74R10206 CBH-F
By Seidlits, et al. H.B. No. 2128
Substitute the following for H.B. No. 2128:
By Black C.S.H.B. No. 2128
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of telecommunications utilities, to the
1-3 provision of telecommunications and related services, and to the
1-4 continuation of the Public Utility Commission of Texas.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 1.002, Public Utility Regulatory Act of
1-7 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
1-8 Session, 1995, is amended to read as follows:
1-9 Sec. 1.002. LEGISLATIVE POLICY AND PURPOSE. This Act is
1-10 enacted to protect the public interest inherent in the rates and
1-11 services of public utilities. The legislature finds that
1-12 traditionally public utilities are by definition monopolies in the
1-13 areas they serve; that therefore the normal forces of competition
1-14 which operate to regulate prices in a free enterprise society do
1-15 not operate; and that therefore utility rates, operations, and
1-16 services are regulated by public agencies with the objective that
1-17 this regulation shall operate as a substitute for competition. The
1-18 purpose of this Act is to establish a comprehensive regulatory
1-19 system which is adequate to the task of regulating public utilities
1-20 as defined by this Act, to assure rates, operations, and services
1-21 which are just and reasonable to the consumers and to the
1-22 utilities.
1-23 SECTION 2. Section 1.003(14), Public Utility Regulatory Act
1-24 of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
2-1 Regular Session, 1995, is amended to read as follows:
2-2 (14) "Rate" means and includes every compensation,
2-3 tariff, charge, fare, toll, rental, and classification, or any of
2-4 them demanded, observed, charged, or collected whether directly or
2-5 indirectly by any public utility for any service, product, or
2-6 commodity described in the definition of "utility" in Section 2.001
2-7 or 3.002 <3.001> of this Act and any rules, regulations, practices,
2-8 or contracts affecting any such compensation, tariff, charge, fare,
2-9 toll, rental, or classification.
2-10 SECTION 3. Section 1.004, Public Utility Regulatory Act of
2-11 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
2-12 Session, 1995, is amended to read as follows:
2-13 Sec. 1.004. DEFINITIONS IN TITLE. In this title, "public
2-14 utility" or "utility" has the meaning assigned by Section 2.001 or
2-15 3.002 <3.001>.
2-16 SECTION 4. Section 1.022, Public Utility Regulatory Act of
2-17 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
2-18 Session, 1995, is amended to read as follows:
2-19 Sec. 1.022. SUNSET PROVISION. The Public Utility Commission
2-20 of Texas and the Office of Public Utility Counsel are subject to
2-21 Chapter 325, Government Code (Texas Sunset Act). Unless continued
2-22 in existence as provided by that chapter, the commission and the
2-23 office are abolished and this Act expires September 1, 2001 <1995>.
2-24 SECTION 5. Subtitle A, Title III, Public Utility Regulatory
2-25 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
2-26 Regular Session, 1995, is amended to read as follows:
2-27 SUBTITLE A. GENERAL PROVISIONS
3-1 Sec. 3.001. POLICY. The legislature finds that significant
3-2 changes have occurred in telecommunications since this Act was
3-3 initially adopted. The legislature hereby finds that it is the
3-4 policy of this state to promote diversity of providers and
3-5 interconnectivity and to encourage a fully competitive
3-6 telecommunications marketplace while protecting and maintaining the
3-7 wide availability of high quality telecommunications services at
3-8 affordable rates. These goals are best achieved by legislation
3-9 that brings telecommunications regulation into the modern era by
3-10 guaranteeing the affordability of basic telephone service in a
3-11 competitively neutral manner, while fostering free market
3-12 competition within the telecommunications industry. The
3-13 legislature further finds that the technological advancements,
3-14 advanced telecommunications infrastructure, and increased customer
3-15 choices for telecommunications services generated by a truly
3-16 competitive market will raise the living standards of all Texans by
3-17 enhancing economic development and improving the delivery of
3-18 education, health, and other public and private services and
3-19 therefore play a critical role in Texas' economic future. It is
3-20 the policy of this state to require the commission to do those
3-21 things necessary to enhance the development of competition by
3-22 adjusting regulation to match the degree of competition in the
3-23 marketplace, thereby reducing the cost and burden of regulation and
3-24 maintaining protection of markets that are not competitive. It is
3-25 further the policy of this state to ensure that high quality
3-26 telecommunications services are available, accessible, and usable
3-27 by individuals with disabilities, unless making the services
4-1 available, accessible, or usable would result in an undue burden,
4-2 including unreasonable cost or technical feasibility, or would have
4-3 an adverse competitive effect. However, the legislature recognizes
4-4 that the strength of competitive forces vary widely between markets
4-5 and products and services. Therefore, to foster, encourage, and
4-6 accelerate the continuing development and emergence of a
4-7 competitive and advanced telecommunications environment and
4-8 infrastructure, the legislature declares that new rules, policies,
4-9 and principles be formulated and applied to protect the public
4-10 interest.
4-11 Sec. 3.002. DEFINITIONS. In this title:
4-12 (1) "Basic local telecommunications service" means:
4-13 (A) flat rate residential and business local
4-14 exchange telephone service, including primary directory listings;
4-15 (B) tone dialing service;
4-16 (C) access to operator services;
4-17 (D) access to directory assistance services;
4-18 (E) access to 911 service where provided by a
4-19 local authority or dual party relay service;
4-20 (F) the ability to report service problems seven
4-21 days a week;
4-22 (G) lifeline and tel-assistance services; and
4-23 (H) any other service the commission, after a
4-24 hearing, determines should be included in basic local
4-25 telecommunications service.
4-26 (2) "Dominant carrier" means:
4-27 (A) a provider of any particular communication
5-1 service which is provided in whole or in part over a telephone
5-2 system who as to such service has sufficient market power in a
5-3 telecommunications market as determined by the commission to enable
5-4 such provider to control prices in a manner adverse to the public
5-5 interest for such service in such market; <and>
5-6 (B) any provider who provided <of> local
5-7 exchange telephone service within a certificated exchange area on
5-8 September 1, 1995, as to such service and as to any other service
5-9 for which a competitive alternative is not available in a
5-10 particular geographic market; and
5-11 (C) any provider of local exchange telephone
5-12 service within a certificated exchange area as to intraLATA long
5-13 distance message telecommunications service originated by dialing
5-14 the access code "1+" so long as the use of that code for the
5-15 origination of "1+" intraLATA calls within its certificated
5-16 exchange area is exclusive to that provider. A telecommunications
5-17 market shall be statewide until January 1, 1985. After this date
5-18 the commission may, if it determines that the public interest will
5-19 be served, establish separate markets within the state. The <Prior
5-20 to January 1, 1985, the> commission shall hold such hearings and
5-21 require such evidence as is necessary to carry out the public
5-22 purpose of this Act and to determine the need and effect of
5-23 establishing separate markets. Any such provider determined to be
5-24 a dominant carrier as to a particular telecommunications service in
5-25 a market may not be presumed to be a dominant carrier of a
5-26 different telecommunications service in that market. The term does
5-27 not include an interexchange carrier that is not a certificated
6-1 local exchange company, with respect to interexchange services.
6-2 (3) "Least cost technology" means the technology, or
6-3 mix of technologies, that would be chosen in the long run as the
6-4 most economically efficient choice, provided that the choice of
6-5 least cost technologies is:
6-6 (A) restricted to technologies that are
6-7 currently available on the market and for which vendor prices can
6-8 be obtained;
6-9 (B) consistent with the level of output
6-10 necessary to satisfy current demand levels for all services using
6-11 the basic network function in question; and
6-12 (C) consistent with overall network design and
6-13 topology requirements.
6-14 (4) <(2)> "Local exchange company" means a
6-15 telecommunications utility that has been granted either a
6-16 certificate of convenience and necessity or a certificate of
6-17 operating authority <certificated> to provide local exchange
6-18 telephone service, basic local telecommunications service, or
6-19 switched access service within the state.
6-20 (5) "Local exchange telephone service" means
6-21 telecommunications service provided within an exchange to establish
6-22 connections between customer premises within the exchange,
6-23 including connections between a customer premises and a long
6-24 distance provider serving the exchange. The term includes tone
6-25 dialing, service connection charges, and directory assistance
6-26 services when offered in connection with basic local
6-27 telecommunications service and interconnection with other service
7-1 providers. The term does not include the following services,
7-2 whether offered on an intraexchange or interexchange basis:
7-3 (A) central office-based PBX-type services for
7-4 systems of 75 stations or more;
7-5 (B) billing and collection services;
7-6 (C) high-speed private line services of 1.544
7-7 megabits or greater;
7-8 (D) customized services;
7-9 (E) private line and virtual private line
7-10 services;
7-11 (F) resold or shared local exchange telephone
7-12 services if permitted by tariff;
7-13 (G) dark fiber services;
7-14 (H) non-voice data transmission service when
7-15 offered as a separate service and not as a component of basic local
7-16 telecommunications service;
7-17 (I) dedicated or virtually dedicated access
7-18 services; and
7-19 (J) any other service the commission declares is
7-20 not a "local exchange telephone service."
7-21 (6) "Long run incremental cost" or "LRIC" has the
7-22 meaning assigned by the commission in 16 T.A.C. Section 23.91.
7-23 (7) "Pricing flexibility" includes customer specific
7-24 contracts, volume, term, and discount pricing, zone density
7-25 pricing, packaging of services, and other promotional pricing
7-26 flexibility. Discounts and other forms of pricing flexibility may
7-27 not be preferential, prejudicial, or discriminatory.
8-1 (8) <(3)> "Public utility" or "utility" means any
8-2 person, corporation, river authority, cooperative corporation, or
8-3 any combination thereof, other than a municipal corporation, or
8-4 their lessees, trustees, and receivers, now or hereafter owning or
8-5 operating for compensation in this state equipment or facilities
8-6 for the conveyance, transmission, or reception of communications
8-7 over a telephone system as a dominant carrier (hereinafter
8-8 "telecommunications utility"). A person or corporation not
8-9 otherwise a public utility within the meaning of this Act may not
8-10 be deemed such solely because of the furnishing or furnishing and
8-11 maintenance of a private system or the manufacture, distribution,
8-12 installation, or maintenance of customer premise communications
8-13 equipment and accessories. Except as provided by Sections 3.605,
8-14 3.606, 3.608, and 3.610 of this Act, nothing <Nothing> in this Act
8-15 shall be construed to apply to companies whose only form of
8-16 business is being telecommunications managers, companies that
8-17 administer central office-based or customer-based PBX-type
8-18 sharing/resale arrangements as their only form of business,
8-19 telegraph services, television stations, radio stations, community
8-20 antenna television services, <or> radio-telephone services that may
8-21 be authorized under the Public Mobile Radio Services rules of the
8-22 Federal Communications Commission, or commercial mobile radio
8-23 service ("CMRS") providers, under Sections 3(n) and 322 of the
8-24 Federal Communications Commission rules, the Communications Act of
8-25 1934 (47 U.S.C. Section 151 et seq.), and the Omnibus Budget
8-26 Reconciliation Act of 1993, other than such radio-telephone
8-27 services provided by wire-line telephone companies under the
9-1 Domestic Public Land Mobile Radio Service and Rural Radio Service
9-2 rules of the Federal Communications Commission. Interexchange
9-3 telecommunications carriers (including resellers of interexchange
9-4 telecommunications services), specialized communications common
9-5 carriers, other resellers of communications, other communications
9-6 carriers who convey, transmit, or receive communications in whole
9-7 or in part over a telephone system, <and> providers of operator
9-8 services as defined in Section 3.052(a) of this Act (except that
9-9 subscribers to customer-owned pay telephone service may not be
9-10 deemed to be telecommunications utilities), and separated affiliate
9-11 and electronic publishing joint ventures as defined by Subtitle L
9-12 of this title are also telecommunications utilities, but the
9-13 commission's regulatory authority as to them is only as hereinafter
9-14 defined. The term "public utility" or "utility" does not include
9-15 any person or corporation not otherwise a public utility that
9-16 furnishes the services or commodity described in this section only
9-17 to itself, its employees, or its tenants as an incident of such
9-18 employee service or tenancy, when such service or commodity is not
9-19 resold to or used by others.
9-20 (9) <(4)> "Separation" means the division of plant,
9-21 revenues, expenses, taxes, and reserves, applicable to exchange or
9-22 local service where such items are used in common for providing
9-23 public utility service to both local exchange telephone service and
9-24 other service, such as interstate or intrastate toll service.
9-25 (10) "Telecommunications provider" means a
9-26 certificated telecommunication utility, a shared tenant service
9-27 provider, a non-dominant carrier of telecommunications services,
10-1 provider of radio-telephone service authorized under the Commercial
10-2 Mobile Radio Service under Sections 3(n) and 322 of Federal
10-3 Communications Commission rules, the Communications Act of 1934 (47
10-4 U.S.C. Section 151 et seq.), and the Omnibus Budget Reconciliation
10-5 Act of 1993, a telecommunications entity that provides central
10-6 office-based PBX-type sharing or resale arrangements, an
10-7 interexchange telecommunications carrier, a specialized common
10-8 carrier, a reseller of communications, a provider of operator
10-9 services, a provider of customer-owned pay telephone service, and
10-10 other persons or entities that the commission may from time to time
10-11 find provide telecommunications services to customers in this
10-12 state. The term does not include a provider of enhanced or
10-13 information services, or another user of telecommunications
10-14 services, who does not also provide telecommunications services.
10-15 (11) "Tier 1 local exchange company" means a Tier 1
10-16 local exchange company as defined by the Federal Communications
10-17 Commission.
10-18 SECTION 6. Section 3.051, Public Utility Regulatory Act of
10-19 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
10-20 Session, 1995, is amended by amending Subsections (a), (c)-(f),
10-21 (j), and (l)-(q) and adding Subsections (r) and (s) to read as
10-22 follows:
10-23 (a) It is the policy of this state to protect the public
10-24 interest in having adequate and efficient telecommunications
10-25 service available to all citizens of the state at just, fair, and
10-26 reasonable rates. The legislature finds that the
10-27 telecommunications industry through technical advancements, federal
11-1 legislative, judicial, and administrative actions, and the
11-2 formulation of new telecommunications enterprises has become and
11-3 will continue to be in many and growing areas a competitive
11-4 industry which does not lend itself to traditional public utility
11-5 regulatory rules, policies, and principles and that, therefore, the
11-6 public interest requires that new rules, policies, and principles
11-7 be formulated and applied to protect the public interest and to
11-8 provide equal opportunity to all telecommunications utilities in a
11-9 competitive marketplace. It is the purpose of this section to
11-10 grant to the commission the authority and the power under this Act
11-11 to carry out the public policy herein stated.
11-12 (c) Except as provided by Subsections (l) and (m) of this
11-13 section and Section 3.052 of this Act, the commission shall only
11-14 have the following jurisdiction over all telecommunications
11-15 utilities who are not dominant carriers:
11-16 (1) to require registration as provided in Subsection
11-17 (d) of this section;
11-18 (2) to conduct such investigations as are necessary to
11-19 determine the existence, impact, and scope of competition in the
11-20 telecommunications industry, including identifying dominant
11-21 carriers in the local exchange and intralata interexchange
11-22 telecommunications industry and defining the telecommunications
11-23 market or markets, and in connection therewith may call and hold
11-24 hearings, issue subpoenas to compel the attendance of witnesses and
11-25 the production of papers and documents, and make findings of fact
11-26 and decisions with respect to administering the provisions of this
11-27 Act or the rules, orders, and other actions of the commission;
12-1 (3) to require the filing of such reports as the
12-2 commission may direct from time to time;
12-3 (4) to require the maintenance of statewide average
12-4 rates or prices of telecommunications service;
12-5 (5) to require that every local exchange area have
12-6 access to local and interexchange telecommunications service,
12-7 except that a <an interexchange> telecommunications utility
12-8 <carrier> must be allowed to discontinue service to a local
12-9 exchange area if comparable service is available in the area and
12-10 the discontinuance is not contrary to the public interest; this
12-11 section does not authorize the commission to require a <an
12-12 interexchange> telecommunications utility <carrier> that has not
12-13 provided services to a local exchange area during the previous 12
12-14 months and that has never provided services to that same local
12-15 exchange area for a cumulative period of one year at any time in
12-16 the past to initiate services to that local exchange area; and
12-17 (6) to require the quality of <interexchange>
12-18 telecommunications service provided in each exchange to be adequate
12-19 to protect the public interest and the interests of customers of
12-20 that exchange if the commission determines that service to a local
12-21 exchange has deteriorated to the point that <long distance> service
12-22 is not reliable.
12-23 (d) All providers of communications service described in
12-24 Subsection (c) of this section who commence such service to the
12-25 public shall register with the commission within 30 days of
12-26 commencing service. Such registration shall be accomplished by
12-27 filing with the commission a description of the location and type
13-1 of service provided, the price <cost> to the public of such
13-2 service, and such other registration information as the commission
13-3 may direct. Notwithstanding any other provision of this Act, an
13-4 interexchange telecommunications utility <carrier> doing business
13-5 in this state shall continue to maintain on file with the
13-6 commission tariffs or lists governing the terms of providing its
13-7 services.
13-8 (e)(1) For the purpose of carrying out the public policy
13-9 stated in Subsection (a) of this section and any other section of
13-10 this Act notwithstanding, the commission is granted all necessary
13-11 power and authority under this Act to promulgate rules and
13-12 establish procedures applicable to incumbent local exchange
13-13 companies for determining the level of competition in specific
13-14 telecommunications markets and submarkets and providing appropriate
13-15 regulatory treatment to allow incumbent local exchange companies to
13-16 respond to significant competitive challenges. Nothing in this
13-17 section is intended to change the burden of proof of the incumbent
13-18 local exchange company under Sections 3.202, 3.203, 3.204, 3.205,
13-19 3.206, 3.207, and 3.208 of this Act.
13-20 (2) In determining the level of competition in a
13-21 specific market or submarket, the commission shall hold an
13-22 evidentiary hearing to consider the following:
13-23 (A) the number and size of telecommunications
13-24 utilities or other persons providing the same, equivalent, or
13-25 substitutable service;
13-26 (B) the extent to which the same, equivalent, or
13-27 substitutable service is available;
14-1 (C) the ability of customers to obtain the same,
14-2 equivalent, or substitutable services at comparable rates, terms,
14-3 and conditions;
14-4 (D) the ability of telecommunications utilities
14-5 or other persons to make the same, equivalent, or substitutable
14-6 service readily available at comparable rates, terms, and
14-7 conditions;
14-8 (E) the existence of any significant barrier to
14-9 the entry or exit of a provider of the service; and
14-10 (F) other relevant information deemed
14-11 appropriate.
14-12 (3) The regulatory treatments which the commission may
14-13 implement include but are not limited to:
14-14 (A) approval of a range of rates for a specific
14-15 service;
14-16 (B) approval of customer-specific contracts for
14-17 a specific service; provided, however, that the commission shall
14-18 approve a contract to provide central office based PBX-type
14-19 services for systems of 200 stations or more, billing and
14-20 collection services, high-speed private line services of 1.544
14-21 megabits or greater, and customized services, provided that the
14-22 contract is filed at least 30 days before initiation of the service
14-23 contracted for; that the contract is accompanied with an affidavit
14-24 from the person or entity contracting for the telecommunications
14-25 service stating that he considered the acquisition of the same,
14-26 equivalent, or substitutable services by bid or quotation from a
14-27 source other than the incumbent local exchange company; that the
15-1 incumbent local exchange company is recovering the appropriate
15-2 costs of providing the services; and that approval of the contract
15-3 is in the public interest; the contract shall be approved or denied
15-4 within 30 days after filing, unless the commission for good cause
15-5 extends the effective date for an additional 35 days; and
15-6 (C) the detariffing of rates.
15-7 (f) Moreover, in order to encourage the rapid introduction
15-8 of new or experimental services or promotional rates, the
15-9 commission shall promulgate rules and establish procedures which
15-10 allow the expedited introduction of, the establishment and
15-11 adjustment of rates for, and the withdrawal of such services,
15-12 including requests for such services made to the commission by the
15-13 governing body of a municipality served by an incumbent <a> local
15-14 exchange company having more than 500,000 access lines throughout
15-15 the state. Rates established or adjusted at the request of a
15-16 municipality may not result in higher rates for ratepayers outside
15-17 the boundaries of the municipality and may not include any rates
15-18 for incumbent local exchange company interexchange services or
15-19 interexchange carrier access service.
15-20 (j) Subsections (e) and (f) of this section are not
15-21 applicable to basic local exchange service, including local
15-22 measured service. Paragraph (B) of Subdivision (3) of Subsection
15-23 (e) of this section is not applicable to message telecommunications
15-24 services, switched access services for interexchange carriers, or
15-25 wide area telecommunications service. An incumbent <A> local
15-26 exchange company may not price similar services provided pursuant
15-27 to contracts under Paragraph (B) of Subdivision (3) of Subsection
16-1 (e) of this section in an unreasonably discriminatory manner. For
16-2 purposes of this section, similar services shall be defined as
16-3 those services which are provided at or near the same point in
16-4 time, which have the same characteristics, and which are provided
16-5 under the same or similar circumstances.
16-6 (l) Notwithstanding any other provision of this Act, the
16-7 commission may enter such orders as may be necessary to protect the
16-8 public interest, including the imposition on any specific service
16-9 or services of its full regulatory authority under this subtitle,
16-10 Subtitles C through F of this title, and Subtitles D through I of
16-11 Title I of this Act, but not Subtitles H and I of this title, if
16-12 the commission upon complaint from another interexchange
16-13 telecommunications utility <carrier> finds by a preponderance of
16-14 the evidence upon notice and hearing that an interexchange
16-15 telecommunications utility <carrier> has engaged in predatory
16-16 pricing or attempted to engage in predatory pricing.
16-17 (m) Notwithstanding any other provision of this Act, the
16-18 commission may enter such orders as may be necessary to protect the
16-19 public interest if the commission finds upon notice and hearing
16-20 that an interexchange telecommunications utility <carrier> has:
16-21 (1) failed to maintain statewide average rates;
16-22 (2) abandoned interexchange message telecommunications
16-23 service to a local exchange area in a manner contrary to the public
16-24 interest; or
16-25 (3) engaged in a pattern of preferential or
16-26 discriminatory activities prohibited by Sections <3.213 and> 3.215
16-27 and 3.217 of this Act, except that nothing in this Act shall
17-1 prohibit volume discounts or other discounts based on reasonable
17-2 business purposes.
17-3 (n) In any proceeding before the commission alleging conduct
17-4 or activities by an interexchange telecommunications utility
17-5 <carrier> against another interexchange telecommunications utility
17-6 <carrier> in contravention of Subsections (l), (m), and (o) of this
17-7 section, the burden of proof shall be upon the complaining
17-8 interexchange telecommunications utility <carrier>; however, in
17-9 such proceedings brought by customers or their representatives who
17-10 are not themselves interexchange telecommunications utilities
17-11 <carriers> or in such proceedings initiated by the commission, the
17-12 burden of proof shall be upon the respondent interexchange
17-13 telecommunications utility <carrier>. However, if the commission
17-14 finds it to be in the public interest, the commission may impose
17-15 the burden of proof in such proceedings on the complaining party.
17-16 (o) The commission shall have the authority to require that
17-17 a service provided by an interexchange telecommunications utility
17-18 <carrier described in Subsection (c) of this section> be made
17-19 available in an exchange served by the utility <carrier> within a
17-20 reasonable time after receipt of a bona fide request for such
17-21 service in that exchange, subject to the ability of the local
17-22 exchange company to provide the required access or other service.
17-23 A utility <carrier> may not be required to extend a service to an
17-24 area if provision of that service would impose, after consideration
17-25 of the public interest to be served, unreasonable costs upon or
17-26 require unreasonable investments by the interexchange
17-27 telecommunications utility <carrier>. The commission may require
18-1 such information from interexchange utilities <carriers> and local
18-2 exchange companies <carriers> as may be necessary to enforce this
18-3 provision.
18-4 (p) The commission may exempt from any requirement of this
18-5 section an interexchange telecommunications utility <carrier> that
18-6 the commission determines does not have a significant effect on the
18-7 public interest, and it may exempt any interexchange
18-8 telecommunications utility <carrier> which solely relies on the
18-9 facilities of others to complete long distance calls if the
18-10 commission deems this action to be in the public interest.
18-11 (q) Requirements imposed by Subsections (c), (d), (k),
18-12 <(l),> (m), (n), (o), and (p) of this section on an interexchange
18-13 telecommunications utility <carrier> shall apply to nondominant
18-14 carriers and shall constitute the minimum requirements to be
18-15 imposed by the commission for any dominant carrier.
18-16 (r) The commission may, only as necessary to enforce its
18-17 limited jurisdiction, prescribe forms of books, accounts, records,
18-18 and memoranda to be kept by a company that has a certificate of
18-19 operating authority or service provider certificate of operating
18-20 authority under Subtitle F of this title that in the judgment of
18-21 the commission may be necessary to carry out the limited
18-22 jurisdiction over those companies that this Act provides to the
18-23 commission.
18-24 (s)(1) Subsections (k), (n), and (o) also apply to a holder
18-25 of a certificate of operating authority or service provider
18-26 certificate of operating authority. Except as otherwise
18-27 specifically provided by this Act, the commission shall have only
19-1 the following authority over a holder of a certificate of operating
19-2 authority or service provider certificate of operating authority:
19-3 (A) to enforce the applicable provisions of this
19-4 Act as provided by Subtitle I, Title I, of this Act;
19-5 (B) to assert jurisdiction over a specific
19-6 service in accordance with Section 3.2572 of this Act;
19-7 (C) to require co-carriage reciprocity; and
19-8 (D) to regulate condemnation and building
19-9 access.
19-10 (2) The commission may not impose on a
19-11 telecommunications utility that has a certificate of operating
19-12 authority or service provider certificate of operating authority a
19-13 rule or regulatory practice under this section that imposes a
19-14 greater regulatory burden on that telecommunications utility than
19-15 is imposed on a certificate of convenience and necessity holder
19-16 serving the same area.
19-17 SECTION 7. Subtitle B, Title III, Public Utility Regulatory
19-18 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
19-19 Regular Session, 1995, is amended by adding Section 3.053 to read
19-20 as follows:
19-21 Sec. 3.053. SALE OF PROPERTY. (a) The commission shall
19-22 complete an investigation under Section 1.251 of this Act that
19-23 relates to a public utility and enter a final order within 180 days
19-24 after the date of notification by the utility. If an order is not
19-25 entered, the utility's action is considered consistent with the
19-26 public interest.
19-27 (b) Section 1.251 of this Act does not apply to an incumbent
20-1 local exchange company electing under Subtitle H or I of this title
20-2 or to a company that receives a certificate of operating authority
20-3 or a service provider certificate of operating authority under
20-4 Subtitle F of this title.
20-5 SECTION 8. Subtitle C, Title III, Public Utility Regulatory
20-6 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
20-7 Regular Session, 1995, is amended by adding Section 3.1015 to read
20-8 as follows:
20-9 Sec. 3.1015. MUNICIPAL FEES. Nothing in this Act may be
20-10 construed as in any way limiting the right of a public utility to
20-11 pass through municipal fees, including any increase in municipal
20-12 fees. A public utility that traditionally passes through municipal
20-13 fees shall promptly pass through any reductions.
20-14 SECTION 9. Section 3.151(a), Public Utility Regulatory Act
20-15 of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
20-16 Regular Session, 1995, is amended to read as follows:
20-17 (a) The commission shall fix proper and adequate rates and
20-18 methods of depreciation, amortization, or depletion of the several
20-19 classes of property of each public utility and shall require every
20-20 public utility to carry a proper and adequate depreciation account
20-21 in accordance with such rates and methods and with such other rules
20-22 and regulations as the commission prescribes. On application of a
20-23 utility, the commission shall fix depreciation rates that promote
20-24 deployment of new technology and infrastructure. In setting those
20-25 rates, the commission shall consider depreciation practices of
20-26 nonregulated telecommunications providers. Such rates, methods,
20-27 and accounts shall be utilized uniformly and consistently
21-1 throughout the ratesetting and appeal proceedings. A company
21-2 electing under Subtitle H of this title may determine its own
21-3 depreciation rates and amortizations, but shall notify the
21-4 commission of any changes.
21-5 SECTION 10. Subtitle C, Title III, Public Utility Regulatory
21-6 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
21-7 Regular Session, 1995, is amended by adding Section 3.1545 to read
21-8 as follows:
21-9 Sec. 3.1545. RECORDS. Notwithstanding Section 1.204 of this
21-10 Act, books, accounts, records, or memoranda of a public utility may
21-11 be removed from the state so long as those books, accounts,
21-12 records, or memoranda are returned to the state for any inspection
21-13 by the commission that is authorized by this Act.
21-14 SECTION 11. Subtitle C, Title III, Public Utility Regulatory
21-15 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
21-16 Regular Session, 1995, is amended by adding Section 3.1555 to read
21-17 as follows:
21-18 Sec. 3.1555. MINIMUM SERVICES. (a) The commission shall
21-19 require each holder of a certificate of convenience and necessity
21-20 or certificate of operating authority in this state to provide at
21-21 the applicable tariff rate, to all customers, irrespective of race,
21-22 national origin, income, or residence in an urban or rural area,
21-23 not later than December 31, 2000:
21-24 (1) single party service;
21-25 (2) tone-dialing service;
21-26 (3) basic custom calling features;
21-27 (4) equal access for interLATA interexchange carriers
22-1 on a bona fide request; and
22-2 (5) digital switching capability in all exchanges on
22-3 customer request, provided by a digital switch in the exchange or
22-4 by connection to a digital switch in another exchange.
