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UTILITIES CODE

TITLE 2. PUBLIC UTILITY REGULATORY ACT

SUBTITLE C. TELECOMMUNICATIONS UTILITIES

CHAPTER 54. CERTIFICATES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 54.001. CERTIFICATE REQUIRED. A person may not provide

local exchange telephone service, basic local telecommunications

service, or switched access service unless the person obtains a:

(1) certificate of convenience and necessity;

(2) certificate of operating authority; or

(3) service provider certificate of operating authority.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.002. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR SERVICE

EXTENSION. (a) A telecommunications utility is not required to

obtain a certificate of convenience and necessity, a certificate

of operating authority, or a service provider certificate of

operating authority for an:

(1) extension into territory that is:

(A) contiguous to the territory the telecommunications utility

serves;

(B) not receiving similar service from another

telecommunications utility; and

area;

(2) extension in or to territory the telecommunications utility

serves or is authorized to serve under a certificate of public

convenience and necessity, a certificate of operating authority,

or a service provider certificate of operating authority; or

(3) operation, extension, or service in progress on September 1,

1975.

(b) An extension allowed by Subsection (a) is limited to a

device used:

(1) to interconnect existing facilities; or

(2) solely to transmit telecommunications utility services from

an existing facility to a customer of retail utility service.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.003. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR CERTAIN

SERVICES. A telecommunications utility is not required to obtain

a certificate of convenience and necessity, a certificate of

operating authority, or a service provider certificate of

operating authority for:

(1) an interexchange telecommunications service;

(2) a nonswitched private line service;

(3) a shared tenant service;

(4) a specialized communications common carrier service;

(5) a commercial mobile service; or

(6) an operator service as defined by Section 55.081.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.004. RELINQUISHMENT PLAN. A holder of a service

provider certificate of operating authority who applies for a

certificate of operating authority or a certificate of

convenience and necessity for the same territory must include

with the application a plan to relinquish the service provider

certificate of operating authority.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.005. NOTICE OF AND HEARING ON APPLICATION. (a) When an

application for a certificate of convenience and necessity, a

certificate of operating authority, or a service provider

certificate of operating authority is filed, the commission

shall:

(1) give notice of the application to interested parties; and

(2) if requested:

(A) set a time and place for a hearing; and

(B) give notice of the hearing.

(b) A person interested in the application may intervene at the

hearing.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.006. REQUEST FOR PRELIMINARY ORDER. (a) A

telecommunications utility that wants to exercise a right or

privilege under a franchise or permit that the utility

anticipates obtaining but has not been granted may apply to the

commission for a preliminary order under this section.

(b) The commission may issue a preliminary order declaring that

the commission, on application and under commission rules, will

grant the requested certificate of convenience and necessity,

certificate of operating authority, or service provider

certificate of operating authority, on terms the commission

designates, after the telecommunications utility obtains the

franchise or permit.

of evidence satisfactory to the commission that the

telecommunications utility has obtained the franchise or permit.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.007. FLEXIBILITY PLAN. (a) After the commission grants

an application for a certificate of convenience and necessity, a

certificate of operating authority, or a service provider

certificate of operating authority or determines that a

certificate is not needed for the applicant to provide the

relevant services, the commission shall conduct appropriate

proceedings to establish a transitional flexibility plan for the

incumbent local exchange company in the same area or areas as the

new certificate holder.

(b) A basic local telecommunications service price of the

incumbent local exchange company may not be increased before the

fourth anniversary of the date the certificate is granted to the

applicant except that the price may be increased as provided by

this title.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 15, eff. Sept. 1,

1999.

Sec. 54.008. REVOCATION OR AMENDMENT OF CERTIFICATE. (a) The

commission may revoke or amend a certificate of convenience and

necessity, a certificate of operating authority or a service

provider certificate of operating authority after notice and

hearing if the commission finds that the certificate holder has

never provided or is no longer providing service in all or any

part of the certificated area.

(b) The commission may require one or more public utilities to

provide service in an area affected by the revocation or

amendment of a certificate held by a public utility.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY

Sec. 54.051. DEFINITION. In this subchapter, "certificate"

means a certificate of convenience and necessity.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.052. CERTIFICATE REQUIRED FOR PUBLIC UTILITY. (a) A

public utility may not directly or indirectly provide service to

the public under a franchise or permit unless the utility first

obtains from the commission a certificate that states that the

public convenience and necessity requires or will require the

installation, operation, or extension of the service.

