SENATE BILL 41
56th legislature - STATE OF NEW MEXICO - first session, 2023
RELATING TO TELECOMMUNICATIONS; AMENDING SECTIONS OF THE NEW MEXICO TELECOMMUNICATIONS ACT; REQUIRING THAT INCUMBENT LOCAL EXCHANGE CARRIERS THAT SERVE FIFTY THOUSAND OR MORE ACCESS LINES BE REGULATED IN THE SAME MANNER AS INCUMBENT RURAL TELECOMMUNICATIONS CARRIERS IN MOST CASES; ESTABLISHING THAT EFFECTIVE COMPETITION EXISTS IN A WIRE CENTER SERVING AREA WHEN VOICE SERVICES ARE PROVIDED TO THE AREA BY TWO OR MORE ALTERNATE PROVIDERS; PROVIDING DEFINITIONS; REQUIRING THE PUBLIC REGULATION COMMISSION TO REPORT THE STEPS TAKEN TO ACHIEVE REGULATORY PARITY AMONG CARRIERS; AMENDING AND REPEALING SECTIONS OF THE NMSA 1978.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. 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 area, giving consideration to the economic conditions and costs to provide service in such area;
B. "alternate provider" means a person that provides voice services, regardless of the technology used. Such providers are not limited to telecommunications companies and include cellular service companies, satellite companies and companies that provide service using an interconnected voice- over-internet protocol;
[B.] C. "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.] D. "commission" means the public regulation commission;
[D.] E. "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.] F. "competitive telecommunications service provider" includes competitive carriers holding certificates of public convenience and necessity issued by the commission pursuant to laws and regulations, including, without limitation, Section 63-9A-6 NMSA 1978;
[F.] G. "effective competition" means the competition that results from the customers of the service having reasonably available and comparable alternatives to the service, consistent with the standards set forth in Section 63-9A-8 NMSA 1978;
[G.] H. "fund" means the state rural universal service fund;
[H.] I. "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 New Mexico on February 8, 1996; or
(2) became a successor or assignee of an incumbent local exchange carrier;
[I.] J. "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 company by the state corporation commission or the public regulation commission;
[J.] K. "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;
[K.] L. "local exchange service" means the transmission of two-way interactive switched voice communications furnished by a telecommunications company within a local exchange area;
[L.] M. "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;
[M.] N. "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;
O. "person" means a natural person, individual, corporation, association, partnership or any other legal entity;
[N.] P. "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;
[O.] Q. "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;
[P.] R. "telecommunications company" means a person that provides public telecommunications service;
S. "voice services" means the transmission of signs, signals, writings, images, sounds, messages, data or other information of any nature by wire, radio, light waves or other electromagnetic means, including those voice services provided by incumbent local exchange carriers, competitive telecommunications service providers, mobile wireless providers and interconnected voice-over-internet protocol service providers;
[Q.] T. "wire center" means a facility where local exchange access lines converge and are connected to a switching device that provides access to the public switched network and includes remote switching units and host switching units; and
[R.] U. "wire center serving area" means the geographic area of a local exchange area served by a single wire center."
SECTION 2. Section 63-9A-5 NMSA 1978 (being Laws 1985, Chapter 242, Section 5, as amended) 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 provided in that act.
B. Except in cases regarding the fixing of rates pursuant to Section 63-7-1.1 NMSA 1978, the commission has exclusive jurisdiction to regulate incumbent local exchange carriers that serve fifty thousand or more access lines within the state [only in the manner and] to the extent authorized by the New Mexico Telecommunications Act [and Subsection B of Section 63-7-1.1 NMSA 1978 does not apply]; provided [however] that:
(1) 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 [The New Mexico Telecommunications Act expressly preserves and does not diminish or expand]; and
(2) incumbent local exchange carriers regulated pursuant to this section shall be regulated in the same manner as incumbent rural telecommunications carriers are regulated pursuant to the Rural Telecommunications Act of New Mexico.
C. Any rules adopted by the commission for the regulation of incumbent local exchange carriers pursuant to the New Mexico Telecommunications Act shall preserve and not alter:
(1) the rights and obligations of any entity, including the commission, established pursuant to federal law, including 47 U.S.C. Sections 251 and 252, or established pursuant to any state law, rule, procedure, regulation or order related to interconnection, intercarrier compensation, intercarrier complaints, wholesale rights and obligations or any wholesale rate or schedule that is filed with and maintained by the commission;
(2) the rights and obligations of any competitive telecommunications service provider holding a certificate of public convenience and necessity, or the rights and obligations of any competitive [local exchange] carrier to obtain such a certificate;
(3) the authority of the commission to resolve consumer complaints regarding basic local exchange service; provided, however, that the commission's authority to resolve such complaints shall be limited to resolving issues of consumer protection and shall not include the authority to determine or fix rates, provider of last resort obligations or service quality standards except as expressly set forth in the New Mexico Telecommunications Act;
(4) the authority of the commission to establish reasonable quality of service standards; provided, however, that the enforcement of such standards shall be limited to the commission's fining authority set forth in Section 63-7-23 NMSA 1978 and the authority to seek an injunction set forth in Section 63-9-19 NMSA 1978;
(5) the rights and obligations of any entity, including the commission, regarding the fund;
(6) the rights and obligations of any entity, including the commission, regarding access to emergency service to the extent consistent with the Enhanced 911 Act; or
(7) the rights and obligations of any entity, including the commission, regarding the administration of slamming and cramming rules, telecommunications relay service and numbering resources to the extent permitted by and consistent with federal law.
