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.