SENATE BILL 152

51st legislature - STATE OF NEW MEXICO - second session, 2014

INTRODUCED BY

Phil A. Griego

AN ACT

RELATING TO COMMUNICATIONS; AMENDING AND REPEALING SECTIONS OF THE NEW MEXICO TELECOMMUNICATIONS ACT TO EQUALIZE REGULATION AMONG INCUMBENT LOCAL EXCHANGE CARRIERS.

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

     SECTION 1. Section 63-9A-2 NMSA 1978 (being Laws 1985, Chapter 242, Section 2, as amended by Laws 2000, Chapter 100, Section 3 and also by Laws 2000, Chapter 102, Section 3) is amended to read:

     "63-9A-2. PURPOSE.--The legislature declares that it remains the policy of the state of New Mexico to maintain the availability of access to telecommunications services at affordable rates. Furthermore, it is the policy of this state to have comparable telecommunications service rates, as established by the commission, for comparable markets or market areas. To the extent that it is consistent with maintaining availability of access to service at affordable rates and comparable telecommunications service rates, it is further the policy of this state to encourage competition in the provision of public telecommunications services, thereby allowing access by the public to resulting rapid advances in telecommunications technology. It is the purpose of the New Mexico Telecommunications Act to extend to all consumers and carriers in the state the benefits of the regulatory flexibility previously provided only to incumbent rural telecommunications carriers and to permit a regulatory framework that will allow an orderly transition from a regulated telecommunications industry to a competitive market environment. It is further the intent of the legislature that the encouragement of competition in the provision of public telecommunications services will result in greater investment in the telecommunications infrastructure in the state, improved service quality and operations and lower prices for such services."

     SECTION 2. Section 63-9A-3 NMSA 1978 (being Laws 1985, Chapter 242, Section 3, as amended) is amended to read:

     "63-9A-3. DEFINITIONS.--As used in the New Mexico Telecommunications Act:

          A. "affordable rates" means local exchange service rates that promote universal service within a local exchange service area, giving consideration to the economic conditions and costs to provide service in such area;

          B. "cable television service" means the one-way transmission to subscribers of video programming or other programming service and subscriber interaction, if any, that is required for the selection of such video programming or other programming service;

          C. "commission" means the public regulation commission;

          [D. "competitive telecommunications service" means a service that has been determined to be subject to effective competition pursuant to Section 63-9A-8 NMSA 1978;

          E. "effective competition" means that the customers of the service have reasonably available and comparable alternatives to the service;

          F.] D. "fund" means the state rural universal service fund;

          E. "incumbent local exchange carrier" means a person that:

                (1) was designated as an eligible telecommunications carrier by the state corporation commission in Docket #97-93-TC by order dated October 23, 1997 or that provided local exchange service in this state on February 8, 1996; or

                (2) became a successor or assignee of an incumbent local exchange carrier;

          F. "incumbent rural telecommunications carrier" means an incumbent local exchange carrier that serves fewer than fifty thousand access lines within the state and has been designated as an eligible telecommunications carrier by the state corporation commission or the public regulation commission;

          G. "local exchange area" means a geographic area encompassing one or more local communities, as described in maps, tariffs or rate schedules filed with the commission, where local exchange rates apply;

          H. "local exchange service" means the transmission of two-way interactive switched voice communications furnished by a telecommunications company within a local exchange area;

          I. "message telecommunications service" means telecommunications service between local exchange areas within the state for which charges are made on a per-unit basis, not including wide-area telecommunications service, or its equivalent, or individually negotiated contracts for telecommunications services;

          [J. "mid-size carrier" means a telecommunications company with more than fifty thousand but less than three hundred seventy-five thousand access lines in the state;

          K. "noncompetitive telecommunications service" means a service that has not been determined to be subject to effective competition pursuant to Section 63-9A-8 NMSA 1978;

          L.] J. "private telecommunications service" means a system, including the construction, maintenance or operation thereof, for the provision of telecommunications service, or any portion of that service, by a person for the sole and exclusive use of that person and not for resale, directly or indirectly. For purposes of this definition, the person that may use such service includes any affiliates of the person if at least eighty percent of the assets or voting stock of the affiliates is owned by the person. If any other person uses the telecommunications service, whether for hire or not, the private telecommunications service is a public telecommunications service;

          [M.] K. "public telecommunications service" means the transmission of signs, signals, writings, images, sounds, messages, data or other information of any nature by wire, radio, lightwaves or other electromagnetic means originating and terminating in this state regardless of actual call routing. "Public telecommunications service" does not include the provision of terminal equipment used to originate or terminate such service; private telecommunications service; broadcast transmissions by radio, television and satellite broadcast stations regulated by the federal communications commission; radio common carrier services, including mobile telephone service and radio paging; or one-way cable television service; and

         [N.] L. "telecommunications company" means a person that provides public telecommunications service."

