Legislature(2023 - 2024)BELTZ 105 (TSBldg)
02/16/2023 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
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| Presentation(s): Overview of the Alaska Office of Broadband | |
| Adjourn |
* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 16, 2023
1:31 p.m.
MEMBERS PRESENT
Senator Forrest Dunbar, Chair
Senator Elvi Gray-Jackson
Senator Jesse Bjorkman
Senator Cathy Giessel
MEMBERS ABSENT
Senator Donald Olson, Vice Chair
COMMITTEE CALENDAR
PRESENTATION(S): OVERVIEW OF THE ALASKA OFFICE OF BROADBAND
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
THOMAS LOCHNER, Director
Alaska Broadband Office
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Gave an Alaska Broadband Office update.
ACTION NARRATIVE
1:31:11 PM 08
CHAIR FORREST DUNBAR called the Senate Community and Regional
Affairs Standing Committee meeting to order at 1:31 p.m. Present
at the call to order were Senators Giessel, Gray-Jackson, and
Chair Dunbar. Senator Bjorkman arrived immediately thereafter.
^PRESENTATION(S): Overview of the Alaska Office of Broadband
PRESENTATION(S): Overview of the Alaska Office of Broadband
1:31:41 PM
CHAIR DUNBAR announced an overview by the Alaska Broadband
Office. He invited Mr. Lochner to put himself on the record and
begin the overview.
1:32:06 PM
THOMAS LOCHNER, Director, Alaska Broadband Office, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, gave an Alaska Broadband Office update. He offered a
brief history of his professional background, stating he has
experience building broadband in urban and rural areas. House
Bill 363, sponsored by Representative Edgmon in 2022,
established a broadband office. The Infrastructure Investment
and Jobs Act (IIJA) requires a broadband office in every state.
MR. LOCHNER advanced to slide 2, Alaska Broadband Office -
Organization Chart. The chart shows the configuration of the
Alaska Broadband Office. The office consists of a Director; a
tribal liaison, Melissa Kookesh; an administrative specialist; a
senior project manager, Lisa Von Bargen; and a connectivity
manager. The office also has the support and expertise of two
grant administrators.
1:32:32 PM
SENATOR BJORKMAN joined the meeting.
1:34:21 PM
SENATOR GRAY-JACKSON asked when the Alaska Broadband Office
added a tribal liaison position.
MR. LOCHNER answered it was added last during the Alaska
Federation of Natives (AFN) Convention. He expressed his belief
that it was in mid-October.
SENATOR GRAY-JACKSON asked if the tribal liaison position was
permanent.
MR. LOCHNER answered yes, it is.
1:34:57 PM
MR. LOCHNER advanced to slide 3, Broadband Advisory Board. The
board consists of members from across the state who have wide-
ranging expertise. Slide 3 listed the name, appointment, and
expiration dates of each advisory member:
Broadband Advisory Board
Name Appointed Expires
in 2023 in 2026
Alaska Native Corporation:
Anastasia Hoffman (Bethel) 1/23 01/23
Broadband Consumer:
Kathleen Moran (Anchorage) 01/23 01/23
Broadband Industry:
Christine O'Connor (Wasilla) 01/23 01/23
Business Community:
Tara Sweeney (Girdwood) 01/23 01/23
DCCED or Designee:
Thomas Lochner (Anchorage) 01/23 01/23
Commissioner of Education &
Early Development or Designee:
Laurel Shoop (Juneau) 01/23
Health Care Community:
Archibald Ferguson (Anchorage) 01/23 01/23
Local Government Representative:
Glenda Ledford (Wasilla) 01/23 01/23
Representative for Rural Energy Systems:
Travis Million (Copper Center) 01/23 01/23
School District:
Steve Noonkesser (Dillingham) 01/23 01/23
Technology Neutral Consultant:
Charles Carpenter (Anchorage) 01/23 01/23
Tribal Government:
Charlene Stern (Fairbanks) 01/23 01/23
University of Alaska:
Michael Brase (Fairbanks) 01/23 01/23
Ex Officio/House Speaker Appointee/nonvoting: Vacant
Ex Officio/Senate President Appointee/nonvoting: Vacant
1:35:31 PM
SENATOR GIESSEL asked if this was a short-term board.
