Legislature(2017 - 2018)BARNES 124
03/05/2018 03:15 PM LABOR & COMMERCE
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HB 277-BROADBAND INTERNET: NEUTRALITY/REGULATION 3:59:25 PM CHAIR KITO announced that the next order of business would be HOUSE BILL NO. 277, "An Act relating to the regulation of broadband Internet; and making certain actions by broadband Internet service providers unlawful acts or practices under the Alaska Unfair Trade Practices and Consumer Protection Act." 3:59:24 PM JACOB GERRISH, Staff, Representative Scott Kawasaki, reintroduced HB 277 on behalf of Representative Kawasaki, prime sponsor. He said HB 277 would require internet service providers (ISPs) to engage in net neutrality practices for all users. 4:00:29 PM TOM BRADY, Engineering Manager, Microcom, Testified in the hearing on HB 277. He explained that net neutrality is only possible when bandwidth is unlimited. When an ISP has unlimited bandwidth, it has no reason to prioritize one service over another. He stated bandwidth is limited, particularly in rural Alaska. He said the market allocates the scarce resource of bandwidth. He added that technically, not all internet packets are equal. He said he wondered whether there have been complaints about packages being treated unfairly before or after 2015 when net neutrality was created. He asked, "What is the extent of the problem we are trying to solve?" He suggested the general lack of bandwidth in Alaska forces an allocation of resources. He said doing away with a market-based allocation and replacing it with a government-adjudication allocation would reintroduce a period of chaos until the government determines who gets to have what and would slow down deployment of more bandwidth in the rural market since quality of service would be differentiated based on the government's perception of need. 4:04:01 PM REPRESENTATIVE WOOL asked what changed in 2015. MR. BRADY answered that in 2015 the Federal Communications Commission (FCC) imposed net neutrality and it was reversed in 2017. REPRESENTATIVE WOOL asked whether the system was neutral prior to 2015. MR. BRADY explained that prior to 2015 there was no requirement for neutrality. CHAIR KITO shared his understanding that before 2015, there was no regulation but there was concern that there could be differential pricing schemes put into place. In 2015, there was an administrative order that restricted that opportunity and that order was repealed in 2017. He said there were not any changes or restrictions seen in how things had been operating. MR. BRADY restated his query whether anything had happened before or since 2015, or since 2017, that posed a problem. CHAIR KITO said that he thought it was a concern that there might be inequitable activity in the area of internet service. MR. BRADY answered that since Alaska has services from a national provider, if Alaska ends up being substantially different, there is a risk of the national provider exiting the state. 4:08:52 PM REPRESENTATIVE BIRCH shared his understanding that the issue is largely a federal issue, not a local or a state issue. He asked whether Mr. Brady felt it is a federal issue. MR. BRADY answered in the affirmative. He clarified that in the case of AT&T, the company would have to manage its service differently in Alaska and Kansas and this could prove onerous and could be overturned at a federal level. 4:10:12 PM GEORGE PIERCE testified in support of HB 277. He said the state depends on the freedom of the internet. He suggested that to limit access to information puts free speech on the line and is more important than pricing issue. He said 60 percent of people in the state live in rural Alaska and restricted broadband is crucial to rural Alaska's lifeline. 4:12:50 PM REPRESENTATIVE BIRCH asked Mr. Pierce whether he has any personal experience with problems with the internet. MR. PIERCE answered, "They slowed it down." REPRESENTATIVE BIRCH asked for confirmation that he had personal experience with internet speeds slowing. MR. PIERCE answered in the affirmative. 4:14:36 PM JODE SPARKS testified in support of HB 277. He said as a youth he goes online to study, relax, shop, interact with friends, and interact with different viewpoints around the world. He gave the example of teleconferences with other students around the world. He said telecommunications is important to teaching and learning in Alaska. He said when the current administration proposed changes to net neutrality, polls cited 83 percent approval [of net neutrality]. He mentioned the executive action of the governor of Washington state against the repeal of net neutrality. 