In accordance with the Texas Government Code §2001.039 regarding Agency Review of Existing Rules and requiring state agencies and other governmental bodies to review their rules every four years, Texas Feed and Fertilizer Control Service (TFFCS)/Office of the Texas State Chemist (OTSC) files an intent to review Title 4, Part 3, Chapter 63, Commercial Pet Food Rules during April, May and June of 2007.

All comments or questions regarding the notice of intention to review may be submitted in writing within 30 days following the publication of notice in the Texas Register and should be directed to Dr. Tim Herrman, State Chemist and Director, Office of the Texas State Chemist, at P.O. Box 3160, College Station, Texas 77841-3160; fax at (979) 845-1389; or via e-mail at tjh@otsc.tamu.edu. Any proposed amendments or repeal of any rule as a result of the review will be published in the "Proposed Rules" section of the Texas Register and will be open for an additional 30-day public comment period prior to final adoption or repeal. Any questions/comments should also be directed to Dr. Herrman as above.

TRD-200700860

Dr. Timothy J. Herrman

State Chemist and Director

Texas Feed and Fertilizer Control Service/Office of the Texas State Chemist

Filed: March 5, 2007

In accordance with the Texas Government Code §2001.039 regarding Agency Review of Existing Rules and requiring state agencies and other governmental bodies to review their rules every four years, Texas Feed and Fertilizer Control Service (TFFCS)/Office of the Texas State Chemist (OTSC) files an intent to review Title 4, Part 3, Chapter 65, Commercial Fertilizer Rules during April, May and June of 2007.

All comments or questions regarding the notice of intention to review may be submitted in writing within 30 days following the publication of notice in the Texas Register and should be directed to Dr. Tim Herrman, State Chemist and Director, Office of the Texas State Chemist, at P.O. Box 3160, College Station, Texas 77841-3160; fax at (979) 845-1389; or via e-mail at tjh@otsc.tamu.edu. Any proposed amendments or repeal of any rule as a result of the review will be published in the "Proposed Rules" section of the Texas Register and will be open for an additional 30-day public comment period prior to final adoption or repeal. Any questions/comments should also be directed to Dr. Herrman as above.

TRD-200700861

Dr. Timothy J. Herrman

State Chemist and Director

Texas Feed and Fertilizer Control Service/Office of the Texas State Chemist

Filed: March 5, 2007

Pursuant to the notice of the proposed rule review that was published in the November 10, 2006, issue of the Texas Register (31 TexReg 9368), the Employees Retirement System of Texas (ERS) reviewed 34 Texas Administrative Code (TAC), Chapter 63, Board of Trustees, pursuant to Texas Government Code §2001.039, to determine whether the reasons for adopting these rules continue to exist. No comments were received concerning the proposed review.

As a result of the review, the ERS Board of Trustees (Board) has determined that the reasons for adopting these rules continue to exist, and therefore, the Board readopts Chapter 63. This completes ERS’ review of 34 TAC Chapter 63, Board of Trustees.

TRD-200700808

Paula A. Jones

General Counsel

Employees Retirement System of Texas

Filed: February 28, 2007

Pursuant to the notice of proposed rule review that was published in the November 10, 2006, issue of the Texas Register (31 TexReg 9368), the Employees Retirement System of Texas (ERS) has reviewed 34 Texas Administrative Code (TAC), Chapter 65, Executive Director, pursuant to Texas Government Code §2001.039, to determine whether the reasons for adopting these rules continue to exist. No comments were received concerning the proposed review.

As a result of the review, the ERS Board of Trustees (Board) has determined that the reasons for adopting these rules continue to exist, and therefore, the Board readopts Chapter 65. It is anticipated, however, that as a result of the review, amendments to Chapter 65 will be proposed at a later date. This completes ERS’ review of 34 TAC Chapter 65, Executive Director.

TRD-200700809

Paula A. Jones

General Counsel

Employees Retirement System of Texas

Filed: February 28, 2007

Pursuant to the notice of proposed rule review that was published in the November 10, 2006, issue of the Texas Register (31 TexReg 9368), the Employees Retirement System of Texas (ERS) has reviewed 34 Texas Administrative Code (TAC), Chapter 67, Hearings on Disputed Claims, pursuant to Texas Government Code §2001.039, to determine whether the reasons for adopting these rules continue to exist. No comments were received concerning the proposed review.

As a result of the review, the ERS Board of Trustees (Board) has determined that the reasons for adopting these rules continue to exist, and therefore, the Board readopts Chapter 67. This completes ERS’ review of 34 TAC Chapter 67, Hearings on Disputed Claims.

TRD-200700810

Paula A. Jones

General Counsel

Employees Retirement System of Texas

Filed: February 28, 2007

Pursuant to the notice of proposed rule review that was published in the November 10, 2006, issue of the Texas Register (31 TexReg 9368), the Employees Retirement System of Texas (ERS) has reviewed 34 Texas Administrative Code (TAC), Chapter 85, Flexible Benefits, pursuant to Texas Government Code §2001.039, to determine whether the reasons for adopting these rules continue to exist.

As a result of the review, the ERS Board of Trustees (Board) has determined that the reasons for adopting these rules continue to exist, and therefore, the Board readopts Chapter 85. It is anticipated, however, that as a result of the review, amendments to Chapter 85 will be proposed at a later date.

No comments were received concerning the proposed review.

This completes ERS' review of 34 TAC Chapter 85, Flexible Benefits.

TRD-200700811

Paula A. Jones

General Counsel

Employees Retirement System of Texas

Filed: February 28, 2007

Pursuant to the notice of proposed rule review that was published in the November 10, 2006, issue of the Texas Register (31 TexReg 9368), the Employees Retirement System of Texas (ERS) has reviewed 34 Texas Administrative Code (TAC), Chapter 87, Deferred Compensation, pursuant to Texas Government Code §2001.039, to determine whether the reasons for adopting these rules continue to exist.

As a result of the review, the ERS Board of Trustees (Board) has determined that the reasons for adopting these rules continue to exist, and therefore, the Board readopts Chapter 87. It is anticipated, however, that as a result of the review, amendments to Chapter 87 will be proposed at a later date.

No comments were received concerning the proposed review.

This completes ERS' review of 34 TAC Chapter 87, Deferred Compensation.

TRD-200700812

Paula A. Jones

General Counsel

Employees Retirement System of Texas

Filed: February 28, 2007

Title 22, Part 15

The Texas State Board of Pharmacy adopts the review of Chapter 291, Subchapter A, §§291.1 - 291.27, concerning All Classes of Pharmacies, pursuant to the Texas Government Code, §2001.039, regarding Agency Review of Existing Rules. The proposed review was published in the December 15, 2006, issue of the Texas Register (31 TexReg 10107).

No comments were received.

The agency finds the reason for adopting the rules continues to exist.

TRD-200700849

Gay Dodson, R.Ph.

Executive Director/Secretary

Texas State Board of Pharmacy

Filed: March 5, 2007

The Texas State Board of Pharmacy adopts the review of Chapter 291, Subchapter E, §§291.91 - 291.94, concerning Clinic Pharmacy pursuant to Texas Government Code, §2001.039, regarding Agency Review of Existing Rules. The proposed review was published in the December 15, 2006, issue of the Texas Register (31 TexReg 10107).

No comments were received.

The agency finds the reason for adopting the rules continues to exist.

TRD-200700852

Gay Dodson, R.Ph.

Executive Director/Secretary

Texas State Board of Pharmacy

Filed: March 5, 2007

Title 16, Part 2

The Public Utility Commission of Texas (commission) readopts Texas Administrative Code (TAC), Chapter 26, Substantive Rules Applicable to Telecommunications Service Providers, pursuant to the Texas Government Code, Administrative Procedure Act (APA), §2001.039, Agency Review of Existing Rules. The notice of intention to review Chapter 26 was published in the Texas Register on September 8, 2006 (31 TexReg 7580). Project Number 33043 is assigned to this proceeding. This concludes the review of Chapter 26 pursuant to APA §2001.039.

APA §2001.039 requires that each state agency review its rules every four years and readopt, readopt with amendments, or repeal the rules adopted by that agency pursuant to the Texas Government Code, Chapter 2001. Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rules continues to exist. The commission requested specific comments on whether the reason for adopting the substantive rules in Chapter 26 continues to exist.

The commission finds that the reasons for adopting Chapter 26 continue to exist. However, the commission also finds that certain sections need amendments and other sections are obsolete due to changes in the telecommunications industry or the passage of time. Separate rulemaking proceedings will be initiated to amend or repeal these sections as discussed further in this preamble.

