|(a) Purpose. This section establishes guidelines for
financial assistance to eligible telecommunications providers (ETPs)
that serve the high cost rural areas of the state, other than study
areas of small and rural incumbent local exchange companies (ILECs),
so that basic local telecommunications service may be provided at
reasonable rates in a competitively neutral manner.
(b) Application. This section applies to telecommunications
providers that have been designated ETPs by the commission pursuant
to §26.417 of this title (relating to Designation as Eligible
Telecommunications Providers to Receive Texas Universal Service Funds
(c) Definitions. The following words and terms when
used in this section shall have the following meaning unless the context
clearly indicates otherwise:
(1) Business line--The telecommunications facilities
providing the communications channel that serves a single-line business
customer's service address. For the purpose of this definition, a
single-line business line is one to which multi-line hunting, trunking,
or other special capabilities do not apply. For a line served by an
ILEC, a business line is a line served pursuant to the ILEC's business
service tariff or a package that includes such a tariffed service.
For a line served by an ILEC pursuant to a customer specific contract
or that is otherwise not served pursuant to a tariff, to qualify as
a business line, the service must be provided pursuant to a customer
application, subscriber agreement, or contract entered into by a public
or private organization of any character, or a representative or agent
of such entity, irrespective of the person or entity in actual possession
of the telephone device. For a line that is served by an ETP other
than an ILEC, to qualify as a business line, the service must be provided
pursuant to a customer application, subscriber agreement, or contract
entered into by a public or private organization of any character,
or a representative or agent of such entity, irrespective of the person
or entity in actual possession of the telephone device.
(2) Eligible line--A residential line or a single-line
business line over which an ETP provides the service supported by
the THCUSP through its own facilities, purchase of unbundled network
elements (UNEs), or a combination of its own facilities and purchase
of UNEs. An eligible line may be a business line or a residential
line but shall not be both.
(3) Eligible telecommunications provider (ETP)--A telecommunications
provider designated by the commission pursuant to §26.417 of
(4) Physical 911 address--For the purposes of this
section, a physical 911 address is an address transmitted to the applicable
emergency service providers by an ETP with respect to a line that
is not stated in GPS coordinates.
(5) Residential line--The telecommunications facilities
providing the communications channel that serves a residential customer's
service address. For the purpose of this definition, a residential
line is one to which multi-line hunting, trunking, or other special
capabilities do not apply. A line that qualifies as a business line
shall not qualify as a residential line.
(6) Service Address--For the purposes of this section,
a business or residential customer's service address is defined using
the following criteria:
(A) A service address is the unique physical street
address, including any suite or unit number, where a line is provided
to a customer, except as provided in clauses (i) - (ii) and subparagraph
(B) of this paragraph.
(i) If no unique physical street address is available,
a physical 911 address shall be used.
(ii) If no unique physical street address and no physical
911 address are available, the business or residential customer's
service address shall be an area of land under common operation or
use as defined by a deed, state permit, lease name, or licensed or
registered field of operation, which shall be described by an ETP
using GPS coordinates. Multiple buildings within a single area of
land under common operation or use shall not qualify as separate service
addresses, even if the GPS coordinates for each building are different.
(B) For eligible lines served using commercial mobile
radio service, a service address for such a line may be the customer's
billing address for the purposes of this definition.
(d) Service to be supported by the THCUSP. The THCUSP
shall support basic local telecommunications services provided by
an ETP in high cost rural areas of the state. Local measured residential
service, if chosen by the customer and offered by the ETP, shall also
(1) Initial determination of the definition of basic
local telecommunications service. Basic local telecommunications service
shall consist of the following:
(A) flat rate, single party residential and business
local exchange telephone service, including primary directory listings;
(B) tone dialing service;
(C) access to operator services;
(D) access to directory assistance services;
(E) access to 911 service where provided by a local
(F) telecommunications relay service;
(G) the ability to report service problems seven days
(H) availability of an annual local directory;
(I) access to toll services; and
(J) lifeline service.
(2) Subsequent determinations.
(A) Initiation of subsequent determinations.
(i) The definition of the services to be supported
by the THCUSP shall be reviewed by the commission every three years
from September 1, 1999.
(ii) The commission may initiate a review of the definition
of the services to be supported on its own motion at any time.
(B) Criteria to be considered in subsequent determinations.
In evaluating whether services should be added to or deleted from
the list of supported services, the commission may consider the following
(i) the service is essential for participation in society;
(ii) a substantial majority, 75% of residential customers,
subscribe to the service;
(iii) the benefits of adding the service outweigh the
(iv) the availability of the service, or subscription
levels, would not increase without universal service support.
(e) Criteria for determining amount of support under
THCUSP. The commission shall determine the amount of per-line support
to be made available to ETPs in each eligible wire center. The amount
of support available to each ETP shall be calculated using the base
support amount as of the effective date of this section and applying
the annual reductions as described in this subsection. As used in
this subsection, "basic local telecommunications service" refers to
services available to residential customers only, and "exchange" or
"wire center" refer to regulated exchanges or wire centers only.
