HBA-JLV C.S.S.B. 1783 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 1783 By: Sibley State Affairs 5/8/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, all regions of the state of Texas, including low-income customers and customers in rural and high cost regions, are to have reasonably comparable access to advanced telecommunications services by 2001. In its report to the 77th Legislature on "Availability of Advanced Services in Rural and High Cost Areas" the Public Utility Commission of Texas identified that it is more expensive to deploy advanced services to many areas of rural Texas because of lower population density and longer distances. Consequently, these areas have less access and lower computer and Internet usage rates. C.S.S.B. 1783 provides various incentives for the deployment of advanced services and encourages local solutions for communities without advanced services, especially smaller rural communities. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.S.B. 1783 amends the Utilities Code and the Development Corporation Act of 1979 to create the Texas Universal Broadband Access Act of 2001, to the enhance the availability of advanced telecommunications services to all residents of the state. The bill amends the Utilities Code to provide that the Public Utility Commission of Texas (PUC) has all jurisdiction necessary to enforce this Act and that the provisions of this Act establish the state's uniform policy for the deployment of an advanced service and supersedes any applicable final order of the PUC (Sec. 54.407). The bill requires the PUC to create and maintain a database that is capable of graphic representation of the location and inventory of all public and private sector advanced service facilities. The bill requires the PUC to participate in policy dialogue and coordinate, cooperate, and mutually agree on policies with the Telecommunications Infrastructure Fund Board (TIF), the Department of Agriculture, or other state agencies or groups, regarding the availability of funding or the establishment of priorities to accelerate the deployment of an advanced service to all areas of this state. The bill requires the PUC to submit a biennial report to the legislature on the deployment of advanced services and to submit the first report not later than January 15, 2003 (Sec. 55.406 and SECTION 15). The bill authorizes a community to submit to a company providing local exchange service (LEC) to the community a request for the deployment of an advanced service for that community. The bill provides that if the community is not a municipality or county, it must be sponsored by a municipality or county in which all or part of the community is located and sets forth the requirements of the request. The bill sets forth provisions under which a retail request for an advanced service is considered a bona fide retail request (Sec. 55.403). The bill requires a LEC that receives, on or after September 1, 2002, a bona fide retail request, not later than the 30th day after the date the company receives the request, to notify in writing the community contact person named in the request as to whether the LEC intends to provide an advanced service, enter into a business arrangement with another provider of an advanced service, or not provide an advanced service. The bill requires the LEC to provide an advanced service not later than the150th day after the date the company notifies the contact person of the LEC's intent. The PUC may authorize an extension to the LEC only on a showing that the circumstances are beyond the LEC's control. The bill sets forth additional requirements governing the deployment of advanced services including the terms of service and the prices the LEC may charge for services (Sec. 55.404). The bill authorizes a community or sponsoring municipality or county (community) to attempt to obtain funding from any applicable source for advanced services to the community if the LEC declines to provide an advanced service. The bill sets forth entities from which a community may attempt to obtain funding (Sec. 55.405). The bill requires the board to use money in the qualifying entities account for community planning and determination of advanced service requirements, development of a community technology center, and an advanced service for a community or sponsoring municipality or county (Sec. 57.046). The bill authorizes TIF to award a grant to a project or proposal that provides equipment and necessary infrastructure for community technology centers or an advanced service for a community. The bill also authorizes TIF to award a loan to a project or proposal submitted by a community to acquire equipment needed for a community technology center project or an advanced service project. In awarding a grant or loan, the board is required to give priority to a project or proposal that will establish or enhance the provision of an advanced service to rural or low-income communities of this state (Sec. 57.047). The bill requires TIF to coordinate its duties and responsibilities with the PUC and any other state or local governmental entity to encourage the ubiquitous access to advanced services in all areas of the state. The bill sets forth requirements relating to community development grants and loans (Sec. 57.0475). The bill decreases, from 1.25 to .76, the annual assessment percentage of the taxable telecommunications receipts imposed on each telecommunications utility and each commercial mobile service provider. The bill deletes provisions setting forth the maximum amount allowed to be deposited to the credit of the telecommunications infrastructure fund (Sec. 57.048). A municipal electric system owned, operated, and controlled by a municipality with a population of not more than 25,000 is not prohibited from providing advanced services for which certification is