(b) Except as otherwise provided by this chapter, a public

utility may not furnish or make available retail public utility

service to an area in which retail utility service is being

lawfully furnished by another public utility unless the utility

first obtains a certificate that includes the area in which the

consuming facility is located.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.053. APPLICATION FOR CERTIFICATE. (a) A public utility

that wants to obtain or amend a certificate must submit an

application to the commission.

(b) The applicant shall file with the commission evidence the

commission requires to show the applicant has received the

consent, franchise, or permit required by the proper municipal or

other public authority.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.054. GRANT OR DENIAL OF CERTIFICATE. (a) The

commission may approve an application and grant a certificate

only if the commission finds that the certificate is necessary

for the service, accommodation, convenience, or safety of the

public.

(b) The commission may:

(1) grant the certificate as requested;

(2) grant the certificate for the construction of a portion of

the requested system, facility, or extension or the partial

exercise of the requested right or privilege; or

(3) refuse to grant the certificate.

nondiscriminatory basis after considering:

(1) the adequacy of existing service;

(2) the need for additional service;

(3) the effect of granting the certificate on the recipient of

the certificate and any public utility of the same kind serving

the proximate area; and

(4) other factors, such as:

(A) community values;

(B) recreational and park areas;

(D) environmental integrity; and

(E) the probable improvement of service or lowering of cost to

consumers in the area if the certificate is granted.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER C. CERTIFICATE OF OPERATING AUTHORITY

Sec. 54.101. DEFINITION. In this subchapter, "certificate"

means a certificate of operating authority.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1,

1999.

Sec. 54.102. APPLICATION FOR CERTIFICATE. (a) A person may

apply for a certificate of operating authority.

(b) The applicant must file with the application a sworn

statement that the applicant has applied for each municipal

consent, franchise, or permit required for the type of services

and facilities for which the applicant has applied.

convenience and necessity may hold a certificate of operating

authority if the holder of the certificate of convenience and

necessity is in compliance with federal law and Federal

Communications Commission rules governing affiliates and

structural separation. An affiliate of a person holding a

certificate of convenience and necessity may not directly or

indirectly sell to a non-affiliate any regulated product or

service purchased from the person holding a certificate of

convenience and necessity at any rate or price less than the

price paid to the person holding a certificate of convenience and

necessity.

(d) A person may hold a certificate for all or any portion of a

service area for which one or more affiliates of the person holds

a certificate of operating authority, a service provider

certificate of operating authority, or a certificate of

convenience and necessity.

(e) An affiliate of a company that holds a certificate of

convenience and necessity and that serves more than five million

access lines in this state may hold a certificate of operating

authority or service provider certificate of operating authority

to provide service in an area of this state in which its

affiliated company is the incumbent local exchange company.

However, the affiliate holding the certificate of operating

authority or service provider certificate of operating authority

may not provide in that area any service listed in Sections

58.051(a)(1)-(4) or Sections 58.151(1)-(4), or any subset of

those services, in a manner that results in a customer-specific

contract so long as the affiliated company that is the incumbent

local exchange company may not provide those services or subsets

of services in a manner that results in a customer-specific

contract under Section 58.003 in that area. This subsection does

not preclude an affiliate of a company holding a certificate of

convenience and necessity from holding a certificate of operating

authority in any area of this state to provide advanced services

as defined by rules or orders of the Federal Communications

Commission, or preclude such an advanced services affiliate from

using any form of pricing flexibility, with regard to services

other than those subject to the restrictions provided by this

subsection. This subsection does not preclude a long distance

affiliate from using any form of pricing flexibility with regard

to services other than those services subject to the restrictions

provided by this subsection. In addition, the affiliate holding

the certificate of operating authority or service provider

certificate of operating authority may not offer, in an area for

which the affiliated incumbent local exchange company holds a

certificate of convenience and necessity, a service listed in

Sections 58.151(1)-(4) as a component of a package of services,

as a promotional offering, or with a volume or term discount

until the affiliated incumbent local exchange company may offer

those services in pricing flexibility offerings in accordance

with Section 58.004, unless the customer of one of these pricing

flexibility offerings is a federal, state, or local governmental

entity.

(f) The commission has the authority to enforce this section.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1,

1999.

Sec. 54.103. GRANT OR DENIAL OF CERTIFICATE. (a) The

commission must grant or deny a certificate not later than the

60th day after the date the application for the certificate is

filed. The commission may extend the deadline on good cause

shown.

