1-1 By: Sibley, Fraser S.B. No. 560
1-2 (In the Senate - Filed February 17, 1999; February 18, 1999,
1-3 read first time and referred to Committee on Economic Development;
1-4 April 14, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 4, Nays 0; April 14, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 560 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the regulation of telecommunications utilities by the
1-11 Public Utility Commission of Texas and the provision of
1-12 telecommunications services.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Section 12.005, Utilities Code, is amended to
1-15 read as follows:
1-16 Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility
1-17 Commission of Texas is subject to Chapter 325, Government Code
1-18 (Texas Sunset Act). Unless continued in existence as provided by
1-19 that chapter, the commission is abolished and this title expires
1-20 September 1, 2005 [2001].
1-21 SECTION 2. Section 52.102, Utilities Code, is amended to
1-22 read as follows:
1-23 Sec. 52.102. LIMITED REGULATORY AUTHORITY. Except as
1-24 otherwise provided by this subchapter and Subchapter D, Chapter 55,
1-25 the commission has only the following jurisdiction over a
1-26 telecommunications utility subject to this subchapter:
1-27 (1) to require registration under Section 52.103;
1-28 (2) to conduct an investigation under Section 52.104;
1-29 (3) to require the filing of reports as the commission
1-30 periodically directs;
1-31 (4) to require the maintenance of statewide average
1-32 rates or prices of telecommunications service;
1-33 (5) to require access to telecommunications service
1-34 under Section 52.105; [and]
1-35 (6) to require the quality of telecommunications
1-36 service provided to be adequate under Section 52.106; and
1-37 (7) to require a telecommunications utility that,
1-38 together with affiliates, had more than six percent of the total
1-39 intrastate access minutes of use as measured for the most recent
1-40 12-month period, to pass switched access rate reductions under this
1-41 title to customers as required under Section 52.112. This
1-42 authority shall expire on the date specified in Section 52.112.
1-43 SECTION 3. Section 52.108, Utilities Code, is amended to
1-44 read as follows:
1-45 Sec. 52.108. OTHER PROHIBITED PRACTICES. The commission may
1-46 enter any order necessary to protect the public interest if the
1-47 commission finds after notice and hearing that a telecommunications
1-48 utility has:
1-49 (1) failed to maintain statewide average rates;
1-50 (2) abandoned interexchange message telecommunications
1-51 service to a local exchange area in a manner contrary to the public
1-52 interest; [or]
1-53 (3) engaged in a pattern of preferential or
1-54 discriminatory activities prohibited by Section 53.003, 55.005, or
1-55 55.006; or
1-56 (4) failed to pass switched access rate reductions to
1-57 customers under Chapter 56 or other law, as required under Section
1-58 52.112.
1-59 SECTION 4. Section 52.110, Utilities Code, is amended to
1-60 read as follows:
1-61 Sec. 52.110. BURDEN OF PROOF. (a) In a proceeding before
1-62 the commission in which it is alleged that a telecommunications
1-63 utility engaged in conduct in violation of Section 52.107, 52.108,
1-64 [or] 52.109, or 52.112, the burden of proof is on:
2-1 (1) a telecommunications utility complaining of
2-2 conduct committed against it in violation of this subchapter; or
2-3 (2) except as provided by Subsection (b), the
2-4 responding telecommunications utility if the proceedings are:
2-5 (A) brought by a customer or customer
2-6 representative who is not a telecommunications utility; or
2-7 (B) initiated by the commission.
2-8 (b) The commission may impose the burden of proof on the
2-9 complaining party in a proceeding described by Subsection (a)(2) if
2-10 the commission determines that placing the burden of proof on the
2-11 complaining party is in the public interest.
2-12 SECTION 5. Subchapter C, Chapter 52, Utilities Code, is
2-13 amended by adding Section 52.112 to read as follows:
2-14 Sec. 52.112. REDUCTION PASS-THROUGH REQUIRED. (a) Each
2-15 telecommunications utility that, together with affiliates, had more
2-16 than six percent of the total intrastate access minutes of use as
2-17 measured for the most recent 12-month period, shall pass through to
2-18 customers switched access rate reductions under this title. The
2-19 residential customer class shall receive no less than a
2-20 proportionate share of the reductions.
2-21 (b) Within six months following each reduction in intrastate
2-22 switched access charges under this title, each telecommunications
2-23 utility subject to this section shall file a report with the
2-24 commission demonstrating its compliance on an average revenue per
2-25 minute basis with Subsection (a).
2-26 (c) This section shall expire two years after the date
2-27 incumbent local exchange companies doing business in the state are
2-28 no longer prohibited by federal law from offering interLATA and
2-29 interstate long distance service.
2-30 SECTION 6. Section 54.007, Utilities Code, is amended to
2-31 read as follows:
2-32 Sec. 54.007. FLEXIBILITY PLAN. (a) After the commission
2-33 grants an application for a certificate of convenience and
2-34 necessity, a certificate of operating authority, or a service
2-35 provider certificate of operating authority or determines that a
2-36 certificate is not needed for the applicant to provide the relevant
2-37 services, the commission shall conduct appropriate proceedings to
2-38 establish a transitional flexibility plan for the incumbent local
2-39 exchange company in the same area or areas as the new certificate
2-40 holder.
2-41 (b) A basic local telecommunications service price of the
2-42 incumbent local exchange company may not be increased before the
2-43 fourth anniversary of the date the certificate is granted to the
2-44 applicant except that the price may be increased[:]
2-45 [(1)] as provided by this title[;]
2-46 [(2) when the new certificate holder has completed the
2-47 build-out plan required by Subchapter C, if applicable; or]
2-48 [(3) when a competitor for basic local
2-49 telecommunications service provides the service in an area in which
2-50 the build-out requirements have been eliminated].
2-51 SECTION 7. Subchapter C, Chapter 54, Utilities Code, is
2-52 amended to read as follows:
2-53 SUBCHAPTER C. CERTIFICATE OF OPERATING AUTHORITY
2-54 Sec. 54.101. DEFINITION. In this subchapter, "certificate"
2-55 means a certificate of operating authority.
2-56 Sec. 54.102. APPLICATION FOR CERTIFICATE. (a) A [In lieu
2-57 of applying for a certificate of convenience and necessity, a]
2-58 person may apply for a certificate of operating authority.
2-59 (b) [An applicant for a facilities-based certificate of
2-60 operating authority must include with the application a proposed
2-61 build-out plan in compliance with this subchapter that demonstrates
2-62 how the applicant will, over a six-year period, deploy facilities
2-63 throughout the geographic area of the certificated service area.]
2-64 [(c)] The applicant must file with the application a sworn
2-65 statement that the applicant has applied for each municipal
2-66 consent, franchise, or permit required for the type of services and
2-67 facilities for which the applicant has applied.
