1 STATUTORY OR OTHER AUTHORITY: The Washington utilities and transportation commission (commission) takes this action under Notice No. WSR 08-14-045, filed with the code reviser on June 23, 2008. The commission brings this proceeding pursuant to RCW 80.01.040 and 80.04.160.

     2 STATEMENT OF COMPLIANCE: This proceeding complies with the Administrative Procedure Act (chapter 34.05 RCW), the State Register Act (chapter 34.08 RCW), the State Environmental Policy Act of 1971 (chapter 43.21C RCW), and the Regulatory Fairness Act (chapter 19.85 RCW).

     3 DATE OF ADOPTION: The commission amends and adopts these rules on the date this order is entered.

     4 CONCISE STATEMENT OF PURPOSE AND EFFECT OF THE RULE: RCW 34.05.325(6) requires the commission to prepare and publish a concise explanatory statement about an adopted rule. The statement must identify the commission's reasons for adopting the rule, describe the differences between the version of the proposed rules published in the register and the rules adopted (other than editing changes), summarize the comments received regarding the proposed rule changes, and state the commission's consideration of them.

     5 To avoid unnecessary duplication in the record of this docket, the commission designates the discussion in this order, including Appendix A, as its concise explanatory statement, supplemented where not inconsistent by the staff memoranda preceding the filing of the CR-102 proposal and the adoption hearing. Together, the documents provide a complete but concise explanation of the agency actions and its reasons for taking those actions.

     6 REFERENCE TO AFFECTED RULES: This order amends the following sections of the Washington Administrative Code: WAC 480-120-071 Extension of service and 480-120-103 Application for service.

     7 PREPROPOSAL STATEMENT OF INQUIRY AND ACTIONS THEREUNDER: The commission filed a preproposal statement of inquiry (CR-101) on August 10, 2007, at WSR 07-17-054.

     8 The statement advised interested persons that the commission was considering initiating a rule making to revise its rules regarding telecommunications line extensions. The commission also informed persons of the inquiry into this matter by providing notice of the subject and the CR-101 to all persons on the commission's list of persons requesting such information pursuant to RCW 34.05.320(3) and by sending notice to all registered telecommunications companies, the commission's list of telecommunications attorneys, and the list for all persons interested in rule-making dockets. The commission posted the relevant rule-making information on its internet web site at http://www.utc.wa.gov/073014. Pursuant to the notice, the commission received written comments.

     9 NOTICE OF PROPOSED RULE MAKING: The commission filed a notice of proposed rule making (CR-102) on May 7, 2008, at WSR 08-10-102. The commission scheduled this matter for oral comment and adoption under Notice No. WSR 08-10-102 at 1:30 p.m., Thursday, June 26, 2008, in the Commission's Hearing Room, Second Floor, Richard Hemstad Building, 1300 South Evergreen Park Drive S.W., Olympia, WA. The notice provided interested persons the opportunity to submit written comments to the commission.

     10 MEETINGS OR WORKSHOPS: The commission held a service extension rule-making workshop on October 4, 2007, in the Commission's Hearing Room, Second Floor, Richard Hemstad Building, 1300 South Evergreen Park Drive S.W., Olympia, WA. Participants in the workshop included TDS Telecom, Tenino-Kalama Telephone, United States Cellular Corporation, and RCC Minnesota, Inc., Verizon Northwest Inc., Washington Independent Telephone Association (WITA); Embarq, Wahkiakum West Long Distance, Inc., Qwest Corporation, and the public counsel section of the Washington state attorney general's office (public counsel). The participants discussed whether the current service extension rules should be modified.

     11 WRITTEN COMMENTS: The commission received written comments from AT&T Communications of the Pacific Northwest, Inc., TCG Seattle and TCG Oregon (collectively AT&T), United States Cellular Corporation, and RCC Minnesota, Inc., supporting the proposed rules as amended. The public counsel section of the Washington state attorney general's office (public counsel) and the Industry Coalition¹ submitted written comments with proposed language changes.

¹ The Coalition includes Verizon Northwest Inc., Qwest Corporation, CenturyTel, Embarq, TDS Telecom, Kalama-Tenino Telephone and other member companies of WITA.