(b) The commission shall grant each certificate on a

nondiscriminatory basis after considering factors such as:

(1) the technical and financial qualifications of the applicant;

and

(2) the applicant's ability to meet the commission's quality of

service requirements.

serves fewer than 31,000 access lines, in addition to the factors

described by Subsection (b), the commission shall consider:

(1) the effect of granting the certificate on a public utility

serving the area and on that utility's customers;

(2) the ability of that public utility to provide adequate

service at reasonable rates;

(3) the effect of granting the certificate on the ability of

that public utility to act as the provider of last resort; and

(4) the ability of the exchange, not the company, to support

more than one provider of service.

(d) Except as provided by Subsections (e) and (f), the

commission may grant an application for a certificate only for an

area or areas that are contiguous and reasonably compact and

cover an area of at least 27 square miles.

(e) In an exchange in a county that has a population of less

than 500,000 and that is served by an incumbent local exchange

company that has more than 31,000 access lines, an area covering

less than 27 square miles may be approved if the area is

contiguous and reasonably compact and has at least 20,000 access

lines.

(f) In an exchange of a company that serves fewer than 31,000

access lines in this state, the commission may grant an

application only for an area that has boundaries similar to the

boundaries of the serving central office that is served by the

incumbent local exchange company that holds the certificate of

convenience and necessity for the area.

(g) Expired.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1,

1999.

Sec. 54.104. TIME OF SERVICE REQUIREMENTS. (a) The commission

by rule may prescribe the period within which a certificate

holder must be able to serve customers.

(b) Notwithstanding Subsection (a), a certificate holder must

serve a customer not later than the 30th day after the date the

customer requests service.

Acts 1997, 75th Leg., ch. 166, Sec. 1, Sept. 1, 1997. Renumbered

from Sec. 54.106 and amended by Acts 1999, 76th Leg., ch. 1212,

Sec. 16, eff. Sept. 1, 1999.

Sec. 54.105. PENALTY FOR VIOLATION OF TITLE. If a certificate

holder fails to comply with a requirement of this title, the

commission may:

(1) revoke the holder's certificate;

(2) impose against the holder administrative penalties under

Subchapter B, Chapter 15; or

(3) take another action under Subchapter B, Chapter 15.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Renumbered from Sec. 54.111 by Acts 1999, 76th Leg., ch. 1212,

Sec. 16, eff. Sept. 1, 1999.

SUBCHAPTER D. SERVICE PROVIDER CERTIFICATE OF OPERATING AUTHORITY

Sec. 54.151. DEFINITION. In this subchapter, "certificate"

means a service provider certificate of operating authority.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.152. LIMITATION ON GRANT OF CERTIFICATE. The commission

may not grant a certificate to a holder of a:

(1) certificate of convenience and necessity for the same

territory; or

(2) certificate of operating authority for the same territory.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.153. ELIGIBILITY FOR CERTIFICATE. (a) A company is not

eligible to obtain a certificate under this subchapter if the

company, together with affiliates, had more than six percent of

the total intrastate switched access minutes of use as measured

for the most recent 12-month period:

(1) that precedes the date the application is filed; and

(2) for which the access information is available.

(b) The commission shall obtain information necessary to

determine eligibility from the incumbent local exchange telephone

companies and the applicant.

10th day after the date the application is filed.

(d) In this section:

(1) "Affiliate" means an entity that, directly or indirectly,

owns or controls, is owned or controlled by, or is under common

ownership or control with a company that applies for a

certificate under this subchapter.

(2) "Control" means to exercise substantial influence over the

policies and actions of another.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.154. APPLICATION FOR CERTIFICATE. (a) The commission

may grant a certificate to encourage an innovative, competitive,

and entrepreneurial business to provide telecommunications

services.

(b) An applicant for a certificate must:

(1) file with the application:

(A) a sworn statement that the applicant has applied for each

municipal consent, franchise, or permit required for the type of

services and facilities for which the applicant has applied; and

(B) a description of the services the applicant will provide;

(2) show the areas in which the applicant will provide the

services;

(3) demonstrate that the applicant has the financial and

technical ability to provide services; and

(4) demonstrate that the services will meet the requirements of

this subchapter.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.155. GRANT OR DENIAL OF CERTIFICATE. (a) The

commission must grant or deny a certificate not later than the

60th day after the date the application for the certificate is

filed. The commission may extend the deadline on good cause

shown.

