Legislature(2019 - 2020)BARNES 124

05/01/2019 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 83 TELECOMMUNICATIONS REGULATION/EXEMPTIONS TELECONFERENCED
Heard & Held
+ SB 16 ALCOHOL LIC:FAIRS,THEATRES,CONCERTS;BONDS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                          May 1, 2019                                                                                           
                           3:20 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Adam Wool, Co-Chair                                                                                              
Representative Gabrielle LeDoux, Co-Chair                                                                                       
Representative Zack Fields                                                                                                      
Representative Sara Hannan                                                                                                      
Representative Louise Stutes                                                                                                    
Representative Josh Revak                                                                                                       
Representative Dave Talerico                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 83                                                                                                              
"An  Act  relating  to  the   Regulatory  Commission  of  Alaska;                                                               
relating to  the public utility regulatory  cost charge; relating                                                               
to the regulation of  telecommunications; relating to exemptions,                                                               
charges,  and rates  applicable to  telecommunications utilities;                                                               
relating  to regulation  of telephone  services; and  relating to                                                               
alternate operator services."                                                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
CS FOR SENATE BILL NO. 16(FIN)                                                                                                  
"An  Act  relating to  certain  alcoholic  beverage licenses  and                                                               
permits; relating  to the bond requirement  for certain alcoholic                                                               
beverage license holders; and providing for an effective date."                                                                 
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 83                                                                                                                   
SHORT TITLE: TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                           
SPONSOR(s): SENATOR(s) BIRCH                                                                                                    
                                                                                                                                
03/11/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/11/19       (S)       L&C                                                                                                    
03/26/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/26/19       (S)       Heard & Held                                                                                           
03/26/19       (S)       MINUTE(L&C)                                                                                            
04/02/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/02/19       (S)       Moved SB 83 Out of Committee                                                                           
04/02/19       (S)       MINUTE(L&C)                                                                                            
04/03/19       (S)       L&C RPT 4DP                                                                                            
04/03/19       (S)       DP: REINBOLD, GRAY-JACKSON, COSTELLO,                                                                  
                         BIRCH                                                                                                  
04/15/19       (S)       TRANSMITTED TO (H)                                                                                     
04/15/19       (S)       VERSION: SB  83                                                                                        
04/16/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/16/19       (H)       L&C, FIN                                                                                               
04/17/19       (H)       JUD REPLACES FIN REFERRAL                                                                              
05/01/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB 16                                                                                                                   
SHORT TITLE: ALCOHOL LIC:FAIRS,THEATRES,CONCERTS;BONDS                                                                          
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
                                                                                                                                
01/16/19       (S)       PREFILE RELEASED 1/11/19                                                                               
01/16/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/19       (S)       L&C, FIN                                                                                               
02/05/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/05/19       (S)       Heard & Held                                                                                           
02/05/19       (S)       MINUTE(L&C)                                                                                            
02/14/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/14/19       (S)       Scheduled but Not Heard                                                                                
02/19/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/19/19       (S)       Moved CSSB 16(L&C) Out of Committee                                                                    
02/19/19       (S)       MINUTE(L&C)                                                                                            
02/25/19       (S)       L&C RPT CS 5DP NEW TITLE                                                                               
02/25/19       (S)       DP: REINBOLD, BIRCH, BISHOP, COSTELLO,                                                                 
                         GRAY-JACKSON                                                                                           
03/08/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/08/19       (S)       Heard & Held                                                                                           
03/08/19       (S)       MINUTE(FIN)                                                                                            
04/01/19       (S)       FIN RPT CS 3DP 4NR NEW TITLE                                                                           
04/01/19       (S)       DP: VON IMHOF, MICCICHE, WILSON                                                                        
04/01/19       (S)       NR: STEDMAN, HOFFMAN, SHOWER, OLSON                                                                    
04/01/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/01/19       (S)       Moved CSSB 16(FIN) Out of Committee                                                                    
04/01/19       (S)       MINUTE(FIN)                                                                                            
04/08/19       (S)       TRANSMITTED TO (H)                                                                                     
04/08/19       (S)       VERSION: CSSB 16(FIN)                                                                                  
04/09/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/09/19       (H)       L&C, FIN                                                                                               
05/01/19       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KIM SKIPPER, Staff                                                                                                              
Senator Chris Birch                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB  83 on behalf of Senator Birch,                                                             
prime sponsor.                                                                                                                  
                                                                                                                                
CHRISTINE O' CONNOR, Executive Director                                                                                         
Alaska Telecom Association                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Provided   a  PowerPoint   presentation                                                             
entitled,  "SB  83:  Telecommunications Statutes,"  and  answered                                                               
questions.                                                                                                                      
                                                                                                                                
DAVID PARRISH, Common Carrier Specialist                                                                                        
Regulatory Commission of Alaska                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on SB 83.                                                                   
                                                                                                                                
STEPHEN MCALPINE, Commissioner                                                                                                  
Regulatory Commission of Alaska                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on SB 83.                                                                   
                                                                                                                                
EDRA MORLEDGE, Staff                                                                                                            
Senator Peter Micciche                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB  16 on behalf of Representative                                                             
Micciche, prime sponsor.                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:20:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  GABRIELLE LEDOUX  called the  House Labor  and Commerce                                                             
Standing   Committee    meeting   to    order   at    3:20   p.m.                                                               
Representatives Revak, Hannan, Stutes,  Talerico, and LeDoux were                                                               
present at  the call to  order.  Representatives Fields  and Wool                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
         SB 83-TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                     
                                                                                                                                
3:20:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced that the  first order of business would                                                               
be  SENATE  BILL NO.  83,  "An  Act  relating to  the  Regulatory                                                               
Commission of  Alaska; relating to the  public utility regulatory                                                               
cost charge;  relating to  the regulation  of telecommunications;                                                               
relating  to   exemptions,  charges,  and  rates   applicable  to                                                               
telecommunications   utilities;   relating   to   regulation   of                                                               
telephone   services;   and   relating  to   alternate   operator                                                               
services."                                                                                                                      
                                                                                                                                
3:22:49 PM                                                                                                                    
                                                                                                                                
KIM   SKIPPER,  Staff,   Senator   Chris   Birch,  Alaska   State                                                               
Legislature, presented  SB 83 on  behalf of Senator  Birch, prime                                                               
sponsor.    She  paraphrased  parts   of  the  sponsor  statement                                                               
[included in  the committee packet],  which read in  its entirety                                                               
as follows [original punctuation provided]:                                                                                     
                                                                                                                                
     Senate  Bill  83  seeks  to  encourage  investment  and                                                                    
     innovation   in  the   telecommunication  industry   by                                                                    
     updating the telecommunication  statutes. Rapid changes                                                                    
     in  technology   and  in  the   Federal  Communications                                                                    
     Commission  (FCC) regulations,  render portions  of the                                                                    
     existing  statutes obsolete  and/or inefficient  in the                                                                    
     modern telecommunications world.                                                                                           
                                                                                                                                
