By Siebert                                            H.B. No. 3572
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the regulation of telecommunications utilities and to
 1-3     the provision of telecommunications and related services.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  The section heading to Section 52.058, Utilities
 1-6     Code, is amended to read as follows:
 1-7           Sec. 52.058.  GENERAL PROVISIONS RELATING TO NEW OR
 1-8     EXPERIMENTAL SERVICES OR PROMOTIONAL RATES.
 1-9           SECTION 2.  Subchapter B, Chapter 52, Utilities Code, is
1-10     amended by adding Sections 52.0583, 52.0584, and 52.0585 to read as
1-11     follows:
1-12           Sec. 52.0583.  NEW SERVICES.  (a)  An incumbent local
1-13     exchange company may introduce a new service 24 hours after
1-14     providing an informational notice to the commission.
1-15           (b)  An incumbent local exchange company shall price each new
1-16     service at or above the service's long run incremental cost.  The
1-17     commission shall allow a company serving fewer than one million
1-18     access lines in this state to establish a service's long run
1-19     incremental cost by adopting, at that company's option, the cost
1-20     studies of a larger company for that service that have been
1-21     accepted by the commission.
 2-1           (c)  Only an affected person may file a complaint with the
 2-2     commission challenging whether the pricing by an incumbent local
 2-3     exchange company of a new service is in compliance with Subsection
 2-4     (b).  The commission shall allow the company to continue to provide
 2-5     the service while the complaint is pending.
 2-6           (d)  An affected person filing a complaint under Subsection
 2-7     (c) has the burden of proving that the incumbent local exchange
 2-8     company did not set the price for the new service in accordance
 2-9     with the applicable provisions of this subchapter.  If the
2-10     complaint is finally resolved in favor of the complainant, the
2-11     company:
2-12                 (1)  shall, not later than the 10th day after the date
2-13     the complaint is finally resolved, amend the price of the service
2-14     as necessary to comply with the final resolution; or
2-15                 (2)  may, at the company's option, discontinue the
2-16     service.
2-17           Sec. 52.0584.  PRICING AND PACKAGING FLEXIBILITY; CUSTOMER
2-18     PROMOTIONAL OFFERINGS.  (a)  Notwithstanding any other provision of
2-19     this title, an incumbent local exchange company may exercise
2-20     pricing flexibility in accordance with this section, including the
2-21     packaging of any regulated service such as basic local
2-22     telecommunications service with any other regulated or unregulated
2-23     service or any service of an affiliate.  The company may exercise
2-24     pricing flexibility 24 hours after providing an informational
2-25     notice to the commission.
 3-1           (b)  An incumbent local exchange company, at the company's
 3-2     option, shall price each regulated service offered separately or as
 3-3     part of a package under Subsection (a) at either the service's
 3-4     tariffed rate or at a rate not lower than the service's long run
 3-5     incremental cost.  The commission shall allow a company serving
 3-6     fewer than one million access lines in this state to establish a
 3-7     service's long run incremental cost by adopting, at that company's
 3-8     option, the cost studies of a larger company for that service that
 3-9     have been accepted by the commission.
3-10           (c)  Only an affected person may file a complaint alleging
3-11     that an incumbent local exchange company has priced a regulated
3-12     service in a manner that does not meet the pricing standards of
3-13     this subchapter.  The complaint must be filed before the 31st day
3-14     after the company implements the rate.
3-15           Sec. 52.0585.  CUSTOMER PROMOTIONAL OFFERINGS.  (a)  An
3-16     incumbent local exchange company may offer a promotion for a
3-17     regulated service for not more than 90 days in any 12-month period.
3-18           (b)  The company shall file with the commission a promotional
3-19     offering that consists of:
3-20                 (1)  waiver of installation charges or service order
3-21     charges, or both, for not more than 90 days in a 12-month period;
3-22     or
3-23                 (2)  a temporary discount of not more than 25 percent
3-24     from the tariffed rate for not more than 60 days in a 12-month
3-25     period.
 4-1           (c)  An incumbent local exchange company is not required to
 4-2     obtain commission approval to make a promotional offering described
 4-3     by Subsection (b).
 4-4           (d)  An incumbent local exchange company may offer a
 4-5     promotion of any regulated service as part of a package of services
 4-6     consisting of any regulated service with any other regulated or
 4-7     unregulated service or any service of an affiliate.
