Legislature(2017 - 2018)ADAMS ROOM 519
04/18/2018 09:00 AM FINANCE
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SENATE BILL NO. 102 "An Act relating to funding for Internet services for school districts; and relating to the Alaska higher education investment fund." 2:08:18 PM SENATOR ANNA MCKINNON, SPONSOR, explained that SB 102 was a mirror image of a bill that was passed in 2014 to create better equity among school districts and being able to provide and communicate over an internet system. In 2004, the legislature created the Broadband Assistance Grant (BAG) program and chose a speed of 10 megabits per second. The bill before the committee moved the speed from 10 megabits to 25 megabits. She chose the number because she had been told that school districts around Alaska had the infrastructure, the hard units, available. The nationally and federally recommended speed was 100 megabits. She was shooting for that number but was a long ways off. She relayed that SB 102 was written to provide educational equity to rural schools. She wanted to provide rural access with similar abilities to virtual education or communication as urban schools currently had. She argued that the best thing the bill did presently was that for every dollar the state contributed, it leveraged $8 from the federal government to try to create equal access opportunities for Americans. Senator MacKinnon surmised that the most contentious issue relating to SB 102 was the funding source from the Alaska Higher Education Fund. There was concern that, because the legislature had reduced the interest rate, the risk level, and the return plans for the Higher Education Fund, the bill would somehow erode the value of the Higher Education Fund specifically as it paid out to the Alaska Performance Scholarship. There was another bill that sat in the House Education Committee that she did not think would move. It tried to streamline the fund so that it only paid out to the top tier. The committee chairman, who had the bill, was a huge advocate of education. The Senate had offered a suite of bills, and SB 102 was a part of that. It was the Senate's belief that the Alaska Performance Scholarship needed retooling. She reported that the Higher Education Fund was earning interest that would meet the current call on cash that was anticipated. For the following 10 years there should not be a problem in providing access. She referenced the Kivalina School as an example. She had blamed adults about fighting over the location or structure of the building while students were sitting with buckets and water dripping through their ceilings. As adults were arguing about such things, students were put in very different positions. She relayed that the state had designated general funds that had been spent to improve education that were sitting in the Higher Education Fund - the reason the Senate Finance Committee recommended the use of those dollars for the project in SB 102. It leveraged $1 to $8 for the state's students at a time they currently needed it. Senator MacKinnon reported that she could not ask for a general fund spend. She relayed that if the bill was changed to reflect a fund source of general funds, she was doubtful there would be enough support for it. She clarified that her comment was not meant as a threat, but rather as a statement of fact. The state had some money set aside for education, and the Senate chose the fund source from the Higher Education Fund because the BAG was already coming from that fund. The state did not have additional general fund dollars to spend on increased internet speed. She deferred to the committee. 2:13:32 PM Co-Chair Foster listed individuals available for questions. Representative Wilson asked, aside from the 191 schools, who paid for the internet for the other schools. BRITTANY HARTMANN, STAFF, SENATOR ANNA MCKINNON, asked Representative Wilson to restate her question. Representative Wilson indicated that the bill was addressing 191 schools. The Senator had mentioned other school districts making it equal. She asked about the other schools that had a higher megabit speed. She wondered if the schools with the higher speeds paid out of their BSA or other grants. Ms. Hartmann answered that their funds came from the federal E-rate program, the State Broadband Assistance grant, and from the funding formula. She noted that the federal E-rate program paid 70 percent to 90 percent of the internet bill. Representative Wilson wondered if the difference was the matching funds. She wondered if the matching funds paid by the other schools outside of the 191 schools were paying it out of their formula monies. The 191 schools would be given additional funding outside of the BSA to make the increase to 25 megabits. Representative Grenn asked for verification there were 209 schools needing the upgrade. Ms. Hartmann replied that, from research she had done with the Federal Communications Commission, 197 schools would be upgraded. Representative Grenn asked about an expected turnaround time to get all of the schools upgraded. Ms. Hartmann would have to direct his question to the telecom companies. However, if the money was provided, the upgrades would be purchased immediately or in the following year. 2:16:40 PM Senator MacKinnon noted that each school would handle it differently. The money was for the speed, not for construction, hardwire, softwire, or building out