     12 CONTINUED NOTICE OF PROPOSED RULE MAKING: The commission filed a continuance of the notice of proposed rule making (CR-102) on June 23, 2008, at WSR 08-14-045. The commission rescheduled this matter for oral comment and adoption under Notice No. WSR 08-14-045 at 1:30 p.m., Thursday, August 14, 2008, in the Commission's Hearing Room, Second Floor, Richard Hemstad Building, 1300 South Evergreen Park Drive S.W., Olympia, WA. The notice provided interested persons the opportunity to submit written comments to the commission.

     13 WRITTEN COMMENTS: The commission received written comments from Kevin Danby, Rimrock Meadows Association, and additional comments from the Industry Coalition.

     14 RULE-MAKING HEARING: The commission considered the proposed rules for adoption at a rule-making hearing on Thursday, August 14, 2008, before Chairman Mark H. Sidran, Commissioner Patrick J. Oshie, and Commissioner Philip B. Jones. Speaking in support of the rules for adoption included: Mark Reynolds of Qwest Corporation; Mary Taylor of CenturyTel; Milt Doumit of Verizon Northwest Inc.; and Rick Finnigan representing Washington Independent Telephone Association. Kevin Danby of the Rimrock Meadows Association commented on the lack of land line and cell phone coverage to all sections of the Rimrock Meadows Association housing development.

     15 SUGGESTIONS FOR CHANGE THAT ARE ACCEPTED OR REJECTED: Written and oral comments suggested changes to the proposed rules. The suggested changes and the commission's reason for rejecting or accepting the suggested changes are described below.

     16 COMMISSION ACTION: After considering all of the information regarding this proposal, the commission finds and concludes that it should amend and adopt the rules as proposed in the CR-102, with changes from the text noticed at WSR 08-14-045, as described below in this order.

     17 CHANGES FROM PROPOSAL: The commission addressed the comments submitted by interested persons for changes to WAC 480-120-071 as follows:

     Subsection (2) Tariffed residential basic local exchange service (c)(ii).

     18 The Industry Coalition proposed that the rule be modified to include language that would permit companies and applicants to agree to use a firm or negotiated quotation for construction charges in lieu of the estimated charge and reimbursement procedure described in WAC 480-120-071 (4)(c). The Industry Coalition suggested that the proposal would not harm any potential customer as it would apply only upon company and customer agreement.

     Suggested added language: (2)(c)(ii) Unless otherwise agreed by a company and its applicant, for an extension . . . (remaining subsection).

     19 The commission rejects the proposed rule change. Because there is typically only one telecommunications company from which an applicant may obtain a wire line extension, a customer could not obtain competing bids or otherwise ascertain the "market" price of the line extension. Therefore, an applicant would have no way of judging the reasonableness of a firm offer and would likely have little or no bargaining power to negotiate a firm price. The initial estimate/true-up approach is preferable because it requires the company to reimburse the amount by which the estimate (and initial bill) exceeds the company's actual cost. Actual costs can be verified against invoices in the event of a dispute. A "negotiated" price would lack any ready indicia of reasonableness.

     Subsection (2) tariffed residential basic local exchange service (c)(iii).

     20 Public counsel expressed concern that limited-income applicants may not be able to pay the full cost of a line extension quickly and thus may go without service for a long time, even when they have entered into a payment plan with the company and have made consistent and substantial payments toward the cost of the line extension. Public counsel suggested that this conflicts with the rule's requirement that service be extended "in a timely manner." Public counsel requested that language be included in subsection (2)(c)(iii) that would require companies to make reasonable payment plans available to all applicants and begin the running of the twelve-month deadline to complete the extension of service and provide new tariffed residential basic local exchange service upon substantial, partial payment.

     21 The commission rejects public counsel's proposed modification. There is no information available about the relative income of applicants. Line extensions are often sought to serve comparatively new developments or second homes. The company may offer payment plans in its tariff. If the payment terms are not acceptable to the applicant, the applicant will need to obtain his/her own financing for the line extension.

     Subsection (3) allowances.

     22 Public counsel requested the commission set the allowance for an extension of service at two thousand feet at no charge to the applicant, stating that would still lower the costs companies are currently responsible for under the existing rule by placing the extraordinary cost of lengthy line extensions on individual customers. According to the data provided by four companies, it was lengthier extensions—those over two thousand feet—which made up the bulk of their overall costs. Shorter line extensions were notably less expensive with almost all line extensions less than two thousand feet costing less than $10,000. Public counsel suggested that a two thousand foot allowance would strike the right balance between fostering universal service while not imposing unreasonable costs on companies and ratepayers in general.