 4-8           SECTION 3.  Subchapter C, Chapter 54, Utilities Code, is
 4-9     amended by adding Section 54.1015 to read as follows:
4-10           Sec. 54.1015.  EFFECT OF AFFILIATE.  Notwithstanding any
4-11     other provision of this title, a person may hold a certificate for
4-12     all or any portion of a service area for which one or more
4-13     affiliates of the person holds a certificate of operating
4-14     authority, a service provider certificate of operating authority,
4-15     or a certificate of convenience and necessity.
4-16           SECTION 4.  Section 54.103, Utilities Code, is amended by
4-17     adding Subsection (g) to read as follows:
4-18           (g)  Notwithstanding any other provision of this title, in
4-19     determining whether to grant a certificate, the commission may not
4-20     consider whether an affiliate of the applicant holds a certificate
4-21     of operating authority, a service provider certificate of operating
4-22     authority, or a certificate of convenience and necessity for all or
4-23     part of the territory the applicant has applied to serve.
4-24           SECTION 5.  Section 58.023, Utilities Code, is amended to
4-25     read as follows:
 5-1           Sec. 58.023.  SERVICE CLASSIFICATION.  On election, the
 5-2     services provided by an electing company are classified into two
 5-3     [three] categories:
 5-4                 (1)  basic network services governed by Subchapter C;
 5-5     and
 5-6                 (2)  nonbasic [discretionary services governed by]
 5-7     [Subchapter D; and]
 5-8                 [(3)  competitive] services governed by Subchapter E.
 5-9           SECTION 6.  Sections 58.024(a) and (b), Utilities Code, are
5-10     amended to read as follows:
5-11           (a)  The commission may reclassify a[:]
5-12                 [(1)]  basic network service as a nonbasic
5-13     [discretionary or competitive] service[; or]
5-14                 [(2)  discretionary service as a competitive service].
5-15           (b)  The commission shall establish criteria for determining
5-16     whether a service should be reclassified. The criteria may only
5-17     [must] include consideration of the:
5-18                 (1)  availability of the service from other providers;
5-19                 (2)  proportion of the market that receives the
5-20     service;
5-21                 (3)  effect of the reclassification on service
5-22     subscribers; and
5-23                 (4)  nature of the service.
5-24           SECTION 7.  Section 58.051, Utilities Code, is amended to
5-25     read as follows:
 6-1           Sec. 58.051.  SERVICES INCLUDED.  Unless reclassified under
 6-2     Section 58.024, the following services are basic network services:
 6-3                 (1)  flat rate residential [and business] local
 6-4     exchange voice telephone service, including primary directory
 6-5     listings and the receipt of a directory and any applicable mileage
 6-6     or zone charges;
 6-7                 (2)  residential tone dialing service;
 6-8                 (3)  lifeline and tel-assistance service;
 6-9                 (4)  service connection for basic residential services;
6-10                 (5)  direct inward dialing service for basic
6-11     residential services;
6-12                 (6)  private pay telephone access service;
6-13                 (7)  call trap and trace service;
6-14                 (8)  access for all residential and business end users
6-15     to 911 service provided by a local authority and access to dual
6-16     party relay service;
6-17                 (9)  [switched access service;]
6-18                 [(10)  interconnection to competitive providers;]
6-19                 [(11)]  mandatory extended area service arrangements;
6-20     and
6-21                 (10) [(12)]  mandatory extended metropolitan service or
6-22     other mandatory toll-free calling arrangements[;]
6-23                 [(13)  interconnection for commercial mobile service]
6-24     [providers;]
6-25                 [(14)  directory assistance; and]
 7-1                 [(15)  "1 plus" intraLATA message toll service].
 7-2           SECTION 8.  Subchapter C, Chapter 58, Utilities Code, is
 7-3     amended by adding Section 58.0595 to read as follows:
 7-4           Sec. 58.0595.  PRICING AND PACKAGING FLEXIBILITY.  (a)
 7-5     Notwithstanding Section 58.052(b) or Subchapter F, Chapter 60, an
 7-6     electing company may exercise pricing flexibility for basic network
 7-7     services including the packaging of basic network services with any
 7-8     other regulated or unregulated service or any service of an
 7-9     affiliate.  The company may exercise pricing flexibility in
7-10     accordance with this section 24 hours after providing an
7-11     informational notice to the commission.
