Legislature(2019 - 2020)BARNES 124
05/11/2019 11:00 AM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB16 | |
| SB83 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 83 | TELECONFERENCED | |
| += | SB 16 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 83-TELECOMMUNICATIONS REGULATION/EXEMPTIONS
3:55:48 PM
CHAIR WOOL announced that the final order of business would be
SENATE BILL NO. 83, "An Act relating to the Regulatory
Commission of Alaska; relating to the public utility regulatory
cost charge; relating to the regulation of telecommunications;
relating to exemptions, charges, and rates applicable to
telecommunications utilities; relating to regulation of
telephone services; and relating to alternate operator
services."
3:56:48 PM
REPRESENTATIVE FIELDS inquired as to the meaning of "rates,
terms, and conditions of service" in Section 7. He asked if,
for example, the existence of service is a condition of service.
3:57:21 PM
BOB PICKETT, Commissioner, Regulatory Commission of Alaska,
deferred to Stuart Goering.
3:57:30 PM
STUART GOERING, Attorney, Department of Law, said the simple
answer is yes, the circumstances under which someone acquires
service from a utility is included within the terms and
conditions of service.
3:57:57 PM
REPRESENTATIVE FIELDS asked if that would include the
preservation of service; for example, would withdrawal of
service be a change in the conditions of service.
MR. GOERING answered yes, any terms that might affect the
discontinuance of service would be a term or condition of
service.
REPRESENTATIVE FIELDS asked Mr. Goering to address meanings of
"incumbent local exchange carrier" versus "competitive local
exchange carrier" in subsections (l) and (m) of section 7.
MR. GOERING explained that an incumbent local exchange carrier
(ILEC) is the first local exchange carrier to an area. Any
carrier that comes after that would be a competitive local
exchange carrier (CLEC). He added that those terms are
exclusive of one another.
REPRESENTATIVE FIELDS questioned whether there are carriers who
provide basic residential telephone service that are neither
ILEC or CLEC and are not encompassed in section 7.
MR. GOERING said his initial reaction is no, ILECS and CLECS
provide all basic residential local telephone service.
Nonetheless, he said he could stand to be corrected by someone
in the industry who knows of a small segment that he's unaware
of.
4:02:44 PM
JIMMY JACKSON, Regulatory Attorney, General Communication Inc.,
in response to Representative Fields, explained that any local
carrier is either an ILEC or CLEC, there would not be any local
exchange carriers that are outside the scope of either one.
REPRESENTATIVE FIELDS asked if Section 7 effectively prohibits a
carrier from withdrawing service from an area that is uneconomic
to serve.
4:03:29 PM
MR. PICKETT noted that there is also a "certificate issue." He
said that abandonment of service is a type of certificate
(indisc.), adding that he only experienced that one time with a
small community called Healy Lake, which involved the power
company, the local exchange carrier, and the inner exchange
carrier, AT&T. After the proceeding the commission declined to
allow them to abandon service in that area.
REPRESENTATIVE FIELDS said he is not sure that answered his
previous question. He repeated his question, "does section 7,
by requiring uniform rates, terms and conditions of service,
prohibit carriers from eliminating service that is uneconomic."
4:04:30 PM
MR. GOERING replied that AS 42.05.261 would prevent the
discontinuance, suspension or abandonment of certificated
service. He noted that the language in Section 7 does suggest
that if there was, for example, a provision in the tariff that
said service in a particular area could be discontinued, it
would have to be done in a way that the conditions were uniform.
If the carrier did have reason to discontinue service, it would
have to be done on a uniform basis as opposed to selectively.
He offered his belief that the exact interaction of AS 42.05.261
and the new language in AS 42.05.381 (l) and (m) would be
subject to debate if that happened.
REPRESENTATIVE FIELDS stressed the need to have the correct
understanding of what the language does.
MR. GOERING said the fact that AS 42.05.261 would continue to
apply to telecommunication carriers would prevent the carrier
from discontinuing service in a certificated area without prior
approval. He said that provision is not identical to carrier of
last resort (COLR), but it would service the same purpose.
