HBA-ATS H.B. 3222 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3222 By: Gallego State Affairs 4/15/1999 Introduced BACKGROUND AND PURPOSE Residents in remote or rural areas often encounter difficulty in obtaining Internet access. Because most rural areas do not have commercial Internet service providers (ISPs), the only other entity who has the capability to provide Internet access is often an educational institution. If educational institutions in rural areas shared or resold their access, residents and businesses of the community could obtain public access to the Internet. In areas that have neither a commercial ISP nor an educational institution, telecommunications utilities that serve those areas could be given incentives to provide affordable Internet access. H.B. 3222 authorizes an educational institution located in a rural community that does not have a local ISP to resell to residents and businesses of that community, or share with those residents or businesses, access to the Internet. In addition, this bill requires a telecommunications utility serving a rural community in which access to the Internet is not available from a local ISP or an educational institution to offer to an ISP that agrees to provide toll-free access to the Internet to all or part of the residents or businesses of the rural community discounted rates for Internet access and for the installation and maintenance of Internet connections. Under this bill, the discounted rate is prohibited from being distance sensitive and from being higher than 105 percent of the long-run incremental cost, including installation. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 55, Utilities Code, by adding Subchapter L, as follows: SUBCHAPTER L. INTERNET ACCESS IN RURAL AREAS Sec. 55.351. DEFINITIONS. Defines "Internet" and "rural community." Sec. 55.352. INTERNET ACCESS BY EDUCATIONAL INSTITUTION. (a) Defines "educational institution" for purposes of this section. (b) Authorizes an educational institution (institution) located in a rural community that does not have a local Internet service provider (ISP) to resell to residents and businesses of that community, or share with those residents or businesses, access to the Internet. (c) Requires an institution that resells a toll-free connection or toll-free dialing arrangement it uses to obtain access to the Internet in an exchange that does not have toll-free access to the Internet to use all profits made from reselling connections to subsidize the installation and maintenance of existing and future Internet connections. Sec. 55.353. TARIFF RATE FOR INTERNET SERVICE PROVIDER. (a) Requires a telecommunications utility serving a rural community in which access to the Internet is not available from a local ISP or an educational institution that can provide access to offer to an ISP that agrees to provide toll-free access to the Internet to all or part of the residents or businesses of the rural community discounted rates for Internet access and for the installation and maintenance of Internet connections. (b) Prohibits the discounted rate from being distance sensitive and from being higher than 105 percent of the long-run incremental cost, including installation. (c) Specifies that, to be eligible to receive the discounted rate, an ISP must agree to offer to the residents and businesses of the rural community dial-up connections with the capability of transmitting at least 28.8 kilobits per second, to offer to the residents and businesses of the rural community service equivalent to a connection on 95 percent of connection attempts between 9 a.m. and 9 p.m. daily, and not impose a monthly charge for Internet access that is more than 10 percent greater than the average monthly charge imposed by national ISPs for toll-free access. (d) Prohibits the sharing or reselling of Internet access provided under this section to a person who is not a resident or business of a rural community. (e) Requires each telecommunications utility described by Subsection (a) to file a tariff for the discounted rates required by this section. Authorizes an ISP that wants to provide service under this section to file an application with the Public Utility Commission of Texas (commission) to receive the discounted rates not earlier than the 30th day after the tariff is filed. Requires the commission to determine whether the ISP meets the requirements prescribed by this section. Requires the commission, if more than one ISP files an application to serve the same rural community, to choose one provider based on the requirements prescribed by this section and any criteria the commission may prescribe that the commission determines are in the best interest of the rural community. SECTION 2. Effective date: September 1, 1999. Requires a telecommunications utility to file the tariffs by January 1, 2000. SECTION 3. Emergency clause.