By: Sibley, Fraser S.B. No. 560
99S0342/2
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of telecommunications utilities and the
1-2 provision of telecommunications services.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 52.102, Utilities Code, is amended to
1-5 read as follows:
1-6 Sec. 52.102. LIMITED REGULATORY AUTHORITY. Except as
1-7 otherwise provided by this subchapter and Subchapter D, Chapter 55,
1-8 the commission has only the following jurisdiction over a
1-9 telecommunications utility subject to this subchapter:
1-10 (1) to require registration under Section 52.103;
1-11 (2) to conduct an investigation under Section 52.104;
1-12 (3) to require the filing of reports as the commission
1-13 periodically directs;
1-14 (4) to require the maintenance of statewide average
1-15 rates or prices of telecommunications service;
1-16 (5) to require access to telecommunications service
1-17 under Section 52.105; [and]
1-18 (6) to require the quality of telecommunications
1-19 service provided to be adequate under Section 52.106; and
1-20 (7) to require an interexchange telecommunications
1-21 carrier to pass switched access rate reductions to customers under
1-22 Chapter 56 or other law, as required under Section 52.112.
1-23 SECTION 2. Section 52.108, Utilities Code, is amended to
1-24 read as follows:
2-1 Sec. 52.108. OTHER PROHIBITED PRACTICES. The commission may
2-2 enter any order necessary to protect the public interest if the
2-3 commission finds after notice and hearing that a telecommunications
2-4 utility has:
2-5 (1) failed to maintain statewide average rates;
2-6 (2) abandoned interexchange message telecommunications
2-7 service to a local exchange area in a manner contrary to the public
2-8 interest; [or]
2-9 (3) engaged in a pattern of preferential or
2-10 discriminatory activities prohibited by Section 53.003, 55.005, or
2-11 55.006; or
2-12 (4) failed to pass switched access rate reductions to
2-13 customers under Chapter 56 or other law, as required under Section
2-14 52.112.
2-15 SECTION 3. Section 52.110, Utilities Code, is amended to
2-16 read as follows:
2-17 Sec. 52.110. BURDEN OF PROOF. (a) In a proceeding before
2-18 the commission in which it is alleged that a telecommunications
2-19 utility engaged in conduct in violation of Section 52.107, 52.108,
2-20 [or] 52.109, or 52.112, the burden of proof is on:
2-21 (1) a telecommunications utility complaining of
2-22 conduct committed against it in violation of this subchapter; or
2-23 (2) except as provided by Subsection (b), the
2-24 responding telecommunications utility if the proceedings are:
2-25 (A) brought by a customer or customer
2-26 representative who is not a telecommunications utility; or
3-1 (B) initiated by the commission.
3-2 (b) The commission may impose the burden of proof on the
3-3 complaining party in a proceeding described by Subsection (a)(2) if
3-4 the commission determines that placing the burden of proof on the
3-5 complaining party is in the public interest.
3-6 SECTION 4. Subchapter C, Chapter 52, Utilities Code, is
3-7 amended by adding Section 52.112 to read as follows:
3-8 Sec. 52.112. REDUCTION PASS-THROUGH REQUIRED. (a) The
3-9 commission shall require that each interexchange telecommunications
3-10 carrier doing business in this state pass reductions in intrastate
3-11 access charges through to customers under Chapter 56 or other law.
3-12 (b) To carry out the public policy stated in Subsection (a)
3-13 and Section 52.001, notwithstanding any other provision of this
3-14 title, the commission may adopt rules and establish procedures
3-15 applicable to interexchange telecommunications carriers to:
3-16 (1) require the pass-through of reductions in
3-17 intrastate access charges to customers under Chapter 56 or other
3-18 law;
3-19 (2) require documentation sufficient to demonstrate
3-20 that the carrier has passed intrastate access charge reductions
3-21 through to customers; and
3-22 (3) take any other reasonable and necessary action,
3-23 consistent with public policy.
3-24 (c) When evaluating the reasonableness of interexchange
3-25 telecommunications carrier reduction pass-through plans, the
3-26 commission may consider factors such as the following:
4-1 (1) the proportion of price reductions by customer
4-2 class in relation to the reduction in intrastate access rates; and
4-3 (2) the net impact on customer bills including
4-4 customers on basic rate plans and customers on discount rate plans.
4-5 (d) This subsection shall expire two years after the date
4-6 incumbent local exchange companies doing business in the state are
4-7 no longer prohibited by federal law from offering interLATA and
4-8 interstate long distance service.
