Legislature(2017 - 2018)ADAMS ROOM 519
04/11/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB384 | |
| SB32 | |
| HB384 | |
| SB32 | |
| HB306 | |
| SB4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 339 | TELECONFERENCED | |
| += | SB 32 | TELECONFERENCED | |
| + | SB 4 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 306 | TELECONFERENCED | |
| += | HB 384 | TELECONFERENCED | |
HOUSE BILL NO. 384
"An Act relating to the Regulatory Commission of
Alaska and broadband Internet regulations."
2:19:35 PM
REPRESENTATIVE DAVID GUTTENBERG, SPONSOR, introduced the
legislation that would add four words to the Regulatory
Commission of Alaska's (RCA) responsibilities: "including
broadband internet access." He read a definition of
telecommunications from AS.42.05.990(13) as follows:
(13) "telecommunications" means the transmission and
reception of messages, impressions, pictures, and
signals by means of electricity, electromagnetic
waves, and any other kind of energy, force variations,
or impulses whether conveyed by cable, wire, radiated
through space, or transmitted through other media
within a specified area or between designated points.
Representative Guttenberg shared that he had been on a
quest to bring broadband to more Alaskan communities. He
explained that the RCA was the proper authority to
investigate the issue, but they believed the statute that
granted its authority lacked clarity. He held that the
statute clearly defined telecommunications as a public
utility and gave the Regulatory Commission of Alaska the
responsibility to regulate providers of telecommunications
services. The legislation further clarified the RCA's
responsibilities by specifically including 'broadband
internet access' under the definition of
telecommunications. He added that on page 2, lines 14
through 15 the definition of broadband was amended to read:
(14) "broadband Internet access" means high-speed
Internet access that is always on and that is faster
than traditional dial-up access.
2:23:06 PM
Co-Chair Foster noted that Representative Kawasaki had
joined the meeting.
Representative Grenn spoke about a letter of opposition
from the Alaska Communications (AC) (copy on file). He read
from the letter:
Consequently, there can be no doubt that internet
access is interstate in nature, and therefore subject
to federal jurisdiction, not state jurisdiction.
Representative Grenn inquired how the bill aligned with the
statement.
Representative Guttenberg answered that it "went right to
the point." He voiced that he did not disagree with the
statement. He delineated that in December 2017, the Federal
Communications Commission (FCC) issued and order titled
"Restoring Internet Freedom." The order rescinded "Net
Neutrality" and appropriated the states' authority to
regulate internet granting the authority solely to the
federal government leaving the state very limited capacity
to regulate broadband. However, there were actions that the
state could engage in to help expand broadband service. He
suggested that other states performed mapping and created
an environment to invite more competition. The actions were
not regulatory. The FCC had stated internet service was not
a utility, so regulation was not possible. However, the
Regulatory Commission of Alaska could still engage in
activities that were in the state's best interest like. He
indicated that 21 states were suing the FCC over the order.
If they prevail and the order was reversed or modified the
state would still not be able to ask the RCA to regulate
broadband if the definition was not included in statute.
2:26:08 PM
Representative Wilson stated that the letter also raised
the concern that the bill would change the definition of
public utility. Representative Guttenberg disagreed with
the statement. He explained that the bill simply included
broadband access into the statute as a "definition of
responsibilities." Representative Wilson asked if
Representative Guttenberg was saying the AC letter was not
justified. Representative Guttenberg agreed with the
statement but restated that the FCC assumed the primary
role of regulating broadband the prior December and if the
bill was heard last session there would not have been a
conflict. He reiterated that the state could still engage
in actions that the FCC did not take on and other states
performed. He noted that 30 states were taking action that
were not regulatory such as mapping, creating opportunities
for competition, and creating opportunities for entities to
"buildout" broadband. He agreed that the states could not
regulate broadband.
2:28:24 PM
Representative Wilson noted that another argument in the
letter was that the internet point for Alaska was Seattle.
