By: Fraser S.B. No. 467
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of telecommunications utilities and to
1-2 the provision of telecommunications and related services.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The title to Section 52.058, Utilities Code, is
1-5 amended to read as follows:
1-6 Sec. 52.058. GENERAL PROVISIONS RELATING TO NEW OR
1-7 EXPERIMENTAL SERVICES OR PROMOTIONAL RATES.
1-8 SECTION 2. Subchapter B, Chapter 52, Utilities Code, is
1-9 amended by adding Section 52.0583 to read as follows:
1-10 Sec. 52.0583. NEW SERVICES. (a) An incumbent
1-11 local exchange company may introduce a new service 10 days after
1-12 providing an informational notice to the commission. Such notice
1-13 shall include the underlying cost information demonstrating
1-14 compliance with Subsection (b).
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.
1-22 (c) The commission shall allow the company to continue to
2-1 provide the service while a complaint or review by the commission
2-2 relating to the appropriateness of the pricing of the service is
2-3 pending.
2-4 (d) The commission or the person filing a complaint has the
2-5 burden of proving that the incumbent local exchange company did not
2-6 set the price for the new service in accordance with the applicable
2-7 provisions of this subchapter. If the review or complaint is
2-8 finally resolved in favor of the commission or complainant, the
2-9 company:
2-10 (1) shall, not later than the 10th day after the date
2-11 the review or complaint is finally resolved, amend the price of the
2-12 service as necessary to comply with the final resolution; or
2-13 (2) may, at the company's option, discontinue the
2-14 service.
2-15 SECTION 3. Subchapter C, Chapter 52, Utilities Code, is
2-16 amended by adding Section 52.112 to read as follows:
2-17 Sec. 52.112. PASS-THROUGH OF ACCESS RATE REDUCTION.
2-18 (a) The commission shall require an interexchange
2-19 telecommunications utility doing business in this state to
2-20 proportionately pass through to all customers any reduction in the
2-21 rates for switched access services.
2-22 (b) On or before the second anniversary of the date rates
2-23 for switched access services are reduced, the commission may assess
2-24 an administrative penalty under Sections 15.023-15.027 against an
2-25 interexchange telecommunications utility that does not pass through
2-26 savings from the reduction as required by this section.
3-1 SECTION 4. Subchapter A, Chapter 53, Utilities Code, is
3-2 amended by adding Section 53.008 to read as follows:
3-3 Sec. 53.008. APPLICATION OF CHAPTER TO ELECTING COMPANIES.
3-4 This chapter does not apply to a company electing under Chapter 58
3-5 or 59 except as otherwise specifically provided by those chapters.
3-6 SECTION 5. Section 58.021, Utilities Code, is amended by
3-7 adding Subsections (c) and (d) to read as follows:
3-8 (c) Except as provided by Subsection (d), an election under
3-9 this chapter remains in effect until the legislature eliminates the
3-10 incentive regulation authorized by this chapter and Chapter 59.
3-11 (d) Notwithstanding any other provision of this chapter, an
3-12 electing company serving fewer than five million access lines in
3-13 this state may withdraw its election under this chapter at any time
3-14 after the later of September 1, 2001, or the fourth anniversary of
3-15 the company's election date if the commission determines that the
3-16 company has fulfilled its infrastructure commitment prescribed by
3-17 this chapter.
3-18 SECTION 6. Section 58.024(b), Utilities Code, is amended to
3-19 read as follows:
3-20 (b) The commission shall establish criteria for determining
3-21 whether a service should be reclassified. The criteria may only
3-22 [must] include consideration of the:
3-23 (1) availability of the service from other providers;
3-24 (2) proportion of the market that receives the
3-25 service;
3-26 (3) effect of the reclassification on service
4-1 subscribers; and
4-2 (4) nature of the service.
4-3 SECTION 7. Subchapter B, Chapter 58, Utilities Code, is
4-4 amended by adding Section 58.0245 to read as follows:
4-5 Sec. 58.0245. RECLASSIFICATION OF SERVICES IN CERTAIN
4-6 GEOGRAPHIC MARKETS. (a) Notwithstanding any other provision of
4-7 this chapter, the commission may reclassify a basic network service
4-8 as a competitive service in a geographic market if, after notice
4-9 and hearing, the commission determines that the electing company is
4-10 not dominant for the service in that geographic market.
