Sub-Chapter 1: General Provisions
§ 7501. Purpose; definitions
(a) It is the purpose of this act to create a financial structure that will allow every Vermont household to obtain basic telecommunications service at an affordable price, and to finance that structure with a proportional charge on all telecommunications transactions that interact with the public switched network.
(b) As used in this chapter:
(1) "Basic telecommunications service" means that a customer has available at his or her location:
(A) switched voice grade interactive telecommunications service permitting origination and termination of calls;
(B) the ability to transmit network switching instructions through tones generated by customer-owned equipment;
(C) the ability to transmit and receive the customer's computer-generated digital data, either by digital or analog transmission, reliably and at common transmission rates, using customer-owned equipment;
(D) the ability to communicate quickly and effectively with emergency response personnel; and
(E) telecommunications relay service, as authorized under section 218a of this title.
(2) "Interactive" means that a communications medium is regularly used to transmit information in two directions.
(3) "Private network" means a telecommunications system entirely owned and operated by a single corporate or individual person other than a telecommunications service provider and not available to the general public.
(4) "Public switched network" means the communications network owned and operated by telecommunications service providers, some of whom are common carriers.
(5) "Telecommunications service" means the transmission of any interactive electromagnetic communications that passes through the public switched network. The term includes, but is not limited to, transmission of voice, image, data and any other information, by means of but not limited to wire, electric conductor cable, optic fiber, microwave, radio wave, or any combinations of such media, and the leasing of any such service.
(A) Telecommunications service includes but is not limited to:
(i) local telephone service, including any facility or service provided in connection with such local telephone service;
(ii) toll telephone service;
(iii) directory assistance;
(iv) two-way cable television service; and
(v) mobile telephone or telecommunication service, both analog and digital.
(B) Notwithstanding the above, for purposes of this chapter, telecommunications service does not include:
(i) Services consisting primarily of the creation of artistic material or other information that is later transmitted over telecommunications equipment, including information services and electronic bulletin boards, but only to the extent that charges for such information processing are separated from charges for other telecommunications services, and only to the extent that such information is not used by any telecommunications service provider in the administration of the telecommunications network.
(ii) Mobile radio and paging services that do not have an electronic interface into the public switched network.
(iii) Private network services; provided, however, that payments by a private network to a telecommunications service provider, such as for point-to-point transmission services, are not exempt under this subdivision.
(v) Telecommunications services paid for at the point of purchase by depositing coins or currency.
(vi) Charges incurred by utilizing prepaid telephone calling cards or prepaid authorization numbers.
(6) "Telecommunications service provider" means a company required by law to hold a certificate of public good from the public service board to offer telecommunications service for intrastate service, or is authorized by the Federal Communications Commission to offer interstate telecommunications service. (Added 1993, No. 197 (Adj. Sess.), § 5; amended 1995, No. 99 (Adj. Sess.), § 12; 1997, No. 71 (Adj. Sess.), § 29, eff. March 11, 1998; 1997, No. 156 (Adj. Sess.), § 31, eff. April 29, 1998.)
§ 7502. Rulemaking
(a) Consistent with the purposes of this chapter, the public service board and the department of public service may interpret the provisions of this chapter. Any person aggrieved by any such interpretation or policy may file with the public service board a petition for a declaratory ruling. Such a petition may include a request to determine whether newly created services, and other services not specifically mentioned by the definition of telecommunications service in this chapter, are telecommunications service. All services declared to be telecommunications service shall thereafter be subject to the charge imposed by subchapter 3 of this chapter.
(b) By rule or general order, the public service board may adopt procedures and standards to implement its responsibilities under this chapter. To the extent applicable, the public service board shall use the procedures and standards applicable to the setting of rates for regulated utilities. Those procedures may be designed to expedite the annual establishment of amounts to be collected and distributed by the fiscal agent. (Added 1993, No. 197 (Adj. Sess.), § 5.)
