Sec. 1. 35-A MRSA §7303-A, as enacted by PL 2001, c. 106, §1, is repealed.

Sec. 2. 35-A MRSA §7303-B is enacted to read:

§7303-B.__Basic service calling areas

No later than January 1, 2006, the commission shall by rule ensure that an eligible local exchange carrier offers its customers a flat-rate-unlimited-calling area option that includes calls made to persons located in contiguous exchanges and in abutting municipalities.__For the purposes of this section, the commission shall by rule define "contiguous exchanges."

1.__Definitions.__As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A.__"Abutting municipalities" means all municipalities that share a common boundary with the municipality in which the calling customer receives telephone service.

B.__"Eligible local exchange carrier" means a local exchange carrier designated by the commission pursuant to 47 United States Code, Section 214(e) as an eligible telecommunications carrier for the purposes of receiving universal service funding pursuant to 47 United States Code, Section 254.

2.__Commission authority.__Nothing in this section limits the commission's authority to expand or modify basic service calling areas consistent with the requirements of this section or to require a local exchange carrier that is not an eligible local exchange carrier to offer flat-rate-unlimited-calling area options.

3.__Cost recovery.__The commission may allow an eligible local exchange carrier affected by the expansion of a flat-rate- unlimited-calling area to recover, to the extent reasonable, its costs, including lost revenues, attributable to the expansion.

4.__Rules.__Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2- A.