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


Office of House Bill AnalysisC.S.H.B. 2388
By: Chisum
State Affairs
4/26/2001
Committee Report (Substituted)


         
BACKGROUND AND PURPOSE 

Some residents 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.  C.S.H.B. 2388 allows persons residing in permanent residential
premises or owners of permanent residential or business premises 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 56.021, Utilities Code) and SECTION 3 (Section
56.023, Utilities Code) of this bill. 

ANALYSIS

C.S.H.B. 2388 amends the Utilities Code to set forth procedures for
extending telecommunications services to permanent residential or business
premises (permanent premises) not included in a certificated service area.
The bill authorizes the Public Utility Commission of Texas (PUC) to
designate a telecommunications provider to provide voice-grade services to
permanent premises that are not included within the certificated area of a
holder of a certificate of convenience and necessity (CCN), but only if the
provider is otherwise eligible under the PUC's criteria for receiving
universal service funds (Sec. 56.202).  
The bill provides that the eligibility criteria adopted by the 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 any permanent premises in an
uncertificated area.  The bill requires the PUC to adopt and enforce rules
to reimburse from the universal service fund a designated provider that
provides telecommunications services to an uncertificated area (Sec.
56.021).  The bill requires an eligible company providing services to
permanent premises within 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 those permanent premises. The bill requires
the PUC to adopt rules to administer these provisions (Secs. 56.023 and
56.201). 

The bill authorizes persons residing in permanent residential premises or
owners of permanent premises that are not included within the certificated
area of a holder of a CCN to petition the PUC to designate a
telecommunications provider to provide to those premises 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
and grants the petition.  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 (Secs. 56.203 56.209).   

 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 the petitioning premises. The
bill provides that if the PUC approves a petition requesting service within
an area, residents of permanent residential premises or owners of permanent
premises in reasonable proximity to the premises that were the subject of
an approved petition who did not sign the prior petition requesting service
are not entitled to receive service until the fifth anniversary of the date
the petition was filed unless the residents or owners file a new petition
and agree to pay aid to construction charges on the same terms as
applicable to the prior petitioners.  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 (Secs.
56.210 56.212). 

The bill specifies that a provider who is designated to serve petitioning
premises located within an uncertificated area is the preferred provider
for any permanent premises in reasonable proximity to those petitioning
premises 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
permanent premises within 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 (Secs. 56.213 and 56.214). 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 2388 modifies the original bill by specifying that the provisions
regarding the extension of telecommunications services to an uncertificated
area apply to a residents of a permanent residential premises or owners of
a permanent residential or business premises within an uncertificated area,
rather than residents of a community in an uncertificated area (Secs.
56.023, 56.202 - 56.214).   

The substitute differs from the original bill by authorizing the Public
Utility Commission of Texas (PUC) to accept a petition for designation of a
service provider that is signed by fewer than five persons if a petitioner,
rather than each petitioner, provides an affidavit stating that the
petitioners have taken all reasonable steps to secure the necessary
signatures (Sec. 56.204).  The substitute specifies the time period during
which a designated provider will recover original costs from the universal
service fund (Sec. 56.209). 

The substitute adds provisions regarding requirements for the reimbursement
of a designated provider from the universal service fund, an order granting
a petition for designation of a service provider, recovery of original and
actual costs by a designated service provider, and requirements for a
designated provider to begin construction (Secs. 56.021 and 56.207 -
56.210). 

The substitute removes the provision in the original bill that required 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.