HBA-JRA, TYH C.S.S.B. 560 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 560
By: Sibley
State Affairs
5/20/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

In 1995, the 74th Texas Legislature enacted legislation to change the
telecommunications market from a highly regulated industry to a less
regulated industry, and eventually to a competitive industry.  Since 1995,
the telecommunications industry market has changed considerably.  With the
development of alternative telecommunications providers, the growing
marketplace for telecommunications, and the end of certain commitments made
under the legislation enacted in 1995, the regulatory framework now
requires some adjustment.  C.S.S.B. 560 sets forth regulations for
telecommunications utilities and provisions regarding telecommunication
services. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Public Utility Commission of Texas
in SECTION 17 (Section 55.013, Utilities Code), SECTION 19 (Section 55.015,
Utilities Code), SECTION 26 (Section 56.072, Utilities Code), SECTION 27
(Section 56.079, Utilities Code), SECTION 28 (Section 58.003, Utilities
Code), and SECTION 50 (Sections 64.003, 64.004, 64.051, 64.052, and 64.102,
Utilities Code) of this bill.  It is the opinion of the Office of House
Bill Analysis that rulemaking authority previously delegated to the Public
Utility Commission of Texas is modified in SECTION 20 (Section 55.302,
Utilities Code) and SECTION 21 (Section 56.021, Utilities Code) of this
bill.  It is also the opinion of the Office of House Bill Analysis that
conditions are placed on rulemaking in SECTION 20 (Section 55.308,
Utilities Code), SECTION 46 (Section 60.164, Utilities Code), and SECTION
50 (Section 64.158, Utilities Code).  It is the opinion of the Office of
House Bill Analysis that SECTION 4 (Section 51.001, Utilities Code) and
SECTION 50 (Subtitle C, Title 2, Chapter 64, Section 64.001, Utilities
Code) state the purpose for rulemaking authority granted to the Public
Utility Commission of Texas. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 12.005, Utilities Code, to provide that the
Public Utility Commission of Texas (PUC) is abolished and this title
(Public Utility Regulatory Act) expires on September 1, 2005, rather than
September 1, 2001, unless continued as provided by Chapter 325 (Texas
Sunset Act), Government Code. 

SECTION 2.  Amends Section 13.002, Utilities Code, to provide that the
Office of Public Utility Counsel is abolished and this chapter (Office of
Public Utility Counsel) expires on September 1, 2005, rather than September
1, 2001, unless continued as provided by Chapter 325 (Texas Sunset Act),
Government Code. 

SECTION 3.  Amends Section 15.024(c), Utilities Code, to provide that this
subsection does not apply to a violation of Chapter 55 (Regulation of
Telecommunications Services) or 64 (Customer Protection). 

SECTION 4.  Amends Section 51.001, Utilities Code, by amending Subsection
(a) and adding Subsection (g), as follows: 

(a)  Provides that changes in technology and market structure have
increased the need for minimum standards of service quality, customer
service, and fair business practices to ensure  high-quality service to
customers and a healthy marketplace where competition is permitted by law.
Sets forth the purpose for rulemaking authority granted to PUC. 

(g)  Sets forth the policy of this state regarding access to
telecommunications and information services.  Requires PUC to begin a
review and evaluation of the availability and pricing of telecommunications
and information services in rural and high cost areas, as well as the
convergence of telecommunications services, by November 1, 1999.  Requires
PUC to file a report, including its recommendations on the issues reviewed
and evaluated, with the legislature by January 1, 2001. 

SECTION 5.  Amends Sections 51.002(6) and (10), Utilities Code, as follows:

(6)  Redefines "long run incremental cost."

(10)  Redefines "telecommunications provider" to exclude the listed
entities for the purposes of Chapter 55 or 64. 

SECTION 6.  Amends Section 51.004, Utilities Code, to prohibit a discount
or other form of pricing flexibility from being predatory or
anticompetitive.  Provides that a price that is set at or above the long
run incremental cost of a service is presumed to comply with this section. 

SECTION 7.  Amends the heading to Section 52.058, Utilities Code, to read
as follows: 

Sec. 52.058.  GENERAL PROVISIONS RELATING TO NEW OR EXPERIMENTAL SERVICES
OR PROMOTIONAL RATES. 

SECTION 8.  Amends Subchapter B, Chapter 52, Utilities Code, by adding
Sections 52.0583, 52.0584, and 52.0585, as follows: 

Sec. 52.0583.  NEW SERVICES.  (a)  Authorizes an incumbent local exchange
company to introduce a new service 10 days after providing an informational
notice to PUC, to the office, and to any person who holds a certificate of
operating authority in the incumbent local exchange company's certificated
area or areas or who has an effective interconnection agreement with the
incumbent local exchange company. 

(b)  Requires an incumbent local exchange company to price each new service
at or above the service's long run incremental cost.  Requires PUC to allow
a company serving fewer than one million access lines in this state to
establish a service's long run incremental cost by adopting, at that
company's option, the cost of studies of a larger company for that service
that have been accepted by PUC. 

(c)  Authorizes an affected person, the office on behalf of residential or
small commercial customers, or PUC to file a complaint challenging whether
the pricing by an incumbent local exchange company of a new service is in
compliance with Subsection (b). 

(d)  Provides that, if such a complaint is filed, the incumbent local
exchange company has the burden of proving that the company set the price
for the new service in accordance with the applicable provisions of this
subchapter.  Requires the company, if the complaint is resolved in favor of
the complainant, to amend the price of the service by the 10th day after
the complaint is finally resolved or, at the company's option, discontinue
the service. 

(e)  Authorizes a company electing incentive regulation under Chapter 58
(Incentive Regulation) or 59 (Infrastructure Plan) to introduce new
services only in accordance with the applicable provisions of Chapter 58 or
59. 

Sec. 52.0584.  PRICING AND PACKAGING FLEXIBILITY; CUSTOMER PROMOTIONAL
OFFERINGS.  (a)  Authorizes an incumbent local exchange company to exercise
pricing flexibility in accordance with this section, notwithstanding any
other provision of this title.  Authorizes the company to exercise pricing
flexibility 10 days after  providing an informational notice to PUC, to the
office, and to any person who holds a certificate of operating authority in
the incumbent local exchange company's certificated area or areas or who
has an effective interconnection agreement with the incumbent local
exchange company.  Defines "pricing flexibility." 

(b)  Requires an incumbent local exchange company, at the company's option,
to price each regulated service offered separately or as part of a package
under Subsection (a) at either the service's tariffed rate or at a rate not
lower than the service's long run incremental cost.  Requires PUC to allow
a company serving fewer than one million access lines in this state to
establish a service's long run incremental cost by adopting, at that
company's option, the cost studies of a larger company for that service
that have been accepted by PUC. 

(c)  Authorizes an affected person, the office on behalf of residential or
small commercial customers, or PUC to file a complaint by the 31st day
after the date the company implements the rate alleging that an incumbent
local exchange company has priced a regulated service in a manner that does
not meet the pricing standards of this subchapter. 

(d)  Authorizes a company electing incentive regulation under Chapter 58 or
59 to use pricing and packaging flexibility and introduce customer
promotional offering only in accordance with the applicable provisions of
Chapter 58 or 59. 

Sec. 52.0585.  CUSTOMER PROMOTIONAL OFFERINGS.  (a)  Authorizes an
incumbent local exchange company to offer a promotion for regulated service
for not more than 90 days in any 12-month period. 

(b)  Requires the company to file with PUC a promotional offering that
consists of a waiver of installation charges or service order charges, or
both, for not more than 90 days in a 12-month period or a temporary
discount of not more than 25 percent from the tariffed rate for not more
than 60 days in a 12-month period. 

(c)  Provides that an incumbent local exchange company is not required to
obtain commission approval to make a promotional offering described by
Subsection (b). 

(d)  Authorizes an incumbent local exchange company to offer a promotion of
any regulated service as part of a package of services consisting of any
regulated service with any other regulated or unregulated service or any
service of an affiliate. 

SECTION 9.  Amends Section 52.102, Utilities Code, as amended by Section
18.04, S.B. No. 1368, Acts of the 76th Legislature, Regular Session, 1999,
to provide that PUC has jurisdiction to require a telecommunications
utility subject to this subchapter (Telecommunications Utilities That Are
Not Dominant Carriers) that had more than six percent of the total
intrastate access minutes of use as measured for the most recent 12-month
period, to pass switched access rate reductions under this title (Public
Utility Regulatory Act)  to customers as required under Section 52.112.
Provides that this authority expires on the date on which Section 52.112
expires.  Makes conforming changes.  

SECTION 10.  Amends Section 52.108, Utilities Code, to authorize PUC to
enter any order necessary to protect the public interest if PUC finds after
notice and hearing that a telecommunications utility has failed to pass
switched access rate reductions to customers under Chapter 56
(Telecommunications Assistance and Universal Service Fund) or other law, as
required under Section 52.112. 

SECTION 11.  Amends Section 52.110(a), Utilities Code, to include Section
52.112 among the sections in the Utility Code of which an alleged violation
by a telecommunications utility in a proceeding before PUC places the
burden of proof is on a telecommunications utility complaining of conduct
committed against it in violation of this subchapter, or on the responding
telecommunications utility if the proceedings are brought by a customer or
customer representative who is not a telecommunications utility or
initiated by PUC. 