22-5 (b) The commission may temporarily waive these requirements
22-6 on a showing of good cause. The commission may not consider the
22-7 cost of implementing this section in determining whether an
22-8 electing company is entitled to a rate increase under Subtitle H or
22-9 I of this title or increased universal service funds under Section
22-10 3.608 of this Act.
22-11 SECTION 12. Sections 3.201 and 3.202, Public Utility
22-12 Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
22-13 Legislature, Regular Session, 1995, are amended to read as follows:
22-14 Sec. 3.201. POWER TO INSURE COMPLIANCE; RATE REGULATION.
22-15 Subject to the provisions of this Act, the commission is hereby
22-16 vested with all authority and power of the State of Texas to insure
22-17 compliance with the obligations of public utilities in this Act.
22-18 Except as <To the extent> otherwise provided by this Act, the
22-19 commission is empowered to fix and regulate rates of public
22-20 utilities, including rules and regulations for determining the
22-21 classification of customers and services and for determining the
22-22 applicability of rates. A rule or order of the commission may not
22-23 conflict with the rulings of any federal regulatory body.
22-24 Sec. 3.202. JUST AND REASONABLE RATES. It shall be the duty
22-25 of the commission to insure that every rate made, demanded, or
22-26 received by any telecommunications utility or by any two or more
22-27 utilities jointly shall be just and reasonable. Rates may not be
23-1 unreasonably preferential, prejudicial, or discriminatory, but
23-2 shall be sufficient, equitable, and consistent in application to
23-3 each class of consumers. For ratemaking purposes, the commission
23-4 may treat two or more municipalities served by a telecommunications
23-5 utility as a single class wherever it deems such treatment to be
23-6 appropriate. Approval by the commission of a reduced rate for
23-7 service for a class of consumers eligible under Section 3.602
23-8 <3.352> of this Act for tel-assistance service does not constitute
23-9 a violation of this section.
23-10 SECTION 13. Section 3.204, Public Utility Regulatory Act of
23-11 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
23-12 Session, 1995, is amended to read as follows:
23-13 Sec. 3.204. BURDEN OF PROOF. Except as hereafter provided,
23-14 in any proceeding involving any proposed change of rates, the
23-15 burden of proof to show that the proposed change, if proposed by
23-16 the utility, or that the existing rate, if it is proposed to reduce
23-17 the rate, is just and reasonable shall be on the public utility.
23-18 In any proceeding involving an incumbent <a> local exchange company
23-19 in which the incumbent local exchange company's rate or rates are
23-20 in issue, the burden of proof that such rate or rates are just and
23-21 reasonable shall be on the incumbent local exchange company.
23-22 SECTION 14. Section 3.210, Public Utility Regulatory Act of
23-23 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
23-24 Session, 1995, is amended by adding Subsection (c) to read as
23-25 follows:
23-26 (c) Except as provided by Subtitles H and I of this title,
23-27 this section does not apply to a company electing into Subtitle H
24-1 or I of this title. However, the commission shall retain
24-2 jurisdiction to hear and resolve complaints regarding an electing
24-3 company's compliance with obligations imposed by this Act.
24-4 SECTION 15. Section 3.211, Public Utility Regulatory Act of
24-5 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
24-6 Session, 1995, is amended by amending Subsections (f) and (h) and
24-7 adding Subsection (j) to read as follows:
24-8 (f) If, after hearing, the commission finds the rates to be
24-9 unreasonable or in any way in violation of any provision of law,
24-10 the commission shall determine the level of rates to be charged or
24-11 applied by the utility for the service in question and shall fix
24-12 the same by order to be served upon the utility; these rates are
24-13 thereafter to be observed until changed, as provided by this Act.
24-14 Except as provided by Subtitles H, I, and J of this title, this
24-15 subsection does not apply to a company electing into Subtitle H or
24-16 I of this title. Rates established under this section after a
24-17 company's election must comply with Subtitle H or I of this title.
24-18 (h) If the commission does not make a final determination
24-19 concerning an incumbent <a> local exchange company's schedule of
24-20 rates prior to the expiration of the 150-day suspension period, the
24-21 schedule of rates finally approved by the commission shall become
24-22 effective and the incumbent local exchange company shall be
24-23 entitled to collect such rates from the date the 150-day suspension
24-24 period expired. Any surcharges or other charges necessary to
24-25 effectuate this subsection may not be recovered over a period of
24-26 less than 90 days from the date of the commission's final order.
24-27 (j) An incumbent local exchange company may file with the
25-1 commission tariffs for switched access service that have been
25-2 approved by the Federal Communications Commission, provided that
25-3 the tariffs include all rate elements in the company's interstate
25-4 access tariff other than end user charges. If on review the filed
25-5 tariffs contain the same rates, terms, and conditions, excluding
25-6 any end user charges, as approved by the Federal Communications
25-7 Commission, the commission shall order the rates to be the
25-8 intrastate switched access rates, terms, and conditions for the
25-9 incumbent local exchange company within 60 days of filing.
25-10 SECTION 16. Sections 3.212(a) and (c), Public Utility
25-11 Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
25-12 Legislature, Regular Session, 1995, are amended to read as follows:
25-13 (a) An incumbent <A> local exchange company may make changes
25-14 in its tariffed rules, regulations, or practices that do not affect
25-15 its charges or rates by filing the proposed changes with the
25-16 commission at least 35 days prior to the effective date of the
25-17 changes. The commission may require such notice to ratepayers as
25-18 it considers appropriate.
25-19 (c) The commission shall approve, deny, or modify the
25-20 proposed changes before expiration of the suspension period. In
25-21 any proceeding under this section, the burden of proving that the
25-22 requested relief is in the public interest and complies with this
25-23 Act shall be borne by the incumbent local exchange company.
25-24 SECTION 17. Subtitle E, Title III, Public Utility Regulatory
25-25 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
25-26 Regular Session, 1995, is amended by amending Section 3.213 and
25-27 adding Section 3.2135 to read as follows:
26-1 Sec. 3.213. <COOPERATIVE OR> SMALL INCUMBENT LOCAL EXCHANGE
26-2 COMPANIES<; STATEMENT OF INTENT TO CHANGE RATES; NOTICE OF INTENT;
26-3 SUSPENSION OF RATE SCHEDULE; REVIEW>. (a) The legislature finds
26-4 that regulatory policy should recognize differences between the
26-5 small and large incumbent local exchange companies, that there are
26-6 a large number of customer-owned telephone cooperatives and small,
26-7 locally owned investor companies, and that it is appropriate to
26-8 provide incentives and flexibility to allow incumbent local
26-9 exchange companies that serve the rural areas to provide existing
26-10 services and to introduce new technology and new services in a
26-11 prompt, efficient, and economical manner.
26-12 (b) Except as otherwise provided by this section, an
26-13 incumbent local exchange company that is a cooperative corporation,
26-14 or that, together with all affiliated incumbent local exchange
26-15 companies, has fewer than 31,000 access lines in service in this
26-16 state, may offer extended local calling services or new services on
26-17 an optional basis or make minor changes in its rates or tariffs if
26-18 the company:
26-19 (1) files with the commission and the office a
26-20 statement of intent, as prescribed by Subsection (c) of this
26-21 section, not later than the 91st day before the date on which the
26-22 proposed change will take effect;
26-23 (2) provides notice as prescribed by Subsection (d) of
26-24 this section; and
26-25 (3) files with the commission affidavits verifying the
26-26 provision of notice as prescribed by Subsection (d) of this
26-27 section.
27-1 (c) The statement of intent required by Subsection (b)(1) of
27-2 this section must include:
27-3 (1) a copy of a resolution approving the proposed
27-4 change by the incumbent local exchange telephone company's board of
27-5 directors;
27-6 (2) a description of the services affected by the
27-7 proposed change;
27-8 (3) a copy of the proposed tariff for the affected
27-9 service;
27-10 (4) a copy of the customer notice required by
27-11 Subsection (b)(2) of this section;
27-12 (5) the number of access lines the company and each
27-13 affiliate has in service in this state; and
27-14 (6) the amount by which the company's total regulated
27-15 intrastate gross annual revenues will increase or decrease as a
27-16 result of the proposed change.
27-17 (d) The incumbent local exchange company shall provide
27-18 notice to affected customers in the manner prescribed by the
27-19 commission not later than the 61st day before the date on which the
27-20 proposed change will take effect. Each notice prescribed by the
27-21 commission must include:
27-22 (1) a description of the services affected by the
27-23 proposed change;
27-24 (2) the effective date of the proposed change;
27-25 (3) an explanation of the customer's right to petition
27-26 the commission for a review under Subsection (e) of this section,
27-27 including the number of persons required to petition before a
28-1 commission review will occur;
28-2 (4) an explanation of the customer's right to obtain
28-3 information concerning how to obtain a copy of the proposed tariff
28-4 from the company;
28-5 (5) the amount by which the company's total regulated
28-6 intrastate gross annual revenues will increase or decrease as a
28-7 result of the proposed change; and
28-8 (6) a list of rates that are affected by the proposed
28-9 rate change.
28-10 (e) The commission shall review a proposed change filed
28-11 under this section if:
28-12 (1) the commission receives complaints relating to the
28-13 proposed change signed by the lesser of five percent or 1,500 of
28-14 the affected local service customers;
28-15 (2) the commission receives a complaint relating to
28-16 the proposed change from an affected intrastate access customer, or
28-17 a group of affected intrastate access customers, that in the
28-18 preceding 12 months accounted for more than 10 percent of the
28-19 company's total intrastate gross access revenues;
28-20 (3) the proposed change is not a minor change;
28-21 (4) the company does not comply with the procedural
28-22 requirements of this section; or
28-23 (5) the proposed change is inconsistent with the
28-24 commission's substantive policies as expressed in its rules.
28-25 (f) On review, the commission may suspend the proposed
28-26 tariff during the pendency of review.
28-27 (g) This section does not prohibit an incumbent local
29-1 exchange company from filing for a new service or rate change under
29-2 another applicable section of this Act or the commission from
29-3 conducting a review in accordance with Section 3.210 of this Act.
29-4 (h) In this section, "minor change" means a change,
29-5 including the restructuring of rates of existing services, that
29-6 decreases the rates or revenues of the incumbent local exchange
29-7 company or that, together with any other rate or proposed or
29-8 approved tariff changes in the 12 months preceding the date on
29-9 which the proposed change will take effect, results in an increase
29-10 of the company's total regulated intrastate gross annual revenues
29-11 by not more than five percent. Further, with regard to a change to
29-12 a basic local access line rate, a minor change may not, together
29-13 with any other change to that rate that went into effect during the
29-14 12 months preceding the proposed effective date of the requested
29-15 change, result in an increase of more than 10 percent. <Except as
29-16 otherwise provided by this section, a local exchange company that
29-17 is a cooperative corporation or that has fewer than 5,000 access
29-18 lines in service in this state may change rates by publishing
29-19 notice of the change at least 60 days before the date of the change
29-20 in the place and form as prescribed by the commission. The notice
29-21 must include:>
29-22 <(1) the reasons for the rate change;>
29-23 <(2) a description of the affected service;>
29-24 <(3) an explanation of the right of the subscriber to
29-25 petition the commission for a hearing on the rate change; and>
29-26 <(4) a list of rates that are affected by the proposed
29-27 rate change.>
30-1 <(b) At least 60 days before the date of the change, the
30-2 local exchange company shall file with the commission a statement
30-3 of intent to change rates containing:>
30-4 <(1) a copy of the notice required by Subsection (a)
30-5 of this section;>
30-6 <(2) the number of access lines the company has in
30-7 service in this state;>
30-8 <(3) the date of the most recent commission order
30-9 setting rates of the company;>
30-10 <(4) the increase in total gross annual local revenues
30-11 that will be produced by the proposed rates;>
30-12 <(5) the increase in total gross annual local revenues
30-13 that will be produced by the proposed rates together with any local
30-14 rate changes which went into effect during the 12 months preceding
30-15 the proposed effective date of the requested rate change and any
30-16 other proposed local rate changes then pending before the
30-17 commission;>
30-18 <(6) the increase in rates for each service category;
30-19 and>
30-20 <(7) other information the commission by rule
30-21 requires.>
30-22 <(c) The commission shall review a proposed change in the
30-23 rates set by a local exchange company under this section upon the
30-24 receipt of complaints signed by at least five percent of all
30-25 affected subscribers or upon its own motion. The commission may
30-26 require notice to ratepayers as it considers appropriate. If
30-27 sufficient complaints are presented to the commission within 60
31-1 days after the date notice of the rate change was sent to
31-2 subscribers, the commission shall review the proposed change.
31-3 After notice to the local exchange company, the commission may
31-4 suspend the rates during the pendency of the review and reinstate
31-5 the rates previously in effect. Review under this subsection shall
31-6 be as provided by Section 3.211 of this Act. The period for review
31-7 by the commission does not begin until the local exchange company
31-8 files a complete rate-filing package.>
31-9 <(d) If the commission has entered an order setting a rate,
31-10 the affected local exchange company may not change that rate under
31-11 this section before 365 days after the date of the commission's
31-12 order setting the rate.>
31-13 <(e) This section does not prohibit a local exchange company
31-14 from filing for a rate change under any other applicable section of
31-15 this Act.>
31-16 <(f) The commission shall review a proposed change in the
31-17 rates of a local exchange company under this section if the
31-18 proposed rates, together with any local rate changes which went
31-19 into effect during the 12 months preceding the proposed effective
31-20 date of the requested rate change as well as any other proposed
31-21 local rate changes then pending before the commission, will
31-22 increase its total gross annual local revenues by more than 2-1/2
31-23 percent or if the proposed change would increase the rate of any
31-24 service category by more than 25 percent, except for basic local
31-25 service, which shall be limited to a maximum of 2-1/2 percent of
31-26 the total gross annual local revenue. Review under this subsection
31-27 shall be as provided by Section 3.211 of this Act. Each local
32-1 exchange company may receive a change in its local rates or in any
32-2 service category pursuant to this section only one time in any
32-3 12-month period.>
32-4 (i) <(g)> Rates established under this section must be in
32-5 accordance with the rate-setting principles of this subtitle.
32-6 However, companies may provide to their board members, officers,
32-7 employees, and agents free or reduced rates for services.
32-8 (j)(1) The commission shall, within 120 days of the
32-9 effective date of this section, examine its policies, its reporting
32-10 requirements, and its procedural and substantive rules as they
32-11 relate to rural and small incumbent local exchange companies and
32-12 cooperatives to eliminate or revise those that place unnecessary
32-13 burdens and expenses on those companies. Notwithstanding any other
32-14 provisions of this Act, the commission shall consider and may adopt
32-15 policies that include the following:
32-16 (A) policies to allow those companies to provide
32-17 required information by report or otherwise as necessary, including
32-18 a rate filing package when required, in substantially less
32-19 burdensome and complex form than required of larger incumbent local
32-20 exchange companies;
32-21 (B) policies that permit consideration of the
32-22 company's future construction plans and operational changes in
32-23 evaluating the reasonableness of current rates;
32-24 (C) policies that provide for evaluation of the
32-25 overall reasonableness of current rates no more frequently than
32-26 once every three years;
32-27 (D) policies that permit companies to change
33-1 depreciation and amortization rates when customer rates are not
33-2 affected by notice to the commission, subject to review by the
33-3 commission in a proceeding under Section 3.210 or 3.211 of this
33-4 Act;
33-5 (E) policies to allow the incumbent local
33-6 exchange companies to adopt for new services the rates for the same
33-7 or substantially similar services offered by a larger incumbent
33-8 local exchange company, without commission requirement of
33-9 additional cost justification; and
33-10 (F) policies that allow an incumbent local
33-11 exchange company, instead of any management audit that would
33-12 otherwise be required by law, policy, or rule, to submit to the
33-13 commission financial audits of the company regularly performed by
33-14 independent auditors or required and performed as a result of the
33-15 company's participation in federal or state financing or
33-16 revenue-sharing programs.
33-17 (2) Notwithstanding any other relevant provision of
33-18 this Act, the commission may adopt policies under this subsection
33-19 that the commission considers appropriate.
33-20 (k) <(h)> The commission is granted all necessary power and
33-21 authority to prescribe and collect fees and assessments from
33-22 incumbent local exchange companies necessary to recover the
33-23 commission's and the office's costs of activities carried out and
33-24 services provided under this section, Subsection (h) of Section
33-25 3.211, and Sections <Section> 3.212 and 3.2135 of this Act.
33-26 (l) Except as provided in Subsection (j), this section may
33-27 not apply to any incumbent local exchange company that is a
34-1 cooperative corporation partially deregulated under the provisions
34-2 of Section 3.2135 of this Act.
34-3 Sec. 3.2135. COOPERATIVE CORPORATIONS. (a) An incumbent
34-4 local exchange company that is a cooperative corporation may vote
34-5 to partially deregulate the cooperative by sending a ballot to each
34-6 cooperative member. The ballot may be included in a bill or sent
34-7 separately. The ballot shall provide for voting for or against the
34-8 proposition: "Authorizing the partial deregulation of the (name of
34-9 the cooperative)."
34-10 (b) The cooperative is deemed to be partially deregulated if
34-11 a majority of the ballots returned to the cooperative not later
34-12 than the 45th day after the date on which the ballots are mailed
34-13 favor deregulation.
34-14 (c) After the initial balloting, the cooperative may offer
34-15 extended local calling services, new services on an optional basis,
34-16 or make changes in its rates or tariffs if the cooperative:
34-17 (1) provides notice of the proposed action under this
34-18 section to all customers and municipalities as prescribed by
34-19 Subsection (e) of this section;
34-20 (2) files with the commission affidavits verifying the
34-21 provision of notice as prescribed by Subsection (f) of this
34-22 section; and
34-23 (3) files a statement of intent under Subsection (d)
34-24 of this section.
34-25 (d) A statement of intent to use this section must be filed
34-26 with the commission and the office not later than the 61st day
34-27 before the date on which a proposed change will take effect and
35-1 must include:
35-2 (1) a copy of a resolution approving the proposed
35-3 action and authorizing the filing of the statement of intent signed
35-4 by a majority of the members of the cooperative's board of
35-5 directors;
35-6 (2) a description of the services affected by the
35-7 proposed action;
35-8 (3) a copy of the proposed tariff for the affected
35-9 service; and
35-10 (4) a copy of the customer notice required by this
35-11 section.
35-12 (e) The cooperative shall provide to all affected customers
35-13 and parties, including municipalities, at least two notices of the
35-14 proposed action by bill insert or by individual notice. The
35-15 cooperative shall provide the first notice not later than the 61st
35-16 day before the date on which the proposed action will take effect.
35-17 The cooperative shall provide the last notice not later than the
35-18 31st day before the date on which the proposed action will take
35-19 effect. Each notice prescribed by this subsection must include:
35-20 (1) a description of the services affected by the
35-21 proposed action;
35-22 (2) the effective date of the proposed action;
35-23 (3) an explanation of the customer's right to petition
35-24 the commission for a review under Subsection (g) of this section;
35-25 (4) an explanation of the customer's right to obtain a
35-26 copy of the proposed tariff from the cooperative;
35-27 (5) the amount by which the cooperative's total gross
36-1 annual revenues will increase or decrease and a statement
36-2 explaining the effect on the cooperative revenues as a result of
36-3 the proposed action; and
36-4 (6) a list of rates that are affected by the proposed
36-5 rate action, showing the effect of the proposed action on each such
36-6 rate.
36-7 (f) Not later than the 15th day before the date on which the
36-8 proposed action will take effect, the cooperative shall file with
36-9 the commission affidavits that verify that the cooperative provided
36-10 each notice prescribed under Subsection (e) of this section.
36-11 (g)(1) The commission shall review a proposed action filed
36-12 under this section if:
36-13 (A) the commission receives, not later than the
36-14 45th day after the first notice is provided under Subsection (e) of
36-15 this section, complaints relating to the proposed action:
36-16 (i) signed by at least five percent of the
36-17 affected local service customers; or
36-18 (ii) from an affected intrastate access
36-19 customer, or group of affected intrastate access customers, that in
36-20 the preceding 12 months accounted for more than 10 percent of the
36-21 cooperative's total intrastate access revenues;
36-22 (B) the cooperative does not comply with the
36-23 procedural requirements of this section; or
36-24 (C) the proposed action is inconsistent with the
36-25 commission's substantive policies as expressed in its rules.
36-26 (2) If the commission conducts a review of the
36-27 proposed action under this subsection before the effective date,
37-1 the commission may suspend the proposed actions of the cooperative
37-2 during the pendency of the review.
37-3 (h) A cooperative that is partially deregulated under this
37-4 section may vote to reverse the deregulation by sending a ballot
37-5 to each cooperative member. Upon its own motion or within 60 days
37-6 upon receipt of a written request of 10 percent of its members, the
37-7 cooperative's board of directors shall reballot. The ballot may be
37-8 included in a bill or sent separately. The ballot shall provide
37-9 for voting for or against the proposition: "Reversing the partial
37-10 deregulation of the (name of the cooperative)." The partial
37-11 deregulation is reversed if a majority of the ballots returned to
37-12 the cooperative not later than the 45th day after the date on which
37-13 the ballots are mailed favor reversal.
37-14 (i) The commission by rule shall prescribe the voting
37-15 procedures a cooperative is required to use under this section.
37-16 (j) This section does not:
37-17 (1) prohibit a cooperative from filing for a new
37-18 service or rate change under another applicable section of this
37-19 Act; or
37-20 (2) affect the application of other provisions of this
37-21 Act not directly related to rate-making or the authority of the
37-22 commission to require the cooperative to file reports as required
37-23 under this Act, Section 3.213(j) of this Act, or under the rules
37-24 adopted by the commission.
37-25 (k) Notwithstanding any other provision of this section, the
37-26 commission may conduct a review in accordance with Section 3.210 of
37-27 this Act.
38-1 SECTION 18. Subtitle E, Title III, Public Utility Regulatory
38-2 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
38-3 Regular Session, 1995, is amended by adding Section 3.219 to read
38-4 as follows:
38-5 Sec. 3.219. INTRALATA CALLS. (a) While any local exchange
38-6 company in this state is prohibited by federal law from providing
38-7 interLATA telecommunications services, the local exchange companies
38-8 in this state designated or de facto authorized to receive "0+" and
38-9 "1+" dialed intraLATA calls shall continue to be so designated or
38-10 authorized.
38-11 (b) A telecommunications utility operating under a
38-12 certificate of operating authority or service provider certificate
38-13 of operating authority to the extent not restricted by Section
38-14 3.2532(f) of this Act is de facto authorized to receive "0+" and
38-15 "1+" dialed intraLATA calls on the date on which the utility
38-16 receives its certificate.
38-17 (c) If local exchange companies are allowed by federal law
38-18 to provide interLATA telecommunications services, the commission
38-19 shall consider whether to allow customers to designate a carrier to
38-20 receive their "0+" and "1+" dialed intraLATA calls.
38-21 SECTION 19. Section 3.251, Public Utility Regulatory Act of
38-22 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
38-23 Session, 1995, is amended by adding Subsection (c) to read as
38-24 follows:
38-25 (c) A person may not provide local exchange telephone
38-26 service, basic local telecommunications service, or switched access
38-27 service without a certificate of convenience and necessity, a
39-1 certificate of operating authority, or a service provider
39-2 certificate of operating authority.
39-3 SECTION 20. Section 3.252, Public Utility Regulatory Act of
39-4 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
39-5 Session, 1995, is amended to read as follows:
39-6 Sec. 3.252. EXCEPTIONS <FOR EXTENSION OF SERVICE>. (a) A
39-7 telecommunications <public> utility is not required to secure a
39-8 certificate of public convenience and necessity, certificate of
39-9 operating authority, or service provider certificate of operating
39-10 authority for:
39-11 (1) an extension into territory contiguous to that
39-12 already served by it and not receiving similar service from another
39-13 telecommunications <public> utility and not within the certificated
39-14 area <of public convenience and necessity> of another
39-15 telecommunications utility <of the same kind>;
39-16 (2) an extension within or to territory already served
39-17 by it or to be served by it under a certificate of public
39-18 convenience and necessity, certificate of operating authority, or
39-19 service provider certificate of operating authority; <or>
39-20 (3) operation, extension, or service in progress on
39-21 September 1, 1975; or
39-22 (4) interexchange telecommunications service,
39-23 non-switched private line service, shared tenant service,
39-24 specialized communications common carrier service, commercial
39-25 mobile radio service, or operator service as defined by Section
39-26 3.052(a) of this Act.
39-27 (b) Any extensions allowed by Subsection (a) of this section
40-1 shall be limited to devices for interconnection of existing
40-2 facilities or devices used solely for transmitting
40-3 telecommunications <public> utility services from existing
40-4 facilities to customers of retail utility service.
40-5 SECTION 21. Subtitle F, Title III, Public Utility Regulatory
40-6 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
40-7 Regular Session, 1995, is amended by adding Section 3.2531 to read
40-8 as follows:
40-9 Sec. 3.2531. CERTIFICATE OF OPERATING AUTHORITY. (a) In
40-10 lieu of applying for a certificate of convenience and necessity, an
40-11 applicant may apply for a certificate of operating authority.
40-12 (b) An application for a certificate of operating authority
40-13 shall specify whether the applicant is seeking a facilities based
40-14 certificate of operating authority under this section or a service
40-15 provider certificate of operating authority under Section 3.2532.
40-16 When an application for a certificate of operating authority or
40-17 service provider certificate of operating authority is filed, the
40-18 commission shall give notice of the application to interested
40-19 parties and, if requested, shall fix a time and place for a hearing
40-20 and give notice of the hearing. Any person interested in the
40-21 application may intervene at the hearing.
40-22 (c) If seeking a facilities based certificate of operating
40-23 authority, the applicant must include in the application a proposed
40-24 build-out plan demonstrating how the applicant will deploy its
40-25 facilities throughout the geographic area of its certificated
40-26 service area over a six-year period. The commission may issue
40-27 rules for a holder of a certificate of operating authority with
41-1 respect to the time within which the holder must be able to serve
41-2 customers, except that a holder must serve customers within a
41-3 build-out area within 30 days of the date of a customer request for
41-4 service. The commission may not require a holder to place "drop"
41-5 facilities on every customer's premises or to activate fiber optic
41-6 facilities in advance of customer request as part of the build-out
41-7 requirements. The plan required by this subsection must meet the
41-8 following conditions:
41-9 (1) 10 percent of the area to be served must be served
41-10 with facilities other than the facilities of the incumbent local
41-11 exchange company by the end of the first year;
41-12 (2) 50 percent of the area to be served must be served
41-13 with facilities other than the facilities of the incumbent local
41-14 exchange company by the end of the third year; and
41-15 (3) all of the area to be served must be served with
41-16 facilities other than the facilities of the incumbent local
41-17 exchange company by the end of the sixth year.
41-18 (d) The build-out plan may permit not more than 40 percent
41-19 of the applicant's service area to be served by resale of the
41-20 incumbent local exchange company's facilities under the tariff
41-21 required to be approved in Section 3.453, except that during the
41-22 six years immediately following the grant, a holder of a
41-23 certificate of operating authority may extend its service by resale
41-24 only within the area it is obligated to serve under the build-out
41-25 plan approved by the commission and to the distant premises of one
41-26 of its multi-premises customers beyond that build-out area but
41-27 within its certificated service area. The 40-percent resale
42-1 limitation applies to all incumbent local exchange facilities
42-2 resold by a holder of a certificate of operating authority,
42-3 regardless of whether the facilities are purchased directly by the
42-4 certificate of operating authority holder from the incumbent local
42-5 exchange company or purchased by an intermediary carrier from the
42-6 incumbent local exchange company and then provided to the
42-7 certificate of operating authority holder for resale. In no event
42-8 may an applicant use commercial mobile radio service ("CMRS") to
42-9 meet the build-out requirement imposed by this section, but an
42-10 applicant may use PCS wireless technology licensed by the Federal
42-11 Communications Commission after January 1, 1995, to meet the
42-12 build-out requirement.
42-13 (e) A certificate of operating authority shall be granted
42-14 within 60 days after the date of the application on a
42-15 nondiscriminatory basis after consideration by the commission of
42-16 factors such as the technical and financial qualifications of the
42-17 applicant and the applicant's ability to meet the commission's
42-18 quality of service requirements. The commission may extend the
42-19 60-day period on good cause shown. In an exchange of an incumbent
42-20 local exchange company serving fewer than 31,000 access lines, the
42-21 commission shall also consider:
42-22 (1) the effect of granting the certificate on any
42-23 public utility already serving the area and on the utility's
42-24 customers;
42-25 (2) the existing utility's ability to provide adequate
42-26 service at reasonable rates;
42-27 (3) the impact of the existing utility's ability as
43-1 the provider of last resort; and
43-2 (4) the ability of the exchange, not the company, to
43-3 support more than one provider of service.
43-4 (f) In addition to the factors prescribed by Subsection (e)
43-5 of this section, the commission shall consider the adequacy of the
43-6 applicant's build-out plan in determining whether to grant the
43-7 application. The commission may administratively and temporarily
43-8 waive compliance with the six-year build-out plan on a showing of
43-9 good cause. The holder of a certificate shall file periodic
43-10 reports with the commission demonstrating compliance with the plan
43-11 approved by the commission, including the requirement that not more
43-12 than 4 percent of the service area of a new certificate may be
43-13 served by resale of the facilities of the incumbent local exchange
43-14 company.
