2. Background
SureWest Telephone (SureWest) filed Petition (P.) 11-11-012 (petition) on November 14, 2011. SureWest, a subsidiary of SureWest Communications, provides telecommunications services in portions of Sacramento and Placer Counties in California. SureWest operates as an incumbent local exchange carrier (ILEC),1 and is regulated in California under the uniform regulatory framework (URF).2 Other URF ILECs include AT&T, Verizon, and Frontier Communications of California (Frontier).3 Comments in opposition to the petition were filed on December 14, 2011, by the Division of Ratepayer Advocates. SureWest filed a reply on December 27, 2011.
1 An ILEC is a local telecommunications provider that operates in the United States that was in existence on the date the Telecommunications Act of 1996 was enacted. This includes independent telephone companies such as SureWest (formerly Roseville Telephone) and General Telephone (which has since been absorbed into Verizon), as well as the Regional Bell Operating Companies, which resulted from the breakup of the AT&T in existence at that time.
2 During the late 1980's and early 1990's, in various proceedings, we addressed issues such as pricing flexibility and alternative ratemaking for basic telecommunications service rates which resulted in a New Regulatory Framework (NRF) applicable to telecommunications providers in California. NRF was authorized for Pacific Bell Telephone Company d/b/a AT&T California (AT&T) and Verizon California, Inc. (Verizon) in Decision (D.) 89-10-031, for Frontier in D.95-11-024, and for SureWest in D.96-12-074. Since the NRF decisions were issued, changes in the voice communications market have occurred, in particular, increased competition from the inclusion of multiple wireless carriers; competitive local exchange carriers (CLECs); and cable television companies. In 2005, we undertook a comprehensive review of the regulation of local exchange carriers in Rulemaking (R.) 05-04-005. By D.06-08-030, we further changed rate regulation for California's four largest ILECs, including SureWest, by adopting a URF. By that decision, we eliminated such requirement as price regulations, and price caps, relaxed the procedural requirements for the four ILECs when offering new services and filing tariffs, reduced or eliminated accounting rules that cause regulatory accounts to diverge from financial accounts, and eliminated all monitoring reports tied to NRF governing the ILECs, replacing them with standardized reporting requirements consistent with reports provided by all carriers to the Federal Communications Commission.
3 Throughout this decision we refer to SureWest, AT&T, Verizon, and Frontier collectively as URF ILECs.
