BILL ANALYSIS
C.S.H.B. 2128
By: Seidlits (Sibley)
Economic Development
05-10-95
Senate Committee Report (Substituted)
BACKGROUND
The Public Utility Commission of Texas (PUC) was created in 1975
and is responsible for regulating electric and telephone utilities
in Texas. The key functions of the PUC include certifying a
utility's initial operation, reviewing any new construction or
changes to existing facilities, setting rates, and monitoring and
auditing the operations of utilities under its jurisdiction.
Currently, the PUC has oversight of investor-owned utilities,
electric cooperatives, river authorities, and local telephone
companies. Cities have retained original ratemaking authority for
electric utilities and cooperatives operating within their
boundaries, but the commission reviews these rates on an appellate
basis. The commission also reviews on appeal the rates of city
utilities serving customers outside of city limits.
The Office of Public Utility Counsel (OPUC) was created in 1983 to
represent residential and small business consumers before PUC.
OPUC participates in many proceedings before PUC but concentrates
its efforts on telephone and electric utility rate cases having the
greatest impact on residential and small business consumers. OPUC
has participated in major rate cases, but only a percentage of all
cases before PUC since 1983.
The PUC and OPUC are subject to the sunset act and will be
abolished September 1, 1995, unless continued by the legislature.
S.B. 319, Acts of the 74th Legislature, Regular Session, 1995,
nonsubstantively recodifies the Public Utility Regulatory Act of
1995. This bill makes substantive changes to that recodification.
PURPOSE
As proposed, C.S.H.B. 2128 continues the Public Utility Commission
of Texas and the Office of Public Utility Counsel for a six-year
period. Among other statutory modifications, H.B. 2128 grants more
rate flexibility to small telephone companies; partially
deregulates telephone cooperatives; creates a certificate of
operating authority and a service provider certificate of operating
authority for new entrants to the telecommunications market to
provide more flexibility in regulation; establishes an incentive
regulatory structure for electing local exchange companies that
regulates price net cost of telecommunications services in three
baskets of competitive regulation in return for $1.4 billion in
infrastructure commitments to benefit schools, libraries, and
hospitals; requires the Public Utility Commission of Texas to
establish competitive safeguards to ensure fair competition and to
accelerate improvement of telecommunications; establishes
requirements for the use of specific customer proprietary network
information; establishes requirements for audio and video
programming, and for audio and video carriage; limits the
involvement of local exchange companies in electronic publishing;
creates the Telecommunications Infrastructure Fund Board to
administer the Telecommunications Infrastructure Fund to award
grants and loans for the purchase of equipment for educational
programs; and requires the delivery of certain exchange company
monies to rural and urban scholarship funds.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Public Utility Commission of Texas under SECTIONS 6, 20, 24,
38, 43, 45, 48 (Sections 3.001, 3.213(j), 3.2135(i), 3.2531(c) and
(j), 3.2625(f) and (h), 3.304(a), 3.309(c), 3.354(a), 3.452(c),
3.454(a), 3.455(a), 3.456(a), 3.457(a), 3.458(f), 3.460(b), 3.461,
3.463, 3.501(c), 3.601, 3.605, 3.608(b), and 3.658, Public Utility
Regulatory Act of 1995), and to the Texas Higher Education
Coordinating Board, the Central Education Agency, and the Texas
State Library Archives Commission under SECTION 48 (Section
3.606(r), Public Utility Regulatory Act of 1995) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 1.002, Public Utility Regulatory Act of
1995 (PURA), to provide that the legislature finds that
traditionally public utilities are by definition monopolies in the
areas they serve.
SECTION 2. Amends Section 1.003(14), PURA, to make a nonsubstantive
change.
SECTION 3. Amends Section 1.004, PURA, to make a nonsubstantive
change.
SECTION 4. Amends Section 1.022, PURA, to declare that, unless
continued in existence by Chapter 325, Government Code, this Act
expires September 1, 2001.
SECTION 5. Amends Section 1.353, PURA, as follows:
(a)-(c) Make no change.
(d) Requires 50 percent of the assessment due August 15, 1997,
to be paid by August 15, 1996, and 50 percent to be paid by
February 15, 1997, rather than August 15, 1997.
(e) Requires 50 percent of the assessment due August 15, 1998,
to be paid by August 15, 1997, and the remainder to be paid by
August 15, 1998.
(f) Makes a conforming change.
(g) Redesignates existing Subsection (f). Declares that this
subsection expires September 1, 1998, rather than 1997.
SECTION 6. Amends Title IIIA, PURA, as follows:
SUBTITLE A. GENERAL PROVISIONS
Sec. 3.001. POLICY. Sets forth the findings of the
legislature concerning the telecommunications industry.
Sec. 3.002. DEFINITIONS. Defines "basic local
telecommunications service," "incumbent local exchange
company," "least cost technology," "local exchange telephone
service," "long run incremental cost" or "LRIC," "pricing
flexibility," "telecommunications provider," "and Tier 1 local
exchange company." Redefines "dominant carrier," "local
exchange company," "public utility" or "utility," and
"separation."
SECTION 7. Amends Section 3.051, PURA, by amending Subsections (a),
(c)-(f), (j), and (l)-(q), and adding Subsections (r) and (s), as
follows:
(a) Declares that the legislature finds that the
telecommunications industry through legislative actions, among
others, does not lend itself to traditional public regulatory
rules.
(c) Grants the commission the jurisdiction to conduct
investigations necessary to identify dominant carriers in the
local telecommunications, rather than exchange, industry; to
require that every local exchange area have access to local
and interexchange telecommunications service, except that a
telecommunications utility, rather than an interexchange
carrier, must be allowed to discontinue service to a local
exchange area under certain circumstances; and to require
adequate quality of telecommunications service in each
exchange if the commission determines that service, rather
than long distance service, is not reliable. Makes conforming
and nonsubstantive changes.
(d) Makes conforming and nonsubstantive changes.
(e) Grants the commission all necessary power and authority to
promulgate rules and procedures applicable to incumbent local
exchange companies, rather than local exchange companies, for
determining the level of competition in specific
telecommunications markets. Makes conforming changes.
(f) and (j) Make conforming changes.
(l) Authorizes the commission to enter into such orders as
necessary to protect the public interest, including the
imposition of services of its full regulatory authority under
this subtitle, Subtitles C-F of this Title and Subtitles D-I
of Title I, but not Subtitles H and I of this title, if the
commission finds that an interexchange telecommunications
utility has engaged in, or attempted to engage in, predatory
pricing.
(m) and (n) Make conforming changes.
(o) Authorizes the commission to require information from
local exchange companies, rather than local exchange carriers,
as necessary to enforce the provision under this subsection.
Makes conforming changes.
(p) Makes conforming changes.
(q) Deletes reference to Subsection (l) of this section.
Makes a conforming change.
(r) Authorizes the commission, only as necessary to enforce
its limited jurisdiction, to prescribe forms of books,
accounts, records, and memoranda to be kept by a company that
has a certificate of operating authority (COA) or service
provider certificate of operating authority (SPC) under
Subtitle F of this title that in the judgment of the
commission may be necessary to carry out the limited
jurisdiction over those companies that this Act provides to
the commission.
(s) Grants the commission, except as otherwise specifically
provided by this Act, only the following authority over a
holder of a COA or SPC: to enforce the applicable provisions
of this Act as provided by Subtitle I, Title I, of this Act;
to assert jurisdiction over a specific service in accordance
with Section 3.2572 of this Act; to require co-carriage
reciprocity; and to regulate condemnation and building access.
Prohibits the commission from imposing on a telecommunications
utility that has a COA or SPC a rule or regulatory practice
under this section that imposes a greater regulatory burden on
that telecommunications utility than is imposed on a
certificate of convenience and necessity (CCN) holder serving
the same area.
SECTION 8. Amends Title IIIB, PURA, by adding Section 3.053, as
follows:
Sec. 3.053. SALE OF PROPERTY. (a) Requires the commission to
complete an investigation under Section 1.251 of this Act that
relates to a public utility and enter a final order within 180
days after the date of notification by the utility. Considers
the utility's action consistent with the public interest if an
order is not entered.
(b) Declares that Section 1.251 of this Act does not apply
to an incumbent local exchange company (LEC) electing under
Subtitle H or I of this title or to a company that receives
a COA or SPC under Subtitle F of this title.
SECTION 9. Amends Title IIIC, PURA, by adding Section 3.1015, as
follows:
Sec. 3.1015. MUNICIPAL FEES. Prohibits anything in this Act
from being construed as in any way limiting the right of a
public utility to pass through municipal fees. Requires a
public utility that traditionally passes through municipal
fees to promptly pass through any reductions.
SECTION 10. Amends Section 3.151(a), PURA, to require the
commission, on application of a utility, to fix depreciation rates
that promote deployment of new technology and infrastructure, and
to consider depreciation practices of nonregulated
telecommunications providers in setting those rates. Authorizes a
company electing under Subtitle H of this title to determine its
own depreciation rates and amortizations, but shall notify the
commission of any changes.
SECTION 11. Amends Title IIID, PURA, by adding Section 3.1545,
as follows:
Sec. 3.1545. RECORDS. Authorizes books, accounts, records,
or memoranda of a public utility, notwithstanding Section
1.204 of this Act, to be removed from the state so long as
those books, accounts, records, or memoranda are returned to
the state for any inspection by the commission that is
authorized by this Act.
SECTION 12. Amends Title IIID, PURA, by adding Section 3.1555,
as follows:
Sec. 3.1555. MINIMUM SERVICES. (a) Requires the commission
to require all holders of CCNs and COAs to provide at the
applicable tariff rate to all customers not later than
December 31, 2000, single party service, tone-dialing service,
basic custom calling features, equal access for interLATA
interexchange carriers upon bona fide request, and certain
digital switching capability on customer request.
(b) Requires an electing incumbent LEC serving as of January
1, 1995, more than 175,00 but fewer than 1,500,000 access
lines to install digital switches in its central offices
serving exchanges of less than 20,000 access lines before
December 31, 1998, notwithstanding Subsection (a) of this
section.
(c) Authorizes the commission to temporarily waive these
requirements on a showing of good cause. Prohibits the
commission from considering the cost of implementing this
section in determining whether an electing company is
entitled to a rate increase under Subtitle H or I of this
title or increased universal service funds under Section
3.608 of this Act.
(d) Declares that this section does not affect the
requirement prescribed by 16 T.A.C. Section 23.69 that, not
later than July 1, 1996, each LEC shall make Integrated
Services Digital Network (ISDN) available to all customers
in exchange areas of the company that have at least 50,000
access lines.
SECTION 13. Amends Title IIID, PURA, by adding Section 3.1556,
as follows:
Sec. 3.1556. RECONNECTION FEE. Requires the commission to
establish a reasonable limit on the amount that a LEC may
charge a customer for changing the location at which the
customer receives service.
SECTION 14. Amends Sections 3.201 and 3.202, PURA, to make
nonsubstantive and conforming changes.
SECTION 15. Amends Section 3.204, PURA, to place the burden of
proof that an incumbent LEC's, rather than a LEC's, rates are just
and reasonable on the incumbent LEC.
SECTION 16. Amends Section 3.208(b), PURA, to require a finding
under this subsection to include, among others, a finding that the
price to the utility is no higher than prices charged by the
supplying affiliate to its other affiliates or divisions for the
same item or class of items, or to unaffiliated persons or
corporations within the same market areas or having the same market
conditions. Declares that, if the supplying affiliate has
calculated its charges to the utility in a manner consistent with
the rules of the Federal Communications Commission (FCC), no
finding shall be required as to the price charged by the supplying
affiliate to its other affiliates or divisions. Requires the
commission, in any case in which the commission finds that the test
period affiliate expense is unreasonable, to determine the
reasonable level of the expense and to include such expense in
determining the utility's cost of service.