MR. LOCHNER answered it is a three-year term for all advisory
board members.
SENATOR GIESSEL sought confirmation that the advisory board will
expire in three years, emphasizing that ongoing boards are not
set up this way.
MR. LOCHNER asked for indulgence, stating it would become more
apparent when he presented the timeline [slide 8].
1:36:19 PM
SENATOR GRAY-JACKSON questioned the board's makeup, wondering if
there were plans to incorporate more rural communities.
MR. LOCHNER answered the applicants and the selection of
appointees went through the governor's office. He clarified that
he had no input into the process. The Boards and Commissions
Office in the Office of the Governor oversees the process.
SENATOR GRAY-JACKSON sought confirmation that members of the
Broadband Advisory Board went through the process that
applicants who want to serve on a board or commission typically
go through.
MR. LOCHNER replied that he is unaware of the details and that
the Boards and Commissions Office did not inform him of anything
unusual.
1:37:13 PM
MR. LOCHNER advanced to slide 4, Infrastructure Investment and
Jobs Act. He explained that Alaska would receive $65 billion for
broadband through IIJA. The National Telecommunications and
Information Administration will distribute the following two
tranches:
NATIONAL TELECOMMUNICATIONS AND INFORMATION
ADMINISTRATION (NTIA) PROGRAMS
Digital Equity (DE): Broadband Equity, Access and
$640,000,000 Deployment (BEAD):
$42,000,000,000
MR. LOCHNER said that NTIA would distribute the DE and BEAD
program funds among states nationwide, and Alaska would receive
a portion. He explained the difference between the DE and BEAD
programs. He described BEAD as the "infrastructure build to" and
DE as making broadband meaningful so people can participate in
the digital economy and the world after the infrastructure has
been installed.
1:38:33 PM
MR. LOCHNER discussed the administrative costs on slide 5. The
National Telecommunications and Information Administration
Program awarded the following administrative funds:
Infrastructure Investment and Jobs Act - So Far
NTIA PLANNING GRANT AWARDS TO Alaska
DE Planning Grant: BEAD Planning Grant:
$567,800 $5,000,000
Develop the DE Plan Develop the BEAD Program
due September 30, 2023
1:39:07 PM
CHAIR DUNBAR asked if either of these grants fund the Alaska
Broadband Office or any staff in the office.
MR. LOCHNER replied that he expects the BEAD planning grant to
fund the Alaska Broadband Office.
1:39:37 PM
MR. LOCHNER advanced to slide 6. He explained that the Digital
Equity Program covers eight specific populations listed under
"Covered Populations." He reviewed the covered populations and
funding on slide 6:
Digital Equity - Digital Inclusion - Digital Literacy
COVERED POPULATIONS
• Households at/or below 150% of the Poverty Level
• Aging Individuals
• Incarcerated Individuals
• Veterans
• Individuals with Disabilities
• Individuals with a Language Barrier
• Individuals who are Members of a Racial or Ethnic
Minority
• Individuals who Reside in Rural Areas
FUNDING
• Planning Grants: $60 Million Alaska Awarded
$567,800
• Capacity Grants: $240 Million Alaska's Award: TBD
• Competitive Grants: $1.25 Billion Alaska's Award:
TBD
1:41:13 PM
CHAIR DUNBAR commented that on some other federal programs,
there has been controversy recently on whether Alaska Native
corporations are eligible to apply for tribal funds. He asked if
Alaska Native corporations could work with these funds.
MR. LOCHNER expressed his belief that Alaska Native corporations
can. He believed the courts resolved this issue. He said he
would confirm and advise the committee.
1:41:49 PM
MR. LOCHNER moved to slide 7 to discuss the $42 billion
allocation for BEAD funding. He said these funds would be
deployed in three tranches in order of the priority shown below:
Broadband Equity, Access and Deployment
ALLOCATED $42 BILLION FOR ALL STATES AND TERRITORIES
• $100 Million Minimum Allocation per state
• High-Cost Allocation (10% of $42B) = High-Cost in
Alaska / High-Cost total for US
• Remaining Funds = Unserved in Alaska / Unserved
total US
DISBURSEMENTS OF ALASKA'S ALLOCATION
Grants will be based on percentage of locations that
are:
• Unserved - less than 25Mbps/3Mbps
• Underserved - less than 100Mbps/20Mbps and
• Unserved Community Anchor Institutions - less than
1Gbps/1Gbps
1:42:40 PM
SENATOR GRAY-JACKSON inquired about Community Anchor
Institutions.
