16 TAC §26.276
The Public Utility Commission of Texas (commission) proposes
new §26.276 relating to Unbundling. The proposed new section replaces
§23.99 of this title (relating to Unbundling). The proposed rule requires
incumbent local exchange companies to unbundle their network to the extent
ordered by the Federal Communications Commission (FCC) as required by Public
Utility Regulatory Act (PURA) §60.021. Project Number 17709 has been
assigned to this proceeding.
The Appropriations Act of 1997, House Bill 1, Article IX, §167 (Section
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 shall include, at a minimum,
an assessment by the agency as to whether the reason for adopting or readopting
the 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 §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 and 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 duplicative
sections of Chapter 23 will be proposed for repeal as each new section is
proposed for publication in the new chapter.
General changes to rule language:
The proposed new section reflects different section, subsection, and paragraph
designations due to the reorganization of the rules. Citations to the Public
Utility Regulatory Act have been updated to conform to the Texas Utilities
Code throughout the sections and citations to other sections of the commission's
rules have been updated to reflect the new section designations. Some text
has been proposed for deletion as unnecessary in the new section because the
dates and requirements in the text no longer apply due to the passage of time
and/or fulfillment of the requirements. The
Texas
Register
will publish this section as all new text. Persons who desire
a copy of the proposed new section as it reflects changes to the existing
section in Chapter 23 may obtain a redlined version from the commission's
Central Records under Project Number 17709.
Other changes specific to each section:
The definitions subsection in existing §23.99(c) has not been included
in proposed 26.276.The definitions have been moved to the general definitions
section, §26.5 of this title (relating to Definitions).
Subsection (f) is revised so that the language requiring incumbent local
exchange companies (ILECs) to designate unbundled components as basic network
services, discretionary services, or competitive services is consistent with
the classification of services in Chapter 58 of the Public Utility Regulatory
Act.
Ms. Bih-Jau Sheu, senior economist, Office of Regulatory Affairs, has determined
that for each year of the first five-year period the proposed section is in
effect there will be no fiscal implications for state or local government
as a result of enforcing or administering the section.
Ms. Sheu has determined that for each year of the first five years the
proposed section is in effect the public benefit anticipated as a result of
enforcing the section will be the ability of carriers to purchase only those
components of the local exchange company (LEC) network that they need to
compete with the local exchange carrier. The enhanced competition in telecommunications
markets should provide additional service choices to customers, increase incentives
for efficiency and lower prices, and facilitate new and innovative services.
The access to unbundled services and the resulting positive effect on competition
in telecommunications markets are expected to have a positive effect on small
and large businesses. There are no anticipated economic costs to persons who
are required to comply with the proposed rule because it ensures the recovery
of appropriate costs.
Ms. Sheu has also determined that for each year of the first five years
the proposed section is in effect there will be no impact on employment in
the geographic area affected by implementing the requirements of the section.
Comments on the proposed section (16 copies) may be submitted to the Filing
Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O.
Box 13326, Austin, Texas 78711-3326, within 30 days after publication. The
commission invites specific comments regarding the costs associated with,
and benefits that will be gained by, implementation of the proposed section.
The commission will consider the costs and benefits in deciding whether to
adopt the section. The commission also invites specific comments regarding
the §167 requirement as to whether the reason for adopting §23.99
continues to exist in the proposed new section. All comments should refer
to Project Number 17709 - proposed §26.276 relating to Unbundling.
This section is proposed under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998) (PURA), which
provides the Public Utility Commission with the authority to make and enforce
rules reasonably required in the exercise of its powers and jurisdiction;
and specifically, PURA §60.021, which requires at a minimum, an incumbent
local exchange company shall unbundle its network to the extent ordered by
the Federal Communications Commission.
Cross Index to Statutes: Public Utility Regulatory Act §14.002 and
§60.021
§26.276. Unbundling.
(a)
Purpose. The purpose of this section is to implement Public
Utility Regulatory Act (PURA) §60.021, which requires an incumbent local
exchange company (ILEC), at a minimum, to unbundle its network to the extent
ordered by the Federal Communications Commission (FCC).
(b)
Application.
(1)
The provisions of this section apply, as of its effective
date, to each ILEC that serves one million or more access lines.
(2)
The provisions of this section apply upon a bona
fide request to each ILEC that serves 31,000 or more access lines but fewer
than one million access lines.
(3)
The provisions of this section apply, after September
1, 1998, upon a bona fide request to each ILEC that serves fewer than 31,000
access lines.
(c)
Unbundling requirements.
