Legislature(2009 - 2010)BELTZ 105 (TSBldg)

02/02/2010 02:00 PM LABOR & COMMERCE


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Audio Topic
02:03:11 PM Start
02:04:44 PM SB175
02:06:33 PM Overview of Broadband in the State of Alaska
03:29:45 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 175 INTERNET ACCESS AUTHORITY/TASK FORCE TELECONFERENCED
Heard & Held
Overview of Broadband in the State of
Alaska
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
          SB 175-INTERNET ACCESS AUTHORITY/TASK FORCE                                                                       
                                                                                                                              
2:04:44 PM                                                                                                                    
CHAIR PASKVAN  announced that  the purpose  of today's  meeting is                                                              
to  discuss  SB  175  and to  hear  a  comprehensive  overview  of                                                              
broadband policy  in Alaska. He  cited US Commerce  Secretary Gary                                                              
Locke's public  statement  last month that  improving "high  speed                                                              
Internet  access  is  the lifeblood  of  today's  economy.  Having                                                              
access  to   the  Internet's   economic  health  and   educational                                                              
benefits  should be  as much of  a fundamental  American right  as                                                              
attending a quality school."                                                                                                    
                                                                                                                                
CHAIR  PASKVAN  said  he  believes  this  fundamental  right  must                                                              
extend  to  all  Alaskans.  He  said  that  three-fourths  of  the                                                              
communities  in  Alaska  have  populations   of  less  than  1,000                                                              
people,  and he  believes that  broadband  technology can  connect                                                              
regions of  Alaska together and can  connect all of Alaska  to the                                                              
world. Broadband  distributes education,  medicine, public  safety                                                              
and economic  opportunities; it provides  the ability in  the 21st                                                              
Century  for rural  Alaska  and  all of  Alaska  to advertise  its                                                              
goods and services within the state and to the world.                                                                           
                                                                                                                                
He said people  need to understand the end-to-end  distribution of                                                              
broadband -  first-mile, middle-mile,  last mile -  and understand                                                              
the  broadband  delivery  modalities  whether  it's  fiber,  radio                                                              
frequency, or satellite.                                                                                                        
                                                                                                                                
CHAIR PASKVAN  said that while  SB 175  is before them,  he didn't                                                              
think there  was a need to  advance legislation in this  area, but                                                              
rather   to   listen   to   the   broadband   opportunities   from                                                              
knowledgeable people  and find out what  is going on in  this area                                                              
in the state.                                                                                                                   
                                                                                                                                
         ^Overview of Broadband in the State of Alaska                                                                      
                                                                                                                                
2:06:33 PM                                                                                                                    
MIKE   BLACK,  Deputy   Commissioner,   Department  of   Commerce,                                                              
Community & Economic  Development (DCCED), said it  was recognized                                                              
by the administration  and the governor that  economic development                                                              
opportunities  are connected  with  the availability  of  reliable                                                              
and high speed broadband.                                                                                                       
                                                                                                                                
He said  for the  past six  years, the  state of  Alaska has  been                                                              
responsible  for  providing  grants  from  the  US  Department  of                                                              
Agriculture  (USDA) Rural  Utilities Services  (RUS) to  companies                                                              
that were expanding  broadband here. Those grants  compared to the                                                              
American  Reinvestment   and  Recovery  Act  (ARRA)   monies  were                                                              
insignificant. With  passage of the  Stimulus Act that  funded two                                                              
nationwide   programs  -  the   National  Telecommunications   and                                                              
Information Administration  (NTIA) and the Department  of Commerce                                                              
and  USDA RUS  program  - with  $7.2 billion,  Mr.  Black said  he                                                              
became much more active in its promotion.                                                                                       
                                                                                                                                
MR. BLACK related  that when the administration  became aware that                                                              
these  grants  would be  provided  to  the  state, they  formed  a                                                              
committee that  included the  Department of Administration  (DOA),                                                              
the  Office  of  Management  and   Budget  (OMB),  the  Regulatory                                                              
Commission  of  Alaska  (RCA), and  the  Department  of  Commerce,                                                              
Community &  Economic Development  (DCCED) to look  into broadband                                                              
issues.  He pointed  out a number  of letters  in their  committee                                                              
packets  from the Governor  to the  agencies  expressing a  lot of                                                              
their opinions.                                                                                                                 
                                                                                                                                