(b) The commission shall grant each certificate on a

nondiscriminatory basis after considering factors such as:

(1) the technical and financial qualifications of the applicant;

and

(2) the applicant's ability to meet the commission's quality of

service requirements.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.156. RESALE OF SERVICES. (a) A certificate holder may

obtain services under the resale tariffs approved by the

commission under Subchapter C, Chapter 60, except in a

certificated area of a company that serves fewer than 31,000

access lines.

(b) A certificate holder may obtain for resale the monthly

recurring flat rate local exchange telephone service and

associated nonrecurring charges, including any mandatory extended

area service, of an incumbent local exchange company at a five

percent discount to the tariffed rate.

service that may be provided to a customer in conjunction with

local exchange service at a five percent discount to the tariffed

rate, including any associated nonrecurring charge for those

services, provided that the incumbent local exchange company

shall make available to a certificate holder, at an additional

five percent discount, any discounts made available to customers

of the incumbent local exchange company who are similarly

situated to the customers of the certificate holder. In this

subsection "feature service" includes:

(1) toll restriction;

(2) call control options;

(3) tone dialing;

(4) custom calling; and

(5) caller identification.

(d) A certificate holder and an incumbent local exchange company

may agree to a rate lower than the tariffed rate or discounted

rate.

(e) The five percent discounts provided by this section do not

apply in an exchange of a company that has fewer than 31,000

access lines in this state.

(f) If the tariffed rate for a resold service changes, the five

percent discount prescribed by this section applies to the

changed rate. The commission may not, for certificate holders,

create a special class for purposes of resold services.

(g) A certificate holder:

(1) may not use a resold flat rate local exchange telephone

service to avoid the rates and terms of an incumbent local

exchange company's tariffs;

(2) may not terminate both flat rate local exchange telephone

service and services obtained under the resale tariff approved

under Section 60.041 on the same end user customer's premises;

(3) may not use resold flat rate local exchange telephone

services to provide access services to another interexchange

carrier, cellular carrier, competitive access provider, or retail

telecommunications provider, but may permit customers to use

resold local exchange telephone services to access such a carrier

or provider;

(4) may sell the flat rate local exchange telephone service only

to the same class of customers to which the incumbent local

exchange company sells that service;

(5) may obtain services offered by or negotiated with a holder

of a certificate of convenience and necessity or a certificate of

operating authority; and

(6) may obtain for resale single or multiple line flat rate

intraLATA calling service when provided by the local exchange

company at the tariffed rate for online digital communications.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.157. OPTIONAL EXTENDED AREA SERVICE OR EXPANDED LOCAL

CALLING SERVICE. (a) A certificate holder may purchase for

resale:

(1) optional extended area service; and

(2) expanded local calling service.

(b) The purchase of optional extended area service and expanded

local calling service may not be discounted.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.158. INTERFERENCE WITH RESOLD SERVICES PROHIBITED. An

incumbent local exchange company may not:

(1) delay providing or maintaining a service provided under this

subchapter;

(2) degrade the quality of access the company provides to

another provider;

(3) impair the speed, quality, or efficiency of a line used by

another provider;

(4) fail to fully disclose in a timely manner after a request

all available information necessary for a certificate holder to

provide resale services; or

(5) refuse to take a reasonable action to allow a certificate

holder efficient access to the company's ordering, billing, or

repair management system.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.159. RETENTION OF ACCESS SERVICE AND INTRALATA TOLL

SERVICE. An incumbent local exchange company that sells flat

rate local exchange telephone service to a certificate holder may

retain all access service and "1-plus" intraLATA toll service

that originates over the resold flat rate local exchange

telephone service.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER E. MUNICIPALITIES

Sec. 54.201. CERTIFICATION PROHIBITED. The commission may not

grant to a municipality a:

(1) certificate of convenience and necessity;

(2) certificate of operating authority; or

(3) service provider certificate of operating authority.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.202. PROHIBITED MUNICIPAL SERVICES. (a) A municipality

or municipal electric system may not offer for sale to the

public:

(1) a service for which a certificate of convenience and

necessity, a certificate of operating authority, or a service

provider certificate of operating authority is required; or

(2) a nonswitched telecommunications service used to connect a

customer's premises with:

(A) another customer's premises within the exchange; or

(B) a long distance provider that serves the exchange.