(1)
Unbundling pursuant to current FCC requirements. Each
ILEC that is subject to this section shall unbundle as specified in subparagraphs
(A) and (B) of this paragraph. An ILEC with interstate tariffs in effect shall
unbundle its network/services under the same terms and conditions, except
for price, as it unbundles its interstate services, unless ordered otherwise
by the commission. The ILEC shall also not impose a charge or rate element
that is not included in its interstate tariffs for these unbundled rate elements.
Nothing herein precludes the commission from requiring further unbundling
of local exchange company services, including the services unbundled pursuant
to this paragraph.
(A)
The ILEC's network shall be unbundled to the extent ordered
by the FCC in compliance with its open network architecture requirements;
and
(B)
Signaling for tandem switching shall be unbundled to the
extent ordered by the FCC in compliance with CC Docket Number 91- 141, Third
Report and Order, In the Matter of Expanded Interconnection with Local Telephone
Company Facilities, Transport Phase II.
(2)
Unbundling pursuant to future FCC requirements.
An ILEC shall unbundle its network/services as defined in the term "unbundling"
in §26.5 of this title (relating to Definitions) for intrastate services
to the extent ordered, in the future, by the FCC for interstate services.
An ILEC with interstate tariffs in effect shall unbundle these services under
the same terms and conditions, except for price, as it unbundles its interstate
services, unless ordered otherwise by the commission. The ILEC shall also
not impose a charge or rate element that is not included in its interstate
tariffs for unbundling. Nothing herein precludes the commission from requiring
further unbundling of local exchange company services, including the services
unbundled pursuant to this paragraph.
(d)
Costing and pricing of services in compliance with this
section.
(1)
Cost standard. Services unbundled in compliance with this
section shall be subject to the following cost standard.
(A)
The cost standard for unbundled services shall be the
long run incremental costs (LRIC) of providing the service.
(B)
Any ILEC subject to §23.91 of this title (relating
to Long Run Incremental Cost Methodology for Dominant Certificated Telecommunications
Utility Services) shall file LRIC studies pursuant to that rule for unbundled
components specified in subsection (c)(1) of this section.
(C)
For any ILEC that is subject to §23.91 of this title,
the cost standard for unbundled services required under subsection (c)(2)
of this section shall be the long run incremental costs pursuant to §23.91
of this title.
(D)
The long run incremental cost standard shall not apply
if the ILEC proposes rates that are the same as the rates in effect for the
carrier's interstate provision of the same or equivalent unbundled service
or if the ILEC adopts rates of another ILEC pursuant to paragraph (2)(B) of
this subsection.
(2)
Pricing standard. Services unbundled in compliance
with this section shall be subject to the following pricing standard.
(A)
Any ILEC may propose rates, without cost justification,
that are at parity with the rates in effect for the carrier's interstate provision
of the same or equivalent unbundled service. The ILEC shall amend its intrastate
rates, terms and conditions to be consistent with subsequent revisions in
its interstate tariffs providing for unbundling pursuant to filing requirements
established in subsection (f)(5) of this section.
(B)
In addition to the provision in subparagraph (A) of this
paragraph, ILECs that are not subject to §23.91 of this title may adopt
the rates of another ILEC that are developed pursuant to the requirements
of this section.
(C)
If an ILEC proposes rates that are not at parity with
the rates in effect for the carrier's interstate provision of the same or
equivalent unbundled service or does not adopt the rates of another ILEC pursuant
to subparagraph (B) of this paragraph, the following requirements shall apply
to any service approved under this section:
(i)
Unless waived or modified by the presiding officer, the
service shall be offered in every exchange served by the ILEC, except exchanges
in which the ILEC's facilities do not have the technical capability to provide
the service.
(ii)
If the sum of the rates of the new unbundled components
is equal to the price of the original bundled service and if the ratio of
the rate of each unbundled component to its LRIC is the same for each unbundled
component, there shall be a rebuttable presumption that the rate of an unbundled
component is reasonable.
(iii)
The proposed rates and terms of the service shall not
be unreasonably preferential, prejudicial, or discriminatory, subsidized directly
or indirectly by regulated monopoly services, or predatory or anticompetitive.
(D)
Rates based upon the new LRIC cost studies required under
paragraph (1)(B) of this subsection shall be subject to the pricing rulemaking
referred to in §23.91(p) of this title to the same extent as any other
service offered by an ILEC subject to the pricing rule.
(e)
Basket assignment. An ILEC electing incentive regulation
under PURA Chapter 58 shall, in its compliance tariff filed pursuant to subsection
(f) of this section, include a proposal and rationale for designating the
unbundled components as basic network services, discretionary services, or
competitive services.
(f)
Filing requirements.
