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

RELATING TO TELECOMMUNICATIONS; AMENDING AND ENACTING SECTIONS OF THE NEW MEXICO TELECOMMUNICATIONS ACT; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA.

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

Section 1. Section 63-7-1.1 NMSA 1978 (being Laws 1998, Chapter 108, Section 52) is amended to read:

"63-7-1.1 COMMISSION POWERS AND DUTIES--TRANSPORTATION AND TRANSMISSION COMPANIES AND COMMON CARRIERS--TELEPHONE AND TELEGRAPH COMPANIES.--

A. With respect to transportation and transmission companies and common carriers, the commission shall:

(1) fix, determine, supervise, regulate and control all prices, charges and rates of railway, express, telegraph, telephone, sleeping car and other transportation and transmission companies and common carriers within the state;

(2) determine any matters of public convenience and necessity with respect to matters subject to its regulatory authority as provided by law;

(3) require railway companies and other common carriers to provide and maintain adequate equipment, depots, stockpens, station buildings, agents and facilities for the accommodation of shippers and passengers and for receiving and delivering freight and express and to provide and maintain necessary crossings, culverts, sidings and other facilities for convenience and safety whenever in the commission's judgment the public interest demands;

(4) require railway companies, transportation companies and common carriers to provide such reasonable safety appliances and use such reasonable safety practices as may be necessary and proper for the safety of employees and the public as required by federal or state laws and rules;

(5) change, amend and rescind rates;

(6) rule upon requests to commence or discontinue business operations or specific services, requests to order the provision of specific services or matters relating to the provision of specific services;

[(6)] (7) enforce its rules through administrative sanctions and in the courts; and

[(7)] (8) carry out all other duties and have all other powers provided by law.

B. In fixing rates of telephone and telegraph companies, due consideration shall be given to the earnings, investments and expenditures as a whole within the state. The commission shall include in that consideration the earnings, investments and expenditures derived from or related to the sale of directory advertising and other directory listing services.

C. The commission may subpoena witnesses and documents, enforce its subpoenas through any court and, through the court, punish for contempt.

D. The commission has the power, after notice and hearing of record, to determine and decide any question and to issue orders relating to its powers and duties. By September 30, 1999, the commission shall promulgate comprehensive rules of practice and procedure in order to ensure fairness of the commission's processes. The commission's rules shall include appropriate procedures as are necessary to designate and protect confidential information.

E. An interested party may appeal from a final order of the commission by filing a notice of appeal with the supreme court asking for review of the order within thirty days of the final order. The appellant shall pay to the commission any costs of preparing and transmitting the record to the court.

F. The pendency of an appeal shall not automatically stay the order appealed from. The appellant may seek to obtain a stay from the commission or the supreme court.

G. The appeal shall be on the record of the hearing before the commission and shall be governed by the appellate rules applicable to administrative appeals. The supreme court shall affirm the commission's order unless it is:

(1) arbitrary, capricious or an abuse of discretion;

(2) not supported by substantial evidence in the record; or

(3) otherwise not in accordance with law.

H. In the case of a failure or refusal of any person to comply with an order of the commission within the time prescribed in the order or within thirty days after the order is entered, whichever is later, unless a stay has been granted, the commission shall seek enforcement of the order in the district court. The enforcement hearing shall be held on an expedited basis. At the hearing, the sole question shall be whether the person has failed to comply with or violated the order."

Section 2. Section 63-7-23 NMSA 1978 (being Laws 1995, Chapter 175, Section 1, as amended) is amended to read:

"63-7-23. TELECOMMUNICATIONS--ADMINISTRATIVE FINES.--

A. For purposes of this section:

(1) "commission" means the public regulation commission; and

(2) "telecommunications provider" means any telegraph company, telephone company, transmission company, telecommunications common carrier, telecommunications [company] carrier, cellular service company or pay telephone provider regulated in whole or in part by the commission under law, including the Telephone and Telegraph Company Certification Act, the New Mexico Telecommunications Act, the Cellular Telephone Services Act and Sections 63-9E-1 and 63-9E-3 NMSA 1978.

B. The commission may impose an administrative fine on a telecommunications provider for any act or omission that the telecommunications provider knew or should have known was a violation of any applicable law or rule or order of the commission.

