UTILITIES CODE
CHAPTER 58. INCENTIVE REGULATION
SUBCHAPTER A. GENERAL PROVISIONS
§ 58.001. POLICY. Considering the status of
competition in the telecommunications industry, it is the policy of
this state to:
(1) provide a framework for an orderly transition from
the traditional regulation of return on invested capital to a fully
competitive telecommunications marketplace in which all
telecommunications providers compete on fair terms;
(2) preserve and enhance universal telecommunications
service at affordable rates;
(3) upgrade the telecommunications infrastructure of
this state;
(4) promote network interconnectivity; and
(5) promote diversity in the supply of
telecommunications services and innovative products and services
throughout the entire state, including urban and rural areas.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.002. DEFINITION. In this chapter, "electing
company" means an incumbent local exchange company that elects to
be subject to incentive regulation and to make the corresponding
infrastructure commitment under this chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.003. CUSTOMER-SPECIFIC
CONTRACTS. (a) Notwithstanding any other provision of this
chapter, but subject to Subsection (b), an electing company may not
offer in an exchange a service, or an appropriate subset of a
service, listed in Sections 58.051(a)(1)-(4) or Sections
58.151(1)-(4) in a manner that results in a customer-specific
contract, unless the other party to the contract is a federal,
state, or local governmental entity, until the earlier of September
1, 2003, or the date on which the commission finds that at least 40
percent of the total access lines for that service or appropriate
subset of that service in that exchange are served by competitive
alternative providers that are not affiliated with the electing
company.
(b) The requirements prescribed by Subsection (a) do not
apply to an electing company serving fewer than five million access
lines after the date on which it completes the infrastructure
improvements described in this subsection. The electing company
must also notify the commission of the company's binding commitment
to make the following infrastructure improvements not later than
September 1, 2000:
(1) install Common Channel Signaling 7 capability in
each central office; and
(2) connect all of the company's serving central
offices to their respective LATA tandem central offices with
optical fiber or equivalent facilities.
(c) The commission by rule shall prescribe appropriate
subsets of services.
(d) An electing company may file with the commission a
request for a finding under this section. The filing must include
information sufficient for the commission to perform a review and
evaluation in relation to the particular exchange and the
particular service or appropriate subset of a service for which the
electing company wants to offer customer-specific contracts. The
commission must grant or deny the request not later than the 60th
day after the date the electing company files the request.
(e) The commitments described by Subsection (b) do not apply
to exchanges of the company sold or transferred before, or for which
contracts for sale or transfer are pending on, September 1, 2001.
In the case of exchanges for which contracts for sale or transfer
are pending as of March 1, 2001, where the purchaser withdrew or
defaulted before September 1, 2001, the company shall have one year
from the date of withdrawal or default to comply with the
commitments.
(f) This section does not preclude an electing company from
offering a customer-specific contract to the extent allowed by this
title as of August 31, 1999.
Added by Acts 1999, 76th Leg., ch. 1212, § 33, eff. Sept. 1,
1999.
§ 58.004. PACKAGING, TERM AND VOLUME DISCOUNTS, AND
PROMOTIONAL OFFERINGS. (a) Notwithstanding any other provision
of this chapter, an electing company that has more than five million
access lines in this state may not offer in an exchange a service
listed in Sections 58.151(1)-(4) as a component of a package of
services or as a promotional offering until the company makes the
reduction in switched access service rates required by Section
58.301(2) unless the customer of one of the pricing flexibility
offerings described in this subsection is a federal, state, or
local governmental entity.
(b) Notwithstanding any other provision of this chapter, an
electing company that has more than five million access lines in
this state may not offer a volume or term discount on any service
listed in Sections 58.151(1)-(4) until September 1, 2000, unless
the customer of one of the pricing flexibility offerings described
in this subsection is a federal, state, or local governmental
entity.
(c) Notwithstanding any other provision of this chapter, an
electing company that has more than five million access lines in
this state may offer in an exchange a service listed in Sections
58.051(a)(1)-(4) as a component of a package of services, as a
promotional offering, or with a volume or term discount on and after
September 1, 1999.
Added by Acts 1999, 76th Leg., ch. 1212, § 34, eff. Sept. 1,
1999.
SUBCHAPTER B. ELECTION OF INCENTIVE REGULATION
§ 58.021. ELECTION. (a) An incumbent local exchange
company may elect to be subject to incentive regulation and to make
the corresponding infrastructure commitment under this chapter by
notifying the commission in writing of its election.
(b) The notice must include a statement that the company
agrees to:
(1) limit until September 1, 2005, any increase in a
rate the company charges for basic network services as prescribed
by Subchapter C; and
(2) fulfill the infrastructure commitment prescribed
by Subchapters F and G.
(c) Except as provided in Subsection (d), an election under
this chapter remains in effect until the legislature eliminates the
incentive regulation authorized by this chapter and Chapter 59.
