76R16761 E                          
         By Sibley, et al.                                      S.B. No. 560
         Substitute the following for S.B. No. 560:
         By Wolens                                          C.S.S.B. No. 560
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the regulation of telecommunications utilities by the
 1-3     Public Utility Commission of Texas and the provision of
 1-4     telecommunications services.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Section 12.005, Utilities Code, is amended to
 1-7     read as follows:
 1-8           Sec. 12.005.  APPLICATION OF SUNSET ACT.  The Public Utility
 1-9     Commission of Texas is subject to Chapter 325, Government Code
1-10     (Texas Sunset Act).  Unless continued in existence as provided by
1-11     that chapter, the commission is abolished and this title expires
1-12     September 1, 2005 [2001].
1-13           SECTION 2.  Section 13.002, Utilities Code, is amended to
1-14     read as follows:
1-15           Sec. 13.002.  APPLICATION OF SUNSET ACT.  The Office of
1-16     Public Utility Counsel is subject to Chapter 325, Government Code
1-17     (Texas Sunset Act).  Unless continued in existence as provided by
1-18     that chapter, the office is abolished and this chapter expires
1-19     September 1, 2005 [2001].
1-20           SECTION 3.  Section 15.024(c), Utilities Code, is amended to
1-21     read as follows:
1-22           (c)  A penalty may not be assessed under this section if the
1-23     person against whom the penalty may be assessed remedies the
 2-1     violation before the 31st day after the date the person receives
 2-2     the notice under Subsection (b).  A person who claims to have
 2-3     remedied an alleged violation has the burden of proving to the
 2-4     commission that the alleged violation was remedied and was
 2-5     accidental or inadvertent.  This subsection does not apply to a
 2-6     violation of Chapter 55 or 64.
 2-7           SECTION 4.  Section 51.001, Utilities Code, is amended  by
 2-8     amending Subsection (a) and adding Subsection (g) to read as
 2-9     follows:
2-10           (a)  Significant changes have occurred in telecommunications
2-11     since the law from which this title is derived was originally
2-12     adopted.  To encourage and accelerate the development of a
2-13     competitive and advanced telecommunications environment and
2-14     infrastructure, new rules, policies, and principles must be
2-15     formulated and applied to protect the public interest.  Changes in
2-16     technology and market structure have increased the need for minimum
2-17     standards of service quality, customer service, and fair business
2-18     practices to ensure high-quality service to customers and a healthy
2-19     marketplace where competition is permitted by law.  It is the
2-20     purpose of this subtitle to grant the commission authority to make
2-21     and enforce rules necessary to protect customers of
2-22     telecommunications services consistent with the public interest.
2-23           (g)  It is the policy of this state to ensure that customers
2-24     in all regions of this state, including low-income customers and
2-25     customers in rural and high cost areas, have access to
2-26     telecommunications and information services, including
2-27     interexchange services, cable services, wireless services, and
 3-1     advanced telecommunications and information services, that are
 3-2     reasonably comparable to those services provided in urban areas and
 3-3     that are available at prices that are reasonably comparable to
 3-4     prices charged for similar services in urban areas.  Not later than
 3-5     November 1, 1999, the commission shall begin a review and
 3-6     evaluation of the availability and the pricing of
 3-7     telecommunications and information services, including
 3-8     interexchange services, cable services, wireless services, and
 3-9     advanced telecommunications and information services, in rural and
3-10     high cost areas, as well as the convergence of telecommunications
3-11     services.  The commission shall file a report with the legislature
3-12     not later than January 1, 2001.  The report must include the
3-13     commission's recommendations on the issues reviewed and evaluated.
3-14           SECTION 5.  Sections 51.002(6) and (10), Utilities Code, are
3-15     amended to read as follows:
3-16                 (6)  "Long run incremental cost" has the meaning
3-17     assigned by 16 T.A.C. Section 23.91 or its successor.
3-18                 (10)  "Telecommunications provider":
3-19                       (A)  means:
3-20                             (i)  a certificated telecommunications
3-21     utility;
3-22                             (ii)  a shared tenant service provider;
3-23                             (iii)  a nondominant carrier of
3-24     telecommunications services;
3-25                             (iv)  a provider of commercial mobile
3-26     service as defined by Section 332(d), Communications Act of 1934
3-27     (47 U.S.C.  Section 151 et seq.), Federal Communications Commission
 4-1     rules, and the Omnibus Budget Reconciliation Act of 1993 (Public
 4-2     Law 103-66), except that the term does not include these entities
 4-3     for the purposes of Chapter 55 or 64;
 4-4                             (v)  a telecommunications entity that
 4-5     provides central office based PBX-type sharing or resale
 4-6     arrangements;
 4-7                             (vi)  an interexchange telecommunications
 4-8     carrier;
 4-9                             (vii)  a specialized common carrier;
4-10                             (viii)  a reseller of communications;
4-11                             (ix)  a provider of operator services;
4-12                             (x)  a provider of customer-owned pay
4-13     telephone service; or
4-14                             (xi)  another person or entity determined
4-15     by the commission to provide telecommunications services to
4-16     customers in this state; and
4-17                       (B)  does not mean:
4-18                             (i)  a provider of enhanced or information
4-19     services, or another user of telecommunications services, who does
4-20     not also provide telecommunications services; or
4-21                             (ii)  a state agency or state institution
4-22     of higher education, or a service provided by a state agency or
4-23     state institution of higher education.
4-24           SECTION 6.  Section 51.004, Utilities Code, is amended to
4-25     read as follows:
4-26           Sec. 51.004.  PRICING FLEXIBILITY.  (a)  A discount or other
4-27     form of pricing flexibility may not be preferential, prejudicial,
 5-1     [or] discriminatory, predatory, or anticompetitive.
 5-2           (b)  This title does not prohibit a volume discount or other
 5-3     discount based on a reasonable business purpose.  A price that is
 5-4     set at or above the long run incremental cost of a service is
 5-5     presumed to comply with this section.
 5-6           SECTION 7.  The section heading to Section 52.058, Utilities
 5-7     Code, is amended to read as follows:
 5-8           Sec. 52.058.  GENERAL PROVISIONS RELATING TO NEW OR
 5-9     EXPERIMENTAL SERVICES OR PROMOTIONAL RATES.
5-10           SECTION 8.  Subchapter B, Chapter 52, Utilities Code, is
5-11     amended by adding Sections 52.0583, 52.0584, and 52.0585 to read as
5-12     follows:
5-13           Sec. 52.0583.  NEW SERVICES.  (a) An incumbent local exchange
5-14     company may introduce a new service 10 days after providing an
5-15     informational notice to the commission, to the office, and to any
5-16     person who holds a certificate of operating authority in the
5-17     incumbent local exchange company's certificated area or areas or
5-18     who has an effective interconnection agreement with the incumbent
5-19     local exchange company.
5-20           (b)  An incumbent local exchange company shall price each new
5-21     service at or above the service's long run incremental cost.  The
5-22     commission shall allow a company serving fewer than one million
5-23     access lines in this state to establish a service's long run
5-24     incremental cost by adopting, at that company's option, the cost
5-25     studies of a larger company for that service that have been
5-26     accepted by the commission.
5-27           (c)  An affected person, the office on behalf of residential
 6-1     or small commercial customers, or the commission may file a
 6-2     complaint at the commission challenging whether the pricing by an
 6-3     incumbent local exchange company of a new service is in compliance
 6-4     with Subsection (b).
 6-5           (d)  If a complaint is filed under Subsection (c), the
 6-6     incumbent local exchange company has the burden of proving that the
 6-7     company set the price for the new service in accordance with the
 6-8     applicable provisions of this subchapter.  If the complaint is
 6-9     finally resolved in favor of the complainant, the company:
6-10                 (1)  shall, not later than the 10th day after the date
6-11     the complaint is finally resolved,  amend the price of the service
6-12     as necessary to comply with the final resolution; or
6-13                 (2)  may, at the company's option, discontinue the
6-14     service.
6-15           (e)  A company electing incentive regulation under Chapter 58
6-16     or 59 may introduce new services only in accordance with the
6-17     applicable provisions of Chapter 58 or 59.
6-18           Sec. 52.0584.  PRICING AND PACKAGING FLEXIBILITY; CUSTOMER
6-19     PROMOTIONAL OFFERINGS.  (a) Notwithstanding any other provision of
6-20     this title, an incumbent local exchange company may exercise
6-21     pricing flexibility in accordance with this section, including the
6-22     packaging of any regulated service such as basic local
6-23     telecommunications service with any other regulated or unregulated
6-24     service or any service of an affiliate.   The company may exercise
6-25     pricing flexibility 10 days after providing an informational notice
6-26     to the commission, to the office, and to any person who holds a
6-27     certificate of operating authority in the incumbent local exchange
 7-1     company's certificated area or areas or who has an effective
 7-2     interconnection agreement with the incumbent local exchange
 7-3     company.  Pricing flexibility includes all pricing arrangements
 7-4     included in the definition of "pricing flexibility" prescribed by
 7-5     Section 51.002 and includes packaging of any regulated service with
 7-6     any unregulated service or any service of an affiliate.
 7-7           (b)  An incumbent local exchange company, at the company's
 7-8     option, shall price each regulated service offered separately or as
 7-9     part of a package under Subsection (a) at either the service's
7-10     tariffed rate or at a rate not lower than the service's long run
7-11     incremental cost. The commission shall allow a company serving
7-12     fewer than one million access lines in this state to establish a
7-13     service's long run incremental cost by adopting, at that company's
7-14     option, the cost studies of a larger company for that service that
7-15     have been accepted by the commission.
7-16           (c)  An affected person, the office on behalf of residential
7-17     or small commercial customers, or the commission may file a
7-18     complaint alleging that an incumbent local exchange company has
7-19     priced a regulated service in a manner that does not meet the
7-20     pricing standards of this subchapter.  The complaint must be filed
7-21     before the 31st day after the date the company implements the rate.
7-22           (d)  A company electing incentive regulation under Chapter 58
7-23     or 59 may use pricing and packaging flexibility and introduce
7-24     customer promotional offerings only in accordance with the
7-25     applicable provisions of Chapter 58 or 59.
7-26           Sec. 52.0585.  CUSTOMER PROMOTIONAL OFFERINGS.  (a) An
7-27     incumbent local exchange company may offer a promotion for a
 8-1     regulated service for not more than 90 days in any 12-month period.
 8-2           (b)  The company shall file with the commission a promotional
 8-3     offering that consists of:
 8-4                 (1)  waiver of installation charges or service order
 8-5     charges, or both, for not more than 90 days in a 12-month period;
 8-6     or
 8-7                 (2)  a temporary discount of not more than 25 percent
 8-8     from the tariffed rate for not more than 60 days in a 12-month
 8-9     period.
8-10           (c)  An incumbent local exchange company is not required to
8-11     obtain commission approval to make a promotional offering described
8-12     by Subsection (b).
8-13           (d)  An incumbent local exchange company may offer a
8-14     promotion of any regulated service as part of a package of services
8-15     consisting of any regulated service with any other regulated or
8-16     unregulated service or any service of an affiliate.
8-17           SECTION 9.  Section 52.102, Utilities Code, as amended by
8-18     Section 18.04, S.B. No. 1368, Acts of the 76th Legislature, Regular
8-19     Session, 1999, is amended to read as follows:
8-20           Sec. 52.102.  LIMITED REGULATORY AUTHORITY.  (a)  Except as
8-21     otherwise provided by this subchapter, Subchapters D and K, Chapter
8-22     55, and Section 55.011, the commission has only the following
8-23     jurisdiction over a telecommunications utility subject to this
8-24     subchapter:
8-25                 (1)  to require registration under Section 52.103;
8-26                 (2)  to conduct an investigation under Section 52.104;
8-27                 (3)  to require the filing of reports as the commission
 9-1     periodically directs;
 9-2                 (4)  to require the maintenance of statewide average
 9-3     rates or prices of telecommunications service;
 9-4                 (5)  to require a telecommunications utility that had
 9-5     more than six percent of the total intrastate access minutes of use
 9-6     as measured for the most recent 12-month period to pass switched
 9-7     access rate reductions under this title to customers as required by
 9-8     Section 52.112;
 9-9                 (6)  to require access to telecommunications service
9-10     under Section 52.105; and
9-11                 (7) [(6)]  to require the quality of telecommunications
9-12     service provided to be adequate under Section 52.106.
9-13           (b)  The authority provided by Subsection (a)(5) expires on
9-14     the date on which Section 52.112 expires.
9-15           SECTION 10.  Section 52.108, Utilities Code, is amended to
9-16     read as follows:
9-17           Sec. 52.108.  OTHER PROHIBITED PRACTICES.  The commission may
9-18     enter any order necessary to protect the public interest if the
9-19     commission finds after notice and hearing that a telecommunications
9-20     utility has:
9-21                 (1)  failed to maintain statewide average rates;
9-22                 (2)  abandoned interexchange message telecommunications
9-23     service to a local exchange area in a manner contrary to the public
9-24     interest; [or]
9-25                 (3)  engaged in a pattern of preferential or
9-26     discriminatory activities prohibited by Section 53.003, 55.005, or
9-27     55.006; or
 10-1                (4)  failed to pass switched access rate reductions to
 10-2    customers under Chapter 56 or other law, as required by Section
 10-3    52.112.