He summarized  that the  State of  Alaska recognized and  reminded                                                              
the  federal agencies  that  if  any state  was  to be  considered                                                              
unserved it  would be this  state and that  Alaska because  of its                                                              
geography  and topography;  and  the extremely  small  communities                                                              
had a  customer base  that in itself  would not attract  broadband                                                              
on   a  commercial   basis.   It's   because   of  the   lack   of                                                              
infrastructure  in rural  Alaska  that much  of  the commerce  one                                                              
sees in  the Railbelt is unavailable  there; broadband  could make                                                              
a huge  difference  for these areas  that are  also suffering  the                                                              
most from  high unemployment  and low  incomes. They also  pointed                                                              
out the  lack of access  to health care  and that telemedicine  is                                                              
really the only  avenue that can provide effective  health care in                                                              
many  parts of  the state.  Even though  the State  of Alaska  and                                                              
health   care   organizations   in  the   state   have   pioneered                                                              
telemedicine, it  still remains  highly unreliable because  of its                                                              
dependency  on satellite  technologies  and communities  sometimes                                                              
are without any service because of satellite malfunction.                                                                       
                                                                                                                                
MR. BLACK  said that conversely  small businesses in  remote areas                                                              
can make  up for their lack  of access to infrastructure  by using                                                              
the  Internet to  market  things  like Native  handcrafts,  trips,                                                              
ecotourism, and B&Bs.  The availability of broadband  would have a                                                              
positive economic benefit.                                                                                                      
                                                                                                                                
Finally,  he repeated the  importance of  broadband in  education,                                                              
which  the  federal  government  recognized by  making  a  special                                                              
arrangement  for  schools to  have  priority access  to  satellite                                                              
bandwidth, but that unfortunately it is still highly limited.                                                                   
                                                                                                                                
2:17:14 PM                                                                                                                    
MR.  BLACK  related  that  the department  began  the  process  of                                                              
working  with its  DC  Office in  understanding  how this  program                                                              
would  be "rolled out."  The state  was given  the opportunity  to                                                              
actually comment  on the individual applications,  but declined to                                                              
do that because  the department might not be the  proper agency to                                                              
judge  the technical  feasibility  of such  applications and  they                                                              
didn't want to lend the Governor's name to winners or losers.                                                                   
                                                                                                                                
He said that they  decided to designate some awards  to the Denali                                                              
Commission because  it can conduct broadband mapping  and identify                                                              
which areas  of the state where  broadband is available.  Also the                                                              
Department  of  Agriculture  awarded  $88 million  to  the  United                                                              
Utilities of  Anchorage for middle-mile  broadband service  for 65                                                              
communities  in the  Yukon Kuskokwim  Delta area  and the  Bristol                                                              
Bay  regions.  A $28-million  award  was  made  for the  Sea  Lion                                                              
Corporation that  serves basically the  same area. So  the reality                                                              
is  that they  have  gotten some  applications  and have  received                                                              
some money under  the programs, but about $4 billion  has not been                                                              
awarded yet.                                                                                                                    
                                                                                                                                
2:20:44 PM                                                                                                                    
SENATOR  BUNDE asked  why two  awards  were given  to groups  that                                                              
served the same area and if they were duplicates.                                                                               
                                                                                                                                
MR. BLACK  answered that  the two  groups have complimentary,  not                                                              
competing,   proposals  for   middle/final   mile  services   that                                                              
basically  distributes   the  broadband  all  the   way  into  the                                                              
households.  However,  the  state   doesn't  have  access  to  the                                                              
complete   proposals,  because   most  of   that  information   is                                                              
proprietary.                                                                                                                    
                                                                                                                                
2:22:15 PM                                                                                                                    
TESSA RINNER,  Director of Programs,  Denali Commission,  said she                                                              
was speaking on  behalf of Craig Johnson, CEO,  Denali Commission,                                                              
on the Commission's  mission, what their efforts have  been in the                                                              
last 10  years of the  existence of the  Agency and  broadband and                                                              
how it  relates to  current broadband  efforts, specifically  with                                                              
regards to the NTIA grant award.                                                                                                
                                                                                                                                
