Sec. 54.102.  APPLICATION FOR CERTIFICATE.  (a)  A person may apply for a certificate of operating authority.
(b)  The applicant must file with the application a sworn statement that the applicant has applied for each municipal consent, franchise, or permit required for the type of services and facilities for which the applicant has applied.
(c)  An affiliate of a person holding a certificate of convenience and necessity may hold a certificate of operating authority if the holder of the certificate of convenience and necessity is in compliance with federal law and Federal Communications Commission rules governing affiliates and structural separation.  An affiliate of a person holding a certificate of convenience and necessity may not directly or indirectly sell to a non-affiliate any regulated product or service purchased from the person holding a certificate of convenience and necessity at any rate or price less than the price paid to the person holding a certificate of convenience and necessity.
(d)  A person may hold a certificate for all or any portion of a service area for which one or more affiliates of the person holds a certificate of operating authority, a service provider certificate of operating authority, or a certificate of convenience and necessity.
(e)  An affiliate of a company that holds a certificate of convenience and necessity and that serves more than five million access lines in this state may hold a certificate of operating authority or service provider certificate of operating authority to provide service in an area of this state in which its affiliated company is the incumbent local exchange company.  However, the affiliate holding the certificate of operating authority or service provider certificate of operating authority may not provide in that area any service listed in Sections 58.051(a)(1)-(4) or Sections 58.151(1)-(4), or any subset of those services, in a manner that results in a customer-specific contract so long as the affiliated company that is the incumbent local exchange company may not provide those services or subsets of services in a manner that results in a customer-specific contract under Section 58.003 in that area.  This subsection does not preclude an affiliate of a company holding a certificate of convenience and necessity from holding a certificate of operating authority in any area of this state to provide advanced services as defined by rules or orders of the Federal Communications Commission, or preclude such an advanced services affiliate from using any form of pricing flexibility, with regard to services other than those subject to the restrictions provided by this subsection.  This subsection does not preclude a long distance affiliate from using any form of pricing flexibility with regard to services other than those services subject to the restrictions provided by this subsection.  In addition, the affiliate holding the certificate of operating authority or service provider certificate of operating authority may not offer, in an area for which the affiliated incumbent local exchange company holds a certificate of convenience and necessity, a service listed in Sections 58.151(1)-(4) as a component of a package of services, as a promotional offering, or with a volume or term discount until the affiliated incumbent local exchange company may offer those services in pricing flexibility offerings in accordance with Section 58.004, unless the customer of one of these pricing flexibility offerings is a federal, state, or local governmental entity.
(f)  The commission has the authority to enforce this section.
Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 16, eff. Sept. 1, 1999.