Legislature(2017 - 2018)ADAMS ROOM 519

04/11/2018 01:30 PM House FINANCE

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HOUSE BILL NO. 384                                                                                                            
     "An  Act  relating  to  the  Regulatory  Commission  of                                                                    
     Alaska and broadband Internet regulations."                                                                                
2:19:35 PM                                                                                                                    
REPRESENTATIVE  DAVID  GUTTENBERG, SPONSOR,  introduced  the                                                                    
legislation  that would  add four  words  to the  Regulatory                                                                    
Commission  of Alaska's  (RCA) responsibilities:  "including                                                                    
broadband  internet   access."  He  read  a   definition  of                                                                    
telecommunications from AS.42.05.990(13) as follows:                                                                            
     (13)  "telecommunications" means  the transmission  and                                                                    
     reception  of  messages,   impressions,  pictures,  and                                                                    
     signals  by   means  of   electricity,  electromagnetic                                                                    
     waves, and any other  kind of energy, force variations,                                                                    
     or impulses  whether conveyed by cable,  wire, radiated                                                                    
     through  space,  or  transmitted  through  other  media                                                                    
     within a specified area or between designated points.                                                                      
Representative  Guttenberg  shared that  he  had  been on  a                                                                    
quest  to bring  broadband to  more Alaskan  communities. He                                                                    
explained  that   the  RCA  was  the   proper  authority  to                                                                    
investigate the  issue, but they  believed the  statute that                                                                    
granted  its  authority lacked  clarity.  He  held that  the                                                                    
statute  clearly  defined  telecommunications  as  a  public                                                                    
utility  and gave  the Regulatory  Commission of  Alaska the                                                                    
responsibility to  regulate providers  of telecommunications                                                                    
services.  The  legislation   further  clarified  the  RCA's                                                                    
responsibilities   by   specifically  including   'broadband                                                                    
internet     access'     under     the     definition     of                                                                    
telecommunications.  He  added  that  on page  2,  lines  14                                                                    
through 15 the definition of broadband was amended to read:                                                                     
     (14)  "broadband  Internet   access"  means  high-speed                                                                    
     Internet access  that is always  on and that  is faster                                                                    
     than traditional dial-up access.                                                                                           
2:23:06 PM                                                                                                                    
Co-Chair  Foster  noted  that  Representative  Kawasaki  had                                                                    
joined the meeting.                                                                                                             
Representative  Grenn spoke  about  a  letter of  opposition                                                                    
from the Alaska Communications (AC)  (copy on file). He read                                                                    
from the letter:                                                                                                                
     Consequently, there can be no doubt that internet                                                                          
     access is interstate in nature, and therefore subject                                                                      
     to federal jurisdiction, not state jurisdiction.                                                                           
Representative Grenn inquired how  the bill aligned with the                                                                    
Representative Guttenberg  answered that  it "went  right to                                                                    
the  point." He  voiced that  he did  not disagree  with the                                                                    
statement. He delineated that in  December 2017, the Federal                                                                    
Communications  Commission  (FCC)  issued and  order  titled                                                                    
"Restoring  Internet  Freedom."  The  order  rescinded  "Net                                                                    
Neutrality"  and  appropriated   the  states'  authority  to                                                                    
regulate  internet  granting  the authority  solely  to  the                                                                    
federal government  leaving the state very  limited capacity                                                                    
to regulate broadband. However,  there were actions that the                                                                    
state could engage  in to help expand  broadband service. He                                                                    
suggested that  other states  performed mapping  and created                                                                    
an environment to invite more  competition. The actions were                                                                    
not regulatory. The FCC had  stated internet service was not                                                                    
a  utility, so  regulation  was not  possible. However,  the                                                                    
Regulatory  Commission  of  Alaska  could  still  engage  in                                                                    
activities that were  in the state's best  interest like. He                                                                    
indicated that 21 states were  suing the FCC over the order.                                                                    
If they prevail  and the order was reversed  or modified the                                                                    
state would  still not be  able to  ask the RCA  to regulate                                                                    
broadband if the definition was not included in statute.                                                                        
2:26:08 PM                                                                                                                    
Representative  Wilson stated  that the  letter also  raised                                                                    
the concern  that the  bill would  change the  definition of                                                                    
public  utility.  Representative Guttenberg  disagreed  with                                                                    
the statement.  He explained that  the bill  simply included                                                                    
broadband  access  into  the statute  as  a  "definition  of                                                                    
responsibilities."    Representative    Wilson   asked    if                                                                    
Representative Guttenberg  was saying the AC  letter was not                                                                    