§ 7503. Fiscal agent
(a) A fiscal agent shall be selected to receive and distribute funds under this chapter for the Vermont telecommunications relay service, for the Vermont lifeline program, for enhanced 911 services, and, subject to further legislative authorization, to reduce the cost to customers of basic telecommunications service in high-cost areas.
(b) The fiscal agent shall be selected by the public service board after competitive bidding. No telecommunications service provider shall be eligible to be the fiscal agent. The duties of the fiscal agent shall be determined by a contract with a term not greater than three years.
(c) In order to finance grants and other expenditures that have been approved by the public service board, the fiscal agent may borrow money from time to time in anticipation of receipts during the current fiscal year. No such note shall have a term of repayment in excess of one year, but the fiscal agent may pledge its receipts in the current and future years to secure repayment. Financial obligations of the fiscal agent are not guaranteed by the state of Vermont.
(d) The fiscal agent shall be audited annually by a certified public accountant in a manner determined by and under the direction of the public service board.
(e) The financial accounts of the fiscal agent shall be available at reasonable times to any telecommunications service provider in this state. The public service board may investigate the accounts and practices of the fiscal agent and may enter orders concerning the same.
(f) The fiscal agent acts as a fiduciary and holds funds in trust for the ratepayers until the funds have been disbursed as provided pursuant to sections 7511 through 7515 of this chapter. (Added 1993, No. 197 (Adj. Sess.), § 5; amended 2005, No. 171 (Adj. Sess.), § 1.)
§ 7504. Severability
In the event that a court determines that some part of this act, or its application to a particular circumstance, violates the Constitution or laws of the United States, the remainder of this chapter shall not thereby be declared invalid. (Added 1993, No. 197 (Adj. Sess.), § 5.)
Sub-Chapter 2: Distribution
§ 7511. Distribution generally
(a) As directed by the public service board, funds collected by the fiscal agent, and interest accruing thereon, shall be distributed as follows:
(1) To pay costs payable to the fiscal agent under its contract with the public service board.
(2) To support the Vermont telecommunications relay service in the manner provided by section 7512 of this title.
(3) To support the Vermont lifeline program in the manner provided by section 7513 of this title.
(4) To support enhanced-911 services in the manner provided by section 7514 of this title.
(5) To reduce the cost to customers of basic telecommunications service in high-cost areas, in the manner provided by section 7515 of this title.
(b) If insufficient funds exist to support all of the purposes contained in subsection (a) of this section, the public service board shall conduct an expedited proceeding to allocate the available funds, giving priority in the order listed in subsection (a). (Added 1993, No. 197 (Adj. Sess.), § 5.)
§ 7512. Telecommunications relay service
The fiscal agent shall make distributions for the Vermont telecommunications relay service to the state treasurer. The amount of the transfer shall be determined by the commissioner of public service as the amount reasonably necessary to pay the costs of a contract administered by the department of public service. (Added 1993, No. 197 (Adj. Sess.), § 5.)
§ 7513. Lifeline
The fiscal agent shall make distributions for the Vermont lifeline program under subsection 218(c) of this title to reimburse telecommunications service providers for credits that have been granted to their customers, within annual limits approved in advance by the public service board. The fiscal agent shall also make distributions to reimburse telecommunications companies for lifeline program administration costs approved by the board. (Added 1993, No. 197 (Adj. Sess.), § 5; amended 1995, No. 99 (Adj. Sess.), § 13.)
§ 7514. Enhanced-911
The fiscal agent shall make distributions to the state treasurer, for deposit into the enhanced 911 special fund, as annually directed by the general assembly. (Added 1993, No. 197 (Adj. Sess.), § 5.)
§ 7515. High-cost basic telecommunications service
(a) The General Assembly intends that the universal service charge be used in the future as a means of keeping basic telecommunications service affordable in all parts of this State, thereby maintaining universal service.
(b) The Commissioner of Public Service, in conjunction with the Public Service Board, shall conduct a study of the costs and other factors affecting the delivery of local exchange service by the incumbent local exchange carriers (the providers of last resort). The study shall include an informal workshop process to be conducted by the Board. Such process shall be noticed to the general public and structured to allow written and verbal comments by the general public, service providers, public officials, and others as determined by the Board. The study shall:
(1) After considering information on how various factors affect the costs of providing telecommunications service in Vermont and elsewhere, estimate the current costs and estimate, on a forward-looking basis, the differential costs of providing local exchange service to various customer groups throughout Vermont.
