Legislature(2003 - 2004)
03/02/2004 10:24 AM House EDT
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT,
INTERNATIONAL TRADE AND TOURISM
March 2, 2004
10:24 a.m.
MEMBERS PRESENT
Representative Cheryll Heinze, Chair
Representative Pete Kott
Representative Nancy Dahlstrom
Representative Vic Kohring
Representative Sharon Cissna
Representative Harry Crawford
MEMBERS ABSENT
Representative Lesil McGuire, Vice Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 512
"An Act establishing the Hydrogen Energy Partnership in the
Department of Community and Economic Development; requiring the
commissioner of community and economic development to seek
public and private funding for the partnership; providing for
the contingent repeal of an effective date; and providing for an
effective date."
- MOVED HB 512 OUT OF COMMITTEE
HOUSE CONCURRENT RESOLUTION NO. 32
Relating to information infrastructure and establishing the
Alaska Information Infrastructure Policy Task Force.
- MOVED CSHCR 32(EDT) OUT OF COMMITTEE
HOUSE BILL NO. 485
"An Act relating to the powers of the Alaska Energy Authority to
make grants and loans and enter into contracts; relating to the
bulk fuel revolving loan fund; relating to the Alaska Energy
Authority's liability for the provision of technical assistance
to rural utilities; relating to the Alaska Energy Authority's
investment of the power development fund; repealing the
electrical service extension fund; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 449
"An Act relating to the contracting and financing authority of
the Alaska Industrial Development and Export Authority;
authorizing the authority to issue bonds in a principal amount
not to exceed $76,000,000 to finance the acquisition, design,
construction, inventory, and operation of natural gas, propane
air, or manufactured gas public utility facilities; and
providing for an effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 512
SHORT TITLE: HYDROGEN ENERGY RESEARCH PROGRAM
SPONSOR(S): REPRESENTATIVE(S) CRAWFORD
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) EDT, FIN
02/24/04 (H) EDT AT 5:15 PM CAPITOL 120
02/24/04 (H) Heard & Held
02/24/04 (H) MINUTE(EDT)
03/02/04 (H) EDT AT 10:00 AM CAPITOL 120
BILL: HCR 32
SHORT TITLE: AK INFO INFRASTRUCTURE POLICY TASK FORCE
SPONSOR(S): REPRESENTATIVE(S) KOTT
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) EDT, FIN
02/26/04 (H) EDT AT 5:15 PM CAPITOL 120
02/26/04 (H) -- Meeting Canceled --
03/02/04 (H) EDT AT 10:00 AM CAPITOL 120
WITNESS REGISTER
JAY HARDENBROOK, Staff
to Representative Harry Crawford
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Discussed details relating to HB 512 on
behalf of Representative Crawford, sponsor.
JOE GRIFFITH, Chief Executive Office (CEO)
Chugach Electric Association
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 512, saying it's the kind
of forward-looking view that's needed in the state.
SUE STANCLIFF
House Majority Office
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HCR 32 on behalf of
Representative Kott, sponsor.
SUSAN DAVIS, Staff
to the Legislative Council Information Technology Subcommittee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing on HCR 32, presented a
two-minute audiovisual program.
STEVE WALKER
Broadband Services Department
GCI
Anchorage, Alaska
POSITION STATEMENT: Provided information related to HCR 32.
TINA PIDGEON, Vice President
of Federal and Regulatory Affairs
GCI
Anchorage, Alaska
POSITION STATEMENT: During hearing on HCR 32, provided
information and made recommendations based on an earlier
version; urged members to look at the current situation.
IK ICARD, Consultant
Kingston, Washington
POSITION STATEMENT: Testified in support of HCR 32.
FRED PEARCE, Ph.D., Professor of Telecommunications
University of Alaska Anchorage
Anchorage, Alaska
POSITION STATEMENT: Voiced wholehearted support for HCR 32.
WANETTA AYERS, Executive Director
Southwest Alaska Municipal Conference (SWAMC)
Anchorage, Alaska
POSITION STATEMENT: Urged support for HCR 32.
SUE COGSWELL, Director
Prince William Sound Economic Development District (PWSEDD)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HCR 32.
JASON OHLER
Juneau, Alaska
POSITION STATEMENT: Testified in support of HCR 32.
ACTION NARRATIVE
TAPE 04-13, SIDE A
Number 0001
CHAIR CHERYLL HEINZE called the House Special Committee on
Economic Development, International Trade and Tourism meeting to
order at 10:24 a.m. Representatives Heinze, Kott, Kohring,
Dahlstrom, Cissna, and Crawford were present at the call to
order.
HB 512-HYDROGEN ENERGY RESEARCH PROGRAM
Number 0080
CHAIR HEINZE announced that the first order of business would be
HOUSE BILL NO. 512, "An Act establishing the Hydrogen Energy
Partnership in the Department of Community and Economic
Development; requiring the commissioner of community and
economic development to seek public and private funding for the
partnership; providing for the contingent repeal of an effective
date; and providing for an effective date."
CHAIR HEINZE brought attention to the two fiscal notes: one
[for $71,000] from the Department of Community & Economic
Development (DCED) and a zero fiscal note from the university.
Number 0104
REPRESENTATIVE CRAWFORD, sponsor, reported that Governor
Schwarzenegger of California has said he'll establish a network
of outlets for hydrogen across California such that no place is
more than 20 miles from an outlet. Representative Crawford
remarked that Alaska has a greater potential than almost any
other place in the world for hydrogen, and should get in the
forefront. Saying there's money available through federal and
private grants, he highlighted the need to set up an entity
which can shepherd that money and get it to the scientists so
the actual potential can be known. He deferred to Mr.