     23 The commission rejects public counsel's proposed revision. The initial line extension allowance proposed in this rule making was five hundred feet. After consideration of the written initial comments, the line extension allowance was expanded to one thousand feet. The one thousand foot allowance strikes a reasonable balance between the costs that should be borne by the company and those that should be borne by the customer.

     Subsection (3) allowances (c).

     24 The Industry Coalition proposed that the rule be modified to address extraordinary costs that could be incurred in construction of the first one thousand feet of any line extension that exceeds one thousand feet. The subsection at issue provides for recovery of extraordinary costs associated with an extension that is up to one thousand feet. The coalition suggested the intent be clarified.

     25 The commission accepts the coalition's proposal to clarify the language regarding recovery of extraordinary costs associated with the first one thousand feet of the line extension. The language is revised to allow the company to demonstrate that the first one thousand feet of any extension of service can be considered for recovery of extraordinary costs.

     Industry Coalition proposed new subsection (3)(d).

     26 The Industry Coalition proposed that a new subsection (3)(d) be added to address general waivers under WAC 480-120-015. The proposed language would make it clear that the existence of an eligible telecommunications carrier as an alternative service provider for the location where the extension is requested could be a factor to be considered in deciding whether to grant a waiver.

     27 Suggested new language:

     (3)(d) A company may seek a waiver of the requirement to extend service under this rule pursuant to WAC 480-120-015. In making its determination whether to grant such a waiver, the commission may take into consideration the existence of an alternative service provider that is an eligible telecommunications carrier ("ETC") for the location where an extension of service is requested.

     28 The commission rejects the Industry Coalition's proposed new subsection (3)(d). The rule as drafted achieves a bright line standard for companies concerning the obligation to construct a line extension. Adding a waiver option would detract from this standard. A company may seek a waiver under WAC 480-120-015 whenever it thinks it appropriate and the commission may consider any pertinent information, including the existence of an ETC alternative, without adding the suggested language.

     Subsection (6) requirements for supporting structures and trenches (a)(ii).

     29 Public counsel proposed that "[t]o further ensure that applicants have a meaningful choice, subsection (7)(a)(ii) should include a statement that the company's construction specifications should be reasonable."

     30 The commission accepts public counsel's recommendation and revises the language to include the term "reasonable." This addition clarifies that supporting structures required for the placement of company-provided drop wire from the applicant's property line to the premises are only those reasonably necessary to complete the line extension.

     Subsection (8) application of rule.

     31 The Industry Coalition proposed that the rule be modified by adding language that would address the transition to the new rule. Cost recovery mechanisms that are in place based on the current rule will not have run their course as of the effective date of the new rule but will be effectively repealed by the new rule. The Industry Coalition asked that subsection (8) be clarified to ensure that there would be no confusion regarding the continued application of the old rule (and particularly the cost recovery mechanism of that rule) to line extension requests already accepted by the company, even though the new rule will apply retroactively to requests made before the effective date of the new rule that are not accepted by the company before the effective date of the new rule.

     32 The commission accepts the Industry Coalition's proposal and revises the language to clarify the applicability of the new rule.

     33 STATEMENT OF ACTION; STATEMENT OF EFFECTIVE DATE: After reviewing the entire record, the commission determines that WAC 480-120-071 and 480-120-103 should be amended to read as set forth in Appendix A, as rules of the Washington utilities and transportation commission, to take effect pursuant to RCW 34.05.380(2) on the thirty-first day after filing with the code reviser.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 2, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

     34 The commission amends and adopts WAC 480-120-071 and 480-120-103 to read as set forth in Appendix A, as rules of the Washington utilities and transportation commission, to take effect on the thirty-first day after the date of filing with the code reviser pursuant to RCW 34.05.380(2).

     35 This order and the rules set out below, after being recorded in the register of the Washington utilities and transportation commission, shall be forwarded to the code reviser for filing pursuant to chapters 80.01 and 34.05 RCW and 1-21 WAC.

     Dated at Olympia, Washington, September 3, 2008.

     WASHINGTON STATE UTILITIES AND TRANSPORTATION COMMISSION

Mark H. Sidran, Chairman

Patrick J. Oshie, Commissioner

Philip B. Jones, Commissioner

     Reviser's note: The brackets and enclosed material in the text of the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.

OTS-1536.3

AMENDATORY SECTION(Amending Order R-474, Docket No. UT-991737, filed 12/5/00, effective 1/15/01)

WAC 480-120-071   Extension of service.   (1) Definitions. The following definitions apply to this section unless the context clearly indicates otherwise:

     (("Basic monthly service rate" means the rate for nonmeasured service for the lowest-priced class of service ordered by the applicant.

