Legislature(2013 - 2014)SENATE FINANCE 532

02/05/2014 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved SJR 9 Out of Committee
SENATE BILL NO. 82                                                                                                            
     "An Act providing for public school funding for                                                                            
     telecommunications or Internet services."                                                                                  
9:09:55 AM                                                                                                                    
Senator Olson stated that SB  82 was related to discounts on                                                                    
broadband  for schools  and that  it would  have a  positive                                                                    
impact on schools throughout the State of Alaska.                                                                               
DAVID SCOTT,  STAFF, SENATOR DONALD OLSON,  related that the                                                                    
intent of the  bill was to have the state  pick up the local                                                                    
share of  the broadband  that was not  covered under  the E-                                                                    
Rate Program.  He explained  that the  E-Rate Program  was a                                                                    
federal  program that  provided from  the Universal  Service                                                                    
Fund (USF) a discount to  schools, libraries, and "things of                                                                    
that nature." He  offered that every school  district in the                                                                    
state would  benefit from the  bill and referenced  a spread                                                                    
sheet   from  the   Department   of   Education  and   Early                                                                    
Development (DEED)  in members'  packets (copy on  file). He                                                                    
referenced page 5  of the spreadsheet and  noted that $9.180                                                                    
million was  the total of  the all the  districts' applicant                                                                    
shares. He observed that through  the E-Rate Program and the                                                                    
USF, the state was able to  leverage roughly $4 for every $1                                                                    
that  it  put  in.  He  noted  that  the  state  was  always                                                                    
attempting to make the education  system better and that the                                                                    
sponsor  felt  that  it was  appropriate  to  assist  school                                                                    
districts by  leveraging even more federal  funding in order                                                                    
to expand  educational opportunities for districts  that did                                                                    
not have  every opportunity; he stated  that the legislation                                                                    
would have the most benefit  for rural school districts, but                                                                    
that  every  school  district  would  benefit  from  it.  He                                                                    
pointed out that there were only  2 sections in the bill. He                                                                    
referenced Section  1, subsection (a), which  dealt with the                                                                    
applicant  share.  He  stated  that  Section  1,  subsection                                                                    
(b)(1) reflected the cap for  bandwidth and that, subsection                                                                    
(b)(2) represented the floor. He  related that the floor was                                                                    
a minimum  of 10  megabits per second  of download  and that                                                                    
the fiscal note  showed that there were  roughly 500 schools                                                                    
in Alaska;  170 of those  schools were below the  10 megabit                                                                    
Mr. Scott  continued to address  SB 82 and offered  that the                                                                    
increased  broadband was  necessary  to  assist in  distance                                                                    
delivery  courses and  new online  assessments. He  observed                                                                    
that  DEED estimated  that  it would  cost  $7.3 million  to                                                                    
bring  the 170  schools  up  to the  10  megabit per  second                                                                    
floor. He  relayed that the  sponsor felt that  the benefits                                                                    
of  technology and  the  internet  would expand  educational                                                                    
opportunities for all students across the state.                                                                                
9:14:37 AM                                                                                                                    
Vice-Chair  Fairclough  understood  that there  had  been  a                                                                    
broadband-bandwidth  study   conducted  regarding  potential                                                                    
needs in  different areas  in Alaska, but  that she  had not                                                                    
received it yet  to the best of her  knowledge. She inquired                                                                    
how the  proposed numbers in  bill compared with  the actual                                                                    
usage  and  need  of   bandwidth  within  those  communities                                                                    
currently. She  furthered inquired  who the  bandwidth would                                                                    
be purchased from. She recalled  discussions with the Alaska                                                                    
Railroad  Corporation (ARRC)  and thought  that there  was a                                                                    
company  that  had basically  bought  all  of the  broadband                                                                    
bandwidth in  all of the  states; as a result,  everyone had                                                                    
to  go through  a particular  entity to  buy bandwidth.  She                                                                    
admitted that she  was unsure if the  situation of bandwidth                                                                    
being bought  up was true, but  that she had heard  that the                                                                    
federal  government  sold  the  bandwidth  to  a  particular                                                                    
company,   which  would   cost  states   and  municipalities                                                                    
additional money.  Mr. Scott replied  that the  question was                                                                    
one that  drilled into  the E-Rate Program  and the  USF; he                                                                    
deferred the  question to Ms.  Thibodeau in the  interest of                                                                    
saving the committee time.                                                                                                      
Co-Chair Meyer inquired  if the state had  contributed to E-                                                                    
Rate  Program in  the  past. Mr.  Scott  responded that  his                                                                    
understanding was  that the federal funds  were dispersed to                                                                    
the  school   districts  and   that  the   school  districts                                                                    
themselves picked up the applicant  share. He furthered that                                                                    
the  intent of  the bill  was to  have the  state cover  the                                                                    
districts' applicant  shares of internet services  that were                                                                    
not  provided by  the E-Rate  Program, which  the state  had                                                                    
never done before to his knowledge.                                                                                             
Co-Chair Meyer inquired  if the bill was a  request that had                                                                    
come  from the  school districts.  Mr. Scott  responded that                                                                    
some school  districts had approached the  sponsor regarding                                                                    
the legislation.                                                                                                                
Senator  Dunleavy  inquired  if  the  funds  that  would  be                                                                    
dedicated  through  the  bill   would  be  focused  just  on                                                                    