a system. That was what providers did on their own. The providers could access other grants at the federal level to be able to provide sources. The bill was about purchasing speed for a school district. Currently, school districts were using BSA money to provide whatever speed they deployed to their students. She reported that buffering was occurring while live streaming videos and other things. The bill provided a way, if the legislature looked at virtual education or classroom-to-classroom peers around the world, Alaska's rural communities would have the needed speed to have a conversation without latency and delay. Representative Guttenberg asked if Department of Education and Early Development could bring a spreadsheet showing what the state was currently paying for what speeds, the E- rate, the local contribution, and the amount of the broadband Access Grant (BAG). Ms. Hartmann answered that she had the information containing the current E-rate and BAG per school district, and the total cost to each school district. She would provide the information following the meeting. Senator MacKinnon noted there was information provided by Co-Chair Hoffman in member packets titled "Alaska Schools Under 25MBPS - Federal Communication Commission, Public Reports, 2016" (copy on file) that showed the schools listed with under 25 megabits under the federal program. She could provide a copy if he did not have it in his packet. Representative Guttenberg noted that in statute speed would increase to 25 megabits, which was not a standard by itself. He conveyed that upload speed, download speed, and latency were almost as critical as the download speeds. He thought she had reported that the additional funds would not be used to pay for upgrades. If they could pay for upgrades currently, he wondered why they were not. The state would not be paying for fiber or new equipment. He wondered why they were not at a certain level. 2:19:57 PM Senator MacKinnon answered that all communities had to make choices about where they deployed their assets. Some of the assets were being deployed in classrooms to support teachers. They were making individual financial decisions Some schools had 1000 megabits because the community had taxing ability to raise revenues. She deferred to her staff. Representative Guttenberg asked why the ISP providers did not offer the 1000 megabits presently. He stated that everybody on fiber was capable of getting 1000 megabits including Kenny Lake. He asked what was preventing the providers from offering higher speeds since they were available without needing any facility change outs or additional capital projects. Senator MacKinnon answered it was a business. Businesses offered a suite and a package for a certain amount of money. There was a contract established between the district and the provider based on the cost to deploy the resource at a particular location. There was fiber in some areas, satellite in other areas, and microwave stations in other areas. Each area had its own costs. There was a relationship with someone selling something, internet at various speeds. She felt personally that she overpaid for her service, but it was an individual choice for her. One of her family members had elected to discontinue cable service due to the cost. It was up to the school districts what they were willing to pay. Senator MacKinnon furthered that there might not be 1000 megabits available at all of the schools. She believed there was up to 25 megabits based on microwave, fiber, and satellite systems that the state could raise the lowest level to a group of districts and provide additional funding to pay for the additional speed. She found that the costs would go down because the fixed cost for a company to try to recover the rate they were charging was spread over more megabits. The costs would go down. She reported that in 2014, multi-million dollars were fronted by the state. Once the fixed costs were covered over time, the actual speed rate dropped, and school districts' bills dropped. She deferred to her aide. 2:23:33 PM Ms. Hartmann replied that she had information from FY 15 through FY 18 regarding BAG statistics. In FY 15 the cost was $3.6 million, in FY 16 the cost was $2.6, in FY 17 the cost was $2.3 million, and in FY 18 the cost was $2.2 million. She reported that there was a decrease every year of the BAG program. Representative Ortiz applauded Senator MacKinnon for bringing the bill forward. He spoke to the importance of broadband. He was concerned about where the funding would come from. He pointed to appropriation language in Section 3 of the bill. He asked about the current balance of the Higher Education Fund. Senator MacKinnon replied $336 million. Representative Ortiz asked if it had initially been capitalized at $400 million. He queried if she had concerns about the solvency of the fund and the continuation of the Alaska Performance Scholarship Program. Senator MacKinnon answered, not for 10 years. She stated that Alaska needed to get its fiscal house in order. The bill was a way to create equity over time. The interest currently being earned on the Higher Education Fund out into the future looked like it would cover the cost, especially if the legislature deployed the resource to receive matching funds and raised the megabits from 10 to 25. Past experience showed that when the legislature invested money at the 10 megabits, the