 SECTION 12.  Amends Subchapter C, Chapter 52, Utilities Code, by adding
Section 52.112, as follows: 

Sec. 52.112.  REDUCTION PASS-THROUGH REQUIRED.  (a) Requires each
telecommunications utility that had more than six percent of the total
intrastate access minutes of use as measured for the most recent 12-month
period, to pass through to customers switched access rate reductions under
this title.  Requires the residential customer class to receive no less
than a proportionate share of the reductions. 

(b) Requires each telecommunications utility subject to this section,
within six months following each reduction in intrastate switched access
charges under this title, to file a report with PUC demonstrating its
compliance on an average revenue per minute basis with Subsection (a). 

(c) Establishes the second anniversary of the date incumbent local exchange
companies doing business in the state are no longer prohibited by federal
law from offering interLATA and interstate long distance service as the
expiration date for this section. 

SECTION 13.  Amends Subchapter D, Chapter 52, Utilities Code, by adding
Section 52.155, as follows: 

Sec. 52.155.  PROHIBITION OF EXCESSIVE ACCESS CHARGES.  (a)  Prohibits a
telecommunications utility that holds a certificate of operating authority
or a service provider certificate of operating authority from charging a
higher amount for originating or terminating intrastate switched access
than the prevailing rates charged by the holder of the certificate of
convenience and necessity in whose territory the call originated or
terminated unless PUC specifically approves the higher rate or a
telecommunications utility establishes, subject to PUC review, statewide
average composite originating and terminating intrastate switched access
rates based on a reasonable approximating of traffic originating and
terminating between all holders of certificates of convenience and
necessity in this state. 

(b)  Provides that PUC has all jurisdiction necessary to enforce this
section, notwithstanding any other provision of this title. 

SECTION 14.  Amends Section 54.007, Utilities Code, to delete provisions
regarding certain instances in which a basic telecommunications service
price may be increased.  Makes a conforming change.  

SECTION 15.  Amends Subchapter C, Chapter 54, Utilities Code, as follows:

SUBCHAPTER C.  CERTIFICATE OF OPERATING AUTHORITY

 Sec.  54.101.  DEFINITION.  Makes no change. 

Sec. 54.102.  APPLICATION FOR CERTIFICATE. (a)  Deletes the authorization
for a person to apply for a certificate of operating authority in lieu of
applying for a certificate of convenience and necessity. 

(b)  Deletes certain application provisions for an applicant for a
facilities-based certificate of operating authority. 

(c)  Authorizes an affiliate of a person holding a certificate of
convenience and necessity to hold a certificate of operating authority if
the holder of the certificate of convenience and necessity is in compliance
with federal law and Federal Communications Commission (FCC) rules
governing affiliates and structural separation.  Prohibits an affiliate of
a person holding a certificate of convenience and necessity from directly
or indirectly selling to a non-affiliate any regulated product or service
purchased from the person holding a certificate of convenience and
necessity at any rate or price less than the price paid to the person
holding a certificate of convenience and necessity. 
 
(d)  Authorizes a person to hold a certificate for all or any portion of a
service area for which one or more affiliates of the person holds a
certificate of operating authority, a service provider certificate of
operating authority, or a certificate of convenience and necessity.   

(e)  Authorizes an affiliate of a company that holds a certificate of
convenience and necessity and that serves more than five million access
lines in this state to hold a certificate of operating authority or service
provider certificate of operating authority to provide service in an area
of this state in which its affiliated company is the incumbent local
exchange company.  Prohibits the affiliate holding the certificate of
operating authority or service provider certificate of operating authority
from providing in that area customer-specific contracts so long as the
affiliated company that is the incumbent local exchange company is
prohibited from providing customer-specific contracts under Section 58.003
in that area.  Provides that this subsection does not preclude an affiliate
of a company holding a certificate of convenience and necessity from
holding a certificate of operating authority in any area of this state to
provide advanced services as defined by rules or orders of the FCC. 

Sec.  54.103.  GRANT OR DENIAL OF CERTIFICATE.  Deletes text regarding the
adequacy of an applicant's build-out plan as one of the commissioner's
required consideration factors in granting a certificate on a
nondiscriminatory basis.  Deletes existing Section 54.104 regarding
build-out plan requirements and existing Section 54.105 regarding six-year
limitation on resale of services.  Makes conforming changes. 

Sec. 54.104.  TIME OF SERVICE REQUIREMENTS.  Requires a certificate holder,
notwithstanding Subsection (a), to serve a customer, rather than a customer
in the build out area, not later than the 30th day after the date the
customer requests service.  Redesignated from existing Section 54.106.
Deletes existing Section 54.107 regarding requirements to certain
facilities; Section 54.108 regarding build-out compliance; Section 54.109
regarding elimination of build-out requirements for certain providers; and
Section 54.110 regarding hearing on build out and resale requirements. 

Sec.  54.105.  PENALTY FOR VIOLATION OF TITLE.  Redesignated from existing
Section 54.111. 

SECTION 16.  Amends Subchapter A, Chapter 55, Utilities Code, by adding
Section 55.012, as follows: 

Sec.  55.012.  TELECOMMUNICATIONS BILLING.  States that the proliferation
of charges for separate services, products, surcharges, fees, and taxes on
a bill for telecommunications products or services has increased the
complexity of those bills to such an extent that in some cases the bills
have become difficult for customers to understand. States that a bill from
a local exchange company for telecommunications products or services should
be simplified into general categories to the extent that simplification is
consistent with providing customers sufficient information about the
charges included in the bill to understand the basis and source of the
charges.  Requires a monthly bill from a local exchange company for local
exchange telephone service to include an aggregate charge for basic local
service charges and fees, optional services, and taxes, to the extent
provided by law. 

SECTION 17.  Amends Subchapter A, Chapter 55, Utilities Code, by adding
Section 55.013, as follows: 

Sec.  55.013.  LIMITATIONS ON DISCONTINUANCE OF BASIC LOCAL
TELECOMMUNICATIONS SERVICE.  (a) Prohibits a provider of basic local
telecommunications service from discontinuing that service because of
nonpayment by a residential customer of charges for long distance service.
Requires payment to first be allocated to basic local telecommunications
service. 
 
(b) Requires the rate of local service to be the rate that the provider
charges for standalone basic local telecommunications service if the
provider provides a discounted rate for basic local service and bundles the
rates of basic local and long distance service together. 

(c) Requires PUC to adopt and implement rules by January 1, 2000, to
prevent customer abuse of the protections afforded by this section.
Provides that the rules must contain provisions requiring a provider to
offer and implement toll blocking capability to limit a customer's ability
to incur additional long distance charges and regarding fraudulent activity
in response to which a provider is authorized to discontinue basic local
service. 

(d) Provides that PUC has jurisdiction to establish a maximum price that an
incumbent local exchange company may charge a long distance provider to
initiate the toll blocking capability required to be offered under
commission rules, notwithstanding any other provisions of this title.
Requires the maximum price established under this subsection to be observed
by all providers of basic local telecommunications service in the incumbent
local exchange company's certificated service area.  Provides that PUC has
all jurisdiction necessary to enforce this section, notwithstanding
Sections 52.102 and 52.152. 

SECTION 18.  Amends Subchapter A, Chapter 55, Utilities Code, by adding
Section 55.014, as follows: 

Sec.  55.014.  PROVISION OF ADVANCED TELECOMMUNICATIONS SERVICES. Defines
"advanced service."  Sets forth the companies to which this section
applies. Requires a company to which this section applies that provides
advanced telecommunications services within the company's urban service
areas, on a bona fide retail request for those service, to provide in rural
areas of this state served by the company advanced telecommunications
services that are reasonably comparable to the advanced services provided
in urban areas, beginning September 1, 2001.  Requires the company to offer
these services and caller identification and custom calling features at
prices, terms, and conditions that are reasonably comparable to the
advanced services provided by the company in urban areas within 15 months
after the bona fide request for those advanced services. Prohibits a
construction of this section which requires a company to provide services
in a rural area in which the company does not provide local exchange
service or provide services in a rural area of this state unless the
company provides the service in an urban area of the state.  Provides that
providing service in a municipality with a population of more than 190,000
is providing services in an urban area of this state.  Provides that PUC
has all jurisdiction necessary to enforce this section. 

SECTION 19.  Amends Subchapter A, Chapter 55, Utilities Code, by adding
Section 55.015, as follows: 

Sec.  55.015.  LIFELINE SERVICES.  (a) Requires PUC to adopt rules
prohibiting a telecommunications provider from discontinuing local exchange
telephone service to a consumer who receives lifeline service because of
nonpayment by the consumer of charges for other services billed by the
provider including long distance service. 

(b) Requires PUC to adopt rules providing for automatic enrollment to
receive lifeline service for eligible consumers.  Requires the Texas
Department of Human Services, on request of PUC, to assist in the adoption
and implementation of those rules.  Requires PUC and the Texas Department
of Human Services to enter into a memorandum of understanding establishing
the respective duties of PUC and the department in relation to the
automatic enrollment.   

(c) Authorizes a telecommunications provider to block a lifeline service
participant's access to all long distance service except toll-free numbers
when the participant owes an outstanding amount for that service.  Requires
the telecommunications provider to remove the block without additional cost
to the participant on payment of the outstanding amount. 
 