     "Binding site plan" has the same meaning as "binding site plan" in RCW 58.17.020.

     "Constructed" means a residential building that has been approved for occupancy by the appropriate local government agency.

     "Cost justification" means such cost and engineering information as the commission may request.

     "Cost of service extension" means the direct and indirect costs of the material and labor to plan and construct the facilities including, but not limited to, drop wire, permitting fees, rights-of-way fees, and payments to subcontractors, and does not include the cost of reinforcement, network upgrade, or similar costs.

     "Development" has the same meaning as "development" and "developed lands" in RCW 58.19.020.

     "Distribution plant" means telephone equipment and facilities necessary to provide service to a premises, but does not include drop wire.

     "Drop wire" means company-supplied wire and pedestals to be placed between a premise and the company distribution plant at the applicant's property line. For drop wire installed after the effective date of this section, a drop wire must be sufficient in capacity to allow the provisioning of three individual basic exchange voice-grade access lines.

     "Extension of service" means an extension of company distribution plant to a location that is outside any municipal boundary and where no distribution plant of the extending company exists at the time an extension is requested, that is constructed at the request of one or more applicants for service who pay a charge under this section, and that extends more than 1/10 mile. Extensions of service do not include customer trenches, conduits or other support structure for placement of company-provided facilities from the customer property line to the premises to be served.

     "Filed" means the approved plat, short plat, binding site plan or other similar approved instrument filed for record with a county auditor and authorizing development activity.

     "Lot" has the same meaning as "lot" in RCW 58.17.020.

     "Marina" has the same meaning as "marina" in RCW 88.12.010.

     "Mobile home lot," "mobile home park," "mobile home park cooperative," and "mobile home park subdivision" have the same meanings as "mobile home lot," "mobile home park," "mobile home park cooperative," and "mobile home park subdivision" have in RCW 59.20.030.

     "Neighboring exchange" means an exchange bordering on any other exchange.

     "Premises" means any structure that is used as a residence, including farm houses, but does not include predominantly commercial or industrial structures.

     "Radio communications service company" has the meaning contained in RCW 80.04.010.

     "Residential buildings" has the same meaning as "residential buildings" in RCW 58.19.020.

     "Short subdivision" has the same meaning as "short subdivision" in RCW 58.17.020.

     "Subdivision" has the same meaning as "subdivision" in RCW 58.17.020.

     "Temporary occupancy" means occupancy definitely known to be for less than one year but does not include intermittent or seasonal use when such intermittent or seasonal use will occur in more than a one-year period.

     "Temporary service" means service definitely known to be for a short period of time, such as service provided for sales campaigns, athletic contests, conventions, fairs, circuses, and similar events.

     (2) Extensions of service.

     (a) Each company required to file tariffs under RCW 80.36.100 must have on file an extension of service tariff and must extend service consistent with its tariff and this section and provide drop wire for customer use. Service extensions must be completed within eighteen months after a request is made and the customer makes the initial payment, unless the commission extends the time on a showing of good cause.

     (b) Extension of service is required to occupied premises unless the company demonstrates occupancy is temporary. In the case of new construction commenced after the effective date of this section, extension of service is required only if the applicant has permission to build from the applicable local government and the need for service is not temporary.

     (c) Any company required to extend service under this section may do so by extending distribution plant or by making a service and financial agreement with a radio communications service company or other alternative provider to provide service. The services provided through a radio communications service company or other alternative provider must be reasonably comparable services at reasonably comparable prices compared to services provided through wireline distribution facilities in the area of the exchange where service has been requested. In addition, the services must include all elements of basic service defined in RCW 80.36.600. A company extending service through a service agreement with a radio communications service company or other alternative provider may file a tariff as permitted under subsection (4) of this section to recover the lesser of the actual direct cost to extend the service through the cooperative agreement or the direct cost of extending wireline distribution plant.

     (3) Service extension charge to applicants.

     (a) For service provided under subsection (2) of this section, companies must submit a tariff that sets the level of an initial fee and per-month fee for any applicant requesting an extension of service. The tariff may also impose such fees upon applicants for new service from a service extension that is less than five years old measured from the date of the initial service provided by the extension. The charge to applicants for service extensions must include an initial payment to process the order. The maximum initial payment to process the order is an amount equal to twenty times the customer's basic monthly service rate exclusive of all fees, taxes or other charges.