4-11 (b) In determining the geographic market under Subsection
4-12 (a), the commission shall consider the economic and technical
4-13 conditions of the market.
4-14 (c) To determine whether an electing company is no longer
4-15 dominant for a basic network service in a geographic market, the
4-16 commission must find that:
4-17 (1) there is an effective competitive alternative; and
4-18 (2) the electing company does not have market power
4-19 sufficient to control, in a manner that is adverse to the public
4-20 interest, the price of the service in the geographic area.
4-21 (d) For purposes of Subsection (c), an electing company does
4-22 not have market power sufficient to control, in a manner that is
4-23 adverse to the public interest, the price of the service in the
4-24 geographic area if other facilities-based providers cumulatively
4-25 have at least 30 percent of the market for that service in that
4-26 area.
5-1 SECTION 8. Section 58.051, Utilities Code, is amended to
5-2 read as follows:
5-3 Sec. 58.051. SERVICES INCLUDED. Unless reclassified under
5-4 Section 58.024, the following services are basic network services:
5-5 (1) flat rate residential and business local exchange
5-6 voice-grade telephone service, including primary directory listings
5-7 and the receipt of a directory and any applicable mileage or zone
5-8 charges;
5-9 (2) tone dialing service;
5-10 (3) lifeline and tel-assistance service;
5-11 (4) service connection for basic services;
5-12 (5) direct inward dialing service for basic services;
5-13 (6) private pay telephone access service;
5-14 (7) call trap and trace service;
5-15 (8) access to 911 service provided by a local
5-16 authority and access to dual party relay service;
5-17 (9) switched access service;
5-18 (10) interconnection to competitive providers;
5-19 (11) mandatory extended area service arrangements;
5-20 (12) mandatory extended metropolitan service or other
5-21 mandatory toll-free calling arrangements;
5-22 (13) interconnection for commercial mobile service
5-23 providers; and
5-24 (14) directory assistance [; and]
5-25 [(15) "1-plus" intraLATA message toll service].
5-26 SECTION 9. Section 58.054, Utilities Code, is amended by
6-1 adding Subsection (c) to read as follows:
6-2 (c) Notwithstanding Subsections (a) and (b), the cap on the
6-3 rates for basic network services for a company electing under this
6-4 subchapter may not expire before September 1, 2005.
6-5 SECTION 10. Sections 58.055(a) and (b), Utilities Code, are
6-6 amended to read as follows:
6-7 (a) An electing company may increase a rate for a basic
6-8 network service during the [four-year] period the company's rates
6-9 for basic network service are capped as prescribed by Section
6-10 58.054 only:
6-11 (1) with commission approval that the proposed change
6-12 is included in Section 58.056, 58.057, or 58.058; and
6-13 (2) as provided by Sections 58.056, 58.057, 58.058,
6-14 and 58.059.
6-15 (b) Notwithstanding Subchapter F, Chapter 60, an electing
6-16 company may, on its own initiative, decrease a rate for a basic
6-17 network service during the [four-year] period the company's rates
6-18 for basic network service are capped as prescribed by Section
6-19 58.054.
6-20 SECTION 11. Section 58.058, Utilities Code, is amended to
6-21 read as follows:
6-22 Sec. 58.058. Rate Group Reclassification. Notwithstanding
6-23 Section 58.054 [Subchapter B], the commission, on request of the
6-24 electing company, shall allow a rate group reclassification that
6-25 results from access line growth.
6-26 SECTION 12. Subchapter C, Chapter 58, Utilities Code, is
7-1 amended by adding Section 58.0595 to read as follows:
7-2 Sec. 58.0595. PRICING AND PACKAGING FLEXIBILITY.
7-3 (a) Notwithstanding Section 58.052(b) or Subchapter F, Chapter 60,
7-4 an electing company may exercise pricing flexibility for basic
7-5 network services including the packaging of basic network services
7-6 with any other regulated or unregulated service or a service of an
7-7 affiliate to the extent consistent with applicable federal
7-8 regulations. The company may exercise pricing flexibility in
7-9 accordance with this section 10 days after providing an
7-10 informational notice to the commission.
