Legislature(2019 - 2020)ADAMS ROOM 519
05/07/2019 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB29 | |
| HB75 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 29 | TELECONFERENCED | |
| += | HB 75 | TELECONFERENCED | |
HOUSE BILL NO. 75
"An Act relating to funding for Internet services for
school districts; and relating to the Alaska higher
education investment fund."
1:44:11 PM
Co-Chair Wilson relayed that public testimony had been left
open during the morning meeting. She relayed public
testimony would continue.
JOHN CONWELL, SUPERINTENDENT, UNALASKA CITY SCHOOL
DISTRICT, UNALASKA (via teleconference), testified in
support of the legislation. He relayed stories from
personal experience regarding technological advances in
schools. He reported that the schools shared 20 megabits
(Mbps) of bandwidth between two buildings and 425 students
and in the evening, it shifted to the public library for
the OWL (Online With Libraries) program. The school was
able to offer a distance class with the University of
Alaska Fairbanks (UAF); Writing 111. He indicated that
during the class it was necessary to cut the internet off
to the other buildings. The insufficient bandwidth worked
for the class, but it caused an inconvenience for others.
He reported that he hired a substitute teacher for two
weeks to carry out assessment and performance evaluation
tests in pencil and paper due to lack of bandwidth. He
encouraged the committee to support the bill.
Co-Chair Wilson asked how much the cost would be if the
district had to pay for the cost itself. Mr. Conwell would
follow up. He acknowledged that the district had a
scalable contract with the provider but needed to review
the contract to answer the question.
Co-Chair Wilson thanked the testifier.
1:49:26 PM
ANNEMARIE O'BRIEN, SUPERINTENDENT, NORTHWEST ARCTIC BOROUGH
SCHOOL DISTRICT, KOTZEBUE (via teleconference), testified
in support of the bill. She communicated that the internet
played a critical role in the delivery of instruction
across the school district that included a range of over 38
thousand square miles with 11 schools. She reiterated the
importance of the internet in relation to giving students
the educational opportunities they deserved.
1:51:01 PM
AMY EAKIN, NORTHWEST ARCTIC BOROUGH SCHOOL DISTRICT,
KOTZEBUE (via teleconference), testified in support of the
bill. She relayed the various internet speeds that the
districts schools received and noted the bill would allow
the remaining 12 schools to reach 25 (Mbps). In addition,
some district schools had a high latency connection that
performed at speeds under the actual bandwidth speed the
schools purchased. Currently, the district received 90
percent E-rate funding and no funding from the School
Broadband Assistance Grant (BAG) program. The cost to the
district was $50 thousand each month totaling $600 thousand
each year of uncovered broadband expenses. She delineated
that the cost of internet had decreased since the inception
of the BAG program and some district schools no longer
qualified for the program. Some village internet speeds
were very low, which affected testing at school sites and
increased the length of time it took to carry out the test.
The testing disrupted class instruction time. She relayed
stories of how the disruption affected some district
schools. Currently, students across the region were able to
take video teleconference classes (Virtual School). Only
one quality connection was available to each school. The
virtual school system allowed access to pre-algebra in
eighth grade for students to qualify for the Alaska Native
Science and Engineering Program (ANSEP). She elucidated
that the increased bandwidth would allow more than one
concurrent virtual class each class hour and increased the
educational opportunities for the students to achieve the
Alaska Performance Scholarship. She emphasized the benefit
of the virtual instruction that included a live teacher and
cohort of district peer students. She elaborated that the
district would spend $1.75 million more per year to
increase each school to 25 (Mbps), which was essentially
unaffordable for the district.
1:56:56 PM
Co-Chair Wilson asked for clarity regarding the $1.75
million. Ms. Eakin answered that currently, the district
spent $5.9 million per year on internet; 90 percent was
currently covered by E-rate and the district spent $50,000
per month on internet. The $1.75 million was the additional
cost per year to increase each school to 25 Mbps.