     A per-month payment beginning with the first monthly bill for service must be charged once the order is complete and service is provided. The maximum allowable per-month payment for a period of twenty months is an amount equal to the customer's basic monthly service rate, exclusive of all fees, taxes or other charges. Customers may pay the entire amount at any time, in lieu of monthly payments, and must pay the entire remaining amount at the time of disconnecting service if the disconnection occurs prior to full payment.

     (b) Customers are responsible for providing or paying the cost of trenching, conduit, or other structures required for placement of company-provided drop wire from the customer's property line to the premises.

     (4) Cost recovery for extensions of service.

     (a) A company with a terminating-access tariff under WAC 480-120-540 and a service-extension tariff imposing fees or charges under subsection (3) of this section may file tariffs to include a service-extension element on terminating access in an amount necessary to recover the cost of an extension of service. The tariff may not recover costs covered by applicant or customer payments for service extensions, federal universal service funds, or any similar funds or grants from other sources. The company must file the tariff to be effective only so long as necessary to recover the costs allowed under this section.

     (b) Companies may recover costs by filing a tariff under (b)(i) or (ii) of this subsection. In the case of companies that serve fewer than two percent of the access lines in the state, placement of the tariff on the agenda of a commission open meeting constitutes notice of an opportunity to be heard on the need for any reporting requirements related to a tariff based on estimated costs.

     (i) A company may file a proposed tariff to recover fifty percent of the estimated cost of an extension after it obtains all permits necessary for construction related to the extension of service. Extensions of service must be completed within twelve months of the effective date of a tariff that uses estimated costs. The tariff based on estimates is null and void at the end of that twelve-month period if the extension of service is not completed however, the commission, for good cause shown, may permit the tariff based on estimates to remain in effect after twelve months. If the commission does not permit the tariff based on estimates to continue, the company must within thirty days of the commission's decision or the end of the twelve-month period, whichever is later, file a replacement tariff to offset the amounts collected. After completion of an extension subject to a tariff based on estimated costs, the company may file a tariff to recover the cost of the extension less any amount already recovered or, in the event of an over-collection, must file a tariff to reduce terminating access sufficient to offset the amount over-collected through the initial tariff.

     Class A companies that have in effect a service-extension tariff based on estimated costs must report quarterly on collections, expenditures, and construction timetables and progress, including a final report after completion of the extension and termination of the tariff. Companies that serve fewer than two percent of the access lines in the state and that have in effect a service-extension tariff based on estimated costs must make the same report every six months if ordered by the commission.

     (ii) A company may file a tariff to recover the cost of a service extension at any time within two years after completion of an extension and may accumulate the cost of multiple line extensions before filing a tariff.

     (c) The commission will review the cost justification for the tariffs and approve the tariffs if they are consistent with this section. The commission will not conduct an earnings review of the company's operations for the purpose of reviewing the proposed tariffs.

     (5) Extension of service to neighboring exchange facilities.

     (a) A company that is willing to extend service to a neighboring exchange may recover under subsection (4) of this section the cost of an extension to a neighboring exchange if companies obligated to serve the neighboring exchange agree that the cost of a cross-boundary service extension would be less than the cost of extension within the applicants' exchange and agree to the cross-boundary extension.

     (b) In the case of a cross-boundary extension, an applicant will become a customer of the extending company. The customer's rates and local calling capabilities must be the same as other customers served out of the extending company's same central office.

     (c) The newly constructed facilities will be the property of the extending company, but the exchange boundary will remain unchanged.

     (d) The charge to the customer shall be determined in accordance with subsection (3) of this section.

     (6) Extensions to developments. The cost of extensions to developments should be borne by those who gain economic advantage from development and not by ratepayers in general. This policy promotes the economic good of having telephone infrastructure placed at the same time as other infrastructure is constructed as a part of development. Accordingly, local exchange companies may not recover under subsection (4) of this section the costs of extensions to serve the following:

     (a) Developments filed after the effective date of this rule for which a public offering statement is required under chapter 58.19 RCW;

     (b) Divisions of land filed after the effective date of this rule that use binding site plans under RCW 58.17.035 to create five or more lots or units;

     (c) Subdivisions filed after the effective date of this rule;

     (d) Short subdivisions with five or more lots filed after the effective date of this rule;

     (e) Developments filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were constructed after the division of land and prior to the effective date of this rule;