REPRESENTATIVE FIELDS pointed out that section 7 refers to
residential local telephone service. He asked if private
businesses are not included in this language presently.
MR. GOERING said carriers have tariffs, which define what their
classes of service are, and the Regulatory Commission of Alaska
(RCA) regulations require that carriers offer residential and
business service as separate classes of service. He noted that
the later would be annulled by this bill and how basic
residential telephone service is defined would be less clear.
He acknowledged that there would be classes of service that
would not be covered by the scope of subsections (l) and (m) of
Section 7, including business service or commercial service.
4:08:53 PM
REPRESENTATIVE FIELDS sought clarification the distinctions
between types of service that would be annulled by this bill.
MR. GOERING said that, currently, the classes of service that a
particular carrier offers are defined by their tariff. Under
this bill, the carrier would no longer be required to have a
tariff. It would be up to the carrier to define who would
qualify for what class of service and it would no longer be
within the scope of AS 42.05 ability to control.
REPRESENTATIVE FIELDS asked Mr. Goering to define the other
classes of service.
MR. GOERING said it varies; however, basic distinction is
between residential and business or residential and commercial
service.
REPRESENTATIVE FIELDS asked if business and commercial are
interchangeable terms.
MR. GOERING reiterated that, currently, the carriers have
definitions of their classes of service within their tariffs.
Therefore, depending on the carrier there might be a distinction
drawn between different classes of services, which would be
defined. For example, a particular carrier might have a class
of service that they call "basic business" and another class of
service called "large commercial," in which case there would be
a distinction. Alternatively, they might have one or the other
and refer to one kind either way. Regardless, the name of the
service and how one qualifies for it is defined by the tariff.
4:11:26 PM
CHAIR WOOL asked for definition of the term tariff.
MR. GOERING said for the purposes of public utilities and
pipeline carriers, the tariff is the document that establishes
all rates, terms, and conditions of service that their
certificated service is offered under. Essentially, he said, it
is the contract between carrier and their customer that is
publicly available and can only be revised under certain
procedures under AS 42.05.
CHAIR WOOL asked if by getting rid of the tariff, the RCA
wouldn't have to look at large filings, which is the main
impetus of bill.
MR. GOERING said he thinks that is true, as the sponsors intent
is to streamline the process. Nonetheless, whether there is a
tariff or not, there must be terms and conditions of service and
rates that people pay, and the business must make that known to
their customers. He said even though there won't be tariffs
that are filed with the RCA, there will still be something that
defines the rules and costs, it just won't be called a tariff
anymore.
CHAIR WOOL asked if it would define a residential service as
separate than a business or commercial service. He questioned
whether somewhere in the industry those distinctions would still
be made.
MR. GOERING offered his understanding that their intention would
be to put those things on their website; however, it wouldn't be
in a document as formal as a tariff, they would migrate to a
plainer language file.
4:14:57 PM
REPRESENTATIVE FIELDS asked if there is a way to write that
language to ensure that Section 7 protections are provided for
business and commercial, while recognizing that those classes
are fluid under this bill.
MR. GOERING offered his belief that many of the classes of
service will be, in some locations, classes of one and small
classes subject to negotiated rates. The idea of uniformity was
probably deliberate. the intention was for residential to be
protected by uniform rates but to allow larger customers that
may have unique circumstances the ability negotiate with the
carrier.
REPRESENTATIVE FIELDS asked if, setting aside those who
negotiate special rates, it would be advantageous to make sure
this language includes the respective classes of services and
not merely limit it to residential.
MR. GOERING deferred policy questions to Commissioner Pickett.
4:17:21 PM
MR. PICKETT said the tariffs are information type filing for the
commission; therefore, when a particular carrier redefines or
changes their classes of service it is approved.
REPRESENTATIVE FIELDS reemphasized his desire to cover certain
classes of services with the important caveat that it shouldn't
be so far reaching that it inadvertently precluded a local
school district, for example, from negotiation more favorable
rates.
4:18:35 PM
REPRESENTATIVE HANNAN asked Mr. Goering if he has any concerns
from his legal perspective that this bill leaves consumers in
Alaska at a disadvantaged position.