Hardenbrook to provide details.
Number 0195
JAY HARDENBROOK, Staff to Representative Harry Crawford, Alaska
State Legislature, explained:
Hydrogen doesn't occur naturally on earth in a pure
form. We have to extract it from something else. And
that does take some energy, although, in fact,
currently, with extracting it from natural gas, it is
more efficient as a fuel source than producing
gasoline from crude oil. ... It actually is more
efficient than what we're currently using to power our
cars.
It's not actually an energy source, but rather a means
of retaining energy. ... Specifically, when we use
electrolysis to extract hydrogen from water, we're
just containing the energy that we've taken from
another source. And that way, we can store it in
hydrogen until we get it to wherever it needs to be
used - currently, they're talking about automobiles,
as well as fuel cells for buildings. But it can also
be extracted from natural gas, as I said, crude oil,
or coal. And as most of us know, we have twice ...
the coal reserves of ... the rest of the United States
put together.
Other hydrogen partnerships and commissions: Hawaii
has one, specifically for their geothermal resources,
which is one of the really promising aspects here in
the state of Alaska. In the Midwest, they've been
analyzing wind potential - huge wind ... farms in the
Midwest, with hydrogen being shipped all over the U.S.
And, of course, ... California currently has Governor
Schwarzenegger on board with establishing ...
infrastructure for automobiles.
Number 0326
MR. HARDENBROOK continued:
President Bush in 2003 put $1.2 billion into the
federal budget for different hydrogen-research
projects, and that money currently is going to the
places that have commissions set up to ... take on
those projects.
The potential benefits of the market, the grants to
the state, and the possibility ... of another valuable
resource being shipped from Alaska far outweigh the
one-time costs that are associated with this bill.
Currently, DCED has a fiscal note of - one time -
$71,000. What Hawaii has taken in, just in grants in
one year, dwarfs that by four times. So the potential
far outweighs the small initial cost, and ... from
what I understand from DCED, that is just the cost of
paying one grant writer for one year to get them
started, and after that the grants would pay for all
other costs.
Number 0407
CHAIR HEINZE asked when hydrogen cars likely will be available.
REPRESENTATIVE CRAWFORD answered:
The future's right now. They have the cars that are
able to run. And what I was told at the NCSL
[National Conference of State Legislatures] last year
was ... they would start selling those cars as soon as
there was ... a distribution system and a supply for
hydrogen. ... It's right now; it's as soon as we can
get a distribution and supply of hydrogen available,
there will be hydrogen cars marketed.
MR. HARDENBROOK added, "I understand that there is a prototype
right now to convert current gasoline automobiles into hydrogen
vehicles, and that should be on the market in the next two
years." In response to a further question, he said, "Hydrogen
can be used in your standard internal-combustion engine right
now. All you need is a pressurized fuel tank that can take in
enough hydrogen to power the vehicle."
Number 0519
REPRESENTATIVE KOHRING asked whether there had been review of
the successes in the other states and whether the commission in
Hawaii has yielded benefits, for example.
MR. HARDENBROOK replied that California is setting up the grid
for actually supplying the vehicles. Hawaii is still in the
"theoretical stage of everything" and currently is using
geothermal to power its power grid, to a certain extent, but
hasn't set up the large-scale electrolysis yet; it has
established the grant-writing system and the institute, and
scientists are working on it right now.
REPRESENTATIVE KOHRING remarked that this is a good piece of
legislation, but expressed some reservations about the public-
funding aspect. He said he appreciates that the sponsor made
reference to seeking private sources, and noted that page 3
talks about seeking private industry investment and tax
incentives, for example. Mentioning the Wright brothers, flight
technology, and private money which funded that success at the
beginning of the 20th century, he noted that someone else had
been funded by some government money then [and wasn't as
successful].
Number 0674
CHAIR HEINZE brought attention to handouts in the committee
packet, noting that Chugach Electric Association operates [one
of the world's largest fuel cell projects] in Anchorage. She
called upon Mr. Griffith.
Number 0695
JOE GRIFFITH, Chief Executive Office (CEO), Chugach Electric
Association, said he applauds the committee for taking this up
and that it's the kind of forward-looking view needed in the
state. He remarked, "Heaven knows, we're experts in the energy
business; we know how to do it and how to make it work. And I
certainly look forward to participation in the project that
Representative Crawford has brought forward here." He said
$71,000 [the one-time amount in DCED's fiscal note] isn't a lot.
MR. GRIFFITH said he understands Representative Kohring's view
that it is better to have private industry undertaking these
things, but reminded the committee that "most of us are public
entities in the energy business on this side of it, particularly
the electrolysis side, and we would need ... special tools and
help from the state in order to put something like this
together." He continued:
There will be big front-end costs, and ... it behooves
us to get out and find those grants that are out there
and perhaps craft partnerships that would make this a
viable industry in our state. It is the fuel of the
future; there's no doubt about it. And we in Alaska
ought to get aboard the process - the sooner, the
better.
We can deal with the front-end costs and the fact that
there's no transportation system and we would have to
create one ... to be able to market the product. But
we have some of the finest wind resources here in
several areas of the state to make that hydrogen ...
out of water, in essence. Maybe we could sell both
the resulting oxygen and the hydrogen.
But it's clearly going to be the fuel of the future.
We have fuel cells that today run on it, very high
efficiencies. As someone said, ... there are already
convention internal-combustion engines that can burn
hydrogen. There are some technical difficulties in
that, as well, but we know how to handle them as well.