(d) The commission may allow an electing company serving
fewer than five million access lines to withdraw the company's
election under this chapter:
(1) on application by the company; and
(2) only for good cause.
(e) In this section, "good cause" includes only matters
beyond the control of the company.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 35, eff. Sept. 1, 1999.
§ 58.022. CHAPTER CONTROLS. This chapter governs the
regulation of an electing company's telecommunications services
regardless of whether the company is a dominant carrier.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.023. SERVICE CLASSIFICATION. On election, the
services provided by an electing company are classified into two
categories:
(1) basic network services governed by Subchapter C;
and
(2) nonbasic services governed by Subchapter E.
(3) Renumbered (2) by Acts 1999, 76th Leg., ch. 1212,
§ 36, eff. Sept. 1, 1999
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 36, eff. Sept. 1, 1999.
§ 58.024. SERVICE RECLASSIFICATION. (a) The
commission may reclassify a basic network service as a nonbasic
service.
(b) The commission shall establish criteria for determining
whether a service should be reclassified. The criteria must
include consideration of the:
(1) availability of the service from other providers;
(2) effect of the reclassification on service
subscribers; and
(3) nature of the service.
(c) The commission may not reclassify a service until:
(1) each competitive safeguard prescribed by
Subchapters B-H, Chapter 60, is fully implemented; or
(2) for a company that serves more than five million
access lines in this state, the date on which the Federal
Communications Commission determines in accordance with 47 U.S.C.
Section 271 that the company or any of its affiliates may enter the
interLATA telecommunications market in this state.
(d) The commission may reclassify a service subject to the
following conditions:
(1) the electing company must file a request for a
service reclassification including information sufficient for the
commission to perform a review and evaluation under Subsection (b);
(2) the commission must grant or deny the request not
later than the 60th day after the date the electing company files
the request for service reclassification; and
(3) there is a rebuttable presumption that the request
for service reclassification by the electing company should be
granted if the commission finds that there is a competitive
alternative provider serving customers through means other than
total service resale.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 62, § 18.11, eff. Sept. 1, 1999;
Acts 1999, 76th Leg., ch. 1212, § 37, eff. Sept. 1, 1999.
§ 58.025. COMPLAINT OR HEARING. (a) An electing
company is not, under any circumstances, subject to a complaint,
hearing, or determination regarding the reasonableness of the
company's:
(1) rates;
(2) overall revenues;
(3) return on invested capital; or
(4) net income.
(b) This section does not prohibit a complaint, hearing, or
determination on an electing company's implementation and
enforcement of a competitive safeguard required by Chapter 60.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.026. CONSUMER COMPLAINTS REGARDING
TARIFFS. (a) This chapter does not restrict:
(1) a consumer's right to complain to the commission
about the application of an ambiguous tariff; or
(2) the commission's right to determine:
(A) the proper application of that tariff; or
(B) the proper rate if that tariff does not
apply.
(b) This section does not permit the commission to:
(1) lower a tariff rate except as specifically
provided by this title;
(2) change the commission's interpretation of a
tariff; or
(3) extend the application of a tariff to a new class
of customers.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.027. CONSUMER COMPLAINTS REGARDING SERVICES;
ENFORCEMENT OF STANDARDS. This chapter does not restrict:
(1) a consumer's right to complain to the commission
about quality of service; or
(2) the commission's right to enforce a quality of
service standard.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.028. REVIEW AND REPORT OF EFFECTS OF ELECTION.
Text of section effective until September 1, 2005
(a) Not later than January 1, 2004, the commission shall
begin a review and evaluation of each company that elects under this
chapter or Chapter 59.
(b) The review must include an evaluation of the effects of
the election, including:
(1) consumer benefits;
(2) impact of competition;
(3) infrastructure investments; and
(4) quality of service.
(c) The commission shall file a report with the legislature
not later than January 1, 2005. The report must include the
commission's recommendations as to whether the incentive
regulation provided by this chapter and Chapter 59 should be
extended, modified, eliminated, or replaced with another form of
regulation.
(d) This section expires September 1, 2005.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 38, eff. Sept. 1, 1999.
SUBCHAPTER C. BASIC NETWORK SERVICES
§ 58.051. SERVICES INCLUDED. (a) Unless reclassified
under Section 58.024, the following services are basic network
services:
(1) flat rate residential local exchange telephone
service, including primary directory listings and the receipt of a
directory and any applicable mileage or zone charges;
(2) residential tone dialing service;
(3) lifeline and tel-assistance service;
(4) service connection for basic residential
services;
(5) direct inward dialing service for basic
residential services;
(6) private pay telephone access service;
(7) call trap and trace service;
(8) access for all residential and business end users
to 911 service provided by a local authority and access to dual
party relay service;
(9) mandatory residential extended area service
arrangements;
(10) mandatory residential extended metropolitan
service or other mandatory residential toll-free calling
arrangements; and
(11) residential call waiting service.