    SECTION 3. Section 63-9A-5 NMSA 1978 (being Laws 1985, Chapter 242, Section 5) is amended to read:

    "63-9A-5. REGULATION BY COMMISSION.--

         A. Except as otherwise provided in the New Mexico Telecommunications Act, each public telecommunications service is declared to be affected with the public interest and, as such, subject to the provisions of that act, including the regulation thereof as [hereinafter] provided in that act.

         B. The commission has exclusive jurisdiction to regulate incumbent local exchange carriers that serve more than fifty thousand access lines within the state only in the manner and to the extent authorized by the New Mexico Telecommunications Act, and Section 63-7-1.1 NMSA 1978 does not apply; provided, however, that the commission's jurisdiction includes the regulation of wholesale rates, including access charges and interconnection agreements consistent with federal law and its enforcement and determinations of participation in low-income telephone service assistance programs pursuant to the Low Income Telephone Service Assistance Act.

         C. For incumbent local exchange carriers that serve more than fifty thousand access lines within the state, the commission shall adopt relaxed regulations that provide for:

             (1) reduced filing requirements for applicants in rate increase proceedings under the New Mexico Telecommunications Act;             (2) expedited consideration in all proceedings initiated pursuant to the New Mexico Telecommunications Act in order to reduce the cost and burden for incumbent local exchange carriers and other applicants; and

             (3) regulations not to be applicable to incumbent rural telecommunications carriers."

    SECTION 4. Section 63-9A-8 NMSA 1978 (being Laws 1985, Chapter 242, Section 8, as amended) is amended to read:

    "63-9A-8. REGULATION OF RATES AND CHARGES.--

         [A. In accordance with the policy established in the New Mexico Telecommunications Act, the commission shall, by its own motion or upon petition by any interested party, hold hearings to determine if any public telecommunications service is subject to effective competition in the relevant market area. When the commission has made a determination that a service or part of a service is subject to effective competition, the commission shall, consistent with the purposes of the New Mexico Telecommunications Act, modify, reduce or eliminate rules, regulations and other requirements applicable to the provision of such service, including the fixing and determining of specific rates, tariffs or fares for the service. The commission's action may include the detariffing of service or the establishment of minimum rates which will cover the costs for the service. Such modification shall be consistent with the maintenance of the availability of access to local exchange service at affordable rates and comparable message telecommunication service rates, as established by the commission, for comparable markets or market areas, except that volume discounts or other discounts based on reasonable business purposes shall be permitted.]

         A. Rates for retail public telecommunications services provided by an incumbent local exchange carrier that serves more than fifty thousand access lines within the state shall be subject to regulation by the commission only in the manner and to the extent authorized by this section.

         B. An incumbent local exchange carrier that serves more than fifty thousand access lines within the state shall file tariffs for all retail public telecommunications services that, other than residential local exchange service, shall be effective after ten days' notice to its customers and the commission. An incumbent local exchange carrier that serves more than fifty thousand access lines within the state shall remain subject to complaint by an interested party subject to Section 63-9H-10 NMSA 1978.

         C. An incumbent local exchange carrier that serves more than fifty thousand access lines within the state may increase its rates for residential local exchange service in the manner provided in Subsection B of this section to comply with requirements imposed by any federal or state law or rule. The procedures of Subsections D, E and F of this section shall not apply to increases under this subsection.

         D. Except as provided in Subsection C of this section, rates for residential local exchange service may be increased by an incumbent local exchange carrier that serves more than fifty thousand access lines within the state only after sixty days' notice to all affected subscribers. The notice of increase shall include:

             (1) the reasons for the rate increase;

             (2) a description of the affected service;

             (3) an explanation of the right of the subscriber to petition the commission for a public hearing on the rate increase;

             (4) a list of local exchange areas that are affected by the proposed rate increase; and

             (5) the dates, times and places for the public informational meetings required by this section.

         E. An incumbent local exchange carrier that serves more than fifty thousand access lines within the state that proposes to increase its rates for residential local exchange service pursuant to Subsection D of this section shall hold at least one public informational meeting in each public regulation commissioner's district as established by the Public Regulation Commission Apportionment Act in which there is a local exchange area affected by the rate change.

         F. Residential local exchange service rates increased by an incumbent local exchange carrier that serves more than fifty thousand access lines within the state pursuant to Subsections D and E of this section shall be reviewed by the commission only upon written protest signed by two and one-half percent of all affected subscribers or upon the commission staff's own motion for good cause. The protest shall specifically set forth the particular rate or charge as to which review is requested, the reasons for the requested review and the relief that the persons protesting desire. If a proper protest is presented to the commission within sixty days from the date notice of the rate change was sent to affected subscribers of an incumbent local exchange carrier that is not an incumbent rural telecommunications carrier, the commission may accept and file the complaint and, upon proper notice, may suspend the rates at issue during the pendency of the proceedings and reinstate the rates previously in effect and shall hold and complete a hearing thereon within ninety days after filing to determine if the rates as proposed are fair, just and reasonable. The commission may, within sixty days after close of the hearing, enter an order adjusting the rates at issue, except that the commission shall not set any rate below the intrastate cost of providing the service. In the order, the commission may order a refund of amounts collected in excess of the rates and charges as approved at the hearing, which may be paid as a credit against billings for future services. If the complaint is denied, the commission shall enter an order denying the complaint within sixty days after the close of the hearing, and the rates shall be deemed approved. For purposes of this section, cost shall also include a reasonable amount of joint and common costs incurred by the incumbent local exchange carrier that serves more than fifty thousand access lines within the state in its operations and may include other accounting adjustments authorized by the commission.

