EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Chapter 704 of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 to 15, inclusive, of this act.

1-3 Sec. 2. As used in sections 2 to 15, inclusive, of this act, unless the

1-4 context otherwise requires, the words and terms defined in sections 3 to

1-5 7, inclusive, of this act, have the meanings ascribed to them in those

1-6 sections.

1-7 Sec. 3. "Affected person" means:

1-8 1. A public utility affected by an action of an electing carrier or an

1-9 action of the commission relating to an electing carrier;

1-10 2. A person whose utility service or rates are affected by an action of

1-11 an electing carrier or an action of the commission relating to an electing

1-12 carrier; or

1-13 3. A person who:

1-14 (a) Is a competitor of an electing carrier with respect to a service

1-15 performed by the electing carrier; or

1-16 (b) Wants to enter into competition with an electing carrier.

2-1 Sec. 4. "Basic network service" means the provision of any of the

2-16 13. Single-line directory listing.

2-17 Sec. 5. "Electing carrier" means an incumbent local exchange

2-18 carrier that elects to be regulated pursuant to sections 2 to 15, inclusive,

2-19 of this act.

2-20 Sec. 6. "Incumbent local exchange carrier" has the meaning

2-21 ascribed to it in 47 U.S.C. § 251(h)(1), as that section existed on the

2-22 effective date of this section, and includes a local exchange carrier that is

2-23 treated as an incumbent local exchange carrier pursuant to that section.

2-24 Sec. 7. "Long-run incremental cost" includes operating expenses

2-27 service.

2-28 Sec. 8. 1. An incumbent local exchange carrier may elect to be

2-29 regulated pursuant to sections 2 to 15, inclusive, of this act by notifying

2-30 the commission in writing of its election to be so regulated.

2-31 2. The notice of election must include a statement that the incumbent

2-32 local exchange carrier agrees not to increase any rate which the carrier

2-33 charges for basic network services.

2-34 3. After making an election pursuant to this section:

2-35 (a) The incumbent local exchange carrier is not subject to any review

2-36 of earnings, monitoring of the rate base, any requirements related to

2-37 filing cost studies concerning rate of return or any other regulation by

2-38 the commission relating to the net income or rate of return of the carrier;

2-39 (b) The commission shall not consider the rate of return, rate base or

2-40 any other earnings of the incumbent local exchange carrier in

2-41 connection with any rate change by the carrier pursuant to section 11 or

2-42 12 of this act; and

3-1 (c) The commission shall not decrease the rate of a basic network

3-2 service of the incumbent local exchange carrier unless the carrier agrees

3-3 to the decrease in the rate.

3-4 Sec. 9. All services provided by an electing carrier that are not basic

3-5 network services shall be deemed to be nonbasic network services.

3-6 Sec. 10. 1. The commission may, upon the request of an electing

3-7 carrier or upon its own initiative, reclassify a basic network service as a

3-8 nonbasic network service.

3-9 2. The commission shall establish by regulation criteria for

3-10 determining whether a service should be reclassified. The criteria must

3-11 include consideration only of:

3-12 (a) The availability of the service from other providers of

3-13 telecommunication services, except that the unavailability of another

3-14 supplier of the service in one portion of this state must not restrict the

3-15 commission from reclassifying a basic network service as a nonbasic

3-16 network service in those portions of this state where another provider of

3-17 the service operates;

3-18 (b) The proportion of the market that receives the service;

3-19 (c) The effect on the subscribers of the service if the service is

3-20 reclassified; and

3-21 (d) The nature of the service.

3-22 Sec. 11. 1. An electing carrier may exercise flexibility in the

3-23 pricing of its services, including, without limitation:

3-24 (a) The packaging of basic network services with:

3-25 (1) Any other service, regardless of whether the other service is a

3-26 regulated service;

3-27 (2) A service provided by an affiliate; or

3-28 (3) Any combination thereof; and

3-29 (b) The establishment of temporary promotional price reductions for

3-30 individual packages of basic network services or nonbasic network

3-31 services.

3-32 2. Before an electing carrier may exercise flexibility in the pricing of

3-33 its services pursuant to subsection 1, the carrier must give a 1-day written

3-34 informational notice to the commission.