The commission received written comments from Southwestern Bell Telephone, LP, doing business as AT&T Texas (AT&T Texas); Central Telephone Company of Texas, Incorporated, doing business as Embarq, and United Telephone Company of Texas, Incorporated, doing business as Embarq (collectively Embarq); John Staurulakis, Incorporated (JSI); Texas Statewide Telephone Cooperative, Incorporated (TSTCI); Texas Telephone Association (TTA); and Verizon Southwest, MCImetro Access Transmission Services LLC, doing business as Verizon Access Transmission Services, and MCI Communications Services, Incorporated, doing business as Verizon Business Services (hereinafter collectively Verizon).

Reply comments were received from DialToneServices, LP (DTS).

General comments

Verizon argued that the reduction of business regulation, the degree of competition for business services and the effectiveness of market forces indicate that regulations related to business customers are no longer necessary and that this is consistent with the provisions of Public Utility Regulatory Act (PURA) §51.001(a). In addition to specific sections that will be addressed in the analysis of comments that follows, Verizon's position is applicable to §26.1, Purpose and Scope of Rules, §26.23, Refusal of Service, §26.24, Credit Requirements and Deposits, §26.27, Bill Payment and Adjustments, §26.28, Suspension or Disconnection of Service, §26.30, Complaints, §26.51, Continuity of Service, §26.54, Service Objectives and Performance Benchmarks, §26.55, Monitoring of Service, and §26.81, Service Quality Reports. Each of these sections, Verizon argued, should be revised or repealed with regard to its application for business customers to reflect the current competitive telecommunications market.

Although other responding parties did not argue for the complete elimination of regulation that applies to business customers, several parties made similar arguments regarding the effect of the competitive market upon existing regulations. Those arguments will be examined as they pertain to each applicable section.

Commission response

The commission believes that the current market conditions justify the continued application of the majority of its rules. The rules provide strong customer protections while allowing the flexibility necessary to encourage increased competition. The commission's rules serve to enhance competition by adjusting regulation to match the degree of competition in the marketplace. The rules thereby reduce the cost and burden of regulation to the extent warranted by market conditions and protect markets that are not sufficiently competitive. In this way, the commission's rules implement the state's telecommunications policy as stated in PURA §51.001(b) to: "(1) promote diversity of telecommunications providers and interconnectivity; (2) encourage a fully competitive telecommunications marketplace; and (3) maintain a wide availability of high quality, interoperable, standards-based telecommunications services at affordable rates." The commission continues to monitor the market and will make appropriate changes to these rules when necessitated by future market conditions. As a result of its evaluation of parties' comments, and discussed in more detail below, the commission will undertake amendments in subsequent rulemaking proceedings where appropriate.

Comments on specific rule sections

Subchapter A, General

Comments on §26.1, Purpose and Scope of Rules

Verizon argued that the reduction of business regulation, the degree of competition for business services and the effectiveness of market forces indicate that regulations related to business customers are no longer necessary and that this is consistent with the provisions of PURA §51.001(a). Verizon's position regarding this section appeared to be that the section contents must be revised to reflect the repeal and amendment of sections discussed in its comments and particularly to reflect the current competitive telecommunications market.

Commission response

The commission does not believe that this section requires amendment at this time. The Purpose and Scope of Rules states generally the intention of the commission's rules. The amendments and revisions incorporated as a result of this project do not substantially affect the section. Should future rulemakings result in a substantive change that alters this section, the commission will consider revision or amendment of the section at that time.

Comments on §26.2, Cross-Reference Reference Transition

JSI and TTA recommended the repeal of this section, and noted that it had been created for use during the interim between the commission's change from Chapter 23 to Chapter 26. JSI and TTA also noted that Chapter 26 still contains references to Chapter 23 and recommended they be eliminated in this proceeding as well. Such references will be discussed in connection with the sections in which they are located.

Commission response

The commission agrees with JSI and TTA that this section has expired and will propose its repeal in a separate rulemaking proceeding. The commission will also propose amendments and revisions to correct inappropriate cross references, such as those in this instance referring to Chapter 23, in a separate rulemaking proceeding.

Comments on §26.5, Definitions

AT&T and Verizon recommended this section be amended to revise definitions and to eliminate inconsistencies between PURA Chapter 65 deregulated or transitioning companies and those telecommunications providers regarded as "dominant carriers." AT&T particularly noted definitions (66), dominant carrier (DCTU), and (139), non-dominant certificated telecommunications utility (NCTU), require re-definition as a result of the transition from rate-of-return regulation to incentive regulation and deregulation.

Commission response

The commission believes that the parties have a valid point because the definitions section does not reflect the adoption of PURA Chapter 65 deregulated or transitioning companies. The commission notes that the new §26.230 was only recently adopted to address Chapter 65 applications. However, an in-depth review of this section will require a separate rulemaking project, which will be initiated by the commission at a future date.

Comments on §26.8, Relief for Victims of Hurricanes Katrina and Rita

AT&T, JSI and TTA recommended the repeal of this section and stated that it had expired on January 29, 2006, pursuant to its own terms.

Commission response

The commission notes that this rule expired on January 29, 2006 and has been eliminated. Therefore, no action is required.

Subchapter B, Customer Service and Protection

Comments on §26.21, General Provisions of Customer Service and Protection Rules and §26.22, Request for Service

Verizon reiterated its position that any Chapter 26 section that applied to business customers should be re-examined in light of the current competitive telecommunications market, but noted that such action would require amendment to PURA §51.003 to add business as an entity for which the title did not apply.

Commission response

The commission agrees with Verizon's conclusion that the elimination of its rules pertaining to business customers would require an amendment of PURA. Therefore, the commission does not believe this proceeding is the appropriate venue for the revisions Verizon seeks related to incumbent local exchange carriers' (ILECs') obligations to business customers. Therefore, the commission will take no action on this issue at this time. The commission notes that Verizon raised this same issue regarding PURA §51.003, in relationship to the following sections: §§26.23, 26.24, 26.27, 26.28, 26.30, 26.51, 26.54, 26.55, and 26.81. In each instance the commission concludes that action is not appropriate unless statutory changes have occurred.

Comments on §26.23, Refusal of Service

AT&T recommended amendment of subsection (a)(1) to include a definition of "applicant" that should also be included as a new definition in §26.5. This proposed definition would require persons applying for telecommunications services to provide minimum verifiable identification for name and address. AT&T argued that §26.23(a)(1)(D) intends to insure an applicant is not seeking service for another customer and that the inclusion of a commission approved definition will insure providers provide notice of refusal of service correctly and also reduce the incidence of identity theft.

Commission response

The commission is not persuaded that the definition sought by AT&T in the context of this section and §26.5 resolves the concerns it raised. The commission believes that the section as currently written addresses the concerns as far as the commission's authority provides. The commission does not prevent telecommunications providers from seeking verifiable identification from applicants and does not believe that the action requested would significantly reduce the incidence of notice problems and identity theft discussed. Therefore, the commission will not take the requested action.

Comments on §26.26, Foreign Language Requirement

Verizon argued that this section should not apply to business customers and stated that the elimination of this requirement would require revision of legislative action to amend PURA §64.004(a)(3) to remove application to business customers.

Commission response

The commission agrees that PURA §64.004(a)(3) would require revision to eliminate the necessity for Verizon's compliance with this requirement. Such action has not been taken, and therefore the commission does not have the authority to consider such a revision at this time.

Comments on §26.29, Prepaid Local Telephone Service (PLTS)

Embarq, JSI and TTA argued that the PLTS offering is no longer a valid obligation because customers have multiple service options available in the current competitive telecommunications market. All of the parties stated that PLTS distorts the marketplace and places the incumbent local exchange carriers (ILECs) at a competitive disadvantage. Embarq argued further that the requirement should at least be eliminated for Chapter 65 electing providers.

AT&T recommended the commission amend subsection (c)(1) and (2) to shorten the customer notice and provide the customer with alternative service options in those cases where service disconnection is imminent. AT&T argued that the detail required in the notice, coupled with the small number of customers receiving the PLTS service, makes it unlikely that the notice is understandable to the customers.

Commission response

The commission notes that the provisions of PURA §55.013 required the establishment of requirements protecting customers' basic local service and that these provisions have not changed. Therefore, the commission believes that the argument of Embarq, JSI and TTA lacks merit. Concerning AT&T's argument regarding the complexity of the required notice, the commission does not believe that a thorough review of the notice provisions for PLTS may be accomplished in this proceeding. In addition, the commission is not inclined to reduce the information provided to customers and does not believe that anything in the section prevents a telecommunications provider from providing the information AT&T recommends, regarding alternative services, should the customer contact the provider as a follow-up to the notice. Therefore, the commission will not take the requested action.

Comments on §26.31, Disclosures to Applicants and Customers

JSI and AT&T recommended that the notice requirements of this section be streamlined into one annual notice and argued that providers should be required to provide all necessary notice at the time that service is initially implemented and at the time of any move or change in service. Further, they argued that subsection (a) is not necessary for business customers with fewer than 5 access lines and that the current cycle of frequent bill inserts and bill messages results in customers' disregarding notices generally.

