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78R8558 CBH-F

By:  Nixon                                                        H.B. No. 2352


A BILL TO BE ENTITLED
AN ACT
relating to powers and duties of a telecommunications utility. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 51.002, Utilities Code, is amended by adding Subdivision (13) to read as follows: (13) "Provider of last resort" means a certificated telecommunications utility that must offer basic local telecommunications service throughout a certificated geographic area to all customers who request that service and who comply with this title and the utility's tariffs and terms for obtaining that service. SECTION 2. Section 54.251(b), Utilities Code, is amended to read as follows: (b) Except as otherwise provided by this subchapter, 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 3. Subchapter F, Chapter 54, Utilities Code, is amended by adding Section 54.2515 to read as follows: Sec. 54.2515. CERTAIN ACTIONS NOT CESSATION OF OPERATIONS OR DISCONTINUATION OF SERVICE. For purposes of this title, a merger or an acquisition affecting a telecommunications utility, or a transfer of a certificate under this title, does not constitute either a cessation of operations or the discontinuation of service by that utility. SECTION 4. Section 54.252, Utilities Code, is amended to read as follows: Sec. 54.252. GROUNDS FOR REDUCTION OF SERVICE BY HOLDER OF CERTIFICATE OF CONVENIENCE AND NECESSITY.(a) Except as provided by 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. (b) A discontinuance, reduction, or impairment of service must be in compliance with and in accordance with this subchapter [is subject to any condition or restriction the commission prescribes]. SECTION 5. Section 54.253, Utilities Code, is amended to read as follows: Sec. 54.253. DISCONTINUATION OF SERVICE BY [CERTAIN] CERTIFICATE HOLDERS. (a) A telecommunications utility that holds a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority may, in accordance with this subchapter: (1) cease operations in all or part of the utility's certificated area; or (2) discontinue an optional service that is not essential to providing basic local telecommunications service. (b) Before the telecommunications utility ceases operations as provided by Subsection (a) [or discontinues an optional service], the utility, in the form and manner required by the commission, must give notice of the intended action to: (1) the commission; [and] (2) each affected customer, which notice must include a toll-free customer service telephone number maintained by the utility to facilitate continuous service and transition of the customer's service to an alternative provider; and (3) each provider of wholesale services or facilities from whom the utility purchases services for resale or leases unbundled facilities to provide basic local telecommunications services in this state. (c) The telecommunications utility may not cease operations in all or part of its certificated area unless: (1) another provider of basic local telecommunications services has adequate facilities and capacity to serve the customers in the area; and (2) the commission authorizes the utility to cease operations. (d) The commission shall authorize a telecommunications utility to cease operations in all or part of the utility's certificated area, and the [telecommunications] utility is entitled to cease those operations [discontinue an optional service] on or after the 100th [61st] day after the date the utility gives the notice, if: (1) the utility provides for an adequate transition of service of the utility's customers to another holder of a certificate for that area; and (2) the utility pays or agrees to pay: (A) the costs affected customers incur in establishing new service with the other telecommunications utility, including tariffed or reasonable and customary installation charges; (B) the actual costs incurred by the other telecommunications utility in accepting affected customers and establishing service to the affected area, including the costs of restoring or upgrading the other utility's facilities in the geographic area as necessary to make those facilities compatible with the facilities in the utility's other certificated areas and to comply with commission quality of service standards; (C) the costs estimated to be necessary to maintain the operations of the telecommunications utility ceasing operations as necessary to provide service to customers until another utility can provide service; and (D) the amounts the telecommunications utility owes to the utility's vendors and wholesale providers, including other utilities. [(d) The telecommunications utility may not cease operations in its certificated area unless: [(1) another provider of basic local telecommunications services has adequate facilities and capacity to serve the customers in the certificated area; and [(2) the commission authorizes the utility to cease operations.] (e) The commission may not authorize the telecommunications utility to cease operations under Subsection (d) before the 100th [61st] day after the date the utility gives the notice required by Subsection (b) unless the utility shows that good cause exists for ceasing operations before that date and ceasing operations before that date will not prejudice the utility's customers, suppliers, or vendors. Unless the commission receives a complaint from an affected person, the commission may enter an order under this subsection administratively. (f) To secure payment of the obligations prescribed