Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/26/2019 01:30 PM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 69 EXEMPT CHARITABLE GAMING FROM PERMIT/FEES TELECONFERENCED
<Bill Hearing Canceled>
-Invited Testimony Followed by Public Testimony-
+= SJR 8 U.S.-MEXICO-CANADA AGREEMENT ON TRADE TELECONFERENCED
Moved SJR 8 Out of Committee
-Invited Testimony Followed by Public Testimony-
*+ SB 83 TELECOMMUNICATIONS REGULATION/EXEMPTIONS TELECONFERENCED
Heard & Held
-Invited Testimony Followed by Public Testimony-
*+ SB 52 ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG TELECONFERENCED
Heard & Held
-Invited Testimony Followed by Public Testimony-
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 44 TELEHEALTH: PHYSICIAN ASSISTANTS; DRUGS TELECONFERENCED
Moved CSSB 44(L&C) Out of Committee
**Streamed live on AKL.tv**
         SB 83-TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                     
                                                                                                                                
1:46:18 PM                                                                                                                    
CHAIR  REINBOLD reconvened  the  meeting and  announced that  the                                                               
next  order of  business would  be SENATE  BILL NO.  83, "An  Act                                                               
relating to the Regulatory Commission  of Alaska; relating to the                                                               
public   utility  regulatory   cost  charge;   relating  to   the                                                               
regulation   of  telecommunications;   relating  to   exemptions,                                                               
charges,  and rates  applicable to  telecommunications utilities;                                                               
relating  to regulation  of telephone  services; and  relating to                                                               
alternate operator services."                                                                                                   
                                                                                                                                
1:46:27 PM                                                                                                                    
SENATOR COSTELLO clarified that the original bill was before the                                                                
committee.                                                                                                                      
                                                                                                                                
SENATOR BISHOP objected for purposes of discussion.                                                                             
                                                                                                                                
1:46:42 PM                                                                                                                    
SENATOR  BIRCH,  speaking as  sponsor  of  SB  83, said  that  he                                                               
introduced a  similar bill last year  that did not quite  make it                                                               
through  the  process.  He   paraphrased  the  following  sponsor                                                               
statement:                                                                                                                      
                                                                                                                                
     SB 83  seeks to encourage investment  and innovation in                                                                    
     the   telecommunication   industry  by   updating   the                                                                    
     telecommunication    statutes.    Rapid   changes    in                                                                    
     technology   and   in    the   Federal   Communications                                                                    
     Commission  (FCC) regulations,  render portions  of the                                                                    
     existing  statutes obsolete  and/or inefficient  in the                                                                    
     modern telecommunications world.                                                                                           
                                                                                                                                
     All  of  Alaska's telecommunications  providers  worked                                                                    
     together  through  the  Alaska Telecom  Association  to                                                                    
     offer the suggested changes made  in SB 83. The goal of                                                                    
     was   to  maintain   important  consumer   protections,                                                                    
     appropriate  Regulatory  Commission   of  Alaska  (RCA)                                                                    
     jurisdiction,  and  consistency  with  FCC  regulations                                                                    
     while   at  the   same   time   allowing  for   greater                                                                    
     flexibility  to  more  rapidly take  advantage  of  new                                                                    
     technology.                                                                                                                
                                                                                                                                
     Some  existing RCA  regulations are  over 25  years old                                                                    
     and focused  on landline and  traditional long-distance                                                                    
     service. As customers continue  to prefer broadband and                                                                    
     mobile services  and the  demand for  landline services                                                                    
     decreases,   the  outdated   regulations  are   largely                                                                    
     obsolete.   Carrier   of    last   resort   regulations                                                                    
     needlessly  duplicate  existing statutory  requirements                                                                    
     and alternative  operator services are no  longer used.                                                                    
     SB83 places  service providers on a  more level playing                                                                    
     field  and   will  encourage  deployment   of  advanced                                                                    
     technologies and more efficient network design.                                                                            
                                                                                                                                
     SB  83 creates  new  protections in  statute for  rural                                                                    
     areas  by requiring  landline and  long-distance rates,                                                                    
     terms and conditions be the same as in larger towns.                                                                       
                                                                                                                                
     SB 83  requires that  the Regulatory Cost  Charge (RCC)                                                                    
     be   assessed  and   submitted  to   the  RCA   by  all                                                                    
     telecommunication utilities.  Currently the RCC  is not                                                                    
     being paid  by utilities that are  municipally owned or                                                                    
     are  cooperatives. All  members of  the Alaska  Telecom                                                                    
     Association  support this  change.  I would  appreciate                                                                    
     your support for SB 83.                                                                                                    
                                                                                                                                
1:49:01 PM                                                                                                                    
KIM SKIPPER, Staff, Senator Chris Birch, Alaska State                                                                           
Legislature, Juneau, read the sectional analysis for SB 83.                                                                     
                                                                                                                                
