Legislature(2019 - 2020)ADAMS ROOM 519
02/07/2020 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Fy 21 Budget Overview: Department of Fish and Game | |
| SB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 205 | TELECONFERENCED | |
| += | HB 206 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 74 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 74(FIN)
"An Act relating to funding for Internet services for
school districts; and providing for an effective
date."
2:20:22 PM
Co-Chair Johnston relayed that the committee had already
heard the bill during the prior session.
2:20:42 PM
MARIDON BOARIO, STAFF, SENATOR LYMAN HOFFMAN, provided a
brief review of the bill. She highlighted that SB 74
increased the broadband requirement for schools from 10
megabits per second (Mbps) to 25 Mbps of download speed and
provided the funding through the School Broadband
Assistance Grant (BAG). Schools applied for a subsidy
commonly known as "E-rate," that provided discounts of up
to 90 percent of the schools internet costs and the BAG
grant helped cover the remainder of the costs. She reported
that about 170 schools in 30 school districts around the
state would be impacted.
Co-Chair Johnston noted that Representative Sara Rasmussen
had joined the meeting.
2:21:50 PM
Representative LeBon asked if some schools were being left
out of the program. Ms. Boario responded that any school
that still operated under 25 Mbps were included. She noted
that some schools already had access to higher bandwidths.
Representative LeBon asked whether all schools would be at
a minimum of 25 Mbps and would be satisfied if the bill
passed. Ms. Boario responded that the increase was a
start.
2:23:04 PM
Vice-Chair Ortiz asked if all schools in Alaska would be
bumped up to 25 Mbps. Ms. Boario responded that 172 schools
were not at 25 Mbps and would be covered under the bill.
2:23:57 PM
Representative Josephson inquired whether the money would
supplant the money schools were currently spending on
bandwidth. He wondered if schools would see a savings or an
offset of funds for other purposes due to the program. Ms.
Boario responded that currently a school applied for the
federal grant program and a school district paid for the
difference. The bill allowed for a school to apply for the
increased bandwidth through the federal program and the BAG
grant would cover the remaining costs.
Co-Chair Johnston interjected that the Department of
Education and Early Development (DEED) would explain the
program further.
2:25:46 PM
Representative Knopp recalled a discussion he had
previously with a representative from GCI explaining the
satellite technology and informing him that the
infrastructure to increase the schools bandwidth was
already in place. He was concerned about the $7 million
cost considering the current fiscal situation. He suggested
that internet rates tend to increase and worried about the
state sustaining the cost into the future. He was uncertain
of his support for the bill.
Co-Chair Johnston commented about an article from the
Alaska Journal of Commerce. She shared that Alaskas first
low orbital satellite was going into operation in the
current year that could possibly provide 80 Mbps to
everyone in the entire state. She believed that it would be
a game-changer. She invited DEED to report on the
disparity test and discuss the fiscal note.
2:29:09 PM
PATIENCE FREDERIKSEN, DIRECTOR OF LIBRARIES, ARCHIVES AND
MUSEUMS, Department of Education and Early Development,
introduced herself and reported that the fiscal note was
approximately $7 million, which was necessary to serve all
the schools at 25 Mbps. She explained that the program was
in existence since FY 2015. Every year the number of
schools participating in the program was reduced. The
schools discovered through the bid process that it was
possible to get over 10 megabits at a lower cost than the
amount of the BAG grant. Each year the number of schools
needing the grant to get to 10 megabits decreased. She
expected the scenario to keep repeating going forward. She
expounded that as the broadband infrastructure in the state
grew it increased bandwidth and lowered the cost of
internet. She thought that the 10 megabit BAG program would
wither away. The program started at 135 schools in 2016 and
was currently down to 72 schools needing support in 2020.
She thought the current trajectory would continue with the
25 Mbps program.
2:31:57 PM
Representative Carpenter noted that she had reported a
decline in the 10 Mbps recipients. He wondered why
participation decreased, if the price was declining or the
school districts had budgeted more money for internet. Ms.
Frederiksen reported that she was certain that it was due
to the decreasing costs of internet in rural areas. She
added that the program was strictly set at 10 Mbps and the
schools could get higher amounts for less. Representative
Carpenter wondered whether the schools currently paying for
25 Mbps or higher that were not currently on the list could
apply for the program. Ms. Frederiksen responded that
eligibility was established at under 25 Mbps. Schools at 25
Mbps or above were ineligible for the program. She
anticipated that 173 schools were eligible to receive
assistance to get to 25 megabits. Representative Carpenter
deduced that some schools were paying for their own
internet and the state was paying for up to 25 megabits of
internet for other schools. Ms. Frederiksen responded that
the BAG program was freezing a schools internet bill.
