HOUSE SPECIAL COMMITTEE ON UTILITY RESTRUCTURING April 5, 2000 8:09 a.m. COMMITTEE CALENDAR STATEWIDE TELECOMMUNICATIONS ISSUES/OVERVIEW HOUSE BILL NO. 169 "An Act relating to including the costs of expansion activities and political activities in rates of electric cooperatives." - BILL HEARING POSTPONED TAPES [No tapes available due to recording difficulties] CALL TO ORDER CHAIRMAN BILL HUDSON convened the House Special Committee on Utility Restructuring meeting at 8:09 a.m. He explained the purpose of the meeting and the importance of keeping abreast of telecommunications issues. PRESENT Committee members present were Representatives Hudson, Cowdery, Davies, Porter, Green and Berkowitz. SUMMARY OF INFORMATION LIEUTENANT GOVERNOR FRAN ULMER gave an update on the activities of the Telecommunications Information Council and the Denali Commission. She talked about Alaska's schools benefiting from "E-Rate" to make Internet access in rural Alaska affordable. Alaska's schools, she said, are second in the nation in being wired for Internet access. GREG BERBERICH, Vice President, Matanuska Telephone Association, a full-service, member-owned telephone company, talked about the evolution of telecommunications in recent years. He said that serving rural customers is costly and that public policy makers should carefully scrutinize competition issues. MARK VASCONI, Director, Regulatory Affairs, AT&T Alascom (largest long-distance carrier in Alaska), explained that his company is a carrier of last resort; it operates more than 200 earth stations in Alaska, a microwave network and the Aurora II satellite. He said AT&T Alascom continues to invest in digital equipment that connects to global networks, and will replace Aurora II with Aurora III at a cost of $45 million. He described other investments, the costs of doing business in Alaska, and concerns about access rates. He asked the Regulatory Commission of Alaska to work toward driving prices to cost. He answered several questions from committee members. BILL BEHNKE, Senior Vice President -Marketing, General Communications, Inc., talked about access cost problems; the RCA's being challenged to manage new paradigm shift to "active, vibrant market" in the industry; the difficulty in hiring trained Alaskans; the need for more time to train users; and other issues relating to developing competitive markets. He also answered questions from committee members. MARY ANN PEASE, Vice President - External Relations, Alaska Communications Systems (ACS), provided a Power Point presentation about ACS's expansion and advanced services development. She answered questions from committee members. MARC FARMER, Western Regional Business Manager, National Rural Telecommunications Cooperative (NRTC), explained that NRTC provides products and services to more than 1,000 rural electric and telephone utilities; 20 members are in Alaska. NRTC is intent upon helping to bring more bandwidth to rural Alaska through support of new federal legislation and testing of new satellite services. DAVE LEWIS, Operations and Maintenance manager, Alaska Fiber Star, concurred with most points presented by other speakers and said he was pleased to hear various industry viewpoints. He answered questions from committee members. JACK RHYNER, President and General Manager, TelAlaska, Inc., stressed the importance of the Universal Service Fund to rural Alaskans. He also expressed some concerns about the RCA's handling of a certain docket as it relates to separation of RCA staff. He answered questions from the committee. CHAIR HUDSON asked RCA chair Nanette Thompson, who was participating by teleconference, to send a response to the committee regarding the concerns expressed by Mr. Rhymer. [There being no time left, Karen Morgan, Acting Director of the Information Technology group, Department of Administration, did not make her scheduled presentation.] COMMITTEE ACTION The committee took no action. ADJOURNMENT CHAIRMAN HUDSON adjourned the House Special Committee on Utility Restructuring meeting at 9:54 a.m. NOTE: There are no tapes for this meeting due to recording difficulties. However, handwritten log notes were taken; those are available from the Legislative Reference Library, 129 6th Street, Suite 102, Juneau, Alaska 99801, (907) 465-3808.