     Section   1      Municipal   powers   and  duties.   AS                                                                  
     29.35.070(a)  This  section   is  amended  to  maintain                                                                    
     existing  exclusion   from  municipal   regulation  for                                                                    
     telecommunications companies  which are  exempted under                                                                    
     new subsection AS 42.05.711(u). (Section 8 below).                                                                         
                                                                                                                                
     Section 2   Alaska  Public Utilities Regulatory Act. AS                                                                  
     42.05.141 Adds two  new subsections (e) and  (f) to the                                                                    
     general   powers  and   duties   of   the  RCA.   These                                                                    
     subsections   state  that   the   Commission  may   not                                                                    
     designate a local exchange  carrier or an interexchange                                                                    
     carrier as  the carrier  of last  resort, and  that the                                                                    
     Commission      may      designate     an      eligible                                                                    
     telecommunications carrier consistent  with the federal                                                                    
     law  that  allows  for   federal  subsidies  under  the                                                                    
     federal Universal Service Fund.                                                                                            
                                                                                                                                
     A  carrier  of  last  resort  is  a  telecommunications                                                                  
     company  that  commits  (or  is  required  by  existing                                                                    
     regulation)  to provide  service to  any customer  in a                                                                    
     service  area that  requests it,  even if  serving that                                                                    
     customer   would   not   be  economically   viable   at                                                                    
     prevailing rates.  There are other protections  in this                                                                    
     legislation (Section 7),  remaining Alaska statutes and                                                                    
     federal  law  to  ensure   rural  Alaska  continues  to                                                                    
     receive telecommunications service.                                                                                        
                                                                                                                                
     The federal  Universal Service Fund  is managed  by the                                                                  
     Federal  Communications Commission  and is  intended to                                                                    
     promote   universal    access   to   telecommunications                                                                    
     services  at reasonable  and affordable  rates for  all                                                                    
     consumers.                                                                                                                 
                                                                                                                                
1:51:02 PM                                                                                                                    
MS. SKIPPER read Sections 3 and 4.                                                                                              
                                                                                                                                
     Section 3  and 4    Regulatory Cost Charge  (RCC). This                                                                  
     section  applies  the  regulatory cost  charge  to  all                                                                    
     certificated telecommunications  provider expanding the                                                                    
     assessment base for the charge.                                                                                            
                                                                                                                                
1:51:25 PM                                                                                                                    
MS. SKIPPER read Sections 5-8.                                                                                                  
                                                                                                                                
     Section  5    Exempt Utility.  AS 42.05.254(i)(2)  This                                                                  
     section  amends the  definition  of  exempt utility  to                                                                    
     apply   the   Regulatory   Cost   Charge   across   all                                                                    
     certificated telecommunications providers.                                                                                 
                                                                                                                                
     Section 6    Tariff Filings AS  42.05.361. This section                                                                  
     prohibits the Commission  from requiring tariff filings                                                                    
     from  telecommunications carriers  except by  providers                                                                    
     of  telecommunications   service  to   prison  inmates.                                                                    
     Tariff  filings in  the competitive  telecommunications                                                                    
     industry  are  outdated,  unnecessary  and  impede  the                                                                    
     ability  of carriers  to respond  to what  the customer                                                                    
     wants and needs.                                                                                                           
                                                                                                                                
     Section 7    Rates AS 42.05.381. This  section adds new                                                                  
     subsections which require  rates, terms, and conditions                                                                    
     of service  to be uniform across  defined service areas                                                                    
     and  the definition  of  "local  exchange carrier"  and                                                                    
     "long  distance telephone"  have the  same meaning  set                                                                    
     forth in AS 42.05.890.                                                                                                     
                                                                                                                                
     Section  8 -  Exemptions from  Alaska Public  Utilities                                                                  
     Regulatory  Act AS  42.05.711.  This  section adds  new                                                                  
     subsections   (u)  and   (v)   which  together   exempt                                                                    
     telecommunication carriers from the  Act except for the                                                                    
     following provisions which will continue to apply:                                                                         
                                                                                                                                
     ? AS  42.05.141(e) and (f)    New sections in  the bill                                                                    
     (Section 2 above)                                                                                                          
     ?  AS 42.05.221     Requiring a  Certificate of  Public                                                                    
     Convenience and Necessity                                                                                                  
     ?  AS   42.05.231     Provision  for   applying  for  a                                                                    
     Certificate of Public Convenience and Necessity                                                                            
     ?  AS 42.05.241     Conditions of  issuing/denial of  a                                                                    
     Certificate of Public Convenience and Necessity                                                                            
     ? AS  42.05.251    Allow public  utilities to  obtain a                                                                    
     permit for use of streets in municipalities.                                                                               
     ? AS 42.05.254  Regulatory cost charge                                                                                     
     ?  AS  42.05.261    Prohibits  a  public  utility  from                                                                    
     discontinuing  or   abandoning  service  for   which  a                                                                    
     certificate has been issued                                                                                                
     ? AS  42.05.271    Allows the Regulatory  Commission of                                                                    
     Alaska  to   amend,  modify,   suspend,  or   revoke  a                                                                    
     certificate                                                                                                                
     ? AS  42.05.281   Prohibiting a  sale, lease, transfer,                                                                    
     or inheritance  of a Certificate of  Public Convenience                                                                    
     and Necessity without RCA permission                                                                                       
     ? AS  42.05.296   Requirements for  providing telephone                                                                    
     services for certain impaired subscribers                                                                                  
                                                                                                                                