43-15 (g) An application for a certificate of operating authority
43-16 may be granted only for an area or areas that are contiguous and
43-17 reasonably compact and have at least a three-mile radius, except
43-18 that:
43-19 (1) in an exchange in a county having a population of
43-20 less than 500,000 that is served by an incumbent local exchange
43-21 company having more than 31,000 access lines, an area having less
43-22 than a three-mile radius may be approved if the area is contiguous
43-23 and reasonably compact and has at least 20,000 access lines; and
43-24 (2) in an exchange of a company serving fewer than
43-25 31,000 access lines in this state, an application may be granted
43-26 only for an area that has boundaries similar to the boundaries of
43-27 the serving central office served by the incumbent local exchange
44-1 company holding the certificate of convenience and necessity for
44-2 that area.
44-3 (h) The commission may not, before September 1, 1998, grant
44-4 a certificate of operating authority in an exchange of an incumbent
44-5 local exchange company serving fewer than 31,000 access lines. The
44-6 commission shall require that the applicant meet the other
44-7 appropriate certification provisions of this Act.
44-8 (i) Six years after an application for a certificate of
44-9 operating authority has been granted for a particular area or areas
44-10 or when the new applicant has completed its build-out plan required
44-11 by this section, the commission may waive the build-out
44-12 requirements of this section for additional applicants.
44-13 (j)(1) On an application filed after September 1, 1997, the
44-14 commission may conduct a hearing to determine:
44-15 (A) if the build-out requirements of Subsections
44-16 (c), (d), and (g) of this section have created barriers to the
44-17 entry of facilities-based local exchange telephone service
44-18 competition in exchanges in counties with a population of more than
44-19 500,000 served by companies having more than 31,000 access lines;
44-20 and
44-21 (B) the effect of the resale provisions on the
44-22 development of competition except in certificated areas of
44-23 companies serving fewer than 31,000 access lines as provided by
44-24 Section 3.2532(d)(1) of this Act.
44-25 (2) In making the determination under Subdivision (1)
44-26 of this subsection, the commission shall consider:
44-27 (A) the policy of this Act to encourage
45-1 construction of local exchange networks;
45-2 (B) the number and type of competitors that have
45-3 sought to provide local exchange competition under the existing
45-4 rules prescribed by this Act; and
45-5 (C) whether, if new build-out and resale rules
45-6 were adopted, innovative and competitive local exchange telephone
45-7 services are more likely to be provided.
45-8 (3) If the commission determines that the existing
45-9 build-out requirements have created barriers to facilities-based
45-10 local exchange competition in exchanges described by Subdivision
45-11 (1)(A) of this subsection, the requirements of Subsections (c),
45-12 (d), and (g) of this section and of Section 3.2532 may be changed
45-13 if the changes will encourage additional facilities-based
45-14 competition. However, in no event may exchange sizes be reduced
45-15 below a radius of two miles, or the permitted resale percentage of
45-16 Subsection (d) of this section be increased to more than 50
45-17 percent. If new rules are adopted, the rules may apply only to
45-18 applicants for certificates filed after the date of adoption of
45-19 those rules.
45-20 (k) If the holder of a certificate of authority fails to
45-21 comply with any requirement imposed by this Act, the commission
45-22 may:
45-23 (1) revoke the certificate; or
45-24 (2) impose administrative penalties or take other
45-25 action under Subtitle I, Title I of this Act.
45-26 SECTION 22. Subtitle F, Title III, Public Utility Regulatory
45-27 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
46-1 Regular Session, 1995, is amended by adding Section 3.2532 to read
46-2 as follows:
46-3 Sec. 3.2532. SERVICE PROVIDER CERTIFICATE OF OPERATING
46-4 AUTHORITY. (a) To encourage innovative, competitive, and
46-5 entrepreneurial businesses to provide telecommunications services,
46-6 the commission may grant service provider certificates of operating
46-7 authority. An applicant must demonstrate that it has the financial
46-8 and technical ability to provide its services and show that the
46-9 services will meet the requirements of this section.
46-10 (b) A company is eligible to obtain a service provider
46-11 certificate of operating authority under this section unless the
46-12 company, together with affiliates, had in excess of four percent of
46-13 the total intrastate switched access minutes of use as measured by
46-14 the most recent 12-month period preceding the filing of the
46-15 application for which data is available. The commission shall
46-16 obtain from each applicable incumbent local exchange telephone
46-17 company and from the applicant any information necessary to
46-18 determine eligibility and shall certify eligibility within 10 days
46-19 after the date of the filing of the application. A service
46-20 provider certificate of operating authority shall be granted within
46-21 60 days after the date on which the application is filed on a
46-22 finding by the commission that the applicant has met the
46-23 requirements of this section.
46-24 (c) An applicant for a service provider certificate of
46-25 operating authority shall file with its application a description
46-26 of the services it will provide and show the areas in which it will
46-27 provide those services.
47-1 (d) A service provider certificate of operating authority
47-2 holder:
47-3 (1) may obtain services under the resale tariffs
47-4 ordered by the commission as specified by Section 3.453, except in
47-5 certificated areas of companies serving fewer than 31,000 access
47-6 lines;
47-7 (2) may obtain for resale the flat rate local exchange
47-8 telephone service of an incumbent local exchange company and:
47-9 (A) the incumbent local exchange company shall
47-10 also sell discretionary services that may be provided to customers
47-11 in conjunction with local exchange service, including toll
47-12 restriction, call control options, tone dialing, custom calling
47-13 services, and caller ID at the tariffed rate for those services;
47-14 and
47-15 (B) service providers and incumbent local
47-16 exchange companies may agree to rates lower than the tariffed
47-17 rates;
47-18 (3) may sell the flat rate local exchange telephone
47-19 service only to the same class of customers to which the incumbent
47-20 local exchange company sells that service;
47-21 (4) may not use a resold flat rate local exchange
47-22 telephone service to avoid the rates, terms, and conditions of an
47-23 incumbent local exchange company's tariffs;
47-24 (5) may not terminate flat rate local exchange
47-25 telephone service and services obtained under the resale tariff
47-26 approved as prescribed by Sections 3.453(a)-(c) of this Act on the
47-27 same end user customer's premises; and
48-1 (6) may not use resold flat rate local exchange
48-2 telephone services to provide access services to other
48-3 interexchange carriers, cellular carriers, competitive access
48-4 providers, or other retail telecommunications providers, but may
48-5 permit customers to use resold local exchange telephone services to
48-6 access interexchange carriers, cellular carriers, competitive
48-7 access providers, or other retail telecommunications providers.
48-8 (e) A service provider certificate of operating authority
48-9 may not be granted to a holder of a certificate of operating
48-10 authority or certificate of convenience and necessity nor may a
48-11 certificate of operating authority or certificate of convenience
48-12 and necessity holder be granted a service provider certificate of
48-13 operating authority as to the same territory.
48-14 (f) An incumbent local exchange company that sells flat rate
48-15 local exchange telephone service to a holder of a service provider
48-16 certificate of operating authority may retain all access service
48-17 and "1+" intraLATA toll service originated over the resold flat
48-18 rate local exchange telephone service.
48-19 (g) An incumbent local exchange company may not:
48-20 (1) delay provisioning or maintenance of services
48-21 provided under this section;
48-22 (2) degrade the quality of access provided to another
48-23 provider;
48-24 (3) impair the speed, quality, or efficiency of lines
48-25 used by another provider;
48-26 (4) fail to fully disclose in a timely manner after a
48-27 request for the disclosure all available information necessary for
49-1 the holder of the service provider certificate of operating
49-2 authority to provision resale services; or
49-3 (5) refuse to take any reasonable action to allow
49-4 efficient access by a holder of a service provider certificate of
49-5 operating authority to ordering, billing, or repair management
49-6 systems of the local exchange company.
49-7 (h) In this section:
49-8 (1) "Affiliate" means any entity that, directly or
49-9 indirectly, owns or controls, is owned or controlled by, or is
49-10 under common ownership or control with a company that applies for a
49-11 service provider certificate of operating authority under this
49-12 section.
49-13 (2) "Control" means to exercise substantial influence
49-14 over the policies and actions of another.
49-15 SECTION 23. Sections 3.255(a) and (b), Public Utility
49-16 Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
49-17 Legislature, Regular Session, 1995, are amended to read as follows:
49-18 (a) If an area has been or shall be included within the
49-19 boundaries of a city, town, or village as the result of annexation,
49-20 incorporation, or otherwise, all telecommunications <public>
49-21 utilities certified or entitled to certification under this Act to
49-22 provide service or operate facilities in such area prior to the
49-23 inclusion shall have the right to continue and extend service in
49-24 its area of certification <public convenience and necessity> within
49-25 the annexed or incorporated area, pursuant to the rights granted by
49-26 its certificate and this Act.
49-27 (b) Notwithstanding any other provision of law, a
50-1 certificated telecommunications <public> utility shall have the
50-2 right to continue and extend service within its area of
50-3 certification <public convenience and necessity> and to utilize the
50-4 roads, streets, highways, alleys, and public property for the
50-5 purpose of furnishing such retail utility service, subject to the
50-6 authority of the governing body of a municipality to require any
50-7 certificated telecommunications <public> utility, at its own
50-8 expense, to relocate its facilities to permit the widening or
50-9 straightening of streets by giving to the certificated
50-10 telecommunications <public> utility 30 days' notice and specifying
50-11 the new location for the facilities along the right-of-way of the
50-12 street or streets.
50-13 SECTION 24. Sections 3.256 and 3.257, Public Utility
50-14 Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
50-15 Legislature, Regular Session, 1995, are amended to read as follows:
50-16 Sec. 3.256. CONTRACTS VALID AND ENFORCEABLE. Contracts
50-17 between telecommunications <public> utilities designating areas to
50-18 be served and customers to be served by those utilities, when
50-19 approved by the commission, shall be valid and enforceable and
50-20 shall be incorporated into the appropriate areas of certification
50-21 <public convenience and necessity>.
50-22 Sec. 3.257. PRELIMINARY ORDER FOR CERTIFICATE. If a
50-23 telecommunications <public> utility desires to exercise a right or
50-24 privilege under a franchise or permit which it contemplates
50-25 securing but which has not as yet been granted to it, such
50-26 telecommunications <public> utility may apply to the commission for
50-27 an order preliminary to the issuance of the certificate. The
51-1 commission may thereupon make an order declaring that it will, on
51-2 application, under such rules as it prescribes, issue the desired
51-3 certificate on such terms and conditions as it designates, after
51-4 the telecommunications <public> utility has obtained the
51-5 contemplated franchise or permit. On presentation to the
51-6 commission of evidence satisfactory to it that the franchise or
51-7 permit has been secured by the telecommunications <public> utility,
51-8 the commission shall issue the certificate.
51-9 SECTION 25. Subtitle F, Title III, Public Utility Regulatory
51-10 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
51-11 Regular Session, 1995, is amended by adding Section 3.2555 to read
51-12 as follows:
51-13 Sec. 3.2555. DISCRIMINATION. (a) An applicant for a
51-14 certificate of operating authority or service provider certificate
51-15 of operating authority shall file with its application a sworn
51-16 statement that it has applied for any necessary municipal consent,
51-17 franchise, or permit required for the type of services and
51-18 facilities for which it has applied. Notwithstanding Section 1.103
51-19 of this Act, a municipality may not discriminate against a
51-20 telecommunications utility in relation to:
51-21 (1) the authorization or placement of
51-22 telecommunications facilities within public right-of-way;
51-23 (2) access to buildings; or
51-24 (3) municipal utility pole attachment rates, terms,
51-25 and conditions, to the extent not addressed by federal law.
51-26 (b) A public or private property owner may not:
51-27 (1) interfere with or prevent a telecommunications
52-1 utility that holds a certificate of convenience and necessity or
52-2 certificate of operating authority from installing on the owner's
52-3 property telecommunications services facilities requested by a
52-4 tenant;
52-5 (2) discriminate against one or more
52-6 telecommunications utilities holding certificates of convenience
52-7 and necessity or certificates of operating authority in relation to
52-8 the installation of telecommunications services facilities to a
52-9 tenant on the owner's property;
52-10 (3) demand or accept an inappropriate payment in any
52-11 form from a tenant or a telecommunications utility holding a
52-12 certificate of convenience and necessity or certificate of
52-13 operating authority for allowing the utility on or within the
52-14 owner's property; or
52-15 (4) discriminate against a tenant in any manner,
52-16 including rental charges, because of the telecommunications utility
52-17 from which the tenant receives telecommunications services.
52-18 (c) Notwithstanding Subsection (b) of this section, the
52-19 owner of public or private property may require that:
52-20 (1) the telecommunications utility:
52-21 (A) install the telecommunications facilities in
52-22 accordance with reasonable conditions necessary to protect the
52-23 safety, functioning, and appearance of the property and the
52-24 well-being of other tenants; and
52-25 (B) agree to indemnify the owner for any damage
52-26 caused by the installation, operation, or removal of the
52-27 facilities; and
53-1 (2) the tenant or the telecommunications utility bear
53-2 the entire cost of the installation, operation, or removal of the
53-3 facilities.
53-4 (d) Notwithstanding any other provision of law, the
53-5 commission has the jurisdiction necessary to:
53-6 (1) investigate a complaint relating to a violation of
53-7 this section, including a complaint relating to the conduct of a
53-8 municipality; and
53-9 (2) enforce this section.
53-10 SECTION 26. Subtitle F, Title III, Public Utility Regulatory
53-11 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
53-12 Regular Session, 1995, is amended by adding Section 3.2571 to read
53-13 as follows:
53-14 Sec. 3.2571. FLEXIBILITY PLAN. After an application for a
53-15 certificate of convenience and necessity, certificate of operating
53-16 authority, or service provider certificate of operating authority
53-17 is granted or the commission determines that a certificate is not
53-18 needed for the services to be provided by the applicant, the
53-19 commission shall conduct proceedings it determines appropriate to
53-20 establish a transitional flexibility plan for the incumbent local
53-21 exchange company in the same area or areas as the new certificate
53-22 holder. However, a basic local telecommunications service price of
53-23 the incumbent local exchange company may not be increased until
53-24 four years following the grant of the certificate to the applicant,
53-25 except:
53-26 (1) as provided by this Act; or
53-27 (2) when the new applicant has completed its build-out
54-1 plan required by Section 3.2531.
54-2 SECTION 27. Subtitle F, Title III, Public Utility Regulatory
54-3 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
54-4 Regular Session, 1995, is amended by adding Section 3.2572 to read
54-5 as follows:
54-6 Sec. 3.2572. MARKET POWER TEST. (a) Notwithstanding any
54-7 other provision of this Act, on notice and hearing, the commission
54-8 may grant price deregulation of a specific service in a particular
54-9 geographic market if the commission determines that the incumbent
54-10 local exchange company or certificate of operating authority holder
54-11 that is a dominant provider is no longer dominant as to that
54-12 specific service in that particular geographic market. For
54-13 purposes of this section only, in determining a particular
54-14 geographic market, the commission shall consider economic and
54-15 technical conditions of the market. Once a service in a particular
54-16 market is price-deregulated under this section, the incumbent local
54-17 exchange company or certificate of operating authority holder that
54-18 is a dominant provider may set the rate for the deregulated service
54-19 at any level above the service's LRIC.
54-20 (b) To determine that an incumbent local exchange company or
54-21 certificate of operating authority holder that is a dominant
54-22 provider is no longer dominant as to a specific service in a
54-23 particular geographic market, the commission must find that an
54-24 effective competitive alternative exists and that the incumbent
54-25 local exchange company or certificate of operating authority holder
54-26 that is a dominant provider does not have sufficient market power
54-27 to control the price of the service within a specified geographic
55-1 area in a manner that is adverse to the public interest.
55-2 (c) The commission shall consider the following factors in
55-3 determining whether the incumbent local exchange company or
55-4 certificate of operating authority holder that is a dominant
55-5 provider is dominant as to a specific service in a particular
55-6 geographic area:
55-7 (1) number and size of telecommunications utilities or
55-8 other persons providing the same, equivalent, or substitutable
55-9 service in the relevant market and the extent to which the service
55-10 is available in the relevant market;
55-11 (2) ability of customers in the relevant market to
55-12 obtain the same, equivalent, or substitutable service at comparable
55-13 rates, terms, and conditions;
55-14 (3) ability of telecommunications utilities or other
55-15 persons to make the same, equivalent, or substitutable service
55-16 readily available in the relevant market at comparable rates,
55-17 terms, and conditions;
55-18 (4) proportion of the relevant market that is
55-19 currently being provided the service by a telecommunications
55-20 utility other than the incumbent local exchange company or
55-21 certificate of operating authority holder that is a dominant
55-22 carrier; and
55-23 (5) other relevant information proven necessary by the
55-24 commission.
55-25 (d) The commission, on its own motion, or on a complaint
55-26 that the commission deems has merit, is granted all necessary power
55-27 and authority to assert or reassert regulation over a specific
56-1 service in a particular geographic market if the incumbent local
56-2 exchange company or certificate of operating authority holder that
56-3 is a dominant carrier is found to again be dominant or the provider
56-4 of services under a certificate of operating authority or service
56-5 provider certificate of operating authority is found to be dominant
56-6 as to that specific service in that particular geographic market.
56-7 (e) On request of an incumbent local exchange company or
56-8 certificate of operating authority holder that is a dominant
56-9 carrier in conjunction with an application under this section, the
56-10 commission shall conduct investigations to determine the existence,
56-11 impact, and scope of competition in the particular geographic and
56-12 service markets at issue and in connection therewith may call and
56-13 hold hearings, may issue subpoenas to compel the attendance of
56-14 witnesses and the production of papers and documents, has any other
56-15 powers, whether specifically designated or implied, necessary and
56-16 convenient to the investigation, and may make findings of fact and
56-17 decisions with respect to those markets.
56-18 (f) The parties to the proceeding shall be entitled to use
56-19 the results of the investigation required to be conducted under
56-20 Subsection (e) of this section in an application for pricing
56-21 flexibility.
56-22 (g) In conjunction with its authority to collect and compile
56-23 information, the commission may collect reports from a holder of a
56-24 certificate of operating authority or service provider certificate
56-25 of operating authority. Any information contained in the reports
56-26 claimed to be confidential for competitive purposes shall be
56-27 maintained as confidential by the commission, and the information
57-1 is exempt from disclosure under Chapter 552, Government Code. The
57-2 commission shall aggregate the information to the maximum extent
57-3 possible considering the purpose of the proceeding to protect the
57-4 confidential nature of the information.
57-5 SECTION 28. Section 3.258(a), Public Utility Regulatory Act
57-6 of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
57-7 Regular Session, 1995, is amended to read as follows:
57-8 (a) Except as provided by this section, <or> Section 3.259,
57-9 or Section 3.2595 of this Act, a telecommunications utility that is
57-10 granted a certificate of convenience and necessity or certificate
57-11 of operating authority shall be required to offer to any customer
57-12 in its certificated area all basic local telecommunications
57-13 services <the holder of any certificate of public convenience and
57-14 necessity shall serve every consumer within its certified area> and
57-15 shall render continuous and adequate service within the area or
57-16 areas. In any event, as between a holder of a certificate of
57-17 convenience and necessity and a holder of a certificate of
57-18 operating authority, the holder of the certificate of convenience
57-19 and necessity has provider of last resort obligations.
57-20 SECTION 29. Section 3.259, Public Utility Regulatory Act of
57-21 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
57-22 Session, 1995, is amended to read as follows:
57-23 Sec. 3.259. CONDITIONS REQUIRING REFUSAL OF SERVICE. The
57-24 holder of a certificate of public convenience and necessity,
57-25 certificate of operating authority, or service provider certificate
57-26 of operating authority shall refuse to serve a customer within its
57-27 certified area if the holder of the certificate is prohibited from
58-1 providing the service under Section 212.012 or 232.0047, Local
58-2 Government Code.
58-3 SECTION 30. Subtitle F, Title III, Public Utility Regulatory
58-4 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
58-5 Regular Session, 1995, is amended by adding Section 3.2595 to read
58-6 as follows:
58-7 Sec. 3.2595. DISCONTINUATION OF SERVICE. (a)
58-8 Notwithstanding Section 3.258 of this Act, a telecommunications
58-9 utility that holds a certificate of operating authority or service
58-10 provider certificate of operating authority may:
58-11 (1) discontinue an optional service that is not
58-12 essential to the provision of basic local telecommunications
58-13 service; or
58-14 (2) cease operations within its certificated area.
58-15 (b) Before a telecommunications utility discontinues an
58-16 optional service or ceases operations, the utility must provide
58-17 notice of the intended action to the commission and each affected
58-18 customer in the manner required by the commission.
58-19 (c) A telecommunications utility is entitled to discontinue
58-20 an optional service on or after the 61st day after the date on
58-21 which the utility provides the notice required by Subsection (b) of
58-22 this section.
58-23 (d) A telecommunications utility may not cease operations
58-24 within its certificated area unless:
58-25 (1) another provider of basic local telecommunications
58-26 services has adequate facilities and capacity to serve the
58-27 customers in the certificated area; and
59-1 (2) the commission authorizes the utility to cease
59-2 operations.
59-3 (e) The commission may not authorize a telecommunications
59-4 utility to cease operations under Subsection (d) of this section
59-5 before the 61st day after the date on which the utility provides
59-6 the notice required by Subsection (b) of this section. The
59-7 commission may enter an order under this subsection
59-8 administratively unless the commission receives a complaint from an
59-9 affected person.
59-10 SECTION 31. Section 3.260, Public Utility Regulatory Act of
59-11 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
59-12 Session, 1995, is amended to read as follows:
59-13 Sec. 3.260. SALE, ASSIGNMENT, OR LEASE OF CERTIFICATE. If
59-14 the commission determines that a purchaser, assignee, or lessee is
59-15 capable of rendering adequate service, a telecommunications
59-16 <public> utility may sell, assign, or lease a certificate of public
59-17 convenience and necessity or certificate of operating authority or
59-18 any rights obtained under the certificate. The sale, assignment,
59-19 or lease shall be on the conditions prescribed by the commission.
59-20 SECTION 32. Section 3.261, Public Utility Regulatory Act of
59-21 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
59-22 Session, 1995, is amended to read as follows:
59-23 Sec. 3.261. INTERFERENCE WITH OTHER TELECOMMUNICATIONS
59-24 <PUBLIC> UTILITY. If a telecommunications <public> utility in
59-25 constructing or extending its lines, plant, or system interferes or
59-26 attempts to interfere with the operation of a line, plant, or
59-27 system of any other utility, the commission may issue an order
60-1 prohibiting the construction or extension or prescribing terms and
60-2 conditions for locating the lines, plants, or systems affected.
60-3 SECTION 33. Subtitle F, Title III, Public Utility Regulatory
60-4 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
60-5 Regular Session, 1995, is amended by adding Section 3.2615 to read
60-6 as follows:
60-7 Sec. 3.2615. DIRECTORY LISTINGS AND ASSISTANCE. (a)
60-8 Companies providing local exchange telephone service shall
60-9 negotiate the terms and conditions of printed directory listings
60-10 and directory assistance within overlapping certificated areas.
60-11 (b) On complaint by the incumbent local exchange company or
60-12 the holder of the certificate of convenience and necessity,
60-13 certificate of operating authority, or service provider certificate
60-14 of operating authority, the commission may resolve disputes between
60-15 the parties and, if necessary, issue an order setting the terms and
60-16 conditions of the directory listings or directory assistance.
60-17 (c) This section does not affect the authority of an
60-18 incumbent local exchange company to voluntarily conduct
60-19 negotiations with an applicant for a certificate of convenience and
60-20 necessity, certificate of operating authority, or service provider
60-21 certificate of operating authority.
60-22 SECTION 34. Section 3.262, Public Utility Regulatory Act of
60-23 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
60-24 Session, 1995, is amended to read as follows:
60-25 Sec. 3.262. IMPROVEMENTS IN SERVICE; INTERCONNECTING
60-26 SERVICE; EXTENDED AREA TOLL-FREE TELEPHONE SERVICE. (a) After
60-27 notice and hearing, the commission may:
61-1 (1) order a public utility to provide specified
61-2 improvements in its service in a defined area, if service in such
61-3 area is inadequate or is substantially inferior to service in a
61-4 comparable area and it is reasonable to require the company to
61-5 provide such improved service;
61-6 (2) order two or more utilities to establish specified
61-7 facilities for the interconnecting service; <and>
61-8 (3) order a telephone company or telephone companies
61-9 to provide extended area toll-free service within a specified
61-10 metropolitan area where there is a sufficient community of interest
61-11 within the area and such service can reasonably be provided; and
61-12 (4) order one or more telephone companies to provide
61-13 optional extended area service within a specified calling area if
61-14 provision of the service is jointly agreed to by the
61-15 representatives of each affected telephone company and the
61-16 representatives of a political subdivision or subdivisions within
61-17 the proposed common calling area, provided that the proposed common
61-18 calling area has a single, continuous boundary.
61-19 (b) If more than one political subdivision is affected by a
61-20 proposed optional calling plan under Subsection (a)(4) of this
61-21 section, the agreement of each political subdivision is not
61-22 required. The commission may not adopt rules that diminish in any
61-23 manner the ability of a political subdivision or affected telephone
61-24 company to enter into joint agreements for optional extended area
61-25 calling service. In this subsection and in Subsection (a)(4) of
61-26 this section, "political subdivision" means a county or
61-27 municipality or an unincorporated town or village that has 275 or
62-1 more access lines.
62-2 SECTION 35. Subtitle F, Title III, Public Utility Regulatory
62-3 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
62-4 Regular Session, 1995, is amended by adding Section 3.2625 to read
62-5 as follows:
62-6 Sec. 3.2625. PAY TELEPHONES. (a) The right of a provider
62-7 of pay telephone service to set the provider's rates and charges
62-8 and the commission's authority over the pay telephone service rates
62-9 of incumbent local exchange companies is expressly limited by this
62-10 section.
62-11 (b) A provider of pay telephone service may not impose on
62-12 pay phone end users any charge for local directory assistance or
62-13 calls made under Chapter 771 or 772, Health and Safety Code.
62-14 (c) A provider of pay telephone service may not charge end
62-15 users more than 25 cents for each five minutes, or increment of
62-16 five minutes, of a pay telephone coin sent-paid call within the
62-17 local exchange company's toll-free local calling area; provided
62-18 that the total charge for the local call may not exceed the maximum
62-19 amount allowed by Section 3.306 of this Act. This subsection does
62-20 not prohibit the commission from establishing a higher charge for
62-21 each five minutes of use or increment of five minutes, following
62-22 the completion of the proceeding provided by Section 3.457 of this
62-23 Act. This subsection does not limit the charge that may be imposed
62-24 for a credit card or operator-handled call.
62-25 (d) A provider of pay telephone service may impose a set use
62-26 fee not exceeding 25 cents at the point at which the call is
62-27 initiated for each "1-800" type call made from a pay telephone,
63-1 provided that:
63-2 (1) except for pay telephones of local exchange
63-3 companies, the pay telephone is registered with the commission and
63-4 the provider certifies that the pay telephone is in compliance with
63-5 commission rules regarding the provision of pay telephone service;
63-6 (2) the imposition of the set use fee is not
63-7 inconsistent with federal law;
63-8 (3) the fee is not imposed for any local call, 9-1-1
63-9 call, or local directory assistance call;
63-10 (4) the fee is not imposed for a call that is covered
63-11 by the Telephone Operator Consumer Services Improvement Act of 1990
63-12 (47 U.S.C. Section 226);
63-13 (5) the pay telephone service provider causes to be
63-14 posted on each pay telephone instrument, in plain sight of the user
63-15 and in a manner consistent with existing commission requirements
63-16 for posting information, the fact that the surcharge will apply to
63-17 those calls; and
63-18 (6) the commission may not impose on a local exchange
63-19 company the duty or obligation to record the use of pay telephone
63-20 service, bill or collect for the use, or remit the fee provided by
63-21 this subsection to the provider of the service.
63-22 (e) A provider of pay telephone service, other than an
63-23 incumbent local exchange company, may not charge for credit card,
63-24 calling card, or live or automated operator-handled calls a rate or
63-25 charge that is an amount greater than the authorized rates and
63-26 charges published, in the eight newspapers having the largest
63-27 circulation in this state, on March 18, 1995, provided that the
64-1 payphone rates of an incumbent local exchange company subject to
64-2 Subtitle H of this title are governed by that subtitle. The
64-3 published rates remain in effect until changed by the legislature.
64-4 (f) The commission shall adopt rules within 180 days from
64-5 the effective date of this section that require every provider of
64-6 pay telephone service not holding a certificate of convenience and
64-7 necessity to register with the commission. A provider of pay
64-8 telephone service must be registered with the commission in order
64-9 to do business in this state.
64-10 (g) The commission may order disconnection of service for up
64-11 to one year for repeat violations of commission rules.
64-12 (h) The commission may adopt rules regarding information to
64-13 be posted on pay telephone instruments, but those rules may not
64-14 require a provider of pay telephone service or an affiliate of a
64-15 provider to police the compliance with those rules by another
64-16 provider of pay telephone service.
64-17 (i) In this section, "provider of pay telephone service"
64-18 means a subscriber to customer-owned pay telephone service, an
64-19 incumbent local exchange company providing pay telephone service,
64-20 and any other entity providing pay telephone service.
64-21 SECTION 36. Section 3.263(a), Public Utility Regulatory Act
64-22 of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
64-23 Regular Session, 1995, is amended to read as follows:
64-24 (a) The commission at any time after notice and hearing may
64-25 revoke or amend any certificate of convenience and necessity,
64-26 certificate of operating authority, or service provider certificate
64-27 of operating authority if it finds that the certificate holder has
65-1 never provided or is no longer providing service in the area or
65-2 part of the area covered by the certificate.
