Part 2.
PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 22.
PRACTICE AND PROCEDURE
Subchapter M. PROCEDURES AND FILING REQUIREMENTS IN PARTICULAR COMMISSION PROCEEDINGS
16 TAC §22.246
The Public Utility Commission of Texas (the commission) adopts
amendments to §22.246 relating to Administrative Penalties without changes
to the proposed text as published in the November 12, 1999, issue of the
The amendments implement the Public Utility Regulatory Act (PURA), Texas
Utilities Code Annotated, §15.024(c) (Vernon 1999 Supp.) These amendments
were adopted under Project Number 21420.
The new provision in PURA §15.024(c) eliminates the 30-day "cure"
period for violations of PURA Chapters 17, 55, and 64.
Upon publication of the proposed rule in the November 12, 1999
Texas Register
(24 TexReg 9916), the commission requested written comments
from all interested parties regarding this rulemaking. The commission received
comments on the proposed amendments from only Texas Statewide Telephone Cooperative,
Inc. (TSTCI) which expressed the organization's support for the proposed amendments.
A public hearing on the proposed amendments was held at the commission
offices on January 18, 2000, at 9:00 a.m. Representatives from TSTCI, AT&T,
GTE, SWBT, Reliant Energy, John Staurulakis, Inc., and Clark Thomas &
Winters attended the hearing; however, no one participated in the proceedings
and, therefore, there were no comments.
The adopted amendments:
1. Eliminate the 30-day "cure" period for violations of PURA Chapters 17,
55, and 64;
2. Clarify that a violator may not opt to pay a penalty without also taking
appropriate corrective action; and
3. Clarify that the term, "continuing violation," which is defined in the
rule, is used in conjunction with the term, "violation," wherever it is appropriate
throughout the amended rule.
The amendments are adopted under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1999 Supp.) (PURA),
which provides the Public Utility Commission with the authority to adopt and
enforce rules reasonably required in the exercise of its powers and jurisdiction;
under PURA §14.052, which provides the Public Utility Commission with
the authority to adopt and enforce rules governing practice and procedure
before the Commission and, as applicable, before the State Office of Administrative
Hearings; and under PURA §15.024(c) which eliminates the 30-day "cure"
period for violations of PURA Chapters 17, 55, and 64.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002,
14.052, and 15.024(c), and Chapters 17, 55, and 64.
§22.246.Administrative Penalties.
(a)
Scope. This section is intended to address enforcement
actions related to administrative penalties only and does not apply to any
other enforcement actions that may be undertaken by the commission or the
commission staff.
(b)
Definitions. The following words and terms, when used in
this section, shall have the following meanings unless the context clearly
indicates otherwise:
(1)
Executive director--The executive director of the commission
or the executive director's designee.
(2)
Person--Includes a natural person, partnership of
two or more persons having a joint or common interest, mutual or cooperative
association, and corporation.
(3)
Violation--Any activity or conduct prohibited by the
Public Utility Regulatory Act (PURA), commission rule or commission order.
(4)
Continuing violation--Except for a violation of PURA
Chapter 17, 55, or 64, and commission rules or commission orders pursuant
to those chapters, any instance in which the person alleged to have committed
a violation attests that a violation has been remedied and was accidental
or inadvertent and subsequent investigation reveals that the violation has
not been remedied or was not accidental or inadvertent.
(c)
Amount of penalty.
(1)
Each day a violation continues or occurs is a separate
violation for which a penalty can be levied, regardless of the status of any
administrative procedures that are initiated under this subsection.
(2)
The penalty for each separate violation may be in
an amount not to exceed $5,000.00 per day.
(3)
The amount of the penalty shall be based on:
(A)
the seriousness of the violation, including the nature,
circumstances, extent, and gravity of any prohibited acts, and the hazard
or potential hazard created to the health, safety, or economic welfare of
the public:
(B)
the economic harm to property or the environment caused
by the violation;
(C)
the history of previous violations;
(D)
the amount necessary to deter future violations;
(E)
efforts to correct the violation; and
(F)
any other matter that justice may require, including, but
not limited to, the respondent's timely compliance with requests for information,
completeness of responses, and the manner in which the respondent has cooperated
with the commission during the investigation of the alleged violation.
(d)
Initiation of investigation. Upon receiving an allegation
of a violation or of a continuing violation, the executive director shall
determine whether an investigation should be initiated.
(e)
Report of violation or continuing violation. If, based
on the investigation undertaken pursuant to subsection (d) of this section,
the executive director determines that a violation or a continuing violation
has occurred, the executive director may issue a report to the commission.
(1)
Contents of the report. The report shall state the facts
on which the determination is based and a recommendation on the imposition
of a penalty, including a recommendation on the amount of the penalty.
(2)
Notice of report. Within 14 days after the report
is issued, the executive director shall, by certified mail, return receipt
requested, give written notice of the report to the person who is alleged
to have committed the violation or continuing violation which is the subject
of the report. The notice must include:
(A)
a brief summary of the alleged violation or continuing
violation;
(B)
a statement of the amount of the recommended penalty;
(C)
a statement that the person who is alleged to have committed
the violation or continuing violation has a right to a hearing on the occurrence
of the violation or continuing violation, the amount of the penalty, or both
the occurrence of the violation or continuing violation and the amount of
the penalty;
(D)
a copy of the report issued to the commission pursuant
to this subsection; and,
(E)
a copy of this section, §22.246 of this title (relating
to Administrative Penalties).
(f)
Options for response to notice of violation or continuing
violation.
(1)
Opportunity to remedy.
(A)
This paragraph does not apply to a violation of PURA Chapters
17, 55, or 64, or of a commission rule or commission order pursuant to those
chapters.
(B)
Within 40 days of the date of receipt of a notice of violation
set out in subsection (e)(2) of this section, the person against whom the
penalty may be assessed may file with the commission proof that the alleged
violation has been remedied and that the alleged violation was accidental
or inadvertent. A person who claims to have remedied an alleged violation
has the burden of proving to the commission both that an alleged violation
was remedied before the 31st day after the date the person received the report
of violation and that the alleged violation was accidental or inadvertent.
Proof that an alleged violation has been remedied and that the alleged violation
was accidental or inadvertent shall be evidenced in writing, under oath, and
supported by necessary documentation.
(C)
If the executive director determines that the alleged violation
has been remedied, was remedied within 30 days, and that the alleged violation
was accidental or inadvertent, no penalty will be assessed against the person
who is alleged to have committed the violation.
(D)
If the executive director determines that the alleged violation
was not remedied or was not accidental or inadvertent, the executive director
shall make a determination as to what further proceedings are necessary.
(E)
If the executive director determines that the alleged violation
is a continuing violation, the executive director shall institute further
proceedings, including referral of the matter for hearing pursuant to subsection
(h) of this section.
(2)
Payment of penalty. Within 30 days after the
date the person receives the notice set out in subsection (e)(2) of this section,
the person may accept the determination and recommended penalty through a
written statement sent to the executive director. If this option is selected,
the person shall take all corrective action required by the commission. The
commission by written order shall approve the determination and impose the
recommended penalty.
(3)
Request for hearing. Not later than the 20th day after
the date the person receives the notice set out in subsection (e)(2) of this
section, the person may submit to the executive director a written request
for a hearing on the occurrence of the violation or continuing violation,
the amount of the penalty, or both the occurrence of the violation or continuing
violation and the amount of the penalty.
(g)
Settlement conference. A settlement conference may be requested
by any party to discuss the occurrence of the violation or continuing violation,
the amount of the penalty, and the possibility of reaching a settlement prior
to hearing. A settlement conference is not subject to the Texas Rules of Evidence
or the Texas Rules of Civil Procedure; however, the discussions are subject
to Texas Rules of Civil Evidence 408, concerning compromise and offers to
compromise.
(1)
If a settlement is reached:
(A)
the parties shall file a report with the executive director
setting forth the factual basis for the settlement;
(B)
the executive director shall issue the report of settlement
to the commission; and
(C)
the commission by written order will approve the settlement.
(2)
If a settlement is reached after the matter has
been referred to SOAH, the matter shall be returned to the commission. If
the settlement is approved, the commission shall issue an order memorializing
commission approval and setting forth commission orders associated with the
settlement agreement.
(h)
Hearing. If a person requests a hearing under subsection
(f)(3) of this section, or fails to respond timely to the notice of the report
of violation or continuing violation provided pursuant to subsection (e)(2)
of this section, or if the executive director determines that further proceedings
are necessary, the executive director shall set a hearing, provide notice
of the hearing to the person, and refer the case to SOAH pursuant to §22.207
of this title (relating to Referral to State Office of Administrative Hearings).
The case shall then proceed as set forth in paragraphs (1)-(5) of this subsection.
(1)
The commission shall provide the SOAH administrative law
judge a list of issues or areas that must be addressed.
(2)
The hearing shall be conducted in accordance with
the provisions of this chapter.
(3)
The SOAH administrative law judge shall promptly issue
to the commission a proposal for decision, including findings of fact and
conclusions of law, about:
(A)
the occurrence of the alleged violation or continuing violation;
(B)
whether the alleged violation was cured and was accidental
or inadvertent for a violation of any chapter other than PURA Chapters 17,
55, or 64, or of a commission rule or commission order pursuant to those chapters;
and
(C)
the amount of the proposed penalty.
(4)
Based on the SOAH administrative law judge's
proposal for decision, the commission may:
(A)
determine that a violation or continuing violation has
occurred and impose a penalty;
(B)
determine that a violation occurred but that, pursuant
to subsection (f)(1) of this section, the person remedied the violation within
30 days and proved that the violation was accidental or inadvertent, and that
no penalty will be imposed; or
(C)
determine that no violation or continuing violation has
occurred.
(5)
Notice of the commission's order issued pursuant
to paragraph (4) of this subsection shall be provided under the Government
Code, Chapter 2001 and §22.263 of this title (relating to Final Orders)
and shall include a statement that the person has a right to judicial review
of the order.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on February 24, 2000.
TRD-200001416
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: March 15, 2000
Proposal publication date: November 12, 1999
For further information, please call: (512) 936-7308
Subchapter E. CUSTOMER SERVICE AND PROTECTION
16 TAC §23.49
The Public Utility Commission of Texas adopts the repeal
of §23.49 relating to Telephone Extended Area Service (EAS) and Expanded
Toll-Free Local Calling Areas without changes to the proposed text as published
in the September 17, 1999, issue of the
Texas Register
(24 TexReg 7340).
The repeal is necessary to avoid duplicative rule sections. The commission
has adopted new §26.217 relating to Administration of Extended Area Service
Requests; §26.219 relating to Administration of Expanded Local Calling
Service Requests; and §26.221 relating to Applications to Establish or
Increase Expanded Local Calling Service Surcharges to replace §23.49.
This repeal is adopted under Project Number 20788.
The commission received no comments on the proposed repeal.
This repeal is adopted under the Public Utility Regulatory Act,
Texas Utilities Code Annotated §14.002 (Vernon 1998) (PURA) which provides
the commission with the authority to make and enforce rules reasonably required
in the exercise of its powers and jurisdiction.
Cross-Reference to Statutes: Public Utility Regulatory Act §14.002.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 23, 2000.
TRD-200001384
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: March 14, 2000
Proposal publication date: September 17, 1999
For further information, please call: (512) 936-7308
16 TAC §23.55
The Public Utility Commission of Texas adopts the repeal
of §23.55 relating to Operator Services without changes to the proposed
text as published in the September 24, 1999, issue of the
Texas Register
(24 TexReg 8007).
The commission received no comments on the proposed repeal.
The repeal is necessary to avoid duplicative rule sections. The commission
has adopted new operator service rules, §26.311 relating to Information
Relating to Operator Services; §26.313 relating to General Requirements
Relating to Operator Services; §26.315 relating to Requirements for Dominant
Certificated Telecommunications Utilities (DCTUs); §26.317 relating to
Information to be Provided at the Telephone Set; §26.319 relating to
Access to the Operator of a Local Exchange Company (LEC); and §26.321
relating to 9-1-1 Calls, "0-" Calls, and End User Choice, to replace §23.55.
This repeal is adopted under Project Number 17709.
This repeal is adopted under the Public Utility Regulatory Act,
Texas Utilities Code Annotated §14.002 (Vernon 1998) (PURA) which provides
the commission with the authority to make and enforce rules reasonably required
in the exercise of its powers and jurisdiction.
Cross-Reference to Statutes: Public Utility Regulatory Act §14.002.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 24, 2000.
TRD-200001420
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: March 15, 2000
Proposal publication date: September 24, 1999
For further information, please call: (512) 936-7308
16 TAC §23.97
The Public Utility Commission of Texas adopts the repeal
of §23.97 relating to Interconnection without changes to the proposed
text as published in the September 24, 1999, issue of the
Texas Register
(24 TexReg 8008).
The repeal is necessary to avoid duplicative rule sections. The commission
has adopted new §26.272 relating to Interconnection to replace §23.97.
This repeal is adopted under Project Number 17709.
The commission received no comments on the proposed repeal.
This repeal is adopted under the Public Utility Regulatory Act,
Texas Utilities Code Annotated §14.002 (Vernon 1998) (PURA) which provides
the commission with the authority to make and enforce rules reasonably required
in the exercise of its powers and jurisdiction.
Cross-Reference to Statutes: Public Utility Regulatory Act §14.002.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 24, 2000.