4-9 SECTION 5. Section 54.007, Utilities Code, is amended to
4-10 read as follows:
4-11 Sec. 54.007. FLEXIBILITY PLAN. (a) After the commission
4-12 grants an application for a certificate of convenience and
4-13 necessity, a certificate of operating authority, or a service
4-14 provider certificate of operating authority or determines that a
4-15 certificate is not needed for the applicant to provide the relevant
4-16 services, the commission shall conduct appropriate proceedings to
4-17 establish a transitional flexibility plan for the incumbent local
4-18 exchange company in the same area or areas as the new certificate
4-19 holder.
4-20 (b) A basic local telecommunications service price of the
4-21 incumbent local exchange company may not be increased before the
4-22 fourth anniversary of the date the certificate is granted to the
4-23 applicant except that the price may be increased[:]
4-24 [(1)] as provided by this title[;]
4-25 [(2) when the new certificate holder has completed the
4-26 build-out plan required by Subchapter C, if applicable; or]
5-1 [(3) when a competitor for basic local
5-2 telecommunications service provides the service in an area in which
5-3 the build-out requirements have been eliminated].
5-4 SECTION 6. Subchapter C, Chapter 54, Utilities Code, is
5-5 amended to read as follows:
5-6 SUBCHAPTER C. CERTIFICATE OF OPERATING AUTHORITY
5-7 Sec. 54.101. DEFINITION. In this subchapter, "certificate"
5-8 means a certificate of operating authority.
5-9 Sec. 54.102. APPLICATION FOR CERTIFICATE. (a) In lieu of
5-10 applying for a certificate of convenience and necessity, a person
5-11 may apply for a certificate of operating authority.
5-12 (b) [An applicant for a facilities-based certificate of
5-13 operating authority must include with the application a proposed
5-14 build-out plan in compliance with this subchapter that demonstrates
5-15 how the applicant will, over a six-year period, deploy facilities
5-16 throughout the geographic area of the certificated service area.]
5-17 [(c)] The applicant must file with the application a sworn
5-18 statement that the applicant has applied for each municipal
5-19 consent, franchise, or permit required for the type of services and
5-20 facilities for which the applicant has applied.
5-21 (c) Notwithstanding the prohibition against one entity
5-22 holding a certificate of convenience and necessity and a
5-23 certificate of operating authority in the same service territory,
5-24 the commission may grant a certificate of operating authority to
5-25 the holder of a certificate of convenience and necessity for the
5-26 same service territory through the holder's affiliate:
6-1 (1) to allow a carrier to provide advanced services
6-2 through an affiliate if the Federal Communications Commission has
6-3 determined that a carrier may provide such services through an
6-4 affiliate as an exception to the resale or unbundling requirements
6-5 of the Federal Telecommunications Act of 1996 (47 U.S.C. Section
6-6 151 et seq.); or
6-7 (2) to allow a carrier to provide advanced services
6-8 through an affiliate if the commission determines that such
6-9 services may be provided through an affiliate as an exception to
6-10 the resale or unbundling requirements of the Federal
6-11 Telecommunications Act of 1996 (47 U.S.C. Section 151 et seq.).
6-12 (d) An affiliate of a person holding a certificate of
6-13 convenience and necessity may hold a certificate of operating
6-14 authority if the holder of the certificate of convenience and
6-15 necessity is in compliance with federal law and Federal
6-16 Communications Commission rules governing affiliates and structural
6-17 separation.
6-18 (e) The commission shall determine which services and
6-19 related facilities pertain to an advanced service.
6-20 Sec. 54.103. GRANT OR DENIAL OF CERTIFICATE. (a) The
6-21 commission must grant or deny a certificate not later than the 60th
6-22 day after the date the application for the certificate is filed.
6-23 The commission may extend the deadline on good cause shown.
6-24 (b) The commission shall grant each certificate on a
6-25 nondiscriminatory basis after considering factors such as:
6-26 (1) [the adequacy of the applicant's build-out plan;]
7-1 [(2)] the technical and financial qualifications of
7-2 the applicant; and
7-3 (2) [(3)] the applicant's ability to meet the
7-4 commission's quality of service requirements.
7-5 (c) In an exchange of an incumbent local exchange company
7-6 that serves fewer than 31,000 access lines, in addition to the
7-7 factors described by Subsection (b), the commission shall consider:
7-8 (1) the effect of granting the certificate on a public
7-9 utility serving the area and on that utility's customers;
7-10 (2) the ability of that public utility to provide
7-11 adequate service at reasonable rates;
7-12 (3) the effect of granting the certificate on the
7-13 ability of that public utility to act as the provider of last
7-14 resort; and
7-15 (4) the ability of the exchange, not the company, to
7-16 support more than one provider of service.
