Justice Delayed

The PRC squabbles over telecom rules…again

Two and a half years ago, Bruce Throne ran for a seat on the state's Public Regulation Commission, but he wasn't doing it to jump-start a political career.

"In fact, I wasn't very interested in winning," Throne tells SFR. "I did it to make a point: This is a technical job for people who understand the law."

Throne argues that PRC commissioners shouldn't be elected, but appointed, because they could be unqualified for the job. "We're electing commissioners that should be vetted," he says.

The most recent sign of PRC dysfunction came June 21, when the New Mexico Supreme Court struck down the commission's ruling on the third and latest phase of the Alternative Form of Regulation, a regulatory document that sets much of the state's telecom standards. Those opposed to AFOR argued that it gave Qwest too much leeway in potential predatory pricing.

The court ruling now forces the PRC to go back and hear input from new parties, particularly TW Telecom, a small provider and player in the AFOR negotiations, whose protests led to last week's high court ruling.

Lyndall Nipps, TW Telecom's vice president of regulatory affairs, says the disputed regulations would have allowed Qwest to raise rates without informing ratepayers. "It would have taken away transparency," he says. "Since Qwest is the dominant provider [in New Mexico], we felt that this was something that should be addressed."

In the court's majority opinion, Justice Petra Jimenez Maes writes that because the PRC imported a ruling from a 2009 case in which TW didn't participate, "an essential element of due process, the opportunity to be heard, was violated."

The 2009 case involved Qwest and Cyber Mesa Telecom, a small provider based in Santa Fe that had accused Qwest of selling basic telephone services at a below-market price.

"We were upset because Qwest was trying to do a promo and give away three free months of service," Cyber Mesa President Jane Hill tells SFR.

Cyber Mesa feared that Qwest, a giant in an industry scant of competition, was using the promo to drive smaller providers out of the market. The PRC allowed Qwest to go through with the promotion anyway.

Then, in a rush to renew AFOR, the PRC used the Cyber Mesa decision as a basis for new regulations—essentially excluding TW from the rule-making process.

"They introduced findings from a case we weren't involved with to one we were involved with," Nipps says, so TW appealed the ruling. Attorney General Gary King also jumped on board, arguing that TW didn't have a chance to express concerns about Qwest's pricing methods.

Qwest, now known as CenturyLink, wouldn't comment on either case, stating that it's waiting to see how the PRC will react to the Supreme Court decision first.

Robert Thormeyer, a spokesman for the National Association of Regulatory Utility Commissioners in Washington, DC, argues that many critics of regulatory bodies don't understand the difficulty involved in the regulatory process and that regulatory bodies are subject to unfair criticism.

But to some, the PRC's way of applying its own rules screams incompetency.

"The problem is people run for the PRC because they want to make $90,000 a year," Hill says. "They don't know anything about telecom and other rates."

The Qwest case also caused infighting within the PRC. Commissioner Jason Marks dissented on the renewed regulations, giving the same due process argument the Supreme Court later adopted. Marks says the high court decision is a "reminder to the commission that you can't shoot from the hip."

TW Telecom, which says it's pleased with the Supreme Court ruling, will share its concerns with the PRC between now and July 6, after which commissioners will decide which issues to re-examine.

None of the current squabbling, however, affects a ruling that allows CenturyLink to raise basic service prices by $3 per customer over three years.

The new hearings may also come too late for smaller companies to benefit from them. Cyber Mesa isn't participating, mainly because it can no longer afford to keep up with the long litigation process.

"It doesn't do us any good now," Throne says. "The damage is already done."

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