Legislature(2017 - 2018)BARNES 124
02/09/2018 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB318 | |
| HB277 | |
| Presentation: Temporary Specialty Dentistry | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 318 | TELECONFERENCED | |
| *+ | HB 277 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HB 277-BROADBAND INTERNET: NEUTRALITY/REGULATION
3:38:25 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 277, "An Act relating to the regulation of
broadband Internet; and making certain actions by broadband
Internet service providers unlawful acts or practices under the
Alaska Unfair Trade Practices and Consumer Protection Act."
3:38:45 PM
REPRESENTATIVE SCOTT KAWASAKI, Alaska State Legislature,
presented HB 277 as prime sponsor. He paraphrased the sponsor
statement, which reads as follows [original punctuation
provided]:
HB 277 would require Internet Service Providers (ISPs)
who provide broadband Internet to Alaskan families
engage in the practice of net neutrality. The bill
would make sure all data on the Internet is treated
equally. It would protect small businesses from
uncompetitive practices and guarantee an open and free
internet for all users.
Without net neutrality, ISPs may legally speed up
certain sites, slow down others, block sites all
together, and require certain users to pay more for
Internet fast lanes. The elimination of net neutrality
gives ISPs the power to determine what websites
consumers could visit and what content website
creators could share. Allowing ISPs to discriminate
based on content undermines a free and open Internet.
On multiple occasions, millions of Americans have
publicly commented in favor of protecting net
neutrality and have spoken out against the recent
Federal Communications Commission order to eliminate
net neutrality rules implemented in 2015. The internet
is a modern necessity for individuals and businesses.
Net neutrality is widely supported by consumer rights
groups, privacy groups, and businesses organizations.
This bill would ensure that the Internet remains a
platform for unrestricted economic competition and
free communication. I respectfully request your
support for HB 277.
3:40:50 PM
REPRESENTATIVE KAWASAKI paraphrased from "Fast Facts for
Conservatives on Net Neutrality," [included in committee packet]
published by the Christian Coalition [original punctuation
provided], which reads as follows:
"Net neutrality" policies helped create the most free
and fair marketplace in history, allowing consumers to
choose the winners and losers in a competitive
marketplace. This resulted in the best ideas, products
and services rising to top.
The Internet currently provides a megaphone for
political expression by virtue of the fact that every
site, no matter how obscure, is just as accessible to
every individual as any site with a multi-million
dollar budget. Every American has the opportunity to
create their own site and say what they want to the
entire world.
Politicians that are sitting idle and empowering cable
and phone monopolies to have power over what consumers
can see on the Internet are some of the same
politicians that would criticize countries such as
China for not allowing its citizens to be exposed to
the free market of ideas represented on the web.
Congress has wisely decided many times in the past to
avoid stunting the growth of the Internet via new
taxation. They should follow the same logic in this
case and not allow the cable and phone companies to
stunt its growth with new fees and content based
discrimination. In the end, the losers will be
consumers, businesses and those who use the Internet
for political expression.
3:42:30 PM
REPRESENTATIVE JOSEPHSON asked for more information.
REPRESENTATIVE KAWASAKI explained it was a position paper issued
in 2015 when the debates on net neutrality began.
3:43:17 PM
REPRESENTATIVE SULLIVAN-LEONARD stated the federal government
was enacting the policy and asked whether the bill would set
apart the state to make its own mandate or whether federal
guidelines would still have to be followed.
REPRESENTATIVE KAWASAKI specified net neutrality was in effect
following the debate in 2015, then in December 2017 net
neutrality was repealed at the Federal Communications Commission
(FCC). He stated Congress has been looking at enacting
bipartisan legislation to uphold net neutrality. He said 30
states have introduced legislation very similar to HB 277. He
added that 2 governors have signed executive orders that net
neutrality shall be the law of the land in their states, and 24
governors and attorneys general have entered litigation against
the federal government. He said the question was premature as
it had not yet been litigated.
3:45:15 PM
CHAIR KITO asked how the current situation is different from
what was happening prior to 2015.
REPRESENTATIVE KAWASAKI answered there had been a significant
lawsuit filed against a large company engaging in the practices
outlined in HB 277.
REPRESENTATIVE WOOL asked whether the proposed bill would
stipulate that the state "can't throttle up and throttle down
different aspects of the internet pipe" and whether there was an
entity "further up the line" that could.
