16 TAC §26.423
The Public Utility Commission of Texas (commission) adopts
new §26.423, relating to High Cost Universal Service Plan for Uncertificated
Areas where an Eligible Telecommunications Provider (ETP) Volunteers to Provide
Basic Local Telecommunications Service with changes to the proposed text as
published in the January 4, 2002
Texas Register
(27 TexReg 24). This new section provides guidelines concerning universal
service fund reimbursement to a telecommunications carrier that voluntarily
provides, without the expectation of up front capital reimbursement, voice-grade
telecommunications service to customers in uncertificated areas of the state.
Implementation of this new section is expected to enhance the provision of
basic local telephone service throughout the state by providing a mechanism
for Universal Service Fund support that has not otherwise been available in
the manner outlined in this section. This new section is adopted under Project
Number 24527.
The commission received written comments for consideration on the proposed
new rule from the following parties: Texas Statewide Telephone Cooperative,
Inc. (TSTCI) and Western Wireless Corporation (WWC). Reply Comments were received
from those same two parties.
A workshop for this rulemaking was conducted at the commission offices
on October 17, 2001 and a public hearing was held at the commission offices
on February 12, 2002. Parties making appearances and/or providing oral comments
at these proceedings include: GVNW Consulting; Office of the Attorney General;
Southwestern Bell Telephone Company (SWBT); John Staurulakus, Inc. (JSI);
Texas Telephone Association (TTA); Texas Statewide Telephone Cooperative Inc.
(TSTCI); Valor Telecommunication, Inc.; Verizon, Inc.; Verizon Wireless; and
Western Wireless Corporation (WWC). To the extent that comments at the workshop/public
hearing differ from those provided in written form, those differences are
recognized herein.
No comments were received for subsections (a) through (d).
§26.423(e), Support for uncertificated areas.
Subsection (e)(1), Determining base support amount
available to ETPs
TSTCI raised concerns in its comments that because the proposed reimbursement
methodology is based on the average costs of the contiguous exchanges of the
certificate of convenience and necessity (CCN) holders, it may only be attractive
to wireless providers. TSTCI indicated that wireless carriers typically do
not have to make a significant investment in additional facilities to serve
an area if they have facilities close by, and therefore, TSTCI rationalized
the resulting outcome of the proposed rule may prove to be a windfall for
wireless providers.
More specifically, TSTCI stated that the language in this subsection requires
clarification on what the specific inputs will be for the formula, indicating
that Texas Universal Service Fund (TUSF) support is different for small and
large incumbent local exchange carriers (ILECs) based on either average support
for all lines served or specific support based on residential lines, business
lines and/or wire center criteria. TSTCI also expressed confusion as to whether
support is based on the average support of each contiguous ILECs' service
area or just the average of the contiguous exchanges.
WWC, on the other hand, indicated that the proposed support mechanism is
based on the "average" Texas universal service support amounts of the exchanges
surrounding the uncertificated areas. The support amounts have been predetermined
by the commission in Docket Number 18515 -
Compliance
Proceeding for Implementation of the Texas High Cost Universal Service Plan
(using a forward-looking hybrid cost model) and Docket Number 18516
-
Compliance Proceeding for Implementation of the
Small and Rural ILEC Service Plan
(using embedded or historical costs).
Because the support amounts are based on either the ILECs' forward looking
costs or embedded costs of provisioning service to high- cost rural areas
of Texas, WWC concluded that the resulting supporting amounts for uncertificated
areas should be attractive to incumbent carriers and wireless carriers alike.
The commission agrees with TSTCI's assessment that the formula requires
further clarification and adds two sentences at the end of subsection (e)(1)(A):
"The per line support amounts used for this calculation shall include, as
appropriate, the support amounts approved for only those exchanges directly
contiguous to the uncertificated area for which support is being requested.
