CHAPTER 59. INFRASTRUCTURE PLAN

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UTILITIES CODE

TITLE 2. PUBLIC UTILITY REGULATORY ACT

SUBTITLE C. TELECOMMUNICATIONS UTILITIES

CHAPTER 59. INFRASTRUCTURE PLAN

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 59.001. POLICY. It is the policy of this state that an

incumbent local exchange company that does not elect to be

regulated under Chapter 58 should have incentives to deploy

infrastructure that will benefit the residents of this state

while maintaining reasonable local rates and universal service.

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

Sec. 59.002. DEFINITIONS. In this chapter:

(1) "Electing company" means an incumbent local exchange company

that elects for an infrastructure commitment and corresponding

regulation under this chapter.

(2) "Election date" means the date on which the commission

receives notice of election under Subchapter B.

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

SUBCHAPTER B. INFRASTRUCTURE INCENTIVES

Sec. 59.021. ELECTION. (a) An incumbent local exchange company

may elect to make an infrastructure commitment and to be subject

to corresponding regulation under this chapter if the company:

(1) serves less than five percent of the access lines in this

state; and

(2) has not elected incentive regulation under Chapter 58.

(b) A company makes the election by notifying the commission in

writing of the company's election.

for successive two-year periods. An election that is renewed

under this subsection remains in effect until the earlier of the

date that:

(1) the election expires because it was not renewed;

(2) the commission allows the company to withdraw its election

under Section 59.022; or

(3) the legislature eliminates the incentive regulation

authorized by this chapter and Chapter 58.

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

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 46, eff. Sept. 1,

1999.

Sec. 59.022. WITHDRAWAL OF ELECTION. (a) The commission may

allow an electing company to withdraw the company's election

under this chapter:

(1) on application by the company; and

(2) only for good cause.

(b) In this section, "good cause" includes only matters beyond

the control of the company.

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

Sec. 59.023. ELECTION UNDER CHAPTER 58. (a) This chapter does

not prohibit a company electing under this chapter from electing

incentive regulation under Chapter 58.

(b) If a company makes an election under Chapter 58, the

infrastructure commitment made under this chapter offsets the

infrastructure commitment required in connection with the Chapter

58 election.

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

Sec. 59.024. RATE CHANGES. (a) Except for the charges

permitted under Subchapter C, Chapter 55, Subchapter B, Chapter

56, and Section 55.024, an electing company may not, before the

end of the company's election period under this chapter, increase

a rate previously established for that company under this title

unless the commission approves the proposed change as authorized

under Subsection (c) or (d).

(b) For purposes of Subsection (a), the company's previously

established rates are the rates charged by the company on its

election date without regard to a proceeding pending under:

(1) Section 15.001;

(2) Subchapter D, Chapter 53; or

(3) Subchapter G, Chapter 2001, Government Code.

own motion, shall adjust prices for services to reflect changes

in Federal Communications Commission separations that affect

intrastate net income by at least 10 percent.

(d) Notwithstanding Subsection (a), the commission, on request

of the electing company, shall allow a rate group

reclassification that results from access line growth.

(e) Section 58.059 applies to a rate change under this section.

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

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 47, eff. Sept. 1,

1999.

Sec. 59.025. SWITCHED ACCESS RATES. Notwithstanding any other

provision of this title, the commission may not, on the

commission's own motion, reduce an electing company's rates for

switched access services before the expiration of the election

period prescribed by Section 59.024, but may approve a reduction

proposed by the electing company.

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

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 48, eff. Sept. 1,

1999.

Sec. 59.026. COMPLAINT OR HEARING. (a) On or before the end of

the company's election period, an electing company is not, under

any circumstances, subject to:

(1) a complaint or hearing regarding the reasonableness of the

company's:

(A) rates;

(B) overall revenues;

(D) net income; or

(2) a complaint that a rate is excessive.

(b) Subsection (a) applies only to a company that is in

compliance with the company's infrastructure commitment under

this chapter.

determination on an electing company's implementation of a

competitive safeguard required by Chapter 60.