justified.   Representative  Guttenberg   agreed  with   the                                                                    
statement  but restated  that the  FCC  assumed the  primary                                                                    
role of regulating  broadband the prior December  and if the                                                                    
bill  was heard  last session  there would  not have  been a                                                                    
conflict. He  reiterated that the  state could  still engage                                                                    
in actions  that the FCC  did not  take on and  other states                                                                    
performed. He noted  that 30 states were  taking action that                                                                    
were not regulatory such  as mapping, creating opportunities                                                                    
for competition, and creating  opportunities for entities to                                                                    
"buildout" broadband.  He agreed  that the states  could not                                                                    
regulate broadband.                                                                                                             
2:28:24 PM                                                                                                                    
Representative  Wilson noted  that another  argument in  the                                                                    
letter was that  the internet point for  Alaska was Seattle.                                                                    
She  asked whether  the broadband  carriers  would be  under                                                                    
Washington or Alaska  law. Representative Guttenberg replied                                                                    
that  point  to  point  inside   of  Alaska  was  considered                                                                    
interstate.  He  commented that  he  was  not talking  about                                                                    
regulating interstate  or intrastate  because the  state did                                                                    
not have  a role  in regulation anymore.  He stated  that by                                                                    
clearly  identifying  that  broadband  was  under  the  RCAs                                                                    
purview  the  Regulatory  Commission  of  Alaska  could  put                                                                    
programs in place  for the private sector  to understand the                                                                    
state's needs or mapping to  inform consumers what providers                                                                    
were available.  He stated that  "there was a whole  slew of                                                                    
things that other states had  done." Alaska "could do things                                                                    
for  its citizens"  that were  not regulatory  in nature  to                                                                    
help  expand   broadband.  Representative   Wilson  remained                                                                    
confused. She commented that the  letter insinuated that the                                                                    
bill  could  place obstacles  in  the  way  of his  goal  of                                                                    
expanding  broadband service,  which  she knew  was not  the                                                                    
sponsor's   intent.  She   wondered   what  the   Regulatory                                                                    
Commission  of Alaska  and private  entities  could do  that                                                                    
they could  not accomplish without the  bill. Representative                                                                    
Guttenberg  answered  that  if the  private  companies  were                                                                    
building out broadband services to  urban and rural areas in                                                                    
Alaska he  would not be  sponsoring the bill. The  RCA could                                                                    
perform   mapping   that   charted  the   carriers   service                                                                    
throughout the  state. Current  FCC mapping  was inefficient                                                                    
and inaccurate. The RCA could  also create opportunities for                                                                    
grants  and subsidies  to build  out broadband.  However, if                                                                    
broadband  was   expanded  the   RCA  was   prohibited  from                                                                    
regulating  fees  - the  FCC  claimed  jurisdiction of  that                                                                    
2:33:01 PM                                                                                                                    
Representative Wilson understood  the regulatory issues. She                                                                    
asked whether the bill allowed  the Regulatory Commission of                                                                    
Alaska  to   promote  competition,  award  grants,   and  do                                                                    
mapping.  Representative  Guttenberg  replied  the  RCA  was                                                                    
hesitant about  saying what actions  they might take  if the                                                                    
bill was  adopted. He looked  at what other states  had done                                                                    
outside of  a regulatory role. The  Regulatory Commission of                                                                    
Alaska would  have to go  through a regulatory  type process                                                                    
with the  industry, state,  and public  to decide  what non-                                                                    
regulatory actions to  participate in. Representative Wilson                                                                    
wanted to hear the perspective of the RCA.                                                                                      
Representative Grenn  asked to  hear more about  the effects                                                                    
of adding the four words and  wondered what the RCA would be                                                                    
regulating.  He  referenced  a memorandum  from  Legislative                                                                    
Legal Services  dated February 18,  2018 (copy on  file) and                                                                    
read the following:                                                                                                             
     The bill  draft clarifies that regulatory  power of the                                                                    
     RCA  to  include  broadband  Internet;  the  Regulatory                                                                    
     Commission  of  Alaska  will  still   not  be  able  to                                                                    
    regulate any area that is preempted by federal law.                                                                         
Representative  Guttenberg answered  the  RCA  would not  be                                                                    
regulating  anything. Representative  Grenn  asked for  more                                                                    
detail on what  the additional words would able  them to do.                                                                    
Representative Guttenberg  responded that  Legislative Legal                                                                    
Services had  determined that  the Regulatory  Commission of                                                                    
Alaska  currently   had  adequate  statutory   authority  to                                                                    
regulate  broadband   if  that   was  still   allowable.  He                                                                    
expressed frustration  that the RCA had  previously declined                                                                    