C. An administrative fine of not more than [one thousand dollars ($1,000)] ten thousand dollars ($10,000) may be imposed for each violation or each of multiple violations arising out of the same facts [up to a maximum of twenty-five thousand dollars ($25,000) or an administrative fine of not more than one thousand dollars ($1,000) may be imposed for each day of a continuing violation arising out of the same facts, up to a maximum of twenty-five thousand dollars ($25,000)]. Each day a violation continues is a separate and distinct violation. Notwithstanding any other provision of this subsection, the commission may impose an additional administrative fine not to exceed [twenty-five thousand dollars ($25,000)] two hundred fifty thousand dollars ($250,000) for a single violation:

(1) that results in substantial harm to the customers of the telecommunications provider or substantial harm to the public interest; or

(2) for failure to obtain a certificate of public convenience and necessity required by law or for operation outside the scope of that certificate.

D. The commission shall initiate a proceeding to impose an administrative fine by giving written notice to the provider that the commission has facts as set forth in the notice that, if not rebutted, may lead to the imposition of an administrative fine under this section and that the telecommunications provider has an opportunity for a hearing. The commission may only impose an administrative fine by written order that, in the case of contested proceedings, shall be supported by a preponderance of the evidence.

E. The commission may initiate a proceeding to impose an administrative fine within two years from the date of the commission's discovery of the violation, but in no event shall a proceeding be initiated more than five years after the date of the violation. This limitation shall not run against any act or omission constituting a violation under

this section for any period during which the telecommunications provider has fraudulently concealed the violation.

F. The commission shall consider mitigating and aggravating circumstances in determining the amount of administrative fine imposed.

G. For purposes of establishing a violation, the act or omission of any officer, agent or employee of a telecommunications provider, within the scope of such person's authority, duties or employment, shall be deemed the act or omission of the telecommunications provider.

H. Any telecommunications provider or other person aggrieved by an order assessing an administrative fine may appeal the order to the supreme court of New Mexico. A notice of appeal shall be filed within thirty days after the entry of the commission's order. Notice of appeal shall name the commission as appellee and shall identify the order from which the appeal is taken.

I. The commission shall promulgate procedural rules for the implementation of this section."

Section 3. 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] public 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 public telecommunications service at affordable [rates] and comparable [message telecommunications service] rates, 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 4. 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 local exchange carrier" means a telecommunications carrier that provides local exchange service and that is not an incumbent local exchange carrier;

[D.] E. "competitive telecommunications service" means a public telecommunications 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. "fund" means the [New Mexico] state universal service fund;

G. "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;

[G.] H. "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.] I. "local exchange service" means the transmission of two-way interactive [switched] voice or data communications furnished by a telecommunications [company] carrier 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. "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. "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. "public telecommunications service" means the offering or the providing of the transmission [of signs, signals, writings, images, sounds, messages, data or other information of any nature by wire, radio, lightwaves or other electromagnetic means] between or among points specified by the user and originating and terminating in this state regardless of actual call routing of telecommunications information of the user's choosing, without change in the form or content of the information as sent and received, for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used. "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. "telecommunications [company] carrier" means a person that provides public telecommunications service, regardless of the facilities used; and

N. "unbundled network elements" means facilities or equipment used in the provision of public telecommunications service, including features, functions and capabilities that are provided by means of such facility or equipment, including subscriber numbers, databases, signaling systems and information sufficient for billing and collection or used in the transmission, routing or other provision of a public telecommunications service, to the extent that the federal Telecommunications Act of 1996 requires incumbent local exchange carriers to unbundle these facilities and equipment and provide them at technically feasible points to requesting telecommunications carriers."

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

"63-9A-5. [REGULATION BY COMMISSION] DELEGATION OF AUTHORITY.--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. The commission shall have exclusive jurisdiction to regulate telecommunications carriers pursuant to the New Mexico Telecommunications Act and, consistent with federal and state law, shall make and enforce rules to implement the federal Telecommunications Act of 1996."

Section 6. Section 63-9A-6 NMSA 1978 (being Laws 1985, Chapter 242, Section 6, as amended) is amended to read:

"63-9A-6. CERTIFICATE REQUIRED.--

A. No public telecommunications service shall be offered in this state except in accordance with the provisions of the New Mexico Telecommunications Act.

B. No public telecommunications service shall be offered within this state without the telecommunications [company] carrier first having obtained from the commission a certificate [declaring that the operation is in the present or future public convenience and necessity, unless the operation is otherwise authorized by] of public convenience and necessity or a certificate of authority, consistent with the New Mexico Telecommunications Act.

