By: Carona, Van de Putte S.B. No. 980
(In the Senate - Filed February 28, 2011; March 8, 2011,
read first time and referred to Committee on Business and Commerce;
April 4, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; April 4, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 980 By: Carona
A BILL TO BE ENTITLED
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;
(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 or collection of a 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) Not earlier than January 2, 2012, 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.
(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.
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