(d) Requires a telecommunications provider to offer a consumer who applies
for or receives lifeline services the option of blocking all toll calls or
placing a limit on the amount of toll calls.  Prohibits the provider from
charging the consumer an administrative charge or other additional amount
for the blocking service. 

(e) Defines "lifeline service."

SECTION 20.  Amends Section 3.312, Article 1446c-0, V.T.C.S. (Public
Utility Regulatory Act of 1995), as added by Section 1, Chapter 919, Acts
of the 75th Legislature, Regular Session, 1997, and codifies it as
Subchapter K, Chapter 55, Utilities Code, as follows: 

SUBCHAPTER K.  SELECTION OF TELECOMMUNICATIONS UTILITIES

Sec.  55.301.  STATE POLICY.  Makes no change.

Sec.  55.302.  COMMISSION RULES.  Deletes reference to carrier initiated
change.  Makes conforming changes.  Makes modification to rulemaking
authority. 

Sec.  55.303.  New title: VERIFICATION OF CHANGE.  Deletes provisions
regarding carrier initiated changes.  Deletes Section 55.304 relating to
authorization of customer initiated changes. 

Sec.  55.304.  UNAUTHORIZED CHANGE.  Redesignated from Section 55.305.
Provides that a customer is not liable for charges incurred during the
first 30 days after the date of an unauthorized carrier change. 

Sec.  55.305.  CORRECTIVE ACTION AND PENALTIES.  Redesignated from Section
55.306. 

Sec.  55.306.  REPEATED AND RECKLESS VIOLATION.  Redesignated from Section
55.307.  Adds denial to the list of actions PUC is authorized to take for
repeated and reckless violations of commission rules. 

Sec.  55.307.  DECEPTIVE OR FRAUDULENT PRACTICE.  Authorizes PUC to
prohibit a utility from engaging in a deceptive or fraudulent practice,
including a marketing practice, involving the selection of a customer's
telecommunications utility.  Authorizes PUC to define deceptive and
fraudulent practices to which this section applies. 

Sec.  55.308.  CONSISTENCY WITH FEDERAL LAW.  Requires the rules adopted by
PUC to be consistent with federal law. 

SECTION 21.  Amends Section 56.021, Utilities Code, as amended by Section
18.08, S.B. No. 1368, Acts of the 76th Legislature, Regular Session, 1999,
to make this section (Universal Service Fund Established) applicable to
telecommunications providers, rather than local exchange companies.
Modifies rulemaking authority previously granted to include using the
universal service fund to reimburse a telecommunications carrier providing
lifeline service as provided by federal regulations. Makes a conforming
change. 

SECTION 22.  Amends Sections 56.023 and 56.024, Utilities Code, to require
PUC to determine which telecommunications providers, rather than local
exchange companies, meet the eligibility criteria and to determine the
amount of and approve a procedure for reimbursement to telecommunications
providers, rather than to local exchange companies, of revenue lost in
providing tel-assistance service under Subchapter C.  Makes a conforming
change.  Authorizes PUC to require a telecommunications provider, and not a
local exchange company, to provide a report or information necessary to
assess contributions and disbursements to the universal service fund. 

SECTION 23.  Amends Section 56.026, Utilities Code, to prohibit PUC from
reducing the amount of disbursements from the universal service fund if an
electing company reduces rates in conjunction  with receiving disbursements
from the universal service fund, except that if a local end user customer
of the electing company switches to another local service provider, in
specified circumstances, the disbursement may be reduced.  Requires any
reductions in switched access service rates for local exchange companies
with more than 125,000 access lines in service in this state on December
31, 1998, that are made in accordance with this section, to be
proportional, based on equivalent minutes of use, to reductions in
intraLATA toll rates, and requires those reductions to be offset by equal
disbursements from the universal service fund.  Requires the decrease in
disbursements to be made in a competitively neutral manner to the extent
that the disbursements from the universal service fund for small and rural
local exchange companies are used to decrease the implicit support in
intraLATA toll and switched access rates.  Makes a conforming change. 

SECTION 24.  Amends Subchapter B, Chapter 56, Utilities Code, by adding
Section 56.028, as follows: 

Sec.  56.028.  UNIVERSAL SERVICE FUND REIMBURSEMENT FOR CERTAIN INTRALATA
SERVICE. Requires PUC to provide reimbursement through the universal
service fund for reduced rates for intraLATA interexchange high capacity
(1.544 Mps) service for entities described in Section 58.253(a) (Private
Network Services for Certain Entities) upon request of a local exchange
company that is not an electing company under Chapters 58 (Incentive
Regulation) and 59 (Infrastructure Plan).  Requires the amount of
reimbursement to be the difference between the company's tariffed rate for
such service as of January 1, 1998,  and the lowest rate offered for such
service by any local exchange company electing incentive regulation under
Chapter 58. 

SECTION 25.  Amends Section 56.071, Utilities Code, to provide that in
addition to local exchange companies, this subchapter (Tel-Assistance
Service Program) applies to telecommunications providers that receive
universal service fund support pursuant to PUC's universal service fund
rules. Requires any reference to or requirement imposed on local exchange
companies in this subchapter to also apply to such telecommunications
providers.  Makes conforming changes. 

SECTION 26.  Amends Section 56.072, Utilities Code, by adding Subsection
(d), as follows: 

(d) Requires PUC to adopt rules providing for automatic enrollment to
receive telassistance service for eligible consumers.  Requires the
department, on request of PUC, to assist in the adoption and implementation
of those rules.  Requires PUC and the department to enter into a memorandum
of understanding establishing the respective duties of PUC and the
department in relation to the automatic enrollment. 

SECTION 27.  Amends Subchapter C, Chapter 56, Utilities Code, by adding
Section 56.079, as follows: 

Sec.  56.079.  RELATIONSHIP TO OTHER SERVICES.  Requires PUC to adopt rules
prohibiting a telecommunications provider from discontinuing local exchange
telephone service to a consumer who receives tel-assistance service because
of nonpayment by the consumer of charges for other services billed by the
provider, including long distance services. Authorizes a telecommunications
provider to block a tel-assistance service participant's access to all long
distance service except toll-free numbers when the participant owes an
outstanding amount for that service.  Requires the telecommunications
provider to remove the block without additional cost to the participant on
payment of the outstanding amount.  Requires a telecommunications provider
to offer a consumer who applies for or receives tel-assistance services the
option of blocking all toll calls or placing a limit on the amount of toll
calls.  Prohibits the provider from charging the consumer an administrative
charge or other additional amount for the blocking service.  

SECTION 28.  Amends Subchapter A, Chapter 58, Utilities Code, by adding
Section 58.003, as follows: 

Sec.  58.003.  CUSTOMER-SPECIFIC CONTRACTS.  (a) Prohibits an electing
company from offering in an exchange a service or an appropriate subset of
a service listed in Sections  58.0151(a)(1)-(4) or Sections 58.151(1)-(4)
in a manner that results in a customer-specific contract, unless the other
party to the contract is a federal, state, or local governmental entity,
until the earlier of September 1, 2005, or the date on which PUC finds that
at least 40 percent of the total access lines for that service or
appropriate subset of that service in that exchange are served by
competitive alternative providers that are not affiliated with the electing
company, notwithstanding any other provision of this chapter.   

(b) Provides that an electing company that serves fewer than five million
access lines must also notify PUC of the company's binding commitment to
install Common Channel Signaling 7 capability in each central office and
connect all of the company's serving central offices to their respective
LATA tandem central offices with optical fiber or equivalent facilities, by
September 1, 2001.   

(c) Requires PUC, by rule, to prescribe appropriate subsets of services.  

(d) Authorizes an electing company to file with PUC a request for a finding
under this section.  Provides that the filing must include information
sufficient for PUC to perform a review and evaluation in relation to the
particular exchange and the particular service or appropriate subset of a
service for which the electing company wants to offer customerspecific
contracts.  Provides that PUC must grant or deny the request within 60 days
after the electing company files the request. 

(e)  Provides that the commitments described by Subsection (b) do not apply
to exchanges of the company sold or transferred before, or for which
contracts for sale or transfer are pending on, September 1, 2001.  Requires
the company to have one year from the date of withdrawal or default to
comply with the commitments in the case of exchanges for which contracts
for sale or transfer are pending as of March 1, 2001, where the purchaser
withdrew or defaulted before September 1, 2001. 

(f)  Provides that this section does not preclude an electing company from
offering a customer-specific contract to the extent allowed by this title
as of August 31, 1999. 

SECTION 29.  Amends Section 58.021, Utilities Code, as follows:

(a) No change.

(b) Provides that notice of election must include a statement that the
company agrees to limit any increase in a rate the company charges for
basic network services until September 1, 2005. 

(c) Provides that except as provided in Subsection (d), an election under
this chapter remains in effect until the legislature eliminates the
incentive regulation authorized by this chapter and Chapter 59. 

(d) Authorizes PUC to allow an electing company serving fewer than five
million access lines to withdraw the company's election under this chapter
under certain circumstances. 

(e) Defines "good cause."        

SECTION 30.  Amends Section 58.023, Utilities Code, to classify certain
services provided by an electing company as nonbasic services governed by
Subchapter E, rather than discretionary services governed by Subchapter D
and competitive services.  Makes a conforming change. 
 