C. The commission shall have full power and authority to determine matters [of public convenience and necessity] relating to the issuance of a certificate of authority or public convenience and necessity to a provider of public telecommunications service; provided, however, that in keeping with the purposes of the New Mexico Telecommunications Act, the commission shall not deny an applicant a certificate on the grounds of need if it is shown that the applicant possesses adequate financial resources and technical competency to provide the service. It shall be within the discretion of the commission to determine when and upon what conditions plant, equipment or services may be provided under certificates of authority or public convenience and necessity [by more than one person], and the commission may attach to the exercise of rights granted by the certificate such terms and conditions as, in its judgment, the public convenience and necessity may require or as otherwise authorized.

[D. Notwithstanding the provisions of Subsection C of this section, any telecommunications company with less than one hundred thousand access lines holding a certificate of public convenience and necessity to provide local exchange service to the public shall have the exclusive right to provide local exchange service within its certificated service territory and shall not be subject to competition in the provision of local exchange service in its certificated service territory unless the commission determines that public convenience and necessity require additional plant or equipment for the provision of local exchange service within the certificated service territory of the existing telecommunications company and a certificate of public convenience and necessity is granted pursuant to Subsection E of this section.]

D. For purposes of considering and acting upon applications for certificates pursuant to this section, the commission may adopt rules, consistent with the provisions of law and the federal Telecommunications Act of 1996, necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of public telecommunications service and safeguard the rights of the customers.

E. In determining whether [public convenience and necessity require an additional] to issue a certificate to provide [local exchange] a public telecommunications service [in a certificated service territory], the commission shall [in a proceeding in which the telecommunications company certificated in the affected area is a party] consider [and determine upon substantial evidence that the following conditions exist:

(1) the existing telecommunications company is inadequate to meet the reasonable needs and convenience of the public;

(2) the proposed second plant or equipment would eliminate such inadequacy;

(3) it is economically feasible to operate the proposed second plant or equipment successfully and continuously for the furnishing of local exchange service] whether:

[(4)] (1) the applicant [for the second plant or equipment] has sufficient financial resources to provide the proposed [local exchange] public telecommunications service properly and continuously;

[(5)] (2) the applicant [for the second plant or equipment] has competent and experienced management and personnel to provide the proposed [local exchange] public telecommunications service;

[(6)] (3) the applicant [for the second plant or equipment] is willing and able to conform to the constitution of New Mexico and laws of New Mexico and the rules [and regulations] of the commission; and

[(7)] (4) the applicant [for the second plant or equipment] is in every respect willing and able to provide the proposed local exchange service properly [and

(8) granting the additional certificate to the applicant shall not have a significant adverse impact on the existing telecommunications company].

F. All certificates of public convenience and necessity shall:

(1) continue in force, notwithstanding the provisions of this section [63-9A-2 NMSA 1978]; and

(2) remain subject to all terms and conditions imposed by statute or commission order at the time of issuance or in connection with any subsequent amendment, notwithstanding the provisions of [that] this section."

Section 7. 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] STATE UNIVERSAL SERVICE FUND--ESTABLISHMENT--BOARD.--

A. The commission shall [establish] implement no later than January 1, 2000 a "[New Mexico] state universal service fund" to maintain [existing residential] local exchange service as determined by the commission and in conformance with the federal Telecommunications Act of 1996, at affordable rates in high cost areas of the state and for low-income New Mexicans. Upon implementation of the state universal service fund, any money in the New Mexico universal service fund shall be transferred immediately into the state universal service fund and the New Mexico universal service fund shall cease to exist.

B. The fund shall be financed by a [uniform surcharge] competitively neutral assessment on all [local exchange service customers] retail public telecommunications service revenues at [a rate] rates to be determined by the commission. The commission may charge the assessment to all providers of intrastate retail public telecommunications services and comparable alternative services, including radio common carrier services, including cellular, paging and wireless services and personal communications services; and operator and aggregator services, including those offered by providers other than telecommunications carriers. 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] that assure the availability of local service at affordable rates [without unreasonably increasing rates to local exchange service and message telecommunications service customers];

(2) determine which [companies] telecommunications carriers meet the eligibility criteria and which areas of the state should receive support;

(3) determine which telecommunications carriers meet the eligibility criteria for participation in the low- income telephone service assistance program in the Low Income Telephone Service Assistance Act and provide for payment to those telecommunications carriers for reduced-rate assistance that is provided pursuant to Section 63-9C-4 NMSA 1978 and that is not otherwise supported by federal or state funding; and

[(3)] (4) provide for the collection of the [surcharge] assessment 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] may select an independent person 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. The commission, as appropriate, may cause the administrator to be compensated for its services and expenses from the proceeds of the fund. The administrator shall consult with an advisory board established by the commission composed of representatives of participating providers, customers and other interested stakeholders.

