84R10460 JXC-F
 
  By: King of Hemphill H.B. No. 2796
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the authority of certain telecommunications providers
  to commit to making infrastructure and network improvements in
  exchange for support from the universal service fund; adding
  provisions subject to a criminal penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle C, Title 2, Utilities Code, is amended
  by adding Chapter 53A to read as follows:
  CHAPTER 53A.  RURAL ADVANCED PLAN FOR INFRASTRUCTURE DEPLOYMENT
         Sec. 53A.001.  POLICY. In accordance with the policy stated
  in Section 51.001(g), considering the differences in the geographic
  and economic challenges posed by providing basic local
  telecommunications services and competitive and advanced
  telecommunications services to rural areas as opposed to urban
  areas, the benefits incident to those services, the status of
  universal service in the rural areas of this state, state and
  national initiatives for widespread deployment of broadband
  services, and the telecommunications services network and
  infrastructure advancements needed to make possible the future
  deployment of an electric smart grid in rural areas, it is the
  policy of this state to:
               (1)  upgrade and maintain the telecommunications
  services infrastructure in rural areas of this state in an effort
  to:
                     (A)  provide to each resident of this state a
  network capable of providing access to basic local
  telecommunications services and advanced telecommunications
  services so that a majority of residents in rural areas have the
  option to use those services; and
                     (B)  ensure that each resident has advanced
  telecommunications services to maintain the role of this state as a
  leader in commerce and education;
               (2)  ensure that the residents of rural areas have
  access to a wide range of advanced telecommunications services and
  other competitive benefits in a manner and at prices similar to the
  access available to residents in urban areas;
               (3)  provide the necessary infrastructure in rural
  areas to support access to an array of telecommunications, data,
  and video services, economic development and educational
  opportunities, and telemedicine applications;
               (4)  provide the required underlying primary network
  infrastructure to support major state and national energy policy
  initiatives established to create an electric smart grid that
  requires the support of an advanced telecommunications services
  network;
               (5)  provide incentives and flexibility similar to
  programs available in urban areas for small incumbent local
  exchange companies that serve rural areas to complete a basic local
  and advanced telecommunications services infrastructure that will
  support universal service; and 
               (6)  promote economic stabilization and growth in rural
  areas through basic local and advanced telecommunications services
  networks.
         Sec. 53A.002.  DEFINITIONS. In this chapter:
               (1)  "Advanced telecommunications services" includes
  high speed, switched, broadband telecommunications service that
  enables users to originate and receive high quality voice, data,
  graphics, and video telecommunications.
               (2)  "Community center" means an organized public or
  private entity that provides a location for specialized groups or
  the general public to meet for group activities involving
  community, educational, patriotic, political, public information,
  recreational, religious, or social functions. The term includes
  recreational centers, senior centers, youth centers, and publicly
  owned meeting facilities. The commission may by rule designate
  additional types of facilities or entities as community centers.
               (3)  "Educational institution" has the meaning
  assigned by Section 57.021.
               (4)  "Electing provider" means a small provider that
  elects to be subject to the infrastructure commitment and
  corresponding regulation under this chapter.
               (5)  "Emergency services facility" means a facility
  from which a person, including a firefighter, paramedic, emergency
  medical technician, police officer, sheriff, constable, or other
  state or federal law enforcement representative, responds to
  emergencies, including 9-1-1 calls.
               (6)  "Library" means:
                     (A)  a public library or regional library system,
  as defined by Section 441.122, Government Code;
                     (B)  a library operated by an institution of
  higher education or a school district; or
                     (C)  a library operated by a nonprofit
  corporation, as defined by Section 441.221, Government Code.
               (7)  "Private network services" means
  telecommunications services, including basic local
  telecommunications services, broadband services, customized
  services, and packaged network services.
               (8)  "Small provider" means:
                     (A)  an incumbent local exchange company or
  cooperative that on September 1, 2013, together with all local
  exchange companies affiliated with the company or cooperative on
  that date, served 31,000 or fewer access lines in this state; or
                     (B)  a company or cooperative that is a successor
  to a company or cooperative described by Subparagraph (A).
