January 2019
News and Updates
Here are some updates from the Texas Telephone Association. View as Webpage
Update from Executive Director Lyn Kamerman
Happy New Year and looking ahead to 2019
Happy New Year to everyone. As we look back at 2018 and look forward to 2019, I want to thank all of you for your hard work in advancing policies to make sure the Texas telecommunications industry remains a strong force in the state economy and Texans will continue to reap the benefits of high-quality communications to support schools, hospitals, businesses and consumers.

Rural networks are vital to our great state and provide a backbone for landline, broadband and wireless services statewide. 

We hit the ground running in 2019 and there are many issues pending impacting the telecommunications industry in Texas.
 
TTA-TSTCI reach settlement with Virgin Mobile on Lifeline
 
The Texas Telephone Association and the Texas Statewide Telephone Cooperative Inc. have reached a settlement with Virgin Mobile on Lifeline.

Virgin Mobile has been designated as both an Eligible Telecommunications Carrier (ETC) and an Eligible Telecommunications Provider (ETP) in certain non-rural service areas of Texas – including AT&T Texas, Verizon Southwest and Frontier – for the purpose of offering Lifeline services. Virgin Mobile’s had applied with the Public Utility Commission of Texas to expand the area covered by those designations to include territory served by additional local phone companies across rural Texas.

If granted, the proposal would have allowed Virgin Mobile to receive state support for Lifeline customers only in designated areas. 

Under the settlement agreement, Virgin Mobile filed an amended application on January 9 withdrawing its request for designation as an eligible telecommunications provider in certain rural areas served by small local phone companies. In addition, Virgin Mobile amended its application to limit the limited its request for eligible telecommunications carrier to only those portions of rural Texas where Virgin Mobile is already capable of providing Lifeline service based on its existing wireless coverage area maps. As part of the settlement, TTA and TSTCI withdrew from the case.

Going forward, Virgin Mobile will continue to seek Lifeline-only designation within portions of Windstream, CenturyLink, and Consolidated service areas while only seeking eligible telecommunications carriers designation within portions of the smaller member companies. Windstream and Consolidated are not parties in the proceeding. Both CenturyLink and the Texas PUC staff continue to oppose Virgin Mobile’s application.

A hearing is scheduled on February 13 and 14. By withdrawing from the case, TTA and TSTCI were able to avoid the costs associated with a contested case, including discovery requests, participating in hearings and other legal costs. The commission could make a final decision in late spring or early summer.

With new Texas universal service fund rules in place, next step: compliance
 
After the Texas PUC in 2018 approved new rules to implement universal service fund reforms under Senate Bill 586 approved by the Texas Legislature in 2017, our work continues to implement them.
 
The majority of eligible TTA members -- with the exception of Southwest Arkansas Telephone Cooperative, Inc. -- opted into the new Texas universal service fund mechanism by the December deadline. Each member was assigned a new company-specific control number for their SB 586 compliance filings, which will enable commission staff to issue any company-specific request for information to individual members.

Under the PUC rules, companies must file SB 586 compliance reports within two months of opting in. However, the PUC staff has requested companies file SB 586 reports as soon as possible, recognizing there will be a substantial number of reports to review.

While compiling the financial data upon which earnings are calculated will likely require much time, TTA reminds members they should also be prepared to submit a written cost allocation manual as well as any affiliate transaction agreements. We anticipate the PUC staff will want to see any affiliate agreements supporting any affiliate transactions and encourages members to either submit those written agreements as supporting documentation or be prepared to submit the information within ten days of any staff requests.

TTA also has had some conversations with PUC staff on including public information in the reports. The PUC staff has indicated they would like to see some public company-specific information included which could be used in public reports or discussed in PUC open meetings. The commission staff also expressed interest in companies filing a short narrative on the company, including when it started, description of the types of customers and where the company serves and office locations. We will keep members posted on this issue.

If you have any questions or need assistance, please contact me.
Around the Texas Capitol – John Hubbard and Ian Randolph
86 th Texas Legislature rolls into town
They’re back.

The 86th Texas Legislature convened on Tuesday January 8 with pomp and circumstance, filling the halls of the state Capitol with smiling legislators, their families, constituents and well-wishers. Every session has its own character and this session is no different. It has begun quietly with few surprises and much hope for addressing the state’s major issues.

In the House of Representatives, legislators took a united front and unanimously elected Rep. Dennis Boonen, R-Angleton, speaker of the House on a 147-0 vote. Bonnen’s election as speaker marks a new era of leadership in the House for the first time in a decade. Speaker Bonnen addressed the House and made it clear he will allow the House process to work and would leave it to the members to set the chamber’s priorities. The one issue the speaker stipulated was a priority is to address the way Texas funds it public schools. In a further display of unity, Gov. Greg Abbott addressed the House and underscored the importance of addressing public school finance.

There were 147 House members on opening day in the lower chamber because there are three vacancies in the House. Longtime member Rep. Joe Pickett, D-El Paso, was forced to resign for health concerns. In addition, Rep. Carol Alvarado, D-Houston, has moved to the Senate, replacing Sen. Sylvia Garcia, who was elected to the Congress. Rep. Justin Rodriguez, D-San Antonio, resigned to fill a vacant seat on the Bexar County Commissioners Court. These House seats will be filled within the next few weeks through special elections.

