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By: Averitt S.B. No. 1829
A BILL TO BE ENTITLED
AN ACT
relating to the designation and obligations of a telecommunications
provider of last resort for defined geographic areas, and recovery
of certain costs from the universal service fund incurred in
transitioning to a successor utility.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 54.251, 54.252, and 54.253 of Title II,
Subtitle C, Chapter 54, Subchapter F, Utilities Code, are amended
to read as follows:
Sec. 54.251. PROVISION OF SERVICE.
(a) Except as provided by this section, Section 54.252,
Section 54.253, and Section 54.254, a telecommunications utility
that holds a certificate of convenience and necessity or a
certificate of operating authority shall:
(1) offer all basic local telecommunications services
to each customer in the utility's certificated area; and
(2) provide continuous and adequate service in that
area.
(b) Unless specifically determined otherwise by the
commission pursuant to this subchapter, Tthe 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.
Sec. 54.252. GROUNDS FOR REDUCTION OF SERVICE BY HOLDER OF
CERTIFICATE OF CONVENIENCE AND NECESSITY. (a) Except to the
extent otherwise ordered by the commission pursuant to this
subchapter, Unless the commission issues a certificate of
convenience 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 is subject to any condition or
restriction the commission prescribes.
Sec. 54.253. DISCONTINUATION OF SERVICE BY CERTAIN
CERTIFICATE HOLDERS. (a) A telecommunications utility that holds
a certificate of operating authority or a service provider
certificate of operating authority may:
(1) cease operations in 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
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 of Public Utility Counsel; and
(5) each wholesale provider of telecommunications
facilities or services from which the utility has purchased
facilities or services.
(c) The telecommunications utility is entitled to
discontinue an optional service on or after the 61st day after the
date the utility gives the notice.
(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
(2) the utility is an exiting utility under Section
54.262, and it acts in good faith to provide for a transition of its
existing basic local telecommunications service customers to
another holder of a certificate for that area.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 61st
day after the date the utility gives the notice required by
Subsection (b). Unless the commission receives a complaint from an
affected person, the commission may enter an order under this
subsection administratively.
SECTION 2. Title II, Subtitle C, Chapter 54, Utilities
Code, is amended to add a new Subchapter G to read as follows:
Chapter 54, SUBCHAPTER G. PROVIDER OF LAST RESORT
Sec. 54.262. DEFINITIONS.
For the purposes of this subchapter the following shall be given the
following definitions:
(a) "Exiting Utility" means a holder of either a certificate
of operating authority or a service provider certificate of
operating authority, which is the predominant provider of basic
local telecommunications service in a defined geographic area where
the holder provides such service using its own facilities and where
no other telecommunications utility has facilities sufficient to
provide basic local telecommunications service in that geographic
area, that ceases operations in all or part of the utility's
certificated area pursuant to sections 54.253 or 54.264.
(b) "Provider of last resort" means a certificated
telecommunications utility that must offer basic local
telecommunications service throughout a defined geographic area.
(c) "Successor Utility" means a telecommunications utility
holding a certificate of convenience and necessity, certificate of
operating authority, or a service provider certificate of operating
authority which becomes provider of last resort for the defined
geographic area served by an exiting utility.
Sec. 54.263. 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 for the provision of
telecommunications services including basic local
telecommunications service at a time 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 petition the
commission for an order relieving it of its provider of last resort
designation in that geographic area.
(b) The holder of the certificate of convenience and
necessity shall be relieved of the obligations of provider of last
resort for a defined geographic area, and another facilities-based
telecommunications utility shall be designated as provider of last
resort, upon the commission's determination that:
(1) the holder of a certificate of convenience and
necessity does not have facilities in place to provide basic local
telecommunications service to all customers within a defined
portion of its certificated area,
(2) another certificated telecommunications utility
has installed facilities adequate to provide such service
throughout that area, and
(3) the public interest would be served by
transferring the provider of last resort obligations.
(c) The commission shall complete proceedings necessary to
make the determinations set forth in this section within 90 days of
the filing of the petition.
Sec. 54.264. SUCCESSOR TELECOMMUNICATIONS UTILITY WHERE 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 as defined in Section 54.262,
then the commission shall open a contested case proceeding for the
purpose of determining:
(1) the identity of the successor utility under this
section, and
(2) the amount of universal service funding pursuant
to Subchapter G, Chapter 56 to be made available to the successor
utility.
(b) Upon designation under this section, where applicable,
the commission shall provide the successor utility:
(1) a reasonable time in accordance with industry
practices to modify, construct, or obtain facilities necessary to
serve the customers of the telecommunications utility seeking to
cease operations in all or part of the utility's certificated area;
and
(2) an exemption on a transitional basis from any
obligation to unbundle its network elements or to provide service
for resale within that defined geographic area for a period of nine
months or such other reasonable period of time as may be authorized
by the commission to modify the network to provide such unbundling
or resale.
(c) A customer within the defined geographic area shall be
deemed to have applied for service from the successor utility upon
the effective date of the utility's designation as the successor
utility by the commission. Such customer shall enjoy all of the
rights, privileges and obligations of being a customer of the
successor utility, including but not limited to, being subject to
the successor utility's applicable terms and conditions of service
as specified in tariff or contract.
