44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO TELECOMMUNICATIONS; ESTABLISHING STATEWIDE TOLL-FREE TELECOMMUNICATIONS SERVICE BY THE CREATION OF A STATEWIDE EXPANDED CALLING AREA; CREATING EXPANDED CALLING AREA SERVICE; IMPOSING A TELECOMMUNICATION SURCHARGE AND CREATING THE NEW MEXICO EXPANDED CALLING AREA SERVICE EQUALIZING FUND; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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) 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 message telecommunications service rates, as established by the commission, for comparable markets or market areas] expanded calling area service for all customers to more equitably and cost-effectively ensure statewide telecommunications service. To the extent that it is consistent with maintaining availability of access to service at affordable rates and [comparable message telecommunications service rates] expanded calling area service, it is further the policy of this state to encourage competition in the telecommunications industry, thereby allowing access by the public to resulting rapid advances in telecommunications technology. It is the purpose of the New Mexico Telecommunications Act to permit a regulatory framework that will allow an orderly transition from a regulated telecommunications industry to a competitive market environment."

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. "expanded calling area" means the geographic area of the state and includes the area within which the area code "505" applies to access toll service by customers in the state;

G. "expanded calling area service" means telecommunications service between local exchange areas in and throughout the expanded calling area;

[F.] H. "fund" means the New Mexico universal service fund;

[G.] I. "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.] J. "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.] 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;

[K.] L. "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;

[L.] M. "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 and includes local exchange service and expanded calling area service. "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

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

Section 3. Section 63-9A-6.1 NMSA 1978 (being Laws 1987, Chapter 21, Section 4, as amended) is amended to read:

"63-9A-6.1. NEW MEXICO UNIVERSAL SERVICE FUND--ESTABLISHMENT--BOARD.--

A. The commission shall establish a "New Mexico universal service fund" to maintain existing residential local exchange service at affordable rates.

B. The fund shall be financed by a uniform surcharge on all local exchange service customers at a rate to be determined by the commission. Money deposited in the fund is not public money and the administration of the fund is not subject to the provisions of law regulating public funds.

C. The commission shall:

(1) establish eligibility criteria for participation in the fund which assure the availability of service at affordable rates without unreasonably increasing rates to local exchange service [and message telecommunications service] customers;

(2) determine which companies meet the eligibility criteria; and

(3) provide for the collection of the surcharge and the administration and disbursement of money from the fund.

D. The commission shall adopt rules and regulations for the implementation and administration of the fund in accordance with the provisions of this section.

E. The commission shall establish a board composed of representatives from the providers of local exchange service to collect, administer and disburse money from the fund under the supervision and control of the commission pursuant to the established criteria and the rules and regulations promulgated by the commission."

Section 4. Section 63-9A-6.2 NMSA 1978 (being Laws 1987, Chapter 21, Section 5) is amended to read:

"63-9A-6.2. CARRIER OF LAST RESORT.--Any telecommunications company which has a certificate of public convenience and necessity permitting it to provide [message] public telecommunications service between or among local exchange areas shall not be allowed to terminate or withdraw from providing [message] public telecommunications service between or among local exchange areas without an order of the commission upon a finding that there is another telecommunications company in place capable of providing service without interruption."

Section 5. 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] of expanded calling area service at a single rate each for residential and business customers, 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]. 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 6. A new section of the New Mexico Telecommunications Act is enacted to read:

"[NEW MATERIAL] EXPANDED CALLING AREA SERVICE--STATEWIDE TOLL-FREE LOCAL CALLING REQUIRED.--On December 1, 1999, expanded calling area service shall be established in the state for all customers." Section 7. A new section of the New Mexico Telecommunications Act is enacted to read:

"[NEW MATERIAL] EXPANDED CALLING AREA SERVICE--STATEWIDE RATES FOR RESIDENTIAL AND BUSINESS CUSTOMERS.--The commission shall establish a single rate for expanded calling area service for residential customers and a separate rate for expanded calling area service for business customers. The rate for business customers shall be calculated to include and continue the current percentage contribution of business customers toward the reduction in rates of residential customers in local exchange service rates. For expanded calling area service, the rate for residential customers shall be a single rate, applicable statewide and the rate for business customers shall be a single rate, applicable statewide, regardless of the telecommunications company providing service."

Section 8. A new section of the New Mexico Telecommunications Act is enacted to read:

"[NEW MATERIAL] EXPANDED CALLING AREA SERVICE--EQUALIZING FUND ESTABLISHMENT.--

A. The "New Mexico expanded calling area service equalizing fund" is created to make expanded calling area service available statewide for residential customers at a single reasonable rate. B. The commission shall promulgate rules to implement and administer the New Mexico expanded calling area service equalizing fund in accordance with the provisions of law.

C. The fund shall be financed by a uniform surcharge on all expanded calling area service customers at a rate to be determined by the commission. Money deposited in the fund is not public money and the administration of the fund is not subject to the provisions of law regulating public funds.

D. The commission shall:

(1) establish eligibility criteria for participation in the fund that ensures the availability of expanded calling area service to residential customers at a single reasonable rate without unreasonably increasing the rates to either residential or business expanded calling area service customers;

(2) determine which telecommunications companies meet the eligibility criteria; and

(3) provide for the collection of the surcharge and the administration and disbursement of money from the fund. E. The commission shall establish a board composed of representatives of telecommunications companies providing expanded calling area service to collect, administer and disburse money from the fund under the supervision and control of the commission pursuant to the established criteria and rules promulgated by the commission."