to take on  the authority. He listed examples  of action the                                                                    
other  states  could do  outside  a  regulatory purview.  He                                                                    
reported that  the state of Kansas  ensured that underserved                                                                    
areas  were   built  out  and  required   broadband  service                                                                    
providers  to   show  where  broadband   was  and   was  not                                                                    
available.  He   related  that  his  office   received  many                                                                    
constituents'   calls   requesting   information   regarding                                                                    
providers, coverage  areas, service,  and fees.  He detailed                                                                    
that  the  FCC performed  mapping  using  census blocks  and                                                                    
there  may be  three  blocks for  an  entire community,  but                                                                    
service  might only  cover one  partial block.  However, the                                                                    
map  depicted  that  the   entire  area  received  highspeed                                                                    
internet. In addition, other states  set up grants to assist                                                                    
in  building out  the  infrastructure  to promote  broadband                                                                    
across the state.                                                                                                               
2:38:33 PM                                                                                                                    
Representative Thompson  remarked on  the complexity  of the                                                                    
issue and the  letters of opposition. He asked  to hear more                                                                    
about the  bill. He did not  know that he was  ready to take                                                                    
any   action  on   the  bill   at  present.   Representative                                                                    
Guttenberg  believed  that   the  Regulatory  Commission  of                                                                    
Alaska  had  the  authority  to   take  an  active  role  in                                                                    
broadband  service   in  Alaska.  However,   the  Regulatory                                                                    
Commission  of Alaska  was hesitant  to do  so due  to their                                                                    
interpretation of statute they  perceived lacked clarity. He                                                                    
maintained  that   no  one  in  the   state,  including  the                                                                    
Department  of Administration  (DOA) who  administered state                                                                    
government broadband, had authority  over broadband or taken                                                                    
on a  study of the  state's need. The bill  merely clarified                                                                    
that  the  responsibility  for broadband  was  in  the  RCAs                                                                    
purview. He wanted the RCA to act on their authority.                                                                           
Co-Chair Foster noted that  Representative Pruitt had joined                                                                    
the meeting.                                                                                                                    
Representative  Thompson cited  the letter  and referred  to                                                                    
the following statement:                                                                                                        
     "The RCA regulation of broadband internet may raise                                                                        
     federal preemption concerns."                                                                                              
Representative   Thompson   asked    for   an   explanation.                                                                    
Representative  Guttenberg replied  that the  preemption was                                                                    
referring  to  the  FCC's  action  in  removing  the  states                                                                    
authority to regulate broadband.                                                                                                
SETH  WHITTEN,   STAFF,  REPRESENTATIVE   DAVID  GUTTENBERG,                                                                    
relayed  that  part  of  the   confusion  was  the  shifting                                                                    
landscape. He  detailed that  if it was  prior to  the FCC's                                                                    
order, broadband would  still be considered by the  FCC as a                                                                    
public  utility  and  the discussion  would  not  be  taking                                                                    
place. Prior to the FCC's  order the bill would have updated                                                                    
the statute to conform to  the way broadband was categorized                                                                    
by the FCC; as a  public utility. However, the landscape had                                                                    
shifted due  to the order,  therefore the four words  in the                                                                    
bill enabled the  RCA to do anything that  was not preempted                                                                    
by  the federal  government.  Therefore,  currently the  RCA                                                                    
could  collect  network  information. The  order  disallowed                                                                    
imposition  of requirements  or regulations,  setting rates,                                                                    
terms or conditions on the offering of broadband services.                                                                      
2:42:03 PM                                                                                                                    
Co-Chair Seaton  pointed to  the note at  the bottom  of the                                                                    
memorandum  (page 1)  from  Legislative  Legal Services  and                                                                    
thought it answered many of  the questions. He read from the                                                                    
     AS.42.05.990(13)"telecommunications"      means     the                                                                    
     transmission  and reception  of messages,  impressions,                                                                    
     pictures,   and  signals   by  means   of  electricity,                                                                    
     electromagnetic waves,  and any  other kind  of energy,                                                                    
     force  variations,  or  impulses  whether  conveyed  by                                                                    
     cable,  wire, radiated  through  space, or  transmitted                                                                    
     through other media within a  specified area or between                                                                    
     designated points."  It is  my understanding  that this                                                                    
     definition includes broadband Internet services.                                                                           
Co-Chair Seaton  noted that the  attorney believed  that the                                                                    
definition   included   broadband  internet   services.   He                                                                    
continued  that   the  RCA  could   not  regulate   the  net                                                                    