 10-4          SECTION 11.  Section 52.110(a), Utilities Code, is amended to
 10-5    read as follows:
 10-6          (a)  In a proceeding before the commission in which it is
 10-7    alleged that a telecommunications utility engaged in conduct in
 10-8    violation of Section 52.107, 52.108, [or] 52.109, or 52.112, the
 10-9    burden of proof is on:
10-10                (1)  a telecommunications utility complaining of
10-11    conduct committed against it in violation of this subchapter; or
10-12                (2)  except as provided by Subsection (b), the
10-13    responding telecommunications utility if the proceedings are:
10-14                      (A)  brought by a customer or customer
10-15    representative who is not a telecommunications utility; or
10-16                      (B)  initiated by the commission.
10-17          SECTION 12.  Subchapter C, Chapter 52, Utilities Code, is
10-18    amended by adding Section 52.112 to read as follows:
10-19          Sec. 52.112.  REDUCTION PASS-THROUGH REQUIRED.  (a)  Each
10-20    telecommunications utility that had more than six percent of the
10-21    total intrastate access minutes of use as measured for the most
10-22    recent 12-month period shall pass through to customers switched
10-23    access rate reductions under this title.  The residential customer
10-24    class shall receive not less than a proportionate share of the
10-25    reductions.
10-26          (b)  Within six months following each reduction in intrastate
10-27    switched access charges under this title, each telecommunications
 11-1    utility subject to this section shall file a report with the
 11-2    commission demonstrating its compliance on an average revenue per
 11-3    minute basis with Subsection (a).
 11-4          (c)  This section expires on the second anniversary of the
 11-5    date incumbent local exchange companies doing business in the state
 11-6    are no longer prohibited by federal law from offering interLATA and
 11-7    interstate long distance service.
 11-8          SECTION 13.  Subchapter D, Chapter 52, Utilities Code, is
 11-9    amended by adding Section 52.155 to read as follows:
11-10          Sec. 52.155.  PROHIBITION OF EXCESSIVE ACCESS CHARGES.
11-11    (a)  A telecommunications utility that holds a certificate of
11-12    operating authority or a service provider certificate of operating
11-13    authority may not charge a higher amount for originating or
11-14    terminating intrastate switched access than the prevailing rates
11-15    charged by the holder of the certificate of convenience and
11-16    necessity in whose territory the call originated or terminated
11-17    unless:
11-18                (1)  the commission specifically approves the higher
11-19    rate; or
11-20                (2)  subject to commission review, the
11-21    telecommunications utility establishes statewide average composite
11-22    originating and terminating intrastate switched access rates based
11-23    on a reasonable approximation of traffic originating and
11-24    terminating between all holders of certificates of convenience and
11-25    necessity in this state.
11-26          (b)  Notwithstanding any other provision of this title, the
11-27    commission has all jurisdiction necessary to enforce this section.
 12-1          SECTION 14.  Section 54.007, Utilities Code, is amended to
 12-2    read as follows:
 12-3          Sec. 54.007.  FLEXIBILITY PLAN.  (a)  After the commission
 12-4    grants an application for a certificate of convenience and
 12-5    necessity, a certificate of operating authority, or a service
 12-6    provider certificate of operating authority or determines that a
 12-7    certificate is not needed for the applicant to provide the relevant
 12-8    services, the commission shall conduct appropriate proceedings to
 12-9    establish a transitional flexibility plan for the incumbent local
12-10    exchange company in the same area or areas as the new certificate
12-11    holder.
12-12          (b)  A basic local telecommunications service price of the
12-13    incumbent local exchange company may not be increased before the
12-14    fourth anniversary of the date the certificate is granted to the
12-15    applicant except that the price may be increased[:]
12-16                [(1)]  as provided by this title[;]
12-17                [(2)  when the new certificate holder has completed the
12-18    build-out plan required by Subchapter C, if applicable; or]
12-19                [(3)  when a competitor for basic local
12-20    telecommunications service provides the service in an area in which
12-21    the build-out requirements have been eliminated].
12-22          SECTION 15.  Subchapter C, Chapter 54, Utilities Code, is
12-23    amended to read as follows:
12-24             SUBCHAPTER C.  CERTIFICATE OF OPERATING AUTHORITY
12-25          Sec. 54.101.  DEFINITION.  In this subchapter, "certificate"
12-26    means a certificate of operating authority.
12-27          Sec. 54.102.  APPLICATION FOR CERTIFICATE.  (a)  A [In lieu
 13-1    of applying for a certificate of convenience and necessity, a]
 13-2    person may apply for a certificate of operating authority.
 13-3          (b)  [An applicant for a facilities-based certificate of
 13-4    operating authority must include with the application a proposed
 13-5    build-out plan in compliance with this subchapter that demonstrates
 13-6    how the applicant will, over a six-year period, deploy facilities
 13-7    throughout the geographic area of the certificated service area.]
 13-8          [(c)]  The applicant must file with the application a sworn
 13-9    statement that the applicant has applied for each municipal
13-10    consent, franchise, or permit required for the type of services and
13-11    facilities for which the applicant has applied.
13-12          (c)  An affiliate of a person holding a certificate of
13-13    convenience and necessity may hold a certificate of operating
13-14    authority if the holder of the certificate of convenience and
13-15    necessity is in compliance with federal law and Federal
13-16    Communications Commission rules governing affiliates and structural
13-17    separation.  An affiliate of a person holding a certificate of
13-18    convenience and necessity may not directly or indirectly sell to a
13-19    non-affiliate any regulated product or service purchased from the
13-20    person holding a certificate of convenience and necessity at any
13-21    rate or price less than the price paid to the person holding a
13-22    certificate of convenience and necessity.
13-23          (d)  A person may hold a certificate for all or any portion
13-24    of a service area for which one or more affiliates of the person
13-25    holds a certificate of operating authority, a service provider
13-26    certificate of operating authority, or a certificate of convenience
13-27    and necessity.
 14-1          (e)  An affiliate of a company that holds a certificate of
 14-2    convenience and necessity and that serves more than five million
 14-3    access lines in this state may hold a certificate of operating
 14-4    authority or service provider certificate of operating authority to
 14-5    provide service in an area of this state in which its affiliated
 14-6    company is the incumbent local exchange company.  However, the
 14-7    affiliate holding the certificate of operating authority or service
 14-8    provider certificate of operating authority may not provide in that
 14-9    area customer-specific contracts so long as the affiliated company
14-10    that is the incumbent local exchange company may not provide
14-11    customer-specific contracts under Section 58.003 in that area.
14-12    This subsection does not preclude an affiliate of a company holding
14-13    a certificate of convenience and necessity from holding a
14-14    certificate of operating authority in any area of this state to
14-15    provide advanced services as defined by rules or orders of the
14-16    Federal Communications Commission.
14-17          Sec. 54.103.  GRANT OR DENIAL OF CERTIFICATE.  (a)  The
14-18    commission must grant or deny a certificate not later than the 60th
14-19    day after the date the application for the certificate is filed.
14-20    The commission may extend the deadline on good cause shown.
14-21          (b)  The commission shall grant each certificate on a
14-22    nondiscriminatory basis after considering factors such as:
14-23                (1)  [the adequacy of the applicant's build-out plan;]
14-24                [(2)]  the technical and financial qualifications of
14-25    the applicant; and
14-26                (2) [(3)]  the applicant's ability to meet the
14-27    commission's quality of service requirements.
 15-1          (c)  In an exchange of an incumbent local exchange company
 15-2    that serves fewer than 31,000 access lines, in addition to the
 15-3    factors described by Subsection (b), the commission shall consider:
 15-4                (1)  the effect of granting the certificate on a public
 15-5    utility serving the area and on that utility's customers;
 15-6                (2)  the ability of that public utility to provide
 15-7    adequate service at reasonable rates;
 15-8                (3)  the effect of granting the certificate on the
 15-9    ability of that public utility to act as the provider of last
15-10    resort; and
15-11                (4)  the ability of the exchange, not the company, to
15-12    support more than one provider of service.
15-13          (d)  Except as provided by Subsections (e) and (f), the
15-14    commission may grant an application for a certificate only for an
15-15    area or areas that are contiguous and reasonably compact and cover
15-16    an area of at least 27 square miles.
15-17          (e)  In an exchange in a county that has a population of less
15-18    than 500,000 and that is served by an incumbent local exchange
15-19    company that has more than 31,000 access lines, an area covering
15-20    less than 27 square miles may be approved if the area is contiguous
15-21    and reasonably compact and has at least 20,000 access lines.
15-22          (f)  In an exchange of a company that serves fewer than
15-23    31,000 access lines in this state, the commission may grant an
15-24    application only for an area that has boundaries similar to the
15-25    boundaries of the serving central office that is served by the
15-26    incumbent local exchange company that holds the certificate of
15-27    convenience and necessity for the area.
 16-1          [Sec. 54.104.  BUILD-OUT PLAN REQUIREMENTS.  (a)  The
 16-2    build-out plan required by Section 54.102 must provide that, by the
 16-3    end of the:]
 16-4                [(1)  first year, 10 percent of the area to be served
 16-5    must be served with facilities that are not facilities of the
 16-6    incumbent local exchange company;]
 16-7                [(2)  third year, 50 percent of the area to be served
 16-8    must be served with facilities that are not facilities of the
 16-9    incumbent local exchange company; and]
16-10                [(3)  sixth year, 100 percent of the area to be served
16-11    must be served with facilities that are not facilities of the
16-12    incumbent local exchange company.]
16-13          [(b)  The build-out plan may permit the certificate holder to
16-14    serve not more than 40 percent of the certificate holder's service
16-15    area by reselling the incumbent local exchange company's
16-16    facilities.  The resale must be in accordance with:]
16-17                [(1)  Section 54.105; and]
16-18                [(2)  the resale tariff approved by the commission
16-19    under Subchapter C, Chapter 60.]
16-20          [(c)  The resale limitation applies to an incumbent local
16-21    exchange facility that a certificate holder resells in providing
16-22    local exchange telephone service, regardless of whether:]
16-23                [(1)  the certificate holder purchases the facility
16-24    directly from the incumbent local exchange company; or]
16-25                [(2)  an intermediary carrier purchases the facility
16-26    from the incumbent local exchange company and then provides the
16-27    facility to the certificate holder for resale.]
 17-1          [(d)  To meet the build-out requirement prescribed by this
 17-2    subchapter, a certificate holder:]
 17-3                [(1)  may not use commercial mobile service; and]
 17-4                [(2)  may use personal communication services (PCS) or
 17-5    other wireless technology licensed or allocated by the Federal
 17-6    Communications Commission after January 1, 1995.]
 17-7          [Sec. 54.105.  SIX-YEAR LIMITATION ON RESALE OF SERVICES.
 17-8    Before the sixth anniversary of the date a certificate is granted,
 17-9    the certificate holder may extend service by resale only:]
17-10                [(1)  in the area it is obligated to serve under the
17-11    approved build-out plan; and]
17-12                [(2)  to the distant premises of one of its
17-13    multi-premises customers beyond the approved build-out area but in
17-14    its certificated service area.]
17-15          Sec. 54.104 [54.106].  TIME OF SERVICE REQUIREMENTS.
17-16    (a)  The commission by rule may prescribe the period within which a
17-17    certificate holder must be able to serve customers.
17-18          (b)  Notwithstanding Subsection (a), a certificate holder
17-19    must serve a customer [in the build-out area] not later than the
17-20    30th day after the date the customer requests service.
17-21          [Sec. 54.107.  REQUIREMENTS RELATING TO CERTAIN FACILITIES.
17-22    As part of the build-out requirements, the commission may not
17-23    require a certificate holder to:]
17-24                [(1)  place a drop facility on each customer's
17-25    premises; or]
17-26                [(2)  activate a fiber optic facility in advance of a
17-27    customer request.]
 18-1          [Sec. 54.108.  BUILD-OUT PLAN COMPLIANCE.  (a)  A certificate
 18-2    holder shall file periodic reports with the commission
 18-3    demonstrating compliance with:]
 18-4                [(1)  the plan approved by the commission; and]
 18-5                [(2)  the resale limitation prescribed by Section
 18-6    54.104(b).]
 18-7          [(b)  The commission may administratively and temporarily
 18-8    waive compliance with the six-year build-out plan on a showing of
 18-9    good cause.]
18-10          [Sec. 54.109.  ELIMINATION OF BUILD-OUT REQUIREMENTS FOR
18-11    CERTAIN PROVIDERS.  (a)  The commission may waive the build-out
18-12    requirements of this subchapter for an additional applicant in a
18-13    particular area:]
18-14                [(1)  on or after the sixth anniversary of the date a
18-15    certificate is granted for that area; or]
18-16                [(2)  on or after the date a certificate holder
18-17    completes the holder's build-out plan in that area.]
18-18          [(b)  The build-out requirements of this subchapter do not
18-19    apply to a service area:]
18-20                [(1)  that is served by an incumbent local exchange
18-21    company that:]
18-22                      [(A)  has more than one million access lines; and]
18-23                      [(B)  on September 1, 1995, was subject to a
18-24    prohibition under federal law on the provision of interLATA
18-25    service; and]
18-26                [(2)  for which all prohibitions on the incumbent local
18-27    exchange company's provision of interLATA services are removed so
 19-1    the company can  offer interLATA service together with local and
 19-2    intraLATA toll service.]
 19-3          [Sec. 54.110.  HEARING ON BUILD-OUT AND RESALE REQUIREMENTS.
 19-4    (a)  The commission on application may conduct a hearing to
 19-5    determine:]
 19-6                [(1)  whether the build-out requirements of Sections
 19-7    54.102(b), 54.103(e) and (f), 54.104, 54.105, 54.106, and 54.107
 19-8    have created a barrier to the entry of facilities-based local
 19-9    exchange telephone service competition in an exchange in a county
19-10    that has a population of more than 500,000 and that is served by a
19-11    company that has more than 31,000 access lines; and]
19-12                [(2)  the effect of the resale provisions on the
19-13    development of competition, other than the development of
19-14    competition in the certificated areas of companies that serve fewer
19-15    than 31,000 access lines as provided by Section 54.156(a).]
