Legislature(1999 - 2000)
03/22/2000 05:12 PM House EDT
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* first hearing in first committee of referral
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HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT
AND TOURISM
March 22, 2000
5:12 p.m.
COMMITTEE CALENDAR
E-COMMERCE OVERVIEW, PART 2
TAPE
00-6, SIDE(S) A & B
00-7, SIDE(S) A
CALL TO ORDER
CHAIR PHILLIPS convened the House Special Committee on
Economic Development and Tourism meeting at 5:12 p.m.
PRESENT
Committee members present were Representatives Phillips,
Cissna, Kerttula, Dyson, Rokeberg and Kemplen.
SUMMARY OF INFORMATION
BOB POE, Commissioner, Department of Administration, said
the Department of Administration spends about $26 million a
year on Telecommunications. The state contracts out $20.5
million to about 40 different vendors. The services
provided include applications for permits, and other
information about the state. Telecommunication will be an
important element of future development. "We are not very
likely to build new roads to places like Kotzebue and
Bethel, but we can build stronger telecommunications
highways. We should think about Telecommunications as a
transportation system."
COMMISSIONER POE continued that the department is in the
process of putting out an Request For Proposal (RFP) to put
all telecommunication services to one company, not 40, like
it is now. The plan will be to pass on some of the savings
to the company if it is able to take advantage of new
technologies and pass on some of the savings.
Telecommunications is changing so fast that the help of the
private sector is needed to provide solutions to the state's
problems.
COMMISSIONER POE noted the Gardner Consulting Group is
helping put the RFP together by studying the broad array of
services being used. Don't expect to see the State of
Alaska spend less on the telecommunications budget. The
additional money will be rolled into new technology and
Bandwidth. The RFP will be on the table by the end of April
and awarded by June. It will be a five-year contract.
Alaska is not the only state to have done this at this
point. He expects an Alaskan company to win the RFP.
J. PENELOPE GOFORTH, Cybercat Productions, said "Technology
requires that we revamp things. As you know the Internet is
changing the way we do business with each other and with
education and government. We are seeing what is called a
new paradigm shift in every phase of life imagined. Public
policy has been a little slow to catch up with this except
in Alaska, However E-commerce is moving ahead at a
resounding rate. In E-commerce the key words are location,
location, location. In Alaska the key words are
connectivity, connectivity, connectivity." There is
moratorium on taxation until 2003. The Federal committees
that are looking into taxing Internet usage right now are
deadlocked because of the difficulties in changing the tax
structure.
MS. GOFORTH gave a PowerPoint presentation. "The policy
issues that you as policy makers have dealt with have been
very beneficial to Alaska such as the technology initiative
grants that were given out over the last two years that
allowed school districts to become wired to the Internet."
MS. GOFORTH continued by saying security measures are an
important issue that need to be resolved. If the public is
afraid of losing money or data over the Internet because of
security issues they will not invest the time to utilize E-
commerce. Taxation and regulation are other issues that
need to be discussed.
MS. GOFORTH stated "education has become a bigger issue. We
are now faced with a younger generation of adults who are
more Internet and computer savvy than the elder generations.
Often we find situations where the students are teaching the
teachers how to use the technology. We must now work toward
more teaching of the teachers to be sure that they are able
to utilize the technology to its fullest extent as a
resource and educational tool."
MS. GOFORTH said that finally there is a convergence between
business and government. Government is striving to become
more efficient as a private business might. One way to do
this is in the field of procurement. By placing Requests
for Proposals (RFPs) on-line and doing on-line ordering
would surely benefit the efficiency of state government.
Government by Internet is going to include voting in the
future.
MS. GOFORTH offered that businesses are doing business with
other businesses to provide services not otherwise offered.
Financial transactions are almost all being done online
today between companies and tracking of products; like with
Fed Ex for example. Now more and more chip and hardware
companies are shifting to a service oriented companies. In
1998, 55 percent of people who did business with a bank has
had the opportunity to do banking on-line but municipalities
and boroughs in Alaska are not transacting financial
business on-line.
MS. GOFORTH cited the Digital State Survey, in which Alaska
ranked number two. The survey had four key survey areas,
availability of permitting and licensing: ease of form
usage, availability of help, and the ability to contact
agency and staff on-line. Education will be important.
Alaska will have to start looking at a knowledge-based
resource and look away from a natural resource development
mentality.
NAN THOMPSON, Commissioner, The Regulatory Commission of
Alaska (RCA) stated that the committee must understand the
capabilities and limitations of the current
telecommunications system in Alaska. Because it's through
that network that the advanced service and systems will be
delivered. Everyone in Alaska has a telephone and every one
pays a reasonable rate for service because of the subsidy
from state and federal programs of universal service, even
though the cost to rural areas is substantially higher than
urban. The mechanisms for the subsidies are complex, but
that same system has not been extended to advanced systems
to allow rural users access to high bandwidth services. The
challenge Alaska now faces is to make those same advance
services available to every one.
COMMISSIONER THOMPSON stated that there use to be only one
technology and one phone service, now there are many types
of delivery systems. The subsidy concept will not apply as
well to what has been set as the precedent. This is
problematic to fix, not impossible but not easy.
COMMISSIONER THOMPSON mentioned that local and regional
companies will have to work together and make significant
investments to solve technological problems. There is a
perception that phones in rural Alaska won't be needed as
much but this is not true.
COMMISSIONER THOMPSON recounted the methods of advance
service delivery which include fiber optic cable, digital
microwave and satellite systems. She stated that
connections to the rural areas are the largest area of
concern. Urban areas seem to be okay. The Federal
Communications Commission (FCC) is working on the rural
problem.
DEAN BARNES, Integrity Solutions Inc., Anchorage, gave a
presentation on how Alaska can participate in profit from
the e-commerce revolution. The concept of freely sharing
information intrigued the business world. The increase in
transaction efficiency will affect Alaskans. The Internet
has eliminated the effort needed to elaborately retail their
products. Venture capital is chasing the possibility of a
global market. Alaska has to promote itself with its high
standard of living, high education levels and low cost of
living, as well as its recreational opportunities. Also
that it is easy for businesses to become incorporated in
Alaska. There is a need to promote hi-tech education at the
university level. Promote real Alaska. And promote the
ability of Anchorage to support hi-tech business. For
Alaska to promote
COMMITTEE ACTION
The committee took no action.
ADJOURNMENT
CHAIR PHILLIPS adjourned the meeting at 6:30 pm.
NOTE: The meeting was recorded and handwritten log notes
were taken. A copy of the tape and log notes may be
obtained by contacting the House Records Office at 129 6th
Street, Suite 229, Juneau, Alaska 99801-2197, (907) 465-
2214, and after adjournment of the second session of the
Twenty-first Alaska State Legislature this information may
be obtained by contacting the Legislative Reference Library
at 129 6th Street, Suite 102, (907) 465-3808.
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