84R10460 JXC-F
	By: King of Hemphill	H.B. No. 2796

	A BILL TO BE ENTITLED
	AN ACT
	relating to the authority of certain telecommunications providers
	to commit to making infrastructure and network improvements in
	exchange for support from the universal service fund; adding
	provisions subject to a criminal penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle C, Title 2, Utilities Code, is amended
	by adding Chapter 53A to read as follows:
	CHAPTER 53A.  RURAL ADVANCED PLAN FOR INFRASTRUCTURE DEPLOYMENT
	Sec. 53A.001.  POLICY. In accordance with the policy stated
	in Section 51.001(g), considering the differences in the geographic
	and economic challenges posed by providing basic local
	telecommunications services and competitive and advanced
	telecommunications services to rural areas as opposed to urban
	areas, the benefits incident to those services, the status of
	universal service in the rural areas of this state, state and
	national initiatives for widespread deployment of broadband
	services, and the telecommunications services network and
	infrastructure advancements needed to make possible the future
	deployment of an electric smart grid in rural areas, it is the
	policy of this state to:
	(1)  upgrade and maintain the telecommunications
	services infrastructure in rural areas of this state in an effort
	to:
	(A)  provide to each resident of this state a
	network capable of providing access to basic local
	telecommunications services and advanced telecommunications
	services so that a majority of residents in rural areas have the
	option to use those services; and
	(B)  ensure that each resident has advanced
	telecommunications services to maintain the role of this state as a
	leader in commerce and education;
	(2)  ensure that the residents of rural areas have
	access to a wide range of advanced telecommunications services and
	other competitive benefits in a manner and at prices similar to the
	access available to residents in urban areas;
	(3)  provide the necessary infrastructure in rural
	areas to support access to an array of telecommunications, data,
	and video services, economic development and educational
	opportunities, and telemedicine applications;
	(4)  provide the required underlying primary network
	infrastructure to support major state and national energy policy
	initiatives established to create an electric smart grid that
	requires the support of an advanced telecommunications services
	network;
	(5)  provide incentives and flexibility similar to
	programs available in urban areas for small incumbent local
	exchange companies that serve rural areas to complete a basic local
	and advanced telecommunications services infrastructure that will
	support universal service; and
	(6)  promote economic stabilization and growth in rural
	areas through basic local and advanced telecommunications services
	networks.
	Sec. 53A.002.  DEFINITIONS. In this chapter:
	(1)  "Advanced telecommunications services" includes
	high speed, switched, broadband telecommunications service that
	enables users to originate and receive high quality voice, data,
	graphics, and video telecommunications.
	(2)  "Community center" means an organized public or
	private entity that provides a location for specialized groups or
	the general public to meet for group activities involving
	community, educational, patriotic, political, public information,
	recreational, religious, or social functions. The term includes
	recreational centers, senior centers, youth centers, and publicly
	owned meeting facilities. The commission may by rule designate
	additional types of facilities or entities as community centers.
	(3)  "Educational institution" has the meaning
	assigned by Section 57.021.
	(4)  "Electing provider" means a small provider that
	elects to be subject to the infrastructure commitment and
	corresponding regulation under this chapter.
	(5)  "Emergency services facility" means a facility
	from which a person, including a firefighter, paramedic, emergency
	medical technician, police officer, sheriff, constable, or other
	state or federal law enforcement representative, responds to
	emergencies, including 9-1-1 calls.
	(6)  "Library" means:
	(A)  a public library or regional library system,
	as defined by Section 441.122, Government Code;
	(B)  a library operated by an institution of
	higher education or a school district; or
	(C)  a library operated by a nonprofit
	corporation, as defined by Section 441.221, Government Code.
	(7)  "Private network services" means
	telecommunications services, including basic local
	telecommunications services, broadband services, customized
	services, and packaged network services.
	(8)  "Small provider" means:
	(A)  an incumbent local exchange company or
	cooperative that on September 1, 2013, together with all local
	exchange companies affiliated with the company or cooperative on
	that date, served 31,000 or fewer access lines in this state; or
	(B)  a company or cooperative that is a successor
	to a company or cooperative described by Subparagraph (A).
	(9)  "Smart grid" means infrastructure required to
	produce an advanced electric energy grid system under the state and
	national policy initiatives under the Energy Independence and
	Security Act of 2007 (42 U.S.C. Section 17001 et seq.).