required (Sec. 54.202). The bill extends, from September 1, 2001 to September 1, 2005, the date by which a LEC that provides advanced telecommunications services within the LEC's urban service areas is required to provide comparable advanced services in rural areas of this state that are comparable to the advanced services provided in urban areas (Sec. 55.014). The bill sets forth limitations, fees, and public hearing requirements for a municipality that provides cable service. The bill provides that a municipality must conduct the municipality's activities in providing cable services and in its regulation of competing private providers that offer cable services so as to avoid discriminatory practices that could limit competition and shall specifically ensure nondiscriminatory and reasonably comparable treatment between the municipality's own provision of cable services and that of competing providers. In the event of a dispute between a municipality and a provider of cable services, the bill requires the parties to explore and attempt to implement available procedures for alternative dispute resolution. The bill prohibits the PUC from adopting any rule related to these provisions (Sec. 54.2045). The bill provides that as an incentive to deploy an advanced service in this state, an electing company is authorized, on notification to the PUC, to elect to have the company's services established as basic network services, nonbasic services, and new services. The bill provides that an election made under these provisions supersedes any applicable final order of the PUC to the extent that the order limits the rates charged for nonbasic services specific to the electing company. The bill authorizes a company to elect only if the company commits to provide an advanced service beginning on September 1, 2001, to any community that submits a bona fide request signed by at least 75 subscribers (Sec. 59.083). The bill amends the Development Corporation Act of 1979 to modify the definition of project (SECTION 13). EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 1783 modifies the original by focusing on the deployment of advanced services to all residents of the state rather than focusing only on rural communities. The substitute sets forth additional limitations on the provision of advanced services by a municipality to a community (Sec. 55.404). The substitute sets forth fees that a municipality or municipal electric system is required to include in its charges. The substitute sets forth provisions requiring a municipality to conduct a public hearing on the issue of offering cable services to a community and provisions relating to alternative dispute resolution in the event of a dispute between a municipality and a provider of cable services (Sec. 54.2045). The substitute provides that if a community requesting an advanced service is not a municipality or county, then it must be sponsored by a municipality or county and sets forth the requirements of the request. The substitute no longer requires the Public Utility Commission (PUC) to post publicly the number of bona fide requests for an advanced service in each rural community. The substitute sets forth provisions relating to the requirements of a bona fide retail request. The substitute no longer requires a community that has not entered into a contract with a provider of advanced services 120 days after the posting to provide advanced service to its wire-line customers within its certificated area (Sec. 55.403). The substitute no longer sets forth provisions relating to local solutions for the encouragement of advanced services in rural communities of the state. The substitute sets forth provisions relating to the receipt of the request for advanced services and the provision of advanced services (Sec. 55.404). The substitute no longer requires strategic planning for the deployment of advanced services to end use customers in rural areas. The substitute sets forth options for a community if a company declines to provide an advanced service to a community (Sec. 55.405). The substitute no longer requires the PUC to begin a review and evaluation on the availability and quality of advanced services and information services in rural and high cost areas (Sec. 55.406). The substitute no longer requires the Telecommunications Infrastructure Fund Board (TIF) to adopt rules to encourage the access of advanced services in rural communities (Sec. 57.0475). The substitute no longer extends the Sunset date of TIF (Sec. 57.051). The substitute decreases, from 1.25 to .76, rather than decreasing from 1.25 to .5, the annual assessment percentage of the taxable telecommunications receipts imposed on each telecommunications utility and each commercial mobile service provider (Sec. 57.048). The substitute no longer amends the Government Code to set forth entities the General Services Commission (GSC) may contract with for use of the consolidated telecommunication system. The substitute no longer requires GSC, upon approval by the PUC, to allow access to, and contract the use of, the consolidated telecommunications system to an approved public or governmental entity or political subdivision of this state. The substitute no longer requires GSC to coordinate its duties and responsibilities with TIF and permit access, pursuant to the PUC approval. The substitute no longer requires the PUC to adopt rules to ensure that a rural community that is unable to obtain advanced services has access to such services through the consolidated telecommunications system. The substitute no longer amends the Tax Code to provide that the sales price of telecommunications services does not include the telecommunications infrastructure fund assessment, if the assessment or fee is passed through to the purchaser of the service and is listed as a separate line item on the customer's bill.