MR. GOERING observed that to the extent that the
telecommunications industry is no longer economically regulated,
there's an argument that the Department of Law has a consumer
protection function. He continued by saying the purpose of a
tariff is to make the rates, terms, and conditions of service
clear to public, and eliminating that without something to
replace it with does raise the question of how someone will know
what they are paying in regard to what his or her neighbor is
paying. He indicated a new normal will have to be worked out.
4:23:01 PM
REPRESENTATIVE TALERICO recalled his own experience looking at
tariffs on the RCA website. He wondered how many people have
gone online to look at the rates instead of being informed by
their carrier. He said tariffs appear to be a reasonably
complicated legal docket and questioned how much information
they actually provide.
CHAIR WOOL acknowledged that he has never looked at a tariff
document.
4:24:36 PM
REPRESENTATIVE HANNAN agreed and said she is feeling more
assured that this wouldn't change how the public will get their
information. If someone is keeping landline at their property,
she said, it's for something like bad cell service, she said.
CHAIR WOOL stated that they have heard from places with no
cellphone service expressing concern that there could be poor
quality or intermittent service. He asked if the RCA loses any
authority to enforce quality or consistency of service if this
bill were to pass. He asked if the RCA has recourse for a
community that goes without service 30 percent of the time.
4:26:30 PM
MR. PICKETT said yes, they do have recourse. He explained that
after receiving a complaint the staff will continue to work with
whoever submitted it as well as the carrier. He said the
carriers need to be reactive and responsive to these complaints.
He said at the end of the day, the RCA still has certificate
power and he anticipates that going forward, the Alaska
Universal Service Fund (AUSF) will be the tool that they use to
address these rural communities in Alaska.
CHAIR WOOL asked if COLR gets funds from AUSF to maintain that
COLR line.
MR. PICKETT said no, effective January 1, 2019, COLR funding
from the AUSF does not exist. The entire fund has been capped
at half and the remaining support is in essential network
services.
MR. PICKETT, responding to a question from Representative
Stutes, said regulatory cost charge (RCC) revenues are portioned
among the various industry groups. It is an annual process
based on the RCA's actual costs, which includes staff costs and
administrative overhead for each sector.
4:30:34 PM
SENATOR CHRIS BIRCH, Alaska State Legislature, said this is
piece of legislation has full support from the
telecommunications industry and the RCA. He stated that it's a
deregulation bill "that does a lot of good work."
4:31:33 PM
REPRESENTATIVE FIELDS, referencing an email from Ms. O'Connor,
asked why business rates that apply to schools are lower in
rural areas than in urban areas.
4:32:21 PM
CHRISTINE O'CONNOR, Executive Director, Alaska Telecom
Association, said one theory is that urban areas have more
complex business systems and services leading to a higher bulk
in sheer numbers of business lines. She added that business
rates need less protection than residential rates due to more
competition between higher revenue customers.
REPRESENTATIVE FIELDS asked if a rural school is a big customer
by industry standard.
MS. O'CONNOR said in each community the school is most likely a
large customer; however, it would depend on the perspective of
the provider.
REPRESENTATIVE FIELDS asked if Mr. Pickett agreed that business
rates tend to be lower in rural areas.
MR. PICKETT said he has yet to see a "full-blown" rate case.
4:35:06 PM
MR. JACKSON echoed Mr. Pickett's sentiments, adding that they
were all surprised by the aforementioned findings and are not
sure how to explain them. He said it may be an unusual
circumstance.
CHAIR WOOL explained that more competition in urban areas should
drive the rates down if they are all competing for particular
contracts. Whereas in rural communities with one school and one
carrier, it becomes more of a monopoly. He opined that the
findings are counterintuitive and asked if Ms. O'Connor wished
to comment.
4:36:18 PM
MS. O'CONNOR related that the third largest landline provider in
the state said raising business rates is the farthest thing from
their mind because they want to keep their customers. She added
landline is important, but it's a small portion of the business.
CHAIR WOOL sought to clarify her answer and asked if schools and
hospitals are subsidized.