1:54:20 PM                                                                                                                    
MS. SKIPPER read Sections 5-8.                                                                                                  
                                                                                                                                
      AS 42.05.306    Allows discounted rates  for customers                                                                    
     receiving  benefits from  a social  services assistance                                                                    
     program   administered   by   the  state   or   federal                                                                    
     government                                                                                                                 
                                                                                                                                
     ?  AS  42.05.381(l)    (n)     New  sections  requiring                                                                    
     uniform rates, terms, and conditions (Section 7 above)                                                                     
                                                                                                                                
       AS  42.05.631   Allows  a public utility  to exercise                                                                    
     the power of eminent domain                                                                                                
                                                                                                                                
     ? AS  42.05.641   Extends the  Regulatory Commission of                                                                    
     Alaska's jurisdiction to  public utilities operating in                                                                    
     a municipality                                                                                                             
                                                                                                                                
     ? AS 42.05.661   Requires entities  to pay a fee to the                                                                    
     Regulatory  Commission of  Alaska when  applying for  a                                                                    
     Certificate of Public Convenience and Necessity                                                                            
                                                                                                                                
     AS   42.05.820      Municipalities  may   not  regulate                                                                    
     landline providers                                                                                                         
                                                                                                                                
     ? AS 42.05.830    Requires the Regulatory Commission of                                                                    
     Alaska to establish exchange access  charges to be paid                                                                    
     by long distance carriers  to compensate local exchange                                                                    
     carriers for  the cost  of originating  and terminating                                                                    
     long distance services                                                                                                     
                                                                                                                                
     ? AS  42.05.840    Allows the Regulatory  Commission of                                                                    
     Alaska to establish a universal service fund                                                                               
                                                                                                                                
     ? AS  42.05.850    Requires local exchange  carriers to                                                                    
     form an association to administer access charges                                                                           
                                                                                                                                
     ? AS  42.05.860   Prohibits a  carrier from restricting                                                                    
     the resale of telecommunications services                                                                                  
                                                                                                                                
1:55:48 PM                                                                                                                    
MS. SKIPPER read Sections 9 - 12.                                                                                               
                                                                                                                                
     Section  9    Municipal Regulation  AS 42.05.820.  This                                                                  
     section amends  AS 42.05.820 to exclude  local exchange                                                                    
     carriers which  are exempted in  whole or in  part from                                                                    
     this chapter from being 3 regulated by a municipality.                                                                     
                                                                                                                                
     Section 10    Calculation of Regulatory  Cost Charge AS                                                                  
     42.06.286(e). This  section is amended to  clarify that                                                                  
     all  telecommunications providers  will continue  to be                                                                    
     assessed the Regulatory Cost Charge (RCC).                                                                                 
                                                                                                                                
     Section  11  and 12     Alternate  Operator Service  AS                                                                  
     45.50.473(a).  This  section  is  amended  to  add  the                                                                  
     definition  of  alternate  operator  service  from  the                                                                    
     statute  that  is  being repealed  in  Section  13  (AS                                                                    
     42.05.325)                                                                                                                 
                                                                                                                                
1:56:38 PM                                                                                                                    
MS. SKIPPER read Section 13.                                                                                                    
                                                                                                                                
     Section  13     Repealers.  This  section  repeals  the                                                                  
     following provisions:                                                                                                      
                                                                                                                                
     ?  AS  42.05.325      Registration  and  regulation  of                                                                    
     alternate  operator  services.  Required  providers  of                                                                    
     alternate operator  services to be registered  with and                                                                    
     regulated  by  the  Regulatory  Commission  of  Alaska.                                                                    
     Alternate operator  service is obsolete  and regulatory                                                                    
     oversight is no longer relevant.                                                                                           
                                                                                                                                
     ?  AS  42.05.810     Long  Distance  Competition.  This                                                                    
     section  required  the  RCA  to  adopt  regulations  by                                                                    
     February 1991  to open-up  the long-distance  market to                                                                    
     competition. The long-distance market  has been open to                                                                    
     competition  since 1991  and it  is a  fraction of  its                                                                    
     earlier  size  and  continues to  shrink  as  consumers                                                                    
     migrate  to  alternative  services.  It  is  no  longer                                                                    
     necessary  to require  the  Commission  to open-up  the                                                                    
     long-distance market to competition.                                                                                       
                                                                                                                                