(2) Estimate the relationship between basic telecommunications service charges and universal service, and the threshold level beyond which universal residential service is likely to be harmed.
(3) Estimate the relationship between basic telecommunications service charges and opportunities for uniform economic development throughout the State, and the threshold prices beyond which such opportunities may be adversely affected.
(4) Estimate the potential effects of local exchange competition on uniform and affordable basic telecommunications service charges in all parts of the State.
(5) Examine policy options by which the cost to customers may be managed so as not to jeopardize universal service and the uniform economic development opportunities, including at least the following:
(A) establishing a maximum price for basic telecommunications service, beyond which customers would have access, without regard to income, to credits or vouchers negotiable for local exchange service from a local exchange provider or competitive access provider;
(B) broadening eligibility for the Lifeline program; and
(C) establishing a mechanism to adjust the level of support for higher cost customers over time to reflect legal rights, recover historic costs, and reflect the advantages of improved technology and increased efficiency.
(6) Examine the actions, if any, of the Federal Communications Commission (FCC) in revising its Universal Service Fund, and the need, if any, for additional action in Vermont. In particular, the study shall examine the impact on Vermont services caused by the FCC's report and order released November 18, 2011, which, among other things, expands the federal Universal Service Fund to include broadband deployment in unserved areas. Further, the study shall consider the potential impact of various legal challenges to the FCC action on the federal Universal Service Fund.
(7) Propose mechanisms to support universal service and rural economic development while securing the benefits of telecommunications competition for Vermont households and businesses.
(8) Include an audit of the Universal Service Fund to examine, among other things, the contributions made to the fund in terms of the categories of telecommunications service providers covered as well as the specific services charged. In addition, the audit shall assess the disbursements made from the Fund.
(9) Consider any other relevant issues that may arise during the course of the study.
(c) The results of the study, together with any plan for amending and distributing funds under this section, shall be submitted to the House Committee on Commerce and Economic Development and the Senate Committee on Finance on or before December 1, 2012.
(d) The Commissioner of Public Service may contract with a consultant to conduct the study required by this section. Costs incurred in conducting the study shall be reimbursed from the State Universal Service Fund up to $75,000.00.
(e) To the extent this study may require disclosure of confidential information by a telecommunications service provider, such confidential information shall be disclosed to a third party pursuant to a protective agreement. In no event shall the third party be a person or persons employed by a business competitor or whose primary duties engage them in business competition with a telecommunications service provider submitting the confidential information. The third party may be the consultant retained by the Commissioner under subsection (d) of this section or may be another third party agreed upon by the Commissioner and the telecommunications service providers. The third party shall be responsible for aggregating the information and, once aggregated, may publicly disclose such information consistent with the purposes of this section. The confidentiality requirements of this subsection shall not affect whether information provided to an agency of the State or a political subdivision of the State pursuant to other laws is or is not subject to disclosure. (Added 1993, No. 197 (Adj. Sess.), § 5; amended 2011, No. 169 (Adj. Sess.), § 2, eff. May 18, 2012.)
Sub-Chapter 3: Collection
§ 7521. Charge imposed; wholesale exemption
(a) A universal service charge is imposed on all retail telecommunications service provided to a Vermont address. Where the location of a service and the location receiving the bill differ, the location of the service shall be used to determine whether the charge applies. The charge is imposed on the person purchasing the service, but shall be collected by the telecommunications provider. Each telecommunications service provider shall include in its tariffs filed at the public service board a description of its billing procedures for the universal service fund charge.
(b) The universal service charge shall not apply to wholesale transactions between telecommunications service providers where the service is a component part of a service provided to an end user. This exemption includes, but is not limited to, network access charges and interconnection charges paid to a local exchange carrier.
