By:  King of Parker, Edwards(Senate Sponsor-Fraser)               H.B. No. 789
	(In the Senate - Received from the House March 30, 2005; 
April 5, 2005, read first time and referred to Committee on 
Business and Commerce; May 21, 2005, reported adversely, with 
favorable Committee Substitute by the following vote:  Yeas 9, 
Nays 0; May 21, 2005, sent to printer.)


COMMITTEE SUBSTITUTE FOR H.B. No. 789                                    By:  Fraser

A BILL TO BE ENTITLED
AN ACT
relating to furthering competition in the telecommunications industry. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 52.155, Utilities Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows: (a) A telecommunications utility that holds a certificate of operating authority or a service provider certificate of operating authority may not charge a higher amount for originating or terminating intrastate switched access than the prevailing rates charged by the holder of the certificate of convenience and necessity or the holder of a certificate of operating authority issued under Chapter 65 in whose territory the call originated or terminated unless: (1) the commission specifically approves the higher rate; or (2) subject to commission review, the telecommunications utility establishes statewide average composite originating and terminating intrastate switched access rates based on a reasonable approximation of traffic originating and terminating between all holders of certificates of convenience and necessity in this state. (c) Notwithstanding Subsection (a), Chapter 65 governs the switched access rates of a company that holds a certificate of operating authority issued under Chapter 65. SECTION 2. Subchapter D, Chapter 52, Utilities Code, is amended by adding Section 52.156 to read as follows: Sec. 52.156. RETAIL RATES, TERMS, AND CONDITIONS. A telecommunications utility may not: (1) establish a retail rate, term, or condition that is anticompetitive or unreasonably preferential, prejudicial, or discriminatory; or (2) engage in predatory pricing or attempt to engage in predatory pricing. SECTION 3. Section 54.251, Utilities Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows: (b) Except as specifically determined otherwise by the commission under this subchapter or Subchapter G, the holder of a certificate of convenience and necessity, or the holder of a certificate of operating authority issued under Chapter 65, 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. (c) A certificate holder may meet the holder's provider of last resort obligations using any available technology. Notwithstanding any provision of Chapter 56, the commission may adjust disbursements from the universal service fund to companies using technologies other than traditional wireline or landline technologies to meet provider of last resort obligations. As determined by the commission, the certificate holder shall meet minimum quality of service standards comparable to those established for traditional wireline or landline technologies. SECTION 4. Subchapter G, Chapter 54, Utilities Code, is amended by adding Section 54.3015 to read as follows: Sec. 54.3015. APPLICABILITY OF SUBCHAPTER. This subchapter applies to a holder of a certificate of operating authority issued under Chapter 65 in the same manner and to the same extent this subchapter applies to a holder of a certificate of convenience and necessity. SECTION 5. Subchapter H, Chapter 55, Utilities Code, is amended by adding Section 55.1735 to read as follows: Sec. 55.1735. CHARGE FOR PAY PHONE ACCESS LINE. The charge or surcharge a local exchange company imposes for an access line used to provide pay telephone service in an exchange may not exceed the amount of the charge or surcharge the company imposes for an access line used for regular business purposes in that exchange. SECTION 6. Section 56.025, Utilities Code, is amended by adding Subsection (g) to read as follows: (g) This section expires August 31, 2007. SECTION 7. Section 56.026, Utilities Code, is amended by adding Subsection (e) to read as follows: (e) This subsection and Subsections (c) and (d) expire August 31, 2007. SECTION 8. Subchapter B, Chapter 56, Utilities Code, is amended by adding Sections 56.029 and 56.030 to read as follows: Sec. 56.029. COMMISSION REVIEW AND EVALUATION OF SUPPORT AMOUNTS; ORDER. (a) On or before October 1, 2005, the commission shall initiate a review and evaluation of the monthly per line support amounts available from the Texas High Cost Universal Service Plan and from the Small and Rural Incumbent Local Exchange Company Universal Service Plan. (b) The review and evaluation must include the commission's determination of appropriate monthly per line support amounts to be made available from the Texas High Cost Universal Service Plan and from the Small and Rural Incumbent Local Exchange Company Universal Service Plan. The commission shall conduct necessary proceedings to determine the appropriate monthly per line support amounts to be made available from those plans and the appropriate costs and revenues to be used to compute those amounts. (c) On or before November 15, 2006, the commission shall issue an order establishing the appropriate monthly per line support amounts