(b) Electing companies shall offer each basic network
service as a separately tariffed service in addition to any
packages or other pricing flexibility offerings that include those
basic network services.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 39, eff. Sept. 1, 1999.
§ 58.052. REGULATION OF SERVICES. (a) Except as
provided by Subchapter E, Chapter 52, basic network services of an
electing company are regulated:
(1) in accordance with this chapter; and
(2) to the extent not inconsistent with this chapter,
in accordance with:
(A) Subtitle A;
(B) Chapters 51, 54, 60, 62, and 63;
(C) Chapter 52, except for Subchapter F;
(D) Subchapters C, D, and E, Chapter 53;
(E) Chapter 55, except for:
(i) Subchapters F and G; and
(ii) Sections 55.001, 55.002, 55.003, and
55.004;
(F) Sections 53.001, 53.003, 53.004, 53.006,
53.065, 55.005, 55.006, 55.009, and 55.010; and
(G) commission rules and procedures.
(b) The commission must approve a change in the terms of the
tariff offering of a basic network service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.053. INVESTMENT LIMITATION ON SERVICE
STANDARDS. (a) The commission may not raise a service standard
applicable to the provision of local exchange telephone service by
an electing company if the increased investment required to comply
with the raised standard in any year exceeds 10 percent of the
company's average annual intrastate additions in capital
investment for the most recent five-year period.
(b) In computing the average under Subsection (a), the
company shall exclude:
(1) extraordinary investments made during the
five-year period; and
(2) investments required by Section 58.203.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.054. RATES CAPPED. (a) As a condition of election
under this chapter, an electing company shall commit to not
increasing a rate for a basic network service on or before the
fourth anniversary of its election date.
(b) The rates an electing company may charge on or before
that fourth anniversary are the rates charged by the company on June
1, 1995, or, for a company that elects under this chapter after
September 1, 1999, the rates charged on the date of its election,
without regard to a proceeding pending under:
(1) Section 15.001;
(2) Subchapter D, Chapter 53; or
(3) Subchapter G, Chapter 2001, Government Code.
(c) Notwithstanding Subsections (a) and (b), the cap on the
rates for basic network services for a company electing under this
chapter may not expire before September 1, 2005.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 40, eff. Sept. 1, 1999.
§ 58.055. RATE ADJUSTMENT BY COMPANY. (a) An electing
company may increase a rate for a basic network service during the
election period prescribed by Section 58.054 only:
(1) with commission approval that the proposed change
is included in Section 58.056, 58.057, or 58.058; and
(2) as provided by Sections 58.056, 58.057, 58.058,
and 58.059.
(b) Notwithstanding Subchapter F, Chapter 60, an electing
company may, on its own initiative, decrease a rate for a basic
network service during the electing period.
(c) The company may decrease the rate for a basic local
telecommunications service to an amount above the service's
appropriate cost. If the company has been required to perform or
has elected to perform a long run incremental cost study, the
appropriate cost for the service is the service's long run
incremental cost.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 40, eff. Sept. 1, 1999.
§ 58.056. RATE ADJUSTMENT FOR CHANGES IN FCC
SEPARATIONS. The commission, on motion of the electing company or
on its own motion, shall proportionally adjust rates for services
to reflect changes in Federal Communications Commission
separations that affect intrastate net income by at least 10
percent.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.057. RATE ADJUSTMENT FOR CERTAIN
COMPANIES. (a) An electing company, after the 42nd month after
the date the company elects incentive regulation under this
chapter, may file an application for a commission review of the
company's need for changes in the rates of its services if the
company:
(1) has fewer than five million access lines in this
state; and
(2) is complying with:
(A) the company's infrastructure commitment;
(B) each requirement relating to quality of
service; and
(C) each commission rule adopted under Chapter
60.
(b) The company's application may request that the
commission adjust rates, implement new pricing plans, restructure
rates, or rebalance revenues between services to recognize changed
market conditions and the effects of competitive entry.
(c) The commission may use an index and a productivity
offset in determining the requested changes.
(d) The commission may not:
(1) order an increase in the rate for residential
local exchange telephone service that would cause the rate to
increase by more than the United States Consumer Price Index in any
12-month period; or
(2) set the monthly rate for residential local
exchange telephone service in an amount that exceeds the nationwide
average rates for similar local exchange telephone services.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.058. RATE GROUP RECLASSIFICATION. Notwithstanding
Subchapter B, the commission, on request of the electing company,
shall allow a rate group reclassification that results from access
line growth.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.059. COMMISSION RATE ADJUSTMENT
PROCEDURE. (a) In accordance with this section, an electing
company may request and the commission may authorize a rate
adjustment under Section 58.056, 58.057, or 58.058.
(b) The electing company must provide to the commission
notice of its intent to adjust rates. The notice must be
accompanied by sufficient documentary evidence to demonstrate that
the rate adjustment is authorized under Section 58.056, 58.057, or
58.058. The commission by rule or order shall prescribe the
documentation required under this subsection.