Commission response

The current notice requirements were adopted to guarantee that all customers are adequately alerted to important matters related to their service on a frequent basis. Customers cannot be expected to retain all of the necessary information inherent in these notices over prolonged periods. Therefore, the commission will not take the requested action.

Comments on §26.32, Protection Against Unauthorized Billing Charges

Verizon argued that PURA §64, Subchapters C and D, should be amended to remove the application of obligations to business customers, again noting the impact of the competitive marketplace.

Commission response

The commission will not address this issue unless statutory changes are made.

Comments on §26.34, Telephone Prepaid Calling Services

Verizon recommended legislative review of PURA §55.253 to repeal the application of this section to business customers, again noting the impact of the competitive marketplace.

Commission response

The commission will not address this issue unless statutory changes are made.

Subchapter C, Quality of Service

Comments on §26.51, Continuity of Service

JSI and TTA noted the out-dated references to the "Year 2000 compliance" in subsections (a), (b) and (g) and also suggested that subsection (g) material be moved to §26.52, related to Emergency Operations.

Commission response

The commission agrees and notes that a consolidated rulemaking for §26.51 and §26.52 will be conducted, during which it will examine the issues raised by comments in this project as well as other matters of interest to the commission.

Comments on §26.52, Emergency Operations

JSI and TSTCI recommended amendment of subsection (a) to include all ETPs as opposed to just DCTUs. TSTCI noted that such a change would be consistent with §26.417(c)(1)(D) ETP requirements. JSI and TSTCI also recommended that the material in §26.51(g) be moved to this section because it pertains to emergency operations.

DTS replied that the application of this rule to technologies other than landline, such as DTS' satellite services or cellular services, has been addressed in the commission's rulings in other proceedings. DTS argued that if this rule is amended, it should be made clear that these requirements apply to non-wireline providers only to the extent that their facilities are the same or analogous to networks of wireline providers. In the alternative, DTS recommended that the commission establish standards specific to facilities of non-wireline providers.

Commission response

The commission notes that the revisions recommended by JSI and TSTCI, with regard to the inclusion of §26.51(g) provisions in this section, and the inclusion of all ETPs as obligated telecommunications carriers, require a thorough evaluation of the section as a whole. Further, as noted by the reply comments received from DTS, the matter of expanding the obligations of this section to ETPs generally, including carriers using technology other than landline services, is one which requires an appropriate review and examination of the technological and competitive impacts. Though the commission will not take the requested action, the commission notes that a consolidated rulemaking for §26.51 and §26.52 will be conducted, during which it will examine the issues raised by comments in this project as well as other matters of interest to the commission.

Comments on §26.53, Inspections and Tests

JSI, TSTCI and TTA recommended this section be repealed, stating that the commission no longer performs central office testing. However, parties noted that, if the rule is retained, subsection (a) should be modified to include all ETPs, not just the DCTUs and that subsection (c) should be modified to require all providers to release test termination numbers to the commission upon request. TTA also argued that an amendment that states "upon request of the commission" should be considered at a minimum.

DTS replied that the application of this rule to technologies other than landline, such as DTS' satellite services or cellular services, has been addressed in the commission's rulings in other proceedings. DTS argued that if this rule is amended, it should be made clear that these requirements apply to non-wireline providers only to the extent that their facilities are the same or analogous to networks of wireline providers. In the alternative, DTS recommended that the commission establish standards specific to facilities of non-wireline providers.

Commission response

As previously stated, the commission does not believe that this is the appropriate project for a broad review of the section's requirements as recommended by JSI, TSTCI and TTA, and the examination of competitive and technological impacts, as noted by DTS, requires a comprehensive review. The commission will not act upon the parties' recommendations, and notes that current testing occurs only as required in exchanges that are fully regulated.

Comments on §26.54, Service Objectives and Performance Benchmarks

JSI, TTA and TSTCI recommended this section be amended, noting that the recommendations in Project Number 32460, Project to Review and Evaluate Telecommunications Carriers' Reporting Requirements and Provide Recommendations Pursuant to Senate Bill (SB) 408 Section 13, 79th Legislative Session, included elimination of the subsection (b)(2) reporting requirements, because all telecommunications providers have now complied with the requirement of the section. JSI and TTA also argued that the obligation to support analog data equipment should be eliminated, and that providers should be allowed the option of either 14.4 kilobits per second or the high speed alternative. TSTCI noted that it is difficult to measure and enforce the current standards for facsimile machines. JSI and TSTCI also argued that this rule should apply to all ETPs, not just the DCTUs.

DTS replied that the application of this rule to technologies other than landline, such as DTS' satellite services or cellular services, has been addressed in the commission's rulings in other proceedings. DTS argued that if this rule is amended, it should be made clear that these requirements apply to non-wireline providers only to the extent that their facilities are the same or analogous to networks of wireline providers. In the alternative, DTS recommended that the commission should establish standards specific to facilities of non-wireline providers.

Commission response

The commission expects to conduct a rulemaking to include §26.77 and §26.98, as well as this section, §26.54, to address matters discussed in its legislative report pursuant to SB 408. In addition, as previously noted, DTS' reply comments raise the issue of the application of commission infrastructure standards to non-wireline carriers' technologies, which will require a complete review and evaluation in an appropriate venue. Therefore, the commission will not act upon parties' recommendations.

Comments on §26.55, Monitoring of Service

JSI and TTA recommended that this section be repealed because it is inappropriate and vague with regard to the monitoring, by telecommunications providers, of employee telephone calls.

Commission response

The commission does not agree with the conclusions of JSI and TTA and believes that the current requirement insures that notice of monitoring activities is provided to affected employees. Therefore, the commission will not repeal this section at this time.

Subchapter D, Records, Reports, and Other Required Information

Comments on §26.71, General Procedures, Requirements, and Penalties

JSI and TTA recommended that the commission amend subsection (f) to eliminate the reporting requirement cross references, pursuant to the commission's conclusions in Project Number 32460 regarding the elimination of certain financial reports.

Commission response

The commission notes that Project Number 33401, Rulemaking to Amend and/or Repeal Commission Rules Related to the Filing of Financial Reports as Recommended in Project Number 32460, pending, addresses the elimination and revision of financial reporting requirements contained in §§26.73, 26.77, 26.84 and 26.98 pursuant to the conclusions contained in its legislative report submitted in Project Number 32460. Therefore, the commission believes the elimination of these cross references, as recommended by JSI and TTA, is premature at this time. The commission will make appropriate adjustments to these cross references at the conclusion of Project Number 33401 in a separate rulemaking proceeding.

Comments on §26.73, Financial and Operating Reports

JSI and TTA recommended that the commission amend this section to eliminate reporting requirements, pursuant to the commission's conclusions in Project Number 32460.

Commission response

As stated previously, Project Number 33401 is currently addressing the financial reporting requirements contained in §§26.73, 26.77, 26.84 and 26.98, pursuant to the commission's evaluation and conclusions in Project Number 32460. Therefore, the commission will not address this issue in this proceeding.

Comments on §26.75, Reports on Sale of 50% or More of Stock

JSI and TTA recommended this section be repealed because §26.101(c) already requires the commission's approval of any certificate of convenience and necessity (CCN) transfer, and the sale of 50% of stock would constitute a sale, transfer or merger requiring a §26.101 amendment application. Therefore, JSI and TTA argued that §26.75 is duplicative.

Commission response

The commission is not persuaded that the requirements in this section are duplicative of those in §26.101(c). Because it is important for the commission to maintain accurate records of telecommunications' providers' ownership, the commission will not take the requested action.

Comments on §26.77, Payments, Compensation, and other Expenditures

JSI and TTA recommended that the commission repeal this section pursuant to the commission's conclusions in Project Number 32460, regarding the elimination of the reporting requirements.

Commission response

In Project Number 33401, the commission is addressing the financial reporting requirements contained in §§26.73, 26.77, 26.84 and 26.98, pursuant to the commission's evaluation and conclusions in Project Number 32460. Therefore, the commission will not address this issue in this proceeding.

Comments on §26.78, State Agency Utility Account Information

JSI recommended the commission streamline the reporting requirements in this section pursuant to its conclusions in Project Number 32460.

Commission response

As noted in the commission's legislative report pursuant to SB 408 (the result of Project Number 32460), the commission will examine this section's requirements in a separate rulemaking proceeding following the 80th legislative session (2007).

Comments on §26.80, Annual Report on Historically Underutilized Businesses

JSI recommended the repeal of this section, or alternately the consolidation of this reporting requirement with that in §26.85, relating to Workforce Diversity, pursuant to the commission's discussion in Project Number 32460.

Commission response

The commission notes that in its evaluation of this section for the legislative report, produced as a result of Project Number 32460, it recommended the 80th legislature review the PURA requirements. Depending upon the legislature's action, the commission may consider a separate rulemaking to either implement statutory changes or consolidate and revise reporting requirements.