The resulting average support shall apply to a line at a premises in the uncertificated
area regardless of the residential or business status of the line." The commission
believes that this addition clarifies the calculation and will allow the commission
to determine appropriate support amounts.
The commission agrees with WWC's observation that because the support amounts
are based on either the ILECs' forward looking costs for large ILECs' service
areas and/or the embedded costs of provisioning service for small ILECs, the
resulting support amounts for uncertificated areas should not just be attractive
to wireless carriers, but should be attractive to both wireless and wireline
carriers. Additionally, any ETP (wireless or wireline) can receive identical
support within a specific uncertificated area for providing basic local service
under this section. As such, the commission finds that the reimbursement methodology,
with the clarifying changes described above is reasonable and competitively
neutral.
WWC believed that the commission should add to subsection (e) the sentence
"Support under the Texas High-Cost Universal Service Plan (THCUSP) is portable
with the consumer," as the concept is explicitly stated in §26.403(e)(1)(C),
Texas High Cost Universal Service Plan (THCUSP), as it relates to the determination
of support amounts under THCUSP. WWC argued that once per line amounts have
been determined by the commission, competitive carriers must have the ability
to draw exactly the same support that ILECs would receive for serving the
uncertificated area. WWC indicated that the concept of portability, as it
is known, has been promoted by this commission and the Federal Communications
Commission (FCC) as a means of bringing competition to areas which have typically
not benefited from choice in telecommunications service. TSTCI indicated that
it does not take issue with the concept of portability of support under this
section.
Consumer portability of THCUSP support is in fact available for certificated
high cost rural areas of the state as addressed by §26.403. The commission
believes that portability of support is necessary for the fund to be competitively
neutral. The commission therefore adds the following language to §26.423(e)(1)(B)
consistent with the suggestion of WWC and the concurrence of TSTCI: "Support
under this section is portable with the consumer."
Subsection (e)(2), Proceeding to determine support
amount
Subsection (e)(2)(A)(i), Establishing a monthly
per line support amount
WWC requested that the commission include a provision in this subsection
that allows the commission upon its own motion and within a certain time frame
from the effective date of this section, to determine and set the support
amounts available to a provider in each uncertificated area of the state.
WWC maintained that this would allow consumers to receive telephone service
within a specific uncertificated area in an expedited fashion. Furthermore,
WWC recommended that such proceeding should be handled administratively in
an uncontested and expedited fashion to promote the policy of providing the
customer service as soon as is practicable.
At the public hearing, TSTCI and WWC indicated that it would be helpful
to providers if the commission would calculate and publish the support that
would be available under this section for the different uncertificated areas
in the state. TSTCI further stated that it would be helpful if the commission
posted a map of the state showing the uncertificated areas and the support
available for each area. Additionally, TSTCI suggested that having the amount
of TUSF support publicly available for the uncertificated areas would simplify
the process for providers and could lead to more providers volunteering to
serve these areas.
TSTCI raised concerns in its comments that this section did not contain
a procedural timeline for processing applications of volunteering providers.
TSTCI indicated that it would support a provision that establishes a 30 day
administrative approval process, contending that such a provision for review
and approval would allow, for example, a small company interested in volunteering
under this section the opportunity to participate without being deterred by
the prospect of a lengthy and expensive regulatory process.
The commission recognizes the potential timesaving for all parties affected
by this rulemaking in having a single proceeding to set support amounts for
specific uncertificated areas of the state rather than having individual proceedings
for separate areas. The commission also recognizes that, once support is established
for an uncertificated area, the process of receiving support for more than
one premises in an area should be streamlined for that area, and the process
of obtaining approval as an ETP for that area should be straight forward.