7-17 (d) Except as provided by Subsections (e) and (f), the
7-18 commission may grant an application for a certificate only for an
7-19 area or areas that are contiguous and reasonably compact and cover
7-20 an area of at least 27 square miles.
7-21 (e) In an exchange in a county that has a population of less
7-22 than 500,000 and that is served by an incumbent local exchange
7-23 company that has more than 31,000 access lines, an area covering
7-24 less than 27 square miles may be approved if the area is contiguous
7-25 and reasonably compact and has at least 20,000 access lines.
7-26 (f) In an exchange of a company that serves fewer than
8-1 31,000 access lines in this state, the commission may grant an
8-2 application only for an area that has boundaries similar to the
8-3 boundaries of the serving central office that is served by the
8-4 incumbent local exchange company that holds the certificate of
8-5 convenience and necessity for the area.
8-6 [Sec. 54.104. BUILD-OUT PLAN REQUIREMENTS. (a) The
8-7 build-out plan required by Section 54.102 must provide that, by the
8-8 end of the:]
8-9 [(1) first year, 10 percent of the area to be served
8-10 must be served with facilities that are not facilities of the
8-11 incumbent local exchange company;]
8-12 [(2) third year, 50 percent of the area to be served
8-13 must be served with facilities that are not facilities of the
8-14 incumbent local exchange company; and]
8-15 [(3) sixth year, 100 percent of the area to be served
8-16 must be served with facilities that are not facilities of the
8-17 incumbent local exchange company.]
8-18 [(b) The build-out plan may permit the certificate holder to
8-19 serve not more than 40 percent of the certificate holder's service
8-20 area by reselling the incumbent local exchange company's
8-21 facilities. The resale must be in accordance with:]
8-22 [(1) Section 54.105; and]
8-23 [(2) the resale tariff approved by the commission
8-24 under Subchapter C, Chapter 60.]
8-25 [(c) The resale limitation applies to an incumbent local
8-26 exchange facility that a certificate holder resells in providing
9-1 local exchange telephone service, regardless of whether:]
9-2 [(1) the certificate holder purchases the facility
9-3 directly from the incumbent local exchange company; or]
9-4 [(2) an intermediary carrier purchases the facility
9-5 from the incumbent local exchange company and then provides the
9-6 facility to the certificate holder for resale.]
9-7 [(d) To meet the build-out requirement prescribed by this
9-8 subchapter, a certificate holder:]
9-9 [(1) may not use commercial mobile service; and]
9-10 [(2) may use personal communication services (PCS) or
9-11 other wireless technology licensed or allocated by the Federal
9-12 Communications Commission after January 1, 1995.]
9-13 [Sec. 54.105. SIX-YEAR LIMITATION ON RESALE OF SERVICES.
9-14 Before the sixth anniversary of the date a certificate is granted,
9-15 the certificate holder may extend service by resale only:]
9-16 [(1) in the area it is obligated to serve under the
9-17 approved build-out plan; and]
9-18 [(2) to the distant premises of one of its
9-19 multi-premises customers beyond the approved build-out area but in
9-20 its certificated service area.]
9-21 Sec. 54.104 [54.106]. TIME OF SERVICE REQUIREMENTS.
9-22 (a) The commission by rule may prescribe the period within which a
9-23 certificate holder must be able to serve customers.
9-24 (b) Notwithstanding Subsection (a), a certificate holder
9-25 must serve a customer [in the build-out area] not later than the
9-26 30th day after the date the customer requests service.
10-1 [Sec. 54.107. REQUIREMENTS RELATING TO CERTAIN FACILITIES.
10-2 As part of the build-out requirements, the commission may not
10-3 require a certificate holder to:]
10-4 [(1) place a drop facility on each customer's
10-5 premises; or]
10-6 [(2) activate a fiber optic facility in advance of a
10-7 customer request.]
10-8 [Sec. 54.108. BUILD-OUT PLAN COMPLIANCE. (a) A certificate
10-9 holder shall file periodic reports with the commission
10-10 demonstrating compliance with:]
10-11 [(1) the plan approved by the commission; and]
10-12 [(2) the resale limitation prescribed by Section
10-13 54.104(b).]
10-14 [(b) The commission may administratively and temporarily
10-15 waive compliance with the six-year build-out plan on a showing of
10-16 good cause.]