to be made available from the Texas High Cost Universal Service Plan and from the Small and Rural Incumbent Local Exchange Company Universal Service Plan. The order takes effect September 1, 2007. The commission shall deliver the order to the lieutenant governor and the speaker of the house of representatives on the date the commission issues the order. (d) The commission may revise the monthly per line support amounts to be made available from the Texas High Cost Universal Service Plan and from the Small and Rural Incumbent Local Exchange Company Universal Service Plan at any time after September 1, 2007, after notice and an opportunity for hearing. (e) This subsection and Subsections (a), (b), and (c) expire September 1, 2007. Sec. 56.030. AFFIDAVITS OF COMPLIANCE. On or before September 1 of each year, a telecommunications provider that receives disbursements from the universal service fund shall file with the commission an affidavit certifying that the telecommunications provider is in compliance with the requirements for receiving money from the universal service fund and requirements regarding the use of money from each universal service fund program for which the telecommunications provider receives disbursements. SECTION 9. Section 57.048, Utilities Code, is amended by adding Subsections (f)-(i) to read as follows: (f) Notwithstanding any other provision of this title, a certificated telecommunications utility may recover from the utility's customers an assessment imposed on the utility under this subchapter after the total amount deposited to the credit of the fund, excluding interest and loan repayments, is equal to $1.5 billion, as determined by the comptroller. A certificated telecommunications utility may recover only the amount of the assessment imposed after the total amount deposited to the credit of the fund, excluding interest and loan repayments, is equal to $1.5 billion, as determined by the comptroller. The utility may recover the assessment through a monthly billing process. (g) The comptroller shall publish in the Texas Register the date on which the total amount deposited to the credit of the fund, excluding interest and loan repayments, is equal to $1.5 billion. (h) Not later than February 15 of each year, a certificated telecommunications utility that wants to recover the assessment under Subsection (f) shall file with the commission an affidavit or affirmation stating the amount that the utility paid to the comptroller under this section during the previous calendar year and the amount the utility recovered from its customers in cumulative payments during that year. (i) The commission shall maintain the confidentiality of information the commission receives under this section that is claimed to be confidential for competitive purposes. The confidential information is exempt from disclosure under Chapter 552, Government Code. SECTION 10. Section 57.051, Utilities Code, is amended to read as follows: Sec. 57.051. SUNSET PROVISION. The Telecommunications Intrastructure Fund [Board] is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, [the board is abolished and] this subchapter expires September 1, 2011 [2005]. SECTION 11. Section 58.258(a), Utilities Code, is amended to read as follows: (a) Notwithstanding the pricing flexibility authorized by this subtitle, an electing company's rates for private network services may not be increased [on or] before January 1, 2012 [the sixth anniversary of the company's date of election]. However, an electing company may increase a rate in accordance with the provisions of a customer specific contract. SECTION 12. Subchapter G, Chapter 58, Utilities Code, is amended by adding Section 58.268 to read as follows: Sec. 58.268. CONTINUATION OF OBLIGATION. Notwithstanding any other provision of this title, an electing company shall continue to comply with this subchapter until January 1, 2012, regardless of: (1) the date the company elected under this chapter; or (2) any action taken in relation to that company under Chapter 65. SECTION 13. Section 59.077(a), Utilities Code, is amended to read as follows: (a) Notwithstanding the pricing flexibility authorized by this subtitle, an electing company's rates for private network services may not be increased [on or] before January 1, 2012 [the sixth anniversary of the company's election date]. SECTION 14. Subchapter D, Chapter 59, Utilities Code, is amended by adding Section 59.083 to read as follows: Sec. 59.083. CONTINUATION OF OBLIGATION. Notwithstanding any other provision of this title, an electing company shall continue to comply with this subchapter until January 1, 2012, regardless of: (1) the date the company elected under this chapter; or (2) any action taken in relation to that company under Chapter 65. SECTION 15. Chapter 60, Utilities Code, is amended by adding Subchapter J to read as follows:
SUBCHAPTER J. WHOLESALE CODE OF CONDUCT
