By: Carona S.B. No. 986
(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. 986 By: Carona
A BILL TO BE ENTITLED
AN ACT
relating to deregulation of certain telecommunications markets and
companies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 52.002, Utilities Code, is amended by
adding Subsection (c) 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.
SECTION 2. 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 3. 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 4. 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 5. 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 6. 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 7. 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 8. Subsection (a), Section 65.102, Utilities Code,
is amended to read as follows:
(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].
SECTION 9. 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 10. Subsection (b), Section 65.152, Utilities Code,
is amended to read as follows:
(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 11. 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 12. Subsections (d), (e), and (f), Section 65.052,
and Sections 65.054 and 65.055, Utilities Code, are repealed.
SECTION 13. (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 the proceeding or
proceedings required by this section and issue any associated
orders not later than November 1, 2012. The commission shall
provide to the legislature a copy of any findings or orders issued
under this section.
SECTION 14. (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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