(1)
Initial filing to implement subsection (c)(1) of this
section in effect for ILECs serving one million or more access lines. An ILEC
serving one million or more access lines shall file initial tariff amendments
to implement the provisions of subsection (c)(1) of this section not later
than 60 days from the effective date of this section. The proposed effective
date of such filings shall be not later than 30 days after the filing date,
unless suspended. Tariff revisions filed pursuant to this subsection shall
not be combined in a single application with any other tariff revision.
(2)
Filings to comply with subsection (c)(2) of this
section for ILECs serving one million or more access lines. An ILEC serving
one million or more access lines shall file tariff amendments to implement
the provisions of subsection (c)(2) of this section, within 60 days of the
effective date of its interstate tariff providing for unbundling. The proposed
effective date of such filings shall be not later than 30 days after the filing
date, unless suspended. Tariff revisions filed pursuant to this subsection
shall not be combined in a single application with any other tariff revision.
(3)
Filings to implement subsections (c)(1) and (2) of
this section for ILECs serving 31,000 or more access lines but fewer than
one million access lines. If an ILEC serving 31,000 or more access lines but
fewer than one million access lines receives a bona fide request, it shall
unbundle its network/services pursuant to the bona fide request within 90
days from the date of receipt of the bona fide request or shall have the burden
of demonstrating the reasons for not unbundling pursuant to the bona fide
request.
(4)
Filings to implement subsections (c)(1) and (2) of
this section for ILECs serving fewer than 31,000 access lines. If an ILEC
serving fewer than 31,000 access lines receives a bona fide request, after
September 1, 1998, it shall unbundle its network/services pursuant to the
bona fide request within 90 days from the date of receipt of the bona fide
request or shall have the burden of demonstrating the reasons for not unbundling
pursuant to the bona fide request.
(5)
Filings to comply subsection (d)(2)(A) of this section.
An ILEC proposing rates pursuant to subsection (d)(2)(A) shall file tariff
amendments to implement the revisions in its interstate tariffs providing
for unbundling, within 30 days of the effective date of its interstate tariff
providing for unbundling. The proposed effective date of such filings shall
be not later than 30 days after the filing date, unless suspended. Tariff
revisions filed pursuant to this subsection shall not be combined in a single
application with any other tariff revision.
(g)
Requirements for notice and contents of application in
compliance with this section.
(1)
Notice of Application. The presiding officer may require
notice to be provided to the public as required by Chapter 22, Subchapter
D of this title (relating to Notice). The notice shall include, at a minimum,
a description of the service, the proposed rates and other terms of the service,
the types of customers likely to be affected if the service is approved, the
probable effect on ILEC's revenues if the service is approved, the proposed
effective date for the service, and the following language: "Persons who wish
to comment on this application should notify the commission by (specified
date, ten days before the proposed effective date). Requests for further information
should be mailed to the Public Utility Commission of Texas, PO Box 13326,
Austin, Texas 78711-3326, or you may call the Public Utility Commission's
Office of Customer Protection at (512) 936-7120 or toll free at (888) 782-8477.
Hearing- and speech-impaired individuals with text telephones (TTY) may contact
the commission at (512) 936- 7136 or may reach the commission's toll free
number by calling Relay Texas at (800) 735-2988."
(2)
Contents of application for an ILEC serving one million
or more access lines that is required to comply with subsection (f)(1), (2),
and (5) of this section An ILEC shall request approval of an unbundled service
by filing an application that complies with the requirements of this section.
In addition to copies required by other commission rules, one copy of the
application shall be delivered to the commission's Office of Regulatory Affairs,
Legal Division, and one copy to the Office of Public Utility Counsel. The
application shall contain the following information:
(A)
a description of the proposed service and the rates, terms
and conditions, under which the service is proposed to be offered and a demonstration
that the proposed rates, terms and conditions are in conformity with the requirements
in subsections (c), (d), and (e) of this section, as applicable;
(B)
a statement detailing the type of notice, if any, the
ILEC has provided or intends to provide to the public regarding the application
and a brief statement explaining why the ILEC's notice proposal is reasonable;
(C)
a copy of the text of the notice, if any;
(D)
a long run incremental cost study supporting the proposed
rates, if the rates are not at parity with the carrier's interstate rates;
(E)
detailed documentation showing that the proposed service
is priced above the long run incremental cost of such service, including all
workpapers and supporting documentation relating to computations or assumptions
contained in the application, if the rates are not at parity with the carrier's
interstate rates;
(F)
projection of revenues, demand, and expenses demonstrating
that in the second year after the service is first offered, the proposed rates
will generate sufficient annual revenues to recover the annual long run incremental
costs of providing the service, as well as a contribution for joint and/or
common costs, if the rates are not at parity with the carrier's interstate
rates;
(G)
explanation that the proposed rates and terms of the service
are not unreasonably preferential, prejudicial, or discriminatory, subsidized
directly or indirectly by regulated monopoly services, or predatory or anticompetitive;
(H)
the information required by §§26.121 of this
title (relating to Privacy Issues), 26.122 of this title (relating to Customer
Proprietary Network Information, and 26.123 of this title (relating to Caller
Identification Services; and
(I)
any other information which the ILEC wants considered
in connection with the commission's review of its application.