MS. O'CONNOR answered yes, adding that it's common to see these
services bundled together. She said that schools and health
care are heavily subsidized through the federal government and
separate programs under the AUSF. All of which have strict
rules. In the case of schools, there are confidential RFC
procedures to get the lowest rates possible.
CHAIR WOOL expressed concern about communities with poor quality
or intermittent service and a landline-only option, like Prince
of Wales Island, for example. He said he would like to make
certain that there is no license for loss of service if this
bill were to pass.
MS. O'CONNOR replied that service providers are currently
working to establish LTE service and upgrades for mobile
broadband in communities like Prince of Wales Island, Craig, and
Klawock. She maintained that outages are an aberration and
unexpected. She said that the Alaska Telecom Association (ATA)
discussed outage reporting with the RCA and assured the
commission that they would continue to report outages if SB 83
were to pass. She added that the RCA, through its certificate
authority, holds the ability to stop and start service, as well
as to open a docket on negligent actions made by carriers.
4:41:54 PM
CHAIR WOOL asked if there was concern that the AUSF is capped at
10 percent.
MS. O'CONNOR explained that the AUSF was reformed and changed.
Part of that change, effective January 1, 2019, was a cap that
reduced the fund by between one-third and one-half and
eliminated the payments for COLR. It also retained a portion of
the fund being paid to carriers and renamed Essential Network
Support, which supports intrastate telecommunication services.
As part of that reform, she said, the commission will open a
docket in 2021 with the goal of explicitly funding broadband.
MS. O'CONNOR, in response to a follow-up question from
Representative Wool, reiterated that the fund is capped at 10
percent which reduced the revenue between one-third and one-
half.
CHAIR WOOL sought clarification on whether, without COLR
designation, last carriers would still receive help. He asked
where that help would come from.
MS. O'CONNOR said the "old" AUSF had multiple segments and was
paying for different functions, including a portion explicitly
for COLR. The largest portion reimbursed companies for "carrier
common line cost," with the intention of lowering instate long-
distance rates.
CHAIR WOOL announced that the committee would take up amendments
to SB 83.
4:46:55 PM
REPRESENTATIVE FIELDS moved to adopt Amendment 1, [labeled 31-
LS0563\M.6, Fisher, 5/10/19], which read:
Page 2, line 1:
Delete "new subsections"
Insert "a new subsection"
Page 2, lines 2 - 5:
Delete all material.
Page 2, line 6:
Delete "(f)"
Insert "(e)"
Page 3, following line 28:
Insert a new bill section to read:
"* Sec. 8. AS 42.05 is amended by adding a new
section to read:
Sec. 42.05.566. Civil penalty related to service
outages in areas served by a carrier of last resort.
(a) The commission may designate an interexchange
carrier as a carrier of last resort to provide service
in a particular area.
(b) The commission may impose a penalty of up to
$10,000 on a carrier of last resort designated under
(a) of this section if the carrier fails to implement
repairs necessary to end a service outage in an area
in which it has carrier of last resort obligations."
Renumber the following bill sections accordingly.
REPRESENTATIVE REVAK objected.
REPRESENTATIVE FIELDS proposed a conceptual amendment to
Amendment 1, which would remove lines 1-10 relating to COLR.
CHAIR WOOL pointed out that the current daily penalty is $100.
He opined that raising it to $10,000 is too much.
4:47:53 PM
MR. GOERING observed that, although members from the ATA say
they will continue to report outages, as SB 83 is currently
written the RCA could not enforce that. He explained that AS
42.05.141 (a)(5) is the current mechanism that allows the
commission to require utilities to file reports. He pointed out
that under SB 83, telecommunications carriers would be exempted
from that statute. He added that this may lead to unreported
outages, which could result to difficult implementation.
4:49:01 PM
REPRESENTATIVE FIELDS emphasized the necessity to maintain the
requirement that outages are reported. He indicated that this
bill should structure policy to protect consumers without
relying on the good will of businesses. He asked Mr. Goering
what to change to ensure the requirement of reporting outages.