7-11 (b) An electing company shall set the price of a package of
7-12 services at any level at or above the lesser of:
7-13 (1) the sum of the long run incremental costs of any
7-14 services contained in the package; or
7-15 (2) the sum of the tariffed prices of any basic
7-16 network services contained in the package and the long run
7-17 incremental costs of other services contained in the package.
7-18 SECTION 13. Section 58.060, Utilities Code, is amended to
7-19 read as follows:
7-20 Sec. 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION. After
7-21 the expiration of the [four-year] period during which the company's
7-22 rates for basic network services are capped as prescribed by
7-23 Section 58.054 [expires], an electing company may increase a rate
7-24 for a basic network service only:
7-25 (1) with commission approval subject to this title;
7-26 and
8-1 (2) to the extent consistent with achieving universal
8-2 affordable service.
8-3 SECTION 14. Section 58.062, Utilities Code, is amended to
8-4 read as follows:
8-5 Sec 58.062. SWITCHED ACCESS RATES. (a) Except as provided
8-6 in Subsection (b), [Notwithstanding any other provision of this
8-7 title], the commission may not reduce an electing company's rates
8-8 for switched access services before the expiration of the period
8-9 during which the company's rates for [cap on] basic network
8-10 services are capped as prescribed by Section 58.054.
8-11 (b) Notwithstanding any other provision of this Title, the
8-12 commission shall, not later than December 15, 1999, reduce the
8-13 switched access rates of an electing company with more than one
8-14 million access lines in service in this state to five cents per
8-15 minute on a combined originating and terminating basis.
8-16 (c) Following the reduction ordered in this section, the
8-17 commission may not reduce an electing company's rates for switched
8-18 access services and the electing company may not increase its rates
8-19 for switched access services.
8-20 SECTION 15. Subchapter E, Chapter 58, Utilities Code, is
8-21 amended to read as follows:
8-22 SUBCHAPTER E. COMPETITIVE SERVICES
8-23 Sec. 58.151. SERVICES INCLUDED. The following services are
8-24 classified as competitive services:
8-25 (1) services described in the WATS tariff as the
8-26 tariff existed on January 1, 1995;
9-1 (2) 800 and foreign exchange services;
9-2 (3) private line service;
9-3 (4) special access service;
9-4 (5) services from public pay telephones;
9-5 (6) paging services and mobile services (IMTS);
9-6 (7) 911 premises equipment;
9-7 (8) speed dialing; [and]
9-8 (9) three-way calling; and
9-9 (10) data services.
9-10 Sec. 58.152. PRICES. (a) An electing company any set the
9-11 price for a competitive service at any level above the lesser of
9-12 the:
9-13 (1) service's long run incremental cost in accordance
9-14 with the imputation rules prescribed by or under Subchapter D,
9-15 Chapter 60; or
9-16 (2) price for the service in effect on September 1,
9-17 1999.
9-18 (b) Subject to the requirements of Sections 60.001 and
9-19 60.002, the company may use pricing flexibility for a competitive
9-20 service. Pricing flexibility includes all pricing arrangements
9-21 included in the definition of "pricing flexibility" prescribed by
9-22 Section 51.002 and includes packages that include basic network
9-23 services.
9-24 Sec. 58.153. NEW SERVICES. (a) Subject to the pricing
9-25 conditions prescribed by SECTION 58.152(a), an electing company may
9-26 introduce a new service 10 days after providing an informational
10-1 notice to the commission. Such notice shall include the underlying
10-2 cost information demonstrating compliance Subsection (c).
10-3 (b) The commission shall allow the company to continue to
10-4 provide the service while a complaint or review by the commission
10-5 relating to the appropriateness of the pricing of the service is
10-6 pending.
10-7 (c) The commission or the person filing a complaint has the
10-8 burden of proving that the incumbent local exchange company did not
10-9 set the price for the new service in accordance with Section
10-10 58.152(a). If the review or complaint is finally resolved in favor
10-11 of the commission or complainant, the company:
10-12 (1) shall, not later than the 10th day after the date
10-13 the review or complaint is finally resolved, amend the price of the
10-14 service as necessary to comply with the final resolution; or
10-15 (2) may, at the company's option, discontinue the
10-16 service.