SECTION 31. Amends Section 58.024, Utilities Code, to prohibit PUC from
reclassifying a service until, for a company that serves more than five
million access lines in this state, the date on which the Federal
Communications Commission determines in accordance with 47 U.S.C. Section
271 (Bell Operating Company Entry into InterLATA Services) that the company
may enter the interLATA telecommunications market in this state.
Authorizes PUC to reclassify a service subject to certain conditions.
Makes conforming changes.  
 
SECTION 32.  Amends Section 58.028, Utilities Code, to require PUC to begin
a review and evaluation of each company that elects under this chapter or
Chapter 59 no later than January 1, 2004, rather than January 1, 2000.
Requires PUC to file a report with the legislature no later than January 1,
2005, rather than January 1, 2001.  Provides that this section expires on
September 1, 2005, rather than September 1, 2001. 

SECTION 33.  Amends Section 58.051, Utilities Code, to delete business
local exchange telephone service, switched access service, interconnection
to competitive providers, interconnection for commercial mobile service
providers, directory assistance, and "1-plus" intraLATA message toll
service, from the list of services which are considered basic network
services, unless reclassified under Section 58.024.  Adds residential tone
dialing services, service connection for basic residential services, direct
inward dialing service for residential services, access for all residential
and business end users to 911 service provided by a local authority and
access to dual party relay services, mandatory residential extended area
service agreements, mandatory residential extended metropolitan or other
mandatory residential toll-free calling arrangements, and residential call
waiting service, to the list of services which are considered basic network
services, unless reclassified under Section 58.024.  Requires electing
companies to offer each basic network service as a separately tariffed
service in addition to any packages or other pricing flexibility offerings
that include those basic network services. 

SECTION 34.  Amends Sections 58.054 and 58.055, Utilities Code, as follows:

Sec. 58.054. RATES CAPPED.  Provides that the rates an electing company may
charge on or before the fourth anniversary are the rates charged by the
company on June 1, 1995, or for a company that elects under this chapter
after September 1, 1999, the rates charged on the date of its election.
Prohibits the cap on the rates for basic network services for a company
electing under this subchapter from expiring before September 1, 2005,
notwithstanding Subsections (a) and (b). 

Sec.  58.055.  RATE ADJUSTMENT BY COMPANY.  Replaces reference to four-year
period with election period.   Deletes text regarding a company's ability
to decrease the rate for switched access service to an amount above the
service's long run incremental cost. Makes a conforming change.  

SECTION 35.  Amends Section 58.060, Utilities Code, to authorize an
electing company to increase a rate for a basic network service only with
PUC's approval subject to this title and to the extent consistent with
achieving universal affordable service, after the expiration of the period
during which the rates for basic network services are capped as prescribed
by Section 58.054 (Rates Capped), rather than after the four-year period
expires.  

SECTION 36.  Amends Subchapter C, Chapter 58, Utilities Code, by adding
Section 58.063, as follows: 

Sec. 58.063.  PRICING AND PACKAGING FLEXIBILITY.  (a) Authorizes an
electing company, notwithstanding Section 58.052(b) or Subchapter F,
Chapter 60, to exercise pricing flexibility for basic network services,
including the packaging of basic network services with any other regulated
or unregulated service or any service of an affiliate.  Authorizes the
company to exercise pricing flexibility in accordance with this section 10
days after providing an informational notice to PUC, to the office, and to
any person who holds a certificate of operating authority in the electing
company's certificated area or areas or who has an effective
interconnection agreement with the electing company. 

(b)  Requires an electing company to set the price for a package of
services containing basic network and nonbasic services at any level at or
above the lesser of the sum of the long run incremental costs of any basic
network services and nonbasic services contained in the package or the sum
of the tariffed rates of any basic network services and the long run
incremental costs of nonbasic services contained in the package. 
  
(c)  Authorizes an electing company to flexibly price a package that
includes a basic  network service in any manner listed in Section 51.002(7)
(Definitions), except as provided by Section 58.003. 

SECTION 37.  Amends Subchapter E, Chapter 58, Utilities Code, as follows:

SUBCHAPTER E.  New title:  NONBASIC SERVICES

Sec. 58.151.  SERVICES INCLUDED.  Classifies as nonbasic services, with
provisions related to caps on prices, flat rate business local exchange
telephone service; business tone dialing service; service connection for
all business services; direct inward dialing for basic business services;
"1-plus" intraLATA message toll services; 0+ and 0- operator services; call
forwarding, custom calling, and non-residential call waiting; call return,
caller identification, and call control options, central office based
PBX-type services; billing and collection services; integrated services
digital network services; new services; directory assistance services; 911
services provided to a local authority that are available from another
provider; and all other services subject to PUC's jurisdiction that are not
specifically classified as basic network services in Section 58.051, except
that nothing in this section precludes a customer from subscribing to a
local flat rate residential or business line for a computer modem or a
facsimile machine. 

Sec. 58.152.  PRICES.  Authorizes an electing company to set the price for
any nonbasic service at any level above the lesser of the service's long
run incremental cost in accordance with the imputation rules prescribed by
or under Subchapter D (Imputation), Chapter 60, or price for the service in
effect on September 1, 1999.  Authorizes an electing company to use pricing
flexibility for a nonbasic service, subject to Section 51.004, rather than
the requirements of Sections 60.001 and 60.002.  Makes conforming changes.
Deletes Subsection (c), which prohibited an electing company from
increasing the price of a competitive service in a geographic area in which
that service or a functionally equivalent service is not readily available
from another provider. 

Sec. 58.153.  NEW SERVICES.  (a)  Authorizes an electing company to
introduce a new service 10 days after providing an informational notice to
PUC, to the office, and to any person who holds a certificate of operating
authority in the electing company's certificated area or areas or who has
an effective interconnection agreement with the electing company, subject
to the pricing conditions prescribed by Section 58.152(a). 

(b)  Requires an electing company serving more than five million access
lines in this state to provide notice to any person who holds a certificate
of operating authority in the electing company's certificated area or areas
or who has an effective interconnection agreement with the electing company
of any changes in the generally available prices and terms under which the
electing company offers basic or nonbasic telecommunications services
regulated by PUC at retail rates to subscribers that are not
telecommunications providers.  Sets forth the changes which require notice
under this subsection.  Requires the electing company to provide the notice
if the electing company is required to give notice to PUC, at the same time
the company provides that notice or if the electing company is not required
to give notice to PUC, at least 45 days before the effective date of a
price change or 90 days before the effective date of a change other than a
price change, unless PUC determines that the notice should not be given. 

(c)  Authorizes an affected person, the office on behalf of residential or
small commercial customers, or PUC to file a complaint at PUC challenging
whether the pricing by an incumbent local exchange company of a new service
is in compliance with Section 58.152(a).  Requires PUC to allow the company
to continue to provide the service while the complaint is pending. 

(d)  Provides that, if such a complaint is filed, the electing company has
the burden of proving that the company set the price for the new service in
accordance with Section 58.152(a).  Requires the company, if the complaint
is resolved in favor of the complainant, to amend the price of the service
by the 10th day after the complaint is  finally resolved or, at the
company's option, discontinue the service. 

(e)  Provides that the notice requirement prescribed by Subsection (b)
expires September 1, 2003. 

SECTION 38.  Amends Subchapter E, Chapter 58, Utilities Code, by adding
Section 58.155, as follows: 

Sec. 58.155.  INTERCONNECTION.  Provides that because interconnection to
competitive providers and interconnection for commercial mobile service
providers are subject to the requirements of Sections 251 (Interconnection)
and 252 (Procedures for Negotiation, Arbitration, and Approval of
Agreements), Title 47, U.S.C. (Communications Act of 1934), and FCC rules,
including PUC's authority to arbitrate issues, interconnection is not
addressed in this subchapter or Subchapter B. 

SECTION 39.  Amends Chapter 58, Utilities Code, by adding Subchapter H, as
follows: 

SUBCHAPTER H.  SWITCHED ACCESS SERVICES

Sec. 58.301.  SWITCHED ACCESS RATE REDUCTION.  Sets forth the required
methods in which an electing company with greater than five million lines
is required to reduce its switched access rates on a combined originating
and terminating basis. 

Sec. 58.302.  SWITCHED ACCESS RATE CAP. Prohibits an electing company from
increasing the per minute rates for switched access services on a combined
originating and terminating basis as specifically provided.  Authorizes an
electing company to, on its own initiative, decrease a rate charged for
switched access service to any amount above the long run incremental cost
of the service, notwithstanding Subchapter F, Chapter 60, but subject to
Section 60.001. 

Sec. 58.303.  SWITCHED ACCESS CHARGE STUDY.  Requires PUC, not later than
November 1, 1999, to begin a review and evaluation of the rates for
intrastate switched access service.  Sets forth the required issues to be
evaluated.  Requires PUC to file a report with the legislature no later
than January 1, 2001.  Requires the report to include PUC's recommendations
as to the issues reviewed and evaluated.  Provides that this section
expires on September 1, 2001.  

SECTION 40.  Amends Section 59.021, Utilities Code, by adding Subsection
(c), to authorize a company electing under this chapter to renew the
election for successive two-year periods.  Provides that an election that
is renewed under this subsection remains in effect until the earlier of
certain specified events. 