She asked whether the broadband carriers would be under
Washington or Alaska law. Representative Guttenberg replied
that point to point inside of Alaska was considered
interstate. He commented that he was not talking about
regulating interstate or intrastate because the state did
not have a role in regulation anymore. He stated that by
clearly identifying that broadband was under the RCAs
purview the Regulatory Commission of Alaska could put
programs in place for the private sector to understand the
state's needs or mapping to inform consumers what providers
were available. He stated that "there was a whole slew of
things that other states had done." Alaska "could do things
for its citizens" that were not regulatory in nature to
help expand broadband. Representative Wilson remained
confused. She commented that the letter insinuated that the
bill could place obstacles in the way of his goal of
expanding broadband service, which she knew was not the
sponsor's intent. She wondered what the Regulatory
Commission of Alaska and private entities could do that
they could not accomplish without the bill. Representative
Guttenberg answered that if the private companies were
building out broadband services to urban and rural areas in
Alaska he would not be sponsoring the bill. The RCA could
perform mapping that charted the carriers service
throughout the state. Current FCC mapping was inefficient
and inaccurate. The RCA could also create opportunities for
grants and subsidies to build out broadband. However, if
broadband was expanded the RCA was prohibited from
regulating fees - the FCC claimed jurisdiction of that
role.
2:33:01 PM
Representative Wilson understood the regulatory issues. She
asked whether the bill allowed the Regulatory Commission of
Alaska to promote competition, award grants, and do
mapping. Representative Guttenberg replied the RCA was
hesitant about saying what actions they might take if the
bill was adopted. He looked at what other states had done
outside of a regulatory role. The Regulatory Commission of
Alaska would have to go through a regulatory type process
with the industry, state, and public to decide what non-
regulatory actions to participate in. Representative Wilson
wanted to hear the perspective of the RCA.
Representative Grenn asked to hear more about the effects
of adding the four words and wondered what the RCA would be
regulating. He referenced a memorandum from Legislative
Legal Services dated February 18, 2018 (copy on file) and
read the following:
The bill draft clarifies that regulatory power of the
RCA to include broadband Internet; the Regulatory
Commission of Alaska will still not be able to
regulate any area that is preempted by federal law.
Representative Guttenberg answered the RCA would not be
regulating anything. Representative Grenn asked for more
detail on what the additional words would able them to do.
Representative Guttenberg responded that Legislative Legal
Services had determined that the Regulatory Commission of
Alaska currently had adequate statutory authority to
regulate broadband if that was still allowable. He
expressed frustration that the RCA had previously declined
to take on the authority. He listed examples of action the
other states could do outside a regulatory purview. He
reported that the state of Kansas ensured that underserved
areas were built out and required broadband service
providers to show where broadband was and was not
available. He related that his office received many
constituents' calls requesting information regarding
providers, coverage areas, service, and fees. He detailed
that the FCC performed mapping using census blocks and
there may be three blocks for an entire community, but
service might only cover one partial block. However, the
map depicted that the entire area received highspeed
internet. In addition, other states set up grants to assist
in building out the infrastructure to promote broadband
across the state.
2:38:33 PM
Representative Thompson remarked on the complexity of the
issue and the letters of opposition. He asked to hear more
about the bill. He did not know that he was ready to take
any action on the bill at present. Representative
Guttenberg believed that the Regulatory Commission of
Alaska had the authority to take an active role in
broadband service in Alaska. However, the Regulatory
Commission of Alaska was hesitant to do so due to their
interpretation of statute they perceived lacked clarity. He
maintained that no one in the state, including the
Department of Administration (DOA) who administered state
government broadband, had authority over broadband or taken
on a study of the state's need. The bill merely clarified
that the responsibility for broadband was in the RCAs
purview. He wanted the RCA to act on their authority.
Co-Chair Foster noted that Representative Pruitt had joined
the meeting.
Representative Thompson cited the letter and referred to
the following statement:
"The RCA regulation of broadband internet may raise
federal preemption concerns."
Representative Thompson asked for an explanation.
Representative Guttenberg replied that the preemption was
referring to the FCC's action in removing the states
authority to regulate broadband.
SETH WHITTEN, STAFF, REPRESENTATIVE DAVID GUTTENBERG,
relayed that part of the confusion was the shifting
landscape. He detailed that if it was prior to the FCC's
order, broadband would still be considered by the FCC as a
public utility and the discussion would not be taking
place. Prior to the FCC's order the bill would have updated
the statute to conform to the way broadband was categorized
by the FCC; as a public utility. However, the landscape had
shifted due to the order, therefore the four words in the
bill enabled the RCA to do anything that was not preempted
by the federal government. Therefore, currently the RCA
could collect network information. The order disallowed
imposition of requirements or regulations, setting rates,
terms or conditions on the offering of broadband services.
2:42:03 PM
Co-Chair Seaton pointed to the note at the bottom of the
memorandum (page 1) from Legislative Legal Services and
thought it answered many of the questions. He read from the
page:
AS.42.05.990(13)"telecommunications" means the
transmission and reception of messages, impressions,
pictures, and signals by means of electricity,
electromagnetic waves, and any other kind of energy,
force variations, or impulses whether conveyed by
cable, wire, radiated through space, or transmitted
through other media within a specified area or between
designated points." It is my understanding that this
definition includes broadband Internet services.
Co-Chair Seaton noted that the attorney believed that the
definition included broadband internet services. He
continued that the RCA could not regulate the net
neutrality portion any longer, but broadband access could
be pursued. He referred to page 1, line 11 and read:
(B) furnishing telecommunications service,
Co-Chair Seaton maintained that for some reason the
Regulatory Commission of Alaska had a different
interpretation of the statute than legal services.
Therefore, by merely clarifying the definition that the
statute did included broadband internet access did not mean
the bill violated any federal regulations. The bill
currently included taking any actions that were left in the
state's purview. He was puzzled why some members questioned
the bill when it merely clarified the definition, so the
RCA felt more comfortable assuming responsibility for
internet services. He reiterated that the legislative
attorney's assured members that the authority already
existed in the current definition. He asked Representative
Guttenberg if his assessment was correct. Representative
Guttenberg replied in the affirmative. He added that by
assuming responsibility the Regulatory Commission of Alaska
would open a docket (process) to determine what actions
were in the best interest of the state. The bill called on
the RCA to consider acting.
2:45:34 PM
Representative Tilton asked if the sponsor foresaw any
costs to the RCA, state, and ultimately end users.
Representative Guttenberg replied that he was an example of
an end user and he would love to pay for improved broadband
services and internet access. He shared that he had lived
in the same home for 41 years and he recalled when power
had been brought to the neighborhood; he had been happy to
pay $1,000 for the service. He noted that the RCA
implemented charges for developing regulations but would
not be regulating so he was uncertain how its costs would
be covered. He wanted the state to build out broadband for
its citizens and considered access a significant service
that builds infrastructure into the state that moved it
into the 21st Century. He compared internet access to the
development of the national electrical grid in the 1930's
or the highway system in the 1950's. He emphasized his
desire for enhanced broadband services in the state.
2:48:29 PM
Representative Kawasaki thanked Representative Guttenberg
for the legislation. He referenced Representative
Guttenberg's opening statement that the RCA already had the
authority to regulate broadband and asked for comment.
Representative Guttenberg interpreted the statute to mean
that it covered all forms of telecommunications, even types
that had not been invented yet. He stated that it was not
clear enough for the commission. The bill further clarified
statute. Representative Kawasaki referenced backup in
members' packets related to locations where broadband was
regulated [Broadband Statutes National Conference of State
Legislatures] (copy on file). He asked what those states
were doing to comply with or adjust to the FCC ruling.
Representative Guttenberg replied that 30 states were
attempting to reorganize broadband as an industry or a
utility and 21 states were suing the FCC over the Restoring
Internet Freedom order. He noted that he had a document
that listed what states were doing since the ruling.
