S.B. No. 980
 
 
 
 
AN ACT
  relating to communications services and markets.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsections (a) and (g), Section 51.001,
  Utilities Code, are amended to read as follows:
         (a)  Significant changes have occurred in telecommunications
  since the law from which this title is derived was originally
  adopted.  Communications providers, including providers not
  subject to state regulation, such as wireless communications
  providers and Voice over Internet Protocol providers, have made
  investments in this state and broadened the range of communications
  choices available to consumers.  To encourage and accelerate the
  development of a competitive and advanced telecommunications
  environment and infrastructure, [new] rules, policies, and
  principles must be reformulated [formulated and applied] to reduce
  regulation of incumbent local exchange companies, ensure fair
  business practices, and protect the public interest. [Changes in
  technology and market structure have increased the need for minimum
  standards of service quality, customer service, and fair business
  practices to ensure high-quality service to customers and a healthy
  marketplace where competition is permitted by law. It is the
  purpose of this subtitle to grant the commission authority to make
  and enforce rules necessary to protect customers of
  telecommunications services consistent with the public interest.]
         (g)  It is the policy of this state to ensure that customers
  in all regions of this state, including low-income customers and
  customers in rural and high cost areas, have access to
  telecommunications and information services, including
  interexchange services, cable services, wireless services, and
  advanced telecommunications and information services, that are
  reasonably comparable to those services provided in urban areas and
  that are available at prices that are reasonably comparable to
  prices charged for similar services in urban areas. [Not later than
  November 1, 1999, the commission shall begin a review and
  evaluation of the availability and the pricing of
  telecommunications and information services, including
  interexchange services, cable services, wireless services, and
  advanced telecommunications and information services, in rural and
  high cost areas, as well as the convergence of telecommunications
  services. The commission shall file a report with the legislature
  not later than January 1, 2001. The report must include the
  commission's recommendations on the issues reviewed and
  evaluated.]
         SECTION 2.  Section 51.002, Utilities Code, is amended by
  adding Subdivisions (3-a) and (13) to read as follows:
               (3-a)  "Internet Protocol enabled service" means a
  service, capability, functionality, or application that uses
  Internet Protocol or a successor protocol to allow an end user to
  send or receive a data, video, or voice communication in Internet
  Protocol or a successor protocol.
               (13)  "Voice over Internet Protocol service" means a
  service that:
                     (A)  uses Internet Protocol or a successor
  protocol to enable a real-time, two-way voice communication that
  originates from or terminates to the user's location in Internet
  Protocol or a successor protocol;
                     (B)  requires a broadband connection from the
  user's location; and
                     (C)  permits a user generally to receive a call
  that originates on the public switched telephone network and to
  terminate a call to the public switched telephone network.
         SECTION 3.  Section 52.002, Utilities Code, is amended by
  adding Subsections (c) and (d) to read as follows:
         (c)  The commission may not require a telecommunications
  utility that is not a public utility, including a deregulated or
  transitioning company, to comply with a requirement or standard
  that is more burdensome than a requirement or standard the
  commission imposes on a public utility.
         (d)  Notwithstanding any other law, a department, agency, or
  political subdivision of this state may not by rule, order, or other
  means directly or indirectly regulate rates charged for, service or
  contract terms for, conditions for, or requirements for entry into
  the market for Voice over Internet Protocol services or other
  Internet Protocol enabled services.  This subsection does not:
               (1)  affect requirements pertaining to use of a
  right-of-way or payment of right-of-way fees applicable to Voice
  over Internet Protocol services under Chapter 283, Local Government
  Code;
               (2)  affect any person's obligation to provide video or
  cable service, as defined under applicable state or federal law,
  the applicability of Chapter 66, or a requirement to make a payment
  under Chapter 66;
               (3)  require or prohibit assessment of enhanced 9-1-1,
  relay access service, or universal service fund fees on Voice over
  Internet Protocol service;
               (4)  affect any entity's obligations under Sections 251
  and 252, Communications Act of 1934 (47 U.S.C. Sections 251 and
  252), or a right granted to an entity by those sections;
               (5)  affect any applicable wholesale tariff;
               (6)  grant, modify, or affect the authority of the
  commission to implement, carry out, or enforce the rights or
  obligations provided by Sections 251 and 252, Communications Act of
  1934 (47 U.S.C. Sections 251 and 252), or of an applicable wholesale
  tariff through arbitration proceedings or other available
  mechanisms and procedures;
               (7)  require or prohibit payment of switched network
  access rates or other intercarrier compensation rates, as
  applicable;
               (8)  limit any commission authority over the subjects
  listed in Subdivisions (1)-(7) or grant the commission any
  authority over those subjects; or
               (9)  affect the assessment, administration,
  collection, or enforcement of any tax or fee over which the
  comptroller has authority.