19-16          [(b)  In making a determination under Subsection (a), the
19-17    commission shall consider:]
19-18                [(1)  this title's policy to encourage construction of
19-19    local exchange networks;]
19-20                [(2)  the number and type of competitors that have
19-21    sought to provide local exchange competition under the existing
19-22    rules prescribed by this title; and]
19-23                [(3)  whether adopting new build-out and resale rules
19-24    would make innovative and competitive local exchange telephone
19-25    services more likely to be provided.]
19-26          [(c)  The commission may change a requirement described by
19-27    Subsection (a)(1) or prescribed by Subchapter D if:]
 20-1                [(1)  the commission determines that the build-out
 20-2    requirements have created a barrier to facilities-based local
 20-3    exchange competition in an exchange described by Subsection (a)(1);
 20-4    and]
 20-5                [(2)  the changes will encourage additional
 20-6    facilities-based competition.]
 20-7          [(d)  Notwithstanding Subsection (c), the commission may not
 20-8    reduce an exchange size to below 12 square miles or increase the
 20-9    resale percentage prescribed by Section 54.104(b) to more than 50
20-10    percent.]
20-11          [(e)  A rule adopted under Subsection (c) may apply only to a
20-12    person who files an application for a certificate after the date
20-13    the rule is adopted.]
20-14          Sec. 54.105 [54.111].  PENALTY FOR VIOLATION OF TITLE.  If a
20-15    certificate holder fails to comply with a requirement of this
20-16    title, the commission may:
20-17                (1)  revoke the holder's certificate;
20-18                (2)  impose against the holder administrative penalties
20-19    under Subchapter B, Chapter 15; or
20-20                (3)  take another action under Subchapter B, Chapter
20-21    15.
20-22          SECTION 16.  Subchapter A, Chapter 55, Utilities Code, is
20-23    amended by adding Section 55.012 to read as follows:
20-24          Sec. 55.012.  TELECOMMUNICATIONS BILLING.  (a)  The
20-25    proliferation of charges for separate services, products,
20-26    surcharges, fees, and taxes on a bill for telecommunications
20-27    products or services has increased the complexity of those bills to
 21-1    such an extent that in some cases the bills have become difficult
 21-2    for customers to understand.
 21-3          (b)  A bill from a local exchange company for
 21-4    telecommunications products or services should be simplified into
 21-5    general categories to the extent that simplification is consistent
 21-6    with providing customers sufficient information about the charges
 21-7    included in the bill to understand the basis and source of the
 21-8    charges.
 21-9          (c)  To the extent permitted by law, a monthly bill from a
21-10    local exchange company for local exchange telephone service shall
21-11    include an aggregate charge for each of the following categories:
21-12                (1)  basic local service charges and fees,  which
21-13    includes carrier's charges for basic local telecommunications
21-14    service and related fees, assessments, and surcharges;
21-15                (2)  optional services; and
21-16                (3)  taxes, which includes any taxes applicable to the
21-17    charges described by Subdivisions (1) and (2).
21-18          SECTION 17.  Subchapter A, Chapter 55, Utilities Code, is
21-19    amended by adding Section 55.013 to read as follows:
21-20          Sec. 55.013.  LIMITATIONS ON DISCONTINUANCE OF BASIC LOCAL
21-21    TELECOMMUNICATIONS SERVICE.  (a)  A provider of basic local
21-22    telecommunications service may not discontinue that service because
21-23    of nonpayment by a residential customer of charges for long
21-24    distance service.  Payment shall first be allocated to basic local
21-25    telecommunications service.
21-26          (b)  For purposes of allocating payment in this section, if
21-27    the provider of basic local telecommunications service bundles its
 22-1    basic local telecommunications service with long distance service
 22-2    or any other service and provides a discount for the basic local
 22-3    telecommunications service because of that bundling, the rate of
 22-4    basic local telecommunications service shall be the rate the
 22-5    provider charges for stand-alone basic local telecommunications
 22-6    service.
 22-7          (c)  Notwithstanding Subsection (a), the commission shall
 22-8    adopt and implement rules, not later than January 1, 2000, to
 22-9    prevent customer abuse of the protections afforded by this section.
22-10    The rules must include:
22-11                (1)  provisions requiring a provider of basic local
22-12    telecommunications service to offer and implement, at the request
22-13    and expense of a long distance service provider, toll blocking
22-14    capability to limit a customer's ability to incur additional
22-15    charges for long distance services after nonpayment for long
22-16    distance services; and
22-17                (2)  provisions regarding fraudulent activity in
22-18    response to which a provider may discontinue a residential
22-19    customer's basic local telecommunications service.
22-20          (d)  Notwithstanding any other provision of this title, the
22-21    commission has all jurisdiction necessary to establish a maximum
22-22    price that an incumbent local exchange company may charge a long
22-23    distance service provider to initiate the toll blocking capability
22-24    required to be offered under the rules adopted under Subsection
22-25    (c).  The maximum price established under this subsection shall be
22-26    observed by all providers of basic local telecommunications service
22-27    in the incumbent local exchange company's certificated service
 23-1    area.  Notwithstanding Sections 52.102 and 52.152, the commission
 23-2    has all jurisdiction necessary to enforce this section.
 23-3          SECTION 18.  Subchapter A, Chapter 55, is amended by adding
 23-4    Section 55.014 to read as follows:
 23-5          Sec. 55.014.  PROVISION OF ADVANCED TELECOMMUNICATIONS
 23-6    SERVICES.  (a)  In this section, "advanced service" means any
 23-7    telecommunications service other than residential or business basic
 23-8    local exchange telephone service, caller identification service,
 23-9    and customer calling features.
23-10          (b)  This section applies to a company electing under Chapter
23-11    58 or a company that holds a certificate of operating authority or
23-12    service provider certificate of operating authority.
23-13          (c)  Notwithstanding any other provision of this title,
23-14    beginning September 1, 2001, a company to which this section
23-15    applies that provides advanced telecommunications services within
23-16    the company's urban service areas, shall, on a bona fide retail
23-17    request for those services,  provide in rural areas of this state
23-18    served by the company  advanced telecommunications services that
23-19    are reasonably comparable to the advanced services provided in
23-20    urban areas.  The company shall offer the advanced
23-21    telecommunications services:
23-22                (1)  at prices, terms, and conditions that are
23-23    reasonably comparable to the prices, terms, and conditions for
23-24    similar advanced services provided by the company in urban areas;
23-25    and
23-26                (2)  within 15 months after the bona fide request for
23-27    those advanced services.
 24-1          (d)  Notwithstanding any other provision of this title, a
 24-2    company to which this section applies shall, on a bona fide retail
 24-3    request for those services, offer caller identification service and
 24-4    custom calling features in rural areas served by the company.  The
 24-5    company shall offer the services:
 24-6                (1)  at prices, terms, and conditions reasonably
 24-7    comparable to the company's prices, terms, and conditions for
 24-8    similar services in urban areas; and
 24-9                (2)  within 15 months after the bona fide request for
24-10    those services.
24-11          (e)  This section may not be construed to require a company
24-12    to:
24-13                (1)  begin providing services in a rural area in which
24-14    the company does not provide local exchange telephone service; or
24-15                (2)  provide a service in a rural area of this state
24-16    unless the company provides the service in urban areas of this
24-17    state.
24-18          (f)  For purposes of this section, a company to which this
24-19    section applies is considered to provide services in urban areas of
24-20    this state if the company provides services in a municipality with
24-21    a population of more than 190,000.
24-22          (g)  Notwithstanding any other provision of this title, the
24-23    commission has all jurisdiction necessary to enforce this section.
24-24          SECTION 19.  Subchapter A, Chapter 55, Utilities Code, is
24-25    amended by adding Section 55.015 to read as follows:
24-26          Sec. 55.015.  LIFELINE SERVICE.  (a)  The commission shall
24-27    adopt rules prohibiting a telecommunications provider from
 25-1    discontinuing local exchange telephone service to a consumer who
 25-2    receives lifeline service because of nonpayment by the consumer of
 25-3    charges for other services billed by the provider, including long
 25-4    distance service.
 25-5          (b)  The commission shall adopt rules providing for automatic
 25-6    enrollment to receive lifeline service for eligible consumers.  The
 25-7    Texas Department of Human Services, on request of the commission,
 25-8    shall assist in the adoption and implementation of those rules.
 25-9    The commission and the Texas Department of Human Services shall
25-10    enter into a memorandum of understanding establishing the
25-11    respective duties of the commission and department in relation to
25-12    the automatic enrollment.
25-13          (c)  A telecommunications provider may block a lifeline
25-14    service participant's access to all long distance service except
25-15    toll-free numbers when the participant owes an outstanding amount
25-16    for that service.  The telecommunications provider shall remove the
25-17    block without additional cost to the participant on payment of the
25-18    outstanding amount.
25-19          (d)  A telecommunications provider shall offer a consumer who
25-20    applies for or receives lifeline service the option of blocking all
25-21    toll calls or, if technically capable, placing a limit on the
25-22    amount of toll calls.  The provider may not charge the consumer an
25-23    administrative charge or other additional amount for the blocking
25-24    service.
25-25          (e)  In this section, "lifeline service" means a retail local
25-26    service offering described by 47 C.F.R. Section 54.401(a), as
25-27    amended.
 26-1          SECTION 20.  Section 3.312, Public Utility Regulatory Act of
 26-2    1995 (Article 1446c-0, Vernon's Texas Civil Statutes), as added by
 26-3    Section 1, Chapter 919, Acts of the 75th Legislature, Regular
 26-4    Session, 1997, is codified as Subchapter K, Chapter 55, Utilities
 26-5    Code, and amended to read as follows:
 26-6         SUBCHAPTER K.  SELECTION OF TELECOMMUNICATIONS UTILITIES
 26-7          Sec. 55.301.  STATE POLICY.  It is the policy of this state
 26-8    to ensure that all customers are protected from the unauthorized
 26-9    switching of a telecommunications utility selected by the customer
26-10    to provide telecommunications service.
26-11          Sec. 55.302.  COMMISSION RULES.  (a)  The commission shall
26-12    adopt nondiscriminatory and competitively neutral rules to
26-13    implement this subchapter, including rules that:
26-14                (1)  ensure that customers are protected from deceptive
26-15    practices in the obtaining of authorizations and verifications
26-16    required by this subchapter;
26-17                (2)  are applicable to all local exchange telephone
26-18    services, interexchange telecommunications service, and other
26-19    telecommunications service provided by telecommunications utilities
26-20    in this state;
26-21                (3)  are consistent with the rules and regulations
26-22    prescribed by the Federal Communications Commission for the
26-23    selection of telecommunications utilities;
26-24                (4)  permit telecommunications utilities to select any
26-25    method of verification of a [carrier-initiated] change order
26-26    authorized by Section 55.303;
26-27                (5)  [require telecommunications utilities to maintain
 27-1    records relating to a customer-initiated change in accordance with
 27-2    Section 55.304;]
 27-3                [(6)]  require the reversal of  certain changes in the
 27-4    selection of a customer's telecommunications utility in accordance
 27-5    with Section 55.304(a) [55.305(a)];
 27-6                (6) [(7)]  prescribe, in accordance with Section
 27-7    55.304(b) [55.305(b)], the duties of a telecommunications utility
 27-8    that initiates an unauthorized customer change; and
 27-9                (7) [(8)]  provide for corrective action and the
27-10    imposition of penalties in accordance with Sections 55.305 [55.306]
27-11    and 55.306 [55.307].
27-12          (b)  The commission is granted all necessary jurisdiction to
27-13    adopt rules required by this subchapter and to enforce those rules
27-14    and this  subchapter.
27-15          (c)  The commission may notify customers of their rights
27-16    under the rules.
27-17          Sec. 55.303.  VERIFICATION OF [CARRIER-INITIATED] CHANGE.
27-18    [(a)]  A telecommunications utility may verify a
27-19    [carrier-initiated] change order by:
27-20                (1)  obtaining written authorization from the customer;
27-21                (2)  obtaining a toll-free electronic authorization
27-22    placed from the telephone number that is the subject of the change
27-23    order; or
27-24                (3)  an oral authorization obtained by an independent
27-25    third party.
27-26          [(b)  In addition to the methods provided by Subsection (a),
27-27    a telecommunications utility may verify a carrier-initiated change
 28-1    order by mailing to the customer an information package that is
 28-2    consistent with the requirements of 47 C.F.R.  Section 64.1100(d)
 28-3    and that contains a postage-prepaid postcard or mailer.  The change
 28-4    is considered verified if the telecommunications utility does not
 28-5    receive a cancellation of the change order from the customer within
 28-6    14 days after the date of the mailing.]
 28-7          [Sec. 55.304.  CUSTOMER-INITIATED CHANGE.  (a)  A
 28-8    telecommunications utility to whom a customer has changed its
 28-9    service on the initiative of the customer shall maintain a record
28-10    of nonpublic customer-specific information that could be used to
28-11    establish that the customer authorized the change.]
28-12          [(b)  Notwithstanding Subsection (a), if the Federal
28-13    Communications Commission requires verification, the
28-14    telecommunications utility shall use the verification methods
28-15    required by the Federal Communications Commission.]
