By Chisum                                             H.B. No. 2388
         77R5743 CBH-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the provision of telecommunications services to an area
 1-3     not included in a certificated service area.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 56.001, Utilities Code, is amended to read
 1-6     as follows:
 1-7           Sec. 56.001.  DEFINITIONS [DEFINITION]. In this chapter:
 1-8                 (1)  "Department"[, "department"] means the Texas
 1-9     Department of Human Services.
1-10                 (2)  "Designated provider" means a telecommunications
1-11     provider designated by the commission to provide services to an
1-12     uncertificated area under Section 56.029.
1-13           SECTION 2. Section 56.023, Utilities Code, is amended by
1-14     amending Subsections (b) and (c) and adding Subsection (d) to read
1-15     as follows:
1-16           (b)  The eligibility criteria must require that a
1-17     telecommunications provider, in compliance with the commission's
1-18     quality of service requirements:
1-19                 (1)  offer service to each consumer within the
1-20     company's certificated area and within any area in which the
1-21     company is designated under Section 56.029 to provide services to
1-22     an uncertificated area; and
1-23                 (2)  render continuous and adequate service within the
1-24     company's certificated area and within any area in which the
 2-1     company is designated under Section 56.029 to provide services to
 2-2     an uncertificated area.
 2-3           (c)  A company designated under Section 56.029 to provide
 2-4     services to an uncertificated area and that complies with
 2-5     Subsection (b) shall receive universal service fund distributions
 2-6     to assist the provider in providing those services. In addition,
 2-7     the commission shall designate the provider as an eligible
 2-8     telecommunications carrier under 47 U.S.C. Section 214(e)(2) for
 2-9     that area.
2-10           (d)  The commission shall adopt rules for the administration
2-11     of the universal service fund and this section and may act as
2-12     necessary and convenient to administer the fund and this section.
2-13           SECTION 3. Section 56.025, Utilities Code, is amended by
2-14     adding Subsection (g) to read as follows:
2-15           (g)  The commission shall implement a mechanism to determine
2-16     a reasonable rate of recovery for the reimbursable costs incurred
2-17     by a designated provider in providing service in an uncertificated
2-18     area.  The mechanism may not allow a designated provider to recover
2-19     more than the actual unreimbursed costs of providing that service.
2-20     The mechanism must allow a designated provider to recover the
2-21     provider's unreimbursed costs over a reasonable period considering
2-22     the effect of the increased expense on the universal service fund
2-23     when the order is entered.  The mechanism may not result in an
2-24     increase in the annual fund expense that is equal to more than 0.02
2-25     percent of the annual gross revenues reported in the previous
2-26     fiscal year of the universal service fund.  The mechanism may allow
2-27     the commission to increase the fund assessment rate or to increase
 3-1     the designated provider's per line recovery rate from the universal
 3-2     service fund.
 3-3           SECTION 4. Subchapter B, Chapter 56, Utilities Code, is
 3-4     amended by adding Section 56.029 to read as follows:
 3-5           Sec. 56.029.  SERVICE TO UNCERTIFICATED AREA. (a)  In this
 3-6     section, "permanent residential or business premises" means a
 3-7     premises that has permanent facilities for water, wastewater, and
 3-8     electricity.
 3-9           (b)  Notwithstanding Section 54.001, the commission may
3-10     designate a telecommunications provider under this section to
3-11     provide voice-grade services to residents of a community that is
3-12     not included within the certificated area of a holder of a
3-13     certificate of convenience and necessity.  The commission may
3-14     designate a provider only if the provider is otherwise eligible to
3-15     receive universal service funds under Section 56.023(a).
3-16           (c)  Residents of a community that is not included within the
3-17     certificated area of a holder of a certificate of convenience and
3-18     necessity may petition the commission to designate a
3-19     telecommunications provider to provide to those petitioners
3-20     voice-grade services supported by state and federal universal
3-21     service support mechanisms.  If the commission finds that the
3-22     petition complies with Subsection (d), the commission shall hold an
3-23     evidentiary hearing to determine if a telecommunications provider
3-24     is willing to be designated to provide service to those petitioners
3-25     or, if a provider is not willing to be designated, to determine the
3-26     telecommunications provider that is best able to serve those
3-27     petitioners under the criteria prescribed by this section.
