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Monday, March 14, 2011

Stealth Deregulation Bill Heading to Final Passage, NM Small Biz Could See Phone Rate Hikes

Images Senate Bill 122, as amended, allows all local exchange carrier telephone companies to withdraw tariffs for business telephone services that are currently filed with the Public Regulation Commission (PRC) and from that point forward, change prices at their discretion. If passed, the state’s two largest phone companies, Qwest and Windstream, would effectively be price deregulated for the services they sell to small and medium businesses, according to a statement released today by PRC Commission Jason Marks.

It is likely that prices would increase for some services. Phone companies like Qwest could even charge different prices to businesses in different parts of the state.  

SB 122, sponsored by Sen. John Ryan (R-Albuquerque) passed the Senate by a vote of 23–17 on February 24, 2011. Late Sunday night, it passed the House Business and Industry Committee (HBIC). It is scheduled for one more House committee -- the House Taxation and Revenue Committee (HTRC) -- and then to the House floor.

Negative Impacts
Tariffs are the filed rates for telephone and utility services that regulated companies submit to commissions like the PRC for approval before they are allowed to go into effect. Approved tariffs are effectively government-approved prices, terms, and conditions (approved tariffs have the force and effect of law). By eliminating the requirement that tariffs for business phone services be filed with the PRC; i.e., allowing the tariffs to be “withdrawn,” prices, terms and conditions will be removed from PRC review and approval.  

As, Commissioner Marks' release explains, SB 122 also eliminates current requirements for companies like Qwest to file special customer contracts with the PRC. Competitors will no longer be able to discover if Qwest and Windstream, which continue to be the dominant carriers in their markets, are engaging in predatory pricing practices through non-public contracts. Because of this prospect, TW Telecom, a competitive local exchange carrier, opposes SB 122.

As originally introduced, SB 122 was limited to “competitive local exchange carriers” (CLECs), companies like Verizon, TW Telecom and eSpire that have entered the market in the past two decades and don’t have substantial market power. CLECs are already much less regulated than “incumbent local exchange carriers” like Qwest and Windstream, and tariffs filed by CLECs have rarely been challenged at the PRC. In its original form, SB 122 eliminated some red-tape for companies without posing much risk to consumers. But an amendment to the bill in the Senate dropped a single word making SB 122 into a “stealth Qwest deregulation” bill.  

Bill Would Diminish Consumer Protections
PRC Commissioner Jason Marks says that he supported the bill in its original form, but that he is very worried that the complete and immediate deregulation of rates for business telephone rates has not been well thought out, nor clearly disclosed by the bill’s proponents. “For proponents of SB 122 to imply that replacing filed tariffs for Qwest and Windstream with prices posted to a company website won’t significantly diminish PRC jurisdiction and consumer protections is very misleading.”

Attorney General Recommends Against Passage
New Mexico Attorney General Gary King gave this comment: "SB 122, as amended, deals with complicated and detailed technical issues, and as amended would essentially deregulate telecommunications in New Mexico. Existing law allows companies to seek this relief at the PRC and I ask the Legislature not to by-pass that body's responsibility.  SB 122, as amended, should not become law." 

Take Action: Call or email your representative and members of the HTRC and urge them to vote no on SB 122 as currently amended.

March 14, 2011 at 04:21 PM in NM Legislature 2011, Regulation, Telecommunications | Permalink

Comments

Uh, I heard Senator Eric Griego on the Senate Floor on February 24, 2011 that YOU, Commissioner Marks, were FOR this bill before you were against it. Senator Griego had to speak at length and to listeners exhaustion about how you and the PRC unanimously were behind this bill and then someone told you to be against it and so you changed your mind. WHO told you to be against it?

Posted by: Stupid | Mar 15, 2011 10:13:56 PM