However, establishment of support amounts for well over 50 uncertificated
areas of the state, many of which may be uninhabitable or do not currently
contain a population of potential subscribers, may not provide the time-savings
expected and could substantially delay the implementation of this section
for those areas where service may actually be funded quickly through an administrative
process. The commission recognizes the value of establishing support levels
for more than one uncertificated area in a single proceeding. To address these
issues of economy and time without an undue burden being placed on staff or
the parties, the commission modifies the language in subsection (e)(2)(A)
to allow an ETP, upon petition, to request establishment of monthly per-line
support amounts for more than one uncertificated area of the state in a single
administrative proceeding, where it has been determined that prospective telecommunications
subscribers exist. The commission also adds new subsection (e)(2)(A)(iii)
indicating that the commission may establish monthly support amounts for uncertificated
areas upon its own motion. These additions should add flexibility and provide
greater efficiency in the processing of requests under this rulemaking.
Once the base support amount has been determined and approved by the commission
for an uncertificated area and that area has been identified by the commission
for TUSF high cost assistance, the commission acknowledges that any ETP may
request approval for funding in that designated area by "amending its ETP
designation," as it normally would when adding additional areas of the state
to its ETP designation. The ETP should file an application pursuant to §26.417
relating to Designation as Eligible Telecommunications Providers to Receive
Texas Universal Service Funds (TUSF). Once an ETP's amended designation has
been approved, that ETP may claim support for each qualifying customer served
in such uncertificated area. No further commission action is needed. The funding
of support for each qualifying customer would be processed directly by the
THCUSP Administrator through the submission of the appropriate forms and/or
affidavits.
Subsection (e)(3)(B), Adjustment for federal USF
support
In its comments, TSTCI questioned the justification in this subsection
that adjustments should be made for federal universal service fund (USF) support,
indicating that under federal USF rules, no federal support is available for
uncertificated areas.
While the commission recognizes that today no federal support is available
in uncertificated areas, consistency of application of support among carriers
would dictate that the commission should retain this requirement in the rule.
Leaving the statement in the rule does not affect any providers draw from
the TUSF fund at this time. However, if federal support does become available
for uncertificated areas in the future, the commission will already have in
place a provision for this funding consistent with the large ILEC funding
provided under §26.403 relating to Texas High Cost Universal Service
Plan (THCUSP).
§26.423(f), Reporting requirements
Subsection (f)(1)(B)
WWC indicated that §26.423(f)(1)(B) refers to "tariffed" rates, and
does not apply to WWC since they are not a "tariffed" provider of service.
Further, WWC stated that as a designated ETP and eligible telecommunications
carrier (ETC), the company is required to provide a "price list" and "service
agreement" to the commission for informational proposes. TSTCI, in its reply
comments, disagreed with WWC, stating that WWC was required by the commission
Order in Docket Number 22289 -
Application of WWC
Texas RSA Limited Partnership for Designation as a Eligible Telecommunications
Carrier (ETC) Pursuant to 47 U.S.C. Sec 214(e) and PUC Subst. R. 26.418, and
as a Eligible Telecommunications Provider (ETP) Pursuant to 47 U.S.C. Sec
214(e) and PUC Subst. R. 26.417
, and Docket Number 22295 -
Application of WWC Texas RSA Limited Partnership for Designation as a Eligible
Telecommunications Provider (ETP)
, to file a tariff detailing the content,
pricing, and terms and conditions of WWC's universal offering. At the most
recent public hearing, WWC indicated that, for its USF offering, it filed
a rate sheet and terms and conditions of service with the commission.
In response to comments, the commission incorporates minor changes to §26.423(f)(1)(B)
to delete the term "tariff" and add a more general explanation of the requirement
for rates and charges. This change recognizes that some ETPs will have tariffs
on file with the commission, while other ETPs will have price sheets or price
lists and other documents, as specifically required by the commission, indicating
descriptions of service, recurring and nonrecurring rates, terms, and/or conditions
of service, as appropriate.
Subsection (f)(3)
WWC suggested that the information requested in §26.423(f)(3) is proprietary
and competitively sensitive, and accordingly, should be submitted on a confidential
basis.