10-17 [Sec. 54.109. ELIMINATION OF BUILD-OUT REQUIREMENTS FOR
10-18 CERTAIN PROVIDERS. (a) The commission may waive the build-out
10-19 requirements of this subchapter for an additional applicant in a
10-20 particular area:]
10-21 [(1) on or after the sixth anniversary of the date a
10-22 certificate is granted for that area; or]
10-23 [(2) on or after the date a certificate holder
10-24 completes the holder's build-out plan in that area.]
10-25 [(b) The build-out requirements of this subchapter do not
10-26 apply to a service area:]
11-1 [(1) that is served by an incumbent local exchange
11-2 company that:]
11-3 [(A) has more than one million access lines; and]
11-4 [(B) on September 1, 1995, was subject to a
11-5 prohibition under federal law on the provision of interLATA
11-6 service; and]
11-7 [(2) for which all prohibitions on the incumbent local
11-8 exchange company's provision of interLATA services are removed so
11-9 the company can offer interLATA service together with local and
11-10 intraLATA toll service.]
11-11 [Sec. 54.110. HEARING ON BUILD-OUT AND RESALE REQUIREMENTS.
11-12 (a) The commission on application may conduct a hearing to
11-13 determine:]
11-14 [(1) whether the build-out requirements of Sections
11-15 54.102(b), 54.103(e) and (f), 54.104, 54.105, 54.106, and 54.107
11-16 have created a barrier to the entry of facilities-based local
11-17 exchange telephone service competition in an exchange in a county
11-18 that has a population of more than 500,000 and that is served by a
11-19 company that has more than 31,000 access lines; and]
11-20 [(2) the effect of the resale provisions on the
11-21 development of competition, other than the development of
11-22 competition in the certificated areas of companies that serve fewer
11-23 than 31,000 access lines as provided by Section 54.156(a).]
11-24 [(b) In making a determination under Subsection (a), the
11-25 commission shall consider:]
11-26 [(1) this title's policy to encourage construction of
12-1 local exchange networks;]
12-2 [(2) the number and type of competitors that have
12-3 sought to provide local exchange competition under the existing
12-4 rules prescribed by this title; and]
12-5 [(3) whether adopting new build-out and resale rules
12-6 would make innovative and competitive local exchange telephone
12-7 services more likely to be provided.]
12-8 [(c) The commission may change a requirement described by
12-9 Subsection (a)(1) or prescribed by Subchapter D if:]
12-10 [(1) the commission determines that the build-out
12-11 requirements have created a barrier to facilities-based local
12-12 exchange competition in an exchange described by Subsection (a)(1);
12-13 and]
12-14 [(2) the changes will encourage additional
12-15 facilities-based competition.]
12-16 [(d) Notwithstanding Subsection (c), the commission may not
12-17 reduce an exchange size to below 12 square miles or increase the
12-18 resale percentage prescribed by Section 54.104(b) to more than 50
12-19 percent.]
12-20 [(e) A rule adopted under Subsection (c) may apply only to a
12-21 person who files an application for a certificate after the date
12-22 the rule is adopted.]
12-23 Sec. 54.105 [54.111]. PENALTY FOR VIOLATION OF TITLE. If a
12-24 certificate holder fails to comply with a requirement of this
12-25 title, the commission may:
12-26 (1) revoke the holder's certificate;
13-1 (2) impose against the holder administrative penalties
13-2 under Subchapter B, Chapter 15; or
13-3 (3) take another action under Subchapter B, Chapter
13-4 15.
13-5 SECTION 7. Section 56.021, Utilities Code, is amended to
13-6 read as follows:
13-7 Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED. The
13-8 commission shall adopt and enforce rules requiring local exchange
13-9 companies to establish a universal service fund to:
13-10 (1) assist telecommunications providers [local
13-11 exchange companies] in providing basic local telecommunications
13-12 service at reasonable rates in high cost or rural areas;
13-13 (2) reimburse telecommunications providers [local
13-14 exchange companies] for revenue lost by providing tel-assistance
13-15 service under Subchapter C;
13-16 (3) reimburse the telecommunications carrier that
13-17 provides the statewide telecommunications relay access service
13-18 under Subchapter D; and
13-19 (4) reimburse the department and the commission for
13-20 costs incurred in implementing this chapter and Chapter 57.