In further housekeeping, House members were asked to submit their preference cards for committee assignments by January 15. The speaker will use the cards as he appoints members to committees and chairmanships. At the beginning of the term of a new speaker, most House members are hopeful they will be rewarded for their support – so, as the joke goes, there are currently 147 hopeful committee chairman.

The selection of committees and committee chairs is one of the speaker’s many powers and is an opportunity to reward early supporters and friends. The speaker is expected to make committee appointments by the end of January. The House made few changes to its rules for this session. However, the House changed a few committees, including increasing the size of the House Public Education Committee from 11 to 13 members.

While for months much of the focus has been on changes in the House, the biggest surprise was in the Texas Senate where Lt. Governor Dan Patrick, the presiding officer of the chamber, was absent on opening day. Instead, Patrick was in Washington D.C. at the behest of the President Donald Trump. This was the first time in recent memory a lieutenant governor missed the opening day of session. Sen. Jane Nelson, R-Flower Mound, filled in for the lieutenant governor, becoming the first woman to preside over the opening of session in Senate history. 

The Senate welcomed a larger-than-usual freshman class of six new senators, including: former Rep. Carol Alvarado, D-Houston; former Rep. Pat Fallon, R-Prosper; Pete Flores, R-Pleasanton; Nathan Johnson, D-Dallas; Angela Paxton, R-McKinney; and Beverly Powell, D-Burleson. The lieutenant governor is expected to name committees within the next two weeks.

As required, state Comptroller Glenn Hegar issued the state’s revenue estimate of $119 billion for the coming two-year budget cycle. This number is important because it signals to the Legislature just how much is available to spend during the next budget biennium. While this estimate is about $15 billion more than the last budget cycle, the estimate is lower than some had hoped. In terms of the Texas economy, Hegar said his outlook as “cautiously optimistic” and “cloudy.” 

While the revenue estimate is significant, the state faces some huge financial challenges including public school finance, Medicaid, Hurricane Harvey recovery and transportation issues. In spite of the increase in revenue, the budget will be tight. This session, drafting of the state budget will originate in the House. The House has released an outline of its budget and a bill will be introduced when the chairman of the House Appropriations Committee is named.
Association News
TTA welcomes new members
Please welcome Consolidated Communications as a new TTA member.
Consolidated provides communications services to consumers, businesses and wireless companies across 23 states, including Texas.

In addition, please welcome three new associate members. These include:
  • Banner Utilities, LLC, which provides outside plant services for fiber and copper networks;
  • FTI Belman, which is a national leader in management and implementation of telecommunications network deployment services and solutions:
  • Premier Legislative Consulting, Inc., which promotes Texas policy and legislative issues for a variety of clients.
Save the date: TTA Convention and Product Showcase set for August 25-28
Mark your calendars – the Texas Telephone Association Convention and Product Showcase is set for August 25 through 28 at the Hyatt Hill Country Resort in San Antonio.

Look for more details soon.
In the State and Around the Nation
Texas PUC finalizing "Scope of Competition" report
The Texas PUC has finalized its “Report on the Scope of Competition in Telecommunications Markets” for the Texas Legislature.

The commission staff on January 14 filed the final version of the PUC’s scope of competition report that is submitted to the Legislature at the beginning of every legislative session. 

The report does not include any legislative recommendations. However, the report highlights a few important trends in the industry such as increasing rates for basic local service, reductions in high-cost demand related to large and mid-sized incumbent local exchange carriers and significant decreases in state Lifeline enrollment. 
In the News
Rural Telfair County, Georgia has the lowest broadband internet subscription rate in the country, according to U.S. Census data. At 25 percent, Telfair's internet lag could become a big problem in a rapidly tech-focused world. Telfair County is not alone: While the internet may seem ubiquitous in America, access to broadband is still a privilege unavailable in many parts of the country – and the divide is increasingly apparent between rural and urban regions. Read more.

Windstream will double the areas in which its 100 Mbps Kinetic Internet service is available by the end of the first quarter, the company says. By the end of March, Windstream broadband availability at the 100 Mbps speed level will reach 30% in the company’s 18-state local service territory. Read more.

The Senate  voted to confirm  a new commissioner to the Federal Communications Commission. Geoffrey Starks, a Democrat nominated this past summer, was confirmed in a unanimous voice vote. The Senate also reconfirmed Republican Brendan Carr. Both will serve five-year terms as commissioners. Read more.

Perhaps policymakers should consider allowing property owners to build their own connections to a service provider, suggested Harold Feld, senior vice president for Public Knowledge, at a tech policy event today. Potentially the property owner could even get some form of reimbursement for the connection, in a manner similar to how property owners that generate their own power are selling it to the grid. Feld’s suggestion was just one of several rural broadband deployment ideas floated by panelists at the event, which was organized by Next Century Cities, the American Action Forum and Public Knowledge. Read more.

It looks as though oral argument in the Mozilla et al. challenge to the  FCC 's Restoring Internet Freedom order rollback, Title II-based network neutrality regulations and the Title II classification itself will proceed as planned Feb. 1. The U.S. Court of Appeals for the D.C. Circuit says on its website that oral arguments scheduled for January and now February will take place, partial government shutdown or not. Read more.

The battle over net neutrality is far from over. Although the Federal Communications Commission last year officially  nixed the Obama-era rules governing the conduct of Internet providers such as Verizon and AT&T, the move kicked off a  backlash  by states, Internet activists and other supporters of the original regulations. Now their legal challenges will play out in 2019. Here’s what to expect as the fight over the future of the Internet enters its next act. Read more.

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