28-16          Sec. 55.304 [55.305].  UNAUTHORIZED CHANGE.  (a)  If a change
28-17    in the selection of a customer's telecommunications utility is not
28-18    made or verified in accordance with this subchapter, the change, on
28-19    request by the customer, shall be reversed within a period
28-20    established by commission ruling.
28-21          (b)  A telecommunications utility that initiates an
28-22    unauthorized customer change shall:
28-23                (1)  pay all usual and customary charges associated
28-24    with returning the customer to its original telecommunications
28-25    utility;
28-26                (2)  pay the telecommunications utility from which the
28-27    customer was changed any amount paid by the customer that would
 29-1    have been paid to that telecommunications utility if the
 29-2    unauthorized change had not been made;
 29-3                (3)  return to the customer any amount paid by the
 29-4    customer that exceeds the charges that would have been imposed for
 29-5    identical services by the telecommunications utility from which the
 29-6    customer was changed if the unauthorized change had not been made;
 29-7    and
 29-8                (4)  provide to the original telecommunications utility
 29-9    from which the customer was changed all billing records to enable
29-10    that telecommunications utility to comply with this subchapter.
29-11          (c)  The telecommunications utility from which the customer
29-12    was changed shall provide to the customer all benefits associated
29-13    with the service on receipt of payment for service provided during
29-14    the unauthorized change.
29-15          (d)  A customer is not liable for charges incurred during the
29-16    first 30 days after the date of an unauthorized carrier change.
29-17          Sec. 55.305 [55.306].  CORRECTIVE ACTION AND PENALTIES.  (a)
29-18    If the commission finds that a telecommunications utility has
29-19    repeatedly violated the commission's telecommunications utility
29-20    selection rules, the commission shall order the utility to take
29-21    corrective action as necessary.  In addition, the utility may be
29-22    subject to administrative penalties under Sections 15.023-15.027.
29-23          (b)  An administrative penalty collected under this section
29-24    shall be used to enforce this subchapter.
29-25          Sec. 55.306 [55.307].  REPEATED AND RECKLESS VIOLATION.  If
29-26    the commission finds that a telecommunications utility has
29-27    repeatedly and recklessly violated the commission's
 30-1    telecommunications utility selection rules, the commission may, if
 30-2    consistent with the public interest, suspend, restrict, deny, or
 30-3    revoke the registration or certificate, including an amended
 30-4    certificate, of the telecommunications utility and, by taking that
 30-5    action, deny the telecommunications utility the right to provide
 30-6    service in this state.
 30-7          Sec. 55.307.  DECEPTIVE OR FRAUDULENT PRACTICE.  The
 30-8    commission may prohibit a utility from engaging in a deceptive or
 30-9    fraudulent practice, including a marketing practice, involving the
30-10    selection of a customer's telecommunications utility.  The
30-11    commission may define deceptive and fraudulent practices to which
30-12    this section applies.
30-13          Sec. 55.308.  CONSISTENCY WITH FEDERAL LAW.  Notwithstanding
30-14    any other provision of this subchapter, rules adopted by the
30-15    commission under this subchapter shall be consistent with
30-16    applicable federal laws and rules.
30-17          SECTION 21.  Section 56.021, Utilities Code, as amended by
30-18    Section 18.08, S.B. No. 1368, Acts of the 76th Legislature, Regular
30-19    Session, 1999, is amended to read as follows:
30-20          Sec. 56.021.  UNIVERSAL SERVICE FUND ESTABLISHED.  The
30-21    commission shall adopt and enforce rules requiring local exchange
30-22    companies to establish a universal service fund to:
30-23                (1)  assist telecommunications providers [local
30-24    exchange companies] in providing basic local telecommunications
30-25    service at reasonable rates in high cost rural areas;
30-26                (2)  reimburse telecommunications providers [local
30-27    exchange companies] for revenue lost by providing tel-assistance
 31-1    service under Subchapter C;
 31-2                (3)  reimburse the telecommunications carrier that
 31-3    provides the statewide telecommunications relay access service
 31-4    under Subchapter D;
 31-5                (4)  finance the specialized telecommunications device
 31-6    assistance program established under Subchapter E; [and]
 31-7                (5)  reimburse the department, the Texas Commission for
 31-8    the Deaf and Hard of Hearing, and the commission for costs incurred
 31-9    in implementing this chapter and Chapter 57; and
31-10                (6)  reimburse a telecommunications carrier providing
31-11    lifeline service as provided by 47 C.F.R. Part 54, Subpart E, as
31-12    amended.
31-13          SECTION 22.  Sections 56.023 and 56.024, Utilities Code, are
31-14    amended to read as follows:
31-15          Sec. 56.023.  COMMISSION POWERS AND DUTIES.  (a)  The
31-16    commission shall:
31-17                (1)  in a manner that assures reasonable rates for
31-18    basic local telecommunications service, adopt eligibility criteria
31-19    and review procedures, including a method for administrative
31-20    review, the commission finds necessary to fund the universal
31-21    service fund and make distributions from that fund;
31-22                (2)  determine which telecommunications providers
31-23    [local exchange companies] meet the eligibility criteria;
31-24                (3)  determine the amount of and approve a procedure
31-25    for reimbursement to telecommunications providers [local exchange
31-26    companies] of revenue lost in providing tel-assistance service
31-27    under Subchapter C;
 32-1                (4)  establish and collect fees from the universal
 32-2    service fund necessary to recover the costs the department and the
 32-3    commission incur in administering this chapter and Chapter 57; and
 32-4                (5)  approve procedures for the collection and
 32-5    disbursal of the revenue of the universal service fund.
 32-6          (b)  The eligibility criteria must require that a
 32-7    telecommunications provider [local exchange company], in compliance
 32-8    with the commission's quality of service requirements:
 32-9                (1)  offer service to each consumer within the
32-10    company's certificated area; and
32-11                (2)  render continuous and adequate service within the
32-12    company's certificated area.
32-13          (c)  The commission shall adopt rules for the administration
32-14    of the universal service fund and may act as necessary and
32-15    convenient to administer the fund.
32-16          Sec. 56.024.  REPORTS; CONFIDENTIALITY.  (a)  The commission
32-17    may require a [local exchange company or another]
32-18    telecommunications provider to provide a report or information
32-19    necessary to assess contributions and disbursements to the
32-20    universal service fund.
32-21          (b)  A report or information is confidential and not subject
32-22    to disclosure under Chapter 552, Government Code.
32-23          SECTION 23.  Section 56.026, Utilities Code, is amended to
32-24    read as follows:
32-25          Sec. 56.026.  UNIVERSAL SERVICE FUND DISBURSEMENTS.  (a)  A
32-26    revenue requirement showing is not required for a disbursement from
32-27    the universal service fund under this subchapter.
 33-1          (b)  The commission shall make each disbursement from the
 33-2    universal service fund promptly and efficiently so that a
 33-3    telecommunications provider [or local exchange company] does not
 33-4    experience an unnecessary cash-flow change as a result of a change
 33-5    in governmental policy.
 33-6          (c)  Notwithstanding any other provision of this title, if an
 33-7    electing company reduces rates in conjunction with receiving
 33-8    disbursements from the universal service fund, the commission may
 33-9    not reduce the amount of those disbursements, except that:
33-10                (1)  if a local end user customer of the electing
33-11    company switches to another local service provider that serves the
33-12    customer entirely through the use of its own facilities and not
33-13    partially or solely through the use of unbundled network elements,
33-14    the electing company's disbursement may be reduced by the amount
33-15    attributable to that customer under Section 56.021(1); or
33-16                (2)  if a local end user customer of the electing
33-17    company switches to another local service provider, and the new
33-18    local service provider serves the customer partially or solely
33-19    through the use of unbundled network elements provided by the
33-20    electing company, the electing company's disbursement attributable
33-21    to that customer under Section 56.021(1) may be reduced only if the
33-22    commission establishes an equitable allocation formula for the
33-23    disbursement.
33-24          (d)  Any reductions in switched access service rates for
33-25    local exchange companies with more than 125,000 access lines in
33-26    service in this state on December 31, 1998, that are made in
33-27    accordance with this section shall be proportional, based on
 34-1    equivalent minutes of use, to reductions in intraLATA toll rates,
 34-2    and those reductions shall be offset by equal disbursements from
 34-3    the universal service fund under Section 56.021(1).  To the extent
 34-4    that the disbursements from the universal service fund under
 34-5    Section 56.021(1) for small and rural local exchange companies are
 34-6    used to decrease the implicit support in intraLATA toll and
 34-7    switched access rates, the decrease shall be made in a
 34-8    competitively neutral manner.
 34-9          SECTION 24.  Subchapter B, Chapter 56, Utilities Code, is
34-10    amended by adding Section 56.028 to read as follows:
34-11          Sec. 56.028.  UNIVERSAL SERVICE FUND REIMBURSEMENT FOR
34-12    CERTAIN INTRALATA SERVICE.  On request of an incumbent local
34-13    exchange company that is not an electing company under Chapters 58
34-14    and 59, the commission shall provide reimbursement through the
34-15    universal service fund for reduced rates for intraLATA
34-16    interexchange high capacity (1.544 Mbps) service for entities
34-17    described in Section 58.253(a).  The amount of reimbursement shall
34-18    be the difference between the company's tariffed rate for that
34-19    service as of January 1, 1998, and the lowest rate offered for that
34-20    service by any local exchange company electing incentive regulation
34-21    under Chapter 58.
34-22          SECTION 25.  Section 56.071, Utilities Code, is amended to
34-23    read as follows:
34-24          Sec. 56.071.  TEL-ASSISTANCE SERVICE REQUIREMENTS.  (a)  The
34-25    commission shall adopt and enforce rules requiring a local exchange
34-26    company to establish a telecommunications service assistance
34-27    program to provide a reduction in the cost of telecommunications
 35-1    service to each eligible consumer in the company's certificated
 35-2    area.  The reduction must be a reduction on the consumer's
 35-3    telephone bill.
 35-4          (b)  In addition to local exchange companies, this subchapter
 35-5    applies to telecommunications providers that receive universal
 35-6    service fund support in accordance with the commission's universal
 35-7    service fund rules, and any reference to or requirement imposed on
 35-8    local exchange companies in this subchapter shall also apply to
 35-9    those telecommunications providers.
35-10          (c)  Except as provided by Section 56.075(b), the reduction
35-11    allowed by the program is 65 percent of the applicable tariff rate
35-12    for the service provided.
35-13          (d) [(c)]  The program is named "tel-assistance service."
35-14          SECTION 26.  Section 56.072, Utilities Code, is amended by
35-15    adding Subsection (d) to read as follows:
35-16          (d)  The commission shall adopt rules providing for automatic
35-17    enrollment to receive tel-assistance service for eligible
35-18    consumers.  The department, on request of the commission, shall
35-19    assist in the adoption and implementation of those rules.  The
35-20    commission and the department shall enter into a memorandum of
35-21    understanding establishing the respective duties of the commission
35-22    and the department in relation to the automatic enrollment.
35-23          SECTION 27.  Subchapter C, Chapter 56, Utilities Code, is
35-24    amended by adding Section 56.079 to read as follows:
35-25          Sec. 56.079.  RELATIONSHIP TO OTHER SERVICES.  (a)  The
35-26    commission shall adopt rules prohibiting a telecommunications
35-27    provider from discontinuing local exchange telephone service to a
 36-1    consumer who receives tel-assistance service because of nonpayment
 36-2    by the consumer of charges for other services billed by the
 36-3    provider, including long distance service.
 36-4          (b)  A telecommunications provider may block a tel-assistance
 36-5    service participant's access to all long distance service except
 36-6    toll-free numbers when the participant owes an outstanding amount
 36-7    for that service.  The telecommunications provider shall remove the
 36-8    block without additional cost to the participant on payment of the
 36-9    outstanding amount.
36-10          (c)  A telecommunications provider shall offer a consumer who
36-11    applies for or receives tel-assistance service the option of
36-12    blocking all toll calls or, if technically capable, placing a limit
36-13    on the amount of toll calls.  The provider may not charge the
36-14    consumer an administrative charge or other additional amount for
36-15    the blocking service.
36-16          SECTION 28.  Subchapter A, Chapter 58, Utilities Code, is
36-17    amended by adding Section 58.003 to read as follows:
36-18          Sec. 58.003.  CUSTOMER-SPECIFIC CONTRACTS.
36-19    (a)  Notwithstanding any other provision of this chapter, an
36-20    electing company may not offer in an exchange a service or an
36-21    appropriate subset of a service listed in Sections 58.051(a)(1)-(4)
36-22    or Sections 58.151(1)-(4) in a manner that results in a
36-23    customer-specific contract, unless the other party to the contract
36-24    is a federal, state, or local governmental entity, until the
36-25    earlier of September 1, 2005, or the date on which the commission
36-26    finds that at least 40 percent of the total access lines for that
36-27    service or appropriate subset of that service in that exchange are
 37-1    served by competitive alternative providers that are not affiliated
 37-2    with the electing company.
 37-3          (b)  In addition to the requirements prescribed by Subsection
 37-4    (a), an electing company serving fewer than five million access
 37-5    lines must also notify the commission of the company's binding
 37-6    commitment to make the following infrastructure improvements not
 37-7    later than September 1, 2001:
 37-8                (1)  install Common Channel Signaling 7 capability in
 37-9    each central office; and
37-10                (2)  connect all of the company's serving central
37-11    offices to their respective LATA tandem central offices with
37-12    optical fiber or equivalent facilities.
37-13          (c)  The commission by rule shall prescribe appropriate
37-14    subsets of services.
