SENATE JUDICIARY COMMITTEE SUBSTITUTE FOR
SENATE BILL 445
49th legislature - STATE OF NEW MEXICO - first session, 2009
AN ACT
RELATING TO TELECOMMUNICATIONS; PROVIDING THAT CERTAIN RETAIL TELECOMMUNICATIONS RATES MAY BE REMOVED FROM THE PUBLIC REGULATION COMMISSION JURISDICTION DUE TO EFFECTIVE COMPETITION; CONTINUING REGULATION OF SINGLE LINE FLAT-RATED LOCAL EXCHANGE SERVICES UNTIL 2012; RESTORING THE JURISDICTION OF THE PUBLIC REGULATION COMMISSION FOR CERTAIN RETAIL RATES IN 2013.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 63-9A-8 NMSA 1978 (being Laws 1985, Chapter 242, Section 8, as amended) is amended to read:
"63-9A-8. REGULATION OF RATES AND CHARGES.--
A. In accordance with the policy established in the New Mexico Telecommunications Act, the commission shall, by its own motion or upon petition by any interested party, hold hearings to determine if any public telecommunications service is subject to effective competition in the relevant market area. When the commission has made a determination that a service or part of a service is subject to effective competition, the commission shall, consistent with the purposes of the New Mexico Telecommunications Act, modify, reduce or eliminate rules, regulations and other requirements applicable to the provision of such service, including the fixing and determining of specific rates, tariffs or fares for the service. The commission's action may include the detariffing of service or the establishment of minimum rates [which will] that cover the costs for the service. Such modification shall be consistent with the maintenance of the availability of access to local exchange service at affordable rates and comparable message [telecommunication] telecommunications service rates, as established by the commission, for comparable markets or market areas, except that volume discounts or other discounts based on reasonable business purposes shall be permitted. Upon petition or request of an affected telecommunications company, the commission, upon a finding that the requirements of [Subsection] Subsections B and C of this section are met, shall modify the same or similar regulatory requirements for those providers of comparable public telecommunications services in the same relevant markets so that there shall be parity of regulatory standards and requirements for all such providers.
B. In determining whether a service is subject to effective competition, the commission shall consider [the following:
(1) the extent to which services are reasonably available from alternate providers in the relevant market area;
(2) the ability of alternate providers to make functionally equivalent or substitute services readily available at competitive rates, terms and conditions; and
(3) existing economic or regulatory barriers] whether:
(1) a comparable service or facility is available from a supplier other than an incumbent telecommunications company in the relevant market area being considered by the commission; and
(2) market forces in that market are sufficient to assure just and reasonable rates without regulation.
C. When considering market forces in the market proposed to be deregulated, the commission shall consider factors, including the presence or absence of all of the following:
(1) wireless communications services;
(2) cable telephony services; and
(3) voice over internet protocol services.
[C.] D. No provider of public telecommunications service may use current revenues earned or expenses incurred in conjunction with any noncompetitive service to subsidize competitive public telecommunications services. In order to avoid cross-subsidization of competitive services by noncompetitive telecommunications services, prices or rates charged for a competitive telecommunications service shall cover the cost for the provision of the service. In any proceeding held pursuant to this section, the party providing the service shall bear the burden of proving that the prices charged for competitive telecommunications services cover cost.
[D.] E. The commission may, upon its own motion or on the petition of an interested party and after notice to all interested parties and customers and a hearing, reclassify any service previously determined to be a competitive telecommunications service if after a hearing the commission finds that a service is not subject to effective competition.
F. Effective July 1, 2009, upon the election by a telecommunications company subject to rate regulation, including a mid-size carrier, the jurisdiction of the commission shall not include the regulation of retail rates for business and residential local exchange services, interexchange services, private line services, designed services or discretionary services provided throughout the state, except for single line flat-rated residential and business local exchange services. The commission shall retain all other forms of regulatory jurisdiction within the current authority of the commission.
G. An election pursuant to this subsection shall be filed with the commission and shall contain:
(1) the name and address of the telecommunications company;
(2) a narrative describing:
(a) the telecommunications services provided by the telecommunications company;
(b) the geographic area and market served by the telecommunications company; and
(c) the telecommunications services for which the election is made; and
(3) the effective date of the election, which shall be no earlier than the later of July 1, 2009 or thirty days after the date the notice is filed with the commission.
H. For a telecommunications company that files an election pursuant to this section, the commission shall retain jurisdiction to set reasonable price caps for single line flat-rated residential and business local exchange services.
I. For a company filing an election pursuant to this section that offers single line flat-rated local exchange service for both residential and business customers on a stand- alone basis, the rate regulation jurisdiction of the commission shall not extend to the rate regulation of packages or bundles of services that include single line flat-rated local exchange services.