Substantive rule §26.420(j) relating to Administration of Texas Universal
Service Fund (TUSF) addresses the treatment of proprietary information. That
section governs any proprietary information received under §26.423. As
such, the commission acknowledges WWC's comments but finds that no changes
to this section are necessary to address proprietary information.
General comments on the proposed rule
WWC recommended in its comments that the commission include a new section
to the proposed rule stating that, once support amounts have been determined
and set by the commission under this section, any ETP who volunteers to provide
service may not receive a higher support amount than that which has been set
by the commission. WWC indicated that such language would ensure that no ETP
is being unjustly enriched for serving an uncertificated area.
The commission declines to incorporate WWC's recommendation into this rulemaking.
Once a support amount is determined by the commission for an uncertificated
area, no ETP will receive more support per line under this section unless
a subsequent commission order allows it to do so. Furthermore, any determination
of discrimination or inconsistency in funding may be dealt with on an individual
case basis as necessary and appropriate, and may be brought before the commission
upon the request of a telecommunications provider alleging such inconsistency.
TSTCI raised concerns in its comments and at the workshop that having two
rules on serving uncertificated areas may create carrier and customer confusion
and, as explained later, potential abuses of the system. TSTCI therefore suggested
that it would be better to have one rule that addressed volunteering providers.
TSTCI stated that House Bill 2388, 77th Legislature (HB2388), provides a
framework for compensating providers to serve uncertificated areas as proposed
in §26.421 relating to designation of an Eligible Telecommunications
Providers to Provide Service to Uncertificated Areas and §26.422 relating
to Subsequent Petitions for Service in Uncertificated Areas. In reply comments
and the public hearing, TSTCI indicated that clarifying language in the preamble
to this rule would help to minimize customer and provider confusion about
two rules dealing with uncertificated areas.
In response to TSTCI's comments, the commission makes no change to this
section. The commission clarifies that this section and §26.421 and §26.422
governing the provision of service in uncertificated areas are meant to complement
one another by implementing different alternatives to accomplish the task
of providing basic local telecommunications service in uncertificated areas
of the state. In this section an ETP, on the basis of established support
amounts, "volunteers" to provide service within a designated uncertificated
area without the necessity of a petition by potential subscribers. In §26.421
and §26.422, a petition by potential subscribers is required before the
commission requests a response from potential providers indicating that they
will either volunteer to provide service or refuse to volunteer to provide
service. After these responses are received an administrative proceeding or
evidentiary hearing is conducted to determine the nature of the provisioning
of service, if any, to the petitioners. The rules clearly represent distinctly
separate mechanisms to obtain high cost assistance for uncertificated areas.
TSTCI was also concerned with the possibility of a customer being served
under two different "volunteer" provider rules (§26.421 and §26.423),
and whether that was in the public interest. TSTCI urged the commission to
add a provision to these sections to prevent the possibility of awarding TUSF
support simultaneously under both rules to serve the same premises and to
coordinate the regulatory process in the event that providers and petitioners
are applying to serve the same premises in the same timeframe under both sections.
The commission agrees with TSTCI that it would be inappropriate for a customer
and the providing local service telecommunication carrier to receive support
under both rules simultaneously. However, the commission finds that no change
to this section is necessary because the commission believes that it is implicit
that no ETP will receive TUSF support from two high cost programs at the same
time for the same customer and no two ETPs will receive duplicate high cost
support for any designated premises within an uncertificated area at the same
time. Furthermore, during the petitioning approval process or ETP amendment
process, the commission can insure that this will not occur.
Additional comments
There were discussions at the workshop about whether it would be necessary
for an ILEC to amend its CCN to provide service in an uncertificated area
under this section. SWBT brought to the commission's attention Public Utility
Regulatory Act (PURA) §54.002(a),
Exceptions
to Certificate Requirement for Service Extension
, and requested clarification
as to its applicability under this section. SWBT questioned whether the voluntary
provision of basic telecommunications service into an uncertificated area
under this section constituted an expansion of an ILEC's service area boundary
and CCN or constituted an "obligation to serve" for a competitive local exchange
carrier (CLEC).