(c) The electing company must also provide notice to its
customers after providing notice to the commission. The notice to
the customers must:
(1) within a reasonable period after notice to the
commission, be published once in a newspaper of general circulation
in the affected service area;
(2) be included in or printed on each affected
consumer's bill in the first billing that occurs after notice is
filed with the commission;
(3) have a title that includes the name of the company
and the words "NOTICE OF POSSIBLE RATE CHANGE"; and
(4) include:
(A) a statement that the consumer's rate may
change;
(B) an estimate of the amount of the annual
change for the typical residential, business, or access consumer if
the commission approves the rate change;
(C) a statement that a consumer who wants to
comment on the rate change or who wants additional information
regarding the rate change may call or write the commission and that
the information will be provided without cost to the consumer and at
the expense of the electing company; and
(D) the commission's telephone number and
address.
(d) The estimate of the amount of the annual change required
by Subsection (c)(4)(B) must be printed in a type style and size
that is distinct from and larger than the type style and size of the
body of the notice.
(e) The commission shall review the proposed rates to
determine if the rate adjustment is authorized under Section
58.056, 58.057, or 58.058.
(f) The rate adjustment takes effect on the 90th day after
the date the electing company completes the notice required by this
section unless the commission suspends the effective date under
Subsection (g).
(g) At any time before a rate adjustment is scheduled to
take effect, the commission, on its own motion or on complaint by an
affected party, may suspend the effective date of the rate
adjustment and conduct a hearing to review the proposed adjustment.
After the hearing, the commission may issue an order approving the
adjustment, or if it finds that the adjustment is not authorized
under Section 58.056, 58.057, or 58.058, issue an order modifying
or rejecting the adjustment. An order modifying or rejecting a rate
adjustment must specify:
(1) each reason why the proposed adjustment was not
authorized by Section 58.056, 58.057, or 58.058; and
(2) how the proposed adjustment may be changed so that
it is authorized.
(h) Except as provided by this section, a request for a rate
restructure must comply with the notice and hearing requirements
prescribed by Sections 53.101-53.106.
(i) An electing company that has not more than five percent
of the total access lines in this state may adopt as the cost for a
service the cost for the same or substantially similar service
offered by a larger incumbent local exchange company. The electing
company may adopt the larger company's cost only if the cost was
determined based on a long run incremental cost study. An electing
company that adopts a cost under this subsection is not required to
present its own long run incremental cost study to support the
adopted cost.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION. After
the expiration of the period during which the rates for basic
network services are capped as prescribed by Section 58.054, an
electing company may increase a rate for a basic network service
only:
(1) with commission approval subject to this title;
and
(2) to the extent consistent with achieving universal
affordable service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 41, eff. Sept. 1, 1999.
§ 58.061. EFFECT ON CERTAIN CHARGES. This subchapter
does not affect a charge permitted under:
(1) Section 55.024;
(2) Subchapter C, Chapter 55; or
(3) Subchapter B, Chapter 56.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.063. PRICING AND PACKAGING
FLEXIBILITY. (a) Notwithstanding Section 58.052(b) or
Subchapter F, Chapter 60, an electing company may exercise pricing
flexibility for basic network services, including the packaging of
basic network services with any other regulated or unregulated
service or any service of an affiliate. The company may exercise
pricing flexibility in accordance with this section 10 days after
providing an informational notice to the commission, to the office,
and to any person who holds a certificate of operating authority in
the electing company's certificated area or areas or who has an
effective interconnection agreement with the electing company.
(b) An electing company shall set the price of a package of
services containing basic network services and nonbasic services at
any level at or above the lesser of:
(1) the sum of the long run incremental costs of any
basic network services and nonbasic services contained in the
package; or
(2) the sum of the tariffed prices of any basic network
services contained in the package and the long run incremental
costs of nonbasic services contained in the package.
(c) Except as provided by Section 58.003, an electing
company may flexibly price a package that includes a basic network
service in any manner provided by Section 51.002(7).
Added by Acts 1999, 76th Leg., ch. 1212, § 42, eff. Sept. 1,
1999.
