III. Commission Decision Eliminating Regulation of Retail Prices
On August 30, 2006, the Commission adopted D.06-08-030 which substantially changed rate regulation for California's four largest incumbent local exchange carriers - AT&T, Verizon, SureWest Telephone, and Frontier - by adopting the Uniform Regulatory Framework. With the objective of symmetrically regulating all providers of local exchange service, the decision immediately eliminated all retail price regulations for all business services. Retail price regulation for residential service, with the exception of basic service, was also eliminated. The existing price caps on basic residential service will remain in place until January 1, 2009, after which these four carriers will have unlimited authority to set prices for basic residential service. Geographically averaged residential basic service rates will no longer be required. The Commission's decision also recognized two on-going proceedings that will address basic residential service provided pursuant to the Commission's low-income program, Lifeline, and California High Cost Fund B subsidized service.
The decision also relaxed the procedural requirements for these four incumbent local exchange carriers when offering new services and filing tariffs. These carriers can now provide new services with full pricing flexibility. The carriers were also authorized to allow all tariffs to go into effect on a same day filing, but any tariffs that impose price increases or service restrictions require a 30-day advance notice to all affected customers.4
Our decision today reflects the changes adopted in the Uniform Regulatory Framework.
4 The Commission established three levels of scrutiny for advice letters in D.07-09-019.
