ELIMINATION OF RESALE PROHIBITIONS.

(a) Except as provided by Subsections (c) and (d), the commission shall eliminate all resale prohibitions in the tariffs of an electing company on the:

(1) completion of the commission's costing and pricing rulemaking;

(2) completion of rate rebalancing of the incumbent local exchange company rates under Subchapter F; and

(3) removal of all prohibitions on an incumbent local exchange company's provision of interLATA services.

(b) Except as provided by Subsections (c) and (d), the commission shall eliminate all resale prohibitions in the tariffs of an electing company that has one million access lines or more on removal of all prohibitions on the company's provision of interLATA service.

(c) After the resale prohibitions are eliminated under this section:

(1) the commission shall continue to prohibit the resale of local exchange or directory assistance flat rate services as a substitute for usage sensitive services; and

(2) residence service may not be resold to a business customer.

(d) A service or function may be offered for resale only to the same class of customer to which the incumbent local exchange company sells the service if the commission finds that:

(1) as a result of the costing and pricing proceeding the rate for the service or function will be less than the cost of providing the service or function; and

(2) the difference in rate and cost will not be recovered from the universal service fund.