MR. GRIFFITH went on to say this is a good bill, the kind of
thing the state should do to ensure the tools are available for
the private sector, and he believes the periodic report to [the
legislature] makes a lot of sense. He concluded, "Let's get on
with it."
Number 0917
CHAIR HEINZE returned attention to the handouts on fuel cells
that [Chugach Electric Association] operates at the U.S. Postal
Service facility. She asked whether it's called "steam
reforming."
MR. GRIFFITH affirmed that, saying, "That's how you start the
process." In further response, he explained that the CH4
molecule is converted to its basic components: carbon monoxide,
and some water because of the amount of steam put in it, and
hydrogen. Then the hydrogen is put through another process that
strips off an electron and makes electrical energy; a certain
amount of heat is also created in the process. He said the U.S.
Postal Service facility uses both the heat and the electricity.
Number 0975
CHAIR HEINZE asked whether, through this process, the hydrogen
atoms are taken from the fuel (indisc.) and the oxygen atoms are
taken from the air, and this produces electricity and water.
MR. GRIFFITH answered that the output is electricity; a little
bit of steam; and some carbon monoxide or carbon dioxide in
small amounts, which he indicated comes from the carbon atom in
the CH4 molecule, which is the natural gas that has to be part
of the reaction. In further response, he said it's very clean;
any fuel cell when it operates is virtually silent, and a wisp
of steam comes out of the vents that is the total emission. He
added, "Anytime you're using hydrogen as a fuel, it's very
clean; the byproduct is water."
Number 1047
REPRESENTATIVE KOHRING moved to report HB 512 out of committee
with individual recommendations and the accompanying fiscal
notes.
CHAIR HEINZE announced that HB 512 was reported from the House
Special Committee on Economic Development, International Trade
and Tourism.
The committee took an at-ease from 10:40 a.m. to 10:44 a.m.
HCR 32-AK INFO INFRASTRUCTURE POLICY TASK FORCE
Number 1079
CHAIR HEINZE announced that the final order of business would be
HOUSE CONCURRENT RESOLUTION NO. 32, Relating to information
infrastructure and establishing the Alaska Information
Infrastructure Policy Task Force.
Number 1090
REPRESENTATIVE KOHRING moved to adopt the proposed committee
substitute (CS), Version 23-LS1717\I, Kurtz, 3/2/04, as a work
draft. There being no objection, Version I was before the
committee.
Number 1122
SUE STANCLIFF, House Majority Office, Alaska State Legislature,
presented HCR 32 on behalf of Representative Kott, sponsor.
Noting that Susan Davis could address technical questions, she
explained that HCR 32 establishes the Alaska Information
Infrastructure Policy Task Force, which will be charged with
consideration of Alaska's role and interest in long-term
information-infrastructure development.
MS. STANCLIFF said the development of information infrastructure
will provide Alaskan communities with access to broadband
connectivity and provide for improved telecommunications, health
care, education, homeland security, and economic development
opportunities. In addition, access to fiber-optic connectivity
will help bridge the divide that separates rural Alaska from the
benefits of technological advances realized in urban Alaska.
She added that public-private partnerships have been used
successfully around the globe to facilitate information-
infrastructure development.
MS. STANCLIFF delineated the makeup of the task force as set
forth in the resolution, and noted that the task force will
begin work the first day of June [2004] and terminate no later
than the close of the first session of the 24th legislature.
The task force will be charged with developing a comprehensive
package with recommendations, including legislation if
necessary, to meet Alaska's needs.
Number 1226
SUSAN DAVIS, Staff to the Legislative Council Information
Technology Subcommittee, Alaska State Legislature, introduced a
two-minute audiovisual program on broadband access and the
effect it could have in Alaska. A transcript of the audio
portion follows:
Rural Alaska has the infrastructure for instantaneous
and reliable access to homeland security and emergency
response, telemedicine, education, communication,
sustainable economic development. Investment in
information-technology infrastructure has enabled
countries to increase foreign direct investment,
sustain economic growth and employment, achieve
balanced regional development, increase gross domestic
product.
Ireland's information-technology infrastructure is a
shining example of what Alaska can achieve and
surpass. Through public-private partnerships, the
Irish government and its partners planned and
developed a fiber-optic infrastructure. Ireland
subsequently became a major player in the global
economy.
Today Ireland, the "Celtic tiger," is the largest
exporter of software products in Europe, home to 300
leading electronics companies, and a base for 9 of the
top 10 pharmaceutical companies in the world. In
2000, Ireland exported $13.3 billion worth of
knowledge-based products to the global marketplace.
Aggressive leveraging of private funds with public
credit and resources enabled Ireland to develop the
infrastructure needed to move its dated economy into
the center lane of the global economy.
This is not out of reach for Alaska. Fiber-optic
cables running deep beneath the sea provide state-of-
the-art telecommunications from Alaska's largest urban
hubs to the Lower 48 and the rest of the world. The
fiber-optic [cable] already stretches between Prudhoe
Bay, Fairbanks, Anchorage, and Juneau.
Alaska's communities are dispersed across its immense
landscape, and the gaps in our infrastructure are the
result of federal land laws, vast distances, and the
relative newness of our state. No paved highway may
ever connect some of our towns and villages to the
outside world. But a telecommunications superhighway
can link them all. Innovative engineering concepts
and robust technologies in use today can be put to use
in Alaska, hardwiring far-flung communities to
logistics hubs. With a telecommunications
superhighway, the Alaskan economy can evolve into a
21st century economic powerhouse.