Mr. Whitten interjected that the regulatory function had
always been in question. There had been a period where
broadband was classified as a public utility under the FCC.
He delineated that typically states focused on
incentivizing broadband through grant programs rather than
on regulation. The one area where states had the ability to
gather information was in the network information that was
used for mapping. The RCA compiled information on broadband
coverage for a legislative report over the prior year and
found there were entities that believed they lacked the
authority to request coverage data. The bill clearly
allowed entities to request information that was not
preempted by the federal government. He discovered the
recent "Competitive Emerging Communications Technologies
Act" in Georgia that granted the state authority consistent
with the FCC ruling and acknowledged that the state did not
maintain the authority to regulate rates and set terms and
conditions on services. However, the act contained a
provision that stated the state would assume the authority
if the FCC ruling was reversed. He commented that states
had to exist in the constantly shifting landscape about
whether broadband was considered a utility. Other states
were trying to occupy the middle ground.
2:53:55 PM
Representative Guttenberg referenced the document from the
NCSL in members' packets and pointed to Mississippi and
read the description of the state's provisions regarding
broadband as an example of actions state could take:
Declares Mississippi's policy is to provide incentives
for "telecommunications enterprises" to invest in the
infrastructure needed to provide broadband technology
throughout the state to keep Mississippi competitive
and to promote economic development within the state.
Extends the sales tax exemption on sales of equipment
to telecommunications enterprises that is used in the
deployment of broadband technologies. Extends the ad
valorem tax exemption for equipment used in the
deployment of broadband technologies by
telecommunications enterprises.
Representative Guttenberg expounded that the document
related what other states were doing. The states were
creating opportunities for industry to develop broadband.
Currently, what measures the RCA would take were unknown.
Representative Kawasaki did not see the problem with the
legislation impacting the FCC ruling and assumed the RCA
would work within the ruling. Representative Guttenberg
answered in the affirmative. He pointed to California and
read one of the measures the state adopted:
Regulates fiber optic cables and broadband placement
on state highways.
Representative Guttenberg had requested that every time the
Department of Transportation and Public Facilities (DOT)
had to repair or build a road they lay empty conduit for
any future broadband capacity. He reported that the Ambler
Road project was planning on adopting the strategy. He
declared that the state had a "broadband deployment
problem." He noted that the fiscal note from the RCA was
zero. Representative Kawasaki referenced the letters of
opposition in members' packets. He cited the legislation
and referred to the words "broadband internet access" [page
1, line 11] included in the definition of public utility
and thought the opposition was related to the wording in
the bill.
2:59:02 PM
Mr. Whitten replied that under the FCC order currently
broadband was not considered a public utility. The question
was whether states would change statutes every time the
federal government changed its categorization of broadband
or created statutes that recognized the issue and provided
flexibility and authority to operate within the
limitations.
Vice-Chair Gara stated that the line pertaining to what
could and could not be regulated would continue to change.
He stated that the bill would allow the RCA to regulate
broadband within the confines of the FCC rulings. He
believed that opposition letters from industry were
inconsistent. He interpreted the bill to mean that the
state would regulate broadband only as far as the court and
federal government allowed. The line would move in the
future. In urban and rural Alaska there was a long list of
grievances among consumers that needed attention. He
thought the bill would enable redress for at least, some of
the grievances. He expressed the frustration caused by
poor, costly internet service. He emphasized with rural
residents who experienced high cost inadequate internet
service. He supported the bill.
3:02:32 PM
Representative Wilson was trying to understand what the
bill would enable the RCA to do that it could not currently
do. She was concerned about how the commission would
promote competition, distribute grant funding, and how
mapping would work.