SECTION 41.  Amends Section 59.024, Utilities Code, to prohibit an electing
company, before the end of the company's election period under this
chapter, rather than before the sixth anniversary of its election date,
from increasing a rate previously established for that company, except for
the charges permitted under Subchapter C, Chapter 55, Subchapter B, Chapter
56, and Section 55.024. Requires PUC, notwithstanding Subsection (a), on
request of the electing company, to allow a rate group reclassification
that results from access line growth. 

SECTION 42.  Amends Section 59.025, Utilities Code, to prohibit PUC,
notwithstanding any other provision of this title, on PUC's own motion, to
reduce an electing company's rate for switched access services before the
expiration of the election period, rather than the six-year period,
prescribed by Section 59.024, but PUC is authorized to approve a reduction
proposed by the electing company. 

SECTION 43.  Amends Section 59.026(a), Utilities Code, to make conforming
changes. 

SECTION 44.  Amends Subchapter B, Chapter 59, Utilities Code, by adding
Sections 59.030, 59.031, 59.032, as follows: 

 Sec. 59.030.  NEW SERVICES. (a) Authorizes an electing company to
introduce a new service 10 days after providing an informational notice to
PUC, to the office, and to any person who holds a certificate of operating
authority in the electing company's certificated area or areas or who has
an effective interconnection agreement with the electing company.  
(b)  Requires an electing company to price each new service at or above the
service's long run incremental cost.  Requires PUC to allow a company
serving fewer than one million access lines to establish a service's long
run incremental cost by adopting, at the company's option, the cost studies
of a large company for that service that has been accepted by PUC.   

(c)  Authorizes an affected person, the office on behalf of residential or
small commercial customers, or PUC to file a complaint at the PUC
challenging whether the pricing by an electing company of a new service is
in compliance with Subsection (b).   

(d)  Provides that if a complaint is filed under Subsection (c), the
electing company has the burden of proving that the company set the price
for the new service in accordance with  the applicable provisions of this
subchapter (Infrastructure Incentives).  Provides if a complaint is finally
resolved in the favor of the complainant, the electing company: 

_is required, not later than the 10th day after the date the complaint is
finally resolved, to amend the price of the service as necessary to comply
with a final resolution; or  

_the company is authorized, at the company's option, to discontinue the
service.   

Sec. 59.031.  PRICING AND PACKAGING FLEXIBILITY.  (a)  Authorizes an
electing company, notwithstanding Section 59.027(b) (Consumer Complaints
Regarding Tariffs) or Subchapter F (Pricing), Chapter 60 (Competitive
Safeguards), to exercise pricing flexibility in accordance with this
section.  Authorizes a company to exercise pricing flexibility 10 days
after providing an informational notice to PUC, to the office, and to any
person who holds a certificate of operating authority in the electing
company's certificated area or areas or who has an effective
interconnection agreement with the electing company.  Provides that pricing
flexibility includes all pricing arrangements included in the definition of
"pricing flexibility" prescribed by Section 51.002(7) and includes
packaging of regulated services with nonregulated services or services of
an affiliate.   

(b)  Requires an electing company, at the company's option, to price each
regulated service offered separately or as part of a package under
Subsection (a) at either the service's tariffed rate or at a rate not lower
than the service's long run incremental cost. Requires PUC to allow a
company serving fewer than one million access lines to establish a
service's long run incremental cost by adopting, at the company's option,
the cost studies of a larger company for that service that have been
accepted by PUC.   

(c)  Authorizes an affected person, the office on behalf of residential or
small commercial customers, or PUC to file a complaint alleging that an
electing company has priced a regulated service in a manner that does not
meet the pricing standards of this subchapter. Requires the complaint to be
filed before the 31st day after the company implements the rate. 

Sec. 59.032.  CUSTOMER PROMOTIONAL OFFERINGS.  Authorizes an electing
company to offer a promotion for a regulated service for not more than 90
days in any 12month period.  Sets forth the required information to be
included in a company's promotional offering to be submitted to PUC.
Provides that an electing company is not required to obtain commission
approval to make a promotional offering.  Authorizes an electing company to
offer a promotion of any regulated service as part of a package of services
consisting of any regulated service with any other regulated or unregulated
service or any service or affiliate. 

SECTION 45.  Amends Section 60.042, Utilities Code, as follows:

 Sec. 60.042.  PROHIBITED RESALE OR SHARING.  (a) Prohibits a provider of
telecommunications service from imposing a restriction on the resale or
sharing of a service entitled to regulatory treatment as a nonbasic, rather
than competitive service, if the provider is a company electing regulation
under Chapter 58. 

(b) Adds this subsection to provide that an incumbent local exchange must
comply  with the resale provisions of applicable federal law, unless
exempted by federal law. 

(c) Adds this subsection to require an electing company under Chapter 58
that offers basic or nonbasic services regulated by PUC to its retail
customers as a promotional offering to make those services available for
resale by a certificated telecommunications utility (CTU) on terms no less
favorable than those terms for the services that are made available to
retail customers.  Requires the electing company's basic or nonbasic
service, for a promotion of 90 days or less, to be made available to the
CTU at the electing company's promotional rate, without an avoided-cost
discount.  Requires the electing company's basic or nonbasic service, for a
promotion of more than 90 days, to be made available to the CTU at a rate
that reflects the avoided-cost discount, if any, for the promotional rate. 

SECTION 46.  Amends Subchapter I, Chapter 60, Utilities Code, by adding
Sections 60.164 and 60.165, as follows:      

Sec. 60.164.  PERMISSIBLE JOINT MARKETING.  Prohibits PUC from adopting any
rule or order that would prohibit a local exchange company from jointly
marketing or selling its products and services with the products and
services of any of its affiliates in any manner permitted by federal law or
applicable rules or orders of the FCC, except as prescribed in Chapters 61
(Information Technology Service), 62 (Broadcaster Safeguards), and 63
(Electronic Publishing). 

Sec.  60.165.  AFFILIATE RULE.  Prohibits PUC from adopting any rule or
order that would prescribe for any local exchange company any affiliate
rule that is more burdensome than federal law or applicable rules or orders
of the FCC, except as prescribed in Chapters 61, 62, and 63.  Prohibits
PUC, notwithstanding any other provision in this title, from attributing or
imputing to a local exchange company a price discount offered by an
affiliate of the local exchange company to the affiliate's customers.
Provides that this section does not limit the authority of PUC to consider
a complaint brought under Subchapter A (General Powers and Duties of
Commission), Chapter 52, Section 53.003 (Just and Reasonable Rates), or
Chapter 60. 

SECTION 47.  Amends Section 62.074(b), Utilities Code, to provide an
exception to the prohibition against an incumbent local exchange from
developing a rate that primarily benefits its separate affiliate.  That
exception is that an incumbent local exchange is authorized to market or
sell audio or video programming or services of its separate affiliate
without marketing or selling the programming of a nonaffiliated provider. 

SECTION 48.  Amends Section 62.108, Utilities Code, to change the
expiration date for Subchapter E (Video Carriage) from August 31, 1999, to
August 31, 2005. 

SECTION 49.  Amends Section 62.136, Utilities Code, to change the
expiration date for Subchapter F (Audio Carriage) from August 31, 1999, to
August 31, 2005. 

SECTION 50.  Amends Subtitle C, Title 2, Utilities Code, by adding Chapter
64, as follows: 

CHAPTER 64.  CUSTOMER PROTECTION

SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 64.001.  CUSTOMER PROTECTION POLICY.  Sets forth legislative findings.
Sets forth the purpose of rulemaking authority granted to PUC.  Prohibits
the construction of this section from abridging customer rights set forth
in commission rules effective at the time this  chapter is enacted.
Provides that this chapter does not limit legal authority of the attorney
general. 

Sec. 64.002.  DEFINITIONS.  Defines "billing agent," "billing utility,"
"certificated telecommunications utility," "customer," "service provider,"
and "telecommunications utility." 

Sec. 64.003.  CUSTOMER AWARENESS.  (a) Requires PUC to promote public
awareness of changes in telecommunications markets, provide customers with
information necessary to make informed choices about available options, and
ensure that customers have an adequate understanding of their rights. 

(b) Requires PUC to compile a report on customer service at least annually.

(c) Requires PUC to adopt and enforce rules to require a CTU to give clear,
uniform, and understandable information to customers about rates, terms,
services, customer rights, and other necessary information as determined by
PUC. 

(d) Requires PUC's customer awareness efforts to be provided in English and
Spanish and any other language as necessary. 

Sec. 64.004.  CUSTOMER PROTECTION STANDARDS.  (a) Enumerates the 11
standards to which all buyers of telecommunications services are entitled. 

(b) Authorizes PUC to adopt and enforce rules as necessary or appropriate
to carry out this section.  Authorizes PUC to waive language requirements
for good cause. 

(c) Requires PUC to request the attorney general's comments to develop the
necessary or appropriate rules. 

(d) Requires PUC to coordinate its enforcement efforts regarding the
prosecution of fraudulent, misleading, deceptive, and anticompetitive
business practices with the attorney general to ensure consistent treatment
of specific alleged violations. 

