(a) Not later than November 1, 1999, the commission shall establish not more than three categories of access lines for statewide use.
(b) Not later than March 1, 2000, the commission shall establish:
(1) for each municipality, rates per access line by category for the use of the rights-of-way in that municipality; and
(2) the statewide average of those rates per access line by category for each certificated telecommunications provider, if necessary.

(c) The rates when applied to the total number of access lines by category in the municipality shall be equal to the base amount.
(d) Not later than December 1, 1999, a municipality that wants to effect an allocation of the base amount over specific access line categories to be assessed rates shall notify the commission of the desired allocation. The commission shall establish an allocation of the base amount over the categories of access lines if a municipality does not file its proposed allocation by December 1, 1999. A municipality may request a modification of the commission’s allocation not more than once every 24 months by notifying the commission and all affected certificated telecommunications providers in September of that year that the municipality wants to change the allocation for the next calendar year. A municipality’s allocation shall be implemented unless, on complaint by an affected certificated telecommunications provider, the commission determines that the allocation is not just and reasonable, is not competitively neutral, or is discriminatory.
(e) Rates imposed under this section and the allocation among certificated telecommunications providers must be exercised in a competitively neutral manner, may not unduly impair competition, must be non-discriminatory, and must comply with state and federal law. The commission shall determine the applicable rates for each municipality for each category, taking into account the allocation under Subsection (d) and the type, use, and function of access lines.
(f) Certificated telecommunications providers shall pay to the municipality a quarterly amount calculated monthly based on the access line rates established by the commission under this section and the number of access lines as reflected in the reports filed under Subsection (j). The providers shall make the quarterly payment not later than 45 days after the end of the quarter.
(g) Beginning 24 months after the date the commission establishes rates per access line, the commission shall annually adjust the rates per access line for each municipality by an amount equal to one-half the annual change, if any, in the consumer price index. At that time, the commission shall provide each certificated telecommunications provider and municipality with the adjusted monthly rates for each category of access line.
(h) On an annual basis, an affected municipality may provide notice to the commission to decline all or any portion of any increase in the per category access line rates.
(i) A certificated telecommunications provider may not be required to remit a right-of-way fee to a municipality on those access lines that have been resold, leased, or otherwise provided to another certificated telecommunications provider, if the underlying certificated telecommunications provider supplying those services or facilities has been furnished with adequate proof that the provider of services to the end-use customer will directly remit to the municipality a right-of-way fee based on those access lines.
(j) On a quarterly basis, each certificated telecommunications provider shall file a report with the commission that shows the number of access lines, including access lines by category, that the provider has within each municipality at the end of each month of the quarter. The provider shall include with the report a certified statement from an authorized officer or duly authorized representative of the provider stating that the information contained in the report is true and correct to the best of the officer’s or representative’s knowledge and belief after inquiry. On request and subject to the confidentiality protections of Section 283.005, each certificated telecommunications provider shall provide each affected municipality with a copy of the report required by this subsection.
(k) On request of the commission and to the extent available, the report required by Subsection (j) shall specifically identify access lines that are provided by means of resold services or unbundled facilities to another certificated telecommunications provider who is not an end-use customer and the identity of the certificated telecommunications providers obtaining the resold services or unbundled facilities to provide services to end-use customers. A provider may not include in its monthly count of access lines and is not required to remit a right-of-way fee to the municipality on access lines that are resold, leased, or otherwise provided to another certificated telecommunications provider if the provider receives adequate proof that the provider leasing or purchasing the access lines will include the access lines in its monthly count and remit payment on those access lines to the municipality.
(l) The commission may use a report required under Subsection (j) only to verify the number of access lines that serve premises within the municipality.
(m) Notwithstanding any other provision of this chapter, payment by a certificated telecommunications provider that complies with the terms of an unexpired franchise agreement or right-of-way ordinance that applies to the provider satisfies the payment attributable to the provider required by this chapter.
(n) A municipality may not demand or require from a certificated telecommunications provider services, facilities, or goods without compensation or at below-market rates.
(o) A certificated telecommunications provider shall, to the extent required, implement commission established access line rates not later than the 90th day after the date the commission establishes the access line rates under this chapter.