SB 126
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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--
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 SB 126
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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
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 SB 126
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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:
(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 SB 126
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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
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 SB 126
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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
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 SB 126
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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 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 SB 126
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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 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: SB 126
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(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 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 SB 126
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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 forty million dollars ($40,000,000) less the
amounts expended pursuant to 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; SB 126
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(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 forty million dollars ($40,000,000) per year.
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
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 SB 126
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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 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.