HBA-JLV C.S.S.B. 1783 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 1783
By: Sibley
State Affairs
5/8/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, all regions of the state of Texas, including low-income
customers and customers in rural and high cost regions, are to have
reasonably comparable access to advanced telecommunications services by
2001.  In its report to the 77th Legislature on "Availability of Advanced
Services in Rural and High Cost Areas" the Public Utility Commission of
Texas identified that it is more expensive to deploy advanced services to
many areas of rural Texas because of lower population density and longer
distances. Consequently, these areas have less access and lower computer
and Internet usage rates.  C.S.S.B. 1783 provides various incentives for
the deployment of advanced services and encourages local solutions for
communities without advanced services, especially smaller rural
communities. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.S.B. 1783 amends the Utilities Code and the Development Corporation Act
of 1979 to create the Texas Universal Broadband Access Act of 2001, to the
enhance the availability of advanced telecommunications services to all
residents of the state. 

The bill amends the Utilities Code to provide that the Public Utility
Commission of Texas (PUC) has all jurisdiction necessary to enforce this
Act and that the provisions of this Act establish the state's uniform
policy for the deployment of an advanced service and supersedes any
applicable final order of the PUC (Sec. 54.407).  The bill requires the PUC
to create and maintain a database that is capable of graphic representation
of the location and inventory of all public and private sector advanced
service facilities. The bill requires the PUC to participate in policy
dialogue and coordinate, cooperate, and mutually agree on policies with the
Telecommunications Infrastructure Fund Board (TIF), the Department of
Agriculture, or other state agencies or groups, regarding the availability
of funding or the establishment of priorities to accelerate the deployment
of an advanced service to all areas of this state.  The bill requires the
PUC to submit a biennial report to the legislature on the deployment of
advanced services and to submit the first report not later than January 15,
2003 (Sec. 55.406 and SECTION 15).  

The bill authorizes a community to submit to a company providing local
exchange service (LEC) to the community a request for the deployment of an
advanced service for that community.  The bill provides that if the
community is not a municipality or county, it must be sponsored by a
municipality or county in which all or part of the community is located and
sets forth the requirements of the request.  The bill sets forth provisions
under which a retail request for an advanced service is considered a bona
fide retail request (Sec. 55.403).   

The bill requires a LEC that receives, on or after September 1, 2002, a
bona fide retail request, not later than the 30th day after the date the
company receives the request, to notify in writing the community contact
person named in the request as to whether the LEC intends to provide an
advanced service, enter into a  business arrangement with another provider
of an advanced service, or not provide an advanced service. The bill
requires the LEC to provide an advanced service not later than the150th day
after the date the company notifies the contact person of the LEC's intent.
The PUC may authorize an extension to the LEC only on a showing that the
circumstances are beyond the LEC's control.  The bill sets forth additional
requirements governing the deployment of advanced services including the
terms of service and the prices the LEC may charge for services (Sec.
55.404).   

The bill authorizes a community or sponsoring municipality or county
(community) to attempt to obtain funding from any applicable source for
advanced services to the community if the LEC declines to provide an
advanced service.  The bill sets forth entities from which a community may
attempt to obtain funding (Sec. 55.405). 

The bill requires the board to use money in the qualifying entities account
for community planning and determination of advanced service requirements,
development of a community technology center, and an advanced service for a
community or sponsoring municipality or county (Sec. 57.046). 

The bill authorizes TIF to award a grant to a project or proposal that
provides equipment and necessary infrastructure for community technology
centers or an advanced service for a community.  The bill also authorizes
TIF to award a loan to a project or proposal submitted by a community to
acquire equipment needed for a community technology center project or an
advanced service project.  In awarding a grant or loan, the board is
required to give priority to a project or proposal that will establish or
enhance the provision of an advanced service to rural or low-income
communities of this state (Sec. 57.047). 

The bill requires TIF to coordinate its duties and responsibilities with
the PUC and any other state or local governmental entity to encourage the
ubiquitous access to advanced services in all areas of the state.  The bill
sets forth requirements relating to community development grants and loans
(Sec. 57.0475). 

The bill decreases, from 1.25 to .76, the annual assessment percentage of
the taxable telecommunications receipts imposed on each telecommunications
utility and each commercial mobile service provider.  The bill deletes
provisions setting forth the maximum amount allowed to be deposited to the
credit of the telecommunications infrastructure fund (Sec. 57.048).   

A municipal electric system owned, operated, and controlled by a
municipality with a population of not more than 25,000 is not prohibited
from providing advanced services for which certification is required (Sec.
54.202). 