F. A telecommunications carrier providing local exchange services eligible for support from the state universal service fund shall be eligible to receive funds only up to the amount that, together with funds from all other sources, including local exchange service revenues and funds from federal supports, equals the cost, as the commission determines, including a reasonable profit of providing local exchange service to customers of that telecommunications carrier."

Section 8. Section 63-9A-7 NMSA 1978 (being Laws 1985, Chapter 242, Section 7) is amended to read:

"63-9A-7. MANNER OF REGULATION.--

A. The granting of any certificate of authority or public convenience and necessity to provide a public telecommunications service shall not be deemed to require the holder [thereof] to provide other telecommunications services under regulation which are otherwise subject to competition.

B. In addition to any other penalties or provisions of law, the commission may suspend or revoke a telecommunications carrier's certificate of authority or public convenience and necessity or plan granted pursuant to an alternative form of regulation allowed by the commission. If a telecommunications carrier's plan approved pursuant to an alternative form of regulation is revoked, the telecommunications carrier shall be regulated as it was prior to the commission's approval of the revoked plan."

Section 9. 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] policies established in [the New Mexico Telecommunications Act] law and the federal Telecommunications Act of 1996, the commission shall, by its own motion or upon petition [by any] of an interested party, hold hearings to determine if [any] a 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] of providing the service as the commission determines and prevent anti-competitive pricing. Such modification shall be consistent with the maintenance of the availability of access to [local exchange service] public telecommunications services 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. Upon petition or request of an affected telecommunications [company] carrier, 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] the regulatory standards and requirements [for] are fairly applied to all such providers.

B. In determining whether a service is subject to effective competition in a relevant market area, the commission shall consider [the following] the extent to which:

(1) [the extent to which services are] service is reasonably available at competitive rates, terms and conditions from alternate providers [in the relevant market area] such that customers have a realistic choice of providers for the service;

(2) [the ability of alternate providers to make] functionally equivalent or substitute services [readily] are reasonably available at competitive rates, terms and conditions from alternate providers, such that customers have a realistic choice of alternative providers for such services; and

(3) [existing] economic [or] regulatory or other barriers to competition exist.

In making its determination, the commission may require parties to produce and may consider, among other evidence, existing relevant market share data from any telecommunications carrier on a confidential basis. Notwithstanding any contrary provisions of this section, the commission may adopt rules recognizing the differences between telecommunications carriers and between different public telecommunications services.

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 telecommunications services by noncompetitive telecommunications services, prices or rates charged for a competitive telecommunications service shall cover the cost [for the provision] of providing the service as the commission determines, and prevent anti-competitive pricing. 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] a service previously determined to be a competitive telecommunications service if after a hearing the commission finds that [a] the service is not subject to effective competition."

Section 10. Section 63-9A-8.1 NMSA 1978 (being Laws 1998, Chapter 108, Section 61) is amended to read:

"63-9A-8.1. CHANGE IN RATES.--

A. At a hearing involving an increase in rates or charges sought by a telecommunications [company] carrier, the burden of proof to show that the increased rate or charge is just and reasonable shall be upon the [company] telecommunications carrier.

B. Unless the commission otherwise orders, no telecommunications [company] carrier shall make a change in an established rate except after thirty days' notice to the commission, which notice shall plainly state the changes proposed to be made in the rates then in force, the time when the changed rates will go into effect and other information as the commission by rule requires. The telecommunications [company] carrier shall also give notice of the proposed changes to other interested persons as the commission may direct. All proposed changes shall be shown by filing new schedules that shall be kept open to public inspection. The commission for good cause shown may allow changes in rates without requiring the thirty days' notice, under conditions that it may prescribe.

C. Whenever a telecommunications [company] carrier files a complete application proposing new rates, the commission may, upon complaint or upon its own initiative, except as otherwise provided by law, upon reasonable notice, enter upon a hearing concerning the reasonableness of the proposed rates. If the commission determines a hearing is necessary, it shall suspend the operation of the proposed rates before they become effective but not for a longer initial period than nine months beyond the time when the rates would otherwise go into effect, unless the commission finds that a longer time will be required, in which case the commission may extend the period for an additional three months. The commission shall hear and decide cases with reasonable promptness. The commission shall adopt rules identifying criteria for various rate and tariff filings to be eligible for suspension periods shorter than what is allowed by this subsection and to be eligible for summary approval without hearing.

