Public Utility Commission v. Texas Telephone Ass'n

163 S.W.3d 204, 2005 Tex. App. LEXIS 2647, 2005 WL 770620
CourtCourt of Appeals of Texas
DecidedApril 7, 2005
Docket03-03-00765-CV, 03-04-00026-CV
StatusPublished
Cited by20 cases

This text of 163 S.W.3d 204 (Public Utility Commission v. Texas Telephone Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Public Utility Commission v. Texas Telephone Ass'n, 163 S.W.3d 204, 2005 Tex. App. LEXIS 2647, 2005 WL 770620 (Tex. Ct. App. 2005).

Opinion

OPINION

DAVID PURYEAR, Justice.

This case concerns the application by Western Wireless Corporation Texas RSA Limited Partnership (‘Western Wireless”) for state and federal subsidies. Western Wireless sought designation as an eligible telecommunications provider and carrier by the Public Utility Commission (“the Commission”) in order to be eligible to receive subsidies from both federal and state universal service funds. Texas Telephone Association and Texas Statewide Telephone Cooperative, Inc. (collectively “Texas Telephone”) filed motions to intervene to object to Western Wireless receiving the subsidies. The Commission granted Western Wireless’s application. In addition, the Commission found that Western Wireless’s description of its basic telecommunications service and the tariff rate that it would charge for the service *207 complied with the Commission’s requirements. Texas Telephone appealed both of these decisions of the Commission, and the district court reversed.

Western Wireless and the Commission appeal to this court. We will reverse the judgment of the district court and render judgment affirming the order of the Commission.

STATUTORY FRAMEWORK

One of the goals of the Federal Communications Commission (“FCC”) is to ensure that all Americans have access to affordable phone service. See Alenco Communications, Inc. v. FCC, 201 F.3d 608, 614-15 (5th Cir.2000). As a way of reaching this goal, the Universal Service Mandate provides that access to telephone service be provided to low-income consumers and those in rural, higher-cost areas. 47 U.S.C.A. § 254(b)(2)-(5) (West 2001). To effectuate this mandate, the FCC and state regulatory agencies have, in the past, provided subsidies to companies providing phone service to customers in rural areas and low-income customers. See In re Federal-State Joint Bd. on Universal Servs., Report and Order, CC Docket No. 96-45, 12 FCC Red. 8776, ¶ 10 & n. 15 (rel. May 8, 1997) (“Universal Service Order ”).

In 1996, Congress amended the Communications Act of 1934. Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56 (codified in various sections of titles 15 and 47 of the United States Code) (“Federal Telecommunications Act”). The purpose of the amendment was to promote competition to secure lower prices and to provide better services for consumers. Id. By requiring local carriers to share their networks with competitors, the goals of competition and market entry would be enhanced. See AT & T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999); see generally 47 U.S.C.A. §§ 251-53 (West 2001 & Supp. 2004). Congress directed that state and federal programs be adopted to advance universal service. 47 U.S.C.A. § 254(b)(5).

As a result, Texas and the federal government have established universal service funds to award subsidies to companies providing service to low income and rural, high-cost areas. See 47 U.S.C.A. § 254(e)-(f) (West 2001); Tex. Util.Code Ann. §§ 56.001-56.026 (West 2002 & Supp.2004-05). The subsidies are available only to carriers meeting the requirements established by the Public Utility Regulatory Act (“PURA”) (Tex. Util.Code Ann. §§ 11.001-64.158 (West 1998 & Supp.2004-05)), the Federal Telecommunications Act, and rules issued by the Commission and the FCC. In order to be eligible to receive these state and federal subsidies, an applicant must be designated as an “eligible telecommunications provider or carrier.” 47 U.S.C.A. § 214(e)(1) (West 2001); 16 Tex. Admin. Code § 26.417(a) (2004). Although the Commission can designate more than one eligible carrier or provider in a given area, in rural areas the Commission can only designate more than one carrier or provider if the Commission finds multiple designations to be in the “public interest.” 47 U.S.C.A. § 214(e)(2) (West 2001); 16 Tex. Admin. Code §§ 26.417(d), .418(e) (2004). When carriers receive these subsidies, they are required to provide basic telecommunications services to all customers within the rural areas they serve and to low-income consumers who cannot obtain service with other carriers. Tex. UtiLCode Ann. § 54.251(a)(2), (b) (West Supp.2004-05).

THE CONTROVERSY

Western Wireless is a telecommunications carrier that provides commercial mobile radio service (“CMRS”) to 107 coun *208 ties in Texas. 1 The services Western Wireless provides to its customers include but are not limited to the following: (1) the ability to make and receive phone calls within a specific bandwidth by use of arrangements with local telephone companies; (2) certain amounts of free local use of phone services; (3) an equivalent of dual-tone, multi-frequency signaling; (4) single-party service where one subscriber, not multiple parties, is served through an access line; (5) access to emergency services; (6) access to operator services; (7) access to interexchange services, which gives customers the ability to make and receive interexehange or toll calls; (8) access to directory assistance; (9) toll blocking services that allow customers to block the completion of outgoing toll calls; and (10) mobile cellular service.

In March 2000, Western Wireless filed applications with the Commission to become an eligible provider and an eligible carrier in order to receive subsidies from the state and federal universal service funds for providing basic local telecommunication services. Western Wireless requested these designations in areas that already had incumbent service providers. In its application, Western Wireless requested designations in the “study areas” 2 of fourteen rural-incumbent carriers of which Texas Telephone is one.

One of the other rural incumbent carriers is the Southwest Arkansas Telephone Cooperative, Inc. (“Southwest”). Southwest’s study area includes seven local exchanges in Arkansas and one in Texas. Western Wireless applied for eligible carrier status only in the Texas portion of Southwest’s study area.

The Commission issued notice of Western Wireless’s applications to be considered an eligible telecommunications provider and carrier and set up a separate “designation docket.” Texas Telephone filed motions to intervene. Texas Telephone is an eligible telecommunications provider and carrier in areas where Western Wireless is seeking to be granted eligibility. The Commission then referred the applications to the State Office of Administrative Hearings.

As a preliminary matter, Texas Telephone insisted that Western Wireless was required to obtain a certificate of convenience and necessity, a certificate of operating authority, or a service provider certifi *209 cate of operating authority (we will refer to each of these as a “CCN”) before receiving a designation as an eligible provider. The Commission rejected this argument and initially determined that Western Wireless was not required to be certificated in order to be an eligible provider.

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163 S.W.3d 204, 2005 Tex. App. LEXIS 2647, 2005 WL 770620, Counsel Stack Legal Research, https://law.counselstack.com/opinion/public-utility-commission-v-texas-telephone-assn-texapp-2005.