internet service  or if schools  would be able to  choose to                                                                    
spend the money  in other areas. Mr. Scott  replied that the                                                                    
E-Rate   Program  limited   the   uses  of   the  funds   to                                                                    
telecommunications services,  internet access,  and internal                                                                    
Co-Chair Meyer  noted that with  federal match, there  was a                                                                    
concern  with  the  federal   contribution  going  away  and                                                                    
inquired if the bill's sponsors  had that concern. Mr. Scott                                                                    
did not  believe that it was  a concern and stated  that the                                                                    
E-Rate   Program   was   not   subject   to   sequestration;                                                                    
furthermore, the  USF was  paid into by  everyone who  had a                                                                    
phone  and received  a  bill  and was  also  not subject  to                                                                    
sequestration. He  noted that as  Alaskans, however,  it was                                                                    
good to be skeptical.                                                                                                           
9:19:49 AM                                                                                                                    
Senator Dunleavy directed the  committee's attention to page                                                                    
2 of  the bill and inquired  if the effective date  was July                                                                    
1, 2013.  Mr. Scott replied  that the bill had  been drafted                                                                    
the previous  year and that  if it passed, there  would need                                                                    
to be  conforming changes in  a committee substitute  to the                                                                    
effective date, as well as other areas of the bill.                                                                             
Co-Chair  Meyer  noted that  the  committee  would make  the                                                                    
changes if and when bill moved.                                                                                                 
Vice-Chair Fairclough  pointed to the sponsor  statement for                                                                    
the  bill  (copy  and  file),  which  discussed  the  bill's                                                                    
minimum bandwidth floor. She inquired  how the minimum floor                                                                    
of megabits  per second was  driving the costs  of providing                                                                    
the broadband; she further inquired  if the districts' costs                                                                    
trickled  down   to  the  individual  schools   and  if  the                                                                    
infrastructure  cost was  reflected in  the bill.  Mr. Scott                                                                    
replied that way he understood  the E-Rate Program, internet                                                                    
connections were considered  infrastructure. He related that                                                                    
the state  assumed that  it would cost  $7.3 million  to get                                                                    
those 170 schools up to  10 megabits per second. He directed                                                                    
the committee's  attention to  Section 1,  subsection (b)(1)                                                                    
of the  bill and  relayed that  eligible schools  would meet                                                                    
the floor and be limited by a cap, which was:                                                                                   
     "10 percent of the amount paid under this section in                                                                       
     the immediately preceding fiscal year for Internet                                                                         
Co-Chair  Meyer  thought  that the  bill  had  potential  to                                                                    
advance  the   distance  delivery  program,  but   that  the                                                                    
administration could address that issue further.                                                                                
Senator Olson  commented that the  bill would not  only help                                                                    
the distance  delivery program, but  would also  assist with                                                                    
general   internet  within   the   individual  schools.   He                                                                    
explained that  he did  not have all  of the  details worked                                                                    
out regarding how the money  would trickle down to different                                                                    
schools, but that the bill would  certainly be a help to all                                                                    
of  the school  districts  in Alaska  regardless of  whether                                                                    
they were  large or  small, which was  why he  had sponsored                                                                    
the legislation.                                                                                                                
LINDA THIBODEAU, DIRECTOR,  DIVISION OF LIBRARIES, ARCHIVES,                                                                    
AND MUSEUMS, DEPARTMENT OF  EDUCATION AND EARLY DEVELOPMENT,                                                                    
related   that  Ms.   Oliver  was   the  division's   E-Rate                                                                    
specialist and  would probably be deferred  to for questions                                                                    
on that issue.                                                                                                                  
9:25:17 AM                                                                                                                    
Senator Olson  inquired if  it was true  that a  company had                                                                    
bought a  major portion  of the  broadband width  in America                                                                    
and that  Alaska would have  go through that company  to get                                                                    
internet coverage for its schools.                                                                                              
VALERIE  OLIVER,   DIVISION  OF  LIBRARIES,   ARCHIVES,  AND                                                                    
MUSEUMS,  DEPARTMENT  OF  EDUCATION AND  EARLY  DEVELOPMENT,                                                                    
ANCHORAGE (via  teleconference), responded that she  was not                                                                    
aware  of that  situation and  that the  reference may  have                                                                    
been  made in  regard to  something else.  She related  that                                                                    
Alaska   had  pretty   robust  competition   among  internet                                                                    
providers. She explained  that one provider did  not fit all                                                                    
needs in  Alaska and that  individual providers  were better                                                                    
suited for  some areas,  while some  were better  suited for                                                                    
others. She concluded  that there was no  monopoly in Alaska                                                                    
regarding internet service.                                                                                                     
Ms. Thibodeau  added that the  E-rate program  also required                                                                    
that the lowest cost provider would be used.                                                                                    
Vice-Chair  Fairclough requested  that the  previous speaker                                                                    
and the speaker online identify themselves for the record .                                                                     
Ms. Thibodeau  stated that the E-Rate  reimbursement program                                                                    
required competition  and that the lowest  cost bandwidth be                                                                    
selected  for  each  location; additionally,  she  was  also                                                                    
unaware of  any monopoly or  any particular vendor  that had                                                                    
bought and owned all the bandwidth for Alaska.                                                                                  
Vice-Chair  Fairclough recalled  that her  previous comments                                                                    
had  specifically   stated  that   ARRC  had   supplied  the                                                                    
