HB 363-BROADBAND: OFFICE, GRANTS, PARITY  1:45:13 PM CHAIR COSTELLO announced the consideration of CS FOR HOUSE BILL NO. 363(FIN) "An Act establishing the office of broadband; creating the broadband parity adjustment fund; establishing the Statewide Broadband Advisory Board; and providing for an effective date." She advised the listening public that this committee sponsored and considered a version of this legislation this year so the topic was familiar. She asked the sponsor to introduce the bill, after which the committee would consider a Senate committee substitute. 1:46:06 PM REPRESENTATIVE BRYCE EDGMON, Alaska State Legislature, Juneau, Alaska, sponsor of HB 363, stated that he introduced the bill because the state is on the cusp of receiving an unprecedented amount of federal money for broadband due to the passage of the federal Infrastructure Act in November 2021. Because there are no Alaska statutes addressing broadband, the bill follows the recommendations from the Governor's Broadband Taskforce that convened from May to November 2021. Both the House Labor and Commerce and Finance committees made slight changes as it went through the committee process. He continued to paraphrase the following sponsor statement: [Original punctuation provided.] Sponsor Statement:  CSHB 363(FIN) Broadband: Office, Grants, Parity "An Act establishing the office of broadband; creating the broadband parity adjustment fund; establishing the Statewide Broadband Advisory Board; and providing for an effective date." Last May, Gov. Dunleavy issued Administrative Order No. 322, establishing the Task Force on Broadband to develop policy objectives and steps necessary to prepare Alaska for a massive infusion of federal money through the federal Infrastructure, Investment, and Jobs Act (IIJA) The goal of the task force recommendations and IIJA is to move Alaska into the 21st century for broadband, and provide for essential services by creating the opportunity for communities to do things like routine two-way video conferencing, advanced telemedicine and educational opportunities, public safety improvements, and economic development. House Bill 363 is written directly from the task force recommendations and as enabling legislation does three things: creates a broadband office, establishes a Broadband Parity Adjustment Fund, and forms a Statewide Broadband Advisory Board. To be eligible for federal funding each state must establish a broadband office. In consultation with the administration, it was decided that the office would be housed in the Commerce, Community, and Economic Development (DCCED). It will initially contain three staff and will focus during the first year on planning activities and working with the FCC to complete the mapping process for the state. In alignment with IIJA, as times goes on, the office will prioritize broadband service expansion in the following priority order: unserved areas, underserved areas, and anchor  institutions. The Broadband Parity Adjustment Fund is a separate fund in the state treasury to be a repository of federal funds for the purposes of deploying high quality, affordable broadband across the Alaska. The Office may develop a program in the Fund to directly offset the costs of broadband for eligible consumers. Finally, HB 363 creates the Statewide Broadband Advisory Board advise to the Office of Broadband and to facilitate statewide stakeholder engagement. The Board is composed of nine public members appointed by the Governor, two ex-officio legislative members, and the Commissioners of DCCED and the Dept. of Education & Early Development (DEED). The Board shall create a technical working group to provide recommendations to the Board comprised of members who have expertise in the different technologies that provide broadband service and who manage and deliver broadband projects in Alaska. REPRESENTATIVE EDGMON said it's important to note that the bill references "technology neutral" and "tribes" several times. He conveyed that as much as Alaska is reacting to this once-in-a- lifetime opportunity, federal agencies are similarly reactive. The plan currently is for at least one federal employee to be in the state to work with the broadband office and stakeholders. REPRESENTATIVE EDGMON said he looked at the draft Senate CS briefly and it appeared to have some very good changes. He looked forward to working with the committee. 1:50:39 PM CHAIR COSTELLO said she appreciates his commitment to this topic. She agreed with his statement that this was a once-in-a- lifetime opportunity that will make a tremendous difference in the quality of life for many Alaskans. CHAIR COSTELLO solicited a motion to adopt the Senate committee substitute. 1:51:22 PM SENATOR MICCICHE moved to adopt the CS for House Bill 363, work order 32-LS1527\D, as the working document. 1:51:42 PM At ease 1:51:51 PM CHAIR COSTELLO reconvened the meeting and recognized Senator Micciche. SENATOR MICCICHE restated the motion. He moved to adopt the Senate CS for CSHB 363, work order 32-LS1527\D, as the working document. 1:52:09 PM CHAIR COSTELLO objected for a description of the changes. 