REPRESENTATIVE KAWASAKI clarified that the state doesn't
"throttle up or down," but the state would be saying the
internet service providers (ISPs) operating within the state
would have to treat all internet activity as it is treated under
net neutrality and could not throttle speeds or block websites.
REPRESENTATIVE WOOL asked if the ISPs in the state are getting
internet from a parent company outside the state that could
throttle speeds.
3:48:20 PM
JAKE GERRISH, Staff, Representative Scott Kawasaki, Alaska State
Legislature, answered questions on HB 277 on behalf of
Representative Kawasaki, prime sponsor. He explained ISPs in
Alaska are connected to other ISPs, called "backbone providers,"
which theoretically could slow down services to the secondary
ISPs. He underlined that with net neutrality protections, all
ISPs would be under the same regulations so that no company
could slow down service for end users.
REPRESENTATIVE WOOL asked whether, if the federal government
does not pass net neutrality legislation, a backbone provider
delivering content to an instate provider could lower speeds for
the local ISP.
MR. GERRISH answered that could be a possibility.
3:50:37 PM
REPRESENTATIVE JOSEPHSON asked whether it was Mr. Gerrish's
understanding that a state under its sovereign authority could
dispense with constitutional issues about the powers of the FCC
and regulate and control the speeds of its internet users
internally. He spoke to principals of federal constitutional
law and gave the example of yoghurt that comes into the state,
which can be regulated by the federal government as it travels
interstate. He asked whether the question had been considered
MR. GERRISH answered that it had been considered and pointed out
that similar legislation is being litigated in other states and
they are further ahead in the process. He suggested that seeing
how those cases are decided would inform how to move forward.
3:52:18 PM
CHAIR KITO spoke to differences in telecommunication providers
in Alaska. He gave the example of AT&T and GCI and asked
whether, if the proposed bill were to pass but net neutrality
was not passed at a national level, GCI would be at a
disadvantage in competition with AT&T as GCI could not change
their capacity in response to users, but AT&T could.
MR. GERRISH answered that he did not think so because the
backbone providers that both companies rely on are outside of
the state. He said the internet was "just a series of tubes"
transferring information from one location to another and the
backbone providers rely on similar fiberoptic and copper cables.
CHAIR KITO asked who the backbone providers are.
MR. GERRISH shared his understanding that those companies can be
larger companies as well as non-profits such as the University
of Maryland.
CHAIR KITO said he was not sure at what point the proposed bill
would provide protections for the organizations, individuals, or
companies moving the data.
3:55:37 PM
REPRESENTATIVE BIRCH spoke to regulation in the phone industry.
He opined deregulation helped the phone industry to lower costs
and innovate. He asked whether Mr. Gerrish saw any disadvantage
to eliminating the competition.
3:58:19 PM
MR. GERRISH paraphrased from "Fast Facts for Conservatives on
Net Neutrality," which reads as follows [original punctuation
provided]:
"Net neutrality" policies helped create the most free
and fair marketplace in history, allowing consumers to
choose the winners and losers in a competitive
marketplace. This resulted in the best ideas, products
and services rising to top."
MR. GERRISH added that net neutrality allows the internet
to act as the marketplace. He posited that eliminating net
neutrality would hand over the power to the ISPs to
regulate access to websites and thereby distort the market.
REPRESENTATIVE BIRCH responded that he felt the power of the
consumer to choose from multiple competitors was being ignored.
He gave the analogy of a supermarket and stated he could choose
to frequent a store where he gets better service at better
prices. He added he was concerned about eliminating competition
and that he would prefer to let it be a consumer-driven
decision.
4:00:43 PM
REPRESENTATIVE JOSEPHSON said it seemed that the intent of
HB 277 was to encourage open competition and what the FCC did
was to create inequality between the vendors rather than create
an equal playing field. He posited the proposed bill is a
conservative bill aimed at deregulation. He asked whether that
was correct.
MR. GERRISH answered that was the intention of the proposed
bill. He pointed out the broad support for the legislation,
from the Christian Coalition to ACLU. He spoke to the concern
regarding market choice and the idea that the consumers want to
keep the internet free and open and would not purchase the
service of an ISP that hinders that. He suggested that when the
first ISP starts charging for priority lanes, all the others
will have to do the same to stay competitive.