neutrality portion  any longer,  but broadband  access could                                                                    
be pursued. He referred to page 1, line 11 and read:                                                                            
     (B) furnishing telecommunications service,                                                                                 
Co-Chair  Seaton   maintained  that  for  some   reason  the                                                                    
Regulatory   Commission   of    Alaska   had   a   different                                                                    
interpretation   of  the   statute   than  legal   services.                                                                    
Therefore,  by merely  clarifying  the  definition that  the                                                                    
statute did included broadband internet  access did not mean                                                                    
the  bill   violated  any  federal  regulations.   The  bill                                                                    
currently included taking any actions  that were left in the                                                                    
state's purview. He was puzzled  why some members questioned                                                                    
the bill  when it  merely clarified  the definition,  so the                                                                    
RCA  felt  more   comfortable  assuming  responsibility  for                                                                    
internet  services.  He   reiterated  that  the  legislative                                                                    
attorney's  assured  members   that  the  authority  already                                                                    
existed in  the current definition. He  asked Representative                                                                    
Guttenberg  if his  assessment  was correct.  Representative                                                                    
Guttenberg  replied in  the affirmative.  He  added that  by                                                                    
assuming responsibility the  Regulatory Commission of Alaska                                                                    
would  open a  docket  (process) to  determine what  actions                                                                    
were in the  best interest of the state. The  bill called on                                                                    
the RCA to consider acting.                                                                                                     
2:45:34 PM                                                                                                                    
Representative  Tilton  asked  if the  sponsor  foresaw  any                                                                    
costs  to   the  RCA,  state,  and   ultimately  end  users.                                                                    
Representative Guttenberg replied that  he was an example of                                                                    
an end user and he would  love to pay for improved broadband                                                                    
services and  internet access. He  shared that he  had lived                                                                    
in the  same home for  41 years  and he recalled  when power                                                                    
had been brought  to the neighborhood; he had  been happy to                                                                    
pay  $1,000  for   the  service.  He  noted   that  the  RCA                                                                    
implemented  charges for  developing  regulations but  would                                                                    
not be  regulating so he  was uncertain how its  costs would                                                                    
be covered. He  wanted the state to build  out broadband for                                                                    
its  citizens and  considered access  a significant  service                                                                    
that  builds infrastructure  into  the state  that moved  it                                                                    
into the  21st Century. He  compared internet access  to the                                                                    
development of  the national electrical  grid in  the 1930's                                                                    
or  the highway  system  in the  1950's.  He emphasized  his                                                                    
desire for enhanced broadband services in the state.                                                                            
2:48:29 PM                                                                                                                    
Representative  Kawasaki  thanked Representative  Guttenberg                                                                    
for   the   legislation.    He   referenced   Representative                                                                    
Guttenberg's opening statement that  the RCA already had the                                                                    
authority  to  regulate  broadband and  asked  for  comment.                                                                    
Representative  Guttenberg interpreted  the statute  to mean                                                                    
that it covered all  forms of telecommunications, even types                                                                    
that had  not been invented yet.  He stated that it  was not                                                                    
clear enough for the commission.  The bill further clarified                                                                    
statute.  Representative   Kawasaki  referenced   backup  in                                                                    
members' packets  related to  locations where  broadband was                                                                    
regulated [Broadband  Statutes National Conference  of State                                                                    
Legislatures]  (copy on  file). He  asked what  those states                                                                    
were  doing to  comply with  or  adjust to  the FCC  ruling.                                                                    
Representative  Guttenberg  replied   that  30  states  were                                                                    
attempting  to  reorganize broadband  as  an  industry or  a                                                                    
utility and 21 states were  suing the FCC over the Restoring                                                                    
Internet  Freedom order.  He noted  that he  had a  document                                                                    
that listed what states were doing since the ruling.                                                                            
Mr.  Whitten interjected  that the  regulatory function  had                                                                    
always  been in  question.  There had  been  a period  where                                                                    
broadband was classified as a  public utility under the FCC.                                                                    
He   delineated    that   typically   states    focused   on                                                                    
incentivizing broadband  through grant programs  rather than                                                                    
on regulation. The one area  where states had the ability to                                                                    
gather information  was in the network  information that was                                                                    
used for mapping. The RCA  compiled information on broadband                                                                    
coverage for  a legislative report  over the prior  year and                                                                    
found  there were  entities that  believed  they lacked  the                                                                    
authority  to  request  coverage   data.  The  bill  clearly                                                                    
allowed  entities  to  request   information  that  was  not                                                                    
preempted  by  the  federal government.  He  discovered  the                                                                    