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

Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 49, eff. Sept. 1,

1999.

Sec. 59.027. CONSUMER COMPLAINTS REGARDING TARIFFS. (a) This

chapter does not restrict:

(1) a consumer's right to complain to the commission about the

application of an ambiguous tariff; or

(2) the commission's right to determine:

(A) the proper application of that tariff; or

(B) the proper tariff rate if that tariff does not apply.

(b) This section does not permit the commission to:

(1) lower a tariff rate except as specifically provided by this

title;

(2) change the commission's interpretation of a tariff; or

(3) extend the application of a tariff to a new class of

customers.

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

Sec. 59.028. CONSUMER COMPLAINTS REGARDING SERVICES; ENFORCEMENT

OF STANDARDS. This chapter does not restrict:

(1) a consumer's right to complain to the commission about

quality of service; or

(2) the commission's right to enforce a quality of service

standard.

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

Sec. 59.029. INVESTMENT LIMITATION ON SERVICE STANDARDS. (a)

The commission may not raise a service standard applicable to the

provision of local exchange telephone service by an electing

company if the increased investment required to comply with the

raised standard in any year exceeds 10 percent of the company's

average annual intrastate additions in capital investment for the

most recent five-year period.

(b) In computing the average under Subsection (a), the electing

company shall exclude:

(1) extraordinary investments made during the five-year period;

and

(2) investments required by Section 59.052.

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

Sec. 59.030. NEW SERVICES. (a) An electing company may

introduce a new service 10 days after providing an informational

notice to the commission, to the office, and to any person who

holds a certificate of operating authority in the electing

company's certificated area or areas or who has an effective

interconnection agreement with the electing company.

(b) An electing company shall price each new service at or above

the service's long run incremental cost. The commission shall

allow a company serving fewer than one million access lines to

establish a service's long run incremental cost by adopting, at

that company's option, the cost studies of a larger company for

that service that has been accepted by the commission.

small commercial customers, or the commission may file a

complaint at the commission challenging whether the pricing by an

electing company of a new service is in compliance with

Subsection (b).

(d) If a complaint is filed under Subsection (c), the electing

company has the burden of proving that the company set the price

for the new service in accordance with the applicable provisions

of this subchapter. If the complaint is finally resolved in favor

of the complainant, the electing company:

(1) shall, not later than the 10th day after the date the

complaint is finally resolved, amend the price of the service as

necessary to comply with the final resolution; or

(2) may, at the company's option, discontinue the service.

Added by Acts 1999, 76th Leg., ch. 1212, Sec. 50, eff. Sept. 1,

1999.

Sec. 59.031. PRICING AND PACKAGING FLEXIBILITY. (a)

Notwithstanding Section 59.027(b) or Subchapter F, Chapter 60, an

electing company may exercise pricing flexibility in accordance

with this section, including the packaging of any regulated

service such as basic local telecommunications service with any

other regulated or unregulated service or any service of an

affiliate. The electing company may exercise pricing flexibility

10 days after providing an informational notice to the

commission, to the office, and to any person who holds a

certificate of operating authority in the electing company's

certificated area or areas or who has an effective

interconnection agreement with the electing company. Pricing

flexibility includes all pricing arrangements included in the

definition of "pricing flexibility" prescribed by Section

51.002(7) and includes packaging of regulated services with

unregulated services or any service of an affiliate.

(b) An electing company, at the company's option, shall price

each regulated service offered separately or as part of a package

under Subsection (a) at either the service's tariffed rate or at

a rate not lower than the service's long run incremental cost.

The commission shall allow a company serving fewer than one

million access lines to establish a service's long run

incremental cost by adopting, at that company's option, the cost

studies of a larger company for that service that have been

accepted by the commission.

small commercial customers, or the commission may file a

complaint alleging that an electing company has priced a

regulated service in a manner that does not meet the pricing

standards of this subchapter. The complaint must be filed before

the 31st day after the company implements the rate.

Added by Acts 1999, 76th Leg., ch. 1212, Sec. 50, eff. Sept. 1,

1999.

