78R10480 CBH-F
By: Nixon H.B. No. 2352
Substitute the following for H.B. No. 2352:
By: Baxter C.S.H.B. No. 2352
A BILL TO BE ENTITLED
AN ACT
relating to the designation and obligations of a telecommunications
provider of last resort and to the recovery of certain costs
incurred in transitioning to a successor utility.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 54.251(b), Utilities Code, is amended to
read as follows:
(b) Except as specifically determined otherwise by the
commission under this subchapter or Subchapter G, the [The] holder
of a certificate of convenience and necessity for an area has the
obligations of a provider of last resort regardless of whether
another provider has a certificate of operating authority or
service provider certificate of operating authority for that area.
SECTION 2. Section 54.252(a), Utilities Code, is amended to
read as follows:
(a) Except to the extent otherwise ordered by the commission
in accordance with this subchapter [Unless the commission issues a
certificate that the present and future convenience and necessity
will not be adversely affected], the holder of a certificate of
convenience and necessity may not discontinue, reduce, or impair
service to any part of the holder's certificated service area
except for:
(1) nonpayment of charges;
(2) nonuse; or
(3) another similar reason that occurs in the usual
course of business.
SECTION 3. Sections 54.253(b) and (d), Utilities Code, are
amended to read as follows:
(b) Before the telecommunications utility ceases operations
or discontinues an optional service, the utility, in the manner
required by the commission, must give notice of the intended action
to:
(1) the commission; [and]
(2) each affected customer;
(3) the Commission on State Emergency Communications;
(4) the office; and
(5) each wholesale provider of telecommunications
facilities or services from which the utility has purchased
facilities or services.
(d) The telecommunications utility may not cease operations
in its certificated area unless the commission authorizes the
utility to cease operations and:
(1) another provider of basic local
telecommunications services has adequate facilities and capacity
to serve the customers in the certificated area; or [and]
(2) the utility is an "exiting utility," as that term
is defined by Section 54.301, and the utility acts in good faith to
provide for a transition of the utility's existing basic local
telecommunications service customers to another holder of a
certificate for that area [the commission authorizes the utility to
cease operations].
SECTION 4. Chapter 54, Utilities Code, is amended by adding
Subchapter G to read as follows:
SUBCHAPTER G. PROVIDER OF LAST RESORT
Sec. 54.301. DEFINITIONS. In this subchapter:
(1) "Exiting utility" means a telecommunications
utility that:
(A) holds a certificate of operating authority or
a service provider certificate of operating authority;
(B) is the predominant provider of basic local
telecommunications service in a defined geographic area and
provides those services using the utility's own facilities; and
(C) ceases operations in all or part of the
utility's certificated service area under Section 54.253 or 54.254.
(2) "Provider of last resort" means a certificated
telecommunications utility that must offer basic local
telecommunications service throughout a defined geographic area.
(3) "Successor utility" means a telecommunications
utility that holds a certificate of convenience and necessity,
certificate of operating authority, or service provider
certificate of operating authority and that is or is designated to
become the provider of last resort for the defined geographic area
previously served by an exiting utility.
Sec. 54.302. PROVIDER OF LAST RESORT; FACILITIES-BASED
PROVIDERS. (a) Notwithstanding any other provision of this title,
if a telecommunications utility installs facilities to serve
customers located in a defined geographic area to provide
telecommunications services, including basic local
telecommunications service, before the holder of the certificate of
convenience and necessity installs facilities to serve customers
located in that defined geographic area, the holder of the
certificate of convenience and necessity may petition the
commission for an order relieving the utility of the utility's
designation as the provider of last resort in that defined
geographic area.
(b) The commission shall relieve the holder of the
certificate of convenience and necessity of the obligations of
serving as the provider of last resort for the defined geographic
area, and the commission shall designate the facilities-based
telecommunications utility as the provider of last resort if the
commission determines that:
(1) the holder of the certificate of convenience and
necessity does not have facilities in place to provide basic local
telecommunications service to all customers within that defined
geographic area;
(2) another certificated telecommunications utility
has installed facilities adequate to provide that service
throughout that area; and
(3) the public interest would be served by
transferring the provider of last resort obligations for that area.
(c) The commission shall complete proceedings necessary to
make the determinations prescribed by this section not later than
the 91st day after the date the petition is filed under Subsection
(a).
Sec. 54.303. SUCCESSOR TELECOMMUNICATIONS UTILITY WHEN NO
SUFFICIENT FACILITIES EXIST. (a) When the commission obtains
notice as required under Section 54.253 or otherwise that a utility
intends to become an exiting utility and no other
telecommunications utility has facilities sufficient to provide
basic local telecommunications service in that defined geographic
area, the commission shall open a contested case proceeding to
determine:
(1) the identity of the successor utility under this
section; and
(2) the amount of universal service funding under
Subchapter G, Chapter 56, to be made available to the successor
utility.
(b) On designation as the successor utility under this
section, the commission, if applicable, shall provide to the
successor utility:
(1) a reasonable time, in accordance with industry
practices and not subject to otherwise applicable commission
service quality rules or standards, to modify, construct, or obtain
facilities necessary to serve the customers of the exiting
telecommunications utility; and
(2) an exemption on a transitional basis from any
obligation to unbundle the utility's network elements or to provide
service for resale within that defined geographic area for nine
months or another reasonable period the commission may authorize as
necessary to modify the utility's network to provide that
unbundling or resale.
(c) A customer within the defined geographic area to be
served by the successor utility is considered to have applied for
service from the successor utility on the effective date of that
designation by the commission. Each right, privilege, and
obligation of being a customer of the successor utility applies to
that customer and the customer is subject to the successor
utility's applicable terms of service as specified in an applicable
tariff or contract.