Comments on §26.81, Service Quality Reports

JSI and TTA recommended the commission repeal this section, stating that the commission has not developed a uniform reporting requirement and that §26.54(c) contains a better reporting requirement.

Commission response

The commission is not persuaded that this section should be repealed. The information collected in these reports is used to evaluate providers' service provisions and to address consumer complaints in exchanges that are regulated. Therefore, the commission will not eliminate these requirements.

Comments on §26.82, Construction Reports

JSI and TTA recommended, pursuant to the commission's conclusions in Project Number 32460, that this section be repealed to eliminate the reporting requirement.

Commission response

The commission intends to establish a separate rulemaking project to examine the repeal and revision of infrastructure reports pursuant to its evaluation in Project Number 32460. Therefore, the commission will not take action at this time.

Comments on §26.84, Annual Report of Affiliate Transactions of DCTUs

JSI and TTA recommended, pursuant to the commission's conclusions in Project Number 32460, that this section be repealed to eliminate the reporting requirement.

Commission response

The commission's current Project Number 33401 addresses financial reporting requirements contained in §§26.73, 26.77, 26.84 and 26.98 that were determined, in Project Number 32460, to be obsolete. Therefore, the commission will not address this issue in this proceeding.

Comments on §26.87, Infrastructure Reports

JSI and TTA recommended, pursuant to the commission's conclusions in Project Number 32460, that this section be repealed to eliminate the reporting requirement.

Commission response

The commission intends to establish a separate rulemaking project to examine the repeal and revision of infrastructure reports that were evaluated in Project Number 32460. Therefore, the commission will not take action at this time.

Comments on §26.88, Traffic Usage Studies

AT&T, JSI, and TSTCI recommended this section be repealed because the Federal Communications Commission (FCC) froze interstate traffic factors and intrastate factors in 2001, making the reporting requirement obsolete.

Commission response

The commission agrees that this section is obsolete, because the original reasons for collecting the traffic usage data no longer exist and because the telecommunications traffic composition has changed dramatically since the time this section was adopted. The commission will initiate a separate rulemaking proceeding to accomplish this repeal.

Comments on §26.89, Information Regarding Rates and Services of Nondominant Carriers

JSI and TTA recommended amendment of this section, stating that because non-dominant carriers already update information pursuant to subsection (a), the requirement in subsection (b), to report annually regarding any changes, is not necessary.

Verizon re-stated its position regarding the legislative review of PURA §52.103(b).

Commission response

The commission believes that the annual filings serve a useful purpose by consolidating provider information for the public record. Therefore, the commission will not take the requested action.

The commission will not act upon Verizon's recommendation because statutory changes have not occurred.

Comments on §26.98, Cost Allocation Manual

TTA recommended the repeal of this section pursuant to the commission's conclusion, in Project Number 32460, that the report is no longer necessary in competitive markets.

Commission response

Project Number 33401 currently addresses the financial reporting requirements contained in §§26.73, 26.77, 26.84 and 26.98. Therefore, the commission will not address this issue in this proceeding.

Subchapter E, Certification

Comments on §26.101, Certification Criteria

AT&T, JSI and TTA recommended amending this section. JSI and TTA recommended the elimination of subsection (b)(2)(D), referencing §26.89 pursuant to the commission's conclusion in Project Number 32460. AT&T requested the addition of procedures for service area boundary changes and a process for filing applications with affected carriers. AT&T also noted that several subsections appear to date back to 1975 and should be reconsidered, such as subsection (e), regarding application forms. AT&T also referred the commission to its comments in Project Number 29077, Rulemaking Regarding P.U.C. Substantive Rules, Chapter 26 Subchapter E Commission response

The commission notes that Project Number 33401 is addressing the repeal and revision of financial reporting requirements. Therefore action pertaining to cross references is premature at this time. The commission will not act upon the recommendations of parties regarding the cross reference in subsection (b)(2)(D) until Project Number 33401 has concluded.

Project Number 29077 will address the issues raised by AT&T as well as matters of cross reference correction.

Comments on §26.102, Registration of Pay Telephone Service Providers

JSI, TTA and TSTCI recommended amendment of this section to allow Pay Telephone Service (PTS) providers to submit changes in registration information within 30 days of the change's occurrence and eliminate the requirement in subsection (d) for an annual filing or registration even when no change has occurred.

Commission response

The PTS providers' annual reports provide a valuable consolidated public record. Therefore the commission will not eliminate the requirement.

Comments on §26.107, Registration of Interexchange Carriers, Prepaid Calling Services Companies, and Other Nondominant Telecommunications Carriers

JSI and TTA recommended the elimination of the requirement in subsection (d) for annual notification even when no change has occurred. Both parties noted that providers already keep information current pursuant to subsection (c).

Commission response

The commission again notes the usefulness of the consolidated annual record provided by the reports. Therefore, the commission will not eliminate this requirement at this time.

Comments on §26.109, Standards for Granting Certificates of Operating Authority (COAs)

AT&T recommended that this section be amended with an eye to safeguards for preventing applicants from failing to disclose affiliate relationships and situations where the applicant is an "alter ego" or principal of another carrier. AT&T suggested that the safeguards should be more stringent financial and liquidity prerequisites, and deposits and bonding requirements, and the commission should examine the procedures of other states. AT&T also recommended that the voluminous information for applicants of public utilities such as AT&T (§26.113) be eliminated. AT&T also suggested revision of the commission's amendment form for COA and SPCOA holders so that it more closely matches the CCN form used by the commission. AT&T again referred the commission to its comments in Project Number 29077, filed on January 12, 2004.

JSI and TTA recommended elimination of the affidavit requirement in subsection (f)(1), stating that it is not necessary. TTA also noted that the commission has indicated it does not want to receive the subsection (f)(1) affidavits. Because many small competitive carriers take more than 12 months to initiate customer service, the parties recommended that the language in subsection (g)(1) and (3) be updated to reflect the annual reporting format on the commission's website instead of the necessity for a paper filing.

Commission response

Project Number 29077 will address the parties' concerns.

Comments on §26.111, Standards for Granting Service Provider Certificates of Operating Authority (SPCOAs)

JSI and TTA recommended that this section be amended to mirror the changes recommended in §26.109, with regard to elimination of affidavit requirements and reflect annual reporting format available on the commission's website.

Commission response

Project Number 29077 will address this issue.

Comments on §26.113, Amendment of Certificate of Operating Authority (COA) or Service Provider Certificates of Operating Authority (SPCOAs)

TTA recommended amendment to include a reference to the commission's prescribed forms for certificate amendments, available at the commission's website.

Commission response

The commission recognizes the value of this recommendation and will address the addition of the website references in a separate proceeding, if it is not accomplished in Project Number 29077.

Subchapter F, Regulation of Telecommunications Service

Comments on §26.121, Privacy Issues

JSI and TTA recommended amendments to remove Chapter 23 citations and replace, where appropriate, with Chapter 26 citations.

Verizon again recommended amendment to eliminate application of this section to business customers. Again, Verizon argued that this is consistent with the reduction of business regulation and that PURA §51.001(a), the degree of competition for business services and the effectiveness of market forces indicate that regulations related to business customers are no longer necessary.

Commission response

The commission will include this section in a separate rulemaking project for the purpose of addressing inappropriate cross references.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.122, Customer Proprietary Network Information (CPNI)

Embarq recommended the repeal of this section, noting that PURA Chapter 62, Subchapter B, was repealed in SB 5 in 2005.

Verizon again recommended the elimination of the section's application to business customers, arguing, as before, that the reduction of business regulation, the impact of PURA §51.001(a), the degree of competition for business services and the effectiveness of market forces indicate that regulations related to business customers are no longer necessary.

Commission response

The commission agrees with Embarq's reasoning and will include this section in a separate rulemaking project for the purpose of repealing obsolete sections.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.123, Caller Identification Services

JSI, TTA and TSTCI recommended the elimination of the requirement in subsection (b)(3) and (5) to report to the Caller ID Consumer Education Panel. The parties noted that PURA §55.108 expired on September 1, 1999. The same parties also recommended the elimination of the requirement in subsection (b)(5)(E) to provide existing and future Caller ID information to the Commission and each panel member. The parties noted that the information related to Caller ID is provided to customers at the time of service initiation and in local directories, and argued it is not necessary to provide additional notice. Further, the parties argued that any Caller ID blocking failures should be reported only to the customers affected.

TSTCI noted that PURA §55.108 needs to be updated and Verizon noted that legislative action is required to amend PURA Chapter 55, Subchapter E.