1:57:41 PM                                                                                                                    
CHRISTINE   OCONNER,    Executive   Director,    Alaska   Telecom                                                               
Association,  Anchorage, recognized  part  of the  team with  her                                                               
today, including  members from  the Alaska  Communications, AT&T,                                                               
and GCI who could answer questions.                                                                                             
                                                                                                                                
MS.  OCONNOR said  that  SB  83 was  solely  related to  landline                                                               
service,  including  local  service  and  long  distance.  Modern                                                               
telecommunication   networks  provide   an   array  of   advanced                                                               
services. She  reviewed slide 2,  "Unanimous Support."  Slide two                                                               
listed Alaska Telecom Association members.                                                                                      
                                                                                                                                
     Adak Eagle  Enterprises, Alaska  Communications, Alaska                                                                    
     Telephone Company, Arctic  Slope Telephone Association,                                                                    
     Cooperative  ASTAC  Wireless AT&T,  Bettles  Telephone,                                                                    
     Bristol   Bay   Cellular   Partnership,   Bristol   Bay                                                                    
     Telephone   Cooperative,   Bush-Tell,   Copper   Valley                                                                    
     Telephone Cooperative, Copper  Valley Wireless, Cordova                                                                    
     Telephone Cooperative, Cordova  Wireless, GCI, Interior                                                                    
     Telephone,    Mukluk   Telephone,    Ketchikan   Public                                                                    
     Utilities,   Matanuska  Telephone   Association,  North                                                                    
     Country Telephone, Nushagak  Cooperative, OTZ Telephone                                                                    
     Cooperative,  OTZ Wireless,  Summit Telephone  Company,                                                                    
     TelAlaska  Cellular,   United  Utilities,   Windy  City                                                                    
     Wireless, and Yukon Telephone Company.                                                                                     
                                                                                                                                
She said  that these companies  are the landline,  long distance,                                                               
wireless,  and broadband  companies  that  serve Alaska,  ranging                                                               
from small local telephone companies  to the statewide providers.                                                               
These companies  have all  agreed that  many of  Alaska's telecom                                                               
statutes were  obsolete, imposing unnecessary  regulatory burdens                                                               
on companies and regulators that do not benefit anyone.                                                                         
                                                                                                                                
1:59:04 PM                                                                                                                    
MS. OCONNER reviewed slide 3, "Transformation."                                                                                 
                                                                                                                                
   • Telecommunications has transformed since many of                                                                           
     Alaska's telecom statutes were adopted in 1970s.                                                                           
                                                                                                                                
   • The federal 1996 Telecom Act transformed the                                                                               
     marketplace  and  started  an evolution  toward  light-                                                                    
     touch oversight.                                                                                                           
                                                                                                                                
   • Landline and long-distance use are dramatically                                                                            
     reduced.                                                                                                                   
                                                                                                                                
   • Long distance revenues reduced from $64M to $13M                                                                           
     between 2006-2018.                                                                                                         
                                                                                                                                
   • 48% of Alaska households have a landline, 4% are                                                                           
     landline only.                                                                                                             
                                                                                                                                
   • Landline and long-distance services continue.                                                                              
                                                                                                                                
MS. OCONNOR  said that despite  the shift to  other technologies,                                                               
many  of the  same  regulations have  remained  in place.  Tariff                                                               
filing requirements  use scarce funds  that could be  better used                                                               
to  serve customers.  These  requirements  also divert  resources                                                               
from the regulators that could be better used on other matters.                                                                 
                                                                                                                                
MS. OCONNOR reviewed  slide 4, which showed a  color-coded map of                                                               
the U.S. She  said that 41 states have reduced  or eliminated all                                                               
telecom  regulation.  Although  the details  were  varied,  these                                                               
changes generally  allow telephone companies to  manage their own                                                               
rates. Updating Alaska's statutes  would allow Alaska's companies                                                               
to  take advantage  of some  of the  flexibility that  most other                                                               
states  already experience,  while still  maintaining regulators'                                                               
important   role  of   overseeing   provider   fitness  and   the                                                               
continuance of landline service.                                                                                                
                                                                                                                                
2:00:34 PM                                                                                                                    
MS. OCONNOR reviewed  slide 5, "AS 42.05  Alaska Public Utilities                                                               
Regulatory Act."                                                                                                                
                                                                                                                                
     ? Sections retained                                                                                                        
                                                                                                                                
      Certificate of Public Convenience & Necessity                                                                             
       Fitness of a provider to serve                                                                                           
       Requirement to continue service                                                                                          
      ?Transfer of certificates                                                                                                 
      ?Enforcement of obligations                                                                                               
     ?Regulatory Cost Charge (amended)                                                                                          
     ?Telecommunications Relay Service                                                                                          
     ?Lifeline                                                                                                                  
     ?Interconnection                                                                                                           
     ?Eminent Domain                                                                                                            
     ?Access charges                                                                                                            
     ?Alaska Exchange Carriers Association                                                                                      
     ?Alaska Universal Service Fund                                                                                             
                                                                                                                                