MR. LOCHNER replied that allocations would be disbursed in the
order prescribed at the bottom of slide 7: unserved first, then
underserved, and lastly, unserved community anchor institutions.
Unserved community anchorage institutions are entities like
schools, clinics, tribal libraries, tribal governments, and
municipalities slated to receive 1Gbps/1Gbps if any money is
left over. He defined Mbps speeds, stating consumers generally
download more than they upload.
1:44:17 PM
CHAIR DUNBAR skipped ahead through the presentation, looking for
an estimate of how much money Alaska will receive for broadband.
He gauged the distribution formula favors rural and underserved
populations, stating it appears Alaska will get a
disproportionate amount of these funds relative to the state
population. He sought confirmation that this is the case and
asked about the magnitude of funds expected in total.
MR. LOCHNER replied he is reluctant to give a really bad answer.
CHAIR DUNBAR remarked that, in this case, a bad answer is okay.
MR. LOCHNER said U.S. Senators Sullivan and Murkowski estimated
between $500 million and $1 billion. He said he did the math,
but there were too many variables to lock in a number.
CHAIR DUNBAR reiterated that Alaska would receive $100 million
minimally through the [BEAD program]. He sought confirmation
that [U.S. Senators Sullivan and Murkowski] estimated up to $1
billion is possible.
MR. LOCHNER replied yes.
1:45:52 PM
MR. LOCHNER reviewed the calendar graph on slide 8, NTIA
Milestone Dates and Alaska Broadband Office (ABO) Timeline. He
brought up an inquiry about the lifespan of the Broadband
Advisory Board and pointed out the three major NTIA milestones
on the graph. [The Broadband Advisory Board lifespan correlates
with the milestones].
MR. LOCHNER said the first milestone was receiving the $5
million planning grant award, which triggered a 270-day shock
clock to write a 5-year action plan. He interjected the red line
on the graph is today. The 5-year action plan will detail what
is necessary to get every broadband serviceable location to
120Mbps/20Mbps in the near future and delineate the entire
network and build-out. He explained the significance of the ABO
benchmark dates that appear below the calendar dates. He said
the ABO overall build and network idea would cost $1.88 billion.
He added that ABO needs input from a lot of different sectors to
fine-tune the model and get a more precise bead on cost.
MR. LOCHNER said the second major milestone is the NTIA Funding
Allocations, estimated to happen on June 30, 2023. This will key
off a 180-day timeline for submitting an initial proposal. After
NTIA approves the initial proposal, it will release a minimum of
20 percent of the funds allocated to the state to build
locations that meet these criteria:
- 80 percent of the population is under 150 percent of the
poverty line, and
- 80 percent of the population is unserved.
MR. LOCHNER drew attention to the [third milestone], the Final
Proposal. This milestone requires ABO to run all the remaining
grants and assign allocations; once that is complete, NTIA will
release the funds to start the builds.
1:51:12 PM
MR. LOCHNER spoke to slide 9 which outlines NTIA's definitions
of unserved, underserved, and served populations:
Required Broadband Service Level for BEAD Funding
Unserved:
• 25 Mbps Download Bandwidth (Watching a video)
• 3 Mbps Upload Bandwidth (Posting a picture)
Underserved:
• 25 Mbps Download Bandwidth, but cannot reach 100
Mbps
• 3 Mbps Upload Bandwidth, but cannot reach 20 Mbps
Served:
• 100 Mbps Download Bandwidth
• 20 Mbps Upload Bandwidth
MR. LOCHNER said served communities are those where 80 percent
of the population gets 100Mbps/20Mbps. He remarked that served
communities could have a population pocket with terrible
service, like Rabbit Creek in Anchorage, Cohoe in Kenai, and
[Nikolaevsk] east of Anchor Point. He coined the term "donut
hole" to describe poor service pockets surrounded by areas with
good service. He plans to work with NTIA to carve out "donut
hole" areas from served communities so they are counted and
treated separately. He wants to optimize the opportunity to get
people served.