Co-Chair Foster referenced Ms. Eakin's testimony that the
district could get one quality connection for an online
class. He wondered if one quality connection worked for a
small school that only received 10 Mbps. Ms. Eakin answered
in the affirmative. She elucidated that the district had a
great number of restrictions on all its internet use; it
blocked internet use for personal devices. One phone update
prevented other students from carrying out school studies.
Currently, the district had dedicated internet for one
secure connection that offered a standard feed to provide
one virtual class per school.
Co-Chair Foster surmised that the district would have to
shut access down for everything else to provide the one
class.
1:59:23 PM
Vice-Chair Johnston asked if Quintillion [commercial
internet provider] had a trunk [fiber optic internet
service] into Kotzebue. Ms. Eakin answered in the
affirmative. She detailed that the service applied to
Kotzebue only and was not offered to villages. Roughly half
of the villages had microwave tower access and 5 villages
had satellite connections. Vice-Chair Johnston asked if
bill passage would allow the district to use the E-rate
funds to increase the Kotzebue schools to 25 Mbps and if
the cost would be reasonable due to fiber optics
technology. Ms. Eakin responded in the affirmative. She
emphasized that Kotzebue schools were some of the largest
schools in the region.
Representative Carpenter asked about the bandwidth speed
for schools on fiber optic cable. Ms. Eakin answered that
each Kotzebue school currently received 10 Mbps.
Representative Carpenter noted that fiber could be much
faster. He asked what the limiting factors were. Ms. Eakin
replied that cost was the limiting factor.
2:01:46 PM
NORM WOOTEN, EXECUTIVE DIRECTOR, ASSOCIATION OF ALASKA
SCHOOL BOARDS, testified in support of the legislation. He
relayed his personal experience of changing technology used
in schools. He opined that the most important education
technology in classrooms today was the internet. He looked
forward to releasing students from the confines of
textbooks and offer open source information. He supported
virtual textbooks that were always updating. He believed
that one of the greatest inequities in the state was
bandwidth capacity. Every district in rural and urban areas
experienced bandwidth shortages; however, the issue was
most noticeable in rural areas. He discussed that internet
crashes during testing was routine. The districts were
using work around fixes. He characterized the bill as a
baby step, but it was a baby step in the right direction.
He was aware that the desired amount of bandwidth was
unaffordable but with continued legislative support the
equity gap would continue to close. He noted that he had
spent time researching members' questions from the days
earlier meeting. He provided answers to the questions. He
discussed the three schools that did not participate in the
grants to increase internet speed from 3 Mbps to 10 Mbps.
He relayed that the Tenakee
Springs School in the Chatham School District was closed
due to insufficient enrollment. The district operated an
independent learning center for the 8 students 3 mornings
each week via correspondence and served special needs
students through speech and occupational therapy online.
The school was not eligible to participate through the
grants due to the closure. He informed the committee that
the Karluk School in the Kodiak Island Borough School
District had closed and paid for an aide to help with home
support for 7 students and the district was paying for the
internet and teaching cost out-of-pocket. The Port
Alexander School in the Southeast Island school district
did not apply for the federal e-rate funding due to a
provider error. The error had been corrected and the
application to increase the speed was submitted. He
responded to the question of what would happen if the
federal e-rate funding program was eliminated. He
ascertained that it was highly unlikely the federal e-rate
funding would be abolished because the funding did not rely
on a congressional appropriation; the program was funded
through the Universal Services Fund.
2:09:13 PM
Mr. Wooten continued that the federal Universal Services
Fund surcharge was assessed to every phone bill. The fund
was established in the 1930's with passage of the
Telecommunications Act and updated in 1996. The fund was
originated to provide underprivileged areas equal access to
phone lines. The update expanded the definition of
universal services in four different areas; one area called
the Schools and Libraries Support Mechanism or E-rate
program. He read the mechanisms definition, provides
telecommunication services which includes local and long
distance calling high speed lines internet access and
internal connections that is the equipment to deliver the
services to eligible schools and libraries. He offered to
give members a copy of the universal services fund
information.