... Alaska's telecommunications superhighway will
offer the opportunity for every city, town, and
village in Alaska to have instantaneous, reliable
access to homeland security and emergency response,
telemedicine, education, communication, sustainable
economic development. However, today these
communities remain isolated from each other and the
rest of the world. Imagine Alaska connected.
MS. STANCLIFF pointed out that committee packets contain related
information.
Number 1429
REPRESENTATIVE CISSNA noted that she'd just spent the last two
hours with Representative Kott [in the House Community and
Regional Affairs Standing Committee meeting] looking at the 911
emergency system. Saying telemedicine is high on her list, she
asked whether the two systems are complementary and use some of
the same technologies.
REPRESENTATIVE KOTT answered that they are somewhat
complementary; the 911 emergency system and this particular
resolution would dovetail nicely. He said this [task force]
will look at expansion of the current emergency system in
Alaska, as well as other arenas, in discussing broadband and
fiber optics; he said this has been a unique priority of his.
Highlighting Ireland's fiber-optics project that began seven or
eight years ago as a classic example of what can be done in an
economy with inventive broadband technology or fiber optics, he
said Ireland's economy has expanded enormously.
REPRESENTATIVE KOTT suggested that vital to Alaska and local
communities is information technology in general, especially
fiber optics; he mentioned telemedicine, tele-education, and
developing economies where none exist currently. Indicating
some projects have already been completed, he cited one in
Hoonah that may occur. He conveyed his intention that this task
force will identify all the "tentacles that we can reach out" to
various communities, after first identifying what exists and
what is lacking, in order to devise a plan. Offering his belief
that two things drive a state - efficient energy and efficient
information - he said that's what this task force would be
charged with accomplishing, to develop a long-term plan.
Number 1611
REPRESENTATIVE CISSNA again referred to discussion [that day in
the House Community and Regional Affairs Standing Committee] and
mentioned different levels of government and the ability to
decide within communities how to do what they want to do. She
asked what role this task force would play in interfacing with
homeland security and 911 systems, for example, and what
autonomy it would allow for "different kinds of layers."
REPRESENTATIVE KOTT replied that the task force would evaluate
the current 911 system; this fairly much relates to local
municipalities and their enhanced systems as heard [that day in
the House Community and Regional Affairs Standing Committee].
Beyond that, it would reach out into rural sectors; that's why
the task force includes a member from the Department of Military
& Veterans' Affairs, which is charged with emergency response
including the 911 system and homeland security.
REPRESENTATIVE KOTT went on to say he doesn't know all the
details about the current reach of the 911 system and where
things are now with the state system, but it certainly will be
addressed. He mentioned the partnership with the private sector
and figuring out how to reach into other areas of the state that
are currently covered under the 911 system.
Number 1718
REPRESENTATIVE CISSNA asked whether local governments will be
included.
REPRESENTATIVE KOTT replied that they absolutely could be and
said:
We've identified three or four positions that we want
to see included, and we've left the remaining
membership, the at-large folks, to be determined. And
it would be my objective to make sure there's a broad-
based group of technical people that are involved,
from the private sector and not government, that would
represent not only the urban area, but rural areas as
well, because that's where we're trying to reach out
into, is the rural segments of the state. And that's
what ... I believe the current objectives are in the
information technology within the private sector, for
instance, GCI, with their fiber optics.
Number 1785
REPRESENTATIVE CISSNA asked whether Representative Kott sees it
as appropriate, then, to have local urban and rural governmental
representation somewhere [in the resolution] "so that we don't
leave any of those parts out," wind up with unfunded mandates,
and leave behind some opportunities that local people might see
but others might miss.
REPRESENTATIVE KOTT replied that it's not the intent to pass
along unfunded mandates. This is a partnership between the
public and the private sector to complete "whatever project they
determine is feasible that we should go on with." With the
[task force] having 13 members, there is a limit on the number
of people who can be selected from various municipalities or
rural communities. He expressed hope that it will be a "broad-
based group who are technical in nature, that bring something to
the table as far as how to get from here to there," and said the
intent is that they'll provide the task force with the ability
to have the vision to go forward, using that vision in an
effective way to drive the task force to a conclusion. He
continued:
This is not to say that just because you're not
identified as a member of this task force that you
cannot participate. Obviously, the more, the better.
I'm certain that if there are meetings in Anchorage or
Fairbanks, there'll be some representation from the
various municipalities. But, clearly, the intent is
to provide the task force with expertise.
Number 1883
REPRESENTATIVE KOTT [moved to adopt] Amendment 1, as follows:
Page 3, line 8, after "not later than"
Insert "the first day of"
Delete "before the day"
Page 3, line 9
Delete "is scheduled to convene"
REPRESENTATIVE KOTT explained that the two amendments he would
offer clarify what he is trying to accomplish. The intent with
Amendment 1 is that the task force will provide its report to
the 24th legislature prior to its starting date. He noted that
the language would read "not later than the first day of the
First Regular Session of the Twenty-Fourth [Alaska State]
Legislature".
Number 1938
CHAIR HEINZE asked whether there was any objection to adopting
Amendment 1. There being no objection, it was so ordered.
Number 1944
REPRESENTATIVE KOTT [moved to adopt] Amendment 2, as follows:
Page 3, line 5
Insert "the task force members shall serve without
compensation but are entitled to transportation
expenses and per diem as authorized for members of
boards and commissions under AS 39.20.180"
REPRESENTATIVE KOTT explained the intent, if there are meetings
away from where [task force members] live, that [the state]
should at least bear the cost of providing the transportation,
as done for other public employees.