1:52:18 PM KATIE MCCALL, Staff, Senator Mia Costello, Alaska State Legislature, Juneau, Alaska, presented the following changes from version W to version D for HB 363: Page 1, Lines 1-4  Amends the title of the bill to "An Act relating to broadband; establishing the office of broadband; providing for a broadband grant and loan program; establishing the Statewide Broadband Advisory Board; establishing community engagement task forces; and providing for an effective date." Sec. 1 Page 1, Lines 6-14 & Page 2, Lines 1-31  Adds legislative findings and intent language to convey the critical need for broadband, particularly in unserved and underserved areas of the state. This section also highlights the importance of: • affordable and quality broadband service in the state • designing policies that ensure robust competition and maximize consumer welfare, innovation, and investment • deploying broadband in high-cost areas and ensuring that low-income individuals can afford broadband • The language in this section also notes that the purpose of this Act is to establish a grant and loan program that will support the extension of broadband infrastructure in unserved and underserved areas, and outlines the legislature's intent that any grant or loan to a private entity will be conditioned on a guarantee that the infrastructure will be developed and maintained for public use for a minimum of 30 years. 1:56:28 PM Sec. 2 AS 44.33.910 Page 3, Lines 1-31 & Page 4,  Lines 1-13  Amends the powers and duties of the office of broadband, established in the Department of Commerce, Community, and Economic Development, by outlining that the office serves as the central planning body for broadband in the state and has the power and duty to: • coordinate with local governments, tribes, public and private entities, nonprofit organizations, and consumer-owned and investor-owned utilities on broadband deployment and access plans • review existing broadband initiatives, policies, and public and private investments • develop a statewide plan to encourage cost- effective broadband access, particularly in rural and other unserved and underserved areas • update broadband goals and definitions for broadband service in unserved and underserved areas as technology advances, though the definition for broadband service must be actual speeds of at least 25 Megabits per second download and three Megabits per second upload • encourage public-private partnerships to increase deployment • review and consider the recommendations of the Statewide Broadband Advisory Board established under AS 44.33.920 This section also states that when developing plans or strategies for broadband deployment, the office must consider the following: • partnerships between communities, tribes, nonprofit organizations, local governments, consumer-owned and investor-owned utilities, and public and private entities • funding opportunities that provide for the coordination of public, private, state, and federal funds for the purposes of making broadband available to unserved and underserved areas • barriers to deployment, adoption, and use of broadband, including affordability and project logistics • requiring the minimum broadband service of 25 Megabits per second download and three Megabits per second upload This section also states that the office: • may assist applicants for the grant and loan program established in this bill in seeking federal funding or matching grants and other grant opportunities for deploying broadband • may take all appropriate steps to seek and apply for federal funds or grants for which the office is eligible, and may accept donations • shall adopt regulations under AS 44.62 to carry out its duties 1:59:54 PM Sec. 44.33.915 Page 4, Lines 14-28  Removes the parity adjustment fund found in Version W of the bill and creates the broadband grant and loan program in the office of broadband. The program will award funding to eligible applicants to expand access to broadband service in unserved and underserved areas. This section stipulates that the office shall work in collaboration with the Statewide Broadband Advisory Board to review applications and award grants. Additionally: • grants and loans may be awarded to assist in funding acquisition, installation, and construction of middle mile and last mile infrastructure, and to assist in funding strategic planning for deploying broadband in unserved and underserved areas  The office: • may fund all or part of an application  • shall award funds to qualified applicants in all regions of the state  • shall consider affordability and quality of service in making determinations on an application 2:01:13 PM Sec. 44.33.920 Page 4, Lines 29-31 & Page 5, Lines 1- 20  Amends the membership of the Statewide Broadband Advisory Board and stipulates that the advisory board shall work with the community engagement task forces established in this version of bill to consider the challenges and opportunities related to regional connectivity. The following eight members are appointed by the governor to serve three-year terms on the advisory board: • a mechanical engineer • a civil engineer • an aerospace engineer • one member with expertise in telecommunications • one member with expertise in fiber optics • one member with expertise in satellite technology • one member with expertise in microwave technology • a technology neutral consultant This section provides that the technology neutral consultant receives a Range 27 salary, while all other members of the advisory board receive $307 a day while attending meetings and are entitled to travel expenses. 