Qwest Corp. v. N.M. Pub. Regulation Comm'n, S-1-SC-38225

CitationS-1-SC-38225
Case DateMay 02, 2022
CourtSupreme Court of New Mexico

QWEST CORPORATION, d/b/a CENTURYLINK QC, Petitioner-Appellant,
v.

NEW MEXICO PUBLIC REGULATION COMMISSION, Appellee,

and BERNALILLO COUNTY, CITY OF ALBUQUERQUE, and COMMUNICATION WORKERS OF AMERICA DISTRICT 7, Intervenors-Appellees. In the Matter of the Petition of CenturyLink QC Regarding Effective Competition for Retail Residential Services,

Nos. S-1-SC-38225, 18-00295-UT

Supreme Court of New Mexico

May 2, 2022


This decision of the Supreme Court of New Mexico was not selected for publication in the New Mexico Appellate Reports. Refer to Rule 12-405 NMRA for restrictions on the citation of unpublished decisions. Electronic decisions may contain computer-generated errors or other deviations from the official version filed by the Supreme Court.

APPEAL FROM THE NEW MEXICO PUBLIC REGULATION COMMISSION

Montgomery & Andrews, P.A. Thomas W. Olson Kari E. Olson Santa Fe, NM for Appellant

Russell R. Fisk, Associate General Counsel Santa Fe, NM

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for Appellee JAlbright Law, LLC Jeffrey H. Albright Albuquerque, NM for Intervenor, Bernalillo County

City of Albuquerque Legal Department Jane Yee Albuquerque, NM for Intervenor, City of Albuquerque

Jason Marks Law, LLC Jason A. Marks Albuquerque, NM for Intervenor, Communication Workers of America

DECISION

J. MILES HANISEE, CHIEF JUDGE SITTING BY DESIGNATION

{¶1} This appeal requires that we construe the meaning of a recently enacted subsection of the New Mexico Telecommunications Act (the Act), NMSA 1978, §§ 63-9A-1 to -21 (1985, as amended through 2017). Qwest Corporation d/b/a CenturyLink QC (CenturyLink) appeals from an order by the New Mexico Public Regulation Commission (the Commission) denying its petition to declare effective competition for CenturyLink's retail residential basic local exchange service under Section 63-9A-8(C). In the Matter of the Petition of CenturyLink QC Regarding Effective Competition for Retail Residential Services, Case No. 18-00295-UT (Nov. 21, 2019). We hold that the Commission did not abuse its discretion in construing the meaning of the provision in question, and we affirm. We address the issue herein to provide guidance by nonprecedential decision. See Rule 12-405(B)(2), (5) NMRA (allowing for disposition by nonprecedential decision).

I. BACKGROUND

{¶2} Under the Act, CenturyLink is an "incumbent local exchange carrier" (ILEC) offering "public telecommunications services" in New Mexico. Section 63-9A-3(H), (O). "Public telecommunications services" are defined as "the transmission of . . . information of any nature by wire . . . or other electromagnetic means." Section 63-9A-3(O). "[M]obile telephone service" is explicitly excluded from this definition. Id. The legislative purpose of the Act is set forth in Section 63-9A-2, which explains that the Legislature intends to "maintain the availability of access to telecommunications services at

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affordable rates" and "encourage competition" through "an orderly transition from a regulated telecommunications industry to a competitive market environment."

{¶3}To facilitate this purpose, the Commission is given authority to regulate ILECs. Section 63-9A-5. The Commission is additionally instructed, "by its own motion or upon petition by any interested party, to hold hearings to determine if any public telecommunications service is subject to effective competition in the relevant market area." Section 63-9A-8(A). If the Commission makes "a determination that a service or part of a service is subject to effective competition, the [C]ommission shall . . . modify, reduce or eliminate rules, regulations and other requirements applicable to the provision of such service, including the fixing and determining of specific rates, tariffs or fares for the service." Id. "Effective competition" is defined as "the competition that results from the customers of the service having reasonably available and comparable alternatives to the service, consistent with the standards set forth in Section 63-9A-8." Section 63-9A-3(F). Stated simply, under the Act, the provision of certain services is subject to diminished regulation in a competitive market.