SUBCHAPTER E. NONBASIC SERVICES
§ 58.151. SERVICES INCLUDED. The following services
are classified as nonbasic services:
(1) flat rate business local exchange telephone
service, including primary directory listings and the receipt of a
directory, and any applicable mileage or zone charges, except that
the prices for this service shall be capped until September 1, 2005,
at the prices in effect on September 1, 1999;
(2) business tone dialing service, except that the
prices for this service shall be capped until September 1, 2005, at
the prices in effect on September 1, 1999;
(3) service connection for all business services,
except that the prices for this service shall be capped until
September 1, 2005, at the prices in effect on September 1, 1999;
(4) direct inward dialing for basic business services,
except that the prices for this service shall be capped until
September 1, 2005, at the prices in effect on September 1, 1999;
(5) "1-plus" intraLATA message toll services;
(6) 0+ and 0- operator services;
(7) call waiting, call forwarding, and custom calling,
except that:
(A) residential call waiting service shall be
classified as a basic network service; and
(B) for an electing company subject to Section
58.301, prices for residential call forwarding and other custom
calling services shall be capped at the prices in effect on
September 1, 1999, until the electing company implements the
reduction in switched access rates described by Section 58.301(2);
(8) call return, caller identification, and call
control options, except that, for an electing company subject to
Section 58.301, prices for residential call return, caller
identification, and call control options shall be capped at the
prices in effect on September 1, 1999, until the electing company
implements the reduction in switched access rates described by
Section 58.301(2);
(9) central office based PBX-type services;
(10) billing and collection services, including
installment billing and late payment charges for customers of the
electing company;
(11) integrated services digital network (ISDN)
services, except that prices for Basic Rate Interface (BRI) ISDN
services, which comprise up to two 64 Kbps B-channels and one 16
Kbps D-channel, shall be capped until September 1, 2005, at the
prices in effect on September 1, 1999;
(12) new services;
(13) directory assistance services, except that an
electing company shall provide to a residential customer the first
three directory assistance inquiries in a monthly billing cycle at
no charge;
(14) services described in the WATS tariff as the
tariff existed on January 1, 1995;
(15) 800 and foreign exchange services;
(16) private line service;
(17) special access service;
(18) services from public pay telephones;
(19) paging services and mobile services (IMTS);
(20) 911 services provided to a local authority that
are available from another provider;
(21) speed dialing;
(22) three-way calling; and
(23) all other services subject to the commission's
jurisdiction that are not specifically classified as basic network
services in Section 58.051, except that nothing in this section
shall preclude a customer from subscribing to a local flat rate
residential or business line for a computer modem or a facsimile
machine.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 43, eff. Sept. 1, 1999.
§ 58.152. PRICES. (a) An electing company may set the
price for any nonbasic service at any level above the lesser of the:
(1) service's long run incremental cost in accordance
with the imputation rules prescribed by or under Subchapter D,
Chapter 60; or
(2) price for the service in effect on September 1,
1999.
(b) Subject to Section 51.004, an electing company may use
pricing flexibility for a nonbasic service. Pricing flexibility
includes all pricing arrangements included in the definition of
"pricing flexibility" prescribed by Section 51.002 and includes
packages that include basic network services.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 1212, § 43, eff. Sept. 1, 1999.
§ 58.153. NEW SERVICES. (a) Subject to the pricing
conditions prescribed by Section 58.152(a), an electing company may
introduce a new service 10 days after providing an informational
notice to the commission, to the office, and to any person who holds
a certificate of operating authority in the electing company's
certificated area or areas or who has an effective interconnection
agreement with the electing company.
(b) An electing company serving more than five million
access lines in this state shall provide notice to any person who
holds a certificate of operating authority in the electing
company's certificated area or areas or who has an effective
interconnection agreement with the electing company of any changes
in the generally available prices and terms under which the
electing company offers basic or nonbasic telecommunications
services regulated by the commission at retail rates to subscribers
that are not telecommunications providers. Changes requiring
notice under this subsection include the introduction of any new
nonbasic services, any new features or functions of basic or
nonbasic services, promotional offerings of basic or nonbasic
services, or the discontinuation of then-current features or
services. The electing company shall provide the notice:
(1) if the electing company is required to give notice
to the commission, at the same time the company provides that
notice; or
(2) if the electing company is not required to give
notice to the commission, at least 45 days before the effective date
of a price change or 90 days before the effective date of a change
other than a price change, unless the commission determines that
the notice should not be given.
(c) An affected person, the office on behalf of residential
or small commercial customers, or the commission may file a
complaint at the commission challenging whether the pricing by an
incumbent local exchange company of a new service is in compliance
with Section 58.152(a). The commission shall allow the company to
continue to provide the service while the complaint is pending.
(d) If a complaint is filed under Subsection (c), the
electing company has the burden of proving that the company set the
price for the new service in accordance with Section 58.152(a). If
the complaint is finally resolved in favor of the complainant, the
company:
(1) shall, not later than the 10th day after the date
the complaint is finally resolved, amend the price of the service as
necessary to comply with the final resolution; or
(2) may, at the company's option, discontinue the
service.
(e) The notice requirement prescribed by Subsection (b)
expires September 1, 2003.
Added by Acts 1999, 76th Leg., ch. 1212, § 43, eff. Sept. 1,
1999.
§ 58.155. INTERCONNECTION. Because interconnection to
competitive providers and interconnection for commercial mobile
service providers are subject to the requirements of Sections 251
and 252, Communications Act of 1934 (47 U.S.C. Sections 251 and
252), as amended, and Federal Communications Commission rules,
including the commission's authority to arbitrate issues,
interconnection is not addressed in this subchapter or Subchapter
B.