13-21 SECTION 8. Sections 56.023 and 56.024, Utilities Code, are
13-22 amended to read as follows:
13-23 Sec. 56.023. COMMISSION POWERS AND DUTIES. (a) The
13-24 commission shall:
13-25 (1) in a manner that assures reasonable rates for
13-26 basic local telecommunications service, adopt eligibility criteria
14-1 and review procedures, including a method for administrative
14-2 review, the commission finds necessary to fund the universal
14-3 service fund and make distributions from that fund;
14-4 (2) determine which telecommunications providers
14-5 [local exchange companies] meet the eligibility criteria;
14-6 (3) determine the amount of and approve a procedure
14-7 for reimbursement to telecommunications providers [local exchange
14-8 companies] of revenue lost in providing tel-assistance service
14-9 under Subchapter C;
14-10 (4) establish and collect fees from the universal
14-11 service fund necessary to recover the costs the department and the
14-12 commission incur in administering this chapter and Chapter 57; and
14-13 (5) approve procedures for the collection and
14-14 disbursal of the revenue of the universal service fund.
14-15 (b) The eligibility criteria must require that a
14-16 telecommunications provider [local exchange company], in compliance
14-17 with the commission's quality of service requirements:
14-18 (1) offer service to each consumer within the
14-19 company's certificated area; and
14-20 (2) render continuous and adequate service within the
14-21 company's certificated area.
14-22 (c) The commission shall adopt rules for the administration
14-23 of the universal service fund and may act as necessary and
14-24 convenient to administer the fund.
14-25 Sec. 56.024. REPORTS; CONFIDENTIALITY. (a) The commission
14-26 may require a [local exchange company or another]
15-1 telecommunications provider to provide a report or information
15-2 necessary to assess contributions and disbursements to the
15-3 universal service fund.
15-4 (b) A report or information is confidential and not subject
15-5 to disclosure under Chapter 552, Government Code.
15-6 SECTION 9. Section 56.026, Utilities Code, is amended to
15-7 read as follows:
15-8 Sec. 56.026. UNIVERSAL SERVICE FUND DISBURSEMENTS. (a) A
15-9 revenue requirement showing is not required for a disbursement from
15-10 the universal service fund under this subchapter.
15-11 (b) The commission shall make each disbursement from the
15-12 universal service fund promptly and efficiently so that a
15-13 telecommunications provider [or local exchange company] does not
15-14 experience an unnecessary cash-flow change as a result of a change
15-15 in governmental policy.
15-16 SECTION 10. Subchapter B, Chapter 56, Utilities Code, is
15-17 amended by adding Section 56.028 to read as follows:
15-18 Sec. 56.028. UNIVERSAL SERVICE FUND REIMBURSEMENT FOR
15-19 CERTAIN INTRALATA SERVICE. Upon request of a local exchange
15-20 company that is not an electing company under Chapters 58 and 59,
15-21 the commission shall provide reimbursement through the universal
15-22 service fund for reduced rates for intraLATA interexchange high
15-23 capacity (1.544 Mps) service for entities described in Section
15-24 58.253(a). The amount of reimbursement shall be the difference
15-25 between the company's tariffed rate for such service as of
15-26 January 1, 1999, and the lowest rate offered for such service by
16-1 any local exchange company electing incentive regulation under
16-2 Chapter 58.
16-3 SECTION 11. Section 56.071, Utilities Code, is amended to
16-4 read as follows:
16-5 Sec. 56.071. TEL-ASSISTANCE SERVICE REQUIREMENTS. (a) The
16-6 commission shall adopt and enforce rules requiring a local exchange
16-7 company to establish a telecommunications service assistance
16-8 program to provide a reduction in the cost of telecommunications
16-9 service to each eligible consumer in the company's certificated
16-10 area. The reduction must be a reduction on the consumer's
16-11 telephone bill.
16-12 (b) In addition to local exchange companies, this subchapter
16-13 applies to telecommunications providers that receive universal
16-14 service fund support pursuant to the commission's universal service
16-15 fund rules, and any reference to or requirement imposed on local
16-16 exchange companies in this subchapter shall also apply to such
16-17 telecommunications providers.
16-18 (c) Except as provided by Section 56.075(b), the reduction
16-19 allowed by the program is 65 percent of the applicable tariff rate
16-20 for the service provided.
16-21 (d) [(c)] The program is named "tel-assistance service."
16-22 SECTION 12. Section 58.002, Utilities Code, is amended to
16-23 read as follows:
16-24 Sec. 58.002. DEFINITIONS [DEFINITION]. In this chapter:
16-25 (1) "Electing[, "electing] company" means an incumbent
16-26 local exchange company that elects to be subject to incentive
17-1 regulation and to make the corresponding infrastructure commitment
17-2 under this chapter.
17-3 (2) "Electing period" means the period from the date
17-4 an incumbent local exchange company elects to be subject to
17-5 incentive regulation until September 1, 2003.