recent  "Competitive  Emerging  Communications  Technologies                                                                    
Act" in Georgia that  granted the state authority consistent                                                                    
with the FCC ruling and  acknowledged that the state did not                                                                    
maintain the authority  to regulate rates and  set terms and                                                                    
conditions  on  services.  However,   the  act  contained  a                                                                    
provision that  stated the state would  assume the authority                                                                    
if the  FCC ruling  was reversed.  He commented  that states                                                                    
had  to exist  in  the constantly  shifting landscape  about                                                                    
whether  broadband was  considered a  utility. Other  states                                                                    
were trying to occupy the middle ground.                                                                                        
2:53:55 PM                                                                                                                    
Representative Guttenberg  referenced the document  from the                                                                    
NCSL  in members'  packets and  pointed  to Mississippi  and                                                                    
read  the description  of the  state's provisions  regarding                                                                    
broadband as an example of actions state could take:                                                                            
     Declares Mississippi's policy  is to provide incentives                                                                    
     for "telecommunications  enterprises" to invest  in the                                                                    
     infrastructure needed  to provide  broadband technology                                                                    
     throughout  the state  to keep  Mississippi competitive                                                                    
   and to promote economic development within the state.                                                                        
     Extends the  sales tax exemption on  sales of equipment                                                                    
     to telecommunications  enterprises that is used  in the                                                                    
     deployment  of broadband  technologies. Extends  the ad                                                                    
     valorem  tax  exemption  for   equipment  used  in  the                                                                    
     deployment     of     broadband     technologies     by                                                                    
     telecommunications enterprises.                                                                                            
Representative  Guttenberg   expounded  that   the  document                                                                    
related  what  other  states were  doing.  The  states  were                                                                    
creating  opportunities for  industry to  develop broadband.                                                                    
Currently, what  measures the RCA  would take  were unknown.                                                                    
Representative  Kawasaki did  not see  the problem  with the                                                                    
legislation  impacting the  FCC ruling  and assumed  the RCA                                                                    
would  work  within  the ruling.  Representative  Guttenberg                                                                    
answered in  the affirmative. He  pointed to  California and                                                                    
read one of the measures the state adopted:                                                                                     
     Regulates  fiber optic  cables and  broadband placement                                                                    
     on state highways.                                                                                                         
Representative Guttenberg had requested  that every time the                                                                    
Department  of Transportation  and  Public Facilities  (DOT)                                                                    
had to  repair or build  a road  they lay empty  conduit for                                                                    
any future  broadband capacity. He reported  that the Ambler                                                                    
Road  project  was planning  on  adopting  the strategy.  He                                                                    
declared  that   the  state  had  a   "broadband  deployment                                                                    
problem." He  noted that  the fiscal note  from the  RCA was                                                                    
zero.  Representative  Kawasaki  referenced the  letters  of                                                                    
opposition  in members'  packets. He  cited the  legislation                                                                    
and referred to the  words "broadband internet access" [page                                                                    
1, line  11] included  in the  definition of  public utility                                                                    
and thought  the opposition  was related  to the  wording in                                                                    
the bill.                                                                                                                       
2:59:02 PM                                                                                                                    
Mr.  Whitten  replied that  under  the  FCC order  currently                                                                    
broadband was not considered a  public utility. The question                                                                    
was  whether states  would change  statutes  every time  the                                                                    
federal government  changed its categorization  of broadband                                                                    
or created  statutes that recognized the  issue and provided                                                                    
flexibility   and   authority    to   operate   within   the                                                                    
Vice-Chair  Gara stated  that  the line  pertaining to  what                                                                    
could and could  not be regulated would  continue to change.                                                                    
He  stated that  the bill  would allow  the RCA  to regulate                                                                    
broadband  within  the  confines  of  the  FCC  rulings.  He                                                                    
believed   that  opposition   letters  from   industry  were                                                                    
inconsistent.  He  interpreted the  bill  to  mean that  the                                                                    
state would regulate broadband only  as far as the court and                                                                    
federal  government  allowed. The  line  would  move in  the                                                                    
future. In urban  and rural Alaska there was a  long list of                                                                    
grievances  among   consumers  that  needed   attention.  He                                                                    
thought the bill would enable  redress for at least, some of                                                                    
the  grievances.  He  expressed the  frustration  caused  by                                                                    
poor,  costly internet  service.  He  emphasized with  rural                                                                    
residents  who  experienced  high cost  inadequate  internet                                                                    