information   regarding  an   internet  monopoly   during  a                                                                    
presentation  on  positive  train   control  in  an  earlier                                                                    
meeting.  She   did  not  know  how   broadband  width  sold                                                                    
throughout  the   country,  but  believed   that  individual                                                                    
carriers  purchased it  from somewhere.  She wondered  where                                                                    
the  individual  carriers  would  purchase  their  broadband                                                                    
bandwidth  from  and  if  there  was  a  difference  between                                                                    
carriers for Alaska.                                                                                                            
Ms.  Thibodeau  responded  that   she  was  unaware  of  the                                                                    
situation ARRC  had referenced  and was  unable to  speak to                                                                    
the issue; however, there were  a lot of different "pots" of                                                                    
E-Rate money  and different pots  of federal  subsidies. She                                                                    
explained that the federal E-Rate  subsidies for schools and                                                                    
libraries were  different than the  subsidies for  health or                                                                    
other entities.  She concluded that the  ARRC's business was                                                                    
out of purview  of the Division of  Libraries, Archives, and                                                                    
Senator  Bishop  queried  if   DEED  was  confident  in  its                                                                    
analysis  that one-third  of Alaska's  schools were  getting                                                                    
under  10 megabits  per second.  Ms. Thibodeau  deferred the                                                                    
question to Ms.  Oliver, but added that  the information was                                                                    
from the previous spring and  could probably be updated. She                                                                    
offered that bandwidth was a  moving target and that schools                                                                    
bought it  depending on what  they could afford and  what it                                                                    
was selling for at a particular time.                                                                                           
9:30:02 AM                                                                                                                    
Ms. Oliver replied that the  information was slightly out of                                                                    
date  and explained  that currently,  school districts  were                                                                    
conducting procurement  for the  next year for  the purposes                                                                    
of  E-Rate;  some  districts   were  currently  looking  for                                                                    
contracts  for  bandwidth  growth.  She noted  that  as  the                                                                    
demand  for online  testing  became  higher, districts  were                                                                    
actively  procuring for  increased  bandwidth. She  believed                                                                    
that the percent of schools  that were under 10 megabits per                                                                    
second would  be dropping rather than  rising; additionally,                                                                    
procurements were in the contract  stage currently and there                                                                    
would more  information regarding  the contracts by  the end                                                                    
of  March. She  concluded that  contracts that  schools were                                                                    
currently signing  were for services  that would  connect on                                                                    
July 1, 2014.                                                                                                                   
Co-Chair  Meyer noted  that Co-Chair  Kelly  had joined  the                                                                    
committee in progress.                                                                                                          
Senator  Hoffman directed  the  committee's  attention to  a                                                                    
document in members' packets titled  "E-Rate Share and Total                                                                    
Cost" (copy on file) and  inquired what the percentage under                                                                    
the "Discount  E-rate Request" column  meant. He  noted that                                                                    
the  percentage  varied  between school  districts  from  48                                                                    
percent  up to  90  percent. Ms.  Oliver  replied that  each                                                                    
district  was awarded  a discount  on its  internet services                                                                    
that depended on  the poverty level in  its local community.                                                                    
She explained that the E-Rate  Program had a discount matrix                                                                    
that  the percent  was drawn  from. She  concluded that  the                                                                    
discount level  truly reflected  the economic  situations in                                                                    
particular school districts and communities.                                                                                    
9:32:57 AM                                                                                                                    
Senator Hoffman queried what the  implications of having the                                                                    
floor at 10 megabits per second  would be in the future when                                                                    
the  speeds  might  increase rapidly.  He  wondered  if  the                                                                    
program would  go away  if everyone was  at 50  megabits per                                                                    
second in the future. Ms.  Oliver understood that the fiscal                                                                    
note  would cover  districts' share  of the  bandwidth costs                                                                    
regardless  of the  where they  were; furthermore,  the bill                                                                    
would  not only  elevate the  districts that  were under  10                                                                    
megabits, but would also cover  the non-discounted share for                                                                    
the districts  like Anchorage or the  Lower Kuskokwim, which                                                                    
were  approaching 100  megabits  per  second. She  concluded                                                                    
that  the  non-discounted  share  would  grow  as  bandwidth                                                                    
subscription increased and that she  did not see the program                                                                    
going  away because  districts would  always have  a portion                                                                    
that  they  would  be  required to  pay  under  the  Federal                                                                    
Communications Commission's statutes.                                                                                           
9:34:32 AM                                                                                                                    
Vice-Chair  Fairclough inquired  if  Ms.  Oliver had  stated                                                                    
that the  local community  would always  be required  to pay                                                                    
its share. Ms. Oliver responded in the affirmative.                                                                             
Vice-Chair  Fairclough  surmised  that the  legislation  was                                                                    
asking the state to pick up  the local share and inquired if                                                                    
that was correct. Ms. Oliver  responded different states did                                                                    
things differently  and that  some states  did pay  the non-                                                                    
discounted share but  some did not. She reported  that a lot                                                                    
of  states had  a network  where the  broadband was  brought                                                                    
down to  the school  site, which  was completely  covered by                                                                    
the state.  She stated that  the way  she read the  bill, it                                                                    