SECTION 17. Amends Section 3.210, PURA, by adding Subsection
(c), to declare that this section, except as provided by Subtitles
H and I of this title, does not apply to a company electing under
Subtitle H or I of this title. Requires the commission to retain
jurisdiction to hear and resolve complaints regarding an electing
company's compliance with obligations imposed by this Act.
SECTION 18. Amends Section 3.211, PURA, by amending Subsections
(f) and (h), and adding Subsection (j), as follows:
(f) Declares that this subsection, except as provided by
Subtitles H, I, and J of this title, does not apply to a
company electing into Subtitle H or I of this title. Requires
rates established under this section after a company's
election to comply with Subtitle H or I of this title.
(h) Requires the schedule of rates finally approved by the
commission, if the commission does not make a final
determination concerning an incumbent LEC's, rather than a
LEC's, schedule of rates prior to the 150-day suspension
period, to become effective from the date the suspension
period expired. Makes a conforming change.
(j) Authorizes an incumbent LEC to file with the commission
tariffs for switched access service that have been approved by
the FCC, provided that the tariffs include all rate elements
in the company's interstate access tariff other than end user
charges. Requires the commission, if on review the filed
tariffs contain the same rates, terms, and conditions,
excluding any end user charges, as approved by the FCC, to
order the rates to be the intrastate switched access rates,
terms, and conditions for the incumbent LEC within 60 days of
filing.
SECTION 19. Amends Sections 3.212(a) and (c), PURA, to authorize
an incumbent LEC, rather than a LEC, to make changes in certain
tariffed rules, regulations or practices by filing the proposed
changes at least 35 days prior to the effective date of the
changes. Makes a conforming change.
SECTION 20. Amends Title IIIE, PURA, by amending Section 3.213
and adding Section 3.2135, as follows:
Sec. 3.213. New heading: SMALL INCUMBENT LOCAL EXCHANGE
COMPANIES. (a) Sets forth the findings of the legislature
concerning regulatory policy.
(b) Authorizes an incumbent LEC that is a cooperative
corporation, or that, together with all affiliated incumbent
LECs, has fewer than 31,000 state access lines in service in
this state, to offer extended local calling or new services
on an optional basis or make minor changes in rates or
tariffs if the company files a prescribed statement of
intent with the commission and the office before a specified
time, provides prescribed notice, and files with the
commission affidavits verifying the provision of notice
prescribed.
(c) Requires the statement of intent to include specific
information.
(d) Requires the incumbent LEC to provide notice to affected
customers not later than the 61st day before the effective
date of the proposed change. Sets forth the required
contents of the notice.
(e) Requires the commission to review a proposed change
filed under this section if the commission receives
complaints relating to the proposed change signed by a
certain number of the affected local service customers; the
commission receives a complaint from an affected intrastate
access customer, or group of such customers, that in the
preceding 12 months accounted for more than 10 percent of
the company's total intrastate gross access revenues; the
proposed change is not a minor change; the company does not
comply with the procedural requirements of this section; or
the proposed change is inconsistent with the commission's
substantive policies as expressed in its rules.
(f) Authorizes the commission, on review, to suspend the
proposed tariff during the pendency of review.
(g) Provides that this section does not prohibit a incumbent
local exchange company from filing for new service or rate
change under another applicable section of this Act, or the
commission from conducting a review under Section 3.210 of
this Act.
(h) Defines "minor change." Deletes existing Subsections
(a)-(f).
(i) Authorizes companies under this section to provide to
their board members, officers, employees, and agents free or
reduced rates for services.
(j) Requires the commission, within 120 days of the
effective date of this section, to review its policies,
rules, and requirements relating to rural and small
incumbent LECs and cooperatives to eliminate or revise those
that place unnecessary burdens on those companies. Sets
forth required considerations of the commission.
(k) Redesignates existing Subsection (h) and makes
conforming changes.
(l) Provides that this section may not apply to an incumbent
LEC that is a cooperative corporation partially deregulated
under Section 3.2135 of this Act, except as provided in
Subsection (j).
Sec. 3.2135. COOPERATIVE CORPORATIONS. (a) Authorizes an
incumbent LEC that is a cooperative corporation to vote to
partially deregulate the cooperative by sending a ballot to
each cooperative member providing for voting for or against
the proposition.
(b) Considers the cooperative to be partially deregulated if
a majority of the ballots, returned before a specific time,
favor deregulation.
(c) Authorizes the cooperative, after balloting, to offer
extended local calling services, new services on an optional
basis, or changes in its rates or tariffs if the cooperative
provides notice, files with the department affidavits
verifying the provision of notice, and files a statement of
intent.
(d) Sets forth requirements for the statement of intent.
(e) Requires the cooperative to provide to all affected
customers and parties at least two notices of the proposed
action. Sets forth requirements for the notice.
(f) Requires the cooperative to file, before a specific
time, with the commission affidavits verifying that the
cooperative provided each notice under Subsection (e).
(g) Requires the commission to review a proposed action if
the commission receives by a certain date, complaints
relating to the proposed action signed by at least five
percent of the affected local service customers or from an
affected intrastate access customer, or group of such
customers, that in the preceding 12 months accounted for
more than 10 percent of the company's total intrastate gross
access revenues; the cooperative does not comply with the
procedural requirements of this section; or the proposed
change is inconsistent with the commission's substantive
policies as expressed in its rules.
(h) Authorizes a cooperative that is partially deregulated
under this section to vote to reverse the deregulation by
sending a ballot to each cooperative member. Sets forth
provisions for a reballot.
(i) Requires the commission, by rule, to prescribe the
voting procedures required for a cooperative.
(j) Provides that this section does not prohibit a
cooperative from filing for a new service or rate change
under another applicable section of this Act or affect the
application of other provisions of this Act.
(k) Authorizes the commission to conduct a review in
accordance with Section 3.210 of this Act.
SECTION 21. Amends Title IIIE, PURA, by adding Section 3.219, as
follows:
Sec. 3.219. INTRALATA CALLS. (a) Requires LECs in this state
designated or de facto authorized to receive "0+" and "1+"
dialed intraLATA calls to be exclusively designated or
authorized to receive those calls, except as provided by
Subsection (b) and while federal law prohibits any company in
this state from providing interLATA services.
(b) Provides that a telecommunications utility operating under
a COA or SPC to the extent not restricted by Section
3.2532(f), is de facto authorized to receive "0+" and "1+"
dialed intraLATA calls on the date on which the utility
receives its certificate.
(c) Requires the commission, effective as of the time the LEC
is allowed by federal law to provide interLATA
telecommunications services, to ensure that customers may
designate a provider of their choice to carry their "0+" and
"1+" dialed intraLATA calls and that equal access in the
public network is implemented such that the provider may carry
such calls.
SECTION 22. Amends Section 3.251, PURA, by adding Subsections
(c) and (d), as follows:
(c) Prohibits a person from providing local exchange telephone
service, basic local telecommunications service, or switched
access service without a CCN, COA, or SPC.
(d) Prohibits a municipality from receiving a CCN, COA, or SPC
under this Act, and from providing a service for which a
certificate is required.
SECTION 23. Amends Section 3.252, PURA, as follows:
Sec. 3.252. New heading: EXCEPTIONS. Provides that a
telecommunications utility, rather than a public utility, is
not required to secure a CCN, COA, or SPC for an extension
into territory contiguous to that already served by it and not
receiving similar service from another telecommunications
utility and not within the certificated area of another
telecommunications utility; an extension within territory
already served by it under a COA or SPC; or interexchange
telecommunications service, non-switched private line service,
shared tenant service, specialized communications common
carrier service, commercial mobile service, or operator
service as defined by Section 3.052(a) of this Act. Makes a
conforming change.
SECTION 24. Amends Title IIIF, PURA, by adding Section 3.2531,
as follows:
Sec. 2.2531. CERTIFICATE OF OPERATING AUTHORITY. (a)
Authorizes an applicant, in lieu of a CCN, to apply for a COA.
(b) Requires an application for a COA to specify whether the
applicant is seeking a facilities based COA under this
section or an SPC under Section 3.2532. Requires the
commission, when an application for a COA or SPC is filed,
to give notice of the application to interested parties and,
if requested, fix a time and place for a hearing and give
notice of the hearing. Authorizes any person interested in
the application to intervene at the hearing.
(c) Requires an applicant, if seeking a facilities based
COA, to include in the application a proposed build-out plan
demonstrating how the applicant will deploy its facilities
throughout the geographic area of its certificated service
area over a six-year period. Authorizes the commission to
issue rules for a holder of a COA with respect to the time
within which the holder must be able to serve customers,
except that a holder must serve customers within a build-out
area within 30 days of the date of a customer request for
service. Prohibits the commission from requiring a holder
to place "drop" facilities on every customer's premises or
to activate fiber optic facilities in advance of customer
request as part of the build-out requirements. Requires the
plan required by this subsection to meet certain conditions.
(d) Authorizes the build-out plan to permit not more than 40
percent of the applicant's service area to be served by
resale of the incumbent LEC's facilities under the tariff
required to be approved in Section 3.453. Provides a
specific exception. Declares that the 40-percent resale
limitation applies to incumbent local exchange facilities
resold by a holder of a COA as part of the provision of
local exchange telephone service. Prohibits an applicant
from using commercial mobile service to meet the build-out
requirement imposed by this section. Authorizes an
applicant to use personal communications services wireless
technology licensed by the FCC after January 1, 1995, to
meet the build-out requirement.
(e) Requires COAs to be granted within 60 days after the
date of application on a nondiscriminatory basis after
commission consideration of certain factors. Authorizes the
commission to extend the 60-day period on good cause shown.
Requires the commission to make additional considerations in
an exchange of an incumbent LEC serving fewer than 31,000
access lines.
(f) Requires the commission to consider the adequacy of the
applicant's build-out plan in determining whether to grant
the application. Authorizes the commission to
administratively and temporarily waive compliance with the
six-year build-out plan on a showing of good cause.
Requires the holder of a certificate to file periodic
reports with the commission demonstrating compliance with
the plan.
(g) Authorizes an application for a COA to be granted only
for an area or areas that are contiguous and reasonably
compact and cover at least 27 square miles. Makes certain
exceptions.
(h) Prohibits the commission, before September 1, 1998, from
granting a COA in an exchange of an incumbent LEC serving
fewer than 31,000 access lines. Requires the commission to
require that the applicant meet the other appropriate
certification provisions of this Act.
(i) Authorizes the commission, six years after an
application for a COA has been granted for a particular area
or when the new applicant has completed its build-out plan
required by this section, to waive the build-out
requirements of this section for additional applicants.
Requires the build-out requirements of this section, in
service areas served by an incumbent LEC having more than
five million access lines which, as of September 1, 1995, is
subject to any prohibition under federal law on the
provision of interLATA service, to be eliminated in any
service where all prohibitions on that company's provision
of interLATA services are removed such that the company can
offer interLATA service together with its local and
intraLATA toll service.
(j) Authorizes the commission, on an application filed after
September 1, 1997, to conduct a hearing to make certain
determinations concerning the build-out requirements. Sets
forth requirements for the commission, including rulemaking
authority, if the commission determines that the existing
build-out requirements have created barriers to facilities
based local exchange competition.
(k) Authorizes the commission, if the holder of a COA fails
to comply with any requirement of this Act, to revoke the
certificate, or impose administrative penalties or take
other action under Subtitle I, Title I, of this Act.
SECTION 25. Amends Title IIIF, PURA, by adding Section 3.2532,
as follows:
Sec. 3.2532. SERVICE PROVIDER CERTIFICATE OF OPERATING
AUTHORITY. (a) Authorizes the commission, in order to
encourage innovative and entrepreneurial businesses to provide
telecommunications services, to grant SPCs. Requires an
applicant to demonstrate that it has the financial and
technical ability to provide its services and show that the
services will meet the requirements of this section.