1:52:46 PM
MR. LOCHNER summarized the maps on slides 10 - 16. All of the
slides are titled, Evaluation of Current Status of Broadband.
MAPS ON SLIDES 10 - 16
Slide 10
This slide shows the location of served communities in Alaska.
Alaska has 112 served communities totaling 28.9 percent of all
the communities in the state.
Slide 11
MR. LOCHNER said that ABO found 100 percent of served
communities are on fiber systems, shown as green lines on slide
11.
Slide 12
MR. LOCHNER said the state has robust microwave systems that
provide broadband; however, these systems do not meet the
specifications required by the federal government. This means
there are no served locations on microwave systems.
1:53:19 PM
Slide 13
MR. LOCHNER said other "money to build" programs have been or
will be deployed. They are:
- United States Department of Agriculture (USDA) Community
Connect and ReConnect Programs. There have been three rounds of
Reconnect Programs, several of which appear as blue pins on the
map.
- The NTIA Tribal Broadband Connectivity Program. There have
been three major Tribal Broadband Connectivity Programs in
Alaska.
- He said there are programs associated with the remaining $1
billion allocated to the Tribal Broadband Connectivity Fund. He
believed that Alaska companies and Native organizations had
applied for this funding.
- Middle Mile Infrastructure Build Fund. He expressed his belief
that entities have applied for this funding.
- USDA ReConnect will continue this program with rounds 4 and 5.
He said these awards will arrive throughout this year.
MR. LOCHNER said that the Federal Communications Commission
(FCC) has a program that applies to the operations side of
broadband, whereas the programs listed above apply to broadband
infrastructure. The FCC has money through the Alaska Plan, E-
Rate program for schools, and Rural Healthcare programs to
subsidize operations on an ongoing basis.
1:55:06 PM
Slide 14
MR. LOCHNER said the yellow-green lines show these fiber
projects:
- Fort Yukon down to Tanana is Doyon in partnership with Alaska
Communication System (ACS);
- Dillingham to Bethel is Bethel Native Corporation in
partnership with General Communication, Inc. (GCI); and
- The Anaktuvuk Pass line is a Reconnect Program for the Arctic
Slope Telephone Association Cooperative.
1:55:44 PM
Slide 15
MR. LOCHNER said the gold lines build microwave technology to
connect villages. He drew attention to a gold line through
Tanana Chiefs Conference and pointed out it is a USDA Reconnect
Program.
1:56:05 PM
CHAIR DUNBAR asked if these lines are already built or are in
the process of being built.
MR. LOCHNER answered this shows built lines except for the two
sets of "adds" on the map, which were awarded and are in the
process of being built.
Slide 16
MR. LOCHNER described this map as his punchline. Purple and
salmon-colored pins were added to this map, denoting underserved
and unserved communities. He said this map shows the tremendous
amount of work remaining to connect the purple and salmon-
colored pins.
1:56:35 PM
MR. LOCHNER summarized the maps on slides 17 - 19 titled,
Network Ideas for Underserved/Unserved Locations.
MAPS ON SLIDES 17 - 19
Slide 17
MR. LOCHNER removed these markings from the map:
- the green pins representing served communities,
- the light blue pins representing projects, and
- the technology system lines.
The purple and salmon-colored pins are all that remain; these
pins represent the Alaska Broadband Office charter to connect
these 196 locations. He encouraged communities to ascertain if
ABO misidentified their population as served. As communities
notify ABO of misidentified populations, the number of
underserved and unserved communities may grow.
1:57:32 PM
SENATOR BJORKMAN commented that he knows of no one in his
district that has a 100Mbps download speed. He asked if a
website or link is available to Alaskans to run speed tests from
home or work and submit those results directly to ABO as real-
world checks on actual broadband speeds.
MR. LOCHNER answered yes. ABO is working on an email address, so
Alaskans can run a speed test, take a screenshot of the results,
then submit them. ABO would compile all that data. He said the
question sparked his imagination; ABO should have a speed test
link on its website. He will work with the webmaster to get this
done.