Sec. 60.201. STATEMENT OF POLICY. It is the policy of this state that providers of telecommunications services operate in a manner that is consistent with minimum standards to provide customers with continued competitive choices. Sec. 60.202. APPLICABILITY OF SUBCHAPTER. A provision of this subchapter applies only to the extent the provision has not been preempted by federal law or a rule, regulation, or order of the Federal Communications Commission. Sec. 60.203. MINIMUM SERVICE REQUIREMENTS. A telecommunications provider may not unreasonably: (1) discriminate against another provider by refusing access to an exchange; (2) refuse or delay an interconnection to another provider; (3) degrade the quality of access the telecommunications provider provides to another provider; (4) impair the speed, quality, or efficiency of a line used by another provider; (5) fail to fully disclose in a timely manner on request all available information necessary to design equipment that will meet the specifications of the network; or (6) refuse or delay access by a person to another provider. Sec. 60.204. INTERCONNECTION. (a) A telecommunications provider shall provide interconnection with other telecommunications providers' networks for the transmission and routing of telephone exchange service and exchange access. (b) A telecommunications provider shall provide the interconnection at any technically feasible point within the provider's network and at rates, terms, and conditions that are just, reasonable, and nondiscriminatory. The quality of the interconnection must be at least equal to the quality of the interconnection provided to itself, a subsidiary or affiliate of the provider, or any other party to which the provider provides interconnection. Sec. 60.205. NUMBER PORTABILITY. A telecommunications provider shall provide number portability in accordance with federal requirements. Sec. 60.206. DUTY TO NEGOTIATE. A telecommunications provider shall negotiate in good faith the terms and conditions of any agreement. Sec. 60.207. DIALING PARITY. (a) A telecommunications provider shall provide dialing parity to competing telecommunications providers of telephone exchange service and telephone toll service. (b) A telecommunications provider shall provide nondiscriminatory access to telephone numbers, operator services, directory assistance, and directory listings and may not delay that access unreasonably. Sec. 60.208. ACCESS TO RIGHTS-OF-WAY. A telecommunications provider shall provide access to poles, ducts, conduits, and rights-of-way to competing providers of telecommunications service on rates, terms, and conditions that are just, reasonable, and nondiscriminatory. Sec. 60.209. RECIPROCAL COMPENSATION. A telecommunications provider shall establish reciprocal compensation arrangements for the transport and termination of telecommunications. Sec. 60.210. ACCESS TO SERVICES. A telecommunications provider shall provide access to: (1) 911 and E-911 service; (2) directory assistance service to allow other telecommunications providers' customers to obtain telephone numbers; and (3) operator call completion service. SECTION 16. Subchapter A, Chapter 62, Utilities Code, is amended by adding Section 62.003 to read as follows: Sec. 62.003. REQUIREMENTS RELATING TO AUDIO AND VIDEO PROGRAMMING. (a) This section applies only to a provider of advanced services or local exchange telephone service that has more than 500,000 access lines in service in this state and that delivers audio or video programming to its subscribers. (b) Notwithstanding any other provision of this title, a provider of advanced services or local exchange telephone service shall provide subscribers access to the signals of the local broadcast television and radio stations licensed by the Federal Communications Commission to serve those subscribers over the air. (c) To facilitate access by subscribers of a provider of advanced services or local exchange telephone service to the signals of local broadcast stations, a station either shall be granted mandatory carriage or may request retransmission consent with the provider. (d) This title does not require a provider of advanced services or local exchange telephone service to provide a television or radio station valuable consideration in exchange for carriage. (e) A provider of advanced services or local exchange telephone service shall transmit without degradation the signals a local broadcast station delivers to the provider. The transmission quality offered a broadcast station may not be lower than the quality made available to another broadcast station or video or audio programming source. (f) A provider of advanced services or local exchange telephone service that delivers audio or video programming to its subscribers may not: (1) discriminate among programming providers regarding transmission of their signals; (2) delete, change, or alter a copyright identification transmitted as part of their signals; or (3) deliver substantially similar programming from a broadcast station or other programmer outside a subscriber's broadcast coverage area. (g) A provider of advanced services or local exchange telephone service that delivers audio or video programming to its subscribers shall include all programming providers in a subscriber programming guide that lists program schedules. SECTION 17. Subtitle C, Title 2, Utilities Code, is amended by adding Chapter 65 to read as follows:
