BILL ANALYSIS |
C.S.S.B. 583 |
By: Carona |
State Affairs |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Interested parties explain that prior legislation established the Texas universal service fund, the Texas equivalent of the federal universal service fund, and add that the concept of universal service is that all citizens should have access to basic telecommunication services. The parties point out that the federal government recently reduced universal service funding and shifted its focus to broadband and that, while universal service funding is meant to ensure that rates in rural areas are not significantly higher than in urban areas, Texas has seen urban area rates that are higher than rural rates. The parties assert that Texas should establish a needs-based test for its universal service fund in order to best serve its intended purpose. C.S.S.B. 583 seeks to establish this needs-based test, among other related provisions.
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RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the Public Utility Commission of Texas in SECTIONS 1, 3, and 7 of this bill.
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ANALYSIS
C.S.S.B. 583 amends the Utilities Code, in a statutory provision setting out eligibility criteria requirements for a telecommunications provider to receive distributions from the universal service fund, to revise these requirements to specify that an eligible telecommunications provider offers service to each customer and renders continuous and adequate service within an exchange in the company's certificated area for which the incumbent local exchange company receives support under the Texas high cost universal service plan or the small and rural incumbent local exchange company universal service plan.
C.S.S.B. 583 provides that for an incumbent local exchange company or cooperative that served greater than 31,000 access lines in Texas on September 1, 2013, or a company or cooperative that is a successor to such a company or cooperative, the support that the company or cooperative is eligible to receive on December 31, 2016, under the Texas high cost universal service plan established under the universal service fund is, on certain specified dates, reduced to certain specified percentages of the level of support the company or cooperative is eligible to receive on December 31, 2016.
C.S.S.B. 583 authorizes such an incumbent local exchange company or cooperative to petition the Public Utility Commission of Texas (PUC) to initiate a contested case proceeding as necessary to determine the eligibility of the company or cooperative to receive support under the Texas high cost universal service plan after the PUC has adopted rules relating to the standards and criteria for an incumbent local exchange company or cooperative to demonstrate that the company or cooperative has a financial need for continued support for residential and business lines. The bill prohibits a company or cooperative from filing more than one such petition. The bill requires the PUC, on receipt of a petition, to initiate a contested case proceeding to determine the eligibility of the company or cooperative to receive such continued support. The bill requires the company or cooperative, to be eligible to receive support for service in an exchange, to demonstrate that it has a financial need for such continued support and requires the PUC to issue a final order on the proceeding not later than the 330th day after the date the petition is filed. The bill entitles the company or cooperative that filed the petition to receive the total amount of support the company or cooperative was eligible to receive on the date the company or cooperative filed the petition until the PUC issues a final order on the proceeding. The bill excludes a company or cooperative that files a petition from being subject to the reduced support timeline after the PUC issues a final order on the proceeding. The bill requires the PUC to set the amount of support in the same proceeding if the PUC determines at the proceeding that a company or cooperative has demonstrated financial need for such continued support. The bill caps the amount of support the PUC is authorized to set at certain specified percentages of the amount of support that the company or cooperative will be eligible to receive on December 31, 2016, depending on the date the petition is filed.
C.S.S.B. 583 provides that for an incumbent local exchange company that is an electing company under statutory provisions relating to incentive regulation or the infrastructure plan or a cooperative that served greater than 31,000 access lines in Texas on September 1, 2013, or a company or cooperative that is a successor to such a company or cooperative, is eligible to receive on December 31, 2017, under a plan established under the small and rural incumbent local exchange company universal service plan is, on certain specified dates, reduced to certain specified percentages of the level of support the company or cooperative is eligible to receive on December 31, 2017.
C.S.S.B. 583 authorizes such an incumbent local exchange company or cooperative to petition the PUC to initiate a contested case proceeding as necessary to determine the eligibility of the company or cooperative to receive support under the small and rural incumbent local exchange company universal service plan after the PUC has adopted rules relating to the standards and criteria for an incumbent local exchange company or cooperative to demonstrate that the company or cooperative has a financial need for continued support for residential and business lines. The bill prohibits a company or cooperative from filing more than one such petition. The bill requires the PUC, on receipt of a petition, to initiate a contested case proceeding to determine the eligibility of the company or cooperative to receive such continued support. The bill requires the company or cooperative, to be eligible to receive support for service in an exchange, to demonstrate that it has a financial need for such continued support. The bill requires the PUC to issue a final order on the proceeding not later than the 330th day after the date the petition is filed. The bill requires that the company or cooperative that filed the petition continue to receive the total amount of support the company or cooperative was eligible to receive on the date the company or cooperative filed the petition until the PUC issues a final order on the proceeding. The bill excludes a company or cooperative that files a petition from being subject to the reduced support timeline after the PUC issues a final order on the proceeding. The bill requires the PUC to set the amount of support in the same proceeding if the PUC determines at the proceeding that a company or cooperative has demonstrated financial need for such continued support. The bill caps the amount of support the PUC is authorized to set at certain specified percentages of the amount of support that the company or cooperative will be eligible to receive on December 31, 2017, depending on the date the petition is filed.
C.S.S.B. 583 requires the PUC by rule to establish the standards and criteria for an incumbent local exchange company or cooperative to demonstrate that the company or cooperative has a financial need for continued support for residential and business lines under the Texas high cost universal service plan or the small and rural incumbent local exchange company universal service plan. The bill provides that the bill's provisions relating to the petition process do not authorize the PUC to initiate a contested case hearing concerning a local exchange company that has elected to participate in a total support reduction plan that requires the company to forego funding under the Texas high cost universal service plan or the small and rural incumbent local exchange company universal service plan after January 1, 2017, and does not affect any obligation of a local exchange company subject to such a total support reduction plan.