65-3 SECTION 37. Section 3.302, Public Utility Regulatory Act of
65-4 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
65-5 Session, 1995, is amended by adding Subsection (i) to read as
65-6 follows:
65-7 (i) A commercial mobile radio service ("CMRS") provider may
65-8 offer caller identification services under the same terms and
65-9 conditions provided by Subsections (c)-(f) of this section.
65-10 SECTION 38. Section 3.303, Public Utility Regulatory Act of
65-11 1995, as enacted by S.B. 319, Acts of the 74th Legislature, Regular
65-12 Session, 1995, is amended to read as follows:
65-13 Sec. 3.303. INTEREXCHANGE SERVICES; INCUMBENT LOCAL EXCHANGE
65-14 COMPANIES' RATES. Incumbent local <Local> exchange companies'
65-15 rates for interexchange telecommunications services must be
65-16 statewide average rates unless the commission on application and
65-17 hearing orders otherwise. Nothing in this section limits an
65-18 incumbent <a> local exchange company's ability to enter into
65-19 contracts for high speed private line services of 1.544 megabits or
65-20 greater under the provisions of Section 3.051 of this Act.
65-21 SECTION 39. Sections 3.304(a) and (b), Public Utility
65-22 Regulatory Act of 1995, as enacted by S.B. 319, Acts of the 74th
65-23 Legislature, Regular Session, 1995, are amended to read as follows:
65-24 (a) To address telephone calling needs between nearby
65-25 telephone exchanges, the commission shall initiate a rulemaking
65-26 proceeding to approve rules to provide for an expedited hearing to
65-27 allow the expanding of toll-free calling areas according to the
66-1 following criteria:
66-2 (1) Toll-free calling boundaries may only be expanded
66-3 under this section after the filing of a petition signed by the
66-4 lesser of five percent of the subscribers or 100 subscribers within
66-5 an exchange. A petitioning exchange may not request expansion to
66-6 more than five exchanges. If such a petition is filed with the
66-7 commission, the commission shall order the incumbent local exchange
66-8 company to provide for the balloting of its subscribers within the
66-9 petitioning exchange and, if there is an affirmative vote of at
66-10 least 70 percent of those responding, the commission shall consider
66-11 the request.
66-12 (2) The commission shall provide for the expansion of
66-13 toll-free calling areas for each incumbent local exchange customer
66-14 in the petitioning exchange if the petitioning exchange serves not
66-15 more than 10,000 lines and if:
66-16 (A) the petitioning exchange is located within
66-17 22 miles of the exchange requested for toll-free calling service;
66-18 or
66-19 (B) the petitioning exchange shares a community
66-20 of interest with the exchange requested for toll-free calling
66-21 service. For purposes of this paragraph, "community of interest"
66-22 includes areas that have a relationship because of schools,
66-23 hospitals, local governments, business centers, and other
66-24 relationships the unavailability of which would cause a hardship to
66-25 the residents of the area but need not include an area where the
66-26 affected central offices are more than 50 miles apart.
66-27 (3)(A) The incumbent local exchange company shall
67-1 recover all of its costs incurred and all loss of revenue from any
67-2 expansion of toll-free calling areas under this section through a
67-3 request other than a revenue requirement showing by:
67-4 (i) a monthly fee for toll-free calling
67-5 service of not more than $3.50 per line for residential customers
67-6 nor more than $7 per line for business customers for up to five
67-7 exchanges, to be collected from all such residential or business
67-8 customers in the petitioning exchange and only until the incumbent
67-9 local exchange company's next general rate case;
67-10 (ii) a monthly fee for toll-free calling
67-11 service for all of the incumbent local exchange company's local
67-12 exchange service customers in the state in addition to the
67-13 company's current local exchange rates; or
67-14 (iii) both (i) and (ii).
67-15 (B) An incumbent <A> local exchange company may
67-16 not recover regulatory case expenses under this section by
67-17 surcharging petitioning exchange subscribers.
67-18 (b)(1) The commission and an incumbent <a> local exchange
67-19 company are not required to comply with this section with regard to
67-20 a petitioning exchange or petitioned exchange if:
67-21 (A) the commission determines that there has
67-22 been a good and sufficient showing of a geographic or technological
67-23 infeasibility to serve the area;
67-24 (B) the incumbent local exchange company has
67-25 less than 10,000 lines;
67-26 (C) the petitioning or petitioned exchange is
67-27 served by a cooperative;
68-1 (D) extended area service or extended
68-2 metropolitan service is currently available between the petitioning
68-3 and petitioned exchanges; or
68-4 (E) the petitioning or petitioned exchange is a
68-5 metropolitan exchange.
68-6 (2) The commission may expand the toll-free calling
68-7 area into an exchange not within a metropolitan exchange but within
68-8 the local calling area contiguous to a metropolitan exchange that
68-9 the commission determines to have a community of interest
68-10 relationship with the petitioning exchange. For the purposes of
68-11 this section, metropolitan exchange, local calling area of a
68-12 metropolitan exchange, and exchange have the meanings and
68-13 boundaries as defined and approved by the commission on September
68-14 1, 1993. However, under no circumstances shall a petitioning or
68-15 petitioned exchange be split in the provision of a toll-free
68-16 calling area.
68-17 SECTION 40. Subtitle G, Title III, Public Utility Regulatory
68-18 Act of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
68-19 Regular Session, 1995, is amended by adding Section 3.308 to read
68-20 as follows:
68-21 Sec. 3.308. CHARGE FOR EXTENDED AREA SERVICE. (a) An
68-22 incumbent local exchange company serving more than one million
68-23 access lines in this state that provides mandatory two-way extended
68-24 area service to customers for a separately stated monthly charge of
68-25 more than $3.50 per line for residential customers and $7 per line
68-26 for business customers shall file with the commission to reduce its
68-27 monthly rates for that extended area service to $3.50 per line for
69-1 residential customers and $7 per line for business customers. The
69-2 incumbent local exchange company shall recover all of its costs
69-3 incurred and all loss of revenue that results from implementation
69-4 of those rates in the manner prescribed by Section
69-5 3.304(a)(3)(A)(ii) of this Act.
69-6 (b) The commission and an incumbent local exchange company
69-7 are not required to comply with this section with regard to the
69-8 separately stated monthly charges for the provision of mandatory
69-9 two-way extended area service if the charge is for extended area
69-10 service in or into a metropolitan exchange or the charge is for
69-11 extended metropolitan service.
69-12 SECTION 41. The Public Utility Regulatory Act of 1995, as
69-13 enacted by S.B. 319, Acts of the 74th Legislature, Regular Session,
69-14 1995, is amended by amending Subtitles H and I and adding Subtitles
69-15 J-N to read as follows:
69-16 SUBTITLE H. INCENTIVE REGULATION OF TELECOMMUNICATIONS
69-17 Sec. 3.351. POLICY. Given the current status of competition
69-18 in the telecommunications industry, it is the policy of the
69-19 legislature to:
69-20 (1) provide a framework for an orderly transition from
69-21 traditional return on invested capital regulation to a fully
69-22 competitive telecommunications marketplace where all
69-23 telecommunications providers compete on fair terms;
69-24 (2) preserve and enhance universal telecommunications
69-25 service at affordable rates;
69-26 (3) upgrade the telecommunications infrastructure of
69-27 this state;
70-1 (4) promote network interconnectivity; and
70-2 (5) promote diversity in the supply of
70-3 telecommunications services and innovative products and services
70-4 throughout the entire state, both urban and rural.
70-5 Sec. 3.352. ELECTION AND BASKETS OF SERVICES. (a) After
70-6 the enactment of this subtitle, an incumbent local exchange company
70-7 may notify the commission in writing of the company's election to
70-8 be regulated under this subtitle. The notice must state the
70-9 company's commitment to limit any increase in the rates charged for
70-10 a four-year period for the services included in Section 3.353 of
70-11 this Act and its infrastructure commitment as described by Section
70-12 3.358 of this Act.
70-13 (b)(1) The services provided by an incumbent local exchange
70-14 company electing incentive regulation under this subtitle
70-15 ("electing company") shall be initially classified into three
70-16 categories or "baskets":
70-17 (A) "Basket I: basic network services";
70-18 (B) "Basket II: discretionary services"; and
70-19 (C) "Basket III: competitive services."
70-20 (2) The commission shall have the authority to
70-21 reclassify a service from Basket I to Basket II or Basket III, or
70-22 from Basket II to Basket III, consistent with the criteria
70-23 prescribed by Section 3.357 of this Act.
70-24 (c) An electing company's telecommunications services shall
70-25 be regulated under this subtitle regardless of whether that company
70-26 is a "dominant carrier" as that term is defined by Section 3.002 of
70-27 this Act.
71-1 (d) If, subsequent to the enactment of this subtitle, an
71-2 incumbent local exchange company notifies the commission in writing
71-3 of its election to incentive regulation under this subtitle, the
71-4 company may not under any circumstances be subject to any
71-5 complaint, hearing, or determination as to the reasonableness of
71-6 its rates, its overall revenues, its return on invested capital, or
71-7 its net income. However, the company's implementation and
71-8 enforcement of the competitive safeguards required by Subtitle J of
71-9 this title are not excluded from a complaint, hearing, or
71-10 determination. Nothing herein restricts any consumer's right to
71-11 complain to the commission regarding quality of service, the
71-12 commission's right to enforce quality of service standards, or the
71-13 consumer's right to complain regarding the application of an
71-14 ambiguous tariff, and if the commission finds an ambiguity, the
71-15 commission's right to determine the proper application of the
71-16 tariff or to determine the proper rate if the tariff is found to
71-17 not apply, but this does not permit the commission to lower a
71-18 tariff rate except as specifically provided by this Act, to change
71-19 its interpretation of a tariff, or to change a tariff so as to
71-20 extend its application to new classes of customers.
71-21 Sec. 3.353. BASKET I: BASIC NETWORK SERVICES. (a) The
71-22 following services shall initially be classified as basic network
71-23 services in Basket I as of September 1, 1995:
71-24 (1) flat rate residential and business local exchange
71-25 telephone service, including primary directory listings and the
71-26 receipt of a directory and any applicable mileage or zone charges;
71-27 (2) tone dialing service;
72-1 (3) lifeline and tel-assistance services;
72-2 (4) service connection charges for basic services;
72-3 (5) direct inward dialing service for basic services;
72-4 (6) private pay telephone access service;
72-5 (7) call trap and trace service;
72-6 (8) access to 911 service where provided by a local
72-7 authority and access to dual party relay service;
72-8 (9) switched access service;
72-9 (10) interconnection to competitive providers;
72-10 (11) mandatory extended area service arrangements;
72-11 (12) mandatory extended metropolitan service or other
72-12 mandatory toll-free calling arrangements;
72-13 (13) interconnection for commercial mobile radio
72-14 service providers;
72-15 (14) directory assistance; and
72-16 (15) 1+ intraLATA message toll service.
72-17 (b) On an incumbent local exchange company's election under
72-18 Section 3.352 of this Act, increases in rates for basic network
72-19 services are permitted only with commission approval and only
72-20 within the parameters specified by Subsection (c) of this section
72-21 for four years following the election. Notwithstanding the
72-22 requirements prescribed by Section 3.457 of this Act, rates for
72-23 basic network services may be decreased at any time on the
72-24 initiative of the electing company to a floor above long run
72-25 incremental cost for switched access service or the appropriate
72-26 cost for any basic local telecommunications service, which shall be
72-27 long run incremental cost as to any incumbent local exchange
73-1 company that is required by the commission to perform long run
73-2 incremental cost studies or elects to perform those studies. This
73-3 section does not affect the charges permitted under Section 3.304,
73-4 3.308, or 3.608 of this Act. The rate decreases for basic network
73-5 services permitted by this section may not be replaced by increases
73-6 in the assessment for the Regulatory Transition Fund (RTF) except
73-7 as specifically permitted by Section 3.610 of this Act. The
73-8 commission may not increase service standards applicable to the
73-9 provision of local exchange telephone service by an electing
73-10 company if the increased investment required to comply with the
73-11 increased standard exceeds in any one year 10 percent of the
73-12 incumbent local exchange company's average annual intrastate
73-13 additions in capital investment for the most recent five-year
73-14 period. In calculating the average, the incumbent local exchange
73-15 company shall exclude extraordinary investments made during that
73-16 five-year period. If the local exchange rates of an electing local
73-17 exchange company are reduced at its initiation before the adoption
73-18 of the pricing rule provided by Section 3.457 of this Act, the
73-19 total amount of the annual reduction shall be deducted from the
73-20 total amount of embedded non-traffic sensitive costs computed under
73-21 Section 3.610(h) of this Act.
73-22 (c)(1) Rates for basic network services may be changed in
73-23 the following circumstances and only with commission approval that
73-24 the proposed change is included in this subsection.
73-25 (2) On motion of an electing incumbent local exchange
73-26 company or on its own motion, the commission shall proportionally
73-27 adjust prices for services to reflect changes in Federal
74-1 Communications Commission separations affecting intrastate net
74-2 income by 10 percent or more.
74-3 (3) If, after 42 months after the date of the
74-4 incumbent local exchange company's election, an electing company in
74-5 this state with less than five million access lines is in
74-6 compliance with its infrastructure commitment, all quality of
74-7 services requirements, and all commission rules enacted under
74-8 Subtitle J of this title, on application of the incumbent local
74-9 exchange company, the commission may undertake a proceeding to
74-10 review the need for changes in the rates of services. The
74-11 application may request that the commission adjust rates, implement
74-12 new pricing plans, restructure rates, or rebalance revenues between
74-13 services to recognize changed market conditions and the effects of
74-14 competitive entry. The commission may use an index and a
74-15 productivity offset in determining these changes. The commission
74-16 may not order an increase in residential local exchange telephone
74-17 service that would cause those rates to increase by more than the
74-18 United States Consumer Price Index in any 12-month period. In no
74-19 case may the new monthly rate exceed the nationwide average of
74-20 local exchange telephone service rates for like services. A
74-21 company electing to receive regulatory transition fund (RTF)
74-22 receipts under Section 3.610 of this Act may not be permitted to
74-23 increase switched access rates under this subdivision.
74-24 (4) The commission may authorize increases permitted
74-25 by Section 3.610 of this Act.
74-26 (5) Notwithstanding the commitments made under Section
74-27 3.352 of this Act, a rate group reclassification occurring as a
75-1 result of access lines growth shall be allowed by the commission on
75-2 request of the electing company.
75-3 (d)(1) Except as provided by Section 3.2572 of this Act, the
75-4 regulation of basic network services of an electing company shall,
75-5 to the extent not inconsistent with this subtitle, be governed by:
75-6 (A) Title I of this Act;
75-7 (B) this subtitle;
75-8 (C) Subtitles A, B, C, F, G, J, K, and L of this
75-9 title;
75-10 (D) Sections 3.201, 3.202, 3.204, 3.210, 3.211,
75-11 3.215, 3.216, 3.217, 3.218, and 3.219 of this Act; and
75-12 (E) all commission procedures and rules not
75-13 inconsistent with this subtitle.
75-14 (2) Changes to the terms and conditions of the tariff
75-15 offering of a basic network service, other than price changes,
75-16 continue to require commission approval.
75-17 (e) The rates capped in Subsection (b) of this section as a
75-18 result of a company's election shall be the rates charged by the
75-19 company on June 1, 1995, without regard to proceedings pending
75-20 under Section 1.301 or 3.210 of this Act or under Subchapter G,
75-21 Chapter 2001, Government Code. However, for an electing local
75-22 exchange company with more than one million access lines in this
75-23 state, if income tax-related issues in any pending proceeding under
75-24 Subchapter G, Chapter 2001, Government Code, are resolved against
75-25 the company, the company shall spend the value of the tax issues
75-26 for the test period on that company's infrastructure commitment
75-27 under Section 3.358, and that expenditure shall be credited against
76-1 the amounts required by Sections 3.358(c) and (d) of this Act.
76-2 Sec. 3.354. RATE ADJUSTMENT PROCEDURES. (a) An electing
76-3 company may adjust its rates for basic network services under
76-4 Section 3.353(c) of this Act on notice to the commission. The
76-5 notice to the commission of a rate adjustment must be accompanied
76-6 with sufficient documentary support to demonstrate that the rate
76-7 adjustment meets the criteria prescribed by Section 3.353(c) of
76-8 this Act. The commission shall establish by rule or order the
76-9 documentation to be required under this subsection.
76-10 (b) Notice to customers shall be published once in a
76-11 newspaper of general circulation in the service area to be affected
76-12 within a reasonable time period after the notice for a rate
76-13 adjustment is provided to the commission, and shall be included in
76-14 or on the bill of each affected consumer in the next billing
76-15 subsequent to the filing with the commission. The notice shall
76-16 contain a title that includes the name of the company and the words
76-17 "NOTICE OF POSSIBLE RATE CHANGE." The notice shall contain the
76-18 following information:
76-19 (1) a statement that the consumer's rate may change;
76-20 (2) an estimate of the amount of the annual change for
76-21 the typical residential, business, or access consumers that would
76-22 result if the rate adjustment is approved by the commission, which
76-23 estimate shall be printed in a type style and size that are
76-24 distinct from and larger than the type style and size of the body
76-25 of the notice; and
76-26 (3) a statement that a consumer who wants to comment
76-27 on the rate adjustment or who wants additional details regarding
77-1 the rate adjustment may call or write the commission, which
77-2 statement must include the telephone number and address of the
77-3 commission and a statement that additional details will be provided
77-4 free of charge to the consumer at the expense of the company.
77-5 (c) The commission shall review the adjusted rates to ensure
77-6 that the proposed adjustment conforms to the requirements of
77-7 Section 3.353(c) of this Act. A rate adjustment under Section
77-8 3.353(c)(2), (3), (4), or (5) of this Act takes effect 90 days
77-9 after the date of completion of notice.
77-10 (d) An incumbent local exchange company that has five
77-11 percent or fewer of the total access lines in this state may adopt
77-12 the cost, if determined based on a long run incremental cost study,
77-13 for the same or substantially similar services offered by a larger
77-14 incumbent local exchange company without the requirement of
77-15 presenting long run incremental cost studies of its own.
77-16 (e) Either by complaint filed by an affected party or on the
77-17 commission's own motion at any time before the rate adjustment
77-18 takes effect, the commission may suspend the effective date of the
77-19 rate adjustment and hold a hearing to review a rate set under
77-20 Section 3.353(c)(2), (3), (4), or (5) of this Act and after the
77-21 review issue an order approving, modifying, or rejecting the rate
77-22 adjustment if it is not in compliance with the applicable
77-23 provisions. Any order modifying or rejecting the proposed rate
77-24 adjustment shall specify each reason why the proposed adjustment is
77-25 not in compliance with the applicable provisions of Section
77-26 3.353(c)(2), (3), (4), or (5) of this Act and the means by which
77-27 the proposed adjustment may be brought into compliance.
78-1 (f) Any rate restructure under Section 3.353(c) of this Act
78-2 shall follow the notice and hearing procedures prescribed by
78-3 Sections 3.211(a)-(c) of this Act.
78-4 Sec. 3.355. BASKET II: DISCRETIONARY SERVICES. (a) Basket
78-5 II services include all services or functions provided by the
78-6 electing company that have not been granted pricing flexibility in
78-7 a particular geographic market and that have not been listed under
78-8 Baskets I or III.
78-9 (b) The following services are initially classified as
78-10 discretionary services in Basket II as of September 1, 1995:
78-11 (1) 1+ intraLATA message toll services, where
78-12 intraLATA equal access is available;
78-13 (2) 0+, 0- operator services;
78-14 (3) call waiting, call forwarding, and custom calling
78-15 features not listed in Basket III;
78-16 (4) call return, caller ID, and call control options
78-17 not listed in Basket III;
78-18 (5) central office based PBX-type services;
78-19 (6) billing and collection services;
78-20 (7) integrated services digital network (ISDN)
78-21 services; and
78-22 (8) new services.
78-23 (c) The commission may reclassify a service from Basket I to
78-24 Basket II or Basket III, or from Basket II to Basket III,
78-25 consistent with the criteria prescribed by Section 3.357 of this
78-26 Act.
78-27 (d) The prices for each Basket II service or function
79-1 provided by the electing company shall be set above the LRIC cost.
79-2 The commission shall set the reasonable price ceiling over and
79-3 above LRIC cost, but the ceiling may not be set below or above the
79-4 rate in effect on September 1, 1995, without regard to proceedings
79-5 pending under Section 1.301 or 3.210 of this Act or under
79-6 Subchapter G, Chapter 2001, Government Code. The ceiling may be
79-7 raised only after the proceedings required under Subtitle J of this
79-8 title. Thereafter, the commission may change the price ceiling but
79-9 may not increase the ceiling more than 10 percent annually. Within
79-10 the range of the LRIC floor and the price ceiling, the incumbent
79-11 local exchange company may change the price of each service,
79-12 including using volume and term discounts, zone density pricing,
79-13 packaging of services, customer specific pricing, and other
79-14 promotional pricing flexibility, but shall notify the commission of
79-15 each change. The placement of a service in Basket II does not
79-16 preclude an incumbent local exchange company from using any of the
79-17 regulatory treatments authorized by or under Section 3.051 of this
79-18 Act. Discounts and other forms of pricing flexibility may not be
79-19 preferential, prejudicial, or discriminatory.
79-20 Sec. 3.356. BASKET III: COMPETITIVE SERVICES. (a) The
79-21 following services are Basket III competitive services and shall be
79-22 subject to pricing flexibility as of September 1, 1995:
79-23 (1) services described in the WATS tariff as of
79-24 January 1, 1995;
79-25 (2) 800 and foreign exchange services;
79-26 (3) private line service;
79-27 (4) special access service;
80-1 (5) services from public pay telephones;
80-2 (6) paging services and mobile services (IMTS);
80-3 (7) 911 premises equipment;
80-4 (8) speed dialing; and
80-5 (9) three-way calling.
80-6 (b) The commission may reclassify a service from Basket I to
80-7 Basket II or Basket III or from Basket II to Basket III, consistent
80-8 with the criteria prescribed by Section 3.357 of this Act.
80-9 (c) The electing company may set the price for the service
80-10 at any level above the service's LRIC, in compliance with the
80-11 imputation rules established under Subtitle J of this title.
80-12 Permissible pricing flexibility includes volume and term discounts,
80-13 zone density pricing, packaging of services, customer specific
80-14 contracts, and other promotional pricing flexibility, subject to
80-15 the requirements of Section 3.451 of this Act. Discounts and other
80-16 forms of pricing flexibility may not be preferential, prejudicial,
80-17 or discriminatory. However, an electing incumbent local exchange
80-18 company may not increase the price of a service in a geographic
80-19 area in which that service or a functionally equivalent service is
80-20 not readily available from another provider.
80-21 (d) Not later than January 1, 2000, the commission shall
80-22 initiate a review and evaluation of any incumbent local exchange
80-23 company electing treatment under this subtitle or Subtitle I of
80-24 this title to review and evaluate the effects of the election,
80-25 including consumer benefits, impact of competition, infrastructure
80-26 investments, and quality of service. The commission shall file a
80-27 report and its recommendations to the legislature by January 1,
81-1 2001, as to whether the incentive regulation plan should be
81-2 extended, modified, eliminated, or replaced with some other form of
81-3 regulation. The legislature, based on the commission's report, may
81-4 authorize the commission to take action to extend, modify,
81-5 eliminate, or replace the incentive plan provided by this subtitle
81-6 and Subtitle I of this title.
81-7 Sec. 3.357. TRANSFERRING SERVICES. (a) In determining
81-8 whether to transfer services from Basket I to Basket II or Basket
81-9 III, or from Basket II to Basket III the commission shall establish
81-10 standards that consider factors including:
81-11 (1) availability of the service from other providers;
81-12 (2) the proportion of the market that currently
81-13 receives the service;
81-14 (3) the effect of the transfer on subscribers of the
81-15 service; and
81-16 (4) the nature of the service.
81-17 (b) The commission may not transfer a service from one
81-18 basket to another until full implementation of all competitive
81-19 safeguards required by Sections 3.452, 3.453, 3.454, 3.455, 3.456,
81-20 3.457, and 3.458 of this Act.
81-21 Sec. 3.358. INFRASTRUCTURE COMMITMENT. (a) A company
81-22 electing under Section 3.352 shall make an infrastructure
81-23 commitment in writing to the governor and commission, committing to
81-24 make a telecommunications infrastructure investment in this state.
81-25 The electing company shall invest in the improvement and
81-26 development of the state telecommunications infrastructure in
81-27 accordance with this section.
82-1 (b)(1) The infrastructure investment shall be made in the
82-2 company's service territory during the six-year period following
82-3 the notification by the incumbent local exchange company that it
82-4 will become an electing company. The infrastructure investment
82-5 shall include the network enhancements and special rates prescribed
82-6 by this subsection.
82-7 (2) On customer request, the electing company shall
82-8 provide broadband service capable of providing transmission speeds
82-9 of up to 45 megabits per second for customer applications to any
82-10 educational institution, as that term is defined by Section 3.605
82-11 of this Act, library, and public or not-for-profit hospital or
82-12 primary health care provider.
82-13 (3) Educational institutions, libraries, or hospitals
82-14 receiving the services provided under this section may not be
82-15 assessed special construction or installation charges.
82-16 (4) If the distance learning customer group has 10 or
82-17 fewer locations, the electing company shall provide a 35-percent
82-18 discount of its preferred customer monthly charges for equivalent
82-19 services for a direct connection of the service between each
82-20 location and the central office that serves as the operating hub
82-21 for the applicable distance learning customer group.
82-22 Notwithstanding the pricing flexibility authorized by this Act, the
82-23 electing company's rates for this service may not be increased for
82-24 four years from the date of election. An educational institution
82-25 or a library may elect this rate treatment or the discount provided
82-26 by Section 3.605 of this Act.
82-27 (5) If the telemedicine customer group has 10 or fewer
83-1 locations, the electing company shall provide a 35-percent discount
83-2 of its preferred customer monthly charges for equivalent services
83-3 for a direct connection of the service between each location and
83-4 the central office that serves as the operating hub for the
83-5 applicable distance learning customer group. Notwithstanding the
83-6 pricing flexibility authorized by this Act, the electing company's
83-7 rates for this service may not be increased for four years from the
83-8 date of election.
83-9 (6) On request for 1.544 megabits per second private
83-10 line or special access service, there shall be a 35-percent
83-11 discount of the applicable tariff or special access rate for
83-12 preferred monthly charges for equivalent services for educational
83-13 institutions and libraries. This discount is in lieu of the
83-14 discount provided by Section 3.605 of this Act.
83-15 (7) On request by schools or libraries in exchanges of
83-16 an electing company serving more than five million access lines in
83-17 which toll-free access to the Internet is not available, the local
83-18 exchange company shall make available a toll-free connection or
83-19 toll-free dialing arrangement for use by schools or libraries in
83-20 accessing the Internet in an exchange in which Internet access is
83-21 available on a toll-free basis. The connection or dialing
83-22 arrangement shall be provided at no charge to the school or library
83-23 until Internet access becomes available in the exchange of the
83-24 requesting school or library. The local exchange company is not
83-25 required to arrange for Internet access or to pay Internet charges
83-26 for the requesting schools or libraries.
83-27 (8) On request of a distance learning customer group
84-1 having 10 or fewer locations where there are different special
84-2 access or tariff rates for individual customers within the serving
84-3 group used to provide the basis for the discount, the electing
84-4 company shall request special access rates for the distance
84-5 learning customer group based on the most cost-effective rate
84-6 structure for the distance learning customer group.
84-7 (9) An electing company of one million access lines or
84-8 more that is obligated to make an investment and incur expenses to
84-9 accomplish the requirements of this section shall give investment
84-10 priority to serving rural areas, areas designated as critically
84-11 underserved, medically or educationally, and schools with high
84-12 percentages of economically disadvantaged students.
84-13 (10) For an electing company serving more than one
84-14 million access lines and fewer than five million access lines, the
84-15 company may include as infrastructure investments any investments
84-16 and expenses incurred in providing digital switching central
84-17 offices in exchanges having fewer than 20,000 access lines, but
84-18 only if those investments and expenses are incurred after September
84-19 1, 1995, and before December 31, 1998.
84-20 (c) For an electing company serving five million access
84-21 lines or more, the obligation to make investments and incur
84-22 expenses to accomplish the requirements of this section is equal to
84-23 $1.1 billion over the six-year period. If five years after that
84-24 company's election demand for broadband facilities as described by
84-25 Subsection (b) of this section has not required the company to
84-26 invest the entire amount specified by this subsection or to have
84-27 plans for that investment in the sixth year, the company and the
85-1 commission shall agree on a plan in which the company commits to
85-2 invest the remaining unspent balance in the infrastructure plan
85-3 described by this section, make a grant equal to the unspent
85-4 balance to the Telecommunications Infrastructure Fund provided by
85-5 Section 3.606 of this Act, or both.
85-6 (d) For an electing company serving more than one million
85-7 access lines and fewer than 5 million access lines, the obligation
85-8 to make investments and incur expenses to accomplish the
85-9 requirements of this section is equal to $300 million over the
85-10 six-year period. If five years after that company's election
85-11 demand for broadband facilities as described by Subsection (b) of
85-12 this section has not required the company to invest the entire
85-13 amount specified by this subsection or to have plans for that
85-14 investment in the sixth year, the company and the commission shall
85-15 agree on a plan in which the company commits to invest the
85-16 remaining unspent balance in the infrastructure plan described by
85-17 this subsection, make a grant equal to the unspent balance to the
85-18 Telecommunications Infrastructure Fund provided by Section 3.606 of
85-19 this Act, or both.
85-20 (e) An electing company that is not covered by a specific
85-21 infrastructure investment provision prescribed by this section
85-22 shall make the infrastructure investment required by Section 3.403
85-23 of this Act.