(b) Subsection (a) applies to a service offered either directly

or indirectly through a telecommunications provider.

owned utility from providing to its energy customers, either

directly or indirectly, any energy related service involving the

transfer or receipt of information or data concerning the use,

measurement, monitoring, or management of energy utility services

provided by the municipally owned utility, including services

such as load management or automated meter reading.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 5, eff. September 7, 2005.

Sec. 54.2025. LEASE OF FIBER OPTIC CABLE FACILITIES. Nothing in

this subchapter shall prevent a municipality, or a municipal

electric system that is a member of a municipal power agency

formed under Chapter 163 by adoption of a concurrent resolution

by the participating municipalities on or before August 1, 1975,

from leasing any of the excess capacity of its fiber optic cable

facilities (dark fiber), so long as the rental of the fiber

facilities is done on a nondiscriminatory, nonpreferential basis.

Added by Acts 1999, 76th Leg., ch. 1212, Sec. 17, eff. Sept. 1,

1999.

Sec. 54.203. SERVICE IN ANNEXED OR INCORPORATED AREA. (a) If

an area is or will be included within a municipality as the

result of annexation, incorporation, or another reason, each

telecommunications utility that holds or is entitled to hold a

certificate under this title to provide service or operate a

facility in the area before the inclusion has the right to

continue to provide the service or operate the facility and

extend service in the utility's certificated area within the

annexed or incorporated area under the rights granted by the

certificate and this title.

(b) Notwithstanding any other law, a certificated

telecommunications utility has the right to:

(1) continue and extend service within the utility's

certificated area; and

(2) use roads, streets, highways, alleys, and public property to

furnish retail utility service.

certificated telecommunications utility to relocate the utility's

facility at the utility's expense to permit the widening or

straightening of a street by:

(1) giving the utility 30 days' notice; and

(2) specifying the new location for the facility along the

right-of-way of the street.

(d) This section does not limit the power of a city, town, or

village to incorporate or of a municipality to extend its

boundaries by annexation.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.204. DISCRIMINATION BY MUNICIPALITY PROHIBITED. (a)

Notwithstanding Section 14.008, a municipality or a municipally

owned utility may not discriminate against a certificated

telecommunications provider regarding:

(1) the authorization or placement of a facility in a public

right-of-way;

(2) access to a building; or

(3) a municipal utility pole attachment rate or term.

(b) In granting consent, a franchise, or a permit for the use of

a public street, alley, or right-of-way within its municipal

boundaries, a municipality or municipally owned utility may not

discriminate in favor of or against a certificated

telecommunications provider regarding:

(1) municipal utility pole attachment or underground conduit

rates or terms; or

(2) the authorization, placement, replacement, or removal of a

facility in a public right-of-way and the reasonable compensation

for the authorization, placement, replacement, or removal

regardless of whether the compensation is in the form of:

(A) money;

(B) services;

(D) another kind of consideration.

any entity, regardless of the nature of the services provided by

that entity, a pole attachment rate or underground conduit rate

that exceeds the fee the municipality or municipally owned

utility would be permitted to charge under rules adopted by the

Federal Communications Commission under 47 U.S.C. Section 224(e)

if the municipality's or municipally owned utility's rates were

regulated under federal law and the rules of the Federal

Communications Commission. In addition, not later than September

1, 2006, a municipality or municipally owned utility shall charge

a single, uniform pole attachment or underground conduit rate to

all entities that are not affiliated with the municipality or

municipally owned utility regardless of the services carried over

the networks attached to the poles or underground conduit.

(d) Notwithstanding any other law, the commission has the

jurisdiction necessary to enforce this section.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 6, eff. September 7, 2005.

Sec. 54.205. MUNICIPALITY'S RIGHT TO CONTROL ACCESS. This title

does not restrict a municipality's historical right to control

and receive reasonable compensation for access to the

municipality's public streets, alleys, or rights-of-way or to

other public property.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.206. RECOVERY OF MUNICIPAL FEE. (a) A holder of a

certificate of convenience and necessity, a certificate of

operating authority, or a service provider certificate of

operating authority has the right to collect a fee that a

municipality imposes under Section 54.204 or 54.205 through a pro

rata charge to the customers in the boundaries of the

municipality.

(b) The charge may be shown on the customer's bill as a separate

line item.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER F. REGULATION OF SERVICES, AREAS, AND FACILITIES

Sec. 54.251. PROVISION OF SERVICE. (a) Except as provided by

this section, Section 54.252, Section 54.253, and Section 54.254,

a telecommunications utility that holds a certificate of

convenience and necessity or a certificate of operating authority

shall:

(1) offer all basic local telecommunications services to each

customer in the utility's certificated area; and

(2) provide continuous and adequate service in that area.