service. He supported the bill.                                                                                                 
3:02:32 PM                                                                                                                    
Representative  Wilson was  trying  to  understand what  the                                                                    
bill would enable the RCA to  do that it could not currently                                                                    
do.  She  was  concerned  about  how  the  commission  would                                                                    
promote  competition,  distribute  grant  funding,  and  how                                                                    
mapping would work.                                                                                                             
RICHARD  GAZAWAY,   ADMINISTRATIVE  LAW   JUDGE,  REGULATORY                                                                    
COMMISSION  OF  ALASKA  (via teleconference),  believed  the                                                                    
question  had been  answered by  Mr. Whitten.  He elaborated                                                                    
that when the commission was  tasked by the legislature with                                                                    
publishing a  broadband report  the commission  attempted to                                                                    
request network  mapping information. Some  service entities                                                                    
took the position  that the RCA lacked the  authority due to                                                                    
jurisdictional  limitations to  request the  information. He                                                                    
assumed  that  was the  reason  the  sponsor introduced  the                                                                    
bill. He believed  that the authority was  supported and not                                                                    
preempted  by   federal  law.  The  commission   would  have                                                                    
authority  that was  not preempted  but was  currently "very                                                                    
Representative  Wilson asked  whether  he  thought that  the                                                                    
bill   would  force   private  companies   to  release   the                                                                    
information.  Mr.  Gazaway  answered  in  the  negative.  He                                                                    
elaborated  that  the  issue was  a  source  of  controversy                                                                    
between the commission and the  industry. The commission did                                                                    
not force  the issue and  he maintained a  neutral position.                                                                    
Representative  Wilson restated  the question.  She inquired                                                                    
if  the bill  would give  the RCA  authority to  force other                                                                    
companies to  provide information  for mapping.  Mr. Gazaway                                                                    
replied that  the clarification in the  statutory definition                                                                    
would grant the RCA "strong  support for the authority to do                                                                    
so."  Representative   Wilson  wondered   about  proprietary                                                                    
information that companies  did not want to  provide and how                                                                    
the commission  would respond to the  situation. Mr. Gazaway                                                                    
was uncertain how the commissioners would respond.                                                                              
3:06:44 PM                                                                                                                    
Representative Wilson  asked if  the RCA  distributed grants                                                                    
and how it promoted competition.  Mr. Gazaway replied with a                                                                    
historical  example.  He  communicated that  the  commission                                                                    
previously handled a broadband  grant. The grant funding was                                                                    
a  federal farm  bill  earmark for  rural  Alaska to  obtain                                                                    
broadband internet access. The  commission and Department of                                                                    
Commerce,  Community and  Economic Development  (DCCED) were                                                                    
the grant administrators. The commission  was able to impose                                                                    
requirements  on service  levels, speeds,  rates, and  other                                                                    
conditions for the life of  the grant. He related that other                                                                    
states  had received  multiple grants  or used  general fund                                                                    
money for broadband  support. He noted the  existence of the                                                                    
Alaska  Universal  Service Fund  that  was  used to  support                                                                    
telecommunications carriers in Alaska.                                                                                          
Co-Chair Foster OPENED and CLOSED public testimony.                                                                             
3:09:30 PM                                                                                                                    
AT EASE                                                                                                                         
3:10:02 PM                                                                                                                    
Co-Chair Foster did not recall  that anyone had signed in to                                                                    
testify during  the morning meeting  when the bill  had been                                                                    
originally scheduled.                                                                                                           
Vice-Chair  Gara   read  the  zero  fiscal   note  from  the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
appropriated to the RCA.                                                                                                        
Representative Wilson  referenced analysis on page  2 of the                                                                    
fiscal note and read:                                                                                                           
     The  Regulatory Commission  of  Alaska  (RCA) would  be                                                                    
     required   to   certificate    or   implement   through                                                                    
     regulation a registration  process for Internet service                                                                    
     providers operating in Alaska.                                                                                             
Representative   Wilson   was  concerned   about   requiring                                                                    
certificates for  internet providers  and reported  that had                                                                    
not  been  her  understanding of  the  bill.  Representative                                                                    
Guttenberg  answered that  the fiscal  note showed  that the                                                                    
RCA did not anticipate any fiscal impact.                                                                                       
Mr. Gazaway  replied that a  public utility was  required to                                                                    
comply  to  a  registration or  certification  process.  The                                                                    
registration   process  was   required  for   carriers  that                                                                    