85-24 (f) Each electing company shall file a report with the
85-25 commission each year on the anniversary date of its election that
85-26 sets forth its progress on its infrastructure commitment. The
85-27 report shall include:
86-1 (1) the institutions requesting service under this
86-2 section;
86-3 (2) the institutions served under this section;
86-4 (3) investment and expense in the previous period and
86-5 cumulative for all periods; and
86-6 (4) any other information the commission considers
86-7 necessary.
86-8 (g) In this section:
86-9 (1) "Distance learning customer group" means a group
86-10 of educational institutions' premises, libraries, or both, that
86-11 conduct distance learning and information sharing programs or
86-12 library services with and among each other. The number of premises
86-13 of a group may be subject to the technical limitations of the
86-14 service.
86-15 (2) "Telemedicine customer group" means a group of
86-16 hospitals and primary health care facilities that conduct
86-17 telemedicine programs with and among each other. The number of
86-18 premises of a group may be subject to the technical limitations of
86-19 the service.
86-20 SUBTITLE I. INFRASTRUCTURE PLAN FOR RATE OF RETURN COMPANIES
86-21 Sec. 3.401. POLICY. It is the policy of the legislature
86-22 that those incumbent local exchange companies that do not elect to
86-23 be regulated under Subtitle H of this title should nevertheless
86-24 have incentives to deploy infrastructure that will benefit the
86-25 citizens of this state, while maintaining reasonable local rates
86-26 and universal service.
86-27 Sec. 3.402. ELECTION. (a) An incumbent local exchange
87-1 company serving less than five percent of the access lines in this
87-2 state that has not elected incentive regulation under Subtitle H of
87-3 this title may elect for an infrastructure plan under this subtitle
87-4 by notifying the commission in writing of its election under this
87-5 section.
87-6 (b)(1) For a period of six years after the election date, an
87-7 electing incumbent local exchange company may not seek an increase
87-8 in any rate previously established for that company under this Act,
87-9 except for the charges permitted under Sections 3.304, 3.308,
87-10 3.608, and 3.610 of this Act, and in the following circumstances
87-11 and only with commission approval that the proposed change is
87-12 included in this subsection.
87-13 (2) On motion of an electing incumbent local exchange
87-14 company or on its own motion, the commission shall adjust prices
87-15 for services to reflect changes in Federal Communications
87-16 Commission separations affecting intrastate net income by 10
87-17 percent or more.
87-18 (3) A rate group classification occurring as a result
87-19 of access lines growth shall be allowed by the commission on
87-20 request of the electing company.
87-21 (c) Section 3.354 of this Act applies to a rate change under
87-22 Subsection (b) of this section.
87-23 (d) If, subsequent to the enactment of this subtitle, an
87-24 incumbent local exchange company notifies the commission in writing
87-25 of its election to the alternative infrastructure plan under this
87-26 subtitle, the electing company may not for a period of six years
87-27 after the election date under any circumstances be subject to any
88-1 complaint or hearing as to the reasonableness of its rates, its
88-2 overall revenues, its return on invested capital, or its net income
88-3 if the electing incumbent local exchange company is complying with
88-4 its infrastructure commitment under Section 3.403 of this Act, nor
88-5 may an electing company be subject to a complaint that any
88-6 particular rate is excessive. However, the company's
88-7 implementation of the competitive safeguards required by Subtitle J
88-8 of this title are not excluded from a complaint, hearing, or
88-9 determination. Nothing herein restricts any consumer's right to
88-10 complain to the commission regarding quality of service, the
88-11 commission's right to enforce quality of service standards, or the
88-12 consumer's right to complain regarding the application of an
88-13 ambiguous tariff, and if the commission finds an ambiguity, the
88-14 commission's right to determine the proper application of the
88-15 tariff or to determine the proper rate if the tariff is found to
88-16 not apply, but this does not permit the commission to lower a
88-17 tariff rate except as specifically provided by this Act, to change
88-18 its interpretation of a tariff, or to change a tariff so as to
88-19 extend its application to new classes of customers. The commission
88-20 may not increase service standards applicable to the provision of
88-21 local exchange telephone service by an electing company if the
88-22 increased investment required to comply with the increased standard
88-23 exceeds in any one year 10 percent of the incumbent local exchange
88-24 company's average annual intrastate additions in capital investment
88-25 for the most recent five-year period. In calculating the average,
88-26 the incumbent local exchange company shall exclude extraordinary
88-27 investments made during the five-year period.
89-1 (e) On application by an electing incumbent local exchange
89-2 company, the commission may allow a company to withdraw its
89-3 election under this section but only for good cause. For the
89-4 purpose of this section, good cause includes only matters that were
89-5 beyond the control of the incumbent local exchange company.
89-6 (f) This section does not prohibit an incumbent local
89-7 exchange company from making an election under Section 3.352 at any
89-8 time, and if the company so elects, the infrastructure commitment
89-9 made under Section 3.403 of this Act offsets any infrastructure
89-10 commitment required in connection with the Section 3.352 election.
89-11 (g) The rates capped by Subsection (b) of this section as a
89-12 result of a company's election shall be the rates charged by the
89-13 company at the date of its election without regard to proceedings
89-14 pending under Section 1.301 or 3.210 of this Act or under
89-15 Subchapter G, Chapter 2001, Government Code.
89-16 (h) In this section, "election date" means the date on which
89-17 the commission receives notice of election under this section.
89-18 Sec. 3.403. INFRASTRUCTURE COMMITMENT. (a) A company
89-19 electing under Section 3.402 of this Act shall make an
89-20 infrastructure commitment in writing to the governor and
89-21 commission, committing to make the following telecommunications
89-22 infrastructure investment in this state over a six-year period
89-23 following the company's election.
89-24 (b)(1) The infrastructure investment shall include the
89-25 network enhancements and special rates prescribed by this
89-26 subsection.
89-27 (2) On customer request, the electing company shall
90-1 provide broadband service capable of providing transmission speeds
90-2 of up to 45 megabits per second for customer applications to any
90-3 educational institution as that term is defined by Section 3.605 of
90-4 this Act, library, and public or not-for-profit hospital or primary
90-5 health care provider.
90-6 (3) Educational institutions, libraries, or hospitals
90-7 receiving the services provided under this section may not be
90-8 assessed special construction or installation charges.
90-9 (c) The electing company's infrastructure investment
90-10 obligation over the six-year period is an amount equal to 15
90-11 percent of the company's intrastate revenues in the year of
90-12 election.
90-13 (d) On request for 1.544 megabits per second private line or
90-14 special access service, there shall be a 35-percent discount of the
90-15 applicable tariff or special access rate for preferred monthly
90-16 charges for equivalent services for educational institutions and
90-17 libraries. This discount is in lieu of the discount provided by
90-18 Section 3.605 of this Act.
90-19 (e) If five years after that company's election demand for
90-20 broadband facilities as described by Subsection (b) has not
90-21 required the company to invest the entire amount specified by
90-22 Subsection (c) or to have plans for that investment in the sixth
90-23 year, the company and the commission shall agree on a plan in which
90-24 the company commits to invest the remaining unspent balance in the
90-25 infrastructure plan described by this section, make a grant equal
90-26 to the unspent balance to the "Telecommunications Infrastructure
90-27 Fund" provided by Section 3.606 of this Act, or both.
91-1 (f) An electing company investment qualifies as an
91-2 infrastructure development commitment under this section only if
91-3 the investment is in addition to the company's annual capital
91-4 investment averaged over the three years preceding the date of
91-5 the election. However, the electing company may apply to the
91-6 commission for a determination that extraordinary expenditures
91-7 justify using a different method for determining the level of
91-8 investment above which the expenditure qualifies as an
91-9 infrastructure commitment under this section.
91-10 (g) Each electing company shall file a report with the
91-11 commission each year on the anniversary date of its election that
91-12 sets forth its progress on its infrastructure commitment. The
91-13 report shall include:
91-14 (1) the institutions requesting service under this
91-15 section;
91-16 (2) the institutions served under this section;
91-17 (3) investment and expense in the previous period and
91-18 cumulative for all periods; and
91-19 (4) any other information the commission considers
91-20 necessary.
91-21 SUBTITLE J. COMPETITIVE SAFEGUARDS
91-22 Sec. 3.451. COMPETITIVE SAFEGUARDS. (a) To the extent
91-23 necessary to ensure that competition in telecommunications is fair
91-24 to all participants and to accelerate the improvement of
91-25 telecommunications in the state, the commission shall ensure that
91-26 the rates and regulations of an incumbent local exchange company
91-27 are not unreasonably preferential, prejudicial, or discriminatory
92-1 but are equitable and consistent in application.
92-2 (b) Section 3.352(d) of this Act does not prevent the
92-3 commission from enforcing this subtitle.
92-4 (c) The commission has exclusive jurisdiction to implement
92-5 competitive safeguards.
92-6 Sec. 3.452. UNBUNDLING. (a) An incumbent local exchange
92-7 company shall, at a minimum, unbundle its network to the extent
92-8 ordered by the Federal Communications Commission.
92-9 (b) Before the adoption of the pricing rules required by
92-10 Section 3.457 of this Act, the commission shall hold a hearing and
92-11 adopt an order on the issue of requiring further unbundling of
92-12 local exchange company services.
92-13 (c) The commission may order further unbundling only after
92-14 considering the public interest and competitive merits of further
92-15 unbundling. The commission may proceed by rulemaking or, if
92-16 requested by a party, shall proceed by evidentiary hearing.
92-17 (d) Following unbundling, the commission may assign the
92-18 unbundled components to the appropriate Basket according to the
92-19 purposes and intents of those Baskets.
92-20 Sec. 3.453. RESALE. (a) An incumbent local exchange
92-21 company serving one million or more access lines or electing the
92-22 incentive regulation plan under Subtitle H of this title shall file
92-23 a usage sensitive loop resale tariff by September 1, 1995. An
92-24 incumbent local exchange company serving fewer than one million
92-25 access lines or not electing under Subtitle H of this title shall
92-26 file a resale tariff within 60 days of the date on which a
92-27 certificate of operating authority or service provider certificate
93-1 of operating authority is granted under Subtitle F of this title.
93-2 (b) "Loop" resale as used in this section means the purchase
93-3 of the local distribution channel or "loop" facility from the
93-4 incumbent local exchange company for the purpose of resale to end
93-5 user customers.
93-6 (c) The commission shall conduct any proceeding it
93-7 determines appropriate to determine the rates, terms, and
93-8 conditions for this tariff within 180 days of filing. The
93-9 commission may:
93-10 (1) only approve a usage sensitive rate that recovers
93-11 the total long run incremental cost of the loop on an unseparated
93-12 basis, plus an appropriate contribution to joint and common costs;
93-13 and
93-14 (2) only permit a holder of a certificate of
93-15 convenience or necessity, certificate of operating authority, or
93-16 service provider certificate of operating authority to purchase
93-17 from the resale tariff, except as provided by Subsection (f)(1) of
93-18 this section.
93-19 (d) On September 1, 1995, a provider of telecommunications
93-20 service may not impose any restriction on the resale or sharing of
93-21 any service for which it is not a dominant provider nor, as to any
93-22 incumbent local exchange company electing alternative regulation
93-23 under Subtitle H of this title, for any service entitled to
93-24 regulatory treatment under Basket III as described by Section 3.356
93-25 of this Act.
93-26 (e) A holder of a certificate of operating authority or
93-27 service provider certificate of operating authority has the
94-1 reciprocal obligation to permit local exchange companies to resell
94-2 its existing loop facilities at its regularly published rates if
94-3 the local exchange company has no loop facilities and has a request
94-4 for service.
94-5 (f)(1) The commission shall eliminate all resale
94-6 prohibitions in an electing incumbent local exchange company's
94-7 tariffs on:
94-8 (A) completion of the commission's costing and
94-9 pricing rulemaking and the establishment and funding of the
94-10 regulatory transition fund (RTF);
94-11 (B) completion of rate rebalancing of the
94-12 incumbent local exchange company rates required by Section 3.457 of
94-13 this Act; and
94-14 (C) removal of all prohibitions on incumbent
94-15 local exchange companies providing interLATA service.
94-16 (2) When the commission eliminates the resale
94-17 prohibitions under this subsection, it shall continue to prohibit
94-18 the resale of local exchange or directory assistance flat rate
94-19 services as a substitute for usage sensitive services. If the
94-20 commission finds that the rate for a particular service or function
94-21 will, as a result of the costing and pricing proceeding, be less
94-22 than the cost of providing the service or function and that the
94-23 difference in rate and cost will not be recovered from the
94-24 universal service fund, the service may be offered for resale only
94-25 to the same class of customer as sold to by the incumbent local
94-26 exchange company.
94-27 (g) Nothing herein alters resale or sharing arrangements
95-1 presently permitted in incumbent local exchange company tariffs
95-2 existing on September 1, 1995.
95-3 Sec. 3.454. IMPUTATION. (a) Not later than December 1,
95-4 1996, the commission shall adopt rules governing imputation of the
95-5 price of a service.
95-6 (b) Imputation is a regulatory policy the commission shall
95-7 apply to prevent an incumbent local exchange company from selling a
95-8 service or function to another telecommunications utility at a
95-9 price that is higher than the rate the incumbent local exchange
95-10 company implicitly includes in services it provides to its retail
95-11 customers.
95-12 (c) The commission may require imputation only of the price
95-13 of a service that is:
95-14 (1) not generally available from a source other than
95-15 the incumbent local exchange company; and
95-16 (2) necessary for the competitor to provide its
95-17 competing services.
95-18 (d) The commission may not require imputation of the price
95-19 to a local exchange telephone service while the price is capped
95-20 under Subtitle H or I of this title.
95-21 (e) The price of switched access service shall be imputed to
95-22 the price of each service for which switched access service is a
95-23 component until switched access service is competitively available.
95-24 (f) The commission may not require imputation on a
95-25 rate-element-by-element basis but only on a service-by-service
95-26 basis.
95-27 (g) For a service provided under a customer specific
96-1 contract for which imputation may be required under Subsection (c)
96-2 of this section, the commission may not require imputation on a
96-3 rate-element-by-element basis but only on a service-by-service
96-4 basis within the contract.
96-5 (h) The incumbent local exchange company shall demonstrate
96-6 that the price it charges for its retail service recovers the costs
96-7 of providing the service. For purposes of this subsection, the
96-8 costs of providing the service is defined as the sum of:
96-9 (1) specifically tariffed premium rates for the
96-10 noncompetitive services or service functions, or elements of these
96-11 noncompetitive services or service functions (or their functional
96-12 equivalent) that are used to provide the service;
96-13 (2) the total service long run incremental costs of
96-14 the competitive services or service functions that are used;
96-15 (3) any costs, not otherwise reflected in Subdivision
96-16 (1) or (2) of this subsection, that are specifically associated
96-17 with the provision of the service or group of services; and
96-18 (4) any cost or surcharge associated with an explicit
96-19 subsidy that is applied to all providers of the service for the
96-20 purpose of promoting universal service.
96-21 (i) The commission may waive an imputation requirement for
96-22 any public interest service such as 9-1-1 service and dual party
96-23 relay service if the commission determines that the waiver is in
96-24 the public interest.
96-25 Sec. 3.455. Telecommunications Number Portability. (a)
96-26 Because a uniform national number plan is valuable and necessary to
96-27 the state, the commission by rule shall adopt guidelines governing
97-1 telecommunications number portability and the assignment of
97-2 telephone numbers in a competitively neutral manner. The
97-3 commission rules may not be inconsistent with the rules and
97-4 regulations of the Federal Communications Commission regarding
97-5 telecommunications number portability.
97-6 (b) In this Act, "telecommunications number portability"
97-7 means the ability of a user of telecommunications services, to the
97-8 extent technically feasible, to retain an existing telephone number
97-9 without impairing the quality, reliability, or convenience of
97-10 service when changing from one provider of telecommunications
97-11 service to another provider.
97-12 (c) As an interim measure, the commission shall adopt
97-13 reasonable mechanisms to allow consumers to retain their telephone
97-14 numbers. At a minimum, these mechanisms shall include the use of
97-15 call forwarding functions and direct inward dialing for those
97-16 purposes. An incumbent local exchange company with one million
97-17 access lines or more shall file tariffs before November 1, 1995,
97-18 and the commission, before March 1, 1996, shall determine
97-19 reasonable rates to be charged for call forwarding functions used
97-20 as an interim number portability measure by a new entrant. An
97-21 incumbent local exchange company with fewer than one million access
97-22 lines where a certificate of operating authority or a service
97-23 provider certificate of operating authority has been granted shall
97-24 file tariffs within 60 days after the date of a bona fide request,
97-25 and the commission, within 60 days after the date the tariffs are
97-26 filed, shall determine reasonable rates to be charged for call
97-27 forwarding functions used as an interim number portability measure
98-1 by a new entrant.
98-2 Sec. 3.456. Expanded Interconnection. Not later than
98-3 September 1, 1996, the commission shall adopt rules for expanded
98-4 interconnection that:
98-5 (1) are consistent with the rules and regulations of
98-6 the Federal Communications Commission relating to expanded
98-7 interconnection;
98-8 (2) treat intrastate private line services as special
98-9 access service; and
98-10 (3) provide that if an incumbent local exchange
98-11 company is required to provide expanded interconnection to another
98-12 local exchange company, the second local exchange company shall, in
98-13 a like manner, provide expanded interconnection to the first
98-14 company.
98-15 Sec. 3.457. COSTING AND PRICING. (a)(1) The commission
98-16 shall complete a pricing rulemaking and adopt a pricing rule by
98-17 April 1, 1997. Companies subject to that rule shall file cost
98-18 studies and necessary supporting data not later than November 1,
98-19 1996, unless specific waivers are authorized.
98-20 (2) The commission has 85 days after the date a cost
98-21 study is submitted to administratively approve it or to order that
98-22 changes be made. If the commission delegates the approval to an
98-23 administrative law judge or hearings examiner, the judge or
98-24 examiner has 85 days to administratively approve it or to order
98-25 that changes be made. The commission may not conduct a contested
98-26 case to approve a cost study submitted under this section.
98-27 (3) Any party may appeal to the commission an
99-1 administrative determination by an administrative law judge or
99-2 hearings examiner under Subdivision (2) of this subsection within
99-3 five days after the date of notification of the determination. The
99-4 commission shall rule on the appeal within 30 days after the date
99-5 it receives the appeal.
99-6 (4) If the commission or an administrative law judge
99-7 or hearings examiner orders a cost study to be changed, the judge
99-8 or examiner shall order the company to make those changes within a
99-9 period that is commensurate with the complexity of the study and
99-10 the need to complete the cost studies in a timely manner.
99-11 (5) The parties shall be permitted expedited discovery
99-12 after a cost study is submitted. The commission shall fairly
99-13 evaluate the comments or pleadings filed by any party regarding the
99-14 cost study.
99-15 (b) In adopting the pricing rule, the commission shall:
99-16 (1) ensure that prices for monopoly services remain
99-17 affordable;
99-18 (2) ensure that prices for competitive services may
99-19 not be:
99-20 (A) unreasonably preferential, prejudicial, or
99-21 discriminatory;
99-22 (B) subsidized either directly or indirectly by
99-23 noncompetitive services; or
99-24 (C) predatory or anticompetitive; and
99-25 (3) require that each service recover the appropriate
99-26 cost, including appropriate joint and common costs, of any and all
99-27 facilities and functions used to provide that service.
100-1 (c) The commission shall allow an incumbent local exchange
100-2 company that is not a Tier 1 local exchange company as of September
100-3 1, 1995, at that company's option, to adopt the cost studies
100-4 approved by the commission for a Tier 1 local exchange company.
100-5 Sec. 3.458. INTERCONNECTION. (a) "Interconnection" for the
100-6 purposes of this section means the termination of local
100-7 intraexchange traffic of another local exchange company or holder
100-8 of a service provider certificate of operating authority within the
100-9 local calling area of the terminating local exchange company or
100-10 certificate holder for calls that originate and terminate in this
100-11 state. The provisions of this section do not govern rates for the
100-12 existing termination of cellular or interexchange traffic.
100-13 (b) The commission shall require all providers of
100-14 telecommunications services to maintain interoperable networks.
100-15 Telecommunications providers shall negotiate network
100-16 interconnectivity, charges, terms, and conditions, and in that
100-17 event the commission shall approve the interconnection rates. The
100-18 commission may resolve disputes filed by a party to those
100-19 negotiations.
100-20 (c) In the absence of a mutually agreed compensation rate
100-21 negotiated under Subsection (b) of this section, each carrier shall
100-22 reciprocally terminate the other carrier's traffic at no charge for
100-23 the first nine months after the date on which the first call is
100-24 terminated between the carriers.
100-25 (d) The commission shall, within the nine-month period
100-26 prescribed by Subsection (c) of this section, complete a proceeding
100-27 to establish reciprocal interconnection rates, terms, and
101-1 conditions. The commission shall establish reciprocal
101-2 interconnection rates, terms, and conditions based solely on the
101-3 commission proceeding. In establishing the initial interconnection
101-4 rate, the commission may not require cost studies from the new
101-5 entrant. Not earlier than three years after the date on which the
101-6 first call is terminated between the carriers, the commission may,
101-7 if the commission receives a complaint, require cost studies by a
101-8 new entrant for the purpose of establishing interconnection rates.
101-9 (e) The incumbent local exchange company may adopt the
101-10 interconnection rates approved for a larger incumbent local
101-11 exchange company or the company's approved interconnection rates
101-12 without the commission requirement of additional cost
101-13 justification. If an incumbent local exchange company elects to
101-14 not adopt the interconnection rates of a larger company, or
101-15 negotiates under Subsection (b) of this section, the company is
101-16 governed by Subsections (c) and (d) of this section. If the
101-17 incumbent local exchange company adopts the interconnection rates
101-18 of another incumbent local exchange company, the new entrant may
101-19 adopt those rates as the new entrant's interconnection rates. If
101-20 the incumbent local exchange company elects to file its own tariff,
101-21 the new entrant must also file its own interconnection tariff.
101-22 (f) The commission may make generic rules and set policies
101-23 governing interconnection arrangements. The commission may
101-24 establish rules that are responsive to changes in federal law or
101-25 developments in the local exchange market.
101-26 (g) The commission may not use interconnection rates under
101-27 this section as a basis to alter interconnection rates for other
102-1 services.
102-2 (h) The commission has exclusive jurisdiction over any
102-3 holder of a certificate of convenience and necessity, certificate
102-4 of operating authority, or service provider certificate of
102-5 operating authority for the determination of rates, terms, and
102-6 conditions for interconnection.
102-7 Sec. 3.459. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS.
102-8 (a) An incumbent local exchange company may not unreasonably:
102-9 (1) discriminate against another provider by refusing
102-10 access to the local exchange;
102-11 (2) refuse or delay interconnections to another
102-12 provider;
102-13 (3) degrade the quality of access provided to another
102-14 provider;
102-15 (4) impair the speed, quality, or efficiency of lines
102-16 used by another provider;
102-17 (5) fail to fully disclose in a timely manner on
102-18 request all available information necessary for the design of
102-19 equipment that will meet the specifications of the local exchange
102-20 network; or
102-21 (6) refuse or delay access by any person to another
102-22 provider.
102-23 (b) This section may not be construed to require an
102-24 incumbent local exchange company to provide expanded
102-25 interconnection as that term is defined by the Federal
102-26 Communications Commission.
102-27 Sec. 3.460. COMMISSION AUTHORITY. (a) The commission has
103-1 all authority necessary to establish procedures with respect to the
103-2 policies stated in Sections 3.451, 3.452, 3.453, 3.454, 3.455,
103-3 3.456, 3.457, and 3.458 of this Act and to resolve any disputes
103-4 arising under those policies.
103-5 (b) The commission has the authority to and shall adopt
103-6 procedures for the processing of proceedings under Sections 3.452
103-7 and 3.453 of this Act, including the authority to limit discovery
103-8 and, except for the office, align parties having similar positions
103-9 for purposes of cross-examination. In adopting procedures under
103-10 this section and in resolving disputes, the commission shall
103-11 consider the impact on consumers, competitors, and the incumbent
103-12 local exchange company. The commission may not implement, by order
103-13 or rule, any requirement that is contrary to any applicable federal
103-14 rule or law.
103-15 Sec. 3.461. APPLICATIONS AND RULES. The obligations
103-16 prescribed by Sections 3.452, 3.453, 3.455, 3.456, and 3.458 of
103-17 this Act may not, until September 1, 1998, be applied to incumbent
103-18 local exchange companies serving fewer than 31,000 access lines.
103-19 After September 1, 1998, the obligations prescribed by Sections
103-20 3.452, 3.453, and 3.456 of this Act may be applied only on a bona
103-21 fide request from a certified telecommunications utility. In
103-22 applying these rules to these incumbent local exchange companies,
103-23 the commission may modify the rules as it finds in the public
103-24 interest.
103-25 Sec. 3.462. REVIEW OF IMPLEMENTATION. The commission may,
103-26 on a bona fide request from a holder of a certificate of operating
103-27 authority or service provider certificate of operating authority,
104-1 review the feasibility of implementing Sections 3.452, 3.454, and
104-2 3.457 of this Act to be applicable to incumbent local exchange
104-3 companies that as of September 1, 1995, have 31,000 or more access
104-4 lines in this state but fewer than one million access lines in this
104-5 state.
104-6 Sec. 3.463. INFRASTRUCTURE SHARING. (a) The commission
104-7 shall prescribe rules that require a local exchange company to
104-8 share public switched network infrastructure and technology with a
104-9 requesting local exchange company that lacks economies of scale or
104-10 scope, for the purpose of enabling that requesting company to
104-11 provide telecommunications services in the geographic areas to
104-12 which the requesting company is designated as the sole carrier of
104-13 last resort.
104-14 (b) The rules governing the sharing:
104-15 (1) may not require a local exchange company to make a
104-16 decision that is uneconomic or adverse to the public;
104-17 (2) shall permit, but not require, joint ownership and
104-18 operation of public switched network infrastructure and services by
104-19 or among the local exchange companies sharing infrastructure; and
104-20 (3) shall establish conditions that promote
104-21 cooperation between local exchange companies.
104-22 SUBTITLE K. BROADCASTER SAFEGUARDS
104-23 Sec. 3.501. CUSTOMER PROPRIETARY NETWORK INFORMATION (CPNI).
104-24 (a) In this section:
104-25 (1) "Specific customer proprietary network
104-26 information" (specific CPNI) means:
104-27 (A) information that relates to the quantity,
105-1 technical configuration, type, destination, or amount of use of
105-2 voice or data telecommunications services subscribed to by any
105-3 customer of a telecommunications utility, but excluding wireless
105-4 telecommunications providers, and is made available to the utility
105-5 by the customer solely by virtue of the utility-customer
105-6 relationship;
105-7 (B) information contained in the bills relating
105-8 to telecommunications services received by a customer of a
105-9 telecommunications utility; and
105-10 (C) any other information concerning the
105-11 customer as is available to the telecommunications utility by
105-12 virtue of the customer's use of the telecommunications utility
105-13 service. The term does not include subscriber list information.
105-14 (2) "Subscriber list information" means any
105-15 information that:
105-16 (A) identifies the listed names of subscribers
105-17 of a telecommunications utility or those subscribers' telephone
105-18 numbers, addresses, or primary advertising classifications, or any
105-19 combination of those listed names, numbers, addresses, or
105-20 classifications; and
105-21 (B) the telecommunications utility or an
105-22 affiliate has published or accepted for future publication.
105-23 (b) Except as preempted by the Federal Communications
105-24 Commission, a telecommunications utility may not use specific CPNI
105-25 for commercial purposes other than the sale, provision, or billing
105-26 and collection of telecommunications or enhanced services. Nothing
105-27 herein prohibits the use of specific CPNI with the customer's
106-1 consent or the provision of specific CPNI to an affiliate
106-2 telecommunications provider.
106-3 (c) Not later than September 1, 1996, the commission shall
106-4 adopt rules that are consistent with rules on this subject adopted
106-5 by the Federal Communications Commission. Rules adopted under this
106-6 section shall:
106-7 (1) require each telecommunications utility to notify
106-8 each subscriber annually, through means approved by the commission,
106-9 of the subscriber's right to reject the utility's use of specific
106-10 CPNI for purposes of marketing other services;
106-11 (2) in the event the Federal Communications Commission
106-12 adopts new CPNI rules that no longer preempt a state's authority to
106-13 adopt inconsistent rules, the commission shall institute a
106-14 proceeding regarding the appropriate use of CPNI by all
106-15 telecommunications utilities, provided that any rule, policy, or
106-16 order adopted by the commission may not be discriminatory in its
106-17 application to telecommunications utilities; and
106-18 (3) require each telecommunications utility, if the
106-19 utility makes nonproprietary aggregate CPNI available to its
106-20 affiliates, to make that information available on the same terms
106-21 and conditions to unaffiliated entities.
106-22 (d) The commission may not implement any rules regarding
106-23 CPNI applicable to an incumbent local exchange company having
106-24 100,000 or fewer access lines in service in this state that are
106-25 more burdensome to the company than the CPNI rules of the Federal
106-26 Communications Commission.
106-27 Sec. 3.502. AUDIO VIDEO. (a) In this Act:
107-1 (1) "Video programming" means programming provided by
107-2 or generally considered comparable to programming provided by a
107-3 television broadcast station as defined by the Federal
107-4 Communications Commission under Section 602, Communications Act of
107-5 1934 (47 U.S.C. Section 522).
107-6 (2) "Audio programming" means programming provided by
107-7 or generally considered comparable to programming provided by an AM
107-8 or FM broadcast station. However, the term does not include any
107-9 audio-related services of the type offered by the incumbent local
107-10 exchange company as of September 1, 1995.