(b) Except as specifically determined otherwise by the

commission under this subchapter or Subchapter G, the holder of a

certificate of convenience and necessity, or the holder of a

certificate of operating authority issued under Chapter 65, for

an area has the obligations of a provider of last resort

regardless of whether another provider has a certificate of

operating authority or service provider certificate of operating

authority for that area.

resort obligations using any available technology.

Notwithstanding any provision of Chapter 56, the commission may

adjust disbursements from the universal service fund to companies

using technologies other than traditional wireline or landline

technologies to meet provider of last resort obligations. As

determined by the commission, the certificate holder shall meet

minimum quality of service standards, including standards for 911

service, comparable to those established for traditional wireline

or landline technologies and shall offer services at a price

comparable to the monthly service charge for comparable services

in that exchange or the provider's nearest exchange.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 76, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 7, eff. September 7, 2005.

Sec. 54.252. GROUNDS FOR REDUCTION OF SERVICE BY HOLDER OF

CERTIFICATE OF CONVENIENCE AND NECESSITY. (a) Except to the

extent otherwise ordered by the commission in accordance with

this subchapter, the holder of a certificate of convenience and

necessity may not discontinue, reduce, or impair service to any

part of the holder's certificated service area except for:

(1) nonpayment of charges;

(2) nonuse; or

(3) another similar reason that occurs in the usual course of

business.

(b) A discontinuance, reduction, or impairment of service must

be in compliance with and is subject to any condition or

restriction the commission prescribes.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 76, Sec. 2, eff. Sept. 1,

2003.

Sec. 54.253. DISCONTINUATION OF SERVICE BY CERTAIN CERTIFICATE

HOLDERS. (a) A telecommunications utility that holds a

certificate of operating authority or a service provider

certificate of operating authority may:

(1) cease operations in the utility's certificated area; or

(2) discontinue an optional service that is not essential to

providing basic local telecommunications service.

(b) Before the telecommunications utility ceases operations or

discontinues an optional service, the utility, in the manner

required by the commission, must give notice of the intended

action to:

(1) the commission;

(2) each affected customer;

(3) the Commission on State Emergency Communications;

(4) the office; and

(5) each wholesale provider of telecommunications facilities or

services from which the utility has purchased facilities or

services.

optional service on or after the 61st day after the date the

utility gives the notice.

(d) The telecommunications utility may not cease operations in

its certificated area unless the commission authorizes the

utility to cease operations and:

(1) another provider of basic local telecommunications services

has adequate facilities and capacity to serve the customers in

the certificated area; or

(2) the utility is an "exiting utility," as that term is defined

by Section 54.301, no other telecommunications utility has

facilities sufficient to provide basic local telecommunications

service in the defined geographic area, and the utility acts in

good faith to provide for a transition of the utility's existing

basic local telecommunications service customers to another

holder of a certificate for that area.

(e) The commission may not authorize the telecommunications

utility to cease operations under Subsection (d) before the 61st

day after the date the utility gives the notice required by

Subsection (b). Unless the commission receives a complaint from

an affected person, the commission may enter an order under this

subsection administratively.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 76, Sec. 3, eff. Sept. 1,

2003.

Sec. 54.254. REQUIRED REFUSAL OF SERVICE. A holder of a

certificate of convenience and necessity, a certificate of

operating authority, or a service provider certificate of

operating authority shall refuse to serve a customer in the

holder's certificated area if the holder is prohibited from

providing the service under Section 212.012, 232.029, or

232.0291, Local Government Code.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch.

708, Sec. 14, eff. September 1, 2005.

Sec. 54.255. TRANSFER OF CERTAIN CERTIFICATES. (a) A

telecommunications utility may sell, assign, or lease a

certificate of convenience and necessity or a certificate of

operating authority or a right obtained under such a certificate

if the commission determines that the purchaser, assignee, or

lessee can provide adequate service.