(b) Declares that a company is eligible for an SPC under
this section unless the company, together with affiliates,
had in excess of six percent of the total intrastate
switched access minutes of use as measured by the most
recent 12-month period preceding the filing of the
application for which data is available. Requires the
commission to obtain from the incumbent LECs such
information as is necessary to determine eligibility, and to
certify such eligibility within 10 days after the
application is filed. Requires an SPC to be granted within
60 days after the date of the application on a
nondiscriminatory basis after consideration by the
commission of certain factors. Authorizes the commission to
extend the 60-day period on good cause shown.
(c) Requires an applicant for an SPC to file with its
application a description of the services it will provide
and to show the areas in which it will provide those
services.
(d) Authorizes a holder of an SPC to obtain services under
the resale tariffs ordered by the commission as specified by
Section 3.453 of this Act; obtain for resale the monthly
recurring flat rate local exchange telephone service and
associated nonrecurring charges of an incumbent LEC as a
five percent discount to the tariffed rate; sell the flat
rate local exchange telephone service only to the same class
of customers to which the incumbent LEC sells that service;
obtain services offered by or negotiated with a holder of a
CCN or COA; and obtain for resale single or multiple line
flat rate intraLATA calling service when provided by the LEC
at the tariffed rate for online digital communications.
Prohibits a holder of an SPC from using a resold flat rate
local exchange telephone service to avoid the rates, terms,
and conditions of an incumbent LEC's tariffs; terminate both
flat rate local exchange telephone service and services
obtained under the resale tariff on the same end user
customer's premises; use the resold flat rate local exchange
telephone services to provide access services to other
interexchange carriers, cellular carriers, competitive
access providers, or other retail telecommunications
providers.
(e) Prohibits the holder of a COA or CCN from being granted
an SPC as to the same territory. Requires a holder of an
SPC who applies for a COA or CCN as to the same territory to
include a plan to relinquish its SPC.
(f) Authorizes an incumbent LEC that sells flat rate local
exchange telephone service to a holder of an SPC to retain
all access service and "1+" intraLATA toll service
originated over the resold flat rate local exchange
telephone service.
(g) Prohibits an incumbent LEC from delaying provisioning or
maintenance of services provided under this section;
degrading the quality of access provided to another
provider; impairing the speed, quality, or efficiency of
lines used by another provider; failing to fully disclose in
a timely manner upon request all available information
necessary for the holder of an SPC to provision resale
services; or refusing to take any reasonable action to allow
efficient access by a holder of an SPC to ordering, billing,
or repair management systems of the LEC.
(h) Defines "affiliate" and "control."
SECTION 26. Amends Sections 3.255(a) and (b), PURA, as follows:
(a) Grants all telecommunications utilities, rather than
public utilities, certified under this Act to provide service
or operate facilities in an area to be included in certain
boundaries prior to the inclusion to continue service in its
area of certification within the annexed or incorporated area.
(b) Grants a certificated telecommunications utility, rather
than a public utility, the right to continue service within
its area of certification under certain circumstances. Makes
conforming changes.
SECTION 27. Amends Sections 3.256 and 3.257, PURA, to make
conforming changes.
SECTION 28. Amends Title IIIF, PURA, by adding Section 3.2555,
as follows:
Sec. 3.2555. DISCRIMINATION. (a) Requires an applicant for
a COA or SPC to file with its application a sworn statement
that it has applied for any necessary municipal consent,
franchise, or permit required for the types of services and
facilities for which it has applied. Prohibits a
municipality, notwithstanding Section 1.103 of this Act, from
discriminating against a telecommunications utility in
relation to the authorization or placement of
telecommunications facilities within public right-of-way,
access to buildings, or municipal utility pole attachment
rates, terms, and conditions to the extent not addressed by
federal law.
(b) Prohibits a municipality, in the granting of consent,
franchises, and permits for the use of public streets,
alleys, or rights-of-way within its corporate municipal
limits, from discriminating in favor of or against a
telecommunications utility that holds or has applied for a
CCN, COA, or SPC all in relation to certain factors.
(c) Prohibits a public or private property owner from taking
certain actions whenever a telecommunications utility holds
a consent, franchise, or permit as determined to be the
appropriate grants of authority by the municipality, and
holds a certificate, where required by this Act.
(d) Authorizes a public or private property owner to take
certain actions whenever a telecommunications utility holds
a municipal consent, franchise, or permit as determined to
be the appropriate grants of authority by the municipality,
and holds a certificate, where required by this Act.
(e) Grants the commission the jurisdiction necessary to
enforce this section.
(f) Prohibits anything in this Act from restricting or
limiting a municipality's historical right to control and
receive reasonable compensation for access to its public
streets, alleys, or rights-of-way or other public property.
(g) Provides that Subsection (c) of this section does not
apply to an institution of higher education. Defines
"institution of higher education."
(h) Grants the holder of a CCN, COA, or SPC the right to
collect the fee imposed by a municipality under this section
through a pro rata charge to customers within the boundaries
of the municipality imposing the fee, which may be shown as
a separate line item on the customer bill.
SECTION 29. Amends Title IIIF, PURA, by adding Section 3.2571,
as follows:
Sec. 3.2571. FLEXIBILITY PLAN. Requires the commission,
after an application for a CCN, COA, or SPC is granted or the
commission determines that a certificate is not needed for the
services to be provided by the applicant, to conduct the
proceedings it determines appropriate to establish a
transitional flexibility plan for the incumbent LEC in the
same area as the new certificate holder. Prohibits a basic
local telecommunications service price of the incumbent LEC
from being increased until four years following the grant of
the certificate to the applicant, except as provided by this
Act or when the new applicant has completed its build-out plan
under Section 3.2531 or when the build-out requirements have
been eliminated.
SECTION 30. Amends Title IIIF, PURA, by adding Section 3.2572,
as follows:
Sec. 3.2572. MARKET POWER TEST. (a) Authorizes the
commission, on notice and hearing, to grant price deregulation
of a specific service in a particular geographic market if the
commission determines that the incumbent LEC or COA holder
that is a dominant provider is no longer dominant as to that
specific service in that particular geographic market.
Authorizes the incumbent LEC or COA holder that is a dominant
provider, once a service is price-deregulated under this
section, to set the rate for the deregulated service at any
level above the service's long-run incremental cost (LRIC).
(b) Requires the commission, in order to determine that an
incumbent LEC or COA holder that is a dominant provider is
no longer dominant as to a particular service in a
particular geographic market, to find that an effective
competitive alternative exists and that the incumbent LEC or
COA holder that is a dominant provider does not have
sufficient market power to control the price of the service
within a specified geographic area in a manner that is
adverse to the public interest.
(c) Sets forth the factors for the commission to consider in
determining whether the incumbent LEC or COA holder is
dominant as to a specific service in a particular geographic
area.
(d) Grants the commission all necessary power to assert or
reassert regulation over a specific service in a particular
geographic market if the incumbent LEC or COA holder that is
a dominant carrier is found to again be dominant, or the
provider of services under a COA or SPC is found to be
dominant as to that specific service in that particular
geographic market.
(e) Requires the commission, on request of an incumbent LEC
or COA holder that is a dominant carrier in conjunction with
an application under this section, to conduct investigations
to determine the existence, impact, and scope of competition
in the particular geographic and service markets at issue.
Authorizes the commission to call and hold hearings and
issue subpoenas. Grants the commission all powers necessary
and convenient to the investigation, and authorizes the
commission to make findings of fact and decisions with
respect to those markets.
(f) Entitles the parties to the proceeding to use the
results of the investigation under Subsection (e) in an
application for pricing flexibility.
(g) Authorizes the commission to collect reports from a
holder of a COA or SPC. Requires the information to be
confidential. Requires the commission to aggregate the
information to the maximum extent possible considering the
purpose of the proceeding to protect the confidential nature
of the information.
SECTION 31. Amends Section 3.258(a), PURA, to require, except as
provided by this Section, Section 3.259, or Section 3.2595, a
telecommunications utility that is granted a CCN or COA to be
required to offer to any customer in its certificated area all
basic local telecommunications services. Places provider of last
resort obligations on the holder of a CCN or COA.
SECTION 32. Amends Section 3.259, PURA, to require the holder of
a COA or SPC to refuse to serve a customer within its certified
area if the certificate holder is prohibited from providing the
service under Section 212.012 or 232.0047, Local Government Code.
SECTION 33. Amends Title IIIF, PURA, by adding Section 3.2595,
as follows:
Sec. 3.2595. DISCONTINUATION OF SERVICE. (a) Authorizes a
telecommunications utility that holds a COA or SPC,
notwithstanding Section 3.258 of this Act, to discontinue an
optional service that is not essential to the provision of
basic local telecommunications service or cease operations
within its certificated area.
(b) Requires such telecommunications utility, before it
discontinues an optional service or ceases operations, to
provide notice of the intended action to the commission and
each affected customer in the manner required by the
commission.
(c) Entitles such telecommunications utility to discontinue
an optional service on or after the 61st day after the date
on which the utility provides the notice required by
Subsection (b) of this section.
(d) Prohibits such telecommunications utility from ceasing
operations within its certificated area unless another
provider of basic local telecommunications services has
adequate facilities and capacity to serve the customers of
the certificated area and the commission authorizes the
utility to cease operations.
(e) Prohibits the commission from authorizing such
telecommunications utility from ceasing operations under
Subsection (d) of this section before the 61st day after the
date on which the utility provides notice under Subsection
(b). Authorizes the commission to enter an order
administratively unless the commission receives a complaint
from an affected person.
SECTION 34. Amends Section 3.260, PURA, to authorize, under
certain conditions, a telecommunications utility to sell a COA.
SECTION 35. Amends Section 3.261, PURA, to make conforming
changes.
SECTION 36. Amends Title IIIF, PURA, by adding Section 3.2615,
as follows:
Sec. 3.2615. DIRECTORY LISTINGS AND ASSISTANCE. (a) Requires
companies providing local exchange telephone service to
negotiate the terms and conditions of printed directory
listings and directory assistance within overlapping
certificated areas.
(b) Authorizes the commission, on complaint by the incumbent
LEC or holder of the CCN, COA, or SPC, to resolve disputes
between the parties and issue an order setting the terms and
conditions of the directory listings or assistance.
(c) Declares that this section does not affect the authority
of an incumbent LEC to voluntarily conduct negotiations with
an applicant for a CCN, COA, or SPC.
SECTION 37. Amends Section 3.262, PURA, as follows:
(a) Authorizes the commission, after notice and hearing, to
order one or more telephone companies to provide optional
extended area service within a specified calling area if
provision of the service is jointly agreed to by the
representatives of each affected telephone company and the
representatives of a political subdivision within the proposed
common calling area, provided that the proposed common calling
area has a single, continuous boundary.
(b) Declares that the agreement of each political subdivision
is not required if more than one political subdivision is
affected by a proposed optional calling plan. Prohibits the
commission from adopting rules that diminish the ability of a
political subdivision or affected telephone company to enter
into joint agreements for optional extended area calling
service. Defines "political subdivision."
SECTION 38. Amends Title IIIF, PURA, by adding Section 3.2625,
as follows:
Sec. 3.2625. PAY TELEPHONES. (a) Limits by this section the
right of a provider of pay telephone service to set the
provider's rates and charges and the commission's authority
over the pay telephone services rates of an incumbent LEC.
(b) Prohibits a provider of pay telephone service from
imposing on pay phone end users any charge for local
directory assistance or calls made under Chapter 771 or 772,
Health and Safety Code.
(c) Requires the commission to establish a limit on the
charge that may be imposed for a pay telephone coin sent-paid call within the LEC's toll-free local calling area.
Authorizes the commission to establish a statewide ceiling
on the charge that may be imposed by a provider of pay
telephone service for local calls which are collect or
operator-assisted or paid by credit card or calling card,
provided that the commission shall not establish the ceiling
at less than the applicable local rates for such calls of
any of the four largest interexchange carriers operating in
Texas.