37-15          (d)  An electing company may file with the commission a
37-16    request for a finding under this section.  The filing must include
37-17    information sufficient for the commission to perform a review and
37-18    evaluation in relation to the particular exchange and the
37-19    particular service or appropriate subset of a service for which the
37-20    electing company wants to offer customer-specific contracts.  The
37-21    commission must grant or deny the request not later than the 60th
37-22    day after the date the electing company files the request.
37-23          (e)  The commitments described by Subsection (b) do not apply
37-24    to exchanges of the company sold or transferred before, or for
37-25    which contracts for sale or transfer are pending on, September 1,
37-26    2001.  In the case of exchanges for which contracts for sale or
37-27    transfer are pending as of March 1, 2001, where the purchaser
 38-1    withdrew or defaulted before September 1, 2001, the company shall
 38-2    have one year from the date of withdrawal or default to comply with
 38-3    the commitments.
 38-4          (f)  This section does not preclude an electing company from
 38-5    offering a customer-specific contract to the extent allowed by this
 38-6    title as of August 31, 1999.
 38-7          SECTION 29.  Section 58.021, Utilities Code, is amended to
 38-8    read as follows:
 38-9          Sec. 58.021.  ELECTION.  (a)  An incumbent local exchange
38-10    company may elect to be subject to incentive regulation and to make
38-11    the corresponding infrastructure commitment under this chapter by
38-12    notifying the commission in writing of its election.
38-13          (b)  The notice must include a statement that the company
38-14    agrees to:
38-15                (1)  limit until September 1, 2005, [for four years]
38-16    any increase in a rate the company charges for basic network
38-17    services as prescribed by Subchapter C; and
38-18                (2)  fulfill the infrastructure commitment prescribed
38-19    by Subchapters F and G.
38-20          (c)  Except as provided in Subsection (d), an election under
38-21    this chapter remains in effect until the legislature eliminates the
38-22    incentive regulation authorized by this chapter and Chapter 59.
38-23          (d)  The commission may allow an electing company serving
38-24    fewer than five million access lines to withdraw the company's
38-25    election under this chapter:
38-26                (1)  on application by the company; and
38-27                (2)  only for good cause.
 39-1          (e)  In this section, "good cause" includes only matters
 39-2    beyond the control of the company.
 39-3          SECTION 30.  Section 58.023, Utilities Code, is amended to
 39-4    read as follows:
 39-5          Sec. 58.023.  SERVICE CLASSIFICATION.  On election, the
 39-6    services provided by an electing company are classified into two
 39-7    [three] categories:
 39-8                (1)  basic network services governed by Subchapter C;
 39-9    and
39-10                (2)  nonbasic [discretionary services governed by
39-11    Subchapter D; and]
39-12                [(3)  competitive] services governed by Subchapter E.
39-13          SECTION 31.  Section 58.024, Utilities Code, is amended to
39-14    read as follows:
39-15          Sec. 58.024.  SERVICE RECLASSIFICATION.  (a)  The commission
39-16    may reclassify a[:]
39-17                [(1)]  basic network service as a nonbasic
39-18    [discretionary or competitive] service[; or]
39-19                [(2)  discretionary service as a competitive service].
39-20          (b)  The commission shall establish criteria for determining
39-21    whether a service should be reclassified.  The criteria must
39-22    include consideration of the:
39-23                (1)  availability of the service from other providers;
39-24                (2)  [proportion of the market that receives the
39-25    service;]
39-26                [(3)]  effect of the reclassification on service
39-27    subscribers; and
 40-1                (3) [(4)]  nature of the service.
 40-2          (c)  The commission may not reclassify a service until:
 40-3                (1)  each competitive safeguard prescribed by
 40-4    Subchapters B-H, Chapter 60, is fully implemented; or
 40-5                (2)  for a company that serves more than five million
 40-6    access lines in this state, the date on which the Federal
 40-7    Communications Commission determines in accordance with 47 U.S.C.
 40-8    Section 271 that the company or any of its affiliates may enter the
 40-9    interLATA telecommunications market in this state.
40-10          (d)  The commission may reclassify a service subject to the
40-11    following conditions:
40-12                (1)  the electing company must file a request for a
40-13    service reclassification including information sufficient for the
40-14    commission to perform a review and evaluation under Subsection (b);
40-15                (2)  the commission must grant or deny the request not
40-16    later than the 60th day after the date the electing company files
40-17    the request for service reclassification; and
40-18                (3)  there is a rebuttable presumption that the request
40-19    for service reclassification by the electing company should be
40-20    granted if the commission finds that there is a competitive
40-21    alternative provider serving customers through means other than
40-22    total service resale.
40-23          SECTION 32.  Section 58.028, Utilities Code, is amended to
40-24    read as follows:
40-25          Sec. 58.028.  REVIEW AND REPORT OF EFFECTS OF ELECTION.
40-26    (a)  Not later than January 1, 2004 [2000], the commission shall
40-27    begin a review and evaluation of each company that elects under
 41-1    this chapter or Chapter 59.
 41-2          (b)  The review must include an evaluation of the effects of
 41-3    the election, including:
 41-4                (1)  consumer benefits;
 41-5                (2)  impact of competition;
 41-6                (3)  infrastructure investments; and
 41-7                (4)  quality of service.
 41-8          (c)  The commission shall file a report with the legislature
 41-9    not later than January 1, 2005 [2001].  The report must include the
41-10    commission's recommendations as to whether the incentive regulation
41-11    provided by this chapter and Chapter 59 should be extended,
41-12    modified, eliminated, or replaced with another form of regulation.
41-13          (d)  This section expires September 1, 2005 [2001].
41-14          SECTION 33.  Section 58.051, Utilities Code, is amended to
41-15    read as follows:
41-16          Sec. 58.051.  SERVICES INCLUDED.  (a)  Unless reclassified
41-17    under Section 58.024, the following services are basic network
41-18    services:
41-19                (1)  flat rate residential [and business] local
41-20    exchange telephone service, including primary directory listings
41-21    and the receipt of a directory and any applicable mileage or zone
41-22    charges;
41-23                (2)  residential tone dialing service;
41-24                (3)  lifeline and tel-assistance service;
41-25                (4)  service connection for basic residential services;
41-26                (5)  direct inward dialing service for basic
41-27    residential services;
 42-1                (6)  private pay telephone access service;
 42-2                (7)  call trap and trace service;
 42-3                (8)  access for all residential and business end users
 42-4    to 911 service provided by a local authority and access to dual
 42-5    party relay service;
 42-6                (9)  [switched access service;]
 42-7                [(10)  interconnection to competitive providers;]
 42-8                [(11)]  mandatory residential extended area service
 42-9    arrangements;
42-10                (10) [(12)]  mandatory residential extended
42-11    metropolitan service or other mandatory residential toll-free
42-12    calling arrangements; and
42-13                (11)  residential call waiting service
42-14                [(13)  interconnection for commercial mobile service
42-15    providers;]
42-16                [(14)  directory assistance; and]
42-17                [(15)  "1-plus" intraLATA message toll service].
42-18          (b)  Electing companies shall offer each basic network
42-19    service as a separately tariffed service in addition to any
42-20    packages or other pricing flexibility offerings that include those
42-21    basic network services.
42-22          SECTION 34.  Sections 58.054 and 58.055, Utilities Code, are
42-23    amended to read as follows:
42-24          Sec. 58.054.  RATES CAPPED.  (a)  As a condition of election
42-25    under this chapter, an electing company shall commit to not
42-26    increasing a rate for a basic network service on or before the
42-27    fourth anniversary of its election date.
 43-1          (b)  The rates an electing company may charge on or before
 43-2    that fourth anniversary are the rates charged by the company on
 43-3    June 1, 1995, or, for a company that elects under this chapter
 43-4    after September 1, 1999, the rates charged on the date of its
 43-5    election, without regard to a proceeding pending under:
 43-6                (1)  Section 15.001;
 43-7                (2)  Subchapter D, Chapter 53; or
 43-8                (3)  Subchapter G, Chapter 2001, Government Code.
 43-9          (c)  Notwithstanding Subsections (a) and (b), the cap on the
43-10    rates for basic network services for a company electing under this
43-11    chapter may not expire before September 1, 2005.
43-12          Sec. 58.055.  RATE ADJUSTMENT BY COMPANY.  (a)  An electing
43-13    company may increase a rate for a basic network service during the
43-14    election [four-year] period prescribed by Section 58.054 only:
43-15                (1)  with commission approval that the proposed change
43-16    is included in Section 58.056, 58.057, or 58.058; and
43-17                (2)  as provided by Sections 58.056, 58.057, 58.058,
43-18    and 58.059.
43-19          (b)  Notwithstanding Subchapter F, Chapter 60, an electing
43-20    company may, on its own initiative, decrease a rate for a basic
43-21    network service during the electing [four-year] period.
43-22          (c)  [The company may decrease the rate for switched access
43-23    service to an amount above the service's long run incremental cost.]
43-24          [(d)]  The company may decrease the rate for a basic local
43-25    telecommunications service [other than switched access] to an
43-26    amount above the service's appropriate cost.  If the company has
43-27    been required to perform or has elected to perform a long run
 44-1    incremental cost study, the appropriate cost for the service is the
 44-2    service's long run incremental cost.
 44-3          SECTION 35.  Section 58.060, Utilities Code, is amended to
 44-4    read as follows:
 44-5          Sec. 58.060.  RATE ADJUSTMENT AFTER CAP EXPIRATION.  After
 44-6    the expiration of the [four-year] period during which the rates for
 44-7    basic network services are capped as prescribed by Section 58.054
 44-8    [expires], an electing company may increase a rate for a basic
 44-9    network service only:
44-10                (1)  with commission approval subject to this title;
44-11    and
44-12                (2)  to the extent consistent with achieving universal
44-13    affordable service.
44-14          SECTION 36.  Subchapter C, Chapter 58, Utilities Code, is
44-15    amended by adding Section 58.063 to read as follows:
44-16          Sec. 58.063.  PRICING AND PACKAGING FLEXIBILITY.  (a)
44-17    Notwithstanding Section 58.052(b) or Subchapter F, Chapter 60, an
44-18    electing company may exercise pricing flexibility for basic network
44-19    services, including the packaging of basic network services with
44-20    any other regulated or unregulated service or any service of an
44-21    affiliate. The company may exercise pricing flexibility in
44-22    accordance with this section 10 days after providing an
44-23    informational notice to the commission, to the office, and to any
44-24    person who holds a certificate of operating authority in the
44-25    electing company's certificated area or areas or who has an
44-26    effective interconnection agreement with the electing company.
44-27          (b)  An electing company shall set the price of a package of
 45-1    services containing basic network services and nonbasic services at
 45-2    any level at or above the lesser of:
 45-3                (1)  the sum of the long run incremental costs of any
 45-4    basic network services and nonbasic services contained in the
 45-5    package; or
 45-6                (2)  the sum of the tariffed prices of any basic
 45-7    network services contained in the package and the long run
 45-8    incremental costs of nonbasic services contained in the package.
 45-9          (c)  Except as provided by Section 58.003, an electing
45-10    company may flexibly price a package that includes a basic network
45-11    service in any manner provided by Section 51.002(7).
45-12          SECTION 37.  Subchapter E, Chapter 58, Utilities Code, is
45-13    amended to read as follows:
45-14              SUBCHAPTER E.  NONBASIC [COMPETITIVE] SERVICES
45-15          Sec. 58.151.  SERVICES INCLUDED.  The following services are
45-16    classified as nonbasic [competitive] services:
45-17                (1)  flat rate business local exchange telephone
45-18    service, including primary directory listings and the receipt of a
45-19    directory, and any applicable mileage or zone charges, except that
45-20    the prices for this service shall be capped until September 1,
45-21    2005, at the prices in effect on September 1, 1999;
45-22                (2)  business tone dialing service, except that the
45-23    prices for this service shall be capped until September 1, 2005, at
45-24    the prices in effect on September 1, 1999;
45-25                (3)  service connection for all business services,
45-26    except that the prices for this service shall be capped until
45-27    September 1, 2005, at the prices in effect on September 1, 1999;
 46-1                (4)  direct inward dialing for basic business services,
 46-2    except that the prices for this service shall be capped until
 46-3    September 1, 2005, at the prices in effect on September 1, 1999;
 46-4                (5)  "1-plus" intraLATA message toll services;
 46-5                (6)  0+ and 0- operator services;
 46-6                (7)  call waiting, call forwarding, and custom calling,
 46-7    except that:
 46-8                      (A)  residential call waiting service shall be
 46-9    classified as a basic network service; and
46-10                      (B)  for an electing company subject to Section
46-11    58.301, prices for residential call forwarding and other custom
46-12    calling services shall be capped at the prices in effect on
46-13    September 1, 1999, until the electing company implements the
46-14    reduction in switched access rates described by Section 58.301(2);
46-15                (8)  call return, caller identification, and call
46-16    control options, except that, for an electing company subject to
46-17    Section 58.301, prices for residential call return, caller
46-18    identification, and call control options shall be capped at the
46-19    prices in effect on September 1, 1999, until the electing company
46-20    implements the reduction in switched access rates described by
46-21    Section 58.301(2);
46-22                (9)  central office based PBX-type services;
46-23                (10)  billing and collection services, including
46-24    installment billing and late payment charges for customers of the
46-25    electing company;
46-26                (11)  integrated services digital network (ISDN)
46-27    services, except that prices for Basic Rate Interface (BRI) ISDN
 47-1    services, which comprise up to two 64 Kbps B-channels and one 16
 47-2    Kbps D-channel, shall be capped until September 1, 2005, at the
 47-3    prices in effect on September 1, 1999;
 47-4                (12)  new services;
 47-5                (13)  directory assistance services, except that an
 47-6    electing company shall provide to a residential customer the first
 47-7    three directory assistance inquiries in a monthly billing cycle at
 47-8    no charge;
 47-9                (14)  services described in the WATS tariff as the
47-10    tariff existed on January 1, 1995;
47-11                (15) [(2)]  800 and foreign exchange services;
47-12                (16) [(3)]  private line service;
47-13                (17) [(4)]  special access service;
47-14                (18) [(5)]  services from public pay telephones;
47-15                (19) [(6)]  paging services and mobile services (IMTS);
47-16                (20) [(7)]  911 services provided to a local authority
47-17    that are available from another provider [premises equipment];
47-18                (21) [(8)]  speed dialing; [and]
47-19                (22) [(9)]  three-way calling; and
47-20                (23)  all other services subject to the commission's
47-21    jurisdiction  that are not specifically classified as basic network
47-22    services in Section 58.051, except that nothing in this section
47-23    shall preclude a customer from subscribing to a local flat rate
47-24    residential or business line for a computer modem or a facsimile
47-25    machine.