J. For a telecommunications company that has made an election pursuant to this section, beginning on July 1, 2012, the retail rate jurisdiction of the commission shall not be applicable to single line flat-rated residential and business basic local exchange service rates unless the commission, during the first six calendar months of 2012, extends its retail rate jurisdiction over single line flat-rated residential and business basic local exchange service rates provided by a previously rate-regulated telecommunications company. The commission shall retain all other forms of regulatory jurisdiction within the current authority of the commission. The commission may extend its retail rate regulation jurisdiction pursuant to this subsection for not more than two years and may do so only upon a finding supported by substantial evidence that such action is necessary to protect the public interest.
K. A telecommunications company that is regulated pursuant to an alternative form of regulation plan on July 1, 2009 shall no longer be subject to the rate regulation terms of that plan upon making an election to be governed by this section, but shall remain subject to all other requirements of an alternative form of regulation plan, including any service quality or investment obligations associated with that plan. No election filed pursuant to this section shall affect any obligations related to settlement agreements approved by the commission to address noncompliance with a previous alternative form of regulation plan.
L. A telecommunications company that filed an election pursuant to this section shall remain obligated to meet applicable service quality rules of the commission then in effect or adopted by the commission in accordance with this section, but such rules shall not provide for the payment of customer credits associated with failure to meet any service quality rule.
M. A telecommunications company that has made an election pursuant to this section shall charge the same rates for single line flat-rated residential or business basic local exchange service in each local exchange calling area served by the telecommunications company within the state, whether urban or rural.
N. A telecommunications company that has made an election pursuant to this section shall make available to the public on the telecommunications company's web site the prices, rates, terms and conditions of services that are no longer subject to a tariff imposed by the commission pursuant to the New Mexico Telecommunications Act.
O. The commission shall require a telecommunications company that fails to meet a service quality metric imposed by the commission consistent with this section to submit a plan to remedy any service quality failures promptly and may also assess an administrative fine pursuant to Section 63-7-23 NMSA 1978.
P. As used in this section:
(1) "designed services" means the provisioning of regulated circuits requiring treatment, equipment or engineering design purchased from an ILEC's tariff or on an individual contract basis, including analog private line services; DDS; DS-1, including channelized service; DS-3; ISDN-PRI; ISDN-BRI; and special assemblies where all facilities and equipment provided are physically located in the state of New Mexico; and
(2) "discretionary services" means voice mail, caller ID, caller name ID, call waiting, three-way calling, call forwarding, call return, call blocker and auto redial and any similar service sold as an add-on to a customer's basic local exchange service."
Section 2. Section 63-9A-8 NMSA 1978 (being Laws 1985, Chapter 242, Section 8, as amended, and as further amended by Section 1 of this act) is repealed and a new Section 63-9A-8 NMSA 1978 is enacted to read:
"63-9A-8. [NEW MATERIAL] REGULATION OF RATES AND CHARGES.--
A. In accordance with the policy established in the New Mexico Telecommunications Act, the commission shall, by its own motion or upon petition by any interested party, hold hearings to determine if any public telecommunications service is subject to effective competition in the relevant market area. When the commission has made a determination that a service or part of a service is subject to effective competition, the commission shall, consistent with the purposes of the New Mexico Telecommunications Act, modify, reduce or eliminate rules, regulations and other requirements applicable to the provision of such service, including the fixing and determining of specific rates, tariffs or fares for the service. The commission's action may include the detariffing of service or the establishment of minimum rates that cover the costs for the service. Such modification shall be consistent with the maintenance of the availability of access to local exchange service at affordable rates and comparable message telecommunications service rates, as established by the commission, for comparable markets or market areas, except that volume discounts or other discounts based on reasonable business purposes shall be permitted. Upon petition or request of an affected telecommunications company, the commission, upon a finding that the requirements of Subsections B and C of this section are met, shall modify the same or similar regulatory requirements for those providers of comparable public telecommunications services in the same relevant markets so that there shall be parity of regulatory standards and requirements for all such providers.
B. In determining whether a service is subject to effective competition, the commission shall consider whether:
(1) a comparable service or facility is available from a supplier other than an incumbent telecommunications company in the relevant market area being considered by the commission; and
(2) market forces in that market are sufficient to assure just and reasonable rates without regulation.
C. When considering market forces in the market proposed to be deregulated, the commission shall consider factors, including the presence or absence of all of the following:
(1) wireless communications services;
(2) cable telephony services; and
(3) voice over internet protocol services.
D. No provider of public telecommunications service may use current revenues earned or expenses incurred in conjunction with any noncompetitive service to subsidize competitive public telecommunications services. In order to avoid cross-subsidization of competitive services by noncompetitive telecommunications services, prices or rates charged for a competitive telecommunications service shall cover the cost for the provision of the service. In any proceeding held pursuant to this section, the party providing the service shall bear the burden of proving that the prices charged for competitive telecommunications services cover cost.
E. The commission may, upon its own motion or on the petition of an interested party and after notice to all interested parties and customers and a hearing, reclassify any service previously determined to be a competitive telecommunications service if after a hearing the commission finds that a service is not subject to effective competition."
Section 3. EFFECTIVE DATE.--
A. The effective date of the provisions of Section 1 of this act is July 1, 2009.
B. The effective date of the provisions of Section 2 of this act is July 1, 2013.
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