Number 1985
CHAIR HEINZE asked whether there was any objection to adopting
Amendment 2. There being no objection, it was so ordered.
Number 1996
REPRESENTATIVE KOHRING spoke in support of the resolution, but
suggested this should be looked at as a first step in the right
direction in terms of encouraging Alaska's economy and getting
telecommunications going in the state, as seen in Ireland.
Noting his interest was sparked by the audiovisual program, he
expressed the desire to further explore what Ireland's
government has done to encourage that type of development.
REPRESENTATIVE KOHRING surmised that people don't just start
locating their companies in a state or country without other
elements such as tax credits, exemptions, or land being provided
for companies to build facilities on. He cited Washington as a
state where the government's efforts have paid off in this
regard, and suggested the need to do something similar in
Alaska. He emphasized that although HCR 32 is a good start, it
should be taken further.
NUMBER 2065
CHAIR HEINZE remarked that Ireland's economy has expanded 7-10
percent each year due to this, and said it's a good point.
REPRESENTATIVE KOTT agreed Representative Kohring had made a
good point. He said the expansion of [Ireland's] fiber-optics
network certainly has led to economic growth, and acknowledged
there might be other reasons such as those mentioned by
Representative Kohring. He encouraged Chair Heinze to consider
putting together a trip to Ireland.
CHAIR HEINZE concurred with looking at Ireland's model.
Number 2121
STEVE WALKER, Broadband Services Department, GCI, discussed what
GCI has done with regard to broadband delivery to rural Alaskan
communities. He said GCI is in the midst of a three-year
project to expand broadband Internet services statewide. The
end product will be the delivery of high-speed broadband
connectivity to more than 150 of about 200 Bush communities; the
remaining communities are served only by [AT&T] Alascom. He
explained that [GCI's] residential and small-business customers
can choose from services with speeds "up to 64K or up to 256K"
at prices comparable to Anchorage rates, with service available
in villages as small as Birch Creek, which has 28 people.
MR. WALKER reported that during 2002-2003, GCI committed $2.1
million to expanding services to 70 rural Alaskan communities;
maps in packets show where service is already provided or is
planned for 2004. In 2004, service is planned for another 68
villages, which will complete GCI's commitment to bring
broadband service to all the Alaskan communities it serves. In
partnership with Alaska village initiatives, [GCI] will provide
not only Internet access, but also the knowledge-based tools
necessary to take full advantage of associated economic and job-
related opportunities. He conveyed the expectation that this
year's portion will be completed in mid-September.
MR. WALKER provided examples where community demand has been
identified and met "through industry and public cooperation."
He said GCI provides more than 105 telehealth sites with
broadband connections and cited examples; mentioned having
fiber, microwave, and satellite connections for all locations;
and said health providers are connected with regional hospital
physicians and some in the Lower 48. He also gave details about
the data-delivery capabilities for telehealth and high-quality
video conferencing. In response to a request from
Representative Cissna, he agreed [to provide information about
the different sites and history that he'd been discussing].
Number 2306
CHAIR HEINZE inquired about providing telehealth from a clinic
in Bethel, for example, [through connection to] the Lower 48.
MR. WALKER answered that it depends on the connectivity
requested. For example, he said [GCI] provides connectivity
between the Kotzebue region and the Lower 48.
CHAIR HEINZE, noting that she'd recently seen x-ray telemedicine
in Talkeetna, asked whether sending an x-ray to Providence
Hospital in Anchorage, for example, is what Mr. Walker was
referring to.
MR. WALKER answered in the affirmative. He added that
organizations have developed what are called telehealth cards.
A computerized otoscope is used to look at infections down a
person's nose or throat; those images and a patient's history
can be stored, and that data forwarded to a regional health care
center, for example.
TAPE 04-13, SIDE B
Number 2355
TINA PIDGEON, Vice President of Federal and Regulatory Affairs,
GCI, expressed appreciation for the interest in an on-site study
of telecommunications services in Ireland. Referring to
Mr. Walker's testimony, she said there is a lot to be excited
about with regard to ongoing and future infrastructure
investments in Alaska that are delivering high-quality, advanced
broadband connectivity and services therefrom.
MS. PIDGEON, noting that GCI had reviewed an earlier version of
HCR 32, offered three principal recommendations as follows:
First, we urge you to take the opportunity to assess
Alaska's current telecom infrastructure before
constituting the task force. We anticipate -
particularly based on some of the services that Mr.
Walker described - that you'll be pleasantly surprised
at what you will find regarding the extent, the
quality, and even the sophistication of the telecom
infrastructure that's available today in Alaska. In
the event that the task force is constituted, we
recommend that one of the first tasks that it
undertake is to inventory existing and planned
broadband infrastructure.
As a second matter, we suggest that if the task force
is created, ... industry members should be included
among its membership. We think ... industry
representatives can provide invaluable expertise
that's based on actual experience in providing ...
these and other services in Alaska.
And, finally, any task force should give great weight
to the telecom advances and infrastructure investments
that have already been made available through
competitive entry, and to consider the practical
challenges of designing technology that meets the
needs of rural communities at urban rates, which GCI
has been able to do.
Number 2268
MS. PIDGEON provided background and statistics, saying GCI has
been at the forefront of deploying new and innovative
technologies to improve and advance telecommunications service
since 1982; significant investments, largely through private
capital, have dramatically improved Alaska's telecommunications
infrastructure since then. For example, GCI has invested more
than $530 million in Alaska's telecom infrastructure since 1996,
including approximately $64 in telemedicine and $138 million in
two undersea fiber-optic cable projects; the second cable
project, currently underway, will substantially fortify Alaska's
fiber-optic network and the security of Alaskan
telecommunications, she predicted.