Commission response

The commission will initiate a separate rulemaking proceeding to address the removal of references to the Caller ID Consumer Education Panel as recommended by JSI, TTA and TSTCI. However, the commission is not persuaded by the parties' arguments regarding annual notice to consumers. Customers are saturated with information at the time of service initiation and directories are not always available; therefore, additional notice is prudent. The commission also believes it should continue to be notified when Caller ID blocking failures occur, in addition to any customers affected, in order to keep an accurate overview of technical problems.

The commission will not act upon TSTCI's or Verizon's recommendations, because statutory changes have not occurred.

Comments on §26.124, Pay-Per-Call Information Services Call Blocking

Verizon again recommended the elimination of this section's application to business customers.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.125, Automatic Dialing Announcing Devices

TTA recommended this section be amended and stated that it believes this requires changes to PURA §55.130 to reflect legislative changes to the Business and Commerce Code. TTA also argued that annual renewals should not be required of ADAD providers or, at a minimum, this renewal requirement should be changed to every five years.

Commission response

The commission believes that annual renewals serve a useful purpose by updating and consolidating the commission's public records. However, the current section does not provide for third-party ownerships, a common occurrence. Therefore, the commission will initiate a separate rulemaking to address the issue of third party ownership.

Comments on §26.126, Telephone Solicitation

AT&T, JSI, TSTCI and TTA recommended the repeal of this section. JSI advised that the Legislature repealed PURA Chapter 55 Subchapter G in 2001 and stated that the requirements of this rule have been met through changes to the Business and Commerce Code--Texas Telemarketing Disclosure and Privacy Act. AT&T and TSTCI noted that the repeal of PURA §55.151 and replacement with Texas No-Call Legislation, reflected in §26.37, address the concerns and requirements of this section.

Commission response

The commission will include this section in its rulemaking proceeding for repealing obsolete sections.

Comments on §26.128, Telephone Directories

JSI, TTA and TSTCI recommended the amendment of this section. They argued for the deletion of the requirement to publish long distance rate samples in subsection (e)(5), stating that these rates fluctuate too much in the current market. They also recommended the deletion of all references to the General Services Commission (GSC) and State of Texas Telephone Directory because neither exists today. In addition, JSI argued that the absence of the GSC and the state directory means that there is no longer a point of contact for providers to acquire state government listings; therefore, JSI recommended a rulemaking be initiated to gather accurate government listings contacts and re-define the directory process. TSTCI noted that the requirements are too vague (listing state public services for example) and that meeting the formatting requirements of §26.128(b)(4) annually is very difficult for small carriers.

Commission response

The commission generally agrees with the arguments of the parties and will initiate a rulemaking proceeding to address these issues.

Comments on §26.130, Selection of Telecommunications Utilities

Embarq argued that this section should be amended to allow customers to freeze their local service providers, as allowed under current FCC regulations. Embarq noted that such freezes are valuable anti-slamming tools.

AT&T, JSI, TSTCI and TTA recommended that subsection (g)(3) be revised to advise customers to contact their authorized carrier in case of slamming, not the unauthorized carrier as it now appears. TSTCI stated that this error in language occurred during revisions adopted in Project Number 28324, P.U.C. Rulemaking Proceeding to Amend P.U.C. Substantive Rules §26.32 and §26.130.

Verizon again argued that legislative action is required to amend PURA §64.004 to remove the application of these obligations for business customers.

Commission response

The commission will initiate a separate rulemaking proceeding in which it will correct the error in subsection (g)(3) noted by the parties in this proceeding.

Embarq's comments raise an issue that is too important to address in this project because of its implications for the developing competitive market. Therefore the commission will not act upon Embarq's recommendation at this time.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Subchapter G, Advanced Services

Comments on §26.141, Distance Learning, Information Sharing Programs, and Interactive Multimedia Communications

JSI, TTA and TSTCI recommended the commission eliminate the reporting requirement in subsection (h), pursuant to the commission's conclusions in Project Number 32460. Parties also recommended elimination of all Chapter 23 citations. TTA and TSTCI noted that Project Number 31925, Commission Review and Evaluation of Distance Learning Discounts and Private Network Services for Certain Entities, related to Distance Learning, may accomplish these amendments.

Commission response

Project Number 31925 did not affect subsection (h) of this section. However, as noted in the legislative report filed pursuant to SB 408, the commission has determined that a rulemaking project to evaluate the elimination of the annual report is warranted, and the project will be initiated later.

Comments on §26.142, Integrated Services Digital Network (ISDN)

AT&T, JSI and TTA recommended this section be repealed, stating ISDN has been surpassed by other technologies since 1999 and §26.143, regarding advanced services in rural areas, is better suited to this purpose. AT&T also noted that PURA §55.014(c) and §26.143 require urban carriers to provide comparable services in rural areas on a bona fide request basis.

TSTCI recommended an amendment to this section to make ISDN optional instead of mandatory.

Verizon again argued for legislative action to amend PURA §58.203 to eliminate the requirement for business customers.

Commission response

The commission agrees that the technological changes of the last five years and the existence of §26.143 indicate a re-evaluation is due. However, the commission does not believe that the section should be repealed without assurances that all Texas incumbents are providing high speed internet access to their customers via digital subscriber line service in lieu of ISDN. All of the state's incumbent providers receive Texas Universal Service Fund support for their networks with the purpose of providing customers with basic services. The current marketplace requires the availability of internet access, and the commission encourages the deployment of advanced services.

Comments on §26.143, Provision of Advanced Services in Rural Areas

Verizon argued for legislative action to amend PURA §55.014 for the removal of this section's application to business customers.

Commission response

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Subchapter I, Alternative Regulation

Comments on §26.171, Small Incumbent Local Exchange Company Regulatory Flexibility

JSI, TTA and TSTCI stated that legislative action is required with regard to PURA §53.301 to accomplish the streamlining of effective dates and notice requirements so that they parallel those allowed for informational filings in other sections of the rules. TSTCI also noted that partially deregulated cooperatives are excluded in this section and argued that PURA §53.351(a) specifically allows the same regulatory flexibility to the partially deregulated cooperatives.

Commission response

The commission will not act upon these recommendations because statutory changes have not occurred.

Comments on §26.175, Reclassification of Telecommunications Services for Electric Incumbent Local Exchange Companies (ILECs)

Verizon again argued for legislative review of PURA §58.024 to remove the application of this section to business services.

Commission response

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Subchapter J, Costs, Rates and Tariffs

Comments on §26.202, Adjustment for House Bill 11, Acts 72nd Legislature, First Called Special Session

JSI and TSTCI recommended the repeal of this section but noted that such action would require legislative review and the amendment or repeal of PURA §53.202. Parties argued that 15 years has passed since House Bill (HB) 11's passage in 1991 and the original intention of the legislation, regarding pre-HB 11 and post-HB 11 tax calculations, has been fulfilled. The parties believed that the franchise tax changes enacted in 2005 through HB 3 should now eliminate the need for this rule. TSTCI also noted that it takes roughly two years to finalize the HB 11 tax adjustments for a given year and the filing requirements are disproportionate to the small amount of revenue for small providers.

Commission response

The commission will not act upon this recommendation, because statutory changes have not occurred.

Comments on §26.207, Form and Filing of Tariffs

Embarq recommended the elimination of paper copies of tariffs and noted that this will require amendment of the commission's procedural rules as well. Embarq argued that four of the 18 states in which it files tariffs no longer require paper copies and that the elimination of such copies is more cost effective for providers and commissions.

AT&T and TTA recommended a revision to subsection (h) to allow customers and the public to review all tariffs online.

JSI recommended an amendment to subsection (i) to state that the effective dates are not applicable to informational notices filed, arguing that this was consistent with other rules.

TTA recommended amendments to the public notice requirements in subsections (c) and (e), the removal of references to §26.212, which has been repealed, and amendments to subsection (i) to include Chapter 65 companies and appropriate consideration of one-day and ten-day filings.

Finally, Verizon again argued that the application of this section to business customers should be eliminated consistent with the reduction of regulation, competition and the effectiveness of market forces.

Commission response

The commission is persuaded by the arguments of the parties that this section should be reviewed for appropriate revisions as a result of changes that have occurred since its last publication. Therefore, the commission will initiate a rulemaking for that purpose separate from this project. The commission notes that the requirements applicable to ten-day and one-day informational filings are addressed in P.U.C. Substantive Rule §§26.224 - 26.230.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.208, General Tariff Provisions

JSI, TTA and TSTCI recommended this section be amended, stating that regulations regarding service withdrawals are unwarranted in the current competitive market. They argued that the language in subsection (h), requiring docketing, should be eliminated or, as an alternative, withdrawal of service should be allowed with the filing of informational notices effective in either one or ten days.

Verizon argued that the section should not apply to business customers.