2-68 (c) An affiliate of a person holding a certificate of
2-69 convenience and necessity may hold a certificate of operating
3-1 authority if the holder of the certificate of convenience and
3-2 necessity is in compliance with federal law and Federal
3-3 Communications Commission rules governing affiliates and structural
3-4 separation. An affiliate of a person holding a certificate of
3-5 convenience and necessity may not directly or indirectly sell to a
3-6 non-affiliate any regulated product or service purchased from the
3-7 person holding a certificate of convenience and necessity at any
3-8 rate or price less than the price paid to the person holding a
3-9 certificate of convenience and necessity.
3-10 (d) A person may hold a certificate for all or any portion
3-11 of a service area for which one or more affiliates of the person
3-12 holds a certificate of operating authority, a service provider
3-13 certificate of operating authority, or a certificate of convenience
3-14 and necessity.
3-15 Sec. 54.103. GRANT OR DENIAL OF CERTIFICATE. (a) The
3-16 commission must grant or deny a certificate not later than the 60th
3-17 day after the date the application for the certificate is filed.
3-18 The commission may extend the deadline on good cause shown.
3-19 (b) The commission shall grant each certificate on a
3-20 nondiscriminatory basis after considering factors such as:
3-21 (1) [the adequacy of the applicant's build-out plan;]
3-22 [(2)] the technical and financial qualifications of
3-23 the applicant; and
3-24 (2) [(3)] the applicant's ability to meet the
3-25 commission's quality of service requirements.
3-26 (c) In an exchange of an incumbent local exchange company
3-27 that serves fewer than 31,000 access lines, in addition to the
3-28 factors described by Subsection (b), the commission shall consider:
3-29 (1) the effect of granting the certificate on a public
3-30 utility serving the area and on that utility's customers;
3-31 (2) the ability of that public utility to provide
3-32 adequate service at reasonable rates;
3-33 (3) the effect of granting the certificate on the
3-34 ability of that public utility to act as the provider of last
3-35 resort; and
3-36 (4) the ability of the exchange, not the company, to
3-37 support more than one provider of service.
3-38 (d) Except as provided by Subsections (e) and (f), the
3-39 commission may grant an application for a certificate only for an
3-40 area or areas that are contiguous and reasonably compact and cover
3-41 an area of at least 27 square miles.
3-42 (e) In an exchange in a county that has a population of less
3-43 than 500,000 and that is served by an incumbent local exchange
3-44 company that has more than 31,000 access lines, an area covering
3-45 less than 27 square miles may be approved if the area is contiguous
3-46 and reasonably compact and has at least 20,000 access lines.
3-47 (f) In an exchange of a company that serves fewer than
3-48 31,000 access lines in this state, the commission may grant an
3-49 application only for an area that has boundaries similar to the
3-50 boundaries of the serving central office that is served by the
3-51 incumbent local exchange company that holds the certificate of
3-52 convenience and necessity for the area.
3-53 [Sec. 54.104. BUILD-OUT PLAN REQUIREMENTS. (a) The
3-54 build-out plan required by Section 54.102 must provide that, by the
3-55 end of the:]
3-56 [(1) first year, 10 percent of the area to be served
3-57 must be served with facilities that are not facilities of the
3-58 incumbent local exchange company;]
3-59 [(2) third year, 50 percent of the area to be served
3-60 must be served with facilities that are not facilities of the
3-61 incumbent local exchange company; and]
3-62 [(3) sixth year, 100 percent of the area to be served
3-63 must be served with facilities that are not facilities of the
3-64 incumbent local exchange company.]
3-65 [(b) The build-out plan may permit the certificate holder to
3-66 serve not more than 40 percent of the certificate holder's service
3-67 area by reselling the incumbent local exchange company's
3-68 facilities. The resale must be in accordance with:]
3-69 [(1) Section 54.105; and]
4-1 [(2) the resale tariff approved by the commission
4-2 under Subchapter C, Chapter 60.]
4-3 [(c) The resale limitation applies to an incumbent local
4-4 exchange facility that a certificate holder resells in providing
4-5 local exchange telephone service, regardless of whether:]
4-6 [(1) the certificate holder purchases the facility
4-7 directly from the incumbent local exchange company; or]
4-8 [(2) an intermediary carrier purchases the facility
4-9 from the incumbent local exchange company and then provides the
4-10 facility to the certificate holder for resale.]
4-11 [(d) To meet the build-out requirement prescribed by this
4-12 subchapter, a certificate holder:]
4-13 [(1) may not use commercial mobile service; and]
4-14 [(2) may use personal communication services (PCS) or
4-15 other wireless technology licensed or allocated by the Federal
4-16 Communications Commission after January 1, 1995.]
4-17 [Sec. 54.105. SIX-YEAR LIMITATION ON RESALE OF SERVICES.
4-18 Before the sixth anniversary of the date a certificate is granted,
4-19 the certificate holder may extend service by resale only:]
4-20 [(1) in the area it is obligated to serve under the
4-21 approved build-out plan; and]
4-22 [(2) to the distant premises of one of its
4-23 multi-premises customers beyond the approved build-out area but in
4-24 its certificated service area.]
4-25 Sec. 54.104 [54.106]. TIME OF SERVICE REQUIREMENTS.
4-26 (a) The commission by rule may prescribe the period within which a
4-27 certificate holder must be able to serve customers.
4-28 (b) Notwithstanding Subsection (a), a certificate holder
4-29 must serve a customer [in the build-out area] not later than the
4-30 30th day after the date the customer requests service.
4-31 [Sec. 54.107. REQUIREMENTS RELATING TO CERTAIN FACILITIES.
4-32 As part of the build-out requirements, the commission may not
4-33 require a certificate holder to:]
4-34 [(1) place a drop facility on each customer's
4-35 premises; or]
4-36 [(2) activate a fiber optic facility in advance of a
4-37 customer request.]
4-38 [Sec. 54.108. BUILD-OUT PLAN COMPLIANCE. (a) A certificate
4-39 holder shall file periodic reports with the commission
4-40 demonstrating compliance with:]
4-41 [(1) the plan approved by the commission; and]
4-42 [(2) the resale limitation prescribed by Section
4-43 54.104(b).]
4-44 [(b) The commission may administratively and temporarily
4-45 waive compliance with the six-year build-out plan on a showing of
4-46 good cause.]
4-47 [Sec. 54.109. ELIMINATION OF BUILD-OUT REQUIREMENTS FOR
4-48 CERTAIN PROVIDERS. (a) The commission may waive the build-out
4-49 requirements of this subchapter for an additional applicant in a
4-50 particular area:]
4-51 [(1) on or after the sixth anniversary of the date a
4-52 certificate is granted for that area; or]
4-53 [(2) on or after the date a certificate holder
4-54 completes the holder's build-out plan in that area.]