3-35 3. The price for a package of services that contains both basic

3-36 network services and nonbasic network services must not be lower than:

3-37 (a) The sum of the long-run incremental costs of the basic network

3-38 services and the nonbasic network services contained in the package; or

3-39 (b) The sum of the prices of the basic network services, as set forth in

3-40 the tariffs of the electing carrier, and the long-run incremental costs of

3-41 the nonbasic network services contained in the package,

3-42 whichever is less.

4-1 Sec. 12. An electing carrier shall, with regard to any nonbasic

4-2 network service that it provides, set the price of that service at a level

4-3 above:

4-4 1. The long-run incremental cost of the service; or

4-5 2. The price of the service on the effective date of this section,

4-6 whichever is lower.

4-7 Sec. 13. 1. Before an electing carrier may introduce a new service,

4-8 the carrier must give a 1-day informational notice to the commission.

4-9 The new service is subject to the conditions set forth in sections 11 and

4-10 12 of this act.

4-11 2. An affected person may file a complaint with the commission

4-12 against the electing carrier to challenge the pricing of the new service.

4-13 The electing carrier may continue providing the new service without

4-14 amending the pricing of that service while the proceedings to resolve the

4-15 complaint are pending.

4-16 3. An affected person who files a complaint challenging the pricing

4-17 of a new service provided by an electing carrier has the burden of

4-18 proving that the pricing of the new service does not comply with sections

4-19 2 to 15, inclusive, of this act. If the complaint is resolved in the favor of

4-20 the affected person, the electing carrier shall amend the pricing of the

4-21 new service not later than 10 days after the date on which the

4-22 commission issues its final order.

4-23 Sec. 14. 1. The commission shall not adopt any regulation or issue

4-24 any rule or order that would prohibit or restrict an electing carrier from

4-25 jointly marketing or selling its products and services with the products

4-26 and services of any of its affiliates in any manner otherwise permitted by

4-27 federal law or the applicable rules of the Federal Communications

4-28 Commission. Notwithstanding any other provision of this Title, the

4-29 commission shall not attribute or impute to the electing carrier a price

4-30 discount offered by an affiliate of the electing carrier to the customers of

4-31 the affiliate.

4-32 2. The commission shall not adopt any regulation or issue any rule

4-33 or order which restricts in any manner the business or operation of a

4-34 local exchange carrier providing competitive telecommunication services

4-35 if the local exchange carrier is an affiliate of an electing carrier,

4-36 including, without limitation, any regulation, rule or order which

4-37 purports to restrict the geographical area in which such a local exchange

4-38 carrier providing competitive services may operate.

4-39 Sec. 15. 1. The commission shall adopt regulations specifying the

4-42 sections 2 to 15, inclusive, of this act.

5-1 2. An incumbent local exchange carrier that elects to be regulated

5-2 pursuant to sections 2 to 15, inclusive, of this act, is not subject to:

5-3 (a) The provisions of subsection 3 of NRS 704.040; or

5-4 (b) The remaining provisions of this chapter or chapter 707 of NRS to

5-5 the extent specified in the regulations adopted by the commission

5-6 pursuant to subsection 1.

5-7 Sec. 16. Section 4 of this act is hereby amended to read as follows:

5-8 Sec. 4. "Basic network service" means the provision of any of

5-9 the following services, unless the service has been reclassified as a

5-10 nonbasic network service by the commission pursuant to section 10

5-11 of this act:

5-12 1. Farmer line service;

5-13 2. Flat rate service for residential lines;

5-14 3. Measured rate service for residential lines;

5-15 4. Flat rate service for residential trunk lines;

5-16 5. [Flat rate service for business lines;

5-17 6. Measured rate service for business lines;

5-18 7. Flat rate service for business trunk lines;

5-19 8. Measured rate service for business trunk lines;

5-20 9.] Suburban service access lines;

5-21 [10.] 6. Toll station service access lines;

5-22 [11.] 7. Universal lifeline service access lines;

5-23 [12.] 8. Access to emergency 911 service; and

5-24 [13.] 9. Single-line directory listing.

5-25 Sec. 17. 1. This section and sections 1 to 15, inclusive, of this act

5-26 become effective upon passage and approval.

5-27 2. Section 16 of this act becomes effective on January 1, 2002.