4:03:05 PM
CHAIR KITO spoke to Representative Josephson's statement that
the aim of the proposed bill is to provide an equal playing
field through deregulation, but he said he thought net
neutrality was a regulation. He pointed to page 1, line 13, of
the new bill language and asked what "utility" means in the
context of the proposed legislation.
MR. GERRISH answered that in the language "utility" refers to
broadband internet access services.
CHAIR KITO suggested the state does not have the ability to
restrict any national companies' activities and he wanted to be
certain the proposed bill would be creating an even playing
field for local ISPs.
4:06:40 PM
TARA RICH, Legal and Policy Director, ACLU of Alaska, testified
in the hearing on HB 277. She presented as an analogy that "it
would be really shocking" if telephone companies were permitted
to make a connection worse if a customer was talking to a
certain person the company doesn't like or were speaking about
certain subjects. She underlined net neutrality means a company
that connects consumers to the internet does not get to control
what one does on the internet, including not blocking or
throttling content or connections. She explained that
throttling refers to intentional slowing of a connection unless
for reasonable network management purposes. She said net
neutrality does not allow for paid prioritization. She stated
net neutrality rules prevent ISPs from "unreasonably
disadvantaging" an end user's content on the internet. She put
forward that while those standards are not verbatim in the
proposed bill, they are what is referred to as net neutrality.
MS. RICH gave some history of telephone regulation. She
explained voice over IP (VOIP) interrupted the telephone service
business model and lead to company mergers and bundled services
for internet, cable, and telephone. She stated that currently
the disruption is from video streaming services (Netflix, Hulu)
so that cable products are now coming through internet services
at much lower prices. She underlined that now that the internet
has grown to become one of the primary means of communication,
having meaningful rules to protect communication from censorship
is critical.
MS. RICH relayed AT&T censored a live stream of a Pearl Jam
concert, silencing the part of the concert in which Eddie Vedder
mentioned President George W. Bush, as it was deemed too
controversial. She added Verizon Wireless blocked text messages
from pro-choice advocacy group, NARAL. In Canada, a company
called Telus blocked the website of a union with which it was
engaged in a labor dispute.
4:12:05 PM
MS. RICH responded to Representative Josephson's concerns that a
state law that regulates primarily outside entities might be
subject to preemption concerns or concerns under the U.S.
Constitution regarding the commerce clause. She described
preemption of a broad field of regulation which belongs to the
federal government, including immigration. She stated this type
of service has never been deemed to be the sole domain of the
federal government, and that states regulate them consistently.
She went on to discuss conflict preemption as in Section 253 of
Title 47 of United States Code, which says that states should
not have the ability to prohibit an entity from providing
intrastate telecommunications service. She highlighted the
exception for rules which are in place to ensure continued
quality of service or to safeguard the rights of the consumers.
She reiterated there is not a conflict preemption concern.
Additionally, with respect to the commerce clause, this type of
legislation has been consistently upheld as long as the
legislation is a neutral, Alaska-only law. She said she felt
there are surmountable issues with state law, including to what
degree Alaska law could affect outside services such as AT&T.
She highlighted the proposed bill was only for statewide
applications. She reiterated there are 30 states in the process
of introducing similar legislation to restore net neutrality in
their states.
MS. RICH described peerage agreements. She stated local IPSs do
not control how data is transferred from its source. She gave
the example of GCI getting its service through Time Warner or
another ISP in the Lower 48, who may have a dispute with
Netflix, perhaps to try and create a Hulu-only service. Alaska
recipients would not have access to that content because it
would be blocked by an agreement over which the consumer had no
control. She added the market theory falls apart as there is
not ample choice in Alaska for this service. She underlined
high speed internet is needed for services such as telehealth
and telemedicine in rural areas in the state.
4:17:51 PM
REPRESENTATIVE WOOL asked whether companies' interest in
eliminating net neutrality was to limit the ability to access
internet streaming services more easily than paying for cable.
MS. RICH shared her understanding that the intent was not
necessarily to block content but to enable the companies to make
money. She went on to say that ISPs that provide certain
content through their cable television service would be able to
offer streaming service as part of their product.
4:20:15 PM
CHAIR KITO spoke to internet speed. He remarked equitable
access seems like it would mean everyone could access the same
internet speed. He added there are already carriers who charge
more for faster speeds.