TRD-200001396
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: March 15, 2000
Proposal publication date: September 24, 1999
For further information, please call: (512) 936-7308
Subchapter J. COSTS, RATES AND TARIFFS
16 TAC §§26.217, 26.219, 26.221
The Public Utility Commission of Texas (commission) adopts
new §26.217 relating to Administration of Extended Area Service Requests,
new §26.219 relating to Administration of Expanded Local Calling Service
Requests, and new §26.221 relating to Applications to Establish or Increase
Expanded Local Calling Service Surcharges with changes to the proposed text
as published in the September 19, 1999, issue of the
Texas Register
(24 TexReg 7343). The rules are necessary to administer
requests from telephone service customers for Extended Area Service (EAS)
and Expanded Local Calling Service (ELCS) and to process applications from
incumbent local exchange companies (ILECs) to establish or increase ELCS surcharges
in accordance with the Public Utility Regulatory Act (PURA), Chapter 55, Subchapters
B and C. These new sections are adopted under Project Number 20788.
The Appropriations Act of 1997, House Bill 1, Article IX, Section 167 (§167)
requires that each state agency review and consider for readoption each rule
adopted by that agency pursuant to the Government Code, Chapter 2001 (Administrative
Procedure Act). Such reviews include, at a minimum, an assessment by the agency
as to whether the reason for adopting a rule continues to exist. The commission
held three workshops to conduct a preliminary review of its rules. As a result
of these workshops, the commission is reorganizing its current substantive
rules located in 16 Texas Administrative Code (TAC) Chapter 23 to (1) satisfy
the requirements of Section 167; (2) repeal rules no longer needed; (3) update
existing rules to reflect changes in the industries regulated by the commission;
(4) do clean-up amendments made necessary by changes in law or commission
organizational structure and practices; (5) reorganize rules into new chapters
to facilitate future amendments and provide room for expansion; and (6) reorganize
the rules according to the industry to which they apply. Chapter 26 has been
established for all commission substantive rules applicable to telecommunications
service providers.
The commission requested specific comments on the Section 167 requirement
as to whether the reasons for adopting these rules continue to exist. The
commission finds that, pursuant to PURA, Chapter 55, Subchapters B and C,
the reasons for adopting the rules continue to exist.
A public hearing on the proposed sections was held at commission offices
on November 9, 1999 at 1:30 p.m. Representatives from the Petitioning Cities
of Texas (the Cities), General Telephone Company of Texas, Inc. (GTE), John
Staurulakis, Inc. (JSI), the Office of Public Utility Counsel (OPC), Southwestern
Bell Telephone Company (SWBT), Sprint Communications, Inc. (Sprint), Sugar
Land Telephone Company (Sugar Land), Texas Alltel, Inc. (Alltel), the Texas
Statewide Telephone Cooperative, Inc. (TSTCI), the Texas Telephone Association
(TTA) and TXU Communications, Inc. (TXU) attended the public hearing and provided
comments. To the extent their comments at the public hearing differed from
their submitted written comments, such comments are also summarized herein.
The commission received no comments on proposed new §26.217. The commission
received comments on proposed new §26.219 and §26.221 from Alltel,
the Cities, GTE, OPC, Sprint, Sugar Land, SWBT, TSTCI, TTA and TXU.
Comments on §26.219(c)(4)
Subsection (c)(4) contains the requirements for notice to affected telephone
service subscribers. GTE, SWBT and TXU opposed the requirement in subsection
(c)(4) for ILECs to provide notice to petitioned exchanges. GTE estimated
the added cost per notice to each petitioned exchange would be $230. SWBT
estimated the added cost to provide notice to five petitioned exchanges in
a typical petition would be an estimated $1,050 each time SWBT serves the
petitioning exchange. Alltel and Sugar Land recommended the proposed rule
specify that the company serving the petitioned exchange give notice to its
customers. Similarly, TSTCI suggested the rule be clarified to state who is
responsible for paying the cost of notice.
The commission accepts the recommendation of GTE, SWBT and TXU to delete
the requirement in subsection (c)(4) for ILECs to provide notice to petitioned
exchanges. The commission notes that ILECs must provide notice to all affected
customers, pursuant to §26.221(f)(1), to establish or increase an ELCS
surcharge.
Comments on §26.219(c)(5)
Subsection (c)(5) prescribes the process for intervening; however, the
rule, as published, contained no intervention deadline. OPC recommended the
intervention deadline be no sooner than ten days after the last date notice
is published. The commission accepts OPC's recommendation and modifies subsection
(c)(5) accordingly.
Comments on §26.219(d)(1)
Subsection (d)(1) describes a process for reviewing the sufficiency of
a request for ELCS. The Cities recommended the first sentence in subsection
(d)(1) be modified either to change "sufficient" to "deficient" or to change
"any" to "the." The commission accepts the Cities recommendation and modifies
subsection (d)(1) to change "any" to "the." This change does not alter the
substance of the rule; instead, the meaning is clarified.
Comments on §26.219(d)(3)
Subsection (d)(3) states the geographic proximity and community of interest
requirements. For calculating geographic proximity (22 miles and 50 miles),
GTE suggested the commission use toll rate centers rather than central switching
offices. SWBT recommended the existing approach be retained. TXU stated that
the use of toll rate centers may tend to increase the number of local exchanges
to which petitioning exchanges have access.
It is not the intent of the commission to increase or decrease the number
of local exchanges to which petitioning exchanges have access. Therefore,
the commission declines GTE's suggestion to change the formula for calculating
geographic proximity.
Comments on §26.219(e)(2)(F)
Subsection (e)(2) contains a list of exemptions that an ILEC may request
to be exempt from the requirement to provide ELCS. TSTCI and TTA pointed out
that an exchange with more than 10,000 access lines is not eligible to petition
for ELCS pursuant to PURA §55.045. Hence, TSTCI and TTA recommended the
commission retain the provision in the current rule automatically dismissing
petitions from exchanges with more than 10,000 access lines and remove the
exemption under proposed subsection (e)(2)(F). The commission agrees with
TSTCI and TTA. Therefore, the commission modifies subsection (c)(1), consistent
with PURA §55.045, to clarify eligibility requirements. Further, the
commission deletes subsection (e)(2)(F).
Comments on §26.219(f)(2)(C)
Subsection (f)(2) lists the ballot format requirements for ballots sent
to subscribers to vote on ELCS. GTE, SWBT, TTA and TXU opposed the requirement
in subparagraph (C) to include a map of the petitioning exchange and petitioned
exchanges with ELCS ballots mailed to petitioning subscribers. GTE estimated
the cost of a map to be $275 per 2000 ballots. SWBT estimated the cost of
a map to be $250 per map plus another $250 in paper, copying, and folding
services to include a copy in each ballot (assuming an average of 2,500 customers
@ $.05 per page). Alltel, Sugar Land and Sprint suggested that, instead of
a map, customers be provided with the NPA/NXXs of telephone exchanges affected
by an ELCS petition. Although OPC recommended the "map" requirement be left
in the proposed rule, OPC was not opposed to ILECs providing customers with
NPA/NXXs instead of maps.
The commission accepts the recommendation of Alltel, Sugar Land and Sprint.
Consistent with subsection (c)(2)(D)(ii) and (iii), the commission modifies
subsection (f)(2)(C) to require an ILEC to provide customers with the name,
area code and prefix of each affected telephone exchange, instead of maps.
Modification to §26.219(f)(2)(D)(i)
Subsection (f)(2) lists the ballot format requirements for ballots sent
to subscribers to vote on ELCS. In adopting §26.219, the commission modifies §26.219(f)(2)(D)(i)
to clarify that the maximum ELCS fees apply whether ELCS is obtained as the
result of one or more petitions, in addition to basic local exchange service
rates. The commission modifies this subsection to achieve consistency with
subsection (c)(2)(D)(v) and to alleviate confusion among subscribers concerned
about being billed more than one ELCS fee pursuant to PURA §55.048(b).
Subscribers will be billed only one ELCS fee, pursuant to PURA §55.048(b),
per access line.
Comments on §26.219(g)(2)
Subsection (g)(2) describes the ELCS fee formula. OPC and GTE recommended
the commission explicitly define which access lines should be included or
excluded for the purpose of calculating ELCS fees. GTE suggested the following
lines be counted as access lines for development of ELCS fees: non-usage sensitive
R1s, R2s, B1s, key lines, PBX trunks, Digital Channel Services, etc.
The commission agrees with OPC and GTE that uniformity in the use of the
term "access line" is a valid objective. However, there is scant information
in the record upon which to create a definition. Further, GTE's proposed definition
is vague and open-ended with the use of the term "etc." Finally, no party
identified a case where there was a dispute over the definition of access
lines. Therefore, the commission does not define the term "access line" in
this rule at this time.
Comments on §26.219(i)
Subsection (i) states the procedure leading to final approval of ELCS fees.
The Cities recommended the rule be amended to limit the permanence of the
rates until the provider files for relief under §26.221 where the fee
would be considered in the context of the ILEC's total lost revenues and costs
incurred and could be adjusted at that time. Alltel and Sugar Land urged the
commission to reject the Cities recommendation. OPC noted that ILEC exchanges
that were neither a petitioning nor a petitioned exchange would not have received
notice of a filing under Substantive Rule §26.219(c)(4). OPC recommended
The commission declines the recommendation of the Cities and OPC to limit
the permanence of ELCS fees. The commission interprets the meaning of the
sentence "A company may impose a fee
under this subsection
only until the company's next general rate case" in PURA §55.048(b)
to apply to ELCS fees (for example, $3.50 for residential customers or $7
for business customers) described in §55.048(b). Notwithstanding the
provision in §55.048(b) establishing the
duration
of ELCS fees, the commission may review and modify the
level
of ELCS fees consistent with the Order on Remand (May 28, 1999)
in Docket Number 17809,
Petitions of Central Telephone
of Texas and United Telephone of Texas doing business as Sprint to Recover
Lost Revenues and Cost of Implementing Expanded Local Calling Service Pursuant
to P.U.C. Substantive Rule §23.49(c)(12)
(Sprint). In the Order
on Remand, the commission determined that it has authority to reconsider prior
determinations of costs and lost revenues resulting from implementation of
ELCS where the commission has expressly reserved the right to do so. Where
the commission did not delimit in its final orders that previous costs and
lost revenues would be reviewed, the commission lacks the authority to review
such costs and revenues.
Subsection (i), as proposed, states "...the fees shall be considered permanent
unless modified in the future, for good cause, by the commission." Consistent
with the Order on Remand in Docket Number 17809 (Sprint), the commission may,
for good cause, review and modify ELCS fees approved on or after the effective
date of §26.219. Also, the commission may, for good cause, review and
modify ELCS fees approved before the effective date of §26.219, if the
commission delimited in its final orders that previous costs and lost revenues
would be subject to review.
Comments on §26.221(a)
Subsection (a) states the purpose of the rule. Alltel and Sugar Land recommended
duplicating the language in PURA §55.048(a) and Substantive Rule §23.49(c)(6)(B)
in the proposed rule to indicate that the ELCS provider has the right to recover
all of its costs and lost revenues due to ELCS. The commission accepts the
recommendation of Alltel and Sugar Land and modifies subsection (a) accordingly.
Comments on §26.221(b)(2)
Subsection (b)(2) defines the term "costs incurred." The Cities recommended
the commission modify the definition of "costs incurred" to clarify that "costs
incurred" could be a negative number, depending on the level of avoided costs.
In response to the Cities comments, Sprint stated that only if a service is
priced well below LRIC could avoided costs be greater than the price of the
service. According to Sprint, ELCS is not priced below cost. Alltel and Sugar
Land argued that, when ELCS is implemented, avoided costs consist primarily
of costs associated with billing individual messages and not, as Cities suggest,
on a per-minute of use basis. Alltel and Sugar Land recommended the Cities
definition of "costs incurred" be rejected.
The recommendation of the Cities is already captured in subsection (b)(2)
and, therefore, the commission declines to amend subsection (b)(2) in the
manner suggested by the Cities. Under the formula contained in subsection
(b)(2), "costs incurred" equal a positive number if avoided costs are less
than the sum of recurring and non-recurring costs. "Costs incurred" equal
a negative number if avoided costs are greater than the sum of recurring and
non-recurring costs.
The commission modifies the definition of "costs incurred" in subsection
(b)(2) to remove the term "actual" to obtain greater consistency with the
language in PURA §55.048(a), consistent with the comments filed under
subsection (a).
Comments on §26.221(b)(4) and (6)
Subsection (b)(4) defines the term "Expanded local calling service (ELCS)
fee." Subsection (b)(6) defines the term "Expanded local calling service (ELCS)
surcharge." The Cities opposed creation of distinctions between the ELCS fee
in subsection (b)(4) and the ELCS surcharge in subsection (b)(6) because,
according to the Cities, such distinctions are not found in PURA §55.048(b)
and §55.048(c). GTE and OPC argued that PURA plainly recognizes two separate
forms of cost recovery and that the proposed rule correctly recognizes the
distinction. The commission agrees with GTE and OPC and, therefore, declines
to amend subsections (b)(4) and (b)(6). The term "ELCS fee" in subsection
(b)(4) and the term "ELCS surcharge" in subsection (b)(6) are both defined
as fees, just as they are described in PURA §55.048(b) and §55.048(c),
respectively. The distinguishing terms recognize an industry convention and
are solely for ease of reference.
Comments on §26.221(b)(5)
Subsection (b)(5) defines the term "Expanded local calling service (ELCS)
requirement." GTE recommends the rule clarify that a particular ILEC's ELCS
requirement is the sum of lost revenue and costs incurred due to the implementation
of ELCS--regardless of whether that ILEC served the petitioning exchange or
the petitioned exchange(s) or both. The commission agrees with GTE that the
ELCS requirement includes costs incurred and lost revenues for both petitioning
and petitioned exchanges, yet declines GTE's recommendation because the multitude
of ELCS surcharge cases administered at the commission clearly establish that
the ELCS requirement pertains to both petitioning and petitioned telephone
exchanges. No party alleged otherwise.