While the original TUSF support mechanism was established based on existing
CCN territories, the commission recognizes a need to expand beyond those predetermined
boundaries to ensure, to the greatest extent possible, the provision of universal
telephone service throughout the geographic regions of the state. Furthermore,
an amendment to a CCN could take 90 to 180 additional days of waiting to provide
service to a residential or small business customer in an uncertificated area.
The commission believes that requiring an amendment to a CCN to voluntarily
serve an uncertificated area would apply constraints to a process where none
are warranted. The commission therefore confirms that the voluntary provision
of service under this section is not meant to constitute an expansion of a
CCN for a dominant carrier or an obligation to serve for a non-dominant telecommunications
provider.
WWC expressed concern that the only thing that is not clear in calculating
a support amount is where the uncertificated areas are and which exchanges
are contiguous to those areas. WWC suggested that "access to a map" that identifies
all of the exchanges that are contiguous areas to an uncertificated area would
be helpful. Further, WWC raised issues concerning who has which area (e.g.
exchange) and how a telecommunications provider can research an area without
a map to estimate the potential TUSF support.
As noted at the public hearing, various maps, although not up-to-date,
are available to identify "exchanges" (the geographic medium used to determine
existing TUSF support amounts). To the extent that these maps are produced
by the commission, the staff will work with parties to make that information
available.
In addition to publication of the proposed new rule, the commission requested
comments on the following question: "Is there a different approach other than
that provided within the proposed rule which would provide incentives for
a carrier to voluntarily provide service to an uncertificated area?" No comments
were received regarding an approach other than that provided for in the proposed
rulemaking.
In addition to modifications made in response to comments, the commission
makes minor changes to the rule in order to clarify its intent and to correct
typographical and grammatical errors. All comments, including any not specifically
referenced herein, were fully considered by the commission.
This new section is adopted under the Public Utility Regulatory
Act (PURA), Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement
2002) which provides the commission with the authority to make and to enforce
rules reasonably required in the exercise of its powers and jurisdiction;
and PURA §56.021 which requires the commission to adopt and enforce rules
relating to the universal service fund.
Cross Reference to Statutes: Public Utility Regulatory Act §14.002
and Chapter 56.
§26.423.High Cost Universal Service Plan for Uncertificated Areas where an Eligible Telecommunications Provider (ETP) Volunteers to Provide Basic Local Telecommunications Service.
(a)
Purpose. This section establishes the guidelines for financial
assistance to ETPs that serve uncertificated areas of the state where an ETP
volunteers to provide basic voice-grade telecommunications service to permanent
residential and single-line business premises.
(b)
Definitions. The following words and terms, when used in
this section, shall have the following meaning unless the context clearly
indicates otherwise:
(1)
Eligible line--A residential line and a single-line business
line as defined by §26.403 of this title (relating to Texas High Cost
Universal Service Plan (THCUSP)).
(2)
Eligible telecommunications provider (ETP)--A telecommunications
provider designated by the commission pursuant to §26.417 of this title
(relating to Designation as Eligible Telecommunications Providers to Receive
Texas Universal Service Funds (TUSF)).
(3)
Permanent residential or business premises--A premise as
defined pursuant to §26.421 of this title (relating to Designation of
Eligible Telecommunications Providers to Provide Service to Uncertificated
Areas).
(4)
Uncertificated areas--An area of the state that is not
included within the certificated area of a holder of a certificate of convenience
and necessity (CCN).
(c)
Application. This section applies to telecommunications
providers that have been designated ETPs by the commission pursuant to §26.417
of this title.
(d)
Service to be supported by the High Cost Universal Service
Plan for uncertificated areas where an ETP volunteers to provide basic local
telecommunications service. The High Cost Universal Service Plan for uncertificated
areas shall support the provision by ETPs of basic local telecommunications
services as defined in §26.403(d) of this title.
