16 Tex. Admin. Code § 26.226 - Requirements Applicable to Pricing Flexibility for Chapter 58 Electing Companies
(a) Application.
This section applies to any electing company as the term is defined in the
Public Utility Regulatory Act (PURA) §58.002. Other sections applicable to
an electing company, include, but are not limited to §
26.211 of this title (relating to
Rate-Setting for Services Subject to Significant Competitive Challenges),
§
26.224 of this title (relating to
Requirements Applicable to Basic Network Services for Chapter 58 Electing
Companies), §
26.225 of this title (relating to
Requirements Applicable to Nonbasic Services for Chapter 58 Electing Companies)
and §
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). PURA §55.003 and
§55.004 do not apply to the retail services offered by an electing
company, or to the retail nonbasic services offered by a transitioning company,
as defined by PURA §65.002.
(b) Purpose. The purpose of this section is
to establish requirements for Chapter 58 electing incumbent local exchange
companies (ILECs) to exercise pricing flexibility.
(c) Pricing flexibility. An electing ILEC
shall exercise pricing flexibility in accordance with this section and §
26.227 of this title.
(1) Pricing flexibility includes:
(A) customer specific contracts;
(B) packaging of services;
(C) volume, term, and discount
pricing;
(D) zone density pricing,
with a zone to be defined as an exchange; and
(E) other promotional pricing.
(2) A discount or other form of
pricing flexibility for a basic or nonbasic service may not be preferential,
prejudicial, discriminatory, predatory or anticompetitive.
(3) This section does not prohibit a volume
discount or other discount based on a reasonable business purpose.
(4) Notwithstanding PURA §58.052(b) or
PURA, Chapter 60, Subchapter F, an electing company may exercise pricing
flexibility for basic network services, including the packaging of basic
network services with any other regulated or unregulated service or any service
of an affiliate.
(5) An electing
company may flexibly price a package that includes a basic network service in
any manner provided by paragraph (1) of this subsection.
(6) An electing company may use pricing
flexibility for a basic or nonbasic service.
(d) Pricing standards. An electing company
exercising pricing flexibility shall price its offerings pursuant to this
subsection.
(1) The electing ILEC shall set
the price of a package of services containing basic network services and
nonbasic services at any level at or above the lesser of:
(A) the sum of the long run incremental costs
of any basic network services and nonbasic services contained in the package;
or
(B) the sum of tariffed prices
of any basic network services contained in the package and the long run
incremental costs of nonbasic services contained in the package.
(2) A price that is set at or
above the long run incremental cost of a service is presumed not to be a
predatory price.
(3) The price of a
package that combines regulated products or services with unregulated products
or services shall, in addition to the requirements of paragraph (1) of this
subsection, recover the cost to the electing company of acquiring and providing
the unregulated products or services. In this section, unregulated products or
services are products or services provided by an entity that is unaffiliated
with the electing company.
(4) The
price of a package that combines regulated products or services with the
products or services of an affiliate shall, in addition to the requirements of
paragraph (1) of this subsection, recover the cost to the electing company of
acquiring and providing the affiliate products or services, which shall be
greater than or equal to the cost to the affiliate of acquiring and/or
providing the products or services. The cost to the electing company of
acquiring or providing the affiliate's products or services shall be valued in
a manner consistent with FCC requirements and with paragraph (5) of this
subsection. A group of products or services that are jointly marketed by an
electing company in conjunction with one or more of its affiliates shall be
priced in a manner consistent with FCC requirements, if any, and with paragraph
(5) of this subsection.
(5)
Consistent with PURA §52.051(1)(C), an electing company shall not use
revenues from regulated monopoly services to subsidize services subject to
competition.
(e)
Requirements for customer-specific contracts. Consistent with PURA
§58.003, an electing ILEC may enter into customer-specific contracts for
certain basic network services and certain nonbasic services as provided in
this subsection. An electing ILEC may but is not required to file
customer-specific contracts with the commission.
(1) An electing company serving fewer than
five million access lines may offer customer-specific contracts in accordance
with this subsection.
(A) An electing company
serving fewer than five million access lines shall not offer customer-specific
contracts until it notifies the commission of the company's binding commitment
to make the following infrastructure improvements consistent with PURA
§58.003(b):
(i) install Common Channel
Signaling 7 capability in each central office; and
(ii) connect all of the company's serving
central offices to their respective local access and transport area (LATA)
tandem central offices with optical fiber or equivalent facilities.
(B) The commitments described by
subparagraph (A) of this paragraph do not apply to exchanges of the company
sold or transferred before, or for which contracts for sale or transfer are
pending on, September 1, 2001. In the case of exchanges for which contracts for
sale or transfer are pending as of March 1, 2001, where the purchaser withdrew
or defaulted before September 1, 2001, the company shall have one year from the
date of withdrawal or default to comply with the commitments.
(2) An electing company serving
more than five million access lines may offer customer specific contracts in
accordance with this subsection.
(A) Unless
the other party to the contract is a federal, state, or local governmental
entity, an electing company serving more than five million access lines may not
offer in an exchange a service, or an appropriate subset of a service, listed
in PURA §58.051(a)(1) - (4) or §58.151(1) - (4) in a manner that
results in a customer-specific contract until the earlier of:
(i) September 1, 2003; or
(ii) the date on which the commission finds
that at least 40% of the total access lines for that service or appropriate
subset of that service in that exchange are served by competitive alternative
providers that are not affiliated with the electing company.
(B) Pursuant to subparagraph
(A)(ii) of this paragraph, the commission may find that the following subsets
of services are served by an alternative provider that is not affiliated with
an ILEC serving more than five million access lines:
(i) flat residential rate local exchange
telephone service;
(ii) residential
primary directory listings;
(iii)
residential tone dialing service;
(iv) lifeline and tel-assistance
service;
(v) service connection for
basic residential services;
(vi)
flat business rate local exchange telephone service;
(vii) business primary directory
listings;
(viii) business tone
dialing service;
(ix) service
connection for all business services;
(x) direct inward dialing for basic business
services; and
(xi) receipt of a
directory.
(3) This subsection does not preclude an
electing company from offering a customer-specific contract to the extent
allowed by PURA as of August 31, 1999.
Notes
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