4-55 [(b) The build-out requirements of this subchapter do not
4-56 apply to a service area:]
4-57 [(1) that is served by an incumbent local exchange
4-58 company that:]
4-59 [(A) has more than one million access lines; and]
4-60 [(B) on September 1, 1995, was subject to a
4-61 prohibition under federal law on the provision of interLATA
4-62 service; and]
4-63 [(2) for which all prohibitions on the incumbent local
4-64 exchange company's provision of interLATA services are removed so
4-65 the company can offer interLATA service together with local and
4-66 intraLATA toll service.]
4-67 [Sec. 54.110. HEARING ON BUILD-OUT AND RESALE REQUIREMENTS.
4-68 (a) The commission on application may conduct a hearing to
4-69 determine:]
5-1 [(1) whether the build-out requirements of Sections
5-2 54.102(b), 54.103(e) and (f), 54.104, 54.105, 54.106, and 54.107
5-3 have created a barrier to the entry of facilities-based local
5-4 exchange telephone service competition in an exchange in a county
5-5 that has a population of more than 500,000 and that is served by a
5-6 company that has more than 31,000 access lines; and]
5-7 [(2) the effect of the resale provisions on the
5-8 development of competition, other than the development of
5-9 competition in the certificated areas of companies that serve fewer
5-10 than 31,000 access lines as provided by Section 54.156(a).]
5-11 [(b) In making a determination under Subsection (a), the
5-12 commission shall consider:]
5-13 [(1) this title's policy to encourage construction of
5-14 local exchange networks;]
5-15 [(2) the number and type of competitors that have
5-16 sought to provide local exchange competition under the existing
5-17 rules prescribed by this title; and]
5-18 [(3) whether adopting new build-out and resale rules
5-19 would make innovative and competitive local exchange telephone
5-20 services more likely to be provided.]
5-21 [(c) The commission may change a requirement described by
5-22 Subsection (a)(1) or prescribed by Subchapter D if:]
5-23 [(1) the commission determines that the build-out
5-24 requirements have created a barrier to facilities-based local
5-25 exchange competition in an exchange described by Subsection (a)(1);
5-26 and]
5-27 [(2) the changes will encourage additional
5-28 facilities-based competition.]
5-29 [(d) Notwithstanding Subsection (c), the commission may not
5-30 reduce an exchange size to below 12 square miles or increase the
5-31 resale percentage prescribed by Section 54.104(b) to more than 50
5-32 percent.]
5-33 [(e) A rule adopted under Subsection (c) may apply only to a
5-34 person who files an application for a certificate after the date
5-35 the rule is adopted.]
5-36 Sec. 54.105 [54.111]. PENALTY FOR VIOLATION OF TITLE. If a
5-37 certificate holder fails to comply with a requirement of this
5-38 title, the commission may:
5-39 (1) revoke the holder's certificate;
5-40 (2) impose against the holder administrative penalties
5-41 under Subchapter B, Chapter 15; or
5-42 (3) take another action under Subchapter B, Chapter
5-43 15.
5-44 SECTION 8. Section 56.021, Utilities Code, is amended to
5-45 read as follows:
5-46 Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED. The
5-47 commission shall adopt and enforce rules requiring local exchange
5-48 companies to establish a universal service fund to:
5-49 (1) assist telecommunications providers [local
5-50 exchange companies] in providing basic local telecommunications
5-51 service at reasonable rates in high cost or rural areas;
5-52 (2) reimburse telecommunications providers [local
5-53 exchange companies] for revenue lost by providing tel-assistance
5-54 service under Subchapter C;
5-55 (3) reimburse the telecommunications carrier that
5-56 provides the statewide telecommunications relay access service
5-57 under Subchapter D; and
5-58 (4) reimburse the department and the commission for
5-59 costs incurred in implementing this chapter and Chapter 57.
5-60 SECTION 9. Sections 56.023 and 56.024, Utilities Code, are
5-61 amended to read as follows:
5-62 Sec. 56.023. COMMISSION POWERS AND DUTIES. (a) The
5-63 commission shall:
5-64 (1) in a manner that assures reasonable rates for
5-65 basic local telecommunications service, adopt eligibility criteria
5-66 and review procedures, including a method for administrative
5-67 review, the commission finds necessary to fund the universal
5-68 service fund and make distributions from that fund;
5-69 (2) determine which telecommunications providers
6-1 [local exchange companies] meet the eligibility criteria;
6-2 (3) determine the amount of and approve a procedure
6-3 for reimbursement to telecommunications providers [local exchange
6-4 companies] of revenue lost in providing tel-assistance service
6-5 under Subchapter C;
6-6 (4) establish and collect fees from the universal
6-7 service fund necessary to recover the costs the department and the
6-8 commission incur in administering this chapter and Chapter 57;
6-9 [and]
6-10 (5) approve procedures for the collection and
6-11 disbursal of the revenue of the universal service fund; and
6-12 (6) establish and implement the universal service fund
6-13 provisions required by Section 56.021(1) for all eligible
6-14 telecommunications providers not later than August 1, 1999.
6-15 (b) The eligibility criteria must require that a
6-16 telecommunications provider [local exchange company], in compliance
6-17 with the commission's quality of service requirements:
6-18 (1) offer service to each consumer within the
6-19 company's certificated area; and
6-20 (2) render continuous and adequate service within the
6-21 company's certificated area.
6-22 (c) The commission shall adopt rules for the administration
6-23 of the universal service fund and may act as necessary and
6-24 convenient to administer the fund.
6-25 Sec. 56.024. REPORTS; CONFIDENTIALITY. (a) The commission
6-26 may require a [local exchange company or another]
6-27 telecommunications provider to provide a report or information
6-28 necessary to assess contributions and disbursements to the
6-29 universal service fund.
6-30 (b) A report or information is confidential and not subject
6-31 to disclosure under Chapter 552, Government Code.
6-32 SECTION 10. Section 56.026, Utilities Code, is amended to
6-33 read as follows:
6-34 Sec. 56.026. UNIVERSAL SERVICE FUND DISBURSEMENTS. (a) A
6-35 revenue requirement showing is not required for a disbursement from
6-36 the universal service fund under this subchapter.
6-37 (b) The commission shall make each disbursement from the
6-38 universal service fund promptly and efficiently so that a
6-39 telecommunications provider [or local exchange company] does not
6-40 experience an unnecessary cash-flow change as a result of a change
6-41 in governmental policy.
6-42 (c) In establishing and implementing the universal service
6-43 fund provisions described in Section 56.021(1), the commission
6-44 shall size the fund to provide for disbursements to a company
6-45 serving more than five million access lines in this state
6-46 sufficient to offset a reduction of at least 2.35 cents per minute
6-47 in switched access rates on a combined originating and terminating
6-48 basis.
6-49 SECTION 11. Subchapter B, Chapter 56, Utilities Code, is
6-50 amended by adding Section 56.028 to read as follows:
6-51 Sec. 56.028. UNIVERSAL SERVICE FUND REIMBURSEMENT FOR
6-52 CERTAIN INTRALATA SERVICE. Upon request of a local exchange
6-53 company that is not an electing company under Chapters 58 and 59,
6-54 the commission shall provide reimbursement through the universal
6-55 service fund for reduced rates for intraLATA interexchange high
6-56 capacity (1.544 Mbps) service for entities described in Section
6-57 58.253(a). The amount of reimbursement shall be the difference
6-58 between the company's tariffed rate for such service as of
6-59 January 1, 1998, and the lowest rate offered for such service by
6-60 any local exchange company electing incentive regulation under
6-61 Chapter 58.