Commission response

The commission believes that the current provisions regarding the withdrawal of services serve a useful purpose. The commission notes that these provisions apply only to the incumbent telecommunications providers and that they insure that adequate notice is provided to customers and that the commission is aware of the impact of the withdrawal upon the company's revenues and upon consumers. Therefore, the commission will not take the requested action.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.209, New and Experimental Services

JSI and TTA recommended the deletion of subsection (g), requiring reporting of new and experimental service revenues, arguing that this constitutes a burdensome and unnecessary obligation that hinders providers' willingness to offer the services.

Verizon argued again that the sections application to business customers should be eliminated.

Commission response

The commission uses the information gathered to gauge the impact of the new and experimental services introduced and therefore will not take the requested action.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.210, Promotional Rates for Local Exchange Company Services

JSI and TTA recommended the deletion of subsection (h), requiring reporting of promotional services' revenues, demand, expenses and investment, and argued that the obligation is burdensome and unjustified for temporary promotional offerings.

Commission response

The commission appreciates JSI and TTA's reasoning regarding the reporting of promotional services. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.211, Rate-Setting Flexibility for Services Subject to Significant Competitive Challenges

Verizon argued that the application of this section to business customers should be eliminated.

Commission response

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.214, Long Run Incremental Cost (LRIC) Methodology for Services Provided by Certain Incumbent Local Exchange Carriers (ILECs)

AT&T recommended that this section be amended to modify or eliminate the procedures for the filing and approval of cost studies for basic network functions (BNFs). AT&T argued that the need for these studies is obsolete in the current competitive and transitioning market. AT&T noted that the original requirement drafted in 1992, and now in §26.215, was created to provide 3000 plus BNFs to be used for retail tariff filings but that these BNFs were never used due to the conflict between their component parts and the company's rate structure. AT&T proposed keeping LRIC on an as needed basis and removing the BNF and service cost studies from the rule.

Commission response

The changes recommended by AT&T are inappropriate for the limited scope of this proceeding and would require an extensive review in a separate rulemaking. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.224, Requirements Applicable to Basic Network Services for Chapter 58 Electing Companies

AT&T advised that this section must be amended because the rate cap referenced in the section has expired for most, if not all, of the electing companies (on September 1, 2005) and this affects several subsections of the rule.

Verizon again argued that this section should not apply to business customers.

Commission response

AT&T is correct; this section needs to be re-evaluated in a separate proceeding, which the commission will undertake at a later date.

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.225, Requirements Applicable to Nonbasic Services for Chapter 58 Electing Companies

Verizon again recommended the elimination of this section's application to business customers and noted that legislative action to amend PURA §58.002 is required.

Commission response

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.226, Requirements Applicable to Pricing Flexibility for Chapter 58 Electing Companies

Verizon again recommended the elimination of this section's application to business customers and noted that legislative action to amend PURA §58.002 is required.

Commission response

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.227, Procedures Applicable to Nonbasic Services and Pricing Flexibility for Basic and Nonbasic Services for Chapter 58 Electing Companies

Verizon again recommended the elimination of this section's application to business customers and noted that legislative action to amend PURA §58.002 is required.

Commission response

The commission will not act upon Verizon's recommendation, because statutory changes have not occurred.

Comments on §26.228, Requirements Applicable to Chapter 52 Companies

JSI, TTA and TSTCI argued that legislative action is required regarding PURA §52.0584(a) to lessen notification requirements for new services. JSI questioned the need to notify COAs within the ILEC territory, stating that the commission does not maintain a public database of COA and SPCOA holders and areas they serve and competitive carriers obtain certification for the entire state. Therefore, JSI argued that using the outdated information results in nearly 505 of such notices being returned as undeliverable. Further, JSI does not believe that COAs typically monitor small ILEC informational filings.

Commission response

Legislative review of PURA §52.0584(a) has not yet occurred. However, the commission has recently updated its public database to reflect the actual service areas of the state's COA and SPCOA holders. The updated database, available online as of December, 2006, will be of assistance in directing notice to the appropriate competitive carriers. Therefore, the commission will take no further action regarding the parties' recommendations.

Subchapter L, Wholesale Market Provisions

Comments on §26.271, Expanded Interconnection

AT&T recommended this section be amended or repealed. AT&T argued that sections §26.271, related to Expanded Interconnection, §26.272, related to Interconnection, and §26.276, related to Unbundling, should be re-evaluated in light of recent FCC orders and rules to insure consistency with federal limitations on the unbundling obligations of ILECs.

Commission response

The changes recommended by AT&T are inappropriate for the limited scope of this proceeding and would require an extensive review in a separate rulemaking. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.272, Interconnection

AT&T again recommended this section be amended or repealed. AT&T argued that sections §26.271, related to Expanded Interconnection, §26.272, related to Interconnection, and §26.276, related to Unbundling, should be re-evaluated in light of recent FCC orders and rules to insure consistency with federal limitations on the unbundling obligations of ILECs.

Embarq recommended the amendment of subsection (d)(4), stating that it does not clearly specify that reciprocal compensation is tied to jurisdiction based upon physical end points of called and calling parties as articulated in the commission's decision in Docket Number 28821 (the Mega Arbitration) and Docket Number 24015 (the Foreign Exchange Arbitration).

Commission response

The changes recommended by AT&T and Embarq are inappropriate for the limited scope of this proceeding and would require a review in a separate rulemaking. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.274, Imputation

AT&T argued that this section must be updated. AT&T reasoned that imputation, originally adopted pursuant to PURA 95, must now reflect the availability of resale services at wholesale rates and the more recent deregulation provisions in PURA Chapter 65.

TTA recommended this section be amended to clarify the application of imputation; when it is necessary and to which companies it applies. TTA also argued that the section's application to PURA Chapter 65 companies should be eliminated entirely.

Commission response

The changes recommended by AT&T and TTA are inappropriate for the limited scope of this proceeding and would require a review in a separate rulemaking. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.275, IntraLATA Equal Access

Embarq, JSI, TSTCI and TTA recommended that this section be repealed. All of the parties stated that this section expired on December 31, 2002 (see subsection (i)) and that it is no longer applicable. The parties noted that IntraLATA dialing parity is already required under federal toll dialing parity rules (47 C.F.R. 51.209).

Commission response

The commission concurs and will repeal this section in a separate rulemaking proceeding.

Comments on §26.276, Unbundling

AT&T recommended this section be amended or repealed. AT&T argued that §26.271, related to Expanded Interconnection, §26.272, related to Interconnection, and §26.276, related to Unbundling, should be re-evaluated in light of recent FCC orders and rules to insure consistency with federal limitations on the unbundling obligations of ILECs.

Embarq noted that this section reflects the FCC's Open Network Architecture and LRIC and has been moribund since the unbundling developed in FTA §251 and §252. Embarq also noted that this section, and Subchapter L generally, has many technically obsolete, inaccurate or incomplete cross references.

TTA also argued that the section should not apply to Chapter 65 electing providers.

Commission response

The changes recommended by AT&T, Embarq and TTA are inappropriate for the limited scope of this proceeding and would require a review in a separate rulemaking. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.283, Infrastructure Sharing

TTA recommended this section be amended to exclude its application to Chapter 65 electing companies.

Commission response

The commission does not believe that the change requested by TTA is appropriate at this time, while competitive markets are still developing, and will not act upon this recommendation.

Subchapter O, Numbering

Comments on §26.375, Reclamation of Codes and Thousand-Blocks and Petitions for Extension of Code and Thousands-Block Activation

JSI and TTA recommended the elimination of the subsection (g)(1) reporting obligations because they are burdensome and unnecessary. The parties noted that the commission may obtain code holder information from www.nanpa.com or www.nationalpooling.com when needed.

Commission response

Although the commission agrees that the information requested in the formal filing is a snapshot of that available on the mentioned websites, the commission does not agree with the reasoning of the parties that the obligation to make a filing should be eliminated. The commission notes that public filings provide a historical record and inform commission staff so that appropriate action may be taken. Therefore, the commission will not make the requested change.

Subchapter P, Texas Universal Service Fund

Comments on §26.403, Texas High Cost Universal Service Plan (THCUSP)

JSI and TTA recommended the elimination of the annual reporting requirement obligating ETPs to notify the TUSF administrator that they are qualified for THCUSP (see subsection (f)(2)). The parties argued that the monthly report provided by the carriers pursuant to subsection (f)(1) and the annual affidavits required by PURA §56.0303 and §26.417(i) should be sufficient.

Commission response

This report appropriately addresses the evaluation of eligibility for THCUSP support. Therefore, the commission will take no action.

Comments on §26.404, Small and Rural Incumbent Local Exchange Company Universal Service Plan

JSI and TTA recommended the elimination of the requirement in subsection (g)(2) for an annual report to the TUSF administrator regarding eligibility to participate in the small and rural ILEC USF Plan. Again, the parties argued that the monthly report filed pursuant to subsection (g)(1) and annual reports filed pursuant to PURA §56.0303 and §26.417(i) should be sufficient.