Added by Acts 1999, 76th Leg., ch. 1212, § 44, eff. Sept. 1,
1999.
SUBCHAPTER F. GENERAL INFRASTRUCTURE COMMITMENT
§ 58.201. STATEMENT OF STATE GOAL. (a) It is the goal
of this state to facilitate and promote the deployment of an
advanced telecommunications infrastructure to spur economic
development throughout this state. This state should be among the
leaders in achieving this objective.
(b) The primary means of achieving this goal is through
encouraging private investment in this state's telecommunications
infrastructure by creating incentives for that investment and
promoting the development of competition.
(c) The best way to bring the benefits of an advanced
telecommunications network infrastructure to communities in this
state is through innovation and competition among all the state's
communications providers. Competition will provide residents of
this state with a choice of telecommunications providers and will
drive technology deployment, innovation, service quality, and
cost-based prices as competing firms try to satisfy customer needs.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.202. POLICY GOALS FOR IMPLEMENTATION. In
implementing this subchapter, the commission shall consider this
state's policy goals to:
(1) ensure the availability of the widest possible
range of competitive choices in the provision of telecommunications
services and facilities;
(2) foster competition and rely on market forces where
competition exists to determine the price, terms, and availability
of service;
(3) ensure the universal availability of basic local
telecommunications services at reasonable rates;
(4) encourage the continued development and
deployment of advanced and reliable capabilities and services in
telecommunications networks;
(5) ensure interconnection and interoperability,
based on uniform technical standards, among telecommunications
carriers;
(6) eliminate unnecessary administrative procedures
that impose regulatory barriers to competition and ensure that
competitive entry is fostered on an economically rational basis;
(7) ensure consumer protection and protection against
anticompetitive conduct;
(8) regulate a provider of services only to the extent
the provider has market power to control the price of services to
customers;
(9) encourage cost-based pricing of
telecommunications services so that consumers pay a fair price for
services they use; and
(10) subject to Subchapter C, develop appropriate
quality of service standards for local exchange companies so as to
place this state among the leaders in deployment of an advanced
telecommunications infrastructure.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.203. INFRASTRUCTURE GOALS OF ALL ELECTING
COMPANIES. (a) Recognizing that it will take time for
competition to develop in the local exchange market, the commission
shall, in the absence of competition, ensure that each electing
company achieves the infrastructure goals described by this
section.
(b) Not later than December 31, 1996, an electing company
shall make available to each customer in the company's territory
access to end-to-end digital connectivity.
(c) Each new central office switch installed for an electing
company after September 1, 1995, must be digital or technically
equal to or superior to digital. In addition, a switch installed
after September 1, 1997, must, at a minimum, be capable of providing
integrated services digital network (ISDN) services in a manner
consistent with generally accepted national standards.
(d) Not later than January 1, 2000, 50 percent of the local
exchange access lines in each electing company's territory must be
served by a digital central office switch.
(e) Not later than January 1, 2000, an electing company's
public switched network backbone interoffice facilities must
employ broadband facilities capable of 45 or more megabits a
second. The company may employ facilities at a lower bandwidth if
technology permits the delivery of video signal at the lower
bandwidth at a quality level comparable to a television broadcast
signal. The requirements of this subsection do not apply to local
loop facilities.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.204. ADDITIONAL INFRASTRUCTURE COMMITMENT OF
CERTAIN COMPANIES. (a) Not later than December 31, 1998, an
electing company serving more than one million but fewer than five
million access lines shall provide digital switching central
offices in all exchanges.
(b) Not later than January 1, 2000, an electing company
serving more than five million access lines shall:
(1) install Common Channel Signaling 7 capability in
each central office; and
(2) connect all of the company's serving central
offices to their respective LATA tandem central offices with
optical fiber or equivalent facilities.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.205. EXTENSION OR WAIVER OF INFRASTRUCTURE
REQUIREMENTS. (a) For an electing company that serves more than
one million but fewer than two million access lines, the commission
may temporarily extend a deadline prescribed by Section 58.203 if
the company demonstrates that the extension is in the public
interest.
(b) For an electing company that serves fewer than one
million access lines, the commission may waive a requirement
prescribed by Section 58.203 if the company demonstrates that the
investment is not viable economically.