	(10)  "Telemedicine center" means a facility that is
	equipped to transmit, by video, data, or voice service, medical
	information for the diagnosis or treatment of an illness or disease
	and that is:
	(A)  owned or operated by a public or
	not-for-profit hospital; or
	(B)  owned by a state-licensed health care
	practitioner and operated on a nonprofit basis.
	Sec. 53A.003.  CHAPTER CONTROLS. To the extent this chapter
	conflicts with Chapter 53, this chapter controls.
	Sec. 53A.004.  ELECTION. (a) A small provider that is not
	an electing company under Chapter 58 or 59 as of September 1, 2013,
	may elect to be subject to this chapter and make the corresponding
	infrastructure commitment under this chapter by notifying the
	commission in writing of the election.
	(b)  The notice must include the information required by
	Section 56.034 and a statement that the provider agrees to fulfill
	the infrastructure commitment prescribed by this chapter.
	(c)  A small provider may not revoke an election.
	Sec. 53A.005.  INFRASTRUCTURE COMMITMENT. (a) After the
	date the commission receives notice of the small provider's
	election under Section 53A.004, the electing provider shall:
	(1)  commit to make all reasonable efforts and
	investments in this state necessary to improve or upgrade network
	infrastructure in the manner described by this chapter;
	(2)  work to ensure that the electing provider's
	network backbone interoffice facilities are capable of supporting
	services that include, at a minimum, broadband speeds that are not
	less than the minimum speeds required by the Federal Communications
	Commission, voice services, video signal at a quality level
	comparable to a television broadcast signal, and other reasonably
	anticipated basic local or advanced telecommunications services
	that may become available to the public in the future; and
	(3)  work to ensure that all new or upgraded local loops
	that are the subject of an equitable request for service are capable
	of supporting basic local and advanced telecommunications
	services, including broadband service at a speed that is not less
	than the minimum broadband speed required by the Federal
	Communications Commission.
	(b)  To meet the requirements of this chapter, an electing
	provider may use any technology capable of achieving the required
	level of service capabilities.  This includes both new construction
	and upgrades to existing facilities.
	Sec. 53A.006.  EQUITABLE REQUESTS FOR SERVICE.  (a)  For the
	purposes of this chapter, a request for service is considered an
	equitable request for service only if provision of the requested
	service by the electing provider receiving the request is
	technologically and economically feasible, including the provision
	of network extensions or upgrades necessary to support any services
	the requesting entity is receiving at the time the request is made
	and other reasonably anticipated basic local or advanced
	telecommunications services that may become available to the public
	in the future.
	(b)  An electing provider shall determine whether a request
	for service is an equitable request. If the electing provider
	determines that the request is not an equitable request, the
	electing provider shall provide written notice of that
	determination to the requesting person. The requesting person may
	appeal to the commission a determination that a request for service
	is not an equitable request.
	(c)  An electing provider may deny a request that is not an
	equitable request.  An infrastructure commitment associated with a
	denied request is waived.
	(d)  If the electing provider or the commission determines
	that a request for service is an equitable request, the electing
	provider shall, regardless of technology used, work to ensure that
	the provider meets the commitments prescribed by Section 53A.005.
	Sec. 53A.007.  PRIVATE NETWORK SERVICES FOR CERTAIN
	ENTITIES. (a) An electing provider shall, after receiving an
	equitable request for service under Section 53A.006, provide
	private network services to:
	(1)  a community center;
	(2)  an educational institution;
	(3)  a library;
	(4)  a public or not-for-profit emergency services
	facility;
	(5)  a telemedicine center; or
	(6)  a legally constituted consortium of entities
	listed in this subsection.
	(b)  The electing provider shall provide the private network
	services for the private and sole use of the receiving entity or
	entities.  The provider may provide the services jointly with a
	facility that is used to provide another service to another
	customer.
	(c)  The entities described by Subsection (a) are a special
	class of customers for the purposes of the private network for
	distance learning, telemedicine, and information-sharing uses.
	(d)  An electing provider may provide a private network
	service under a customer-specific contract.
	(e)  The entities described by Subsection (a) warrant
	preferred rate treatment.  An electing provider shall provide
	private network services to those entities at a reduced rate equal
	to 65 percent of the amount owed under the customer-specific
	contract or under the otherwise applicable tariffed rate after
	applicable federal discounts are applied.