provided  service.   The  certification  process   was  more                                                                    
extensive,  and  he thought  that  a  certification was  not                                                                    
possible to  issue related to  the net neutrality  order and                                                                    
market barriers.  He indicated  that a  registration process                                                                    
was more  likely. The commission had  statutory authority to                                                                    
allow registration instead  of certification. Representative                                                                    
Wilson asked  whether the RCA  would obtain  the information                                                                    
as  part of  the  application for  a required  certification                                                                    
process. Mr.  Gazaway answered that other  states obtained a                                                                    
list of providers  to provide a service  list for consumers.                                                                    
He assumed  that was  the intent of  the bill's  sponsor. He                                                                    
added that if there was  a desire for mapping information on                                                                    
network  availability the  inquiry  would be  issued to  the                                                                    
providers listed on the registration information.                                                                               
3:14:00 PM                                                                                                                    
Representative Wilson  did not  care what other  states did.                                                                    
She was trying to determine  whether it was the commission's                                                                    
intent  to  require  a  registration  process.  Mr.  Gazaway                                                                    
answered   that  there   was  no   intent.  The   commission                                                                    
determined  what  would  be  required  under  its  statutory                                                                    
framework  if the  bill was  adopted, which  was to  develop                                                                    
some  type of  registration process  and what  that involved                                                                    
was decided on by  the commissioners. The simplified process                                                                    
was the registration process.                                                                                                   
3:15:14 PM                                                                                                                    
AT EASE                                                                                                                         
3:16:20 PM                                                                                                                    
Representative Wilson  wondered whether the language  in the                                                                    
fiscal  note  was  binding. She  suggested  using  the  word                                                                    
"might" to avoid requiring registration.                                                                                        
Representative  Guttenberg  answered  that the  bill  was  a                                                                    
blank page;  there were  no regulations  in place  and there                                                                    
were  no  regulations  defining a  process.  The  commission                                                                    
would  engage in  a public  process before  establishing any                                                                    
regulations.  Representative Wilson  stated that  the fiscal                                                                    
note had been approved by  Stephen McAlpine the chair of the                                                                    
RCA and  approved by  Catherine Reardon,  Director, Division                                                                    
of  Administrative  Services,  DCCED. Her  concern  was  the                                                                    
language  in  the  fiscal note  reflected  the  commission's                                                                    
analysis  of  the bill.  She  surmised  that the  commission                                                                    
would be  required to implement a  registration process. She                                                                    
wanted a definitive answer.                                                                                                     
Vice-Chair Gara stated that the  fiscal note was simple, and                                                                    
he  believed  the requirement  was  "a  molehill and  not  a                                                                    
mountain." He voiced that registration  was a simple process                                                                    
and nothing  in the  bill was  controversial. He  added that                                                                    
the state did not preempt the federal government                                                                                
3:20:20 PM                                                                                                                    
Co-Chair Foster voiced that at  some point the members would                                                                    
have to agree to disagree.                                                                                                      
Mr. Gazaway answered  that a public utility  was required to                                                                    
obtain  operating authority  via  statute. The  registration                                                                    
process was more informational  and informal. The commission                                                                    
would determine what process was  more relevant according to                                                                    
Co-Chair  Seaton  remarked  that   the  bill  was  merely  a                                                                    
clarification of  subsection (b) in statute.  He pointed out                                                                    
that  if  there  was  already  an  established  registration                                                                    
process for telecommunication services  than broadband was a                                                                    
subsection  of   telecommunication  services.  He   did  not                                                                    
believe  that   anything  new  was  being   established  and                                                                    
referred to the legal opinion.                                                                                                  
Representative   Wilson  believed   no   one   spoke  of   a                                                                    
certification process during the mapping discussions.                                                                           
Representative Pruitt  declared that  the bill  was invalid.                                                                    
He referred to the legal memo and read:                                                                                         
     "?under   the   Supremacy   Clause   of   the   federal                                                                    
     constitution,  state laws  that interfere  with federal                                                                    
     laws are invalid."                                                                                                         
Representative Pruitt  deduced that  it clearly  stated that                                                                    
the  federal  government  prohibited regulation  beyond  the                                                                    
authority allowed and was baffled  why the committee engaged                                                                    
