Time to Update NM Broadband Regulations to Encourage Competition

Other than Marty McFly’s time-traveling DeLorean, 1985 is the distant past in terms of technology. Yet some of New Mexico’s phone carriers are still regulated under a law passed that year – before the World Wide Web was created and before wireless broadband connectivity became the norm for our multitude of digital devices. Carriers are governed under different sets of rules, leading to an overly-complicated regulatory mix that hampers competition among carriers and discourages private investment in the state’s telecommunications infrastructure.

SB 152, which has been introduced in the 2014 Legislative Session seeks to harmonize the regulatory scheme, holding all carriers to the same standards. It enjoys bipartisan support from Governor Martinez (R) and Democrats such as bill sponsor Sen. Phil Griego and House Business and Industry Chair Rep. Debbie Rodella. The bill would hold all incumbent phone carriers to the same standards and apply the benefits of a 1999 rural incumbent telephone law evenly throughout the state.

The old law made perfect sense when it was passed. Back then, there was only one carrier in New Mexico, and telecom infrastructure meant mile after endless mile of copper wire. Telecom technology and the structure of the state’s telecom industry itself have changed so much since then that they would be unrecognizable, even inconceivable, to the legislature that passed the 1985 law.

There is no longer a monopoly on phone service. Broadband is the new standard in the telecommunications industry. Many phone companies are wireless only. It’s entirely sensible to ask that Santa Fe’s regulations attempt to keep pace with these changes.

Harmonizing the regulatory scheme would level the competitive playing field among carriers, pulling up the level of investment and pushing down prices for consumers. Instead of requiring the diversion of resources toward antiquated systems, it represents a full legislative embrace of 21st century technology. The technological capacity already exists, but its full potential is locked up by outdated legislation. The telecoms that currently operate here are capable of modernizing and expanding infrastructure, but are held up by New Mexico’s regulatory schemes. As economics and plain common sense can tell us, resources that are used for 1980s-level technology are resources not used for modern technology.

The ultimate goal of any regulatory scheme should be serving the interests of consumers. The current scheme discourages competition among carriers and investment in modern infrastructure, leading to consumers being underserved relative to potential by the telecom industry in the state. Smarter, fairer regulation that fully recognizes how different the industry is now would allow New Mexico’s telecoms to correct this situation.
It is not only private individuals but also New Mexico’s businesses that suffer. As more and more jobs come to rely on strong, cutting-edge telecom service, New Mexico risks falling even further behind neighboring states with more savvy and up-to-date regulatory schemes. With the lingering effects of the Great Recession still being felt and with one of the country’s highest levels of reliance on government assistance, our state can ill afford to pass up solid opportunities to enhance its economic attractiveness. High-speed broadband is the future of telecommunications, and like our neighbors—states rapidly gaining new residents, new jobs, and broader tax bases—New Mexico should recognize this fact.

Imagine if the state’s transportation authorities still based their rules on the assumption that horses and trains were how most of us got from place to place. It would be no surprise if states that included automobiles in their plans outperformed us economically. Getting the rules to account for automobiles would be legislative priority #1.

The proposed bill is emphatically not a call for deregulation. No one is asking Santa Fe for any kind of free-for-all. It simply seeks to harmonize the disparate regulatory schemes for New Mexico’s phone carriers in a forward-looking manner. We may not yet have time-traveling DeLoreans or flying skateboards, but we can easily enjoy better use of technologies that already exist.

McElroy is a Policy Analyst with New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility