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F I S C A L I M P A C T R E P O R T

SPONSOR Rodella

ORIGINAL DATE

LAST UPDATED

2-11-07

HJM 76

SHORT TITLE

STUDY IMPACT OF WIRE NEW MEXICO

PROJECT

SB

ANALYST Hadwiger

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY06

FY07

FY08 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$20.0

$20.0

Non-

Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department (PED)

SUMMARY

Synopsis of Bill

House Joint Memorial 76 would request that the legislative interim committee responsible for

telecommunications issues to study:

1.

the implications of the state-funded Wire New Mexico project competing with private in-

dustry;

2.

the economic impact that the Wire New Mexico project may have on telecommunications

providers and the communities they serve and to evaluate the most appropriate methods

of addressing this impact; and

3.

the collaborative approaches whereby the state and telecommunications providers can

work together to ensure that the telecommunications and technology needs of the state’s

residents are met.

The committee would report its findings to the New Mexico Legislative Council by Decem-

ber 2006.

FISCAL IMPLICATIONS

The fiscal impact of this memorial would depend on whether Legislative Council Services staff

is capable of conducting the study with support from the administration or if contractual support

would be required. Because of the technical nature of this study, the fiscal impact is based on a

need for some professional services contracts for experts in this field.

House Joint Memorial Bill 76 – Page 2

PED noted that there is a potential for public schools to save money if the General Services De-

partment can provide at least the same level of service at a lower price.

SIGNIFICANT ISSUES

The memorial indicates that the state’s Wire New Mexico project will not be regulated by the

Public Regulation Commission and will be competing against existing rural telecommunications

providers who are so regulated and who have invested substantial resources to provide high-

capacity services to customers in New Mexico communities. The memorial expresses concern

that direct competition between the state and existing telecommunications providers may ad-

versely affect the financial viability of existing telecommunications providers serving communi-

ties throughout the state, may harm those communities due to job loss and may negatively impact

economic development in both rural and urban areas.

DH/mt