     (f) Divisions of land using binding site plans under chapter 58.17 RCW with five or more lots or units filed prior to the effective date of this rule, in which all lots, units or both were under common ownership and control on the effective date of this rule, and in which no residential buildings or commercial or industrial buildings were constructed after the division of land and prior to the effective date of this rule;

     (g) Subdivisions filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were constructed after the division of land and prior to the effective date of this rule;

     (h) Short subdivisions with five or more lots filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were constructed after the division of land and prior to the effective date of this rule;

     (i) Mobile home parks, mobile home park cooperatives, and mobile home park subdivisions filed after the effective date of this rule;

     (j) Mobile home parks, mobile home park cooperatives, and mobile home park subdivisions filed prior to the effective date of this rule, in which all lots were under common ownership and control on the effective date of this rule, and in which no residential buildings were placed or constructed after the division of land and prior to the effective date of this rule;

     (k) Marinas;

     (l) Camping resorts regulated under chapter 19.105 RCW;

     (m) Condominiums regulated under chapters 64.32 and 64.34 RCW;

     (n) Timeshares regulated under chapter 64.36 RCW.

     (7) Waiver of obligation under this section.

     (a) The commission retains the authority under RCW 80.36.090 to determine whether any applicant for service is not reasonably entitled to service and whether the local exchange company is not obligated to provide service to an applicant under subsection (2)(b) of this section. In determining the reasonable entitlement, the commission may consider those factors listed in (b)(ii)(A) through (G) of this subsection and such other information that it may consider necessary to a proper determination.

     (b) Waiver of subsection (3)(a) of this section:

     (i) A company may petition for a waiver of subsection (3)(a) of this section in order to charge an applicant the direct cost to extend service if it is unreasonable for the direct cost of the extension of service to be borne by rates permitted under subsection (4) of this section.

     (ii) In determining whether cost recovery under subsection (4) of this section for an extension is unreasonable and granting a waiver is consistent with public interest, the commission will consider:

     (A) The total direct cost of the extension;

     (B) The number of customers to be served;

     (C) The comparative price and capabilities of radio communication service or other alternatives available to customers;

     (D) Technological difficulties and physical barriers presented by the requested extensions;

     (E) The effect on the individuals and communities involved;

     (F) The effect on the public switched network; and

     (G) The effect on the company.)) "Applicant" means any person applying to a telecommunications company for new tariffed residential basic local exchange service. Applicant does not include developers requesting service for developments.

     "Cost of service extension" means the direct and indirect costs of the material and labor to plan and construct the facilities including, but not limited to, permitting fees, rights of way fees, and payments to subcontractors, and does not include the cost of reinforcement, network upgrade, or similar costs.

     "Developer" means any owner of a development who offers it for disposition, or an agent of such an owner.

     "Development" means land which is divided or is proposed to be divided for the purpose of disposition into four or more lots, parcels, or units.

     "Distribution plant" means telephone equipment and facilities necessary to provide new tariffed residential basic local exchange service to a premises, but does not include drop wire.

     "Drop wire" means company-supplied wire and pedestals to be placed between a premises and the company distribution plant at the applicant's property line. For drop wire installed after January 15, 2001, a drop wire must be sufficient in capacity to allow the provisioning of three individual basic exchange voice-grade access lines.

     "Extension of service" means an extension of company distribution plant for new tariffed residential basic local exchange service to a location where no distribution plant of the extending company exists at the time an extension of service is requested. An extension is constructed at the request of one or more applicants for service. Extensions of service do not include trenches, conduits, or other support structure for placement of company-provided facilities from the applicant's property line to the premises to be served. Extension of service, as defined in this rule, does not apply to extensions of service to developments or to extensions of service for temporary occupancy or temporary service.

     "Extraordinary cost" means a substantial expense resulting from circumstances or conditions beyond the control of the company that are exceptional and unlikely to occur in the normal course of planning and constructing facilities contemplated by this rule.

     "Order date" as defined in WAC 480-120-021 (Definitions) means the date when an applicant requests service unless a company identifies specific actions a customer must first complete in order to be in compliance with tariffs or commission rules. Except as provided in WAC 480-120-061 (Refusing service) and 480-120-104 (Information to consumers), when specific actions are required to be completed by the applicant, the order date becomes the date the company receives the completed application for extension of service.

     "Premises" means any structure that is used as a residence, but does not include predominantly commercial or industrial structures.

     "Tariffed" means offered under a tariff filed with the commission.