 4-1           (d)  A petition for designation of a service provider must:
 4-2                 (1)  state with reasonable particularity the geographic
 4-3     territory for which the petitioners are requesting service;
 4-4                 (2)  establish that the geographic area for which
 4-5     service is requested possesses a sufficient community of interest
 4-6     to warrant the designation of a provider and the expenditure of
 4-7     universal service funds necessary to establish service;
 4-8                 (3)  except as provided by Subsection (e), be signed by
 4-9     at least five persons who:
4-10                       (A)  are not members of the same household;
4-11                       (B)  are permanent residents of the petitioned
4-12     geographic territory or owners of businesses permanently located in
4-13     the petitioned geographic territory;
4-14                       (C)  want service to a permanent residential or
4-15     business premises; and
4-16                       (D)  commit to pay the aid to construction
4-17     charges for service to those premises as determined by the
4-18     commission;
4-19                 (4)  nominate as potential providers of service not
4-20     more than five  telecommunications providers serving territory
4-21     contiguous to the petitioned geographic territory using wireless or
4-22     wireline facilities, resale, or unbundled network elements; and
4-23                 (5)  include as an attachment or an appendix
4-24     documentation indicating permanent residence in the geographic area
4-25     for which service is requested, including a state-issued license or
4-26     identification, tax records, deeds, or voter registration
4-27     materials.
 5-1           (e)  The commission may accept a petition that is signed by
 5-2     fewer than five persons if each petitioner provides an affidavit
 5-3     stating that the petitioner has taken all reasonable steps to
 5-4     secure the signatures of each person within reasonably close
 5-5     proximity of the geographic territory who is not receiving
 5-6     telephone service when the petition is filed and who want telephone
 5-7     service initiated.
 5-8           (f)  In determining which nominated telecommunications
 5-9     provider the commission will designate to provide service to the
5-10     petitioners, the commission shall consider the relative estimated
5-11     cost to be incurred by contiguous providers to serve the
5-12     petitioners and give preference to  the provider having the least
5-13     cost technology that meets the quality of service standards
5-14     prescribed by the commission.
5-15           (g)  The commission may not designate a telecommunications
5-16     provider to serve petitioners unless the area for which service is
5-17     requested is contiguous to an area in which the telecommunications
5-18     provider is eligible to receive universal service funding under
5-19     Section 56.023(b). This subsection does not apply if the commission
5-20     designates the provider after the provider voluntarily agrees to
5-21     provide service to the uncertificated territory.
5-22           (h)  The commission shall deny a petition if the commission
5-23     determines that services cannot be extended to the petitioners at a
5-24     reasonable cost.  In making that determination, the commission
5-25     shall consider all relevant factors, including:
5-26                 (1)  the actual costs to be incurred by a designated
5-27     provider in providing service to the petitioners, and the effect of
 6-1     reimbursement of those costs on the universal service fund;
 6-2                 (2)  the number of access lines requested by the
 6-3     petitioners for permanent residences and business premises;
 6-4                 (3)  the size of the geographic territory for which the
 6-5     petitioners request service;
 6-6                 (4)  the proximity of existing facilities and the
 6-7     existence of a preferred designated provider under Subsection (m);
 6-8     and
 6-9                 (5)  any technical barriers to the provision of
6-10     service.
6-11           (i)  If, after a hearing, the commission designates a
6-12     telecommunications provider to serve the petitioners, the
6-13     commission shall permit the designated provider to recover its
6-14     actual costs of providing service to the petitioners from the
6-15     universal service fund.  The reimbursable costs of extending
6-16     facilities to the petitioners are:
6-17                 (1)  the actual capitalized costs of the designated
6-18     provider's facilities to be installed in the uncertificated
6-19     territory as determined by the commission that are not recovered
6-20     through the aid to construction charge assessed to the petitioners;
6-21     and
6-22                 (2)  the monthly recurring costs of service, including
6-23     operations and maintenance costs, not recovered through the monthly
6-24     rate charged the petitioners and not included in the monthly per
6-25     line fee recovered from the universal service fund.
