Texas Administrative Code
Title 16 - ECONOMIC REGULATION
Part 2 - PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 26 - SUBSTANTIVE RULES APPLICABLE TO TELECOMMUNICATIONS SERVICE PROVIDERS
Subchapter I - ALTERNATIVE REGULATION
Section 26.175 - Reclassification of Telecommunications Services for Electing Incumbent Local Exchange Companies (ILECs)

(1) establish the minimum criteria and standards for reclassifying a basic network service as a discretionary service or competitive service; or a discretionary service as a competitive service, in accordance with the Public Utility Regulatory Act (PURA) §58.024; and

(2) to establish the procedures to be followed in petitioning for reclassification.

(1) Prerequisite for reclassification of a service. The commission may reclassify a service only if each competitive safeguard prescribed by PURA Chapter 60, Subchapters B through H, is fully implemented.

(2) Designation of reclassification area. An electing ILEC must designate the exchange areas for which it is seeking to reclassify each service. A reclassification area must contain the entire territory of each exchange area designated.

(3) Identification of services to be reclassified. An electing ILEC must identify each service which it is seeking to reclassify and must specify for each service whether the service is for residential lines, business lines, or both.

(4) Public interest standard. The reclassification of the service is just and reasonable, is not unreasonably preferential, prejudicial, or discriminatory, or predatory or anti-competitive, and is in the public interest.

(5) Rate changes. Rate changes must be contemplated by the commission, in a separate proceeding, after reclassification has occurred.

(1) The service is not necessary to complete a telephone call; and

(2) Public policy determines that the service does not need to remain in a basic network service classification.

(1) There is an alternative facilities-based provider offering the same, equivalent, or substitutable service at comparable rates, terms, and conditions in the reclassification area;

(2) At least 60% of access lines of the type, either residential, business, or both, for which the service is provided that are located in the reclassification area have access to alternative, facilities-based providers;

(3) Substantial barriers to entry do not exist for the relevant market;

(4) The existing competitors have or can easily obtain additional capacity, or new competitors may easily enter the market in response to an increase in price of the electing ILEC's rates; and

(5) The electing ILEC does not have market power sufficient to control the price of the service in the reclassification area in a manner that is adverse to the public interest.

(1) Notice of Application. The electing ILEC must provide direct notice to all certificate of convenience and necessity, service provider certificate of operating authority, and certificate of operating authority holders offering service in the reclassification area and issue direct notice to each customer of the ILEC in the reclassification area. The notice must include a description of the requested reclassification, the service, the proposed rates, the reclassification area, other terms of the service, the types of customers likely to be affected if the application is approved, the proposed effective date for the application, and the following language: "Persons who wish to comment on this application should notify the commission by (specified date, ten days before the proposed effective date), and (any other item required by the presiding officer). Requests for further information should be mailed to the Public Utility Commission of Texas, P. O. Box 13326, Austin, Texas 78711-3326, or you may call the PUCT Consumer Division at (512) 936-7120 or toll free at (888) 782-8477. Hearing- and speech-impaired individuals may contact the commission through Relay Texas at 1-800-735-2989 "

(2) Contents of application for each electing ILEC seeking a service reclassification. In addition to the commission's filing requirements, one copy of the application must be delivered to commission staff and one copy must be delivered to the Office of Public Utility Counsel (OPUC). The application must contain the following:

(1) Administrative review. An application considered under this section is eligible for administrative review unless the electing ILEC requests the application be docketed or the presiding officer, for good cause, determines at any point during the review that the application should be docketed.

(2) Approval or denial of application. The application will be approved by the presiding officer if the proposed reclassification complies with each requirement of this section. If, based on the administrative review, the presiding officer determines that one or more of the requirements not waived have not been met, the presiding officer must docket the application.

(3) Standards for docketing. The application may be docketed in accordance with § 22.33(b) of this title (relating to Tariff Filings).

(4) Review of the application after docketing. If the application is docketed, the deadline is automatically suspended to 120 days after the applicant has filed all direct testimony and exhibits, or 155 days after the effective date of the reclassification, whichever is later. Affected persons may move to intervene in the docket, and the presiding officer may schedule a hearing on the merits. The application must be processed in accordance with the commission's rules applicable to docketed cases.