RICHARD GAZAWAY, ADMINISTRATIVE LAW JUDGE, REGULATORY
COMMISSION OF ALASKA (via teleconference), believed the
question had been answered by Mr. Whitten. He elaborated
that when the commission was tasked by the legislature with
publishing a broadband report the commission attempted to
request network mapping information. Some service entities
took the position that the RCA lacked the authority due to
jurisdictional limitations to request the information. He
assumed that was the reason the sponsor introduced the
bill. He believed that the authority was supported and not
preempted by federal law. The commission would have
authority that was not preempted but was currently "very
limited."
Representative Wilson asked whether he thought that the
bill would force private companies to release the
information. Mr. Gazaway answered in the negative. He
elaborated that the issue was a source of controversy
between the commission and the industry. The commission did
not force the issue and he maintained a neutral position.
Representative Wilson restated the question. She inquired
if the bill would give the RCA authority to force other
companies to provide information for mapping. Mr. Gazaway
replied that the clarification in the statutory definition
would grant the RCA "strong support for the authority to do
so." Representative Wilson wondered about proprietary
information that companies did not want to provide and how
the commission would respond to the situation. Mr. Gazaway
was uncertain how the commissioners would respond.
3:06:44 PM
Representative Wilson asked if the RCA distributed grants
and how it promoted competition. Mr. Gazaway replied with a
historical example. He communicated that the commission
previously handled a broadband grant. The grant funding was
a federal farm bill earmark for rural Alaska to obtain
broadband internet access. The commission and Department of
Commerce, Community and Economic Development (DCCED) were
the grant administrators. The commission was able to impose
requirements on service levels, speeds, rates, and other
conditions for the life of the grant. He related that other
states had received multiple grants or used general fund
money for broadband support. He noted the existence of the
Alaska Universal Service Fund that was used to support
telecommunications carriers in Alaska.
Co-Chair Foster OPENED and CLOSED public testimony.
3:09:30 PM
AT EASE
3:10:02 PM
RECONVENED
Co-Chair Foster did not recall that anyone had signed in to
testify during the morning meeting when the bill had been
originally scheduled.
Vice-Chair Gara read the zero fiscal note from the
Department of Commerce, Community and Economic Development
appropriated to the RCA.
Representative Wilson referenced analysis on page 2 of the
fiscal note and read:
The Regulatory Commission of Alaska (RCA) would be
required to certificate or implement through
regulation a registration process for Internet service
providers operating in Alaska.
Representative Wilson was concerned about requiring
certificates for internet providers and reported that had
not been her understanding of the bill. Representative
Guttenberg answered that the fiscal note showed that the
RCA did not anticipate any fiscal impact.
Mr. Gazaway replied that a public utility was required to
comply to a registration or certification process. The
registration process was required for carriers that
provided service. The certification process was more
extensive, and he thought that a certification was not
possible to issue related to the net neutrality order and
market barriers. He indicated that a registration process
was more likely. The commission had statutory authority to
allow registration instead of certification. Representative
Wilson asked whether the RCA would obtain the information
as part of the application for a required certification
process. Mr. Gazaway answered that other states obtained a
list of providers to provide a service list for consumers.
He assumed that was the intent of the bill's sponsor. He
added that if there was a desire for mapping information on
network availability the inquiry would be issued to the
providers listed on the registration information.
3:14:00 PM
Representative Wilson did not care what other states did.
She was trying to determine whether it was the commission's
intent to require a registration process. Mr. Gazaway
answered that there was no intent. The commission
determined what would be required under its statutory
framework if the bill was adopted, which was to develop
some type of registration process and what that involved
was decided on by the commissioners. The simplified process
was the registration process.
3:15:14 PM
AT EASE
3:16:20 PM
RECONVENED
Representative Wilson wondered whether the language in the
fiscal note was binding. She suggested using the word
"might" to avoid requiring registration.
Representative Guttenberg answered that the bill was a
blank page; there were no regulations in place and there
were no regulations defining a process. The commission
would engage in a public process before establishing any
regulations. Representative Wilson stated that the fiscal
note had been approved by Stephen McAlpine the chair of the
RCA and approved by Catherine Reardon, Director, Division
of Administrative Services, DCCED. Her concern was the
language in the fiscal note reflected the commission's
analysis of the bill. She surmised that the commission
would be required to implement a registration process. She
wanted a definitive answer.
Vice-Chair Gara stated that the fiscal note was simple, and
he believed the requirement was "a molehill and not a
mountain." He voiced that registration was a simple process
and nothing in the bill was controversial. He added that
the state did not preempt the federal government
3:20:20 PM
Co-Chair Foster voiced that at some point the members would
have to agree to disagree.
Mr. Gazaway answered that a public utility was required to
obtain operating authority via statute. The registration
process was more informational and informal. The commission
would determine what process was more relevant according to
statute.
Co-Chair Seaton remarked that the bill was merely a
clarification of subsection (b) in statute. He pointed out
that if there was already an established registration
process for telecommunication services than broadband was a
subsection of telecommunication services. He did not
believe that anything new was being established and
referred to the legal opinion.
Representative Wilson believed no one spoke of a
certification process during the mapping discussions.
Representative Pruitt declared that the bill was invalid.
He referred to the legal memo and read:
"?under the Supremacy Clause of the federal
constitution, state laws that interfere with federal
laws are invalid."
Representative Pruitt deduced that it clearly stated that
the federal government prohibited regulation beyond the
authority allowed and was baffled why the committee engaged
in "fruitless conversation" and would move forward with a
bill that did nothing.
3:24:03 PM
Vice-Chair Gara believed that Representative Pruitt's
characterization of the bill was unfair. He referred to the
NCSL report and ascertained that the bill did what the
state of Alabama mandated; regulate the internet to the
extent permitted by federal law.
Representative Pruitt read from AC's opposition letter as
follows:
As early as 1998 the FCC concluded that applying
common carrier or "telecommunications service"
regulation to BIAS would "seriously curtail" the
regulatory freedom deemed necessary to the development
of "enhanced services," as information services
formerly were known.
Representative Pruitt contended that creating a heavily
regulated environment would achieve the goal of limiting
expanded broadband services especially in rural areas of
the state. He believed that regulations would curtail
broadband expansion and emphasized his opposition.
Representative Guttenberg provided a counter argument. He
suggested that Representative Pruitt read the report
included in the FCC's Restoring Internet Freedom Order from
Commissioner Pai, Chairman of the FCC who stated that $1.3
billion would be wasted for not building out the internet
consistently. He reiterated that more could be done to
accomplish expanded broadband. He voiced that the bill was
not preempting federal law. Other states had demonstrated
that opportunities to create incentives and remove barriers
to expand broadband existed. He stressed that the problem
in Alaska was severe. He reiterated the problems with
internet service in the state. He hoped the RCA would help
improve internet access for Alaskans with passage of the
bill.
3:30:23 PM
Co-Chair Seaton MOVED to REPORT HB 384 out of committee
with individual recommendations and the accompanying fiscal
note.
Representative Wilson OBJECTED. She elaborated on her
objection. She stated that the government did not provide
internet services, private industry did. She believed
building new infrastructure was costly for private
industry. She understood the frustration regarding poor
internet service but was not willing to tell private
companies how or where to do business. She believed the
bill would place private business inside a regulatory
framework.
Representative Pruitt contended that he did not know of any
industry that grew through regulation. He opposed the
legislation.
Representative Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Kawasaki, Ortiz, Gara, Guttenberg, Seaton, Foster
OPPOSED: Pruitt, Thompson, Tilton, Wilson, Grenn
The MOTION PASSED (6/5). There being NO OBJECTION, it was
so ordered.
HB 384 was REPORTED out of committee with four "do pass"
recommendations, three "do not pass" recommendations, three
"no recommendation" recommendations, and one "amend"
recommendation; and with one previously published zero
fiscal note: FN1 (CED).
3:34:29 PM
AT EASE
3:35:19 PM
RECONVENED