1:59:12 PM
CHAIR DUNBAR wondered how citizens could help with this effort.
MR. LOCHNER directed the committee to a website where citizens
can give feedback.
CHAIR DUNBAR asked what specific type of help the Alaska
Broadband Office would like from citizens.
MR. LOCHNER replied that this map is on a Google Earth image on
the ABO webpage. Users can zoom in, see their community's
technology system, give feedback, and make suggestions for a
better system. He noted that this project is technology
agnostic. The webpage is set up with an EXCEL capital cost model
spreadsheet to calculate the cost of changes. He spoke to the
[notice of funding opportunity] (NOFO), stating the future
definition of affordability is 1Gbps/1Gbps.
2:01:43 PM
Slide 18
MR. LOCHNER said this slide re-adds infrastructure lines that
are in place or will be shortly.
Slide 19
MR. LOCHNER said ABO network ideas show up as fuchsia lines on
this map. The salmon-colored pins change to salmon egg pins as
every community is penciled-in for a network connection. He
explained this is how the Alaska Broadband Office puts every
community's stake in the ground for their network connection. If
a stake is in the wrong area, he encourages anyone interested to
go to the ABO website and give feedback. The office needs input
to get the best possible network reaching all of the unserved
and underserved villages.
2:02:35 PM
MR. LOCHNER advanced to slide 20, BEAD Next Steps - Five-Year
Action Plan, stating he hopes to submit the action plan by June
15. He categorized the notice of funding opportunity items as
follows:
BEAD Next Steps Five-Year Action Plan
Work with Communities, Tribes, Village & Regional
Corporations, AFN, AML, Industry, and others to
develop and submit a Five-Year Action Plan.
Outreach:
• Digital Equity Inclusion and External Engagement
Process
• Alignment with Other Statewide
Social/Economic/Infrastructure Plans
About 1/3 of this category is complete.
Network:
• Broadband Service Needs
• Asset Inventory
• Deployment Barriers & Obstacle Identification
• Comprehensive High-Speed Internet Plan
About 3/4 of this category is complete.
Logistical:
• Outline of Broadband Office, Employees, Consultants
& Contractors, Program Work, and Anticipated
Technical Assistance & Capacity Needs
• Broadband Funding Identification (Federal, State,
Local & Tribal Providers) and Broadband
Affordability Data
About 2/3 of this category is complete.
2:03:23 PM
SENATOR GRAY-JACKSON sought confirmation that this project will
substantially reduce the cost of broadband in rural areas.
MR. LOCHNER answered yes. ABO has a target of $150 per month. He
said that he heard the Affordable Connectivity Program will
continue, and because all of Alaska is considered tribal lands,
there is an opportunity for a $75 per month subsidy.
2:04:23 PM
MR. LOCHNER reviewed slide 21, which outlined the NTIA notice of
funding opportunity scoring criteria:
BEAD Next Steps - Grant Criteria - Initial Proposal:
Primary Criteria
Fixed 75% of Scoring from Notice of Funding
Opportunity:
• Efficient Use of BEAD Funding How big is the
match?
• Affordability 1Gbps/1Gbps affordable consumer
product
• Fair Labor Practices Can and will Subgrantees
comply with Federal labor and employment laws?
Secondary Criteria:
Will the work be completed by a set date?
All Other Criteria:
• Network Design
• Operating Costs Sustainable, Affordable and
Scalable
• Native Bidders
• Carrier Neutral and Fair Pricing Practices
2:07:30 PM
CHAIR DUNBAR outlined this model:
- A private, for-profit entity builds out its network.
- With the help of the state, the federal government makes a
massive financial investment into building out that entity's
infrastructure.
- Operations are turned over to that entity.
- The entity runs the network for profit.
CHAIR DUNBAR asked the following series of questions based on
that model:
- What is to stop a private, for-profit entity from dramatically
raising its rates in the future?
- Would anyone else have access to that network?
- Who would own the network?
- How can monopolistic price gouging be prevented in rural
communities?
