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SENATE BILL 126
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Michael Padilla
AN ACT
RELATING TO TELECOMMUNICATIONS; AMENDING SECTION 63-9H-6 NMSA
1978 (BEING LAWS 1999, CHAPTER 295, SECTION 6, AS AMENDED);
INCREASING THE AMOUNT FROM THE STATE RURAL UNIVERSAL SERVICE
FUND ALLOCATED TO THE BROADBAND PROGRAM FROM THIRTY MILLION
DOLLARS ($30,000,000) LESS CERTAIN EXPENSES TO FORTY MILLION
DOLLARS ($40,000,000) LESS CERTAIN EXPENSES; INCREASING THE CAP
ON OBLIGATIONS OF THE STATE RURAL UNIVERSAL SERVICE FUND PLUS
ADMINISTRATIVE EXPENSES AND A PRUDENT FUND BALANCE FROM THIRTY
MILLION DOLLARS ($30,000,000) TO FORTY MILLION DOLLARS
($40,000,000).
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 63-9H-6 NMSA 1978 (being Laws 1999,
Chapter 295, Section 6, as amended) is amended to read:
"63-9H-6. STATE RURAL UNIVERSAL SERVICE FUND--
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ESTABLISHMENT.--
A. The commission shall implement and maintain a
"state rural universal service fund" to maintain and support
universal service that is provided by eligible
telecommunications carriers, including commercial mobile radio
services carriers, as are determined by the commission. As
used in this section, "universal service" means basic local
exchange service, comparable retail alternative services at
affordable rates, service pursuant to a low-income telephone
assistance plan and broadband internet access service to
unserved and underserved areas as determined by the commission.
B. The fund shall be financed by a surcharge on
intrastate retail public telecommunications services to be
determined by the commission, excluding services provided
pursuant to a low-income telephone assistance plan billed to
end-user customers by a telecommunications carrier, and
excluding all amounts from surcharges, gross receipts taxes,
excise taxes, franchise fees and similar charges. For the
purpose of funding the fund, the commission has the authority
to apply the surcharge on intrastate retail public
telecommunications services provided by telecommunications
carriers, including commercial mobile radio services and voice
over internet protocol services, at a competitively and
technologically neutral rate or rates to be determined by the
commission. The commission may establish the surcharge as a
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percentage of intrastate retail public telecommunications
services revenue or as a fixed amount applicable to each
communication connection. For purposes of this section, a
"communication connection" means a voice-enabled telephone
access line, wireless voice connection, unique voice over
internet protocol service connection or other uniquely
identifiable functional equivalent as determined by the
commission. Such surcharges shall be competitively and
technologically neutral. 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. The
commission shall not apply this surcharge to a private
telecommunications network; to the state, a county, a
municipality or other governmental entity; to a public school
district; to a public institution of higher education; to an
Indian nation, tribe or pueblo; or to Native American customers
who reside on tribal or pueblo land.
C. The fund shall be competitively and
technologically neutral, equitable and nondiscriminatory in its
collection and distribution of funds, portable between eligible
telecommunications carriers and additionally shall provide a
specific, predictable and sufficient support mechanism as
determined by the commission that ensures universal service in
the state.
D. The commission shall:
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(1) establish eligibility criteria for
participation in the fund consistent with federal law that
ensure the availability of universal service at affordable
rates. The eligibility criteria shall not restrict or limit an
eligible telecommunications carrier from receiving federal
universal service support;
(2) provide for the collection of the
surcharge on a competitively neutral basis and for the
administration and disbursement of money from the fund;
(3) determine those services and areas
requiring support from the fund;
(4) provide for the separate administration
and disbursement of federal universal service funds consistent
with federal law; and
(5) establish affordability benchmark rates
for local residential and business services that shall be
utilized in determining the level of support from the fund.
The process for determining subsequent adjustments to the
benchmark shall be established through a rulemaking.
E. All incumbent telecommunications carriers and
competitive carriers already designated as eligible
telecommunications carriers for the fund shall be eligible for
participation in the fund. All other carriers that choose to
become eligible to receive support from the fund may petition
the commission to be designated as an eligible
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telecommunications carrier for the fund. The commission may
grant eligible carrier status to a competitive carrier in a
rural area upon a finding that granting the application is in
the public interest. In making a public interest finding, the
commission may consider at least the following items:
(1) the impact of designation of an additional
eligible carrier on the size of the fund;
(2) the unique advantages and disadvantages of
the competitor's service offering; and
(3) any commitments made regarding the quality
of telephone service.
F. The commission shall adopt rules, including a
provision for variances, for the implementation and
administration of the fund in accordance with the provisions of
this section. The rules shall enumerate the appropriate uses
of fund support and any restrictions on the use of fund support
by eligible telecommunications carriers. The rules shall
require that an eligible telecommunications carrier receiving
support from the fund pursuant to Subsection K, L, M or N of
this section must expend no less than sixty percent of the
support it receives to deploy and maintain broadband internet
access services in rural areas of the state. The rules also
shall provide for annual reporting by eligible
telecommunications carriers verifying that the reporting
carrier continues to meet the requirements for designation as
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an eligible telecommunications carrier for purposes of the fund
and is in compliance with the commission's rules, including the
provisions regarding use of support from the fund.
G. The commission shall, upon implementation of the
fund, select a neutral third-party administrator to collect,
administer and disburse money from the fund under the
supervision and control of the commission pursuant to
established criteria and rules promulgated by the commission.
The administrator may be reasonably compensated for the
specified services from the surcharge proceeds to be received
by the fund pursuant to Subsection B of this section. For
purposes of this subsection, the commission shall not be a
neutral third-party administrator.
