HBA-AMW H.B. 2388 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2388
By: Chisum
State Affairs
3/23/2001
Introduced



BACKGROUND AND PURPOSE 

Some citizens living in rural areas outside of the certificated areas
assigned to telecommunications providers are not receiving basic dial-tone
service.  The universal service fund was created to help provide basic
telephone service at affordable rates in high-cost, rural parts of the
state but, under current law, funds are only distributed to certificated
areas.  House Bill 2388 allows residents in uncertificated areas to
petition the Public Utility Commission of Texas for basic dial-tone
telephone service and sets forth procedures for extending
telecommunications services to areas not included in a certificated service
area. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Public Utility Commission of Texas
in SECTION 2 (Section 56.023, Utilities Code) of this bill. 

ANALYSIS

House Bill 2388 amends the Utilities Code to set forth procedures for
extending telecommunications services to areas not included in a
certificated service area.  The bill provides that the eligibility criteria
adopted by the Public Utility Commission of Texas (PUC) for funding the
universal service fund and making distributions from the fund must require
a telecommunications provider (provider) to offer service and render
continuous and adequate service to an uncertificated area.  The bill
requires an eligible company providing services to an uncertificated area
to receive universal service fund distributions to assist the provider in
providing those services and requires the PUC to designate the provider as
an eligible telecommunications carrier for that area.  The bill requires
the PUC to adopt rules to administer these provisions (Sec. 56.023). 

The bill requires the PUC to implement a mechanism to determine a
reasonable rate of recovery for the reimbursable costs incurred by a
designated provider in providing service in an uncertificated area.  The
bill sets forth provisions regarding the mechanism and the recovery of
unreimbursed costs (Sec. 56.025).  
H.B. 2388 authorizes the PUC to designate a telecommunications provider to
provide voice-grade services to residents of a community that is not
included within the certificated area of a holder of a certificate of
convenience and necessity, but only if the provider is otherwise eligible
under the PUC's criteria for receiving universal service funds.  The bill
authorizes the residents of a community that is not included within the
certificated area of a holder of a certificate of convenience and necessity
to petition the PUC to designate a telecommunications provider to provide
to those petitioners voice-grade services supported by state and federal
universal service support mechanisms.  The bill sets forth provisions
regarding the contents of the petition and the procedures for the PUC if it
finds the petition compliant.  The bill sets forth provisions regarding the
acceptance and denial of a petition by the PUC, the designation of a
provider by the PUC, and the recovery of actual costs by the designated
provider (Sec. 56.029).   

The bill sets forth provisions regarding the establishment of a reasonable
aid to construction charge to be assessed to each petitioner and sets forth
timelines for the extension of service to an uncertificated area. The bill
provides that if the PUC approves a petition requesting service within an
area, residents of that area  who did not sign the petition requesting
service are not entitled to receive service until the fifth anniversary of
the date the petition was filed unless the residents file a new petition
and agree to pay aid to construction charges on the same terms as
applicable to the initial petitioning residents.  The bill sets forth
provisions regarding the reimbursement of the provider's costs and expenses
and payments to the universal service fund by subsequent petitioners (Sec.
56.029). 

The bill specifies that a provider who is designated to serve petitioners
residing within an uncertificated area is the preferred provider in that
area for later petitions filed and that a preferred designated provider is
entitled to an opportunity for a hearing on a petition that is filed.  The
bill also provides that the designation of a provider to serve an
uncertificated area does not have the effect of amending the boundaries of
the provider's certificate to provide local exchange service or imposing
carrier of last resort responsibilities on the provider (Sec. 56.029). 

EFFECTIVE DATE

September 1, 2001.