2:03:00 PM Sec. 44.33.930 Page 5, Lines 21-31 & Page 6, Lines 1- 16  Establishes community engagement task forces. The director of the office of broadband shall appoint state residents to serve as needed, and shall include members representing: • a tribe • a broadband user • a heath care provider • a member of the Alaska Search and Rescue Association or an operational member organization • the social services sector • a tribal or state governmental employee with access to judicial records • the transportation industry • a member of a regional development organization • a local government public servant • a state government public servant This section provides that members of a community engagement task force receive $307 a day while attending meetings and are entitled to travel expenses. Sec. 44.33.940 Page 6, Lines 17-25  Provides definitions for: • office • underserved area • unserved area Sec. 3 Page 6, Lines 26-27  Lists sections repealed on June 30,2030 Sec. 4 Page 6, Line 28  Has an immediate effective date 2:05:14 PM CHAIR COSTELLO removed her objection; finding no further objection, the Senate CS for HB 363, version D, was adopted. SENATOR STEVENS joined the committee. 2:05:36 PM CHAIR COSTELLO opened public testimony on HB 363. 2:05:55 PM CHAD RUPE, Broadband Program Manager, State of Montana, described his experience standing up and working on broadband programs at both the state and local levels. Most recently he completed the application for the Connect Montana program for the American Rescue Plan Act (ARPA) section 602 State and Local Fiscal Recovery Funds. MR. RUPE offered the following suggestions and observations based on what he had learned through the Montana process • Work to ensure that the state legislation does not overprescribe because it can create more problems than solutions. • Align state law with the federal National Telecommunications and Information Administration (NTIA) requirements for deployment of Infrastructure Investment and Jobs Act (IIJA) funds. • Creating a definition for "underserved" and including low latency in the model are very important • Ensure the state is able to appropriately fund the deployment of broadband and fund contractors to enable monitoring throughout the life cycle • Flex the different contractors for different purposes • Montana chose to focus exclusively on a grant program to pay for monitoring because the burden of a loan program is much higher • Ensure there is a robust location-level statewide broadband mapping system, such as Montana has established • Readily identify areas as "served," "unserved," "under-served" and "frontier" • Think through decisions before disbursing funds • Ensure special funding is available to address fraud • Ensure compliance with NTIA for eligibility for funding • Develop a small but effective staff to deploy the funds • Have an independent consultant with experience working with the different agencies at the state and federal level who will understand the technical, financial, and managerial components of sustainability • Reduce the guaranteed term for providing service to an area from 30 years to 15 years • This would match the lifecycle of the hard assets deployed with the grant funding • Ensure the advisory board has someone who has been a provider • They will be uniquely qualified to identify issues • Include language to streamline permitting • Coordination between state and federal agencies will facilitate getting to the construction phase • Coordinate with Native villages CHAIR COSTELLO expressed appreciation for the review and his experience. 2:15:21 PM MARK GOLDSTEIN, President, International Research Center (IRC), Phoenix, Arizona, advised that IRC is a 30-year-old company that works in the areas of broadband, and smart technologies for homebuilding and cities and things that intersect with broadband. He recounted his professional credentials related to broadband. [Mr. Goldstein's testimony was interrupted due to technical difficulties.] 2:16:45 PM MR. GOLDSTEIN recounted his Alaska-focused client work with both Quintillion Networks and through a firm that writes grants for a number of Alaska Native tribes. MR. GOLDSTEIN echoed Mr. Rupe's comments about the efforts the Alaska broadband office will need to undertake and how to staff for those efforts. He agreed that adequate staffing is critical to ensure compliance between the state and the grantees and the state and the federal government. He also highlighted the importance of using technical resources to inform strategic processes and evaluate the technical viability of grant applications. He voiced support for the paid position for the technologist and dedicating substantial bandwidth to the effort. 