6-62 SECTION 12. Section 56.071, Utilities Code, is amended to
6-63 read as follows:
6-64 Sec. 56.071. TEL-ASSISTANCE SERVICE REQUIREMENTS. (a) The
6-65 commission shall adopt and enforce rules requiring a local exchange
6-66 company to establish a telecommunications service assistance
6-67 program to provide a reduction in the cost of telecommunications
6-68 service to each eligible consumer in the company's certificated
6-69 area. The reduction must be a reduction on the consumer's
7-1 telephone bill.
7-2 (b) In addition to local exchange companies, this subchapter
7-3 applies to telecommunications providers that receive universal
7-4 service fund support pursuant to the commission's universal service
7-5 fund rules, and any reference to or requirement imposed on local
7-6 exchange companies in this subchapter shall also apply to such
7-7 telecommunications providers.
7-8 (c) Except as provided by Section 56.075(b), the reduction
7-9 allowed by the program is 65 percent of the applicable tariff rate
7-10 for the service provided.
7-11 (d) [(c)] The program is named "tel-assistance service."
7-12 SECTION 13. Section 58.002, Utilities Code, is amended to
7-13 read as follows:
7-14 Sec. 58.002. DEFINITIONS [DEFINITION]. In this chapter:
7-15 (1) "Electing[, "electing] company" means an incumbent
7-16 local exchange company that elects to be subject to incentive
7-17 regulation and to make the corresponding infrastructure commitment
7-18 under this chapter.
7-19 (2) "Urban" for purposes of Subchapters C, D, and E,
7-20 means an area within rate group 4 and above in tariffs on file with
7-21 the commission.
7-22 SECTION 14. Section 58.021, Utilities Code, is amended to
7-23 read as follows:
7-24 Sec. 58.021. ELECTION. (a) An incumbent local exchange
7-25 company may elect to be subject to incentive regulation and to make
7-26 the corresponding infrastructure commitment under this chapter by
7-27 notifying the commission in writing of its election.
7-28 (b) The notice must include a statement that the company
7-29 agrees to:
7-30 (1) limit until September 1, 2005 [for four years] any
7-31 increase in a rate the company charges for basic network services
7-32 as prescribed by Subchapter C; and
7-33 (2) fulfill the infrastructure commitment prescribed
7-34 by Subchapters F and G.
7-35 (c) Except as provided in Subsection (d), an election under
7-36 this chapter remains in effect until the legislature eliminates the
7-37 incentive regulation authorized by this chapter and Chapter 59.
7-38 (d) The commission may allow an electing company serving
7-39 fewer than five million access lines to withdraw the company's
7-40 election under this chapter:
7-41 (1) on application by the company; and
7-42 (2) only for good cause.
7-43 (e) In this section, "good cause" includes only matters
7-44 beyond the control of the company.
7-45 SECTION 15. Section 58.024, Utilities Code, is amended by
7-46 amending Subsections (b) and (c) and adding Subsection (d) to read
7-47 as follows:
7-48 (b) The commission shall establish criteria for determining
7-49 whether a service should be reclassified. The criteria must
7-50 include consideration of the:
7-51 (1) availability of the service from other providers;
7-52 (2) [proportion of the market that receives the
7-53 service;]
7-54 [(3)] effect of the reclassification on service
7-55 subscribers; and
7-56 (3) [(4)] nature of the service.
7-57 (c) The commission may not reclassify a service until:
7-58 (1) each competitive safeguard prescribed by
7-59 Subchapters B-G, Chapter 60, is fully implemented; or
7-60 (2) for a company that serves more than five million
7-61 access lines in this state, the date on which the Federal
7-62 Communications Commission determines in accordance with 47 U.S.C.
7-63 Section 271 that the company may enter the interLATA
7-64 telecommunications market in this state.
7-65 (d) For an electing company having greater than five million
7-66 access lines, the commission may reclassify a service subject to
7-67 the following conditions:
7-68 (1) the electing company must file a request for a
7-69 service reclassification including information sufficient for the
8-1 commission to perform a review and evaluation under subsection (b);
8-2 (2) the commission must grant or deny the request not
8-3 later than the 30th day after the date the electing company files
8-4 the request for service reclassification; and
8-5 (3) there shall be a rebuttable presumption that the
8-6 request for service reclassification by the electing company should
8-7 be granted if the commission finds that there is a competitive
8-8 alternative provider serving customers through means other than
8-9 total service resale.
8-10 SECTION 16. Section 58.028, Utilities Code, is amended to
8-11 read as follows:
8-12 Sec. 58.028. REVIEW AND REPORT OF EFFECTS OF ELECTION.
8-13 (a) Not later than January 1, 2004 [2000], the commission shall
8-14 begin a review and evaluation of each company that elects under
8-15 this chapter or Chapter 59.
8-16 (b) The review must include an evaluation of the effects of
8-17 the election, including:
8-18 (1) consumer benefits;
8-19 (2) impact of competition;
8-20 (3) infrastructure investments; and
8-21 (4) quality of service.
8-22 (c) The commission shall file a report with the legislature
8-23 not later than January 1, 2005 [2001]. The report must include the
8-24 commission's recommendations as to whether the incentive regulation
8-25 provided by this chapter and Chapter 59 should be extended,
8-26 modified, eliminated, or replaced with another form of regulation.
8-27 (d) This section expires September 1, 2003 [2001].
8-28 SECTION 17. Subchapter C, Chapter 58, Utilities Code, is
8-29 amended by adding Section 58.0511 to read as follows:
8-30 Sec. 58.0511. SERVICES INCLUDED FOR CERTAIN ELECTING
8-31 COMPANIES. (a) From September 1, 1999, until such time as an
8-32 affected company offers interLATA long distance service, and
8-33 notwithstanding Section 58.051, for an electing company with more
8-34 than five million access lines, the services in Subsection (b) are
8-35 basic network services, unless reclassified under Section 58.024.
8-36 (b) Basic network services include:
8-37 (1) flat rate local exchange telephone service
8-38 including primary directory listings and the receipt of a directory
8-39 and any applicable mileage or zone charges;
8-40 (2) tone dialing service;
8-41 (3) lifeline and tel-assistance service;
8-42 (4) service connection for basic services;
8-43 (5) direct inward dialing service for basic services;
8-44 (6) private pay telephone access service;
8-45 (7) call trap and trace service;
8-46 (8) access for all residential and business end users
8-47 to 911 service provided by a local authority and access to dual
8-48 party relay service;
8-49 (9) mandatory extended area service arrangements;
8-50 (10) mandatory extended metropolitan service or other
8-51 mandatory toll-free calling arrangements;
8-52 (11) "1-plus" intraLATA message toll service if
8-53 intraLATA dialing parity has not yet been implemented; and
8-54 (12) residential and business installment billing and
8-55 late payment charges.
