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Friday, February 28, 2003

House May Relax Telecom Oversight

By Barry Massey
The Associated Press
    SANTA FE A House committee endorsed a measure Thursday to relax regulatory oversight over telecommunications companies when there is "developing competition."
    Critics warned that the measure sought by Qwest Communications would deregulate the company, which is the dominant provider of local telephone service in New Mexico.
    Debate over the bill in the House Business and Industry Committee revived some of the same arguments over telecommunications from 2000 and 1999 when lawmakers considered regulatory overhauls.
    A law was enacted three years ago to change state regulation of large telephone companies, such as Qwest, then known as U S West. Proponents argued that the overhaul would promote competition and encourage companies to offer more services, especially high-speed lines for using the Internet and sending data.
    A similar argument was made for the latest measure.
    Rep. Luciano "Lucky" Varela, D-Santa Fe, said the bill provided for "balanced regulation" and he maintained that "New Mexico consumers are the real winners" because the proposal would lead to more investment in telecommunications infrastructure in rural areas.
    The committee approved the bill on a voice vote and sent it to the House Judiciary Committee.
    The measure has two main elements:
   
  • Freeing Qwest or Valor Telcom, the two main providers of local phone service, from the current regulation of pricing if the Public Regulation Commission determines there is "developing competition" for all or part of a telecommunication service. If that happened, prices could increase by a certain percentage yearly. The PRC could review a price change only if there was a protest signed by 2.5 percent of the company's customers.
       
  • Ending a fund that helps subsidize Qwest's costs in extending service in rural areas. As a result of a rate-related case in the late 1980s, the company has been required to put $2 million a year in the fund, which has a balance of about $12 million. The bill would require Qwest to use the $12 million for telecommunications projects in rural areas.
        Critics criticized the proposal's definition of "developing competition."
        Ed Lopez, secretary of the General Services Department, said the Richardson administration opposed the bill.