MS. RICH answered that net neutrality was not addressing faster
speeds, but content creators' access to opportunity. She added
net neutrality was about requiring that companies not
intentionally slow down services based on content. Larger
organizations and businesses can negotiate for prioritization of
their product or viewpoint, whereas a local "mom and pop shop"
will not have that capacity. She stated the quality of
opportunity was based on content and not on the actual
infrastructure in which the ISP has invested.
REPRESENTATIVE JOSEPHSON asked about the intent of the FCC's
order. He asked whether it was designed to create an exchange
of commerce wherein one company could bid with an ISP to slow
down a competitor's content.
4:23:35 PM
MS. RICH answered it was out of her league "speaking about the
legislative intent of Chairman Pai and some of the former
Verizon employees who made this decision at the FCC." She said
that a key part of net neutrality is called "paid
prioritization," which was one of the pieces which was
dismantled with the action taken in December. She gave the
example of several wallet applications which were blocked
because they competed with the ISPs' own mobile wallet
applications. She stated she did not know whether that was in
the intent of the decision but that it was certainly one of the
results.
REPRESENTATIVE WOOL posited a scenario in which Alaska enacts
its own net neutrality law, but the federal government does not.
He said the state would receive content from a national backbone
company, and suggested one provider (Netflix, Hulu) could pay to
go faster and smaller provider could not pay for the extra
speed. He asked whether Alaska consumers would have the same
disparity in speed, even with the net neutrality law.
4:26:26 PM
MS. RICH explained "providers paying to go faster" refers to the
content provider (Netflix or a small business), and not to the
ISP. She pointed out that small businesses can't afford the
same speeds that bigger businesses can afford. Net neutrality
rules are designed to prevent content providers from
accelerating the speed of certain content, so that users and not
the ISPs get to decide where their traffic should go. She gave
the example of a national provider such as AT&T who has an
agreement with Netflix, and said the question was whether end
users would feel the effects and get Netflix faster than another
streaming service. She shared it was her understanding that
Alaska would feel the effects if Alaska passed net neutrality
legislation, but the federal government did not, or not enough
states passed it to make it impractical for ISPs to go around
net neutrality rules across the country. She suggested a
scenario in which GCI has a peering agreement with Time Warner
and said consumers would feel the effects of their content-
blocking, without ever contracting with Time Warner.
4:28:49 PM
REPRESENTATIVE BIRCH shared his concern that the situation was
being misrepresented. He remarked that testimony states the FCC
has restored the pre-2015 view that broadband internet is an
information service and not a utility common carrier service and
restored Federal Trade Commission (FTC) authority over broadband
providers. He asked Ms. Rich whether she has confidence in
those agencies which were designed to protect the consumer.
MS. RICH answered she was not comfortable relying on the federal
government to enforce the rules. She underlined it is not a
coincidence that the legislation has such broad bipartisan
support and that 30 states have introduced similar legislation.
REPRESENTATIVE BIRCH stated it doesn't appear to him to be
bipartisan.
4:33:01 PM
CHAIR KITO opened public testimony on HB 277.
4:33:25 PM
JERRY KEEGAN, CTIA, Trade Association for Wireless Industry,
testified in opposition to HB 277. He stated the wireless
industry supports free and open internet, and that local
companies (AT&T, GCI, Verizon Wireless) agree not to block or
throttle lawful content in an anti-competitive manner. He said
strong consumer protections remain in effect after the recent
FCC decision, wherein it restored FTC broad authority to police
providers and their actions. Additionally, FTC can prosecute
providers who try to adopt anti-competitive practices, such as
favoring their own content or services. He remarked FCC
retained its transparency rule to require providers to present
extensive information about their network management practices.
He added the Alaska attorney general may enforce consumer
protection laws of general applicability against any provider
acting anti-competitively, violating its terms of service, or
not abiding by its agreements. He stated the FCC's recent order
reaffirms the 2015 decision finding that broadband is an
interstate, indeed a global offering, preempting states and
localities in this area. He opined state-by-state regulation of
broadband services, especially mobile broadband, is untenable,
and added that he thought a patchwork of state laws would hinder
innovation and increase the cost of compliance. He suggested it
would be unnecessary to pass the proposed bill considering what
ISPs have agreed to do and the strong consumer protections
already in place. He stated CTIA supports a federal legislative
solution to ensure a free and open internet.