8-56 (c) Rates for the services listed in Subsections (b) and (e)
8-57 are capped until September 1, 2005.
8-58 (d) At such time as an electing company serving more than
8-59 five million access lines offers interLATA long distance, the
8-60 services listed in Subsection (e) are basic network services for
8-61 that company except that the commission may permit an electing
8-62 company, on application, to establish rates, terms and conditions
8-63 of service for residential and business installment billing and
8-64 late payment charges.
8-65 (e) Basic network services include:
8-66 (1) flat rate local exchange telephone service
8-67 including primary directory listings and the receipt of a directory
8-68 and any applicable mileage or zone charges, tone dialing, basic
8-69 service connection, and direct inward dialing residential services;
9-1 (2) flat rate local exchange telephone services
9-2 including primary directory listings and the receipt of a directory
9-3 and any applicable mileage or zone charges, tone dialing, basic
9-4 service connection, and direct inward dialing non-urban business
9-5 services;
9-6 (3) lifeline and tel-assistance service;
9-7 (4) private pay telephone access service;
9-8 (5) call trap and trace service;
9-9 (6) access for all residential and business end users
9-10 to 911 service provided by a local authority and access to dual
9-11 party relay service;
9-12 (7) mandatory extended area service arrangements;
9-13 (8) mandatory extended metropolitan service or other
9-14 mandatory toll-free calling arrangements; and
9-15 (9) residential and non-urban business installment
9-16 billing and late payment charges.
9-17 SECTION 18. Sections 58.054 and 58.055, Utilities Code, are
9-18 amended to read as follows:
9-19 Sec. 58.054. RATES CAPPED. (a) As a condition of election
9-20 under this chapter, an electing company shall commit to not
9-21 increasing a rate for a basic network service on or before the
9-22 fourth anniversary of its election date.
9-23 (b) The rates an electing company may charge on or before
9-24 that fourth anniversary are the rates charged by the company on
9-25 June 1, 1995, or, for a company that elects under this chapter
9-26 after September 1, 1999, the rates charged on the date of its
9-27 election, without regard to a proceeding pending under:
9-28 (1) Section 15.001;
9-29 (2) Subchapter D, Chapter 53; or
9-30 (3) Subchapter G, Chapter 2001, Government Code.
9-31 (c) Notwithstanding Subsections (a) and (b), the cap on the
9-32 rates for basic network services for a company electing under this
9-33 chapter may not expire before September 1, 2005.
9-34 Sec. 58.055. RATE ADJUSTMENT BY COMPANY. (a) An electing
9-35 company may increase a rate for a basic network service during the
9-36 election [four-year] period prescribed by Section 58.054 only:
9-37 (1) with commission approval that the proposed change
9-38 is included in Section 58.056, 58.057, or 58.058; and
9-39 (2) as provided by Sections 58.056, 58.057, 58.058,
9-40 and 58.059.
9-41 (b) Notwithstanding Subchapter F, Chapter 60, an electing
9-42 company may, on its own initiative, decrease a rate for a basic
9-43 network service during the electing [four-year] period.
9-44 (c) [The company may decrease the rate for switched access
9-45 service to an amount above the service's long run incremental cost.]
9-46 [(d)] The company may decrease the rate for a basic local
9-47 telecommunications service [other than switched access] to an
9-48 amount above the service's appropriate cost. If the company has
9-49 been required to perform or has elected to perform a long run
9-50 incremental cost study, the appropriate cost for the service is the
9-51 service's long run incremental cost.
9-52 SECTION 19. Section 58.060, Utilities Code, is amended to
9-53 read as follows:
9-54 Sec. 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION. After
9-55 the expiration of the [four-year] period during which the rates for
9-56 basic network services are capped as prescribed by Section 58.054
9-57 [expires], an electing company may increase a rate for a basic
9-58 network service only:
9-59 (1) with commission approval subject to this title;
9-60 and
9-61 (2) to the extent consistent with achieving universal
9-62 affordable service.
9-63 SECTION 20. Subchapter C, Chapter 58, Utilities Code, is
9-64 amended by adding Sections 58.063 and 58.064 to read as follows:
9-65 Sec. 58.063. FLEXIBLE PACKAGING ACROSS SERVICE
9-66 CLASSIFICATIONS. (a) Notwithstanding any other provision of this
9-67 title, an electing company serving more than five million access
9-68 lines may package basic network services with discretionary
9-69 services or competitive services as of the date the company enters
10-1 into the interLATA long distance market.
10-2 (b)(1) Notwithstanding any other provision of this title, an
10-3 electing company serving less than five million access lines may
10-4 package basic network services with discretionary services or
10-5 competitive services if the company notifies the commission of its
10-6 binding commitment to make the following infrastructure
10-7 improvements by September 1, 2001:
10-8 (A) install Common Channel Signaling 7
10-9 capability in each central office; and
10-10 (B) connect all of the company's serving central
10-11 offices to the company's respective LATA tandem central offices
10-12 with optical fiber or equivalent facilities.
10-13 (2) These commitments shall not apply to exchanges of
10-14 the company sold or transferred before, or for which contracts for
10-15 sale or transfer were pending on September 1, 2001. In the case of
10-16 exchanges for which contracts for sale or transfer were pending as
10-17 of March 1, 2001, where the purchaser withdrew or defaulted prior
10-18 to September 1, 2001, the company shall have one year from the date
10-19 of withdrawal or default to comply with the commitments.
10-20 (c) The price for a package of services containing basic
10-21 network services and discretionary or competitive services shall
10-22 not be higher than the sum of the tariffed rates of the basic
10-23 network services and the competitive services and the price
10-24 ceilings of the discretionary services.
10-25 (d) The price for a package of services containing basic
10-26 network services and discretionary or competitive services shall be
10-27 set at a level above the sum of:
10-28 (1) the lesser of the long run incremental cost or the
10-29 tariffed rate in effect on September 1, 1999, for a basic network
10-30 service; and
10-31 (2) the long run incremental cost in accordance with
10-32 the imputation rules prescribed in Subchapter D, Chapter 60, for a
10-33 discretionary or competitive service.
10-34 (e) An electing company may flexibly price a package that
10-35 includes a basic network service in any manner listed in Section
10-36 51.002(7), except that such a package may not be offered in a
10-37 manner that results in a customer-specific contract.
10-38 Sec. 58.064. ZONE-DENSITY PRICING OF BASIC LOCAL
10-39 TELECOMMUNICATIONS SERVICE. Until an electing company may engage
10-40 in pricing flexibility pursuant to Section 58.063, the only form of
10-41 pricing flexibility allowed for basic local telecommunications
10-42 service is zone-density pricing.
