OFFICIAL TITLE

AN INITIATIVE MEASURE

CONSUMER CHOICE AND FAIR COMPETITION TELECOMMUNICATIONS AMENDMENT; PROPOSING AN AMENDMENT TO THE CONSTITUTION OF ARIZONA; ADDING SECTIONS 3.1 AND 3.2 TO ARTICLE XV, CONSTITUTION OF ARIZONA; RELATING TO LOCAL TELEPHONE SERVICE.

TEXT OF PROPOSED AMENDMENT

Be it enacted by the People of the State of Arizona:

The Constitution of Arizona is proposed to be amended as follows if approved by a majority of the qualified electors voting thereon and on proclamation of the Governor:

Section 1. Article XV, Constitution of Arizona, is amended by adding section 3.1, to read:

§ 3.1. PROMOTION OF CONSUMER CHOICE AND COMPETITION, AND TRANSITION RULES TO PROTECT CONSUMERS

SECTION 3.1 A. TO PROMOTE CONSUMER CHOICE, COMPETITION AND THE AVAILABILITY OF ADVANCED TELECOMMUNICATIONS SERVICES, THE RATES, CHARGES AND CLASSIFICATIONS OF A PROVIDER FOR ITS TELEPHONE AND OTHER TELECOMMUNICATIONS SERVICES FOR RESIDENTIAL OR BUSINESS CONSUMERS, OR BOTH, SHALL BE ESTABLISHED SOLELY BY COMPETITION IN ANY CITY, COMMUNITY OR OTHER AREA IN WHICH IT IS DETERMINED THAT LOCAL TELEPHONE SERVICE IS GENERALLY AVAILABLE FROM COMPETING PROVIDERS TO SUCH CONSUMERS.

B. TO ENSURE FAIRNESS AND TO PROTECT CONSUMERS WHO DO NOT HAVE A CHOICE OF PROVIDERS, A PROVIDER OF LOCAL TELEPHONE SERVICE SHALL MAKE AVAILABLE TO ANY OF ITS RESIDENTIAL OR BUSINESS CONSUMERS THAT (i) DO NOT HAVE A CHOICE OF PROVIDERS FOR LOCAL TELEPHONE SERVICE, (ii) BUT ARE LOCATED IN AN AREA, AS DETERMINED PURSUANT TO SUBSECTION C OF THIS SECTION, WHERE RATES, CHARGES AND CLASSIFICATIONS FOR RESIDENTIAL OR BUSINESS CONSUMERS, AS APPLICABLE, ARE ESTABLISHED SOLELY BY COMPETITION, THE SAME RATES FOR COMPARABLE LOCAL TELEPHONE AND OTHER TELECOMMUNICATIONS SERVICES OFFERED BY THAT PROVIDER TO OTHER SIMILARLY SITUATED CONSUMERS IN THE SAME AREA.