state paid a significant amount up front. Over the years it started sliding down and the school districts were getting the same speeds. She believed the state would see a similar drop. Senator MacKinnon noted that Senator Olson carried the bill on the Senate Floor but was not able to address the issue in House Finance because of the timing of the meeting. The Senate saw the idea as emeritus. She copied his bill and added the 15 megabit speed up to 25 megabits because she saw the merit of the bill passed in 2014. She hoped that the expenses would reduce over time and that the fund would be whole. She emphasized that the finance committee had not chosen to use the Higher Education Funds on other proposals. However, the other BAG programs were funded from the Higher Education Fund, which was the reason she chose it as the source for her proposal. 2:27:39 PM Representative Wilson referred to a handout that showed the annual call for the internet, the E-rate, the BAG portion, and the school portion. She noted that it was only for the 197 schools. She wondered if there was any information for the other districts outside of those that serve the 197 schools. Ms. Hartmann answered she would follow up with the information. Representative Wilson wondered why the bill did not use the Power Cost Equalization (PCE) Fund as opposed to the Higher Education Fund. She suggested that the nature of the issue had to do with a utility. The Power Cost Equalization fund balance equaled $1 billion. She opined that the Higher Education Fund had been robbed for several things. She was concerned the state would have more problems within 10 years. Senator MacKinnon answered that the PCE Fund had been modified the preceding year to prioritize spending and reduced interest earnings on it. It provided heating assistance and applied to other items to reduce costs in rural Alaska. In addition, the fund was being shared with all communities including Fairbanks, Wrangel, Anchorage, and other communities. All communities qualifying for community revenue sharing were receiving funds from the PCE Fund. A bill had been structured through Senate Finance with her support in advancing it to provide energy use and community assistance. Representative Wilson stated that the Higher Education Fund had not made enough interest to pay for the scholarship program and the needs-based program. She was concerned about taking more out of the fund. She relayed a personal scenario about her internet service at home. She also spoke about her son's internet service. She agreed with Representative Guttenberg about the speed of service. Speed was necessary. She thought the amount could go down, but a commitment of more than $10 million was being discussed. She was very concerned about fairness. She continued that districts all over Alaska were paying for whatever speed they had. She spoke about fairness. She was concerned the bill only pertained to 197 schools. There were other schools trying to do the right thing. She did not want to jeopardize an important program. She thought the scholarship programs were equally important for B and C students. She did not want to negatively impact them. 2:31:35 PM Senator MacKinnon spoke about a conversation pertaining to equity for rural states and about equity in education opportunities. She reported that 100 megabits per second (mbps) was the national recommendation. However, because Alaska's smaller communities in more rural locations did not have the same advantage of fiber that could provide lower cost service, the bill was only providing an opportunity of 25 percent of the national recommendation. She agreed there was consternation around the funding source. The funds were set aside for higher education. Should the legislature solve the state's fiscal challenges, there was an opportunity to place more money back into the fund to continue to provide resources for the Alaska Performance Scholarship, the needs-based Alaska Education Grant, and the BAG program. She understood there might be a negative draw on the fund and that it might eat the corpus of the money placed in the account. However, she felt that providing equity for those presently in the system would be helpful. Representative Pruitt spoke about the funding source. He mentioned a Legislative Finance Division analysis of the impact of SB 102 on the fund. By 2023, the estimated investment earnings would be just over $15 million while the total appropriations would be $35 million, $20 million being drawn down. He reported the total value at the end of 2023 would be $245 million. He had concerns about the impact on the ability to earn with less in the account and the residual effects of being able to provide various services. He thought Senator McKinnon had said that the earnings could be covered by what was being asked to be drawn down. He thought it looked like in the estimate that what was provided in the bill could fit within the amount. However, there were other items still being drawn from the fund including the Alaska Performance Scholarship (APS). He asked how he could say it was fiscally responsible if the goal was to be able to provide scholarships in the long term. 2:35:03 PM Senator MacKinnon answered that if students were not ready to go to college, they had to take remedial courses. In the Anchorage area there had been a newspaper report that showed that reading and math were below the