(b) The sale, assignment, or lease of a certificate or a right

is subject to conditions the commission prescribes.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.256. APPLICATION OF CONTRACTS. A contract approved by

the commission between telecommunications utilities that

designates areas and customers to be served by the utilities:

(1) is valid and enforceable; and

(2) shall be incorporated into the appropriate areas of

certification.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.257. INTERFERENCE WITH ANOTHER TELECOMMUNICATIONS

UTILITY. If a telecommunications utility constructing or

extending the utility's lines, plant, or system interferes or

attempts to interfere with the operation of a line, plant, or

system of another utility, the commission by order may:

(1) prohibit the construction or extension; or

(2) prescribe terms for locating the affected lines, plants, or

systems.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.258. MAPS. A public utility shall file with the

commission one or more maps that show each utility facility and

that separately illustrate each utility facility for transmission

or distribution of the utility's services on a date the

commission orders.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.259. DISCRIMINATION BY PROPERTY OWNER PROHIBITED. (a)

If a telecommunications utility holds a consent, franchise, or

permit as determined to be the appropriate grants of authority by

the municipality and holds a certificate if required by this

title, a public or private property owner may not:

(1) prevent the utility from installing on the owner's property

a telecommunications service facility a tenant requests;

(2) interfere with the utility's installation on the owner's

property of a telecommunications service facility a tenant

requests;

(3) discriminate against such a utility regarding installation,

terms, or compensation of a telecommunications service facility

to a tenant on the owner's property;

(4) demand or accept an unreasonable payment of any kind from a

tenant or the utility for allowing the utility on or in the

owner's property; or

(5) discriminate in favor of or against a tenant in any manner,

including rental charge discrimination, because of the utility

from which the tenant receives a telecommunications service.

(b) Subsection (a) does not apply to an institution of higher

education. In this subsection, "institution of higher education"

means:

(1) an institution of higher education as defined by Section

61.003, Education Code; or

(2) a private or independent institution of higher education as

defined by Section 61.003, Education Code.

jurisdiction to enforce this section.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.260. PROPERTY OWNER'S CONDITIONS. (a) Notwithstanding

Section 54.259, if a telecommunications utility holds a municipal

consent, franchise, or permit as determined to be the appropriate

grant of authority by the municipality and holds a certificate if

required by this title, a public or private property owner may:

(1) impose a condition on the utility that is reasonably

necessary to protect:

(A) the safety, security, appearance, and condition of the

property; and

(B) the safety and convenience of other persons;

(2) impose a reasonable limitation on the time at which the

utility may have access to the property to install a

telecommunications service facility;

(3) impose a reasonable limitation on the number of such

utilities that have access to the owner's property, if the owner

can demonstrate a space constraint that requires the limitation;

(4) require the utility to agree to indemnify the owner for

damage caused installing, operating, or removing a facility;

(5) require the tenant or the utility to bear the entire cost of

installing, operating, or removing a facility; and

(6) require the utility to pay compensation that is reasonable

and nondiscriminatory among such telecommunications utilities.

(b) Notwithstanding any other law, the commission has the

jurisdiction to enforce this section.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Sec. 54.261. SHARED TENANT SERVICES CONTRACT. Sections 54.259

and 54.260 do not require a public or private property owner to

enter into a contract with a telecommunications utility to

provide shared tenant services on a property.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER G. PROVIDER OF LAST RESORT

Sec. 54.301. DEFINITIONS. In this subchapter:

(1) "Exiting utility" means a telecommunications utility that:

(A) holds a certificate of operating authority or a service

provider certificate of operating authority;

(B) is the predominant provider of basic local

telecommunications service in a defined geographic area and

provides those services using the utility's own facilities; and

certificated service area under Section 54.253 or 54.303.

(2) "Provider of last resort" means a certificated

telecommunications utility that must offer basic local

telecommunications service throughout a defined geographic area.

(3) "Successor utility" means a telecommunications utility that

holds a certificate of convenience and necessity, certificate of

operating authority, or service provider certificate of operating

authority, and that is or is designated to become the provider of

last resort for the defined geographic area previously served by

an exiting utility.

Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1,

2003.

Sec. 54.3015. APPLICABILITY OF SUBCHAPTER. This subchapter

applies to a holder of a certificate of operating authority

issued under Chapter 65 in the same manner and to the same extent

this subchapter applies to a holder of a certificate of

convenience and necessity.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 8, eff. September 7, 2005.

Sec. 54.302. PROVIDER OF LAST RESORT; FACILITIES-BASED

PROVIDERS. (a) Notwithstanding any other provision of this

title, if a telecommunications utility installs facilities to

serve customers located in a defined geographic area to provide

telecommunications services, including basic local

telecommunications service, before the holder of the certificate

of convenience and necessity installs facilities to serve

customers located in that defined geographic area, the holder of

the certificate of convenience and necessity may petition the

commission for an order relieving the utility of the utility's

designation as the provider of last resort in that defined

geographic area.