(d) Authorizes a provider of pay telephone service, under
certain conditions, to impose a set use fee not exceeding 25
cents at the point at which the call is initiated for each
"1-800" type call made from a pay telephone.
(e) Prohibits a pay telephone service provider, other than
an incumbent LEC, from charging for credit card, calling
card, or live or automated operator-handled calls at a rate
or charge that is an amount greater than the authorized
rates and charges published in the eight newspapers having
the largest circulation in this state on March 18, 1995,
provided that the pay phone rates of an incumbent LEC
subject to Subtitle H are governed by that subtitle.
Declares that the published rates remain in effect until
changed by the legislature.
(f) Requires the commission to adopt rules within 180 days
from the effective date of this section that require every
pay telephone service provider not holding a CCN to register
with the commission. Requires a provider of pay telephone
service to be registered in order to do business in this
state.
(g) Authorizes the commission to order disconnection of
service for up to one year for repeat violations of
commission rules.
(h) Authorizes the commission to adopt rules regarding
information to be posted on pay telephone instruments, but
those rules may not require a provider of pay telephone
service or an affiliate of a provider to police the
compliance with those rules by another provider of pay
telephone service.
(i) Defines "provider of pay telephone service."
SECTION 39. Amends Section 3.263(a), PURA, to authorize the
commission, at any time after notice and hearing, to revoke or
amend any COA or SPC if it finds that the certificate holder has
never provided or is no longer providing service in the area
covered by the certificate.
SECTION 40. Amends Section 3.302, PURA, by adding Subsection
(i), to authorize a commercial mobile service provider to offer
caller identification services under the same terms and conditions
provided by Subsections (c)-(f) of this section.
SECTION 41. Amends Title IIIG, PURA, by adding Section 3.3025,
as follows:
Sec. 3.3025. CALLER ID SERVICES: CONSUMER INFORMATION. (a)
Requires the telecommunications provider, when a customer
requests per-line blocking through the commission, to notify
the customer by mail of the effective date that per-line
blocking will be instituted. Requires a telecommunications
provider providing Caller ID service to a customer originating
a call, when the provider becomes aware of a failure to block
the delivery of the calling party's identification information
from a line equipped with per-call blocking or per-line
blocking of Caller ID information, to report such failure to
the panel, the commission, and the affected customer if that
customer did not report the failure. Requires a reasonable
effort to be made to notify the affected customer within 24
hours after the provider becomes aware of such failure.
(b) Requires the commission to form the Caller ID Consumer
Education Panel (panel). Sets forth the composition of the
panel. Requires the panel to meet at least quarterly and to
file an annual report with the commission regarding the
level of effort and effectiveness of consumer education
materials and its recommendations for increasing the safe
use and privacy of the calling customer and decreasing the
likelihood of harm resulting from Caller ID services.
Authorizes the commission to implement the recommendations
of the panel and interested parties to the extent consistent
with the public interest. Requires the panel to disband on
September 1, 1999, unless reauthorized by statute.
(c) Requires all providers offering Caller ID services to
file with panel, no later than the effective date of this
Act, all existing Caller ID materials used on or before
September 1, 1995. Requires all future materials to be
provided when they become available. Requires the panel to
investigate whether educational materials are distributed in
as effective a manner as marketing materials.
(d) Defines "Caller ID services."
(e) Defines "Caller ID materials."
SECTION 42. Amends Section 3.303, PURA, as follows:
Sec. 3.303. New heading: INTEREXCHANGE SERVICES; INCUMBENT
LOCAL EXCHANGE COMPANIES' RATES. Requires an incumbent LEC's
rates for interexchange telecommunications services to be
statewide average rates.
SECTION 43. Amends Sections 3.304(a) and (b), PURA, as follows:
(a)(1) Requires the commission, if a petition for the
expansion of toll-free calling boundaries is filed with the
commission, to order the incumbent LEC, rather than the LEC,
to provide for the balloting of its subscribers.
(2) Requires the commission to provide for such expansion
for each incumbent LEC customer in the petitioning exchange
if, in addition to other requirements, the central switching
office of the exchange is located within 22 miles utilizing
vertical and horizontal geographic coordinates of the
central switching office of the exchange requested for toll-free calling service, or the petitioning exchange shall
demonstrate in its petition that it shares a community of
interest with the exchange requested for toll-free calling
service. Redefines "community of interest."
(3) Requires an incumbent LEC to recover all of its costs
incurred through a request other than a revenue requirement
showing by a monthly fee for toll-free calling of not
greater than a certain amount for up to five exchanges,
together with an additional monthly fee of $1.50 per line
for each exchange in excess of five, whether obtained in one
or more petitions. Makes conforming changes.
(b) Makes conforming changes.
SECTION 44. Amends Title IIIG, PURA, by adding Section 3.308, as
follows:
Sec. 3.308. CHARGE FOR EXTENDED AREA SERVICE. (a) Requires
an incumbent LEC serving more than one million access lines in
this state, that provides mandatory two-way extended area
service to customers for a separately stated monthly charge of
more than $3.50 per line for residential customers and $7 per
line for business customers, to file with the commission to
reduce its monthly rates for that extended area service to
$3.50 per line for residential customers and $7 per line for
business customers. Requires the incumbent LEC to recover all
of its costs incurred and all loss of revenue that results
from implementation of those rates in the manner prescribed by
Section 3.304(a)(3)(A)(ii).
(b) Declares that the commission and an incumbent LEC are
not required to comply with this section with regard to the
separately stated monthly charges for the provision of
mandatory two-way extended area service, if the charge is
for extended area service in or into a metropolitan exchange
or for extended metropolitan service.
SECTION 45. (a) Amends Title IIIG, PURA, by adding Section
3.309, as follows:
Sec. 3.309. (a) Requires a private for-profit publisher of
a residential telephone directory that is distributed to the
public at minimal or no cost to include in the directory a
listing of any toll-free and local telephone numbers of
state agencies and state public services and of each state
elected official who represents all or part of the
geographical area for which the directory contains listings.
(b) Requires the listing required by this section to be
clearly identified and located or clearly referenced at
the front of the directory before the main listing of
residential and business telephone numbers. Declares that
the listing is not required to exceed two 8-1/2 by 11-inch
pages, single-spaced in eight-point type.
(c) Authorizes the commission to adopt rules to implement
this section. Requires the commission to compile relevant
information to ensure accuracy of information in the
listing, and to provide the information to a
telecommunications utility or telephone directory
publisher within a reasonable time after a request by the
utility or publisher.
(b) Effective date of this section: September 1, 1995.
Makes application of this section prospective beginning
September 1, 1996.
SECTION 46. Amends Title IIIG, PURA, by adding Section 3.310, to
require a telecommunications utility or an affiliate of that
utility that publishes a residential or business telephone
directory that is distributed to the public to publish the name of
each state senator or representative who represents all or part of
the geographical area for which the directory contains listings.
SECTION 47. Amends Title IIIG, PURA, by adding Section 3.311, as
follows:
Sec. 3.311. HUNTING SERVICE. Requires LECs to make
available, at a reasonable tariffed rate, hunting service from
local exchange lines to extended metropolitan service lines.
Prohibits the customer from being required to purchase
additional extended metropolitan service in order to purchase
hunting service from local exchange service to extended
metropolitan service.
SECTION 48. Amends the PURA, by amending Subtitles H and I, and
adding Subtitles J-O, as follows:
SUBTITLE H. INCENTIVE REGULATION OF TELECOMMUNICATIONS
Sec. 3.351. POLICY. Sets forth the policy of the
legislature, given the current status of competition in the
telecommunications industry.
Sec. 3.352. ELECTION AND BASKETS OF SERVICES. (a) Authorizes
an incumbent LEC to notify the commission in writing of the
company's election to be regulated under this subtitle.
Requires the notice to state the company's commitment to limit
any increase in rates charged for a four-year period under
Section 3.353 and its infrastructure commitment under Section
3.358.
(b) Requires the services of an incumbent LEC electing
incentive regulation (electing company) to be classified
initially into three categories or "baskets": "Basket I:
basic network services," "Basket II: discretionary
services," and "Basket III: competitive services." Grants
the commission the authority to reclassify a service from
Basket I to Basket II or III, or from Basket II to Basket
III, as consistent with Section 3.357.
(c) Requires an electing company's telecommunications
services to be regulated under this subtitle regardless of
whether that company is a "dominant carrier," as defined by
Section 3.002.
(d) Prohibits the commission, if an incumbent LEC notifies
the commission in writing of its election to incentive
regulation under this subtitle, from subjecting to any
complaint, hearing, or determination as to the
reasonableness of its rates, its overall revenues, its
return on invested capital, or its net income. Declares
that nothing herein restricts any consumer's right to
complain to the commission regarding quality of service, the
commission's right to enforce quality of service standards,
or the consumer's right to complain regarding the
application of an ambiguous tariff, and the commission's
right, if the commission finds an ambiguity, to determine
the proper application of the tariff or to determine the
proper rate if the tariff is found to not apply. Declares
that the aforementioned does not permit the commission to
lower a tariff rate except as provided by this Act, to
change its interpretation of a tariff, or to change a tariff
so as to extend its application to new classes of customers.
Sec. 3.353. BASKET I: BASIC NETWORK SERVICES. (a) Sets forth
the services to be classified initially as basic network
services in Basket I as of September 1, 1995.
(b) Permits increases in rates for basic network services
only upon commission approval and only within the parameters
of Subsection (c) and for four years following the election
of an incumbent LEC under Section 3.352. Authorizes
decreases in rates at any time on the initiative of the
electing company to a floor above long run incremental cost
for switched access service or the appropriate cost for any
basic local telecommunications service, which shall be long
run incremental cost as to any incumbent LEC required by the
commission to perform long run incremental cost studies or
electing to perform those studies. Provides that this
section does not affect the charges permitted under Section
3.304, 3.308, or 3.608. Prohibits the commission from
increasing service standards applicable to the provision of
local exchange telephone service by an electing company if
the increased investment required for compliance with
increased standards exceeds in any one year 10 percent of
the incumbent LEC's average annual intrastate additions in
capital investment for the most recent five-year period.
Requires the incumbent LEC to exclude extraordinary
investments made during that five-year period in calculating
the average.
(c)(1) Authorizes rates for basic network services to be
changed only with commission approval that the proposed
change is included in this subsection.
(2) Requires the commission, on motion of an incumbent LEC
or its own motion, to proportionally adjust prices for
services to reflect changes in FCC separations affecting
intrastate net income by 10 percent or more.
(3) Authorizes the commission, if, after 42 months after
the date of the incumbent LEC's election, an electing
company in this state with less than five million access
lines is in compliance with its infrastructure commitment,
all quality of services requirements, and all commission
rules under Subtitle J, undertake a proceeding to review
the need for changes in the rates of services upon
application of an incumbent LEC. Authorizes the
application to request that the commission adjust rates,
implement new pricing plans, restructure rates, or
rebalance revenues between services. Authorizes the
commission to use an index and a productivity offset in
determining these changes. Prohibits the commission from
ordering an increase in residential local exchange
telephone service that would cause those rates to increase
by more than the United States Consumer Price Index in any
12-month period. Prohibits the new monthly rate from
exceeding the nationwide average of local exchange
telephone service rates for like services.
(4) Requires a rate group reclassification occurring as a
result of access lines growth to be allowed by the
commission on request of an electing company.
(d)(1) Requires the regulation of basic network services of
an electing company to be governed by specific provisions of
this Act.
(2) Declares that changes to the terms and conditions of
the tariff offering of a basic network service, other than
price changes, continue to require commission approval.
(e) Sets the rates capped in Subsection (b) as the rates
charged by the company on June 1, 1995.