MR. LOCHNER replied that the notice of funding opportunity
contemplates open networks, meaning the network has to be
available to all comers at a reasonable rate. NOFO does not
define a reasonable rate. The sweet spot is a 10 to 15 percent
margin in the [operations and maintenance] (O&M) calculator. It
will look like price gouging when ABO grades a grant application
with a 50 percent margin. He said tribes in partnership with
telecoms or municipalities will own networks, but the state will
not.
2:09:35 PM
CHAIR DUNBAR asked whether ownership is limited to
municipalities, tribal entities, and co-ops or if a for-profit
company could own the infrastructure.
MR. LOCHNER replied yes, a for-profit could own the
infrastructure.
CHAIR DUNBAR asked what the enforcement mechanism is to prevent
price gouging ten years down the road.
MR. LOCHNER replied he does not know whether there is an
enforcement mechanism for ten years out; he did not see one in
the NOFO.
CHAIR DUNBAR commented that an entity could go through the grant
process, build it out, own it, then change its rate structure
ten years from now. He wondered if the federal or state
government would try to retrieve funds for price gouging.
MR. LOCHNER answered that he had not seen a mechanism for the
federal or state government to do that if an owner changes from
an affordable to an unaffordable product.
CHAIR DUNBAR said that could be a question for the Department of
Law at some point.
2:11:05 PM
CHAIR DUNBAR inquired about the timeline, asking if the initial
20 percent tranche of funds would come out this summer.
MR. LOCHNER referred to slide 8, explaining the dates on this
timeline are estimates. He said after NTIA approves the initial
proposal, they would disburse the 20 percent tranche.
CHAIR DUNBAR asked for an estimate of when the first fiber will
be laid in the ground.
MR. LOCHNER replied that an estimate based on mega project
permitting, supply chain, and workforce development is three
years after funding is awarded.
2:12:17 PM
SENATOR GRAY-JACKSON dovetailed on Senator Dunbar's question.
She expressed concern about price gouging five years down the
road. She said GCI continually raises its rates. She stays with
GCI because the alternative telecommunications provider's
broadband speeds are too slow. Price gouging defeats the purpose
of this project. She asked Mr. Lochner if he would provide the
committee with legal answers on price gouging or should the
committee do it.
MR. LOCHNER answered that he did not know.
SENATOR GRAY-JACKSON restated that she would like him to get the
advice of legal counsel and provide answers to the committee's
questions.
2:13:22 PM
CHAIR DUNBAR commented that the primary purpose of the Alaska
Broadband Office is to identify the locations of underserved
areas and coordinate and direct the funds to build connectivity.
He sought confirmation that the ABO charter does not appear to
have a post-connectivity plan.
MR. LOCHNER replied that he would contact the Department of Law
to see if the grant allowed something to be done or what
mechanism could be used to prevent price gouging. He said that
in his experience, when providers raise rates, they nominally
increase the value of the service whether the customers want it
or not.
CHAIR DUNBAR emphasized that in this case, more than most,
mechanisms to prevent price gouging are a little more justified
because of the massive public investment in this infrastructure.
Private industry alone is not building this; it is coming
through the federal and state governments. He asked how the
legislature could help with this project, for example, statutory
changes or matching funds.
MR. LOCHNER answered that ABO does not need immediate action
from the legislature, but the office may need help as the
project progresses.
2:16:27 PM
CHAIR DUNBAR commented on the irony of underserved communities
trying to submit feedback online, stating they might have
difficulty accessing the website. He asked if ABO has a phone
number so people can call in their feedback.
MR. LOCHNER replied that ABO would host a community call-in
starting in March. Communities can talk to the director on
Tuesdays and Wednesdays, and technical calls are on Thursdays.
ABO is sensitive to this irony and wants to ensure that people
can reach out to the office in a meaningful way.
CHAIR DUNBAR asked for the best phone number.
MR. LOCHNER replied it is being set up.
CHAIR DUNBAR thanked the presenter.
2:18:24 PM
There being no further business to come before the committee,
Chair Dunbar adjourned the Senate Community and Regional Affairs
Standing Committee meeting at 2:18 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Broadband Office Presentation S CRA 02-16-23.pdf |
SCRA 2/16/2023 1:30:00 PM |