MR. GOERING suggested conceptually that language could be
drafted for this section that requires outages be reported in a
certain period of time, or that outages be required as specified
in regulations to be adopted by the RCA. The other option, he
said, is to remove AS 42.05.141 (a)(5) from the exemption so
that general reporting could continue to be required.
MR. GOERING directed attention to Section 8 of the bill. He
said that if SB 83 were to pass as it's currently written, the
reporting requirement for utilities providing telecommunication
services would be terminated.
4:52:19 PM
SENATOR BIRCH expressed concern with rushing the process, adding
that he only received the seven amendments shortly before this
meeting. He stated that he is not supportive of Amendment 1 or
any of them. He emphasized the need for dialogue and said, as
the bill sponsor, he would have appreciated it.
4:55:03 PM
REPRESENTATIVE STUTES voiced her opposition to Amendment 1,
offering her belief that allowing service outages is not to the
benefit of any provider.
4:56:08 PM
REPRESENTATIVE FIELDS asked if there were suggestions for an
alternative penalty fee, adding that the current amount of $100
seems meaningless.
4:56:43 PM
MS. O'CONNOR pointed out that the statute in question applies to
all utilities not just telecom. She acknowledged that $100 per
day is outdated; however, she said the statute is structured to
apply to all utilities. She offered her belief that changing it
should be a separate matter.
REPRESENTATIVE FIELDS said there will be economic conditions
under which carriers become monopolies in Alaska due to the
state's geography. He added that [the service outage] in his
colleague's district seems to indicate that sometimes there's
not an economic imperative to fix an outage quickly;
consequently, he said he will continue to offer the amendment.
CHAIR WOOL suggested changing the penalty to $1,000.
REPRESENTATIVE STUTES made a call for the question.
4:58:16 PM
The committee took a brief at-ease.
4:58:20 PM
REPRESENTATIVE FIELDS said, "I've accepted that I think
amendment to the amendment, so it would be $1,000 daily fine."
4:59:07 PM
REPRESENTATIVE HANNAN asked Commissioner Pickett whether the RCA
has the ability to adjust penalties via regulation, or if it's
done via statute.
MR. PICKETT said they have not addressed directly addressed
fines and penalties, primarily due to significant issues
regarding potential reform of the utilities that they have been
working on.
REPRESENTATIVE HANNAN questioned whether the RCA's report will
indicate a penalty change for utilities addressed across
multiple sectors of regulated utilities, which can be done
without a statutory change.
MR. PICKETT deferred to Mr. Goering.
5:00:50 PM
MR. GOERING said that the specific statute in question is AS
42.05.571 (a), which dates back to 1970 and provides for a
maximum penalty of $100 per violation. He pointed out that AS
42.05.581 provides that each violation of any order, decision,
regulation, or written requirement of the commission is a
separate and distinct offense; therefore, there is an argument
that in the case of an outage, every customer who was out of
service for a particular day would be a separate violation,
making it $100 multiplied by the number of effected customers
multiplied by the number of days the outage lasted. Regarding
the increased penalty, the maximum penalty of $100 per violation
is in statute and cannot be increased by regulation; only a
statutory amendment can change that.
5:02:20 PM
REPRESENTATIVE STUTES asked what other utilities might be
affected.
MR. PICKETT answered any utilities that are subject to the
commission's jurisdiction. He noted that the RCA regulates
electric utilities, waste providers, and natural gas local
distribution companies.
5:02:55 PM
REPRESENTATIVE FIELDS asked if the amendment is drafted to
change the penalty for all those utilities.
MR. GOERING said that as it's currently written, lines 12-23 of
Amendment 1, would not apply to telecommunication carriers -
unless a carrier had been designated as a COLR to provide
service in a particular area. Therefore, the penalty wouldn't
be applicable to every telecommunications carrier with an outage
-only a COLR with an outage - as it's drafted.
REPRESENTATIVE FIELDS said he's only concerned in a monopolistic
environment where there's potentially no economic incentive.
CHAIR WOOL added that it's a penalty "of up to," which doesn't
make it mandatory. He referenced the incident in Kodiak where
an outage lasted 47 days and asked if that provider was fined
$4700.