Modification to §26.221(b)(7)
Subsection (b)(7) defines the term "lost revenue." The commission modifies
the definition of "lost revenue" in subsection (b)(7) to remove the term "actual"
to obtain greater consistency with the language in PURA §55.048(a), consistent
with the comments filed under subsection (a).
Comments on §26.221(c)(1)
Subsection (c)(1) is a general principle stating that the commission may
initiate an investigation to determine whether ELCS surcharges comply with
PURA §55.048. Sprint was unclear if the intent of §26.221(c)(1)
is to provide the commission investigative powers at any time or only upon
establishing or increasing ELCS surcharges. Sprint pointed out that the commission
has acknowledged it is legally prohibited from adjusting previous costs and
lost revenues ordered in prior ELCS surcharge cases. According to Sprint,
the ELCS rates of a Chapter 59 company, such as Sprint, cannot be reduced
unless the company agrees to it. OPC recommended the commission add clarifying
language to subsection (c)(1) so that it is clear the investigation under
this subsection is a compliance or show cause-type review rather than a reasonableness
review. OPC stated that, unlike reasonableness reviews, compliance or show
cause reviews are not prohibited under PURA §58.025 or §59.026.
The commission accepts the recommendation of OPC and modifies subsection
(c)(1) to refer to compliance investigations and show cause investigations.
Pursuant to Procedural Rule §22.241(b), the commission may initiate a
show cause proceeding to determine the compliance or lack of compliance with
any applicable statute, rule, regulation or general order. If a utility is
found not to be in compliance, PURA §15.021 authorizes the attorney general,
on the request of the commission, to enjoin or require compliance.
In its Order on Certified Issues (July 1, 1999) in Docket Number 17809
(Sprint), the commission determined that it could not reevaluate its previous
determinations of costs and lost revenues where it had not reserved the authority
to do so. However, where the commission reserves the authority to reevaluate
its previous determinations of costs and lost revenues, it may review the
reasonableness of such costs and lost revenues in a future proceeding.
However, if significant changes in the telecommunications industry occur
that cause a previous determination by the commission to no longer be reasonable,
the previous determination may be corrected by the commission following a
show cause or compliance investigation, rather than a reasonableness review,
so that the ELCS surcharge may be brought into compliance with PURA §55.048.
Significant changes in the telecommunications industry were discussed by the
commission in the Order on Remand (May 28, 1999) in Docket Number 17809 (Sprint),
where the commission determined that "The significant changes in the structure
of toll calling precludes Sprint from relying upon the type and amount of
revenues received in a historically different period as a proxy for its lost
revenues in this docket. In a similar vein, if pending legislation regarding
access fee reductions is enacted into law, then the amount of lost revenues
would be lower since such loss could no longer be attributable to implementation
of ELCS. This view comports with the final order in Docket Number 17641,
Comments on §26.221(c)(2)
Subsection (c)(2) is a general principle describing the burden of proof
regarding an ELCS surcharge. TSTCI suggested that subsection (c)(2), which
places the burden of proof on the ILEC, goes beyond the intent of PURA §55.048,
the intent being to enable ILECs to recover ELCS costs in an expedited manner.
The Cities, on the other hand, referred to PURA §53.006 and to the commission's
Order on Remand (May 28, 1999) in Docket Number 17809 (Sprint) to show that
the burden of proof falls on a public utility in any proceeding involving
a proposed rate change.
The commission modifies subsection (c)(2) to remove the term "actual" from
the general principle. In the Order on Remand (May 28, 1999) in Docket Number
17809 (Sprint), the commission determined that a utility has the burden to
show that its proposed rate is just and reasonable in accordance with PURA §53.006.
Subsection (c)(2), as modified, is consistent with PURA and the commission's
Order on Remand in Docket Number 17809 (Sprint).
Sprint considered the phrase "recovers costs necessary only for implementation
of ELCS" to be too limited. Further, Sprint stated that this phrase does not
recognize the impact expanded toll-free calling can have on the costs of implementing
an ELCS route. Sprint suggested the language in PURA §55.048(a) be used
instead of the "implementation" phrase.
OPC was concerned with Sprint's distinction between "costs necessary only
for implementation of ELCS" in subsection (c)(2)(B) and "costs incurred due
to implementation" of ELCS in subsection (a). OPC argued that, as a matter
of public policy, if costs are unnecessary, such costs cannot be passed on
to subscribers (through an ELCS surcharge).
The Cities expressed concern about the possibility that costs associated
with infrastructure commitments under PURA Chapters 58 and 59 could be mingled
with ELCS costs and, therefore, urged that subsection (c)(2)(B) remain as
proposed.
The commission declines to amend subsection (c)(2)(B). Subsection (c)(2)(B)
is consistent with the commission's Order on Remand (May 28, 1999) in Docket
Number 17809 (Sprint) where the commission determined, as part of its discussion
about a utility's burden of proof, that "Such evidence must not only quantify
the costs and lost revenues, but also show that such amounts were reasonably
Comments on §26.221(c)(3)
Subsection (c)(3) is a general principle describing the burden of proof
if an ILEC departs from the filing requirements in subsection (e)(1)-(6).
GTE requested clarification as to what is meant in the rule by "standard for
review." The commission accepts GTE's suggestion to clarify what is meant
by the term "standard for review" and modifies subsection (c)(3) to refer
to the requirements in subsection (e)(1)-(6) instead of a "standard for review."
Sprint does not object to the requirement for an ILEC to demonstrate the
reasonableness of a statistical method; however, Sprint does object if the
requirement applies to previously approved surcharges. The commission agrees
with Sprint that a utility does not bear the burden of demonstrating the reasonableness
of a statistical sampling method used to support a previously approved ELCS
surcharge as it relates to
the previously approved
surcharge. If a utility relies upon a statistical sampling method
to establish a new, separate surcharge, the utility bears the burden of proving
the reasonableness of the statistical sampling method as it relates to the
new, separate surcharge. Further, a show cause investigation or a compliance
investigation under subsection (c)(1) could include a review of a statistical
sampling method.
Comments on §26.221(c)(6)
Subsection (c)(6) is a general principle describing the commission's goal
that ELCS surcharges be revenue neutral. Sprint stated that the goal of revenue
neutrality is not contained in the Public Utility Regulatory Act. The commission
declines to amend subsection (c)(6) to remove the reference to revenue neutrality.
The reference to revenue neutrality in subsection (c)(6) is consistent with
the commission's Order on Remand (May 28, 1999) in Docket Number 17809 (Sprint)
where the commission found that "…further modifications to the design
of Sprint's ELCS fees are needed to maintain a fundamental statutory goal
of the ELCS fee: revenue neutrality." In the Order on Certified Issues (July
2, 1999) in Docket Number 17809 (Sprint), the commission reaffirmed "In the
order on remand, the Commission recognized a fundamental statutory goal for
ELCS fees: revenue neutrality." PURA §55.048(a).
Sprint was concerned that the term "restructure" is ambiguous and, therefore,
Sprint recommended the statement "The commission may restructure ELCS charges"
be struck from the rule. The commission accepts Sprint's recommendation to
remove the statement "The commission may restructure ELCS charges" from subsection
(c)(6). It is not necessary to state the commission's authority to restructure
ELCS surcharges, for example from a flat ELCS surcharge to a 2-for-1 ratio
between business customers and residential customers, because the commission
clearly established that it has such authority in past ELCS surcharge cases.
Comments on §26.221(c)(7)
Subsection (c)(7) is a general principle stating that an ILEC has no continuing
right to bill an ELCS surcharge for an indefinite period. GTE argued that
subsection (c)(7) is unlawful and confiscatory and should be deleted. Sprint
opined that this subsection thwarts the intent of the Legislature. Sprint
advised the commission to strive to be consistent with the law. TXU suggested
deleting subsection (c)(7) and, instead, modifying subsection (i)(2) and (3)
to allow for the recovery of ELCS costs "so long as they actually occur."
OPC recommended subsection (c)(7) be modified as follows so that it can more
easily be read in harmony with subsection (i)(1):
Except as provided under §26.221(i)(1)
, an ILEC has no continuing
right to bill an ELCS surcharge for an indefinite period. (clarifying language
italicized) Alternatively, OPC said subsection (c)(7) could be deleted from
the proposed rule if subsection (i)(2) and (3) are modified to allow recovery
of ELCS costs "so long as they actually occur."
The commission accepts the recommendation of OPC and modifies subsection
(c)(7) to reference the exception in subsection (i)(1). In its Order (February
2, 1999) in Docket Number 17641 (Alltel), the commission determined that it
is not appropriate to allow an ELCS surcharge to continue to recover costs
indefinitely. In the Order on Remand (May 28, 1999) in Docket Number 17809
(Sprint), the commission reaffirmed its decision that there is no continuing
right to recovery of any specific types or level of costs and lost revenues
for an indefinite period of time. Subsection (c)(7), as modified, is consistent
with the commission's stated policy.
Comments on §26.221(c)(9)
Subsection (c)(9) describes requirements for adjustments to previously
approved ELCS surcharges. According to SWBT, subsection (c)(9) appears to
be unlawful. SWBT stated that a previously approved surcharge may only be
reopened by the commission if (a) the order approving that surcharge expressly
provides for such a reopening or (b) the ILEC is seeking to increase its ELCS
surcharge to recover increased lost revenues or costs incurred as a result
of the previously approved ELCS routes.
Sprint stated that modifying the ELCS rate based upon a change in (the
number of) access lines is in direct violation of PURA Chapters 58 and 59.
Sprint noted that there is no provision in subsection (c)(9) for the commission
to determine if new access lines also create added ILEC costs. Sprint was
concerned that the phrase "relevant to development of the residual" is ambiguous
and that the intent of this phrase should be specifically described.
The Cities pointed to the commission's Order on Certified Issues (July
1, 1999) in Docket Number 17809 (Sprint) to show that the commission explicitly
allowed for adjustments to previously approved ELCS surcharges but did not
allow the provider to request additional lost revenues or costs based on the
increased (number of) access lines.
GTE stated that the commission has the right to review new ELCS surcharges,
but the commission cannot review previously approved surcharges in the current
application, nor can the commission re-open an investigation of previously
approved surcharges.
The commission deletes subsection (c)(9) from the rule because it is not
a general principle and because the commission's rate design policy is set
out in detail in subsections (g) and (h).
Comments on §26.221(e)
Subsection (e) identifies the required contents of an ELCS surcharge application.
The Cities stated that the proposed rule represents a giant leap forward and
noted that finally there will be explicit documentation requirements for a
local exchange company seeking to implement a statewide fee pursuant to PURA §55.048(c).
The Cities asserted that the rule will require companies to file much of the
supporting information that has been sorely lacking in recent PURA §55.048(c)
applications. The commission agrees.
With regard to applications to increase an existing ELCS surcharge, GTE
preferred that ILECs be permitted to demonstrate allowable expenses with commission
approval or disapproval of those expenses at the time the application is filed
to alleviate the burden on ILECs to produce old documents and support material
at a later date. The Cities opposed GTE's suggestion, unless GTE provides
notice to all of its customers in the state and, subsequently, provides an
opportunity to examine calculations of the ELCS surcharge. GTE clarified that
it would be willing to provide statewide notice to its subscribers via bill
message. However, GTE replied that it would not view its action as an application
for an ELCS surcharge; rather, the proposed action would be an identification
of a shortfall that would be included in a surcharge filing at some future
date. The commission rejects GTE's recommendation because the commission is
unclear exactly what GTE's proposal entails and because GTE did not describe
how its proposal might be implemented procedurally within the rule.
Alltel and Sugar Land were uncertain as to whether the ELCS service provider
may protect the confidentiality of its competitive toll and access data. The
commission clarifies that subsection (e)(9) explicitly provides for the use
of a confidentiality agreement.
Alltel and Sugar Land supported the use of validated sampling. At the public
hearing, Alltel and Sugar Land clarified their use of the term "validated"
as it relates to sampling to mean "accepted by the Staff for the purpose of
establishing the monthly ELCS fees, and once accepted for that purpose they
would also be accepted for the surcharge." The Cities asserted that if the
Staff validates a two-month sample, the Cities and other intervenors should
not be bound by any such validation, and a telephone company must still prove
its costs. The commission agrees with the Cities that a recommendation from
the Office of Regulatory Affairs neither binds an intervenor nor alters a
utility's burden of proof. In response to Alltel and Sugar Land, the commission
notes that the term "validated sampling" is used nowhere in the rule.
TSTCI suggested that requirements for the ELCS surcharge application be
no different than what is required to justify the ELCS fee. The commission
notes that §26.219(f)(4)(A)(i) and §26.221(e) are constructed so
that, as TSTCI suggests, the requirements for the ELCS surcharge application
and the ILEC's ELCS fee filing are nearly identical.
Comments on §26.221(e)(1)
Subsection (e)(1) describes the toll revenue data to be included in an
ELCS surcharge application. Alltel and Sugar Land advised that it is not possible
for Alltel and Sugar Land to obtain 12 months of toll revenue data for ELCS
routes implemented before the effective date of the new rule. Therefore, Alltel
and Sugar Land argue that the rule should be modified to impose the 12-month
requirement only for ELCS routes implemented after the effective date of the
proposed rule. Alltel and Sugar Land recommended amending subsection (e)(1)
to permit either 12 months of actual toll or annualized data developed from
a sample of representative months. Alltel and Sugar Land suggested using the
months of March, April, September and October. The Cities opposed identification
of sample months in the rule because of regional variations in telephone calling
patterns.