She provided an example of a school paying $1 thousand per
month for 20 Mbps. The BAG program was freezing the
schools bill at the 20 Mbps cost and BAG was paying the
remainder to 25 Mbps in combination with the E-rate. The
schools bills would not increase through the life of the
program. She related the same was true for the 72 remaining
schools in the 10 Mbps program; their bills were frozen at
2014 levels and the E-rate and BAG programs were paying the
rest of the bill.
2:35:26 PM
Representative Knopp looked at the situation in a different
way. He suggested that the schools and state would stay on
the program indefinitely if 25 Mbps was the highest amount
of bandwidth available.
2:36:29 PM
Ms. Frederiksen explained the ways eligibility for the
program was certified. The school district would apply for
every school operating under 25 Mbps. The superintendent
certified the application with their signature and
submitted the application. The district simultaneously
applied for the federal E-rate program. The departments E-
rate coordinator reviewed the E-rate applications. The E-
rate paid 70 percent to 90 percent of the bill for
internet. She emphasized that both applications were
scrutinized. The penalty for false information on the E-
rate application could prohibit a school from receiving the
E-rate. Representative Knopp was not suggesting any
questionable behavior would take place. He voiced that if
25 Mbps was the highest bandwidth available in the state, a
school could not purchase a higher amount at a reduced rate
like the schools currently paying for their own bandwidth
at 15 Mbps instead of remaining in the BAG program at 10
Mbps. Under the 25 Mbps scenario, participants would not
drop out of the program if it were the highest bandwidth
available in the state under the current infrastructure.
Ms. Frederiksen believed that there were areas in Alaska
where higher than 25 megabits was available. She reported
that it depended on the pressure from each school. She
determined that if a school discovered 40 Mbps was
available in their area and they could afford to pay for it
with their own resources and the E-rate, they would likely
exit the BAG program. She stated that the upward pressure
for more bandwidth from schools and libraries was
unstoppable due to advances in technology.
Co-Chair Johnston reiterated the low orbit information she
shared earlier in the meeting.
2:40:04 PM
Representative Carpenter remembered in the prior year 25
Mbps was considered a benchmark. He reasoned that in the
future the benchmark would grow higher and the demand due
to new technology would require an increase above 25 Mbps
bringing additional costs. Currently, 25 Mbps was a mid-
level of the amount the schools would need. Ms.
Frederiksen replied that the amount was a very basic level
of bandwidth. She elucidated that the more students,
internet testing, and distance education the more bandwidth
was necessary. The 25 Mbps amount was the Federal
Communications Commission (FCC) standard, but the
commission was moving beyond the figure in other states
where bandwidth was easily accessible. The low orbit
satellites would bring more competition in rural areas that
would draw prices down. The satellite and other providers
would be in competition for schools. The e-rate had been
designed to create the infrastructure and progress
bandwidth development around the country. The state of
Alaska would never be on the cutting edge of bandwidth.
She deemed that currently, 25 Mbps would be a boon to the
schools but in 5 or 10 years the schools would want more.
Representative Wool referred to the rate sheet [FY 2019
School BAG Awards by District and School (copy on file)]
in members packets and asked whether the costs were based
on 10 Mbps. He provided Whittier as an example. Ms.
Frederiksen answered in the affirmative. She added that the
table showed the annual cost of internet for each school,
the E-rate paid portion, the school paid portion, and the
BAG portion.
2:43:10 PM
Representative Wool guessed that the rate for 25 Mbps was
higher and as bandwidth increases content increases. He
imagined the demand would continue to grow. He wondered if
the school would pay the entire cost of internet if there
was higher bandwidth available. Ms. Frederiksen explained
that prior to School BAG the districts paid for internet
from a combination of E-rate ranging from 70 to 90 percent
and the districts funding. The BAG was an additional
source of funding to meet the internet needs. She
delineated that if the cost of internet were to decrease
and a district wanted to increase over 25 Mbps the district
would exit the BAG program if they could afford it. She
reminded the committee that the district would continue to
receive E-rate subsidies.
2:45:08 PM
Representative Wool clarified that E-rates would continue
to be available. He observed that no matter how much band-
width was available and competition increased, his cell
phone and internet bill always increased. He was looking
forward to new satellites, but he did not think internet
costs would decrease especially for rural districts.
Co-Chair Johnston requested discussion concerning the
disparity test.
HEIDI TESHNER, DIRECTOR, FINANCE AND SUPPORT SERVICES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, pointed to
Section 2 and Section 3 of the bill and noted that they
addressed conditional language. She reported that the
department worked with the federal Department of Education
on the disparity test and received confirmation that the E-
rate was excluded from the calculation. She elaborated that
the issues in the prior spring regarding the disparity test
were addressed.
Co-Chair Johnston asked about the filing window. Ms.
Frederiksen responded that the filing window for the
federal E-rate awards was March 27, 2020. The regulations
had been re-drafted and there were a couple of date issues
that were necessary to address. The department was ready to
address the school BAG regulations with the state Board of
Education during the March 26, 2020 meeting.
2:48:18 PM
Co-Chair Johnston asked whether the department would take
the new BAG provisions to the state Board of Education if
the bill was adopted and signed by the governor by March
26, 2020. Ms. Frederiksen confirmed that it would take the
regulations before the board for approval.
Co-Chair Johnston hoped that the state would make the
deadline.
2:48:57 PM
Representative Wool asked how many of the schools on the
2019 list had the 25 Mbps increase available to them. Ms.
Frederiksen responded that she did not know the answer. She
elaborated that with the inception of the 10 Mbps program
many schools could not receive 10 Mbps in the first year of
the program. The vendors had to insert some hardware into
their networks and the schools need additional hardware.
The highest number of participants was in FY 16. She
relayed testimony from the prior year from Christine
O'Conner, Alaska Telecommunications Association, stating
that 25 Mbps would be available statewide.
2:50:40 PM
DR. LISA SKILES PARADY, DIRECTOR, ALASKA COUNCIL OF SCHOOL
ADMINISTRATORS, related that she was working with the
internet providers and assured that 25 MBPS would be
available to all the schools on the list.
2:51:07 PM
Representative Josephson requested the matching amount for
the E-rate. Dr. Parady responded that it was up to a 9 to 1
match.
Ms. Frederiksen interjected that the amount of E-rate
awarded a school was based on its school lunch program and
the poverty rate. She noted that one school in Unalaska
only received 50 percent but most of the schools received
80-90 percent. Representative Josephson asked what sort of
federal resources the $7 million fiscal note would bring.
Ms. Frederiksen replied that the E-rate at 86 percent was
approximately $84.3 million. Representative Josephson
mentioned the deadline and noted that $84 million was at
stake. Ms. Frederiksen responded in the affirmative. She
noted that the school districts would need to reapply, and
she was uncertain how long that could take. The problem was
that the legislature's schedule was similar to the E-rate
application schedule. The department would work arduously
on its end to help facilitate the process.
2:53:41 PM
Representative Wool noted that $86 million would be coming
to the state to internet providers who would greatly
benefit from the program. Ms. Frederiksen responded
affirmatively. Representative Wool asked if the E-rate
contribution could change at the federal level. Ms.
Frederiksen responded in the negative. She indicated that
most other schools received a higher level of E-rate
because costs were lower in the rest of the country. The E-
rate program wanted Alaska to receive higher bandwidth.
2:54:37 PM
Co-Chair Johnston noted the slight increase from the
previous year on the fiscal note and wondered why. Ms.
Frederiksen recalled that the services line increased but
was unclear why. The School BAG program paid for the E-rate
coordinator and some other services. Co-Chair Johnston
asked Ms. Frederiksen to get back to the committee with the
answer.
Ms. Teshner interjected that the reason was reported on the
fiscal note analysis. She communicated that the increase
was for increased contractual hours and technical review of
applications by DEEDs contractor.
Co-Chair Johnston indicated amendments were due by Monday,
February 10th.
CSSB 74(FIN) was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Deptartment of Fish and Game FY21 Budget Overview 2.7.20.pdf |
HFIN 2/7/2020 1:30:00 PM |
|
| FY21 Pacific Coastal Salmon Recovery Fund Cap Request.pdf |
HFIN 2/7/2020 1:30:00 PM |
ADFG Response HFIN Overview |
| ADF&G Response to HFIN Hearing 2.7.20.pdf |
HFIN 2/7/2020 1:30:00 PM |