(1) Determining base support amount available to ILEC
ETPs. The initial annual base support amount for an ILEC ETP shall
be the annualized monthly THCUSP support amount for the month preceding
the effective date of this section, less the 2011 amount of support
disbursed to the ILEC ETP from the federal universal service fund
for High Cost Loop, High Cost Model, Safety Net Additive, and Safety
Valve components of the frozen high-cost support as determined by
the Universal Service Administration Company pursuant to 47 C.F.R. §54.312(a).
The initial per-line monthly support amount for a wire center shall
be the per-line support amount for the wire center for the month preceding
the effective date of this section, less each wire center's pro rata
share of one-twelfth of the 2011 amount of support disbursed to the
ILEC ETP from the federal universal service fund for High Cost Loop,
High Cost Model, Safety Net Additive, and Safety Valve components
of the frozen high-cost support determined by the Universal Service
Administration Company pursuant to 47 C.F.R §54.312(a). The initial
annual base support amount shall be reduced annually as described
in paragraph (3) of this subsection.
(2) Determination of the reasonable rate. The reasonable
rate for basic local telecommunications service shall be determined
by the commission in a contested case proceeding. To the extent that
an ILEC ETP's existing rate for basic local telecommunications service
in any wire center is less than the reasonable rate, the ILEC ETP
may, over time, increase its rates for basic local telecommunications
service to an amount not to exceed the reasonable rate. The increase
to the existing rate shall not in any one year exceed an amount to
be determined by the commission in the contested case proceeding.
An ILEC ETP may, in its sole discretion, accelerate its THCUSP reduction
in any year by as much as 10% and offset such reduction with a corresponding
local rate increase in order to produce rounded rates. In no event
shall any such acceleration obligate the ETP to reduce its THCUSP
support in excess of the total reduction obligation initially calculated
under paragraph (3) of this subsection.
(3) Annual reductions to THCUSP base support and per-line
support recalculation. As part of the contested proceeding referenced
in paragraph (2) of this subsection, each ILEC ETP shall, using line
counts as of the end of the month preceding the effective date of
this rule, calculate the amount of additional revenue that would result
if the ILEC ETP were to charge the reasonable rate for basic local
telecommunications service to all residential customers for those
services where the price, or imputed price, are below the reasonable
rate. Lines in exchanges for which an application for deregulation
is pending as of June 1, 2012 shall not be included in this calculation.
If the application for deregulation for any such exchanges subsequently
is denied by the commission, the ILEC ETP shall, within 20 days of
the final order denying such application, submit revised calculations
including the lines in those exchanges for which the application for
deregulation was denied. Without regard to whether an ILEC ETP increases
its rates for basic local telecommunications service to the reasonable
rate, the ILEC ETP's annual base support shall be reduced on January
1 of each year for four consecutive years, with the first reduction
occurring on January 1, 2013. The ETP's annual base support amount
shall be reduced by 25% of the additional revenue calculated pursuant
to this paragraph in each year of the transition period. This reduction
shall be accomplished by reducing support for each wire center served
by the ETP proportionally.
(4) Portability. The support amounts established pursuant
to this section are applicable to all ETPs and are portable with the
(5) Limitation on availability of THCUSP support.
(A) THCUSP support shall not be provided in a wire
center in a deregulated market that has a population of at least 30,000.
(B) An ILEC may receive support from the THCUSP for
a wire center in a deregulated market that has a population of less
than 30,000 only if the ILEC demonstrates to the commission that the
ILEC needs the support to provide basic local telecommunications service
at reasonable rates in the affected market. An ILEC may use evidence
from outside the wire center at issue to make the demonstration. An
ILEC may make the demonstration for a wire center before or after
submitting a petition to deregulate the market in which the wire center
(6) Total Support Reduction Plan. Within 10 days of
the effective date of this section, an ILEC may elect to participate
in a Total Support Reduction Plan (TSRP) as prescribed in this subsection,
by filing a notification of such participation with the commission.
The TSRP would serve as an alternative to the reduction plan prescribed
in paragraph (3) of this subsection. The TSRP will be implemented
(A) For an ILEC making this election, the ILEC shall
reduce its THCUSP funding in accordance with paragraph (3) of this
subsection with the exception that THCUSP reductions due to exchange
deregulation may be credited against the electing ILEC's annual reduction
obligation in the calendar year immediately following such deregulation.
(B) In no event shall an electing ILEC seek or receive
THCUSP funding after January 1, 2017 even if it would otherwise be
entitled to such funding as of this date.
(f) Support Reduction. Subject to the provisions of §26.405(f)(3)
of this title (relating to Financial Need for Continued Support),
the commission shall adjust the support to be made available from
the THCUSP according to the following criteria.
(1) For each ILEC that is not electing under subsection
(e)(6) of this section and that served greater than 31,000 access
lines in this state on September 1, 2013, or a company or cooperative
that is a successor to such an ILEC, the monthly per-line support
that the ILEC is eligible to receive for each exchange on December
31, 2016 from the THCUSP is reduced:
(A) on January 1, 2017, to 75 percent of the level
of support the ILEC is eligible to receive on December 31, 2016;
(B) on January 1, 2018, to 50 percent of the level
of support the ILEC is eligible to receive on December 31, 2016; and