She said the  Denali Commission was  created in 1998 by  an act of                                                              
Congress  to  work on  basic  infrastructure  including  planning,                                                              
design and  construction across  the state, training  and economic                                                              
development  initiatives, and  government  coordination. She  said                                                              
it is important  to note that historically the  Commission has had                                                              
relatively  little  involvement  in the  development  of  advanced                                                              
telecommunications  in Alaska, but  it is specifically  identified                                                              
in their mission in the statute.                                                                                                
                                                                                                                                
MS. RINNER  said that in  the year 2000  the Commission  worked in                                                              
partnership  with  the  University  of  Alaska and  the  state  to                                                              
conduct  a  survey  of  Alaska  communities  that  found  that  60                                                              
percent of  rural communities  had unreliable  dial up  connection                                                              
to  the Internet.  In  2009  the  Governor designated  the  Denali                                                              
Commission as the  entity that would apply for the  funds that are                                                              
available  through  NTIA  to  every  state  to  map  broadband  to                                                              
essentially  determine  the  amount of  unserved  and  underserved                                                              
areas, and  that would in essence  create a broadband map  for the                                                              
country  that  would  be  presented  to  Congress  in  2011.  They                                                              
received $1.8 million for this project.                                                                                         
                                                                                                                                
MS. RINNER  said the Commission  is working with  Connected Nation                                                              
and  the  telecommunications  providers  to on  the  map  project.                                                              
Their  major  role,  however,  is  the  creation  of  a  broadband                                                              
steering  committee  that  has memberships  from  state,  federal,                                                              
telecommunication  providers and  the  Alaska State  Legislature's                                                              
Senator Paskvan. The initial meeting will happen shortly.                                                                       
                                                                                                                                
She said  one of  the items the  commission is  working on  is the                                                              
agreement it  has with  NTIA that  will functionally transfer  the                                                              
funds  to it.  The committee  will have  three primary  activities                                                              
and will  produce three  specific  work products.  One will  be an                                                              
annual  status report  on broadband  in Alaska,  second an  annual                                                              
work  plan that  will  summarize the  state,  private and  federal                                                              
efforts to development  broadband in Alaska and  third, produce an                                                              
annual  research   plan  that  will  provide   recommendations  on                                                              
potential  research needs  in  broadband adoption  technology  and                                                              
other research issues.                                                                                                          
                                                                                                                                
2:27:27 PM                                                                                                                    
One  other  item  the  Commission   will  undertake  shortly  that                                                              
relates to  the award  is working with  UAA's Institute  of Social                                                              
and   Economic  that   will  identify   what   the  benefits   and                                                              
ramifications are of having broadband in Alaska.                                                                                
                                                                                                                                
2:28:05 PM                                                                                                                    
STEVE  SMITH,  Chief  IT  Officer,   University  of  Alaska,  said                                                              
broadband  is  an   infrastructure  for  the  state   that  is  as                                                              
essential  as  roads, health  and  safety.  The University  has  a                                                              
mission to  deliver higher education  to everyone in the  state no                                                              
matter where  they live and  this is very  challenging due  to the                                                              
lack  of  infrastructure  in  many areas.  Just  this  morning  he                                                              
discussed the  challenges that the  Aleutians campus  have because                                                              
their  education centers  that are  located  across the  Aleutians                                                              
are unable  to get online and  use core HR administrative  systems                                                              
and have to find other means to do that.                                                                                        
                                                                                                                                
The University  working together  with the  Denali Commission  and                                                              
the  Institute  of  the North  sponsored  three  audio  conference                                                              
public   briefings   about   the    stimulus   broadband   funding                                                              
opportunities  and held  a  workshop at  the  Anchorage campus  to                                                              
move  this issue  forward.  The biggest  challenge  was finding  a                                                              
"business  case"  that  will  work  for  the  capital  expense  of                                                              
putting in  the infrastructure and  operating it with a  very thin                                                              
population  base. Some carriers  have been  able to leverage  some                                                              
of the  funds for that,  but having enough  capital is  still very                                                              
difficult.                                                                                                                      
                                                                                                                                
MR. SMITH  said he  wanted to work  with them  to build  out those                                                              
networks but  he wasn't  interested in  having a separate  network                                                              
for  the  University.  Broadband   comes  into  the  state  fairly                                                              
easily, but  getting it  out to the  western and northern  regions                                                              
remains a serious challenge.                                                                                                    
                                                                                                                                