appeared as  though the districts  were asking the  state to                                                                    
pay its non-discounted portion.                                                                                                 
Vice-Chair  Fairclough  inquired if  there  was  a State  of                                                                    
Alaska  broadband width  study. Ms.  Thibodeau replied  that                                                                    
that  she was  unable to  answer the  question and  believed                                                                    
that  Vice-Chair Fairclough  was referencing  the governor's                                                                    
broadband  taskforce.   She  added  that  the   Division  of                                                                    
Libraries, Archives, and Museums  had not been involved with                                                                    
the taskforce.                                                                                                                  
Vice-Chair  Fairclough   inquired  how  the   fiscal  note's                                                                    
numbers were  arrived at and  if the previous  year's actual                                                                    
numbers  were  used  in   the  calculations.  Ms.  Thibodeau                                                                    
replied that  she and  Ms. Oliver had  worked on  the fiscal                                                                    
note with  the vendors  and the  school districts  the prior                                                                    
spring to find costs; at  the time, the school districts had                                                                    
been  involved   in  bidding  for  the   current  year.  She                                                                    
explained that  the fiscal  note was  lagging a  bit behind,                                                                    
but that  the process  had been to  get the  best estimates;                                                                    
those  estimates  were  divided with  one-third  of  schools                                                                    
needing upgrades to 10 megabits  and two-thirds needing a 10                                                                    
percent increase.                                                                                                               
Vice-Chair Fairclough pointed  out that the bill  built in a                                                                    
10  percent  cost  increase  that  vendors  could  negotiate                                                                    
because the  state would  pick it up.  She offered  that the                                                                    
legislation   proposed   to    deposit   or   transfer   the                                                                    
responsibility of  paying internet services.  She referenced                                                                    
a document  titled "Erate  Brief" (copy  on file)  and noted                                                                    
that it provided examples of  eligible services; she was not                                                                    
opposed to  the types of  eligible services, but  noted that                                                                    
the bill proposed  to supplant state funds  for funds coming                                                                    
in from elsewhere.  She acknowledged that she  was unsure if                                                                    
the money that the bill  proposed using would simply consist                                                                    
of state funding that was  shifted from one pool to another;                                                                    
however, the legislation  did have a built  in increase that                                                                    
vendors could  use against the districts  to perpetuate cost                                                                    
increases  and not  really negotiate  well. She  appreciated                                                                    
the  bill  being  brought  forward  and  was  supportive  of                                                                    
providing better  internet access; however, she  wanted more                                                                    
information about  the financial implications of  the fiscal                                                                    
note, as well  as how the cost figures were  arrived at. She                                                                    
also wanted  to look  at the  governor's broadband  study to                                                                    
see if the bill's formula  would achieve the effect that the                                                                    
state desired.                                                                                                                  
9:39:31 AM                                                                                                                    
Senator Olson  noted that the  internet was the wave  of the                                                                    
future and would  be a very important  factor for posterity.                                                                    
He stated  that the bill  started the discussion of  how the                                                                    
state could provide  not only for the  school districts that                                                                    
were  struggling  to  provide  internet, but  also  for  the                                                                    
districts in the metropolitan areas.  He stated that another                                                                    
option  would be  to  have the  state  and school  districts                                                                    
split the costs in half instead  of having the state pay for                                                                    
the full $22  million in FY16. He concluded  that there were                                                                    
other  options to  make the  bill affordable,  but that  his                                                                    
goal was to  make costs affordable for  school districts and                                                                    
have the bill benefit students.                                                                                                 
Co-Chair Meyer offered  that the discussion on  the bill was                                                                    
good.  He relayed  that  he  wanted to  hear  more from  the                                                                    
administration regarding a possible  broadband study and how                                                                    
the  bill fit  into the  overall objective  of getting  more                                                                    
distance learning into education.                                                                                               
Vice-Chair  Fairclough noted  that  there was  a concept  of                                                                    
driving   down   administrative    costs   by   centralizing                                                                    
insurance. She  wondered if  the state  had buying  power to                                                                    
take  the  expense directly  off  of  the school  districts'                                                                    
plates or  if there was a  benefit to having a  local entity                                                                    
negotiating  with  multiple  carriers  to  keep  competition                                                                    
going. She wondered  if there was a way  to negotiate better                                                                    
terms by moving with access differently.                                                                                        
Senator  Bishop requested  a list  of the  one-third of  the                                                                    
districts  that  were  under 10  megabits  per  second.  Ms.                                                                    
Thibodeau  responded that  she believed  that DEED  had that                                                                    
information and asked Ms. Oliver if that was correct.                                                                           
Ms.  Oliver  replied  that  while  DEED  did  not  have  the                                                                    
information for July 1, 2014  and going forward, it did have                                                                    
the current information. In other  words, the department did                                                                    
not  know  what  the districts  were  currently  negotiating                                                                    
contracts for, but it did know about the current contracts.                                                                     
Ms. Oliver stated for the record  that she was a resource if                                                                    
the committee wanted more information.                                                                                          
9:44:19 AM                                                                                                                    
LUKE   FULT,  ASSISTANT   SUPERINTENDENT  OF   BUSINESS  AND                                                                    