               (9)  "Smart grid" means infrastructure required to
  produce an advanced electric energy grid system under the state and
  national policy initiatives under the Energy Independence and
  Security Act of 2007 (42 U.S.C. Section 17001 et seq.).
               (10)  "Telemedicine center" means a facility that is
  equipped to transmit, by video, data, or voice service, medical
  information for the diagnosis or treatment of an illness or disease
  and that is:
                     (A)  owned or operated by a public or
  not-for-profit hospital; or
                     (B)  owned by a state-licensed health care
  practitioner and operated on a nonprofit basis.
         Sec. 53A.003.  CHAPTER CONTROLS. To the extent this chapter
  conflicts with Chapter 53, this chapter controls.
         Sec. 53A.004.  ELECTION. (a) A small provider that is not
  an electing company under Chapter 58 or 59 as of September 1, 2013,
  may elect to be subject to this chapter and make the corresponding
  infrastructure commitment under this chapter by notifying the
  commission in writing of the election.
         (b)  The notice must include the information required by
  Section 56.034 and a statement that the provider agrees to fulfill
  the infrastructure commitment prescribed by this chapter.
         (c)  A small provider may not revoke an election.
         Sec. 53A.005.  INFRASTRUCTURE COMMITMENT. (a) After the
  date the commission receives notice of the small provider's
  election under Section 53A.004, the electing provider shall:
               (1)  commit to make all reasonable efforts and
  investments in this state necessary to improve or upgrade network
  infrastructure in the manner described by this chapter;
               (2)  work to ensure that the electing provider's
  network backbone interoffice facilities are capable of supporting
  services that include, at a minimum, broadband speeds that are not
  less than the minimum speeds required by the Federal Communications
  Commission, voice services, video signal at a quality level
  comparable to a television broadcast signal, and other reasonably
  anticipated basic local or advanced telecommunications services
  that may become available to the public in the future; and
               (3)  work to ensure that all new or upgraded local loops
  that are the subject of an equitable request for service are capable
  of supporting basic local and advanced telecommunications
  services, including broadband service at a speed that is not less
  than the minimum broadband speed required by the Federal
  Communications Commission.
         (b)  To meet the requirements of this chapter, an electing
  provider may use any technology capable of achieving the required
  level of service capabilities.  This includes both new construction
  and upgrades to existing facilities.
         Sec. 53A.006.  EQUITABLE REQUESTS FOR SERVICE.  (a)  For the
  purposes of this chapter, a request for service is considered an
  equitable request for service only if provision of the requested
  service by the electing provider receiving the request is
  technologically and economically feasible, including the provision
  of network extensions or upgrades necessary to support any services
  the requesting entity is receiving at the time the request is made
  and other reasonably anticipated basic local or advanced
  telecommunications services that may become available to the public
  in the future.
         (b)  An electing provider shall determine whether a request
  for service is an equitable request. If the electing provider
  determines that the request is not an equitable request, the
  electing provider shall provide written notice of that
  determination to the requesting person. The requesting person may
  appeal to the commission a determination that a request for service
  is not an equitable request.
         (c)  An electing provider may deny a request that is not an
  equitable request.  An infrastructure commitment associated with a
  denied request is waived.
         (d)  If the electing provider or the commission determines
  that a request for service is an equitable request, the electing
  provider shall, regardless of technology used, work to ensure that
  the provider meets the commitments prescribed by Section 53A.005.
         Sec. 53A.007.  PRIVATE NETWORK SERVICES FOR CERTAIN
  ENTITIES. (a) An electing provider shall, after receiving an
  equitable request for service under Section 53A.006, provide
  private network services to:
               (1)  a community center;
               (2)  an educational institution;
               (3)  a library;
               (4)  a public or not-for-profit emergency services
  facility;
               (5)  a telemedicine center; or
               (6)  a legally constituted consortium of entities
  listed in this subsection.
         (b)  The electing provider shall provide the private network
  services for the private and sole use of the receiving entity or
  entities.  The provider may provide the services jointly with a
  facility that is used to provide another service to another
  customer.