     All  of  Alaska's telecommunications  providers  worked                                                                    
     together  through  the  Alaska Telecom  Association  to                                                                    
     offer  the suggested  changes made  in Senate  Bill 83.                                                                    
     The  goal   of  was  to  maintain   important  consumer                                                                    
     protections,   appropriate  Regulatory   Commission  of                                                                    
     Alaska  (RCA) jurisdiction,  and  consistency with  FCC                                                                    
     regulations  while  at  the   same  time  allowing  for                                                                    
     greater flexibility  to more rapidly take  advantage of                                                                    
     new technology.                                                                                                            
                                                                                                                                
     Some  existing RCA  regulations are  over 25  years old                                                                    
     and focused  on landline and  traditional long-distance                                                                    
     service. As customers continue  to prefer broadband and                                                                    
     mobile services and the  demand for landline decreases,                                                                    
     the outdated regulations  are largely obsolete. Carrier                                                                    
     of   last  resort   regulations  needlessly   duplicate                                                                    
     existing   statutory   requirements   and   alternative                                                                    
     operator  services  are  no longer  used.  SB83  places                                                                    
     service  providers on  a more  level playing  field and                                                                    
     will encourage deployment  of advanced technologies and                                                                    
     more efficient network design.                                                                                             
                                                                                                                                
     SB  83 creates  new  protections in  statute for  rural                                                                    
     areas  by requiring  landline and  long-distance rates,                                                                    
     terms and conditions be the same as in larger towns.                                                                       
                                                                                                                                
     SB 83  requires that  the Regulatory Cost  Charge (RCC)                                                                    
     be   assessed  and   submitted  to   the  RCA   by  all                                                                    
     telecommunication utilities.  Currently the RCC  is not                                                                    
     being paid  by utilities that are  municipally owned or                                                                    
     are  cooperatives. All  members of  the Alaska  Telecom                                                                    
     Association support this change.                                                                                           
                                                                                                                                
     I would appreciate your support for SB 83.                                                                                 
                                                                                                                                
3:24:32 PM                                                                                                                    
                                                                                                                                
CHRISTINE   O'  CONNOR,   Executive   Director,  Alaska   Telecom                                                               
Association,  provided a  PowerPoint  presentation entitled,  "SB                                                               
83: Telecommunications  Statutes."   Ms. O'Connor noted  that the                                                               
statutes in  the presentation only  relate to landline  service -                                                               
either local  calling or long  distance.   She stated that,  as a                                                               
baseline, SB  83 is unanimously  supported by all  Alaska Telecom                                                               
Association  (ATA)   members,  which   are  the   landline,  long                                                               
distance,  wireless, and  broadband providers  that serve  Alaska                                                               
(slide 2).   All members  also agree that  many telecommunication                                                               
statutes in Alaska are obsolete  and impose regulatory burdens on                                                               
companies  and  regulators.   She  continued  by  explaining  how                                                               
telecommunications  has   transformed  since  many   of  Alaska's                                                               
telecom  statutes were  adopted  in the  1970s,  adding that  the                                                               
federal Telecommunications  Act of  1996 changed  the marketplace                                                               
and started an evolution toward  light-touch oversight (slide 3).                                                               
As  of 2017,  she  said,  41 states  have  reduced or  eliminated                                                               
telecommunication regulation, which  generally means that telecom                                                               
companies manage  their owns rates  as cooperative  and municipal                                                               
telecom companies  on Alaska  already do  today.   Updating state                                                               
statutes would allow Alaska's companies  to take advantage of the                                                               
flexibility   that  most   other   states   allow,  while   still                                                               
maintaining  the  regulators  important role  of  overseeing  the                                                               
fitness of  providers and mandating  the continuance  of landline                                                               
and long-distance  service.   She emphasized that  this is  not a                                                               
deregulation  bill,  "it is  simply  pulling  away some  obsolete                                                               
statutes and getting  rid of some pointless  paper shuffle that's                                                               
happening."                                                                                                                     
                                                                                                                                
3:27:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL noted  that the  Regulatory  Commission of  Alaska                                                               
(RCA) seems to  think that this is a deregulation  bill, based on                                                               
a  memorandum  they sent  to  the  legislature [included  in  the                                                               
committee packet].                                                                                                              
                                                                                                                                
MS.  O' CONNOR  opined  that it's  not  deregulation because  the                                                               
regulatory commission  will continue  to have authority  over all                                                               
telecom  providers.     The   regulators  would   determine  that                                                               
providers  are fit,  willing, and  able to  serve; and  designate                                                               
areas where their service is mandatory.   She added that in those                                                               
designated areas,  only the  RCA has the  authority to  allow the                                                               
discontinuation of  service if the  company can  demonstrate it's                                                               
in  the public's  interest.   "This is  strong regulation  of the                                                               
continuation of landline service," she said.                                                                                    
                                                                                                                                
3:29:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES, referencing slide  4, asked what the white                                                               
colored states represent.                                                                                                       
                                                                                                                                
MS. O'  CONNOR said  those states  have not  taken any  action on                                                               
updating  their  telecommunication  statutes and  still  maintain                                                               
traditional   monopoly-style   regulation  over   their   telecom                                                               
entities.                                                                                                                       
                                                                                                                                
3:29:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES sought clarification on the map's legend.                                                                 
                                                                                                                                
MS.  O'  CONNOR explained  that  the  map  is from  the  National                                                               
Regulatory  Research Institute,  which studies  regulation across                                                               
the  United States.   She  said  that the  legend represents  the                                                               
largest land provider in each state with color coding.                                                                          
                                                                                                                                
3:30:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS questioned  the  historic balance  between                                                               
subsidies and regulation in the telecommunication industry.                                                                     
                                                                                                                                
MS.  O' CONNOR  said  that every  subsidy  has its  corresponding                                                               
obligations.                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  asked who pays  each subsidy and  how much                                                               
they receive annually.                                                                                                          
                                                                                                                                
MS.  O' CONNOR  said the  state fund  is through  a line  item on                                                               
landline  and  wireless  telephone bills,  which  is  distributed                                                               
through regulation  that the RCA  has authority over.   She noted                                                               
that  SB 83  doesn't affect  that authority.   She  further noted                                                               
that the state fund is approximately 19 million annually.                                                                       
                                                                                                                                
REPRESENTATIVE FIELDS questioned whether  the all 19 million goes                                                               
towards supporting RCA functions.                                                                                               
                                                                                                                                
MS.  O' CONNOR  explained that  the funding  is dispersed  to the                                                               
providers to support the landline  networks in Alaska.  She noted                                                               
that the RCA  is funded through a separate line  item on landline                                                               
phone bills called the "regulatory costs charge."                                                                               
                                                                                                                                
