44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO TELECOMMUNICATIONS; ENACTING THE STATE UNIVERSAL SERVICE FUND ACT; REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new section of Chapter 63, Article 9A NMSA 1978 is enacted to read:

"[NEW MATERIAL] SHORT TITLE.--Sections 1 through 3 of this act may be cited as the "State Universal Service Fund Act"."

Section 2. A new section of Chapter 63, Article 9A NMSA 1978 is enacted to read:

"[NEW MATERIAL] PURPOSE.--The purpose of the State Universal Service Fund Act is to:

A. provide equal treatment for all telecommunications carriers;

B. provide price stability for residence and business telecommunications customers during the transition to a deregulated market;

C. eliminate subsidies in the current prices of telecommunications services in order to further competition in the telecommunications market in New Mexico; and

D. create a statewide universal service fund to ensure affordable local telecommunications service in all communities."

Section 3. A new section of Chapter 63, Article 9A NMSA 1978 is enacted to read:

"[NEW MATERIAL] UNIVERSAL SERVICE FUND.--

A. The "universal service fund" is created in the state treasury. The balance of the New Mexico universal service fund is transferred to the universal service fund on July 1, 1999. No later than January 1, 2000, the commission shall implement the provisions of this section. The universal service fund shall be used to maintain and support at affordable prices those retail public telecommunications services identified by the commission and offered in those areas of the state found to be of low density and high cost.

B. Collection for and distribution of money from the universal service fund shall be competitively neutral, equitable and nondiscriminatory and targeted to low density and high cost areas, and shall provide a specific, predictable and sufficient support mechanism that reduces implicit subsidies and assures universal service in the state.

C. Money for the universal service fund shall be produced by the imposition of competitively neutral and uniform surcharge rates on all retail public telecommunications services revenue, excluding revenue from services provided pursuant to a low-income telephone assistance plan billed to end-user customers by a telecommunications carrier and excluding revenue from surcharges, gross receipts taxes, excise taxes, franchise fees and similar charges. The commission shall apply the surcharge to all end-user retail public telecommunications services provided in the state by telecommunications carriers and to comparable retail alternative services provided by telecommunications carriers and non-telecommunications carriers. When the federal communications commission determines that commercial mobile radio services providers qualify as eligible telecommunications carriers pursuant to federal law, the commission shall apply the surcharge to all end-user retail public telecommunications services provided in the state by commercial mobile radio services providers. In prescribing a competitively neutral surcharge rate, the commission shall require telecommunications carriers and non-telecommunications carriers to apply uniform surcharge rates for the same or comparable services. Money deposited in the universal service fund is not public money, and the administration of the universal service fund is not subject to the provisions of law regulating public funds.

D. The commission shall:

(1) consistent with federal law, establish eligibility criteria for participation in the universal service fund that:

(a) ensure the availability of service at affordable prices without unreasonably increasing prices to local exchange service and long distance service customers;

(b) ensure eligible telecommunications carriers, as defined in the federal Telecommunications Act of 1996, a reasonable profit on supported services in geographic areas requiring support from the universal service fund;

(c) do not require any investigations of the costs or prices of a telecommunications carrier receiving support from the universal service fund, other than that provided for in Subsection F of this section; and

(d) do not restrict or limit an eligible telecommunications carrier from receiving federal universal service support;

(2) provide for collection of the surcharge on a competitively neutral basis and administration and disbursement of money from the universal service fund;

(3) determine those geographic areas of existing wire centers that are low density in nature;

(4) determine those retail public telecommunications services requiring support from the universal service fund; and

(5) provide for the separate administration and disbursement of federal universal service funds consistent with federal law.

E. The commission shall promulgate rules for the implementation and administration of the universal service fund in accordance with the provisions of this section. The cost basis for establishing the universal service fund and determining the rate of distribution of the universal service fund for areas served by a telecommunications carrier with less than fifty thousand access lines shall be the same cost of providing the supported service by geographic area determined by the federal communications commission. The cost basis for establishing the universal service fund and determining the rate of distribution of the new fund for areas served by telecommunications carriers with over fifty thousand access lines shall be the forward-looking economic cost of providing the supported service in the geographic area as determined by the commission.

F. The commission shall select a neutral third party administrator to collect, administer and disburse money from the universal service fund under the supervision and control of the commission pursuant to the established criteria and the rules promulgated by the commission. The administrator may be reasonably compensated for the services from the surcharge proceeds to be received by the universal service fund pursuant to Subsection C of this section. The neutral third party administrator shall consult with an advisory board established by the commission composed of representatives from all participating providers. The commission shall not be a neutral third party administrator.

G. To ensure that telecommunications carriers providing intrastate long distance service contribute to the universal service fund, no later than December 31, 1999, the commission shall promulgate rules and take other appropriate action to require telecommunications carriers providing intrastate long distance service to participate in any plan to ensure accurate reporting of intrastate retail long distance revenues.

H. Switched access charges and business dial tone access line services may be considered for reductions as an offset to payments received by a telecommunications carrier from the universal service fund."

Section 4. REPEAL.--Section 63-9A-6.1 NMSA 1978 (being Laws 1987, Chapter 21, Section 4, as amended) is repealed.