national average. The bill provided an opportunity to help increase the chances that those that were ready to go to college would be prepared and not have to take remedial classes. She believed the fund had been used as a funding source for two years for items that were not education related. The items had dwindled the fund and the fund had been used for those items in response to Alaska not solving its fiscal challenges. She reported that the state had better numbers at the beginning of the year. But the fund had changed its earnings estimation. She explained that when she had originally started with the bill, the interest earnings were meeting everything in the fund. The numbers had dropped, and she had received them the previous day. She was looking for equity for all Alaskans, mostly those in small communities. She relayed that all of Alaska's school districts could qualify for the E-rate. It was the committee's decision whether it was the correct funding source. The Senate chose to use the Higher Education Fund as the funding source inside of a comprehensive look at education with a suite of bills. The other legislation that would affect this fund was not before the committee. She admitted it was a bit out of sequence with what the Senate's ideas were around the issues. 2:37:18 PM Representative Pruitt mentioned remedial classes needed by University of Alaska students. In Anchorage a large portion of students likely came from the Anchorage and Mat-Su areas with access to broadband. He thought it spoke to a larger issue than whether there was access to broadband. He noted a policy call about whether to continue with the scholarship fund. He asked if Senator MacKinnon thought going forward with the bill without another component was appropriate. He reported having objected to using the fund. He questioned whether the committee should go forward with only one piece of a larger package. Senator MacKinnon commented that each bill stood on its own merits. She deferred to the deliberation of the House. She thought she had made a fair case for smaller communities that were paying high costs for providing educational services. They received the same BSA as other communities that had taxing authority to add to their schools. She noted that all schools in Alaska qualified for E-rate. The cost for internet speed in larger communities was less or might be less than in rural Alaska. She indicated that she was trying to benefit all students. The goal from the Senate Finance Committee was to try to do what was possible to support education. She would explain to people in her district that equal was equal and being able to provide broadband access without latency and buffering meant that the state could deploy a state of the art teacher into classrooms that might or might not currently have the option. 2:41:03 PM Vice-Chair Gara appreciated the rural equity goal the senator was trying to achieve. He wondered if 25 mbps would be enough to allow for a large classroom setting. Ms. Hartmann thought the question would be better addressed to the telecom companies or DEED. She had been told that it took 4 mbps to have a face-to-face interactive video. The bill would help increase the ability to livestream. Vice-Chair Gara reported having spent a fair amount of time in rural Alaska and watched the little circle on his computer go around and around. He asked if all of the school districts listed with less than 25 mbps worth of broadband had enough infrastructure from the telecom companies to provide the 25 mbps. He wondered if internet access would slow down. He asked if the broadband available to others would slow down or be eaten up. He also wondered if the telecom infrastructure would have to be upgraded. Ms. Hartmann responded that she had recently uploaded letters from the telecom companies that currently provided services to the 197 schools that they were capable to go up to 25 mbps with current infrastructure. She also had a letter from the Alaska Telecom Association confirming the same thing. Regarding Vice-Chair Gara's other question, she would have to research or defer the question to the telecom companies. Vice-Chair Gara did not know the answer and did not expect her to either. 2:44:24 PM Representative Guttenberg asserted that providing broadband across Alaska was likely the most important thing the state could do for its students. He reported paying more than $110 for 4 megabytes. He indicated that the GCI map was inaccurate. He mentioned that 3 years prior, the FCC adopted the industry written Alaska plan. Over the course of 10 years GCI would receive $1.350 billion. He spoke about the telecom companies building infrastructure, which was supposed to increase coverage in remote locations. He noted living 5 miles from the university and reported not having access to service. He was interested in seeing the cost associated with the schools. Representative Guttenberg wondered if the Senator had queried the telecom companies about where they intended to build out in communities. The Alaska plan was looked at critically by some. He indicated there would be a 5-year look back in about 2 years. He thought $1.350 billion in subsidies with a minimal amount of build out was way beyond what was being considered in the bill ($15 million per year). He asked if the senator had asked the telecom companies about where the build outs would enhance communities without