(b) The commission shall relieve the holder of the certificate

of convenience and necessity of the obligations of service as the

provider of last resort for the defined geographic area, and the

commission shall designate the facilities-based

telecommunications utility as the provider of last resort if the

commission determines that:

(1) the holder of the certificate of convenience and necessity

does not have facilities in place to provide basic local

telecommunications service to all customers within that defined

geographic area;

(2) another certificated telecommunications utility has

installed facilities adequate to provide that service throughout

that area; and

(3) the public interest would be served by transferring the

provider of last resort obligations for that area.

the determinations prescribed by this section not later than the

91st day after the date the petition is filed under Subsection

(a).

Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1,

2003.

Sec. 54.303. SUCCESSOR TELECOMMUNICATIONS UTILITY WHEN NO

SUFFICIENT FACILITIES EXIST. (a) When the commission obtains

notice as required under Section 54.253 or otherwise that a

utility intends to become an exiting utility and no other

telecommunications utility has facilities sufficient to provide

basic local telecommunications service in that defined geographic

area, the commission shall open a contested case proceeding to

determine:

(1) the identity of the successor utility under this section;

and

(2) the amount of universal service funding under Subchapter G,

Chapter 56, to be made available to the successor utility.

(b) On designation as the successor utility under this section,

the commission, if applicable, shall provide to the successor

utility:

(1) a reasonable time, in accordance with industry practices and

not subject to otherwise applicable commission service quality

rules or standards, to modify, construct, or obtain facilities

necessary to serve the customers of the exiting

telecommunications utility; and

(2) an exemption on a transitional basis from any obligation to

unbundle the utility's network elements or to provide service for

resale within that defined geographic area for nine months or

another reasonable period the commission may authorize as

necessary to modify the utility's network to provide that

unbundling or resale.

by the successor utility is considered to have applied for

service from the successor utility on the effective date of that

designation by the commission. Each right, privilege, and

obligation of being a customer of the successor utility applies

to that customer and the customer is subject to the successor

utility's applicable terms of service as specified in an

applicable tariff or contract.

Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1,

2003.

Sec. 54.304. ABANDONMENT OR CESSATION BY FACILITIES-BASED

PROVIDER; EMERGENCY RESTORATION. (a) The commission, on its own

motion or on the petition of an interested party, may institute

an expedited proceeding under this section if the commission

finds that:

(1) a holder of a certificate of operating authority or service

provider certificate of operating authority is the predominant

provider of basic local telecommunications service in a defined

geographic area and the utility provides that service using the

utility's own facilities;

(2) no other telecommunications utility has facilities

sufficient to provide basic local telecommunications service in

that defined geographic area; and

(3) the holder of the certificate of operating authority or

service provider certificate of operating authority has:

(A) ceased providing basic local telecommunications service to

the utility's customers in that defined geographic area; or

(B) abandoned the operation of the utility's facilities in the

defined geographic area that are used to provide basic local

telecommunications service.

(b) In a proceeding under this section, the commission may

declare that an emergency exists and issue any order necessary to

protect the health, safety, and welfare of affected customers of

the utility and to expedite the restoration and continuation of

basic local telecommunications service to those customers. An

order issued by the commission under this subsection may include

an order to:

(1) provide for a temporary arrangement for operation of the

utility's facilities by an uncertificated entity that agrees to

provide service;

(2) authorize one or more third parties to enter the premises of

the abandoned facilities; or

(3) grant temporary waivers from quality of service

requirements.

accordance with Section 54.303 during a proceeding under this

section.

Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1,

2003.

Sec. 54.305. COMMISSION PARTICIPATION IN BANKRUPTCY PROCEEDINGS.

(a) The commission, on written notice that a certificated

telecommunications utility has filed a petition in bankruptcy or

is the subject of an involuntary petition in bankruptcy, may

inform the appropriate court and parties of the commission's

interest in obtaining notice of proceedings.

(b) Within the time prescribed by the applicable statutes,

rules, and court orders, the commission may intervene and

participate in any bankruptcy proceedings that affect customers

or providers of telecommunications services in this state.

the office's interest in obtaining notice of the proceedings.

Within the time prescribed by the applicable statutes, rules, and

court orders, the office may intervene and participate in any

bankruptcy proceeding on behalf of residential and small

commercial customers.

Added by Acts 2003, 78th Leg., ch. 76, Sec. 4, eff. Sept. 1,

2003.