         SECTION 4.  Subchapter A, Chapter 52, Utilities Code, is
  amended by adding Section 52.007 to read as follows:
         Sec. 52.007.  TARIFF REQUIREMENTS RELATING TO PROVIDERS NOT
  SUBJECT TO RATE OF RETURN REGULATION. (a)  This section applies
  only to a telecommunications provider that is not subject to rate of
  return regulation under Chapter 53.
         (b)  A telecommunications provider:
               (1)  may, but is not required to, maintain on file with
  the commission tariffs, price lists, or customer service agreements
  governing the terms of providing service;
               (2)  may make changes in its tariffs, price lists, and
  customer service agreements in relation to services that are not
  subject to regulation without commission approval; and
               (3)  may cross-reference its federal tariff in its
  state tariff if the provider's intrastate switched access rates are
  the same as the provider's interstate switched access rates.
         (c)  A telecommunications provider may withdraw a tariff,
  price list, or customer service agreement not required to be filed
  or maintained with the commission under this section if the
  telecommunications provider:
               (1)  files written notice of the withdrawal with the
  commission; and
               (2)  notifies its customers of the withdrawal and posts
  the current tariffs, price lists, or generic customer service
  agreements on the telecommunications provider's Internet website.
         (d)  The commission may not require a telecommunications
  provider to withdraw a tariff, price list, or customer service
  agreement.
         (e)  This section does not affect the authority of the
  commission to regulate wholesale services, or administer or enforce
  Chapter 56 or any other applicable regulation permitted or required
  under this title.
         SECTION 5.  Section 52.056, Utilities Code, is amended to
  read as follows:
         Sec. 52.056.  SPECIFICALLY AUTHORIZED REGULATORY
  TREATMENTS. The regulatory treatments the commission may implement
  under Section 52.054 include:
               (1)  approval of a range of rates for a specific
  service; and
               (2)  [approval of a customer-specific contract for a
  specific service; and
               [(3)]  the detariffing of rates.
         SECTION 6.  Subsection (b), Section 54.251, Utilities Code,
  is amended to read as follows:
         (b)  Except as specifically determined otherwise by the
  commission under this subchapter or Subchapter G of this chapter,
  and except as provided by Subchapters C and D, Chapter 65, the
  holder of a certificate of convenience and necessity[, or the
  holder of a certificate of operating authority issued under Chapter
  65,] for an area has the obligations of a provider of last resort
  regardless of whether another provider has a certificate of
  operating authority or service provider certificate of operating
  authority for that area.
         SECTION 7.  Section 54.3015, Utilities Code, is amended to
  read as follows:
         Sec. 54.3015.  APPLICABILITY OF SUBCHAPTER.  This subchapter
  applies to a transitioning company [holder of a certificate of
  operating authority issued] under Chapter 65 in relation to its
  regulated exchanges in the same manner and to the same extent this
  subchapter applies to a holder of a certificate of convenience and
  necessity.
         SECTION 8.  Subchapter B, Chapter 55, Utilities Code, is
  amended by adding Section 55.026 to read as follows:
         Sec. 55.026.  NEW ORDERS PROHIBITED AFTER CERTAIN DATE. On
  or after September 1, 2011, the commission may not require a
  telecommunications provider to provide mandatory or optional
  extended area service to additional metropolitan areas or calling
  areas.
         SECTION 9.  Subchapter C, Chapter 55, Utilities Code, is
  amended by adding Section 55.049 to read as follows:
         Sec. 55.049.  EXPANSION PROHIBITED AFTER CERTAIN DATE. On
  or after September 1, 2011, the commission may not order an
  expansion of a toll-free local calling area.
         SECTION 10.  Subsection (d), Section 56.023, Utilities Code,
  is amended to read as follows:
         (d)  The commission shall adopt rules for the administration
  of the universal service fund and this chapter and may act as
  necessary and convenient to administer the fund and this chapter.  