additional costs. Senator MacKinnon thought the providers that were participating in the Alaska plan should be consulted. The telecom companies participating in the Alaska Plan received a benefit from the federal government, which came with strings attached. She noted that for people concerned about the price of internet service going up, the FCC who ran the federal E-rate program, showed all of its data online. The prices reflected the cost continuing to go down. Senator MacKinnon reported that the FCC had a rule called the "Lowest Corresponding Price Rule (LCP). She explained that the LCP was defined as the lowest price that a service provider charged to non-residential customers who were similarly situated to a particular applicant, school, library, or consortium for similar services. The rule also stated that service providers could not charge applicants a price above the LCP for E-rate program services. She indicated that the state could not force people to build in all rural communities in the state. There were active choices occurring with how many individuals were in a location to receive service. The federal government was trying to extend the stretch and trying to regulate that the lowest cost structure was still provided to those receiving the services. She offered to reach out to the providers on behalf of the House Finance Committee. She thought their plan had investment in infrastructure costs every year. However, the state did not direct where providers built out. 2:48:16 PM Representative Guttenberg relayed that the state was providing $1.3 billion in subsidies which did not cover E- rate, rural clinics, or FirstNet. He thought there was an intangible public purpose for the legislature to see that an infrastructure build-out happened. He frequently had discussions with industry people in which he posed the question about when infrastructure would be built. He reported that there was no square answer from industry folks. He reiterated the need for additional infrastructure with the amount of money going into Alaska in subsidies. He indicated that the chairman of the FCC criticized the lack of infrastructure build-out in Alaska. He thought it was untenable that, at the end of a 10-year period, there would be no substantial infrastructure in place. He felt policy makers would be faced with continued escalating costs. He agreed with the bill sponsor that Alaska's kids and businesses were owed an infrastructure to allow them to function at their highest level. He reiterated that he lived in sight of the University and the mappings were inaccurate. He continued to criticize the telecom companies. He appreciated the senator's efforts. Senator MacKinnon clarified she was not representing telecom companies. The bill represented students and school districts in Alaska. She believed that the legislature had reached out to telecom companies to understand how they were providing service and some of their challenges. In no way was she trying to direct a single dollar towards any individual private sector person. However, private sector companies were providing the services. She emphasized that she was not in communication with telecom providers with the exception of asking questions. Representative Guttenberg clarified that he had not been inferring anything. Representative Wilson wanted to understand how the calculation had been made for the figure of $13.4 million. She suggested that $2.5 million applied to the 197 schools. She had hoped to have a discussion about other options after seeing how the calculation was applied. Senator MacKinnon answered that the department was prepared to address the fiscal note. 2:52:43 PM Co-Chair Foster OPENED public testimony. DAMON HARGRAVES, KODIAK ISLAND BOROUGH SCHOOL DISTRICT, KODIAK (via teleconference), testified in support of the bill. He relayed that in Kodiak bandwidth offered options for its students. Many of the district's sights had one high school teacher available locally. Bandwidth provided access to high quality teachers and provided students in the smaller schools with access to as many as a dozen or more teachers. He continued that live video connections between students and teachers for each distance class was crucial. The Kodiak School District was currently limited to 2 simultaneous video connections at most sites. An increase to 25 mbps would help the district to deliver 4 or more simultaneous connections to each of its sites. The district, with increased bandwidth, would also be able to offer more classes including welding. The course was taught and facilitated by a teacher in Kodiak at the high school. He continued he was able to offer a better experience. [The testifier's call dropped off]. 2:54:45 PM LUKE MEINERT, YUKON-KOYUKUK SCHOOL DISTRICT, FAIRBANKS (via teleconference), spoke in favor of the bill. He thanked members for supporting the bandwidth assistance grant in the past. The grant provided a positive impact on the educational opportunities the district provided its students. Because of this impact, he encouraged members to support SB 102. The Yukon-Koyukuk School District had 10 rural schools in the interior of Alaska. 