2:18:43 PM MR. GOLDSTEIN turned his attention to the issue of mapping. He questioned having a mechanical engineer on the technical advisory committee and emphasized the need for the committee to have expertise in mapping and socioeconomic analysis. He agreed that the amount of money Alaska is slated to receive is unprecedented, but pointed out that it will not bring fiber to all areas of the state. Some areas will be oversubscribed in the grants received and some will be left out. The idea of mapping and a socioeconomic analysis is to ensure a methodology for allocating spending for both fiber and wireless. He voiced support for the technology agnosticism in that regard. MR. GOLDSTEIN highlighted that Alaska is unique among all states in the number of Native villages and entities interested in Educational Broadband Service (EBS) frequencies. He opined that the Commerce authority was the right track. MR. GOLDSTEIN provided specific recommendations on the 363 language. Under the powers to make grants and loans he strongly suggested: • In addition to unserved and under-served communities, add the term "community anchor institutions." Both the U.S. Treasury and IIJA allow grant programs and grants specifically to schools, libraries and higher education. In some circumstances health care is also allowed. He said that category is in statute for both of the large pools of money, so it makes sense to recognize the granting authority for those kinds of institutions directly. • In addition to the focus on infrastructure deployment, he suggested mentioning the power and scope to develop and manage digital equity initiatives and grant programs in the digital equity space. For example, $3 billion in block grants and $15 billion for consumer monthly subsidies is moving to the state. Digital equity that is not consumer subsidies is usually for things like giving away devices and services and paying for community centers. CHAIR COSTELLO thank him for the review and expressed appreciation for his expertise. 2:23:50 PM MARK SPRINGER, representing self, Bethel, Alaska, stated that he is a private consultant who currently is working in the tribal broadband arena. He mentioned Ms. McCall's review of the latest version and said he was pleased that the provision for the parity adjustment fund was removed. There is no need for it if the extension of fiber to rural areas results in costs comparable to what Anchorage is paying. He commented on and provided suggestions in the following areas: • It will be a huge job for the broadband office to write regulations, particularly in the area of applicant qualifications for the loans. • He suggested the advisory board specifically have a telecommunications representative and a community-based taskforce • He urged including capacity for Alaska Public Broadcasting and the Public Broadcasting System (PBS) to improve programming into rural Alaska. • He mentioned the authority of the broadband office and urged respect for the inherent sovereignty of Alaska Native tribes to develop and carry out their own broadband planning for the federal funding they receive. There should be no concern that a state plan may override a tribe's plan to provide service. • Regardless of the system a village has, the Middle Mile will be reaching back to connect to all the other networks in Alaska and the country so that shouldn't be an issue. 2:27:38 PM MR. SPRINGER concluded his comments saying his wish is that the final bill does not contain the provision for the parity adjustment fund and that it does maintain the neutrality of the advisory board. CHAIR COSTELLO thanked him for his testimony. 2:28:30 PM SHAWN WILLIAMS, Vice President of Government Affairs and Strategy, Pacific Dataport, Anchorage, Alaska, provided the following prepared testimony on HB 363: [Original punctuation provided.] We are the locally-owned satellite middle mile provider located in Anchorage launching two satellites over 100% of Alaska and connecting more than 110,000 rural Alaskans with broadband. Our first of two satellites will launch in August and the second will launch in 2024. I'm going to keep my testimony short and simple. The committee substitute (CS) version that Chair Costello is bringing forward today is supported by the stakeholders who previously had concerns about HB 363. It takes into consideration what other states have actually done to simply establish an office of broadband. This CS has several changes that are important to us: • Removes the non-sensical parity fund • Adjusts for better provider representation and community engagement • Includes all the IIJA requirements known to date • Promotes competition • Does not deprioritize the tribes in the award consideration process • Includes all technologies possible and • Establishes a broadband office with the goal of serving every household in Alaska Finally, Chair Costello's CS has the changes we needed and wanted. We appreciate that this CS version prioritizes the unserved and works to organize Alaska's broadband funding. We encourage the spirit of competition and anything that promotes broadband expansion, efficiency, lower prices, better service, competition, and a free market we believe the new CS version does this. I would like to thank this committee and our bill sponsor for addressing such a major challenge for Alaska. 