     "Temporary occupancy" means occupancy definitely known to be for less than one year but does not include intermittent or seasonal use when the intermittent or seasonal use will occur in more than a one-year period.

     "Temporary service" means service definitely known to be for a short period of time, such as service provided for construction huts, sales campaigns, athletic contests, conventions, fairs, circuses, and similar events.

     (2) Tariffed residential basic local exchange service.

     (a) Each company required to file tariffs under RCW 80.36.100, and each company required to do so under an alternative form of regulation, must have on file with the commission an extension of service tariff for residential basic local exchange service consistent with this rule. Each company must extend service consistent with its tariff and this section.

     (b) Within seven business days of an applicant's initial request, each company to which (a) of this subsection applies must provide the applicant with an application for extension of service. The company must also provide the applicant a brief explanation of the extension of service rules, including the requirement that subsequent applicants must contribute to the cost of a previously built extension that is less than five years old.

     (c) The company must process applications that require an extension of service in a timely manner, consistent with the following:

     (i) When there will be no charge for an extension of service as a result of the allowances required under subsection (3) of this section, the company must construct the extension and provide new tariffed residential basic local exchange service within thirteen months of the order date unless the commission grants the company's request to charge the applicant for extraordinary extension of service costs.

     (ii) For an extension of service that exceeds the allowances provided under subsection (3) of this section, within one hundred twenty days of the order date, the company must provide the applicant a bill for the estimated cost of construction of the extension of service under subsection (4)(a) of this section. The company must include with the bill a notice to the applicant of the right to be reimbursed for a portion of the cost by a subsequent applicant as provided under subsection (5) of this section.

     (iii) When the company bills for the estimated construction charges, including extraordinary costs as allowed in this section, it must complete the extension of service and provide new tariffed residential basic local exchange service within twelve months after the applicant meets the payment terms established by the company (e.g., payment in full, partial payment on a schedule). If there are multiple applicants under subsection (4)(b) of this section, then all applicants must meet the payment terms established by the company.

     (3) Allowances.

     (a) A company's tariff must allow for an extension of service within its service territory up to one thousand feet at no charge to the applicant. The tariff may allow for an extension of service for distances over the allowance at no charge to the applicant.

     (b) The applicant is responsible for the cost of that portion of the extension of service, if any, that exceeds the allowance. When the applicant meets the company's payment terms under subsection (2)(c)(iii) of this section, the company must construct the extension of service. The company's tariff must permit multiple applicants to aggregate their allowances when an extension of service to two or more applicants would follow a single construction path.

     (c) If the company determines that the first one thousand feet of an extension of service will involve extraordinary costs, the company may petition for permission to charge the applicant(s) for those costs. The petition must be in the form required under WAC 480-07-370 (1)(b)(ii) and the company must file the petition within one hundred twenty days after the order date. The company must provide notice to the applicant of the petition.

     (4) Determining costs and billing for extensions of service longer than allowances.

     (a) The company must estimate the cost of the service extension that is attributable to distribution plant that must be extended beyond the applicable allowance established under subsection (3)(b) of this section.

     (b) When two or more applicants request service and aggregate their allowances, and it is still necessary to construct an extension of service longer than the aggregated incremental allowances, the company must bill each applicant for an equal portion of the allowable charge (e.g., when two applicants aggregate allowances, the charge is divided by two; when five applicants aggregate allowances, the charge is divided by five). Multiple applicants may agree to divide the bill among themselves in amounts different from those billed as long as the billing company receives full payment.

     (c) At the completion of the construction of the extension of service, the company must determine the difference between the estimated cost provided under subsection (2)(c)(ii) of this section and the actual cost of construction. The company must provide to the applicant detailed construction costs showing the difference. The company must refund any overpayment and may charge the applicant for reasonable additional costs up to ten percent of the estimate.

     (d) The company must retain records pertaining to the construction charges paid for a period of at least six years from payment of the charges by the original applicant(s).

     (5) Subsequent applicants to existing extensions of service for which construction charges were paid.

     (a) If within five years of the order date for an extension of service a subsequent applicant seeks service from that previous extension of service and the original applicant(s) paid construction charges under subsection (4) of this section, then the company tariff must require the subsequent applicant to pay a proportionate share of the original extension of service charges before extending service. The tariff must provide that the amount paid by subsequent applicants will be refunded proportionately to the original applicant(s) who paid the extension charges.

