(a) When the commission obtains notice as required under § 54.253 or otherwise that a utility intends to become an exiting utility and no other telecommunications utility has facilities sufficient to provide basic local telecommunications service in that defined geographic area, the commission shall open a contested case proceeding to determine:
(1) the identity of the successor utility under this section; and
(2) the amount of universal service funding under Subchapter G, Chapter 56, to be made available to the successor utility.
(b) On designation as the successor utility under this section, the commission, if applicable, shall provide to the successor utility:
(1) a reasonable time, in accordance with industry practices and not subject to otherwise applicable commission service quality rules or standards, to modify, construct, or obtain facilities necessary to serve the customers of the exiting telecommunications utility; and
(2) an exemption on a transitional basis from any obligation to unbundle the utility’s network elements or to provide service for resale within that defined geographic area for nine months or another reasonable period the commission may authorize as necessary to modify the utility’s network to provide that unbundling or resale.

(c) A customer within the defined geographic area to be served by the successor utility is considered to have applied for service from the successor utility on the effective date of that designation by the commission. Each right, privilege, and obligation of being a customer of the successor utility applies to that customer and the customer is subject to the successor utility’s applicable terms of service as specified in an applicable tariff or contract.