She said  that SB 83  was structured to  exempt telecommunication                                                               
companies from rate  regulation under AS 42.05.  She reviewed the                                                               
sections retained. Statutes  in AS 42.05 that  generally apply to                                                               
the commission  and are not specific  to telecommunications would                                                               
still be  in effect, including  requirements for  public records,                                                               
and the  RCA's authority  to enforce the  statutes that  apply to                                                               
general and housekeeping provisions.                                                                                            
                                                                                                                                
2:01:21 PM                                                                                                                    
MS. OCONNOR reviewed slide 6, "Changes to AS 42.05."                                                                            
                                                                                                                                
   • Rate regulation    and   tariff    management   adopt                                                                      
     cooperative model, protections for consumers remain.                                                                       
    • Rates are limited by federal rules                                                                                        
    • Rates across defined service areas are the same                                                                           
                                                                                                                                
   • Eligible   Telecommunications    Carriers     ("ETC")                                                                      
      designation explicitly authorized by the Regulatory                                                                       
     Commission of Alaska.                                                                                                      
                                                                                                                                
   • COLR designations for ILECs and IXCs eliminated                                                                            
      • Certificate of Public Convenience and Necessity                                                                         
       oversight remains                                                                                                        
    • ETC designation and oversight remains                                                                                     
      • Federal USF/ETC obligations to continue service                                                                         
       remain                                                                                                                   
    • New AS 42.05.381(l) protects rural service                                                                                
                                                                                                                                
   • Regulatory Cost Charge                                                                                                     
                                                                                                                                
She explained that federal caps  and local limits would remain in                                                               
place and  new provisions  would be added  to require  that rates                                                               
across service  areas must  be the same.  Carrier of  last resort                                                               
(COLR)  designations  for  landline and  long-distance  companies                                                               
would  be  eliminated.  Important  protections  would  remain  to                                                               
ensure  that rural  areas  continue to  have  landline and  long-                                                               
distance services. The certificate  (CPCN) authority requires the                                                               
RCA  to approve  both the  entry and  exit of  a provider  from a                                                               
location, she said.                                                                                                             
                                                                                                                                
MS.  OCONNOR  said that  the  RCA  would oversee  those  eligible                                                               
telecommunications carrier designations  or ETC, including annual                                                               
reports and  certifications to the  proper use of  funds. Federal                                                               
rules  prevent  discontinuance   of  landline  and  long-distance                                                               
service   without   approval   by  the   Federal   Communications                                                               
Commission  (FCC).  Federal  universal service  fund  rules  also                                                               
require that  providers must  provide service  upon receipt  of a                                                               
reasonable  request. A  new  section in  the  bill would  require                                                               
providers to  provide the  same rates,  terms, and  conditions to                                                               
everyone  in  the  service  area, which  is  how  Alaska  Telecom                                                               
Association currently  operates. SB 83 would  put those practices                                                               
into statute, she  said. The regulatory cost  charge provides the                                                               
funding mechanism  for the RCA,  which is self-funded,  she said.                                                               
As industry  has changed over  time, it has become  distorted and                                                               
inequitable, so SB 83 would fix that mechanism.                                                                                 
                                                                                                                                
2:03:18 PM                                                                                                                    
CHAIR REINBOLD asked for further  clarification on the regulatory                                                               
cost charge adjustment.                                                                                                         
                                                                                                                                
MS.  OCONNER  explained that  the  regulatory  cost charges  were                                                               
covered in statute  in some detail. The time  spent on activities                                                               
at the regulatory commission was  calculated and converted into a                                                               
percentage. Telephone  companies pass  on these small  charges to                                                               
consumers. The  statute also states  that cooperatives  that have                                                               
voted  to  economically  deregulate cannot  participate  in  that                                                               
mechanism.  This meant  that charges  cannot be  placed on  their                                                               
bills. However, it  also meant that the  remaining companies were                                                               
the only  ones assessing  these charges. SB  83 would  change the                                                               
language  to state  that everyone  would be  assessed the  charge                                                               
since the  telecom activity  was generated by  the RCA  and these                                                               
charges should apply to all users.                                                                                              
                                                                                                                                
2:04:34 PM                                                                                                                    
MS. OCONNOR reviewed slide 7, "Rate Protections."                                                                               
                                                                                                                                
        • Federal rules limit local landline rates                                                                              
                                                                                                                                
        • New subsection AS 42.05.381(l) requires rates,                                                                        
          terms, and conditions of service to be the same                                                                       
          across defined service areas                                                                                          
                                                                                                                                
        • Federal Lifeline program supports low-income                                                                          
          subscribers                                                                                                           
                                                                                                                                
Currently  federal rules  limit local  landline rates,  which are                                                               
certified  each year.  The federal  lifeline program  allows low-                                                               
income subscribers to  receive landlines at a very  low cost, she                                                               
said.                                                                                                                           
                                                                                                                                