The commission agrees with Alltel and Sugar Land that an ILEC may include
a sample of representative months in its application. Nevertheless, the commission
declines to amend subsection (e)(1) because subsection (e)(8) allows an ILEC
to request an exemption from any of the requirements in subsection (e), thus
allowing an ILEC to request exemption from the 12-month requirement in subsection
(e)(1). Further, subsection (c)(3) indicates that the use of statistical sampling
by some ILECs is anticipated by the commission. The commission prefers for
the standard to be as stated in subsection (e)(1) with the flexibility in
subsection (e)(8) for an ILEC to request exemption from the standard. If an
exemption request is granted, an ILEC will be required to demonstrate the
reasonableness of its proposed alternative method in accordance with subsection
(c)(3).
Comments on §26.221(e)(2)
Subsection (e)(2) describes the access revenue data to be included in an
ELCS surcharge application. Alltel and Sugar Land recommended subsection (e)(2)
be modified to permit a company's application to include route-specific annualized
data developed from the months for which carrier access billing system (CABS)
data is available prior to the ELCS implementation and to allow terminating
usage to be developed by using a terminating/originating ratio.
The commission agrees with Alltel and Sugar Land that an ILEC may propose
an ELCS surcharge that is based, in part, upon CABS data and an ILEC may propose
to use a surrogate for determining unquantifiable terminating access minutes.
Nevertheless, the commission declines to amend subsection (e)(2) because subsection
(e)(8) allows an ILEC to request an exemption from any of the requirements
in subsection (e), thus allowing an ILEC to request exemption from the 12-month
requirement in subsection (e)(2). Further, subsection (c)(3) indicates that
the use of alternative methods by some ILECs is anticipated by the commission.
The commission prefers for the standard to be as stated in subsection (e)(1)
with the flexibility in subsection (e)(8) for an ILEC to request exemption
from the standard. If an exemption request is granted, an ILEC will be required
to demonstrate the reasonableness of its proposed alternative method in accordance
with subsection (c)(3).
Comments on §26.221(e)(4)
Subsection (e)(4) describes supporting documentation to be included in
an ELCS surcharge application. Sprint stated that subsection (e)(4) is unreasonable
because it fails to recognize there are some costs for which no physical documents
exist for proof, including switching and transport costs. According to Sprint,
switching and transport costs require the use of a cost model. Sprint declared
that it has no non-recurring costs related to ELCS.
Alltel and Sugar Land recommended subsection (e)(4) be modified to permit
development of switching costs based on the average per-minute costs of switching
times the additional ELCS minutes of use. Similarly, Alltel and Sugar Land
suggested the subsection be amended to permit proof of transport facility
costs based on the average per-mile costs of transport facilities times the
route miles of transport installed to serve ELCS traffic. Alltel and Sugar
Land stated that it is not a problem for a service provider to produce copies
of its lease agreements with other carriers, as these leases are readily available
and ELCS-specific in scope. Alltel and Sugar Land advised that it is not possible
for Alltel and Sugar Land to obtain copies of receipts or invoices for equipment
installed in historical periods. Therefore, Alltel and Sugar Land believe
the rule should be modified to impose the requirement in (e)(4) only on ELCS
routes implemented after the effective date of the proposed rule.
TXU uses a forward-looking long run incremental cost methodology to determine
costs for new ELCS routes. TXU suggested that its method, although not based
upon historical costs, is practical and reasonable and should be allowed.
According to TXU, while it may appear that there are costs of a one-time nature
associated with ELCS, these costs are recorded in asset accounts and recovered
through depreciation.
The Cities noted that TXU's initial comments about costs which continually
occur imply that there are also costs which do not occur continually. Hence,
the Cities supported the requirement in subsection (e)(4) for an ILEC to identify
its recurring and non-recurring costs. The Cities also stated it is important
that none of the costs to implement infrastructure commitments under PURA
Chapters 58 and 59 be included in an ILEC's ELCS costs.
GTE asserted that 100% of the costs associated with ELCS, and particularly
switching and transport costs, cannot be supported by documents such as invoices
and work orders.
The commission agrees with the commenting ILECs that supporting documents
may not exist for all costs incurred. Therefore, the commission modifies subsection
(e)(4) to remove the reference to "100%" of the costs incurred. With respect
to the various methods proposed by ILECs for recovering costs incurred, the
rule is designed with sufficient flexibility to accommodate the variety of
methods proposed.
The commission disagrees with the commenting ILECs that all ELCS implementation
costs are recurring in nature. In its Order (February 2, 1999) in Docket Number
17641 (Alltel), the commission determined that certain costs of implementing
ELCS reflect investments in infrastructure and other costs of a non-recurring
nature. Because these types of costs are wholly recovered at some future date,
the commission stated that it is not appropriate to allow an ELCS surcharge
to continue to recover these costs indefinitely. The commission ordered Alltel
to structure its next ELCS surcharge application in a manner that ensures
that non-recurring costs are not over-recovered. Subsection (e)(4), as modified,
is consistent with the commission's policy decision in Docket Number 17641
(Alltel).
Comments on §26.221(e)(11)
Subsection (e)(11) states that an ILEC shall select its preferred duration
of applicability of the proposed ELCS surcharges from three duration alternatives
listed in subsection (i). Sprint stated that there is neither need nor a statutory
requirement to set an ELCS surcharge duration because PURA allows for the
surcharge to continue in place until the next general rate case.
The commission declines to amend subsection (e)(11). The commission interprets
the meaning of the sentence "A company may impose a fee under this subsection
only until the company's next general rate case" in PURA §55.048(b) to
apply solely to ELCS fees (for example, $3.50 for residential customers or
$7 for business customers) described in §55.048(b) and imposed upon customers
in petitioning telephone exchanges, not to ELCS surcharges in PURA §55.048(c).
(emphasis added) No such language regarding duration is included in PURA §55.048(c).
Thus, the commission is neither obligated to establish nor prohibited from
establishing a reasonable duration for the recovery of incurred costs and
lost revenues through an ELCS surcharge.
Comments on §26.221(f)(1)
Subsection (f)(1) contains the notice requirements for an ELCS surcharge
application. OPC requests the commission provide notice to OPC upon receipt
of the filing of an application to establish or modify an ELCS surcharge.
The commission accepts the recommendation of OPC and modifies subsection (f)(1)
to require the ILEC filing an application with the commission's Filing Clerk
to concurrently deliver a copy of its application to OPC.
Comments on §26.221(f)(2)
Subsection (f)(2) contains intervention requirements; however, the rule
as published contained no intervention deadline. The Cities recommended the
rule establish a standard intervention deadline not less than 45 days after
the last day of the billing cycle in which notices are sent out as bill inserts.
OPC recommended the intervention deadline be no sooner than ten days after
the last date notice is published. The commission accepts the recommendation
of OPC and modifies subsection (f)(2) to state that the intervention deadline
shall be no sooner than ten days after the last date notice is published.
Comments on §26.221(f)(4)
Subsection (f)(4) addresses requests for interim relief. OPC recommended
a change in the phrasing of subsection (f)(4) so that the presiding officer
is not required to either grant or deny a request for interim surcharges;
instead, as OPC proposed, the presiding officer "may grant a filed request
for establishment of interim surcharges…." OPC reasoned that its proposed
phrasing provides the presiding officer with the flexibility to grant in part,
deny in part, modify, or alter the requested interim rate. The commission
modifies subsection (f)(4) so that, not more than 30 days after the intervention
deadline, the presiding officer shall grant or deny, in whole or in part,
a request for interim relief and may approve or modify a proposed interim
ELCS surcharge.
Comments on §26.221(f)(5)
Subsection (f)(5) contains a process for ORA to conduct a sufficiency review
of an ELCS surcharge application and for an ILEC to respond to ORA's comments.
The Cities preferred for the rule to state that a recommendation by the Office
of Regulatory Affairs (ORA) that an application is sufficient or that requirements
be waived not preclude an intervenor, within 30 days after the intervention
deadline, from asserting that an application is insufficient or that an exemption
from the requirements of the rule was erroneously granted. The commission
declines to amend subsection (f)(5) as recommended by the Cities. The commission
acknowledges, however, that a recommendation filed by the ORA in no way usurps
the right of an intervenor to assert its position.
Sprint supported subsection (f)(5), yet preferred that an ILEC be afforded
30 days rather than ten days to respond to ORA's comments on its application
and to amend or supplement the ILEC's application. The commission accepts
Sprint's recommendation and amends subsection (f)(5) accordingly.
Comments on §26.221(f)(6)
Subsection (f)(6) contains the deadline to request docketing. Following
docketing, this subsection provides three avenues for processing the case
including: settlement negotiations, alternative dispute resolution or a contested
hearing.
The Cities recommended the deadline to request docketing be extended to
60 days. OPC recommended the deadline to request docketing be increased from
20 days after the intervention deadline to 45 days after the intervention
deadline. The commission agrees with OPC and the Cities that the deadline
to request docketing should be extended, but not to the extent recommended.
Therefore, the commission modifies subsection (f)(6) to extend the deadline
to request docketing from 20 days to 30 days after the intervention deadline.
Alltel and Sugar Land recommended the current timeline for processing ELCS
surcharge cases found in Substantive Rule §23.49(c)(12) be maintained
in the proposed rule. The commission declines the recommendation of Alltel
and Sugar Land because the proposed timeline provides greater flexibility
to ILECs and other parties than the current rule. Nevertheless, the commission
recognizes the necessity for a provision in the rule directing the presiding
officer to administratively approve or modify the application if no request
for docketing is filed and, therefore, the commission modifies subsection
(f)(6) to specify that, if neither the Office of Regulatory Affairs nor an
intervenor requests docketing, the presiding officer shall administratively
approve or modify the application within 40 days after the intervention deadline.
Comments on §26.221(g)
Subsection (g) describes the formula for calculating ELCS surcharges. The
Cities opposed the application of statewide fees to ratepayers in petitioning
exchanges who are already paying the maximum ELCS fees of $3.50 for residential
customers and $7 for business customers. According to the Cities, the commission's
policy decision to apply ELCS surcharges in addition to ELCS fees goes against
the intent of the Texas Legislature. The Cities conceded that the commission
may have authority to spread state-wide ELCS fees on a prospective basis to
exchanges that request ELCS in the future as long as the notices contained
in the proposed rules are given. GTE and OPC argued that there is no statutory
maximum on the ELCS surcharge. OPC supported subsection (g). OPC reasoned
that spreading the surcharge to all customers in the state results in a more
equitable allocation of lost revenues and costs among ratepayers. Sprint stated
that on a prospective basis, at least, the commission has the ability to spread
new ELCS surcharges on all customers.
The commission declines to amend subsection (g). The commission's Order
on Certified Issues (May 29, 1998) in Docket Number 18986,
Petition of United Telephone Company of Texas, Inc., doing business as Sprint
for Authority to Recover Lost Revenues and Costs of Implementing Expanded
Local Calling Service Pursuant to PUC Substantive Rule §23.49(c)(12)
, set out the commission's policy that surcharges "applied pursuant
to (PURA) §55.048(c) should be applied to all customers of a company,
including those petitioning customers who are already paying the maximum amount
of $3.50/$7 that can be charged pursuant to §55.048(b)." Subsection (g),
which results in spreading ELCS surcharges established after the effective
date of §26.221 to all customers in Texas, is consistent with the commission's
stated policy.
GTE recommended the commission explicitly define which access lines should
be included or excluded for the purpose of calculating ELCS fees. In response
to GTE's recommendation, Alltel and Sugar Land suggested that, for ELCS purposes,
the access line count be equivalent to the number of customers that a telephone
company charges the ELCS fee to as shown in proposed subsection (g)(2). Alltel
and Sugar Land stated that the ELCS surcharge may not be applied to lines
used for pay telephone service. SWBT recommended access lines be defined as
the total number of exchange access arrangements (EAAs) within a local calling
area, less any access lines that would not be charged the ELCS surcharge,
which should be determined on a case-by-case basis. TXU states that nonswitched
circuits or private lines should not be included in the assessment of ELCS
surcharges.
The commission agrees with GTE that uniformity in the use of the term "access
line" is a valid objective. However, there appears to be little unanimity
among the commentors on the use of the term and scant information upon which
to create a definition. Therefore, the commission does not define the term
"access line" in this rule at this time.
Comments on §26.221(h)
Subsection (h) describes the way in which ELCS surcharges may be adjusted
to account for growth in access lines. Alltel and Sugar Land recommended subsection
(h) (inadvertently referred to as (g) in the comments of Alltel and Sugar
Land) either be omitted or, alternatively, amended to address (1) whether
the commission will consider an increase in costs in the recalculation of
a surcharge; (2) whether a service provider must prove up again the costs
of ELCS to the initial group of exchanges addressed by the initial surcharge;
(3) whether the cost per-minute of switching and/or the cost per-transport
facility, established in the initial case, may be used in the second proceeding;
and (4) whether a whole new revenue requirement is required?
The commission declines to address every methodological question raised
by Alltel and Sugar Land about subsection (h). The commission notes that,
in the Order on Remand (May 28, 1999) in Docket Number 17809 (Sprint), the
commission determined that an ILEC's burden of proof is not met by merely
showing that it followed a particular methodology used in prior proceedings,
but rather, by demonstrating that its request is just and reasonable.