REPRESENTATIVE  FIELDS  questioned  whether  SB  83  contemplates                                                               
reducing  subsidies   to  the  industry  in   exchange  for  less                                                               
regulation.                                                                                                                     
                                                                                                                                
MS. O' CONNOR  answered no.  She said that  subsidies, the Alaska                                                               
Universal  Service fund,  is  a  separate issue.    The RCA  made                                                               
dramatic changes to the fund and  will conduct a sunset review of                                                               
the fund is 2021.                                                                                                               
                                                                                                                                
3:34:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN sought  to  clarify that  SB  83 does  not                                                               
affect RCA's authority over the Alaska Universal Services fund.                                                                 
                                                                                                                                
MS. O' CONNOR replied that is correct.                                                                                          
                                                                                                                                
REPRESENTATIVE  HANNAN questioned  whether the  bill affects  the                                                               
civil  penalties that  the RCA  has authority  over for  a profit                                                               
negative service.                                                                                                               
                                                                                                                                
MS.  O' CONNOR  said the  civil penalties  that are  currently in                                                               
statute would continue to apply  to any sections that still apply                                                               
to  telecommunication.   She  added  that  if  a company  was  in                                                               
violation  of those  statutes  then the  RCA  could assess  civil                                                               
penalties.                                                                                                                      
                                                                                                                                
3:35:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  asked for the  purpose of the subsidies  and why                                                               
they are needed.                                                                                                                
                                                                                                                                
3:35:25 PM                                                                                                                    
                                                                                                                                
MS.  O'  CONNOR  said  each funding  mechanism  has  a  different                                                               
purpose.  The AUS, for example,  is for the support of intrastate                                                               
communication while  federal funds have different  purposes.  The                                                               
High Cost Fund is to  help deploy and operate broadband networks.                                                               
The  E-Rate program  supports schools  and  libraries; the  Rural                                                               
Healthcare Fund  supports medical  facilities connectivity.   She                                                               
pointed  out   that  we  need  them   because  infrastructure  is                                                               
immensely  expensive,  and Alaska  is  vast,  adding that  Alaska                                                               
would not have  the networks we have today  without these support                                                               
funds.                                                                                                                          
                                                                                                                                
3:36:35 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  sought clarification on where  the subsidies are                                                               
used.                                                                                                                           
                                                                                                                                
3:36:44 PM                                                                                                                    
                                                                                                                                
MS. O' CONNOR reemphasized that  each program is different - with                                                               
the E-Rate  program the  funds go  for a  certain school  and the                                                               
school district  applies - same  with the Rural  Healthcare Fund.                                                               
The High Cost  Fund is different, in that they  give a set amount                                                               
of  money  to  a  company  and  in  return  the  company  deploys                                                               
broadband or upgrades the speed  of broadband at a defined number                                                               
of locations.                                                                                                                   
                                                                                                                                
3:38:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS  asked  Ms. Skipper  for  Senator  Birch's                                                               
perspective  on eliminating  carrier of  last resort  protections                                                               
versus continuing to  use the status quo of addressing  on a case                                                               
by case basis through the commission.                                                                                           
                                                                                                                                
MS.  SKIPPER  offered  her understanding  that  carrier  of  last                                                               
resort would not be eliminated under SB 83.                                                                                     
                                                                                                                                
MS. O'  CONNOR, in response to  Representative Fields, maintained                                                               
that  the bill  would  not eliminate  the  obligation to  provide                                                               
service  in  all the  same  areas  -  that obligation  exists  in                                                               
statute.   She  said the  certificate of  public convenience  and                                                               
necessity   carries  that   obligation   and  the   corresponding                                                               
regulations.    What   is  being  eliminated,  she   said,  is  a                                                               
duplicates  layer  of  regulation  that  is  separate  from  that                                                               
certificate. She  added that ATA  will still have  the obligation                                                               
to serve and to request permission before discontinuing service.                                                                
                                                                                                                                
3:40:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS inquired as  to the perspective in crafting                                                               
the  bill  in  such  a  way  that,  according  to  the  staff,  a                                                               
substantial elimination of carrier of last resort is being made.                                                                
                                                                                                                                
MS.  O' CONNOR  noted  she  spend several  months  in the  public                                                               
process at the commission, discussing  modernizing statutes.  She                                                               
further noted that  the commissioners adopted this  bill as their                                                               
recommendation for modernization.   She said that  the staff memo                                                               
was  presented to  the commission  and  was never  adopted.   The                                                               
staff  memo in  many places  calls for  more regulation  of items                                                               
that are out  of the jurisdiction of the state.   She assured the                                                               
committee  that  it  was  a   well-vetted  conversation  and  the                                                               
commission ultimately adopted SB 83.                                                                                            
                                                                                                                                
REPRESENTATIVE  FIELDS  asked  which   carriers  of  last  resort                                                               
protections are being eliminated.                                                                                               
                                                                                                                                
3:43:28 PM                                                                                                                    
                                                                                                                                
MS. O' CONNOR said "there is  a section of regulation - again not                                                               
statute  - that  defines some  details  about service  in a  more                                                               
granular level  than statute; but  again they are  duplicative of                                                               
the certificates statutes, which  require continuing service, RCA                                                               
approval to serve."                                                                                                             
                                                                                                                                
REPRESENTATIVE  FIELDS suggested  that Ms.  O'Connor was  saying,                                                               
"this particular  regulation is gone,  but the RCA  could decide,                                                               
as a  nuclear option, to  revoke someone's certificate,  but they                                                               
would be  left with more of  just a nuclear option  versus a more                                                               
refined tool."   He asked if that accurately  summarized her last                                                               
statement.                                                                                                                      
                                                                                                                                
MS. O'CONNOR answered no, the  certificate is not all or nothing.                                                               
She clarified that the RCA  had certificate authority through the                                                               
certificate  of public  convenience  and  necessity for  decades,                                                               
adding  that "they  have  multiple options."    For example,  she                                                               
said,  they  have had  concerns  about  certain areas  that  were                                                               
served by an  old radio telephone technology and  in those cases,                                                               
they  have  called the  companies  to  the commission,  opened  a                                                               
monitoring  docket,  which  requires  the  company  to  regularly                                                               
report back to the commission.                                                                                                  
                                                                                                                                
3:44:29 PM                                                                                                                    
                                                                                                                                
MS. O'CONNOR turned attention to slide  5.  She stated that SB 83                                                               
is  structured to  exempt telecommunication  companies from  rate                                                               
regulation in AS 42.05 [Alaska  Public Utilities Regulatory Act];                                                               
nonetheless,  many important  sections  would be  retained.   She                                                               
noted  that statutes  in AS  42.05  that generally  apply to  the                                                               
functions   of   the  commission   and   are   not  specific   to                                                               
telecommunications will still apply.                                                                                            
                                                                                                                                
3:47:14 PM                                                                                                                    
                                                                                                                                
REPRSENTATIVE HANNAN questioned the  kind of situation that would                                                               
incline the federal FCC to allow a discontinuation of service.                                                                  
                                                                                                                                
3:47:28 PM                                                                                                                    
                                                                                                                                
MS.  O'  CONNOR  stated  that the  most  recent  application  for                                                               
discontinuation of service was an  area in Healy Lake where there                                                               
were  two  residents  left.    She  explained  that  the  telecom                                                               
equipment  was being  run on  backup generations  due to  lack of                                                               
commercial power.  She noted  that the RCA denied the application                                                               
and allowed the service to continue.   She restated that in order                                                               
to discontinue service it must  be in the public's best interest,                                                               
which is a high bar to meet.                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL asked  for an  example of  the distorted  fee that                                                               
will be fixed under SB 83.                                                                                                      
                                                                                                                                
MS. O'CONNOR explained that the  regulatory cost charge is set up                                                               
in statute and funds the commission.   Any exempt utility, like a                                                               
cooperative,  does not  assess that  charge on  consumers' bills;                                                               
however privately-owned companies  do not have that  option.  The                                                               
amount  being  assessed  is  a percentage  from  adding  all  the                                                               
activity related  to telecommunications  at the commission.   She                                                               
pointed  out  that  by  statute,  only  have  of  the  companies'                                                               
consumers are funding the RCA's  telecommunications activity.  SB                                                               
83 would  level the playing  field by assessing that  charge over                                                               
all telecommunications providers.                                                                                               
                                                                                                                                
3:50:01 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL  asked  why   cooperative  companies  that  aren't                                                               
regulated by the RCA would still  have to pay the regulatory cost                                                               
charge to the commission.                                                                                                       
                                                                                                                                
MS.  O'CONNER offered  her belief  that all  cooperatives support                                                               
this  change.    She  pointed out  that  all  telecom  companies,                                                               
including  cooperatives,  generate  activity  at the  RCA.    The                                                               
statute allowed  cooperatives to  economically deregulate  and it                                                               
was  originally  adopted, the  belief  was  that they  would  not                                                               
generate  activity  at the  RCA.    Since  that time,  she  said,                                                               
federal  funding programs  have  delegated oversite  to the  RCA,                                                               
which every  company participates in.   Dockets such as  the AUSF                                                               
docket, which  is reopening  in 2021,  will affect  every company                                                               
even though only half of them are funding that activity.                                                                        
                                                                                                                                
CO-CHAIR WOOL questioned whether this  change will result in more                                                               
money  for the  RCA  or  lower rates  for  customers because  the                                                               
charge would be spread over all providers.                                                                                      
MS. O'  CONNOR shared  her understanding  that the  charge should                                                               
decrease;  however,  it varies  depending  on  how much  activity                                                               
there  is.   Nonetheless,  she said,  it is  still  a very  small                                                               
charge.                                                                                                                         
                                                                                                                                
3:53:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  pointed out  that  most  entities don't  accept                                                               
increased charges based on fairness.   She asked to hear from the                                                               
cooperative (co-op)  telecom companies to explain  their rational                                                               
and what they would be getting out of SB 83.                                                                                    
                                                                                                                                
MS.  O' CONNOR  opined  that  the alternative  to  paying into  a                                                               
predictable  sustainable  regulatory  cost  charge  is  that  the                                                               
commission also  has the authority  to assess on a  per-use basis                                                               
and  figure  out  the  cost.   Last  year,  when  this  piece  of                                                               
legislation  was  introduced  in   the  senate  the  statute  was                                                               
unchanged, leaving the  RCA with the authority to  bill for their                                                               
time used  and their  cost.   She noted  that they  realized it's                                                               
hard  to have  a  predictable revenue  stream  when assessing  on                                                               
whatever may arise.   She said that was the  incentive to sustain                                                               
the RCC across everyone to  insure predictability to both the ATA                                                               
and the RCA.                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  offered his  belief that  under SB  83 the                                                               
industry will  profit from deregulation.   He suggested  having a                                                               
concomitant   reduction   in    subsidies   from   consumers   to                                                               
conceptually match that.  He  asked how much additional money the                                                               
industry anticipates  making from  consumers as  a result  of the                                                               
elimination of economic regulation.                                                                                             
                                                                                                                                
MS.  O' CONNOR  said  this bill  is not  about  pulling in  extra                                                               
revenue.  On  the contrary it's about  efficiency and eliminating                                                               
what a commissioner  has called "a blizzard of paper  that is not                                                               
being used  for any value."   She noted  the federal rate  cap on                                                               
local rates, adding that it could  conceivably go up to a maximum                                                               
of 15 dollars.   She stated that they are  putting resources into                                                               
building broadband networks in attempt  to gain efficiency, while                                                               
continuing to serve their landline customers.                                                                                   
                                                                                                                                
3:57:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS asked if that is 15 dollars per month.                                                                    
                                                                                                                                
MS.  O'  CONNOR  answered  yes.    She  explained  that  the  RCA                                                               
acknowledged  that  new  section 381-L,  which  requires  uniform                                                               
rates,  terms,  and conditions  across  service  areas for  every                                                               
company, is pivotal.  By placing  that in statute, she said, that                                                               
gives extra  assurance that more  high-cost rural areas  won't be                                                               
disadvantaged.                                                                                                                  
                                                                                                                                
CO-CHAIR LEDOUX  questioned whether the RCA  regulates cell phone                                                               
service.                                                                                                                        
                                                                                                                                
MS. O'CONNOR affirmed that.                                                                                                     
                                                                                                                                
CO-CHAIR LEDOUX questioned the point of regulating landlines.                                                                   
                                                                                                                                
3:59:03 PM                                                                                                                    
                                                                                                                                
MS. O'  CONNOR countered  that by  point out  that 48  percent of                                                               
Alaskans have  landlines, adding  that they  are resilient  in an                                                               
emergency and an important service  that the ATA will continue to                                                               
provide.                                                                                                                        
                                                                                                                                
3:59:4 PM                                                                                                                     
                                                                                                                                
MS. O'  CONNOR returned attention  to slide  7.  She  shared that                                                               
there are  protections against dramatic increases  in local rates                                                               
and that federal  rules limit local [landline] rates.   She noted                                                               
that  SB 83  also  adds a  new  layer of  protection  in the  new                                                               
subsection  AS  42.05.38(l),  which requires  rates,  terms,  and                                                               
conditions  of service  to  be the  same  across defined  service                                                               
areas. Thus, making  it statewide for large  providers, like GCI.                                                               
It  would  also  extend  the  benefits  of  lower  rates  through                                                               
competition  in urban  areas and  ensure that  those lower  rates                                                               
continue in the more remote areas.                                                                                              
                                                                                                                                
4:00:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  pointed out that most  brick-and-mortar businesses                                                               
use landlines.   He  asked if this  change would  affect business                                                               
equally the same as residential.                                                                                                
                                                                                                                                
MS. O'  CONNOR acknowledged that  all landline services  would be                                                               
affected equally.                                                                                                               
                                                                                                                                
CO-CHAIR  WOOL sought  clarification  on whether  the ability  to                                                               
change rates would no longer go through the RCA.                                                                                
                                                                                                                                
MS. O'  CONNOR noted  that 90 percent  of Alaskans  are currently                                                               
served by a  company that can change its  rates without approval.                                                               
She explained  the process as  an "informational filing"  made to                                                               
the regulatory commission, which is approved automatically.                                                                     
                                                                                                                                
4:02:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   FIELDS  inquired   as  to   the  "no   municipal                                                               
regulation" section of the bill.                                                                                                
                                                                                                                                
MS. O'  CONNOR stated that the  RCA regulates telecommunications;                                                               
therefore, while  structuring the bill  they didn't want  to open                                                               
the door to asking for regulatory relief from a municipality.                                                                   
                                                                                                                                
4:03:39 PM                                                                                                                    
                                                                                                                                
MS. O' CONNOR  continued with her presentation.   She stated that                                                               
rate  regulation  and the  filing  process  with the  commissions                                                               
authority depends on who you  are.  Under existing regulation and                                                               
statutory  timelines,  tariff  authority,  review,  and  approval                                                               
process vary.   A filing could be an  informational filing, where                                                               
the  company notifies  the  commission that  a  landline rate  or                                                               
service  has changed,  and the  commission must  then review  and                                                               
then automatically  accept it.   In some cases, the  filing could                                                               
be more traditional,  which requires the company  to provide more                                                               
detail and the  statutory timeline is 45 days.   It could even be                                                               
a change  that requires an  extended, in-depth  monopoly utility-                                                               
type review with a timeline as long as 420 days (slide 8).                                                                      
                                                                                                                                
4:04:32 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  asked where  the  telecom  companies can  raise                                                               
rates without permission and where they cannot.                                                                                 
                                                                                                                                
MS. O' CONNOR replied that they  must do the extended filings and                                                               
get  permission  in  the  most remote  areas  where  there  isn't                                                               
another provider.  She said that  lead them to the new section AS                                                               
381(l),  asking what  is  the  protection for  those  areas if  a                                                               
company  can just  change  its rates,  so  guaranteeing that  the                                                               
rates, terns,  and conditions will  be uniform across  remote and                                                               
across the large service areas  protects those areas and provides                                                               
relief.                                                                                                                         
                                                                                                                                
CO-CHAIR LEDOUX  questioned whether  people in the  large service                                                               
areas will see an increase in their rates.                                                                                      
                                                                                                                                
MS.  O'CONNOR  stated  that  she  did not  expect  that,  as  the                                                               
companies have  been able  to change their  rates for  years now.                                                               
Some rates have been adjusted  while others haven't changed in 20                                                               
years.                                                                                                                          
                                                                                                                                
4:06:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  inquired as  to the reason  for requesting                                                               
deregulation if there is no anticipation of raising rates.                                                                      
                                                                                                                                
MS. O'  CONNOR stated that the  impetus for SB 83  is efficiency,                                                               
adding that  there was an average  of 80 filings per  year at the                                                               
commission of  various informational  rate filings.   She pointed                                                               
out  that each  filing  takes  a lot  of  resources  and is  time                                                               
consuming for both the ATA and the commission.                                                                                  
                                                                                                                                
4:09:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  WOOL  questioned  whether   any  of  the  informational                                                               
filings would be necessary under SB 83.                                                                                         
                                                                                                                                
MS. O' CONNOR said they would all be eliminated.                                                                                
                                                                                                                                
4:09:34 PM                                                                                                                    
                                                                                                                                
MS. O'  CONNOR returned attention to  slide 9.  She  related that                                                               
Alaska Communications  is one of Alaska's  largest companies that                                                               
expend  significant resources  managing  five tariffs.   This  is                                                               
thousands of  detailed tariff pages  that are  incredibly complex                                                               
and  full of  telecommunication  industry  jargon that  consumers                                                               
don't look at.  Rate  regulation consumes resources from both the                                                               
company  and  regulators that  could  be  better spent  on  other                                                               
matters.    SB  83  allows  the RCA  to  designate  providers  as                                                               
Eligible  Telecommunications Carriers  (ETCs).   ETC  designation                                                               
qualifies  a   telecommunications  provider  to   participate  in                                                               
federal Universal Service Fund programs,  which is then monitored                                                               
by  the RCA.   The  Federal Communications  Commission (FCC)  has                                                               
delegated this  authority to  the RCA  and SB  83 would  put this                                                               
authority  in statute  making their  oversite  of those  programs                                                               
explicit (slide 10).   COLR regulations were  implemented in 2010                                                               
with the intention  of ensuring that landline  service remains in                                                               
an area  by offering explicit  financial support to  one provider                                                               
in  the service  area.   That  explicit funding  for COLR  duties                                                               
ended January  1, 2019.   Now, the  COLR regulations remain  as a                                                               
duplicate  layer  of regulation,  which  SB  83 would  eliminate.                                                               
However,  longstanding  state   and  federal  protections  remain                                                               
making  COLA  redundant.    Before   the  COLA  regulations  were                                                               
adopted,  the RCA  relied on  the  powers of  the Certificate  of                                                               
Public Convenience  and Necessity  (CPNC) defined in  statute and                                                               
demonstrated  the effectiveness  of that  authority in  requiring                                                               
companies  to  serve  certain  locations.     This  authority  is                                                               
unchanged   by    SB   83.       Oversight   of    the   Eligible                                                               
Telecommunications Carrier  designation remains  and is  added to                                                               
statute, and federal obligations  still require permission before                                                               
discontinuing service (slide 11).                                                                                               
                                                                                                                                
4:12:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  inquired as  to the difference  between an                                                               
RCA-based regulatory process for COLR versus a federal process.                                                                 
                                                                                                                                
MS.  SKIPPER  offered her  understanding  that  the two  work  in                                                               
tandem.                                                                                                                         
                                                                                                                                
MS. O'  CONNOR, in response  to Representative Fields,  said that                                                               
they are different  with the two different  entities, adding that                                                               
both  have a  public process.    She said  she did  not know  the                                                               
details  of  each process  and  offered  to  follow up  with  the                                                               
requested information.                                                                                                          
                                                                                                                                
CO-CHAIR WOOL sought clarification  on the reason for eliminating                                                               
the duplicate layer of COLR regulation.                                                                                         
                                                                                                                                