7-12           (b)  An electing company shall set the price of a package of
7-13     services containing basic network services and nonbasic services at
7-14     any level at or above the lesser of:
7-15                 (1)  the sum of the long run incremental costs of any
7-16     basic network services and nonbasic services contained in the
7-17     package; or
7-18                 (2)  the sum of the tariffed prices of any basic
7-19     network services contained in the package and the long run
7-20     incremental costs of nonbasic services contained in the package.
7-21           SECTION 9.  Subchapter E, Chapter 58, Utilities Code, is
7-22     amended to read as follows:
7-23                SUBCHAPTER E. NONBASIC [COMPETITIVE] SERVICES
7-24           Sec. 58.151.  SERVICES INCLUDED.  The following services are
7-25     classified as nonbasic [competitive] services:
 8-1                 (1)  flat rate business local exchange telephone
 8-2     service, including primary directory listings and the receipt of a
 8-3     directory, and any applicable mileage or zone charges;
 8-4                 (2)  service connection for all business services;
 8-5                 (3)  direct inward dialing for basic business services;
 8-6                 (4)  "1-plus" intraLATA message toll services;
 8-7                 (5)  0+ and 0- operator services;
 8-8                 (6)  call waiting, call forwarding, and custom calling;
 8-9                 (7)  call return, caller identification, and call
8-10     control options;
8-11                 (8)  central office based PBX-type services;
8-12                 (9)  billing and collection services, including
8-13     installment billing and late payment charges;
8-14                 (10)  integrated services digital network (ISDN)
8-15     services;
8-16                 (11)  switched access services;
8-17                 (12)  new services;
8-18                 (13)  directory assistance services;
8-19                 (14)  services described in the WATS tariff as the
8-20     tariff existed on January 1, 1995;
8-21                 (15) [(2)]  800 and foreign exchange services;
8-22                 (16) [(3)]  private line service;
8-23                 (17) [(4)]  special access service;
8-24                 (18) [(5)]  services from public pay telephones;
8-25                 (19) [(6)]  paging services and mobile services (IMTS);
 9-1                 (20) [(7)]  911 services provided to a local authority
 9-2     [premises equipment];
 9-3                 (21) [(8)]  speed dialing; [and]
 9-4                 (22) [(9)]  three-way calling;
 9-5                 (23)  data services; and
 9-6                 (24)  all other services subject to the commission's
 9-7     jurisdiction that are not specifically classified as basic network
 9-8     services in Section 58.051.
 9-9           Sec. 58.152.  PRICES.  (a)  An electing company may set the
9-10     price for any nonbasic [a competitive] service at any level above
9-11     the lesser of the:
9-12                 (1)  service's long run incremental cost in accordance
9-13     with the imputation rules prescribed by or under Subchapter D,
9-14     Chapter 60; or
9-15                 (2)  price for the service in effect on September 1,
9-16     1999.
9-17           (b)  An electing [Subject to the requirements of Sections]
9-18     [60.001 and 60.002, the] company may use pricing flexibility for a
9-19     nonbasic [competitive] service.  Pricing flexibility includes all
9-20     pricing arrangements included in the definition of "pricing
9-21     flexibility" prescribed by Section 51.002 and includes packages
9-22     that include basic network services.
9-23           [(c)  Notwithstanding Subsection (a) or (b), the company may
9-24     not increase the price of a competitive service in a geographic
9-25     area in which that service or a functionally equivalent service is
 10-1    not readily available from another provider].
 10-2          Sec. 58.153.  NEW SERVICES.  (a)  Subject to the pricing
 10-3    conditions prescribed by Section 58.152(a), an electing company may
 10-4    introduce a new service 24 hours after providing an informational
 10-5    notice to the commission.
 10-6          (b)  Only an affected person may file a complaint with the
 10-7    commission challenging whether the pricing by an incumbent local
 10-8    exchange company of a new service is in compliance with Section
 10-9    58.152(a).  The commission shall allow the company to continue to
10-10    provide the service while the complaint is pending.
10-11          (c)  An affected person filing a complaint under Subsection
10-12    (b) has the burden of proving that the incumbent local exchange
10-13    company did not set the price for the new service in accordance
10-14    with Section 58.152(a).  If the complaint is finally resolved in
10-15    favor of the complainant, the company:
10-16                (1)  shall, not later than the 10th day after the date
10-17    the complaint is finally resolved, amend the price of the service
10-18    as necessary to comply with the final resolution; or
10-19                (2)  may, at the company's option, discontinue the
10-20    service.