17-6 SECTION 13. Section 58.021, Utilities Code, is amended to
17-7 read as follows:
17-8 Sec. 58.021. ELECTION. (a) An incumbent local exchange
17-9 company may elect to be subject to incentive regulation and to make
17-10 the corresponding infrastructure commitment under this chapter by
17-11 notifying the commission in writing of its election.
17-12 (b) The notice must include a statement that the company
17-13 agrees to:
17-14 (1) limit for the electing period [four years] any
17-15 increase in a rate the company charges for basic network services
17-16 as prescribed by Subchapter C; and
17-17 (2) fulfill the infrastructure commitment prescribed
17-18 by Subchapters F and G.
17-19 (c) An election pursuant to this subchapter shall expire at
17-20 the conclusion of the electing period unless extended through
17-21 subsequent action by the legislature. Upon the expiration of the
17-22 electing period, a company is no longer considered to be an
17-23 electing company.
17-24 SECTION 14. Section 58.028, Utilities Code, is amended to
17-25 read as follows:
17-26 Sec. 58.028. REVIEW AND REPORT OF EFFECTS OF ELECTION.
18-1 (a) Not later than January 1, 2002 [2000], the commission shall
18-2 begin a review and evaluation of each company that elects under
18-3 this chapter or Chapter 59.
18-4 (b) The review must include an evaluation of the effects of
18-5 the election, including:
18-6 (1) consumer benefits;
18-7 (2) impact of competition;
18-8 (3) infrastructure investments; and
18-9 (4) quality of service.
18-10 (c) The commission shall file a report with the legislature
18-11 not later than January 1, 2003 [2001]. The report must include the
18-12 commission's recommendations as to whether the incentive regulation
18-13 provided by this chapter and Chapter 59 should be extended,
18-14 modified, eliminated, or replaced with another form of regulation.
18-15 (d) This section expires September 1, 2003 [2001].
18-16 SECTION 15. Sections 58.054 and 58.055, Utilities Code, are
18-17 amended to read as follows:
18-18 Sec. 58.054. RATES CAPPED. (a) As a condition of election
18-19 under this chapter, an electing company shall commit to not
18-20 increasing a rate for a basic network service during the electing
18-21 period [on or before the fourth anniversary of its election date].
18-22 (b) For an election that took place during the year 1995,
18-23 the [The] rates an electing company may charge during the electing
18-24 period [on or before that fourth anniversary] are the rates charged
18-25 by the company on June 1, 1995, without regard to a proceeding
18-26 pending under:
19-1 (1) Section 15.001;
19-2 (2) Subchapter D, Chapter 53; or
19-3 (3) Subchapter G, Chapter 2001, Government Code.
19-4 (c) For an election that takes place after the year 1995,
19-5 the rates an electing company may charge during the electing period
19-6 are the rates charged by the company on the date of election.
19-7 Sec. 58.055. RATE ADJUSTMENT BY COMPANY. (a) An electing
19-8 company may increase a rate for a basic network service during the
19-9 four-year period prescribed by Section 58.054 only:
19-10 (1) with commission approval that the proposed change
19-11 is included in Section 58.056, 58.057, or 58.058; and
19-12 (2) as provided by Sections 58.056, 58.057, 58.058,
19-13 and 58.059.
19-14 (b) Notwithstanding provisions restricting an electing
19-15 company's access to pricing flexibility for basic network services,
19-16 upon request by an electing company, the commission may allow the
19-17 company one or more forms of pricing flexibility for basic network
19-18 services. The commission shall impose such conditions on pricing
19-19 flexibility as it deems necessary to protect the public interest
19-20 [Subchapter F, Chapter 60, an electing company may, on its own
19-21 initiative, decrease a rate for a basic network service during the
19-22 four-year period].
19-23 (c) As part of an electing company's request pursuant to
19-24 Subsection (b), the electing company shall propose any potential
19-25 restrictions it believes are necessary to adequately minimize any
19-26 potential harm to the public interest. [The company may decrease
20-1 the rate for switched access service to an amount above the
20-2 service's long run incremental cost.]
20-3 (d) The company may decrease the rate for a basic local
20-4 telecommunications service other than switched access to an amount
20-5 above the service's appropriate cost. If the company has been
20-6 required to perform or has elected to perform a long run
20-7 incremental cost study, the appropriate cost for the service is the
20-8 service's long run incremental cost.
