HBA-ALS C.S.H.B. 2692 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2692 By: Counts State Affairs 5/6/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, telephone companies do not have the direct authority to recover their costs associated with the statewide Universal Service Fund assessment. In order to recover this charge, telephone companies are required to file a rate case type proceeding at the Public Utility Commission of Texas (PUC). In addition, small telephone companies do not currently have the ability to market or sell their products and services jointly with those of an affiliate. C.S.H.B. 2692 allows a local exchange company to recover its universal service fund assessment through a surcharge added to the bills of customers without presenting a full rate case to PUC. This bill provides reimbursement to certain local exchange companies through the universal service fund from reduced rates for certain intraLATA services. In addition, this bill allows a local exchange company to market and sell its products or services jointly with the products and services of an affiliate. 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 56, Utilities Code, by adding Sections 56.027 and 56.028, as follows: Sec. 56.027. UNIVERSAL SERVICE CHARGE SURCHARGE. Authorizes a local exchange company to recover its universal service fund assessment through a surcharge added to the bills of the local exchange company's customers. Sec. 56.028. UNIVERSAL SERVICE FUND REIMBURSEMENT FOR CERTAIN INTRALATA SERVICE. Requires the Public Utility Commission of Texas (PUC), on request of a local exchange company that is not an electing company under Chapter 58 (Incentive Regulation) or 59 (Infrastructure Plan), to provide reimbursement through the universal service fund for reduced rates for intraLATA interexchange high capacity (1.544 Mbps) service for entities described under Section 58.253(a). Requires the amount of reimbursement to be equal to the difference between the company's tariffed rates for that service on January 1, 1998, and the lowest rate offered for that service by any company electing incentive regulation under Chapter 58. SECTION 2. Amends Subchapter I, Chapter 60, Utilities Code, by adding Sections 60.164 and 60.165, as follows: Sec. 60.164. PERMISSIBLE JOINT MARKETING. Prohibits PUC, except as prescribed by Chapters 61 (Information Technology Services) and 63 (Electronic Publishing), from adopting a rule or order that prohibits a local exchange company from marketing or selling the company's products and services jointly with the products and services of an affiliate in a manner permitted by federal law or applicable rules of the Federal Communications Commission. Sec. 60.165. AFFILIATE RULES. (a) Prohibits PUC, except as prescribed by Chapters 61 and 63, from adopting a rule or order that prescribes for a local exchange company an affiliate rule, including an accounting rule, cost allocation rule, or structural separation rule, that is more burdensome than prescribed by federal law or applicable rules of the Federal Communications Commission. (b) Prohibits PUC from attributing or imputing to a local exchange company a price discount offered by an affiliate to the affiliate's customers, notwithstanding any other provision of this title. SECTION 3. Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE This substitute modifies the original bill to conform to Legislative Council format.