Sec. 1. 35-A MRSA §9106 is enacted to read:

§9106.__Standard alternative form of regulation for rural

telephone companies

Notwithstanding section 9103, the commission shall adopt an alternative form of regulation proposed by a rural telephone company, as defined in the federal Telecommunications Act of 1996, 47 United States Code, Section 153, if the alternative form of regulation has a period of not less than 5 years and contains the following provisions.

1.__Retail rates.__The rural telephone company may establish rates, without the need for commission review and approval, for any local basic service interexchange service, optional calling features and other services provided by the rural telephone company, if the local basic service rates do not exceed the local basic service rates of exchanges of the largest nonrural incumbent local exchange carrier, as defined in the federal Telecommunications Act of 1996, in the State that have basic service calling areas of a similar size.

2.__Access rates.__The rural telephone company shall establish intrastate access rates that meet the requirements of section 7101-B.

3.__Universal service support.__The rural telephone company may choose either:

A.__To not receive support from the state universal service fund for purposes of meeting its revenue requirement; or

B.__To continue to receive the same level of support from the state universal service fund as the rural telephone company was receiving at the time of adoption of the alternative form of regulation.__The level of support is subject to a percentage adjustment equal to the percentage of any change in comparable local basic service rates of the largest nonrural incumbent local exchange carrier.

In the case of either paragraph A or B, the rural telephone company is entitled to receive support that is not related to its revenue requirement to the same extent as other rural telephone companies.

4.__Exogenous events.__The rural telephone company may increase its local basic service rates above those of the largest nonrural incumbent local exchange carrier and receive an increase