2:33:46 PM                                                                                                                    
MR.  SMITH  said  the  federal  stimulus  program  has  emphasized                                                              
working with  "anchor institutions"  like schools, hospitals,  and                                                              
safety and  security entities that  can help bring  broadband into                                                              
small  communities  where  it  can  then  be  spread  out  to  the                                                              
individuals  within  those  communities.  He  explained  that  the                                                              
universities have  been at the forefront of  broadband development                                                              
for  a  number  of  years  and   the  UAA  has  been  active  with                                                              
developing new applications  for the next generation  of Internet.                                                              
He  said the  carriers  have  made use  of  some of  these  anchor                                                              
institutions  when   they  can,  but  the  problem   is  that  the                                                              
subsidies  Mr.  Black talked  about  go  to K-12  schools,  public                                                              
libraries  and rural health.  An unintended  consequence  of these                                                              
subsidies  is   that  they   create  "stovepipes"  for   broadband                                                              
deployment, because  they are very  specific to those  communities                                                              
and others  cannot  make use of  it. For  instance post  secondary                                                              
education  cannot take advantage  of the  education subsidy  which                                                              
is  limited to  K-12. So  students  may graduate  from their  high                                                              
school in  their village, but  not be able  to still live  in that                                                              
village  and take  courses  from  any post  secondary  institution                                                              
that could  be delivered  electronically  because they don't  have                                                              
access to broadband  that would make that available  to them. They                                                              
hope the FCC  will address that  issue when it comes out  with its                                                              
national broadband plan.                                                                                                        
                                                                                                                                
He  said the  University welcomes  the development  of the  Denali                                                              
Commission  task force  and supports  SB  175. A  number of  other                                                              
states have  a broadband task force  or committee and they  have a                                                              
leg  up on  Alaska when  it comes  to  competing for  some of  the                                                              
federal funds  that are  and will  become available for  broadband                                                              
deployment.                                                                                                                     
                                                                                                                                
2:37:36 PM                                                                                                                    
BOB  PICKETT, Chairman,  Regulatory  Commission  of Alaska  (RCA),                                                              
said most of  his comments relate  to his role as the  chairman of                                                              
the Legacy  Broadband Work Group.  The Legacy Groups  were created                                                              
by an  Administrative Order  (AO) in  February 2009  to look  at a                                                              
number of separate  areas in the state and hopefully  come up with                                                              
recommendations  that will  encourage  economic development.  This                                                              
group consists  of representatives  from the Department  of Public                                                              
Safety  (DPS),  AT&T,  Ahtna,  USDA,  ACS,  and  GCI,  with  staff                                                              
support by the Commission.                                                                                                      
                                                                                                                                
He  explained that  when this  group was  formed a  lot of  things                                                              
were up  in the air  - the  stimulus bill just  passed and  it was                                                              
obvious that it  had an emphasis on broadband,  but the definition                                                              
was  not  there.  The  group decided  to  take  advantage  of  the                                                              
medical adage "first  - do no harm."  Most Alaskans  are not aware                                                              
of the  nature of the telecommunications  system in the  state and                                                              
how it  is paid for;  so they would  look at the  physical network                                                              
and  develop  a work  product  that  could provide  some  baseline                                                              
information.  They  looked  at   barriers  to  the  deployment  of                                                              
broadband,    some    potential   legislative    and    regulatory                                                              
considerations,  financing   issues  and  other   mechanisms  they                                                              
thought  would be  helpful in  this mission.   At  the end of  the                                                              
day, the  consensus of the group  was that broadband  is generally                                                              
available in urban  Alaska - in the more populated  areas - not to                                                              
mean that  there are  no problems with  spottiness in  some areas.                                                              
He  remarked  that  Rural  Alaska   may  have  services  that  are                                                              
advertised  as   broadband,  but  their  nature   and  expense  is                                                              
entirely different  than what  is available  in urban  Alaska. And                                                              
he said,  "Let's face  it, the definition  of high speed  Internet                                                              
access has  changed tremendously in  a relatively short  period of                                                              
time."                                                                                                                          
                                                                                                                                