D. If after a hearing the commission finds the proposed rates to be unjust, unreasonable or in any way in violation of law, the commission shall determine the just and reasonable rates to be charged or applied by the telecommunications [company] carrier for the service in question and shall fix the rates by order to be served upon the telecommunications [company] carrier; or the commission by its order shall direct the telecommunications [company] carrier to file new rates respecting such service that are just and reasonable. Those rates shall thereafter be observed until changed as provided by the New Mexico Telecommunications Act."

Section 11. 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 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] a telecommunications carrier may file a verified application with the commission for authorization to provide a tariffed public telecommunications service on an individual contract basis to customers with specific volume, capacity, size, location or other unique characteristics or circumstances. The application shall describe:

(1) the public telecommunications services to be offered;

(2) the [party] customer 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]; the price of the services to be offered; and sufficient information, as the commission determines, to establish that the prices cover the costs of providing the services and prevent anti-competitive pricing. 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. 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:

(1) 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];

(2) with respect to a noncompetitive service, approval of the application would result in harm to other customers of that service;

(3) the contract fails to cover the costs of providing the service as the commission determines; or

(4) it is necessary to prevent anti-competitive pricing.

D. Within ten days after the conclusion of negotiations, the [provider of public telecommunications services] telecommunications carrier 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 12. Section 63-9A-10 NMSA 1978 (being Laws 1985, Chapter 242, Section 10) is amended to read:

"63-9A-10. EXAMINATION OF BOOKS AND RECORDS.--[Nothing in the New Mexico Telecommunications Act shall preclude the commission from exercising its authority to require such accounting or reporting systems as are necessary to allow a proper allocation of investments, costs or expenses that are joint or common to both public telecommunications services and other services.] The commission may examine any telecommunications carrier's book and records concerning its business in this state for the purpose of determining compliance with any provision of federal or state law or commission rule or order. The telecommunications carrier shall make its books and records concerning its business in this state available to the commission in this state in accordance with commission rules. The commission shall not disclose confidential information provided to it by a telecommunications carrier to third parties, except in accordance with commission rule."

Section 13. Section 63-9C-4 NMSA 1978 (being Laws 1987, Chapter 197, Section 4) is amended to read:

"63-9C-4. LOW-INCOME ASSISTANCE RATES--COMMISSION AUTHORITY.--

A. A local exchange company [may] shall provide assistance in the form of reduced rates to [those persons] residential customers who meet the eligibility criteria of one or more need-based assistance programs administered by the department or by the federal government.

B. The commission shall promulgate rules [and regulations] for the implementation of the Low Income Telephone Service Assistance Act for [those] local exchange companies who provide such assistance. The commission shall adopt a delivery structure for its program that is cost effective and coordinated with the department.

C. The commission shall structure the implementation of the Low Income Telephone Service Assistance Act in a manner that will result in funding of low-income programs in an amount at least equal to what is necessary to secure the maximum amount of federal matching funds for low-income telephone assistance programs. A local exchange company may obtain support from the state universal service fund pursuant to Section 63-9A-6.1 NMSA 1978 for reduced-rate assistance that is provided pursuant to this section and that is not otherwise supported by federal or state funding."

Section 14. Section 63-9C-5 NMSA 1978 (being Laws 1987, Chapter 197, Section 5) is amended to read:

"63-9C-5. [FEDERAL WAIVER] WAIVERS.--

A. In addition to any reduced rates provided by local exchange companies [on behalf of] that provide residential local exchange service to low-income New Mexicans, the commission shall apply to the [federal communications commission] appropriate governmental agency for a waiver of the federal end user common line charges and any other assessments or surcharges that, pursuant to federal or state law and rules, are at any time, subject to waiver with respect to recipients of low-income telephone service assistance. Upon receipt of [the] a waiver, the commission shall notify the local exchange companies providing low-income telephone service assistance and the monthly telephone bill shall reflect the waiver of the federal end user common line charges or other assessments or surcharges.

B. Recipients of low-income telephone service assistance shall note surcharged or otherwise pay assessments that contribute to the state universal service fund pursuant to Section 63-9A-6.1 NMSA 1978."