MS. PIDGEON reported that as a result of these and other
investments, coverage has increased significantly in Alaska over
the last several years for both basic telephone and broadband
services. More than 96 percent of Alaskan homes have telephone
service, whereas the national average is 95.2 percent. As for
broadband connectivity, Alaska is first in individual Internet
use, estimated at 71.6 percent, compared with a national average
of about 54 percent; Alaska is also first in home subscription
to broadband service, at about 26 percent, compared with a
national average of 13 percent. She surmised this demonstrates
that Alaskans demand these types of services and use them when
available. Returning to HCR 32, she urged the committee to look
at the current status of broadband connectivity and fiber
deployment in Alaska.
CHAIR HEINZE asked Ms. Pidgeon to provide a written copy of her
report.
MS. PIDGEON agreed to do that.
Number 2161
IK ICARD, Consultant, began by saying he is working with Kodiak
Kenai Fiber Company to extend fiber-optic cable out of Anchorage
and down along the Kenai Peninsula to Kodiak Island. Voicing
support for HCR 32, he said he believes this is an important
issue that only the state can undertake, since the type of
telecommunications infrastructure development that will offer
broadband services to communities throughout the state often
isn't economically feasible for the private sector to undertake
alone; however, the projects can be encouraged and made feasible
through public-private partnerships.
MR. ICARD said a task force dedicated to an analysis of existing
infrastructure and recommendations for further development is a
timely and necessary first step for the state. He discussed
identifying preferred levels of services and suggested that
telemedicine-related broadband services for evaluation of
patients and treatments might require a higher level of service
than would the sharing of records and consultation among
doctors, for example.
MR. ICARD highlighted the process gone through by countries and
states that lead the world in information technology; the need
for backbone infrastructure to support it; and the recognition
that in many cases the investment levels, rates of return, and
payback periods make projects difficult or impossible for the
private sector to undertake alone. He noted that Ireland,
Iceland, India, Israel, Australia, Southeast Asia, and Malaysia,
for example, all have taken steps to encourage private
investment in local infrastructure. He said Ireland has the
fastest-growing economy in the OECD [Organization for Economic
Cooperation and Development]; has seen growth over 7 percent
every year since 1993, with a drop in the unemployment rate as
well; and has productivity levels among the highest in Europe.
Number 2018
MR. ICARD voiced his belief that Alaska has a predisposition for
an even greater infrastructure build-out, including fiber
optics, satellite, microwave, and wireless infrastructure. He
noted that Alaska has abundant, robust infrastructure already in
place to major urban hubs; that Prudhoe Bay, Fairbanks,
Anchorage, Juneau, and the Lower 48 are all connected by fiber
optics; and that GCI is installing yet another fiber-optic trunk
line. This [resolution] is an opportunity for the state to
build on that and leverage private equity to encourage
infrastructure build-out and economic diversification throughout
Alaska's communities.
MR. ICARD said Alaska, at 62 percent, has the highest per-capita
use of computers in the home. He suggested the slumping fishing
and oil industries and Alaska's "terrific" labor base make it a
prime candidate for further economic diversification facilitated
by broadband development. Mentioning a confluence of state and
federal interests, he pointed out that homeland security and
defense considerations for the U.S. converge with state
interests, for example. He urged support for HCR 32 as an
important step for Alaska in evaluating and encouraging a robust
telecommunications infrastructure in the state.
Number 1952
REPRESENTATIVE KOHRING asked what those other countries have
done beyond developing telecommunications infrastructure. He
reiterated his belief that more must be done; he mentioned the
possibility of exemptions, tax credits, making land available,
or providing other types of infrastructure such as port
facilities. He cited Canada's Yukon Territory - which has
beautiful highways, a railroad track up to Fort Nelson, and
electrical distribution lines - as a place without a robust
economy despite its infrastructure.
MR. ICARD noted that Representative Kohring had listed a number
of mechanisms available to encourage "public-private
partnerships," and pointed out that this term has different
meanings; these include tax benefits and tax abatements such as
the State of Washington has extended to Boeing, as well as
bonding authority and the ability for private investors to have
their investment leveraged and the debt terms extended. He said
such mechanisms can facilitate projects that otherwise aren't
economically feasible for private investors.
MR. ICARD characterized infrastructure as a tool to provide
economic diversification and development. He said without that
infrastructure to begin with, there is no means to encourage
some of the "most recent, highest advances in telemedicine" such
as participation in real-time evaluations and even treatment of
patients beyond simply trading "high data density" information
such as x-rays or MRI [magnetic resonance imaging] reports or
transmission of records and prescriptions. He mentioned
marketing and interactive efforts between retail and wholesale
providers, saying these are facilitated by broadband services
regardless of where those markets are. He asked whether he'd
hit some of the salient points of Representative Kohring's
question.
REPRESENTATIVE KOHRING said not really, but acknowledged that it
was an in-depth question. He thanked Mr. Icard and said he'd
research it himself.
Number 1791
REPRESENTATIVE CRAWFORD followed up, emphasizing the importance
of education. He suggested one common thread for [Ireland,
Iceland, India, and Israel] is the high degree to which they've
invested in higher education and educational opportunities for
their students; these are some of the most highly educated
workforces in the world. Agreeing that infrastructure is a
necessary part, he highlighted education as the key to the
"economic miracle" in those other countries.