2:30:35 PM LESIL MCGUIRE, Consultant, OneWeb, Anchorage, Alaska, stated that OneWeb was the first company to build a low earth orbit (LEO) constellation for more powerful connections for Alaskans and others. She noted that she was also testifying as a lifelong Alaskan who cares deeply about the policies that will be established for broadband. She advised that she joined OneWeb in the belief that having capacity from the first LEO satellite constellation is one of the many solutions needed to close the digital divide. To date, she said OneWeb has successfully launched 423 satellites so it now fully covers Alaska and the Arctic. They also have four meaningful partnerships with Alaska companies and tribes. She invited the members to the Anchorage office for a demonstration. She provided the following comments on the Senate committee substitute for HB 363: • Carefully consider the composition of the broadband office and Broadband Advisory Board to ensure a subjective outlook. • She liked the way the SCS interweaves a strong broadband office mission in the findings section. • An advisory board that is scientifically oriented will make objective decision making more likely. • Ensure the grant process is overseen by people with the expertise to understand the difficulties associated with building broadband projects. • Ensure sufficient capital and technology underpinnings to move to fruition • She voiced support for the community-engagement taskforce pulling in a myriad of stakeholders. • Importantly, the SCS provides a strong framework and a good interweaving of legislative objectives with flexibility in the IIJA regulation process. • She voiced support for the definitions section, particularly for "underserved area" and "unserved area." • She liked the adherence to the Administrative Procedures Act because it gives the public the opportunity to see the proposed regulations throughout the process. MS. MCGUIRE expressed appreciation for the open-minded, curious technology approach of the Senate CS for HB 363 and emphasized the importance of laying the right foundation for awarding the grants. CHAIR COSTELLO thanked her for her service to the state in her current capacity and also as a former member of the Senate. SENATOR STEVENS said he was pleased to hear her voice and her presence as a member of the Senate was missed. MS. MCGUIRE thanked him for the warm comments. SENATOR MICCICHE said he too appreciated hearing her voice. CHAIR COSTELLO listed the individuals online to answer questions. 2:39:25 PM BRITTANY WOODS-ORRISON, Broadband Specialist, Alaska Public Interest Research Group and Native Movement, Fairbanks, Alaska, stated that her position was created recently to educate users on broadband issues and create a network of advocates to overcome the digital divide. She described Alaska as one of the most disconnected states in the nation and pointed out that indigenous communities are disproportionately affected. She conveyed her belief that the 2.5 gigahertz spectrum licenses that the FCC has awarded to Alaska tribes were the key to helping tribes employ their own people, control their own networks, and resolve their own issues. She highlighted the importance of knowing the geography of an area to successfully build out broadband and pointed out that the people living in these indigenous communities already possess that knowledge. 2:41:40 PM CHAIR COSTELLO closed public testimony on HB 363. 2:41:47 PM At ease 2:45:45 PM CHAIR COSTELLO reconvened the meeting and stated she would hold HB 363 in committee to allow the members to review the SCS. She noted that she would not adjourn the meeting until later in the day. HB 363-BROADBAND: OFFICE, GRANTS, PARITY  6:54:58 PM CHAIR COSTELLO announced the consideration of CS FOR HOUSE BILL NO. 363(FIN) "An Act establishing the office of broadband; creating the broadband parity adjustment fund; establishing the Statewide Broadband Advisory Board; and providing for an effective date." She solicited a motion to adopt Amendment 1. 6:55:13 PM SENATOR MICCICHE moved Amendment 1 to HB 363. AMENDMENT 1  HB 363 Version D Page 2, line 31: Remove "30" Insert "15" 6:55:30 PM CHAIR COSTELLO objected for discussion purposes. She explained that the amendment reduces the time to maintain the infrastructure for a broadband project from 30 years to 15 years. Earlier in the meeting the committee heard testimony that the lifecycle of broadband infrastructure is about 15 years and that 30 years didn't align with the federal legislation. CHAIR COSTELLO removed her objection; finding no further objection, Amendment 1 was adopted. 6:56:29 PM At ease 6:56:49 PM CHAIR COSTELLO reconvened the meeting and voiced support for the bill. SENATOR MICCICHE commented that the federal money to extend broadband throughout the state was unprecedented and HB 363 was an important piece to make it happen. SENATOR GRAY-JACKSON said she was excited about the bill and what it will mean to citizens in rural communities in particular. 6:57:55 PM SENATOR MICCICHE moved to report the [Senate] committee substitute for HB 363, work order 32-LS1527\D, as amended, from committee with individual recommendations and attached fiscal note(s). 6:58:11 PM CHAIR COSTELLO found no objection and SCS CSHB 363(L&C) was reported from the Senate Labor and Commerce Standing Committee.