98 percent of the students in the villages were Athabaskan and 8 of the 10 villages were only reachable via air service, with all school internet being delivered by satellite or a microwave connection. Very few homes in the area had internet connections and there was no cell service. Each school's internet costs for a 10-megabit circuit was $16,000 per location or $160,000 for each of the district's 10 schools prior to E-rate and the BAG contribution. The internet at the school was a lifeline for their communities. Securing more bandwidth for the district's students was not possible without assistance, given the district's challenging budget constraints. He relayed the estimated costs of expanding the bandwidth without assistance. The district was more and more reliant on internet service for education. He spoke to the equitability of educating rural students through distance learning with additional bandwidth being made accessible. He indicated that to continue to improve student outcomes additional bandwidth was necessary. He asked that members consider supporting an increase to the bandwidth from 10 megabits to 25 megabits. He thanked the committee. Representative Guttenberg asked who provided the district's bandwidth. Mr. Meinert answered, "DRS Technologies is our carrier." 2:57:47 PM DAVID NEESE, SELF, ANCHORAGE (via teleconference), believed increasing bandwidth was a good idea. However, internet service was provided by 2 companies in Alaska, GCI and DRS. He relayed that DRS had the ability to increase it but cost much more. None of the letters included in the documentation showed what the amount would be to go from 10 to 25 megabits. He reported that 4 megabits per device were necessary to have video. If a school had 5 devices streaming could occur on 4 of them. Other activities on the internet such as accounting would likely drop off. He referred to the last section of the bill that noted "any amount" from the fund. He believed those words should be removed or a cap should be included. He argued that the legislature would be funding internet at the school for elementary kids and taking it away from college kids. He reported that at Dot Lake School, the cost per child was $30,000 for internet at 10 megabits. He argued that "any cost" would be difficult. He encouraged legislators to consider that the state was helping to subsidize a monopoly, GCI in most of the villages, instead of promoting competition. He relayed that ACS had sent a letter to the FCC complaining that GCI had a monopoly in rural Alaska. The bill did nothing to break the monopoly up. He was worried about the fund source to solve the problem. He did not support the bill in its current from and recommended looking at another funding source. 3:01:05 PM AT EASE 3:01:44 PM RECONVENED Mr. Hargraves continued his earlier testimony. He shared that the Kodiak Island Borough School District offered Career Technical Education (CTE) courses including classes in welding through distance, which were heavily reliant on connectivity. The school was the best location for reliable internet. He shared that many home school students came in to use the internet. He noted a decline in enrollment in rural schools. He attributed it partial to limited options. Increased bandwidth would increase educational opportunities for students. He also mentioned opportunities for professional development was impacted by connectivity. Kodiak had cut down on travel for professional development and was now focused on videoconferencing capability for training. He relayed that the bill would impact 8 schools within his district. He anticipated that the Kodiak Island School District would see a benefit of about $400,000. Upon the passage of the bill, the school district would be ready to implement immediately; it had the personnel, the expertise, and the local hardware in place. He asked members to support the bill. Representative Guttenberg asked what the district was paying for 10 megabits currently. Mr. Hargraves did not have the numbers on hand. 3:04:59 PM BILL BURR, DELTA/GREELY SCHOOL DISTRICT AND ALASKA SOCIETY OF TECHNOLOGY IN EDUCATION, DELTA JUNCTION (via teleconference), testified in support of the bill. He spoke to the technical side of delivering broadband, going from 10 to 25 mmbps. The cost of increasing bandwidth in rural areas was high. Flat funding did not afford the school district to put money towards increased internet service when other costs were higher. He pointed out the ratio of 5:8:1 federal dollars through the E-rate program. Every dollar set aside to increase the bandwidth came with more money from the federal government. He believed the bill was an opportunity that should not be passed up. He talked about the incredible opportunities that would come with additional bandwidth. He needed bandwidth in order to reach out and participate in the modern world. He stressed the importance of the funding. He shared that the Delta/Greely School District was not one of the BAG communities. The district was in full support of rural communities that did not have schools at 25 megabits. Vice-Chair Gara indicated that his interest was that students would be able to participate live in a classroom. He thought Mr. Burr had stated that his district had this level of internet. He asked if it worked well for the district to provide live classroom participation. Mr. Burr replied that the school district had 250 megabits of data. It had the ability to do desktop video inside the school as well as with other communities and other states and countries. The district's level was higher than 25 megabits and was very functional. Vice-Chair Gara would wait to speak with a district that had 25 megabits. He thanked the testifier. 