[C. For incumbent local exchange carriers that serve fifty thousand or more 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; and
(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.
D. The regulatory requirements and the commission's regulation of competitive local exchange carriers, competitive access providers and interexchange carriers shall be no greater than, and no more extensive than, that of incumbent local exchange carriers that serve fifty thousand or more access lines.
E.] D. The provisions of the New Mexico Telecommunications Act do not apply to incumbent rural telecommunications carriers."
SECTION 3. 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--EFFECTIVE COMPETITION.--
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] a wire center serving area 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] wire center serving area 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] telecommunications services within that wire center serving area, including the fixing and determining of specific rates, quality of service, tariffs or fares [for the service]. The commission's action [may] shall include the detariffing of service [or] and may include the establishment of minimum rates that will cover the costs for the service. Such [modification] action shall be consistent with the maintenance of the availability of access to local exchange service and message telecommunications service at affordable rates [and comparable message telecommunications service rates] comparable in both urban and rural markets 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 B of this section are met] shall also modify the same or similar retail regulatory requirements for those providers of comparable public telecommunications services in the same relevant markets so that there shall be parity of retail regulatory standards and requirements for all such providers; provided, however, that this subsection shall not be construed to permit the adoption of any new regulatory requirements or standards for providers of comparable telecommunications services.
[B. In determining whether a service is subject to effective competition the commission shall consider the following on a wire center serving area basis for each wire center serving area and service for which a determination of effective competition is requested, and separate determinations shall be made for residential and business services in each wire center serving area:
(1) the extent to which services are reasonably available from alternate providers
(2) the ability of alternate providers to make functionally equivalent or substitute services readily available at competitive rates, terms and conditions;
(3) existing economic, technological, regulatory or other barriers to market entry and exit;
(4) the number of other providers offering the same or reasonably comparable services;
(5) the presence of at least two facilities- based competitors, including without limitation facilities-based providers of wireless or voice over internet protocol services, operating in all or part of the wire center for which a determination of effective competition is requested that are unaffiliated with the petitioning carrier and provide the same or reasonably comparable service of the type for which the finding of effective competition is sought;
(6) the ability of the petitioning provider to affect prices or deter competition; and
(7) such other factors as the commission deems appropriate.
C. If, in the wire center serving area for which a determination of effective competition is requested, the incumbent local exchange carrier provides basic local exchange service either separately or bundled to less than one-half of the customer locations where such service is available at the time the petition is filed, the public interest requires that effective competition be presumed for all regulated telecommunications services provided by the incumbent provider in that wire center serving area; provided, however, that findings and presumptions applied pursuant to this section shall be made separately for residential and business services and customer locations.]
B. Effective competition pursuant to the New Mexico Telecommunications Act shall exist in a wire center serving area when voice services are reasonably available from two or more alternate providers within the wire center serving area, regardless of:
(1) the technology used to provide the voice services;
(2) whether the voice services are regulated or unregulated; or
(3) whether the voice services are provided by alternate providers that receive state or federal funding assistance.
C. In addition to establishment of effective competition pursuant to Subsection B of this section and upon notice to the commission, when an alternate provider other than the incumbent local exchange carrier has been awarded funding to provide broadband service within a wire center serving area pursuant to a state or federal broadband assistance or deployment program, effective competition for all regulated telecommunications services in that wire center serving area shall exist.
D. 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 consistent with the provisions of Subsection G of Section 63-9A-8.1 NMSA 1978. In any proceeding held pursuant to this section, the party claiming that the price for a competitive telecommunications service does not cover the cost shall bear the burden of proving that the prices charged for competitive telecommunications services do not cover cost; provided, however, that the commission may require the telecommunications company against whom the complaint is filed to submit a cost study for the service that is the subject of the complaint as part of its examination and determination of the complaint.
E. 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.
F. If a wire center [service] serving area is deregulated pursuant to a determination of effective competition, for those wire center [service] serving areas where that service is deregulated, the petitioning telecommunications company shall no longer be eligible to claim an exemption from the application of the Unfair Practices Act or the Antitrust Act."
SECTION 4. Section 63-9A-21 NMSA 1978 (being Laws 2017, Chapter 71, Section 7) is amended to read:
"63-9A-21. COMMISSION REVIEW OF IMPACTS.--
A. The commission shall review the impact of provisions of the New Mexico Telecommunications Act on residential and business consumers in urban and rural areas of the state every three years, the first review to be completed by July 31, 2019, and shall report its findings to the legislature. The review shall:
(1) investigate the impact on rates, service quality, incumbent local exchange carrier employment, investment in telecommunications infrastructure and the availability and deployment of high speed data services; [The review shall also include a report on those]
(2) report on the wire center serving areas that have been deemed to have effective competition and any wire centers no longer subject to carrier of last resort obligations; and
(3) specify the steps the commission has taken to implement parity of regulation among all incumbent local exchange carriers consistent with the provisions of the New Mexico Telecommunications Act.
B. For any wire center serving an area deregulated pursuant to the provisions of Section 63-9A-8 NMSA 1978, if the commission finds that reregulation of basic local exchange service is necessary to protect the public interest following a hearing and findings of fact and conclusions of law, after July 31,  2023, the commission shall regulate basic local exchange service pursuant to the New Mexico Telecommunications Act."
SECTION 5. REPEAL.--Section 63-9A-2 NMSA 1978 (being Laws 1985, Chapter 242, Section 2, as amended) is repealed.
SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2023.
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