{¶4}To determine "whether a service is subject to effective competition," the Commission considers seven factors:

(1) the extent to which services are reasonably available from alternate providers; (2) the ability of alternate providers to make functionally equivalent or substitute services readily available at competitive rates, terms and conditions; (3) existing economic, technological, regulatory or other barriers to market entry and exit; (4) the number of other providers offering the same or reasonably comparable services; (5) the presence of at least two facilities-based competitors . . .; (6) the ability of the petitioning provider to affect prices or deter competition; and (7) such other factors as the commission deems appropriate

Section 63-9A-8(B). Factors (4) through (7) of this section were added in a 2017 amendment to the Act. Compare 2017 N.M. Laws, ch. 71, § 3, with 1987 N.M. Laws, ch. 21, § 6. This amendment also added Section 63-9A-8(C), which CenturyLink invoked in the proceedings before the Commission. Section 63-9A-8(C) creates a presumption of effective competition, providing that

[i]f, in the wire center serving area for which a determination of effective competition is requested, the [ILEC] provides basic local exchange service either separately or bundled to less than one-half of the customer locations where such service is available at the time the petition is filed, the public interest requires that effective competition be presumed for all regulated telecommunications services provided by the incumbent provider in that wire center serving area; provided, however that findings and presumptions applied pursuant to this section shall be made separately for residential and business services and customer locations.
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Section 63-9A-8(C) lays out a formula for calculating "effective competition" for the area. It requires the Commission to divide the "locations" where Century Link provides landline telephone services (the numerator) by the "locations where such service is available" (the denominator).

{¶5} In September 2018 CenturyLink filed a "Petition Requesting a Determination of Effective Competition for Retail Residential Telecommunications Services Pursuant to NMSA 1978, § 63-9A-8(C)" (Petition). The Petition was limited to CenturyLink's retail residential telephone service.[1] The Commission held a public hearing on September 25 and 26, 2019, to determine whether CenturyLink had demonstrated effective competition under Section 63-9A-8(C). Bernalillo County, the City of Albuquerque (the City), and the Communication Workers of America District 7 (the CWA) intervened in the proceedings, opposing CenturyLink's petition for various reasons. CenturyLink submitted testimony of David Ziegler, CenturyLink's Regional Director for State and Local Government Affairs, who presented "eight different scenarios" determining the applicability of Section 63-9A-8(C) and discussing how its presumption is triggered by a service provider's provision of services to less than one half of customer locations where a given service is provided. Ziegler presented four "estimates" for the numerator and two for the denominator of his determinations. The parties ultimately agreed that "the numerator of the equation" should be limited to "the number of CenturyLink access lines providing residential basic local exchange service in each wire center;" however, they disagreed about the scope of the denominator ("customer locations where such service is available").

{¶6} Ziegler presented two calculations for the denominator, which both relied on 2010 United States Census housing unit data. The first relied solely on the 2010 census data, while the second calculation updated the 2010 census data with estimates from Experian and Alteryx Designer to predict housing units in 2018. In response to Ziegler's testimony, the Commission heard expert testimony from Michael Ripperger on behalf of the Commission's utility staff, Susan Baldwin on behalf of the CWA, and Larry Blank on behalf of the City, who contended that the calculations offered by CenturyLink had "multiple sources of uncertainty inherent." The experts were also concerned that CenturyLink included locations that did not have physical connectivity to CenturyLink's landline telephone service.

{¶7} Following additional posthearing briefing by the parties, the hearing examiner issued an opinion recommending that CenturyLink's petition be denied, as she determined that it failed to introduce evidence establishing a presumption of effective

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competition under Section 63-9A-8(C). In February 2020 the Commission adopted the hearing examiner's decision. This appeal followed.

II. DISCUSSION

{¶8} The key dispute on appeal centers on the construction of Section 63-9A-8(C), under which we consider whether CenturyLink "provides basic local exchange service either separately or bundled to less than one-half of the customer locations where such service is available." (Emphasis added.) On appeal, CenturyLink asserts that (1) the Commission failed to consider the Legislature's deregulatory intent, (2) the Commission's construction of "such service" should have included services of like kind or character, and (3) the Commission's construction of "available" conflicts with CenturyLink's regulatory obligation to provide services throughout its territory and should have included all customer locations within the territory.

A. Standard of Review

{¶9} We review the Commission's order to determine whether it is "(1) arbitrary, capricious or an abuse of discretion; (2) not supported by substantial evidence in the record; or (3) otherwise not in accordance with law." Section 63-9A-16. "In reviewing the Commission's decision, we...

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