  The rules must include procedures to ensure reasonable transparency
  and accountability in the administration of the universal service
  fund.
         SECTION 11.  Subchapter B, Chapter 56, Utilities Code, is
  amended by adding Section 56.032 to read as follows:
         Sec. 56.032.  SUPPORT AVAILABLE TO DEREGULATED MARKETS.
  (a)  An incumbent local exchange company may not receive support
  from the universal service fund for a deregulated market that has a
  population of at least 30,000.
         (b)  An incumbent local exchange company may receive support
  from the universal service fund for a deregulated market that has a
  population of less than 30,000 only if the company demonstrates to
  the commission that the company needs the support to provide basic
  local telecommunications service at reasonable rates in the
  affected market.  A company may use evidence from outside the
  affected market to make the demonstration.
         (c)  An incumbent local exchange company may make the
  demonstration described by Subsection (b) in relation to a market
  before submitting a petition to deregulate the market.
         SECTION 12.  Subsection (c), Section 58.255, Utilities Code,
  is amended to read as follows:
         (c)  [Each contract shall be filed with the commission.]
  Commission approval of a contract is not required.
         SECTION 13.  Subsection (c), Section 59.074, Utilities Code,
  is amended to read as follows:
         (c)  [Each contract shall be filed with the commission.]
  Commission approval of a contract is not required.
         SECTION 14.  Section 65.051, Utilities Code, is amended to
  read as follows:
         Sec. 65.051.  MARKETS DEREGULATED.  A market that is
  deregulated as of September 1, 2011, shall remain deregulated.  
  Notwithstanding any other provision of this title, the commission
  may not reregulate a market or company that has been deregulated 
  [(a)     Except as provided by Subsection (b), all markets of all
  incumbent local exchange companies are deregulated on January 1,
  2006, unless the commission determines under Section 65.052(a) that
  a market or markets should remain regulated.
         [(b)     A market of an incumbent local exchange company in
  which the population in the area included in the market is less than
  30,000 is deregulated on January 1, 2007, unless the commission
  determines under Section 65.052(f) that the market should remain
  regulated].
         SECTION 15.  Subsections (a), (b), and (c), Section 65.052,
  Utilities Code, are amended to read as follows:
         (a)  An incumbent local exchange company may petition the
  commission to deregulate a market of the company that the
  commission previously determined should remain regulated.  
  Notwithstanding any other provision of this title, only the
  incumbent local exchange company may initiate a proceeding to
  deregulate one of the company's markets.  Not later than the 90th
  day after the date the commission receives the petition, [Except as
  provided by Subsection (f),] the commission shall:
               (1)  determine whether the regulated [each] market [of
  an incumbent local exchange company] should remain regulated [on
  and after January 1, 2006]; and
               (2)  issue a final order classifying the market 
  [company] in accordance with this section [effective January 1,
  2006].
         (b)  In making a determination under Subsection (a), the
  commission may not determine that a market should remain regulated
  if:
               (1)  the population in the area included in the market
  is at least 100,000; or
               (2)  the population in the area included in the market
  is [at least 30,000 but] less than 100,000 and, in addition to the
  incumbent local exchange company, there are at least two
  competitors operating in all or part of the market that [three
  competitors of which]:
                     (A)  are unaffiliated with the incumbent local
  exchange company [at least one is a telecommunications provider
  that holds a certificate of operating authority or service provider
  certificate of operating authority and provides residential local
  exchange telephone service in the market]; and
                     (B)  provide voice communications service without
  regard to the delivery technology, including through:
                           (i)  Internet Protocol or a successor
  protocol;
                           (ii)  satellite; or
                           (iii)  a technology used by a wireless
  provider or a commercial mobile service provider, as that term is
  defined by Section 64.201 [at least one is an entity providing
  residential telephone service in the market using facilities that
  the entity or its affiliate owns; and
                     [(C)     at least one is a provider in that market of
  commercial mobile service as defined by Section 332(d),
  Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal
  Communications Commission rules, and the Omnibus Budget
  Reconciliation Act of 1993 (Pub. L. No. 103-66), that is not
  affiliated with the incumbent local exchange company].