MR. PICKETT answered no, adding that no proceeding had been
started to initiate a $4700 fine against that carrier.
5:04:47 PM
REPRESENTATIVE FIELDS acknowledged that the incident in Kodiak
and the fact that there's not a meaningful penalty was the
reason behind this amendment.
REPRESENTATIVE TALERICO pointed out that Amendment 1 does not
define whether the penalty is daily, monthly, or annually.
5:05:22 PM
REPRESENTATIVE FIELDS said the intention was to amend the
maximum daily fine.
MR. GOERING offered his understanding that as it's currently
drafted, there appears to be a single penalty per failure to
implement repairs; therefore, for each failure to implement
repairs, regardless of how long it lasts, there could be one
penalty of up to $10,000.
CHAIR WOOL reasoned that the provider in Kodiak could have been
fined $100 for 47 days of no service.
MR. GOERING clarified that in current statute it does specify
"per day." He reiterated that each customer could be considered
a separate act, making it a proposed civil penalty of 47 days
multiplied by the number of people that were out of service
multiplied by up to $100; which would be $4700 multiplied by the
number of people who did not have service.
CHAIR WOOL suggested that they were amending the wrong statute.
5:07:25 PM
REPRESENTATIVE FIELDS withdrew Amendment 1.
5:08:07 PM
REPRESENTATIVE FIELDS moved to adopt Amendment 2, [labeled 31-
LS0563\M.8, Fisher, 5/10/19], which read:
Page 2, following line 7:
Insert a new subsection to read:
"(g) The commission shall adopt regulations
requiring a telecommunications utility that is exempt
from certain provisions of this chapter under
AS 42.05.711 to keep records of savings realized by
the telecommunications utility as a result of the
exemption and to invest those savings in the
maintenance and construction of infrastructure serving
a public purpose."
Page 3, line 31:
Delete "AS 42.05.141(e) and (f)"
Insert "AS 42.05.141(e) - (g)"
REPRESENTATIVE HANNAN objected.
REPRESENTATIVE FIELDS said there was a discussion about a lack
of transparency with respect to subsidies that are reinvested
into infrastructure. He explained that Amendment 2 is an
insurance amendment to guarantee that any savings or increases
in telecom companies' profitability related to passage of this
bill is reinvested into infrastructure.
5:09:12 PM
MS. O'CONNOR clarified that the RCA has complete authority to
require reporting around the AUSF. She added that the ATA
members follow every compliance instituted by the RCA and must
be in compliance to continue to receive funds. Regarding
Amendment 2, she said it would be a cumbersome attempt, adding
that telecom companies have not been cost-regulated for 10-15
years. She said the processes are not in place and expressed
concern that this amendment would divert resources from ATA
members and the commission - resources that would be much better
used looking at the AUSF or other issues.
5:10:47 PM
REPRESENTATIVE STUTES maintained her objection.
A roll call vote was taken. Representative Fields voted in
favor of Amendment 2. Representatives Revak, Hannan, Stutes,
Talerico, Story, and Wool voted against it. Therefore,
Amendment 2 failed by a vote of 1-6.
5:11:23 PM
REPRESENTATIVE FIELDS said he would not be offering Amendment 3.
REPRESENTATIVE FIELDS moved to adopt Amendment 4, [labeled 31-
LS0563\M.5, Fisher, 5/8/19], which read:
Page 4, lines 6 - 10:
Delete all material.
Renumber the following bill sections accordingly.
CHAIR WOOL objected for purposes of discussion.
REPRESENTATIVE FIELDS explained that Amendment 4 removes the
elimination of municipal authority. He said he has a
fundamental problem with the state legislature taking away local
authority that currently exists. He stated that there is
already strong language in Alaska's constitution related to
local authority.
REPRESENTATIVE HANNAN objected.
REPRESENTATIVE HANNAN inquired as to the current circumstances
wherein there are municipals who regulate long distance
telephone companies within their municipality. She asked if
there could be any foreseen problems if long distance service
was provided across 5 to 6 municipalities and one chose to
participate in internal regulations within its municipal
boundaries but not in the entire service area.