4:17:40 PM REPRESENTATIVE KNOPP asked whether there were other states besides Washington and Montana which had taken action against the repeal of net neutrality. MR. SPARKS answered that he did not know, but that the repeal had only occurred in December . REPRESENTATIVE BIRCH asked whether Mr. Sparks had witnessed any intentional slowing down of bandwidth. MR. SPARKS explained that industry hasn't taken action yet, but that he felt he could not have faith in the industry self- regulating. 4:20:31 PM KYRSTYN KELLY testified in support of HB 277. She explained that many communities do not have broad access to ISPs. She stated it was a huge concern as those communities rely on internet service for education. She shared her belief that industry would not self-regulate. REPRESENTATIVE BIRCH said he thinks there is competition available and that a customer can choose another provider if they feel the service they receive is not adequate. He asked whether Ms. Kelly had personal experience with broadband slowing. MS. KELLY answered that she had not, but that it is too early to see. REPRESENTATIVE WOOL reiterated his question regarding net neutrality and whether it has changed since the inception of the internet. MR. GERRISH answered the executive order has not gone into effect and that he thought the date would be April 23rd . REPRESENTATIVE WOOL asked whether the proposed bill is a symbolic gesture, or whether it was intended to ensure that the internet service in the state is not throttled further at a state level. MR. GERRISH answered that he did not want to speak to the intent of the bill, but that he thought it may have both effects. 4:26:16 PM REPRESENTATIVE BIRCH shared his understanding that the FTC managed the internet from 1996 to 2015, when the authority was moved to the FCC and it just went back to the FTC. He asked whether it was Mr. Gerrish's understanding as well. MR. GERRISH answered it is not his understanding. He explained that 1996 was when the Title 1 and Title 2 service distinction was made. He added net neutrality has been the regulation standard since 1996. He said there have been cases of companies caught slowing services. He gave the example of ComCast slowing a site called BitTorrent. He said the FCC had issued an order to stop the throttling at the time. 4:28:55 PM JEANIE PIERCE testified in support of HB 277. She stated that Netflix had been slowed down. She stated the repeal would not be implemented until April 30 , so no change would be seen yet. 4:30:29 PM CHAIR KITO closed public testimony on HB 277 upon ascertaining that there was no one else who wished to testify. 4:30:33 PM CHAIR KITO commented that he felt the legislation was attempting to address something that has not happened yet. He added he thinks there is a need to ensure equitable access to the internet. He said he was not sure that the bill was the correct vehicle by which to address the issue. REPRESENTATIVE JOSEPHSON said that something happened with net neutrality in 2017. He said he would support the bill but that he felt it would act more as a resolution than a bill. REPRESENTATIVE WOOL commented that sending a signal to Congress was worth doing and he would support the bill. 4:34:23 PM REPRESENTATIVE BIRCH stated his objection to moving the bill due to the risk that companies could move away. He said he thought it was good to have a choice. He said it should be a federal issue. REPRESENTATIVE SULLIVAN-LEONARD said she shared the concerns stated by Representative Birch. She added that she saw a "fear factor" in the proposed bill and she would not be supporting it. 4:37:24 PM REPRESENTATIVE KNOPP said that he likes the net neutrality concept. He said he preferred to wait until there is a problem. He said he though industry should have the right to market their product as faster service. REPRESENTATIVE WOOL said he does not pay for the fastest internet service and he does not have access to more ISPs in his area. He said he supports the net neutrality concept. 4:39:52 PM REPRESENTATIVE WOOL moved to report HB 277 out of committee with individual recommendations and the accompanying fiscal notes. A roll call vote was taken. Representatives Josephson, Wool, Stutes, and Kito voted in favor of HB 277. Representatives Sullivan-Leonard, Knopp, and Birch voted against it. Therefore, HB 277 was reported out of the House Labor and Commerce Standing Committee by a vote of 4-3.