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TITLE 16ECONOMIC REGULATION
PART 2PUBLIC UTILITY COMMISSION OF TEXAS
CHAPTER 26SUBSTANTIVE RULES APPLICABLE TO TELECOMMUNICATIONS SERVICE PROVIDERS
SUBCHAPTER JCOSTS, RATES AND TARIFFS
RULE §26.211Rate-Setting Flexibility for Services Subject to Significant Competitive Challenges

    (N) for any type of pricing flexibility other than detariffing, include proposed tariffs and identify any tariff language that restricts the resale, sharing, or joint use of the service identified in accordance with subparagraph (C) of this paragraph and any component of the service and demonstrate why such restrictive tariff language is consistent with the policy established in the Public Utility Regulatory Act §52.001; and

    (O) include any other information that the ILEC wants considered in connection with the review of its application.

  (4) Tier 1 LECs. The commission will allow an incumbent LEC that is not a Tier 1 LEC as of September 1, 1995, at that company's option, to adopt the cost studies approved by the commission for a Tier 1 LEC.

  (5) Notice filing. An ILEC may, in accordance with §26.227 of this title (relating to Procedures Applicable to Nonbasic Services and Pricing Flexibility for Basic and Nonbasic Services for Chapter 58 Electing Companies.), submit an informational notice filing to introduce a service or exercise pricing flexibility to which this section applies. An informational notice filing must also comply with §26.228 of this title (relating to Requirements Applicable to Pricing Flexibility for Chapter 58 Electing Companies) or §26.229 of this title (relating to Requirements Applicable to Chapter 52 Companies) as applicable.

  (6) Review of competition outside exchange. For ILECs with less than 31,000 access lines, the presiding officer will not be limited under paragraph (7)(D)(i) - (x) of this subsection to considering only competition within each exchange where the ILEC will provide the service. In accordance with paragraph (3)(O) of this subsection, an ILEC with less than 31,000 access lines may provide information that addresses the criteria of paragraph (3)(G) - (I) of this subsection with respect to products or services available outside each exchange designated in paragraph (3)(E) of this subsection.

  (7) Application requirements. An application for pricing flexibility will be approved if, after commission review the commission determines that:

    (A) no service for which pricing flexibility is sought is basic local telecommunications service, including local measured service;

    (B) no service for which the ILEC requests detariffing of rates is message telecommunications service, switched access service, or wide area telecommunications service;

    (C) no service for which pricing flexibility is sought includes a component that is not subject to significant competitive challenge;

    (D) the grant of pricing flexibility for the service identified in accordance with paragraph (3)(C) of this subsection within each designated in accordance with paragraph (3)(E) of this subsection is appropriate to allow the ILEC to respond to a significant competitive challenge, based upon consideration of the following:

      (i) the number and size of telecommunications utilities or other persons providing the same, equivalent, or substitutable service within each exchange designated in accordance with paragraph (3)(E) of this subsection;

      (ii) the extent to which the same, equivalent, or substitutable service is available within each exchange designated in accordance with paragraph (3)(E) of this subsection;

      (iii) the ability of customers to obtain the same, equivalent, or substitutable services at comparable rates, terms, and conditions within each exchange designated in accordance with paragraph (3)(E) of this subsection;

      (iv) the ability of telecommunications utilities or other persons to make the same, equivalent, or substitutable service readily available at comparable rates, terms, and conditions within each exchange designated in accordance with paragraph (3)(E) of this subsection;

      (v) the existence of any significant barrier to the entry or exit of a provider of the same, equivalent or substitutable services within each designated in accordance with paragraph (3)(E) of this subsection;

      (vi) whether there are mechanisms to minimize potential anti-competitive practices, to the extent that any such practice has been identified in the record;

      (vii) whether there are mechanisms to prevent the subsidization of the service with revenues from regulated monopoly services;

      (viii) whether the ability of the ILEC to flexibly price the service within each designated exchange would have any significant impact on universal service;

      (ix) whether the type of pricing flexibility requested is appropriate in light of the level and nature of competition within each exchange where the ILEC will provide the service; and

      (x) any other relevant information contained in the record;

    (E) the rates, if the type of pricing flexibility granted is either banded rates or some other type of pricing flexibility in accordance with paragraph (1)(C) of this subsection that involves rate-setting, are just and reasonable and:

      (i) yield revenues that are equal to or greater than 105% of the long run incremental cost of the service in the geographic market in which the service will be provided;

      (ii) are not unreasonably preferential, prejudicial or discriminatory;

      (iii) are such that the service will not be subsidized directly or indirectly by regulated monopoly services; and

      (iv) are not predatory or anticompetitive.

  (8) Alternative relief. Nothing in this subsection prevents the presiding officer from approving relief other than that requested in the application.

(d) Customer-specific contracts. An ILEC may enter into customer-specific contracts for:

  (1) central office based PBX-type services for systems of 200 stations or more, as those services compete with customer premises equipment provided by PBX vendors;

  (2) billing and collection services;

  (3) high-speed private line services of 1.544 megabits or greater;

  (4) customized services that are unique because of size or configuration, provided that such customized services do not include basic local telecommunications service, including local measured service, or message telecommunications services, switched access services, or wide area telecommunications service; and

  (5) any other service for which the commission has authorized the ILEC to enter into customer- specific contracts in accordance with this section.

(e) Subsequent review. The commission may modify, or revoke, upon notice and hearing, the authorization of any type or types of pricing flexibility granted in accordance with this section.


Source Note: The provisions of this §26.211 adopted to be effective June 22, 1999, 24 TexReg 4553; amended to be effective April 4, 2012, 37 TexReg 2178; amended to be effective April 7, 2014, 39 TexReg 2499; amended to be effective December 21, 2023, 48 TexReg 7524

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