20-9 SECTION 16. Section 58.060, Utilities Code, is amended to
20-10 read as follows:
20-11 Sec. 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION. After
20-12 the electing [four-year] period [prescribed by Section 58.054]
20-13 expires, an electing company may increase a rate for a basic
20-14 network service only:
20-15 (1) with commission approval subject to this title;
20-16 and
20-17 (2) to the extent consistent with achieving universal
20-18 affordable service.
20-19 SECTION 17. Subchapter C, Chapter 58, Utilities Code, is
20-20 amended by amending Section 58.062 and adding Sections 58.063 and
20-21 58.064 to read as follows:
20-22 Sec. 58.062. SWITCHED ACCESS RATES. (a) Notwithstanding
20-23 any other provision of this title, and except as provided in this
20-24 section, the commission may not reduce an electing company's rates
20-25 for switched access services before the expiration of the cap on
20-26 basic network services.
21-1 (b) For an electing company with greater than five million
21-2 access lines, switched access rates shall be transitioned to six
21-3 cents per minute on a combined originating and terminating basis.
21-4 (c) For purposes of this section, the difference between the
21-5 tariffed intrastate switched access rates on a combined originating
21-6 and terminating basis on September 1, 1999, and six cents per
21-7 minute on a combined originating and terminating basis shall be
21-8 known as the "transition amount."
21-9 (d) The proportional relationship between the levels of
21-10 originating and terminating intrastate access charges shall remain
21-11 the same as the proportional relationship in effect on September 1,
21-12 1999.
21-13 (e) For an electing company with greater than five million
21-14 access lines, the following switched access rate reduction plan
21-15 shall be followed:
21-16 (1) on September 1, 1999, switched access rates in
21-17 effect shall be reduced by one-third of the transition amount;
21-18 (2) on the company's entry into the interLATA long
21-19 distance market, switched access rates shall be reduced by an
21-20 additional one-third of the transition amount; and
21-21 (3) on the one-year anniversary of the company's entry
21-22 into the long distance market, switched access rates shall be
21-23 reduced by a final one-third of the transition amount.
21-24 (f) For an electing company with less than five million
21-25 access lines, there shall be a rebuttable presumption that a
21-26 switched access rate reduction is not required. This rebuttable
22-1 presumption may be overcome only upon a showing in a contested case
22-2 that the switched access rates of the electing company were more
22-3 than 20 percent above the cost of switched access service on
22-4 September 1, 1999. In determining the September 1, 1999, cost, the
22-5 commission shall include the long run incremental cost associated
22-6 with providing switched access service and may attribute a portion
22-7 of the cost of the local loop to the cost of providing switched
22-8 access service.
22-9 Sec. 58.063. FLEXIBLE PACKAGING ACROSS SERVICE
22-10 CLASSIFICATIONS. (a) Notwithstanding any other provision of this
22-11 title, an electing company serving more than five million access
22-12 lines may package basic network services with discretionary
22-13 services or competitive services as of the date the company
22-14 complies with the requirements of Section 58.062(e)(2).
22-15 (b) Notwithstanding any other provision of this title, an
22-16 electing company serving less than five million access lines may
22-17 package basic network services with discretionary services or
22-18 competitive services if the company notifies the commission of its
22-19 binding commitment to make the following infrastructure
22-20 improvements by September 1, 2001:
22-21 (1) install Common Channel Signaling 7 capability in
22-22 each central office; and
22-23 (2) connect all of the company's serving central
22-24 offices to their respective LATA tandem central offices with
22-25 optical fiber or equivalent facilities.
22-26 (c) The price for a package of services containing basic
23-1 network services and discretionary or competitive services shall
23-2 not be higher than the sum of the tariffed rates of the basic
23-3 network services and the competitive services and the price
23-4 ceilings of the discretionary services.
23-5 (d) The price for a package of services containing basic
23-6 network services and discretionary or competitive services shall be
23-7 set at a level above the sum of:
23-8 (1) the lesser of the long run incremental cost or the
23-9 tariffed rate in effect on September 1, 1999, for a basic network
23-10 service; and
23-11 (2) the long run incremental cost in accordance with
23-12 the imputation rules prescribed in Subchapter D, Chapter 60, for a
23-13 discretionary or competitive service.
23-14 (e) An electing company may flexibly price a package that
23-15 includes a basic network service in any manner listed in Section
23-16 51.002(7), except that such a package may not be offered in a
23-17 manner that results in a customer-specific contract.
23-18 Sec. 58.064. ZONE-DENSITY PRICING OF BASIC LOCAL
23-19 TELECOMMUNICATIONS SERVICE. Until an electing company may engage
23-20 in pricing flexibility pursuant to Section 58.063, the only form of
23-21 pricing flexibility allowed for basic local telecommunications
23-22 service is zone-density pricing.
