HB 179-BROADBAND DISCOUNTS FOR SCHOOLS 8:44:09 AM CHAIR GATTIS announced that the next order of business would be HOUSE BILL NO. 179, "An Act providing for public school funding for telecommunications or Internet services." 8:44:24 AM REPRESENTATIVE BENJAMIN NAGEAK, Alaska State Legislature, explaining the proposed bill, paraphrased from the following prepared statement [original punctuation provided]: The E-rate program provides federal funding for a portion of a school district's telecommunication cost. HB 179 will provide state funding for the portion not covered by the federal discount. For FY 14 that amount is approximately $13.8 million dollars. This bill also allows school districts to increase their bandwidth. Right now about 1/3 or approximately 170 schools have less than 10 megabits per second of Internet services. HB 179 will allow school schools below 10 megabits per second to come up to that minimum level and receive state reimbursement. For schools that are already at that level or higher, HB 179 allows those schools to increase 10% over their prior year and receive state funding. This bill does not limit any school district to higher increases but does limit the state contribution at that point. This bill will benefit all school districts across the state. HB 179 will assists school districts with their Internet needs and bring all schools across Alaska to a minimum level of Internet services. Thank you for again for hearing this bill today. I am happy to answer any questions the committee may have. My staff is available and there are people from the Department online to answer questions as well. 8:46:24 AM REPRESENTATIVE SEATON moved to adopt the proposed committee substitute (CS) for HB 170, labeled 28-LS0679\U, Mischel, 4/5/13, as the working draft. There being no objection, Version U was before the committee. 8:47:01 AM REPRESENTATIVE NAGEAK explained the changes in the CS, and paraphrased from the following prepared statement: Removed "telecommunication" from the bill on advice from the department. Removed Title 1 references on advice from the department. For FY14 the state match would be the total of the applicant's share. This is considered the "base amount." Beginning in FY15, for those school districts whose Internet services are faster than 10 megabits-a-second the amount they are eligible to receive is limited to 10 percent increase from the previous year's amount. Beginning in FY15, for those school districts whose Internet services are slower than 10 megabits-a-second the amount they are eligible to receive can increase more than 10 percent from the previous year's amount. 8:48:27 AM PEGGY COWAN, Superintendent, North Slope Borough School District, stated that the proposed bill supported all the school districts in Alaska, as increased costs and flat funding created a continuing challenge to provide the necessary student programs. She declared that funding for internet services was critical for education. It allowed the State of Alaska to leverage federal funds for a percentage of district telecommunications services. She encouraged support for proposed HB 179. 8:50:08 AM REPRESENTATIVE P. WILSON asked for an explanation of the E-rate program. 8:50:23 AM MS. COWAN explained that it was a per school determination, with an application that required the school district to bid out its telecommunication services. She stated that a formula, established by poverty rates, would define the average reimbursement percentage to each school district, with a specific rate to specific schools. She compared reimbursement percentages among various Rural Alaska school districts. She noted that the amount of reimbursement was based on the amount spent on telecommunication, but that the level of reimbursement was based on federal poverty guidelines for the school district. MS. COWAN, in response to Representative P. Wilson, said that the proposed bill would allow her school district to receive an increase of more than 10 percent reimbursement for internet services up to 10 megabits-a-second, beginning in 2015. She declared that this was a big step forward for rural school districts. She reported that, currently, the rural schools in her district had less than 3 megabits, compared to 100 megabits in the Alaska legislative offices. She pointed out that any school districts with more than 10 megabits would also be eligible to increase funding by up to 10 percent. 