C. TO IMPLEMENT THIS SECTION, THE COMMISSION SHALL ADOPT RULES, WITHIN 120 DAYS OF THE ENACTMENT OF THIS SECTION, THAT (i) REQUIRE EACH PROVIDER OF LOCAL TELEPHONE SERVICE IN THE STATE TO INFORM THE COMMISSION, WITHIN 30 DAYS OF THE ADOPTION OF SUCH RULES AND ANNUALLY THEREAFTER, OF THE AREAS IN WHICH THAT PROVIDER IS OFFERING LOCAL TELEPHONE SERVICE TO RESIDENTIAL OR BUSINESS CONSUMERS; (ii) ESTABLISH PROCEDURES FOR THE DETERMINATION BY THE COMMISSION, UPON THE FILING OF A PETITION BY A PROVIDER, WHETHER LOCAL TELEPHONE SERVICE IS GENERALLY AVAILABLE FROM COMPETING PROVIDERS TO RESIDENTIAL OR BUSINESS CONSUMERS, OR BOTH, WITHIN THE CITY, COMMUNITY OR OTHER AREA DESIGNATED IN SUCH PETITION; AND (iii) ESTABLISH A SIMPLIFIED AND EXPEDITED PROCESS BY WHICH CONSUMERS MAY ENFORCE THEIR RIGHTS UNDER SUBSECTION B OF THIS SECTION. FOR PURPOSES OF SECTIONS 3.1 AND 3.2 OF THIS ARTICLE, "LOCAL TELEPHONE SERVICE" MEANS TELECOMMUNICATIONS SERVICE, OTHER THAN WIRELESS TELEPHONE SERVICE, THAT INCLUDES THE ABILITY TO PLACE AND RECEIVE LOCAL TELEPHONE CALLS. THE COMMISSION SHALL DETERMINE THAT LOCAL TELEPHONE SERVICE IS GENERALLY AVAILABLE FROM COMPETING PROVIDERS TO RESIDENTIAL OR BUSINESS CONSUMERS, OR BOTH, WITHIN THE CITY, COMMUNITY OR OTHER AREA DESIGNATED IN A PROVIDER’S PETITION IF LOCAL TELEPHONE SERVICE IS AVAILABLE FROM TWO OR MORE PROVIDERS TO A MAJORITY OF THE RESIDENTIAL OR BUSINESS CONSUMERS WITHIN THE DESIGNATED AREA. BUSINESS CONSUMERS SHALL INCLUDE ALL NON-RESIDENTIAL CONSUMERS. DETERMINATIONS SHALL BE MADE SEPARATELY FOR RESIDENTIAL AND BUSINESS CONSUMERS. A PETITION MAY CONTAIN A REQUEST FOR MULTIPLE DETERMINATIONS. THE COMMISSION SHALL APPROVE OR DENY THE DETERMINATIONS REQUESTED IN A PETITION WITHIN 60 DAYS OF ITS FILING. IF THE COMMISSION DOES NOT APPROVE OR DENY A DETERMINATION REQUESTED IN A PETITION WITHIN SUCH 60-DAY PERIOD, THAT DETERMINATION SHALL BE DEEMED APPROVED. THE APPROVAL OR DENIAL OF A DETERMINATION SHALL BE REVIEWABLE ON A DE NOVO BASIS BY THE SUPERIOR COURT, WITH RIGHT OF APPEAL TO THE COURT OF APPEALS.

Section 2: Article XV, Constitution of Arizona, is amended by adding section 3.2, to read:

§ 3.2. SUPPLEMENTAL RULES GOVERNING REGULATION OF TELECOMMUNICATIONS SERVICES SUBJECT TO COMMISSION JURISDICTION

SECTION 3.2 A. IN AREAS WHERE THERE IS NOT A DETERMINATION PURSUANT TO SECTION 3.1 OF THIS ARTICLE THAT LOCAL TELEPHONE SERVICE IS GENERALLY AVAILABLE FROM COMPETING PROVIDERS TO RESIDENTIAL CONSUMERS OR BUSINESS CONSUMERS, OR BOTH, THE COMMISSION SHALL RETAIN JURISDICTION WITH RESPECT TO RATES, CHARGES AND CLASSIFICATIONS OF A PROVIDER FOR ITS TELEPHONE AND OTHER TELECOMMUNICATIONS SERVICES TO RESIDENTIAL OR BUSINESS CONSUMERS, AS APPLICABLE. THE COMMISSION SHALL HAVE NO JURISDICTION WITH RESPECT TO RATES, CHARGES AND CLASSIFICATIONS FOR SERVICES IN AREAS WHERE RATES ARE ESTABLISHED SOLELY BY COMPETITION; PROVIDED, HOWEVER, THAT THE COMMISSION SHALL HAVE JURISDICTION TO IMPLEMENT SUBSECTION B OF SECTION 3.1 OF THIS ARTICLE.

B. IN PRESCRIBING RATES, CHARGES AND CLASSIFICATIONS FOR TELEPHONE AND TELECOMMUNICATIONS SERVICES OVER WHICH THE COMMISSION RETAINS JURISDICTION, THE COMMISSION SHALL HAVE THE AUTHORITY TO USE FAIR VALUE, RATE CAPS AND OTHER RATEMAKING METHODOLOGIES. IN EXERCISING THIS AUTHORITY, THE COMMISSION MAY, BUT SHALL NOT BE REQUIRED TO, ASCERTAIN THE FAIR VALUE OF THE PROPERTY USED FOR, AND SHALL CONSIDER ONLY THE COSTS ARISING AND REVENUES DERIVED FROM, THE PROVISION OF THE TELEPHONE AND TELECOMMUNICATION SERVICES OVER WHICH IT RETAINS JURISDICTION PURSUANT TO SUBSECTION A OF THIS SECTION.