(a) Application. This section applies to electing companies, as defined in the Public Utility Regulatory Act (PURA) §59.002(1).     
      (b) Purpose. The purpose of this section is to establish the substantive and procedural requirements for an electing company that chooses to provide an informational notice to introduce new services and/or to exercise pricing and packaging flexibility, including customer promotional offerings, and for complaints regarding service offerings introduced by informational notice offerings.     
      (c) New services. The term "new services" has the meaning assigned in §26.5 of this title (relating to Definitions) and shall include services for which no rate was in effect on September 1, 1999. An electing company may file an informational notice to introduce a new service. An electing company filing an informational notice pursuant to this subsection shall file the appropriate information in accordance with subsection (g)(2) of this section.      
        (1) Pricing standards.                  (A) An electing company shall price each new service at or above the service's long run incremental cost (LRIC).                   (B) The price of a new service may not be preferential, prejudicial, discriminatory, predatory, or anticompetitive.                   (C) A price that is set at or above the service's LRIC is presumed not to be predatory.         
        (2) LRIC studies. An electing company may establish a service's LRIC by submitting a LRIC study, as specified in subsection (g)(2)(D)(ix) of this section, that conforms to the requirements of §26.214 of this title (relating to Long Run Incremental Cost (LRIC) Methodology for Services Provided by Certain Incumbent Local Exchange Companies (ILECs)).       
        (3) LRIC adoption. An electing company serving fewer than one million access lines in Texas may establish a service's LRIC by adopting the commission-approved cost studies of a larger company for the same service.       
        (4) Rate adoption. In lieu of filing a LRIC study or adopting the LRIC studies of a larger company, an electing company with less than one million access lines may adopt a rate that is identical to or higher than a larger company's tariffed rate for the same service.       
        (5) Packaging of new services. If an electing company offers a new service as a component of a package, the electing company shall also offer the new service as a separately tariffed service.       
      (d) Pricing and packaging flexibility. An electing company may file an informational notice to exercise pricing and packaging flexibility by filing the appropriate information in accordance with subsection (g)(2) of this section.      
        (1) General requirements.                  (A) Pricing flexibility includes:                      (i) customer specific contracts;                       (ii) packaging of services;                       (iii) volume, term, and discount pricing;                       (iv) zone density pricing, with a zone defined as an exchange; and                       (v) other promotional pricing.                     (B) A discount or other form of pricing flexibility may not be preferential, prejudicial, discriminatory, predatory, or anticompetitive.                   (C) An electing company may exercise pricing flexibility, including the packaging or joint marketing of any regulated service with any other regulated or unregulated service or any service of an affiliate.         
        (2) Pricing standards.                  (A) An electing company shall price each regulated service offered separately or as part of a package at either the service's tariffed rate or at a rate not lower than the service's LRIC.                   (B) An electing company shall price each service at or above the service's LRIC.                   (C) A price that is set at or above the service's LRIC is presumed not to be predatory.                   (D) The price of a package that combines regulated products or services with unregulated products or services shall 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.                   (E) The price of a package that combines regulated products or services with the products or services of an affiliate shall recover the cost to the electing company of acquiring and providing its affiliate's 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 an electing company of acquiring or providing the affiliate's products or services shall be valued in a manner consistent with Federal Communications Commission (FCC) requirements, to the extent such requirements are applicable to the electing company, and with subparagraph (F) of this paragraph. 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, to the extent such requirements are applicable to the electing company, and with subparagraph (F) of this paragraph.                   (F) Consistent with PURA §52.051(1)(C), an electing company shall not use revenues from regulated monopoly services to subsidize services subject to competition.         
        (3) LRIC studies. An electing company may establish a service's LRIC by submitting a LRIC study, as specified in subsection (g)(2)(D)(ix) of this section, that conforms to the requirements of §26.214 of this title.       
        (4) LRIC adoption. An electing company serving fewer than one million access lines in Texas may establish a service's LRIC by adopting the commission-approved cost studies of a larger company for the same services.       
        (5) Rate adoption. In lieu of filing a LRIC study or adopting the LRIC studies of a larger company, an electing company with less than one million access lines may adopt a rate that is identical to or higher than a larger company's tariffed rate for the same service.       
      (e) Customer promotional offerings. An electing company may file an informational notice to offer customer promotional offerings by filing the appropriate information in accordance with subsection (g)(2) of this section.      
        (1) An electing company may offer a promotion for a regulated service for not more than 90 days in any 12-month period.       
        (2) Customer promotional offerings may consist of:                  (A) a waiver of installation charges or service order charges, or both, for not more than 90 days in a 12-month period; or                   (B) a temporary discount of not more than 25% from the tariffed rate for not more than 60 days in a 12-month period.         
        (3) Although electing companies are not required to file LRIC studies with informational notices regarding these customer promotional offerings, the offerings are subject to the standards for pricing flexibility in subsection (d) of this section, in the event of a complaint.       