107-11 (b) An incumbent local exchange company may not provide
107-12 audio or video programming in this state. However, nothing herein
107-13 prohibits a separate corporate affiliate of an incumbent local
107-14 exchange company from providing audio or video programming.
107-15 (c) A separate corporate affiliate of an incumbent local
107-16 exchange company providing audio or video programming:
107-17 (1) shall obtain telecommunications services from its
107-18 affiliate incumbent local exchange company at tariffed rates, or if
107-19 those services are not provided under a tariff, at the fair market
107-20 value or, in the event there is no fair market value or that value
107-21 is less than long run incremental cost (LRIC), then the rate is
107-22 equal to the service's LRIC;
107-23 (2) shall purchase, use, rent, or access information,
107-24 services, space, or devices that are not telecommunications
107-25 services from its affiliate incumbent local exchange company
107-26 consistent with the affiliate transaction rules promulgated by the
107-27 Federal Communications Commission then in effect, provided that in
108-1 no case shall those transactions be valued at less than the greater
108-2 of net book value or fair market value, whichever is applicable;
108-3 (3) shall maintain books, records, and accounts that
108-4 are separate from those of an incumbent local exchange company,
108-5 which books, records, and accounts shall be kept in accordance with
108-6 generally accepted accounting principles;
108-7 (4) shall prepare financial statements that are not
108-8 consolidated with those of an incumbent local exchange company,
108-9 provided, however, that financial statements and consolidated tax
108-10 returns may be prepared that consolidate the operation of the
108-11 separate corporate affiliate with a parent company and its other
108-12 subsidiaries;
108-13 (5) may not incur debt in a manner that would permit a
108-14 creditor on default to have recourse to the assets of the incumbent
108-15 local exchange company;
108-16 (6) may not use the names, trademarks, or service
108-17 marks of the incumbent local exchange company, but this does not
108-18 prohibit the use of those names or marks if they are used in common
108-19 with the parent, affiliate, or owner of the incumbent local
108-20 exchange company;
108-21 (7) shall perform its marketing and sales functions
108-22 and operation in compliance with Open Network Architecture and the
108-23 affiliate transaction rules promulgated by the Federal
108-24 Communications Commission then in effect;
108-25 (8) may not have any directors, officers, or employees
108-26 in common with the incumbent local exchange company; and
108-27 (9) shall maintain a separate corporate entity from
109-1 the incumbent local exchange company.
109-2 (d) As to its separate affiliate providing video or audio
109-3 programming, an incumbent local exchange company:
109-4 (1) may not develop a rate for a telecommunications
109-5 service or deploy a telecommunications service to primarily benefit
109-6 its separate affiliate for the affiliate's video or audio
109-7 programming unless that rate or service is available on a
109-8 nondiscriminatory basis to all purchasers;
109-9 (2) may not be unreasonably preferential in the
109-10 deployment of telecommunications services for its separate
109-11 affiliates' audio or video programming;
109-12 (3) may not enter into customer specific contracts for
109-13 the provision of tariffed telecommunications services with its
109-14 separate affiliate unless substantially the same terms and
109-15 conditions of the contract are generally available to nonaffiliated
109-16 interests;
109-17 (4) shall maintain and file with the commission copies
109-18 of all contracts or arrangements between the incumbent local
109-19 exchange company and the separate affiliate and report the contract
109-20 amount for each cash and noncash transaction with the separate
109-21 affiliate, including payments for costs of any goods and services
109-22 or any property right or thing or for interest expense;
109-23 (5) may not transfer assets to the separate affiliate
109-24 unless those assets are priced no lower than assets that are
109-25 available in an arm's-length transaction to third parties;
109-26 (6) shall value any assets that are transferred to a
109-27 separate affiliate at the greater of net book or fair market value;
110-1 (7) shall value any assets that are transferred to it
110-2 by its separate affiliate at the lesser of net book value or fair
110-3 market value except instances where Federal Communications
110-4 Commission or commission rules or regulations permit in-arrears
110-5 payment for tariffed telecommunications services or the investment
110-6 by an affiliate of dividends or profits derived from the incumbent
110-7 local exchange company;
110-8 (8) shall comply with all applicable Federal
110-9 Communications Commission cost and other accounting rules;
110-10 (9) may not have any directors, officers, or employees
110-11 in common with the separate affiliate;
110-12 (10) may not own any property in common with the
110-13 separate affiliate; and
110-14 (11) shall provide, if it offers telecommunications
110-15 equipment or services to audio and video programming providers,
110-16 those services:
110-17 (A) at just and reasonable rates that are
110-18 tariffed, so long as the commission rules require those tariffs,
110-19 under nondiscriminatory terms and conditions; and
110-20 (B) if the equipment and services are not
110-21 subject to regulation, on similar terms and conditions to all video
110-22 or audio programming providers.
110-23 (e) In addition to the requirements and prohibitions
110-24 prescribed by Subsection (d) of this section, an incumbent local
110-25 exchange company shall, if it offers billing and collection
110-26 services to nonaffiliated audio and video programming providers,
110-27 provide those services under nondiscriminatory terms and
111-1 conditions. Nothing herein requires an incumbent local exchange
111-2 company to offer billing and collection service to nonaffiliated
111-3 programmers, and an incumbent local exchange company may exclude
111-4 certain classes of programmers from its billing and collection
111-5 services.
111-6 (f) An incumbent local exchange company shall have a
111-7 compliance audit performed every three years by an independent
111-8 accounting firm. The audit shall be conducted for the purpose of
111-9 determining whether the incumbent local exchange company, during
111-10 the preceding three years, is in compliance with all of the
111-11 requirements imposed by this section regarding the incumbent local
111-12 exchange company. The independent accounting firm shall file the
111-13 report with the commission. If the report concludes that the
111-14 incumbent local exchange company is not in compliance with any
111-15 portion of this section, the commission shall institute appropriate
111-16 action against the incumbent local exchange company. The report
111-17 shall be considered commercial or financial information that is
111-18 confidential by statute under Chapter 552, Government Code.
111-19 (g) Except as otherwise specifically provided by this Act,
111-20 the commission's jurisdiction over affiliates of incumbent local
111-21 exchange companies that are audio and video programmers is limited
111-22 to the requirements of this section and does not extend to subjects
111-23 not specifically provided herein.
111-24 (h) This section does not apply to an incumbent local
111-25 exchange company having 100,000 or fewer total access lines in
111-26 service in this state.
111-27 (i) A company to which this section applies may petition the
112-1 commission for a waiver from any of the requirements imposed
112-2 herein. The commission shall grant the waiver if it is in the
112-3 public interest to do so, taking into account whether the need for
112-4 the restriction still exists in the market involved. The
112-5 commission may revoke any waiver granted if it is shown that
112-6 conditions under which the waiver was granted have materially
112-7 changed and it is in the public interest to do so.
112-8 Sec. 3.503. ADVERTISING. (a) Advertising agency services
112-9 include the functions generally performed by a general advertising
112-10 agency, including advertising development, advertising purchase,
112-11 advertising consultation, advertising copywriting, and advertising
112-12 research.
112-13 (b) An incumbent local exchange company may not sell
112-14 advertising agency services to nonaffiliates in this state.
112-15 Nothing herein prohibits a local exchange company from:
112-16 (1) any activities to promote or sell
112-17 telecommunications services and equipment, including voice, data,
112-18 video dial tone, video programming, audio programming, cellular,
112-19 interactive media, software, and other related services and
112-20 equipment; or
112-21 (2) any activities that seek to enhance or promote the
112-22 use of the telecommunications network.
112-23 (c) A separate corporate affiliate of an incumbent local
112-24 exchange company may engage in advertising agency activities, but
112-25 in the conduct of that business a separate corporate affiliate:
112-26 (1) shall maintain books, records, and accounts that
112-27 are separate from those of an incumbent local exchange company,
113-1 which books, records, and accounts shall be kept in accordance with
113-2 generally accepted accounting principles;
113-3 (2) shall prepare financial statements that are not
113-4 consolidated with those of an incumbent local exchange company
113-5 provided, however, that financial statements and consolidated tax
113-6 returns may be prepared that consolidate the operation of the
113-7 separate corporate affiliate with a parent company and its other
113-8 subsidiaries;
113-9 (3) may not incur debt in a manner that would permit a
113-10 creditor on default to have recourse to the assets of the incumbent
113-11 local exchange company;
113-12 (4) may not have any directors, officers, or employees
113-13 in common with the incumbent local exchange company;
113-14 (5) shall maintain a separate corporate entity from
113-15 the incumbent local exchange company; and
113-16 (6) may not use the names, trademarks, or service
113-17 marks of the incumbent local exchange company, but this does not
113-18 prohibit the use of those names or marks where they are used in
113-19 common with the parent, affiliate, or owner of the incumbent local
113-20 exchange company.
113-21 (d) Except as provided by Subsection (b) of this section,
113-22 an incumbent local exchange company that has an affiliate that
113-23 provides advertising agency services on behalf of nonaffiliates in
113-24 this state may not jointly market that affiliate's advertising
113-25 agency services in connection with telecommunications services and
113-26 equipment provided by the incumbent local exchange company. This
113-27 prohibition does not apply to advertising in telephone directories
114-1 in whatever form disseminated.
114-2 (e) Nothing herein prevents the incumbent local exchange
114-3 company from providing telephone solicitation services for
114-4 charitable organizations.
114-5 (f) This section does not apply to an incumbent local
114-6 exchange company having 100,000 or fewer total access lines in
114-7 service in this state.
114-8 (g) A company to which this section applies may petition the
114-9 commission for a waiver from any of the requirements imposed
114-10 herein. The commission shall grant the waiver if it is in the
114-11 public interest to do so, taking into account whether the need for
114-12 the restriction still exists in the market involved. The
114-13 commission may revoke any waiver granted if it is shown that
114-14 conditions under which the waiver was granted have materially
114-15 changed and it is in the public interest to do so.
114-16 Sec. 3.504. VIDEO CARRIAGE. (a) Subject to a programmer
114-17 operating as a common channel manager under the provisions of
114-18 Subsection (c) of this section, each incumbent local exchange
114-19 company that provides telecommunications services that are used in
114-20 the transmission of video programming directly to subscribers or
114-21 that enables customers to access video programming shall permit
114-22 local full-power, FCC-licensed broadcast stations, to the extent
114-23 capacity permits, access to these telecommunications services at
114-24 tariffed rates or, if those services are not provided under a
114-25 tariff, on similar terms and conditions as other video programmers
114-26 that provide similar programming. The incumbent local exchange
114-27 company shall transmit the signals delivered to it by the local
115-1 broadcast station without material degradation, and the quality
115-2 offered may not be less than that made available to other video
115-3 programmers.
115-4 (b) Each incumbent local exchange company that provides
115-5 telecommunications services that are used in the transmission of
115-6 video programming directly to subscribers or to enable customers to
115-7 access video programming:
115-8 (1) may not unreasonably discriminate among
115-9 programming providers with respect to transmission of their
115-10 signals;
115-11 (2) may not delete, change, or alter any copyright
115-12 identification transmitted as part of the programming signal; and
115-13 (3) shall, if it provides a "video dial tone service"
115-14 with a level one gateway, as that term is defined by the Federal
115-15 Communications Commission, make available to programmers a menu or
115-16 programming guide on which programmers may display a listing of the
115-17 stations required to be carried by the programmer under Subsection
115-18 (c) of this section.
115-19 (c) To the extent that federal law and Federal
115-20 Communications Commission rules and orders permit, a programmer
115-21 operating as a common channel manager that purchases for commercial
115-22 purposes 50 or more analog channels on a local exchange video dial
115-23 tone level one platform over which video programming is made
115-24 available to subscribers, shall make available to subscribers local
115-25 full-power, Federal Communications Commission-licensed television
115-26 stations, provided that retransmission is granted under Subsection
115-27 (d) of this section. A programmer subject to this section shall be
116-1 required to make available up to six television stations, except
116-2 that in markets that contain a county having a population of more
116-3 than one million, the programmer shall be required to make
116-4 available up to nine full-power, Federal Communications
116-5 Commission-licensed local broadcast stations. The programmer shall
116-6 make the selection of the broadcast channels to be carried under
116-7 this section.
116-8 (d) A Federal Communications Commission-licensed television
116-9 station seeking carriage under Subsection (c) of this section shall
116-10 grant retransmission consent to the programmer and to the incumbent
116-11 local exchange company. However, nothing in this Act requires a
116-12 programmer or incumbent local exchange company to provide monetary
116-13 payment or other valuable consideration in exchange for that
116-14 carriage.
116-15 (e) This section does not apply to an incumbent local
116-16 exchange company having 100,000 or fewer total access lines in
116-17 service in this state or to a programmer on the video dial tone
116-18 platform of that incumbent local exchange company.
116-19 (f) A company to which this section applies may petition the
116-20 commission for a waiver from any of the requirements imposed
116-21 herein. The commission shall grant the waiver if it is in the
116-22 public interest to do so, taking into account whether the need for
116-23 the restriction still exists in the market involved. The
116-24 commission may revoke any waiver granted if it is shown that
116-25 conditions under which the waiver was granted have materially
116-26 changed and it is in the public interest to do so.
116-27 (g) Except as otherwise specifically provided by this Act,
117-1 the commission's jurisdiction over affiliates of incumbent local
117-2 exchange companies that are video programmers is limited to the
117-3 requirements of this section and does not extend to subjects not
117-4 specifically provided herein.
117-5 (h) This section expires August 31, 1999.
117-6 Sec. 3.505. AUDIO CARRIAGE. (a) To the extent that federal
117-7 law and Federal Communications Commission rules and orders permit,
117-8 and consistent with technical specifications, a programmer
117-9 operating as a common channel manager that makes available for
117-10 commercial purposes to subscribers 12 or more channels of audio
117-11 programming similar to broadcasts of Federal Communications
117-12 Commission-licensed radio stations on an incumbent local exchange
117-13 company's level one video dial tone platform shall make available
117-14 to subscribers local Federal Communications Commission-licensed
117-15 radio stations, provided that retransmission is granted under
117-16 Subsection (b) of this section. A programmer subject to this
117-17 subsection may not be required to make available more than
117-18 one-third of its analog audio channels to radio stations. The
117-19 programmer shall make the selection of the radio stations to be
117-20 carried under this section.
117-21 (b) A local Federal Communications Commission-licensed radio
117-22 station seeking carriage under Subsection (a) of this section shall
117-23 grant retransmission consent to the programmer and the incumbent
117-24 local exchange company. However, nothing in this Act requires a
117-25 programmer or incumbent local exchange company to provide monetary
117-26 payment or other valuable consideration in exchange for that
117-27 carriage.
118-1 (c) This section does not apply to an incumbent local
118-2 exchange company having 100,000 or fewer total access lines in
118-3 service in this state or to a programmer on the video dial tone
118-4 platform of that incumbent local exchange company.
118-5 (d) A company to which this section applies may petition the
118-6 commission for a waiver from any of the requirements imposed
118-7 herein. The commission shall grant the waiver if it is in the
118-8 public interest to do so, taking into account whether the need for
118-9 the restriction still exists in the market involved. The
118-10 commission may revoke any waiver granted if it is shown that
118-11 conditions under which the waiver was granted have materially
118-12 changed and it is in the public interest to do so.
118-13 (e) Except as otherwise specifically provided by this Act,
118-14 the commission's jurisdiction over affiliates of incumbent local
118-15 exchange companies that are video programmers is limited to the
118-16 requirements of this section and does not extend to subjects not
118-17 specifically provided herein.
118-18 (f) This section expires August 31, 1999.
118-19 Sec. 3.506. APPLICATION OF SUBTITLE. This subtitle does not
118-20 apply to a cable company.
118-21 SUBTITLE L. ELECTRONIC PUBLISHING
118-22 Sec. 3.551. DEFINITIONS. In this subtitle:
118-23 (1) "Affiliate" means any entity that, directly or
118-24 indirectly, owns or controls, is owned or controlled by, or is
118-25 under common ownership or control with an incumbent local exchange
118-26 company. The term does not include a separated affiliate.
118-27 (2) "Basic telephone service" means any wireline
119-1 telephone exchange service, or wireline telephone exchange
119-2 facility, provided by an incumbent local exchange company in a
119-3 telephone exchange area, other than a competitive wireline
119-4 telephone exchange service provided in a telephone exchange area
119-5 where another entity provides a wireline telephone exchange service
119-6 that was provided on January 1, 1984, and a commercial mobile
119-7 service provided by an affiliate that is required by the Federal
119-8 Communications Commission to be a corporate entity separate from
119-9 the local exchange company.
119-10 (3) "Basic telephone service information" means
119-11 network and customer information of an incumbent local exchange
119-12 company and other information acquired by an incumbent local
119-13 exchange company as a result of its engaging in the provision of
119-14 basic telephone service.
119-15 (4) "Control" has the meaning provided by 17 C.F.R.
119-16 Section 240.12b--2, the regulations promulgated by the Securities
119-17 and Exchange Commission under the Securities Exchange Act of 1934
119-18 (15 U.S.C. Section 78a et seq.) or any successor provision to that
119-19 section.
119-20 (5)(A) "Electronic publishing" means the
119-21 dissemination, provision, publication, or sale to an unaffiliated
119-22 entity or person, using an incumbent local exchange company's basic
119-23 telephone service, of:
119-24 (i) news;
119-25 (ii) entertainment (other than interactive
119-26 games);
119-27 (iii) business, financial, legal,
120-1 consumer, or credit material;
120-2 (iv) editorials;
120-3 (v) columns;
120-4 (vi) sports reporting;
120-5 (vii) features;
120-6 (viii) advertising;
120-7 (ix) photos or images;
120-8 (x) archival or research material;
120-9 (xi) legal notices or public records;
120-10 (xii) scientific, educational,
120-11 instructional, technical, professional, trade, or other literary
120-12 materials; or
120-13 (xiii) other like or similar information.
120-14 (B) "Electronic publishing" does not include the
120-15 following network services:
120-16 (i) information access, as that term is
120-17 defined by the modification of final judgment;
120-18 (ii) the transmission of information as a
120-19 common carrier;
120-20 (iii) the transmission of information as
120-21 part of a gateway to an information service that does not involve
120-22 the generation or alteration of the content of information,
120-23 including data transmission, address translation, protocol
120-24 conversion, billing management, introductory information content,
120-25 and navigational systems that enable users to access electronic
120-26 publishing services, that do not affect the presentation of those
120-27 electronic publishing services to users;
121-1 (iv) voice storage and retrieval services,
121-2 including voice messaging and electronic mail services;
121-3 (v) level 2 gateway services as those
121-4 services are defined by the Federal Communications Commission's
121-5 Second Report and Order, Recommendation to Congress and Second
121-6 Further Notice of Proposed Rulemaking in CC Docket No. 87-266
121-7 dated August 14, 1992;
121-8 (vi) data processing services that do not
121-9 involve the generation or alteration of the content of information;
121-10 (vii) transaction processing systems that
121-11 do not involve the generation or alteration of the content of
121-12 information;
121-13 (viii) electronic billing or advertising
121-14 of an incumbent local exchange company's regulated
121-15 telecommunications services;
121-16 (ix) language translation;
121-17 (x) conversion of data from one format to
121-18 another;
121-19 (xi) the provision of information
121-20 necessary for the management, control, or operation of a telephone
121-21 company telecommunications system;
121-22 (xii) the provision of directory
121-23 assistance that provides names, addresses, and telephone numbers
121-24 and does not include advertising;
121-25 (xiii) caller identification services;
121-26 (xiv) repair and provisioning databases
121-27 for telephone company operations;
122-1 (xv) credit card and billing validation
122-2 for telephone company operations;
122-3 (xvi) 911-E and other emergency assistance
122-4 databases;
122-5 (xvii) any other network service of a type
122-6 that is like or similar to these network services and that does not
122-7 involve the generation or alteration of the content of information;
122-8 (xviii) any upgrades to these network
122-9 services that do not involve the generation or alteration of the
122-10 content of information;
122-11 (xix) full motion video entertainment on
122-12 demand; and
122-13 (xx) video programming as defined by
122-14 Section 602, Communications Act of 1934 (47 U.S.C. Section 522).
122-15 (6) "Electronic publishing joint venture" means a
122-16 joint venture owned by an incumbent local exchange company or
122-17 affiliate that engages in the provision of electronic publishing
122-18 that is disseminated by means of that incumbent local exchange
122-19 company's or any of its affiliates' basic telephone service.
122-20 (7) "Entity" means any organization, and includes a
122-21 corporation, partnership, sole proprietorship, association, and
122-22 joint venture.
122-23 (8) "Inbound telemarketing" means the marketing of
122-24 property, goods, or services by telephone to a customer or
122-25 potential customer who initiated the call.
122-26 (9) "Own," with respect to an entity, means to have a
122-27 direct or indirect equity interest, or the equivalent, of more than
123-1 10 percent of an entity, or the right to more than 10 percent of
123-2 the gross revenues of an entity under a revenue sharing or royalty
123-3 agreement.
123-4 (10) "Separated affiliate" means a corporation under
123-5 common ownership or control with an incumbent local exchange
123-6 company that does not own or control an incumbent local exchange
123-7 company and is not owned or controlled by an incumbent local
123-8 exchange company and that engages in the provision of electronic
123-9 publishing that is disseminated by means of the incumbent local
123-10 exchange company's or any of its affiliates' basic telephone
123-11 service.
123-12 (11) "Incumbent local exchange company" means, for
123-13 purposes of this subtitle only, a company serving more than five
123-14 million access lines in this state and subject to the modification
123-15 of final judgment or any entity owned or controlled by that
123-16 corporation, or any successor or assign of that corporation. The
123-17 term does not include an electronic publishing joint venture owned
123-18 by that corporation or entity and permitted by Section 3.559.
123-19 Sec. 3.552. Electronic Publishing. (a) An incumbent local
123-20 exchange company or an affiliate may not engage in the provision of
123-21 electronic publishing that is disseminated by means of the
123-22 incumbent local exchange company's or any of its affiliates' basic
123-23 telephone service.
123-24 (b) Nothing in this subtitle prohibits a separated affiliate
123-25 or electronic publishing joint venture from engaging in the
123-26 provision of electronic publishing or any other lawful service in
123-27 any area.
124-1 (c) Nothing in this subtitle prohibits an incumbent local
124-2 exchange company or affiliate from engaging in the provision of any
124-3 lawful service other than electronic publishing in any area or from
124-4 engaging in the provision of electronic publishing that is not
124-5 disseminated by means of the incumbent local exchange company's or
124-6 any of its affiliates' basic telephone service.
124-7 Sec. 3.553. SEPARATED AFFILIATE OR ELECTRONIC PUBLISHING
124-8 JOINT VENTURE REQUIREMENTS. A separated affiliate or electronic
124-9 publishing joint venture:
124-10 (1) shall maintain books, records, and accounts that
124-11 are separate from those of the incumbent local exchange company and
124-12 from any affiliate and that record in accordance with generally
124-13 accepted accounting principles all transactions, whether direct or
124-14 indirect, with the incumbent local exchange company;
124-15 (2) may not incur debt in a manner that would permit a
124-16 creditor on default to have recourse to the assets of the incumbent
124-17 local exchange company;
124-18 (3) shall prepare financial statements that are not
124-19 consolidated with those of the incumbent local exchange company or
124-20 an affiliate, provided that consolidated statements may also be
124-21 prepared;
124-22 (4) shall file with the commission annual reports in a
124-23 form substantially equivalent to the Form 10-K required by
124-24 regulations of the Securities and Exchange Commission;
124-25 (5) after September 1, 1996, may not hire:
124-26 (A) as corporate officers, sales and marketing
124-27 management personnel whose responsibilities at the separated
125-1 affiliate or electronic publishing joint venture will include the
125-2 geographic areas where the incumbent local exchange company
125-3 provides basic telephone service;
125-4 (B) network operations personnel whose
125-5 responsibilities at the separated affiliate or electronic
125-6 publishing joint venture would require dealing directly with the
125-7 incumbent local exchange company; or
125-8 (C) any person who was employed by the incumbent
125-9 local exchange company during the year preceding the date of hire,
125-10 except that the requirements of this paragraph do not apply to
125-11 persons subject to a collective bargaining agreement that gives
125-12 those persons rights to be employed by a separated affiliate or
125-13 electronic publishing joint venture of the local exchange company;
125-14 (6) may not provide any wireline telephone exchange
125-15 service in any telephone exchange area in which an incumbent local
125-16 exchange company with which it is under common ownership or control
125-17 provides basic telephone exchange service except on a resale basis;
125-18 (7) may not use the name, trademarks, or service marks
125-19 of an existing incumbent local exchange company except for names,
125-20 trademarks, or service marks that were used in common with the
125-21 entity that owns or controls the incumbent local exchange company;
125-22 (8) shall have performed annually by March 31, or any
125-23 other date prescribed by the commission, a compliance review:
125-24 (A) that is conducted by an independent entity
125-25 that is subject to professional, legal, and ethical obligations for
125-26 the purpose of determining compliance during the preceding calendar
125-27 year with any provision of this subtitle that imposes a requirement
126-1 on the separated affiliate or electronic publishing joint venture;
126-2 and
126-3 (B) the results of which are maintained by the
126-4 separated affiliate for a period of five years subject to review by
126-5 any lawful authority; and
126-6 (9) shall within 90 days after the date of receiving a
126-7 review described by Subdivision (8) of this subsection, file a
126-8 report of any exceptions and corrective action with the commission
126-9 and allow any person to inspect and copy the report subject to
126-10 reasonable safeguards to protect any proprietary information
126-11 contained in the report from being used for purposes other than to
126-12 enforce or pursue remedies under this subtitle.
126-13 Sec. 3.554. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS.
126-14 (a) An incumbent local exchange company under common ownership or
126-15 control with a separated affiliate or electronic publishing joint
126-16 venture:
126-17 (1) may not provide a separated affiliate any
126-18 facilities, services, or basic telephone service information unless
126-19 it makes those facilities, services, or information available to
126-20 unaffiliated entities on request and on the same terms and
126-21 conditions;
126-22 (2) shall carry out transactions with a separated
126-23 affiliate in a manner equivalent to the manner that unrelated
126-24 parties would carry out independent transactions and not based on
126-25 the affiliation;
126-26 (3) shall carry out transactions with a separated
126-27 affiliate, that involve the transfer of personnel, assets, or
127-1 anything of value, in accordance with written contracts or tariffs
127-2 that are filed with the commission and made publicly available;
127-3 (4) shall carry out transactions with a separated
127-4 affiliate in a manner that is auditable in accordance with
127-5 generally accepted auditing standards;
127-6 (5) shall value any assets that are transferred to a
127-7 separated affiliate at the greater of net book cost or fair market
127-8 value;
127-9 (6) shall value any assets that are transferred to the
127-10 incumbent local exchange company by its separated affiliate at the
127-11 lesser of net book cost or fair market value;
127-12 (7) may not, except for instances where Federal
127-13 Communications Commission or commission rules or regulations permit
127-14 in-arrears payment for tariffed telecommunications services or the
127-15 investment by an affiliate of dividends or profits derived from an
127-16 incumbent local exchange company, provide debt or equity financing
127-17 directly or indirectly to a separated affiliate;
127-18 (8) shall comply fully with all applicable Federal
127-19 Communications Commission and commission cost allocation and other
127-20 accounting rules;
127-21 (9) shall have performed annually by March 31, or any
127-22 other date prescribed by the commission, a compliance review:
127-23 (A) that is conducted by an independent entity
127-24 that is subject to professional, legal, and ethical obligations for
127-25 the purpose of determining compliance during the preceding calendar
127-26 year with any provision of this subtitle that imposes a requirement
127-27 on the incumbent local exchange company; and
128-1 (B) the results of which are maintained by the
128-2 incumbent local exchange company for a period of five years subject
128-3 to review by any local authority; and
128-4 (10) shall within 90 days after the date of receiving
128-5 a review described by Subdivision (9) of this subsection, file a
128-6 report of any exceptions and corrective action with the commission
128-7 and allow any person to inspect and copy the report subject to
128-8 reasonable safeguards to protect any proprietary information
128-9 contained in the report from being used for purposes other than to
128-10 enforce or pursue remedies under this subtitle.
128-11 (b) If the incumbent local exchange company provides
128-12 facilities or services for telecommunication, transmission, billing
128-13 and collection, or expanded interconnection to any electronic
128-14 publisher, including a separated affiliate, for use with or in
128-15 connection with the provision of electronic publishing that is
128-16 disseminated by means of the incumbent local exchange company's or
128-17 any of its affiliates' basic telephone service, the incumbent local
128-18 exchange company shall provide to all other electronic publishers
128-19 the same type of facilities and services on request, on the same
128-20 terms and conditions or as required by the Federal Communications
128-21 Commission or the commission, and unbundled and individually
128-22 tariffed to the smallest extent that is technically feasible and
128-23 economically reasonable to provide.
128-24 (c) The incumbent local exchange company shall provide
128-25 network access and interconnections for basic telephone service to
128-26 electronic publishers at any technically feasible and economically
128-27 reasonable point within the incumbent local exchange company's
129-1 network and at just and reasonable rates that are tariffed, so long
129-2 as rates for those services are subject to regulation, and that are
129-3 not higher on a per unit basis than those charged for those
129-4 services to any other electronic publisher or any separated
129-5 affiliate engaged in electronic publishing.
129-6 (d) If prices for network access and interconnection for
129-7 basic telephone service are no longer subject to regulation, the
129-8 incumbent local exchange company shall provide electronic
129-9 publishers those services on the same terms and conditions as a
129-10 separated affiliate receives those services.