by Subsection (d), the telecommunications utility shall, not later than the 30th day after providing notice under Subsection (b), establish a bond or security in an amount equal to $250 for each access line the utility serves in the affected certificated area. The commission, on motion of an affected party and on notice and hearing, shall determine the adequacy of the bond or security and require an increase in the bond or security if the sum of the estimated costs payable under this section is more than an amount equal to $250 for each access line. If the utility defaults in the payment of the utility's obligations under this section, the commission shall determine the costs under this section and the bond or security shall be apportioned among obligees in accordance with the commission's determination of costs. (g) A telecommunications utility is entitled to discontinue an optional service that is not essential to providing basic local telecommunications service by providing the commission with notice of that discontinuation not later than the 30th day before the date on which the utility intends to discontinue that service. SECTION 6. Section 54.260(a), Utilities Code, is amended to read as follows: (a) Notwithstanding Section 54.259, if a telecommunications utility holds a [municipal consent, franchise, or permit as determined to be the appropriate grant of authority by the municipality and holds a] certificate [if] required by this title, a public or private property owner may: (1) impose a condition on the utility that is reasonably necessary to protect: (A) the safety, security, appearance, and condition of the property; and (B) the safety and convenience of other persons; (2) impose a reasonable limitation on the time at which the utility may have access to the property to install a telecommunications service facility; (3) impose a reasonable limitation on the number of such utilities that have access to the owner's property, if the owner can demonstrate a space constraint that requires the limitation; (4) require the utility to agree to indemnify the owner for damage caused installing, operating, or removing a facility; (5) require the tenant or the utility to bear the entire cost of installing, operating, or removing a facility; and (6) require the utility to pay compensation that is reasonable and nondiscriminatory among such telecommunications utilities. SECTION 7. Subchapter F, Chapter 54, Utilities Code, is amended by adding Sections 54.262-54.266 to read as follows: Sec. 54.262. PROVIDER OF LAST RESORT WHERE FACILITIES-BASED PROVIDER PRECEDES HOLDER OF CERTIFICATE OF CONVENIENCE AND NECESSITY. (a) Notwithstanding any other provision of this title, if a telecommunications utility installs facilities to serve customers located in a 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 geographic area, the holder of the certificate of convenience and necessity may provide notice to the commission that the utility no longer wants to be the provider of last resort in that geographic area. (b) On the date the commission receives notice under Subsection (a), the holder of the certificate of convenience and necessity is relieved of the obligations of serving as the provider of last resort, and the commission shall designate the facilities-based telecommunications utility as the provider of last resort. Sec. 54.263. CERTIFICATE HOLDERS' OBLIGATIONS. (a) Notwithstanding Section 54.252, if a telecommunications utility attempting to cease operations in all or part of the utility's certificated area fails to establish a bond or security as provided by Section 54.253, a telecommunications utility that does not own facilities adequate to serve customers in that area may not automatically be required to serve as the provider of last resort for that area. (b) If a telecommunications utility does not elect to serve as the provider of last resort for an area described by Subsection (a), the commission may establish a proceeding under Subchapter G to designate one or more utilities as the provider of last resort for that area. (c) A telecommunications utility designated as the provider of last resort for an area described by Subsection (a): (1) shall have a reasonable time in accordance with industry practices to modify, construct, or obtain facilities necessary to serve the customers in that area; and (2) is exempt on a transitional basis from any obligation to unbundle the utility's network elements or to provide services for resale for not less than 18 months or the time necessary for the utility to modify the network to provide that unbundling or resale. Sec. 54.264. RESPONSIBILITIES AND RIGHTS OF MIGRATING CUSTOMERS. (a) If a customer of basic local telecommunications services provided by a telecommunications utility is migrated to another telecommunications utility, the customer is responsible for all applicable rates and is subject to all applicable terms and conditions of the succeeding utility. (b) This section does not require a customer to accept the provision of services from any telecommunications utility. However, if the commission designates a telecommunications utility to serve as the provider of last resort in the area in which the customer is located, another certificated utility may not be required to offer service to that customer. Sec. 54.265. BONDING AS CONDITION OF OBTAINING CERTIFICATE FOR CERTAIN PROVIDERS. (a) A person that wants to obtain a certificate of operating authority or a service provider certificate of authority and to purchase services for resale or to lease unbundled network