10-17 [(c) Notwithstanding Subsection (a) or (b), the company may
10-18 not increase the price of a competitive service in a geographic
10-19 area in which that service or a functionally equivalent service is
10-20 not readily available from another provider.]
10-21 SECTION 16. Section 59.021, Utilities Code, is amended by
10-22 adding Subsection (c) to read as follows:
10-23 (c) A company electing under this chapter may renew the
10-24 election for successive two-year periods. An election that is
10-25 renewed under this subsection remains in effect until the earlier
10-26 of the date the:
11-1 (1) election expires because it was not renewed;
11-2 (2) commission allows the company to withdraw under
11-3 Section 59.022; or
11-4 (3) legislature eliminates the incentive regulation
11-5 authorized by this chapter and Chapter 58.
11-6 SECTION 17. Section 59.024, Utilities Code, is amended by
11-7 amending Subsections (a), (d), and (e) and adding Subsection (f) to
11-8 read as follows:
11-9 (a) Except for the charges permitted under Subchapter C,
11-10 Chapter 55, Subchapter B, Chapter 56, and Section 55.024, an
11-11 electing company may not, [on or] before the end of the company's
11-12 election period under this chapter [sixth anniversary of its
11-13 election date], increase a rate previously established for that
11-14 company under this title unless the commission approves the
11-15 proposed change as authorized under Subsection (c) or (d).
11-16 (d) Notwithstanding Subsection (a), the [The] commission, on
11-17 request of the electing company, shall allow a rate group
11-18 reclassification that results from access line growth.
11-19 (e) An electing company may, on its own initiative, decrease
11-20 a rate during the company's election period. Section 58.059 does
11-21 not apply to a rate decrease under this subsection.
11-22 (f) Except as provided by Subsection (e), Section 58.059
11-23 applies to a rate change under this Section.
11-24 SECTION 18. Section 59.025, Utilities Code, is amended to
11-25 read as follows:
11-26 Sec. 59.025. SWITCHED ACCESS RATES. (a) Except as provided
12-1 in Subsection (b), [Notwithstanding any other provision of this
12-2 title], the commission may not reduce an electing company's rates
12-3 for switched access services before the expiration of the period
12-4 during which the company's rates for basic network services are
12-5 capped as [six-year period] prescribed by Section 59.024.
12-6 (b) Notwithstanding any other provision of this Title, the
12-7 commission shall, not later than December 15, 1999, reduce the
12-8 switched access rates of an electing company to five cents per
12-9 minute on a combined originating and terminating basis.
12-10 (c) Following the reduction ordered in this section, the
12-11 commission may not reduce an electing company's rates for switched
12-12 access services and the electing company may not increase its rates
12-13 for switched access services.
12-14 SECTION 19. Section 59.026(a), Utilities Code, is amended to
12-15 read as follows:
12-16 (a) On or before the end [sixth anniversary] of the
12-17 company's election period [date], an electing company is not, under
12-18 any circumstances, subject to:
12-19 (1) a complaint or hearing regarding the
12-20 reasonableness of the company's:
12-21 (A) rates;
12-22 (B) overall returns;
12-23 (C) return on invested capital; or
12-24 (D) net income; or
12-25 (2) a complaint that a rate is excessive.
12-26 SECTION 20. Subchapter B, Chapter 59, Utilities Code, is
13-1 amended by adding Sections 59.030, 59.031, and 59.032 to read as
13-2 follows:
13-3 Sec. 59.030. NEW SERVICES. (a) An electing company may
13-4 introduce a new service 10 days after providing an informational
13-5 notice to the commission. Such notice shall include the underlying
13-6 cost information demonstrating compliance Subsection (b).
13-7 (b) An electing company shall price each new service at or
13-8 above the service's long run incremental cost. The commission
13-9 shall allow a company serving fewer than one million access lines
13-10 in this state to establish a service's long run incremental cost by
13-11 adopting, at that company's option, the cost studies of a larger
13-12 company for that service that have been accepted by the commission.
13-13 (c) The commission shall allow a company to continue to
13-14 provide the service while a complaint or review by the commission
13-15 relating to the appropriateness of the pricing of the service is
13-16 pending.