Co-Chair Wilson noted that the committee had been hearing a
significant amount about virtual schools in the state. She
asked if there was anything that would prevent a school
district from using out-of-state virtual schools. Mr.
Wooten replied that no provision existed to prevent a
district from doing so. He detailed that more and more
districts in Alaska were providing virtual services.
2:12:34 PM
CHRISTINE O'CONNOR, EXECUTIVE DIRECTOR, ALASKA TELECOM
ASSOCIATION (via teleconference), spoke in support of HB 75
that would allow districts to increase broadband speeds.
She revealed that the association represented
telecommunication providers offering landline, long
distance, wireless, and broadband service to Alaska. The
bill would allow schools to better access the federal E-
rate program and more robust broadband networks in the
entire community. The schools broadband connection could
be leveraged to allow the community library to access it.
The association reviewed the list of schools that would
benefit from the legislation. She confirmed that every
school could receive the upgrade. Some upgrades may require
changes to remote end equipment or other equipment specific
to each site, but costs would be low. She reiterated the
associations support of the bill.
2:14:38 PM
Co-Chair Wilson asked that if the state paid $100 million,
every school could increase beyond 25 Mbps. She ascertained
that the capacity to provide higher speeds existed and the
limiting factor was cost. She asked for the accuracy of her
statement. Ms. O'Connor answered the statement was broadly
correct. She clarified that some schools would need some
equipment changes and upgrades necessary at the cite. She
equated the need to changing a router in a home but on a
larger scale. She did not expect the upgrade costs to be
major. Co-Chair Wilson shared that she paid one-third of
what her son paid who was a heavier internet user. She
asked whether every districts bills would increase with
the increase to 25 Mbps. Ms. O'Connor answered that she
would not expect that to occur. She expounded that schools
submitted a request for proposal (RFP) that included
competitive bidding for the contracts. Every school could
be served by two or three providers; the costs had been
dropping due to competition. The bidding process was
confidential.
Vice-Chair Johnston asked for the status of the Alaska
Plan. She believed it was a 10-year plan. She asked for the
status. Ms. O'Connor answered that the plan was currently
in year three. She elaborated that companies had been
reporting the locations they served through an internet
portal. Every company was meeting the goals with 7 years
remaining. She had queried the companies recently and they
had collectively spent over $270 million in capital
expenditures. She voiced that the networks were building.
Vice-Chair Johnston asked for an explanation of the Alaska
Plan. Ms. O'Connor replied that the Alaska Plan was part of
the Universal Services Fund. She provided further detail
about the plan. The fund was divided into 4 buckets. She
listed the divisions as follows: Lifeline - for low income
consumers; Rural Healthcare for healthcare connectivity;
E-Rate Program - for schools and libraries; the Connect
America Fund (High Cost Fund) to help operate and
construct networks in high cost areas. The Alaska Plan was
part of the Connect America Fund. She detailed that the
Alaska Plan was adopted in 2016 to stabilize the funding.
The Federal Communications Commission (FCC) in a reform
attempt, disadvantaged Alaskas providers through funding
cuts. However, the E-rate funding was not affected. The
Alaska Plan was currently stabilized in cooperation with
the FCC.
2:20:01 PM
Representative Merrick shared that she had a standard cell
phone plan. She asked how many megabits that would be if
she used a hotspot on her phone. Ms. O'Connor answered that
the answer varied by type of use. She guessed that at a
minimum usage level, the use was 100 Mbps and could be as
high as 1 Gbps if she was streaming in high definition.
Representative Merrick asked if a teacher using their own
cell phone to show a video in class using a cell hot spot
violated terms of use. Ms. O'Connor answered that she was
uncertain.
