Opinion ID: 2631857
Heading Depth: 2
Heading Rank: 2

Heading: Federal Telecommunications Act

Text: ¶ 22 We must also decide whether the federal Telecommunications Act of 1996 prohibits the commission from determining the fair value of potential competitors' in-state property as part of the rate-setting process. It is undisputed that the legislation in question was enacted to initiate competition in the historically monopolistic telecommunications industry. To insure that states did not interfere, Congress declared that [n]o state or local statute or regulation ... may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service. 47 U.S.C. § 253(a). However, this section does not prevent states from regulating telecommunications on a competitively neutral basis. Id. § 253(b). ¶ 23 Obviously, if Arizona's fair value requirement conflicts with the federal act, the latter preempts and precludes application of this constitutional provision. See U.S. Const. art. VI, cl. 2 (This Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.). Whenever possible, however, we construe the Arizona Constitution to avoid conflict with the United States Constitution and federal statutes. Ruiz v. Hull, 191 Ariz. 441, 448, 957 P.2d 984, 991, ¶ 24 (1998). ¶ 24 We have previously indicated that while the commission is constitutionally required to ascertain the fair value of the CLECs' Arizona property, it has considerable discretion in a competitive environment to determine how such information should be used. Thus, the issue before us is whether the fair value requirement alone acts to prohibit or have the effect of prohibiting the entry of competition in the telecommunications industry. See 47 U.S.C. § 253(a). We think not. ¶ 25 Fair value can be determined in an impartial manner. Such objective data may prove helpful in the rate-setting process, though not necessarily as the sole factor to be assessed. We recognize that some competitors may have little, if any, physical property in Arizona. The commission can consider this in setting rates. In any event, following a fair value determination the corporation commission is free to decide the just and reasonable rates that may be charged by a CLEC to whom a certificate of convenience and necessity has been granted. We fail to see how such a procedure impedes telecommunications competition in Arizona. ¶ 26 We therefore hold that the fair value determination required by article XV, § 14 of the Arizona Constitution is neither in conflict with, nor preempted by, the federal Telecommunications Act of 1996.