         (c)  If the commission deregulates a market under this
  section and the deregulation results in a regulated or
  transitioning company no longer meeting the definition of a
  regulated or transitioning company, the commission shall issue an
  order reclassifying the company as a transitioning company or
  deregulated company, as those terms are defined by Section 65.002
  [The commission shall issue an order classifying an incumbent local
  exchange company as a deregulated company that is subject to
  Subchapter C if:
               [(1)     the company does not have any markets in which the
  population in the area included in the market is less than 30,000;
  and
               [(2)     the commission does not determine that a market
  of the company should remain regulated on and after January 1,
  2006].
         SECTION 16.  Section 65.102, Utilities Code, is amended to
  read as follows:
         Sec. 65.102.  REQUIREMENTS.  (a)  A deregulated company that
  holds a certificate of operating authority issued under this
  subchapter:
               (1)  is a nondominant carrier governed in the same
  manner as a holder of a certificate of operating authority issued
  under Chapter 54;
               (2)  is not required to:
                     (A)  fulfill the obligations of a provider of last
  resort;
                     (B)  comply with retail quality of service
  standards or reporting requirements;
                     (C)  file an earnings report with the commission
  unless the company is receiving support from the Texas High Cost
  Universal Service Plan; or
                     (D)  comply with a pricing requirement other than
  a requirement prescribed by this subchapter; and
               (3)  [, except that the deregulated company:
               [(1)     retains the obligations of a provider of last
  resort under Chapter 54;
               [(2)]  is subject to the following provisions in the
  same manner as an incumbent local exchange company that is not
  deregulated:
                     (A)  Sections 54.156, 54.158, and 54.159;
                     (B)  Section 55.012; and
                     (C)  Chapter 60[; and
               [(3)     may not increase the company's rates for
  stand-alone residential local exchange voice service before the
  date that the commission has the opportunity to revise the monthly
  per line support under the Texas High Cost Universal Service Plan
  pursuant to Section 56.031, regardless of whether the company is an
  electing company under Chapter 58].
         (b)  Except as provided by Subsection (c), in [In] each
  deregulated market, a deregulated company shall make available to
  all residential customers uniformly throughout that market the same
  price, terms, and conditions for all basic and non-basic services,
  consistent with any pricing flexibility available to such company
  [on or before August 31, 2005].
         (c)  A deregulated company may offer to an individual
  residential customer a promotional offer that is not available
  uniformly throughout the market if the company makes the offer
  through a medium other than direct mail or mass electronic media and
  the offer is intended to retain or obtain a customer.
         SECTION 17.  Section 65.151, Utilities Code, is amended to
  read as follows:
         Sec. 65.151.  PROVISIONS APPLICABLE TO TRANSITIONING
  COMPANY.  (a)  Except as provided by Subsection (b), a [A]
  transitioning company is governed by this subchapter and the
  provisions of this title that applied to the company immediately
  before the date the company was classified as a transitioning
  company.  If there is a conflict between this subchapter and the
  other applicable provisions of this title, this subchapter
  controls.
         (b)  A transitioning company is not required to fulfill the
  obligations of a provider of last resort in a deregulated market. 
         SECTION 18.  Section 65.152, Utilities Code, is amended to
  read as follows:
         Sec. 65.152.  GENERAL REQUIREMENTS. (a)  A transitioning
  company may:
               (1)  exercise pricing flexibility in a market subject
  only to the price and rate standards prescribed by Sections 65.153
  and 65.154 [in the manner provided by Section 58.063 one day after
  providing an informational notice as required by that section]; and
               (2)  introduce a new service in a market subject only to
  the price and rate standards prescribed by Sections 65.153 and
  65.154 [in the manner provided by Section 58.153 one day after
  providing an informational notice as required by that section].
         (b)  A transitioning company may not be required to:
               (1)  comply with [exchange-specific] retail quality of
  service standards or reporting requirements in a market that is
  deregulated; or
               (2)  file an earnings report with the commission unless
  the company is receiving support from the Texas High Cost Universal
  Service Plan.
         SECTION 19.  Section 65.153, Utilities Code, is amended by
  amending Subsection (c) and adding Subsection (c-1) to read as
  follows:
         (c)  Except as provided by Subsection (c-1), in [In] each
  deregulated market, a transitioning company shall make available to
  all residential customers uniformly throughout that market the same
  price, terms, and conditions for all basic and non-basic services,
  consistent with any pricing flexibility available to such company
  [on or before August 31, 2005].