Section 15. A new section of the New Mexico Telecommunications Act is enacted to read:

"[NEW MATERIAL] QUALITY OF SERVICE STANDARDS.--

A. The commission shall establish minimum retail and wholesale service quality standards applicable to telecommunications carriers and, on or before December 31, 1999, promulgate rules necessary to implement the provisions of this section. The standards shall address performance in a range of service quality and reliability areas for both retail residential and business customers. In addition, the commission shall establish specific standards to measure the quality of incumbent local exchange carriers' service to other telecommunications carriers seeking interconnection, resale and purchase of unbundled network elements from the incumbent local exchange carriers. In determining the applicability of and in developing retail service quality standards for competitive local exchange carriers, the commission may consider the reliance of competitive local exchange carriers on incumbent local exchange carriers to provide wholesale services underlying the competitive local exchange carriers' retail service.

B. The commission shall provide for appropriate remedies, including penalties, if the commission finds that a telecommunications carrier has violated service quality standards. When determining an appropriate penalty for a telecommunications carrier, the commission may consider the recent history of the telecommunications carrier in achieving reasonable service quality and reliability and the telecommunications carrier's revenues, expenses, finances and investments. In any year in which penalties are imposed, the commission may require the telecommunications carrier to inform its intrastate customers of its failure to achieve the required level of service quality, in a manner approved by the commission."

Section 16. A new section of the New Mexico Telecommunications Act is enacted to read:

"[NEW MATERIAL] CONSUMER PROTECTION REQUIREMENTS FOR TELECOMMUNICATIONS COMPETITION.--The commission shall adopt rules on or before December 31, 1999 that establish minimum consumer protections applicable to all telecommunications carriers certificated in this state, consistent with applicable federal and state laws. These rules should address all appropriate issues, including:

A. minimum billing disclosures designed to enhance customers' knowledge and understanding;

B. disclosure and customer notice of an initiation of or change in service, price or other service conditions, as appropriate;

C. fair and reasonable credit, collection and service disconnection procedures and practices;

D. fair and reasonable trade and marketing practices; and

E. privacy protection of individual customer information."

Section 17. A new section of the New Mexico Telecommunications Act is enacted to read:

"[NEW MATERIAL] ALTERNATIVE FORMS OF REGULATION.--

A. The commission may authorize a telecommunications carrier to implement alternative forms of regulation, which are alternatives to the form of regulation of rates and charges for public telecommunications services authorized pursuant to Section 63-9A-8.1 NMSA 1978. Alternative forms of regulation may include price caps or an equitable sharing of earnings or revenues between a telecommunications carrier and its customers.

B. A telecommunications carrier may petition the commission for alternative regulation by submitting with its petition a detailed plan of the alternative form of regulation sought. The commission shall issue an order on the petition no later than nine months after its filing, accompanied by the requisite detailed plan. The commission shall grant the petition and authorize implementation of the plan, after notice and hearing, if the telecommunications carrier demonstrates that the plan as filed or as modified by the commission:

(1) does not degrade the quality or availability of public telecommunications services at affordable rates;

(2) produces fair, just and reasonable rates for public telecommunications services;

(3) does not unduly or unreasonably prejudice or disadvantage a customer or telecommunications carrier class;

(4) reduces regulatory delay and costs;

(5) promotes the public interest;

(6) enhances economic development in the state;

(7) results in the improvement of the public telecommunications services infrastructure in the state; and

(8) encourages competition in the telecommunications industry and permits a regulatory framework that will allow an orderly transition from a regulated telecommunications industry to a competitive market environment.

C. Within sixty days after the commission issues any order modifying the plan, the telecommunications carrier may withdraw its petition for alternative regulation. If the petition for alternative regulation is withdrawn, the telecommunications carrier:

(1) remains subject to the applicable regulation authorized by law and rule; and

(2) may again petition the commission to be regulated pursuant to a revised alternative regulation plan.

D. Upon petition or upon its own motion, the commission may rescind its approval or suspend a plan for an alternative form of regulation if, after notice and hearing, it finds that the requisite conditions for approval described in Subsection B of this section are no longer satisfied.

E. Nothing contained in this section shall be construed as limiting or otherwise affecting the commission's authority to:

(1) conduct investigations or hear complaints as authorized or permitted by law; or

(2) modify, after notice and hearing, the form of regulation of rates and charges for public telecommunications services pursuant to Section 63-9A-8 NMSA 1978."

Section 18. REPEAL.--Section 63-9A-6.2 NMSA 1978 (being Laws 1987, Chapter 21, Section 5) is repealed.