CHAPTER 65. DEREGULATION OF CERTAIN INCUMBENT LOCAL EXCHANGE COMPANY MARKETS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 65.001. STATEMENT OF POLICY. It is the policy of this state to provide for full rate and service competition in the telecommunications market of this state so that customers may benefit from innovations in service quality and market-based pricing. Sec. 65.002. DEFINITIONS. In this chapter: (1) "Deregulated company" means an incumbent local exchange company for which all of the company's markets have been deregulated. (2) "Market" means an exchange in which an incumbent local exchange company provides residential local exchange telephone service. (3) "Regulated company" means an incumbent local exchange company for which none of the company's markets have been deregulated. (4) "Stand-alone residential local exchange voice service" means: (A) residential tone dialing service; (B) services and functionalities supported under the lifeline program; (C) access for all residential end users to 911 service provided by a local authority and access to dual party relay service; (D) at the election of the incumbent local exchange company, mandatory residential extended area service arrangements, mandatory residential extended metropolitan service or other mandatory residential toll-free calling arrangements, mandatory expanded local calling service arrangements, or another service that a company is required under a tariff to provide to a customer who subscribes or may subscribe to basic network services; and (E) flat rate residential local exchange telephone service delivered by landline, but only if the service is ordered and received independent of: (i) a service classified as a nonbasic service under Section 58.151; (ii) a package of services that includes a service classified as a nonbasic service under Section 58.151; or (iii) another flat rate residential local exchange service delivered by landline. (5) "Transitioning company" means an incumbent local exchange company for which at least one, but not all, of the company's markets has been deregulated. Sec. 65.003. COMMISSION AUTHORITY. (a) Notwithstanding any other provisions of this title, the commission has authority to implement and enforce this chapter. (b) The commission may adopt rules and conduct proceedings necessary to administer and enforce this chapter, including rules to determine whether a market should remain regulated, should be deregulated, or should be reregulated. Sec. 65.004. INFORMATION. (a) The commission may collect and compile information from all telecommunications providers as necessary to implement and enforce this chapter. (b) The commission shall maintain the confidentiality of information collected under this chapter that is claimed to be confidential for competitive purposes. Information that is claimed to be confidential is exempt from disclosure under Chapter 552, Government Code. Sec. 65.005. CUSTOMER PROTECTION. This chapter does not affect a customer's right to complain to the commission regarding a telecommunications provider.
[Sections 65.006-65.050 reserved for expansion]
SUBCHAPTER B. DETERMINATION OF WHETHER MARKET SHOULD BE REGULATED
Sec. 65.051. MARKETS DEREGULATED. (a) Except as provided by Subsection (b), all markets of all incumbent local exchange companies are deregulated on January 1, 2006, unless the commission determines under Section 65.052(a) that a market or markets should remain regulated. (b) A market of an incumbent local exchange company in which the population in the area included in the market is less than 30,000 is deregulated on January 1, 2007, unless the commission determines under Section 65.052(f) that the market should remain regulated. Sec. 65.052. DETERMINATION OF WHETHER A MARKET SHOULD REMAIN REGULATED. (a) Except as provided by Subsection (f), the commission shall: (1) determine whether each market of an incumbent local exchange company should remain regulated on and after January 1, 2006; and (2) issue a final order classifying the company in accordance with this section effective January 1, 2006. (b) In making a determination under Subsection (a), the commission may not determine that a market should remain regulated if: (1) the population in the area included in the market is at least 100,000; or (2) the population in the area included in the market is at least 30,000 but less than 100,000 and, in addition to the incumbent local exchange company, there are at least three competitors of which: (A) at least one is a telecommunications provider that holds a certificate of operating authority or service provider certificate of operating authority and provides residential local exchange telephone service throughout the entire market; (B) at least one is an entity providing residential telephone service throughout the market using facilities that the entity owns; and (C) at least one is a provider in that market of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Pub. L. No. 103-66), that is not affiliated with the incumbent local exchange company. (c) The commission shall issue an order classifying an incumbent local exchange company as a deregulated company that is subject to Subchapter C if: (1) the company does not have any markets in which the population in the area included in the market is less than 30,000; and (2) the commission does not determine that a market