(a) Purpose. This section provides the requirements for the commission to designate telecommunications providers as eligible telecommunications providers (ETPs) to receive funds from the Texas Universal Service Fund (TUSF) under §26.403 of this title (relating to the Texas High Cost Universal Service Plan (THCUSP)) and §26.404 of this title (relating to the Small and Rural Incumbent Local Exchange Company (ILEC) Universal Service Plan). Only telecommunications providers designated by the commission as ETPs qualify to receive universal service support under these programs.
(b) Requirements for establishing ETP service areas.
  (1) THCUSP service area. A THCUSP service area is based upon wire centers (WCs) or other geographic area as determined appropriate by the commission. A telecommunications provider may be designated an ETP for any or all WCs that are wholly or partially contained within its certificated service area. An ETP must serve an entire WC, or other geographic area as determined appropriate by the commission, unless its certificated service area does not encompass the entire WC, or other geographic area as determined appropriate by the commission.
  (2) Small and Rural ILEC Universal Service Plan service area. A Small and Rural ILEC Universal Service Plan service area for an ETP serving in a small or rural ILEC's territory must include the entire study area of such small or rural ILEC.
(c) Criteria for designation of ETPs.
  (1) Telecommunications providers. A telecommunications provider, as defined in the Public Utility Regulatory Act (PURA) §51.002(10), is eligible to receive TUSF support in accordance with §26.403 or §26.404 of this title in each service area for which it seeks ETP designation if it meets the following requirements:
    (A) the telecommunications provider has been designated an eligible telecommunications carrier, in accordance with §26.418 of this title (relating to the Designation of Common Carriers as Eligible Telecommunications Carriers to Receive Federal Universal Service Funds), and provides the federally designated services to customers in order to receive federal universal service support;
    (B) the telecommunications provider defines its ETP service area in accordance with subsection (b) of this section and assumes the obligation to offer any customer within an exchange in its ETP service area for which the provider receives support under this section, basic local telecommunications services, as defined in §26.403 of this title, at a rate not to exceed 150% of the ILEC's tariffed rate;
    (C) the telecommunications provider offers basic local telecommunications services using either its own facilities, purchased unbundled network elements (UNEs), or a combination of its own facilities, purchased UNEs, or resale of another carrier's services;
    (D) the telecommunications provider renders continuous and adequate service within an exchange in its ETP service area for which the provider receives support under this section, in compliance with the quality of service standards defined in §26.52 of this title (relating to Emergency Operations), §26.53 of this title (relating to Inspections and Tests), and §26.54 of this title (relating to Service Objectives and Performance Benchmarks);
    (E) the telecommunications provider offers services in compliance with §26.412 of this title (relating to Lifeline Service Programs); and
    (F) the telecommunications provider advertises the availability of, and charges for, supported services using media of general distribution.
  (2) ILECs. If the telecommunications provider is an ILEC, as defined in PURA §51.002(10), it must be eligible to receive TUSF support in accordance with §26.403 of this title in each service area for which it seeks ETP designation if it meets the requirements of paragraph (1) of this subsection and the following requirements:
    (A) If the ILEC is regulated under Public Utility Regulatory Act (PURA) Chapter 58 or 59 it must either:
      (i) reduce rates for services determined appropriate by the commission to an amount equal to its THCUSP support amount; or
      (ii) provide a statement that it agrees to a reduction of its THCUSP support amount equal to its CCL, RIC and intraLATA toll revenues.
    (B) If the ILEC is not regulated under PURA Chapter 58 or 59 it must reduce its rates for services determined appropriate by the commission by an amount equal to its THCUSP support amount.
    (C) Any reductions in switched access service rates for ILECs with more than 125,000 access lines in service in this state on December 31, 1998, that are made in accordance with this section must be proportional, based on equivalent minutes of use, to reductions in intraLATA toll rates, and those reductions must be offset by equal disbursements from the universal service fund under PURA §56.021(1). This subparagraph expires August 31, 2007.
(d) Designation of more than one ETP.
  (1) In areas not served by small or rural ILECs, as defined in §26.404(b) of this title, the commission may designate, upon application, more than one ETP in an ETP service area so long as each additional provider meets the requirements of subsection (c) of this section.
  (2) In areas served by small or rural ILECs as defined in §26.404(b) of this title, the commission may designate additional ETPs if the commission finds that the designation is in the public interest.
(e) Proceedings to designate telecommunications providers as ETPs.
  (1) At any time, a telecommunications provider may seek commission approval to be designated an ETP for a requested service area.
  (2) To receive support under §26.403 or §26.404 of this title for exchanges purchased from an unaffiliated provider, the acquiring ETP must file an application, within 30 days after the date of the purchase, to amend its ETP service area to include those geographic areas in the purchased exchanges that are eligible for support.
  (3) If an ETP receiving support under §26.403 or §26.404 of this title sells an exchange to an unaffiliated provider, it must file an application, within 30 days after the date of the sale, to amend its ETP designation to exclude those exchanges for which it was receiving support from its designated service area.
(f) Requirements for application for ETP designation and commission processing of application.
  (1) Requirements for notice and contents of application for ETP designation.
    (A) Notice of application. Notice must be published in the Texas Register. The presiding officer may require additional notice. Unless otherwise required by the presiding officer or by law, the notice must include at a minimum a description of the service area for which the applicant seeks designation, the proposed effective date of the designation, and the following language: "Persons who wish to comment on this application should notify the Public Utility Commission by (specified date, ten days before the proposed effective date). 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 Protection Division at (512) 936-7120 or (888) 782-8477. Hearing- and speech-impaired individuals may contact the commission through Relay Texas at (800) 735-2989."
    (B) Contents of application. A telecommunications provider seeking to be designated as an ETP for a high cost service area in this state must file with the commission an application complying with the requirements of this section. A copy of the application must be delivered to the Office of Public Utility Counsel.
      (i) Telecommunications providers. The application must:
        (I) show that the applicant is a telecommunications provider as defined in PURA §51.002(10);
        (II) show that the applicant has been designated by the commission as a telecommunications provider eligible for federal universal service support and show that the applicant offers federally supported services to customers under the terms of 47 United States Code §214(e) (relating to Provision of Universal Service) in order to receive federal universal service support;
        (III) specify the THCUSP or small and rural ILEC service area in which the applicant proposes to be an ETP, show that the applicant offers each of the designated services, as defined in §26.403 of this title, throughout the THCUSP or small and rural ILEC service area for which it seeks an ETP designation, and show that the applicant assumes the obligation to offer the services, as defined in §26.403 of this title, to any customer in the THCUSP or small and rural ILEC service area for which it seeks ETP designation;
        (IV) show that the applicant does not offer the designated services, as defined in §26.403 of this title, solely through total service resale;
Cont'd...