Sec. 3.354. RATE ADJUSTMENT PROCEDURES. (a) Authorizes an
electing company to adjust its rates for basic network
services under Section 3.353(c), upon notice to the commission
accompanied by certain documents demonstrating that the rate
adjustment meets the criteria in Section 3.353(c). Requires
the commission to establish by rule or order the documentation
to be required under this subsection.
(b) Requires the notice to be published in a certain
newspaper and included in or on the bill of each affected
consumer in the next billing subsequent to the filing of the
notice. Sets forth the title and information to be included
in the notice.
(c) Requires the commission to review the adjusted rates to
ensure that they conform to the requirements of Section
3.353(c), and makes an adjustment effective 90 days from the
date of completion of notice.
(d) Authorizes an incumbent LEC having five percent or fewer
of the total access lines in this state to adopt the cost,
based on a long run incremental cost study, for the same or
very similar services offered by a larger incumbent LEC,
without needing to present long run incremental cost studies
of its own.
(e) Authorizes the commission to suspend the effective date
of the rate adjustment and hold a hearing to review a rate
set under Sections 3.353(c)(2)-(5). Requires the
commission, after the review, to issue an order approving,
modifying, or rejecting the adjustment if it does not comply
with the applicable provisions. Requires orders modifying
or rejecting an adjustment to specify each reason why the
adjustment does not comply and the means for attaining
compliance.
(f) Requires any rate restructure under Section 3.353(c) to
follow the notice and hearing procedures under Sections
3.211(a)-(c).
Sec. 3.355. BASKET II: DISCRETIONARY SERVICES. (a) Declares
that Basket II services include all services or functions
provided by the electing company that have not been granted
pricing flexibility in a particular geographic market, and
which have not been listed under Baskets I or III.
(b) Sets forth the services classified initially as Basket
II as of September 1, 1995. Makes a conforming change.
(c) Authorizes the commission to reclassify a service from
Basket I to Basket II or III, or from Basket II to III,
consistent with certain criteria.
(d) Requires the prices for each Basket II service or
function to be set above long run incremental cost (LRIC)
cost. Requires the commission to set the price ceiling over
and above LRIC cost, but not below or above the rate in
effect on September 1, 1995. Authorizes the ceiling to be
raised only after proceedings required under Subtitle J, and
prohibits the commission from raising the ceiling more than
10 percent annually. Authorizes the incumbent LEC, within
the LRIC floor and ceiling, to change the price of each
service, and requires the incumbent LEC to notify the
commission of each change. Provides that the placement of
a service in Basket II does not preclude an incumbent LEC
from using regulatory treatments under Section 3.051.
Prohibits discounts and other forms of pricing flexibility
from being preferential, prejudicial, or discriminatory.
Sec. 3.356. BASKET III: COMPETITIVE SERVICES. (a) Sets forth
the Basket III competitive services, and subjects them to
pricing flexibility as of September 1, 1995. Makes a
conforming change.
(b) Authorizes the commission to reclassify a service from
Basket I to Basket II or III, or from Basket II to III,
consistent with certain criteria.
(c) Authorizes the electing company to set the service price
at a level above the service's LRIC in compliance with
Subtitle J. Prohibits discounts and other forms of pricing
flexibility from being preferential, prejudicial, or
discriminatory. Prohibits an electing incumbent LEC from
increasing the price of a service in a geographic area in
which that service or a functionally equivalent service is
not readily available from another provider.
(d) Requires the commission, not later than January 1, 2000,
to initiate a review and evaluation of any incumbent LEC
electing treatment under Subtitle H or I to review and
evaluate the effects of the election. Requires the
commission to file a report and recommendations to the
legislature not later than January 1, 2001, as to whether
the incentive regulation plan should be extended, modified,
eliminated, or replaced. Authorizes the legislature to
authorize the commission to take action on the plan.
Sec. 3.357. TRANSFERRING SERVICES. (a) Requires the
commission, in determining whether to transfer services from
Basket I to Baskets II or III, or from Basket II to Basket
III, to establish standards which include such considerations
as the availability of the service from other providers, the
proportion of the market currently receiving service, the
effect of the transfer on subscribers of the service, and the
nature of the service.
(b) Prohibits transfer until the full implementation of all
competitive safeguards under Sections 3.452-3.458.
Sec. 3.358. INFRASTRUCTURE. (a) Declares that it is the goal
of this state to facilitate and promote the deployment of an
advanced telecommunications infrastructure in order to spur
economic development through Texas.
(b) Requires the commission to consider certain policy goals
of the state in implementing this section.
(c) Requires the commission to act, recognizing that it will
take time for competition to develop in the local exchange
market, in the absence of competition, to ensure that
certain infrastructure goals are achieved by electing
companies.
(d)(1) Requires an electing company of greater than five
million access lines to install Common Channel Signaling 7
capability in all central office by January 1, 2000.
(2) Requires an electing company of greater than five
million access lines to connect all of its serving central
offices to their respective LATA tandem control offices
with optical fiber or equivalent facilities by January 1,
2000.
(3) Requires an electing company serving more than one
million access lines and fewer than five million access
lines to provide digital switching central offices in all
exchanges by December 31, 1998.
(e) Authorizes the commission to consider waivers of
Subsections (c)(1)-(4) for electing LECs serving fewer than
one million lines, if the LEC demonstrates that such
investment is not viable economically; and to consider a
temporary extension of any period with respect to
Subsections (c)(1)-(4) for electing LECs serving fewer than
two million but more than one million lines, if the LEC
demonstrates that such extension is in the public interest.
(f) Prohibits the commission from considering the cost of
implementing Subsection (c) or (d) of this section in
determining whether an electing company is entitled to a
rate increase under this subtitle or increased universal
service funds under Section 3.608 of this Act.
Sec. 3.359. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES.
(a)(1) States that it is the intent of this section to
establish a telecommunications infrastructure that
interconnects public entities described in this section.
(2) States that the goal of this section is to
interconnect and aggregate the connections to every entity
described in this section, within the local serving area;
and that the implementation of the infrastructure will
connect all the entities requesting the services offered
under this section.
(b)(1) Requires the electing company, on customer request,
to provide broadband digital service that is capable of
providing transmission speeds of up to 45 megabits per
second or better for customer applications and other
customized or packaged network services to certain entities
for their private and sole use except as provided in
Subsection (d) of this section.
(2) Prohibits an entity receiving the services provided
under this section from being assessed special
construction or installation charges.
(3) Authorizes an educational institution or library to
elect the rate treatment provided in this section or the
discount provided by Section 3.605 of this Act.
(4) Prohibits an electing company's rates for the services
provided under this section from being increased for six
years from the date of election except as otherwise
provided in customer specific contracts.
(5) Requires a LEC, on customer request by an educational
institution or library in exchanges of an electing company
serving more than five million access lines in which toll-free access to the Internet is not available, to make
available a toll-free connection or toll-free dialing
arrangement for use by educational institutions or
libraries in accessing the Internet in an exchange in
which Internet access is available on a toll-free basis.
Sets forth guidelines and requirements for the provision
of such service.
(6) Requires an electing company to give priority to
serving rural areas, areas designated as critically
underserved, medically or educationally, and educational
institutions with high percentages of economically
disadvantaged students.
(c) Authorizes the private network services provided
pursuant to this section to be interconnected with other
similar networks for distance learning, telemedicine, and
information sharing purposes.
(d) Prohibits the private network services provided pursuant
to this section from being shared or resold to other
customers, with a specific exception. Prohibits the
services provided pursuant to this section from being
required to be resold to other customers at the rates
provided in this section.
(e) Defines "telemedicine center."
(f) Declares that Article 601b, V.T.C.S. (State Purchasing
and General Services Act), does not apply to contracts
entered under this section.
SUBTITLE I. INFRASTRUCTURE PLAN FOR RATE OF RETURN COMPANIES
Sec. 3.401. POLICY. Sets forth the policy of the legislature
concerning incumbent LECs that do not elect to be regulated
under Subtitle H.
Sec. 3.402. ELECTION. (a) Authorizes an incumbent LEC
serving less than five percent of the state's access lines and
that has not elected incentive regulation under Section
Subtitle H to elect for an infrastructure plan under this
subtitle by notifying the commission in writing of its
election under this section.
(b) Prohibits an electing incumbent LEC, for a six-year
period after the election date, from seeking an increase in
a rate previously established for that company under this
Act, except for charges permitted under Sections 3.304,
3.308, 3.608, and 3.610 of this Act, and upon commission
approval that the proposed change is included in this
subsection. Requires the commission, on motion of an
electing incumbent LEC or its own motion, to adjust prices
for services to reflect changes in FCC separations affecting
intrastate net income by 10 percent or more. Requires a
rate group classification resulting from access lines growth
to be allowed by the commission on request of the electing
company.
(c) Declares that Section 3.354 of this Act applies to a
rate change under Subsection (b) of this section.
(d) Prohibits an electing company, if an incumbent LEC
notifies the commission of its election to an alternative
infrastructure plan under this subtitle, from being subject
for the six-year period after election to any complaint or
hearing as to the reasonableness of its rates, overall
revenues, return on invested capital, or net income, if the
electing incumbent LEC complies with its infrastructure
commitment under Section 3.403, and from being subject to a
complaint that any particular rate is excessive. Declares
that nothing herein restricts any consumer's right to
complain to the commission regarding quality of service, the
commission's right to enforce quality of service standards,
or the consumer's right to complain regarding the
application of the tariff or to determine the proposed rate
if the tariff is found to not apply. Prohibits the
commission from lowering a tariff rate except as
specifically provided by this Act, to change its
interpretation of a tariff, or to change a tariff so as to
extend its application to new classes of customers.
Prohibits the commission from increasing service standards
applicable to the provision of local exchange telephone
service by an electing company if the increased investment
required to comply with the increased standards exceeds in
any one year 10 percent of the incumbent LEC's average
annual intrastate additions in capital investment for the
most recent five-year period. Requires the incumbent LEC,
in calculating the average, to exclude extraordinary
investments made during the five-year period.
(e) Authorizes the commission, on application of an
incumbent LEC, to allow a company to withdraw its election
under this section with good cause. Provides that good
cause includes only matters that were beyond the control of
the incumbent LEC.
(f) Declares that this section does not prohibit an
incumbent LEC from making an election under Section 3.352.
Provides that the infrastructure agreement under Section
3.403, if the company so elects, offsets any infrastructure
commitment required in connection with the Section 3.352
election.
(g) Requires the rates capped by Subsection (b) to be the
rates charged by the company at the date of its election.
(h) Defines "election date."
Sec. 3.403. INFRASTRUCTURE COMMITMENT. (a) Requires a
company electing under Section 3.402 to make an infrastructure
commitment in writing to the governor and commission,
committing to make telecommunications infrastructure
investment in the state over a six-year period following the
company's election.
(b) Requires the commission to act to ensure that certain
infrastructure goals are achieved by electing companies.
(c) Requires the electing company, on customer request, to
provide private broadband services and other customized or
packaged network services for the private and sole use of
certain entities. Sets forth guidelines and requirements
for the provision of such services.
(d) Authorizes the commission to consider waivers of
requirements listed under Subsections (b)(1)-(5) of this
section for electing LECs serving fewer than one million
lines if the LEC demonstrates that such investment is not
viable economically.
(e) Prohibits the commission from considering the cost of
implementing Subsection (b) or (c) f this section in
determining whether an electing company is entitled to a
rate increase under this subtitle or increased universal
service funds under Section 3.608 of this Act.
(f) Defines "private network services" and "telemedicine
center."
(g) Requires each electing company to file an annual report
with the commission on the anniversary date of its election
that sets forth the progress on the company's infrastructure
commitment and includes specific information.
SUBTITLE J. COMPETITIVE SAFEGUARDS
Sec. 3.451. COMPETITIVE SAFEGUARDS. (a) Requires the
commission, to the extent necessary to ensure fair competition
and accelerate the improvement of telecommunications in this
state, to ensure that the rates and regulations of an
incumbent LEC are not unreasonably preferential, prejudicial,
or discriminatory but are equitable and consistent in
application. Grants the commission exclusive jurisdiction to
implement competitive safeguards.