2:41:35 PM                                                                                                                    
He explained  that they  were able  to use only  half of  the $15-                                                              
million  grant,  because  of how  rapidly  the  technologies  were                                                              
changing;  and because the  original legislative  language  was so                                                              
restrictive,  they couldn't  get  the major  telecom companies  to                                                              
come to the  table and even apply.  So their plan is  to step back                                                              
and  let  some of  the  dust  settle  with  some of  the  stimulus                                                              
awards, let  the broadband  mapping activities  continue,  and see                                                              
where they were.                                                                                                                
                                                                                                                                
The "final  mile" in  rural Alaska is  generally not  the problem,                                                              
Mr.  Pickett said,  but it's  the  middle mile  from the  Internet                                                              
node to  the community  itself that  has been  the bottleneck.  He                                                              
didn't  want to  speak for  or against  SB 175,  but instead  said                                                              
there  is value  in  stepping back  and  letting  the dust  settle                                                              
before locking  things into place.  As a regulator he  has learned                                                              
the law of unintended consequences.                                                                                             
                                                                                                                                
2:42:58 PM                                                                                                                    
MR. PICKETT said  he wanted to speak on federal  systems because a                                                              
great  deal of the  funding  - over $210  million  per year  - for                                                              
Alaska's  telecom  system  comes  through  the  federal  Universal                                                              
Service   Fund  (USF).  He   said  the   Commission  made   annual                                                              
certifications to  the FCC for  the funding. The  initial eligible                                                              
telecommunication  carrier   designations  (ETC)  that   are  made                                                              
primarily  to  wireless  carriers  opened  up  the  door  to  that                                                              
subsidy.                                                                                                                        
                                                                                                                                
MR.  PICKETT  said  he thought  new  wireless  technologies  would                                                              
develop to help  fill in the gaps  on the final mile.  He said the                                                              
FCC is  scheduled to come  up with the  federal broadband  plan in                                                              
February,  but it has  been delayed  by about  a month.  There are                                                              
talks  about   reforming  the  federal  universal   service  (FUS)                                                              
mechanism  to  allow  broadband  support;  that is  one  of  those                                                              
things that depending  on the details it sounds  good and actually                                                              
could be  a very  positive development,  but if it  is a  zero sum                                                              
game  at the  expense of  other uses  it could  have some  funding                                                              
impacts on existing telecommunications systems.                                                                                 
                                                                                                                                
Finally, he noted  that the RCA will take up the  topic of issuing                                                              
regulations on  access charge reform  at its meeting  this Friday,                                                              
and the  telecom system  has to  be in place  for that  to happen.                                                              
The regulations  will  be released  for a 30-day  period.  It will                                                              
shape  the  environment  for  the  interrelationship  between  the                                                              
local exchange carriers and the long distance carriers.                                                                         
                                                                                                                                
2:45:46 PM                                                                                                                    
IKE ICARD,  owner, Great  Pacific Cable, said  he is  working with                                                              
the Kodiak  Kenai Cable  Company on  a number  of projects  in the                                                              
state.  He said the  Kodiak Kenai  Cable Company  wants to  extend                                                              
broadband equitably  throughout the state  of Alaska. He  said the                                                              
company was  formed in 2001  and the purpose  at that time  was to                                                              
extend  fiber  optic  telecommunication   capacity  to  the  Kenai                                                              
Peninsula and Kodiak  Island, two areas that represent  roughly 10                                                              
percent  of  the  state's  population  that  hadn't  yet  had  the                                                              
benefit of  real broadband access  even as currently  defined. The                                                              
project  involved   650  miles   of  fiber  optic   cable,  mostly                                                              
submarine installation  extending from the fiber  hub in Anchorage                                                              
with  landings along  the  Kenai  Peninsula -  Kenai  and Homer  -                                                              
Kodiak  Island  -  City of  Kodiak  and  Alaska  Aerospace  Kodiak                                                              
Launch  Complex -  and a  return leg  that came  back from  Kodiak                                                              
into Seward  and back  to Anchorage  over existing overland  fiber                                                              
optic  cable -  for  a  cost of  $37  million. This  provided  the                                                              
first-ever  fiber-based broadband  capacity to  the Peninsula  and                                                              
Kodiak  Island. It  was completed  in 2006  - on  time and  within                                                              
budget  and has  operated flawlessly  ever since  then. The  cable                                                              
company is organized  as a carrier's carrier rather  than entering                                                              
the  retail  market  with services  and  competing  with  existing                                                              
carriers or the local incumbents.                                                                                               
                                                                                                                                