10-43 SECTION 21. Subchapter D, Chapter 58, Utilities Code, is
10-44 amended by adding Section 58.1011 to read as follows:
10-45 Sec. 58.1011. SERVICES INCLUDED FOR CERTAIN ELECTING
10-46 COMPANIES. (a) From September 1, 1999, until such time as an
10-47 affected company offers interLATA long distance service, and
10-48 notwithstanding Section 58.101, for an electing company with more
10-49 than five million access lines, the services in Subsection (b) are
10-50 discretionary services, unless reclassified under Section 58.024.
10-51 (b) Discretionary services include:
10-52 (1) call waiting, call forwarding, and custom calling
10-53 features that are not classified as competitive services;
10-54 (2) call return, caller identification, and call
10-55 control options that are not classified as competitive services;
10-56 (3) integrated services digital network (ISDN)
10-57 services;
10-58 (4) 0+ and 0- operator services if intraLATA dialing
10-59 parity has not yet been implemented; and
10-60 (5) new services when associated with a basic network
10-61 service or a discretionary service.
10-62 (c) At such time as an electing company serving more than
10-63 five million access lines offers interLATA long distance, the
10-64 services listed in Subsection (d) are discretionary services for
10-65 that company.
10-66 (d) Discretionary services include:
10-67 (1) call waiting, call forwarding, and custom calling
10-68 features, call return, caller identification, and call control
10-69 options that are not classified as competitive services, when
11-1 associated with a residential line;
11-2 (2) call waiting, call forwarding, and custom calling
11-3 features, call return, caller identification, and call control
11-4 options that are not classified as competitive services, when
11-5 associated with a non-urban business line;
11-6 (3) non-urban integrated services digital network
11-7 (ISDN); and
11-8 (4) new services when associated with a basic network
11-9 service or a discretionary service.
11-10 SECTION 22. Section 58.102, Utilities Code, is amended to
11-11 read as follows:
11-12 Sec. 58.102. MAXIMUM PRICE. (a) The commission shall set
11-13 the maximum price an electing company may charge for a
11-14 discretionary service until:
11-15 (1) for an electing company serving more than five
11-16 million access lines, the date the Federal Communications
11-17 Commission determines that the company may enter the interLATA
11-18 telecommunications market in this state; or
11-19 (2) for an electing company serving fewer than five
11-20 million access lines, September 1, 1999.
11-21 (b) The initial maximum price for a service is the price in
11-22 effect on the date of the electing company's election [September 1,
11-23 1995], without regard to a proceeding pending under:
11-24 (1) Section 15.001;
11-25 (2) Subchapter D, Chapter 53; or
11-26 (3) Subchapter G, Chapter 2001, Government Code.
11-27 (c) After the dates prescribed in Subsection (a), the
11-28 electing company may file annually a revised maximum price list for
11-29 the services classified as discretionary services. The new maximum
11-30 prices for the services classified as discretionary services may
11-31 not exceed, in the aggregate, 112 percent of the previous maximum
11-32 prices for those services. The electing company shall file the new
11-33 maximum price list in an informational tariff filed with the
11-34 commission five days prior to the date on which the new maximum
11-35 prices will become effective. [The commission may not increase the
11-36 initial maximum price until after the proceedings required by
11-37 Chapter 60.]
11-38 [(d) After the proceedings required by Chapter 60, the
11-39 commission, on its own motion or on application by the electing
11-40 company, may change the initial maximum price. However, the
11-41 commission may not increase the price more than 10 percent
11-42 annually.]
11-43 SECTION 23. Subchapter E, Chapter 58, Utilities Code, is
11-44 amended by adding Section 58.1511 to read as follows:
11-45 Sec. 58.1511. SERVICES INCLUDED FOR CERTAIN ELECTING
11-46 COMPANIES. (a) From September 1, 1999, until such time as an
11-47 affected company offers interLATA long distance service, and
11-48 notwithstanding Section 58.151, for an electing company with more
11-49 than five million access lines, the services in Subsection (b) are
11-50 competitive services.
11-51 (b) Competitive services include:
11-52 (1) directory assistance;
11-53 (2) "1-plus" intraLATA message toll service if
11-54 intraLATA dialing parity has been implemented;
11-55 (3) 0+ and 0- operator services if intraLATA dialing
11-56 parity has been implemented;
11-57 (4) central office based PBX-type services;
11-58 (5) wholesale billing and collection services;
11-59 (6) services described in the WATS tariff as of
11-60 January 1, 1995;
11-61 (7) 800 and foreign exchange services;
11-62 (8) private line service;
11-63 (9) special access service;
11-64 (10) services from public pay telephones;
11-65 (11) paging services and mobile services (IMTS);
11-66 (12) 911 services provided to a local authority that
11-67 are available from another provider;
11-68 (13) speed dialing;
11-69 (14) three-way calling;
12-1 (15) data services;
12-2 (16) all services not specifically classified as basic
12-3 network services or discretionary services; and
12-4 (17) new services other than those described in
12-5 Section 58.1011(b).
12-6 (c) At such time as an electing company serving more than
12-7 five million access lines offers interLATA long distance, the
12-8 services listed in Subsection (d) are competitive services for that
12-9 company.
12-10 (d) Competitive services include:
12-11 (1) flat rate urban business local exchange telephone
12-12 service including primary directory listings and the receipt of a
12-13 directory and any applicable mileage or zone charges;
12-14 (2) urban business tone dialing service;
12-15 (3) service connection for basic urban business
12-16 services;
12-17 (4) direct inward dialing service for basic urban
12-18 business services;
12-19 (5) directory assistance;
12-20 (6) call waiting, call forwarding, and custom calling
12-21 features, when associated with an urban business line;
12-22 (7) call return, caller identification, and call
12-23 control options, when associated with an urban business line;
12-24 (8) "1-plus" intraLATA message toll service;
12-25 (9) 0+ and 0- operator services;
12-26 (10) central office based PBX-type services;
12-27 (11) wholesale billing and collection services;
12-28 (12) services described in the WATS tariff as of
12-29 January 1, 1995;
12-30 (13) 800 and foreign exchange services;
12-31 (14) private line service;
12-32 (15) special access service;
12-33 (16) services from public pay telephones;
12-34 (17) paging services and mobile services (IMTS);
12-35 (18) 911 services provided to a local authority that
12-36 are available from another provider;
12-37 (19) speed dialing;
12-38 (20) three-way calling;
12-39 (21) data services;
12-40 (22) all services not specifically classified as basic
12-41 network services or discretionary services;
12-42 (23) urban integrated services digital network (ISDN);
12-43 (24) new services other than those described in
12-44 Section 58.1011(d); and
12-45 (25) urban business installment billing and late
12-46 payment charges.
12-47 (e) Rates for the services listed in Subsections (d)(1)-(3)
12-48 are capped until September 1, 2005.
