New Mexico Regulators Grappling with Effective Competition Proceeding
Stakeholders are fighting out the proper effective competition rulings and subsequent telecom regulation that should take hold in New Mexico. The state regulators are looking at how best to move from a long phase 1 of proceedings to a second phase. The New Mexico Public Regulation Commission has considered a September 2011 request from CenturyLink to rule for effective competition, prompting a protracted back-and-forth among stakeholders for years (CD Aug 30 p5). These stakeholders issued new filings at the end of last week, with the Department of Defense and other executive-branch agencies still opposed to the deregulation the telco sought. The latest filings focus on a 143-page phase-1 recommended decision (http://bit.ly/18pZSOq) the PRC hearing examiner introduced in February, looking at how best to move forward.
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The PRC hasn’t decided whether to adopt, change or decline the phase-1 decision. The recommended decision, issued by PRC Hearing Examiner Carolyn Glick, proposed to grant CenturyLink’s request on packaged residential services and bundled residential services and deny it for nonpackaged residential services and all business services. “To protect consumers in those CenturyLink QC wire centers where effective competition may not exist, CenturyLink QC shall offer uniform rates, terms and conditions of service for its packaged and bundled residential services throughout its service territory, for a period of time to be determined in Phase II of this case,” said the decision. It said some level of effective competition exists for the telco, under these circumstances, but also called for a “second bite at the apple” before moving on to phase II to allow for CenturyLink to file more evidence. This evidence requested in a second-bite hearing would focus on “how to define/categorize services that are not 1FR [flat-rated residential local one-party access line service], 1FB [flat-rated business local one-party access line service] or packaged or bundled services” and “competitive offerings for services other than packaged and bundled services,” Glick said.
"Not a single party argued that the Commission would benefit from additional evidence presented,” said New Mexico Attorney General Gary King (http://bit.ly/128FxcZ). “Given that no new facts or circumstances have been alleged, the Commission should decline to adopt those parts of the Recommended Decision that call for an additional hearing.” King said there is no evidence showing how competitors have affected CenturyLink’s choices and investment, prices, availability or better service. But the record shows that additional deregulation won’t help consumers in these ways, he said. “Indeed, under the existing pro-competition policies of both Federal and State governments, we have seen additional industry consolidation, stagnating internet speeds, service dislocations and interruptions and increasing prices,” King said. “In light of this, it is not reasonable to expect a different result from eliminating even more pro-consumer regulations.” King said the record failed to show effective competition exists and asked the PRC to deny the recommended decision.
"Further proceedings in Phase 1 are procedurally unnecessary,” said PRC staff last week (http://bit.ly/18pZSOq). They noted CenturyLink “had adequate notice of it [sic] burden of proof, and CenturyLink failed to meet its burden.” The staff opposes certain effective competition contentions in the recommended decision.
CenturyLink fears “unnecessary delay and meaningless market evaluations driven by artificial regulatory classifications rather than economic and market realities,” referring to such a possibility as “that wilderness,” it told the PRC last week (http://bit.ly/18OuWVt). The telco noted that it’s not its burden to prove effective competition so much as ask the PRC to consider the levels of competition in the state. It asked the PRC to adopt the recommended decision with its own suggested changes, favoring a broader assessment of effective competition for residential and business services and viewing wireless service as a substitute for CenturyLink’s landline service.
CenturyLink failed to show effective competition for business customers, a finding “confirmed” by the recommended decision, said the joint filing by DOD and other federal agencies (http://bit.ly/13nGy1a). It asked the PRC to adopt the decision with its own recommendations and strongly advocated against CenturyLink having a “second bite at the apple” to submit more evidence before moving to phase II. CenturyLink is “wedded to the argument that competitive capacity rather than meaningful proof of market presence of competitors can support a determination of effective competition,” tw telecom said, pointing to the exceptions CenturyLink had proposed for the recommended decision (http://bit.ly/13Zf69B). It wrote in favor of how Glick judged the New Mexico business market. “The Recommended Decision was correct in relying to a reasonable degree on market share data as proof of the lack of effective competition in the business market, but the Recommended Decision did not rely on market share alone,” tw telecom said. “It considered all the evidence presented by the parties including line loss data, economic barriers to competitive market entry, and the lack of proof by CenturyLink of competitive services and rates, terms and conditions of service.”