8:54:11 AM REPRESENTATIVE SADDLER, asking about the Department of Commerce, Community & Economic Development statewide broadband task force to increase bandwidth for rural communities, questioned how the proposed bill would "mesh with that effort." MS. COWAN replied that, although proposed HB 179 would not solve the broadband issue, it was a step in the right direction. The populated areas of the state did not have the Internet access issues that the rural areas had, and this was the concern for the taskforce. She offered her belief that there would be an attempt to bring up to 450 megabits to all the rural communities. She clarified that the proposed bill would allow the rural school districts to afford to utilize the current technology, and make available distance courses in order for students to compete for the performance scholarship. She emphasized that this was not the fix that the task force was researching. REPRESENTATIVE SADDLER called attention to previous legislation regarding bandwidth. 8:57:23 AM REPRESENTATIVE P. WILSON asked to clarify that each school contracted for these services. LINDA THIBODEAU, Director, Office of the Director, Libraries, Archives & Museums, Department of Education and Early Development (EED), offered her belief that currently the services were contracted through the school district, but that the services in the proposed bill would go to each school individually. REPRESENTATIVE P. WILSON asked if it would be possible to have a statewide contract for these services. MS. THIBODEAU replied that it would be a huge leap forward beyond the proposed bill, but that, conceptually, it was possible. She explained that the E-rate requirements were for a competitive bidding process, so that a school district would not be required to buy from a provider. REPRESENTATIVE P. WILSON asked to clarify whether it would be possible, and if the providers could bid for this contract. MS. THIBODEAU explained that the providers would bid to the school districts individually, and that the school districts would buy from the cheapest option. REPRESENTATIVE P. WILSON asked if a statewide approach would be advantageous. MS. THIBODEAU replied that it could be very advantageous, but would require a lot of study. 8:59:47 AM CHAIR GATTIS opened public testimony. 9:00:01 AM DAVE JONES, Assistant Superintendent, Kenai Peninsula Borough School District (KPBSD), stated support for proposed HB 179 and said that, although it would only have a limited effect in the Kenai Peninsula Borough School District, it would provide great opportunities for other rural areas of the state. 9:01:02 AM REPRESENTATIVE P. WILSON asked about the statewide contract approach. MR. JONES declared that services were currently bid on a district wide basis and that the federal reimbursement was determined on an individual basis. He said that the volume in the district could bring the cost down, but he questioned that a single company had the ability to service the entire state. 9:02:30 AM DEENA PARAMO, Superintendent, Matanuska-Susitna Borough School District, stated support for HB 179. She declared that her school district invested heavily in technology and on-line courses, to ensure that its students were well connected. She pointed out that digital learning was an integral part of the school district curriculum, and allowed students mastery of on- line research methods and course work, in order to adequately prepare for a future immersed in technology. She reported that, as this was a responsibility of the school district, the partnerships with service providers had increased the area network for connection to more schools. She emphasized that this connectivity had brought higher costs, which had been paid by the community. She declared support for proposed HB 179. 9:04:13 AM BRUCE JOHNSON, Executive Director, Alaska Council of School Administrators, stated support of HB 179, declaring that it would be beneficial for payment of ever increasing higher costs, while providing greater internet access in Rural Alaska. 9:05:14 AM CARL ROSE, Executive Director, Association of Alaska School Boards (AASB), stated support of proposed HB 179, observing that digital technology needed to be extended into the schools. 9:05:45 AM CHAIR GATTIS closed public testimony. 9:05:55 AM REPRESENTATIVE SADDLER stated his support for proposed HB 179. He referenced page 7, footnote 8, of the Legislative Research Report 00.007 titled "The Federal E-Rate Program and ASTF Grants: Helping to Connect Alaska's Schools," dated March 17, 2000 [Included in members' packets]. The footnote pointed out that although wireless connection in schools would be much more cost effective, it would entail a change to the Federal Communications Commission (FCC) rules. He suggested that this could be a better long-term fix. 9:06:48 AM REPRESENTATIVE LEDOUX asked to clarify that the schools were not able to utilize wireless internet access. 9:07:09 AM CHAIR GATTIS explained that schools could use wireless but there was a federal issue. 9:07:32 AM REPRESENTATIVE SEATON moved to report CSHB 179, Version 28- LS0679\U, Mischel, 4/5/13, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 179(EDC) was reported from the House Education Standing Committee.