Sprint questioned whether the commission has authority to review previously
approved surcharges because such a review is a violation of PURA Chapters
58 and 59. Sprint stated that implementing the formula without making a corresponding
adjustment for additional costs and lost revenues for each new access line
is inappropriate. OPC pointed out that the commission's Order on Certified
Issues (July 2, 1999) in Docket Number 17809 (Sprint) allows the ELCS surcharge
to be adjusted for increases in access lines without a corresponding adjustment
to costs and revenues.
The commission modifies subsection (h) in three ways. First, the commission
refers to "Adjustments to" ELCS surcharges instead of "Calculation of increases
or decreases to initial" ELCS surcharges because, in the Order on Certified
Issues (July 2, 1999) in Docket Number 17809 (Sprint), the commission concluded
that the purpose of the commission's ELCS surcharge formula (contained in
Attachment A to the Order on Remand, May 28, 1999) was to calculate a new
statewide fee, not to calculate an incremental increase in the existing statewide
fee.
Second, the commission clarifies paragraph (h)(1) by adding subparagraphs
(A) and (B) to ensure consistency with the Order on Remand (May 28, 1999)
in Docket Number 17809 (Sprint). In the Order on Remand, the commission concluded
that because it did not delimit the prior final orders approving Sprint's
ELCS fees, it lacked the legal authority to review the previous costs and
lost revenue determinations in those prior ELCS projects. Subparagraph (h)(1)(A)
memorializes the commission's decision not to review costs incurred and lost
revenues associated with an ELCS surcharge approved in the past, except where
the commission reserved the right to do so in its order(s) approving a specific
surcharge. In subparagraph (h)(1)(B), the commission explicitly reserves the
right to modify lost revenues and costs incurred (the numerator), associated
with an ELCS surcharge approved in the future, to consider new information
relevant to development of the residual.
Third, the commission modifies subsection (h)(2), consistent with the commission's
decision (January 27, 2000 open meeting) in Docket Number 17809 (Sprint),
so that a previously approved surcharge spread over non-petitioning exchanges
will continue to be spread over non-petitioning exchanges, even if adjusted
for changes in the number of access lines. Subsection (h), as modified, complies
with the commission's orders in Docket Number 17809 (Sprint), orders regarding
the commission's legal authority to establish ELCS policy.
Comments on §26.221(i)
Subsection (i) provides ILECs with three options for the duration of applicability
of proposed ELCS surcharges. Sprint argued that subsection (i) is in contravention
of the intent of the Legislature. Sprint pointed out that PURA §55.048(b)
states the $3.50/$7 ELCS fees are to be imposed only until the company's next
general rate case. Sprint opined that if the Legislature intended the surcharge
to be in place for a set duration, it would have so specified.
Alltel and Sugar Land stated that the commission does not have authority
to terminate, without review, an approved ELCS surcharge after a two-year
period or to require a phase-out or phase-down of an approved surcharge. According
to Alltel and Sugar Land, for a non-electing company, the commission can investigate
an ELCS surcharge and determine whether it remains reasonable. On the other
hand, pursuant to PURA §59.026, an incentive-regulated company, during
the period of its election, is not subject to a commission-initiated proceeding
to review the reasonableness of its rates. Alltel and Sugar Land asserted
that the rule's provision for terminating the surcharge may be viewed as a
method to avoid the statutory restriction on review of the approved rates
of an electing company.
TTA indicated that it does not believe the commission can, through a rulemaking,
alter, phase-down, or phase-out a company's ability to recover the lost revenues
due to them and protected for them by PURA for implementation of a service
they are required to implement.
OPC stated that there is a need to have a provision in §26.221 dealing
with the duration of the surcharge because the statutory language in PURA §55.048(b),
providing for the surcharge to continue only until the company's next general
rate case, was a definite ending point for recovery; however, PURA §55.048(b)
was enacted prior to incentive regulation and does not account for PURA Chapter
58 and 59 electing companies not being subject to rate cases.
The commission declines to amend subsection (i) in the manner suggested.
The commission interprets the meaning of the sentence "A company may impose
a fee under this subsection only until the company's next general rate case"
in PURA §55.048(b) to apply solely to ELCS fees (for example, $3.50 for
residential customers or $7 for business customers) described in §55.048(b)
and imposed upon customers in petitioning telephone exchanges, not to ELCS
surcharges in PURA §55.048(c). (emphasis added) No such language regarding
duration is included in PURA §55.048(c). Thus, the commission is neither
obligated to establish nor prohibited from establishing a reasonable duration
for the recovery of incurred costs and lost revenues through an ELCS surcharge.
Further, in its Order (February 2, 1999) in Docket Number 17641 (Alltel),
the commission limited the duration of Alltel's surcharge to two years. The
commission reasoned that, although Alltel is entitled to recover costs and
lost revenues resulting from implementing ELCS, in this time of increasing
competition in the telecommunications industry, the calculation of lost revenues
becomes more complicated. The commission determined that, as the toll market
becomes more competitive, any right to recover lost toll revenues through
the mechanism of an ELCS surcharge diminishes. In addition, the commission
recognized that certain costs of implementing ELCS are non-recurring. The
commission granted Alltel the authority to file a subsequent application if
any incurred costs or lost revenues were not recovered during the two-year
period. Similarly, the commission limited the duration of Sugar Land's ELCS
surcharge to two years in its Order (October 6, 1999) in Docket Number 18978,
Subsections (i)(2) and (i)(3), as proposed, are consistent with the commission's
stated policy limiting ELCS surcharges to a finite period. Further, an ILEC
may file a subsequent application to recover continuing costs incurred and
revenues lost, if any, after expiration of the finite period. Subsection (i)(1)
provides an additional alternative to ILECs resulting in an ELCS surcharge
with a permanent duration.
Comments on §26.221(i)(1)-(3)
Subsection (i) identifies three options for the duration of applicability
of an ELCS surcharge. Sprint and TSTCI argued that subsection (i)(1) is unlawful
because PURA §55.048 states that all costs and lost revenues are to be
recovered through a request "other than a revenue requirement showing." Sprint
and TSTCI stated they believe subsection (i)(1) is a revenue requirement showing.
The commission views subsections (i)(1), (i)(2), and (i)(3) as distinctly
separate options available to ILECs; no subparagraph in (i) can be considered
a mandatory revenue requirement showing. The commission considers subsection
(i)(1) to be a revenue requirement option.
TSTCI expressed concern that the proposed rule is so burdensome and costly
that it would not be cost effective for a small company to apply for anything
other than a two-year phase-out under subsection (i)(3). At the public hearing,
OPC acknowledged that subsection (e)(8) provides small ILECs the opportunity
to request exemption from one or more requirements in the rule.
The commission declines to amend subsection (i)(1)-(3) in the manner suggested.
Subsection (i) is crafted overall so that the greater the breadth and depth
of supporting information provided by an ILEC, the longer the duration available
under subsection (i)(1)-(3) options. The commission views the decision of
an ILEC to provide full or partial documentation of its ELCS implementation
costs and lost revenues as a routine business decision. Subsection (i) provides
an ILEC with a framework of options relevant to such a decision. Further,
as OPC points out, a small ILEC may request exemption from any requirement
in the rule.
Comments on §26.221(j)
Subsection (j) proposed the phased elimination of previously approved ELCS
surcharges. GTE stated that subsection (j) is unlawful and, therefore, should
not be adopted. Sprint objected to subsection (j) because it is inappropriate
to require an ILEC to phase-down its previously approved surcharges and because
subsection (j) is unlawful. OPC comments that the phase-down in subsection
(j) reflects the commission's expectation that the cost of implementing ELCS
decreases over time and should naturally be reflected in the surcharge. According
to OPC, subsection (j) is not tantamount to retroactive ratemaking because
the newly modified surcharge would be prospectively applied.
Consistent with its determination in the Order on Remand (May 28, 1999)
in Docket Number 17809 (Sprint) regarding the review of previous costs and
lost revenues, the commission removes subsection (j) from the rule.
In addition to modifications made in response to comments, the commission
makes minor changes in the rules to clarify its intent and to correct typographical
and grammatical errors. All comments, including any not specifically referenced
herein, were fully considered by the commission.
These sections are adopted under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998) (PURA) which
provides the commission with the authority to make and enforce rules reasonably
required in the exercise of its powers and jurisdiction.
Cross Reference to Statutes: Public Utility Regulatory Act, Chapter 55,
Subchapters B and C, §58.061 and §59.042(a).
§26.217.Administration of Extended Area Service (EAS) Requests.
(a)
Purpose. This section establishes procedures for processing
requests for extended area service (EAS) pursuant to the Public Utility Regulatory
Act (PURA), Chapter 55, Subchapter B.
(b)
Extended Area Service. The term "utility(ies)" in this
section refers to dominant certificated telecommunications utility(ies).
(1)
Filing requirements.
(A)
In order to be considered by the commission, a request
for EAS shall be initiated by at least one of the following actions:
(i)
a petition signed by the greater of 5.0% or 100 of the
subscribers in the exchange from which the petition originates;
(ii)
a resolution adopted and filed with the commission by
the governing body of a political subdivision provided that said governing
body properly represents the exchange requesting EAS;
(iii)
a resolution adopted and filed with the commission by
the board of directors or trustees of a community association representing
an unincorporated community; or
(iv)
an application filed by one or more of the affected utility(ies).
(B)
A request for establishment of a particular EAS arrangement
pursuant to subparagraph (A)(i), (ii), or (iii) of this paragraph shall not
be considered sooner than three years after either a determination of the
failure of a previous request to meet eligibility requirements, or final commission
action on a previously docketed request. An exception to this requirement
may be granted to any petitioning exchange which demonstrates that a change
of circumstances may have materially affected traffic levels between the petitioning
exchange and the exchange to which EAS is desired.
(C)
A request for EAS shall state the name of the exchange(s)
to which EAS is sought.
(D)
The petition shall set forth the name and telephone number
of each signatory and the name of the exchange from which the subscribers
receive service.
(E)
Each signature page of a petition for EAS must contain
information which clearly states that establishment of the requested EAS route
may require that subscribers to the service change their telephone numbers
and pay a monthly EAS rate in addition to their local exchange service rates,
as well as applicable service connection charges.
(F)
Requests for EAS into metropolitan exchanges will be grouped
by relevant metropolitan exchange. For each metropolitan exchange, the commission
staff will file a motion to docket a proceeding for the determination of uniform
EAS rate additives as directed by paragraphs (3), (4), and (5) of this subsection
for all pending EAS requests to that metropolitan exchange. Upon the docketing
of such a proceeding, two weeks notice in a newspaper of general circulation
in the metropolitan area shall be published. The notice shall contain such
information as deemed reasonable by the presiding officer in the proceeding.
No earlier than 60 days from the date of final publication of notice, the
demand studies required by paragraph (3) of this subsection shall be initiated.
New petitions for EAS into the metropolitan exchange may be accepted prior
to the initiation of the demand studies.
(2)
Community of interest.
(A)
Upon receipt of a proper filing under the provisions set
out in paragraph (1) of this subsection, the utility(ies) involved will be
directed by the commission staff to initiate appropriate calling usage studies.
Within 90 days of receipt of such direction, the utility(ies) shall provide
the results of such studies to the commission staff and to a representative
of the petitioning exchange(s). The message distribution and revenue distribution
detail from the studies shall be considered proprietary unless the parties
agree otherwise and shall not be released for use outside the context of the
commission's proceedings. The data to be provided shall be based upon a minimum
60 day study of representative calling patterns, shall be in such form, detail,
and content as the commission staff may reasonably require and shall include
at least the following information:
(i)
for business customers and residential customers and for
the combined total, the number of messages and either minutes-of-use or billed
toll revenues per customer account per month, in each direction over the route
being studied;
(ii)
a detailed analysis of the distribution of calling usage
among subscribers, in each direction over the route being studied, showing
the number of subscriber accounts placing zero calls, one call, etc., through
ten calls, the number of subscriber accounts placing between 11 and 20 calls,
the number placing between 21 and 50 calls, and the number of subscriber accounts
placing more than 50 calls, per month;
(iii)
data showing, by class of service, the number of subscriber
accounts in service for each of the exchanges being studied;
(iv)
the distance between rate centers, and the average revenue
per message for the calls during the study period;
(v)
the number of foreign exchange (FX) lines in service over
each route and the estimated average calling volumes on these lines expressed
as messages per month;
(vi)
a listing of known interexchange carriers providing service
between the petitioning exchange and the exchange(s) to which EAS is desired.
(B)
A community of interest between exchanges shall be considered
to exist from one exchange to the other when:
(i)
there is an average (arithmetic mean) of no less than ten
calls per subscriber account per month from one exchange to the other, and
(ii)
no less than two thirds of the subscribers' accounts place
at least five calls per month from one exchange to the other.
(C)
A request for EAS shall be assigned a project number and
notice shall be provided, pursuant to paragraph (7) of this subsection, when
a community of interest is found to exist as described in subparagraph (B)
of this paragraph:
(i)
on a bilateral basis between exchanges, or
(ii)
on a unilateral basis from the petitioning exchange to
the other exchange.
(D)
The project shall be established as a formal docket upon
the motion of the commission staff.
(E)
Following the docketing of a request, a prehearing conference
shall be scheduled to establish the exchange(s) to which EAS is sought, and
to report any agreements reached by the parties. The utility(ies) involved
shall conduct appropriate demand and costing analyses according to paragraphs
(3) and (4) of this subsection.
(3)
Demand analysis.
(A)
The utility(ies) involved shall conduct analyses of anticipated
demand for the requested EAS. The data shall be in such form, detail, and
content as the commission staff may reasonably require and shall include,
at a minimum, the following information:
(i)
the number of subscribers who are expected to take the
requested service at the estimated rates recommended pursuant to paragraph
(5) of this subsection and the associated probability of that level of subscribership;
(ii)
how call traffic within the requested extended area is
expected to change given the rates and subscribership under clause (i) of
this paragraph; and
(iii)
the total volume of traffic upon which to base the anticipated
switching and trunking requirements resulting from clause (i) and clause (ii)
of this subparagraph.