Sec. 54.265. ABANDONMENT OR CESSATION BY FACILITIES
PROVIDER - EMERGENCY RESTORATION. (a) The commission may, upon
its own motion or upon the petition of an interested party,
institute an expedited proceeding under this section upon a finding
that 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 where the holder provides such service using its
own facilities and where no other telecommunications utility has
facilities sufficient to provide basic local telecommunications
service in that geographic area, and the holder of the certificate
of operating authority or service provider certificate of operating
authority has:
(1) ceased providing basic local telecommunications
service to its customers in a defined geographic area; or
(2) abandoned the operation of its facilities in a
geographic area used to provide basic local telecommunications
service.
(b) In a proceeding under this section, the commission may
declare an emergency to exist and issue those orders necessary to
protect the health, safety and welfare of affected customers of the
utility in order to expedite the restoration and continuation of
basic local telecommunications service to affected customers. Such
orders may include:
(1) providing for a temporary arrangement for
operation of the facilities by an uncertificated entity that agrees
to provide service;
(2) authorizing third parties to enter the premises of
the abandoned facilities; or
(3) granting temporary waivers from quality of service
requirements.
(c) In a proceeding under this section, the commission may
designate a successor utility pursuant to Section 54.263.
Sec. 54.266. COMMISSION PARTICIPATION IN BANKRUPTCY
PROCEEDINGS. Upon written notice that a certificated
telecommunications utility has filed a petition in bankruptcy or is
the subject of an involuntary petition in bankruptcy, the
commission may inform the appropriate court and parties of its
interest in obtaining notice of proceedings. Within the time
prescribed by the applicable statutes, rules, and court orders, the
commission may intervene and participate in any bankruptcy
proceedings that may affect customers or providers of
telecommunications services in this State.
SECTION 3. Sections 56.021 and 56.023 of Title II, Subtitle
C, Chapter 56, Subchapter A, Utilities Code, are 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;
(7) reimburse a designated provider under Subchapter
F;
(8) reimburse a successor utility under Subchapter G.
Sec. 56.023. COMMISSION POWERS AND DUTIES. (a) The
commission shall:
(1) in a manner that assures reasonable rates for
basic local telecommunications service, adopt eligibility criteria
and review procedures, including a method for administrative
review, the commission finds necessary to fund the universal
service fund and make distributions from that fund;
(2) determine which telecommunications providers
companies meet the eligibility criteria;
(3) determine the amount of and approve a procedure
for reimbursement to telecommunications providers of revenue lost
in providing tel-assistance service under Subchapter C;
(4) establish and collect fees from the universal
service fund necessary to recover the costs the department and the
commission incur in administering this chapter and Chapter 57; and
(5) approve procedures for the collection and
disbursal of the revenue of the universal service fund.
(b) The eligibility criteria must require that a
telecommunications providers, in compliance with the commission's
quality of service requirements:
(1) offer service to each consumer within the
company's certificated area and to any permanent residential or
business premises to which the company is designated to provide
services under Subchapter F; and
(2) render continuous and adequate service within the
company's certificated area and to any permanent residential or
business premises to which the company is designated to provide
services under Subchapter F.
(c) A company designated under Subchapter F to provide
services to permanent residential or business premises within an
uncertificated area and that complies with Subsection (b) shall
receive universal service fund distributions to assist the provider
in providing those services. In addition, the commission shall
designate the provider as an eligible telecommunications carrier
under 47 U.S.C. Section 214(e)(2), as amended, for those permanent
residential or business premises.
(d) A successor utility under Section 54.264 which is or
becomes an eligible telecommunications carrier under 47 U.S.C.
Section 214(e)(2), as amended, shall be entitled to receive
universal service fund distributions for costs defined in Section
56.302.
(e) The commission shall adopt rules for the administration
of the universal service fund and this chapter and may act as
necessary and convenient to administer the fund and this chapter.
SECTION 4. Title II, Subtitle C, Chapter 56, Utilities
Code, is amended to add Subchapter G, as follows:
SUBCHAPTER G. FUNDING SUCCEEDING UTILITIES.
Sec. 56.301. PROVIDERS ELIGIBLE TO RECEIVE USF PURSUANT TO
THIS SUBCHAPTER. Only a provider eligible to receive universal
service funds under Section 56.023(b) and designated as the
successor utility pursuant to Sec. 54.263 may receive funds under
this subchapter.
Sec. 56.302. DETERMINATION OF SUCCESSOR UTILITY'S COSTS TO
BE RECOVERED. At the time the commission designates the successor
utility pursuant to Section 54.264, the commission shall determine
the extent to which the successor utility should recover its costs
that will be incurred by the successor utility in accepting and
establishing service to the affected service area. In making this
determination, the commission shall consider, among other things,
the costs of acquiring and restoring or upgrading the facilities in
the geographic area necessary to make the facilities both
compatible with those of the successor utility in its other
certificated areas, and comply with commission quality of service
standards.
Sec. 56.303. RECOVERY OF COSTS. The commission order
designating the successor utility pursuant to Section 54.264 shall
authorize the successor utility to recover those costs determined
pursuant to Section 56.302. These 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 for costs of $1 million or less;
(2) not later than the second anniversary of the date
of the order for costs of more than $1 million, but not more than $2
million; and
(3) not later than the third anniversary of the date of
the order for costs of more than $2 million.
SECTION 5. This Act takes effect September 1, 2003.