1. (a)

   1. (1) Conditions. An LEC may require a deposit from any applicant to guarantee payment for service, subject to the conditions in subdivisions (a)(2) and (3) of this section.

   2. (2) An LEC may not require a deposit or other guaranty based upon:

      1. (A) Income;
      2. (B) Residential location;
      3. (C) Race;
      4. (D) Color;
      5. (E) Home ownership;
      6. (F) Creed;
      7. (G) Sex;
      8. (H) Marital status;
      9. (I) Age; or
      10. (J) National origin.

   3. (3) An LEC shall not demand a deposit as a condition of service from an applicant for residential service unless one (1) or more of the following criteria apply:

      1. (A) The applicant cannot provide proof of a satisfactory payment history with an LEC for the previous twelve (12) months;
      2. (B) The applicant has a past due, unpaid account for previous service with the LEC that is not in dispute;
      3. (C) The applicant did not pay bills from the LEC:

2. (i) By the close of business on the due date two (2) times in a row; or

   1. (ii) Any three (3) times in the last twelve (12) months;

      1. (D) The applicant gave the LEC two (2) or more checks in payment for previous service within the most recent twelve-month period of service that were returned unpaid for reasons other than bank error;

      2. (E) The applicant’s service from the LEC has been suspended during the last twenty-four (24) months for one (1) or more of the following reasons:

         1. (i) Nonpayment of any undisputed past due bill or bills;
         2. (ii) Misrepresentation of the applicant’s identity for the purpose of obtaining service;
         3. (iii) Failure to reimburse the LEC for damages due to negligent or intentional acts of the customer; or
         4. (iv) Obtaining, diverting, or using service without the authorization or knowledge of the LEC; or
      3. (F) Information provided by the applicant upon application for service or within the previous two-year period is materially false or materially misrepresentative of the applicant’s true status, and the misrepresentation is relevant to the conditions under which the applicant may obtain service.

3. (b) Amounts. LECs shall determine the amount of a deposit as follows:

   1. (1) The deposit shall not be more than two (2) average bills as defined in 23 CAR § 466-403 if payment for service is due after service begins;
   2. (2) The deposit shall not be more than one (1) average bill as defined in 23 CAR § 466-403 if payment for service is due before service begins;

   3. (3)

      1. (A) If an LEC discovers that an applicant has used service without authorization or tampered with the LEC’s equipment, it may charge that applicant a total deposit of not more than six (6) average bills plus the potential damage to the LEC’s equipment.
      2. (B) The LEC may not charge this deposit if the customer has received more than two (2) years’ cumulative service since the unauthorized use or tampering was discovered;

   4. (4)

      1. (A) If the LEC has proof of a misrepresentation by the applicant relevant to the conditions under which the applicant obtained service, it may charge that applicant a total deposit of not more than twice the maximum bill.
      2. (B) The LEC may not charge this deposit if the customer has received more than two (2) years’ cumulative service since the misrepresentation was discovered;
   5. (5) In accordance with 11 U.S.C. § 366 of the United States Bankruptcy Code, the LEC may require an applicant to furnish adequate assurance of payment in the form of a deposit or other security; and

   6. (6) If the applicant has previously left the LEC’s service owing a bill and that bill is unpaid at the time of application, the LEC may require a deposit equal to twice the maximum billing.

      1. (c) Payment procedures. Except for deposits under subdivision (b)(3) of this section, applicants shall be allowed to pay the deposit in two (2) installments:
   7. (1) One-half (1/2) of the deposit before receiving service; and

   8. (2) The remaining one-half (1/2) by the due date of the first bill.

      1. (d) Receipts. LECs shall give customers receipts for their deposits upon customer request.

Codification Notes: This section was promulgated as Rule 4.01 of the Telecommunications Providers Rules prior to codification in the Code of Arkansas Rules.