Legislature(2003 - 2004)

05/17/2003 12:18 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                          May 17, 2003                                                                                          
                           12:18 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Con Bunde, Chair                                                                                                        
Senator Bettye Davis                                                                                                            
Senator Hollis French                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Gary Stevens                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Confirmation Hearing                                                                                                          
 Kate Giard - Regulatory Commission of Alaska                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-36, SIDE A                                                                                                            
                                                                                                                                
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting  to order at  12:18 p.m. Present  were SENATORS                                                               
STEVENS, FRENCH and BUNDE.                                                                                                      
                                                                                                                                
MS. KATE GIARD,  nominee for the Regulatory  Commission of Alaska                                                               
(RCA), said she  has been in Alaska since 1992  and is serving as                                                               
Chief  Fiscal  Officer for  the  Municipality  of Anchorage.  She                                                               
applied  for this  position because  she has  some background  in                                                               
telecommunications through  her work  with the  municipality; she                                                               
had fiduciary  responsibility for  the operation of  their wholly                                                               
owned subsidiary utilities.                                                                                                     
                                                                                                                                
She said  there have been  concerns about  the size of  the RCA's                                                               
docket  and adjudications.  One thing  that really  interests her                                                               
about serving on  the RCA is that it will  provide an opportunity                                                               
for  someone  with  her background  to  perform  regulatory  rate                                                               
evaluations and  also to look  for improvements to  the decision-                                                               
making process.                                                                                                                 
                                                                                                                                
SENATOR FRENCH said  he appreciated her willingness  to serve. He                                                               
asked  if she  has any  prior affiliation  with or  connection to                                                               
either of the two big telecommunication players, ACS or GCI.                                                                    
                                                                                                                                
MS. GIARD replied  that she worked for  Alaskan Choice Television                                                               
(ACT) for  three and  a half  years, which is  where she  got her                                                               
telecommunications  background.  ACT's  mission  was  to  provide                                                               
communities   in  Anchorage,   Mat-Su  and   Fairbanks  with   an                                                               
alternative to hard-line cable.  She had an indirect relationship                                                               
with GCI  in that it  was her  main competitor for  offering that                                                               
service. ACT  was a start-up  entity and  was a stepchild  of the                                                               
1996 Telecommunications  Act. It was initially  owned by Goldbelt                                                               
and  a company  from the  Lower 48.  In 1997,  one-third of  that                                                               
company was  sold to ATU  for about $5  million. ATU had  a board                                                               
position,  although operations  were managed  through the  energy                                                               
partner, which  was a corporation  in Utah.  In May of  1999, ACS                                                               
purchased ATU and  thus acquired the one-third  interest that ATU                                                               
held  in Alaskan  Choice Television.  At board  meetings at  that                                                               
time, she was  still with Alaskan Choice. She  resigned in August                                                               
of 1999. ACS  determined that it was beneficial  for its business                                                               
objectives  to  acquire  an entire  interest  in  Alaskan  Choice                                                               
Television, which it did in September 1999.                                                                                     
                                                                                                                                
SENATOR  FRENCH  asked  if  she   has  maintained  any  financial                                                               
position in Alaskan Choice T.V.                                                                                                 
                                                                                                                                
MS. GIARD  replied no, she  had no financial interest  other than                                                               
as an employee as the in-ground operating manager.                                                                              
                                                                                                                                
SENATOR FRENCH  asked if anything about  her experience competing                                                               
with GCI  might lead led her  to favor or disfavor  GCI in future                                                               
rate-setting endeavors.                                                                                                         
                                                                                                                                
MS. GIARD  replied no and  said she  loved the experience  at the                                                               
time. The Telecommunications Act of  1996 had a tremendous impact                                                               
on Alaska. She  admires GCI for what it has  been able to achieve                                                               
and didn't have any negative feelings towards them.                                                                             
                                                                                                                                
SENATOR FRENCH said  one of the great puzzles of  the '96 Telecom                                                               
Act is the way  it has affected the business of  ACS. He is moved                                                               
by  ACS's arguments  that the  act  is basically  forcing ACS  to                                                               
subsidize GCI in carrying its signal  the last mile to homes over                                                               
a  network  that ACS  built  and  maintains with  no  concomitant                                                               
responsibility  on  the part  of  GCI  to  pay to  maintain  that                                                               
network. He was  curious about how she views  that struggle about                                                               
the last  mile and  how she  would take up  those questions  as a                                                               
commissioner.                                                                                                                   
                                                                                                                                
MS. GIARD  replied that  she understands  that ACS  acquired what                                                               
was,  essentially, a  monopoly.  ATU,  at the  time,  was in  the                                                               
throes  of learning  what  it was  like to  be  in a  competitive                                                               
market. The Act  had been put in place prior  to the acquisition.                                                               
She maintained:                                                                                                                 
                                                                                                                                
     There  are going  to be  pains in  any act  when you're                                                                    
     trying to  take a  monopoly system and  move it  into a                                                                    
     competitive  environment.  Those pains  certainly  have                                                                    
     been felt by  ACS and previously by,  and I'm certainly                                                                    
     more familiar with,  the pains that ATU  was feeling at                                                                    
     the time.                                                                                                                  
                                                                                                                                
She thought  the role of  the RCA  is to balance  the competitive                                                               
needs of  the consumer against  the entrepreneurial needs  of the                                                               
players in the  field. All three entities, Alascom,  GCI and ACS,                                                               
are viable  and continue to  invest in their  infrastructure. The                                                               
RCA is not  responsible for keeping any one  company in business,                                                               
but it is responsible for responding  in a timely manner to those                                                               
filings that are mandated by the  laws the legislature sets. As a                                                               
commissioner,  her  role would  be  to  find  that balance  in  a                                                               
timely, thoughtful and well-planned decisive manner.                                                                            
                                                                                                                                
CHAIR  BUNDE asked  if she  thought  she was  constrained by  FCC                                                               
regulations in making her decisions.                                                                                            
                                                                                                                                
MS.  GIARD replied  that the  FCC gave  the states  a significant                                                               
amount of power, control and  authority over the determination of                                                               
a  competitive market  through the  RCA. The  legislature has  to                                                               
tell them how to adjudicate and what to adjudicate on.                                                                          
                                                                                                                                
CHAIR BUNDE  said one of  the criticisms  he has heard  about the                                                               
RCA is the length of time it  takes to come up with decisions. He                                                               
asked, if with her accounting  and managerial background, she had                                                               
any ideas about how to speed up the process.                                                                                    
                                                                                                                                
MS. GIARD  replied that she believes  there are ways to  speed up                                                               
the process that have not been evaluated yet.                                                                                   
                                                                                                                                
SENATOR  DAVIS said  she appreciated  Ms.  Giard's testimony  and                                                               
thought she would do a fine job.                                                                                                
                                                                                                                                
SENATOR FRENCH said  that he was happy to hear  Ms. Giard mention                                                               
consumers several  times in the  course of answering some  of the                                                               
questions,  since that  is one  of the  fundamental roles  of the                                                               
RCA. He  noted for the  record that  she was the  chief financial                                                               
officer of Alaska  Village Initiatives for one year,  which is an                                                               
especially valuable  experience. He  thanked her for  offering to                                                               
serve the state.                                                                                                                
                                                                                                                                
CHAIR BUNDE  announced that there  were no stated  objections for                                                               
the  confirmation  of  Ms.  Giard  and that  her  name  would  be                                                               
forwarded  to the  joint  session. He  adjourned  the meeting  at                                                               
12:36 p.m.                                                                                                                      
                                                                                                                                
                                                                                                                                

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