13-17 (d) The commission or the person filing a complaint has the
13-18 burden of proving that the electing company did not set the price
13-19 for the new service in accordance with the applicable provisions of
13-20 this subchapter. If the review or complaint is finally resolved in
13-21 favor of the commission or complainant, the company:
13-22 (1) shall, not later than the 10th day after the date
13-23 the review or complaint is finally resolved, amend the price of the
13-24 service as necessary to comply with the final resolution; or
13-25 (2) may, at the company's option, discontinue the
13-26 service.
14-1 Sec. 59.031. PRICING AND PACKAGING FLEXIBILITY; CUSTOMER
14-2 PROMOTIONAL OFFERINGS. (a) Notwithstanding Section 59.027(b) or
14-3 Subchapter F, Chapter 60, an electing company may exercise pricing
14-4 flexibility in accordance with this section, including the
14-5 packaging of a regulated service such as basic local
14-6 telecommunications service with any other regulated or unregulated
14-7 service or a service of an affiliate to the extent consistent with
14-8 applicable federal regulations. The company may exercise pricing
14-9 flexibility 10 days after providing an informational notice to the
14-10 commission.
14-11 (b) An electing company, at the company's option, shall
14-12 price each regulated service offered separately or as part of a
14-13 package under Subsection (a) at either the service's tariffed rate
14-14 or at a rate not lower than the service's long run incremental
14-15 cost. The commission shall allow a company serving fewer than one
14-16 million access lines in this state to establish a service's long
14-17 run incremental cost by adopting, at that company's option the cost
14-18 studies of a larger company for that service that have been
14-19 accepted by the commission.
14-20 (c) A complaint alleging that an electing company has priced
14-21 a regulated service in a manner that does not meet the pricing
14-22 standards of this subchapter must be filed before the 31st day
14-23 after the company implements the rate.
14-24 Sec. 59.032. CUSTOMER PROMOTIONAL OFFERINGS. (a) An
14-25 electing company may offer a promotion for a regulated service for
14-26 not more than 90 days in any 12-month period.
15-1 (b) The company shall file with the commission a promotional
15-2 offering that consists of:
15-3 (1) waiver of installation charges or service order
15-4 charges, or both, for not more than 90 days in a 12-month period,
15-5 or
15-6 (2) a temporary discount of not more than 25 percent
15-7 from the tariffed rate for not more than 90 days in a 12-month
15-8 period.
15-9 (c) An electing company is not required to obtain commission
15-10 approval to make a promotional offering described by Subsection
15-11 (b).
15-12 (d) An electing company may offer a promotion of regulated
15-13 service as part of a package of services consisting of any
15-14 regulated service with any other regulated or unregulated service
15-15 or a service of an affiliate to the extent consistent with
15-16 applicable federal regulations.
15-17 SECTION 21. Subchapter I, Chapter 60, Utilities Code, is
15-18 amended by adding Sections 60.164 and 60.165 to read as follows:
15-19 Sec. 60.164. PERMISSIBLE JOINT MARKETING. Except as
15-20 prescribed by Chapters 61 and 63, the commission may not adopt a
15-21 rule or order that would prohibit a local exchange company from
15-22 marketing or selling the company's products and services jointly
15-23 with the products and services of an affiliate in a manner
15-24 permitted by federal law or applicable rules of the Federal
15-25 Communications Commission.
15-26 Sec. 60.165. AFFILIATE RULES. Except as prescribed by
16-1 Chapters 61 and 63, the commission may not adopt a rule or order
16-2 that would prescribe for a local exchange company an affiliate
16-3 rule, including an accounting rule, cost allocation rule, or
16-4 structural separation rule, that is inconsistent with federal law
16-5 or applicable rules of the Federal Communications Commission.
16-6 SECTION 22. The Public Utility Commission of Texas shall
16-7 implement the universal service fund in all areas of this state not
16-8 later than November 1, 1999.
16-9 SECTION 23. Section 53.151(c), Utilities Code, is repealed.
16-10 SECTION 24. This Act takes effect September 1, 1999.
16-11 SECTION 25. The importance of this legislation and the
16-12 crowded condition of the calendars in both houses create an
16-13 emergency and an imperative public necessity that the
16-14 constitutional rule requiring bills to be read on three several
16-15 days in each house by suspended, and this rule is hereby suspended.