12-49 SECTION 24. Subchapter E, Chapter 58, Utilities Code, is
12-50 amended by adding Section 58.1512 to read as follows:
12-51 Sec. 58.1512. SERVICES INCLUDED FOR CERTAIN ELECTING
12-52 COMPANIES. (a) For the 12-month period following the date an
12-53 electing company with more than five million access lines begins
12-54 offering interLATA long distance service, and notwithstanding
12-55 Sections 58.101 and 58.1511, the following services offered by such
12-56 an electing company shall be classified as discretionary services
12-57 and may not be reclassified under Section 58.024:
12-58 (1) flat rate urban business local exchange telephone
12-59 service;
12-60 (2) urban business tone dialing service;
12-61 (3) service connection for basic urban business
12-62 services; and
12-63 (4) direct inward dialing service for basic urban
12-64 business services.
12-65 (b) At the expiration of the 12-month period described in
12-66 Subsection (a), the services listed in Subsections (a)(1)-(4) shall
12-67 be classified as competitive services.
12-68 (c) Notwithstanding any other provision in this title, an
12-69 electing company with more than five million access lines may not
13-1 provide the services listed in Subsections (a)(1)-(4) pursuant to a
13-2 customer specific contract until 18 months have expired following
13-3 the date that such an electing company begins offering interLATA
13-4 long distance service. An electing company may not offer a package
13-5 of services, including a service listed in Subsections (a)(1)-(4),
13-6 that results in a customer specific contract until the 18-month
13-7 period has expired.
13-8 SECTION 25. Subchapter E, Chapter 58, Utilities Code, is
13-9 amended by adding Section 58.155 to read as follows:
13-10 Sec. 58.155. INTERCONNECTION SERVICES. Because
13-11 interconnection to competitive providers and interconnection for
13-12 commercial mobile service providers are subject to the requirements
13-13 of Sections 251 and 252, Communications Act of 1934, as amended (47
13-14 U.S.C. Sections 251 and 252), as amended, and Federal
13-15 Communications Commission rules, including the Federal
13-16 Communication Commission's authority to arbitrate issues, they are
13-17 not addressed in Sections 58.0511, 58.1011, and 58.1511.
13-18 SECTION 26. Chapter 58, Utilities Code, is amended by adding
13-19 Subchapter H to read as follows:
13-20 SUBCHAPTER H. SWITCHED ACCESS SERVICES
13-21 Sec. 58.301. SWITCHED ACCESS RATE REDUCTION. (a) An
13-22 electing company with greater than five million access lines shall
13-23 reduce its switched access rates on a combined originating and
13-24 terminating basis as follows:
13-25 (1) on September 1, 1999, switched access rates on a
13-26 combined originating and terminating basis in effect on that date
13-27 shall be reduced by one cent per minute;
13-28 (2) on the company's entry into the interLATA long
13-29 distance market, switched access rates on a combined originating
13-30 and terminating basis shall be reduced by an additional two cents
13-31 per minute; and
13-32 (3) on the first anniversary of the company's entry
13-33 into the interLATA long distance market, switched access rates on a
13-34 combined originating and terminating basis shall be reduced by an
13-35 additional half cent per minute.
13-36 Sec. 58.302. SWITCHED ACCESS RATE CAP. An electing company
13-37 may not increase the per minute rates for switched access services
13-38 on a combined originating and terminating basis above the lesser
13-39 of:
13-40 (1) the rates for switched access services charged by
13-41 that electing company on September 1, 1999, as may be further
13-42 reduced upon implementation of the universal service fund pursuant
13-43 to Chapter 56; or
13-44 (2) the applicable rate described by Section 58.301 as
13-45 may be further reduced upon implementation of the universal service
13-46 fund pursuant to Chapter 56.
13-47 Sec. 58.303. SWITCHED ACCESS CHARGE STUDY. (a) Not later
13-48 than November 1, 1999, the commission shall begin a review and
13-49 evaluation of the rates for intrastate switched access service.
13-50 The review shall include an evaluation of at least the following
13-51 issues:
13-52 (1) whether alternative rate structures for recovery
13-53 of switched access revenues are in the public interest and
13-54 competitively neutral; and
13-55 (2) whether disparities in rates for switched access
13-56 service between local exchange companies are in the public
13-57 interest.
13-58 (b) The commission shall file a report with the legislature
13-59 no later than January 1, 2001. The report must include the
13-60 commission's recommendations as to the issues reviewed and
13-61 evaluated.
13-62 (c) This section expires September 1, 2001.
13-63 SECTION 27. Section 59.021, Utilities Code, is amended by
13-64 adding Subsection (c) to read as follows:
13-65 (c) A company electing under this chapter may renew the
13-66 election for successive two-year periods. An election that is
13-67 renewed under this subsection remains in effect until the earlier
13-68 of the date that:
13-69 (1) the election expires because it was not renewed;
14-1 (2) the commission allows the company to withdraw its
14-2 election under Section 59.022; or
14-3 (3) the legislature eliminates the incentive
14-4 regulation authorized by this chapter and Chapter 58.
14-5 SECTION 28. Section 59.024, Utilities Code, is amended to
14-6 read as follows:
14-7 Sec. 59.024. RATE CHANGES. (a) Except for the charges
14-8 permitted under Subchapter C, Chapter 55, Subchapter B, Chapter 56,
14-9 and Section 55.024, an electing company may not, [on or] before the
14-10 end of the company's election period under this chapter [sixth
14-11 anniversary of its election date], increase a rate previously
14-12 established for that company under this title unless the commission
14-13 approves the proposed change as authorized under Subsection (c) or
14-14 (d).
14-15 (b) For purposes of Subsection (a), the company's previously
14-16 established rates are the rates charged by the company on its
14-17 election date without regard to a proceeding pending under:
14-18 (1) Section 15.001;
14-19 (2) Subchapter D, Chapter 53; or
14-20 (3) Subchapter G, Chapter 2001, Government Code.
14-21 (c) The commission, on motion of the electing company or on
14-22 its own motion, shall adjust prices for services to reflect changes
14-23 in Federal Communications Commission separations that affect
14-24 intrastate net income by at least 10 percent.
14-25 (d) Notwithstanding Subsection (a), the [The] commission, on
14-26 request of the electing company, shall allow a rate group
14-27 reclassification that results from access line growth.
14-28 (e) Section 58.059 applies to a rate change under this
14-29 section.
14-30 SECTION 29. Section 59.025, Utilities Code, is amended to
14-31 read as follows:
14-32 Sec. 59.025. SWITCHED ACCESS RATES. Notwithstanding any
14-33 other provision of this title, the commission may not, on the
14-34 commission's own motion, reduce an electing company's rates for
14-35 switched access services before the expiration of the election
14-36 [six-year] period prescribed by Section 59.024, but may approve a
14-37 reduction proposed by the electing company.