C.S.S.B. 583 provides that the bill's provisions relating to support reduction and the petition process do not apply to an incumbent local exchange company that elects, not later than March 1, 2014, to eliminate, not later than September 1, 2018, the support it receives under the Texas high cost universal service plan or the small and rural incumbent local exchange company universal service plan. The bill clarifies that nothing in statutory provisions relating to telecommunications assistance and the universal service fund relieves any party of an obligation entered into in the PUC's Docket No. 40521 or is intended to affect the rate rebalancing proceeding in the PUC's Docket No. 41097.
C.S.S.B. 583 adds a temporary provision, set to expire January 2, 2020, to specify that the PUC has no authority, except as provided by the bill's provisions relating to support reduction, to reduce support provided to an incumbent local exchange company that is an electing company under statutory provisions relating to incentive regulation or the infrastructure plan or is a cooperative that served greater than 31,000 access lines in Texas on September 1, 2013, under a plan established under the Texas high cost universal service plan before January 1, 2019, or under a plan established under the small and rural incumbent local exchange company universal service plan before January 1, 2020.
C.S.S.B. 583 prohibits a plan established under the Texas high cost universal service plan or the small and rural incumbent local exchange company universal service plan from providing support to any other telecommunications providers for services in that exchange if an incumbent local exchange company or cooperative is ineligible for support for services in an exchange, except that an eligible telecommunications provider that is receiving support under the Texas high cost universal service plan in that exchange is required to continue to receive such support for a 24-month period following the date the incumbent local exchange provider or cooperative ceases receiving support in that exchange. The bill requires that the support received by the eligible telecommunications provider during the 24-month period be at the same monthly per line support level in effect for that exchange as of the date the incumbent local exchange provider or cooperative ceases receiving funding in that exchange. The bill entitles the telecommunications provider, if the eligible telecommunications provider receiving continued support is a cooperative or an affiliate thereof, to continued support through December 31, 2017, at the same monthly per-line support amount as the provider is receiving as of the date the support ceases for that exchange for the incumbent local exchange company or cooperative and provides that such authorized continued support ceases December 31, 2017.
C.S.S.B. 583 requires a telecommunications provider to file with the PUC the provider's annual earnings report if the provider is not a local exchange company subject to a total support reduction plan or that has made an election, as specified by the bill, to eliminate support it receives under the Texas high cost universal service plan or the small and rural incumbent local exchange company universal service plan, serves greater than 31,000 access lines, and receives support under a plan established under the universal service fund. The bill makes such a report confidential and provides that it is not subject to disclosure under state public information law.
C.S.S.B. 583 requires the PUC to adopt rules to expand the universal service fund for each local exchange company and each cooperative that serves 31,000 or fewer access lines and that on June 1, 2013, is not an electing company under statutory provisions relating to incentive regulation or the infrastructure plan. The bill prohibits the PUC from distributing support after December 31, 2013, including any support granted before that date, to a local exchange company or cooperative that serves greater than 31,000 access lines or that is an electing company under statutory provisions relating to incentive regulation or the infrastructure plan on June 1, 2013.
C.S.S.B. 583 removes a provision establishing that a revenue requirement showing is not required for a disbursement from the universal service fund.
C.S.S.B. 583 revises provisions authorizing the PUC to revise monthly support amounts to be made available from the small and rural incumbent local exchange company universal service plan to specify that the PUC may make such a revision by any mechanism, including support reductions resulting from rate rebalancing approved by the PUC, instead of making a revision by revising the monthly per line support amounts. The bill entitles a company that receives frozen monthly support amounts as prescribed by a final order issued by the PUC in the PUC's Docket No. 39643 to continue to receive that monthly support until the support is revised and removes a provision relating to the requirement that the PUC disburse funds to a small or rural incumbent local exchange company on written request. The bill requires the PUC to establish monthly support amounts not later than the 60th day after the date the PUC determines the company is eligible and removes provisions relating to requiring the PUC to approve requests after administrative review. The bill revises the formula for calculating the annualized support amount received by a small or rural local exchange company that is not receiving frozen support amounts. The bill provides for the expiration of certain specified provisions related to the small and rural incumbent local exchange company universal service plan and any monthly support amount approved under those provisions on September 1, 2017, rather than September 1, 2013.
C.S.S.B. 583 requires the PUC, not later than December 1, 2014, to adopt rules relating to standards and criteria for an incumbent local exchange company or cooperative to demonstrate that the company or cooperative has a financial need for continued support for residential and business lines under a plan established under the Texas high cost universal service plan or the small and rural incumbent local exchange company universal service plan. The bill requires the PUC to initiate the rulemaking proceeding not later than January 1, 2014.
C.S.S.B. 583 repeals a Utilities Code provision that authorizes the PUC to 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 under certain conditions.
C.S.S.B. 583 repeals Section 3, Chapter 535 (H.B. 2603), Acts of the 82nd Legislature, Regular Session, 2011, which amended Section 56.031, Utilities Code.
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EFFECTIVE DATE
June 1, 2013, or, if the bill does not receive the necessary vote, on the 91st day after the last day of the legislative session.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.S.B. 583 may differ from the engrossed version in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the engrossed and committee substitute versions of the bill.
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