|(a) Purpose. This section establishes guidelines for
financial assistance to eligible telecommunications providers (ETPs)
that provide service in the study areas of small and rural ILECs in
the state so that basic local telecommunications service or its equivalent
may be provided at reasonable rates in a competitively neutral manner.
(1) Small or rural ILECs. This section applies to small
ILECs, as defined in subsection (c) of this section, and to rural
ILECs, as defined in §26.5 of this title (relating to Definitions),
that have been designated ETPs.
(2) Other ETPs providing service in small or rural
ILEC study areas. This section applies to telecommunications providers
other than small or rural ILECs that provide service in small or rural
ILEC study areas that have been designated ETPs.
(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 Small and Rural ILEC Universal Service Plan (SRILEC USP) 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
(3) Eligible telecommunications provider (ETP)--A telecommunications
provider designated by the commission pursuant to §26.417 of
this title (relating to Designation as Eligible Telecommunications
Providers to Receive Texas Universal Service Funds (TUSF)).
(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.
(7) Small incumbent local exchange company--An incumbent
local exchange (ILEC) that qualifies as a "small local exchange company"
as defined in the Public Utility Regulatory Act (PURA), §53.304(a)(1).
(d) Service to be supported by the Small and Rural
ILEC Universal Service Plan. The Small and Rural ILEC Universal Service
Plan shall support the provision by ETPs of basic local telecommunications
service as defined in §26.403(d) of this title (relating to Texas
High Cost Universal Service Plan (THCUSP)) and is limited to those
services carried on all residential lines and the first five single-line
business lines at a business customer's service address for which
a flat rate plan is an available option.
(e) Criteria for determining amount of support under
Small and Rural ILEC Universal Service Plan. The commission shall
determine the amount of per-line support to be made available to ETPs
in each eligible study area. The amount of support available to each
ETP shall be calculated using the small and rural ILEC ETP base support
amount and applying the annual reductions as described in this subsection.
(1) Determining base support amount available to ETPs.
The initial per-line monthly base support amount for a small or rural
ILEC ETP shall be the per-line monthly support amount for each small
or rural ILEC ETP study area as specified in Docket Number 18516,
annualized by using the small or rural ILEC ETP access line count
as of January 1, 2012. The initial per-line monthly base support amount
shall be reduced as described in paragraph (3) of this subsection.
(2) Determination of the reasonable rate.
(A) The reasonable rate for basic local telecommunications
service shall be determined by the commission in a contested case
proceeding. An increase to an existing rate shall not in any one year
exceed an amount to be determined by the commission in the contested
(B) The length of the transition period applicable
to the reduction in support calculated under paragraph (3) of this
subsection shall be determined in the contested case proceeding.
(3) Annual reductions to the Small and Rural ILEC Universal
Service Plan per-line support. As part of the contested case proceeding
referenced in paragraph (2) of this subsection, for each small or
rural ILEC ETP, the commission shall calculate the amount of additional
revenue, using the basic telecommunications service rate (the tariffed
local service rate plus any additional charges for tone dialing services,
mandatory expanded local calling service and mandatory extended area
service) and the access line count as of September 1, 2013, would
result if the small and rural ILEC ETP were to charge the reasonable
rate for basic local telecommunications service to all residential
customers. Without regard to whether a small or rural ILEC ETP increases
its rates for basic local telecommunications service to the reasonable
rate, the small or rural ILEC ETP's annual base support amount for
each study area shall be reduced on January 1 of each year for four
consecutive years, with the first reduction occurring on January 1,
2014. The small or rural ILEC 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, unless specified
otherwise pursuant to paragraph (2)(B) of this subsection. This reduction
shall be accomplished by reducing support for each study area proportionally.
An ILEC ETP may, in its sole discretion, accelerate its SRILEC USP
reduction in any year by as much as 10% and offset such reductions
with a corresponding local rate increase in order to produce rounded
(f) Small and Rural ILEC Universal Service Plan support
payments to ETPs. The TUSF administrator shall disburse monthly support
payments to ETPs qualified to receive support pursuant to this section.
(1) Payments to small or rural ILEC ETPs. The payment
to each small or rural ILEC ETP shall be computed by multiplying the
per-line amount established in subsection (e) of this section by the
number of eligible lines served by the small or rural ILEC ETP for
(2) Payments to ETPs other than small or rural ILECs.
The payment to each ETP other than a small or rural ILEC shall be
computed by multiplying the per-line amount established in subsection
(e) of this section for a given small or rural ILEC study area by
the number of eligible lines served by the ETP in such study area
for the month.
(g) 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 SRILEC USP according to the following criteria.
(1) For each ILEC ETP that is electing under PURA,
Chapter 58 or 59 or a cooperative 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 ETP is eligible to receive for each exchange on December
31, 2017 from the SRILEC USP is reduced:
(A) on January 1, 2018, to 75 percent of the level
of support the ILEC ETP is eligible to receive on December 31, 2017;
(B) on January 1, 2019, to 50 percent of the level
of support the ILEC ETP is eligible to receive on December 31, 2017;
(C) on January 1, 2020, to 25 percent of the level
of support the ILEC ETP is eligible to receive on December 31, 2017.
(2) An ILEC ETP subject to this subsection may file
a petition to show financial need for continued support, pursuant
to §26.405(f)(1) of this title, on or before January 1, 2020.
(h) Reporting requirements. An ETP eligible to receive
support under this section shall report information as required by
the commission and the TUSF administrator.
(1) Monthly reporting requirement. An ETP shall report
the following to the TUSF administrator on a monthly basis:
(A) the total number of eligible lines for which the
ETP seeks SRILEC USP support; and
(B) a calculation of the base support computed in accordance
with the requirements of subsection (e) of this section.
(2) Quarterly filing requirements. An ETP shall file
quarterly reports with the commission showing actual SRILEC USP receipts
by study area.
(A) Reports shall be filed electronically in the project
number assigned by the commission's central records office no later
than 3:00 p.m. on the 30th calendar day after the end of the calendar
quarter reporting period.
(B) Each ETP's reports shall be filed on an individual
company basis; reports that aggregate the disbursements received by
two or more ETPs will not be accepted as complying with the requirements
of this paragraph.
(C) All reports filed pursuant to paragraph (3) of
this subsection shall be publicly available.
(3) Annual reporting requirements. An ETP shall report
annually to the TUSF administrator that it is qualified to participate
in the Small and Rural ILEC Universal Service Plan.
(4) Other reporting requirements. An ETP shall report
any other information that is required by the commission or the TUSF
administrator, including any information necessary to assess contributions
and disbursements from the TUSF.