of the company should remain regulated on and after January 1, 2006. (d) Regardless of the population in the area included in an incumbent local exchange company's markets, the commission shall issue an order classifying the company as a transitioning company that is subject to Subchapter D if the commission determines that one or more, but not all, of the markets of the company should remain regulated on and after January 1, 2006. (e) The commission shall issue an order classifying the company as a regulated company that is subject to the provisions of this title that applied to the company on September 1, 2005, if the commission determines that all of the markets of the company in which the population in each area included in the markets is at least 30,000 should remain regulated on and after January 1, 2006. This subsection does not affect the authority of a regulated company to elect under Chapter 58 or 59 after January 1, 2005, and to be regulated under the chapter under which the company elected. (f) Not later than November 30, 2006, the commission shall determine whether a market of an incumbent local exchange company in which the population in the area included in the market is less than 30,000 should remain regulated on or after January 1, 2007. The commission by rule shall determine the market test to be applied in determining whether the market should remain regulated. If the commission does not determine that the market should remain regulated on or after January 1, 2007, and the deregulation of that market results in a transitioning or regulated company no longer meeting the definition of a transitioning or regulated company, as appropriate, the commission shall issue an order reclassifying the company appropriately. Sec. 65.053. INCUMBENT LOCAL EXCHANGE COMPANY MARKETS. (a) Notwithstanding Section 65.052, an incumbent local exchange company may elect to have all of the company's markets remain regulated on and after January 1, 2006. (b) To make an election under Subsection (a), an incumbent local exchange company must file an affidavit with the commission making that election not later than December 1, 2005. (c) If an incumbent local exchange company makes an election under this section, the commission shall issue an order classifying the company as a regulated company that is subject to the provisions of this title that applied to the company on September 1, 2005. This subsection does not affect the authority of a regulated company to elect under Chapter 58 or 59 after January 1, 2005, and to be regulated under the chapter under which the company elected. Sec. 65.054. PETITION FOR DEREGULATION. (a) After July 1, 2007, a transitioning or regulated company may petition the commission to deregulate a market that the commission previously determined should remain regulated. (b) If the commission deregulates a market under this section and the deregulation results in the transitioning or regulated company no longer meeting the definition of a transitioning or regulated company, as appropriate, the commission shall issue an order reclassifying the company appropriately. Sec. 65.055. COMMISSION AUTHORITY TO REREGULATE CERTAIN MARKETS. (a) This section applies only to a market of an incumbent local exchange company in which the population in the area included in the market is less than 100,000. (b) The commission, on its own motion or on a complaint that the commission considers to have merit, may determine that a market that was previously deregulated should again be subject to regulation. (c) The commission by rule shall prescribe the procedures and standards applicable to a determination under this section.
[Sections 65.056-65.100 reserved for expansion]
SUBCHAPTER C. DEREGULATED COMPANY
Sec. 65.101. ISSUANCE OF CERTIFICATE OF OPERATING AUTHORITY. (a) A deregulated company may petition the commission to relinquish the company's certificate of convenience and necessity and receive a certificate of operating authority. (b) The commission shall issue the deregulated company a certificate of operating authority and rescind the deregulated company's certificate of convenience and necessity if the commission finds that all of the company's markets have been deregulated under Subchapter B. Sec. 65.102. REQUIREMENTS. (a) A deregulated company that holds a certificate of operating authority issued under this subchapter is a nondominant carrier governed in the same manner as a holder of a certificate of operating authority issued under Chapter 54, except that the deregulated company: (1) retains the obligations of a provider of last resort under Chapter 54; (2) is subject to the following provisions in the same manner as an incumbent local exchange company that is not deregulated: (A) Sections 54.156, 54.158, and 54.159; (B) Section 55.012; and (C) Chapter 60; and (3) may not increase the company's rates for stand-alone residential local exchange voice service before the date the commission order issued under Section 56.029(c) takes effect, regardless of whether the company is an electing company under Chapter 58. (b) In each market, a deregulated company shall make available to all customers uniformly throughout that market the same price for all services and products.