4:36:13 PM
REPRESENTATIVE SULLIVAN-LEONARD asked for a response to
assertions about ISPs blocking access to content on the
internet.
MR. KEEGAN answered the complaints generally refer to non-U.S.
carriers or did not involve net neutrality violations at all.
He stated the AT&T incident occurred over ten years previously
involving a vendor who operated a webcast for AT&T and explained
the current bill does not address website operators. He stated
the Telus incident did not involve a U.S. company. He added the
Verizon incident had involved a single employee's
misinterpretation of policy and the decision had been instantly
reversed. He addressed peer-to-peer agreements and stated they
would not be covered under HB 277 as they are not broadband
internet access services as defined under the bill and are not
mass-market retail services.
4:38:42 PM
JACK BARNEY testified in support of HB 277. He said he believes
a fair and open internet is vital and the proposed bill is the
most business-friendly way to achieve that goal. He pointed out
large business states such as California have introduced similar
legislation. He spoke to Representative Birch's comments about
telephone regulation and suggested the telephone industry could
innovate because it was under Title 2, whereas internet service
was no longer under Title 2 with the recent FCC decision. He
referred to the analogy of the supermarket. He remarked "if we
were to imagine the entire internet is a grocery store, what
this legislation is doing is saying that a grocery store cannot
say, 'I'm only going to give you the opportunity to purchase
Lucky Charms because I have cut an inside deal with them,' when
what I want is cornflakes." He stated this legislation says the
market should be open and consumers should be able to decide for
themselves what should be on the shelves through the power of
their purchases.
4:41:08 PM
CHARLES MCKEE, Self, testified in the hearing on HB 277.
4:42:37 PM
LEON JAIMES, Self, testified in support of HB 277. He stated he
has worked in the information technology services sector for
over 20 years and currently works as an information security
consultant. He said he feels a free and open internet is
fundamental to democracy and that internet connectivity allows
residents in the most remote areas of the state to participate
in the global economy. He stated Alaska is leading some of the
efforts in telemedicine for which connectivity is vital. He
said without net neutrality regulations, free speech and privacy
are at risk. He spoke to recent data breaches and pointed out
many ISPs fail in their data protection efforts. He gave the
examples of an Alaska Communications 2014 data breach which
compromised the information of current and former employees, and
the AT&T 2015 settlement with the FCC over a data breach. He
underscored the data collection that is necessary to block,
throttle, and engage in paid prioritization is directly
attributable to individuals, and once it is collected it can be
stolen with no recourse to recover it.
MR. JAIMES said United States Senator Lisa Murkowski has stated
she supports net neutrality and has said the fundamental
decisions on internet policy should involve the Congress, "they
are that important." Although she has sponsored legislation
such as the North American Energy Security and Infrastructure
Act of 2016 with provisions for securing "the internet of
things" energy management solutions, not one of the 2,915 pieces
of legislation sponsored by the senator is aimed at protecting
net neutrality.
MR. JAIMES spoke to a comment made during a previous committee
meeting that net neutrality is not an issue as consumers are
free to switch to another provider. He remarked that
perspective shows a fundamental misunderstanding of what is at
stake, as it is not only that the connection of consumers can be
throttled, but the services at the other end of the connection
may be throttled as well. He stated the website of an
entrepreneur in Nome may be deprioritized so that customers
around the world, regardless of their data plan, cannot access
that website. He added telemedicine is another important
example. He suggested ISP could charge more for telemedicine
connections regardless of technological advances.
4:47:10 PM
SANTA CLAUS, Self, testified in support of net neutrality. He
stated the internet was designed to enable and protect free
speech. He said net neutrality ensures that ISPs cannot slow
down or block content to subscribers who do not want to pay
extra for preferential service. He stated that without net
neutrality, an ISP could decide to block or slow down access to
internet content throughout Alaska and internet access could be
restricted to websites that contain only particular religious or
political views. He said net neutrality encourages free speech
without discrimination and that without it, legislators may have
to pay ISPs more to ensure their campaign websites were viewed
along with their opponents' websites. He encouraged the
committee to protect free speech and ensure equal and timely
access to information to benefit all the people in the state.
4:49:01 PM
GEORGE PIERCE, Self, testified in the hearing on HB 277.
4:51:04 PM
CHAIR KITO announced that public testimony would be left open.
HB 277 was held over.