2:22:00 PM
JUSTIN PARISH, SELF, JUNEAU, testified in support of the
bill. He supported the bill. He believed that remote and
virtual classrooms were vital to the future of the state.
He shared his one concern regarding the tremendous amount
of profiteering on the part of the telecom companies like
GCI, that tended to wield monopolistic power in the state.
He commented that there was a good bit of very difficult
negotiation on the part of telecommunication companies that
was often monopolistic. He relayed that in 2017, one school
district with 700 students spent an excess of $230,000 per
month, which was approximately $300 per student. He found
the costs unconscionable. He suggested that the state
regulate telecommunication companies the same as utility
companies. The telecommunication companies would receive a
reasonable rate of return on investment rather than
sticking the public with the bill.
2:25:01 PM
Co-Chair Wilson CLOSED public testimony.
Co-Chair Wilson asked to hear from the Legislative Finance
Division.
ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
spoke to the disparity test issue. He explained that there
were three sources of funding for the school foundation
formula; one was federal impact aid. Federal Impact aid
amounted to $80 million to $90 million per year in aid that
was allotted to school districts and was deducted from the
states share of the K-12 formula. The deduction saved the
state money. The state had to pass a disparity test to
qualify for the impact aid. The test ensured that the state
had an equitable funding formula. He elaborated that the
test demonstrated that the difference in funding between
the highest and lowest funded districts in Alaska was no
higher than 25 percent and was normally somewhere between
22 to 23 percent. The federal government allowed the state
to remove 5 percent of the highest and lowest funded
districts so that outliers did not affect the test. The
number was the reason for the 23 percent cap on optional
local effort in the foundation formula. The complication
for the disparity test was that the state received funds
outside of state or local government - the largest was
federal E-rate funding, which was counted in the disparity
test, but was not subject to the 23 percent local cap. He
observed that the test had been reshaped with the increase
in E-rate funding. In the FY 18 test, the top district was
the Lower Kuskokwim, which was a Regional Educational
Attendance Area (REAA) and had no local contributions,
which made it likely the district would rank so high.
However, the E-rate funding floated the school to the top
of the list. The bill would further increase federal E-rate
funding to the Lower Kuskokwim among other districts. Since
the money did not flow equally to all districts,
disproportionately providing more funding to Lower
Kuskokwim would likely cause the state to fail the
disparity test. He relayed that the district
superintendents testimony that stated Lower Kuskokwim
received $28 million in E-rate funding and the districts
total subject to the cap was approximately $108 million. He
furthered that if the bill caused the districts funding
to double the state would test at a 40 percent disparity
versus the 25 percent. The Department of Education and
Early Development (DEED) had requested that the state be
allowed to disregard the federal disparity test to avoid
the failure. The department was waiting for an answer from
the federal government. A contingent effective date had
been added to the Senate version of the bill, meaning the
bill would only become effective if the federal government
allowed the state to waive the disparity test. The waiver
would resolve any complications from the bill. He offered
that the waiver was the way the Senate had addressed the
issue.
2:30:04 PM
Representative Josephson asked whether there were any
regulations granting an exemption from the E-rate similar
to the Medicaid waiver program or if DEED made a special
request. Mr. Painter answered that the department may
better address the question. He understood that the
disparity test regulations allowed for some flexibility due
to local circumstances but were not specific.
HEIDI TESHNER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, OFFICE OF MANAGEMENT
AND BUDGET, replied that the request was not a special
waiver. The E-rate was included in the definition of what
was considered a current expenditure as part of the
disparity test regulations, which allowed the federal
Department of Education to determine whether not to
consider E-rate as part of the definition. The definition
included excludable items. She noted that she failed to
bring the list of items and could provide the definition
later. The request was clarifying the definition to ensure
the E-rate did not fit the definition of what was included
in the disparity test.