Commission response

This report appropriately addresses the evaluation of eligibility for THCUSP support. Therefore, the commission will take no action.

Comments on §26.417, Designation as Eligible Telecommunications Providers to Receive Texas Universal Service Funds (TUSF)

JSI, TTA and TSTCI reasoned that this section should be amended because the current effective dates in the rule make docketed proceedings difficult due to expedited timelines. The parties argued that recent contested ETP cases have seen parties file their testimony prior to the establishment of an agreed procedural schedule from the State office of Administrative Hearings (SOAH). This strategy has made it difficult for SOAH, the commission's staff and the other parties to conclude the case and produce a Proposal for Decision for the commission's final determination in time to meet the Commissioners' Open Meeting schedule and the effective date deadline. JSI recommended extending the effective date of docketed ETP designations to a date 180 days after the applicant has filed direct testimony and exhibits or 155 days after the proposed effective date, whichever is later.

DTS replied that the current section allows an unopposed application to be approved in approximately 65 days. If the ETP application is contested that period increases to 185 days after the initial filing or 155 days after the applicant's testimony is filed, whichever is later. DTS argued that this schedule is more than adequate, particularly because the applicant carries the burden of proof. DTS further reasoned that the change suggested by the parties erects additional barriers to companies providing competitive alternatives by delaying market entry and adding legal expenses, which favor incumbents.

Commission response

The changes recommended by JSI, TTA and TSTCI are inappropriate for the limited scope of this proceeding and would require review in a separate rulemaking. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.418, Designation of Common Carriers as Eligible Telecommunications Carriers to Receive Federal Universal Service Funds

JSI, TTA and TSTCI reiterated their arguments related to the current effective dates in this section, which mirror those in §26.417. JSI again recommended extending the effective date of docketed ETP designations to a date 180 days after the applicant has filed direct testimony and exhibits or 155 days after the proposed effective date, whichever is later.

Commission response

The changes recommended by JSI, TTA and TSTCI are inappropriate for the limited scope of this proceeding and would require review in a separate rulemaking. The commission may consider such a review at a later date but will not act at this time.

Comments on §26.420, Administration of Texas Universal Service Fund

JSI and TTA recommended the elimination of all references to Tel-Assistance, a program that has been grandfathered, and an amendment to add reference to the Audio Newspaper Assistance Program where appropriate.

Commission response

The commission agrees that the Tel-Assistance references must be addressed and will undertake a separate rulemaking proceeding to correct inappropriate and obsolete references and to add the appropriate references for the Audio Newspaper Assistance Program.

Subchapter Q, 9-1-1 Issues

Comments on §26.433, Roles and Responsibilities of 9-1-1 Service Providers AT&T recommended the section be amended to reflect technological changes affecting the provisions of 911 services.

Commission response

A separate rulemaking would be required to thoroughly examine the effect of technological changes in the provision of 911 services. The commission is currently engaged in discussions with the Commission on State Emergency Communications (CSEC) and will consider a separate rulemaking at a later date to address this issue.

Subchapter R, Provisions Relating to Municipal Regulation and Rights-of-Way Management

Comments on §26.467, Rates, Allocation, Compensation, Adjustments, and Reporting

JSI and TTA recommended that this section be revised, pursuant to the commission's conclusions in Project Number 32460, to eliminate the quarterly reporting requirement for providers with zero access line counts.

Commission response

The commission believes that the change requested by JSI and TTA may be accomplished by making appropriate changes in the commission's web-based Municipal Access Reporting System (MARS) and, if necessary, in a rulemaking proceeding and will take appropriate action.

Comments on §26.468, Procedures for Standardized Access Line Reports and Enforcement Relating to Quarterly Reporting

JSI and TTA recommended that this section be revised, pursuant to the commission's conclusions in Project Number 32460, to eliminate the quarterly renewal requirement for providers with an exempt status (see subsection (e)(2)).

Commission response

As in the case with the requirement of §26.467, the commission believes that the change requested by JSI and TTA may be accomplished by making appropriate changes in the commission's web-based Municipal Access Reporting System (MARS). The commission will review this concern and make appropriate changes to the MARS database if necessary.

Additional results of the commission's rule review

In reviewing the rules, the commission determined that there are rule sections that need non-substantive amendments, e.g., to update references from rules in Chapter 23, now repealed, to the current rules in Chapter 26; to correct cross-references that have changed as a result of rule amendments; remove language which has become obsolete due to the passage of time; to correct typographical errors, etc. In addition, some rules may require more substantive amendments to clarify policy and procedures. Separate projects will be initiated to implement additional changes as needed.

Rules in Chapter 26 in need of repeal

Section 26.2, which was created as an interim section for cross-referencing purposes at the time that the commission transitioned from chapter 23 to chapter 26, is obsolete and may be repealed. Section 26.82 contains a reporting requirement that has been determined to be obsolete and may therefore be eliminated. Section 26.88 is also obsolete; changes in traffic usage and FCC regulations have eliminated its usefulness, and it may be repealed. Section 26.122 is also obsolete due to the repeal of PURA Chapter 62, Subchapter B, and may also be repealed. Section 26.126 is also obsolete due to statutory changes and the repeal of PURA Chapter 55, Subchapter G, and may also be repealed. Finally, §26.275 expired on December 31, 2002 and may also be repealed.

All of the above repeals will be proposed in a consolidated rulemaking to be undertaken at the close of this proceeding.

Rules in Chapter 26 in need of administrative corrections

Section 26.121 and §26.141 reference Chapter 23 and require correction, and §26.101 contains an obsolete cross-reference that must be corrected. The commission will propose these corrections in a separate consolidated rulemaking at the close of this proceeding,

Section 26.71 and §26.101 also contain cross references that may be obsolete at the conclusion of Project Number 33401. At that project's conclusion, if the cross-references in question are incorrect, a separate rulemaking will be proposed to correct those cross-references.

Section 26.130 must be amended to reflect the appropriate procedure for reports of slamming.

Rules in Chapter 26 that require separate rulemaking proceedings

A number of the sections require separate rulemakings to thoroughly examine the contents of the requirements and the impact of technological, competitive and regulatory changes that have occurred since their adoption. The commission will initiate separate rulemaking proceedings for §§26.5, 26.51, 26.52, 26.54, 26.77, 26.78, 26.80, 26.82, 26.87, 26.98, 26.125, 26.128, 26.130, 26.141, 26.207, 26.224 and 26.420.

The commission readopts Chapter 26 pursuant to the Public Utility Regulatory Act (PURA), Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement 2006), which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; and Texas Government Code §2001.039, which requires each state agency to review and readopt its rules every four years.

Cross Reference to Statutes: Texas Utilities Code Annotated, Title II, Public Utility Regulatory Act, Subtitles A and C; and Title IV, Chapter 162, Chapter 181, Subchapter E, Chapter 182 and Chapter 183.

SUBCHAPTER A. GENERAL PROVISIONS

§26.1. Purpose and Scope of Rules.

§26.2. Cross-Reference Transition Provision.

§26.3. Severability Clause.

§26.4. Statement of Nondiscrimination.

§26.5. Definitions.

§26.6. Cost of Copies of Public Information.

§26.7. Local Exchange Company Assessment.

§26.9. Classification System for Violations of Statutes, Rules, and Orders Applicable to Telecommunications Service Providers.

SUBCHAPTER B. CUSTOMER SERVICE AND PROTECTION

§26.21. General Provisions of Customer Service and Protection Rules.

§26.22. Request for Service.

§26.23. Refusal of Service.

§26.24. Credit Requirements and Deposits.

§26.25. Issuance and Format of Bills.

§26.26. Foreign Language Requirements.

§26.27. Bill Payment and Adjustments.

§26.28. Suspension or Disconnection of Service.

§26.29. Prepaid Local Telephone Service (PLTS).

§26.30. Complaints.

§26.31. Disclosures to Applicants and Customers.

§26.32. Protection Against Unauthorized Billing Charges ("Cramming").

§26.34. Telephone Prepaid Calling Services.

§26.37. Texas No-Call List.

SUBCHAPTER C. QUALITY OF SERVICE

§26.51. Continuity of Service.

§26.52. Emergency Operations.

§26.53. Inspections and Tests.

§26.54. Service Objectives and Performance Benchmarks.

§26.55. Monitoring of Service.

SUBCHAPTER D. RECORDS, REPORTS, AND OTHER REQUIRED INFORMATION

§26.71. General Procedures, Requirements and Penalties.

§26.72. Uniform System of Accounts.

§26.73. Financial and Operating Reports.

§26.74. Reports on Sale of Property and Mergers.

§26.75. Reports on Sale of 50% or More of Stock.

§26.76. Gross Receipts Assessment Report.

§26.77. Payments, Compensation, and Other Expenditures.

§26.78. State Agency Utility Account Information.

§26.79. Equal Opportunity Reports.