Sec. 54.304. ABANDONMENT OR CESSATION BY FACILITIES
PROVIDER; EMERGENCY RESTORATION. (a) The commission, on its own
motion or on the petition of an interested party, may institute an
expedited proceeding under this section if the commission finds
that:
(1) a holder of a certificate of operating authority
or service provider certificate of operating authority is the
predominant provider of basic local telecommunications service in a
defined geographic area and the utility provides that service using
the utility's own facilities;
(2) no other telecommunications utility has
facilities sufficient to provide basic local telecommunications
service in that defined geographic area; and
(3) the holder of the certificate of operating
authority or service provider certificate of operating authority
has:
(A) ceased providing basic local
telecommunications service to the utility's customers in that
defined geographic area; or
(B) abandoned the operation of the utility's
facilities in the defined geographic area that are used to provide
basic local telecommunications service.
(b) In a proceeding under this section, the commission may
declare that an emergency exists and issue any order necessary to
protect the health, safety, and welfare of affected customers of
the utility and to expedite the restoration and continuation of
basic local telecommunications service to those customers. An
order issued by the commission under this subsection may include an
order to:
(1) provide for a temporary arrangement for operation
of the utility's facilities by an uncertificated entity that agrees
to provide service;
(2) authorize one or more third parties to enter the
premises of the abandoned facilities; or
(3) grant temporary waivers from quality of service
requirements.
(c) The commission may designate a successor utility in
accordance with Section 54.303 during a proceeding under this
section.
Sec. 54.305. COMMISSION PARTICIPATION IN BANKRUPTCY
PROCEEDINGS. (a) The commission, on written notice that a
certificated telecommunications utility has filed a petition in
bankruptcy or is the subject of an involuntary petition in
bankruptcy, may inform the appropriate court and parties of the
commission's interest in obtaining notice of proceedings.
(b) Within the time prescribed by the applicable statutes,
rules, and court orders, the commission may intervene and
participate in any bankruptcy proceedings that affect customers or
providers of telecommunications services in this state.
SECTION 5. Section 56.021, Utilities Code, as amended by
Chapters 651 and 1451, Acts of the 77th Legislature, Regular
Session, 2001, is reenacted and amended to read as follows:
Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED. The
commission shall adopt and enforce rules requiring local exchange
companies to establish a universal service fund to:
(1) assist telecommunications providers in providing
basic local telecommunications service at reasonable rates in high
cost rural areas;
(2) reimburse the telecommunications carrier that
provides the statewide telecommunications relay access service
under Subchapter D;
(3) finance the specialized telecommunications
assistance program established under Subchapter E;
(4) reimburse the department, the Texas Commission for
the Deaf and Hard of Hearing, and the commission for costs incurred
in implementing this chapter and Chapter 57;
(5) reimburse a telecommunications carrier providing
lifeline service as provided by 47 C.F.R. Part 54, Subpart E, as
amended;
(6) finance the implementation and administration of
an integrated eligibility process created under Section 17.007 for
customer service discounts relating to telecommunications
services, including outreach expenses the commission determines
are reasonable and necessary; [and]
(7) reimburse a designated provider under Subchapter
F; and
(8) reimburse a successor utility under Subchapter G.
SECTION 6. Section 56.023, Utilities Code, is amended by
adding Subsection (e) to read as follows:
(e) A successor utility, as that term is defined by Section
54.301, that is or becomes an eligible telecommunications carrier
under 47 U.S.C. Section 214(e)(2), as amended, is entitled to
receive universal service fund distributions for costs in
accordance with Subchapter G.
SECTION 7. Chapter 56, Utilities Code, is amended by adding
Subchapter G to read as follows:
SUBCHAPTER G. FUNDING FOR CERTAIN TELECOMMUNICATIONS UTILITIES
Sec. 56.251. DEFINITION. In this subchapter, "successor
utility" has the meaning assigned by Section 54.301.
Sec. 56.252. TELECOMMUNICATIONS UTILITIES ELIGIBLE TO
RECEIVE FUNDING UNDER THIS SUBCHAPTER. A telecommunications
utility may receive funding under this subchapter only if:
(1) the telecommunications utility is eligible to
receive universal service funding under Section 56.023(b); and
(2) the telecommunications utility is designated as a
successor utility under Section 54.303.
Sec. 56.253. DETERMINATION OF SUCCESSOR UTILITY'S COSTS TO
BE RECOVERED. (a) At the time the commission designates the
successor utility under Section 54.303, the commission shall
determine the extent to which the utility should recover the costs
the utility will incur in accepting and establishing service to the
affected service area.
(b) In making the determination under Subsection (a), the
commission shall consider relevant information, including the
costs of acquiring and restoring or upgrading the utility's
facilities in the geographic area as necessary to make those
facilities compatible with the facilities in the utility's other
certificated service areas and to comply with commission quality of
service standards.
Sec. 56.254. RECOVERY OF COSTS. The commission order
designating the succeeding utility under Section 54.303 shall
authorize the utility to recover the costs determined under Section
56.253. The costs may be amortized and recovered from the state
universal service fund, together with interest at the prevailing
commercial lending rate:
(1) not later than the first anniversary of the date of
the order if the costs are not more than $1 million;
(2) not later than the second anniversary of the date
of the order if the costs are more than $1 million but not more than
$2 million; and
(3) not later than the third anniversary of the date of
the order if the costs are more than $2 million.
SECTION 8. This Act takes effect September 1, 2003.