129-11 (e) If any basic telephone service used by electronic
129-12 publishers ceases to require a tariff, the incumbent local exchange
129-13 company shall provide electronic publishers with that service on
129-14 the same terms and conditions as a separated affiliate receives
129-15 that service.
129-16 (f) The incumbent local exchange company shall provide
129-17 reasonable advance notification at the same time and on the same
129-18 terms to all affected electronic publishers of information if the
129-19 information is within any one or more of the following categories:
129-20 (1) information necessary for the transmission or
129-21 routing of information by an interconnected electronic publisher;
129-22 (2) information necessary to ensure the
129-23 interoperability of an electronic publisher's and the incumbent
129-24 local exchange company's networks; or
129-25 (3) information that relates to changes in basic
129-26 telephone service network design and technical standards that may
129-27 affect the provision of electronic publishing.
130-1 (g) The incumbent local exchange company may not directly or
130-2 indirectly provide anything of monetary value to a separated
130-3 affiliate unless in exchange for consideration at least equal to
130-4 the greater of its net book cost or fair market value, except the
130-5 investment by an affiliate of dividends or profits derived from an
130-6 incumbent local exchange company.
130-7 (h) The incumbent local exchange company may not:
130-8 (1) discriminate in the presentation or provision of
130-9 any gateway for electronic publishing services or any electronic
130-10 directory of information services that is provided over the
130-11 incumbent local exchange company's basic telephone service;
130-12 (2) have any directors, officers, or employees in
130-13 common with a separated affiliate;
130-14 (3) own any property in common with a separated
130-15 affiliate;
130-16 (4) perform hiring or training of personnel on behalf
130-17 of a separated affiliate;
130-18 (5) perform the purchasing, installation, or
130-19 maintenance of equipment on behalf of a separated affiliate, except
130-20 for telephone service that the company provides under tariff or
130-21 contract subject to the provisions of this subtitle; or
130-22 (6) perform research and development on behalf of a
130-23 separated affiliate.
130-24 Sec. 3.555. CUSTOMER PROPRIETARY NETWORK INFORMATION.
130-25 Consistent with Section 232, Communications Act of 1934, as
130-26 amended, and Section 3.501 of this Act, an incumbent local exchange
130-27 company or an affiliate may not provide to an electronic publisher,
131-1 including a separated affiliate or electronic publishing joint
131-2 venture, customer proprietary network information for use with or
131-3 in connection with the provision of electronic publishing that is
131-4 disseminated by means of the incumbent local exchange company's or
131-5 any of its affiliates' basic telephone service that is not made
131-6 available by the incumbent local exchange company or affiliate to
131-7 all electronic publishers on the same terms and conditions.
131-8 Sec. 3.556. COMPLIANCE WITH SAFEGUARDS. An incumbent local
131-9 exchange company or affiliate, including a separated affiliate, may
131-10 not act in concert with another incumbent local exchange company or
131-11 any other entity to knowingly and wilfully violate or evade the
131-12 requirements of this subtitle.
131-13 Sec. 3.557. INCUMBENT LOCAL EXCHANGE COMPANY DIVIDENDS.
131-14 Nothing in this subtitle prohibits an affiliate from investing
131-15 dividends derived from an incumbent local exchange company in its
131-16 separated affiliate, and Sections 3.560 and 3.561 of this Act do
131-17 not apply to that investment.
131-18 Sec. 3.558. JOINT MARKETING. Except as provided by Section
131-19 3.559 of this Act, an incumbent local exchange company may not
131-20 carry out:
131-21 (1) any promotion, marketing, sales, or advertising
131-22 for or in conjunction with a separated affiliate; or
131-23 (2) any promotion, marketing, sales, or advertising
131-24 for or in conjunction with an affiliate that is related to the
131-25 provision of electronic publishing.
131-26 Sec. 3.559. PERMISSIBLE JOINT ACTIVITIES. (a) An incumbent
131-27 local exchange company may provide inbound telemarketing or
132-1 referral services related to the provision of electronic publishing
132-2 for a separated affiliate, electronic publishing joint venture,
132-3 affiliate, or unaffiliated electronic publisher, provided that if
132-4 those services are provided to a separated affiliate, electronic
132-5 publishing joint venture, or affiliate, those services shall be
132-6 made available to all electronic publishers on request, on
132-7 nondiscriminatory terms, at compensatory prices, and subject to
132-8 regulations of the commission to ensure that the incumbent local
132-9 exchange company's method of providing telemarketing or referral
132-10 and its price structure do not competitively disadvantage any
132-11 electronic publishers regardless of size, including those that do
132-12 not use the incumbent local exchange company's telemarketing
132-13 services.
132-14 (b) An incumbent local exchange company may engage in
132-15 nondiscriminatory teaming or business arrangements to engage in
132-16 electronic publishing with any separated affiliate or with any
132-17 other electronic publisher, provided that the incumbent local
132-18 exchange company provides only facilities, services, and basic
132-19 telephone service information as authorized by this subtitle, and
132-20 provided that the incumbent local exchange company does not own
132-21 that teaming or business arrangement.
132-22 (c) An incumbent local exchange company or affiliate may
132-23 participate on a nonexclusive basis in electronic publishing joint
132-24 ventures with an entity that is not an incumbent local exchange
132-25 company, affiliate, or separated affiliate to provide electronic
132-26 publishing services, provided that the incumbent local exchange
132-27 company or affiliate has not more than a 50 percent direct or
133-1 indirect equity interest, or the equivalent, or the right to more
133-2 than 50 percent of the gross revenues under a revenue sharing or
133-3 royalty agreement in any electronic publishing joint venture.
133-4 Officers and employees of an incumbent local exchange company or
133-5 affiliate participating in an electronic publishing joint venture
133-6 may not have more than 50 percent of the voting control over the
133-7 electronic publishing joint venture. In the case of joint ventures
133-8 with a small, local electronic publisher, the commission for good
133-9 cause shown may authorize the incumbent local exchange company or
133-10 affiliate to have a larger equity interest, revenue share, or
133-11 voting control, but not to exceed 80 percent. An incumbent local
133-12 exchange company participating in an electronic publishing joint
133-13 venture may provide promotion, marketing, sales, or advertising
133-14 personnel and services to the joint venture.
133-15 Sec. 3.560. TRANSACTIONS RELATED TO THE PROVISION OF
133-16 ELECTRONIC PUBLISHING BETWEEN AN INCUMBENT LOCAL EXCHANGE COMPANY
133-17 AND ANY AFFILIATE. (a) Any provision of facilities, services, or
133-18 basic telephone service information, or any transfer of assets,
133-19 personnel, or anything of commercial or competitive value, from an
133-20 incumbent local exchange company to an affiliate related to the
133-21 provision of electronic publishing shall be:
133-22 (1) recorded in the books and records of each entity;
133-23 (2) auditable in accordance with generally accepted
133-24 auditing standards; and
133-25 (3) done in accordance with written contracts or
133-26 tariffs filed with the commission.
133-27 (b) A transfer of assets directly related to the provision
134-1 of electronic publishing from an incumbent local exchange company
134-2 to an affiliate shall be valued at the greater of net book cost or
134-3 fair market value. A transfer of assets related to the provision
134-4 of electronic publishing from an affiliate to the incumbent local
134-5 exchange company shall be valued at the lesser of net book cost or
134-6 fair market value.
134-7 (c) An incumbent local exchange company may not provide
134-8 directly or indirectly to a separated affiliate any facilities,
134-9 services, or basic telephone service information related to the
134-10 provision of electronic publishing that are not made available to
134-11 unaffiliated companies on the same terms and conditions.
134-12 Sec. 3.561. TRANSACTIONS RELATED TO THE PROVISION OF
134-13 ELECTRONIC PUBLISHING BETWEEN AN AFFILIATE AND A SEPARATED
134-14 AFFILIATE. (a) Any facilities, services, or basic telephone
134-15 service information provided, or any assets, personnel, or anything
134-16 of commercial or competitive value transferred, from an incumbent
134-17 local exchange company to an affiliate as described by Section
134-18 3.560 of this Act and then provided or transferred to a separated
134-19 affiliate shall be:
134-20 (1) recorded in the books and records of each entity;
134-21 (2) auditable in accordance with generally accepted
134-22 auditing standards; and
134-23 (3) done in accordance with written contracts or
134-24 tariffs filed with the commission.
134-25 (b) A transfer of assets directly related to the provision
134-26 of electronic publishing from an incumbent local exchange company
134-27 to an affiliate as described by Section 3.560 of this Act and then
135-1 transferred to a separated affiliate shall be valued at the greater
135-2 of net book cost or fair market value. A transfer of assets
135-3 related to the provision of electronic publishing from a separated
135-4 affiliate to an affiliate and then transferred to the incumbent
135-5 local exchange company as described by Section 3.560 of this Act
135-6 shall be valued at the lesser of net book cost or fair market
135-7 value.
135-8 (c) An affiliate may not provide directly or indirectly to a
135-9 separated affiliate any facilities, services, or basic telephone
135-10 service information related to the provision of electronic
135-11 publishing that are not made available to unaffiliated companies on
135-12 the same terms and conditions.
135-13 Sec. 3.562. OTHER ELECTRONIC PUBLISHERS. (a) Except as
135-14 provided by Section 3.559(c) of this Act:
135-15 (1) an incumbent local exchange company may not have
135-16 any officers, employees, property, or facilities in common with an
135-17 entity whose principal business is publishing of which a part is
135-18 electronic publishing; and
135-19 (2) an officer or employee of an incumbent local
135-20 exchange company may not serve as a director of an entity whose
135-21 principal business is publishing of which a part is electronic
135-22 publishing.
135-23 (b) For the purposes of Subsection (a) of this section, an
135-24 incumbent local exchange company or an affiliate that owns an
135-25 electronic publishing joint venture may not be deemed to be engaged
135-26 in the electronic publishing business solely because of that
135-27 ownership.
136-1 (c) Except as provided by Section 3.559(c) of this Act, an
136-2 incumbent local exchange company may not carry out:
136-3 (1) any marketing or sales for an entity that engages
136-4 in electronic publishing; or
136-5 (2) any hiring of personnel, purchasing, or
136-6 production, for an entity that engages in electronic publishing.
136-7 (d) Except as provided by Section 3.559(c) of this Act, the
136-8 incumbent local exchange company may not provide any facilities,
136-9 services, or basic telephone service information to an entity that
136-10 engages in electronic publishing, for use with or in connection
136-11 with the provision of electronic publishing that is disseminated by
136-12 means of the incumbent local exchange company's or any of its
136-13 affiliates' basic telephone service, unless equivalent facilities,
136-14 services, or information are made available on equivalent terms and
136-15 conditions to all.
136-16 Sec. 3.563. PRIVATE RIGHT OF ACTION. (a) A person claiming
136-17 that an act or practice of an incumbent local exchange company,
136-18 affiliate, or separated affiliate constitutes a violation of this
136-19 subtitle may file a complaint with the commission or bring suit for
136-20 the recovery of damages, and the incumbent local exchange company,
136-21 affiliate, or separated affiliate shall be liable if the incumbent
136-22 local exchange company does, or causes or permits to be done, any
136-23 act, matter, or thing in this subtitle required to be done. The
136-24 incumbent local exchange company shall be liable to the person or
136-25 persons injured thereby for the full amount of damages sustained in
136-26 consequence of any violation of the provisions of this subtitle,
136-27 together with a reasonable counsel or attorney's fees to be fixed
137-1 by the court in every case of recovery, which attorney's fees shall
137-2 be taxed and collected as part of the costs of the case. Damages
137-3 may not be awarded for a violation that is discovered by a
137-4 compliance review as required by Section 3.553(8) or 3.554(a)(9) of
137-5 this Act and corrected within 90 days.
137-6 (b) In addition to the provisions of Subsection (a) of this
137-7 section, a person claiming that any act or practice of an incumbent
137-8 local exchange company, affiliate, or separated affiliate
137-9 constitutes a violation of this subtitle may make application to
137-10 the commission for an order to cease and desist that violation or
137-11 may make application in any state district court for an order
137-12 enjoining those acts or practices or for an order compelling
137-13 compliance with that requirement.
137-14 Sec. 3.564. ANTITRUST LAWS. Nothing in this section may be
137-15 construed to modify, impair, or supersede the applicability of any
137-16 of the antitrust laws.
137-17 Sec. 3.565. TRANSITION. An electronic publishing service
137-18 being offered to the public by an incumbent local exchange company
137-19 or affiliate on the date of enactment of this subtitle shall have
137-20 one year from that date of enactment to comply with the
137-21 requirements of this subtitle.
137-22 Sec. 3.566. SUNSET. The provisions of this subtitle do not
137-23 apply to conduct occurring after June 30, 2001.
137-24 SUBTITLE M. TELECOMMUNICATIONS SERVICE ASSISTANCE PROGRAM;
137-25 UNIVERSAL SERVICE FUND
137-26 Sec. 3.601 <3.351>. TEL-ASSISTANCE SERVICE. The commission
137-27 shall adopt and enforce rules requiring each local exchange company
138-1 to establish a telecommunications service assistance program to be
138-2 called "tel-assistance service." This service is established to
138-3 provide eligible consumers with a reduction in costs of
138-4 telecommunications services.
138-5 Sec. 3.602 <3.352>. ELIGIBILITY FOR TEL-ASSISTANCE SERVICE;
138-6 BURDEN OF PROOF; BILLING. (a) To be eligible for tel-assistance
138-7 service, an applicant must be a head of household, 65 years of age
138-8 or older, and disabled as determined by the Texas Department of
138-9 Human Services and must have a household income at or below the
138-10 poverty level as determined by the United States Office of
138-11 Management and Budget and reported annually in the Federal
138-12 Register. The department, in accordance with this subtitle and
138-13 rules adopted by the department for the program, shall develop
138-14 procedures for taking applications for certification of eligibility
138-15 and for determining program eligibility. The burden of proving
138-16 eligibility for tel-assistance service is on the consumer applying
138-17 for the service.
138-18 (b) Each six months the department shall provide a list or
138-19 lists of the names, addresses, and, if applicable, telephone
138-20 numbers of all persons eligible for tel-assistance service to each
138-21 local exchange company. The local exchange company shall determine
138-22 from the list those consumers to whom the company provides service
138-23 and within 60 days after receiving the list shall begin
138-24 tel-assistance billing for eligible consumers. This billing shall
138-25 continue until the local exchange company is notified by the
138-26 department that a consumer is no longer eligible to receive
138-27 tel-assistance service.
139-1 Sec. 3.603 <3.353>. TEL-ASSISTANCE SERVICES; BILLING; RATES.
139-2 (a) The local exchange company shall provide tel-assistance
139-3 service to all eligible consumers within its certificated area in
139-4 the form of a reduction on each eligible consumer's telephone bill.
139-5 The reduction shall apply only to the following types of service:
139-6 (1) residential flat rate basic local exchange
139-7 service;
139-8 (2) residential local exchange access service; and
139-9 (3) residential local area calling usage, except that
139-10 the reduction for local area calling usage shall be limited to an
139-11 amount such that together with the reduction for local exchange
139-12 access service the rate does not exceed the comparable reduced flat
139-13 rate for the service.
139-14 (b) No other local voice service may be provided to the
139-15 dwelling place of a tel-assistance consumer, nor may single or
139-16 party line optional extended area service, optional extended area
139-17 calling service, foreign zone, or foreign exchange service be
139-18 provided to a tel-assistance consumer. Nothing in this section
139-19 shall prohibit a person otherwise eligible to receive
139-20 tel-assistance service from obtaining and using telecommunications
139-21 equipment designed to aid such person in utilizing
139-22 telecommunications services.
139-23 (c) The reduction allowed by the telecommunications service
139-24 assistance program shall be 65 percent of the applicable tariff
139-25 rate for the service provided.
139-26 Sec. 3.604 <3.354>. STATEWIDE TELECOMMUNICATIONS RELAY
139-27 ACCESS SERVICE FOR HEARING-IMPAIRED AND SPEECH-IMPAIRED. (a) The
140-1 commission shall adopt and enforce rules establishing a statewide
140-2 telecommunications relay access service for the hearing-impaired
140-3 and speech-impaired using specialized communications equipment such
140-4 as telecommunications devices for the deaf (TDD) and operator
140-5 translations. The purpose of this section is to provide for the
140-6 uniform and coordinated provision of the service on a statewide
140-7 basis by one telecommunications carrier.
140-8 (b) Commission rules relating to a statewide
140-9 telecommunications relay access service for the hearing-impaired
140-10 and speech-impaired shall provide that:
140-11 (1) the service shall provide the hearing-impaired and
140-12 speech-impaired with access to the telecommunications network in
140-13 Texas equal to that provided other customers;
140-14 (2) the service shall consist of the following:
140-15 (A) switching and transmission of the call;
140-16 (B) verbal and print translations by either live
140-17 or automated means between hearing-impaired and speech-impaired
140-18 individuals who use TDD equipment or similar automated devices and
140-19 others who do not have such equipment; and
140-20 (C) other service enhancements proposed by the
140-21 carrier and approved by the commission;
140-22 (3) the calling or called party shall bear no charge
140-23 for calls originating and terminating within the same local calling
140-24 area;
140-25 (4) the calling or called party shall bear one-half of
140-26 the total charges established by contract with the commission for
140-27 intrastate interexchange calls;
141-1 (5) as specified in its contract with the commission,
141-2 charges related to providing the service which are not borne by a
141-3 calling or called party pursuant to Subdivisions (3) and (4) of
141-4 this subsection shall be funded from the universal service fund;
141-5 (6) local exchange companies may not impose
141-6 interexchange carrier access charges on calls which make use of
141-7 this service and which originate and terminate in the same local
141-8 calling area;
141-9 (7) local exchange companies shall provide billing and
141-10 collection services in support of this service at just and
141-11 reasonable rates; and
141-12 (8) if the commission orders a local exchange company
141-13 to provide for a trial telecommunications relay access service for
141-14 the hearing-impaired or speech-impaired, all pertinent costs and
141-15 design information from this trial shall be available to the
141-16 general public.
141-17 (c) The commission shall allow telecommunications utilities
141-18 to recover their universal service fund assessment related to this
141-19 service through a surcharge which the utility may add to its
141-20 customers' bills. The commission shall specify how the amount of
141-21 the surcharge is to be determined by each utility. If a utility
141-22 chooses to impose the surcharge, the bill shall list the surcharge
141-23 as the "universal service fund surcharge."
141-24 (d) The commission shall set the appropriate assessments for
141-25 the funding of the service by all telecommunications utilities. In
141-26 setting the appropriate assessments, the commission shall consider
141-27 the aggregate calling pattern of the users of the service and all
142-1 other factors found appropriate and in the public interest by the
142-2 commission. The commission shall review the assessments annually
142-3 and adjust the assessments as found appropriate hereunder.
142-4 (e) The commission shall select the telecommunications
142-5 carrier which will provide the statewide telecommunications relay
142-6 access service for the hearing-impaired and speech-impaired. In
142-7 awarding the contract for this service, the commission shall make a
142-8 written award of the contract to the offerer whose proposal is the
142-9 most advantageous to the state, considering price, the interests of
142-10 the hearing-impaired and speech-impaired community in having access
142-11 to a high quality and technologically advanced telecommunications
142-12 system, and all other factors listed in the commission's request
142-13 for proposals. The commission shall consider each proposal in a
142-14 manner that does not disclose the contents of the proposal to
142-15 competing offerers. The commission's evaluation of the proposals
142-16 shall include:
142-17 (1) charges for the service;
142-18 (2) service enhancements proposed by the offerers;
142-19 (3) technological sophistication of the network
142-20 proposed by the offerers; and
142-21 (4) the proposed commencement date for the service.
142-22 (f) The telecommunications carrier providing the service
142-23 shall be compensated for providing such service at rates, terms,
142-24 and conditions established in its contract with the commission.
142-25 This compensation may include a return on the investment required
142-26 to provide the service and compensation for unbillable and
142-27 uncollectible calls placed through the service, provided that
143-1 compensation for unbillable and uncollectible calls shall be
143-2 subject to a reasonable limitation as determined by the commission.
143-3 (g) The advisory committee to assist the commission in
143-4 administering this section is composed of the following persons
143-5 appointed by the commission:
143-6 (1) two deaf persons recommended by the Texas
143-7 Association of the Deaf;
143-8 (2) one hearing-impaired person recommended by
143-9 Self-Help for the Hard of Hearing;
143-10 (3) one hearing-impaired person recommended by the
143-11 American Association of Retired Persons;
143-12 (4) one deaf and blind person recommended by the Texas
143-13 Deaf/Blind Association;
143-14 (5) one speech-impaired person and one speech-impaired
143-15 and hearing-impaired person recommended by the Coalition of Texans
143-16 with Disabilities;
143-17 (6) two representatives of telecommunications
143-18 utilities, one representing a nonlocal exchange utility and one
143-19 representing a local exchange company, chosen from a list of
143-20 candidates provided by the Texas Telephone Association;
143-21 (7) two persons, at least one of whom is deaf, with
143-22 experience in providing relay services recommended by the Texas
143-23 Commission for the Deaf and Hearing-Impaired; and
143-24 (8) two public members recommended by organizations
143-25 representing consumers of telecommunications services.
143-26 (h) The commission shall appoint advisory committee members
143-27 based on recommended lists of candidates submitted in accordance
144-1 with Subdivision (6) of Subsection (g) of this section. The
144-2 advisory committee shall monitor the establishment, administration,
144-3 and promotion of the statewide telecommunications relay access
144-4 service and advise the commission in pursuing a service which meets
144-5 the needs of the hearing-impaired and speech-impaired in
144-6 communicating with other users of telecommunications services. The
144-7 terms of office of each member of the advisory committee shall be
144-8 two years. A member whose term has expired shall continue to serve
144-9 until a qualified replacement is appointed. The members of the
144-10 advisory committee shall serve without compensation but shall be
144-11 entitled to reimbursement at rates established for state employees
144-12 for travel and per diem incurred in the performance of their
144-13 official duties. The commission shall reimburse members of the
144-14 advisory committee in accordance with this subsection and shall
144-15 provide clerical and staff support to the advisory committee,
144-16 including a secretary to record the committee meetings. The
144-17 commission's costs associated with the advisory committee shall be
144-18 reimbursed from the universal service fund.
144-19 Sec. 3.605 <3.355>. DISTANCE LEARNING ACTIVITIES BY
144-20 EDUCATIONAL INSTITUTIONS; REDUCED RATES. (a) The commission by
144-21 rule shall require a dominant carrier to file a tariff containing a
144-22 reduced rate for a telecommunications service the commission finds
144-23 is directly related to a distance learning activity that is or
144-24 could be conducted by an educational institution in this state.
144-25 (b) The commission rules shall specify:
144-26 (1) the telecommunications services that qualify under
144-27 this section;
145-1 (2) the process by which an educational institution
145-2 qualifies for a reduced rate;
145-3 (3) the date by which a dominant carrier shall file a
145-4 tariff;
145-5 (4) guidelines and criteria by which the services and
145-6 reduced rates shall further the goals stated in Subsection (d) of
145-7 this section; and
145-8 (5) any other requirements, terms, and conditions that
145-9 the commission determines to be in the public interest.
145-10 (c) A tariff filing by a dominant carrier under this
145-11 section:
145-12 (1) shall concern only the implementation of this
145-13 section;
145-14 (2) is not a rate change under Section 3.211 of this
145-15 Act; and
145-16 (3) does not affect any of the carrier's other rates
145-17 or services.
145-18 (d) The services and reduced rates shall be designed to:
145-19 (1) encourage the development and offering of distance
145-20 learning activities by educational institutions;
145-21 (2) meet the distance learning needs identified by the
145-22 educational community; and
145-23 (3) recover the long-run incremental costs of
145-24 providing the services, to the extent those costs can be
145-25 identified, so as to avoid subsidizing educational institutions.
145-26 (e) The commission is not required to determine the long-run
145-27 incremental cost of providing a service before approving a reduced
146-1 rate for the service. Until cost determination rules are developed
146-2 and the rates established under this section are changed as
146-3 necessary to ensure proper cost recovery, the reduced rates
146-4 established by the commission shall be equal to 75 percent of the
146-5 otherwise applicable rate. After the commission develops cost
146-6 determination rules for telecommunications services generally, it
146-7 shall ensure that a reduced rate approved under this section
146-8 recovers service-specific long-run incremental costs and avoids
146-9 subsidization.
146-10 (f) An educational institution or dominant carrier may at
146-11 any time request the commission to:
146-12 (1) provide for a reduced rate for a service directly
146-13 related to a distance learning activity that is not covered by
146-14 commission rules;
146-15 (2) change a rate;
146-16 (3) amend a tariff; or
146-17 (4) amend a commission rule.
146-18 (g) If the commission determines that a change requested
146-19 under Subsection (f) is appropriate, it shall make the requested
146-20 change.
146-21 (h) In this section:
146-22 (1) "Distance learning" means instruction, learning,
146-23 and training that is transmitted from one site to one or more sites
146-24 by telecommunications services that are used by an educational
146-25 institution predominantly for such instruction, learning, or
146-26 training, including video, data, voice, and electronic information.
146-27 (2) "Educational institution" means and includes:
147-1 (A) accredited primary or secondary schools
147-2 owned or operated by state and local governmental entities or
147-3 private entities;
147-4 (B) institutions of higher education as defined
147-5 by Section 61.003, Education Code;
147-6 (C) private institutions of higher education
147-7 accredited by a recognized accrediting agency as defined by Section
147-8 61.003(13), Education Code;
147-9 (D) the Central Education Agency, its successors
147-10 and assigns;
147-11 (E) regional education service centers
147-12 established and operated pursuant to Sections 11.32 and 11.33,
147-13 Education Code; and
147-14 (F) the Texas Higher Education Coordinating
147-15 Board, its successors and assigns.
147-16 Sec. 3.606. TELECOMMUNICATIONS INFRASTRUCTURE FUND. (a) In
147-17 this section:
147-18 (1) "Board" means the Telecommunications
147-19 Infrastructure Fund Board.
147-20 (2) "Fund" means the Telecommunications Infrastructure
147-21 Fund.
147-22 (3) "Institution of higher education" has the meaning
147-23 assigned by Section 61.003, Education Code, and also includes a
147-24 "private or independent institution of higher education" as defined
147-25 by Section 61.003, Education Code.
147-26 (4) "Library" means a "public library," or "regional
147-27 library system" as those terms are defined by Section 441.122,
148-1 Government Code, or a library operated by an institution of higher
148-2 education.
148-3 (5) "School district" has the meaning assigned by
148-4 Section 19.001, Education Code.
148-5 (b) The board shall administer the fund. The board consists
148-6 of nine members. Three members are appointed by the governor,
148-7 three members are appointed by the lieutenant governor, and three
148-8 members are appointed by the governor from a list of individuals
148-9 submitted by the speaker of the house of representatives. Members
148-10 of the board serve for staggered, six-year terms, with three
148-11 members' terms expiring on August 31 of each odd-numbered year.
148-12 The governor shall designate the presiding officer of the board.
148-13 (c) The governor and the lieutenant governor, in making
148-14 their appointments to the board, and the speaker of the house of
148-15 representatives, in compiling the list of recommended persons,
148-16 shall attempt to select members who are representative of urban and
148-17 rural school districts, institutions of higher education,
148-18 libraries, and the public. A person may not serve on the board if
148-19 the person is required to register as a lobbyist under Chapter 305,
148-20 Government Code, because of the person's activities for
148-21 compensation on behalf of a profession related to the operation of
148-22 the board.
148-23 (d) Members of the board serve without pay but are entitled
148-24 to reimbursement for their actual expenses incurred in attending
148-25 meetings of the board or in attending to other work of the board
148-26 if approved by the chairman of the board.
148-27 (e) The board is subject to Chapters 551 and 2001,
149-1 Government Code. The board is subject to Chapter 325, Government
149-2 Code (Texas Sunset Act). Unless continued in existence as provided
149-3 by that chapter, the advisory board and this section expire
149-4 September 1, 2001.
149-5 (f) The board is authorized to employ any personnel as
149-6 reasonably necessary to perform duties delegated by the board, and
149-7 the board may also enter into contracts as are necessary with state
149-8 agencies or private entities to perform its duties.
149-9 (g) The board may appoint any committees as it determines
149-10 may assist it in performing its duties under this section.
149-11 (h) The fund administered by the board is financed by an
149-12 annual assessment on all telecommunications providers doing
149-13 business in this state. Each telecommunications provider shall pay
149-14 the annual assessment in accordance with the ratio that the annual
149-15 taxable telecommunications receipts reported by that provider under
149-16 Chapter 151, Tax Code, bears to the total annual taxable
149-17 telecommunications receipts reported by all telecommunications
149-18 providers under Chapter 151, Tax Code.
149-19 (i) For the fiscal year beginning September 1, 1995, and for
149-20 the five fiscal years immediately following, the comptroller shall
149-21 assess and collect from telecommunications providers a total annual
149-22 amount of $75 million. The amount shall be assessed and collected
149-23 in each year without respect to whether all of the funds previously
149-24 collected have been disbursed or spent due to lack of demand or
149-25 otherwise.
149-26 (j) The comptroller may require telecommunications providers
149-27 to provide any reports and information as are needed to fulfill the
150-1 duties of the comptroller provided by this section. Any
150-2 information provided to the comptroller by a telecommunications
150-3 provider under this section is confidential and exempt from
150-4 disclosure under Chapter 552, Government Code.
150-5 (k) All amounts collected by the comptroller from
150-6 telecommunications providers under Subsection (h) of this section
150-7 shall be deposited in the fund in the state treasury and may be
150-8 appropriated solely for use by the board consistent with the
150-9 purposes of this section. Sections 403.094 and 403.095, Government
150-10 Code, do not apply to the fund.