     (b) The company must provide notice to the last known address of the original applicant(s) of the amount of the refund due the applicant(s). Any refund not requested within sixty days of the date notice was sent will be returned to the subsequent applicant.

     (6) Requirements for supporting structures and trenches.

     (a) A company tariff may condition construction on completion of support structures, trenches, or both on the applicant's property.

     (i) Applicants are responsible for installation of all supporting structures required for placement of company-provided drop wire from the applicant's property line to the applicant's premises. The company may offer to construct supporting structures and dig trenches and may charge for those services, but the tariff must not require that applicants use only company services to construct supporting structures and dig trenches. The offer must clearly state that the applicant may choose to employ a different company for construction services.

     (ii) The company tariff may require that all supporting structures required for placement of company-provided drop wire from the applicant's property line to the premises are placed in accordance with reasonable company construction specifications. The tariff must require that, once in place and in use, all supporting structures and drop wire will be maintained by the company as long as the company provides service, and any support structure and trenches constructed at company expense are owned by the company.

     (b) The tariff must provide that once supporting structures, trenches, or both, have been constructed, the company will provide drop wire to applicants at no charge.

     (7) Temporary service. Each company required to file tariffs under RCW 80.36.100 (Tariff schedules to be filed and open to public -- Exceptions), and each company regulated under an alternative form of regulation, must have on file with the commission an extension of service tariff for temporary service consistent with this rule. Each company must extend service consistent with its tariff and this section. A company tariff for extension of temporary service may not provide allowances (e.g., one thousand feet without charge) or discounts on the cost of construction.

     (8) Application of rule.

     (a) The prior WAC 480-120-071, as it was in effect on June 1, 2008, will continue to apply to applications for extension of service that a company has completed or accepted before (the effective date of the amended rule).

     (b) This section, as amended effective (the effective date of the amended rule), applies to all other requests for service before and after the effective date.

[Statutory Authority: RCW 80.01.040, 80.04.160, 80.36.080, 80.36.300. 00-24-097 (Order R-474, Docket No. UT-991737), § 480-120-071, filed 12/5/00, effective 1/15/01; Order R-25, § 480-120-071, filed 5/5/71. Formerly WAC 480-120-170.]

     (a) Accept and process applications when an applicant for service for a particular location has met all tariff requirements and applicable commission rules;

     (b) Establish the due date as the date requested by the applicant but is not required to establish a due date that is fewer than seven business days after the order date. If the company establishes a due date other than the date requested by the applicant, it must inform the applicant of the specific date when service will be provided or state that an estimated due date will be provided within seven business days as required by subsection (2) of this section; and

     (c) Maintain a record in writing, or in electronic format, of each application for service, including requests for a change of service.

     (2) If the company does not provide the applicant with a due date for installation or activation at the time of application as required in subsection (1)(b) of this section, the company must state the reason for the delay. Within seven business days of the date of the application, the company must provide the applicant with an estimated due date for installation or activation. The standards imposed by WAC 480-120-105 (Company performance standards for installation or activation of access lines) and 480-120-112 (Company performance for orders for nonbasic services) are not altered by this subsection.

     (3) When the company informs the customer that installation of new service orders requires on-premises access by the company, the company must offer the customer an opportunity for an installation appointment that falls within a four-hour period.

     (4) When the application for service requires ((a)) an extension of service ((extension)) as defined in WAC 480-120-071 (Extension of service), the requirement of subsection (1)(b) of this section does not apply ((and, for the purpose of determining when an extension must be completed, the order date is the application date or six weeks prior to the date the customer makes the required initial payment, whichever is later.

     When a service extension is required, the company must inform the customer within six weeks of a request for service that it will construct the extension and also request payment from the customer according to WAC 480-120-071, or inform the customer in writing that it will request an exemption from the commission pursuant to WAC 480-120-071(7).

     In the event a company informs the customer it will request an exemption, the company must submit the request to the commission within four weeks of informing the customer of its decision. A copy of the exemption request must be mailed to the customer not later than the date the request is filed)).

[Statutory Authority: RCW 80.36.010, 80.36.110, 80.36.320, 80.36.330, 80.36.333, 80.36.338, 80.01.040 and 80.04.160. 07-08-027 (Docket UT-060676, General Order R-540), § 480-120-103, filed 3/27/07, effective 4/27/07. Statutory Authority: RCW 80.01.040 and 80.04.160. 03-01-065 (Docket No. UT-990146, General Order No. R-507), § 480-120-103, filed 12/12/02, effective 7/1/03.]

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