(e) Prohibits the construction of this section from abridging customer
rights set forth in commission rules effective at the time this chapter is
enacted.  

SUBCHAPTER B.  CERTIFICATION, REGISTRATION, AND REPORTING REQUIREMENTS

Sec. 64.051.  ADOPTION OF RULES.  (a) Requires PUC to adopt rules relating
to certification, registration, and reporting requirements for a CTU, all
telecommunications utilities that are not dominant carriers, and pay
telephone providers. 

(b) Requires the rules adopted under Subsection (a) to be consistent with
and no less effective than federal law, and prohibits them from requiring
the disclosure of highly sensitive competitive or trade secret information. 

Sec. 64.052.  SCOPE OF RULES.  Enumerates the scope of the rules PUC may
adopt and enforce under this section, including certification or
registration requirements, customer service and protection, and suspension
or revocation of certificates or registrations for repeated violations. 

Sec. 64.053.  REPORTS.  Authorizes PUC to require a telecommunications
service provider to submit reports to PUC concerning any matter over which
it has authority under this chapter. 

SUBCHAPTER C.  CUSTOMER'S RIGHT TO CHOICE

 Sec. 64.101.  POLICY.  Sets forth the policy of this state as it relates
to the unauthorized switching of a telecommunications service provider. 

Sec. 64.102.  RULES RELATING TO CHOICE.  Enumerates the scope of the
customer protection rules PUC is required to adopt and enforce relating to
this section.  Provides for penalties for violations by CTUs. 

SUBCHAPTER D.  PROTECTION AGAINST UNAUTHORIZED CHARGES

Sec. 64.151.  REQUIREMENTS FOR SUBMITTING CHARGES.  (a) Enumerates the
conditions under which a service provider or billing agent is authorized to
submit charges for a new product or service to be billed on a customer's
telephone bill on after the effective date of this section. 

(b) Provides that the customer consent required by Subsection (a)(2) must
be verified by the service provider offering the product or service by
authorization from the customer. Provides that a record of the customer
consent including verification must be maintained by the service provider
offering the product or service for at least 24 months immediately after
the consent and verification have been obtained.  Enumerates the four
methods by which a customer consent and verification are to be obtained. 

(c) Provides that the contract required by Subsection (a)(3)(B) must
include the service provider's name, business address, and business
telephone number. Requires the contract to be maintained by the billing
utility for as long as the billing for the products and services continues
and for the 24 months immediately following the permanent discontinuation
of the billing. 

(d) Prohibits a service provider and any billing agent from using
fraudulent, misleading, deceptive, and anticompetitive marketing practices
to obtain customers, including the use of negative option marketing,
sweepstakes, and contests. 

(e) Provides that Subsection (b) does not apply to customer-initiated
transactions with a certificated telecommunications provider for which the
service provider has the appropriate documentation, unless verification is
required by federal law or rules implementing federal law. 

(f) Requires the service provider, if it has been notified by a billing
utility that a customer has reported to the billing utility that a charge
made by the service provider is unauthorized, to cease to charge the
customer for the unauthorized product or service. 

(g) Provides that this section does not apply to message telecommunications
services charges for 1+, 0+, 0-, 1010XXX calls, or collect calls and
charges for video services if the service provider has the necessary call
detail record to establish the billing for the call or service. 

Sec. 64.152.  RESPONSIBILITIES OF BILLING UTILITY.  (a) Enumerates the five
actions required to be taken by a billing utility, if a customer's
telephone bill is charged for any product or service without proper
customer consent or verification, not later than 45 days after the billing
utility on its knowledge or notification of any unauthorized charge. 

(b) Enumerates information required in the record required under Subsection
(a)(5) of every customer who has experienced any unauthorized charge on the
customer's telephone bill and who has notified the billing utility of the
unauthorized charge. 

(c) Enumerates actions a billing utility is prohibited from taking.

Sec. 64.153.  RECORDS OF DISPUTED CHARGES.  (a) Requires every service
provider to maintain a record of every disputed charge for a product or
service placed on a customer's bill. 
 
(b) Enumerates the information required to be contained in the record
required under Subsection (a) for every disputed charge. 

(c) Requires the record required under Subsection (a) to be maintained for
at least 24 months following the completion of all steps required by
Section 64.152(a). 
 
Sec. 64.154.  NOTICE.  (a) Requires a billing utility to provide notice of
a customer's rights under this section in the manner prescribed by PUC. 

(b) Provides that notice of a customer's rights must be given by mail to
each customer within 60 days of the effective date of this section or by
inclusion in the telephone directory published after the effective date of
this section.  Requires each billing utility to send the notice to new
customers at the time the service is initiated or to any customer at that
customer's request. 

Sec. 64.155.  PROVIDING COPY OF RECORDS.  Requires a billing utility to
provide a copy of records maintained under Sections 64.151(c), 64.152, and
64.154 to PUC staff on request.  Requires a service provider to provide a
copy of records maintained under Sections 64.151(b) and 64.153 to PUC on
request. 

Sec. 64.156.  VIOLATIONS.  (a) Authorizes PUC, if it finds that a billing
utility violated this subchapter, to implement penalties and other
enforcement actions under Chapter 15 (Judicial Review, Enforcement, and
Penalties). 

(b) Authorizes PUC, if it finds that any other service provider or billing
agent subject to this subchapter has violated this subchapter or has
knowingly provided false information to PUC on matters subject to this
subchapter, to enforce the provisions of Chapter 15 against the service
provider or billing agent as if it were regulated by PUC. 

(c) Prohibits the authority granted under this section or any other
provision of this subchapter from being construed to grant PUC jurisdiction
to regulate service providers or billing agents who are not otherwise
subject to commission regulation other than as specifically provided by
this chapter. 

(d) Authorizes PUC, if it finds that a billing utility or service provider
repeatedly violates this subchapter, to suspend, restrict, or revoke the
registration or certificate of the telecommunications service provider, if
the action is consistent with the public interest. Provides that
suspending, restricting, or revoking the registration or certificate of the
telecommunications service provider denies the telecommunications service
provider the right to provide service in this state.  Prohibits PUC from
revoking a certificate of convenience and necessity of a telecommunications
utility except as provided by Section 54.008. 

(e) Authorizes PUC, if it finds that a billing agent or service provider
has repeatedly violated this subchapter, to order the billing utility to
terminate billing and collection services for that service provider or
billing agent. 

(f) Prohibits this subchapter from being construed to preclude a billing
utility from taking action on its own to terminate or restrict its billing
and collection services. 

Sec. 64.157.  DISPUTES.  (a) Authorizes PUC to resolve disputes between a
retail customer and a billing utility, service provider, or
telecommunications utility. 

(b) Enumerates actions in which PUC is authorized to engage in exercising
its authority to resolve disputes between a retail customer and a billing
utility, service provider, or telecommunications utility, including
requirements for the production of records or information, for the display
of toll-free telephone numbers for complaints, for the refund or credits
for improper changes, and for customer protection. 
  
(c) Requires PUC to adopt procedures for the resolution of disputes in a
timely manner, which is prohibited from exceeding 60 days. 

Sec. 64.158.  CONSISTENCY WITH FEDERAL LAW.  Requires rules adopted by PUC
under this subchapter to be consistent with and not more burdensome than
applicable federal laws and rules. 

SECTION 51.  Effective date for Section 55.012 (Telecommunications
Billing), Utilities Code: March 1, 2000. 

SECTION 52.  Repealer: Section 58.062 (Switched Access Rates), Utilities
Code, and Subchapter D (Discretionary Services), Chapter 58 (Incentive
Regulation), Utilities Code. 

SECTION 53.Emergency clause.
  Effective date: upon passage.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute adds a new SECTION 2, which amends Section 13.002, Utilities
Code, to provide that the Office of Public Utility Counsel is abolished and
this chapter (Office of Public Utility Counsel) expires on September 1,
2005, rather than September 1, 2001, unless continued as provided by
Chapter 325 (Texas Sunset Act), Government Code. 

The substitute adds a new SECTION 3, which amends Section 15.024(c),
Utilities Code, to provide that this subsection does not apply to a
violation of Chapter 55 (Regulation of Telecommunication Services) or 64
(Customer Protection). 

The substitute adds a new SECTION 4 which amends Section 51.001, Utilities
Code, by amending Subsection (a) and adding Subsection (g), to provide an
additional purpose of this subtitle, to set forth the policy of this state
regarding access to telecommunications and information services, and to
require the Public Utility Commission (PUC) to begin a review and
evaluation of the availability and pricing of telecommunications and
information services in rural and high cost areas, as well as the
convergence of telecommunications services.  For more information, please
see the Section-bySection Analysis portion of this document. 

The substitute adds a new SECTION 5, which amends Sections 51.002(6) and
(10), Utilities Code, to redefine "long run incremental cost" and
"telecommunications provider." 

The substitute adds a new SECTION 6, which amends Section 51.004, Utilities
Code, to prohibit a discount or other form of pricing flexibility from
being predatory or anticompetitive and to provide that a price that is set
at or above the long run incremental cost of a service is presumed to
comply with this section. 

The substitute adds a new SECTION 7, which amends the section title of
Section 52.058, Utilities Code, to read "General Provisions Relating to New
or Experimental Services or Promotional Rates." 

