(a) Purpose. The purpose of this section is to provide
the standard for review of an incumbent local exchange company (ILEC)
application, filed in accordance with the Public Utility Regulatory
Act (PURA) §55.048(c), to recover all costs incurred and all
loss of revenue from an expansion of a toll-free local calling area.
(b) Definitions. The following terms, when used in
this section, have the following meanings, unless the context clearly
indicates otherwise.
(1) Avoided costs--ILEC costs that are reduced or eliminated
due to implementation of ELCS.
(2) Costs incurred--The amount of recurring and non-recurring
costs incurred by an ILEC to implement ELCS, minus avoided costs.
(3) Expanded local calling service (ELCS)--A two-way
toll-free local calling service provided by an ILEC to telephone service
subscribers in accordance with §26.219 of this title (relating
to Administration of Expanded Local Calling Service Requests).
(4) Expanded local calling service (ELCS) fee--A fee
billed by an ILEC, in accordance with PURA §55.048(b), to subscribers
in a petitioning telephone exchange.
(5) Expanded local calling service (ELCS) requirement--The
sum of lost revenue and costs incurred due to implementation of ELCS.
(6) Expanded local calling service (ELCS) surcharge--A
fee billed by an ILEC, in accordance with PURA §55.048(c), to
each Texas subscriber of the ILEC, unless an exception is granted
by the commission. ELCS surcharges are designed to recover the residual
in paragraph (8) of this subsection.
(7) Lost revenue--The loss of revenue an ILEC realizes
due to implementation of ELCS.
(8) Residual--The sum of lost revenue and costs incurred,
minus revenue collected from ELCS fees.
(c) General Principles. The commission will consider
these general principles when establishing or increasing ELCS surcharges.
(1) The commission may, at any time, initiate a show
cause investigation or a compliance investigation of ELCS surcharges
in accordance with Procedural Rule §22.241 of this title (relating
to Investigations) to determine whether ELCS surcharges comply with
the requirements in PURA §55.048.
(2) An ILEC bears the burden of demonstrating that
a proposed ELCS surcharge:
(A) recovers lost revenue and costs incurred;
(B) recovers costs necessary only for implementation
of ELCS; and
(C) is just and reasonable.
(3) If an ILEC departs from the requirements in subsection
(e)(1) - (6) of this section, and proposes instead to use statistical
sampling or another method of calculating ELCS surcharges, the ILEC
bears the burden of demonstrating the reasonableness of the alternative
method as it relates to the surcharge at issue.
(4) An application to establish an ELCS surcharge must
contain information that enables commission staff to validate and
replicate the method used by the ILEC to develop a proposed ELCS surcharge.
(5) When established, ELCS surcharges must be based
upon the most current count of local exchange access lines billed
by an ILEC.
(6) The commission will pursue the goal of revenue
neutrality in designing ELCS surcharges.
(7) Except as provided under subsection (i)(1) of this
section, an ILEC has no continuing right to bill an ELCS surcharge
for an indefinite period.
(8) ELCS surcharges must be designed so that business
subscribers are billed twice the monthly per line charge billed to
residential subscribers.
(d) Confidentiality. Before filing an application regarding
an ELCS surcharge, an ILEC must obtain agreement from commission staff
on a method for securing the confidentiality of information the ILEC
deems confidential. An application filed in accordance with subsection
(e) of this section must not exclude information deemed confidential
by the ILEC.
(e) Filing an application. An application to establish
or increase an ELCS surcharge must be assigned a control number and
a presiding officer must be assigned to the project. An ILEC's application
must be reviewed administratively unless the presiding officer dockets
the project. An application must, at a minimum, include:
(1) twelve consecutive months of actual toll revenue
data collected as near the ELCS implementation date as is practicable
but no earlier than 18 months before the ELCS implementation date.
Data provided by an ILEC must show actual toll revenue billed by the
ILEC for each direction of each pre-ELCS toll route for each of the
12 consecutive months collected;
(2) twelve consecutive months of actual access revenue
data collected as near the ELCS implementation date as is practicable
but no earlier than 18 months before the ELCS implementation date.
Data provided by an ILEC must show access revenue billed by the ILEC
for each direction of each pre-ELCS access route for each of the 12
consecutive months collected;
(3) a calculation of the effect of any mechanism for
pooling or settling revenue collected from and disbursed to telecommunications
providers;
(4) copies of documents, such as invoices, work orders,
receipts and lease agreements, that demonstrate the costs incurred
by an ILEC to implement ELCS, with recurring costs and non-recurring
costs separately identified for each pre-ELCS toll route;
(5) workpapers supporting all documents contained in
the application, including but not limited to, the ILEC's development
of factors, ratios, allocations, estimates, projections, averages
and labor rates;
(6) a calculation of avoided costs;
(7) one or more tariff sheets reflecting the proposed
rates;
(8) a request for exemption, if any, from one or more
requirements in this subsection;
(9) a copy of the confidentiality agreement, if such
an agreement is necessary, signed by a representative of commission
staff;
(10) the text of the proposed notice of an application
to establish or increase ELCS surcharges; and
(11) the ILEC's preferred duration of applicability
of the proposed ELCS surcharges among alternatives listed in subsection
(i) of this section.
(f) Administrative response to an application.
(1) Notice. The presiding officer will approve or modify
the notice proposed under subsection (e)(10) of this section within
20 days after the filing of an application to establish or increase
ELCS surcharges. The ILEC must arrange for publication of notice at
least once each week for four consecutive weeks, in newspapers having
general circulation in each of the ILEC's affected telephone exchanges.
Published notice must identify the assigned control number, must include
the language provided by §22.51(a)(1)(F) of this title (relating
to Notice for Public Utility Regulatory Act, Chapter 36, Subchapters
C-E; Chapter 51, §51.009; and Chapter 53, Subchapters C-E, Proceedings)
modified to reflect the appropriate intervention deadline, must describe
the application and must be written in plain English and Spanish.
Notice must be published within 40 days of the date the presiding
officer files an order approving the notice format. The ILEC must
file an affidavit of completion of published notice within ten days
following such completion. The presiding officer will cause notice
to be published in the Texas Register within
30 days of the date an order of approval of the notice format is filed.
Additionally, the ILEC must provide a copy of its application to the
Office of Public Utility Counsel on the same day the application is
filed with the commission.
(2) Intervention. The intervention deadline must be
no sooner than ten days after the last date notice is published. On
or before the intervention deadline, any interested person may file
a request to intervene in the project. The presiding officer will
rule on a request to intervene, in accordance with §22.103 of
this title (relating to Standing to Intervene) within ten days from
the date the request for intervention is filed with the commission.
Intervention by an interested person does not by itself require that
the project be docketed.
(3) Discovery. Discovery may commence on the date the
application is filed in accordance with Chapter 22, Subchapter H of
this title (relating to Discovery Procedures).
(4) Interim surcharges. No later than 30 days after
the intervention deadline, the presiding officer will grant or deny,
in whole or in part, a request for interim relief and may approve
or modify a proposed interim ELC surcharge in accordance with §22.125
of this title (relating to Interim Relief).
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