6-26           (j)  The commission shall establish a reasonable aid to
6-27     construction charge, not to exceed $3,000, to be assessed each
 7-1     petitioner.  The commission may not require a designated provider
 7-2     to begin construction until each petitioner has paid or executed an
 7-3     agreement acceptable to the provider to pay the aid to construction
 7-4     charge.
 7-5           (k)  A telecommunications provider may not under any
 7-6     circumstances be required to extend service to a location that is
 7-7     not a permanent residential or business premises or be required to
 7-8     provide service to an area before the 180th day after it was
 7-9     designated to provide service to the area.
7-10           (l)  If the commission approves a petition requesting service
7-11     within an area, residents of that area who did not sign the
7-12     petition requesting service  are not entitled to receive service
7-13     under this section until the fifth anniversary of the date the
7-14     petition was filed unless the residents file a new petition under
7-15     this section and agree to pay aid to construction charges on the
7-16     same terms as applicable to the initial petitioning residents.  The
7-17     designated provider shall receive reimbursement for the costs of
7-18     deployment and recurring costs of providing service to those
7-19     additional residents  in the same manner as the provider received
7-20     reimbursement of those costs in relation to the initial
7-21     petitioners.  The provider may not receive reimbursement for
7-22     expenses in a geographic area if the provider previously received
7-23     complete reimbursement for those expenses from the universal
7-24     service fund.  If the universal service fund has completely
7-25     reimbursed those expenses, each subsequent petitioning resident in
7-26     the geographic area must pay into the universal service fund an
7-27     amount equal to the aid to construction charge paid by each
 8-1     original petitioner.
 8-2           (m)  A provider who is designated to serve petitioners
 8-3     residing within an uncertificated area under this section is the
 8-4     preferred provider in that area for later petitions filed under
 8-5     Subsection (l).  A preferred designated provider is entitled to an
 8-6     opportunity for a hearing under Subsection (c) on a petition filed
 8-7     under Subsection (l).
 8-8           (n)  The designation of a provider to serve an uncertificated
 8-9     area under this section does not have the effect of:
8-10                 (1)  amending the boundaries of the provider's
8-11     certificate to provide local exchange service; or
8-12                 (2)  imposing carrier of last resort responsibilities
8-13     on the provider.
8-14           SECTION 5. Section 51.002(10), Utilities Code, as amended by
8-15     Chapters 1212 and 1579, Acts of the 76th Legislature, Regular
8-16     Session, 1999, is reenacted and amended to read as follows:
8-17                 (10)  "Telecommunications provider":
8-18                       (A)  means:
8-19                             (i)  a certificated telecommunications
8-20     utility;
8-21                             (ii)  a shared tenant service provider;
8-22                             (iii)  a nondominant carrier of
8-23     telecommunications services;
8-24                             (iv)  a provider of commercial mobile
8-25     service as defined by Section 332(d), Communications Act of 1934
8-26     (47 U.S.C. Section 151 et seq.), Federal Communications Commission
8-27     rules, and the Omnibus Budget Reconciliation Act of 1993 (Public
 9-1     Law 103-66), except that the term does not include these entities
 9-2     for the purposes of Chapter 17, 55, or 64;
 9-3                             (v)  a telecommunications entity that
 9-4     provides central office based PBX-type sharing or resale
 9-5     arrangements;
 9-6                             (vi)  an interexchange telecommunications
 9-7     carrier;
 9-8                             (vii)  a specialized common carrier;
 9-9                             (viii)  a reseller of communications;
9-10                             (ix)  a provider of operator services;
9-11                             (x)  a provider of customer-owned pay
9-12     telephone service; or
9-13                             (xi)  a [another] person or entity
9-14     determined by the commission to provide telecommunications services
9-15     to customers in this state; and
9-16                       (B)  does not mean:
9-17                             (i)  a provider of enhanced or information
9-18     services, or another user of telecommunications services, who does
9-19     not also provide telecommunications services; or
9-20                             (ii)  a state agency or state institution
9-21     of higher education, or a service provided by a state agency or
9-22     state institution of higher education.
9-23           SECTION 6. This Act takes effect September 1, 2001.