10-21          SECTION 10.  Subchapter B, Chapter 59, Utilities Code, is
10-22    amended by adding Sections 59.030, 59.031, and 59.032 to read as
10-23    follows:
10-24          Sec. 59.030.  NEW SERVICES.  (a)  An electing company may
10-25    introduce a new service 24 hours after providing an informational
 11-1    notice to the commission.
 11-2          (b)  An electing company shall price each new service at or
 11-3    above the service's long run incremental cost.  The commission
 11-4    shall allow a company serving fewer than one million access lines
 11-5    in this state to establish a service's long run incremental cost by
 11-6    adopting, at that company's option, the cost studies of a larger
 11-7    company for that service that have been accepted by the commission.
 11-8          (c)  Only an affected person may file a complaint with the
 11-9    commission challenging whether the pricing by an electing company
11-10    of a new service is in compliance with Subsection (b).  The
11-11    commission shall allow the company to continue to provide the
11-12    service while the complaint is pending.
11-13          (d)  An affected person filing a complaint under Subsection
11-14    (c) has the burden of proving that the electing company did not set
11-15    the price for the new service in accordance with the applicable
11-16    provisions of this subchapter.  If the complaint is finally
11-17    resolved in favor of the complainant, the company:
11-18                (1)  shall, not later than the 10th day after the date
11-19    the complaint is finally resolved, amend the price of the service
11-20    as necessary to comply with the final resolution; or
11-21                (2)  may, at the company's option, discontinue the
11-22    service.
11-23          Sec. 59.031.  PRICING AND PACKAGING FLEXIBILITY; CUSTOMER
11-24    PROMOTIONAL OFFERINGS.  (a)  Notwithstanding Section 59.027(b) or
11-25    Subchapter F, Chapter 60, an electing company may exercise pricing
 12-1    flexibility in accordance with this section, including the
 12-2    packaging of any regulated service such as basic local
 12-3    telecommunications service with any other regulated or unregulated
 12-4    service or any service of an affiliate.  The company may exercise
 12-5    pricing flexibility 24 hours after providing an informational
 12-6    notice to the commission.
 12-7          (b)  An electing company, at the company's option, shall
 12-8    price each regulated service offered separately or as part of a
 12-9    package under Subsection (a) at either the service's tariffed rate
12-10    or at a rate not lower than the service's long run incremental
12-11    cost.  The commission shall allow a company serving fewer than one
12-12    million access lines in this state to establish a service's long
12-13    run incremental cost by adopting, at that company's option, the
12-14    cost studies of a larger company for that service that have been
12-15    accepted by the commission.
12-16          (c)  Only an affected person may file a complaint alleging
12-17    that an electing company has priced a regulated service in a manner
12-18    that does not meet the pricing standards of this subchapter.  The
12-19    complaint must be filed before the 31st day after the company
12-20    implements the rate.
12-21          Sec. 59.032.  CUSTOMER PROMOTIONAL OFFERINGS.  (a)  An
12-22    electing company may offer a promotion for a regulated service for
12-23    not more than 90 days in any 12-month period.
12-24          (b)  The company shall file with the commission a promotional
12-25    offering that consists of:
 13-1                (1)  waiver of installation charges or service order
 13-2    charges, or both, for not more than 90 days in a 12-month period;
 13-3    or
 13-4                (2)  a temporary discount of not more than 25 percent
 13-5    from the tariffed rate for not more than 60 days in a 12-month
 13-6    period.
 13-7          (c)  An electing company is not required to obtain commission
 13-8    approval to make a promotional offering described by Subsection
 13-9    (b).
13-10          (d)  An electing company may offer a promotion of any
13-11    regulated service as part of a package of services consisting of
13-12    any regulated service with any other regulated or unregulated
13-13    service or any service of an affiliate.
13-14          SECTION 11.  The following provisions of the Utilities Code
13-15    are repealed:
13-16                (1)  Section 58.062; and
13-17                (2)  Subchapter D, Chapter 58.
13-18          SECTION 12.  This Act takes effect September 1, 1999.
13-19          SECTION 13.  The importance of this legislation and the
13-20    crowded condition of the calendars in both houses create an
13-21    emergency and an imperative public necessity that the
13-22    constitutional rule requiring bills to be read on three several
13-23    days in each house be suspended, and this rule is hereby suspended.