(e)
Support for uncertificated areas where an ETP volunteers
to provide service. The TUSF administrator shall disburse monthly support
payments to ETPs qualified to receive support pursuant to this section. The
amount of support available to each ETP shall be calculated using the base
support amount available as provided under paragraph (1) of this subsection
as adjusted by the requirements of paragraph (3)(B) of this subsection.
(1)
Determining base support amount available to ETPs.
(A)
The monthly per-line support available for uncertificated
areas shall be determined by calculating the average of the per-line support
amount approved for all local telephone company exchanges of CCN holder's
that are contiguous to the uncertificated area for which reimbursement is
requested. The per line support amounts used for this calculation shall include,
as appropriate, support amounts approved for only those exchanges directly
contiguous to the uncertificated area for which support is being requested.
The resulting average support shall apply to a line at a premises in the uncertificated
area regardless of the residential or business status of the line.
(B)
Support under this section is portable with the consumer.
(2)
Proceedings to determine support amount.
(A)
Initial determination for uncertificated areas.
(i)
Upon petition by an ETP, the commission shall establish
a monthly per-line support amount for an uncertificated area as identified
by the ETP where it has been determined that prospective telecommunications
subscribers exist. The establishment of support for more than one uncertificated
area may be requested within a single petition.
(ii)
The review of the petition shall be accomplished in an
administrative or docketed proceeding initiated by the ETP requesting support
for the provision of single-line residential or business service within an
uncertificated area or areas.
(iii)
The commission, on its own motion, may initiate a proceeding
to establish monthly per-line support amounts for uncertificated areas.
(B)
Subsequent determination of support amount.
(i)
The commission shall subsequently review the support for
uncertificated areas consistent with the review provided for under §26.403
and §26.404 of this title (relating to Small and Rural Incumbent Local
Exchange Company (ILEC) Universal Service Plan).
(ii)
The commission may initiate review of the support for
uncertificated areas and base support amounts under this section on its own
motion at any time.
(3)
Calculating amount of support payments to individual ETPs.
After the monthly per-line amount is determined, the TUSF administrator shall
make the following adjustments each month in order to determine the actual
support payment that each ETP may receive each month.
(A)
Payments. The payment to each ETP shall be computed by
multiplying the per-line amount established by paragraph (1) of this subsection
for a given uncertificated area by the number of eligible lines served by
the ETP in such uncertificated area for the month.
(B)
Adjustment for federal USF support. The base support amount
an ETP is eligible to receive shall be decreased by the amount of federal
universal service high cost support received by the ETP.
(f)
Reporting requirements.
(1)
An ETP eligible to receive support under this section shall
provide the TUSF administrator with the following information:
(A)
A report of the total number of eligible lines served by
the ETP in a designated uncertificated area to the TUSF Administrator on a
monthly basis;
(B)
The telecommunications provider's residential and single-line
business rates on file with the commission, as of the provisioning date for
service;
(C)
The average per-line assistance for each local exchange
telephone company exchange contiguous to the area in question; and
(D)
A calculation of the base support in accordance with the
requirements of this subsection and subsection (e) of this section.
(2)
Upon request by the commission, the telecommunications
provider awarded support under this section shall explain the basis on which
it is establishing rates under this section.
(3)
An ETP shall report any other information required by the
commission and the TUSF Administrator, including any information necessary
to assess contributions to and disbursements from the TUSF.
(g)
Initial support provided pursuant to this section. Initial
payment of support under this section shall be retroactive to the latter of
the date on which a telecommunications provider either:
(1)
Petitions the commission for THCUSP assistance; or
(2)
Begins providing basic local telephone service to the residential
or business location approved for support.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on May 3, 2002.
TRD-200202774
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: May 23, 2002
Proposal publication date: January 4, 2002
For further information, please call: (512) 936-7308