4:13:57 PM                                                                                                                    
                                                                                                                                
MS.  O' CONNOR  said the  COLR  regulations are  not in  statute,                                                               
whereas the  CPNC and  all of  the processes  and powers  that go                                                               
with it are.   The COLR regulations enacted in  2010 were tied to                                                               
explicit funding,  making a  duplicate set  of regulations.   The                                                               
funding has since been eliminated.   The concept is to remove the                                                               
potential confusion and uncertainty of  having an "orphan" set of                                                               
regulations and  leave the longstanding  statute that  has always                                                               
been operated under requiring service to continue.                                                                              
                                                                                                                                
4:14:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  asked if  the funding that  ended on  January 1,                                                               
2019 was state funding.                                                                                                         
                                                                                                                                
MS. O' CONNOR  stated that it was a part  of the Alaska Universal                                                               
Service Fund, which was reformed over the last two years.                                                                       
                                                                                                                                
4:15:51 PM                                                                                                                    
                                                                                                                                
MS. O' CONNOR  returned to the presentation.  She  stated that SB                                                               
83  removes   COLR  designation   in  regulation;   however,  the                                                               
requirement to provide  landline service remains in  statute.  SB                                                               
83  also maintains  strong consumer  protections: the  CPNC, ETC,                                                               
new  AS  42.05.381(l)  rate protection,  Regulatory  Affairs  and                                                               
Public  Advocacy  (RAPA),  Attorney General  Consumer  Protection                                                               
Unit, and  the FCC Consumer Complaint  Center (slide 13).   SB 83                                                               
also benefits consumers by mandating  rates in remote areas match                                                               
rates  in  larger  areas;  allowing  companies  to  respond  more                                                               
quickly to  consumer preferences; focusing resources  on consumer                                                               
services;  and correcting  existing distorted  assessment of  the                                                               
regulatory cost charge (slide 14).   In summary, SB 83 peels away                                                               
obsolete  statutes   related  to  landline  service   and  allows                                                               
companies and  regulators to operate  more efficiently.   It will                                                               
allow  companies to  focus on  better service  for Alaskans.   In                                                               
February 2019  the RCA  voted to  support SB 83  as the  means of                                                               
modernizing Alaska's telecommunications statutes (slide 15).                                                                    
                                                                                                                                
4:19:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS asked  how SB 83 compares  to other states'                                                               
deregulation proposals.   He expressed interest  in hearing about                                                               
what happened  after deregulation from  the equivalent of  RCA in                                                               
other states.                                                                                                                   
                                                                                                                                
MS. O'CONNOR said she would provide the requested information.                                                                  
                                                                                                                                
REPRESENTATIVE  FIELDS referenced  the staff  memo and  asked why                                                               
the staff recommended continued COLR protections.                                                                               
                                                                                                                                
4:20:59 PM                                                                                                                    
                                                                                                                                
DAVID PARRISH,  Common Carrier Specialist,  Regulatory Commission                                                               
of Alaska, disclosed that he  is the author of the aforementioned                                                               
staff  memo.    He  explained   that  with  COLR,  generally  the                                                               
protection  exists in  markets that  have recently  been declared                                                               
competitive where one carrier generally  owns the majority of the                                                               
facilities that  are used to  provide service  in the area.   The                                                               
concept  was  not to  let  competition  erode the  incentive  for                                                               
carriers to  keep their networks up  to date and in  good working                                                               
order; there  was a  subsidy that went  along with  another added                                                               
layer   of   regulations.     While   there   was   an   explicit                                                               
discontinuation  of COLR  support, there  is frozen  COLR support                                                               
that does get  folded into the essential network  support that is                                                               
continuing.   He  expressed concern  that there  is a  disconnect                                                               
between what the continued subsidy is  and what is proposed in SB                                                               
83 with regard to the  obligations that currently designated COLR                                                               
would have  going forward.   He  added that  COLR does  give some                                                               
certainty in situations where the  commission must choose between                                                               
two  carriers that  both  no  longer want  to  serve.   Having  a                                                               
designated COLR  adds efficiency, which  was the intent  when the                                                               
commission adopted it years ago.                                                                                                
                                                                                                                                
4:24:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS questioned whether  there is enough insight                                                               
into finances  and costs of  these programs to estimate  how much                                                               
money companies might save  through this deregulation; therefore,                                                               
how much subsidies might be reduced to save consumers money.                                                                    
                                                                                                                                
MR.  PARRISH  replied  that there's  multiple  services  that  go                                                               
across these networks  - some are regulated some are  not.  There                                                               
is very little in terms of  cost specifics and revenue that these                                                               
networks generate.   He  related that  carriers have  noted their                                                               
use of subsidies to build out  broadband networks.  He noted that                                                               
it's  a supplement  to the  federal support  they are  receiving,                                                               
which is exclusively targeted towards broadband networks.                                                                       
                                                                                                                                
4:26:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS asked  if the companies must  report to the                                                               
RCA  to  demonstrate  that  they  are  using  the  subsidies  for                                                               
investments   that   are  for   public   benefit   in  terms   of                                                               
infrastructure.                                                                                                                 
                                                                                                                                
STEPHEN MCALPINE, Commissioner,  Regulatory Commission of Alaska,                                                               
replied that the  investigation over the subsidies  of the Alaska                                                               
Universal Service  Fund came about  as a result of  the companies                                                               
being unable  to account for how  these funds were expended.   He                                                               
added  that  there's no  specificity  in  the amount  of  subsidy                                                               
that's awarded  to a utility  and how they  spend the money.   He                                                               
acknowledged that  there's expenditures being made  for broadband                                                               
that  can't be  sourced.   He said  they don't  know for  certain                                                               
whether  they are  AUSF funds  but  if they  comingled all  their                                                               
funds and built  broadband then some of those  funds probably are                                                               
being used for that purpose.                                                                                                    
                                                                                                                                
4:27:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS noted  that if  deregulation occurs  there                                                               
should be additional  transparency over where the  money is going                                                               
if  it  potentially  guarantees that  the  additional  money  the                                                               
companies save go back into publicly benefitting infrastructure.                                                                
                                                                                                                                
MR.  MCALPINE said  that  point has  been made  many  times.   He                                                               
acknowledged that  if the RCA  is going  to approve the  award of                                                               
the subsidies they should at least  know where the money is being                                                               
spent.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  FIELDS  requested  that  Mr.  McAlpine  send  the                                                               
appropriate  language   to  require   that  transparency   in  an                                                               
amendment.                                                                                                                      
                                                                                                                                
MR. MCALPINE agreed to provide the requested information.                                                                       
                                                                                                                                
REPRESENTATIVE FIELDS  sought explanation  from Mr. Parrish  on a                                                               
section  of  the  staff memo,  "other  statutory  exemptions  for                                                               
telecommunications carriers proposed by ATA are problematic."                                                                   
                                                                                                                                