2:05:15 PM                                                                                                                    
CHAIR REINBOLD  asked whether these changes  would affect current                                                               
landline  households  in  cities  in Alaska.  She  said  she  has                                                               
landline services and does not want them to be disrupted.                                                                       
                                                                                                                                
MS.  OCONNER  answered that  the  landline  network is  a  robust                                                               
system  that  is  especially   helpful  during  emergencies.  She                                                               
affirmed that these  change would not affect  the availability of                                                               
landlines. It  would add a  new layer of certainty  going forward                                                               
to assure that landline service would always be available.                                                                      
                                                                                                                                
2:05:56 PM                                                                                                                    
SENATOR  BISHOP  said the  rate  protections  seem to  level  the                                                               
playing field and close any loopholes for overcharging.                                                                         
                                                                                                                                
MS. OCONNER  agreed that  leveling the playing  field was  one of                                                               
the biggest benefits of the bill.                                                                                               
                                                                                                                                
MS. OCONNER reviewed  slide 8, "Rate Regulation    It Depends Who                                                               
You Are."                                                                                                                       
                                                                                                                                
   • Cooperatives, with the approval of their members, and                                                                      
     municipal telcoms manage their own tariffs. All other                                                                      
     companies must maintain one or multiple tariffs at the                                                                     
     RCA.                                                                                                                       
                                                                                                                                
   • For other companies review and approval for rate                                                                           
     changes varies, with timelines as long as 420 days.                                                                        
                                                                                                                                
   • This limits the introduction of new offerings due to                                                                       
         the expense of preparing and supporting tariff                                                                         
     filings.                                                                                                                   
                                                                                                                                
   • SB 83 allows all providers to manage their own rates                                                                       
     without costly regulatory filings.                                                                                         
                                                                                                                                
She explained  that companies  set their  rates in  varying ways.                                                               
The cooperatives manage their own  rates, so if customers wish to                                                               
buy services  they can do  so. However, it  could take up  to 420                                                               
days  for other  companies to  change their  rates and  products.                                                               
This change would  move everyone to the  cooperative model, which                                                               
has been  successful for  many years, but  it would  still retain                                                               
limits on landline  rates per the federal rule that  would not be                                                               
changed.                                                                                                                        
                                                                                                                                
MS. OCONNER  summarized that this  bill seeks to put  everyone on                                                               
the same basis.                                                                                                                 
                                                                                                                                
2:07:22 PM                                                                                                                    
MS. OCONNER reviewed slide 9," Burden of Rate Regulation."                                                                      
                                                                                                                                
        • Alaska Communications                                                                                                 
                                                                                                                                
        • "We have 4 local exchange tariffs with a mixture                                                                      
          of  tariff rules  that apply?Each  time we  make a                                                                    
          tariff  change we  must do  basically 5  times for                                                                    
          the  local  exchange  since  one  study  area  has                                                                    
          different rules  to follow. We  also have  a long-                                                                    
          distance  tariff which  has even  different rules.                                                                    
          When filing 5 different tariffs plus a long-                                                                          
          distance  tariff, it  simply is  not an  efficient                                                                    
          business    practice    especially   when    these                                                                    
          regulations   do  not   apply  across   all  other                                                                    
          carriers."                                                                                                            
                                                                                                                                
      - Lisa Phillips, Senior Manager, Regulatory Affairs                                                                       
     and Risk Management                                                                                                        
                                                                                                                                
She  said  that  Alaska  Communications is  one  of  the  largest                                                               
companies in  Alaska, serving dozens  of remote villages  as well                                                               
as  Alaska's urban  centers.  Alaska  Communications must  manage                                                               
2,500  pages  of tariffs,  rarely  accessed  by the  public.  The                                                               
statutes  are outdated,  and rate  regulation consumes  resources                                                               
that could be better spent serving customers.                                                                                   
                                                                                                                                
2:08:00 PM                                                                                                                    
MS.  OCONNER  reviewed  slide  10,  "Eligible  Telecommunications                                                               
Carrier (ETC)."                                                                                                                 
                                                                                                                                
        • ETC designation qualifies a telecommunications                                                                        
          provider  to  participate   in  federal  Universal                                                                    
          Service Fund programs.                                                                                                
                                                                                                                                
        • Each program requires specific performance and                                                                        
          accountability.                                                                                                       
                                                                                                                                
        • The Regulatory Commission of Alaska provides                                                                          
          annual     certification     to    the     Federal                                                                    
          Communications Commission.                                                                                            
                                                                                                                                
        • New subsection AS 42.05.141(f) makes explicit the                                                                     
          RCA's authority to designate a provider an ETC.                                                                       
                                                                                                                                
She  explained that  "ETC" [Eligible  Telecommunications Carrier]                                                               
would remain  unchanged. This designation  provides the  RCA with                                                               
an oversight  role to provide  consumer protection.  For example,                                                               
companies must  report to the  RCA on  their ETC status.  The RCA                                                               
designates  ETCs, which  qualifies companies  to receive  federal                                                               
funding. She said that SB 83  would make the authority to oversee                                                               
the ETC process explicit for the RCA.                                                                                           
                                                                                                                                
