Mergers, acquisitions and bankruptcies in telecommunications- as well as some pretty fantastic technological advances - have made this industry a rapidly evolving one, and it will remain so in the coming years. The Telecommunications Act of 1996 aimed to create a framework for competition and growth in the telecommunications industry, but implementation of that law has fallen woefully short of its goal. Here in Arizona we need to establish the kind of regulatory environment that will encourage real competition, technological advances, better service and lower prices for our consumers. It is essential that the Corporation Commission encourages an advanced telecommunications infrastructure, creates appropriate regulations that support new technologies, and pries apart the monopolistic chokehold on local service competition.

A balanced approach is absolutely essential in the Corporation Commission's regulation of telecommunications - too much regulation may hinder the innovation that keeps our economy churning forward and may inadvertently hinder corporate access to low-cost capital, and too little regulation may concentrate economic power in the hands of the few at the expense of the many. Again, the Commission must establish the kind of regulatory environment that will encourage technological advances, increased choice, better service and lower prices for our consumers. And the Commission should also help empower consumers, whether by providing them with more information on choices for their telecommunications services or by helping to bridge the "digital divide" that prevents so many in our state from participating in this vital sector of our economy.

Providing cutting-edge technologies usually involves considerable infrastructure costs, which is why rural communities gain access last - fewer customers to pay for overhead and other expenses. This status quo is unacceptable; we must seek to extend critical technologies to rural communities for the sake of our consumers and the health of our economy.

First, I want to establish a capacity either at the Corporation Commission or elsewhere to promote the development of rural-based telecommunication cooperatives to bring in locally based service providers to offer Internet access without long distance connect charges where the incumbent utilities are unwilling or unable to invest.

Second, Qwest, the dominant telecommunications provider in most of Arizona, is not serving rural Arizona adequately. At the same time, Qwest is seeking to be a long distance phone service provider. The Commission should review Qwest's record in providing reasonably priced telecommunications services, including connections, in rural Arizona before it grants long distance provider status to the company. The Commission should use its regulatory power to ensure that Arizona's diverse population, including rural and tribal communities, is receiving basic service.

When these measures are not effective, public programs like the Universal Service Fund should be enhanced.

Congress included Universal Service in the 1996 Telecommunications Reform Act. The purpose of Universal Service is to ensure access and availability of resources to all consumers, including those in low income, rural, insular and high-cost areas.

To me, "Universal Service" means availability of quality, affordable services and widespread access to basic telecommunications services, like local phone service. But even as we're working to guarantee these services to everyone, we see technological advances raising the bar on what is considered "basic." Internet access has become a basic tool and broadband is now widely available in urban areas, but consumers in rural areas don't have the same kinds of choices when it comes to these services.

The Corporation Commission can play a key role in bridging this digital divide. The Commission should consider the expansion of the Universal Service Fund so that services are available across various social, cultural, geographic and economic groups and so that all consumers are able to access basic and advanced telecommunications services at affordable rates.

Like any branch of government, the Corporation Commission has a duty to protect the privacy rights of Arizona citizens. The Commission ought to play a critical role in ensuring that electronic transmissions can be performed securely and in enforcing laws relating to consumer privacy.

Specifically, I believe that consumers should be able to easily protect their private information from getting into the hands of telemarketing firms. Consumers should not be required to take extraordinary and often frustrating steps to protect this information from telemarketers, as Qwest tried to require recently. The public supports measures to protect private information, but the legislature failed to adopt a telemarketing "no-call" list approach to reducing the number of unwanted and annoying contacts from telemarketers. Therefore, the Commission should explore the possibility of implementing protections that this bill proposed through its regulation of Qwest and other companies whose facilities are the conduit for telemarketing. Even if this is not within the Commission's jurisdiction, it should strongly support similar legislative measures in the future

Knowledge is power, so a measurement of the Commission's success is whether the public is informed about the myriad choices in public utilities. Competition assumes that consumers will be informed sufficiently to do "comparison" shopping. For example, in the area of long distance service, most of the comments I have heard are that consumers - even relatively sophisticated business consumers - cannot figure out how to compare the different products available to them in the competitive jungle that is long distance. The Commission should encourage utilities to develop public outreach programs to give consumers the tools they need to make informed decisions. The Commission must also expand the public's ability to participate more fully in Commission proceedings.

Ultimately, the best judge of the Commission's performance may be the consumer pocketbook. It's the Commission's job to strike a regulatory balance that encourages healthy competition, innovation, and reasonable prices for public services like energy, water, and phone service. If consumers are receiving quality services at competitive prices, the Commission is doing its job.

1. Demanding corporate accountability and accurate accounting standards.
   
   The Corporation Commission must insist on corporate accountability, including strict compliance with consumer fraud and federal and state securities laws. Simply put, corporations must follow the same rules as all of us. To protect the increasing percentage of Arizonans who are investing in securities, the Commission's securities division needs to be fully staffed and investigators must detect and prevent fraudulent practices early. The Attorney General and local prosecutors should be supplied with the results of investigations and with expert witnesses to assist in prosecutions. The Commission's goal must be to restore public confidence in business by exercising visible, active and robust leadership in promoting accurate accounting and ethical business behavior.
   
   
2. Halting electricity deregulation unless consumers benefit and service is assured.
   
   As deregulation did not work in California, we must stop and reexamine current proposed deregulation rules. We should insist on two conditions in Arizona: first, lower costs to residential consumers; second, reliable and quality service to all consumers. Residential consumers did not ask the Corporation Commission to try the risky deregulation experiment. When and if deregulation is abandoned, the residential consumer must not be stuck with costs for unforeseen consequences.
   
   
3. Forcing telecommunications companies to guarantee quality service to rural markets.
   
   Critical technologies must be extended to rural communities, including expansion of the Universal Service Fund to help eliminate the digital divide between the metropolitan "haves" and the rural "have-nots." The Commission should review Qwest's record in providing reasonably priced telecommunications services, including connections, in rural Arizona before it is granted long distance provider status. The Commission should use its regulatory power to ensure that Arizona's diverse population, including rural and tribal communities, is receiving basic service.