OPERATIONS,  MAT-SU  BOROUGH  SCHOOL DISTRICT,  MAT-SU  (via                                                                    
teleconference), testified  in support of SB  82. He related                                                                    
that the  district invested heavily in  technology to ensure                                                                    
that  its  schools  were well  connected;  furthermore,  the                                                                    
district  provided online  courses,  tutorials, and  lessons                                                                    
that served to enrich activities  that took place within the                                                                    
traditional  classroom  setting.   He  stated  that  digital                                                                    
learning was an important part  of the Mat-Su Borough School                                                                    
District's curriculum and pointed  out that the district had                                                                    
partnered  with  service  providers  to  increase  bandwidth                                                                    
connectivity across  its area-wide  network. He  pointed out                                                                    
that  increased infrastructure  made the  district's schools                                                                    
more  connected   than  ever   before;  however,   with  the                                                                    
increased connectivity  came higher costs. He  reported that                                                                    
in the next school year,  the Mat-Su Borough School District                                                                    
planned to contribute  $600,000 for the local  portion of E-                                                                    
Rate-eligible services.                                                                                                         
MARY SAGE,  BOARD OF EDUCATION  MEMBER, NORTH  SLOPE BOROUGH                                                                    
SCHOOL DISTRICT,  BARROW (via teleconference),  testified in                                                                    
support  of  SB 82.  She  related  that the  E-Rate  Program                                                                    
currently  paid  for  60  to  90  percent  of  all  internet                                                                    
services in public schools. She  stated that the legislation                                                                    
would  provide  approximately  $13.8  million  in  FY14  for                                                                    
school  districts  to offset  the  local  costs of  internet                                                                    
services. She  pointed out that one-third  of public schools                                                                    
had less than  10 megabits per second  of internet services.                                                                    
She added that 10 megabits was  a pretty low bar to set. She                                                                    
stated that the bill would  allow schools that were below 10                                                                    
megabits per  second to  come up to  that minimum  level and                                                                    
receive  state  reimbursement.  She noted  that  the  Alaska                                                                    
Legislature and its  staff had over 100  megabits per second                                                                    
available to them in the legislative session.                                                                                   
PEGGY  COWAN,  SUPERINTENDENT,  NORTH SLOPE  BOROUGH  SCHOOL                                                                    
DISTRICT, BARROW  (via teleconference), spoke in  support of                                                                    
SB 82. She  reported that the bill had 2  aspects to it; one                                                                    
was to bring  schools to a minimum bandwidth  of 10 megabits                                                                    
per second.  The other  aspect of  the bill  was to  cap the                                                                    
state's exposure  to a  10 percent  increase over  the prior                                                                    
year for  internet services increases. She  pointed out that                                                                    
other states  provided some utilities  and services  free of                                                                    
charge to  schools. She  observed that  the bill  would have                                                                    
the  state  share  some  of the  support  with  the  federal                                                                    
government  and  thought  that  increasing  broadband  would                                                                    
assist   schools  with   distance   delivered  courses   and                                                                    
anticipated state  online assessments. She stated  that with                                                                    
its  current  situation,  the  North  Slope  Borough  School                                                                    
District  would  not be  able  to  do an  online  assessment                                                                    
program. She stated that the  E-Rate Program was not subject                                                                    
to sequestration  and noted that  there had  been discussion                                                                    
about adding money to the  USF because of things like online                                                                    
assessments that were being developed  at the federal level.                                                                    
She stated  that the  school district  was currently  in the                                                                    
process  of taking  and evaluating  bids for  its phone  and                                                                    
internet  services and  noted that  4 different  vendors had                                                                    
been used in  the past; in this particular  bid process, the                                                                    
district was  looking at  2 bid  packages. She  thought that                                                                    
the legislation was critical for  rural school districts and                                                                    
to the 170  schools that had internet below  10 megabits per                                                                    
second; however, it  would also be an asset  to urban school                                                                    
9:53:07 AM                                                                                                                    
ROBERT    THOMASON,   SUPERINTENDENT,    PETERSBURG   SCHOOL                                                                    
DISTRICT,  PETERSBURG  (via  teleconference),  testified  in                                                                    
support  of  SB 82.  He  noted  that the  Petersburg  School                                                                    
District  was  recognized  as  a  state  leader  in  digital                                                                    
learning  and the  application of  technology, and  observed                                                                    
that it was  very fortunate to have 25  megabits per second;                                                                    
the cost  of that bandwidth  was about $6,350 per  month, 77                                                                    
percent  of which  was currently  reimbursed  by the  E-Rate                                                                    
JON PAINTER, DIRECTOR,  INSTRUCTIONAL TECHNOLOGY, PETERSBURG                                                                    
SCHOOL DISTRICT, PETERSBURG  (via teleconference), expressed                                                                    
support  for  SB 82.  He  related  that as  technology  went                                                                    
forward, there  became more need for  technology support. He                                                                    
discussed innovations in technology  such as 3D printing and                                                                    
teleconferencing with  other educators around the  world. He                                                                    
stated that  modern teaching  methods that  utilized digital                                                                    
tools  were revolutionizing  education  and that  technology                                                                    
was  a   great  equalizer   in  society.  He   thought  that                                                                    
delivering faster  and more  robust internet  connection had                                                                    
implications   on  students'   learning  and   offered  that                                                                    
connectivity  in  Rural  Alaska   had  a  direct  impact  on                                                                    
learning  outcomes; furthermore,  the  education system  and                                                                    
the nation's  ability to prepare students  were important in                                                                    