      (f) Requirements for customer specific contracts. An electing company may enter into customer-specific contracts for certain services as provided in §26.211 of this title (relating to Rate-Setting Flexibility for Services Subject to Significant Competitive Challenges). For all services not addressed in §26.211 of this title, an electing company must offer customer specific contracts pursuant to this section.     
      (g) Procedures related to the filing of informational notices and associated tariffs. The provisions of this subsection apply to electing companies choosing to introduce new services and exercise pricing and packaging flexibility including customer promotional offerings through informational notice filings.      
        (1) Notice requirements.                  (A) An electing company shall provide the informational notice in compliance with this section to the commission, to the Office of Public Utility Counsel (OPC), and to any person who holds a certificate of operating authority in the electing company's certificated area or areas, or who has an effective interconnection agreement with the electing company.                   (B) Unless an interconnection agreement contract specifies otherwise, an incumbent local exchange carrier shall continue to provide to affected resellers of retail services the same notice of rate changes or withdrawal of detariffed services that it was required to provide prior to detariffing.         
        (2) Filing requirements.                  (A) Filing of informational notice and confidential information. At the time the informational notice is filed in Central Records, a copy of the informational notice, including confidential information, shall be delivered to OPC. In addition to the record copy, an additional copy of any confidential information shall be filed in Central Records for use by the commission staff.                      (i) The commission shall assign each informational notice a unique control number and shall stamp the tariff sheets "received".                       (ii) The commission staff shall file any notice of deficiencies (including deficiencies in LRIC studies submitted) for incomplete filings not in compliance with this section or pleading alleging that the service offering is inappropriately filed as an informational notice filing within three working days after the date of the filing of the informational notice.                       (iii) Within two working days after the date of the commission staff's filing, the applicant shall file an explanation of the actions it has taken or intends to take in response to a notice or pleading filed under clause (ii) of this subparagraph.                     (B) Effective date. A service offering shall be effective no earlier than ten days after the electing company files a complete informational notice with the commission.                   (C) Access to confidential information. Access to confidential information filed with the commission as part of an informational notice filing shall be available to commission staff and OPC, upon execution of a commission approved protective agreement, at the time the informational notice is filed.                   (D) Format of filing. An informational notice under this section must include the following elements:                      (i) name of company;                       (ii) PURA chapter under which company operates;                       (iii) date of submission;                       (iv) effective date;                       (v) new and/or revised tariff pages, written in plain language and conforming to the requirements of §26.207 of this title (relating to Form and Filing of Tariffs);                       (vi) proposed implementation date (if different from effective date);                       (vii) affidavit of notice to the Office of Public Utility Counsel, certificate of operating authority holders, and parties to interconnection agreements;                       (viii) type of filing (new service; pricing flexibility; packaging, or promotional offering; customer specific contract);                       (ix) except for customer promotional offerings, relevant LRIC study or LRIC study reference, and relevant support materials (confidential/proprietary/protected materials provided to commission only). When LRIC studies for which commission approval has not been obtained are provided with an informational notice filing, an application for approval of that LRIC study must be filed pursuant to the standards in §26.214 of this title to establish a LRIC floor and shall be filed before or simultaneously with the informational notice filing. The electing company shall file a notice of intent to file LRIC studies pursuant to §26.214 of this title no later than ten days before the filing of the LRIC study;                       (x) except for customer promotional offerings, relevant LRIC study or LRIC study reference, and relevant supporting materials (confidential/proprietary/protected materials provided to commission only), if an electing company chooses to adopt LRIC studies of a larger company pursuant to the requirements of subsection (c)(3) or (d)(4) of this section, as applicable;                       (xi) except for customer promotional offerings, relevant tariff rates or specific tariff references, if the electing company chooses to adopt rates of a larger company pursuant to requirements of subsection (c)(4) or (d)(5) of this section, as applicable;                       (xii) a response of "yes", "no", or "not applicable", with explanatory language, to the following question: "Is the sum of the TELRIC-based wholesale prices of components needed for provision of the retail service at or below the retail price set forth in this filing?" Except for customer promotional offerings, if the response is "yes" or "no", the filing must identify the components needed for the provision of the retail service, along with a list of relevant wholesale and retail prices;                       (xiii) a response of "yes" or "no" to the following question: "Is the service available for resale by a competitor?" If the answer is "no", does the proposed price meet the standards set forth in §26.274(f) - (h) of this title (relating to Imputation)? For purposes of this question, "available for resale" means:                          (I) the service is not subject to tariffed resale restrictions; and                           (II) the electing company is not aware of any constraints that would prevent a competitor from functionally provisioning the service to the competitor's customers in parity with the electing company's provisioning of the service to the electing company's customers; providing the products or services. The cost to an electing company of acquiring or providing the affiliate's products or services shall be valued in                             Cont'd...