47-26          Sec. 58.152.  PRICES.  (a)  An electing company may set the
47-27    price for any nonbasic [a competitive] service at any level above
 48-1    the lesser of the:
 48-2                (1)  service's long run incremental cost in accordance
 48-3    with the imputation rules prescribed by or under Subchapter D,
 48-4    Chapter 60; or
 48-5                (2)  price for the service in effect on September 1,
 48-6    1999.
 48-7          (b)  Subject to Section 51.004, an electing [Subject to the
 48-8    requirements of Sections 60.001 and 60.002, the] company may use
 48-9    pricing flexibility for a nonbasic [competitive] service.  Pricing
48-10    flexibility includes all pricing  arrangements included in the
48-11    definition of "pricing flexibility" prescribed by Section 51.002
48-12    and includes packages that include basic network services
48-13    [(c)  Notwithstanding Subsection (a) or (b), the company may not
48-14    increase the price of a competitive service in a geographic area in
48-15    which that service or a functionally equivalent service is not
48-16    readily available from another provider].
48-17          Sec. 58.153.  NEW SERVICES.  (a)  Subject to the pricing
48-18    conditions prescribed by Section 58.152(a), an electing company may
48-19    introduce a new service 10 days after providing an informational
48-20    notice to the commission, to the office, and to any person who
48-21    holds a certificate of operating authority in the electing
48-22    company's certificated area or areas or who has an effective
48-23    interconnection agreement with the electing company.
48-24          (b)  An electing company serving more than five million
48-25    access lines in this state shall provide notice to any person who
48-26    holds a certificate of operating authority in the electing
48-27    company's certificated area or areas or who has an effective
 49-1    interconnection agreement with the electing company of any changes
 49-2    in the generally available prices and terms under which the
 49-3    electing company offers basic or nonbasic telecommunications
 49-4    services regulated by the commission at retail rates to subscribers
 49-5    that are not telecommunications providers.  Changes requiring
 49-6    notice under this subsection include the introduction of any new
 49-7    nonbasic services, any new features or functions of basic or
 49-8    nonbasic services, promotional offerings of basic or nonbasic
 49-9    services, or the discontinuation of then-current features or
49-10    services.  The electing company shall provide the notice:
49-11                (1)  if the electing company is required to give notice
49-12    to the commission, at the same time the company provides that
49-13    notice; or
49-14                (2)  if the electing company is not required to give
49-15    notice to the commission, at least 45 days before the effective
49-16    date of a price change or 90 days before the effective date of a
49-17    change other than a price change, unless the commission determines
49-18    that the notice should not be given.
49-19          (c)  An affected person, the office on behalf of residential
49-20    or small commercial customers, or the commission may file a
49-21    complaint at the commission challenging whether the pricing by an
49-22    incumbent local exchange company of a new service is in compliance
49-23    with Section 58.152(a).  The commission shall allow the company to
49-24    continue to provide the service while the complaint is pending.
49-25          (d)  If a complaint is filed under Subsection (c), the
49-26    electing company has the burden of proving that the  company set
49-27    the price for the new service in accordance with Section 58.152(a).
 50-1    If the complaint is finally resolved in favor of the complainant,
 50-2    the company:
 50-3                (1)  shall, not later than the 10th day after the date
 50-4    the complaint is finally resolved,  amend the price of the service
 50-5    as necessary to comply with the final resolution; or
 50-6                (2)  may, at the company's option, discontinue the
 50-7    service.
 50-8          (e)  The notice requirement prescribed by Subsection (b)
 50-9    expires September 1, 2003.
50-10          SECTION 38.  Subchapter E, Chapter 58, Utilities Code, is
50-11    amended by adding Section 58.155 to read as follows:
50-12          Sec. 58.155.  INTERCONNECTION.  Because interconnection to
50-13    competitive providers and interconnection for commercial mobile
50-14    service providers are subject to the requirements of Sections 251
50-15    and 252, Communications Act of 1934, as amended (47 U.S.C. Sections
50-16    251 and 252), as amended, and Federal Communications Commission
50-17    rules, including the commission's authority to arbitrate issues,
50-18    interconnection is not addressed in this subchapter or Subchapter
50-19    B.
50-20          SECTION 39.  Chapter 58, Utilities Code, is amended by adding
50-21    Subchapter H to read as follows:
50-22                  SUBCHAPTER H.  SWITCHED ACCESS SERVICES
50-23          Sec. 58.301.  SWITCHED ACCESS RATE REDUCTION.  An electing
50-24    company with greater than five million access lines in this state
50-25    shall reduce its switched access rates on a combined originating
50-26    and terminating basis as follows:
50-27                (1)  the electing company shall reduce switched access
 51-1    rates on a combined originating and terminating basis in effect on
 51-2    September 1, 1999, by one cent a minute; and
 51-3                (2)  the electing company shall reduce switched access
 51-4    rates on a combined originating and terminating basis by an
 51-5    additional two cents a minute on the earlier of:
 51-6                      (A)  July 1, 2000; or
 51-7                      (B)  the date the electing company, or its
 51-8    affiliate formed in compliance with 47 U.S.C. Section 272, as
 51-9    amended, actually begins providing interLATA services in this state
51-10    in accordance with the authorization required by 47 U.S.C. Section
51-11    271, as amended.
51-12          Sec. 58.302.  SWITCHED ACCESS RATE CAP.  (a)  An electing
51-13    company may not increase the per minute rates for switched access
51-14    services on a combined originating and terminating basis above the
51-15    lesser of:
51-16                (1)  the rates for switched access services charged by
51-17    that electing company on September 1, 1999, as may be further
51-18    reduced on implementation of the universal service fund under
51-19    Chapter 56; or
51-20                (2)  the applicable rate described by Section 58.301 as
51-21    may be further reduced on implementation of the universal service
51-22    fund under Chapter 56.
51-23          (b)  Notwithstanding Subchapter F, Chapter 60, but subject to
51-24    Section 60.001, an electing company may, on its own initiative,
51-25    decrease a rate charged for switched access service to any amount
51-26    above the long run incremental cost of the service.
51-27          Sec. 58.303.  SWITCHED ACCESS CHARGE STUDY.  (a)  Not later
 52-1    than November 1, 1999, the commission shall begin a review and
 52-2    evaluation of the rates for intrastate switched access service. The
 52-3    review shall include an evaluation of at least the following
 52-4    issues:
 52-5                (1)  whether alternative rate structures for recovery
 52-6    of switched access revenues are in the public interest and
 52-7    competitively neutral; and
 52-8                (2)  whether disparities in rates for switched access
 52-9    service between local exchange companies are in the public
52-10    interest.
52-11          (b)  The commission shall file a report with the legislature
52-12    not later than January 1, 2001. The report must include the
52-13    commission's recommendations on the issues reviewed and evaluated.
52-14          (c)  This section expires September 1, 2001.
52-15          SECTION 40.  Section 59.021, Utilities Code, is amended by
52-16    adding Subsection (c) to read as follows:
52-17          (c)  A company electing under this chapter may renew the
52-18    election for successive two-year periods.  An election that is
52-19    renewed under this subsection remains in effect until the earlier
52-20    of the date that:
52-21                (1)  the election expires because it was not renewed;
52-22                (2)  the commission allows the company to withdraw its
52-23    election under Section 59.022; or
52-24                (3)  the legislature eliminates the incentive
52-25    regulation authorized by this chapter and Chapter 58.
52-26          SECTION 41.  Section 59.024, Utilities Code, is amended to
52-27    read as follows:
 53-1          Sec. 59.024.  RATE CHANGES.  (a)  Except for the charges
 53-2    permitted under Subchapter C, Chapter 55, Subchapter B, Chapter 56,
 53-3    and Section 55.024, an electing company may not, [on or] before the
 53-4    end of the company's election period under this chapter [sixth
 53-5    anniversary of its election date], increase a rate previously
 53-6    established for that company under this title unless the commission
 53-7    approves the proposed change as authorized under Subsection (c) or
 53-8    (d).
 53-9          (b)  For purposes of Subsection (a), the company's previously
53-10    established rates are the rates charged by the company on its
53-11    election date without regard to a proceeding pending under:
53-12                (1)  Section 15.001;
53-13                (2)  Subchapter D, Chapter 53; or
53-14                (3)  Subchapter G, Chapter 2001, Government Code.
53-15          (c)  The commission, on motion of the electing company or on
53-16    its own motion, shall adjust prices for services to reflect changes
53-17    in Federal Communications Commission separations that affect
53-18    intrastate net income by at least 10 percent.
53-19          (d)  Notwithstanding Subsection (a), the [The] commission, on
53-20    request of the electing company, shall allow a rate group
53-21    reclassification that results from access line growth.
53-22          (e)  Section 58.059 applies to a rate change under this
53-23    section.
53-24          SECTION 42.  Section 59.025, Utilities Code, is amended to
53-25    read as follows:
53-26          Sec. 59.025.  SWITCHED ACCESS RATES.  Notwithstanding any
53-27    other provision of this title, the commission may not, on the
 54-1    commission's own motion, reduce an electing company's rates for
 54-2    switched access services before the expiration of the election
 54-3    [six-year] period prescribed by Section 59.024, but may approve a
 54-4    reduction proposed by the electing company.
 54-5          SECTION 43.  Subsection (a), Section 59.026, Utilities Code,
 54-6    is amended to read as follows:
 54-7          (a)  On or before the end [sixth anniversary] of the
 54-8    company's election period [date], an electing company is  not,
 54-9    under any circumstances, subject to:
54-10                (1)  a complaint or hearing regarding the
54-11    reasonableness of the company's:
54-12                      (A)  rates;
54-13                      (B)  overall revenues;
54-14                      (C)  return on invested capital; or
54-15                      (D)  net income; or
54-16                (2)  a complaint that a rate is excessive.
54-17          SECTION 44.  Subchapter B, Chapter 59, Utilities Code, is
54-18    amended by adding Sections 59.030, 59.031, and 59.032 to read as
54-19    follows:
54-20          Sec. 59.030.  NEW SERVICES.  (a)  An electing company may
54-21    introduce a new service 10 days after providing an informational
54-22    notice to the commission, to the office, and to any person who
54-23    holds a certificate of operating authority in the electing
54-24    company's certificated area or areas or who has an effective
54-25    interconnection agreement with the electing company.
54-26          (b)  An electing company shall price each new service at or
54-27    above the service's long run incremental cost.  The commission
 55-1    shall allow a company serving fewer than one million access lines
 55-2    to establish a service's long run incremental cost by adopting, at
 55-3    that company's option, the cost studies of a larger company for
 55-4    that service that has been accepted by the commission.
 55-5          (c)  An affected person, the office on behalf of residential
 55-6    or small commercial customers, or the commission may file a
 55-7    complaint at the commission challenging whether the pricing by an
 55-8    electing company of a new service is in compliance with Subsection
 55-9    (b).
55-10          (d)  If a complaint is filed under Subsection (c), the
55-11    electing company has the burden of proving that the company set the
55-12    price for the new service in accordance with the applicable
55-13    provisions of this subchapter.  If the complaint is finally
55-14    resolved in favor of the complainant, the electing company:
55-15                (1)  shall, not later than the 10th day after the date
55-16    the complaint is finally resolved, amend the price of the service
55-17    as necessary to comply with the final resolution; or
55-18                (2)  may, at the company's option, discontinue the
55-19    service.
55-20          Sec. 59.031.  PRICING AND PACKAGING FLEXIBILITY.  (a)
55-21    Notwithstanding Section 59.027(b) or Subchapter F, Chapter 60, an
55-22    electing company may exercise pricing flexibility in accordance
55-23    with this section, including the packaging of any regulated service
55-24    such as basic local telecommunications service with any other
55-25    regulated or unregulated service or any service of an affiliate.
55-26    The electing company may exercise pricing flexibility 10 days after
55-27    providing an informational notice to the commission, to the office,
 56-1    and to any person who holds a certificate of operating authority in
 56-2    the electing company's certificated area or areas or who has an
 56-3    effective interconnection agreement with the electing company.
 56-4    Pricing flexibility includes all pricing arrangements included in
 56-5    the definition of "pricing flexibility" prescribed by Section
 56-6    51.002(7) and includes packaging of regulated services with
 56-7    unregulated services or any service of an affiliate.