[Sections 65.103-65.150 reserved for expansion]
SUBCHAPTER D. TRANSITIONING COMPANY
Sec. 65.151. PROVISIONS APPLICABLE TO TRANSITIONING COMPANY. A transitioning company is governed by this subchapter and the provisions of this title that applied to the company immediately before the date the company was classified as a transitioning company. If there is a conflict between this chapter and the other applicable provisions of this title, this chapter controls. Sec. 65.152. GENERAL REQUIREMENTS. (a) A transitioning company may: (1) exercise pricing flexibility in a market in the manner provided by Section 58.063 one day after providing an informational notice as required by that section; and (2) introduce a new service in a market in the manner provided by Section 58.153 one day after providing an informational notice as required by that section. (b) A transitioning company may not be required to comply with exchange-specific retail quality of service standards or reporting requirements in a market that is deregulated. Sec. 65.153. RATE REQUIREMENTS. (a) In a market that remains regulated, a transitioning company shall price the company's retail services in accordance with the provisions that applied to that company immediately before the date the company was classified as a transitioning company. (b) In a market that is deregulated, a transitioning company shall price the company's retail services as follows: (1) for all services, other than basic local telecommunications service, at any price higher than the service's long run incremental cost; and (2) for basic local telecommunications service, at any price higher than the lesser of the service's long run incremental cost or the tariffed price on the date that market was deregulated, provided that the company may not increase the company's rates for stand-alone residential local exchange voice service before the date the commission order issued under Section 56.029(c) takes effect, regardless of whether the company is an electing company under Chapter 58. (c) In each deregulated market, a transitioning company shall make available to all customers uniformly throughout that market the same price for all services and products. (d) In any market, regardless of whether regulated or deregulated, the transitioning company may not: (1) establish a retail rate, term, or condition that is anticompetitive or unreasonably preferential, prejudicial, or discriminatory; (2) establish a retail rate that is subsidized either directly or indirectly by a regulated monopoly service or a service provided in an exchange that is not deregulated; or (3) engage in predatory pricing or attempt to engage in predatory pricing.
[Sections 65.154-65.200 reserved for expansion]
SUBCHAPTER E. REDUCTION OF SWITCHED ACCESS RATES
Sec. 65.201. REDUCTION OF SWITCHED ACCESS RATES BY DEREGULATED COMPANY. (a) On the date the last market of an incumbent local exchange company is deregulated, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market to parity with the company's respective local reciprocal compensation rates. (b) After reducing the rates under Subsection (a), a deregulated company shall maintain parity with the company's local reciprocal compensation rates. If the company's local reciprocal compensation rates are changed, the company shall change the company's per minute of use switched access rates in each market as necessary to re–achieve parity with the company's local reciprocal compensation rates. Sec. 65.202. REDUCTION OF SWITCHED ACCESS RATES BY TRANSITIONING COMPANY WITH MORE THAN THREE MILLION ACCESS LINES. Notwithstanding any other provision of this title, a transitioning company that has more than three million access lines in service in this state on January 1, 2006, shall: (1) on July 1, 2006, reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to 50 percent of the difference in the rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates; and (2) on July 1, 2007, reduce both the company's originating and terminating per minute of use switched access rates in each market to parity with the company's respective federal originating and terminating per minute of use switched access rates. Sec. 65.203. REDUCTION OF SWITCHED ACCESS RATES BY CERTAIN TRANSITIONING COMPANIES WITH NOT MORE THAN THREE MILLION ACCESS LINES. (a) Notwithstanding any other provision of this title, a company that is classified as a transitioning company effective January 1, 2006, and that has not more than three million access lines in service in this state on that date shall reduce both the company's originating and terminating per minute of use switched access rates in each market in accordance with this section. (b) On July 1, 2006, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of: (1) 25 percent of the difference in the company's rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or (2) an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on July 1, 2006, by the total number of the company's markets on December 30, 2005. (c) On July 1, 2007, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of: (1) 25 percent of the difference in the company's rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or (2) an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on July 1, 2007, by the total number of the company's markets on December 30, 2005. (d) On July 1, 2008, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of: (1) 25 percent of the difference in the company's rates in effect on June 30, 2006, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or (2) an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on July 1, 2008, by the total number of the company's markets on December 30, 2005. (e) On July 1, 2009, the transitioning company shall reduce both the company's originating and terminating per minute of use switched access rates in each market to parity with the company's respective federal originating and terminating per minute of use switched access rates. Sec. 65.204. REDUCTION OF SWITCHED ACCESS RATES BY NEWLY DESIGNATED TRANSITIONING