03/29/2019 09:00 AM Senate EDUCATION

                  SB  74-INTERNET FOR SCHOOLS                                                                               
                                                                                                                                
9:00:17 AM                                                                                                                    
CHAIR STEVENS announced the consideration of SB 74, Version M.                                                                  
                                                                                                                                
9:00:20 AM                                                                                                                    
SENATOR LYMAN HOFFMAN, Alaska  State Legislature, Juneau, Alaska,                                                               
sponsor of  SB 74,  stated that  he was  available to  answer any                                                               
additional questions that the committee may have.                                                                               
                                                                                                                                
9:00:53 AM                                                                                                                    
SENATOR  HUGHES said  that this  is an  important bill  that will                                                               
help  students across  the state.  The committee  learned at  the                                                               
last meeting  that the  ideal speed is  100 megabits  of download                                                               
per  second (Mbps).  She expressed  hope that  as the  bill moves                                                               
forward there would  be consideration for stair  stepping so that                                                               
over time  as schools are  ready and  as the legislature  has the                                                               
funding, they could increase their  speed to 100 Mbps. This would                                                               
free the legislature of annual review of similar bills.                                                                         
                                                                                                                                
9:02:01 AM                                                                                                                    
PATIENCE FREDERICKSEN,  Director, Division of  Library, Archives,                                                               
and  Museums,  Department  of  Education  and  Early  Development                                                               
(DEED),  Juneau,   Alaska,  said   the  division   would  suggest                                                               
eliminating the  proposed new text  "a minimum of" because  it is                                                               
vague and  open to interpretation.  For clarity it would  be most                                                               
helpful to  say, "bring the  applicant's share to 25  megabits of                                                               
download a second [of the Internet services.]"                                                                                  
                                                                                                                                
CHAIR STEVENS asked where that was located in the bill.                                                                         
                                                                                                                                
MS. FREDERICKSEN said the underlined  phrase "a minimum of" is on                                                               
page 1, line 7. She explained  that the phrase is problematic for                                                               
administration of the  program and that it would  be much clearer                                                               
to identify the applicant's share as 25 megabits a second.                                                                      
                                                                                                                                
CHAIR STEVENS said the committee  will ask the sponsor to comment                                                               
on the  suggestion. He asked  if she  had any comments  about the                                                               
fiscal note.                                                                                                                    
                                                                                                                                
MS.  FREDERICKSEN replied  that  the fiscal  note  is written  as                                                               
though the division  could start the program right  away but they                                                               
would suggest an effective date  of September. She explained that                                                               
school districts have  an E-rate filing window in  the spring and                                                               
then  they submit  a grant  application to  the School  Broadband                                                               
Assistance Grant  (BAG) program.  Those two applications  have to                                                               
agree. The E-rate  filing window closed two  days ago. Therefore,                                                               
an effective  date of September  2019 will give the  division one                                                               
more year of  School BAG program at 10 Mbps.  Then July next year                                                               
the School  BAG program would be  25 Mbps. If the  effective date                                                               
is  September,  the  $8,676,300 for  the  FY  2020  appropriation                                                               
request  would   not  be  needed.   The  governor's   budget  has                                                               
$1,487,500 for  School BAG now and  that will cover the  cost for                                                               
FY 20 if the program is run at  10 Mbps. In FY 2021, the division                                                               
would need what  is shown in the fiscal note.  She explained that                                                               
starting  the   program  is  somewhat  complicated   and  entails                                                               
revising  regulations  and  grant applications  and  benchmarking                                                               
what  schools pay  for  Internet to  ensure  equity among  school                                                               
districts.                                                                                                                      
                                                                                                                                
MS. FREDERICKSEN explained that for  the fiscal note, DEED used a                                                               
Federal Communications Commission (FCC)  list that shows that 245                                                               
schools  had less  than  25  Mbps at  the  end  of February.  The                                                               
average  FY 2019  School BAG  cost  per school  was $16,594.  The                                                               
School Bag cost for 245 schools  at 10 Mbps is $4,065,530 and the                                                               
proportional  increase  from 10  to  25  Mbps  is just  over  $10                                                               
million. There are no positions  associated with this program but                                                               
the cost  of the  E-rate consultant is  added onto  the contract.                                                               
That person  does the  lion's share  of the  review of  the grant                                                               
applications and works  with the school districts  to ensure they                                                               
are eligible.                                                                                                                   
                                                                                                                                
9:07:22 AM                                                                                                                    
SENATOR COSTELLO  commented that  the effective date  issue seems                                                               
to be  more programmatic  than fiscal  and could  be left  to the                                                               
Finance  Committee  to  decide.   The  official  record  of  this                                                               
conversation  could  include the  legislative  intent  of how  it                                                               
would best work for the program to go into effect.                                                                              
                                                                                                                                
CHAIR STEVENS asked  the sponsor if he had any  comment on DEED's                                                               
suggestion  to strike  the language  "a minimum  of" and  instead                                                               
identify  an  applicant's share  as  25  megabits of  download  a                                                               
second.                                                                                                                         
                                                                                                                                
SENATOR HOFFMAN replied that he  did not object to the conceptual                                                               
amendment.                                                                                                                      
                                                                                                                                
SENATOR  COSTELLO  offered  a  conceptual  amendment  to  SB  74,                                                               
Version M, to  strike the words "a minimum of"  on [page 1,] line                                                               
7.                                                                                                                              
                                                                                                                                
CHAIR STEVENS found no objection  and the conceptual amendment to                                                               
SB 74 was adopted.                                                                                                              
                                                                                                                                
9:09:11 AM                                                                                                                    
CHAIR STEVENS opened public testimony.                                                                                          
                                                                                                                                
9:09:32 AM                                                                                                                    
DAVID GUTTENBERG, representing self,  Fairbanks, Alaska, said the                                                               
committee heard  quite a  bit from education  experts when  SB 74                                                               
was introduced,  but he believes  that they minimized  the impact                                                               
of bringing broadband to Alaska  schools. He highlighted that the                                                               
bill seeks to  bring broadband to students across  the state, not                                                               
just rural schools.  He pointed out that if  more communities had                                                               
connectivity and  sustainable high-speed  broadband, then  all of                                                               
Alaska would  have significant increases  in quality of  life and                                                               
educational  opportunities. Diversifying  the economy  would also                                                               
be more likely.                                                                                                                 
                                                                                                                                
MR.   GUTTENBERG  referenced   Senator  Hughes'   question  about                                                               
industry  regulation  and  said  he doesn't  understand  why  the                                                               
Regulatory Commission  of Alaska (RCA) refuses  to recognize that                                                               
the Internet  is a telecommunication. The  universal service fund                                                               
is a tax and  the Alaska universal service fund is  a tax, all of                                                               
which flows  into a  specific fund.  But what's  disturbing about                                                               
the  situation in  Alaska  is  that the  demand  for Internet  is                                                               
escalating  but there  is no  control of  cost. Ms.  Fredericksen                                                               
testified during  the previous hearing  that schools  spend about                                                               
$145  million  a year  for  Internet.  He  said the  reports  the                                                               
legislature told the  RCA to produce on  Internet are significant                                                               
with regard  to broadband in  Alaska. Billions of dollars  of tax                                                               
money  are  going into  Alaska  for  Internet infrastructure  but                                                               
there is  no infrastructure or  no guiding hand that  says Alaska                                                               
needs  infrastructure,   not  just  escalating  costs.   All  the                                                               
reports, including the state's  broadband task force, recommended                                                               
that there be  a quasigovernmental entity to point  out where the                                                               
efficiencies  are to  build out  an infrastructure.  Part of  the                                                               
broadband task  force report is  that the estimated cost  is $1.3                                                               
billion. That was about eight  years ago, so it's probably higher                                                               
now. The  point is that the  billions of dollars in  public funds                                                               
coming into Alaska now could  pay for infrastructure if an entity                                                               
pointed  out  where  Alaska lacks  infrastructure  not  just  for                                                               
schools  but   for  telemedicine   and  public  safety   too.  He                                                               
emphasized the need for the legislature to address this issue.                                                                  
                                                                                                                                
9:17:46 AM                                                                                                                    
DAVID NEES, representing self, Anchorage,  Alaska, said the House                                                               
education task  force discussed Internet broadband  speed and the                                                               
concern that schools are just  paying for operations and there is                                                               
no  incentive  to upgrade  facilities.  He  cited several  failed                                                               
efforts to  improve Internet  service in  Alaska and  agreed with                                                               
Mr.  Guttenberg that  the issue  is lack  of infrastructure,  not                                                               
connectivity  speed. He  said  no one  has  presented a  proposal                                                               
about  what  would  happen  if fiber  optics  were  installed  in                                                               
schools.  If  it is  going  to  be  the  schools' mission  to  do                                                               
distance delivery,  it is a  good idea  to look at  the broadband                                                               
report and decide on a way to  do this. He suggested that this is                                                               
a basic  unmet need that  should be addressed by  [the department                                                               
of] commerce or  a similar entity. Increasing speed  alone is not                                                               
the solution.  He pointed  out that  a number  of schools  do not                                                               
meet the  current minimum and  raising that minimum  won't change                                                               
anything. The  access point  is the problem.  He said  people are                                                               
subsidizing this  and everyone would benefit  from faster access.                                                               
That will take infrastructure.                                                                                                  
                                                                                                                                
9:20:11 AM                                                                                                                    
CHAIR STEVENS closed public testimony.                                                                                          
                                                                                                                                
9:20:20 AM                                                                                                                    
SENATOR HUGHES moved to report SB  74, Version M as amended, from                                                               
committee  with   individual  recommendations   and  accompanying                                                               
fiscal notes.                                                                                                                   
                                                                                                                                
There was  no objection  and CSSB 74(EDC)  moved from  the Senate                                                               
Education Standing Committee.