Number 1736
FRED PEARCE, Ph.D., Professor of Telecommunications, University
of Alaska Anchorage, voiced wholehearted support for HCR 32.
Agreeing that broadband telecommunication services clearly are
needed, he emphasized the corollary development of knowledge-
based approaches and industries as a key to the success of
[Ireland, Iceland, India, and Israel]. Dr. Pearce spoke for
engendering both an infrastructure and an approach that allows
development of local jobs. He also mentioned work "here and
through the Alaska Rural Development Council" to ensure that for
[health-related] consultations done in rural Alaska, the money
for primary care should "pool up" around those consultations,
rather than going to Anchorage or outside the state.
Number 1660
REPRESENTATIVE CISSNA asked how this task force can help in some
telemedicine-related challenges such as the ability to finance
the system and get reimbursement.
DR. PEARCE replied that issues of reimbursement are "rather
edgy" and are key. For most of the research he did from the
beginning of 1996 through 2001, he reported, the cost-
reimbursement model cannot justify the cost; the cost per
transaction far exceeds the current cost per transaction based
on the current transportation-based model. Nonetheless, these
broadband services will make available services that aren't
currently available. For instance, telemedicine activities in
Alaska to date have revolved around data acquisition, data
movement, and high-resolution imaging.
DR. PEARCE, addressing whether these broadband-based services
and "teleconsultations" will take root in rural Alaska, said
it's as much a function of the training and educational support
of "folks on the rural side" as in Anchorage. For example,
handheld health care devices do no good if people in rural sites
don't have active training and support. "I think there are a
lot of other issues here ... than the broadband issues, though I
support them wholeheartedly," he concluded.
Number 1539
WANETTA AYERS, Executive Director, Southwest Alaska Municipal
Conference (SWAMC), began by explaining that SWAMC is the
economic development district and the Alaska Regional
Development Organization (ARDOR) for Southwest Alaska. Urging
support for HCR 32, she specified that she was speaking on
behalf of the 54 communities and 131 members of SWAMC. Calling
creation of this proposed task force a much-needed step, she
noted that similar efforts have been undertaken by other states
to determine how state government can use its resources to
create an environment in which the private sector has the
incentive to provide information technology - usually, broadband
fiber-based technology - to small, rural markets.
MS. AYERS reported that Colorado, Minnesota, North Carolina,
Oregon, and Vermont have developed statewide information
technology strategies to help bridge the "digital divide"
between urban and rural areas, enhancing the economic
competitiveness of rural areas and transforming the overall
economies of these forward-thinking states.
Number 1490
MS. AYERS encouraged committee members to look at three
resources: the web site "thinkvermont.com/technology"; the
Progressive Policy Institute's new economy index for 2002, where
Alaska ranked 1st in online population and 6th in technology and
tools, but 49th in broadband access and online manufacturers,
with an aggregate digital-economy ranking of 36th; and a
benchmark study of state telecommunication networks developed by
the State of Colorado that provides an excellent grid showing
how government services and education are addressed through
telecommunications in all 50 states. Ms. Ayers noted that
Colorado's study showed, for instance, that 10 years ago Ohio
integrated a fiber-optic backbone with an 800-megahertz radio
system and replaced its existing microwave system, thereby
reaping many millions of dollars' worth of savings.
MS. AYERS returned attention to Alaska and the region she
represents, citing an example and emphasizing that fiber-optics
technology will complement existing technology and create a fair
playing field for existing stakeholders. She pointed out that
although a number of localized fiber-related projects are being
developed, they aren't interconnected; without a stable, secure
fiber-optic link, they only provide a marginal benefit on a
localized level. She again urged support for HCR 32.
Number 1332
CHAIR HEINZE requested that Ms. Ayers provide a copy of the
report.
MS. AYERS agreed to that.
Number 1316
SUE COGSWELL, Director, Prince William Sound Economic
Development District (PWSEDD), indicated PWSEDD represents
Tatitlek, Chenega Bay, Whittier, Valdez, and Cordova. She spoke
in support of HCR 32, highlighting the need for certainty that
all regions in Prince William Sound are covered by
telecommunications and fiber-optic service; although some
communities have fiber optics now, they aren't linked to the
statewide system. She cited an example of a possible link
within Prince William Sound that would assist with various
emergency responses as well as commercial tanker traffic.
Saying she thinks this is a great opportunity for state, public,
and private entities to work together for a "terrific,
innovative solution to just about every problem we have," she
closed by saying, "All of our communities support this effort."
Number 1193
JASON OHLER informed members that he has a professional
relationship with the digital-media industry in Ireland and will
go there next April, at which time he'll make a serious effort
to get details. He noted that when he'd asked about the
"miracle" there, people from within the media industry had cited
leadership and cooperation, and had said the government had come
forward and tried to make it easier for the industry.
MR. OHLER shared his dream of waking up one day and reading in
the newspaper that the governor has said it's time for Alaska to
develop its economy. Mr. Ohler explained that although that
wouldn't cost anything, he could take that headline and go to
the National Science Foundation or the Bill [& Melinda] Gates
Foundation, for example, where doors would open because he'd be
able to show them that Alaska has the political climate they're
looking for.
MR. OHLER recalled talking to someone recently about a [federal
Technology Opportunities Program (TOP)] grant for innovative
technology; the person had almost immediately asked what the
attitude in Alaska is and whether it's possible to get the
governor behind this. Mr. Ohler remarked, "Those of us who
don't come seeking money but come seeking support, ... those are
the things that we look for. And I can't tell you the value to
those of us who are trying to do ... those kinds of things."