         (c)  The entities described by Subsection (a) are a special
  class of customers for the purposes of the private network for
  distance learning, telemedicine, and information-sharing uses.
         (d)  An electing provider may provide a private network
  service under a customer-specific contract.
         (e)  The entities described by Subsection (a) warrant
  preferred rate treatment.  An electing provider shall provide
  private network services to those entities at a reduced rate equal
  to 65 percent of the amount owed under the customer-specific
  contract or under the otherwise applicable tariffed rate after
  applicable federal discounts are applied.
         (f)  On request of an electing provider, the commission shall
  provide reimbursement through the universal service fund, in
  addition to monthly support received under Section 56.034(d)(1) or
  (2), for reduced rates for private network services for entities
  described by Subsection (a).  The amount of reimbursement shall be
  equal to the difference between the electing provider's
  customer-specific contract or otherwise applicable tariffed rate
  for that service, and the reduced rate offered for that service
  under this chapter.
         Sec. 53A.008.  WAIVER OF INFRASTRUCTURE COMMITMENT
  REQUIREMENTS. (a) On the request of an electing provider, the
  commission may waive an infrastructure commitment requirement
  under Section 53A.005 or 53A.009 or a requirement under an
  equitable request for service under Section 53A.006.
         (b)  The commission may grant a waiver in relation to an
  equitable request for service under Section 53A.006 if the electing
  provider demonstrates that the requested investment or service
  places an undue burden on the universal service fund or the electing
  provider.
         (c)  Before granting a waiver under Subsection (b), the
  commission must consider the public benefits that would result from
  the investment or service, the willingness and ability of the
  requestor to pay a reasonable aid to construction charge, and the
  allowance of additional universal service fund support to allow
  timely completion of the request.
         (d)  The commission shall review a waiver granted under
  Subsection (a) or (b) at least once every three years if the
  corresponding requirement or the corresponding equitable request
  for service remains pending.  The commission may not extend a waiver
  until the commission reviews the factors listed in Subsection (c),
  the technical ability of the provider to meet the waived
  requirement, and the effect of extending the waiver on the
  universal service fund.
         Sec. 53A.009.  PLAN.  (a)  An electing provider shall develop
  and implement a five-year infrastructure investment plan to
  maintain and upgrade existing network facilities to ensure
  connectivity capable of meeting the standards prescribed by this
  chapter.
         (b)  The plan must include a description of the proposed
  improvements or upgrades to the electing provider's network
  throughout its service area that will help the provider meet
  infrastructure commitments and customer needs.
         (c)  An electing provider who is subject to a requirement
  under federal law to file a five-year plan is not required to create
  an additional plan under this section.
         Sec. 53A.010.  PROGRESS AND ACCOUNTABILITY REPORT. (a) An
  electing provider shall file annually with the commission a report
  on the provider's progress toward fulfilling the provider's
  infrastructure commitment.
         (b)  The report must include:
               (1)  the plan described by Section 53A.009 or the
  provider's federally prescribed five-year plan;
               (2)  a description of the provider's progress on
  implementing the plan, how the provider is using universal service
  support funds to improve service quality, coverage, or capacity,
  and an explanation detailing why improvements or targets for the
  previous calendar year have not been met, including adjustments for
  evolving standards;
               (3)  a summary of financial data for the previous
  calendar year that includes total company data, including:
                     (A)  plant-specific operations expenses;
                     (B)  plant non-specific operations expenses;
                     (C)  customer operations expenses;
                     (D)  corporate operations expenses;
                     (E)  depreciation and amortization expenses;
                     (F)  other operating expenses;
                     (G)  total telecom plant in service;
                     (H)  total property held for future use; and
                     (I)  total telecom plant under construction; and
               (4)  average network capacity and speed capabilities
  available to customers.
         (c)  A report filed under this section is confidential and
  not subject to disclosure under Chapter 552, Government Code.
         (d)  The commission shall monitor the progress of each
  electing provider through the reports submitted under this section.
         Sec. 53A.011.  UNIVERSAL SERVICE FUND RECOVERY. (a)  An
  electing provider is eligible to receive support from the universal
  service fund as provided by this chapter and Section 56.034.