(B)
Unless the utility(ies) demonstrates good cause to expand
the time schedule, the utility(ies) shall provide to the commission staff
and to other parties to the proceeding, no later than 120 days after the prehearing
conference, the results of these analyses, together with supporting schedules
and detailed documentation needed to understand and verify the study results.
(4)
Determination of costs.
(A)
The utility(ies) involved shall conduct studies necessary
to determine the changes in costs and revenues which may reasonably be expected
to result from establishment of the requested EAS. These studies shall consider
and develop the long run incremental costs as follows:
(i)
switching and trunking costs associated with existing toll
traffic which converts to EAS traffic plus the costs of switching and trunking
required to handle the additional traffic as determined in paragraph (3)(A)(ii)
of this subsection;
(ii)
the increases and decreases in expenses resulting from
the new service and the net effect on operating expenses; and
(iii)
direct costs incurred by the utility(ies) in conducting
demand analyses in compliance with paragraph (3) of this subsection.
(B)
The utility(ies) may analyze the effect on toll revenues
in order to present evidence on the overall revenue effects of providing the
requested EAS. Revenue effects supported by such evidence, if presented, may
be included in the EAS rate additives specified in paragraph (5)(D) of this
subsection.
(C)
The utility(ies) shall file with the commission's Filing
Clerk and serve copies on commission staff and other parties to the proceeding
the results of these studies, together with supporting schedules and detailed
documentation needed to understand and verify the study results according
to the following schedule, unless the utility(ies) can demonstrate that good
cause exists to expand the time schedule for a particular study:
(i)
incremental costs identified in this paragraph shall be
filed no later than 90 days from the filing of the results of the demand analysis
conducted pursuant to paragraph (3) of this subsection; and
(ii)
toll revenue effects, if analyzed pursuant to subparagraph
(B) of this paragraph, shall be filed no later than 90 days from the filing
of the results of the incremental costs, pursuant to clause (i) of this subparagraph.
(5)
EAS rate additives.
(A)
Coincident with the filing of cost study results, or coincident
with the toll revenue effect results, if filed, the utility(ies) shall file
recommendations for proposed incremental rate additives, by class of service,
necessary to support the cost of the added service, as well as to support
the toll revenue effect, if such effect is filed.
(i)
EAS rate additives to be assessed on EAS subscribers in
the petitioning exchange(s) are to recover the incremental cost of providing
the service according to paragraph (4)(A) of this subsection plus 10% of the
incremental cost.
(ii)
The rate additives to be assessed on subscribers in the
metropolitan exchange for which EAS has been requested are to recover revenues
determined by the following formula: net lost toll multiplied by percent outbound
toll and multiplied by the estimated EAS take rate. The terms in the formula
are defined as follows:
(I)
net lost toll--lost toll revenue calculated according to
paragraph (4)(B) of this subsection less the revenue recovered through the
EAS rate additive identified in clause (i) of this subparagraph;
(II)
percent outbound toll--this factor is calculated by dividing
toll minutes of use originating in the metropolitan exchange and terminating
in the petitioning exchanges by the total number of toll minutes of use between
the metropolitan exchange and the petitioning exchange(s); and
(III)
estimated EAS take rate--the estimated number of EAS
subscribers in the petitioning exchanges divided by the total number of subscribers
in the petitioning exchange(s).
(iii)
Tel-Assistance subscribers in the metropolitan exchange
will not be assessed this rate additive.
(B)
Service connection charges will be applicable.
(C)
A non-recurring charge to defray the direct incremental
costs of the demand analyses identified in paragraph (4)(A)(iii) of this subsection
shall be charged to subscribers who order the service within 12 months from
the time it is first offered. The non-recurring charge shall not exceed $5.00
per access line.
(D)
The EAS rate additive to be used in the affected exchange(s)
must meet the following standards.
(i)
No increase in rates shall be incurred by the subscribers
of nonbenefitting exchanges, that is, by subscribers whose calling scopes
are not affected by the requested EAS service.
(ii)
If the petitioning exchange demonstrated a unilateral
but not a bilateral community of interest through the requirements of paragraph
(2)(C)(ii) of this subsection, the EAS arrangements shall be priced using
those rate increments designed to recover the added costs for each route,
plus the toll revenue effect, if reasonably substantiated. The total increment
chargeable to subscribers within an exchange shall be the sum of the increments
of all new EAS routes established for that exchange.
(iii)
If the petitioning exchange demonstrated a bilateral
community of interest through the requirements of paragraph (2)(C)(i) of this
subsection and requested that the costs be borne on a bilateral basis, the
additional cost for the new EAS route shall be divided between the two participating
exchanges according to the ratio of calling volumes between the two exchanges.
(iv)
In establishing a flat rate EAS increment, all classes
of customer access line rates within each exchange shall be increased by equal
percentages.
(6)
Subscription threshold.
(A)
A threshold demand level shall be established by the commission's
order in the docketed proceeding prior to the design or construction of facilities
for the service. A reasonable pre-subscription process shall then be undertaken
to determine the likely demand level. If the likely demand level equals or
exceeds the threshold demand level, then EAS shall be provided in accordance
with the commission's order. If the threshold demand level is not met, the
affected utility(ies) is not required to provide the EAS approved by the commission.
(B)
The cost of pre-subscription shall be divided between the
utility and the petitioners. The petitioners shall pay for the printing of
bill inserts and ballots and the utility shall insert them in bills free of
charge. In the alternative, upon the agreement of the parties, the utility
shall provide, free of charge, and under protective order, the mailing labels
of the subscribers in the petitioning exchange, and the petitioners shall
pay the cost of printing and mailing the bill inserts and ballots.
(7)
Notice.
(A)
Notice of the filing of an EAS application must be provided
to all subscribers within the petitioning exchange(s), by publication for
two consecutive weeks in a newspaper of general circulation in the area. Notice
must also be given to individual subscribers either through inserts in customer
bills, or through a separate mailing to each subscriber. The notice must state:
the project number, the nature of the request, and the commission's mailing
address and telephone number to contact in the event an individual wishes
to protest or intervene. The commission shall also publish notice in the
(B)
Written notice containing the information described above
shall be provided to the governing official(s) of all incorporated areas within
the affected exchanges and the county commission(s) or the board of directors
or trustees of a community association representing any unincorporated areas
within the affected exchanges.
(C)
The cost of notice shall be borne by the petitioners.
(8)
Joint filings.
(A)
EAS agreements. The commission may approve agreements for
EAS or EAS substitute services filed jointly by the representatives of petitioning
exchanges and the affected utility(ies) (joint filings) so long as the agreements
are in accordance with subparagraph (C)(i)-(x) of this paragraph. Notwithstanding
any other provisions of this paragraph, if more than one political subdivision
is affected by a proposed optional calling plan under PURA §55.023, the
agreement of each political subdivision is not required.
(B)
Multiple exchange common calling plans. Joint filing agreements
for EAS or EAS substitute services among three or more exchanges shall be
permitted pursuant to subparagraph (C)(i)-(x) of this paragraph.
(C)
Standards for joint filings. Joint filings shall be permitted
subject to the following:
(i)
The parties to joint filings shall include the name of
each utility which provides service in the affected exchanges and one duly
appointed representative for each affected exchange. Each exchange representative
shall be designated jointly by the governing officials of all incorporated
areas within the affected exchange and the county commission(s) representing
any unincorporated areas within the affected exchange.
(ii)
Joint filings are exempt from the traffic requirements
contained in paragraph (2) of this subsection.
(iii)
Joint filings may include rate proposals which are flat
rate, usage sensitive, block rates, or other pricing mechanisms. If usage-sensitive
rates are proposed, joint applicants shall include the commission staff in
their negotiations.
(iv)
Joint filings may propose either one-way or two-way calling.
(v)
Joint filings may propose either optional or non-optional
calling.
(vi)
Joint filings shall specify all non-recurring and recurring
rate additives to be paid by the various classes and grades of service in
the affected exchanges.
(vii)
Joint filings shall demonstrate that the proposed rate
additives:
(I)
are in the public interest, and in the case of non-optional
joint filings which include flat rate additives, the filing shall demonstrate
that more than 50% of the total subscribers who will experience a rate change
are in favor of this joint filing at the proposed rates; and
(II)
recover, for the utility providing the service, the appropriate
cost of providing EAS including a contribution to joint costs.
(viii)
The notice requirements of paragraph (7) of this subsection
are applicable to joint filings. In addition, the commission shall publish
notice of the proposed joint filing in the
Texas
Register
and shall provide notice to the Office of Public Utility Counsel
upon receipt of the joint filing.
(ix)
If intervenor status is not granted within 60 days of
completion of notice, the joint filing shall be handled administratively,
with the commission determining whether the service meets the criteria listed
in clause (vii) of this subparagraph. If requested by an intervenor or the
commission staff, the joint filing shall be docketed for hearing and final
order. Any of the parties to the joint filing may withdraw the joint filing
without prejudice at any time prior to the rendition of the final order. Any
alteration or modification of the joint filing by the commission may only
be made upon the agreement of all parties to the proceeding.
(x)
The exchanges to be included within the proposed common
calling plan area shall be contained within a continuous boundary and all
exchanges within that boundary shall be included in the common calling plan.
§26.219.Administration of Expanded Local Calling Service Requests.
(a)
Purpose. The purpose of this section is to describe the
process used to administer requests from telephone service subscribers for
two-way toll-free expanded local calling service (ELCS) pursuant to the Public
Utility Regulatory Act (PURA), Chapter 55, Subchapter C. Only incumbent local
exchange companies (ILECs) are subject to the provisions of PURA, Chapter
55, Subchapter C.
(b)
Definitions. The following terms, when used in this section,
have the following meanings unless the context clearly indicates otherwise.
(1)
Expanded local calling service (ELCS)--The meaning assigned
in §26.221 of this title (relating to Applications to Establish or Increase
Expanded Local Calling Service Surcharges).
(2)
Expanded local calling service (ELCS) fee--The meaning
assigned in §26.221 of this title.
(3)
Expanded local calling service (ELCS) surcharge--The
meaning assigned in §26.221 of this title.
(4)
Metropolitan exchange--The meaning assigned in PURA §55.041,
including Austin, Corpus Christi, Dallas/Fort Worth, Houston, San Antonio
and Waco.
(c)
ELCS requests, notice and intervention.
(1)
Filing a request for ELCS. Telephone subscribers in an
exchange that has 10,000 or fewer access lines are eligible to request ELCS
from the commission by filing information listed in paragraph (2) of this
subsection. The request shall be assigned a project number. A presiding officer
shall be assigned to the project and the request shall be reviewed administratively
unless the presiding officer, for good cause, determines at any point during
the review that the request should be docketed. A request from telephone subscribers
in an exchange that has more than 10,000 access lines shall be dismissed by
the presiding officer within 20 days of the date the request is filed.
(2)
Contents of a request for ELCS.
(A)
Filing letter. A request for ELCS shall include a letter
that designates a contact person to respond to inquiries about the request
for ELCS. The name, address, and daytime telephone number of the contact person
shall be identified in the letter. The letter shall be sent with all other
parts of the request to the commission's Filing Clerk.
(B)
Community of interest statement. If the petitioning and
petitioned exchanges do not meet the geographic proximity requirement set
forth in subsection (d)(3)(C) of this section, the request for ELCS shall
contain a statement describing the community of interest between the petitioning
and petitioned exchanges, based upon standards in subsection (d)(3)(D) of
this section. The statement must describe the existence of a community of
interest between the petitioning exchange and each petitioned exchange in
sufficient detail to allow for verification of assertions made.
(C)
Statement of changed circumstances. If subscribers in the
petitioning exchange denied by ballot a petition for ELCS to any one or more
of the same petitioned exchange(s) within the previous 18 months, the new
request shall contain a statement explaining what circumstances have changed
since the time of the prior ballot that materially affect the need for ELCS
between the petitioning exchange and each petitioned exchange. A petition
is denied by ballot if it fails to receive an affirmative vote of at least
70% of the voting subscribers in the petitioning exchange.
(D)
Petition. A request for ELCS shall include a petition.
A petition may request ELCS between a single petitioning exchange and one
or more petitioned exchanges. A petition shall be signed by at least 100 subscribers
or 5.0% of subscribers in the petitioning exchange, whichever is less. Each
signatory shall include his or her name and telephone number on the petition.
Each signature page of the petition for ELCS shall include:
(i)
the name and telephone number of a petition coordinator,
whom signatories may contact for further information about the petition;
(ii)
the name, area code and prefix of the exchange from which
the petitioners receive telephone service (the petitioning exchange);
(iii)
the name, area code and prefix(es) of exchange(s) to
which ELCS is sought (the petitioned exchange(s));
(iv)
a clear statement that only subscribers in the petitioning
exchange may sign the petition;
(v)
a clear statement that subscribers in the petitioning exchange
will be billed a monthly ELCS fee of up to $3.50 per residential line and
$7.00 per business line for the first five petitioned exchanges granted, with
an additional $1.50 per line for each exchange in excess of five, whether
obtained in one or more petitions, in addition to basic local exchange service
rates;
(vi)
a clear statement that there must be an affirmative vote
of at least 70% of those subscribers responding within the petitioning exchange
as to each petitioned exchange before ELCS can be implemented to that petitioned
exchange; and
(vii)
a clear statement that, in addition to ELCS fees billed
to petitioning subscribers, an ELCS surcharge may, if necessary, be billed
to that ILEC's Texas customers to recover the costs of implementing ELCS.