2:08:37 PM                                                                                                                    
MS.  OCONNER   reviewed  slide  11,   "Carrier  of   Last  Resort                                                               
Designation (COLR)."                                                                                                            
                                                                                                                                
        • COLR regulations implemented in 2010                                                                                  
        •                                                                                                                       
        • Explicit funding for COLR duties ended Jan. 1,                                                                        
     2019                                                                                                                       
                                                                                                                                
        • COLR is redundant to state statutes and federal                                                                       
     rules                                                                                                                      
                                                                                                                                
        • Certificate of Public Convenience and Necessity                                                                       
        oversight remains                                                                                                       
        • Eligible Telecommunications Carrier designation                                                                       
        and oversight remains                                                                                                   
        • Federal obligations to continue service remain                                                                        
        • New AS 42.05.381(l) requires uniform rates, terms                                                                     
        and conditions                                                                                                          
                                                                                                                                
She  explained  that  landline  Carrier  of  Last  Resort  (COLR)                                                               
regulations  were  implemented in  2010.  They  were intended  to                                                               
ensure  that landline  service  remains in  an  area by  offering                                                               
financial  support  to  one  provider   per  service  area.  That                                                               
explicit financial support  was removed in January  2019. Now the                                                               
COLR regulations still remain as  a duplicate layer of regulation                                                               
that  injects  regulatory  uncertainty  into  telecommunications,                                                               
which  SB  83 would  eliminate.  However,  the obligations  would                                                               
remain since  long standing federal and  state protections exist.                                                               
She read the  bullet points, including comments that  the RCA has                                                               
relied  on the  power  of the  certificate  authority defined  in                                                               
statute.  This  certificate  has   been  effective  in  requiring                                                               
companies to serve in certain locations, she said.                                                                              
                                                                                                                                
2:10:25 PM                                                                                                                    
MS. OCONNER reviewed slide 12, "Regulatory Cost Charge."                                                                        
                                                                                                                                
   • Funding for telecommunications-related activity at the                                                                     
     RCA is inequitable                                                                                                         
   • Cooperative   members    have     elected    economic                                                                      
     deregulation, resulting in exclusion from RCC statutes                                                                     
   • SB 83 restores fair assessment by applying RCC                                                                             
     statutes to all telecommunications providers                                                                               
                                                                                                                                
She said that the regulatory  cost charge has become distorted by                                                               
the statutory  age and the  changes in the marketplace.  She said                                                               
that SB 83  would fix the inequity by  including all certificated                                                               
telecommunication  providers in  that  mechanism.  This has  been                                                               
unanimously supported  by the industry, even  by the cooperatives                                                               
since they recognize it as a matter of fairness.                                                                                
                                                                                                                                
2:10:53 PM                                                                                                                    
MS. OCONNER reviewed slide 13, "Consumer Protection."                                                                           
                                                                                                                                
   • Strong consumer protections today                                                                                          
    • Certificate of Public Convenience and Necessity                                                                           
    • (CPCN)                                                                                                                    
    • Eligible Telecommunications Carrier (ETC)                                                                                 
    • New 42.05.381(l) rate protection                                                                                          
    • Regulatory Affairs and Public Advocacy (RAPA)                                                                             
                                                                                                                                
    • Attorney General Consumer Protection Unit                                                                               
       •  FCC Consumer Complaint Center                                                                                         
                                                                                                                                
   •  SB 83 maintains these protection                                                                                          
                                                                                                                                
She said  that when  someone files  a complaint  with the  FCC, a                                                               
company must respond within a defined time period.                                                                              
                                                                                                                                
2:11:25 PM                                                                                                                    
MS. OCONNER reviewed slide 14, "Benefits to Consumers."                                                                         
                                                                                                                                
 • Mandates rates in remote areas match rates in larger areas                                                                   
   • Allows companies to respond more quickly to consumer                                                                       
     preferences                                                                                                                
   • Focuses resources on consumer services                                                                                     
   • Corrects existing distorted assessment of regulatory cost                                                                  
     charge                                                                                                                     
                                                                                                                                
She said  that this  bill would remove  regulatory delay  and the                                                               
cost of  providing new service.  It also provides  companies with                                                               
the same ability across the  playing field to respond to consumer                                                               
needs.                                                                                                                          
                                                                                                                                
2:11:50 PM                                                                                                                    
MS. OCONNER reviewed slide 15, "SB 83 in Summary."                                                                              
                                                                                                                                
   • Updates statutes and streamlines regulations which                                                                         
      only apply to landline-accessed services both local                                                                       
     and long distance                                                                                                          
   • Exempts from many obsolete statutes                                                                                        
   • Reduces cost and delay of regulation                                                                                       
   • Maintains oversight of providers and continuance of                                                                        
     service                                                                                                                    
                                                                                                                                