5:13:14 PM
MR. PICKETT said that would be a problematic situation. He
added that Ketchikan is the only known local municipally owned
telephone utilities.
MS. O'CONNOR confirmed that there is one municipally owned local
exchange carrier, Ketchikan Public Utilities, which is overseen
by their city council. She noted that currently, municipalities
do not regulate long distance carriers or local exchange
carriers - except in the case where the municipality is a
telephone company.
REPRESENTATIVE FIELDS said Amendment 4 was not drafted the way
he envisioned. He said he intended to strike the additional
language on page 4, line 8, "or a local exchange carrier," to
preserve current statute with respect to municipal preemption.
5:14:43 PM
REPRESENTATIVE STUTES asked what kind of impact that would have.
MS. O'CONNOR said it would be a similar problem if
municipalities began regulating the local landline carriers
because several are very large - United Utilities, for example,
has 76 communities across the state. She said a "patchwork" of
regulations could develop if a local municipality wanted to
regulate telecom. She offered her understanding that that is
preemptive because the RCA has authority through the certificate
of public convenience and necessity.
5:15:54 PM
MR. JACKSON acknowledged that there is no municipal regulation
of telecommunication at this time. He agreed with Ms. O'Connor
that United Utilities, owned by GCI, serves a large number of
municipalities and said it would be a "nightmare" if each one
independently tried to regulate within their own area.
5:16:51 PM
REPRESENTATIVE FIELDS asked why the industry is attempting to
add this language if they are already preempted. He asserted
that this substantial deregulation of a regulated industry that
is subsidized. He said he hopes that it's the right decision
and if it's not, local governments should have the right to step
in and preserve local coverage that might otherwise be
eliminated through deregulation. He reiterated the need to
maintain local authority, "at least to the limited extent that
it exists now."
REPRESENTATIVE TALERICO said appreciates the intent because he
supports local government control. He addressed cross boundary
issues, adding that the carrier in his area stretches into
another bureau. He opined that from a municipal standpoint, it
would be much easier to be exempt because Alaska's geography
presents an obstacle.
REPRESENTATIVE HANNAN maintained her objection.
5:19:19 PM
A roll call vote was taken. Representative Fields voted in
favor of Amendment 4. Representatives Revak, Hannan, Stutes,
Talerico, Story, and Wool voted against it. Therefore,
Amendment 4 failed by a vote of 1-6.
5:19:57 PM
REPRESENTATIVE FIELDS said would not be offering Amendment 5 or
Amendment 6 at this time.
5:20:25 PM
The committee took an at-ease from 5:20 to 5:27 p.m.
5:27:01 PM
REPRESENTATIVE FIELDS moved to adopt Amendment 7, [labeled 31-
LS0563\M.9, Fisher, 5/10/19], which read:
Page 4, line 1:
Following "42.05.306,":
Insert "42.05.361,"
Following "42.05.381 (l) - (n),":
Insert "42.05.391, 42.05.411,"
REPRESENTATIVE STUTES objected.
REPRESENTATIVE FIELDS explained that Amendment 7 would preserve
the filing of tariffs and preserve the prohibition on
discrimination amongst rate payers. He said it's difficult to
identify appropriate language to outline respective classes of
service without precluding the ability of a rural school to
negotiate a better rate than the uniform rates. Consequently,
this amendment ensures some protection for consumers.
CHAIR WOOL said he is still unsure what the language does.
REPRESENTATIVE FIELDS explained that in lieu of eliminating
COLR, the insertion of Section 7 provides adequate consumer
protection for residential telephone service; however, concern
remains regarding consumer protection for commercial carriers.
He said if there was a way to tweak Section 7 to provide those
consumer protections for commercial carriers it would be
preferable to Amendment 7. Nonetheless, he said in his own
inability to do adequately do so, he drafted Amendment 7 to
provide those protections for commercial carriers, which
includes school districts.
