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Arizona Telecommunications & Information Council (ATIC)
Multitenant Building Telecommunications Access Study
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State Regulatory Precedents and Trends

Arizona Telecommunications Regulatory Overview

The approaching transformation of telecommunications and information infrastructure promises to bring many benefits to American society, delivering effects that will be felt locally, nationally and across the globe. As technology drives us toward a national information infrastructure, few segments of society will be as greatly affected as the business user of advanced telecommunications and information technologies. Today, businesses, small and large, realize that these technologies will dramatically reshape and redefine the work place and the methods by which business is conducted.
-- The Importance of Telecommunications and Information Services for Businesses in Arizona, From a report by the Advanced Information and Communications Infrastructure (AICI) Foundation (precursor to the Arizona Telecommunications and Information Council - ATIC) & the Morrison Institute for Public Policy, October 1994


The Arizona Corporation Commission (ACC- http://www.cc.state.az.us/) was created by the Arizona Constitution as one of only seven states with a constitutionally formed Commission and one of only thirteen states with elected Commissioners. In most states, the Commission is known as the Public Service Commission (PSC) or the Public Utility Commission (PUC). The Arizona Revised Statutes (ARS) define the role of the ACC to regulate public service corporations (ARS 40-322) and issue rules and regulations for furnishing services (ARS 40-323). Additionally in Arizona, the Commission with its three elected commissioners has regulatory responsibility for business incorporation, investment securities, railroad and pipeline safety, as well as utilities.

In the telecommunications arena, the ACC has jurisdiction over the quality of service and rates charged by public service utilities, which are defined by state law as regulated monopolies to be given the opportunity to earn a fair and reasonable return on their investments. Generally, the Commission tries to balance the customers' interest in affordable and reliable utility service with the utility's interest in earning a fair profit, though these matters remains open to debate in public rate hearings and other proceedings. The ACC's Utilities Division makes specific recommendations to the Commissioners to assist them in reaching decisions regarding public utility rates, utility finance and quality of service. The Utilities Division is also responsible for researching and developing utility issues, providing information and evidence in Commission proceedings dealing with utility applications, and monitoring the quality of utility service, as well as the rates approved by the Commissioners.

ARS R14-2-1113 directs the ACC to establish an intrastate Universal Service Fund (USF) so as to assure the continued availability of basic telephone service at reasonable rates. Arizona recently renewed their contract with National Exchange Carrier Association's (NECA) to administer the state universal service fund through December 2002. NECA collects approximately $1million per year from more than 350 service providers in the state, supporting a program that helps local telcos with unusually high costs keep rates affordable for their customers.

State government remains a complex aggregation of agencies, functions and services. The technology infrastructure is aging and inefficient. However, information technology provides the resources to reduce the frustration a citizen feels when they attempt to do business with the State. In the pursuit of our objectives we must remain focused on one principle... government is a business and we do serve customers. Our customers are the citizens of Arizona.
-- State of Arizona Strategic Plan For Information Technology Government Information Technology Agency (GITA) (http://gita.state.az.us/sitplan99/)


Arizona's Government Information Technology Agency (GITA - http://www.gita.state.az.us/) is responsible for statewide information technology (IT) planning, coordinating and consulting. The GITA Director serves as the Chief Information Officer (CIO) for state government and has the responsibility to administer the state's Executive Branch IT resources. GITA's Digital Government Working Group (Arizona@YourService - http://gita.state.az.us/digitalgov/) seeks to create a digital government in order to support a digital economy and implement the Governor's "No Wrong Door" initiative for citizen services. They are identifying the types of transactions that can be moved to the Internet and the inhibitors to electronic transactions, so as to recommend action, such as policy changes and legislation including their proposals for this Arizona legislative session for an Electronic Transactions Act (HB2069), Electronic Notary Act (HB2622), State Agency Credit Card Acceptance (SB1259), and a Technology Licensing Account (SB1131).

Arizona State government has initiated a project, Arizona Telecommunication System (ATS - http://www.ats.state.az.us/), to aggregate the purchasing power of its over one hundred agencies in telecommunications services totaling some $50 million annually. This large project will drive the commercial deployment of telecommunications infrastructure and services throughout the state, with state government acting as an anchor tenant. In time, other government entities such as counties, municipalities, and educational institutions will be able to share in this network, purchasing certain service offerings at favorable prices. Business users will also benefit from the availability of services.

