unless otherwise authorized by the commission.

F. Tariff changes for local exchange telecommunications services of new entrants shall be implemented as follows:

1. Price increases, in addition to the requirements in subsection E of this section, shall be submitted to the Division of Communications at least seven business days prior to the effective date.

a. A copy of the customer notice, the date or dates of such notification, and proof of publication, if applicable, shall be included with the submission to the Division of Communications.

b. A rate increase, if there are no current customers, shall not require customer notice. The submission to the Division of Communications shall include an attestation by the new entrant that it has no customers.

2. Price decreases shall be submitted to the Division of Communications no later than three days after the effective date.

3. New service tariff offerings shall become effective after at least three business days' submission to the Division of Communications.

4. Administrative or nonprice tariff changes shall become effective after at least three business days' submission to the Division of Communications.

5. A new entrant, subject to prior approval of the Division of Communications, may seek to file price changes in less than the prescribed timeframe stated above.

G. A new entrant may petition the commission for approval of pricing structures or rates that do not conform with access price ceiling requirements in subsection D of this section. The new entrant shall provide appropriate documentation and rationale to support any request. The commission may permit such alternative pricing structures and rates if the public interest will not be harmed.

H. Tariff filings and revisions shall be submitted to the Director of the Division of Communications and shall include an original and two copies.

I. A new entrant may, for a specified period of time, offer promotional rates, terms, or conditions for its local exchange telecommunications services offerings that differ from the rates, terms, or conditions in its tariffs. Promotions may be submitted by letter and become effective after at least three business days' written notice to the Director of the Division of Communications. Upon request from a new entrant, the Division of Communications may grant a shorter effective date for the promotion.

J. A new entrant may offer individual customer pricing for local exchange telecommunications services to a customer that may differ from those in its tariffs in a competitive bid or procurement situation. The new entrant shall retain records of any such agreements and make same available to the Division of Communications upon request.

K. A new entrant may, pursuant to § 56-481.2 of the Code of Virginia, submit for the commission's consideration an alternative regulatory plan or seek other deregulatory treatment or detariffing for nonretail services in the applicant's certification proceeding or at a later date if it desires regulation different from that specified in this section.

L. A new entrant providing local exchange telecommunications services shall not abandon or discontinue such services except as prescribed in 20VAC5-423, Rules Governing the Discontinuance of Local Exchange Telecommunications Services Provided by Competitive Local Exchange Carriers.

M. An MLEC may petition the commission for authority to include a subsidy in any of its local exchange services. The commission may approve such a subsidy if it is deemed to be in the public interest. Any subsidy approved by the commission may not result in a price for the service lower than the price for the same service charged by the ILEC provider in the area.

N. A new entrant requesting authority to expand its geographic service territory not covered by its existing certificate shall file a petition with the commission.

O. A new entrant shall, prior to collecting any customer deposits, establish and maintain an escrow account for such funds, held in a duly chartered state or national bank, savings and loan association, savings bank, or credit union, which is unaffiliated with the applicant. The Division of Communications shall be notified of this arrangement at its inception and of any subsequent change to the arrangement. Any escrow arrangement established pursuant to this requirement shall be maintained until such time as the staff or commission determines it is no longer necessary.

P. The new entrant shall be subject to applicable commission rules and regulations.

Q. The new entrant shall provide interconnection on a nondiscriminatory basis with other local exchange carriers.

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003; amended, Virginia Register Volume 24, Issue 4, eff. October 9, 2007; Volume 28, Issue 12, eff. February 1, 2012.

20VAC5-417-60. Reporting requirements for new entrants.

A. A new entrant shall provide the name, address, telephone number, fax number, and e-mail address of the person designated to receive all official mailings or notices from the Divisions of Communications and Public Service Taxation. Updates to this information shall be provided to each division within 30 days of any change.

B. A new entrant shall comply with the following economic reporting requirements:

1. At a minimum annually, or as deemed necessary by the staff or the commission, a new entrant shall be required to provide information to the Division of Communications that includes the number of access lines served, reported by residential lines and business lines and Virginia intrastate revenue.

2. A new entrant shall, on an annual basis or upon request of the staff or the commission, specify to the Division of Communications the geographic areas served within Virginia. Such information shall include the identification of specific exchanges where service is provided or offered and the wire centers associated with all collocation arrangements.

C. A new entrant shall file all reports and provide all information required for the administration of tax statutes by the Division of Public Service Taxation. Information filed with the Division of Public Service Taxation shall include financial statements and other statements showing Virginia revenues. If available, audited financial statements shall be filed. A new entrant shall maintain records of all its real property and tangible personal property located in Virginia. Such records shall include the property's original cost and location by city, county, or town and district.

D. If a new entrant establishes exchange boundaries that are not in conformance with the exchange boundaries of the incumbent local exchange carriers, maps depicting the new entrant's exchange boundaries shall be filed with the Division of Communications.

E. Should the commission determine that a new entrant has a monopoly over any of its services, whether or not those services are telephone services, it may order the new entrant to file annually with the Division of Communications data to demonstrate that its revenues from local exchange telecommunications services cover the long run incremental costs of such services in the aggregate.

F. A new entrant shall, upon request of the commission staff, file additional information with respect to any of its services or practices.

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003; amended, Virginia Register Volume 28, Issue 12, eff. February 1, 2012.

20VAC5-417-70. Name changes and use of assumed and fictitious names by a new entrant.

A. A new entrant shall comply with all provisions of Virginia law that regulate the change of name of a business entity. Within 30 days of the acceptance by the Clerk of the Commission of all documents required for the change of name of a business entity not related to the merger or reorganization of a new entrant, the new entrant shall file with the Clerk of the Commission an application to amend and reissue its certificate of public convenience and necessity to provide local exchange telecommunications services in its new name. The application shall conform to the commission's Rules of Practice and Procedure, 5VAC5-20.

B. A new entrant shall, before using an assumed or fictitious name in Virginia, comply with §§ 59.1-69 and 59.1-70 of Chapter 5 (§ 59.1-69 et seq.) of Title 59.1 of the Code of Virginia, Transacting Business Under Assumed Name. In addition, a new entrant shall:

1. File with the Division of Communications a copy of all certificates and related correspondence required by §§ 59.1-69 and 59.1-70 of the Code of Virginia. A new entrant shall identify all its fictitious and assumed names in any tariffs on file with the Division of Communications.

2. File with the Division of Public Service Taxation a copy of all certificates and related correspondence required by §§ 59.1-69 and 59.1-70 of the Code of Virginia.

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003; amended, Virginia Register Volume 28, Issue 12, eff. February 1, 2012.

20VAC5-417-80. Commission authority.

The commission may, in its discretion, waive or grant exceptions to any provision of this chapter and may also attach conditions or limitations to any certificate issued pursuant to this chapter and § 56-265.4:4 of the Code of Virginia.

Statutory Authority

§§ 12.1-13 and 56-265.4:4 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 17, eff. April 10, 2003.

Documents Incorporated by Reference (20VAC5-417)

Form 10Q, General Instructions, United States Securities and Exchange Commission.

Form 10K, Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.



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