The bill extends, from September 1, 2001 to September 1, 2005, the date by
which a LEC that provides advanced telecommunications services within the
LEC's urban service areas is required  to provide comparable advanced
services in rural areas of this state that are comparable to the advanced
services provided in urban areas (Sec. 55.014). 

The bill sets forth limitations, fees, and public hearing requirements for
a municipality that provides cable service.  The bill provides that a
municipality must conduct the municipality's activities in providing cable
services and in its regulation of competing private providers that offer
cable services so as to avoid discriminatory practices that could limit
competition and shall specifically ensure nondiscriminatory and reasonably
comparable treatment between the municipality's own provision of cable
services and that of competing providers.  In the event of a dispute
between a municipality and a provider of cable services, the bill requires
the parties to explore and attempt to implement available procedures for
alternative dispute resolution.  The bill prohibits the PUC from adopting
any rule related to these provisions (Sec. 54.2045). 

 The bill provides that as an incentive to deploy an advanced service in
this state, an electing company is authorized, on notification to the PUC,
to elect to have the company's services established as basic network
services, nonbasic services, and new services.   The bill provides that an
election made under these provisions supersedes any applicable final order
of the PUC to the extent that the order limits the rates charged for
nonbasic services specific to the electing company.  The bill authorizes a
company to elect  only if the company commits to provide an advanced
service beginning on September 1, 2001, to any community that submits a
bona fide request signed by at least 75 subscribers (Sec. 59.083). 

The bill amends the Development Corporation Act of 1979 to modify the
definition of project (SECTION 13). 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.S.B. 1783 modifies the original by focusing on the deployment of
advanced services to all residents of the state rather than focusing only
on rural communities. 

The substitute sets forth additional limitations on the provision of
advanced services by a municipality to a community (Sec. 55.404).  The
substitute sets forth fees that a municipality or municipal electric system
is required to include in its charges.  The substitute sets forth
provisions requiring a municipality to conduct a public hearing on the
issue of offering cable services to a community and provisions relating to
alternative dispute resolution in the event of a dispute between a
municipality and a provider of cable services (Sec. 54.2045). 

The substitute provides that if a community requesting an advanced service
is not a municipality or county, then it must be sponsored by a
municipality or county and sets forth the requirements of the request.  The
substitute no longer requires the Public Utility Commission (PUC) to post
publicly the number of bona fide requests for an advanced service in each
rural community.  The substitute sets forth provisions relating to the
requirements of a bona fide retail request.  The substitute no longer
requires a community that has not entered into a contract with a provider
of advanced services 120 days after the posting to provide advanced service
to its wire-line customers within its certificated area (Sec. 55.403). 

The substitute no longer sets forth provisions relating to local solutions
for the encouragement of advanced services in rural communities of the
state.  The substitute sets forth provisions relating to the receipt of the
request for advanced services and the provision of advanced services (Sec.
55.404). 

The substitute no longer requires strategic planning for the deployment of
advanced services to end use customers in rural areas.  The substitute sets
forth options for a community if a company declines to provide an advanced
service to a community (Sec. 55.405).   The substitute no longer requires
the PUC to begin a review and evaluation on the availability and quality of
advanced services and information services in rural and high cost areas
(Sec. 55.406). 

The substitute no longer requires the Telecommunications Infrastructure
Fund Board (TIF) to adopt rules to encourage the access of advanced
services in rural communities (Sec. 57.0475).  The substitute no longer
extends the Sunset date of TIF (Sec. 57.051). 

The substitute decreases, from 1.25 to .76, rather than decreasing from
1.25 to .5, the annual assessment percentage of the taxable
telecommunications receipts imposed on each telecommunications utility and
each commercial mobile service provider (Sec. 57.048).   

The substitute no longer amends the Government Code to set forth entities
the General Services Commission (GSC) may contract with for use of the
consolidated telecommunication system.  The substitute no longer requires
GSC, upon approval by the PUC, to allow access to, and contract the use of,
the consolidated telecommunications system to an approved public or
governmental entity or political subdivision of this state.  The substitute
no longer requires GSC to coordinate its duties and responsibilities with
TIF and permit access, pursuant to the PUC approval.  The substitute no
longer requires the PUC to adopt rules to ensure that a rural community
that is unable to obtain advanced services has access to such  services
through the consolidated telecommunications system. 

The substitute no longer amends the Tax Code to provide that the sales
price of telecommunications services does not include the
telecommunications infrastructure fund assessment, if the assessment or fee
is passed through to the purchaser of the service and is listed as a
separate line item on the customer's bill.