(3)
Notice to affected ILECs. Within five working
days of receipt by the Office of Regulatory Affairs of a filed request for
ELCS, the Office of Regulatory Affairs shall send a copy of the request by
certified mail to each ILEC serving either a petitioning or a petitioned telephone
exchange.
(4)
Notice to affected telephone service subscribers.
An ILEC serving a petitioning exchange shall arrange for publication of notice
in the petitioning exchange and shall bear the cost of notice as a regulatory
case expense. This notice shall be published once, not later than 15 days
before ballots are mailed in accordance with subsection (f) of this section,
in each local newspaper in the petitioning exchange. The information contained
in subsection (f)(2)(A)-(D) and (F) of this section shall be published. Published
notice shall identify the assigned project number, shall include the language
in Procedural Rule §22.51(a)(1)(F) of this title (relating to Notice
for Public Utility Regulatory Act, Chapter 36, Subchapter C-E, Chapter 51, §51.009;
and Chapter 53, Subchapters C-E Proceedings) modified to reflect the appropriate
intervention deadline and shall be written in both English and Spanish. Additionally,
the presiding officer shall cause notice to be published in the
Texas Register
no later than 15 days before ballots are mailed.
(5)
Intervention. The intervention deadline shall be no
sooner than ten days after the last date notice is published in the petitioning
exchange. On or before the intervention deadline stated in the published notice,
any interested person may file a request to intervene in the project. The
presiding officer shall rule on a request to intervene in accordance with
Procedural Rule §22.103 of this title (relating to Standing to Intervene)
within ten days from the date the request to intervene is filed with the commission's
Filing Clerk. Intervention by an interested person does not by itself require
that the project be docketed.
(d)
Initial review of a request for ELCS.
(1)
Sufficiency. The presiding officer shall, by order issued
within 15 days of the filing of a request for ELCS, determine if the request
is sufficient as to the requirements in subsection (c)(2) of this section.
If the presiding officer finds that the request is deficient, the presiding
officer shall notify the designated contact person so that the contact person
may cure any such deficiencies. Deficiencies in the request for ELCS may be
cured within 30 days of its initial filing. If not cured by the subsequent
filing of sufficient information within that time, the presiding officer shall
dismiss the request in whole, if appropriate, or in relevant part, without
prejudice to the filing of another request involving the same petitioning
and petitioned exchanges.
(2)
Changed Circumstances. The presiding officer shall,
by order issued no later than 15 days after the filing of the request for
ELCS, determine whether a statement of changed circumstances required by subsection
(c)(2)(C) of this section justifies allowing another ballot sooner than 18
months after the denial by ballot of a prior petition involving the same petitioning
and petitioned exchanges. If the presiding officer finds that the statement
does not justify allowing another ballot, the presiding officer shall dismiss
the request in whole, if appropriate, or in relevant part.
(3)
Geographic proximity or community of interest.
(A)
Distance limitation. ELCS is not available where the most
distant central switching offices in a petitioning and petitioned exchange
are more than 50 miles apart as measured by using vertical and horizontal
(V&H) geographic coordinates.
(B)
Determination. The presiding officer shall, by order issued
no later than 15 days after the request for ELCS is filed, determine whether
the request satisfies either the geographic proximity requirement set forth
in subparagraph (C) of this paragraph or the community of interest requirement
set forth in subparagraph (D) of this paragraph. If the presiding officer
determines that neither the geographic proximity nor the community of interest
requirements are satisfied, the presiding officer shall dismiss the request
in whole, if appropriate, or in relevant part.
(C)
Geographic proximity. The geographic proximity requirement
is satisfied as to each petitioned exchange if the nearest central switching
office in the petitioning exchange is located within 22 miles of the nearest
central switching office in the petitioned exchange as measured using vertical
and horizontal (V&H) geographic coordinates.
(D)
Community of interest. A community of interest statement
shall address situations where the nearest central switching offices in a
petitioning and petitioned exchange are more than 22 miles apart and the most
distant central offices in a petitioning and petitioned exchange are 50 or
less miles apart. A community of interest between a petitioning exchange and
a petitioned exchange exists, for purposes of this section, when the community
of interest statement includes information demonstrating that the petitioning
and petitioned exchanges have a relationship because of schools, hospitals,
local governments, or business centers, or that the petitioning or petitioned
exchanges have other relationships that make the unavailability of ELCS a
hardship on residents of the area.
(e)
Exemptions.
(1)
ILEC requests for exemption. An ILEC serving either the
petitioning or the petitioned exchange may file a request for exemption from
the potential requirement to provide ELCS. Such requests must be filed no
later than 20 days after the filing of the request for ELCS. The request for
exemption shall be accompanied by an affidavit identifying in detail which
conditions described in paragraph (2) of this subsection exist. If the petition
includes more than one petitioned exchange, the request for exemption shall
clearly identify which conditions apply to which exchanges. The presiding
officer shall look to facts or circumstances existing on the date the ELCS
request is filed in determining whether a request for exemption may be granted.
(2)
Types of exemptions. The following conditions shall
be considered by the presiding officer in determining whether to exempt an
ILEC from being required to provide ELCS:
(A)
the ILEC serves fewer than 10,000 access lines statewide;
or
(B)
the petitioning or petitioned exchange is served by a telephone
cooperative; or
(C)
extended area service (EAS) or extended metropolitan service
is currently available between the petitioning exchange and the petitioned
exchange(s); or
(D)
the petitioning or petitioned exchange is a metropolitan
exchange as defined in subsection (b) of this section; or
(E)
it is technologically or geographically infeasible to provide
ELCS to the area; or,
(F)
the request for ELCS proposes to split a petitioning or
petitioned exchange.
(3)
Determination. If one or more of the conditions
described in paragraph (2)(A)-(D) or (2)(F) of this subsection exist, the
presiding officer shall, within 40 days after the filing of the request for
ELCS, dismiss the request in whole, if appropriate, or in relevant part. If
the ILEC requests an exemption based on paragraph (2)(E) of this subsection,
the presiding officer shall, by order issued no later than 40 days after the
filing of the request for ELCS, determine whether the ILEC's affidavit sufficiently
demonstrates that technology is not available in the marketplace to make ELCS
feasible. If the exemption request is granted, the presiding officer shall
dismiss the request for ELCS in whole, if appropriate, or in relevant part.
(f)
Balloting. If all applicable requirements contained in
subsections (c) and (d) of this section are met and no exemption requests
are outstanding, the presiding officer shall issue an order directing the
ILEC serving the petitioning exchange to begin balloting subscribers in that
exchange, and the presiding officer shall notify the designated contact person
for the petitioning exchange that balloting will take place.
(1)
Cost of balloting. The cost of preparing and distributing
ballots shall be borne by the ILEC serving the petitioning exchange as a regulatory
case expense.
(2)
Ballot format. No later than 30 days after the presiding
officer's order directing the ILEC serving the petitioning exchange to begin
balloting, that ILEC shall distribute a ballot, written in English and Spanish,
to each subscriber in the petitioning exchange. The ballot shall require a
separate vote from each subscriber for each petitioned exchange. The ballot
must be in a standard form approved by the Office of Regulatory Affairs and
each ballot shall include:
(A)
a statement explaining ELCS;
(B)
a statement that subscribers in the petitioning exchange
have petitioned to expand the toll-free local calling area into the named
exchange(s);
(C)
a description of the proposed ELCS area, including the
name, area code and prefix of the petitioning exchange and each petitioned
exchange for which toll-free local calling is sought;
(D)
a statement that if at least 70% of those subscribers responding
vote "yes" as to any petitioned exchange:
(i)
subscribers in the petitioning exchange will be billed,
in addition to the company's local exchange service rates, a monthly ELCS
fee of up to $3.50 per residential line and up to $7.00 per business line
for the first five petitioned exchanges granted, with an additional $1.50
per line for each exchange in excess of five, whether obtained as the result
of one or more petitions; and
(ii)
in addition to the ELCS fee billed to petitioning subscribers,
an ELCS surcharge may, if necessary, be billed to all of the ILEC's Texas
subscribers to recover the costs of implementing ELCS; and
(iii)
the amount of the monthly ELCS fee and ELCS surcharge
will depend on the revenue lost and costs incurred by the company providing
the service;
(E)
unambiguous instructions for voting, including the following
statement in large print: "It is important that you return this ballot. If
you are in favor of obtaining Expanded Toll-Free Local Calling to a listed
exchange, check the box labeled 'YES' next to that exchange. If you do not
want Expanded Toll-Free Local Calling to a listed exchange, check the box
labeled 'NO' next to that exchange";
(F)
a statement that a petitioned exchange will be included
in the expanded toll-free local calling area only if at least 70% of the petitioning
subscribers responding vote affirmatively for ELCS to that exchange;
(G)
the date by which the returned ballot must be postmarked,
which shall be 15 days from the date the ballot is mailed to the customer;
(H)
the address to which the ballot should be returned upon
completion of voting, identifying the commission as the recipient of returned
ballots; and
(I)
a unique identification number assigned by the ILEC serving
the petitioning exchange to each subscriber in that exchange.
(3)
Master list of subscribers. No later than 35
days after the presiding officer's order to the ILEC serving the petitioning
exchange to begin balloting, that ILEC shall submit to the Office of Regulatory
Affairs a master list of all subscribers within the petitioning exchange in
an electronic spreadsheet format prescribed by the Office of Regulatory Affairs.
The ILEC shall classify the master list as confidential, and the list shall
be treated as such under the provisions of the Government Code, Title 5, Chapter
552. The master list shall be arranged sequentially by billing number and
shall include for each subscriber in the petitioning exchange:
(A)
the billing name;
(B)
the billing number;
(C)
the service address;
(D)
the mailing address;
(E)
the class of service; and
(F)
the unique identification number assigned to the subscriber
by the ILEC.
(4)
Response to balloting. The Office of Regulatory
Affairs shall, no later than 15 days after the date stated on the ballot for
return of the ballot, notify the presiding officer, the contact person, and
affected ILEC(s) of the results of the ballot by filing a ballot report. The
ballot report shall specify the results of the ballot for each petitioned
exchange.
(A)
Affirmative vote.
(i)
If at least 70% of petitioning subscribers responding vote
affirmatively as to any petitioned exchange, the ILEC serving the petitioning
exchange shall file with the commission, within 30 days after the filing of
the Office of Regulatory Affairs' ballot report, an application to establish
ELCS fees pursuant to PURA §55.048(b). The ILEC's application shall include
the ILEC's proposed implementation schedule and proposed schedule of fees
as well as other information described in §26.221(e)(1)-(9) of this title
(relating to Applications to Establish or Increase Expanded Local Calling
Service Surcharges).
(ii)
The implementation of ELCS shall be scheduled for completion
within five months after an order is issued by the presiding officer acknowledging
the ballot results. The ILEC shall explain and justify the reasons for any
implementation delay beyond five months.
(iii)
No later than 15 days after the ILEC's filing of its
application to establish ELCS fees, the presiding officer shall issue an order
granting interim approval of the ILEC's proposed fees, which may be billed
as of the first billing cycle following implementation of ELCS from the petitioning
exchange. All fees given interim approval are subject to refund.
(iv)
No later than 30 days after the ILEC's filing of its implementation
schedule, the presiding officer shall issue an order approving, modifying,
or denying the schedule.
(B)
Negative vote. If less than 70% of those responding vote
in favor of ELCS to a petitioned exchange, the presiding officer shall, within
10 days after the filing of the Office of Regulatory Affairs' ballot report,
deny the request for ELCS to that specific petitioned exchange.
(g)
Calculation of ELCS Fees. ELCS fees shall be calculated
using the formula described in this subsection unless the presiding officer,
for good cause, modifies the formula. Key formula terms are defined in §26.221(b)
of this title.
(1)
Regulatory case expenses. In accordance with PURA §55.048(d),
an ILEC may not recover regulatory case expenses under this subsection by
surcharging petitioning subscribers.
(2)
ELCS fee formula. First, sum lost revenues and costs
incurred to determine the ILEC's annual ELCS requirement. Divide the annual
ELCS requirement by 12 to obtain the monthly requirement, which is the numerator.
Second, obtain the most current count of access lines in the petitioning exchange.
Multiply the number of business lines by two and multiply the number of Tel-Assistance
lines by 35%. Add the doubled business lines and the 35% of Tel-Assistance
lines to the number of residential lines. This total is the denominator. Third,
divide the numerator by the denominator to obtain the monthly ELCS fee per
residential line. Multiply the monthly ELCS fee per residential line by two
to obtain the monthly ELCS fee per business line. Multiply the monthly fee
per residential line by 35% to obtain the monthly ELCS fee per Tel-Assistance
line. Round ELCS fees up or down to the nearest penny.
(3)
ELCS fee maximums. The monthly ELCS fee per residential
line shall not exceed $3.50 for up to five petitioned exchanges. The monthly
ELCS fee per business line shall equal twice the monthly ELCS fee per residential
line; however, the monthly ELCS fee per business line shall not exceed $7.00
for up to five petitioned exchanges. For each additional petitioned exchange
beyond five, the monthly ELCS fee shall not exceed an additional $1.50 per
residential or business line.
(4)
ELCS surcharge. If ELCS fees do not recover the annual
ELCS requirement, an ILEC may request establishment of an ELCS surcharge under §26.221
of this title.
