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SPONSOR: |
SJC |
DATE TYPED: |
|
HB |
|
||
SHORT TITLE: |
Telecommunications Development Act |
SB |
CS/530/aSJC |
||||
|
ANALYST: |
Padilla |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
($12,000.0) |
|
Non-recurring |
Rural
Extension Fund |
|
|
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates HJC Substitute for HBIC Substitute
for House Bill 636
Relates to SB 775
SOURCES OF INFORMATION
Responses
Received From
Public Regulation
Commission
General Services
Department
Attorney General
Information
Technology Management Office
SUMMARY
Synopsis
of SJC Amendment
The SJC amendment reinstates the current
statutory provision that allows the PRC to impose a $100.0 per day fine
on certain telecommunications providers.
(See the first bullet below.) The
effect of the amendment is to return to the status quo.
Synopsis
Original Bill
The Senate Judiciary Committee Substitute for
Senate Bill 530 does the following:
Significant
Issues
1. Performance Assessment Plan Penalties: The New Mexico telecommunications
company currently subject to a performance assurance plan is Qwest. Qwest’s performance assurance plan (“QPAP”)
springs from its pursuit of 271 approval from the
Federal Communications Commission. That
approval will allow Qwest to re-enter the interstate long-distance market. The QPAP is a method to ensure customers and
regulatory authorities of Qwest’s commitments to performance in key areas. If Qwest fails to provide adequate service to
competitive local exchange carriers (CLECs), Qwest
will make payments directly to those carriers.
This bill will allow the PRC to offset these payments against any
administrative fines it imposes on Qwest for violations of interconnection
agreements and other rules.
2. Abbreviated Time Frame for Hearings: There is currently no statutory time limit
for hearings on the existence of “effective competition.” This bill would establish a 120-day limit. The PRC is concerned that 120 days might be
insufficient time in which to make an informed determination.
3. Eliminating Hearings on New Rates: Because Qwest and Valor are currently regulated
under AFORs (Alternative Forms of Regulation), the
PRC points out that the companies currently have no need to propose new rates,
as rate increases are built into the AFORs if certain
conditions are met. The PRC is
concerned that the companies may wish to re-open their AFORs
and propose new rates. In that case, the
PRC is concerned that this bill, by eliminating the PRC’s
ability to conduct a hearing on new rates, eliminates necessary due process.
4. Rural
Extension Fund: Section 4 of the
bill prevents the PRC from requiring a telecommunications company to establish
or maintain a Rural Extension Fund. The only carrier with a Rural Extension
Fund is Qwest. The fund was created by
the State Corporation Commission (now the New Mexico PRC) as a result of the
Tax Reform Act of 1986. The Tax Reform
Act lowered the tax expenses of the incumbent carriers; however, the SCC did
not refund the “savings” to consumers of Mountain Bell (which is now
Qwest). Instead it ordered Mountain Bell
to deposit $2 million annually into a Rural Extension Fund. The Fund is currently used to subsidize the
cost of providing primary line service to consumers who live more than 1,000
feet from the nearest pedestal or terminal. The cost of installing the line is
the responsibility of the person requesting service. A qualifying consumer may
be eligible for up to $5,000 from the Fund.
The Rural
Extension Fund has a balance of approximately $12 million. The bill provides
that after
The bill
provides that the money in the Fund will be spent by Qwest after consultation
with the PRC. The AG’s office suggests
that it would be better public policy for the PRC to decide where, when and how
the Fund should be spent after consultation by all interested parties,
including staff, consumer advocates and citizens in the rural areas of
FISCAL IMPLICATIONS
The fiscal impact of this bill will be the
potential transfer of funds from the Rural Extension Fund, which currently has
a balance of approximately $12,000.0, to Qwest for telecommunications
development projects
CONFLICT AND DUPLICATION
The House Judiciary Committee Substitute for the House Business and Industry Committee Substitute for House Bill 636 is a duplicate of this bill.
SB 775 proposes a new fund, to be used by the PRC, that would be financed by payments from
telecommunications companies that are subject to a Performance Assurance
Plan.
POSSIBLE QUESTIONS
1. What is the public policy reason for eliminating
the PRC’s ability to conduct hearings on the
reasonableness of proposed new rates for telecommunications services?
2. If the Rural Extension Fund is not available
to consumers for its original purpose, is there some other way to use the
money?
LP/njw:yr