23-23 SECTION 18. Section 59.002, Utilities Code, is amended by
23-24 adding Subdivision (3) to read as follows:
23-25 (3) "Electing period" means the period from the date
23-26 an incumbent local exchange company elects to be subject to the
24-1 infrastructure plan under this chapter until such time that the
24-2 incentive regulation provided by this chapter is no longer in
24-3 effect.
24-4 SECTION 19. Section 59.021, Utilities Code, is amended by
24-5 adding Subsection (c) to read as follows:
24-6 (c) An electing company may, on its own motion, decrease a
24-7 rate during the electing period described in Subsection (a).
24-8 Section 58.059 does not apply to a rate decrease under this
24-9 subsection.
24-10 SECTION 20. Subsection (a), Section 59.024, Utilities Code,
24-11 is amended to read as follows:
24-12 (a) Except for the charges permitted under Subchapter C,
24-13 Chapter 55, Subchapter B, Chapter 56, and Section 55.024, an
24-14 electing company may not, during the election period [on or before
24-15 the sixth anniversary of its election date], increase a rate
24-16 previously established for that company under this title unless the
24-17 commission approves the proposed change as authorized under
24-18 Subsection (c) or (d).
24-19 SECTION 21. Section 59.025, Utilities Code, is amended to
24-20 read as follows:
24-21 Sec. 59.025. SWITCHED ACCESS RATES. Notwithstanding any
24-22 other provision of this title, the commission may not reduce an
24-23 electing company's rates for switched access services during the
24-24 election period [before the expiration of the six-year period]
24-25 prescribed by Section 59.024.
24-26 SECTION 22. Subsection (a), Section 59.026, Utilities Code,
25-1 is amended to read as follows:
25-2 (a) An [On or before the sixth anniversary of the company's
25-3 election date, an] electing company is not, under any
25-4 circumstances, subject to:
25-5 (1) a complaint or hearing regarding the
25-6 reasonableness of the company's:
25-7 (A) rates;
25-8 (B) overall revenues;
25-9 (C) return on invested capital; or
25-10 (D) net income; or
25-11 (2) a complaint that a rate is excessive.
25-12 SECTION 23. Section 60.124, Utilities Code, is amended to
25-13 read as follows:
25-14 Sec. 60.124. INTEROPERABLE NETWORKS REQUIRED. (a) The
25-15 commission shall require each telecommunications provider to
25-16 maintain interoperable networks and shall require that
25-17 interconnection agreements between incumbent local exchange
25-18 companies and competitive local exchange companies contain
25-19 self-executing performance penalties for incumbent noncompliance
25-20 with contract provisions that impair a competitor's ability to
25-21 provide service to its customers.
25-22 (b) The commission may:
25-23 (1) adopt rules, including generic rules that are
25-24 responsive to changes in federal law or a development in the local
25-25 exchange market; and
25-26 (2) set policies governing interconnection
26-1 arrangements.
26-2 SECTION 24. Subchapter I, Chapter 60, Utilities Code, is
26-3 amended by adding Sections 60.164 and 60.165 to read as follows:
26-4 Sec. 60.164. PERMISSIBLE JOINT MARKETING. Except as
26-5 prescribed in Chapters 61 and 63, the commission shall not adopt
26-6 any rule or order that would prohibit a local exchange company from
26-7 jointly marketing or selling its products and services with the
26-8 products and services of any of its affiliates in any manner
26-9 permitted by federal law or applicable rules of the Federal
26-10 Communications Commission.
26-11 Sec. 60.165. AFFILIATE RULE. Except as prescribed in
26-12 Chapters 61 and 63, the commission shall not adopt any rule or
26-13 order that would prescribe for any local exchange company any
26-14 affiliate rule, including any accounting rule, any cost allocation
26-15 rule, or any structural separation rule, that is more burdensome
26-16 than federal law or applicable rules of the Federal Communications
26-17 Commission. Notwithstanding any other provision in this title, the
26-18 commission shall not attribute or impute to a local exchange
26-19 company a price discount offered by an affiliate of the local
26-20 exchange company to the affiliate's customers.
26-21 SECTION 25. The importance of this legislation and the
26-22 crowded condition of the calendars in both houses create an
26-23 emergency and an imperative public necessity that the
26-24 constitutional rule requiring bills to be read on three several
26-25 days in each house be suspended, and this rule is hereby suspended,
26-26 and that this Act take effect and be in force from and after its
27-1 passage, and it is so enacted.