(c) Before granting a waiver under Subsection (b), the
commission must consider the public benefits that would result from
compliance with the requirement.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.206. IMPLEMENTATION COSTS; INCREASE IN RATES AND
UNIVERSAL SERVICE FUNDS. The commission may not consider the cost
of implementing Section 58.203 or 58.204 in determining whether an
electing company is entitled to:
(1) a rate increase under this chapter; or
(2) increased universal service funds under
Subchapter B, Chapter 56.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER G. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES
§ 58.251. INTENT AND GOAL OF SUBCHAPTER. (a) It is the
intent of this subchapter to establish a telecommunications
infrastructure that interconnects the public entities described in
this subchapter. The interconnection of these entities requires
ubiquitous, broadband, digital services for voice, video, and data
in the local serving area. The ubiquitous nature of these
connections must allow individual networks of these entities to
interconnect and interoperate across the broadband digital service
infrastructure. The delivery of these advanced telecommunications
services requires collaborations and partnerships of public,
private, and commercial telecommunications service network
providers.
(b) The goal of this subchapter is to interconnect and
aggregate the connections to every entity described in this
subchapter, in the local serving area. It is further intended that
the infrastructure implemented under this subchapter connect each
entity that requests a service offered under this subchapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.252. DEFINITIONS. In this subchapter:
(1) "Educational institution" has the meaning
assigned by Section 57.021.
(2) "Library" has the meaning assigned by Section
57.042.
(3) "Private network services" means:
(A) broadband digital service that is capable of
providing transmission speeds of 45 megabits a second or greater
for customer applications; and
(B) other customized or packaged network
services.
(4) "Telemedicine center" means a facility that is
equipped to transmit, by video, data, or voice service, medical
information for the diagnosis or treatment of illness or disease
and that is:
(A) owned or operated by a public or
not-for-profit hospital, including an academic health center; or
(B) owned by one or more state-licensed health
care practitioners and operated on a nonprofit basis.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.253. PRIVATE NETWORK SERVICES FOR CERTAIN
ENTITIES. (a) On customer request, an electing company shall
provide private network services to:
(1) an educational institution;
(2) a library as defined in Section 57.042(6)(A) and
(B);
(3) a nonprofit telemedicine center;
(4) a public or not-for-profit hospital;
Text of subsec. (a)(5) as amended by Acts 2001, 77th Leg., ch. 959,
§ 9 and Acts 2001, 77th Leg., ch. 1255, § 16
(5) a project that would have been eligible to be
funded by the telecommunications infrastructure fund under
Subchapter C, Chapter 57, as that subchapter existed on January 1,
2001; or
Text of subsec. (a)(5) as amended by Acts 2001, 77th Leg., ch. 1220,
§ 4
(5) a project funded by the telecommunications
infrastructure fund under Subchapter C, Chapter 57, except for a
telepharmacy system; or
Text of subsec. (a)(5) as amended by Acts 2001, 77th Leg., ch. 1350,
§ 7
(5) a project eligible to have been funded by the
telecommunications infrastructure fund under Subchapter C, Chapter
57, as of January 1, 2001; or
(6) a legally constituted consortium or group of
entities listed in this subsection.
(b) Except as provided by Section 58.266, the electing
company shall provide the private network services for the private
and sole use of the receiving entity.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 959, § 9, eff. June 14, 2001; Acts
2001, 77th Leg., ch. 1220, § 4, eff. Sept. 1, 2001; Acts 2001,
77th Leg., ch. 1255, § 16, eff. June 15, 2001; Acts 2001, 77th
Leg., ch. 1350, § 7, eff. Sept. 1, 2001.
§ 58.254. PRIORITIES. An electing company shall give
priority to serving:
(1) rural areas;
(2) areas designated as critically underserved either
medically or educationally; and
(3) educational institutions with high percentages of
economically disadvantaged students.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.255. CONTRACTS FOR PRIVATE NETWORK
SERVICES. (a) An electing company shall provide a private
network service under a customer specific contract.
(b) An electing company shall offer private network service
contracts under this subchapter at 105 percent of the long run
incremental cost of providing the private network service,
including installation.
(c) Each contract shall be filed with the commission.
Commission approval of a contract is not required.
(d) Subtitle D, Title 10, Government Code, does not apply to
a contract entered into under this subchapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.256. PREFERRED RATE TREATMENT WARRANTED. An
entity described by Section 58.253(a) warrants preferred rate
treatment. However, a rate charged for a service must cover the
service's long run incremental cost.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.257. ELECTION OF RATE TREATMENT. An educational
institution or a library may elect the rate treatment provided by
this subchapter or the discount provided by Subchapter B, Chapter
57.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.258. PRIVATE NETWORK SERVICES RATES AND
TARIFFS. (a) Notwithstanding the pricing flexibility authorized
by this subtitle, an electing company's rates for private network
services may not be increased on or before the sixth anniversary of
the company's date of election. However, an electing company may
increase a rate in accordance with the provisions of a customer
specific contract.
(b) An electing company may not charge an entity described
by Section 58.253(a) a special construction or installation charge.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.259. TARIFF RATE FOR CERTAIN INTRALATA
SERVICE. (a) An electing company shall file a flat monthly tariff
rate for point-to-point intraLATA 1.544 megabits a second service
for the entities described by Section 58.253(a).