MR. PARRISH  explained that the  way SB 83 is  structured exempts                                                               
everything except what's retained,  adding these are all statutes                                                               
that would be exempted.                                                                                                         
                                                                                                                                
4:32:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  asked how  often  the  commission arbitrates  a                                                               
complaint  that  comes  out  in  favor  of  the  utility  or  the                                                               
consumer.                                                                                                                       
                                                                                                                                
4:32:44 PM                                                                                                                    
                                                                                                                                
MR. MCALPINE replied that there  had been a misunderstanding that                                                               
stemmed  from GCI  putting multiple  services on  a single  bill.                                                               
Instead  of  receiving  multiple   services  on  multiple  bills,                                                               
consumers  received all  their services  on  a single  bill.   He                                                               
noted that the  reduced level of complaints is  evidence that the                                                               
miscommunication "worked out."                                                                                                  
                                                                                                                                
4:34:17 PM                                                                                                                    
                                                                                                                                
MR. PARRISH  added that their  consumer protection acts as  a "go                                                               
between,"  it can  facilitate a  resolution without  any kind  of                                                               
formal or informal complaint.   Consumers can call with a problem                                                               
or issue and the commission acts as a liaison.                                                                                  
                                                                                                                                
4:35:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  asked they negotiate complaints  under the RCA's                                                               
authority.                                                                                                                      
                                                                                                                                
MR. MCALPINE  explained that  there is a  statutory process.   He                                                               
established  a scenario  in  which a  consumer  from a  regulated                                                               
utility calls  with a problem.   The  first step is  sending them                                                               
back  to the  utility to  resolve it  one on  one.   If it's  not                                                               
resolved  they can  return with  an informal  complaint that  the                                                               
consumer affairs  department will mediate.   He noted one  of the                                                               
problems that  results in outages  is costly equipment  repair in                                                               
rural areas.   He referenced an  outage that lasted over  40 days                                                               
in Kodiak,  adding that  the utility did  not follow  statute and                                                               
notify the commission  when the outage occurred.   He stated that                                                               
the statutory provision that allows the  RCA to fine a utility is                                                               
100 per day,  which is not significant.  He  opined that the cost                                                               
of  enforcement   exceeds  any  penalty  that   can  be  leveled.                                                               
Consequently,  he said,  problems  are ignored  knowing that  the                                                               
statute won't be  enforced and even if it is  the fine is cheaper                                                               
than  dealing with  the actual  problem.   He offered  his belief                                                               
that  the commission  has  always worked  well  to resolve  these                                                               
matters.                                                                                                                        
                                                                                                                                
4:39:06 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX asked if customer  complaints wouldn't be handled                                                               
by the RCA if SB 83 were to pass.                                                                                               
                                                                                                                                
MR. PARRISH offered his understanding  that the commission's role                                                               
would  continue,  adding  that  it   might  be  hampered  by  the                                                               
elimination of  tariffs.  He  stated that rates or  conditions of                                                               
service are  the first things  that consumer protection  goes to.                                                               
They look to the tariff to  see whether the carrier or utility is                                                               
operating within the bounds of the tariff.                                                                                      
                                                                                                                                
CO-CHAIR LEDOUX asked who goes to the tariff.                                                                                   
                                                                                                                                
MR.  PARRISH  clarified  that  the  consumer  protection  section                                                               
within the  commission relies on  the tariff language  to resolve                                                               
disputes  over regulated  service,  adding that  this bill  would                                                               
eliminate tariffs.   He pointed  out that there are  tariffs that                                                               
will still  be required  on the federal  level, regardless  of if                                                               
there were no longer state tariffs for intrastate service.                                                                      
                                                                                                                                
4:41:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL asked  why Mr. McAlpine voted against SB  83 and if                                                               
the bill has been changed since.                                                                                                
                                                                                                                                
4:43:08 PM                                                                                                                    
                                                                                                                                
MR.  ACALPINE explained  that  his concern  has  always been  the                                                               
elimination of the designation of  COLR, which could impact rural                                                               
Alaska.                                                                                                                         
                                                                                                                                
4:45:43 PM                                                                                                                    
                                                                                                                                
MR.  PARRISH  opined  that  the bill  isn't  necessarily  in  the                                                               
public's best interest.  He added  that is has improved since the                                                               
addition of  section 381  (l) and (n),  which provide  some state                                                               
level  protection against  rate escalation,  noting that  it only                                                               
protects  basic residential  local  telephone service.   He  said                                                               
that if you  look at a carrier's tariff there  are a multitude of                                                               
business commercial  services that  would not be  protected under                                                               
that provision.                                                                                                                 
                                                                                                                                
CO-CHAIR WOOL  sought clarification  the business  protection and                                                               
whether this is a deregulation bill.                                                                                            
                                                                                                                                
MR. PARRISH  replied that in  order to receive  federal universal                                                               
service support,  basic residential  rates must  be kept  below a                                                               
maximum that  gets adjusted based  on a nation-wide average.   He                                                               
reiterated that  the new  provision in SB  83 would  only protect                                                               
basic  residential  local  telephone service,  while  the  others                                                               
would not have  rate protections.  He added  that deregulation is                                                               
a bit of  a semantics game and it's not  full deregulation by any                                                               
stretch.                                                                                                                        
                                                                                                                                
4:49:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced that SB 83 was held over.                                                                             
                                                                                                                                
        SB 16-ALCOHOL LIC:FAIRS,THEATRES,CONCERTS;BONDS                                                                     
                                                                                                                                
4:50:32 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced that the  final order of business would                                                               
be  SENATE BILL  NO. 16,  "An Act  relating to  certain alcoholic                                                               
beverage  licenses   and  permits;  and  relating   to  the  bond                                                               
requirement for certain alcoholic beverage license holders."                                                                    
                                                                                                                                
4:51:13 PM                                                                                                                    
                                                                                                                                
EDRA  MORLEDGE,  Staff,  Senator  Peter  Micciche,  Alaska  State                                                               
Legislature,  presented  SB 16  on  behalf  of Senator  Micciche,                                                               
prime sponsor.   She paraphrased  parts of the  sponsor statement                                                               
[included in  the committee packet],  which read in  its entirety                                                               
as follow [ original punctuation provided]:                                                                                     
                                                                                                                                
     In 2017,  the Alaska  Alcoholic Beverage  Control (ABC)                                                                    
     Board began  to "crack  down" on alcohol  licenses that                                                                    
     they  deemed  to  not  be  intended  under  state  law,                                                                    
     placing  at risk  several long-time  licenses important                                                                    
     to  the  Alaska  public.  One of  those  license  types                                                                    
     issued  under the  recreational  site  category is  the                                                                    
     license  held  by the  Alaska  State  Fair. The  Alaska                                                                    
     State  Fair and  other businesses  have been  operating                                                                    
     under  the recreational  site license  since 1981,  and                                                                    
     the loss  of the ability  to serve at the  annual event                                                                    
     would  be financially  devastating to  the State  Fair.                                                                    
     Through the legislative  process, we identified several                                                                    
     other  licenses   that  we   believe  should   be  held                                                                    
     harmless,  and   thus  included  them  in   the  latest                                                                    
     committee substitute.                                                                                                      
                                                                                                                                