Representative LeBon cited the document titled 2017-2018
School Year School District Bandwidth Counts less than 25
Mbps (copy on file) included in the members bill backup.
He noted that the Juneau, Mat-Su, and Fairbanks School
Districts were not included in the list. He assumed that
the districts were at the 25 Mbps level. Ms. Teshner
answered in the affirmative. Representative LeBon voiced
that the schools still maintained internet expenses and he
guessed the districts were paying for the internet within
their own funding mechanisms that included federal, state
and local dollars. Ms. Teshner replied in the affirmative.
Representative LeBon wondered that if all districts could
tap the BAG program, it would come at the expense of the
rural school districts listed in the document. He deduced
that what made the bill important was the rural versus
urban element. Ms. Teshner deferred to her colleagues for
an answer.
Representative LeBon repeated his question and added that
he viewed the programs goal as bringing internet parity
between rural and urban school districts.
MICHAEL JOHNSON, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, replied that he believed it was an
accurate assessment. He explained that many urban districts
had access to higher speed internet that was much less
expensive than the cost in rural communities. He thought
that the program acknowledged the fact that the cost of
internet for rural school districts was much higher than
urban districts, even at the 25 Mbps limit.
Co-Chair Wilson noted that part of the committee's concern
was considering the cost for the upgrade up to 25 mbps and
the cost to school districts. Commissioner Johnson asked
for clarification. Co-Chair Wilson did not understand who
was chosen first. She assumed that a district had to have
funds to pay their portion. She wanted to ensure the
districts were not increasing class size to obtain more
internet. Commissioner Johnson answered that the
application process included information regarding whether
the district could afford the increase. He disclosed that
if the district could not pay, they lost their ability to
apply for the program.
Co-Chair Wilson queried about the legality of school
districts using an out-of-state virtual school for K-12
education.
2:38:40 PM
Commissioner Johnson answered that there were currently
many students in the state taking courses from vendors who
provided the courses from outside the state. The district
was able to utilize the vendors and ask a district teacher
to support the students using them. The courses available
were regular and AP (advanced placement). He reported that
some of the companies spent $500 thousand developing the
courses and they were very rigorous. He added that there
was a growing field of Career and Technical Education (CTE)
classes available. Co-Chair Wilson referenced
paraprofessionals in a classroom. She asked whether a
course could currently be taught using a virtual teacher
with only a paraprofessional in a classroom, or if it
violated state statute or regulation. Commissioner Johnson
answered that he was reluctant to say there would never be
issues. He affirmed that there was an opportunity to do
what Co-Chair Wilson described at present. A teacher was
required based on current statute. However, he exemplified
that in small school districts, if a small number of
students had conflicts with the sole English class, the
students could take a virtual class with the school's
English teacher as the teacher of record. He indicated that
the department was considering how to modernize the teacher
of record concept to extend the benefit of great teaching
to many students. Co-Chair Wilson clarified that she was
not talking about replacing teachers. She understood the
difficulties and issues in small schools with accessing
classes. She relayed personal experience observing non-
village teachers traveling home for the holidays or summer
and not having buy-in in the community versus the
paraprofessionals who remained in the community and could
provide additional educational access to the students. She
considered that the issue was access.
2:42:38 PM
Commissioner Johnson shared that technology could extend
the benefit of a great teacher to more and more students.
He believed that the discussion centered on teacher
quality. He relayed a story regarding a friend who was a
pilot for Alaska Airlines who had communicated that they
could land a plane in Juneau in weather they could not land
in 20 years earlier. He declared that it was due to
increased technology, but that navigational aide did not
replace the need for pilots. He reiterated that increased
bandwidth thereby increasing technology enhanced good
teaching but in no way replaced the teacher.