Sec. 59.032. CUSTOMER PROMOTIONAL OFFERINGS. (a) An electing

company may offer a promotion for a regulated service for not

more than 90 days in any 12-month period.

(b) The electing company shall file with the commission a

promotional offering that consists of:

(1) waiver of installation charges or service order charges, or

both, for not more than 90 days in a 12-month period; or

(2) a temporary discount of not more than 25 percent from the

tariffed rate for not more than 60 days in a 12-month period.

approval to make a promotional offering described by Subsection

(b).

(d) An electing company may offer a promotion of any regulated

service as part of a package of services consisting of any

regulated service with any other regulated or unregulated service

or any service of an affiliate.

Added by Acts 1999, 76th Leg., ch. 1212, Sec. 50, eff. Sept. 1,

1999.

SUBCHAPTER C. INFRASTRUCTURE COMMITMENT AND GOALS

Sec. 59.051. INFRASTRUCTURE COMMITMENT. (a) An electing

company shall commit to make in this state, during the six years

after the election date, the telecommunications infrastructure

investment prescribed by this chapter.

(b) The company shall make the commitment to the governor and

the commission in writing.

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

Sec. 59.052. INFRASTRUCTURE GOALS. (a) The commission shall

ensure that each electing company achieves the infrastructure

goals described by this section.

(b) Each new central office switch installed for an electing

company in this state after September 1, 1995, must be digital.

the company's territory access to end-to-end digital

connectivity. In this subsection, "make available" has the

meaning assigned by 16 T.A.C. Section 23.69.

(d) In each electing company's territory, 50 percent of the

local exchange access lines must be served by a digital central

office switch.

(e) An electing company's public switched network backbone

interoffice facilities must employ broadband facilities that

serve at least 50 percent of the local exchange access lines and

are capable of 45 or more megabits a second. The company may

employ facilities at a lower bandwidth if technology permits the

delivery of video signal at the lower bandwidth at a quality

level comparable to a television broadcast signal. The

requirements of this subsection do not apply to local loop

facilities.

(f) An electing company shall install Common Channel Signaling 7

capability in each access tandem office.

(g) The infrastructure goals specified by Subsections (c)-(f)

must be achieved not later than January 1, 2000.

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

Sec. 59.053. WAIVER OF INFRASTRUCTURE REQUIREMENTS. (a) For an

electing company that serves fewer than one million lines, the

commission may waive a requirement prescribed by Section 59.052

if the company demonstrates that the investment is not viable

economically.

(b) Before granting a waiver under Subsection (a), the

commission must consider the public benefits that would result

from compliance with the requirement.

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

Sec. 59.054. PROGRESS REPORT. (a) On each anniversary of the

company's election date, an electing company shall file with the

commission a report on the company's progress on its

infrastructure commitment.

(b) The report must include a statement of:

(1) the institutions requesting service under Subchapter D;

(2) the institutions served under Subchapter D;

(3) the investments and expenses for the previous period and the

total investments and expenses for all periods; and

(4) other information the commission considers necessary.

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

Sec. 59.055. IMPLEMENTATION COSTS; INCREASE IN RATES AND

UNIVERSAL SERVICE FUNDS. The commission may not consider the

cost of implementing Section 59.052 in determining whether an

electing company is entitled to:

(1) a rate increase under this chapter; or

(2) increased universal service funds under Subchapter B,

Chapter 56.

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

SUBCHAPTER D. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES

Sec. 59.071. DEFINITIONS. In this subchapter:

(1) "Educational institution" has the meaning assigned by

Section 57.021.

(2) "Library" means:

(A) a public library or regional library system as those terms

are defined by Section 441.122, Government Code;

(B) a library operated by an institution of higher education or

a school district; or

Section 441.221(3), Government Code.

(3) "Private network services" means telecommunications services

provided to an entity described by Section 59.072(a), including

broadband services, customized services, and packaged network

services.

(4) "Telemedicine center" means a facility that is equipped to

transmit, by video or data service, medical information for the

diagnosis or treatment of illness or disease and that is:

(A) owned or operated by a public or not-for-profit hospital; or

(B) owned by a state-licensed health care practitioner and

operated on a nonprofit basis.

