SENATE BILL NO. 102 "An Act relating to funding for Internet services for school districts; and relating to the Alaska higher education investment fund." 10:36:33 AM Co-Chair MacKinnon discussed SB 102. She noted that the public hearing had been opened and closed on the bill on April 10, 2017. The bill changed the baseline download speed from 10 megabits per second (Mbps) to 25 Mbps for schools in Alaska. HEIDI TESHNER, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT (via teleconference), discussed a new fiscal note (OMB component 208). She detailed that within the fiscal note there was $34,000 requested for FY 18. The amount included $30,000 for additional contract houses and technical support for reviewing applications. In addition, there was $4,000 related to legal services costs related to regulation changes. It was projected that the increase from 10 Mbps to 25 Mbps would signify an approximately $16 million grant to the additional qualifying school districts. Co-Chair MacKinnon asked why a contractor with an additional fee of $30,000 was needed to maintain the current program when existing schools already had 10 Mbps of connectivity. Ms. Teshner understood that currently the contractor was part-time, and the additional funding would go toward processing additional applications after more school districts qualified for funding. Co-Chair MacKinnon was not sure of the accuracy of the fiscal note. She wondered about the connection of other projects. She reminded that the bill addressed existing schools, and did not include new construction that would require additional confirmation to qualify for funds. Ms. Teshner stated that the $30,000 on the fiscal note would be split; with $15,000 to approve additional applications, and $15,000 for the expected additional technical support to districts to help with applications. 10:40:37 AM Co-Chair Hoffman stated that the Unalaska School District had informed that it could not go to 25 Mbps because of the capacity of satellites. PATIENCE FREDERIKSEN, DIRECTOR, LIBRARIES ARCHIVES AND MUSEUMS (via teleconference), stated that if Unalaska was already receiving 25 Mbps, it would not be eligible for the enhanced grant that was proposed in the bill. Only districts with under 25 Mbps would be able to apply for the funding. Co-Chair Hoffman restated that the district currently had 20 Mbps of download, which it shared between the school and the library. He continued that because the district was receiving the services through the satellite system, it could not expand the connectivity. Ms. Frederiksen understood that the Alaska Telephone Association had authored a letter of support for the bill, and had guaranteed that every school district could receive up to 25 Mbps with the networking that was in place. Additionally, schools that were receiving internet through satellite would be able to take advantage of the 25 Mbps. She emphasized that she was speaking outside her area of expertise. Senator Hughes stated that there was rapidly advancing technology that might be able to help with internet connectivity. She understood that a new satellite had been launched recently over the State of Texas, and was giving speeds of 75 Mbps in a spot in Southeast Alaska. She thought the technology was being tested. 10:44:11 AM Co-Chair MacKinnon referred to the new fiscal note, and was uncertain why $30,000 was needed to process grant applications. She thought the expenditure should be for one-time contact rather than recurring contact. Ms. Frederiksen stated that the e-rate contractor in place reviewed grant applications closely. She specified that the application was a spreadsheet, and the law needed to be followed. She discussed certifying school districts that were receiving less than 10 Mbps. There had been school districts that had sent quotes from internet service providers that showed purchase of 50 Mbps that was split between schools, and the arrangement had not fit the criteria for the law. She discussed the complexity of the extensive e-rate application as it pertained to the criteria of the program. It had taken the e-rate coordinator two full weeks of work to review applications the previous fall. The applications changed each year. She added that the process was intensive and required numerous phone calls, ergo the need for additional funding. She added that the state was going from a $2.7 million program to a $16 million program, and the stakes were much higher. 10:47:35 AM Ms. Hutchison clarified that the purpose of SB 102 was for every individual school to have the ability to apply for and receive broadband assistance grant funding. Each eligible school could be brought up to an internet download speed of 25 Mbps. The amount would not be divided in a district, but would be for each individual school. Senator Olson thought there were some schools that did not have the infrastructure to take advantage of the program. He asked how many schools would not be able to take part in the program. Ms. Hutchison did not have the numbers Senator Olson requested. She referred to a support letter from the Alaska Telephone Association (the umbrella group for all internet service companies), which iterated that current technology and infrastructure was able to deliver 25 Mbps to all schools in Alaska. Co-Chair MacKinnon commented that infrastructure was not covered in the bill. Senator Olson asked if there were schools that could not take advantage of the grant funds. Co-Chair MacKinnon stated that there was no funding to connect schools that were not already connected. She continued that there was another project that was trying to provide services to other communities. She did not have a list of schools that did not qualify, but offered to obtain the information for Senator Olson. Co-Chair Hoffman MOVED to report SB 102 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. SB 102 was REPORTED out of committee with a "do pass" recommendation and with one new fiscal impact note from the Department of Education and Early Development.