in "fruitless  conversation" and  would move forward  with a                                                                    
bill that did nothing.                                                                                                          
3:24:03 PM                                                                                                                    
Vice-Chair  Gara   believed  that   Representative  Pruitt's                                                                    
characterization of the bill was  unfair. He referred to the                                                                    
NCSL  report and  ascertained  that the  bill  did what  the                                                                    
state  of Alabama  mandated; regulate  the  internet to  the                                                                    
extent permitted by federal law.                                                                                                
Representative Pruitt  read from  AC's opposition  letter as                                                                    
     As  early  as  1998  the FCC  concluded  that  applying                                                                    
     common   carrier    or   "telecommunications   service"                                                                    
     regulation  to  BIAS   would  "seriously  curtail"  the                                                                    
     regulatory freedom deemed  necessary to the development                                                                    
     of   "enhanced  services,"   as  information   services                                                                    
     formerly were known.                                                                                                       
Representative  Pruitt  contended  that creating  a  heavily                                                                    
regulated  environment would  achieve the  goal of  limiting                                                                    
expanded  broadband services  especially in  rural areas  of                                                                    
the  state.  He  believed  that  regulations  would  curtail                                                                    
broadband expansion and emphasized his opposition.                                                                              
Representative  Guttenberg provided  a counter  argument. He                                                                    
suggested  that   Representative  Pruitt  read   the  report                                                                    
included in the FCC's Restoring Internet Freedom Order from                                                                     
Commissioner Pai, Chairman  of the FCC who  stated that $1.3                                                                    
billion would  be wasted for  not building out  the internet                                                                    
consistently.  He  reiterated that  more  could  be done  to                                                                    
accomplish expanded  broadband. He voiced that  the bill was                                                                    
not preempting  federal law.  Other states  had demonstrated                                                                    
that opportunities to create  incentives and remove barriers                                                                    
to expand  broadband existed. He  stressed that  the problem                                                                    
in  Alaska  was  severe.  He reiterated  the  problems  with                                                                    
internet service in  the state. He hoped the  RCA would help                                                                    
improve  internet access  for Alaskans  with passage  of the                                                                    
3:30:23 PM                                                                                                                    
Co-Chair  Seaton MOVED  to REPORT  HB 384  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
Representative  Wilson  OBJECTED.   She  elaborated  on  her                                                                    
objection. She  stated that the  government did  not provide                                                                    
internet  services,  private   industry  did.  She  believed                                                                    
building   new  infrastructure   was   costly  for   private                                                                    
industry.  She  understood  the frustration  regarding  poor                                                                    
internet  service  but  was  not  willing  to  tell  private                                                                    
companies  how or  where to  do business.  She believed  the                                                                    
bill  would  place  private  business  inside  a  regulatory                                                                    
Representative Pruitt contended that he  did not know of any                                                                    
industry  that  grew  through  regulation.  He  opposed  the                                                                    
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Kawasaki, Ortiz, Gara, Guttenberg, Seaton, Foster                                                                     
OPPOSED: Pruitt, Thompson, Tilton, Wilson, Grenn                                                                                
The MOTION  PASSED (6/5). There  being NO OBJECTION,  it was                                                                    
so ordered.                                                                                                                     
HB 384  was REPORTED  out of committee  with four  "do pass"                                                                    
recommendations, three "do  not pass" recommendations, three                                                                    
"no   recommendation"  recommendations,   and  one   "amend"                                                                    
recommendation;  and  with  one  previously  published  zero                                                                    
fiscal note: FN1 (CED).                                                                                                         
3:34:29 PM                                                                                                                    
AT EASE                                                                                                                         
3:35:19 PM                                                                                                                    

Document Name Date/Time Subjects
HB 339 Support.pdf HFIN 4/11/2018 1:30:00 PM
HB 339
SB032 Opposing Document-Opposition Letters 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB032 Sectional Analysis ver J 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB032 Sponsor Statement 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB032 Supporting Documents-Support Letters 04.17.17.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB32_Support_050317.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB4 Explanation of Changes ver. J to ver. N 4.2.3018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Sectional Analysis ver. N 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Sponsor Statement ver. N 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Letters 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Doc - News Articles 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Doc - Braiding Regs Report Packet Version 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
SB4 Support Doc - DEC Letters 4.2.2018.pdf HFIN 4/11/2018 1:30:00 PM
SB 4
Board of Pharmacy BOP 3-22-18 SB32 Support Letter.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
HB 386 Opposition.PDF HFIN 4/11/2018 1:30:00 PM
HB 386
Alaska AMCP letter SB 32.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
HB384 2018-03-29 ATA Comments in Opposition to .pdf HFIN 4/11/2018 1:30:00 PM
HB 384
HB 384 Letter of Opposition - House Finance.pdf HFIN 4/11/2018 1:30:00 PM
HB 384
HB 385 - Sectional Analysis - 4.10.2018.pdf HFIN 4/11/2018 1:30:00 PM
HB 385
SB 32 Alaska Biosimilars one-pager.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB 32 Alaska UNITED Support doc_4.11.18.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
SB 32 Biologicals list under 505 pathway.pdf HFIN 4/11/2018 1:30:00 PM
SB 32
HB 306 CS WORKDRAFT v J.pdf HFIN 4/11/2018 1:30:00 PM
HB 306