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

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

831, Sec. 13, eff. September 1, 2008.

Sec. 59.072. PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES. (a)

On customer request, an electing company shall provide private

network services to:

(1) an educational institution;

(2) a library;

(3) a telemedicine center; or

(4) a legally constituted consortium or group of entities listed

in this subsection.

(b) Except as provided by Section 59.081, the electing company

shall provide the private network services for the private and

sole use of the receiving entity. However, the company may

provide the services with a facility that is used to provide

another service to another customer.

of customers for purposes of the private network for distance

learning, telemedicine, and information-sharing purposes.

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

Sec. 59.073. INVESTMENT PRIORITIES. An electing company shall

give investment priority to serving:

(1) rural areas;

(2) areas designated as critically underserved medically or

educationally; and

(3) educational institutions with high percentages of

economically disadvantaged students.

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

Sec. 59.074. CONTRACTS FOR PRIVATE NETWORK SERVICES. (a) An

electing company shall provide a private network service under a

customer-specific contract.

(b) An electing company shall offer private network service

contracts under this subchapter at 110 percent of the long run

incremental cost of providing the private network service,

including installation costs.

approval of a contract is not required.

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

Sec. 59.075. PREFERRED RATE TREATMENT WARRANTED. The classes of

customers described by Section 59.072(a) warrant preferred rate

treatment. However, a rate charged for a service must cover the

service's long run incremental cost.

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

Sec. 59.076. ELECTION OF RATE TREATMENT. An educational

institution or a library may elect the rate treatment provided by

this subchapter or the discount provided by Subchapter B, Chapter

57.

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

Sec. 59.077. PRIVATE NETWORK SERVICES RATES AND TARIFFS. (a)

Notwithstanding the pricing flexibility authorized by this

subtitle, an electing company's rates for private network

services may not be increased before January 1, 2012.

(b) An electing company may not assess an entity described by

Section 59.072(a) a tariffed special construction or installation

charge unless the company and the entity agree on the assessment.

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

Amended by:

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

2, Sec. 22, eff. September 7, 2005.

Sec. 59.078. PRIVATE LINE OR SPECIAL ACCESS RATES. (a) On

request by an educational institution or a library, an electing

company shall provide 1.544 megabits a second private line or

special access service at 110 percent of the service's long run

incremental cost, including installation costs.

(b) The rate provided by Subsection (a) is in lieu of the

discount provided by Subchapter B, Chapter 57.

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

Sec. 59.079. COMPLAINTS LIMITED. Notwithstanding any other

provision of this title, an electing company is subject to a

complaint under Subchapter C or this subchapter only by an entity

described by Section 59.072(a).

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

Sec. 59.080. INTERCONNECTION OF NETWORK SERVICES. The private

network services provided under this subchapter may be

interconnected with other similar networks for distance learning,

telemedicine, and information-sharing purposes.

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

Sec. 59.081. SHARING OR RESALE OF NETWORK SERVICES. (a) A

private network service may be used and shared among the entities

described by Section 59.072(a) but may not be otherwise shared or

resold to other customers.

(b) A service provided under this subchapter may not be required

to be resold to other customers at a rate provided by this

subchapter.

of another service that an electing company may offer through the

use of the same facilities used to provide a private network

service offered under this subchapter.

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

Sec. 59.082. IMPLEMENTATION COSTS; INCREASE IN RATES AND

UNIVERSAL SERVICE FUNDS. The commission may not consider the

cost of implementing this subchapter in determining whether an

electing company is entitled to:

(1) a rate increase under this chapter; or

(2) increased universal service funds under Subchapter B,

Chapter 56.

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

Sec. 59.083. CONTINUATION OF OBLIGATION. Notwithstanding any

other provision of this title, an electing company shall continue

to comply with this subchapter until January 1, 2012, regardless

of:

(1) the date the company elected under this chapter; or

(2) any action taken in relation to that company under Chapter

65.

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

2, Sec. 23, eff. September 7, 2005.

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