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SPONSOR: |
Heaton |
DATE TYPED: |
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HB |
715/aHCPAC |
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SHORT TITLE: |
Incumbent Rural Telecommunications Carriers |
SB |
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ANALYST: |
Padilla |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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NFI
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(Parenthesis
( ) Indicate Expenditure Decreases)
Duplicates some provisions of SB 629
Relates to and potentially conflicts with SB 530
and HB 636
LFC Files
Responses
Received From
Public
Regulation Commission
Attorney
General’s Office
General
Services Department
SUMMARY
Synopsis
of HCPAC Amendment
The House Consumer and Public Affairs Committee
Amendment establishes that the provisions of HB 715 do not apply to Valor
Telecommunications until the expiration of its AFOR (Alternative Form of
Regulation). Valor shall continue to
operate under terms of its AFOR until it expires, after which the changes made
by this bill would apply.
Significant
Issues
The HCPAC amendment appears to address a significant issue of the original bill, namely that it was in conflict with Valor’s AFOR. See “Potential Conflict with AFOR” under “Significant Issues” of the original bill.
Synopsis
of Original Bill
House Bill 715 changes the definition of
“incumbent rural telecommunications carrier” in the Rural Telecommunications
Act. The bill changes the definition
from “an incumbent local exchange carrier that serves fewer than fifty thousand
access lines within the state. . .” to one that meets any of three criteria,
including a carrier that “provides local
exchange service to any local exchange carrier study areas with fewer than one
hundred thousand access lines.”
Significant
Issues
Valor Becomes a Rural
Incumbent Telecommunications Carrier: The new definition of “incumbent rural
telecommunications carrier” would affect only one company, Valor
Telecommunications. Valor, with more
than fifty thousand access lines in
As an incumbent rural telecommunications carrier, as this bill would allow, Valor, like other rural carriers, would be able to change residential rates after 60 days notice to all affected subscribers unless 2.5% of the subscribers or PRC staff file a protest with the PRC. It could change other rates upon ten days notice to the PRC and publication in a local newspaper. The AG’s office points out that Qwest and Valor advocated for price cap regulation, such as an AFOR, because once the rates and standards were set, the companies would be relatively free from oversight from the PRC and have more certainty in their business. According to this bill, Valor would no longer be subject to PRC rules regarding quality of service, consumer protection, investment and deployment of high-speed data services.
Potential Conflict with AFOR: The PRC believes by changing the regulatory framework for Valor midstream, the bill may violate Article II, Section 9 (prohibition against retroactive lawmaking or ex post facto lawmaking) and Article IV, Section 34 (prohibition against changing rights or procedures in pending cases) of the New Mexico Constitution.
ADMINISTRATIVE IMPLICATIONS
The PRC believes a major review of the existing
Valor AFOR and a review of the impact of this bill upon consumer protection and
quality of service rules currently applicable to Valor will be necessary if
this bill is enacted.
RELATIONSHIP
This bill duplicates, in part, Senate Bill
629. SB 629 makes the same definitional
change of “incumbent rural telecommunications carrier” as is made in Section 1
of this bill.
The bill potentially conflicts with SB 530 and
HB 636, which make changes in regulatory procedures involving Valor.
Valor Telecommunications is a private held
company based in
The Attorney General’s office suggests the
following amendment to address concerns about the change in Valor’s regulatory
status:
Section 8. "63-9H-7. REGULATION OF RETAIL RATES OF INCUMBENT RURAL TELECOMMUNICATIONS CARRIER.--
E. Residential local
exchange service rates increased by a rural telecommunications carrier pursuant
to Subsection D of this section shall be reviewed by the commission only upon
written protest signed by two and one-half percent of all affected subscribers,
the Attorney General, or upon the commission staff's own motion for good
cause…
POSSIBLE QUESTIONS
1. What will be the impact on customers of considering Valor a rural carrier?
2. What benefits, if any, will accrue to Valor as a result of being considered a rural carrier?
LP/ls:yr