MR.  ICARD  explained  that  the Kodiak  Kenai  Cable  Company  is                                                              
merely a  system builder,  owner and provider  of capacity  to the                                                              
other  carriers; today  all the  major carriers  carry traffic  to                                                              
Kenai and Kodiak  over the fiber of the Kenai  Cable Company. More                                                              
recently  over a year  ago, the  cable company  began work  on the                                                              
Northern  Fiber  Optic  Link  project  (NFOL).  The  Stimulus  Act                                                              
provided an opportunity  to extend capitalized  broadband capacity                                                              
to the vast  majority of western  Alaska, about 40 percent  of the                                                              
geographic area  of the state. He  described that the  system will                                                              
be a fiber optic  cable that extends out of the  southern terminus                                                              
of  fiber  on  Kodiak  Island out  to  the  Aleutian  Islands  and                                                              
Unalaska with landing  points in Bristol Bay and  ultimately up to                                                              
Prudhoe  Bay  (the  northern  most  extent  of  fiber  trunk  line                                                              
capacity  in  Alaska  today).  The   project  is  tailor-made  and                                                              
answers  the  mandates and  specifications  of  the NTIA  and  RUS                                                              
programs that distribute the broadband stimulus funds.                                                                          
                                                                                                                                
2:50:29 PM                                                                                                                    
MR. ICARD  said  they don't  yet have  word on a  grant under  the                                                              
initial round,  but they  were heartened to  see that  the program                                                              
recognizes  the  importance  of   extending  broadband  in  Alaska                                                              
through  a recent grant  to the  Universal Utilities  and  the Sea                                                              
Lion  projects. He  would have  been  more gratified  if they  had                                                              
granted funds  to the  NFOL project. The  project is  moving ahead                                                              
with an aggressive  application under the very  recently announced                                                              
NFOL round 2 funding.                                                                                                           
                                                                                                                                
He  said they  are also  working on  a larger  project that  would                                                              
extend fiber  for the  first time over  the Arctic Circle  between                                                              
landing  points  in  Asia, and  Tokyo,  Japan,  with  intermediate                                                              
landings in  Alaska and  ultimately to  London. The project  would                                                              
be a  substantial improvement  on any existing  telecommunications                                                              
broadband capacity  extending between Asia and Europe  and greatly                                                              
reduce  the  signal  latency  that  is  critically  important  for                                                              
today's commerce.                                                                                                               
                                                                                                                                
He  said  because  they  have  taken   the  position  that  it  is                                                              
critically  important  that  broadband   not  be  limited  to  one                                                              
standard for  rural areas  and another  standard for urban  areas,                                                              
it is  important that  a federal  broadband strategy recognizes  a                                                              
broadband    standard    across    the    board    that    doesn't                                                              
institutionalize  a "sort  of a  divide"  between rural  broadband                                                              
access and that available in urban areas.                                                                                       
                                                                                                                                
He  agreed with  Dr.  Smith that  the  NTIA's  program focuses  on                                                              
anchor  institutions and  that is  partly  a focus  of the  second                                                              
round  of funding.  He agreed  that  while it's  important to  get                                                              
broadband to  the anchor  institutions it  is also important  that                                                              
these funds  be used  more broadly  to service entire  communities                                                              
in the  rural areas.  They also concur  that the subsidy  programs                                                              
have been somewhat "stove piped" in an erratic distribution.                                                                    
                                                                                                                                
2:54:01 PM                                                                                                                    
SENATOR  THOMAS  asked how  much  a  project that  stretches  from                                                              
London to Tokyo costs.                                                                                                          
                                                                                                                                
MR. ICARD answered around $1.2 billion.                                                                                         
                                                                                                                                
SENATOR  THOMAS asked  the payoff  anticipated on  a project  like                                                              
that.                                                                                                                           
                                                                                                                                
MR. ICARD  replied sufficient  to make it  an economic  project on                                                              
its  own. It  is not  a subject  of their  applications under  the                                                              
broadband Stimulus Act.                                                                                                         
                                                                                                                                