§26.80. Annual Report on Historically Underutilized Businesses.

§26.81. Service Quality Reports.

§26.82. Construction Reports.

§26.84. Annual Reporting of Affiliate Transactions of DCTUs.

§26.85. Report of Workforce Diversity and Other Business Practices.

§26.87. Infrastructure Reports.

§26.88. Traffic Usage Studies.

§26.89. Information Regarding Rates and Services of Nondominant Carriers.

§26.98. Cost Allocation Manual.

SUBCHAPTER E. CERTIFICATION, LICENSING AND REGISTRATION

§26.101. Certification Criteria.

§26.102. Registration of Pay Telephone Service Providers.

§26.103. Affiliate Guidelines for Certificates of Convenience and Necessity Holders.

§26.107. Registration of Interexchange Carriers, Prepaid Calling Services Companies, and Other Nondominant Telecommunications Carriers.

§26.109. Standards for Granting of Certificates of Operating Authority (COAs)

§26.111. Standards for Granting Service Provider Certificates of Operating Authority (SPCOAs).

§26.113. Amendment of Certificate of Operating Authority (COA) or Service Provider Certificate of Operating Authority (SPCOA).

§26.114. Suspension or Revocation of Certificates of Operating Authority (COAs) and Service Provider Certificates of Operating Authority (SPCOAs).

SUBCHAPTER F. REGULATION OF TELECOMMUNICATIONS SERVICE.

§26.121. Privacy Issues.

§26.122. Customer Proprietary Network Information.

§26.123. Caller Identification Services.

§26.124. Pay-Per-Call Information Services Call Blocking.

§26.125. Automatic Dial Announcing Devices (ADAD).

§26.126. Telephone Solicitation.

§26.127. Abbreviated Dialing Codes.

§26.128. Telephone Directories.

§26.129. Standards for Access to Provide Telecommunications Services at Tenant Request.

§26.130. Selection of Telecommunications Utilities.

§26.131. Competitive Local Exchange Carrier (CLEC)-to-CLEC and CLEC-to-Incumbent Local Exchange Carrier (ILEC) Migration Guidelines.

§26.133. Business and Marketing Code of Conduct for Certificated Telecommunications Utilities (CTUs)

§26.134 Market Test to be Applied in Determining if Markets with Populations Less than 30,000 Should Remain Regulated on or After January 1, 2007.

SUBCHAPTER G. ADVANCED SERVICES

§26.141. Distance Learning, Information Sharing Programs, and Interactive Multimedia Communications.

§26.142. Integrated Services Digital Network (ISDN).

§26.143. Provision of Advanced Services in Rural Areas.

SUBCHAPTER I. ALTERNATIVE REGULATION

§26.171. Small Incumbent Local Exchange Company Regulatory Flexibility.

§26.172. Voting Procedures for Partial Deregulation or Reversal of Partial Deregulation of Telephone Cooperatives.

§26.175. Reclassification of Telecommunications Services for Electing Incumbent Local Exchange Companies (ILECs).

SUBCHAPTER J. COSTS, RATES AND TARIFFS

§26.201. Cost of Service.

§26.202. Adjustment for House Bill 11, Acts of 72nd Legislature, First Called Special Session 1991.

§26.203. Rate Policies for Small Local Exchange Companies (SLECs).

§26.205. Rates for Intrastate Access Services.

§26.206. Depreciation Rates.

§26.207. Form and Filing of Tariffs.

§26.208. General Tariff Procedures.

§26.209. New and Experimental Services.

§26.210. Promotional Rates for Local Exchange Company Services.

§26.211. Rate-Setting Flexibility for Services Subject to Significant Competitive Challenges.

§26.214. Long Run Incremental Cost (LRIC) Methodology for Services provided by Certain Incumbent Local Exchange Companies (ILECs).

§26.215. Long Run Incremental Cost Methodology for Dominant Certificated Telecommunications Utility (DCTU) Services.

§26.216. Educational Percentage Discount Rates (E-Rates).

§26.217. Administration of Extended Area Service (EAS) Requests.

§26.219. Administration of Expanded Local Calling Service Requests.

§26.221. Applications to Establish or Increase Expanded Local Calling Service Surcharges.

§26.223. Prohibition of Excessive COA/SPCOA Usage Sensitive Intrastate Switched Access Rates.

§26.224. Requirements Applicable to Basic Network Services for Chapter 58 Electing Companies.

§26.225. Requirements Applicable to Nonbasic Services For Chapter 58 Electing Companies.

§26.226. Requirements Applicable to Pricing Flexibility for Chapter 58 Electing Companies.

§26.227. Procedures Applicable to Nonbasic Services and Pricing Flexibility for Basic and Nonbasic Services for Chapter 58 Electing Companies.

§26.228. Requirements Applicable to Chapter 52 Companies.

§26.229. Requirements Applicable to Chapter 59 Electing Companies.

§26.230. Requirements Applicable to Chapter 65 One-day Informational Notice Filings.

SUBCHAPTER L. WHOLESALE MARKET PROVISIONS

§26.271. Expanded Interconnection.

§26.272. Interconnection.

§26.274. Imputation.

§26.275. IntraLATA Equal Access.

§26.276. Unbundling.

§26.283. Infrastructure Sharing.

SUBCHAPTER M. OPERATOR SERVICES.

§26.311. Information Relating to Operator Services.

§26.313. General Requirements Relating to Operator Services.

§26.315. Requirements for Dominant Certificated Telecommunications Utilities (DCTUs).

§26.317. Information to be Provided at the Telephone Set.

§26.319. Access to the Operator of a Local Exchange Company (LEC).

§26.321. 9-1-1 calls, "0-" calls, and End User Choice.

SUBCHAPTER N. PAY TELEPHONE SERVICE.

§26.341. General Information Relating to Pay Telephone Service (PTS).

§26.342. Pay Telephone Service Tariff Provisions.

§26.343. Responsibilities for Pay Telephone Service (PTS) of Certificated Telecommunications Utilities (CTUs) Holding Certificates of Convenience and Necessity (CCNs).

§26.344. Pay Telephone Service Requirements.

§26.345. Posting Requirements for Pay Telephone Service Providers.

§26.346. Rates and Charges for Pay Telephone Service.

§26.347. Fraud Protection for Pay Telephone Service.

SUBCHAPTER O. NUMBERING.

§26.375. Reclamation of Codes and Thousand-Blocks and Petitions for Extension of Code and Thousands-Block Activation.

SUBCHAPTER P. TEXAS UNIVERSAL SERVICE FUND.

§26.401. Texas Universal Service Fund (TUSF).

§26.403. Texas High Cost Universal Service Plan (THCUSP).

§26.404. Small and Rural Incumbent Local Exchange Company (ILEC) Universal Service Plan.

§26.406. Implementation of the Public Utility Regulatory Act §56.025.

§26.408. Additional Financial Assistance (AFA).

§26.410. Universal Service Fund Reimbursement for Certain IntraLATA Service.

§26.412. Lifeline Service and Link Up Service Programs.

§26.414. Telecommunications Relay Service (TRS).

§26.415. Specialized Telecommunications Assistance Program (STAP).

§26.417. Designation as Eligible Telecommunications Providers to Receive Texas Universal Service Funds (TUSF).

§26.418. Designation of Common Carriers as Eligible Telecommunications Carriers to Receive Federal Universal Service Funds.

§26.420. Administration of Texas Universal Service Fund (TUSF).

§26.421. Designation of Eligible Telecommunications Providers to Provide Service to Uncertificated Areas.

§26.422. Subsequent Petitions for Service in Uncertificated Areas.

§26.423. High Cost Universal Service Plan for Uncertificated Areas where an Eligible Telecommunications Provider (ETP) Volunteers to Provide Basic Local Telecommunications Service.

§26.424. Audio Newspaper Assistance Program.

SUBCHAPTER Q. 9-1-1 ISSUES.

§26.431. Monitoring of Certain 911 Fees.

§26.433. Roles and Responsibilities of 9-1-1 Service Providers.

§26.435. Cost Recovery Methods for 9-1-1 Dedicated Transport.

SUBCHAPTER R. PROVISIONS RELATING TO MUNICIPAL REGULATION AND RIGHTS-OF-WAY MANAGEMENT.

§26.461. Access Line Categories.

§26.463. Calculation and Reporting of a Municipality's Base Amount.

§26.465. Methodology for Counting Access Lines and Reporting Requirements for Certificated Telecommunications Providers.

§26.467. Rates, Allocation, Compensation, Adjustments and Reporting.

§26.468. Procedure for Standardized Access Line Reports and Enforcement Relating to Quarterly Reporting.

§26.469. Municipal Authorized Review of a Certificated Telecommunication Provider's Business Records.

TRD-200700830

Adriana A. Gonzales

Rules Coordinator

Public Utility Commission of Texas

Filed: March 2, 2007