elements from a telecommunications utility shall establish a cash deposit or other equivalent security for the benefit of each utility that will provide services for resale and unbundled facilities to the person applying for the certificate. The cash deposit or other equivalent security must be conditioned on the person timely and fully paying to each utility the charges for resold services or unbundled facilities. (b) The commission shall establish the initial amount of the cash deposit or other equivalent security at the time the person is granted a certificate of operating authority or service provider certificate of operating authority. The commission shall determine the amount of the cash deposit or other equivalent security based on the person's representation of the wholesale charges of the underlying utility or utilities it anticipates using to provide services to customers. The amount of the initial cash deposit or other equivalent security may be not less than an amount equal to three months anticipated use. (c) The commission, on petition of one or more underlying telecommunications utilities, shall require the certificate holder to increase the cash deposit or other equivalent security to an amount equal to the certificate holder's actual use for the three months preceding the date the petition is filed or an amount that the petitioning utility or utilities can demonstrate, by a preponderance of the evidence, that the certificate holder is likely to use during any future three-month period. Sec. 54.266. COMMISSION INTERVENTION OR PARTICIPATION IN BANKRUPTCY PROCEEDINGS. (a) The commission, on notice that a certificated telecommunications utility has filed a petition in bankruptcy or is the subject of an involuntary petition in bankruptcy, shall 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 8. Chapter 54, Utilities Code, is amended by adding Subchapter G to read as follows:
SUBCHAPTER G. FUNDING FOR CERTAIN TELECOMMUNICATIONS UTILITIES
Sec. 54.301. DETERMINATION OF PROVIDER OF LAST RESORT WHEN NO PROVIDER HAS ADEQUATE FACILITIES. (a) When a certificated utility provides notice under Section 54.253 that the utility intends to cease operations in all or part of the utility's certificated area, the commission shall open a contested case proceeding to determine: (1) the amount of the bond or security to be provided under Section 54.253; (2) the identity of the telecommunications utility that will be required to serve as the provider of last resort for the area under this section; and (3) if necessary, the amount of universal service funding to be made available to benefit customers of two utilities. (b) The commission may designate a telecommunications utility as the provider of last resort only if the utility is otherwise eligible to receive universal service funds under Section 56.023(b). Sec. 54.302. HEARING FOR DESIGNATION OF SUCCEEDING TELECOMMUNICATIONS UTILITY. (a) If no telecommunications utilities have facilities adequate to serve the customers of an area in which a telecommunications utility is ceasing operations and no utility offers to provide service with funding provided under the bond or security established under Section 54.253, the commission shall designate a holder of a certificate of convenience and necessity as the provider of last resort for the area. (b) At the time the commission designates the holder of a certificate of convenience and necessity as the provider of last resort, the commission shall determine and provide for that utility to recover the actual costs the utility will incur in accepting and establishing service to the affected certificated area, 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 areas and to comply with commission quality of service standards. Sec. 54.303. RECOVERY OF ACTUAL COSTS. The commission order designating the telecommunications utility that will serve as the provider of last resort shall ensure that the utility will recover all of the actual costs that the utility will incur in accepting and establishing service to the affected certificated area as determined under Section 54.302. Actual costs shall 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 9. 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 succeeding utility under Subchapter G, Chapter 54. SECTION 10. Section 56.023, Utilities Code, is amended by adding Subsection (e) to read as follows: (e) A telecommunications utility designated as a provider of last resort under Subchapter G, Chapter 54, that does not have adequate facilities in place to provide service to the customers in that area is entitled to receive universal service fund distributions for the actual costs incurred by the utility in providing those services under Subchapter G, Chapter 54, if the utility ceasing operations in that area fails to provide a bond or security in accordance with Section 54.253. The commission shall also designate the new provider of last resort as an eligible telecommunications carrier under 47 U.S.C. Section 214(e)(2), as amended, for the geographic area in which that utility is to provide service under Subchapter G, Chapter 54. SECTION 11. (a) This Act takes effect September 1, 2003. (b) Not later than December 1, 2003, a telecommunications utility that holds a certificate of operating authority or service provider certificate of operating authority on the effective date of this Act shall establish a cash deposit or other equivalent security in the amount determined by the Public Utility Commission of Texas as required by Section 54.265, Utilities Code, as added by this Act.