The substitute adds a new SECTION 8, which amends Subchapter B, Chapter 52,
Utilities Code, by adding Sections 52.0583, 52.0584, and 52.0585.  Section
52.0583  authorizes an incumbent local exchange company to introduce a new
service and sets forth the notice and pricing requirements and procedures
for complaint.  Section 52.0584 authorizes an incumbent local exchange
company to exercise pricing flexibility in accordance with this section,
notwithstanding any other provision of this title, and sets forth the
notice and pricing requirements and procedures for complaint.  Section
52.0585 authorizes an incumbent local exchange company to offer a promotion
for regulated service for not more than 90 days in any 12-month period and
sets forth the requirements for such a promotion.  For more information,
please see the Section-by-Section Analysis portion of this document. 

The substitute redesignates SECTION 2 (Section 52.102, Utilities Code) of
the original to SECTION  9 and modifies it as amended by Section 18.04,
S.B. No. 1368, Acts of the 76th Legislature, Regular Session, 1999, and to
provide that the PUC has jurisdiction to requires  a telecommunications
utility subject to this subchapter (Telecommunications Utilities That Are
Not Dominant Carriers), rather than a telecommunications utility together
with affiliates, that had more than six percent of the total intrastate
access minutes of use as measured for the most recent 12-month period, to
pass switched access rate reductions under this title (Public Utility
Regulatory Act)  to customers as required under Section 52.112.  The
substitute also makes conforming changes. 

The substitute redesignates SECTION 5 (proposed Section 52.112, Utilities
Code) of the original to SECTION 12 and strikes the reference to a
"telecommunications utility together with affiliates" and substitutes "a
telecommunications utility." 

The substitute adds a new SECTION 13, which amends Subchapter D, Chapter
52, Utilities Code, by adding Section 52.155, to prohibit a
telecommunications utility that holds a certificate of operating authority
or a service provider certificate of operating authority from charging a
higher amount for originating or terminating intrastate switched access
than the prevailing rates charged by the holder of the certificate of
convenience and necessity in whose territory the call originated or
terminated, except under certain conditions.  Notwithstanding any other
provision, the PUC is granted all jurisdiction necessary to enforce this
section. 

The substitute redesignates SECTION 7 of the original to SECTION 15 and
further modifies Section 54.102, Utilities Code, by adding a new Subsection
(e), to authorize an affiliate of a company that holds a certificate of
convenience and necessity and that serves more than five million access
lines in this state to hold a certificate of operating authority or service
provider certificate of operating authority to provide service in an area
of this state in which its affiliated company is the incumbent local
exchange company.  The proposed subsection also prohibits the affiliate
holding the certificate of operating authority or service provider
certificate of operating authority from providing in that area
customer-specific contracts so long as the affiliated company that is the
incumbent local exchange company is prohibited from providing
customer-specific contracts under Section 58.003 in that area.  In
addition, the proposed subsection provides that this subsection does not
preclude an affiliate of a company holding a certificate of convenience and
necessity from holding a certificate of operating authority in any area of
this state to provide advanced services as defined by rules or orders of
the Federal Communications Commission. 

The substitute adds new SECTIONS 16-20.  For a complete analysis of these
SECTIONS please see the Section-by-Section Analysis portion of this
document. 

The substitute redesignates SECTION 8 (Section 56.021, Utilities Code) of
the original to SECTION 21 of the substitute, modifies it as amended by
Section 18.04, S.B. No. 1368, Acts of the 76th Legislature, Regular
Session, 1999, and further amends it as detailed in the Section-by-Section
Analysis portion of this document. 

The substitute redesignates SECTION 9 (Sections 56.023 and 56.024,
Utilities Code) of the original to SECTION 22 of the substitute and further
modifies Section 56.023 by deleting a provision which would have required
PUC to establish and implement the universal service fund provisions by a
certain date. 

The substitute redesignates SECTION 10 (Section 56.026, Utilities Code) of
the original to SECTION 23 of the substitute and further amends it by
deleting proposed Subsection (c), which would have required PUC, in
establishing and implementing the universal service fund described in
Section 56.021(1), to size the fund to provide for disbursements to a
company serving more than five million access lines in this state
sufficient to offset a reduction of at least 2.35 cents per minute in
switched access rates on a combined originating and terminating basis.  The
substitute adds new Subsections (c) and (d), as detailed in the
Section-by-Section Analysis portion of this document. 

The substitute redesignates SECTIONS 11 and 12 of the original to SECTIONS
24 and 25 and makes nonsubstantive changes. 

The substitute differs from the original by deleting SECTION 13 of the
original, which would have  amended Section 58.002, Utilities Code, to
define "electing company" and "urban," and made conforming changes. 

The substitute add a new SECTION 26, which amends Section 56.072, Utilities
Code, by adding Subsection (d), to require PUC to adopt rules providing for
automatic enrollment to receive telassistance service for eligible
consumers.  The substitute also requires the department, on request of PUC,
to assist in the adoption and implementation of those rules and requires
PUC and the department to enter into a memorandum of understanding
establishing the respective duties of PUC and the department in relation to
the automatic enrollment. 

The substitute adds a new SECTION 27, which amends Subchapter C, Chapter
56, Utilities Code, by adding Section 56.079, to require PUC to adopt rules
prohibiting a telecommunications provider from discontinuing local exchange
telephone service to a consumer who receives tel-assistance service because
of nonpayment by the consumer of charges for other services billed by the
provider, including long distance services. The substitute authorizes a
telecommunications provider to block a tel-assistance service participant's
access to all long distance service except toll-free numbers when the
participant owes an outstanding amount for that service.  The substitute
requires the telecommunications provider to remove the block without
additional cost to the participant on payment of the outstanding amount and
requires a telecommunications provider to offer a consumer who applies for
or receives tel-assistance services the option of blocking all toll calls
if technically capable or placing a limit on the amount of toll calls.  The
substitute also prohibits the provider from charging the consumer an
administrative charge or other additional amount for the blocking service.  

The substitute adds a new SECTION 28, which amends Subchapter A, Chapter
58, Utilities Code, by adding Section 58.003, Utilities Code.  Please see
the Section-by-Section Analysis portion of this document for a complete
analysis. 

The substitute adds a new SECTION 30, which amends Section 58.023,
Utilities Code, to classify certain services provided by an electing
company as nonbasic services governed by Subchapter E, rather than
discretionary services governed by Subchapter D and competitive services. 

The substitute redesignates SECTION 15 (Section 58.024, Utilities Code) of
the original as SECTION 31 of the substitute and further amends it to
conform to other sections by amending PUC's authorization to reclassify a
discretionary service as a competitive service to reclassification of a
basic service as a nonbasic service and deleting a provision which would
have made reclassification under this section applicable only to a company
that had five million access lines. The substitute differs from the
original by requiring the PUC to grant or deny a request for
reclassification no later than 60 days after filing the request, rather
than 30 days as in the original. 

The substitute redesignates SECTION 16 (Section 58.028, Utilities Code) of
the original as SECTION 32 of the substitute and further amends it by
providing that this section expires in 2005, rather than 2003, and PUC
shall file a report with the legislature in 2005, rather than 2003. 

The substitute differs from the original by deleting SECTION 17 of the
original which would have amended Subchapter C, Chapter 58, Utilities Code,
by adding Section 58.0511, relating to basic network services for certain
electing companies. 

The substitute adds a new SECTION 33, which amends Section 58.051,
Utilities Code, to delete certain services from and add other services to
the services which are considered basic network services and require
electing companies to offer each basic network service as a separately
tariffed service in addition to any packages or other pricing flexibility
offerings that include those basic network services. 

The substitute redesignates SECTION 20 (adding Section 58.063 and 58.064,
Utilities Code) of the original to SECTION 36 (adding only Section 58.063)
by changing the section title to "Pricing And Packaging Flexibility" and
further modifies it to authorize an electing company to exercise pricing
flexibility for basic network services, rather than to authorize an
electing company serving more than five million access lines to package
basic network services with discretionary services or competitive services
as of the date the company enters into the interLATA long distance market.
The substitute  deletes proposed Subsection (b), which would have
authorized an electing company serving less than five million access lines
to package basic network services with discretionary services or
competitive services if the company notifies PUC of its binding commitment
to make certain infrastructure improvements by September 1, 2001, and
prohibited these commitments from applying to exchanges of the company sold
or transferred before, or for which contracts for which for sale or
transfer were pending on, September 1, 2001.  Proposed Subsection (b) also
would have required the company, in the case of exchanges for which
contracts for sale or transfer were pending as of March 1, 2001, where the
purchaser withdrew or defaulted prior to September 1, 2001, to have one
year from the date of withdrawal or default to comply with the commitments.
The substitute redesignates proposed Subsections (e) of the original to
Subsection (c) and deletes the prohibition against the package being
offered in manner that results in a customer-specific contract except as
provided by Section 58.003. The substitute combines provisions from
Subsections (c) and (d) of the original in new Subsection (b).  The
substitute also deletes proposed Section 58.064 (Zone-Density Pricing of
Basic Local Telecommunications Service), which would have provided that
until an electing company is authorized to engage in pricing flexibility
pursuant to Section 58.063, the only form of pricing flexibility allowed
for basic local telecommunications service is zone-density pricing. 