the highly global workforce.                                                                                                    
THERESA  KEEL,  SUPERINTENDENT,   CORDOVA  SCHOOL  DISTRICT,                                                                    
CORDOVA  (via teleconference),  testified in  support of  SB
82. She related the Cordova  School District was a model for                                                                    
the use  of technology in  education and that  every student                                                                    
in it  had daily  access to  an internet  device such  as an                                                                    
IPad or  laptop computer;  from grades 7-12,  the district's                                                                    
students had a 24-hour laptop  that they used all year long.                                                                    
She  reported  that not  all  districts  in Alaska  were  as                                                                    
fortunate  as Cordova  and offered  that technology  was the                                                                    
great equalizer  for children in  Rural Alaska.  She thought                                                                    
that  the  ability  to provide  online  content  in  courses                                                                    
enabled   kids    to   achieve   the    Alaska   Performance                                                                    
Scholarships, allowed students  to take duel-credit courses,                                                                    
and offered  diversity in course and  content opportunities;                                                                    
furthermore, rural  districts could not provide  all of this                                                                    
due to  staffing and broadband limitations.  She pointed out                                                                    
that  the  cost of  broadband  was  becoming more  and  more                                                                    
difficult  to  deal  with  as  funding  remained  flat.  She                                                                    
thought that providing  a minimum of 10  megabits per second                                                                    
of  bandwidth for  every district  would take  a significant                                                                    
financial  burden off  of school  districts  and would  give                                                                    
every  district  the ability  to  provide  more courses  for                                                                    
content.  She stated  that the  prior  year, Cordova  School                                                                    
district had spent  over $14,000 for its local  share of the                                                                    
E-Rate Program for  6 megabits of broadband.  She added that                                                                    
the cost for the district in  the current year would be over                                                                    
$20,000  for  10  megabits  per  second  of  bandwidth.  She                                                                    
concluded that the  bill would provide the  biggest bang for                                                                    
the state's buck regarding funding  education outside of the                                                                    
formula and stated that it  would provide more opportunities                                                                    
for success in Rural Alaska.                                                                                                    
9:59:41 AM                                                                                                                    
Senator Olson  wondered if the  bill would be outdated  in 5                                                                    
or  10  years  with  the advance  of  technology.  Ms.  Keel                                                                    
replied  that through  the E-Rate  bid process,  the Cordova                                                                    
School  District  had the  opportunity  to  contract with  a                                                                    
provider for  2, 3, or 5  years; the district had  chosen to                                                                    
go  with a  2-year contract  because of  the uncertainty  of                                                                    
where the  cost of bandwidth  was going. She added  that the                                                                    
district believed that  the cost of bandwidth  would fall as                                                                    
competition  increased. She  reported  that  5 years  prior,                                                                    
when the district had conducted  its E-Rate contract, only 1                                                                    
out of 2  the vendors that had went through  the bid process                                                                    
had  been affordable;  however, in  the current  year, there                                                                    
were 3  different vendors with  very competitive  bids vying                                                                    
to provide services for Cordova.  She concluded thought that                                                                    
the  cost would  be going  down, but  that it  was currently                                                                    
very  hard for  school districts  to provide  the amount  of                                                                    
bandwidth necessary to keep up with the age of technology.                                                                      
10:02:07 AM                                                                                                                   
Co-Chair Meyer CLOSED public testimony.                                                                                         
10:02:19 AM                                                                                                                   
AT EASE                                                                                                                         
10:04:58 AM                                                                                                                   
Co-Chair  Meyer  noted that  there  had  been some  specific                                                                    
questions for the  administration and how the  bill fit into                                                                    
the broadband study that was being conducted.                                                                                   
10:06:11 AM                                                                                                                   
Vice-Chair Fairclough  noted that  the committee  was trying                                                                    
to  get   in  contact  with  different   broadband  carriers                                                                    
throughout  Alaska   to  see   where  broadband   was  being                                                                    
purchased  from. She  wondered if  the task  force broadband                                                                    
study had been distributed  to the legislators and requested                                                                    
that someone  come by her  office to discuss the  study. She                                                                    
wanted  to see  what information  the administration  had on                                                                    
the issue.                                                                                                                      
LES MORSE, DEPUTY COMMISSIONER,  DEPARTMENT OF EDUCATION AND                                                                    
EARLY DEVELOPMENT,  replied that  the broad band  task force                                                                    
had worked out of the  Department of Commerce, Community and                                                                    
Economic  Development (DCCED),  but noted  that he  would be                                                                    
happy  to   contact  the  department   regarding  Vice-Chair                                                                    
Fairclough's   interest.  He   understood  that   DCCED  had                                                                    
finalized its  report earlier in  the month, but  was unsure                                                                    
if it had been distributed yet.                                                                                                 
Vice-Chair Fairclough  noted that  the commissioner  of DEED                                                                    
had  indicated   the  prior  summer  in   a  Senate  Finance                                                                    
Subcommittee that  there was a broadband  study. She thought                                                                    
that  DEED had  been working  on a  needs assessment  of the                                                                    
districts.  Mr. Morse  noted that  he better  understood the                                                                    
question and  reported that there  was another  effort being                                                                    
looked  at  by  DEED;  it  was  not  being  conducted  by  a                                                                    
taskforce,  but  was  a   technology  readiness  survey.  He                                                                    