     The  two new  license types  and two  new permit  types                                                                    
     would be added  in to AS 04.11  to specifically include                                                                    
     a performing  arts theater license,  a fair  license, a                                                                    
     concert permit and a music  festival permit. SB 16 also                                                                    
     clarifies that  skiing and snowboarding  activities are                                                                    
     allowable under a recreational  site license, which has                                                                    
     been   historically   permissible   until   2018.   The                                                                    
     legislation also  expands the number of  special events                                                                    
     at  a fraternal  organization, grandfathers  in certain                                                                    
     operators  as of  December 31,  2018,  and provides  an                                                                    
     incentive for  operators that file and  pay their taxes                                                                    
     in a timely manner.                                                                                                        
                                                                                                                                
     Although  there   remains  an  effort  to   update  the                                                                    
     remainder of  Alaska's Title  4 alcohol  statutes, this                                                                    
     specific  bill is  designed to  protect the  ability of                                                                    
     our beloved  Alaska State Fair and  other traditionally                                                                    
     licensed  entities to  operate  as they  have for  many                                                                    
     years.                                                                                                                     
                                                                                                                                
     We believe  that the  public will  be better  served by                                                                    
     specifically clarifying  Title 4  under Senate  Bill 16                                                                    
     to provide  the ability  for the  ABC Board  to license                                                                    
     and    manage   these    specific   applications.    We                                                                    
      respectfully ask for Legislative and public support                                                                       
     for passage of the bill.                                                                                                   
                                                                                                                                
CO-CHAIR LEDOUX questioned  whether the "save the  fair" bill has                                                               
morphed into a mini omnibus bill.                                                                                               
                                                                                                                                
MS. MORLEDGE  answered yes,  adding that  the business  that were                                                               
included would have lost their license this year.                                                                               
                                                                                                                                
CO-CHAIR LEDOUX suggested that could  be remedied by the addition                                                               
of the grandfather clause.                                                                                                      
                                                                                                                                
MS. MORLEDGE  acknowledged that they could  have grandfathered in                                                               
business  that had  valid license  at the  end of  December 2018.                                                               
She noted  that it was  appropriate to separate the  state fair's                                                               
license  to make  it specific  to that  business model  and their                                                               
operation.                                                                                                                      
                                                                                                                                
4:56:29 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL sought clarification  on the grandfather section of                                                               
the bill.  He  asked if it would last for  two years while fixing                                                               
the problem.                                                                                                                    
                                                                                                                                
MS. MORLEDGE answered yes.  She  said they were trying to provide                                                               
several different license types that  would be in perpetuity, and                                                               
for the  ones that didn't fit  into neat categories would  get an                                                               
additional two years.                                                                                                           
                                                                                                                                
CO-CHAIR WOOL  asked if the  Palmer Fair  was the only  fair with                                                               
this problem.                                                                                                                   
                                                                                                                                
MS. MORLEDGE said  they were the only ones singled  out with that                                                               
business model, adding that the  other fairs were operating under                                                               
caterers' licenses.   She said  there was no  way for them  to be                                                               
offered a  license that  would follow  the interpretation  of the                                                               
statute.                                                                                                                        
                                                                                                                                
5:00:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR WOOL  asked why  the State Fair  can't operate  like the                                                               
others.                                                                                                                         
                                                                                                                                
MS.  MORLEDGE  replied  that  the  AAMCO  office  was  no  longer                                                               
comfortable  issuing Alaska  State Fair's  license with  multiple                                                               
sites  on  their fair  grounds  under  one recreational  site  or                                                               
caterers' license.                                                                                                              
                                                                                                                                
5:02:17 PM                                                                                                                    
                                                                                                                                
MS. MORLEDGE in a follow-up  question from Representative Stutes,                                                               
acknowledged that these  licenses are renewals not  new ones with                                                               
one  caveat.     She  said  that  the  addition   of  skiing  and                                                               
snowboarding activities to the  recreational site license because                                                               
it was  recommended by the  steering committee and  stake holders                                                               
to not  create a new  license specifically for that  activity but                                                               
to put it with the rest of the sporting activities.                                                                             
                                                                                                                                
5:02:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX questioned whether 24,  25, and 26 were brand new                                                               
licenses.                                                                                                                       
                                                                                                                                
5:03:24 PM                                                                                                                    
                                                                                                                                
MS. MORLEDGE  explained that the  new one  is line 26,  the music                                                               
festival,  while the  other two  were already  in regulation  and                                                               
being moved into statute.                                                                                                       
                                                                                                                                
REPRESENTATIVE STUTES asked if there  had been any music festival                                                               
permits issued in the past.                                                                                                     
                                                                                                                                
MS.  MORLEDGE answered  no.    She said  they  were issued  under                                                               
catering permits or bending the rules.                                                                                          
                                                                                                                                
5:04:27 PM                                                                                                                    
                                                                                                                                
CHAIR LEDOUX announced that SB 16 was held over.                                                                                
                                                                                                                                
5:04:46 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
[5:04] p.m.                                                                                                                     

Document Name Date/Time Subjects
SB 83.Sponsor.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Bill Version M.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Sectional.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Fiscal DCCED.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support TelAlaska.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support APT.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support Alaska Telecommunications.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support ASTAC.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support ATA.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support ATT.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support CVTC.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support MTA.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support GCI.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support OTZ.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support Presentation for HLC.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support Rural Coalition.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83 Letter of Support ACS.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support ACS.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support Myth vs Fact.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Support RCA.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 83.Backup Opposition David Parrish.pdf HL&C 5/1/2019 3:15:00 PM
SB 83
SB 16.Sponsor.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Bill Version G.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Sectional.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Summary of Changes to Version G.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Fiscal REV.PDF HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Fiscal DCCED AMCO.PDF HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Leg Audit 2014.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Leg Audit.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Letter from CHARR.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support ADN Article.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support ADN Article2.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support ADN Article3.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support Alaska Club.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support AP Article.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support ATA.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support CER STAR.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support CER STAR2.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support Eaglecrest.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support Frontiersman Article.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support Gilmore.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support Herrington.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support KINY Article.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support KTOO.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Letter ATA2.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support KTOO2.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support KTUU.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support KTVA Article.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support PAC.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support Price.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Support State Fair.pdf HL&C 5/1/2019 3:15:00 PM
SB 16
SB 16.Backup Supporting Doc AMCO.pdf HL&C 5/1/2019 3:15:00 PM
SB 16