14-38 SECTION 30. Subsection (a), Section 59.026, Utilities Code,
14-39 is amended to read as follows:
14-40 (a) On or before the end [sixth anniversary] of the
14-41 company's election period [date], an electing company is not,
14-42 under any circumstances, subject to:
14-43 (1) a complaint or hearing regarding the
14-44 reasonableness of the company's:
14-45 (A) rates;
14-46 (B) overall revenues;
14-47 (C) return on invested capital; or
14-48 (D) net income; or
14-49 (2) a complaint that a rate is excessive.
14-50 SECTION 31. Subchapter B, Chapter 59, Utilities Code, is
14-51 amended by adding Sections 59.030, 59.031, and 59.032 to read as
14-52 follows:
14-53 Sec. 59.030. NEW SERVICES. (a) An electing company may
14-54 introduce a new service 10 days after providing an informational
14-55 notice to the commission and to any person who holds a certificate
14-56 of operating authority in the electing company's certificated area
14-57 or areas or who has an effective interconnection agreement with the
14-58 electing company.
14-59 (b) An electing company shall price each new service at or
14-60 above the service's long run incremental cost. The commission
14-61 shall allow a company serving fewer than one million access lines
14-62 to establish a service's long run incremental cost by adopting, at
14-63 that company's option, the cost studies of a larger company for
14-64 that service that has been accepted by the commission.
14-65 (c) Only an affected person may file a complaint with the
14-66 commission challenging whether the pricing by an electing company
14-67 of a new service is in compliance with Subsection (b).
14-68 (d) If an affected person files a complaint under Subsection
14-69 (c), the electing company has the burden of proving that the
15-1 company set the price for the new service in accordance with the
15-2 applicable provisions of this subchapter. If the complaint is
15-3 finally resolved in favor of the complainant, the electing company:
15-4 (1) shall, not later than the 10th day after the date
15-5 the complaint is finally resolved, amend the price of the service
15-6 as necessary to comply with the final resolution; or
15-7 (2) may, at the company's option, discontinue the
15-8 service.
15-9 Sec. 59.031. PRICING AND PACKAGING FLEXIBILITY.
15-10 (a) Notwithstanding Section 59.027(b) or Subchapter F, Chapter 60,
15-11 an electing company may exercise pricing flexibility in accordance
15-12 with this section, including the packaging of any regulated service
15-13 such as basic local telecommunications service with any other
15-14 regulated or unregulated service or any service of an affiliate.
15-15 The electing company may exercise pricing flexibility 10 days after
15-16 providing an informational notice to the commission and to any
15-17 person who holds a certificate of operating authority in the
15-18 electing company's certificated area or areas or who has an
15-19 effective interconnection agreement with the electing company.
15-20 Pricing flexibility includes all pricing arrangements included in
15-21 the definition of "pricing flexibility" prescribed by Section
15-22 51.002(7) and includes packaging of regulated services with
15-23 non-regulated services or services of an affiliate, except that
15-24 such a package may not be offered in a manner that results in a
15-25 customer-specific contract.
15-26 (b) An electing company, at the company's option, shall
15-27 price each regulated service offered separately or as part of a
15-28 package under Subsection (a) at either the service's tariffed rate
15-29 or at a rate not lower than the service's long run incremental
15-30 cost. The commission shall allow a company serving fewer than one
15-31 million access lines to establish a service's long run incremental
15-32 cost by adopting, at that company's option, the cost studies of a
15-33 larger company for that service that have been accepted by the
15-34 commission.
15-35 (c) Only an affected person may file a complaint alleging
15-36 that an electing company has priced a regulated service in a manner
15-37 that does not meet the pricing standards of this subchapter. The
15-38 complaint must be filed before the 31st day after the company
15-39 implements the rate.
15-40 Sec. 59.032. CUSTOMER PROMOTIONAL OFFERINGS. (a) An
15-41 electing company may offer a promotion for a regulated service for
15-42 not more than 90 days in any 12-month period.
15-43 (b) The electing company shall file with the commission a
15-44 promotional offering that consists of:
15-45 (1) waiver of installation charges or service order
15-46 charges, or both, for not more than 90 days in a 12-month period;
15-47 or
15-48 (2) a temporary discount of not more than 25 percent
15-49 from the tariffed rate for not more than 60 days in a 12-month
15-50 period.
15-51 (c) An electing company is not required to obtain commission
15-52 approval to make a promotional offering described by Subsection
15-53 (b).
15-54 (d) An electing company may offer a promotion of any
15-55 regulated service as part of a package of services consisting of
15-56 any regulated service with any other regulated or unregulated
15-57 service or any service of an affiliate.
15-58 SECTION 32. Section 60.124, Utilities Code, is amended to
15-59 read as follows:
15-60 Sec. 60.124. INTEROPERABLE NETWORKS REQUIRED. (a) The
15-61 commission shall require each telecommunications provider to
15-62 maintain interoperable networks and shall require that
15-63 interconnection agreements between incumbent local exchange
15-64 companies and competitive local exchange companies contain
15-65 self-executing performance penalties for incumbent noncompliance
15-66 with contract provisions that impair a competitor's ability to
15-67 provide service to its customers.
15-68 (b) The commission may:
15-69 (1) adopt rules, including generic rules that are
16-1 responsive to changes in federal law or a development in the local
16-2 exchange market; and
16-3 (2) set policies governing interconnection
16-4 arrangements.
16-5 SECTION 33. Subchapter I, Chapter 60, Utilities Code, is
16-6 amended by adding Sections 60.164 and 60.165 to read as follows:
16-7 Sec. 60.164. PERMISSIBLE JOINT MARKETING. Except as
16-8 prescribed in Chapters 61 and 63, the commission shall not adopt
16-9 any rule or order that would prohibit a local exchange company from
16-10 jointly marketing or selling its products and services with the
16-11 products and services of any of its affiliates in any manner
16-12 permitted by federal law or applicable rules of the Federal
16-13 Communications Commission.
16-14 Sec. 60.165. AFFILIATE RULE. Except as prescribed in
16-15 Chapters 61 and 63, the commission shall not adopt any rule or
16-16 order that would prescribe for any local exchange company any
16-17 affiliate rule, including any accounting rule, any cost allocation
16-18 rule, or any structural separation rule, that is more burdensome
16-19 than federal law or applicable rules of the Federal Communications
16-20 Commission. Notwithstanding any other provision in this title, the
16-21 commission shall not attribute or impute to a local exchange
16-22 company a price discount offered by an affiliate of the local
16-23 exchange company to the affiliate's customers. This section does
16-24 not limit the authority of the commission to consider a complaint
16-25 brought under Subchapter A, Chapter 52, Section 53.003, or this
16-26 chapter.
16-27 SECTION 34. The importance of this legislation and the
16-28 crowded condition of the calendars in both houses create an
16-29 emergency and an imperative public necessity that the
16-30 constitutional rule requiring bills to be read on three several
16-31 days in each house be suspended, and this rule is hereby suspended,
16-32 and that this Act take effect and be in force from and after its
16-33 passage, and it is so enacted.
16-34 * * * * *