The substitute adds a new SECTION 37, which amends Subchapter E, Chapter
58, Utilities Code. The substitute amends Section 58.151 to additionally
classify certain services as nonbasic services. The substitute also amends
Section 58.152 to authorize an electing company to set the price for any
nonbasic service at any level above the lesser of the service's long run
incremental cost in accordance with the imputation rules prescribed by or
under Subchapter D, Chapter 60, or price for the service in effect on
September 1, 1999, and to use pricing flexibility for a nonbasic service,
subject to Section 51.004, rather than the requirements of Sections 60.001
and 60.002.  In addition, the substitute adds a new Section 58.153 to
authorize an electing company to introduce a new service, subject to
Section 58.152(a).  The proposed section sets forth the notice and pricing
requirements and procedures for complaint. 

The substitute deletes SECTION 21 of the original, which would have amended
Subchapter D, Chapter 58, Utilities Code, by adding Section 58.1011.  The
proposed section would have provided that from September 1, 1999, until
such time as an affected company offers interLATA long distance service,
and notwithstanding Section 58.101 (Services Included), for an electing
company with more than five million access lines, that certain services are
discretionary services, unless reclassified under Section 58.024; sets
forth what is included as discretionary services; and would have provided
that at such time as an electing company serving more than five million
access lines offers interLATA long distance, the services are discretionary
services of that company.  Sets forth what is included as discretionary
services. 

The substitute deletes SECTION 22 of the original, which would have amended
Section 58.102, Utilities Code, to require the Commission to set the
maximum price an electing company may charge for discretionary service
until one of the specified dates and provided that the initial maximum
price for a service is the price in effect on the date of the electing
company's election, rather than September 1, 1995.  The section would also
have authorized the electing company, after the dates prescribed in Section
58.102(a) (Maximum Price), to file annually a revised maximum price list
for the services classified as discretionary services.  The section would
have prohibited the new maximum prices for the services classified as
discretionary services from exceeding, in the aggregate, 112 percent of the
previous maximum prices for those services and required the electing
company to file the new maximum price list in an informational tariff filed
with PUC five days prior to the date on which the new maximum prices will
become effective.  In addition, the section would have deleted text
prohibiting PUC from increasing the initial maximum price and text
authorizing PUC to change the initial maximum price. 

The substitute deletes SECTION 23 of the original, which would have amended
Subchapter E, Chapter 58, Utilities Code, by adding Section 58.1511.  The
proposed section would have provided that from September 1, 1999, until
such time as an affected company offers interLATA long distance service,
and notwithstanding Section 58.151 (Services Included), for an electing
company with more than five million access lines, the services in this
section are competitive services and set forth what is included in
competitive services.  The proposed section also would have provided that
at such time as an electing company serving more than five million access
lines offers interLATA long distance,  the services listed in Subsection
(d) are competitive services for that company, set forth what is included
in competitive services, and provided that rates for the listed services
are capped until September 1, 2005. 

The substitute deletes SECTION 24, which would have amended Subchapter E,
Chapter 58, Utilities Code, by adding Section 58.1512.  The proposed
section would have set forth certain required services to be offered by an
electing company to be classified as discretionary services and prohibit it
from being reclassified under Section 58.024, for the 12-month period
following the date an electing company with more than five million access
lines begins offering interLATA long distance service, and require the
services listed in this section, at the expiration of the 12-month period,
to be classified as competitive services.  The proposed section also would
have prohibited an electing company, notwithstanding any other provision in
this title, with more than five million access lines from providing the
services in this section pursuant to a customer specific contract until 18
months have expired following the date that such an electing company begins
offering interLATA long distance service and from offering a package of
services, including a service listed in this section, that results in a
customer specific contract until the 18-month period has expired. 

The substitute redesignates SECTION 25 (Subchapter E, Chapter 58, Utilities
Code) of the original to SECTION 38 and changes the section title to
"Interconnection," rather than "Interconnection Services."  The substitute
also corrects a cross-reference and corrects the reference to the
arbitration authority of the commission rather than the FCC. 

The substitute redesignates SECTION 26 (Chapter 58, Utilities Code) of the
original to SECTION 39 and modifies proposed Section 58.301(2) to reflect
that the additional two cent reduction in switched access rates occurs on
the earlier of July 1, 2000 or interLATA entry.  The substitute further
differs from the original by deleting the half cent reduction required on
the first anniversary of interLATA entry.  It also modifies proposed
Section 58.302 to authorize an electing company to, on its own initiative,
decrease a rate charged for switched access service to any amount above the
long run incremental cost of the service, notwithstanding Subchapter F,
Chapter 60, but subject to Section 60.001. 

The substitute redesignates SECTION 31  (proposed Sections 59.030, 59.031,
and 59.032, Utilities Code) of the original to SECTION 44 and further
modifies Section 59.030(a) by including the Office of Public Utility
Counsel (office) and the PUC among the entities to whom an electing company
that wishes to introduce a new service must first provide an informational
notice. 

In proposed Section 59.030(c), the substitute differs from the original by
including the office and PUC, in addition to an affected person, as
entities authorized to file a complaint with PUC that challenges the
pricing of a new service.  The substitute also makes a conforming change. 

In proposed Section 59.030(d), the substitute differs from the original by
making a conforming change. 

In proposed Section 59.031(a), the substitute differs from the original by
including the office among the entities to whom an electing company that
wishes to exercise pricing flexibility must first provide an informational
notice.  The substitute also removes an exception that prohibited a package
of regulated services with non-regulated services from being offered in a
manner that resulted in a customer-specific contract. 

In proposed Section 59.031(c), the substitute differs from the original by
including the office and PUC, in addition to an affected person, as
entities authorized to file a complaint at PUC that alleges that the price
of a regulated service does not comply with the applicable pricing
standards.  The substitute also makes a conforming change. 

The substitute adds a new SECTION 45, which amends Section 60.042,
Utilities Code, as follows: 

Sec. 60.042.  PROHIBITED RESALE OR SHARING.  (a) Prohibits a provider of
telecommunications service from imposing a restriction on the resale or
sharing of a service  entitled to regulatory treatment as a nonbasic,
rather than competitive service, if the provider is a company electing
regulation under Chapter 58. 

(b) Adds this subsection to provide that an incumbent local exchange must
comply  with the resale provisions of applicable federal law, unless
exempted by federal law. 

(c) Adds this subsection to require an electing company that offers basic
or nonbasic services regulated by PUC to its retail customers as a
promotional offering to make those services available for resale by a
certificated telecommunications utility (CTU) on terms that are no less
favorable than those terms for the services for the services that are made
available to retail customers.  Requires the electing company's basic or
nonbasic service, for a promotion of 90 days or less, to be made available
to the CTU at the electing company's promotional rate, without an
avoided-cost discount.  Requires the electing company's basic or nonbasic
service, for a promotion of more than 90 days, to be made available to the
CTU at a rate that reflects the avoided-cost discount, if any, from the
promotional rate. 

The substitute deletes SECTION 32 of the original, which would have amended
Section 60.124, Utilities Code, to set forth a requirement of
interconnection agreements between incumbent local exchanges and
competitive local exchanges. 

The substitute redesignates SECTION 33 of the original to SECTION 46.  In
proposed Sections 60.164 and 60.165, the substitute modifies the original
by including Chapter 62 (Broadcaster Safeguards) as a chapter of the
Utilities Code that is an exception to the prohibition against PUC adopting
certain rules or orders for a local exchange that are more burdensome than
federal law, rules, or orders.  The substitute also makes nonsubstantive
changes in proposed Section 60.165.  The substitute authorizes the
commission not to adopt rules, the original required the commission not to
adopt rule. 

The substitute adds a new SECTION 47, which amends Section 62.074(b),
Utilities Code, to provide an exception to the prohibition against an
incumbent local exchange company from developing a rate that primarily
benefits its separate affiliate.  That exception is that an incumbent local
exchange is authorized to market or sell audio and video programming of its
separate affiliate without marketing or selling the programming of a
nonaffiliated provider. 

The substitute adds a new SECTION 48, which amends Section 62.108,
Utilities Code, to change the expiration date for Subchapter E (Video
Carriage) from August 31, 1999, to August 31, 2005. 

The substitute adds a new SECTION 49, which amends Section 62.136,
Utilities Code, to change the expiration date for Subchapter F (Audio
Carriage) from August 31, 1999, to August 31, 2005. 

The substitute adds a new SECTION 50, which amends Subtitle C, Title 2,
Utilities Code, by adding Chapter 64.  Please see the Section-by-Section
Analysis portion of this document for a complete analysis of Chapter 64. 

The substitute adds a new SECTION 51, to provide that Section 55.012,
Utilities Code, takes effect March 1, 2000. 

The substitute adds a new SECTION 52 to repeal Section 58.062 (Switched
Access Rates), Utilities Code, and Subchapter D (Discretionary Services),
Chapter 58 (Incentive Regulation), Utilities Code. 

The substitute redesignates SECTION 34 (emergency clause) of the original
to SECTION 53.HBA-JRA, TYH C.S.S.B. 560 76(R) 

The substitute also redesignates SECTIONS 3, 4, 6, 14, 18, 19, 27, 28, 29,
and 30 of the original to SECTIONS 10, 11, 14, 29, 34, 35, 40, 41, 42, 43.