 56-8          (b)  An electing company, at the company's option, shall
 56-9    price each regulated service offered separately or as part of a
56-10    package under Subsection (a) at either the service's tariffed rate
56-11    or at a rate not lower than the service's long run incremental
56-12    cost.  The commission shall allow a company serving fewer than one
56-13    million access lines to establish a service's long run incremental
56-14    cost by adopting, at that company's option, the cost studies of a
56-15    larger company for that service that have been accepted by the
56-16    commission.
56-17          (c)  An affected person, the office on behalf of residential
56-18    or small commercial customers, or the commission may file a
56-19    complaint alleging that an electing company has priced a regulated
56-20    service in a manner that does not meet the pricing standards of
56-21    this subchapter.  The complaint must be filed before the 31st day
56-22    after the company implements the rate.
56-23          Sec. 59.032.  CUSTOMER PROMOTIONAL OFFERINGS.  (a)  An
56-24    electing company may offer a promotion for a regulated service for
56-25    not more than 90 days in any 12-month period.
56-26          (b)  The electing company shall file with the commission a
56-27    promotional offering that consists of:
 57-1                (1)  waiver of installation charges or service order
 57-2    charges, or both, for not more than 90 days in a 12-month period;
 57-3    or
 57-4                (2)  a temporary discount of not more than 25 percent
 57-5    from the tariffed rate for not more than 60 days in a 12-month
 57-6    period.
 57-7          (c)  An electing company is not required to obtain commission
 57-8    approval to make a promotional offering described by Subsection
 57-9    (b).
57-10          (d)  An electing company may offer a promotion of any
57-11    regulated service as part of a package of services consisting of
57-12    any regulated service with any other regulated or unregulated
57-13    service or any service of an affiliate.
57-14          SECTION 45.  Section 60.042, Utilities Code, is amended to
57-15    read as follows:
57-16          Sec. 60.042.  PROHIBITED RESALE OR SHARING.  (a)  A provider
57-17    of telecommunications service may not impose a restriction on the
57-18    resale or sharing of a service:
57-19                (1)  for which the provider is not a dominant provider;
57-20    or
57-21                (2)  entitled to regulatory treatment as a nonbasic
57-22    [competitive] service under Subchapter E, Chapter 58, if the
57-23    provider is a company electing regulation under Chapter 58.
57-24          (b)  An incumbent local exchange company must comply with the
57-25    resale provisions of 47 U.S.C. Section 251(c)(4), as amended,
57-26    unless exempted under 47 U.S.C. Section 251(f), as amended.
57-27          (c)  If a company electing under Chapter 58 offers basic or
 58-1    nonbasic services regulated by the commission to its retail
 58-2    customers as a promotional offering, the electing company shall
 58-3    make those services available for resale by a certificated
 58-4    telecommunications utility on terms that are no less favorable than
 58-5    the terms on which the services are made available to retail
 58-6    customers in accordance with this section.  For a promotion with a
 58-7    duration of 90 days or less, the electing company's basic or
 58-8    nonbasic services shall be made available to the certificated
 58-9    telecommunications utility at the electing company's promotional
58-10    rate, without an avoided-cost discount.  For a promotion with a
58-11    duration of more than 90 days, the electing company's basic or
58-12    nonbasic services shall be made available to the certificated
58-13    telecommunications utility at a rate reflecting the avoided-cost
58-14    discount, if any, from the promotional rate.
58-15          SECTION 46.  Subchapter I, Chapter 60, Utilities Code, is
58-16    amended by adding Sections 60.164 and 60.165 to read as follows:
58-17          Sec. 60.164.  PERMISSIBLE JOINT MARKETING.  Except as
58-18    prescribed in Chapters 61, 62, and 63, the commission may not adopt
58-19    any rule or order that would prohibit a local exchange company from
58-20    jointly marketing or selling its products and services with the
58-21    products and services of any of its affiliates in any manner
58-22    permitted by federal law or applicable rules or orders of the
58-23    Federal Communications Commission.
58-24          Sec. 60.165.  AFFILIATE RULE.  Except as prescribed in
58-25    Chapters 61, 62, and 63, the commission may not adopt any rule or
58-26    order that would prescribe for any local exchange company any
58-27    affiliate rule, including any accounting rule, any cost allocation
 59-1    rule, or any structural separation rule, that is more burdensome
 59-2    than federal law or applicable rules or orders of the Federal
 59-3    Communications Commission.  Notwithstanding any other provision in
 59-4    this title, the commission may not attribute or impute to a local
 59-5    exchange company a price discount offered by an affiliate of the
 59-6    local exchange company to the affiliate's customers.  This section
 59-7    does not limit the authority of the commission to consider a
 59-8    complaint brought under Subchapter A, Chapter 52, Section 53.003,
 59-9    or this chapter.
59-10          SECTION 47.  Section 62.074(b), Utilities Code, is amended to
59-11    read as follows:
59-12          (b)  An incumbent local exchange company may not:
59-13                (1)  develop a rate for a telecommunications service or
59-14    provide a telecommunications service to benefit primarily the
59-15    company's separate affiliate for the affiliate's video or audio
59-16    programming unless the rate or service is available to any
59-17    purchaser without discrimination, except that an incumbent local
59-18    exchange company may market or sell the audio or video programming
59-19    products or services provided by the company's separate affiliate
59-20    without marketing or selling the audio or video programming
59-21    products or services of a nonaffiliated provider;
59-22                (2)  provide a telecommunications service for the
59-23    separate affiliate's audio or video programming in an unreasonably
59-24    preferential manner;
59-25                (3)  transfer an asset to the separate affiliate for
59-26    less than the amount for which the asset is available to a third
59-27    party in an arm's-length transaction;
 60-1                (4)  have a director, officer, or employee in common
 60-2    with the separate affiliate;
 60-3                (5)  own property in common with the separate
 60-4    affiliate; or
 60-5                (6)  enter into a customer-specific contract with the
 60-6    separate affiliate to provide tariffed telecommunications services
 60-7    unless substantially the same contract terms are generally
 60-8    available to nonaffiliated interests.
 60-9          SECTION 48.  Section 62.108, Utilities Code, is amended to
60-10    read as follows:
60-11          Sec. 62.108.  EXPIRATION.  This subchapter expires August 31,
60-12    2005 [1999].
60-13          SECTION 49.  Section 62.136, Utilities Code, is amended to
60-14    read as follows:
60-15          Sec. 62.136.  EXPIRATION.  This subchapter expires August 31,
60-16    2005 [1999].
60-17          SECTION 50.  Subtitle C, Title 2, Utilities Code, is amended
60-18    by adding Chapter 64 to read as follows:
60-19                     CHAPTER 64.  CUSTOMER PROTECTION
60-20                     SUBCHAPTER A.  GENERAL PROVISIONS
60-21          Sec. 64.001.  CUSTOMER PROTECTION POLICY.  (a)  The
60-22    legislature finds that new developments in telecommunications
60-23    services, as well as changes in market structure, marketing
60-24    techniques, and technology, make it essential that customers have
60-25    safeguards against fraudulent, unfair, misleading, deceptive, or
60-26    anticompetitive business practices and against businesses that do
60-27    not have the technical and financial resources to provide adequate
 61-1    service.
 61-2          (b)  The purpose of this chapter is to establish customer
 61-3    protection standards and confer on the commission authority to
 61-4    adopt and enforce rules to protect customers from fraudulent,
 61-5    unfair, misleading, deceptive, or anticompetitive practices.
 61-6          (c)  Nothing in this section shall be construed to abridge
 61-7    customer rights set forth in commission rules in effect at the time
 61-8    of the enactment of this chapter.
 61-9          (d)  This chapter does not limit the constitutional,
61-10    statutory, and common law authority of the office of the attorney
61-11    general.
61-12          Sec. 64.002.  DEFINITIONS.  In this chapter:
61-13                (1)  "Billing agent" means any entity that submits
61-14    charges to the billing utility on behalf of itself or any provider
61-15    of a product or service.
61-16                (2)  "Billing utility" means any telecommunications
61-17    provider, as defined by Section 51.002, that issues a bill directly
61-18    to a customer for any telecommunications product or service.
61-19                (3)  "Certificated telecommunications utility" means a
61-20    telecommunications utility that has been granted either a
61-21    certificate of convenience and necessity, a certificate of
61-22    operating authority, or a service provider certificate of operating
61-23    authority.
61-24                (4)  "Customer" means any person in whose name
61-25    telephone service is billed, including individuals, governmental
61-26    units at all levels of government, corporate entities, and any
61-27    other entity with legal capacity to be billed for telephone
 62-1    service.
 62-2                (5)  "Service provider" means any entity that offers a
 62-3    product or service to a customer and that directly or indirectly
 62-4    charges to or collects from a customer's bill an amount for the
 62-5    product or service on a customer's bill received from a billing
 62-6    utility.
 62-7                (6)  "Telecommunications utility" has the meaning
 62-8    assigned by Section 51.002.
 62-9          Sec. 64.003.  CUSTOMER AWARENESS.  (a)  The commission shall
62-10    promote public awareness of changes in telecommunications markets,
62-11    provide customers with information necessary to make informed
62-12    choices about available options, and ensure that customers have an
62-13    adequate understanding of their rights.
62-14          (b)  The commission shall compile a report on customer
62-15    service at least once each year showing the comparative customer
62-16    information from reports given to the commission it deems
62-17    necessary.
62-18          (c)  The commission shall adopt and enforce rules to require
62-19    a certificated telecommunications utility to give clear, uniform,
62-20    and understandable information to customers about rates, terms,
62-21    services, customer rights, and other necessary information as
62-22    determined by the commission.
62-23          (d)  Customer awareness efforts by the commission shall be
62-24    conducted in English and Spanish and any other language as
62-25    necessary.
62-26          Sec. 64.004.  CUSTOMER PROTECTION STANDARDS.  (a)  All buyers
62-27    of telecommunications services are entitled to:
 63-1                (1)  protection from fraudulent, unfair, misleading,
 63-2    deceptive, or anticompetitive practices, including protection from
 63-3    being billed for services that were not authorized or provided;
 63-4                (2)  choice of a telecommunications service provider
 63-5    and to have that choice honored;
 63-6                (3)  information in English and Spanish and any other
 63-7    language as the commission deems necessary concerning rates, key
 63-8    terms, and conditions;
 63-9                (4)  protection from discrimination on the basis of
63-10    race, color, sex, nationality, religion, marital status, income
63-11    level, or source of income and from unreasonable discrimination on
63-12    the basis of geographic location;
63-13                (5)  impartial and prompt resolution of disputes with a
63-14    certificated telecommunications utility and disputes with a
63-15    telecommunications service provider related to unauthorized charges
63-16    and switching of service;
63-17                (6)  privacy of customer consumption and credit
63-18    information;
63-19                (7)  accuracy of billing;
63-20                (8)  bills presented in a clear, readable format and
63-21    easy-to-understand language;
63-22                (9)  information in English and Spanish and any other
63-23    language as the commission deems necessary concerning low-income
63-24    assistance programs and deferred payment plans;
63-25                (10)  all consumer protections and disclosures
63-26    established by the Fair Credit Reporting Act (15 U.S.C. Section
63-27    1681 et seq.) and the Truth in Lending Act (15 U.S.C. Section 1601
 64-1    et seq.); and
 64-2                (11)  programs that offer eligible low-income customers
 64-3    an affordable rate package and bill payment assistance programs
 64-4    designed to reduce uncollectible accounts.
 64-5          (b)  The commission may adopt and enforce rules as necessary
 64-6    or appropriate to carry out this section, including rules for
 64-7    minimum service standards for a certificated telecommunications
 64-8    utility relating to customer deposits and the extension of credit,
 64-9    switching fees, termination of service, an affordable rate package,
64-10    and bill payment assistance programs for low-income customers.  The
64-11    commission may waive language requirements for good cause.
64-12          (c)  The commission shall request the comments of the office
64-13    of the attorney general in developing the rules that may be
64-14    necessary or appropriate to carry out this section.
64-15          (d)  The commission shall coordinate its enforcement efforts
64-16    regarding the prosecution of fraudulent, misleading, deceptive, and
64-17    anticompetitive business practices with the office of the attorney
64-18    general in order to ensure consistent treatment of specific alleged
64-19    violations.
64-20          (e)  Nothing in this section shall be construed to abridge
64-21    customer rights set forth in commission rules in effect at the time
64-22    of the enactment of this chapter.
64-23                SUBCHAPTER B.  CERTIFICATION, REGISTRATION,
64-24                        AND REPORTING REQUIREMENTS
64-25          Sec. 64.051.  ADOPTION OF RULES.  (a)  The commission shall
64-26    adopt rules relating to certification, registration, and reporting
64-27    requirements for a certificated telecommunications utility, all
 65-1    telecommunications utilities that are not dominant carriers, and
 65-2    pay telephone providers.
 65-3          (b)  The rules adopted under Subsection (a) shall be
 65-4    consistent with and no less effective than federal law and may not
 65-5    require the disclosure of highly sensitive competitive or trade
 65-6    secret information.
 65-7          Sec. 64.052.  SCOPE OF RULES.  The commission may adopt and
 65-8    enforce rules to:
 65-9                (1)  require certification or registration with the
65-10    commission as a condition of doing business in this state;
65-11                (2)  amend certificates or registrations to reflect
65-12    changed ownership and control;
65-13                (3)  establish rules for customer service and
65-14    protection;
65-15                (4)  suspend or revoke certificates or registrations
65-16    for repeated violations of this chapter or commission rules, except
65-17    that the commission may not revoke a certificate of convenience and
65-18    necessity of a telecommunications utility except as provided by
65-19    Section 54.008; and
65-20                (5)  order disconnection of a pay telephone service
65-21    provider's pay telephones or revocation of certification or
65-22    registration for repeated violations of this chapter or commission
65-23    rules.