(h)
Docketing. Within 30 days of the issuance of an order under
subsection (f)(4)(A)(iii) of this section granting interim approval of fees
to be billed by the ILEC serving the petitioning exchange, any intervenor
or the Office of Regulatory Affairs may request that the presiding officer
docket the project. Docketing may be requested in order to allow further investigation
of the ILEC's application or, for good cause shown, any other reason. Upon
receipt of a request for docketing, the presiding officer shall docket the
project and shall establish a procedural schedule. Upon docketing, discovery
may commence in accordance with the commission's Procedural Rules, Chapter
22, Subchapter H of this title (relating to Discovery Procedures).
(i)
Final approval. If no request for docketing is timely filed
under subsection (h) of this section, the presiding officer shall, within
60 days after the order granting interim approval of fees, issue an order
granting final approval to or modification of the ELCS fees to be billed by
the ILEC serving the petitioning exchange. Upon final approval by the presiding
officer of either the proposed or modified tariff sheets, the fees shall be
considered permanent unless modified in the future, for good cause, by the
commission.
§26.221.Applications to Establish or Increase Expanded Local Calling Service Surcharges.
(a)
Purpose. The purpose of this section is to provide the
standard for review of an incumbent local exchange company (ILEC) application,
filed pursuant to the Public Utility Regulatory Act (PURA) §55.048(c),
to recover all costs incurred and all loss of revenue from an expansion of
a toll-free local calling area.
(b)
Definitions. The following terms, when used in this section,
have the following meanings, unless the context clearly indicates otherwise.
(1)
Avoided costs--ILEC costs that are reduced or eliminated
due to implementation of ELCS.
(2)
Costs incurred--The amount of recurring and non-recurring
costs incurred by an ILEC to implement ELCS, minus avoided costs.
(3)
Expanded local calling service (ELCS)--A two-way toll-free
local calling service provided by an ILEC to telephone service subscribers
pursuant to §26.219 of this title (relating to Administration of Expanded
Local Calling Service Requests).
(4)
Expanded local calling service (ELCS) fee--A fee billed
by an ILEC, pursuant to PURA §55.048(b), to subscribers in a petitioning
telephone exchange.
(5)
Expanded local calling service (ELCS) requirement--The
sum of lost revenue and costs incurred due to implementation of ELCS.
(6)
Expanded local calling service (ELCS) surcharge--A
fee billed by an ILEC, pursuant to PURA §55.048(c), to all of its Texas
subscribers, unless an exception is granted by the commission. ELCS surcharges
are designed to recover the residual in paragraph (8) of this subsection.
(7)
Lost revenue--The loss of revenue an ILEC realizes
due to implementation of ELCS.
(8)
Residual--The sum of lost revenue and costs incurred,
minus revenue collected from ELCS fees.
(c)
General Principles. The commission shall consider these
general principles when establishing or increasing ELCS surcharges.
(1)
The commission may, at any time, initiate a show cause
investigation or a compliance investigation of ELCS surcharges pursuant to
Procedural Rule §22.241 of this title (relating to Investigations) to
determine whether ELCS surcharges comply with the requirements in PURA §55.048.
(2)
An ILEC bears the burden of demonstrating that a proposed
ELCS surcharge:
(A)
recovers lost revenue and costs incurred,
(B)
recovers costs necessary only for implementation of ELCS
and
(C)
is just and reasonable.
(3)
If an ILEC departs from the requirements in subsection
(e)(1)-(6) of this section, and proposes instead to use statistical sampling
or another method of calculating ELCS surcharges, the ILEC bears the burden
of demonstrating the reasonableness of the alternative method as it relates
to the surcharge at issue.
(4)
An application to establish an ELCS surcharge shall
contain information that enables the Office of Regulatory Affairs to validate
and replicate the method used by the ILEC to develop a proposed ELCS surcharge.
(5)
When established, ELCS surcharges shall be based upon
the most current count of local exchange access lines billed by an ILEC.
(6)
The commission shall pursue the goal of revenue neutrality
in designing ELCS surcharges.
(7)
Except as provided under subsection (i)(1) of this
section, an ILEC has no continuing right to bill an ELCS surcharge for an
indefinite period.
(8)
ELCS surcharges shall be designed so that business
subscribers are billed twice the monthly per line charge billed to residential
subscribers and Tel-Assistance subscribers are billed 35% of the monthly per
line charge billed to residential subscribers.
(d)
Confidentiality. Before filing an application regarding
an ELCS surcharge, an ILEC shall obtain agreement from the Office of Regulatory
Affairs on a method for securing the confidentiality of information the ILEC
deems confidential. An application filed pursuant to subsection (e) of this
section shall not exclude information deemed confidential by the ILEC.
(e)
Filing an application. An application to establish or increase
an ELCS surcharge shall be assigned a project number and a presiding officer
shall be assigned to the project. An ILEC's application shall be reviewed
administratively unless the presiding officer dockets the project. An application
shall, at a minimum, include:
(1)
twelve consecutive months of actual toll revenue data collected
as near the ELCS implementation date as possible and, in no event, earlier
than 18 months before the ELCS implementation date. Data provided by an ILEC
shall show actual toll revenue billed by the ILEC for each direction of each
pre-ELCS toll route for each of the 12 consecutive months collected;
(2)
twelve consecutive months of actual access revenue
data collected as near the ELCS implementation date as possible and, in no
event, earlier than 18 months before the ELCS implementation date. Data provided
by an ILEC shall show access revenue billed by the ILEC for each direction
of each pre-ELCS access route for each of the 12 consecutive months collected;
(3)
a calculation of the effect of any mechanism for pooling
or settling revenue collected from and disbursed to telecommunications providers;
(4)
copies of documents, such as invoices, work orders,
receipts and lease agreements, that demonstrate the costs incurred by an ILEC
to implement ELCS, with recurring costs and non-recurring costs separately
identified for each pre-ELCS toll route;
(5)
workpapers supporting all documents contained in the
application, including but not limited to, the ILEC's development of factors,
ratios, allocations, estimates, projections, averages and labor rates;
(6)
a calculation of avoided costs;
(7)
one or more tariff sheets reflecting the proposed
rates;
(8)
a request for exemption, if any, from one or more
requirements in this subsection;
(9)
a copy of the confidentiality agreement, if such an
agreement is necessary, signed by a representative of the Office of Regulatory
Affairs;
(10)
the text of the proposed notice of an application
to establish or increase ELCS surcharges; and
(11)
the ILEC's preferred duration of applicability of
the proposed ELCS surcharges among alternatives listed in subsection (i) of
this section.
(f)
Administrative response to an application.
(1)
Notice. The presiding officer shall approve or modify the
notice proposed under subsection (e)(10) of this section within 20 days after
the filing of an application to establish or increase ELCS surcharges. The
ILEC shall arrange for publication of notice at least once each week for four
consecutive weeks, in newspapers having general circulation in each of the
ILEC's affected telephone exchanges. Published notice shall identify the assigned
project number, shall include the language in Procedural Rule §22.51(a)(1)(F)
of this title (relating to Notice for Public Utility Regulatory Act, Chapter
36, Subchapters C-E; Chapter 51, §51.009; and Chapter 53, Subchapters
C-E, Proceedings) modified to reflect the appropriate intervention deadline,
shall describe the application and shall be written in both English and Spanish.
Notice shall be published within 40 days of the date the presiding officer
files an order approving the notice format. The ILEC shall file an affidavit
of completion of published notice within ten days following such completion.
The presiding officer shall cause notice to be published in the
Texas Register
within 30 days of the date an order of approval of the
notice format is filed. Additionally, the ILEC shall provide a copy of its
application to the Office of Public Utility Counsel on the same day the application
is filed with the commission's Filing Clerk.
(2)
Intervention. The intervention deadline shall be no
sooner than ten days after the last date notice is published. On or before
the intervention deadline, any interested person may file a request to intervene
in the project. The presiding officer shall rule on a request to intervene,
in accordance with Procedural Rule §22.103 of this title (relating to
Standing to Intervene) within ten days from the date the request for intervention
is filed with the commission's Filing Clerk. Intervention by an interested
person does not by itself require that the project be docketed.
(3)
Discovery. Discovery may commence on the date the
application is filed in accordance with the commission's Procedural Rules,
Chapter 22, Subchapter H of this title (relating to Discovery Procedures).
(4)
Interim surcharges. Not more than 30 days after the
intervention deadline, the presiding officer shall grant or deny, in whole
or in part, a request for interim relief and may approve or modify a proposed
interim ELC surcharge in accordance with Procedural Rule §22.125 of this
title (relating to Interim Relief).
(5)
Sufficiency review and requests for exemption. Within
30 days after the filing of an ILEC application, the Office of Regulatory
Affairs shall file comments on the sufficiency of the application and on any
request for exemption filed by the ILEC under subsection (e)(8) of this section.
Not more than 30 days after the Office of Regulatory Affairs' comments are
filed, the ILEC shall file a response and may amend or supplement its application.
Not more than ten days after the ILEC's response is filed, the Office of Regulatory
Affairs shall file a recommendation to the presiding officer addressing whether
the application is sufficient and whether any requests for exemption should
be granted.
(6)
Docketing. If the Office of Regulatory Affairs or
any intervenor files, within 30 days after the intervention deadline, a request
to docket the project, the presiding officer shall docket the project. Upon
docketing, the presiding officer shall ascertain whether the parties prefer
to pursue settlement negotiations or alternative dispute resolution. If so,
the presiding officer shall abate the docket for a reasonable period. If the
parties prefer to establish a procedural schedule, the presiding officer may
refer the docket to the State Office of Administrative Hearings or may take
other appropriate action. If neither the Office of Regulatory Affairs nor
an intervenor requests docketing, the presiding officer shall administratively
approve or modify the application within 40 days after the intervention deadline.
(g)
Calculation of initial ELCS surcharges. An initial ELCS
surcharge shall be calculated using the formula described in this subsection
unless the presiding officer, for good cause, modifies the formula.
(1)
Numerator. First, sum the lost revenues and costs incurred
to determine the ILEC's annual ELCS requirement. Second, use the most current
count of access lines to calculate the amount of ELCS fee revenue received
annually by the ILEC. Subtract the annual ELCS fee revenue from the annual
ELCS requirement. The result is the annual residual. Third, divide the annual
residual by 12 to obtain the monthly residual, the numerator.
(2)
Denominator. First, obtain the most current count
of residential, business and Tel-Assistance lines served by the ILEC in Texas.
Second, multiply the number of business lines by two and multiply the number
of Tel-Assistance lines by 35%. Third, add the doubled business lines and
the 35% of Tel-Assistance lines to the number of residential lines. This total
is the denominator.
(3)
ELCS surcharge formula. Divide the numerator in paragraph
(1) of this subsection by the denominator in paragraph (2) of this subsection
to obtain the monthly ELCS surcharge per residential line. Multiply the monthly
ELCS surcharge per residential line by two to obtain the monthly ELCS surcharge
per business line. Multiply the monthly ELCS surcharge per residential line
by 35% to obtain the monthly ELCS surcharge per Tel-Assistance line. Round
ELCS surcharges up or down to the nearest penny.
(h)
Adjustments to ELCS surcharges. ELCS surcharges shall be
adjusted using the formula described in subsection (g) of this section, except
that:
(1)
the numerator established in a previous application may
be modified to consider new information relevant to development of the residual:
(A)
for any ELCS surcharge approved before February 1, 2000,
if the commission reserved the right to subsequently review the costs incurred
and lost revenues associated with the ELCS surcharge; or
(B)
for any ELCS surcharge approved after February 1, 2000;
and
(2)
the denominator shall be modified to reflect
the most current count of local exchange access lines at the time of the adjustment.
For ELCS surcharges approved before February 1, 2000, if the number of access
lines in the denominator initially included only non-petitioning exchanges,
an adjustment in the number of access lines shall include only non-petitioning
exchanges.
(i)
Duration. An ILEC shall select a preferred duration of
applicability of its proposed ELCS surcharges from alternatives listed in
this subsection. The commission may establish ELCS surcharges for any duration.
(1)
Permanent. An ILEC may initiate a review of all of its
rates and charges by filing a rate filing package. Following a review of the
ILEC's cost of service pursuant to Substantive Rule §26.201 of this title
(relating to Cost of Service), any resulting ELCS surcharge shall be considered
permanent unless modified, for good cause, by the commission.
(2)
Phase-down. If an ILEC's application to establish
or increase an ELCS surcharge contains all information required in subsection
(e)(1)-(6) of this section, the ILEC may propose a phase-down of its ELCS
surcharge for a duration of five years. The phase-down shall be implemented
by reducing each ELCS surcharge by 20% at the end of each year of the phase-down
period. At the end of the five-year phase-down period, the ELCS surcharge
shall be zero. Tariff sheet(s) filed by the ILEC shall contain ELCS surcharges
for each of the five years of the phase-down period.
(3)
Phase-out. An ILEC that files an application to establish
or increase an ELCS surcharge may propose a phase-out of its ELCS surcharge.
A proposed phase-out shall be for a duration not to exceed two years. At the
end of the phase-out period, the ELCS surcharge shall be zero. Tariff sheet(s)
filed by the ILEC shall contain ELCS surcharges for the two-year period and
shall state the two-year duration of applicability of the ELCS surcharges.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on February 23, 2000.
TRD-200001383
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: March 14, 2000
Proposal publication date: September 17, 1999
For further information, please call: (512) 936-7308
Chapter 23.
SUBSTANTIVE RULES
Subchapter H. TELEPHONE
Chapter 26.
SUBSTANTIVE RULES APPLICABLE TO TELECOMMUNICATIONS SERVICE PROVIDERS
Subchapter L. WHOLESALE MARKET PROVISIONS