         G. Rates for local exchange, vertical and long distance service to retail end-user customers may be reduced to a level equal to, but not below, the intrastate cost. If an incumbent local exchange carrier that serves more than fifty thousand access lines within the state loses or lacks an exemption pursuant to federal law, the rate for a service, excluding basic service, must cover the cost of the service, including the imputed rate of wholesale service elements as may be required by the commission. The cost of long distance service must also include any interexchange access rates charged to another telecommunications carrier for the service.

         H. An incumbent local exchange carrier that serves more than fifty thousand access lines within the state shall have the ability to offer or discontinue offering special incentives, discounts, packaged offerings, temporary rate waivers or other promotions, or to offer individual contracts.

         I. Upon petition or request of an affected telecommunications company, the commission, upon a finding that the requirements of [Subsection C of] this section are met, shall modify the same or similar regulatory requirements for those providers of comparable public telecommunications services in the same relevant markets so that there shall be parity of regulatory standards and requirements for all such providers.

         [B. In determining whether a service is subject to effective competition, the commission shall consider the following:

             (1) the extent to which services are reasonably available from alternate providers in the relevant market area;

             (2) the ability of alternate providers to make functionally equivalent or substitute services readily available at competitive rates, terms and conditions; and

             (3) existing economic or regulatory barriers.

         C. No provider of public telecommunications service may use current revenues earned or expenses incurred in conjunction with any noncompetitive service to subsidize competitive public telecommunications services. In order to avoid cross-subsidization of competitive services by noncompetitive telecommunications services, prices or rates charged for a competitive telecommunications service shall cover the cost for the provision of the service. In any proceeding held pursuant to this section, the party providing the service shall bear the burden of proving that the prices charged for competitive telecommunications services cover cost.

         D. The commission may, upon its own motion or on the petition of an interested party and after notice to all interested parties and customers and a hearing, reclassify any service previously determined to be a competitive telecommunications service if after a hearing the commission finds that a service is not subject to effective competition.]"

    SECTION 5. Section 63-9A-9 NMSA 1978 (being Laws 1985, Chapter 242, Section 9, as amended) is amended to read:

    "63-9A-9. REGULATION OF INDIVIDUAL CONTRACTS TO FACILITATE COMPETITION.--

         A. In accordance with the provisions of this section, the commission shall regulate the rates, charges and service conditions for individual contracts for public telecommunications services in a manner [which] that facilitates effective competition and shall authorize the provision of all or any portion of a public telecommunications service under stated or negotiated terms to any person or entity that has acquired or is preparing to acquire, through construction, lease or any other form of acquisition, similar public telecommunications services from an alternate source.

         B. At any time, the provider of public telecommunications services may file a verified application with the commission for authorization to provide a public telecommunications service on an individual contract basis. The application shall describe the telecommunications services to be offered, the party to be served and the parties offering the service, together with such other information and in such form as the commission may prescribe. Such additional information shall be reasonably related to the determination of the existence of a competitive offer. [A determination of effective competition pursuant to Section 63-9A-8 NMSA 1978 shall not be necessary to file an application or to have an application granted by the commission pursuant to this section.]

         C. An application is deemed approved when filed unless the commission denies it. The commission shall approve or deny any such application within ten days or such other period as shall be established by the commission, not to exceed sixty days, giving consideration to the requirements of any contract negotiations. If the commission has not acted on any application within the time period established, the application shall be deemed granted. The commission shall deny the application only upon a finding that the application fails to set forth prescribed information or that the subject or comparable services are not being offered to the customer by parties other than the applicant or that the contract fails to cover the costs of the service.

         D. Within ten days after the conclusion of negotiations, the provider of public telecommunications services shall file with the commission the final contract or other evidence of the service to be provided, together with the charges and other conditions of the service, which shall be maintained by the commission on a confidential basis subject to an appropriate protective order."

    SECTION 6. REPEAL.--Sections 63-9A-5.1, 63-9A-5.2, 63-9A-8.1 and 63-9A-8.2 NMSA 1978 (being Laws 2004, Chapter 3, Sections 4 and 5, Laws 1998, Chapter 108, Section 61 and Laws 2000, Chapter 100, Section 4 and Laws 2000, Chapter 102, Section 4, as amended) are repealed.

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