Vice-Chair Johnston spoke to technology enhancing
cooperation among districts. She shared that her favorite
subject was something that Commissioner Johnson had started
in his prior district that enable a great teacher to expand
his network through technology. Commissioner Johnson shared
that there were some amazing examples in the state of
extending great teaching to more and more students through
technology. He noted that Ketchikan and the Northwest
Arctic School District were examples. He spoke of a teacher
in Kotzebue that taught students all around the district.
Extending the benefit of a great teacher to as many
students as possible was now available. He noted that there
were some other great examples. He cited Seward High School
that was full of teachers providing instruction to students
that may or may not be in the facility when the class was
taught.
2:46:11 PM
Vice-Chair Ortiz offered that the developments were
positive and should be applauded. He inquired whether as
the state moved towards the opportunities if there were
concerns about cost sharing among districts. Commissioner
Johnson answered that the question had arisen around
athletics. He believed that athletics played a wonderful
role in student life, but often the coaches were teachers
and the coach travelled with the team making a substitute
necessary. He considered whether the instruction was of the
same quality. The coach was taking time to serve a limited
number of students and he considered whether it took time
away from his classroom students. He believed that the
question was important and not limited to the use of
technology. Vice-Chair Ortiz commented that the example was
a bit different since the coach was coaching students in
his district and not outside the district.
2:48:49 PM
Vice-Chair Johnston spoke to cost sharing between school
districts. She pointed out that Anchorage was currently
cost sharing with the Lower Kuskokwim and Copper River was
sharing with Chugach. She asked for details. Commissioner
Johnson clarified that he was not suggesting the need to
open the foundation formula. He stated that the application
of the formula needed to be reviewed. He explained that
extending the benefit of great teachers served students. He
specified that if the way the state applied funding
hindered a student from receiving great teaching, it needed
to be addressed. He did not want to penalize any district
for teaching across districts.
Co-Chair Wilson clarified that the discussion regarding
the education formula was appropriate. She posed a
hypothetical scenario where a teacher in North Pole wanted
to help another district offer trigonometry. She asked if
there was a problem for the other school district to
reimburse the Fairbanks North Star Borough School District.
Commissioner Johnson answered that the scenario was
possible. He communicated that school districts could enter
an agreement and reimburse one another similar to when a
district had a contract with a vendor and paid the vendor
for courses. He delineated that another approach was for
one district school to enroll the student three-quarter
time and the other district school would receive funding
for one-quarter time. He noted that the scenario was more
common for high school but could be done for elementary and
middle school. He deduced that there may be other
approaches to make the process easier and less complicated
2:53:13 PM
Representative Carpenter considered the $7 million per year
fiscal note [FN1 EED]. He pointed to the second page of the
fiscal note analysis that was based on estimates. He asked
if Commissioner Johnson could poll his districts to
determine what it would cost to get to 25 mbps. He assumed
that the numbers varied and wondered whether the actual
costs were available. Commissioner Johnson was sure the
information existed somewhere and was part of the
application process. The department did not currently have
the data but would ask the school districts for the
numbers. Representative Carpenter thought it would be
helpful to know the costs for each district to determine
whether the legislature was approaching the issue in the
right way.
Co-Chair Wilson wondered about the $7 million per year
cost. She thought that the money would bring the schools up
to 25 Mbps and wondered why it would be needed annually.
She thanked the commissioner for his time. She wanted to
ensure districts would have the ability to pay for the
increase.
HB 75 was HEARD and HELD in committee for further
consideration.
Co-Chair Wilson reviewed the schedule for the following
morning.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 75 E-Rate Consumer Guide FCC.pdf |
HFIN 5/7/2019 1:30:00 PM |
HB 75 |
| HB 75 School Bag Admin Code.pdf |
HFIN 5/7/2019 1:30:00 PM |
HB 75 |
| HB 75 Supporting Doc Broadband Networks map.pdf |
HFIN 5/7/2019 1:30:00 PM |
HB 75 |
| HB 75 YKSD Support letter.pdf |
HFIN 5/7/2019 1:30:00 PM |
HB 75 |