reported that DEED was still  in the midst of conducting the                                                                    
technology  readiness  survey  and  that  it  was  primarily                                                                    
looking at if schools had the  technology and tools to do an                                                                    
electronic assessment;  the survey had a  limitation and did                                                                    
not really speak to broadband.  He explained that the survey                                                                    
looked at  if the  equipment a  school had  could facilitate                                                                    
testing regardless of whether it  would be using an internet                                                                    
connection.  He explained  that  there was  a system  called                                                                    
local caching, which  used a local server  for testing; this                                                                    
made  it so  you  did  not have  to  rely  on broadband.  He                                                                    
explained  that  DEED was  looking  at  local caching  as  a                                                                    
solution  because  broadband  was  not  currently  available                                                                    
everywhere.  He stated  that he  would make  the preliminary                                                                    
information available  to Vice-Chair Fairclough and  that he                                                                    
would provide the finalized report to the full committee.                                                                       
Vice-Chair  Fairclough believed  that  she had  specifically                                                                    
asked  about  a  broadband  study  and  not  a  survey.  She                                                                    
recalled  that  the  Senate Finance  Subcommittee  had  been                                                                    
trying to determine how the  state would deliver educational                                                                    
opportunities  to Rural  Alaska,  as well  as anywhere  else                                                                    
that  did  not  have  a highly  qualified  instructor  in  a                                                                    
particular area.                                                                                                                
Vice-Chair Fairclough  noted that  the E-Rate  discount that                                                                    
subsidized the  internet connectivity was  distributed based                                                                    
on the  poverty rate  and inquired if  that system  would be                                                                    
equitable in Alaska  for reaching need. She  wondered if the                                                                    
system  targeted  enough or  too  much  money for  Anchorage                                                                    
based on  the poverty level guidelines  and further inquired                                                                    
if the  criteria for  the distribution  of funds  would meet                                                                    
the  needs  of  excess   or  lacking  broadband  in  smaller                                                                    
communities. Mr.  Morse responded  that he could  only speak                                                                    
to the  distribution and that  under that definition  it was                                                                    
distributed  in a  fair process.  He offered  that it  was a                                                                    
policy  discussion of  whether the  system met  the need  or                                                                    
10:11:56 AM                                                                                                                   
Vice-Chair  Fairclough noted  that she  wanted to  wait till                                                                    
the committee had  a broadband study, so that  it could know                                                                    
what  actual   resources  were   needed  in   the  different                                                                    
communities. She supported the idea  of the bill and getting                                                                    
resources to  schools that were trying  to provide internet.                                                                    
She  noted  that  there  college  campuses  in  Alaska.  She                                                                    
wondered  whether  the  state   would  stand  up  individual                                                                    
locations  for purchasing  power or  if it  would look  at a                                                                    
community as a  whole and look at its need.  She wondered if                                                                    
it would  be best to  let the school districts  negotiate if                                                                    
the state was going to take on the investment.                                                                                  
Senator  Dunleavy understood  that  there was  a task  force                                                                    
that   looked  at   broadband,  but   that  study   was  not                                                                    
necessarily  comprehensive. He  applauded Senator  Olson for                                                                    
the legislation, but wanted to  make sure that the committee                                                                    
was not  constantly adding  pieces to a  system that  it did                                                                    
not have  enough information on.  He thought  that broadband                                                                    
or  technological  capabilities   and  or  issues  statewide                                                                    
needed  to  be  ascertained  and that  a  plan  to  possibly                                                                    
address those needed to be developed.                                                                                           
Co-Chair Meyer  did not  recall the  name of  the governor's                                                                    
program that  had been discussed  in the State of  the State                                                                    
speech  and  inquired  how  the  bill  was  related  to  the                                                                    
governor's  proposed program.  Mr.  Morse  replied that  the                                                                    
governor  had spoken  to a  Digital Teaching  Initiative and                                                                    
reported  that  the  initiative would  start  with  a  pilot                                                                    
program for a  limited number of years on  3 locations where                                                                    
there would be some  opportunity to use distance technology.                                                                    
The  idea was  to  work  with 3  districts  the first  year,                                                                    
examine  success,  and  expand  the number  to  5  districts                                                                    
during the pilot phase. He  reported that the other piece of                                                                    
the plan was supporting  instructors because instruction via                                                                    
distance was different in terms  of what a teacher needed to                                                                    
do to be prepared. He  concluded that there would be greater                                                                    
details regarding the governor's  plan as the capital budget                                                                    
was rolled out in hearings.                                                                                                     
10:15:44 AM                                                                                                                   
Co-Chair  Meyer wanted  to figure  out if  there was  common                                                                    
ground between the bill and  the governor's proposed program                                                                    
in the capital budget.                                                                                                          
Senator Olson  inquired if the  administration was  in favor                                                                    
of the bill as it was  written. Ms. Morse responded that the                                                                    
administration  thought it  was  an  important dialogue  and                                                                    
that all  of the  discussion around broadband  had a  lot of                                                                    
points to  it. He  noted that  there had  been a  task force                                                                    
that looked  specifically at broadband  and thought  that it                                                                    
should probably be added to  the discussion. He thought that                                                                    