H. The fund established by the commission shall
ensure the availability of universal service as determined by
the commission at affordable rates in rural areas of the state;
provided, however, that nothing in this section shall be
construed as granting any authority to the commission to impose
the surcharge on or otherwise regulate broadband internet
access services.
I. The commission shall ensure that intrastate
switched access charges are equal to interstate switched access
charges established by the federal communications commission as
of January 1, 2006. Nothing in this section shall preclude the
commission from considering further adjustments to intrastate
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switched access charges based on changes to interstate switched
access charges.
J. To ensure that providers of intrastate retail
communications service contribute to the fund and to further
ensure that the surcharge determined pursuant to Subsection B
of this section to be paid by the end-user customer will be
held to a minimum, the commission shall adopt rules, or take
other appropriate action, to require all such providers to
participate in a plan to ensure accurate reporting.
K. The commission shall authorize payments from the
fund to incumbent local exchange carriers, in combination with
revenue-neutral rate rebalancing up to the affordability
benchmark rates. Beginning in 2018, the commission shall make
access reduction support payments in the amount made from the
fund in base year 2014, adjusted each year thereafter by:
(1) the annual percentage change in the number
of access lines served by the incumbent local exchange carriers
receiving such support for the prior calendar year, as compared
to base year 2014; and
(2) changes in the affordability benchmark
rates that have occurred since 2014.
L. Notwithstanding the provisions of Subsection K
of this section, the annual amount of access reduction support
payments for an eligible incumbent local exchange carrier in
2024, 2025 and 2026 shall be equal to the annual access
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reduction support payments for that eligible incumbent local
exchange carrier for the year 2023. Access reduction support
payments shall be terminated after December 31, 2026.
M. The commission shall determine the methodology
to be used to authorize payments to all other carriers that
apply for and receive eligible carrier status; provided that:
(1) an eligible incumbent telecommunications
carrier that is not eligible for funding pursuant to rate
rebalancing in Subsection K of this section and that has been
previously authorized pursuant to Subsection N of this section
for need-based support may apply for ongoing fund support;
(2) the commission shall award an applicant
ongoing fund support at no less than the average access line
amount of funding support for comparable carriers; provided
that an eligible telecommunications carrier receiving fund
support pursuant to this subsection shall not offer basic local
exchange residential and business services at rate levels lower
than the rates for such services charged by any of the
comparable carriers used for the determination of the level of
support;
(3) the commission shall act upon a request
for ongoing fund support within one hundred twenty days of the
filing of the request; and
(4) nothing in this section shall limit the
commission's authority to adopt rules pursuant to Subsection F
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of this section regarding appropriate uses of fund support and
any restrictions on the use of the fund support by eligible
telecommunications carriers.
N. The commission may also authorize payments from
the fund to incumbent rural telecommunications carriers or to
telecommunications carriers providing comparable retail
alternative services that have been designated as eligible
telecommunications carriers serving in rural areas of the state
upon a finding, based on factors that may include a carrier's
regulated revenues, expenses or investment, by the commission
that such payments are needed to ensure the widespread
availability and affordability of universal service. The
commission shall decide cases filed pursuant to this subsection
with reasonable promptness, with or without a hearing, but no
later than six months following the filing of an application
seeking payments from the fund, 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.
O. The commission shall adopt rules that establish
and implement a broadband program to provide funding to
eligible telecommunications carriers for the construction and
maintenance of broadband infrastructure. Each year, an amount
equal to [thirty million dollars ($30,000,000) ] forty million
dollars ($40,000,000) less the amounts expended pursuant to
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Subsections K, L, M and N of this section shall be dedicated to
the broadband program.
P. Rules adopted pursuant to Subsection O of this
section shall require that the commission:
(1) consider applications for funding on a
technology-neutral basis;
(2) submit applications for funding to the
connect New Mexico council for prioritization and alignment
with the statewide broadband plan to ensure digital equity and
digital inclusion; and
(3) require that the awards of support be
consistent with federal universal service support programs.
Q. The total obligations of the fund determined by
the commission pursuant to this section, plus administrative
expenses and a prudent fund balance, shall not exceed a cap of
[thirty million dollars ($30,000,000) ] forty million dollars
($40,000,000) per year. [The commission shall evaluate the
amount of the cap in an appropriate proceeding to be completed
by June 30, 2019 and consider whether, based on the then-
current status of the fund, the cap should be modified,
maintained or eliminated. ]
R. By October 1 of each year, the commission shall
make a report to the legislature regarding the status of the
fund, including:
(1) relevant data relating to implementation
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of the broadband program and the progress toward digital equity
and digital inclusion in rural areas of the state;
(2) recommendations for changes to the
structure, size and purposes of the fund and whether the cap on
the fund provided for in Subsection Q of this section should be
modified, maintained or eliminated; and
(3) the service areas that received funding
awards from the broadband program and the amounts of those
awards.
S. The 2025 annual report made pursuant to
Subsection R of this section shall include an assessment of the
state rural universal service fund that addresses:
(1) whether to repurpose the access reduction
support funds into the commission's broadband support program;
(2) a methodology for determining broadband
support levels that is consistent with the requirements of
Subsection C of this section and accounts, at a minimum, for
broadband costs, potential revenues from deployed
infrastructure and existing federal support mechanisms;
(3) the appropriate size of the fund;
(4) criteria for awarding funding;
(5) the impact of proposed changes on per-
connection assessments; and
(6) whether all sellers of prepaid
telecommunications services should be required to collect state
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rural universal service fund assessments at the point of sale,
similar to the methodology for collecting 911 emergency
surcharges pursuant to Section 63-9D-5 NMSA 1978."
SECTION 2. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.
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