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SPONSOR: |
HJC |
DATE TYPED: |
|
HB |
CS/CS/636/aHFl#1 |
||
SHORT TITLE: |
Telecommunications Development Act |
SB |
|
||||
|
ANALYST: |
Padilla |
|||||
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 SJC Substitute for SB 530
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 HFl Amendment
The House Floor Amendment #1 requires the PRC to
issue a final order regarding determinations of effective competition within 60
days of the end of the hearing.
Currently, there is no statutory provision that provides timeframes for
these hearings and orders.
Synopsis
of Original Bill
The House Judiciary Committee Substitute for the
House Business and Industry Committee Substitute for House Bill 636 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 Senate Judiciary Committee Substitute for SB 530 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