3:09:40 PM DR. LISA PARADY, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF SCHOOL ADMINISTRATORS, spoke in strong support of the bill to increase the floor of megabit speed from 10 to 25. She shared that she had previously worked for 6 years on the North Slope bringing the original Broadband Assistance Grant forward. At the time, there were villages with only 1 to 3 megabits which made it unrealistic to deliver certain content. It was decided that 10 megabits would become the new floor for rural Alaska. She thought it was appropriate to continue to incrementally lift the floor. She agreed with Senator MacKinnon that it was an equity issue. There had been discussions about the shortage and recruitment of teachers and educators. She thought that in rural Alaska broadband played a role. She argued that Alaska had to continue to deliver quality education to all of Alaska's students. Teaching and learning through distance learning, using video conferencing over broadband, was a viable option to provide equity to students. She spoke to the enhancement of many of the education applications that needed broadband. She noted a number of applications available to students that would be enhanced by lifting the megabit floor. She emphasized that the state's investment in its broadband infrastructure with a federal match was 8:1. The bill would expand access for students to take University classes. She urged members to consider the bill. She shared that members had expressed concern about the funding mechanism. 3:14:31 PM Representative Guttenberg stated there were other ways to get less expensive internet. He invited her to come to his office to review those options. He continued that the charges for internet service in rural Alaska were exorbitant. Dr. Parady replied that she would never engage in a conversation about telecom companies or prices as it was not her area of expertise. She relayed that having tried to provide quality professional development across 89,000 square miles, she might be the only person in Alaska who had a call from a provider saying that because satellites were colliding she would not be able to provide a district-wide professional development class. She had lived the issue. She had talked to teachers that reported they could not upload or download due to latency problems. She would not consider speaking to the costs, but she could definitely speak to the needs. It was a desperate time for the districts to figure out how to best serve their students going forward. She believed the technology piece in the bill had to be part of the answer. Representative Guttenberg noted that if someone compared the charges with anything else anywhere in the world, they would be dumbfounded. Representative Ortiz noted that Ms. Parady had mentioned her concern about the funding source at the end of her testimony. He agreed that the state needed to upgrade broadband, especially in his district, as there were several rural areas that would be positively impacted. He asked that if the question boiled down to having to leave the funding source as is in order for the bill to move forward, or not having the program, did she support the funding source remaining. Dr. Parady answered that she saw the megabit increase as a very high priority to education. Representative Pruitt spoke about fiscal costs for items. He asked if Ms. Parady's members would be okay with removing other things that were drawing from the Higher Education Fund in order to keep the fund stable. Ms. Parady responded that she could not answer his question. She thought that there were many worthwhile supports to education. They had varying degrees of impact across different school districts. She was unclear whether the answer to his question would be uniform and was not prepared to answer it. From a fiscal perspective, using federal dollars appeared to be a wise investment. School districts were being called upon to come up with creative and innovative ways to serve students. Connectivity was necessary to do so. She did not see the bill as a luxury, but rather a necessity. Representative Pruitt added that often times people requested certain things that had fiscal costs. He disagreed that it was up to the legislature to decide how the state paid for things. He inherently disagreed and argued that people had to recognize and determine priorities. He agreed that better connectivity was necessary in order to provide better education in Rural communities. He thought it was good to discuss other areas of savings. Dr. Parady thought it would cost about $2 billion to wire the school districts. From a fiscal perspective, incrementally raising the megabit floor and leveraging federal dollars seemed to be a wise investment. 3:22:31 PM Representative Guttenberg clarified that the estimate for wiring the entire state was between $1.2 billion and higher based on the 2008 Broadband Taskforce calculations. He compared it to buying a house: A total cash layout would not be required. The investment would be paid off over time. The cost for not doing things for Alaska's children was higher than making the investment. Co-Chair Foster CLOSED public testimony. He set an amendment deadline for 5:00 PM Friday, April 20, 2018. He appreciated the sponsor's work on the bill. SB 102 was HEARD and HELD in committee for further consideration.