         (b)  This chapter does not affect the eligibility of an
  electing provider to receive support under Section 56.025.
         SECTION 2.  Section 56.021, Utilities Code, is 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 under two plans:
                     (A)  the Texas High Cost Universal Service Plan
  (16 T.A.C. Section 26.403); and
                     (B)  the Small and Rural Incumbent Local Exchange
  Company Universal Service Plan (16 T.A.C. Section 26.404);
               (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 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;
  [and]
               (9)  finance the program established under Subchapter
  H; and
               (10)  assist telecommunications providers that are
  small and rural local exchange companies in providing basic local
  and advanced telecommunications services in high cost rural areas
  through fulfilling infrastructure commitments under Chapter 53A,
  as provided by Section 56.034.
         SECTION 3.  Subchapter B, Chapter 56, Utilities Code, is
  amended by adding Section 56.034 to read as follows:
         Sec. 56.034.  SUPPORT FOR RURAL ADVANCED PLAN FOR
  INFRASTRUCTURE DEPLOYMENT. (a) Support for the Rural Advanced
  Plan for Infrastructure Deployment is available to
  telecommunications providers who are electing providers under
  Chapter 53A.
         (b)  Not later than January 1, 2017, the commission shall
  implement a mechanism for electing providers to transition support
  from the Small and Rural Incumbent Local Exchange Company Universal
  Service Plan to the Rural Advanced Plan for Infrastructure
  Deployment. Until the mechanism is in place, an electing
  provider's support level may not be decreased from the level the
  provider receives on the date the commission receives notice under
  Section 53A.004 of the provider's election.
         (c)  When a provider notifies the commission that it elects
  to be subject to Chapter 53A, the provider shall request that the
  commission determine and disburse support to the provider under
  Subsection (d)(1) or (d)(2).
         (d)  An electing provider may request that the commission
  disburse funds to the provider in fixed monthly amounts based on:
               (1)  the company's annualized amount of recovery from
  the universal service fund for the fiscal year ending on August 31,
  2017, but only if the commission receives notice under Section
  53A.004 of the provider's election on or before September 1, 2017;
  or
               (2)  an annualized support amount determined to be
  sufficient, based on the Federal Communications Commission cost
  study and independently audited financials of the provider for the
  most recently ended fiscal year and when considered with other
  revenues, to permit the company the opportunity to earn a
  reasonable return in accordance with Section 53.051.
         (e)  The commission shall determine the initial support
  level not later than the 60th day after the date the commission
  receives the notice under Section 53A.004.
         (f)  An electing provider who requests to have the provider's
  initial support level determined and disbursed under Subsection
  (d)(1) may, not earlier than the first anniversary of the date of
  the determination of initial support level, make a one-time request
  to have the provider's fixed monthly support determined and
  disbursed under Subsection (d)(2). Not later than the 60th day
  after the date the commission receives a request under this
  subsection, the commission shall recalculate the amount of the
  electing provider's support as provided by Subsection (d)(2) and
  the electing provider is considered to have made a request under
  Subsection (d)(2) for the purposes of all future adjustments.  This
  subsection does not limit a provider's ability to make a request
  under Subsection (g).
         (g)  Not earlier than the first anniversary of the date of
  the determination of an initial support level the electing provider
  will receive under Subsection (d), or after an election under
  Subsection (f), the commission may, only for good cause and on its
  own motion, or shall, on the written request of the provider,
  initiate a proceeding to recalculate the annual support amount to
  be used as the basis for the fixed monthly support amounts.  The
  commission shall base the recalculation under this subsection on an
  annualized support amount determined to be sufficient, when
  considered with other revenues, to permit the company the
  opportunity to earn a reasonable return in accordance with Section
  53.051.  Except for good cause, the commission may not initiate a
  proceeding to adjust a provider's support under this subsection
  more frequently than once every three years.
         (h)  The commission shall adjust support disbursed under
  Subsection (d)(2) automatically every three years using the
  calculation prescribed by Subsection (d)(2).  An adjustment
  proceeding under this subsection must be completed in not more than
  60 days.
         SECTION 4.  This Act takes effect September 1, 2015.