(b) Declares that Section 3.352(d) does not prevent the
commission from enforcing this subtitle.
(c) Grants the commission exclusive jurisdiction to
implement competitive safeguards.
Sec. 3.452. UNBUNDLING. (a) Requires an incumbent LEC to
unbundle its network as ordered by the FCC.
(b) Requires the commission, before the adoption of the
pricing rules required by Section 3.457, to hold a hearing
and adopt an order on the issue of requiring further
unbundling of LEC services.
(c) Authorizes the commission to order further unbundling
only after considering the public interest and competitive
merits of further unbundling. Authorizes the commission to
proceed by rulemaking or evidentiary hearing.
(d) Authorizes the commission, following the unbundling, to
assign the unbundled components to the appropriate Basket
according to the purposes and intents of those Baskets.
Sec. 3.453. RESALE. (a) Requires an incumbent LEC, serving
one million or more access lines or electing the incentive
regulation plan under Subtitle H, to file a usage sensitive
loop resale tariff.
(b) Defines "loop" resale.
(c) Requires the commission to conduct any proceeding it
determines appropriate to determine the rates, terms, and
conditions for this tariff within 180 days of filing.
Authorizes the commission to approve only a usage sensitive
rate that recovers the total long run incremental cost of
the loop on an unseparated basis, plus an appropriate
contribution to joint and common costs; and only permit a
holder of a CCN, COA, or SPC to purchase from the resale
tariff, except under Subsection (f)(1) of this section.
(d) Prohibits a provider of telecommunications service, on
September 1, 1995, from imposing any restriction on the
resale or sharing of any service for which it is not a
dominant provider, or, as to any incumbent LEC electing
alternative regulation under Subtitle H of this title, for
any service entitled to regulatory treatment under Basket
III.
(e) Places on a holder of a COA or SPC the reciprocal
obligation to permit LECs to resell its existing loop
facilities at its regularly published rates, if the LEC has
no loop facilities and has a request for service.
(f) Requires the commission to eliminate all resale
prohibitions in an electing incumbent LEC's tariffs on
completion of the commission's costing and pricing
rulemaking, completion of rate rebalancing of the incumbent
LEC rates under Section 3.457, and removal of all
prohibitions on incumbent LECs providing interLATA service.
Requires the commission to eliminate all resale prohibitions
in the tariffs of an electing company of five million or
more access lines on removal of all prohibitions and
restrictions on such company's provision of interLATA
service. Requires the commission, when it eliminates the
resale prohibitions, to continue to prohibit the resale of
local exchange or directory assistance flat rate services as
a substitute for usage sensitive services.
(g) Declares that nothing herein alters resale or sharing
arrangements presently permitted in incumbent LEC tariffs
existing on September 1, 1995, or tariffs proposed by an
incumbent LEC serving more than five million access lines in
this state that are filed on or before May 1, 1995.
Sec. 3.454. IMPUTATION. Requires the commission, not later
than December 1, 1996, to adopt rules governing imputation of
the service price.
(b) Declares that imputation is a regulatory policy the
commission shall apply to prevent an incumbent LEC from
selling a service or function to another telecommunications
utility at a price that is higher than the rate the
incumbent LEC implicitly includes in services it provides to
its retail customers.
(c) Authorizes the commission to require imputation only if
the price of a service is not generally available from a
source other than the incumbent LEC and is necessary for the
competitor to provide its competing services.
(d) Prohibits the commission from requiring the imputation
of the price to a local exchange telephone service while the
price is capped under Subtitle H or I.
(e) Require the price of switched access service to be
imputed to the price of each service for which switched
access service is a component until switched access service
is competitively available.
(f) Prohibits the commission from requiring imputation on a
rate-element-by-element basis but only on a service-by-service basis.
(g) Prohibits the commission, for a service provided under
a customer specific contract for which imputation may be
required under Subsection (c), from requiring imputation on
a rate-element-by-element basis but only on a service-by-service basis within the contract.
(h) Requires the incumbent LEC to demonstrate that the price
it charges for its retail service recovers the costs of
providing the service. Defines the costs of providing the
service.
(i) Authorizes the commission to waive an imputation
requirement for any public interest service if the
commission determines that the waiver is in the public
interest.
Sec. 3.455. TELECOMMUNICATIONS NUMBER PORTABILITY. Requires
the commission, by rule, to adopt guidelines governing
telecommunications number portability and the assignment of
telephone numbers in a competitively neutral manner.
(b) Defines "telecommunications number portability."
(c) Requires the commission, as an interim measure, to adopt
reasonable mechanisms to allow consumers to retain their
telephone numbers. Requires these mechanisms to include
call forwarding functions and direct inward dialing.
Requires the commission and incumbent LEC to determine
reasonable rates for call forwarding functions, direct
inward dialing, and other interim measures.
Sec. 3.456. EXPANDED INTERCONNECTION. (a) Requires the
commission, not later than September 1, 1996, to adopt certain
rules for expanded interconnection.
(b) Declares that this section does not prohibit the
commission from completing a proceeding pending on April 1,
1995, that addresses expanded interconnection.
Sec. 3.457. COSTING AND PRICING. (a) Requires the commission
to complete a pricing rulemaking and adopt a pricing rule by
April 1, 1997. Requires companies subject to that rule to
file cost studies and necessary supporting data not later than
November 1, 1996. Requires the commission to approve a cost
study or order changes to be made, within 85 days after the
date a cost study is submitted. Authorizes any party to
appeal to the commission an administrative determination by an
administrative law judge or hearings examiner. Requires the
parties to be permitted expedited discovery after a cost study
is submitted.
(b) Requires the commission, in adopting the pricing rule,
to ensure that prices for monopoly services remain
affordable; ensure that prices for competitive services may
not be unreasonably preferential, prejudicial, or
discriminatory, subsidized by noncompetitive services, or
predatory or anticompetitive; and require that each service
recover the appropriate cost of any and all facilities and
functions used to provide that service.
(c) Requires the commission to allow an incumbent LEC that
is not a Tier I LEC as of September 1, 1995, to adopt the
cost studies prices approved for a Tier I LEC.
Sec. 3.458. INTERCONNECTION. (a) Defines "interconnection."
(b) Requires the commission to require all providers of
telecommunications services to maintain interoperable
networks. Requires telecommunications services to negotiate
network interconnectivity, charges, terms, and conditions.
Authorizes the commission to resolve disputes filed by a
party to those negotiations.
(c) Requires each carrier, in the absence of a mutually
agreed compensation rate under Subsection (b), to
reciprocally terminate the other carrier's traffic at no
charge for the first nine months after the date on which the
first call is terminated between the carriers.
(d) Requires the commission, within the nine-month period
prescribed by Subsection (c), to complete a proceeding to
establish reciprocal interconnection rates, terms, and
conditions based solely on the commission proceeding. Sets
forth guidelines for the requirement of cost studies by a
new entrant.
(e) Authorizes the incumbent LEC to adopt the
interconnection rates approved for a larger incumbent LEC
without the commission requirement of additional cost
justification.
(f) Authorizes the commission to make generic rules and set
policies governing interconnection arrangements that are
responsive to changes in federal law or developments in the
local exchange market.
(g) Prohibits the commission from using interconnection
rates under this section as a basis to alter interconnection
rates for other services.
(h) Grants the commission exclusive jurisdiction over any
holder of a CCN, COA, or SPC for the determination of rates,
terms, and conditions for interconnection.
Sec. 3.459. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS.
(a) Prohibits an incumbent LEC from taking certain
unreasonable actions.
(b) Prohibits this section from being construed to require
an incumbent LEC to provide expanded interconnection.
(c) Declares that nothing in this Act shall require the
commission to change the rate treatment for Bulletin Board
Systems in residences established by the commission in
Docket No. 8387, and that nothing in this Act is intended to
regulate or tax Bulletin Board Systems or Internet Service
Providers or to require any changes in the rates charged to
these entities under existing tariff, provided they only
provide enhanced or information services and not
telecommunications services.
Sec. 3.460. COMMISSION AUTHORITY. (a) Grants the commission
all authority necessary to establish procedures for the
policies under Subsections 3.451-3.458 and to resolve any
disputes under such policies.
(b) Requires the commission to adopt procedures for the
processing of proceedings under Section 3.452 and 3.453 of
this Act by considering the impact on consumers,
competitors, and the incumbent LEC. Prohibits the
commission from implementing any requirement that is
contrary to any applicable federal rule or law.
Sec. 3.461. APPLICATIONS AND RULES. Sets forth limitations
to the applicability of certain subsections of this section.
Sec. 3.462. REVIEW OF IMPLEMENTATION. Declares that the
provisions of Sections 3.452, 3.454, and 3.457 do not
initially apply to incumbent LECs that as of September 1,
1995, have 31,000 or more, but fewer than one million, access
lines in this state, and apply only on a bona fide request
from a holder of a COA or SPC. Authorizes the commission to
modify the rules in the public interest.
Sec. 3.463. INFRASTRUCTURE SHARING. Requires the commission
to prescribe rules that require a LEC to share public switched
network infrastructure and technology with a requesting LEC
that lacks economies of scale or scope, in order to enable
that requesting company to provide telecommunications services
in the geographic areas to which the requesting company is
designated as the sole carrier of last resort.
SUBTITLE K. BROADCASTER SAFEGUARDS
Sec. 3.501. CUSTOMER PROPRIETARY NETWORK INFORMATION (CPNI).
(a) Defines "specific customer proprietary network
information" and "subscriber list information."
(b) Prohibits telecommunications utilities from using
specific customer proprietary network information (CPNI) for
commercial purposes other than the sale, provision, or
billing and collection of telecommunications or enhanced
services.
(c) Requires the commission, not later than September 1,
1996, to adopt rules consistent with FCC rules. Sets forth
requirements for the rules.
(d) Prohibits the commission from implementing any rules,
regarding CPNI applicable to an incumbent LEC having 100,000
or fewer access lines in service in this state, that are
more burdensome than FCC CPNI rules, with an exception.
Sec. 3.502. AUDIO VIDEO. (a) Defines "video programming" and
"audio programming."
(b) Prohibits an incumbent LEC from providing audio or video
programming in this state, but prohibits this section from
prohibiting a separate corporate affiliate of an incumbent
LEC from providing such programming.
(c) Sets forth requirements for a separate corporate
affiliate which provides audio or video programming.
(d) Sets forth requirements for an incumbent LEC when a
separate affiliate provides programming.
(e) Requires an incumbent LEC, if it offers billing and
collection services to nonaffiliated audio and video
programming providers, to provide those services under
nondiscriminatory terms and conditions. Provides that this
section does not require an incumbent LEC to offer such
services to nonaffiliated programmers, and authorizes an
incumbent LEC to exclude certain classes of programmers from
its billing and collection services.
(f) Requires an incumbent LEC to have a compliance audit
performed every three years by an independent accounting
firm to determine compliance with requirements of this
section. Requires the firm to file the report, considered
confidential commercial or financial information, with the
commission. Requires the commission to institute action
against the incumbent LEC, if it does not comply with this
section.
(g) Limits the commission's jurisdiction over affiliates
that are audio or video programmers to the requirements of
this section.
(h) Declares that this section does not apply to an
incumbent LEC having 100,000 or fewer in-service total
access lines in this state.
(i) Authorizes a company under this section to petition the
commission for waiver from any requirements of this section,
and requires the commission to grant a waiver if it serves
the public interest to do so. Authorizes the commission to
revoke a waiver under certain conditions.
Sec. 3.503. ADVERTISING. (a) Declares that advertising
agency services include the functions generally performed by
a general advertising agency.
(b) Prohibits an incumbent LEC from selling advertising
agency services to nonaffiliates in this state. Declares
that this section does not prohibit a LEC from promoting or
selling telecommunications services and equipment and from
enhancing or promoting the use of the telecommunications
network.