150-11 (l) From funds appropriated to the board, the comptroller
150-12 shall issue warrants as requested by the board in accordance with
150-13 the purposes of this section, including warrants to grantees of the
150-14 board in amounts certified by the board to the comptroller.
150-15 (m) In addition to any appropriated funds, the board may
150-16 accept gifts, grants, and donations and use them for the purposes
150-17 of this section.
150-18 (n) The board shall use the fund to award grants and loans,
150-19 including grants for installation costs, if applicable, on a
150-20 competitive basis to rural and urban school districts, regional
150-21 education service centers, institutions of higher education, and
150-22 libraries recommended to the board by the Central Education Agency,
150-23 the Texas Higher Education Coordinating Board, or the State Library
150-24 and Archives Commission.
150-25 (o) The board may award grants to projects and proposals
150-26 that:
150-27 (1) provide equipment and infrastructure needed for
151-1 distance learning and telemedicine services;
151-2 (2) develop and implement the initial or prototypical
151-3 delivery of courses and other distance learning material;
151-4 (3) train teachers, faculty, or technicians in the use
151-5 of distance learning materials and equipment; or
151-6 (4) develop curricula and instructional material
151-7 especially suited for delivery by telecommunications.
151-8 (p) The board may award loans to projects and proposals to
151-9 acquire equipment needed for distance learning and telemedicine
151-10 projects.
151-11 (q) In awarding grants and loans, the board shall give
151-12 priority to projects and proposals that:
151-13 (1) represent collaborative efforts involving multiple
151-14 schools, universities, or libraries;
151-15 (2) contribute matching funds from other sources;
151-16 (3) show promise of becoming self-sustaining;
151-17 (4) help users of information learn new ways to
151-18 acquire and use information through telecommunications;
151-19 (5) extend specific educational information and
151-20 knowledge services to groups not previously served, especially
151-21 those in rural and remote areas;
151-22 (6) result in more efficient or effective learning
151-23 than through conventional teaching;
151-24 (7) improve the effectiveness and efficiency of health
151-25 care delivery; or
151-26 (8) take advantage of distance learning opportunities
151-27 in rural and urban school districts with disproportionate numbers
152-1 of at-risk youths or with high dropout rates.
152-2 (r) The Texas Higher Education Coordinating Board and
152-3 Central Education Agency shall adopt policies and procedures in
152-4 consultation with the board that are designed to aid the board in
152-5 achieving the purposes of this section.
152-6 (s) In distributing funds to public schools, the board
152-7 shall take into account the relative property wealth per student of
152-8 the recipient school districts and recognize the unique needs of
152-9 rural communities.
152-10 Sec. 3.607 <3.356>. RECOVERY OF LOST REVENUES. A local
152-11 exchange company is entitled to recover the lost revenue, if any,
152-12 resulting solely from the provision of tel-assistance service from
152-13 the universal service fund, the establishment of which is provided
152-14 for by this Act.
152-15 Sec. 3.608 <3.357>. UNIVERSAL SERVICE FUND. (a) The
152-16 commission shall adopt and enforce rules requiring local exchange
152-17 companies to establish a universal service fund to assist local
152-18 exchange companies in providing basic local telecommunications
152-19 service <exchange service> at reasonable rates in high cost rural
152-20 areas, to reimburse local exchange companies for revenues lost as a
152-21 result of providing tel-assistance service under this Act, to
152-22 reimburse the telecommunications carrier providing the statewide
152-23 telecommunications relay access service for the hearing-impaired
152-24 and speech-impaired as authorized in Section 3.604 <3.354> of this
152-25 Act, and to reimburse the Texas Department of Human Services and
152-26 the commission for costs incurred in implementing the provisions of
152-27 this subtitle.
153-1 (b)(1) In addition to the authority described by Subsection
153-2 (a) of this section, the commission may adopt any mechanisms
153-3 necessary to maintain reasonable rates for local exchange telephone
153-4 service and shall establish rules that would expand the universal
153-5 service fund for local exchange companies serving fewer than one
153-6 million access lines in the circumstances prescribed by this
153-7 subsection.
153-8 (2) In the event of a commission order, rule, or
153-9 policy, the effect of which is to reduce the amount of the high
153-10 cost assistance fund, except an order entered in an individual
153-11 company revenue requirements proceeding, the commission shall
153-12 implement a mechanism through the universal service fund to replace
153-13 the reasonably projected reduction in revenues caused by that
153-14 regulatory action.
153-15 (3) In the event of a Federal Communications
153-16 Commission order, rule, or policy, the effect of which is to change
153-17 the federal universal service fund revenues of a local exchange
153-18 company or change costs or revenues assigned to the intrastate
153-19 jurisdiction, the commission shall implement a mechanism, through
153-20 either the universal service fund or an increase to rates if that
153-21 increase would not adversely impact universal service, to replace
153-22 the reasonably projected change in revenues caused by the
153-23 regulatory action.
153-24 (4) In the event of a commission change in its policy
153-25 with respect to intraLATA "1+" dialing access, the commission shall
153-26 implement a mechanism, through either the universal service fund or
153-27 an increase to rates if that increase would not adversely impact
154-1 universal service, to replace the reasonably projected reduction in
154-2 contribution caused by the action. Contribution for purposes of
154-3 this subdivision equals average intraLATA long distance message
154-4 telecommunications service (MTS) revenue, including intraLATA toll
154-5 pooling and associated impacts, per minute less average MTS cost
154-6 per minute less the average contribution from switched access times
154-7 the projected change in intraLATA "1+" minutes of use.
154-8 (5) In the event of any other governmental agency
154-9 issuing an order, rule, or policy, the effect of which is to
154-10 increase costs or decrease revenues of the intrastate jurisdiction,
154-11 the commission shall implement a mechanism through either the
154-12 universal service fund or an increase to rates if that increase
154-13 would not adversely impact universal service, to replace the
154-14 reasonably projected increase in costs or decrease in revenues
154-15 caused by that regulatory action.
154-16 (6) A revenue requirement showing is not required with
154-17 respect to disbursements from the universal service fund under
154-18 Subsection (a) or (b) of this section. Those disbursements shall
154-19 be implemented promptly and efficiently so that telecommunications
154-20 providers and local exchange companies do not experience
154-21 unnecessary cash flow changes as a result of these changes in
154-22 governmental policy.
154-23 (c) The universal service fund shall be funded by a
154-24 statewide uniform charge, at rates and on services determined by
154-25 the commission, payable by all telecommunications providers
154-26 <utilities> that have access to the customer base. In establishing
154-27 the uniform level of the charge and the services to which it will
155-1 apply, the commission may not make or grant an unreasonable
155-2 preference or advantage to a telecommunications provider <utility>
155-3 or subject a telecommunications provider <utility> to unreasonable
155-4 prejudice or disadvantage. The charge shall be paid in accordance
155-5 with procedures approved by the commission.
155-6 (d) <(c)> The commission shall:
155-7 (1) establish, in a manner that assures reasonable
155-8 rates for basic local telecommunications <exchange> service,
155-9 eligibility criteria and review procedures, including a method for
155-10 administrative review, it finds necessary for funding of and
155-11 distribution from <participation in> the universal service fund;
155-12 (2) determine which local exchange companies meet the
155-13 eligibility criteria, which, at a minimum, include the requirement
155-14 to offer service to every consumer within its certificated area and
155-15 render continuous and adequate service within the area or areas, in
155-16 compliance with the commission's quality of service requirements;
155-17 (3) determine the amount of and approve a procedure
155-18 for reimbursement to local exchange companies of revenue lost in
155-19 providing tel-assistance service under this Act;
155-20 (4) prescribe and collect fees from the universal
155-21 service fund necessary to recover the costs the Texas Department of
155-22 Human Services and the commission incurred in implementing and
155-23 administrating the provisions of this subtitle; and
155-24 (5) approve procedures for the collection and
155-25 disbursal of the revenues of the universal service fund.
155-26 (e) <(d)> The commission shall adopt rules for the
155-27 implementation and administration of the universal service fund.
156-1 (f) <(e)> The commission may do all things necessary and
156-2 convenient to implement and administer the universal service fund,
156-3 including require local exchange companies and other
156-4 telecommunications providers to provide any reports and information
156-5 needed to assess contributions to the fund. All reports and
156-6 information are confidential and not subject to disclosure under
156-7 Chapter 552, Government Code.
156-8 Sec. 3.609 <3.358>. INTERACTIVE MULTIMEDIA COMMUNICATIONS.
156-9 (a) The commission shall permit a local exchange company that
156-10 provides interactive multimedia communications services to
156-11 establish rates at levels necessary, using sound ratemaking
156-12 principles, to recover costs associated with providing the
156-13 services. Unless determined by the commission to be in the public
156-14 interest, a local exchange company may not establish rates under
156-15 this subsection that are less than the local exchange company's
156-16 long-run incremental costs of providing the interactive multimedia
156-17 communications services.
156-18 (b) In this section, "interactive multimedia communications"
156-19 has the meaning assigned by Section 14.0451(a), Education Code, as
156-20 added by Chapter 868, Acts of the 73rd Legislature, Regular
156-21 Session, 1993.
156-22 Sec. 3.610. REGULATORY TRANSITION FUND. (a) The commission
156-23 shall establish a fund outside the state treasury known as the
156-24 Regulatory Transition Fund (RTF). The purposes of the fund are to:
156-25 (1) promote affordable universal local exchange
156-26 telephone service in areas in which no competition exists; and
156-27 (2) facilitate the transition from networks
157-1 established and prices set under monopoly conditions to a
157-2 competitive market without endangering affordable universal
157-3 service, while permitting existing facilities based local exchange
157-4 companies to recover the costs of those networks.
157-5 (b) The RTF shall be funded by an assessment on the billed
157-6 retail revenues of all telecommunications providers in this state
157-7 except as provided by Subsection (e) of this section. An
157-8 assessment may not be made on local exchange telephone service
157-9 revenues of a holder of a certificate of convenience and necessity,
157-10 certificate of operating authority, or service provider certificate
157-11 of operating authority. The commission shall set the assessment
157-12 for the next calendar year on or before November 1 of each year.
157-13 (c) The RTF shall be administered by the commission, which
157-14 may retain a competitively neutral administrator for the day-to-day
157-15 operations of the RTF. The commission is the trustee of the fund's
157-16 assets. The commission may do all things necessary and convenient
157-17 to implement and administer the RTF, including require local
157-18 exchange companies and other telecommunications providers to
157-19 provide any reports and information needed to assess contributions
157-20 to the fund. All reports and information are confidential and not
157-21 subject to disclosure under Chapter 552, Government Code. The
157-22 commission shall administer the RTF in a manner to promptly and
157-23 efficiently collect and transfer funds so that telecommunications
157-24 providers and local exchange companies do not experience
157-25 unnecessary cash flow changes as a result of the replacement of
157-26 access revenues with revenues from the RTF.
157-27 (d) A telecommunications provider may impose a surcharge on
158-1 or increase rates to its retail customers to collect its share of
158-2 the assessment, except that the surcharge may not be imposed on a
158-3 service if its revenues are not subject to the RTF assessment.
158-4 (e) On or before January 1, 1996, each existing local
158-5 exchange company shall inform the commission if the company intends
158-6 to receive funds from the RTF. An incumbent local exchange company
158-7 electing under Subtitle H of this title shall elect to receive
158-8 funds from the RTF. In an area as to which a local exchange
158-9 company that has a certificate of convenience and necessity on
158-10 September 1, 1995, informs the commission that it will not receive
158-11 RTF funds, that local exchange company and no other
158-12 telecommunications provider, including a holder of a certificate of
158-13 operating authority or service provider certificate of authority,
158-14 shall be assessed for revenues arising in that company's
158-15 certificated area.
158-16 (f) Effective July 1, 1996, each local exchange company that
158-17 has elected to receive RTF funds shall price its intrastate
158-18 switched access rates at the level of interstate switched access
158-19 rates as of January 1, 1995. A company electing under this section
158-20 and having fewer than 100,000 access lines in this state shall have
158-21 the option to price its intrastate switched access rates at the
158-22 same level as the intrastate switched access rates of a local
158-23 exchange company having more than five million access lines in this
158-24 state. Coincident with this change, the local exchange company
158-25 shall reprice its intrastate intraLATA toll rates proportionately.
158-26 A local exchange company that receives intraLATA toll settlements
158-27 and that elects under this section shall reprice its intraLATA toll
159-1 rates at the same level as the intraLATA toll rates of a local
159-2 exchange company having more than five million access lines in this
159-3 state. The amount the company receives from the RTF may not be
159-4 increased after the repricing required by this subsection except as
159-5 permitted by Subsection (h) of this section.
159-6 (g) The commission shall disburse funds from the RTF on a
159-7 revenue neutral basis to existing local exchange companies when
159-8 switched access and intraLATA toll rates have been repriced so that
159-9 those companies receive an amount from the RTF equal to the net
159-10 revenue reductions, including any additional settlements that
159-11 result from those reductions, specified by Subsection (f) of this
159-12 section for intraLATA toll and access.
159-13 (h) As to companies subject to commission substantive rule
159-14 16 T.A.C. Section 23.91, if price changes are required by the
159-15 commission following the completion of the pricing proceedings, the
159-16 commission may assess additional amounts to telecommunications
159-17 providers to fund any revenue reductions caused by those price
159-18 changes, but that assessment may not exceed the amount of embedded
159-19 non-traffic sensitive costs that are, at the time of the pricing
159-20 proceeding, allocated to or recovered from intraLATA toll and
159-21 switched access for those companies.
159-22 (i) The commission shall establish rules and procedures to
159-23 transitionally reduce RTF receipts for an area or areas of an
159-24 incumbent local exchange company in which another certificate of
159-25 convenience and necessity or a certificate of operating authority
159-26 or service provider certificate of operating authority has been
159-27 granted. After the basic local telecommunications service of the
160-1 incumbent local exchange company has been completely deregulated
160-2 for a particular geographic market area, receipts for the RTF shall
160-3 be reduced. The reduction shall be in proportion to the level of
160-4 non-traffic sensitive costs recovered from the RTF for that area or
160-5 areas. In making this determination, the commission shall take
160-6 into account the non-traffic sensitive costs incurred in the
160-7 particular geographic area. In the alternative, after a new
160-8 applicant has completed its build-out plan required by Section
160-9 3.2531 of this Act, the commission may reduce receipts for the RTF
160-10 for a particular geographic area, even if basic local exchange
160-11 telecommunications has not been completely deregulated, if the
160-12 commission orders that the RTF receipt reduction is revenue neutral
160-13 to the incumbent local exchange company involved.
160-14 (j) At the beginning of the fourth and fifth years following
160-15 the price changes specified by Subsection (f) of this section, and
160-16 in order to move services toward cost, on application of a local
160-17 exchange company, the commission may restructure the rates of
160-18 companies receiving funds from the RTF. An increase in the
160-19 revenues from the restructuring in the rates for local exchange
160-20 service shall be used to reduce a company's receipts from the RTF.
160-21 In calculating the amount of RTF reduction, a factor of 115 percent
160-22 of the new revenue generated from a local exchange service increase
160-23 shall be used. The commission may not approve a basic local rate
160-24 increase of more than 5 percent a year and the resulting rate may
160-25 not exceed the nationwide average of rates for the same service.
160-26 (k) A revenue requirement showing is not required for a
160-27 receipt of disbursements from the RTF.
161-1 Sec. 3.611 <3.359>. SEVERABILITY. If this subtitle
161-2 conflicts with another provision of this Act, this subtitle
161-3 prevails.
161-4 SUBTITLE N <I>. AUTOMATIC DIAL ANNOUNCING DEVICES
161-5 Sec. 3.651 <3.401>. DEFINITIONS. In this subtitle:
161-6 (1) "Automated dial announcing device" or "ADAD" means
161-7 automated equipment used for telephone solicitation or collection
161-8 that is capable:
161-9 (A) of storing telephone numbers to be called or
161-10 that has a random or sequential number generator capable of
161-11 producing numbers to be called; and
161-12 (B) alone or in conjunction with other
161-13 equipment, of conveying a prerecorded or synthesized voice message
161-14 to the number called without the use of a live operator.
161-15 (2) "LEC" means a local exchange company, as that term
161-16 is defined by Section 3.002 <3.001> of this Act.
161-17 Sec. 3.652 <3.402>. EXEMPTIONS. This subtitle does not
161-18 apply to the use of an ADAD to make a telephone call:
161-19 (1) relating to an emergency or a public service under
161-20 a program developed or approved by the emergency management
161-21 coordinator of the county in which the call was received; or
161-22 (2) made by a public or private primary or secondary
161-23 school system to locate or account for a truant student.
161-24 Sec. 3.653 <3.403>. REQUIREMENTS FOR OPERATION OF ADAD.
161-25 (a) A person may not operate an ADAD to make a telephone call if
161-26 the device plays a recorded message when a connection is completed
161-27 to a telephone number unless:
162-1 (1) the person has obtained a permit from the
162-2 commission and given written notice specifying the type of device
162-3 to each telecommunications utility over whose system the device is
162-4 to be used;
162-5 (2) the device is not used for random number dialing
162-6 or to dial numbers determined by successively increasing or
162-7 decreasing integers;
162-8 (3) the message states during the first 30 seconds of
162-9 the call the nature of the call, the identity of the person,
162-10 company, or organization making the call, and the telephone number
162-11 from which the call was made, provided, however, that if an ADAD is
162-12 used for debt collection purposes and the use complies with
162-13 applicable federal law and regulations, and the ADAD is used by a
162-14 live operator for automatic dialing or hold announcement purposes,
162-15 the use complies with this subdivision;
162-16 (4) the device disconnects from the called person's
162-17 line not later than 30 seconds after the call is terminated by
162-18 either party or, if the device cannot disconnect within that
162-19 period, a live operator introduces the call and receives the oral
162-20 consent of the called person before beginning a prerecorded or
162-21 synthesized voice message; and
162-22 (5) for calls terminating in this state, the device is
162-23 not used to make a call:
162-24 (A) before noon or after 9 p.m. on a Sunday or
162-25 before 9 a.m. or after 9 p.m. on a weekday or a Saturday, if the
162-26 device is used for solicitation; or
162-27 (B) at an hour at which collection calls would
163-1 be prohibited under the federal Fair Debt Collection Practices Act
163-2 (15 U.S.C. Section 1692 et seq.), if the device is used for
163-3 collection purposes.
163-4 (b) In addition to the requirements prescribed by Subsection
163-5 (a) of this section, if during the call a cross-promotion or
163-6 reference to a pay-per-call information service is made, the call
163-7 shall include:
163-8 (1) a statement that a charge will be incurred by a
163-9 caller who makes a call to a pay-per-call information services
163-10 telephone number;
163-11 (2) the amount of the flat-rate or cost-per-minute
163-12 charge that will be incurred or the amount of both if both charges
163-13 will be incurred; and
163-14 (3) the estimated amount of time required to receive
163-15 the entire information offered by the service during a call.
163-16 (c) In this section, "pay-per-call information service"
163-17 means a service that allows a caller to dial a specified "900" or
163-18 "976" number to call a service that routinely delivers, for a
163-19 predetermined and sometimes time-sensitive fee, a prerecorded or
163-20 live message or interactive program.
163-21 Sec. 3.654 <3.404>. INVESTIGATION OF COMPLAINTS; VIOLATIONS;
163-22 DISCONNECTION OF SERVICE. (a) The commission shall investigate
163-23 complaints relating to the use of an ADAD and enforce this
163-24 subtitle.
163-25 (b) If the commission or a court determines that a person
163-26 has violated this subtitle, the commission or court shall require a
163-27 telecommunications utility to disconnect service to the person.
164-1 The telecommunications utility may reconnect service to the person
164-2 only on a determination by the commission that the person will
164-3 comply with this subtitle. The utility shall give notice to the
164-4 person using the device of its intent to disconnect service not
164-5 later than the third day before the date of the disconnection,
164-6 except that if the device is causing network congestion or
164-7 blockage, the notice may be given on the day before the date of
164-8 disconnection.
164-9 (c) A telecommunications utility may, without an order by
164-10 the commission or a court, disconnect or refuse to connect service
164-11 to a person using or intending to use an ADAD if the utility
164-12 determines that the device would cause or is causing network harm.
164-13 Sec. 3.655 <3.405>. APPLICATION FOR PERMIT TO OPERATE ADAD.
164-14 (a) An application for a permit to use one or more ADADs must be
164-15 made using the form prescribed by the commission and must be
164-16 accompanied by a fee in a reasonable amount computed to cover the
164-17 enforcement cost to the commission, but not to exceed $500, as
164-18 determined by the commission. A permit is valid for one year after
164-19 its effective date. Subject to Subsection (c) of this section, a
164-20 permit may be renewed annually by making the filing required by
164-21 this section and paying a filing fee of not more than $100, as
164-22 determined by the commission. The proceeds of the fees shall be
164-23 deposited to the credit of the general revenue fund.
164-24 (b) Each application for the issuance or renewal of a permit
164-25 under this section must contain the telephone number of each ADAD
164-26 that will be used and the physical address from which the ADAD will
164-27 operate. If the telephone number of an ADAD or the physical
165-1 address from which the ADAD operates changes, the owner or operator
165-2 of the ADAD shall notify the commission by certified mail of each
165-3 new number or address not later than the 48th hour before the hour
165-4 at which the ADAD will begin operating with the new telephone
165-5 number or at the new address. If the owner or operator of an ADAD
165-6 fails to notify the commission as required by this subsection
165-7 within the period prescribed by this subsection, the permit is
165-8 automatically invalid.
165-9 (c) In determining if a permit should be issued or renewed,
165-10 the commission shall consider the compliance record of the owner or
165-11 operator of the ADAD. The commission may deny an application for
165-12 the issuance or renewal of a permit because of the applicant's
165-13 compliance record.
165-14 (d) The commission shall provide to an LEC on request a copy
165-15 of a permit issued under this section and of any changes relating
165-16 to the permit.
165-17 (e) An LEC that receives a complaint relating to the use of
165-18 an ADAD shall send the complaint to the commission. The commission
165-19 by rule shall prescribe the procedures and requirements for sending
165-20 a complaint to the commission.
165-21 Sec. 3.656 <3.406>. VIOLATIONS; PENALTIES. (a) A person
165-22 who owns or operates an ADAD and who operates the ADAD without a
165-23 valid permit or with an expired permit or who operates the ADAD in
165-24 violation of this subtitle or a commission rule or order is subject
165-25 to an administrative penalty of not more than $1,000 for each day
165-26 or portion of a day during which the ADAD was operating in
165-27 violation of this section.
166-1 (b) The administrative penalty authorized by this section is
166-2 civil in nature and is cumulative of any other penalty provided by
166-3 law.
166-4 (c) The commission by rule shall prescribe the procedures
166-5 for assessing an administrative penalty under this section. The
166-6 procedures shall require proper notice and hearing in accordance
166-7 with Chapter 2001, Government Code.
166-8 (d) A person may appeal the final order of the commission
166-9 under Chapter 2001, Government Code, using the substantial evidence
166-10 rule on appeal.
166-11 (e) The proceeds of administrative penalties collected under
166-12 this section shall be deposited to the credit of the general
166-13 revenue fund.
166-14 Sec. 3.657 <3.407>. REVOCATION OF PERMIT; OFFENSES.
166-15 (a) The commission may revoke a permit issued under this subtitle
166-16 for failure to comply with this subtitle.
166-17 (b) A person commits an offense if the person owns or
166-18 operates an ADAD that the person knows is operating in violation of
166-19 this subtitle. An offense under this subsection is a Class A
166-20 misdemeanor.
166-21 Sec. 3.658 <3.408>. RULEMAKING AUTHORITY. The commission
166-22 may adopt any rules necessary to carry out its powers and duties
166-23 under this subtitle.
166-24 Sec. 3.659 <3.409>. COMPLIANCE WITH CONSUMERS' REQUESTS NOT
166-25 TO BE CALLED. Every telephone solicitor operating in this state
166-26 who makes consumer telephone calls subject to Section 37.02 of the
166-27 Business & Commerce Code shall implement in-house systems and
167-1 procedures so that every effort is made not to call consumers who
167-2 ask not to be called again. The commission is granted all
167-3 necessary power and authority to enforce the provisions of this
167-4 section.
167-5 Sec. 3.660 <3.410>. NOTICE TO CONSUMER OF PROVISIONS OF
167-6 CHAPTER 37 OF THE BUSINESS & COMMERCE CODE AND SECTION 3.659
167-7 <3.409>. The commission by rule shall require that a local
167-8 exchange company or telephone cooperative inform its customers of
167-9 the provisions of Chapter 37 of the Business & Commerce Code and
167-10 Section 3.659 <3.409> of this Act by:
167-11 (1) inserting the notice annually in the billing
167-12 statement mailed to a customer; or
167-13 (2) publishing the notice in the consumer information
167-14 pages of its local telephone directory.
167-15 SECTION 42. (a) Subchapter D, Chapter 74, Property Code, is
167-16 amended by adding Section 74.3011 to read as follows:
167-17 Sec. 74.3011. DELIVERY OF MONEY TO RURAL SCHOLARSHIP FUND.
167-18 (a) Notwithstanding and in addition to any other provision of this
167-19 chapter or other law, a local telephone exchange company may
167-20 deliver reported money to a scholarship fund for rural students
167-21 instead of delivering the money to the state treasurer as
167-22 prescribed by Section 74.301.
167-23 (b) A local telephone exchange company may deliver the money
167-24 under this section only to a scholarship fund established by one or
167-25 more local telephone exchange companies in this state to enable
167-26 needy students from rural areas to attend college, technical
167-27 school, or another postsecondary educational institution.
168-1 (c) A local telephone exchange company shall file with the
168-2 state treasurer a verification of money delivered under this
168-3 section that complies with Section 74.302.
168-4 (d) A claim for money delivered to a scholarship fund under
168-5 this section must be filed with the local telephone exchange
168-6 company that delivered the money. The local telephone exchange
168-7 company shall forward the claim to the administrator of the
168-8 scholarship fund to which the money was delivered. The scholarship
168-9 fund shall pay the claim if the fund determines in good faith that
168-10 the claim is valid. A person aggrieved by a claim decision may
168-11 file a suit against the fund in a district court in the county in
168-12 which the administrator of the scholarship fund is located in
168-13 accordance with Section 74.506.
168-14 (e) The state treasurer shall prescribe forms and procedures
168-15 governing this section, including forms and procedures relating to:
168-16 (1) notice of presumed abandoned property;
168-17 (2) delivery of reported money to a scholarship fund;
168-18 and
168-19 (3) filing of a claim.
168-20 (f) In this section, "local telephone exchange company"
168-21 means a telecommunications utility certificated to provide local
168-22 exchange service within the state and that is a telephone
168-23 cooperative or has fewer than 50,000 access lines in service in
168-24 this state.
168-25 (b) Section 74.3011, Property Code, as added by this Act,
168-26 applies only to money that a local telephone exchange company would
168-27 otherwise be required to deliver to the state treasurer on or after
169-1 the effective date of this Act. Money that was required to be
169-2 delivered to the state treasurer before the effective date of this
169-3 Act is governed by the law in effect when the money was required to
169-4 be delivered, and that law is continued in effect for that purpose.
169-5 SECTION 43. As soon as possible after the effective date of
169-6 this Act, the governor and lieutenant governor shall appoint the
169-7 members of the Telecommunications Infrastructure Fund Board created
169-8 by Section 3.606, Public Utility Regulatory Act of 1995, as enacted
169-9 by S.B. 319, Acts of the 74th Legislature, Regular Session, 1995,
169-10 as added by this Act. The governor shall appoint two members with
169-11 terms expiring on August 31, 1997, two members with terms expiring
169-12 on August 31, 1999, and two members with terms expiring on August
169-13 31, 2001. The terms of the members appointed from the list
169-14 provided by the speaker of the house of representatives must be
169-15 staggered so that the terms of one-third of those appointees expire
169-16 every odd-numbered year. The lieutenant governor shall appoint one
169-17 member with a term expiring on August 31, 1997, one member with a
169-18 term expiring on August 31, 1999, and one member with a term
169-19 expiring on August 31, 2001.
169-20 SECTION 44. All laws or parts of laws in conflict with this
169-21 Act are repealed effective September 1, 1995.
169-22 SECTION 45. (a) This Act takes effect September 1, 1995.
169-23 (b) Section 3.2555, Public Utility Regulatory Act of 1995,
169-24 as enacted by S.B. 319, Acts of the 74th Legislature, Regular
169-25 Session, 1995, as added by this Act, applies only to a franchise or
169-26 contract entered into or amended on or after September 1, 1995. A
169-27 franchise or contract entered into before September 1, 1995, and
170-1 not amended on or after that date is governed by the law in effect
170-2 when the contract was entered into or last amended, and that law is
170-3 continued in effect for that purpose.
170-4 (c) Section 3.304(a)(3)(A)(i), Public Utility Regulatory Act
170-5 of 1995, as enacted by S.B. 319, Acts of the 74th Legislature,
170-6 Regular Session, 1995, as amended by this Act, applies only to a
170-7 petition filed on or after April 15, 1995. A petition filed before
170-8 April 15, 1995, is governed by the law in effect when the petition
170-9 was filed, and that law is continued in effect for that purpose.
170-10 SECTION 46. The importance of this legislation and the
170-11 crowded condition of the calendars in both houses create an
170-12 emergency and an imperative public necessity that the
170-13 constitutional rule requiring bills to be read on three several
170-14 days in each house be suspended, and this rule is hereby suspended.