	(f)  On request of an electing provider, the commission shall
	provide reimbursement through the universal service fund, in
	addition to monthly support received under Section 56.034(d)(1) or
	(2), for reduced rates for private network services for entities
	described by Subsection (a).  The amount of reimbursement shall be
	equal to the difference between the electing provider's
	customer-specific contract or otherwise applicable tariffed rate
	for that service, and the reduced rate offered for that service
	under this chapter.
	Sec. 53A.008.  WAIVER OF INFRASTRUCTURE COMMITMENT
	REQUIREMENTS. (a) On the request of an electing provider, the
	commission may waive an infrastructure commitment requirement
	under Section 53A.005 or 53A.009 or a requirement under an
	equitable request for service under Section 53A.006.
	(b)  The commission may grant a waiver in relation to an
	equitable request for service under Section 53A.006 if the electing
	provider demonstrates that the requested investment or service
	places an undue burden on the universal service fund or the electing
	provider.
	(c)  Before granting a waiver under Subsection (b), the
	commission must consider the public benefits that would result from
	the investment or service, the willingness and ability of the
	requestor to pay a reasonable aid to construction charge, and the
	allowance of additional universal service fund support to allow
	timely completion of the request.
	(d)  The commission shall review a waiver granted under
	Subsection (a) or (b) at least once every three years if the
	corresponding requirement or the corresponding equitable request
	for service remains pending.  The commission may not extend a waiver
	until the commission reviews the factors listed in Subsection (c),
	the technical ability of the provider to meet the waived
	requirement, and the effect of extending the waiver on the
	universal service fund.
	Sec. 53A.009.  PLAN.  (a)  An electing provider shall develop
	and implement a five-year infrastructure investment plan to
	maintain and upgrade existing network facilities to ensure
	connectivity capable of meeting the standards prescribed by this
	chapter.
	(b)  The plan must include a description of the proposed
	improvements or upgrades to the electing provider's network
	throughout its service area that will help the provider meet
	infrastructure commitments and customer needs.
	(c)  An electing provider who is subject to a requirement
	under federal law to file a five-year plan is not required to create
	an additional plan under this section.
	Sec. 53A.010.  PROGRESS AND ACCOUNTABILITY REPORT. (a) An
	electing provider shall file annually with the commission a report
	on the provider's progress toward fulfilling the provider's
	infrastructure commitment.
	(b)  The report must include:
	(1)  the plan described by Section 53A.009 or the
	provider's federally prescribed five-year plan;
	(2)  a description of the provider's progress on
	implementing the plan, how the provider is using universal service
	support funds to improve service quality, coverage, or capacity,
	and an explanation detailing why improvements or targets for the
	previous calendar year have not been met, including adjustments for
	evolving standards;
	(3)  a summary of financial data for the previous
	calendar year that includes total company data, including:
	(A)  plant-specific operations expenses;
	(B)  plant non-specific operations expenses;
	(C)  customer operations expenses;
	(D)  corporate operations expenses;
	(E)  depreciation and amortization expenses;
	(F)  other operating expenses;
	(G)  total telecom plant in service;
	(H)  total property held for future use; and
	(I)  total telecom plant under construction; and
	(4)  average network capacity and speed capabilities
	available to customers.
	(c)  A report filed under this section is confidential and
	not subject to disclosure under Chapter 552, Government Code.
	(d)  The commission shall monitor the progress of each
	electing provider through the reports submitted under this section.
	Sec. 53A.011.  UNIVERSAL SERVICE FUND RECOVERY. (a)  An
	electing provider is eligible to receive support from the universal
	service fund as provided by this chapter and Section 56.034.
	(b)  This chapter does not affect the eligibility of an
	electing provider to receive support under Section 56.025.
