The Commission should be wary at this time in light of the $1.5 trillion telecommunications implosion and the probable bankruptcy of many more telecommunications companies, possibly even Qwest. Sometimes, especially in a time of rapidly changing technology, it is best to let the market that has been developed shake itself out.

Qwest should be allowed into long distance, but any profit that Qwest would gain from long distance is dwarfed by the $2.3 billion that the top two executives have pulled out of this company as its stock has slid from $90 to $1+ --leaving Qwest workers, shareholders, and consumers holding the empty bag. Now Qwest seems to be cannibalizing itself by possible sale of Yellow Pages, ...

The controversy over Qwest and long distance is a tempest in a teapot. The relative benefits are problematic:

1. Cell phone users often have surplus free long distance minutes in the evenings and on weekends;
2. The additional cost of communicating by email is zero;
3. 10-10 numbers allow long distance calling for 5 cents per minute without a basic charge each month.

It is time for strong and fair regulation of companies that provide public utility services. Local basic phone service and open access to the Internet are the two areas of telecommunications that require such regulation; other areas of telecomm should only have the light hand of regulation, at the most.

Local public telephone service is as close to a natural monopoly as anything else. Don't we want integrated, unified, and universal local public phone systems? The competition envisioned by the 1996 Telecommunications Act is the strangest competition that I have ever seen. Comparably, it is like saying to Basha's, which has a monopoly in some parts of Arizona, that they have to lease out part of their stores and warehouses to competitors.

If the quality of service is bad from the local phone company, how will that service be improved by requiring that local company to lease out part of its system to competitors? The incumbent local phone company will still handle most service problems.

In 1998, US West transferred the yellow pages within its corporate umbrella for 28X book value and about $4 billion in debt, for which three retiring executives were paid $45 million. Republican Commissioners Kunasek and Irvin voted against Democrat Renz Jennings' amendments to keep the huge interest on this debt and the $45 million out of rates. We know now that this deal was bad for everyone, including shareholders and Qwest, which was already overleveraged prior to the takeover.

This deregulatory/lasses-faire philosophy, especially for public goods, is not good for the economy in the long run. High-quality telecommunications is necessary for a vibrant economy. The Commission sets just and reasonable rates for public service corporations and should be as neutral as possible in light of changing markets and technology. It isn't the Commission's job to determine winners and losers.

However, the Commission should always act in the public interest, especially counterbalancing the power of large corporations. It should be remembered that the transistor and the other bases for the telecommunications/computer revolution came out of the regulated, monopoly Bell Labs. There have been no comparable inventions since the divestiture and deregulation of Ma Bell.

(a) Yes. Because I believe in basic justice. In the last 20 years especially, the gap between rich and poor has increased in both the U.S. and in the world. The U.S. has the greatest gap between rich and poor of the industrial democracies. On the other hand, Norway, which has the highest standard of living in the world, is much more egalitarian than the U.S.; the political debate in Norway is usually about morality—not individual morality, but how Norway can be more just and sustainable for themselves, for their neighbors on the planet, and for future generations. As a result, Norwegians pay $6 per gallon for gasoline, even though Norway has a glut of oil from the North Sea. Norway has much less social dysfunction than the U.S.—1/10th the per capita number of people in prison, for example. Norway follows the Alpine model of capitalism ("Capitalism vs. Capitalism" by Michel Albert). The U.S. follows Neoliberalism.

In the 1970s Milton Friedman and fellow economists developed free-market ideas based on deregulation and privatization that went back to the laissez-faire capitalism of the Gilded Age of the late 19th century. This has become the orthodoxy of the U.S. and of globalization. In the 1980s corporate America mobilized to gain control of the political agenda. Thatcher and Reagan, using Friedmanite/"Chicago School" ideas, moved to deregulate, privatize, and put corporate rights at the pinnacle. They dismantled the social contract through tax cuts, cuts in regulatory spending, ignoring unemployment, rolling back social welfare and increasing deregulation/privatization. Enron, Worldcom and others now show that markets need boundaries and regulation.

(b) You gotta be kidding. There is little political will to eliminate these disparities in the U.S., and antipathy to eliminating these disparities in Arizona.

(c) I'm not sure beyond the Universal Service Fund. I'm open to suggestions. In the 1990s the federal government wanted to bring the benefits of telecommunications to schools and set up a discounted phone rate for Internet connection, based on the poverty level of the school's area. There was little discussion of the merits of Internet use for elementary school children, especially in relation to other learning. Shouldn't reading books should have priority over the Internet for elementary students? Will elementary schools continue to cut music, art, and physical education because of financial constraints, but accept discounted Internet service that has been hyped as necessary for even elementary school students.