(3)
Contents of application for an ILEC serving
fewer than one million access lines that is required to comply with subsection
(f)(3), (4), and (5) of this section. An ILEC shall file with the commission
an application complying with the requirements of this section. In addition
to copies required by other commission rules, one copy of the application
shall be delivered to the commission's Office of Regulatory Affairs, Legal
Division, and one copy shall be delivered to the Office of Public Utility
Counsel. The application shall contain the following:
(A)
contents of application required by paragraph (2)(A),
(B), (C), (H), and (I) of this subsection;
(B)
contents of application required by paragraph (2)(D),
(E), (F), and (G) of this subsection, if the rates are not at parity with
the carrier's interstate rates or the rates of another ILEC;
(C)
a description of the proposed service(s) and the rates,
terms, and conditions under which the service(s) are proposed to be offered
and an affidavit from the general manager or an officer of the ILEC approving
the proposed service;
(D)
a notarized affidavit from a representative of the ILEC
affirming that the rates are just and reasonable and are not unreasonably
preferential, prejudicial, or discriminatory; subsidized directly or indirectly
by regulated monopoly services; or predatory, or anticompetitive; and
(E)
projections of the amount of revenues that will be generated
by the proposed service.
(h)
Commission processing of application.
(1)
Administrative review. An application considered under
this section may be reviewed administratively unless the ILEC requests the
application be docketed or the presiding officer, for good cause, determines
at any point during the review that the application should be docketed.
(A)
The operation of the proposed rate schedule may be suspended
for 35 days after the effective date of the application. The effective date
shall be according to the requirements in subsection (f) of this section.
(B)
The application shall be examined for sufficiency. If
the presiding officer concludes that material deficiencies exist in the application,
the applicant shall be notified within ten working days of the filing date
of the specific deficiency in its application, and the earliest possible effective
date of the application shall be no less than 30 days after the filing of
a sufficient application with substantially complete information as required
by the presiding officer. Thereafter, any time deadlines shall be determined
from the 30th day after the filing of the sufficient application and information
or from the effective date if the presiding officer extends that date.
(C)
While the application is being administratively reviewed,
the commission staff and the staff of the Office of the Public Utility Counsel
may submit requests for information to the ILEC. Six copies of all answers
to such requests for information shall be filed with Central Records and one
copy shall be provided to the Office of Public Utility Counsel within ten
days after receipt of the request by the ILEC.
(D)
No later than 20 days after the filing date of the sufficient
application, interested persons may provide to the commission staff written
comments or recommendations concerning the application. The commission staff
shall and the Office of Public Utility Counsel may file with the presiding
officer written comments or recommendations concerning the application.
(E)
No later than 35 days after the effective date of the
application, the presiding officer shall issue an order approving, denying,
or docketing the ILEC's application.
(2)
Approval or denial of application. The application
shall be approved by the presiding officer if the proposed tariff meets the
requirements in this section. If, based on the administrative review, the
presiding officer determines, that one or more of the requirements not waived
have not been met, the presiding officer shall docket the application.
(3)
Standards for docketing. The application may be docketed
pursuant to §22.33(b) of this title (relating to Tariff Filings).
(4)
Review of the application after docketing. If the
application is docketed, the operation of the proposed rate schedule shall
be automatically suspended to a date 120 days after the applicant has filed
all of its direct testimony and exhibits, or 155 days after the effective
date, whichever is later. Affected persons may move to intervene in the docket,
and the presiding officer may schedule a hearing on the merits. The application
shall be processed in accordance with the commission's rules applicable to
docketed cases.
(5)
Interim rates. For good cause, interim rates may
be approved after docketing. If the service requires substantial initial investment
by customers before they may receive the service, interim rates shall be approved
only if the ILEC shows, in addition to good cause, that it will notify each
customer prior to purchasing the service that the customer's investment may
be at risk due to the interim nature of the service.
(i)
Commission processing of waivers. Any request for modification
or waiver of the requirements of this section shall include a complete statement
of the ILEC's arguments and factual support for that request. The presiding
officer shall rule on the request expeditiously.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
December 21, 1998.
TRD-9818534
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: February 7, 1999
For further information, please call: (512) 936-7308