         (c-1)  A transitioning company may offer to an individual
  residential customer a promotional offer that is not available
  uniformly throughout the market if the company makes the offer
  through a medium other than direct mail or mass electronic media and
  the offer is intended to retain or obtain a customer.
         SECTION 20.  Subchapter D, Chapter 65, Utilities Code, is
  amended by adding Sections 65.154 and 65.155 to read as follows:
         Sec. 65.154.  RATE AND PRICE REQUIREMENTS NOT APPLICABLE.  
  (a)  A transitioning company is not required to comply with the
  following requirements prescribed by this title on submission of a
  written notice to the commission:
               (1)  a direct or indirect requirement to price a
  residential service at, above, or according to the long-run
  incremental cost of the service or to otherwise use long-run
  incremental cost in establishing prices for residential services;
  or
               (2)  a requirement to file with the commission a
  long-run incremental cost study for residential or business
  services.
         (b)  Notwithstanding Subsection (a), a transitioning company
  may not:
               (1)  establish a retail rate, price, term, or condition
  that is anticompetitive or unreasonably preferential, prejudicial,
  or discriminatory;
               (2)  establish a retail rate for a basic or non-basic
  service in a deregulated market that is subsidized either directly
  or indirectly by a basic or non-basic service provided in an
  exchange that is not deregulated; or
               (3)  engage in predatory pricing or attempt to engage
  in predatory pricing.
         (c)  A rate or price for a basic local telecommunications
  service is not anticompetitive, predatory, or unreasonably
  preferential, prejudicial, or discriminatory if the rate or price
  is equal to or greater than the rate or price in the transitioning
  company's tariff for that service in effect on the date the
  transitioning company submits notice to the commission under
  Subsection (a).
         (d)  This section, including Subsection (a)(1), does not
  affect:
               (1)  other law or legal standards governing predatory
  pricing or anticompetitive conduct; or
               (2)  an infrastructure commitment under Chapter 58 or
  59.
         Sec. 65.155.  COMPLAINT BY AFFECTED PERSON. (a)  An
  affected person may file a complaint at the commission challenging
  whether a transitioning company is complying with Section
  65.154(b).
         (b)  Notwithstanding Section 65.154(a)(2), the commission
  may require a transitioning company to submit a long-run
  incremental cost study for a business service that is the subject of
  a complaint submitted under Subsection (a).
         SECTION 21.  The following provisions of the Utilities Code
  are repealed:
               (1)  Section 52.057;
               (2)  Subsection (b), Section 53.065;
               (3)  Subsections (d), (e), and (f), Section 65.052;
               (4)  Section 65.054; and
               (5)  Section 65.055.
         SECTION 22.  (a)  In this section, "commission" means the
  Public Utility Commission of Texas.
         (b)  The commission shall initiate one or more proceedings to
  review and evaluate whether the universal service fund accomplishes
  the fund's purposes, as prescribed by Section 56.021, Utilities
  Code, or whether changes are necessary to accomplish those
  purposes.  The commission may not initiate a proceeding to review
  the Texas High Cost Universal Service Plan before January 2, 2012.
         (c)  The commission has all authority necessary to conduct
  the review, including determining issues relevant to each
  telecommunications provider's need for universal service fund
  support, adjusting monthly per line support amounts under Section
  56.031, Utilities Code, and implementing any other changes it
  determines are necessary and in the public interest.
         (d)  Notwithstanding Subsection (b), Section 56.024,
  Utilities Code, a party to a commission proceeding examining the
  universal service fund is entitled to access confidential
  information provided to the commission under Subsection (a),
  Section 56.024, Utilities Code, if a protective order is issued for
  the confidential information in the proceeding.
         (e)  The commission shall complete each proceeding required
  by this section not later than November 1, 2012.  The commission
  shall provide to the legislature a copy of the commission's
  findings and of any orders issued under this section.
         SECTION 23.  (a)  Except as provided by Subsection (b) of
  this section, this Act takes effect September 1, 2011.
         (b)  Sections 56.032, 65.154, and 65.155, Utilities Code, as
  added by this Act, take effect January 2, 2012.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 980 passed the Senate on
  April 7, 2011, by the following vote: Yeas 30, Nays 1; and that
  the Senate concurred in House amendment on May 9, 2011, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 980 passed the House, with
  amendment, on May 4, 2011, by the following vote: Yeas 136,
  Nays 0, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor