Legislature(2017 - 2018)BELTZ 105 (TSBldg)
02/27/2018 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB205 | |
| SJR7 | |
| SB119 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 205 | TELECONFERENCED | |
| *+ | SJR 7 | TELECONFERENCED | |
| *+ | SB 119 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 205-TELECOMMUNICATIONS REGULATION/EXEMPTIONS
1:34:09 PM
CHAIR COSTELLO announced the consideration of SB 205.
1:34:21 PM
SENATOR KEVIN MEYER, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 205, stated that the legislation seeks to
modernize the telecommunication statutes and adopts the
cooperative model for tariffs. The RCA will assess regulatory
costs directly to the company, rather that assessing individuals
monthly. He continued the introduction speaking to the following
sponsor statement:
The telecommunication statutes (AS 42.05) are in need
of revision due to rapid changes in technology and in
FCC regulations, which render portions of the existing
statutes obsolete and/or inefficient in the modern
telecommunications world.
All of Alaska's telecommunications providers through
the Alaska Telephone Association have worked together
to offer these suggested changes. In doing so, they
have strived to maintain important consumer
protections, appropriate RCA jurisdiction, and
consistency with FCC regulations while at the same
time allowing for greater flexibility to more rapidly
take advantage of new technology.
Some existing RCA regulations are over 25 years old
and are largely obsolete today. Customer preferences
continue to grow for broadband and mobile service
while the demand for landlines declines. In
competitive markets, carrier of last resort
requirements and alternative operator services are no
longer necessary. Placing service providers on a more
level playing field will encourage deployment of
advanced technologies and more efficient network
design.
Adoption of these recommended statutory changes will
result reduced regulatory cost charges for consumers.
1:36:35 PM
EDRA MORLEDGE, Staff, Senator Kevin Meyer, Alaska State
Legislature, Juneau, Alaska, paraphrased the following sectional
analysis of SB 205.
Section 1 Municipal powers and duties. AS 29.35.070
Public Utilities. Section 7 repeals AS 42.05.810,
therefore it is removed from reference in this section
of the statute.
Section 2 Alaska Public Utilities Regulatory Act. AS
42.05.141 Adds two new subsections (e) and (f) to the
general powers and duties of the RCA. These
subsections state that the Commission may not
designate a local exchange carrier or an interexchange
carrier as the carrier of last resort, and that the
Commission may designate an eligible
telecommunications carrier consistent with the federal
code that allows for federal subsidies under the
Universal Service Fund.
A carrier of last resort is a telecommunications
company that commits (or is required by law) to
provide service to any customer in a service area that
requests it, even if serving that customer would not
be economically viable at prevailing rates.
The Universal Service Fund is a system of
telecommunications subsidies and fees managed by the
U.S. Federal Communications Commission intended to
promote universal access to telecommunications
services at reasonable and affordable rates for all
consumers.
Section 3 - Alaska Public Utilities Regulatory Act. AS
42.05.711 Exemptions. This section exempts
telecommunications carriers from the Act except for
the following provisions:
• AS 42.05.141(f) New section in the bill
(Section 2 above)
• AS 42.05.221 Requiring a Certificate of
Public Convenience and Necessity
• AS 42.05.231 Provision for applying for the
certificate
• AS 42.05.241 Conditions of issuing/denial of
a certificate
• AS 42.05.251 Allow public utilities to obtain
a permit for the use of streets in
municipalities
• AS 42.05.254 Regulatory cost charge
• AS 42.05.261 Prohibits a public utility from
discontinuing or abandoning service for which a
certificate has been issued
• AS 42.05.271 Allows the RCA to amend, modify,
suspend or revoke a certificate
• AS 42.05.281 Prohibiting a sale, lease,
transfer or inheritance of certificate without
RCA permission
• AS 42.05.296 Requirements for providing
telephone services for certain impaired
subscribers
1:41:26 PM
At ease
1:44:34 PM
CHAIR COSTELLO reconvened the meeting.
MS. MORLEDGE continued the sectional analysis of SB 205.
Continuation of Section 3
• AS 42.05.306 Allows discounted rates for
customers receiving benefits from a social
services assistance program administered by the
state or federal government
• AS 42.05.631 Allows a public utility to
exercise the power of eminent domain
• AS 42.05.641 Extends RCA's jurisdiction to
public utilities operating in a municipality
• AS 42.05.830 Requires the RCA to establish
exchange access charges to be paid by long
distance carriers to compensate local exchange
carriers for the cost of originating and
terminating long distance services
• AS 42.05.840 Allows the RCA to establish a
universal service fund
• AS 42.05.860 Prohibits a carrier from
restricting the resale of telecommunications
services
Section 4 AS 42.05.820 No Municipal Regulation. In
addition to a long distance telephone company, this
section amends AS 42.05.820 to add 'local exchange
carrier' that is exempted in whole or in part from
this chapter from being regulated by a municipality.
MS. MORLEDGE said Section 5 and a corresponding repealer in
Section 7 will be removed due to an open docket with the RCA
that deals with exchange access charges and the administration
of those charges.
Section 6 AS 42.05.890 Definitions. This section
defines "local exchange carrier," "long distance
telephone company," and "long distance telephone
service."
Section 7 Repealers. This section repeals the
following provisions:
• AS 42.05.145 Telecommunications regulation
policy; restriction on regulation of telephone
directories.
• AS 42.05.325 Registration and regulation of
alternate operator services.
• AS 42.05.810 Competition
• AS 42.05.850 Exchange carrier association.
Allows the RCA to require a trade association to
assist in administering access charges and may
require the association to file tariffs and pool
costs and revenue. [This will be removed in a
future version of the bill.]
Section 8 Transition language requiring
telecommunications utilities to continue paying the
annual regulatory cost charge (RCC) until July 1,
2019.
1:48:46 PM
CHRISTINE O'CONNOR, Executive Director, Alaska Telecom
Association, Anchorage, Alaska, testified in support of SB 205.
She recognized the member companies in the audience and
clarified that all the statutes addressed in SB 205 relate to
local landline service or long-distance access through a
landline.
MS. O'CONNOR presented a brief PowerPoint to help explain how SB
205 simplifies and modernizes the telecommunications statutes.
Slide 2 depicts the roster of ATA members that are unanimous in
support of SB 205. These are landline, long distance, wireless,
and broadband companies.
Slide 3 highlights the transformation of the telecommunications
industry. Landlines still exist and are important, but consumer
preferences are focused on wireless and broadband service.
Currently, 48 percent of the population has a landline and 52
percent of adults are in wireless only households. The
underlying networks are essential but the landline service (the
piece regulated by Alaska statutes) is an increasingly smaller
portion of the market and resources are consumed to monitor and
report on the competition. For example, in 1999 there was $64
million in long distance revenues within the state and in 2016
that had dropped to $16 million.
The national trends are similar. Forty-one states have reduced
or eliminated oversight of retail landline telecommunications
services. The National Regulatory Research Institute (NRRI)
monitors the status of regulations throughout the U.S. and
issues annual reports. They recommend that state commissions
focus on the quality of the networks, consumer complaints, and
interactions with providers and consumers to identify needs. She
said those elements and strong consumer protections remain,
regardless of the changes in SB 205.
She displayed slide 5 that depicts a map of the U.S. from the
NRRI showing the states that have reduced regulation.
1:52:35 PM
MR. O'CONNOR reviewed the obsolete statutes addressed in SB 205.
She explained that the long-distance competition statutes AS
42.05.800-810 require the RCA to manage competition in the
landline long distance market. This is left over from the era
when long distance competition was developing. It was hugely
competitive, and the RCA played a critical role in adopting,
monitoring, and managing regulations. The statute and the
regulations are still in place and require annual reports and
tariff filings. A lot of resources are expended for a small
piece of the market. SB 205 removes the outdated regulation of
long distance retail competition.
She reviewed tariff regulation. She related that as the market
has changed, cooperatives are able to manage their own tariffs
if their members grant approval. They can post the rates on
their websites and roll out new bundles and different service
offerings for landlines. Any privately-owned companies must
still file some form of tariff filing with the RCA. Depending on
the operating location, the filing can be a simple informational
filing or one that takes 45 days to review. That is a
considerable delay for changing services for a customer for a
new bundle. A full rate case has a statutory timeline of over
420 days. SB 205 proposes that all companies would operate the
same as the cooperatives. With membership permission,
cooperatives have been doing this successfully for over 15
years.
MS. O'CONNOR displayed a snapshot of the telecom filings that
still must go through the commission. She said this is an
inefficient and unnecessary process for both sides. SB 205
proposes moving these to the cooperative model.
1:55:29 PM
MS. O'CONNOR said SB 205 also proposes a change to the carrier
of last resort designation. This is a duplicative designation
that was used in the past to guarantee that at least one
provider in an area would be available to offer service upon
request. The Certificate of Public Convenience & Necessity
designates an area where service is required and prevents the
abandonment of service without permission from the RCA. An
application to discontinue service is rigorously evaluated with
the public interest in mind. Federal rules designate that a
company must also apply through the FCC to abandon service in an
area.
She said she does not consider SB 205 a deregulation bill
because the RCA retains strong authority to ensure that Alaskan
consumers continue to have service. The bill adds efficiencies
and saves resources while maintaining essential consumer
protections. These include the Certificate of Public Convenience
and Necessity, Eligible Telecommunications Carrier, RCA Consumer
Protection & Information Section, Attorney General Consumer
Protection Unit, and FCC Consumer Complaint Center.
1:58:50 PM
MS. O'CONNOR said SB 205 is structured to right-size the
regulation. SB 205 maintains essential RCA oversight, removes
obsolete statutes, adopts the cooperative model for tariffs,
requires RCA and FCC approval before discontinuing service,
reduces costs and delays of regulation for RCA and providers,
eliminates regulatory surcharges on consumer bills, and shifts
actual costs to providers. The benefits to consumers are
eliminating the regulatory cost charge. Now the cost to regulate
telecommunication companies is funded by a surcharge on
customers' bills. After some transition, the RCA will bill the
cost of services directly to the companies.
2:00:14 PM
CHAIR COSTELLO asked if the RCA has taken a position on the
bill.
MS. O'CONNOR said not yet; she will present the bill to the RCA
tomorrow morning during the public meeting.
CHAIR COSTELLO asked how SB 205 would impact SB 80, a bill she
introduced on behalf of a member of the RCA. SB 80 takes a
portion of the surcharge from landline fees and shifts it to the
cellphone environment to help pay for the materials that deaf
and hard of hearing Alaskans need for their devices.
MS. O'CONNOR said SB 205 would not affect SB 80 and Alaska
Telecom Association supports the much-needed change proposed by
that bill. TRS services currently are funded by a separate
surcharge on a consumer's bill, not the regulatory cost charge.
2:01:57 PM
SENATOR MEYER said his concern is whether the bill would impact
RCA budget. He offered his understanding that RCA now
automatically receives the $0.16 RCC charge on consumers'
monthly bill, whereas SB 205 provides that the RCA will need to
bill the telephone companies directly.
MS. O'CONNOR said that's correct. She explained that the bill
provides a transition period for the RCA to get the mechanism in
place to bill actual charges. Because fewer filings will be
necessary, this should be more equitable. The RCA has the
statutory authority to bill any telecom generated activity
directly to the company, not the consumer.
SENATOR MEYER asked if the list on slide two includes all the
telephone providers in the state.
MS. O'CONNOR replied Circle Telephone Company and Verizon are
not on the list because they are not official members. Both
operate in Alaska and ATA keeps them updated. Circle is a very
small company and Verizon doesn't offer landline service in
Alaska.
SENATOR MEYER noted that the rural providers are listed so the
concerns about future development and infrastructure in rural
areas should be addressed.
MS. O'CONNOR advised that the federal funding those companies
receive has very stringent requirements for the deployment of
broadband.
2:04:36 PM
SENATOR MICCICHE asked if consumer groups are aware of the bill
and if any have voiced concern about the changes.
MS. O'CONNOR said she hasn't received any comment from consumer
groups and she doesn't expect any objection because the strong
RCA consumer protection role is unchanged.
2:05:25 PM
SENATOR STEVENS asked if the legislation has any connection to
or effect on 911 service.
MS. CONNOR said no; that is a separate surcharge that the bill
does not change.
SENATOR GARDNER directed attention to Section 7 that repeals AS
42.05.145 and asked for an explanation of the restriction on
regulation of telephone directories.
MS. O'CONNOR explained that the provision removes the obligation
for companies to deliver a phonebook to consumers. Companies are
adjusting their phonebooks to meet the needs of consumers,
including online options.
2:07:09 PM
CHAIR COSTELLO found no one who wished to comment, and closed
public testimony on SB 205.
[SB 205 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 205.PDF |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 205 Sponsor Statement 2.27.18.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 205 Sectional Analysis.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB205-DCCED-RCA-02-23-18.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 205 Modernization Act FAQ 2-15-2018 (003).pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 205 Presentation SL&C 02.27.18.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 205 Telecommunications Regulatory Modernization Act 1-page v2 (002).pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| AT&T Support Letter for SB205.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 205 Suport - APT.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 205 Support Letter-Copper Valley Telecom.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB205 Support TelAlaska.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB205 Support-OTZ Telephone Cooperative.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SJR 7.pdf |
SL&C 2/27/2018 1:30:00 PM |
SJR 7 |
| SJR 7 Sponsor Statement.pdf |
SL&C 2/27/2018 1:30:00 PM |
SJR 7 |
| SJR7-LEG-LEG-02-26-18.pdf |
SL&C 2/27/2018 1:30:00 PM |
SJR 7 |
| SB 119.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 Sponsor Statement.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 Sectional Analysis.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 - Voters-Want-the-Right-to-Shop-1-22-18.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 - RTS-SpreadingLogos-DRAFT2.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 - Right to Shop Brief on ME.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| MTA Support of SB 205.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 205 |
| SB 119 - Right to Shop FAQ.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 - Right to Shop One Pager (12-15-16).pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 - RTS Healthcare Blue Book Alaska.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| SB 119 - Senate Labor and Commerce Presentation 02.27.18.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| Aetna Letter SB 119 2-27-17.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |
| ASHNHA SB119 testimony 2-27-17.pdf |
SL&C 2/27/2018 1:30:00 PM |
SB 119 |