5:30:25 PM
MR. GOERING explained that lines 2-3 of Amendment 7, would
insert AS 42.05.361 which is titled "Tariffs, contracts, filing,
and public inspection." This statute requires utilities to have
a complete tariff on file, which means everything they offer to
their customers, as well as the rates and terms and conditions
of service for those service offerings are in a public document
that's on file with the RCA. He added that in order to change
that there must be a filing. This amendment, he said, would
maintain that existing requirement. He suggested including AS
42.05.371 in addition to AS 42.05.361 on line 3 of the amendment
as a way to make the consumer protection "truly meaningful." He
said that would ensure the tariff that is on file at the RCA
would be actually binding on the utility.
MR. GOERING turned attention to lines 4-5 of Amendment 7,
explaining that AS 42.05.391 is titled "discrimination and
rates" and prohibits utilities from charging rates and requires
that all similarly situated customers be treated substantially
alike. AS 42.05.411, he said, is procedural section that
describes how a utility provides updates or revisions to its
tariffs. However, he suggested leaving out subsection 411(c),
as it is at odds with deregulation of the telecommunications
industry, which is seemingly the purpose of SB 83.
5:34:41 PM
REPRESENTATIVE FIELDS, regarding Section 7, asked Ms. O'Connor
if it's possible to include respective classes of service in a
way that doesn't make all classes of service the same rate.
5:35:17 PM
MS. O'CONNOR said no. She noted that in the business segment of
the market, services are migrating to voice-over IP service,
which is completely unregulated. She shared her belief that
trying to preserve any uniform or regulatory construct over them
would be burdensome and inhibit companies' ability to pursue
those contracts and respond to customer needs.
CHAIR WOOL pondered the proposal to require a tariff filing. He
wondered how that coincides with SB 83 if the purpose of the
bill is to remove tariffs. He said if there's no tariff then
there's no distinction between residential and other kinds of
service. He questioned how to reconcile that. He expressed
concern about protecting both businesses and non-residential and
asked if there's a way to do that without requiring a tariff.
MS. O'CONNOR gave context to a situation regarding business
rates. She said that currently 90 percent of Alaskans live in
places where companies have been able to change these rates
without permission, which is why there haven't been any rate
case filings to review because the regulations have been changed
in response to the industry. She said, "it's already happened,
were doing a paper shuffle to record it with the commission."
She noted that there are thousands of pages of tariffs per
company, and a web services survey found that .005 percent of
people looked at the tariffs posted on one company's website.
She said she recognize the concern, but the ability to change
rates and services by notification is already happening without
problem. She asked for the continuance of this successful
market practice without the paper shuffle. She added that co-
ops, which make up half the providers in this state, are not
required to file the paperwork back and forth. Instead, they
just make changes in response to their customers.
CHAIR WOOL sought clarification on "voice-over internet
protocol" and what constitutes being a landline customer.
MS. O'CONNOR explained that landline is largely a regulatory
construct. She noted that the technology underneath could be,
for example, internet or copper wire; however, that alone does
not make it a landline.
REPRESENTATIVE FIELDS said he shares the concern over lack of
protections for businesses, and therefore, will continue to
offer Amendment 7.
REPRESENTATIVE STUTES maintained her objection.
5:42:49 PM
A roll call vote was taken. Representative Fields voted in
favor of Amendment 7. Representatives Story, Revak, Hannan,
Stutes, Talerico, and Wool voted against it. Therefore,
Amendment 7 failed by a vote of 1-6.
5:44:05 PM
SENATOR BIRCH thanked the committee for taking time out of their
weekend this late in the legislative session to hear this bill.
He said he appreciated the dialogue and discussion.
[SB 83 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 16.Bill Version O.pdf |
HL&C 5/11/2019 11:00:00 AM |
SB 16 |
| SB 16.Amendments 1-2.pdf |
HL&C 5/11/2019 11:00:00 AM |
SB 16 |
| SB 16.Amendment 3.pdf |
HL&C 5/11/2019 11:00:00 AM |
SB 16 |
| SB 83.Bill Version M.pdf |
HL&C 5/11/2019 11:00:00 AM |
SB 83 |
| SB 83.Amendments 1-7.pdf |
HL&C 5/11/2019 11:00:00 AM |
SB 83 |