Governor Jane Dee Hull recently announced the formation of the Arizona Partnership for the New Economy (APNE - http://www.researchedge.com/apne/), a 35 member public-private advisory board. The successful Arizona Strategic Partnership for Economic Development (ASPED) planning of the late 1980's and the Governor's Strategic Partnership for Economic Development (GSPED - http://www.commerce.state.az.us/gsped/) strategic initiatives and cluster model of the past 10 years will be revisited, renewed, and re-engaged for the new millennium and the New Economy. One of APNE's prime responsibilities is developing a legislative agenda for the next session of the State Legislature. The Governor's press release announcing the formation of APNE and its initial appointees can be found at http://www.governor.state.az.us/news/releases/nov99/11-24-99nr.html.

One of GSPED's infrastructure foundations, the Arizona Telecommunications & Information Council (ATIC - http://www.researchedge.com/atic/), is a statewide collaboration of business, government, and education. ATIC's mission is to support the development of local and statewide policies that will encourage investment in, deployment, and effective utilization of advanced telecommunications services. They develop and promote policy initiatives to advance Arizona's ability to connect and compete in the New Economy including an extensive monthly regional events calendar and policy briefs and studies, such as this report. The Morrison Institute for Public Policy and Arizona State University (ASU) has published Arizona Policy Choices - The New Economy: A Guide for Arizona (10/99 - http://www.asu.edu/copp/morrison/public/apc99.htm) on the status of the New Economy and Arizona's relationship to it as well as a follow up publication, The New Economy: Policy Choices for Arizona (01/2000 - http://www.asu.edu/copp/morrison/public/nefollowup.htm).

People who work in a worldwide business environment, use the latest technology tools, and think the fast lane is the only route have already been experiencing the new economy first hand. But, to the vast majority of people and public decision makers, the circumstances of the new economy are daunting. For better or worse, it really is a new world. In the case of the new economy, Arizona is-- like it or not-- in an enormously competitive arena. Arizona leaders have to make tough public policy choices in light of new economic realities. These decisions will lay the economic, education, and social foundations for the future and will in large part determine whether or not our state's people and places prosper.
-- Arizona Policy Choices - The New Economy: A Guide for Arizona


The Arizona Legislature's Internet Study Committee (ISC) is a sixteen-member committee convened in the fall of 1999 to hold a series of hearings and conduct investigations on crucial Internet-related issues affecting the state. The ISC produced their Final Report in December 1999 so as to help form future Arizona public policy in regards to the Internet. Though not a standing committee, they will continue hearings and deliberations for the foreseeable future. Further Information, webcasts and resources on the web at http://www.azhousetv.org/internetcommittee/.

Positioning Arizona to Achieve Maximum Benefit from the Information Economy - Key Principles:
  1. The Internet is a key element of the state's future economic, educational, health, safety, and government viability. The Internet infrastructure must be recognized as a fundamental component in the state's critical infrastructure.

  2. A primary role of government is to protect citizens.

  3. Electronic information should be made equal under law for the purposes of contract, evidence, or similar traditionally "paper based" uses. Arizona statutes should be revised as necessary to allow these electronic uses.

  4. Though the private sector should exert primary leadership, government support for e-industry is essential for its success.

  5. Government regulation should be employed when voluntary codes of conduct and industry self-regulation fail to provide an adequate remedy.

  6. Providing special treatment to one sector of the economy, to the disadvantage of other competing sectors, does not make rational economic or tax policy. Government should provide uniform treatment for all. Requiring that sales and use taxes be collected on all like transactions is an equitable tax policy approach.

  7. Alternative funding mechanisms are needed for the purpose of stimulating investment in less attractive communities and for early stage businesses.

  8. e-Businesses (electronic businesses) have the ultimate power of choice as to where to locate. For Arizona to be successful in fostering e-industry development it must provide a political and economic climate that fosters continuing and increased investments in e-infrastructure (electronic infrastructure) and e-industry activities.

  9. Arizona should tap all available external public and private funding sources earmarked for e-development to speed development during this critical infrastructure rollout phase.

  10. The technology will certainly continue to evolve rapidly. What is true today, in terms of business alliances, market share, preferred method of transmission, and technical specifications, will likely not apply tomorrow. Any attempt to regulate e-industry must consider its evolutionary nature.

  11. Until viable alternative revenue sources are identified, existing tax structures should not be dismantled
-- Arizona Legislative Internet Study Committee (ISC) Final Report (12/01/99 - http://www.azhousetv.org/internetcommittee/contents/report.pdf)





Multitenant Building Telecommunications Access Study
PREVIOUS CONTENTS STATE TRENDS NEXT :
State Precedents and Trends-- Summary of State Legislative and Regulatory Actions Affecting Multitenant Building Access