She   said   that   the  Federal   1996   Telecom   Act   changed                                                               
telecommunications,   putting   everyone   on   a   path   toward                                                               
competition, innovation, and light-touch  regulation instead of a                                                               
traditional monopoly-style regulation. She  related that 41 other                                                               
states  have  recognized  this   transformation  and  the  Alaska                                                               
Telecom Association proposes  that Alaska do the  same and tailor                                                               
its  statutes  to ensure  that  service  continues, but  to  stop                                                               
wasting resources on work that  is without value, she said. Since                                                               
last year, ATA  has held multiple discussions with  the RCA about                                                               
this proposal.  It has participated  in multiple  public meetings                                                               
and  through  those  discussions  have  modified  the  bill.  She                                                               
reported  that in  February 2019,  the  Regulatory Commission  of                                                               
Alaska (RCA) voted to support SB 83.                                                                                            
                                                                                                                                
2:14:10 PM                                                                                                                    
SENATOR   COSTELLO   reminded   members  that   the   legislature                                                               
previously  heard this  bill.  She asked  whether  there was  any                                                               
opposition to the bill.                                                                                                         
                                                                                                                                
MS. OCONNER answered no.                                                                                                        
                                                                                                                                
2:14:46 PM                                                                                                                    
CHAIR REINBOLD opened public testimony on SB 83.                                                                                
                                                                                                                                
2:15:53 PM                                                                                                                    
RICK  HITTS, Vice-President,  GCI,  Anchorage, said  that he  has                                                               
worked  in telecommunications  in Alaska  for over  33 years.  He                                                               
said  he  is  familiar  with the  statutes  and  regulations.  He                                                               
expressed gratitude that the committee  would encourage this type                                                               
of  legislation,  especially since  it  was  overdue. The  entire                                                               
industry  is  in  support  of   SB  83,  he  said.  Further,  the                                                               
Regulatory Commission  of Alaska (RCA)  voted 4-1 to  support the                                                               
bill. In  addition, this bill  is consistent with  the governor's                                                               
goal  to reduce  unnecessary  regulation. He  offered his  belief                                                               
that  government  was  becoming   more  efficient,  with  a  more                                                               
productive  industry, and  most importantly  that better  service                                                               
would be provided  to the end user. SB 83  contains safeguards to                                                               
protect places  where competition was  not as robust, such  as in                                                               
rural areas. He encouraged members to pass the bill.                                                                            
                                                                                                                                
2:17:34 PM                                                                                                                    
CHAIR REINBOLD suggested that this bill provided deregulation.                                                                  
                                                                                                                                
MR.  HITTS  agreed  it  was  deregulation  but  that  it  retains                                                               
necessary regulation.                                                                                                           
                                                                                                                                
[SB 83 was held in committee.]                                                                                                  

Document Name Date/Time Subjects
SB44 Amendment Effective Date Amendment SL&C.pdf SL&C 3/26/2019 1:30:00 PM
SB 44
SJR 8 USTR Statement for the Record.pdf SL&C 3/26/2019 1:30:00 PM
SJR 8
SJR 8 Alaska USMCA and Section 232 Impacts and Benefits.pptx SL&C 3/26/2019 1:30:00 PM
SJR 8
SB 83 Version M.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Sponsor Statement.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Sectional Analysis.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Supporting Document Myth v Fact Modernizing Alaska's Telecommunications Legislation - Alaska Telecom Assn.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Supporting Document Modernizing Alaska's Telecommunications Legislation - Alaska Telecom Assn.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Alaska Telecom Association Presentation.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 - Letters of Support.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB83-DCCED-RCA-03-20-19.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 52 Version U.PDF HL&C 3/11/2020 3:15:00 PM
SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Sponsor Statement.pdf SFIN 2/11/2020 9:00:00 AM
SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Sectional Analysis 2.19.19.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Title 4 Bill Summary Changes SB 76 (2018) to SB 52 (2019).pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52 Sectional Analysis v.U.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Summary of Proposed Penalties.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Summary of Goals.pdf HL&C 3/9/2020 3:15:00 PM
SFIN 2/11/2020 9:00:00 AM
SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Title 4 Review Report.pdf HFIN 3/24/2020 9:00:00 AM
SFIN 2/11/2020 9:00:00 AM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB52 Title4 Letter Support Firetap Alehouse.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Support ABC Board 2.18.19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB52 Title4 Resolution Support Firetap Alehouse.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Support Recover Alaska.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Support ALPHA 3.25.19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Opposition AK Berries.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 AK Berries Winery Fees Table.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DCCED-AMCO-03-22-19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DHSS-PS-3-22-2019.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DCCED-CBPL-02-14-19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DOR-TAX-3-21-2019.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SJR8-SLAC-03-21-19.pdf SL&C 3/26/2019 1:30:00 PM
SJR 8