(c) Authorizes a separate corporate affiliate of an LEC to
engage in advertising agency activities, and sets forth
requirements for the conduct of such business.
(d) Prohibits an incumbent LEC with an affiliate providing
advertising agency services on behalf of nonaffiliates in
this state from jointly marketing that affiliate's services
as they relate to telecommunications services and equipment
provided by the incumbent LEC.
(e) Declares that nothing in this section prohibits the
incumbent LEC from providing telephone solicitation services
for charitable organizations.
(f) Declares that this section does not apply to an
incumbent LEC having 100,000 or fewer in-service access
lines in this state.
(g) Authorizes a company under this section to petition the
commission for a waiver from any requirement under this
section, and authorizes the commission to grant a waiver if
it serves the public interest. Authorizes the commission to
revoke a waiver.
Sec. 3.504. VIDEO CARRIAGE. (a) Requires each incumbent LEC,
which provides telecommunications services used in the
transmission of video programming directly to subscribers or
which enables customers to access video programming, to permit
local full-power, FCC licensed broadcast stations access to
these services at tariffed rates. Requires the incumbent LEC
to transmit signals from the local broadcast station without
material degradation and in a quality at least on par with
that of other video programmers.
(b) Sets forth requirements for each incumbent LEC under
Subsection (a).
(c) Requires any programmer, that operates as a common
channel manager and purchases for commercial purposes at
least 50 analog channels on a local exchange video dial tone
level one platform over which video programming is made
available to subscribers, to make local full-power, FCC-licensed televisions stations available to subscribers,
provided retransmission is granted under Subsection (d).
Requires a programmer under this section to make available
up to six television stations, and makes specific provisions
for markets serving populations of more than one million.
(d) Requires a FCC-licensed television station seeking
carriage to grant retransmission consent to the programmer
and incumbent LEC. Declares that this requires a programmer
or incumbent LEC to provide any valuable consideration in
exchange for that carriage.
(e) Provides that this section does not apply to an
incumbent LEC having 100,000 or fewer in-service access
lines in this state or to a programmer on the video dial
tone platform of that LEC.
(f) Authorizes a company under this section to petition the
commission for a waiver from any requirement under this
section, and authorizes the commission to grant a waiver if
it serves the public interest. Authorizes the commission to
revoke a waiver.
(g) Limits the commission's jurisdiction over affiliates
that are video programmers to the requirements of this
section.
(h) Provides that this section expires August 31, 1999.
Sec. 3.505. AUDIO CARRIAGE. (a) Requires a programmer,
operating as a common channel manager and making available for
commercial purposes to subscribers at least 12 channels of
audio programming similar to broadcasts of FCC-licensed radio
stations on an incumbent LEC's level one video dial tone
platform, to make local FCC-licensed radio stations available
to subscribers, provided that retransmission is granted under
Subsection (b). Prohibits a programmer under this subsection
from being required to make available more than one-third of
its analog audio channels to radio stations.
(b) Requires a local FCC-licensed radio station seeking
carriage under Subsection (a) of this section to grant
retransmission consent to the programmer and incumbent LEC.
Declares that nothing in this Act requires a programmer or
incumbent LEC to provide any valuable consideration in
exchange for that carriage.
(c) Provides that this section does not apply to an
incumbent LEC having 100,000 or fewer in-service access
lines in this state or to any programmer on the video dial
tone platform of that LEC.
(d) Authorizes a company under this section to petition the
commission for a waiver from any requirement under this
section, and authorizes the commission to grant a waiver if
it serves the public interest. Authorizes the commission to
revoke a waiver.
(e) Limits the commission's jurisdiction over affiliates
which are video programmers to the requirements of this
section.
(f) Provides that this section expires August 31, 1999.
Sec. 3.506. APPLICATION OF SUBTITLE. Provides that this
subtitle does not apply to a cable company.
SUBTITLE L. ELECTRONIC PUBLISHING
Sec. 3.551. DEFINITIONS. Defines "affiliate," "basic
telephone service," "basic telephone service information,"
"control," "electronic publishing," "electronic publishing
joint venture," "entity," "inbound telemarketing," "own,"
"separated affiliate," and "incumbent local exchange company."
Sec. 3.3552. ELECTRONIC PUBLISHING. (a) Prohibits an
incumbent LEC or an affiliate from engaging in the provision
of electronic publishing disseminated through telephone
service.
(b) Declares that nothing in this subtitle prohibits a
separated affiliate or electronic publishing joint venture
from engaging in publishing or any other lawful service in
any area.
(c) Declares that nothing in this subtitle prohibits an
incumbent LEC or affiliate from engaging in the provision of
any lawful service other than electronic publishing in any
area or from engaging in the provision of electronic
publishing that is not disseminated by means of the
incumbent LEC's or any of its affiliate's basic telephone
service.
Sec. 3.553. SEPARATED AFFILIATE OR ELECTRONIC PUBLISHING
JOINT VENTURE REQUIREMENTS. Sets forth requirements for a
separated affiliate or electronic publishing joint venture.
Sec. 3.554. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS.
(a) Sets forth requirements for an incumbent LEC under common
ownership or control with a separated affiliate or electronic
publishing joint venture.
(b) Requires an incumbent LEC, if it provides certain
services to any electronic publisher for use with or in
connection with the provisions of electronic publishing that
is disseminated by means of the incumbent LEC's or any of
its affiliate's basic telephone service, to provide all
other electronic publishers the same type of facilities and
services on request and unbundled and individually tariffed
to the smallest extent that is technically feasible and
economically reasonable to provide.
(c) Requires the incumbent LEC to provide network access and
interconnections for basic telephone service to electronic
publishers at any technically feasible and economically
reasonable point within the incumbent LEC's network, and at
just and reasonable rates that are tariffed and are not
higher on a per unit basis than those charged for those
services to any other electronic publisher or any separated
affiliate engaged in electronic publishing.
(d) Requires the incumbent LEC, if prices for network access
and interconnection for basic telephone service are no
longer subject to regulation, to provide electronic
publishers those services on the same terms and conditions
as a separated affiliate receives those services.
(e) Requires an incumbent LEC, if any basic telephone
service used by electronic publishers ceases to require a
tariff, to provide electronic publishers with that service
on the same terms and conditions as a separated affiliate
receives that service.
(f) Requires the incumbent LEC to provide reasonable advance
notification at the same time and on the same terms to all
affected electronic publishers of information if the
information is of a certain type.
(g) Prohibits the incumbent LEC from providing anything of
monetary value to a separated affiliate under a certain
condition.
(h) Prohibits the incumbent LEC from taking specific action.
Sec. 3.555. CUSTOMER PROPRIETARY NETWORK INFORMATION.
Prohibits an incumbent LEC or an affiliate from providing to
an electronic publisher customer proprietary network
information for use or in connection with electronic
publishing disseminated through local basic telephone service
that is not made available by the LEC or affiliate to all
electronic publishers on the same terms and conditions.
Sec. 3.556. COMPLIANCE WITH SAFEGUARDS. Prohibits an
incumbent LEC or affiliate from acting in concert with another
entity to knowingly and willfully violate or evade the
requirements of this subtitle.
Sec. 3.557. INCUMBENT LOCAL EXCHANGE COMPANY DIVIDENDS.
Declares that nothing in this subtitle prohibits an affiliate
from investing dividends derived from an incumbent LEC in its
separated affiliate, and that Section 3.560 and 3.561 do not
apply to that investment.
Sec. 3.558. JOINT MARKETING. Prohibits an incumbent LEC from
carrying out any promotion, marketing, sales, or advertising
for or in conjunction with a separated affiliate or an
affiliate related to the provision of electronic publishing,
except as provided by Section 3.559 of this Act.
Sec. 3.559. PERMISSIBLE JOINT ACTIVITIES. Sets forth
permissible joint activities for an incumbent LEC related to
joint telemarketing, teaming arrangements, and electronic
publishing joint ventures.
Sec. 3.560. TRANSACTIONS RELATED TO THE PROVISION OF
ELECTRONIC PUBLISHING BETWEEN AN INCUMBENT LOCAL EXCHANGE
COMPANY AND ANY AFFILIATE. (a) Requires any transaction from
an incumbent LEC to any affiliate related to the provision of
electronic publishing to be recorded in a specific manner.
Requires any transfer of assets from the incumbent LEC to an
affiliate to be valued at the greater of net book cost or fair
market value, and any asset transfer from an affiliate to a
company to be valued at the lesser of net book cost.
Prohibits an incumbent LEC from providing to a separated
affiliate any facilities, services, or basic telephone service
information related to the provision of electronic publishing
that are not made available to unaffiliated companies on the
same terms and conditions.
Sec. 3.561. TRANSACTIONS RELATED TO THE PROVISION OF
ELECTRONIC PUBLISHING BETWEEN AN AFFILIATE AND A SEPARATED
AFFILIATE. Requires any transaction from an incumbent LEC to
an affiliate, and then from the affiliate to a separated
affiliate, to be recorded in a specific manner. Requires any
transfer of assets from the incumbent LEC to an affiliate, and
then from the affiliate to a separated affiliate, to be valued
at the greater of net book cost or fair market value, and any
asset transfer from a separated affiliate to an affiliate, and
then from the affiliate to the company to be valued at the
lesser of net book cost or fair market value. Prohibits an
affiliate from providing to a separated affiliate any
facilities, services, or basic telephone service information
related to the provision of electronic publishing that are not
made available to unaffiliated companies on the same terms and
conditions.
Sec. 3.562. OTHER ELECTRONIC PUBLISHERS. (a) Limits the
involvement of an incumbent LEC and an entity whose principal
business is publishing of which a part is electronic
publishing.
(b) Prohibits an incumbent LEC or an affiliate that owns an
electronic publishing joint venture from being deemed to be
engaged in the electronic publishing business solely because
of that ownership.
(c) Prohibits an incumbent LEC from carrying out any
marketing or sales of an entity that engages in electronic
publishing or any hiring of personnel, purchasing, or
production for an entity that engages in electronic
publishing. Provides an exception.
(d) Prohibits the incumbent LEC from providing any
facilities, services, or basic telephone service information
to an entity that engages in electronic publishing for use
with or in connection with the provision if electronic
publishing that is disseminated by means of the incumbent
LEC's or affiliates' basic telephone service. Provides
exceptions.
Sec. 3.563. PRIVATE RIGHT OF ACTION. Sets forth requirements
governing private rights of action regarding complaints
against an incumbent LEC, affiliate, or separated affiliate.
Sec. 3.564. ANTITRUST LAWS. Prohibits anything in this
section from being construed to modify, impair, or supersede
the applicability of any of the antitrust laws.
Sec. 3.565. TRANSITION. Requires any electronic publishing
service being offered to the public by an incumbent LEC or
affiliate on the date of enactment of this section to comply
with the requirements of this section within one year from the
date of enactment.
Sec. 3.566. SUNSET. Sunset date: June 30, 2001.
SUBTITLE M. INFORMATION TECHNOLOGY SERVICES
Sec. 3.581. DEFINITIONS. Defines "management consulting,"
"systems development," "systems integration," "systems
management," and "process management."
Sec. 3.582. PROVISION OF INFORMATION TECHNOLOGY SERVICES
THROUGH SEPARATE AFFILIATE. (a) Prohibits a LEC serving more
than five million access lines in this state from providing
certain customized business products or services to customers
with 50 or more access lines in this state.
(b) Declares that this section does not prohibit an
affiliate of the LEC from providing any of the products or
services under Subsection (a) in accordance with Sections
3.583 and 3.584 of this Act, or prohibit a LEC from
providing those products or services to itself. Authorizes
the LEC to provide those services to an affiliate if neither
the LEC nor any of its affiliates are engaged in providing
those products or services to unaffiliated third parties.