	SECTION 2.  Section 56.021, Utilities Code, is amended to
	read as follows:
	Sec. 56.021.  UNIVERSAL SERVICE FUND ESTABLISHED. The
	commission shall adopt and enforce rules requiring local exchange
	companies to establish a universal service fund to:
	(1)  assist telecommunications providers in providing
	basic local telecommunications service at reasonable rates in high
	cost rural areas under two plans:
	(A)  the Texas High Cost Universal Service Plan
	(16 T.A.C. Section 26.403); and
	(B)  the Small and Rural Incumbent Local Exchange
	Company Universal Service Plan (16 T.A.C. Section 26.404);
	(2)  reimburse the telecommunications carrier that
	provides the statewide telecommunications relay access service
	under Subchapter D;
	(3)  finance the specialized telecommunications
	assistance program established under Subchapter E;
	(4)  reimburse the department and the commission for
	costs incurred in implementing this chapter and Chapter 57;
	(5)  reimburse a telecommunications carrier providing
	lifeline service as provided by 47 C.F.R. Part 54, Subpart E, as
	amended;
	(6)  finance the implementation and administration of
	an integrated eligibility process created under Section 17.007 for
	customer service discounts relating to telecommunications
	services, including outreach expenses the commission determines
	are reasonable and necessary;
	(7)  reimburse a designated provider under Subchapter
	F;
	(8)  reimburse a successor utility under Subchapter G;
	[and]
	(9)  finance the program established under Subchapter
	H; and
	(10)  assist telecommunications providers that are
	small and rural local exchange companies in providing basic local
	and advanced telecommunications services in high cost rural areas
	through fulfilling infrastructure commitments under Chapter 53A,
	as provided by Section 56.034.
	SECTION 3.  Subchapter B, Chapter 56, Utilities Code, is
	amended by adding Section 56.034 to read as follows:
	Sec. 56.034.  SUPPORT FOR RURAL ADVANCED PLAN FOR
	INFRASTRUCTURE DEPLOYMENT. (a) Support for the Rural Advanced
	Plan for Infrastructure Deployment is available to
	telecommunications providers who are electing providers under
	Chapter 53A.
	(b)  Not later than January 1, 2017, the commission shall
	implement a mechanism for electing providers to transition support
	from the Small and Rural Incumbent Local Exchange Company Universal
	Service Plan to the Rural Advanced Plan for Infrastructure
	Deployment. Until the mechanism is in place, an electing
	provider's support level may not be decreased from the level the
	provider receives on the date the commission receives notice under
	Section 53A.004 of the provider's election.
	(c)  When a provider notifies the commission that it elects
	to be subject to Chapter 53A, the provider shall request that the
	commission determine and disburse support to the provider under
	Subsection (d)(1) or (d)(2).
	(d)  An electing provider may request that the commission
	disburse funds to the provider in fixed monthly amounts based on:
	(1)  the company's annualized amount of recovery from
	the universal service fund for the fiscal year ending on August 31,
	2017, but only if the commission receives notice under Section
	53A.004 of the provider's election on or before September 1, 2017;
	or
	(2)  an annualized support amount determined to be
	sufficient, based on the Federal Communications Commission cost
	study and independently audited financials of the provider for the
	most recently ended fiscal year and when considered with other
	revenues, to permit the company the opportunity to earn a
	reasonable return in accordance with Section 53.051.
	(e)  The commission shall determine the initial support
	level not later than the 60th day after the date the commission
	receives the notice under Section 53A.004.
	(f)  An electing provider who requests to have the provider's
	initial support level determined and disbursed under Subsection
	(d)(1) may, not earlier than the first anniversary of the date of
	the determination of initial support level, make a one-time request
	to have the provider's fixed monthly support determined and
	disbursed under Subsection (d)(2). Not later than the 60th day
	after the date the commission receives a request under this
	subsection, the commission shall recalculate the amount of the
	electing provider's support as provided by Subsection (d)(2) and
	the electing provider is considered to have made a request under
	Subsection (d)(2) for the purposes of all future adjustments.  This
	subsection does not limit a provider's ability to make a request
	under Subsection (g).
	(g)  Not earlier than the first anniversary of the date of
	the determination of an initial support level the electing provider
	will receive under Subsection (d), or after an election under
	Subsection (f), the commission may, only for good cause and on its
	own motion, or shall, on the written request of the provider,
	initiate a proceeding to recalculate the annual support amount to
	be used as the basis for the fixed monthly support amounts.  The
	commission shall base the recalculation under this subsection on an
	annualized support amount determined to be sufficient, when
	considered with other revenues, to permit the company the
	opportunity to earn a reasonable return in accordance with Section
	53.051.  Except for good cause, the commission may not initiate a
	proceeding to adjust a provider's support under this subsection
	more frequently than once every three years.
	(h)  The commission shall adjust support disbursed under
	Subsection (d)(2) automatically every three years using the
	calculation prescribed by Subsection (d)(2).  An adjustment
	proceeding under this subsection must be completed in not more than
	60 days.
	SECTION 4.  This Act takes effect September 1, 2015.