(c) In the case of mobile telecommunications service, the universal service charge is imposed when the customer's place of primary use is in Vermont. The terms "customer," "place of primary use," and "mobile telecommunications service" have the meanings given in 4 U.S.C. § 124. All provisions of 32 V.S.A. § 9782 shall apply to the imposition of the universal service charge under this section. (Added 1993, No. 197 (Adj. Sess.), § 5, eff. Oct. 1, 1994; amended 2001, No. 144 (Adj. Sess.), § 36.)
§ 7522. Rebate for payment elsewhere
When a telecommunications service is subject to the charge imposed by section 7521 of this title and also to a similar charge imposed for similar purposes in another state, the customer shall be liable only for the difference between the amount demonstrably paid in the other state and the amount due in this state. (Added 1993, No. 197 (Adj. Sess.), § 5.)
§ 7523. Rate adjusted annually
(a) Annually, after considering the probable expenditures for programs funded pursuant to this chapter, the probable service revenues of the industry and seeking recommendations from the department, the public service board shall establish a rate of charge to apply during the 12 months beginning on the following September 1. However, the rate so established shall not at any time exceed two percent of retail telecommunications service. The board's decision shall be entered and announced each year before July 15. However, if the general assembly does not enact an authorization amount for E-911 before July 15, the board may defer decision until 30 days after the E-911 authorization is established, and the existing charge rate shall remain in effect until the board establishes a new rate.
(b) Universal service charges imposed and collected by the fiscal agent under this subchapter shall not be transferred to any other fund or used to support the cost of any activity other than in the manner authorized by section 7511 of this title. (Added 1993, No. 197 (Adj. Sess.), § 5; amended 1995, No. 182 (Adj. Sess.), § 7, eff. May 22, 1996; 2005, No. 171 (Adj. Sess.), § 2.)
§ 7524. Payment to fiscal agent
(a) Telecommunications service providers shall pay to the fiscal agent all universal service charge receipts collected from customers. A report in a form approved by the public service board shall be included with each payment.
(b) Payments shall be made monthly, by the 15th day of the month, and shall be based upon amounts collected in the preceding month. If the amount is small, the board may allow payment to be made less frequently, and may permit payment on an accrual basis.
(c) Telecommunications service providers shall maintain records adequate to demonstrate compliance with the requirements of this chapter. The board or the fiscal agent may examine those records in a reasonable manner.
(d) When a payment is due under this section by a telecommunications service provider who has provided customer credits under the lifeline program, the amount due may be reduced by the amount of credit granted. (Added 1993, No. 197 (Adj. Sess.), § 5; amended 1995, No. 99 (Adj. Sess.), § 14; 1995, No. 182 (Adj. Sess.), § 8, eff. May 22, 1996.)
§ 7525. Delinquent payments
(a) If a report required by this chapter is not filed, or if a report when filed is incorrect or insufficient, or if a provider fails to bill and collect amounts required by this chapter, the fiscal agent shall determine a delinquency from information available and shall so inform the provider.
(b) Interest shall be charged on delinquent payments to the fiscal agent at the rate of 1.5 percent per month or part thereof.
(c) The public service board may hear appeals from any determinations of delinquency made by the fiscal agent. Any such determination shall become final if not so appealed within 60 days of its issuance.
(d) Upon petition of the fiscal agent, the public service board may impose, after notice and an opportunity for hearing, civil penalties against a telecommunications service provider who is delinquent in making payments to the fiscal agent. Any penalty imposed may be based upon the size and duration of the violation, but no such penalty shall exceed twice the amount of the delinquency or $1,000.00, whichever is larger.
(e) A telecommunications service provider who has filed reports required by this chapter shall not be liable for delinquent payments that were due more than three years before the fiscal agent gave notice of delinquency to the provider.
(f) Payments, interest, and penalties due under this chapter may be collected by civil actions in the courts of this state initiated in the name of the state or fiscal agent. (Added 1993, No. 197 (Adj. Sess.), § 5; amended 1995, No. 99 (Adj. Sess.), § 15; 2005, No. 171 (Adj. Sess.), § 3.)