(c) Declares that the prohibitions under Subsection (b) do
not prohibit a LEC from providing mass market and consumer
market products and services to certain customers, or
selling or leasing billing and collection services, local
area networks, wide area networks, or any other
telecommunications service.
Sec. 3.583. SEPARATE AFFILIATE REQUIREMENTS. (a) Requires an
affiliate of the LEC providing a service under Section
3.582(a) to operate independently from the LEC in the
provision of its services, maintain its own books of accounts,
and, with exception, have separate officers, directors, and
employees who may not also serve as officers, directors, and
employees of the LEC.
(b) Requires all transactions between the LEC and the
affiliate providing a service under Section 3.582(a) of this
Act to be conducted on an "arms length" basis with respect
to the acquisition of that service from the affiliate.
(c) Requires the LEC to maintain and keep available for
commission inspection copies of all contracts and
arrangements between the company and an affiliate relating
to the LEC's acquisition of a service described by Section
3.582(a) from the affiliate. Requires the LEC's records to
show each cash or noncash transaction with the affiliate for
that service.
(d) Prohibits the LEC and an affiliate engaged in a service
under Section 3.582(a) of this Act from jointly owning or
sharing in the use of any property.
Sec. 3.584. ADDITIONAL COMPETITIVE SAFEGUARDS. (a) Prohibits
a LEC from discriminating between an affiliate providing a
service under Section 3.582(a) and any other person in the
provision or procurement of goods, services, facilities, or
information, or in the establishment of standards.
(b) Prohibits a LEC or affiliate from using revenues from
local exchange telephone service or from local-exchange-company-provided access services to subsidize the provision
of a service described by Section 3.582(a).
(c) Declares that this section does not prohibit the
investment by an affiliate of dividends or profits derived
from a LEC, or the development of a product or service
described by Section 3.582(a) by an affiliate of a LEC for
the LEC if the investment or development complies with
Section 3.583.
SUBTITLE N. TELECOMMUNICATIONS SERVICE ASSISTANCE PROGRAM; UNIVERSAL SERVICE FUND
Sec. 3.601. Redesignates existing Section 3.351.
Sec. 3.602. Redesignates existing Section 3.352.
Sec. 3.603. Redesignates existing Section 3.353.
Sec. 3.604. Redesignates existing Section 3.354.
Sec. 3.605. New heading: DISTANCE LEARNING ACTIVITIES BY
EDUCATIONAL INSTITUTIONS AND INFORMATION SHARING PROGRAMS BY
LIBRARIES; REDUCED RATES. (a) Requires the commission, by
rule, to require a dominant carrier to file an information
sharing program that is or could be conducted by a library in
this state.
(b) Requires the commission rules to specify the process by
which a library qualifies for a reduced rate.
(d) Requires the services and reduced rates to be designed,
among other goals, to encourage the development and offering
of information sharing programs of libraries, meet the
information sharing needs identified by libraries, and
recover certain costs so as to avoid subsidizing libraries.
(f) Authorizes an educational institution, library, or
dominant carrier to provide for a reduced rate for a service
directly related to an information sharing program that is
not covered by commission rules.
(h) Defines "library."
Sec. 3.606. TELECOMMUNICATIONS INFRASTRUCTURE FUND. (a)
Defines "board," "fund," "institution of higher education,"
"public library," "school district," "private network
services," "public, not-for-profit hospital" or "public not-for-profit health care facility," and "telemedicine."
(b)-(c) Requires the Telecommunications Infrastructure Fund
Board (board) to administer the Telecommunications
Infrastructure Fund (fund). Requires the board to consist
of nine members, and sets forth the guidelines for
appointment and membership.
(d) Requires board members to serve without pay, but to be
reimbursed for expenses.
(e) Subjects the board to Chapters 325, 551, and 2001,
Government Code. Makes the board and this article expire
September 1, 2001, unless continued by Chapter 325,
Government Code.
(f) Authorizes the board to employ any personnel necessary
to perform duties delegated by the board, and to enter into
contracts with state or private entities as necessary to
perform its duties.
(g) Authorizes the board to appoint committees to assist in
performing its duties.
(h) Declares that the fund is financed by an assessment on
all telecommunications providers doing business in the
state. Sets forth guidelines for the assessment.
(i) Requires the comptroller to assess and collect from
telecommunications providers
a total annual amount of $150 million for the fiscal year
beginning September 1, 1995, and for the next ten fiscal
years.
(j) Authorizes the comptroller to require providers to
provide information and reports, exempt from disclosure,
which are necessary to fulfill duties under this section.
(k) Requires all amounts collected by the comptroller to be
deposited in the fund and designated solely for board use.
(l) Requires the comptroller, from funds appropriated to the
board, to issue warrants as requested by the board.
(m) Authorizes the board to accept gifts, grants, and
donations.
(n) Requires the board to use the fund to award grants and
loans competitively to rural and urban school districts,
institutions of higher education, and libraries recommended
to it by the Central Education Agency (CEA), the Texas
Higher Education Coordinating Board (coordinating board), or
the Texas State Library and Archives Commission (TSLAC).
(o) Sets forth the requirements for awarding grants.
(p) Authorizes the board to award loans to projects and
proposals to acquire equipment needed for distance learning
and telemedicine projects.
(q) Requires the board to give priority to certain projects
and proposals.
(r) Requires CEA, the coordinating board, and TSLAC to adopt
policies and procedures designed to aid the board.
(s) Requires the board, in distributing funds to public
schools, to consider the relative property wealth per
student of recipient school districts and to recognize the
unique needs of rural communities.
Sec. 3.607. Redesignates existing Section 3.356.
Sec. 3.608. Redesignates existing Section 3.357. (a) Makes
conforming changes.
(b) Authorizes the commission to adopt mechanisms
necessary to maintain reasonable rates for local exchange
telephone service and to establish rules that would expand
the universal service fund (USF) for LECs serving fewer
than 1 million access lines in circumstances prescribed by
this subsection. Makes other provisions.
(c) Makes conforming changes.
(d) Requires the commission to establish review procedure,
including administrative review procedure, necessary for
funding of and distribution from the USF, and to determine
which LECs meet eligibility criteria including
requirements to offer service to every consumer in a
certificated area and render continuous, adequate service
within that area.
(e) Redesignates existing Subsection (d).
(f) Redesignates existing Subsection (e). Authorizes the
commission to require LECs and other telecommunications
providers to provide reports and information, not to be
disclosed, which are necessary to assess fund
contributions.
Sec. 3.609. Redesignates existing Section 3.358.
Sec. 3.610. Redesignates existing Section 3.359.
Severability clause.
SUBTITLE O. AUTOMATIC DIAL ANNOUNCING DEVICES
Sec. 3.651. Redesignates existing Section 3.401. Makes a
conforming change.
Sec. 3.652. Redesignates existing Section 3.402.
Sec. 3.653. Redesignates existing Section 3.403. Provides
that, if an automated dial announcing device (ADAD) is used
for debt collection purposes and the use complies with
applicable federal law and regulations, and the ADAD is used
by a live operator for automatic dialing or hold announcement
purposes, the use complies with this subdivision. Permits a
person to operate an ADAD that plays a recorded message when
the connection is completed to a telephone number if the
device, when used for solicitation purposes, has a message
shorter than one minute or has the technical capacity to
recognize a telephone answering device on the called person's
line and terminates the call within one minute.
Sec. 3.654. Redesignates existing Section 3.404.
Sec. 3.655. Redesignates existing Section 3.405.
Sec. 3.656. Redesignates existing Section 3.406.
Sec. 3.657. Redesignates existing Section 3.407.
Sec. 3.658. Redesignates existing Section 4.408.
Sec. 3.659. Redesignates existing Section 3.409.
Sec. 3.660. New heading: NOTICE TO CONSUMER OF PROVISIONS OF
CHAPTER 37 OF THE BUSINESS & COMMERCE CODE AND SECTION 3.659.
Redesignates existing Section 3.410. Makes a conforming
change.
SECTION 49. (a) Amends Chapter 74D, Property Code, by adding
Section 74.3011, as follows:
Sec. 74.3011. DELIVERY OF MONEY TO RURAL SCHOLARSHIP FUND.
(a) Authorizes a local telephone exchange company to deliver
reported money to a scholarship fund for rural students
instead of delivering the money to the state treasurer under
Section 74.301.
(b) Authorizes a local telephone exchange company to
deliver money under this section only to a scholarship
fund established by one or more local telephone exchange
companies in this state to enable needy students from
rural areas to attend college, technical school, or
another postsecondary educational institution.
(c) Requires a local telephone exchange company to file
with the state treasurer a verification of money delivered
under this section.
(d) Requires a claim for money delivered to a scholarship
fund under this section to be filed with the local
telephone exchange company that delivered the money.
Requires the LEC to forward the claim to the scholarship
fund administrator, and requires the fund to pay the claim
if it determines in good faith that the claim is valid.
Authorizes an aggrieved person to file a suit against the
fund in the district court.
(e) Requires the state treasurer to prescribe forms and
procedures governing this section.
(f) Defines "local telephone exchange company."
(g) Prohibits the total amount of money transferred by all
local telephone exchange companies from exceeding $400,000
during a state fiscal year. Requires the state treasury
to keep a record of the total amount transferred annually.
Requires the treasury, when the total amount transferred
during a state fiscal year equals the amount allowed by
this subsection, to notify each local telephone exchange
company that the company may not transfer any additional
money to the company's scholarship fund during the
remainder of that state fiscal year.
(b) Makes application of Section 74.3011, Property Code,
prospective.
SECTION 50. (a) Amends Chapter 74D, Property Code, by adding
Section 74.3012, as follows:
Sec. 74.3012. DELIVERY OF MONEY TO URBAN SCHOLARSHIP FUND.
(a) Authorizes a LEC to deliver reported money to a
scholarship fund for urban students instead of delivering
the money to the state treasurer under Section 74.301.
(b) Authorizes a LEC to deliver money under this section
only to a scholarship fund established by one or more LECs
in this state to enable needy students from urban areas to
attend college, technical school, or another postsecondary
educational institution.
(c) Requires a LEC to file with the state treasurer a
verification of money delivered under this section.
(d) Requires a claim for money delivered to a scholarship
fund under this section to be filed with the LEC that
delivered the money. Requires the LEC to forward the
claim to the scholarship fund administrator, and requires
the fund to pay the claim if it determines in good faith
that the claim is valid. Authorizes an aggrieved person
to file a suit against the fund in the district court.
(e) Requires the state treasurer to prescribe forms and
procedures governing this section.
(f) Defines "local exchange company."
(g) Prohibits the total amount of money transferred by all
LECs from exceeding $400,000 during the 1995-1996 fiscal
year. Prohibits the total amount of money that may be
transferred by all LECs during each subsequent fiscal year
from exceeding the total amount of money transferred to
rural scholarship funds under Section 74.3011 during the
previous state fiscal year. Requires the state treasury
to keep a record of the total amount transferred annually.
Requires the treasury, if the total amount transferred
during a state fiscal year equals the amount allowed by
this subsection, to notify each LEC that the company may
not transfer any additional money to the company's
scholarship fund during the remainder of that state fiscal
year.
(b) Makes application of Section 74.3012, Property Code,
prospective.
SECTION 51. Requires the governor and lieutenant governor, as
soon as possible after the effective date of this Act, to appoint
the members of the Telecommunications Infrastructure Fund Board,
and sets forth guidelines and term limits for those appointments.
SECTION 52. Repeals all laws and parts of laws in conflict with
this Act effective September 1, 1995.
SECTION 53. (a) Effective date: September 1, 1995.
(b) Makes application of Section 3.2555, PURA, applicable only
to a franchise or contract entered into or amended on or after
September 1, 1995.
(c) Makes application of Section 3.304(a)(3)(A)(i), PURA,
applicable only to a petition filed on or after April 15,
1995.
SECTION 54. Emergency clause.