COMPANY. (a) Notwithstanding any other provision of this title, a company that is classified as a transitioning company after January 1, 2006, shall reduce both the company's originating and terminating per minute of use switched access rates in each market in accordance with this section. (b) On the date the company is classified as a transitioning company, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of: (1) 25 percent of the difference in the company's rates in effect on the day before the date the company was classified, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or (2) an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on the date the company is classified as a transitioning company by the total number of the company's markets on December 30, 2005. (c) On the first anniversary of the date the company is classified as a transitioning company, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of: (1) 25 percent of the difference in the company's rates in effect on the day before the date the company was classified, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or (2) an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on the first anniversary of the date the company is classified as a transitioning company by the total number of the company's markets on December 30, 2005. (d) On the second anniversary of the date the company is classified as a transitioning company, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market by an amount equal to the lesser of: (1) 25 percent of the difference in the company's rates in effect on the day before the date the company was classified, and the company's respective federal originating and terminating per minute of use switched access rates in effect on that date; or (2) an amount derived by multiplying that difference by a percentage derived by dividing the number of the company's markets that are not regulated on the second anniversary of the date the company is classified as a transitioning company by the total number of the company's markets on December 30, 2005. (e) On the third anniversary of the date the company is classified as a transitioning company, the company shall reduce both the company's originating and terminating per minute of use switched access rates in each market to parity with the company's respective federal originating and terminating per minute of use switched access rates. Sec. 65.205. MAINTENANCE OF REDUCTION OR PARITY. (a) After a deregulated or transitioning company reduces the company's rates under this subchapter, the company may not increase those rates above the applicable rates prescribed by this subchapter. (b) If a transitioning company's federal per minute of use switched access rates are reduced, the company shall reduce the company's per minute of use switched access rates to not more than the applicable rates prescribed by this subchapter. (c) Notwithstanding Subsections (a) and (b), a deregulated or transitioning company may decrease the company's per minute of use switched access rates to amounts that are less than the applicable rates prescribed by this subchapter.
[Sections 65.206-65.250 reserved for expansion]
SUBCHAPTER F. LEGISLATIVE OVERSIGHT COMMITTEE
Sec. 65.251. OVERSIGHT COMMITTEE. (a) In this subchapter, "committee" means the telecommunications competitiveness legislative oversight committee. (b) The committee is composed of nine members as follows: (1) the chair of the Senate Committee on Business and Commerce; (2) the chair of the House Committee on Regulated Industries; (3) three members of the senate appointed by the lieutenant governor; (4) three members of the house of representatives appointed by the speaker of the house of representatives; and (5) the chief executive of the Office of Public Utility Counsel. (c) An appointed member of the committee serves at the pleasure of the appointing official. Sec. 65.252. COMMITTEE DUTIES. (a) The committee shall conduct joint public hearings with the commission at least annually regarding the introduction of full competition to telecommunications services in this state. (b) The commission shall: (1) collect and compile information from all telecommunications providers as necessary to conduct a hearing under this section; and (2) maintain the confidentiality of information collected under this section that is claimed to be confidential for competitive purposes. (c) Information that is claimed to be confidential under Subsection (b) is exempt from disclosure under Chapter 552, Government Code. (d) The commission shall provide to the committee information regarding rules relating to telecommunications deregulation proposed by the commission. The committee may submit comments to the commission on those proposed rules. (e) The committee shall monitor the effectiveness of telecommunications deregulation, including the fairness of rates, the quality of service, and the effect of regulation on the normal forces of competition. (f) The committee may request reports and other information from the commission as necessary to carry out this subchapter. (g) Not later than November 15 of each even-numbered year, the committee shall report to the governor, lieutenant governor, and speaker of the house of representatives on the committee's activities under this subchapter. The report must include: (1) an analysis of any problems caused by telecommunications deregulation; and (2) recommendations for any legislative action necessary to address those problems and to further competition within the telecommunications industry. SECTION 18. The following provisions of the Utilities Code are repealed: (1) Sections 57.048(c) and (d); (2) Subchapters B-F, Chapter 62; and (3) Chapters 61 and 63. SECTION 19. If on August 31, 2005, the assessment prescribed by Section 57.048, Utilities Code, is imposed at a rate of less than 1.25 percent, the comptroller shall, on September 1, 2005, reset the rate of the assessment to 1.25 percent. SECTION 20. This Act takes effect September 1, 2005.
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