65-24          Sec. 64.053.  REPORTS.  The commission may require a
65-25    telecommunications service provider to submit reports to the
65-26    commission concerning any matter over which it has authority under
65-27    this chapter.
 66-1                 SUBCHAPTER C.  CUSTOMER'S RIGHT TO CHOICE
 66-2          Sec. 64.101.  POLICY.  It is the policy of this state that
 66-3    all customers be protected from the unauthorized switching of a
 66-4    telecommunications service provider selected by the customer to
 66-5    provide service.
 66-6          Sec. 64.102.  RULES RELATING TO CHOICE.  The commission shall
 66-7    adopt and enforce rules that:
 66-8                (1)  ensure that customers are protected from deceptive
 66-9    practices employed in obtaining authorizations of service and in
66-10    the verification of change orders, including negative option
66-11    marketing, sweepstakes, and contests that cause customers to
66-12    unknowingly change their telecommunications service provider;
66-13                (2)  provide for clear, easily understandable
66-14    identification, in each bill sent to a customer, of all
66-15    telecommunications service providers submitting charges on the
66-16    bill;
66-17                (3)  ensure that every service provider submitting
66-18    charges on the bill is clearly and easily identified on the bill
66-19    along with its services, products, and charges;
66-20                (4)  provide that unauthorized changes in service be
66-21    remedied at no cost to the customer within a period established by
66-22    the commission;
66-23                (5)  require refunds or credits to the customer in the
66-24    event of an unauthorized change; and
66-25                (6)  provide for penalties for violations of commission
66-26    rules adopted under this section, including fines and revocation of
66-27    certificates or registrations, by this action denying the
 67-1    certificated telecommunications utility the right to provide
 67-2    service in this state, except that the commission may not revoke a
 67-3    certificate of convenience and necessity of a telecommunications
 67-4    utility except as provided by Section 54.008.
 67-5          SUBCHAPTER D.  PROTECTION AGAINST UNAUTHORIZED CHARGES
 67-6          Sec. 64.151.  REQUIREMENTS FOR SUBMITTING CHARGES.  (a)  A
 67-7    service provider or billing agent may submit charges for a new
 67-8    product or service to be billed on a customer's telephone bill on
 67-9    or after the effective date of this section only if:
67-10                (1)  the service provider offering the product or
67-11    service has thoroughly informed the customer of the product or
67-12    service being offered, including all associated charges, and has
67-13    explicitly informed the customer that the associated charges for
67-14    the product or service will appear on the customer's telephone
67-15    bill;
67-16                (2)  the customer has clearly and explicitly consented
67-17    to obtain the product or service offered and to have the associated
67-18    charges appear on the customer's telephone bill and the consent has
67-19    been verified as provided by Subsection (b); and
67-20                (3)  the service provider offering the product or
67-21    service and any billing agent for the service provider:
67-22                      (A)  has provided the customer with a toll-free
67-23    telephone number the customer may call and an address to which the
67-24    customer may write to resolve any billing dispute and to answer
67-25    questions; and
67-26                      (B)  has contracted with the billing utility to
67-27    bill for products and services on the billing utility's bill as
 68-1    provided by Subsection (c).
 68-2          (b)  The customer consent required by Subsection (a)(2) must
 68-3    be verified by the service provider offering the product or service
 68-4    by authorization from the customer.  A record of the customer
 68-5    consent, including verification, must be maintained by the service
 68-6    provider offering the product or service for a period of at least
 68-7    24 months immediately after the consent and verification have been
 68-8    obtained.  The method of obtaining customer consent and
 68-9    verification must include one or more of the following:
68-10                (1)  written authorization from the customer;
68-11                (2)  toll-free electronic authorization placed from the
68-12    telephone number that is the subject of the product or service;
68-13                (3)  oral authorization obtained by an independent
68-14    third party; or
68-15                (4)  any other method of authorization approved by the
68-16    commission or the Federal Communications Commission.
68-17          (c)  The contract required by Subsection (a)(3)(B) must
68-18    include the service provider's name, business address, and business
68-19    telephone number and shall be maintained by the billing utility for
68-20    as long as the billing for the products and services continues and
68-21    for the 24 months immediately following the permanent
68-22    discontinuation of the billing.
68-23          (d)  A service provider offering a product or service to be
68-24    charged on a customer's telephone bill and any billing agent for
68-25    the service provider may not use any fraudulent, unfair,
68-26    misleading, deceptive, or anticompetitive marketing practice to
68-27    obtain customers, including the use of negative option marketing,
 69-1    sweepstakes, and contests.
 69-2          (e)  Unless verification is required by federal law or rules
 69-3    implementing federal law, Subsection (b) does not apply to
 69-4    customer-initiated transactions with a certificated
 69-5    telecommunications provider for which the service provider has the
 69-6    appropriate documentation.
 69-7          (f)  If a service provider is notified by a billing utility
 69-8    that a customer has reported to the billing utility that a charge
 69-9    made by the service provider is unauthorized, the service provider
69-10    shall cease to charge the customer for the unauthorized product or
69-11    service.
69-12          (g)  This section does not apply to message
69-13    telecommunications services charges that are initiated by dialing
69-14    1+, 0+, 0-, 1010XXX, or collect calls and charges for video
69-15    services if the service provider has the necessary call detail
69-16    record to establish the billing for the call or service.
69-17          Sec. 64.152.  RESPONSIBILITIES OF BILLING UTILITY.  (a)  If a
69-18    customer's telephone bill is charged for any product or service
69-19    without proper customer consent or verification, the billing
69-20    utility, on its knowledge or notification of any unauthorized
69-21    charge, shall promptly, not later than 45 days after the date of
69-22    knowledge or notification of the charge:
69-23                (1)  notify the service provider to cease charging the
69-24    customer for the unauthorized product or service;
69-25                (2)  remove any unauthorized charge from the customer's
69-26    bill;
69-27                (3)  refund or credit to the customer all money that
 70-1    has been paid by the customer for any unauthorized charge, and if
 70-2    the unauthorized charge is not adjusted within three billing
 70-3    cycles, shall pay interest on the amount of the unauthorized
 70-4    charge;
 70-5                (4)  on the customer's request, provide the customer
 70-6    with all billing records under its control related to any
 70-7    unauthorized charge within 15 business days after the date of the
 70-8    removal of the unauthorized charge from the customer's bill; and
 70-9                (5)  maintain for at least 24 months a record of every
70-10    customer who has experienced any unauthorized charge for a product
70-11    or service on the customer's telephone bill and who has notified
70-12    the billing utility of the unauthorized charge.
70-13          (b)  A record required by Subsection (a)(5) shall contain for
70-14    each unauthorized charge:
70-15                (1)  the name of the service provider that offered the
70-16    product or service;
70-17                (2)  any affected telephone numbers or addresses;
70-18                (3)  the date the customer requested that the billing
70-19    utility remove the unauthorized charge;
70-20                (4)  the date the unauthorized charge was removed from
70-21    the customer's telephone bill; and
70-22                (5)  the date any money that the customer paid for the
70-23    unauthorized charges was refunded or credited to the customer.
70-24          (c)  A billing utility may not:
70-25                (1)  disconnect or terminate telecommunications service
70-26    to any customer for nonpayment of an unauthorized charge;
70-27                (2)  file an unfavorable credit report against a
 71-1    customer who has not paid charges the customer has alleged were
 71-2    unauthorized unless the dispute regarding the unauthorized charge
 71-3    is ultimately resolved against the customer, except that the
 71-4    customer shall remain obligated to pay any charges that are not in
 71-5    dispute, and this subsection does not apply to those undisputed
 71-6    charges; or
 71-7                (3)  interrupt or terminate local exchange service if
 71-8    charges for local exchange service are paid, unless the customer's
 71-9    local exchange service provider:
71-10                      (A)  offers to the customer prepaid local
71-11    telephone service in accordance with terms and conditions
71-12    established by the commission; and
71-13                      (B)  provides eligible customers with notice of
71-14    their eligibility for this service in accordance with commission
71-15    rules.
71-16          Sec. 64.153.  RECORDS OF DISPUTED CHARGES.  (a)  Every
71-17    service provider shall maintain a record of every disputed charge
71-18    for a product or service placed on a customer's bill.
71-19          (b)  The record required under Subsection (a) shall contain
71-20    for every disputed charge:
71-21                (1)  any affected telephone numbers or addresses;
71-22                (2)  the date the customer requested that the billing
71-23    utility remove the unauthorized charge;
71-24                (3)  the date the unauthorized charge was removed from
71-25    the customer's telephone bill; and
71-26                (4)  the date action was taken to refund or credit to
71-27    the customer any money that the customer paid for the unauthorized
 72-1    charges.
 72-2          (c)  The record required by Subsection (a) shall be
 72-3    maintained for at least 24 months following the completion of all
 72-4    steps required by Section 64.152(a).
 72-5          Sec. 64.154.  NOTICE.  (a)  A billing utility shall provide
 72-6    notice of a customer's rights under this section in the manner
 72-7    prescribed by the commission.
 72-8          (b)  Notice of a customer's rights must be provided by mail
 72-9    to each residential and retail business customer within 60 days of
72-10    the effective date of this section or by inclusion in the
72-11    publication of the telephone directory next following the effective
72-12    date of this section.  In addition, each billing utility shall send
72-13    the notice to new customers at the time service is initiated or to
72-14    any customer at that customer's request.
72-15          Sec. 64.155.  PROVIDING COPY OF RECORDS.  A billing utility
72-16    shall provide a copy of records maintained under Sections
72-17    64.151(c), 64.152, and 64.154 to the commission staff on request.
72-18    A service provider shall provide a copy of records maintained under
72-19    Sections 64.151(b) and 64.153 to the commission on request.
72-20          Sec. 64.156.  VIOLATIONS.  (a)  If the commission finds that
72-21    a billing utility violated this subchapter, the commission may
72-22    implement penalties and other enforcement actions under Chapter 15.
72-23          (b)  If the commission finds that any other service provider
72-24    or billing agent subject to this subchapter has violated this
72-25    subchapter or has knowingly provided false information to the
72-26    commission on matters subject to this subchapter, the commission
72-27    may enforce the provisions of Chapter 15 against the service
 73-1    provider or billing agent as if it were regulated by the
 73-2    commission.
 73-3          (c)  Neither the authority granted under this section nor any
 73-4    other provision of this subchapter shall be construed to grant the
 73-5    commission jurisdiction to regulate service providers or billing
 73-6    agents who are not otherwise subject to commission regulation,
 73-7    other than as specifically provided by this chapter.
 73-8          (d)  If the commission finds that a billing utility or
 73-9    service provider repeatedly violates this subchapter, the
73-10    commission may, if the action is consistent with the public
73-11    interest, suspend, restrict, or revoke the registration or
73-12    certificate of the telecommunications service provider, by this
73-13    action denying the telecommunications service provider the right to
73-14    provide service in this state, except that the commission may not
73-15    revoke a certificate of convenience and necessity of a
73-16    telecommunications utility except as provided by Section 54.008.
73-17          (e)  If the commission finds that a service provider or
73-18    billing agent has repeatedly violated any provision of this
73-19    subchapter, the commission may order the billing utility to
73-20    terminate billing and collection services for that service provider
73-21    or billing agent.
73-22          (f)  Nothing in this subchapter shall be construed to
73-23    preclude a billing utility from taking action on its own to
73-24    terminate or restrict its billing and collection services.
73-25          Sec. 64.157.  DISPUTES.  (a) The commission may resolve
73-26    disputes between a retail customer and a billing utility, service
73-27    provider, or telecommunications utility.
 74-1          (b)  In exercising its authority under Subsection (a), the
 74-2    commission may:
 74-3                (1)  order a billing utility or service provider to
 74-4    produce information or records;
 74-5                (2)  require that all contracts, bills, and other
 74-6    communications from a billing utility or service provider display a
 74-7    working toll-free telephone number that customers may call with
 74-8    complaints and inquiries;
 74-9                (3)  require a billing utility or service provider to
74-10    refund or credit overcharges or unauthorized charges with interest
74-11    if the billing utility or service provider has failed to comply
74-12    with commission rules or a contract with the customer;
74-13                (4)  order appropriate relief to ensure that a
74-14    customer's choice of a telecommunications service provider is
74-15    honored;
74-16                (5)  require the continuation of service to a
74-17    residential or small commercial customer while a dispute is pending
74-18    regarding charges the customer has alleged were unauthorized; and
74-19                (6)  investigate an alleged violation.
74-20          (c)  The commission shall adopt procedures for the resolution
74-21    of disputes in a timely manner, which in no event shall exceed 60
74-22    days.
74-23          Sec. 64.158.  CONSISTENCY WITH FEDERAL LAW.  Rules adopted by
74-24    the commission under this subchapter shall be consistent with and
74-25    not more burdensome than applicable federal laws and rules.
74-26          SECTION 51.  Section 55.012, Utilities Code, as added by this
74-27    Act, takes effect March 1, 2000.
 75-1          SECTION 52.  The following provisions of the Utilities Code
 75-2    are repealed:
 75-3                (1)  Section 58.062; and
 75-4                (2)  Subchapter D, Chapter 58.
 75-5          SECTION 53.  The importance of this legislation and the
 75-6    crowded condition of the calendars in both houses create an
 75-7    emergency and an imperative public necessity that the
 75-8    constitutional rule requiring bills to be read on three several
 75-9    days in each house be suspended, and this rule is hereby suspended,
75-10    and that this Act take effect and be in force according to its
75-11    terms, and it is so enacted.