MR. OHLER explained that foremost in his mind is community
sustainability. Noting that today's discussion primarily had a
commercial bent, which is fine, he reminded listeners that any
build-out of the telecommunication infrastructure system also
has benefits for health, education, and government services. He
said there are tremendously efficient ways for [the state] to
communicate with the public, for the public to get fishing
licenses and so forth. He suggested tremendous progress can be
made in that vein, and highlighted the need to include Alaska's
citizens in the governmental process once that connectivity is
there and is affordable.
Number 1024
MR. OHLER noted that one hat he wears is as a researcher at the
university. Saying the research project still waiting to be
done is the "longitudinal effects of bringing bandwidth to a
small community," he explained:
The progress goes like this: You go in, you take
baseline data; the baseline data is, how do people get
their health needs met, their educational needs met;
how do they interact with government; how do they do
business. Then you bring in bandwidth and you bring
in - and this is absolutely key - ... training. I
can't tell you how many failed projects are out there
because people dropped bandwidth on them and ...
waited for them to get the education they needed to
figure out what to do with that stuff.
MR. OHLER went on to say that the third phase of such a project
is looking at the impacts such as whether health care,
education, and commerce and economic development have improved.
He added that there is no better way of including people in the
opportunities of living in the year 2004 - to "teach someone how
to fish, rather than continue to give them fish" - than bringing
them into the benefits of living in the Internet age.
Number 0928
MR. OHLER pointed out that obviously he's all for the resolution
and added:
This is exactly the leadership, to me, that the
government can show. It doesn't cost a lot. It sort
of sits up here. It tries to bring everyone together.
This is wonderful. This is exactly what government
ought to do.
But the bottom line is, none of us is really going to
be so impressed with a piece of wire that's in the
ground. What we're going to be impressed with is what
people can do with that. We're really, really
impressed with expansions in economies and jobs and
health care and so on. And, quite frankly, most
people don't know how their refrigerator works, but
... they don't want to live without one. They want
the benefits of the technology.
MR. OHLER noted that the infrastructure and bandwidth must be in
place first, and closed by highlighting the need to get Alaskans
to use it for their own benefit.
Number 0850
CHAIR HEINZE referred to a document in committee packets
relating to the Centers of Excellence in Rural America (CERA).
She asked Mr. Ohler whether he has looked into CERA.
MR. OHLER answered no, although he knew something about it. He
explained that his focus is on the need to "move beyond
centers." For example, a person who must walk a mile to use a
car probably won't do so. Commenting that "it's got to be as
ubiquitous as your cell phone," he said there are small, remote
communities that have gone wireless where a person can walk
around with a laptop computer and use it in a field, for
example.
CHAIR HEINZE asked whether Mr. Ohler doesn't see CERA as a
model, then.
MR. OHLER offered to look at the document and said:
I know the model of the center, which is great. They
are wonderful. It may be where people go to get their
training so they know what to do with it. It's just
as a standalone, people need it infused into their
lives the way the phone is. So I'm going to say it's
a great model for certain aspects of it. But the
bottom line and the goal that you're pursuing is, you
want people to be fully brought in to ... mobile use
of digital communication and Internet technology.
Number 0748
CHAIR HEINZE paraphrased from the document, saying the concept
of CERA "builds on the roots of small towns and ... their
independence but mutual support for the common good." It's an
effort to test [the hypothesis] that creating a network of
small, rural towns deploying affordable, high-speed
telecommunications services will result in "increased job
creation and/or income in those towns while also improving
education, health care, and governmental services." She
remarked that she found that interesting. She also noted that
at the bottom of the page it says CERA is looking for partners
and corporate sponsors that are willing to help design,
implement, and evaluate the emerging CERA.
REPRESENTATIVE CISSNA pointed out that it's dated October 2000.
She suggested the need to look at what has happened since then.
CHAIR HEINZE asked Mr. Ohler whether he'd be following up.
MR. OHLER replied in the affirmative.
CHAIR HEINZE remarked that the governor might not provide the
headlines, but asked about the Speaker of the House
[Representative Kott, sponsor of HCR 32].
MR. OHLER said it happened last year, and thanked Representative
Kott for that. He emphasized the desire to get it on the front
page of the Anchorage newspaper and reiterated, "If I have that,
I can then go and get my own money to do these things."
Number 0620
REPRESENTATIVE KOHRING thanked Mr. Ohler for his enthusiasm and
said he'd like to have him play an active role in facilitating
this. He requested more information on Mr. Ohler's credentials.
MR. OHLER replied that he is "what they call a president's
professor at the University of Alaska in educational
technology."
REPRESENTATIVE KOHRING remarked that he looked forward to
receiving information about what Ireland has done to create its
boom that Alaska could use. He added that when this [task
force] is created, he'd like to see Mr. Ohler considered as one
of the members.
MR. OHLER provided further information on Ireland, reporting
that in Dublin, Guinness provided a city block of old brewery
buildings that was turned into the digital-media hub. He said
he'd spent a day touring it, and it's quite remarkable. He
expressed hope that following his visit, they are making the
connection between education and what they're doing there.
Number 0482
CHAIR HEINZE asked whether anyone else wished to testify. She
then closed public testimony.
Number 0469
REPRESENTATIVE KOHRING moved to report CSHCR 32, Version 23-
LS1717\I, Kurtz, 3/2/04 [as amended], out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHCR 32(EDT) was reported from the
House Special Committee on Economic Development, International
Trade and Tourism.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Economic Development, International Trade
and Tourism meeting was adjourned at 11:55 a.m.
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