(1) Competitive local exchange market. Local exchange telecommunications markets shall be open to competition, under conditions determined by the commission by rule pursuant to this part 5, on or before July 1, 1996. (2) Basic service. Basic service is the availability of high quality, minimum elements of local exchange telecommunications service, as defined by the commission, at just, reasonable, and affordable rates to all people of the state of Colorado. The commission shall conduct a proceeding no less frequently than every three years to consider the revision of the definition of basic service, with the goal that every citizen of this state shall have access to a wider range of services at rates that are reasonably comparable as between urban and rural areas. (3) Universal basic service - affordability of basic service. (a) The commission shall require the furtherance of universal basic service, toward the ultimate goal that basic service be available and affordable to all citizens of the state of Colorado. The general assembly acknowledges the use of low-income telephone assistance programs, including "life-line" and "link-up", and telecommunications relay services for disabled telephone users to further the goal of universal service. The commission may regulate providers of telecommunications services to the extent necessary to assure that universal basic service is available to all consumers in the state at fair, just, and reasonable rates. (b) (I) Consistent with the public interest goal of maintaining affordable, just, and reasonably priced basic local exchange service for all citizens of the state, the commission shall structure telecommunications regulation to achieve a transition to a fully competitive telecommunications market with the policy that prices for residential basic local exchange service, including zone charges, if any, do not rise above the levels determined by the commission. (I.5) In determining the appropriate maximum price for residential basic service for each regulated provider, the commission: (A) Shall consider the changes since May 24, 1995, in the costs of providing such service; (B) Shall consider the changes since May 24, 1995, in the nationwide average price for comparable service; (C) Shall consider flexible-pricing tariff options; and (D) May, for any affected provider, consider the net revenues derived from other services regulated under part 2 or 3 of this article, with the exception of switched access service, notwithstanding any provision of section 40-15-201 to the contrary. Nothing in this sub- subparagraph (D) shall permit the commission to limit the affected provider's overall rate of return or overall revenues when determining the appropriate maximum price for residential basic service for that provider. (II) The commission may delay or deny a price increase for residential basic service if a provider is in substantial violation of the commission's rules governing quality of service or held service orders. (III) This section shall not be construed to prohibit the commission from granting an increase in residential basic local exchange service rates for local exchange carriers under rate- of-return regulation if such increase was approved before May 24, 1995, or if, and to the extent that, such increase is necessary to recover a provider's costs associated with investments for network upgrades made for the purpose of provisioning residential basic local exchange service if such investments are approved or required by the commission and not previously included in the calculation of residential basic local exchange service rates. (IV) (A) For service provided to residential customers outside the base rate area of a local exchange provider, the commission shall limit rate increases to maintain rates at affordable levels and shall employ universal service funding mechanisms as contemplated in subsection (5) of this section to compensate for the high cost of serving such customers in preference to allowing rate increases. (B) If there are areas within a provider's base rate area, as determined by the commission, that are receiving subsidies, those areas may continue to receive subsidies or be eligible for funding under the universal service support funding mechanisms at the commission's discretion. (V) If and when additional elements are included in the definition of basic service as a result of review by the commission under subsection (2) of this section, prices may increase as is reasonably necessary to cover the cost and account for the inclusion of such additional elements. (4) Universal access to advanced service. The general assembly acknowledges the goal of universal access to advanced service to all citizens of this state. The commission shall consider the impact of opening entry to the local exchange market and shall determine whether additional support mechanisms may be necessary to promote this goal if competition for local exchange services fails to deliver advanced services in all areas of the state. (5) Universal service support mechanisms. (a) In order to accomplish the goals of universal basic service, universal access to advanced service under section 24-37.5-905, and any revision of the definition of basic service under subsection (2) of this section, the commission shall create a system of support mechanisms to assist in the provision of basic service and advanced service in high-cost areas. The commission shall fund these support mechanisms equitably and on a nondiscriminatory, competitively neutral basis through assessments, which may include a rate element, on all telecommunications providers in Colorado. A provider's eligibility to receive support for basic service under the support mechanisms is conditioned upon the provider's offering basic service throughout an entire support area. (b) A provider that offers basic local exchange service throughout an entire support area through use of its own facilities or on a resale basis may be qualified as a provider of last resort. (c) A provider that fails to pay an assessment due and payable under paragraph (a) of this subsection (5) shall have its certificate revoked after notice and the opportunity for a hearing as provided in article 6 of this title. (6) Provider of last resort - duty to follow evolving definition of basic service. (a) In all relevant geographic areas of the state, as defined by the commission, the commission shall designate at least one provider as the provider of last resort and adopt procedures for changing or terminating such designations. A provider of last resort designation carries the responsibility to offer basic local exchange service to all consumers who request it. (b) A person holding a certificate of public convenience and necessity to provide basic service shall be subject to the evolving definition of basic service developed by the commission under subsection (2) of this section and the system of financial support for universal service established by the commission under subsection (5) of this section. (7) Barriers to entry. It is the policy of this state that all barriers to entry into the provision of telecommunications services in Colorado be removed as soon as is practicable, subject to the commission's authority to ensure quality of service and other matters as provided in this article.
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