Corporations have a legal obligation to realize profit to their shareholders. It's the responsibility of regulators to ensure that in that in that process the poor are still being served and looked after. In Bolivia in the last few years, for example, the price of water doubled almost overnight as unregulated Bechtal Corporation provided water service; a quarter of an average Bolivian's salary was spent on water. There's not anything necessarily wrong with private companies providingthese public utility functions. It's just that when we have weak or no regulation, no competition, and you leave it to companies—the bottom part of an unequal society will be the losers.

(d) Again, I'm open to suggestions. Telecomm infrastructure development is less a priority than water availability. Water is more "local" than other utilities, and often there is not water available at a reasonable price, especially in rural Arizona. The federal government has helped build a "Cadillac Desert" in parts of Arizona, where golf courses are sometimes able to buy water for 1/10 the price that rural people in water-short areas have to pay for water needed to live. There is a Universal Service Fund for equalizing such inequities in telephone service; there needs to be state legislation that establishes such a fund for water. In light of the drought and global climate change, which the Bush administration now says "very likely" means the "disruption of snow-fed water supplies, more stifling heat waves and the permanent disappearance of Rocky Mountain meadows...," we also must move away from the production and use of energy from fossil fuels. Water availability is very much tied to energy production and use.

"Universal Service" for telecomm now means that a high (specific % is debatable) percentage of residences have local basic landline phone service. "Universal Service" for advanced telecomm services is beyond the scope of regulatory bodies until the overall society decides to become more egalitarian.

I don't know that the Universal Service Fund, as presently constituted, can even begin to bridge the Digital Divide. If "universal service" is to begin to mean access to the Internet, for example, then the Universal Service program would have to be greatly expanded. I'm willing to look at this.

The Constitutional role of the ACC is to set just and reasonable rates for public service corporation. If the Commission lawyers say that the Corporation Commission has any authority in the area of protecting electronic data, I would certainly use it to protect the integrity and safety of electronic data.

I support privacy as well as freedom and openness. Unauthorized use of individual data and information by a public service corporation should have a very hefty fine imposed by the Commission.

How the Commission balances the public interest with corporate and individual interests. Ultimately, this determination is made by the citizens of Arizona. Arizona became a state in the Progressive era, and the Corporation Commission was put in the Arizona Constitution as the "fourth branch of government." The state of regulation nationwide 30 years ago was such that corporate-toady Alabama Commissioner Bull Conner was the most visible representative of regulation; you may remember Bull from his days as Birmingham Police Chief who set the dogs on civil rights marchers. I prefer Bob La Follette: "Which shall rule—wealth or man? Which shall lead—money or intellect? Who shall fill public stations—educated and patriotic free men and women, or the feudal serfs of corporate wealth."

Controlling the Internet so that it is open and free is one area where I will push for protection of the public interest. Lawrence Lessig, professor at Stanford Law School and author of "The Future of Ideas: The Fate of the Commons in a Connected World" has noted that cable has a technological advantage in Internet with its broad band, but that cable has no mandate to be neutral and open, whereas the telephone companies have had such a mandate. The Internet has been relatively free and decentralized, but there is a danger that cable companies, as they have an increasing part of Internet traffic, will discriminate by attempting to control access, and thereby control content. This is especially troubling since Bush-appointed FCC Chair Michael Powell has questioned the historic mandate of his agency to act for citizens "in the public interest." In this time of deregulation fever, Powell has questioned this concept as being quaint and outmoded. The greatest good to policy makers like Powell now seems to be the maximum freedom to profit for everyone as consumers and/or providers. The fact that the Commission has no jurisdiction over cable now is especially troubling considering the enormous influence that moneyed interests like cable have at the federal level. [That is also the primary reason state commissions and attorney generals should not give up their securities regulation to uniform federal regulation. In light of Enron, Arthur Anderson, etc., the Congress can't seem to pass common sense reforms in stock options or in the separation of accounting from auditing and consulting. The power of contributions from investments banks, accounting firms, brokerage firms, etc. ...is indeed great.]

Moving back to Teddy Roosevelt-like regulation of public goodsÑelectricity, water, and basic phone service... Making sure that the securities marketplace has suitable boundaries and is as fair, open, and as just as possible. In light of the drought and global climate change (see, for example, July 2,'02 The Economist cover story: "CO2AL: Environmental enemy No. 1"), helping move gradually away from coal and fossil fuels to the efficiency/solar/wind/biomass/fuel cell/hydrogen economy. Just as failure to move from charcoal to coal 200 years ago would eventually have meant denuded land and failing economies, the failure to make this technological transition could make for disaster: "That points to the biggest fear: warming may trigger irreversible changes that transform the earth into a largely uninhabitable environment." Quote from The Economist article above. For example, could much of the Rocky Mountain West become uninhabitable--like the Australian Outback? Even the Bush administration says that there likely will be the permanent disappearance of Rocky Mountain meadows.