the issue around creating  opportunity and connectedness for                                                                    
families  was important.  He thought  that whether  the bill                                                                    
should  move forward  was an  important policy  conversation                                                                    
that the legislature should have.                                                                                               
Senator  Olson  inquired  when the  committee  could  expect                                                                    
advice  regarding the  administration's  desired changes  in                                                                    
the bill, including  the fiscal note. Mr.  Morse stated that                                                                    
in  terms  of  the   fiscal  note,  the  administration  had                                                                    
provided necessary  information. He  was unsure if  DEED had                                                                    
any other  advice regarding the  fiscal note. He  added that                                                                    
the  administration's perspective  of the  bill was  that it                                                                    
represented   an  important   policy  discussion   that  the                                                                    
legislature    needed   to    have.   He    concluded   that                                                                    
administration  would take  a  position on  the  bill as  it                                                                    
moved along  if it were  passed, but reiterated that  it was                                                                    
important dialogue and policy decision of the legislature.                                                                      
Co-Chair Kelly agreed that the  legislation did represent an                                                                    
important policy  discussion and  thanked Senator  Olson for                                                                    
offering the  bill. He thought  that the  legislature tended                                                                    
to incorporate  "these kinds of subjects"  in its day-to-day                                                                    
talking points.  He noted that  the legislature  believed in                                                                    
broadband for Rural  Alaska, as well as  digital learning to                                                                    
equalize  education   opportunities;  however,   when  these                                                                    
issues came to the legislature,  they woke people up because                                                                    
of their high expense. He  thought that the conversation was                                                                    
necessary because ultimately,  it needed to be  done. He was                                                                    
unsure  if the  bill  was exact  vehicle,  but thought  that                                                                    
legislators had  all stated that digital  learning needed to                                                                    
be  made  available for  Rural  Alaska.  He stated  that  he                                                                    
wanted to meet with some people to discuss the issue.                                                                           
10:18:45 AM                                                                                                                   
Co-Chair  Meyer  noted  that  currently,  the  local  school                                                                    
districts  were picking  up  the cost  and  that bill  would                                                                    
shift  the cost  to the  state.  He inquired  if there  were                                                                    
synergies involved with having  the funding come through the                                                                    
state. Mr.  Morse deferred  the question  to staff  at DEED,                                                                    
but indicated  that there may  be some advantages  of having                                                                    
the state  negotiate; however, there  were also  unknowns in                                                                    
terms of the  fiscal impact of having the  state funding the                                                                    
local share  of E-Rate  Program. He added  that DEED  may be                                                                    
able to provide some more specifics on the issue.                                                                               
10:19:55 AM                                                                                                                   
AT EASE                                                                                                                         
10:22:48 AM                                                                                                                   
10:22:59 AM                                                                                                                   
Co-Chair Meyer noted that  Vice-Chair Fairclough had brought                                                                    
up some good  questions and that a lot of  them could not be                                                                    
answered  in the  current meeting.  He  observed that  there                                                                    
were a  lot of unknowns with  the bill and wanted  to form a                                                                    
subcommittee  on   the  legislation  to  get   more  details                                                                    
regarding the  nuts and  bolts of  the bill  and how  it, or                                                                    
something similar,  could work. He noted  that Senator Olson                                                                    
would chair  the subcommittee and that  Senator Dunleavy and                                                                    
Vice-Chair Fairclough  would be  members. He hoped  that the                                                                    
legislation could be brought back  before the full committee                                                                    
within approximately 30 days.                                                                                                   
10:24:11 AM                                                                                                                   
SB  82  was   HEARD  and  HELD  in   committee  for  further                                                                    
10:24:21 AM                                                                                                                   
AT EASE                                                                                                                         
10:25:48 AM                                                                                                                   

Document Name Date/Time Subjects
FY2012 Total Broadband Cost E-Rate share and Applicant Share.pdf SFIN 2/5/2014 9:00:00 AM
SB 82
SB 82 - Erate brief.PDF SFIN 2/5/2014 9:00:00 AM
SB 82
SB 82 - Erate share & total cost.PDF SFIN 2/5/2014 9:00:00 AM
SB 82
SB 82 - Fiscal note new.PDF SFIN 2/5/2014 9:00:00 AM
SB 82
SB 82 - lege research Erate section.PDF SFIN 2/5/2014 9:00:00 AM
SB 82
SB 82 - Sponsor Statement.doc SFIN 2/5/2014 9:00:00 AM
SB 82
SB082CS(EDC) -EED-LO-1-21-14.pdf SFIN 2/5/2014 9:00:00 AM
SB 82
05_SB111_HSGQE Relevancy.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
06_SB111_HSGQE_ContractualCosts.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
07_SB111_Statewide HSGQE Results 09-13.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
08_SB111_AK_Dispatch_Article_120713.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
09_SB111_HSGQE_Moore_v_AK-1.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
10_SB111_SupportLetter_Talley_012114.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
11_SB111_SupportLetter_Sanders_012114.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
13_SB111_SponsorStatment_VersionU_012514-1.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
14_SB111_Sectional_VersionU_012514.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
15_SB111_Statewide HSGQE Results 2004-2013.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
SB111CS(EDC)-EED-SSA-01-31-14.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
16_SB111_SBEED_SupportResolution.pdf SFIN 2/5/2014 9:00:00 AM
SB 111
SJR 9 - opposition - Mitchell.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - opposition - Nyman.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - opposition - Nienhueser 2.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Adcock.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Christine.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Dougherty.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Gary.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Giessel.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Grafton.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Keil.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Kitson.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Lewkowski.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Luntz.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 - support - Lynn.msg SFIN 2/5/2014 9:00:00 AM
SJR 9 -support - Columbus.msg SFIN 2/5/2014 9:00:00 AM
SB 82 2013-08-AK-Broadband-Task-Force-Report_A-Blueprint-for-Alaska's-Broadband-Future.pdf SFIN 2/5/2014 9:00:00 AM
SB 82
SB 111 - HB 278A Public Testimony change to section 2 - Coons.pdf SFIN 2/5/2014 9:00:00 AM
HB 278
SB 111