(b) The tariff rate may not be:
(1) distance sensitive; or
(2) higher than 105 percent of the service's statewide
average long run incremental cost, including installation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.260. POINT-TO-POINT 45 MEGABITS A SECOND INTRALATA
SERVICE. (a) On request of an entity described by Section
58.253(a), an electing company shall provide to the entity
point-to-point 45 megabits a second intraLATA services.
(b) The service must be provided under a customer specific
contract except that any interoffice portion of the service must be
recovered on a statewide average basis that is not distance
sensitive.
(c) The rate for the service may not be higher than 105
percent of the service's long run incremental cost, including
installation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.261. BROADBAND DIGITAL SPECIAL ACCESS
SERVICE. (a) An electing company shall provide to an entity
described by Section 58.253(a) broadband digital special access
service to interexchange carriers.
(b) The rate for the service may not be higher than 105
percent of the service's long run incremental cost, including
installation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.262. EXPANDED INTERCONNECTION. (a) On request of
an entity described by Section 58.253(a), an electing company shall
provide to the entity expanded interconnection (virtual
colocation).
(b) The company shall provide expanded interconnection:
(1) in accordance with commission rules adopted under
Subchapter H, Chapter 60; and
(2) at 105 percent of long run incremental cost,
including installation.
(c) An entity described by Section 58.253(a) is not required
to qualify for expanded interconnection if expanded
interconnection is ordered by the commission.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.263. INTERNET ACCESS. (a) This section applies
only to an educational institution or library in an exchange of an
electing company serving more than five million access lines in
which toll-free access to the Internet is not available.
(b) On request of the educational institution or library,
the electing company shall make available a toll-free connection or
toll-free dialing arrangement that the institution or library may
use to obtain access to the Internet in an exchange in which
toll-free access to the Internet is available.
(c) The electing company shall provide the connection or
dialing arrangement at no charge to the educational institution or
library until Internet access becomes available in the exchange of
the requesting educational institution or library.
(d) The electing company is not required to arrange for
Internet access or to pay Internet charges for the requesting
educational institution or library.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.264. COMPLAINTS LIMITED. (a) Notwithstanding any
other provision of this title, an electing company is subject to a
complaint under this subchapter only by an entity described by
Section 58.253(a).
(b) An entity may only complain that the company provided a
private network service under this subchapter preferentially to a
similarly situated customer.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.265. INTERCONNECTION OF NETWORK SERVICES. The
private network services provided under this subchapter may be
interconnected with other similar networks for distance learning,
telemedicine, and information-sharing purposes.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.266. SHARING OR RESALE OF NETWORK SERVICES. (a) A
private network service may be used by and shared among the entities
described by Section 58.253(a) but may not be otherwise shared or
resold to other customers.
(b) A service provided under this subchapter may not be
required to be resold to another customer at a rate provided by this
subchapter.
(c) This section does not prohibit an otherwise permitted
resale of another service that an electing company may offer
through the use of the same facilities used to provide a private
network service offered under this subchapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 58.267. IMPLEMENTATION COSTS; INCREASE IN RATES AND
UNIVERSAL SERVICE FUNDS. The commission may not consider the cost
of implementing this subchapter in determining whether an electing
company is entitled to:
(1) a rate increase under this chapter; or
(2) increased universal service funds under
Subchapter B, Chapter 56.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER H. SWITCHED ACCESS SERVICES
§ 58.301. SWITCHED ACCESS RATE REDUCTION. An electing
company with greater than five million access lines in this state
shall reduce its switched access rates on a combined originating
and terminating basis as follows:
(1) the electing company shall reduce switched access
rates on a combined originating and terminating basis in effect on
September 1, 1999, by one cent a minute; and
(2) the electing company shall reduce switched access
rates on a combined originating and terminating basis by an
additional two cents a minute on the earlier of:
(A) July 1, 2000; or
(B) the date the electing company, or its
affiliate formed in compliance with 47 U.S.C. Section 272, as
amended, actually begins providing interLATA services in this state
in accordance with the authorization required by 47 U.S.C. Section
271, as amended.
Added by Acts 1999, 76th Leg., ch. 1212, § 45, eff. Sept. 1,
1999.
§ 58.302. SWITCHED ACCESS RATE CAP. (a) An electing
company may not increase the per minute rates for switched access
services on a combined originating and terminating basis above the
lesser of:
(1) the rates for switched access services charged by
that electing company on September 1, 1999, as may be further
reduced on implementation of the universal service fund under
Chapter 56; or
(2) the applicable rate described by Section 58.301 as
may be further reduced on implementation of the universal service
fund under Chapter 56.
(b) Notwithstanding Subchapter F, Chapter 60, but subject
to Section 60.001, an electing company may, on its own initiative,
decrease a rate charged for switched access service to any amount
above the long run incremental cost of the service.
Added by Acts 1999, 76th Leg., ch. 1212, § 45, eff. Sept. 1,
1999.