CHAIR PASKVAN asked  if the latency issue makes  the Asia, Europe,                                                              
North America program so valuable.                                                                                              
                                                                                                                                
MR. ICARD  answered yes.  He explained  that latency for  existing                                                              
interconnections  between Asia  and Europe  runs on  the order  of                                                              
140-150  milliseconds, and  those  are a  submarine links  through                                                              
the Mediterranean  and Suez  or overland  through Sakhalin  Island                                                              
in Russia.  The Arctic  route provides a  very clean  express lane                                                              
between  Europe and  Asia  and it  would  provide  a gateway  into                                                              
Alaska through a regeneration station at Prudhoe Bay.                                                                           
                                                                                                                                
2:56:37 PM                                                                                                                    
BRENT  LEGG,   Director,  [indisc.]  Relations   and  Development,                                                              
Connected  Nation,  said  it  is  the  parent  organization  of  a                                                              
subsidiary  nonprofit  they  have  established  in  Alaska  called                                                              
Connect Alaska. They  are primarily based in two  different places                                                              
in  the Lower  48  and  Washington, D.C.  as  well  as in  Bowling                                                              
Green,  Kentucky.  Their  mission  is primarily  to  generate  and                                                              
support economic  development through  the expansion  of broadband                                                              
availability  and by increasing  the broadband  adoption  rates in                                                              
areas  where broadband  is available.  The  Denali Commission  has                                                              
selected  Connect  Alaska  to  partner   with  them  in  order  to                                                              
implement  the broadband  mapping and  data collection  processes.                                                              
They are  the recipient through  the Denali Commission of  a grant                                                              
which  provides  a  total  of  $1.9  million  for  broadband  data                                                              
collection,  mapping activities  as  well  as planning  activities                                                              
and  the  implementation  of  the   steering  committee  that  was                                                              
discussed.  Specifically,   the  broadband  data   collection  and                                                              
mapping  services  total  about  $1.4 million  out  of  that  $1.9                                                              
million.                                                                                                                        
                                                                                                                                
MR. LEGG  said the objectives of  the mapping project are  to form                                                              
strong  working  relationships  with  all  of  Alaska's  broadband                                                              
providers  and to  support an  environment of  public and  private                                                              
sector collaboration  on broadband issues among  all stakeholders.                                                              
They  believe  that  the  steering  committee  the  Commission  is                                                              
forming  will do  just that.  They are  also going  to create  and                                                              
maintain  the state's  first maps  of broadband  coverage and  use                                                              
them  to   help  accurately   pinpoint  any   gaps  in   broadband                                                              
availability   both  in   terms  of   last-mile  and   middle-mile                                                              
connectivity.  They  are  also   going  to  assess  the  level  of                                                              
connectivity  currently  provided  to  Alaska's  community  anchor                                                              
institutions,  a   term  that  the  federal  government   uses  to                                                              
identify   schools,   libraries,   hospitals,   local   government                                                              
agencies,  et  cetera.  They  are  also going  to  work  with  the                                                              
steering  committee to  route  the course  of  its existence.  The                                                              
initial  broadband  mapping and  data  collection  is intended  to                                                              
produce an initial  map and then keep it updated  for at least two                                                              
years  with  the possibility  of  an  extension from  the  federal                                                              
government up to five years.                                                                                                    
                                                                                                                                
3:00:03 PM                                                                                                                    
The  map will  be an  evolving  document and  they  will have  the                                                              
opportunity to  refine it over time.  It will be available  to the                                                              
public via the Connectak.org website.                                                                                           
                                                                                                                                
He  said they  are  currently beginning  the  outreach process  to                                                              
Alaska's  broadband provider  community  -  including DSL,  cable,                                                              
fixed wireless,  mobile cellular wireless, fiber  to the premises,                                                              
as well  as the state's middle-mile  connectivity providers  - and                                                              
that  will  happen  over  the  next two  months  or  so  with  the                                                              
ultimate goal of  releasing the first broadband map  for the state                                                              
sometime  between the end  of March  and the  end of April.  These                                                              
deadlines  are set  as part of  the DCCED's  NTIA state  broadband                                                              
data development grant program goals.                                                                                           
                                                                                                                                
MR.  LEGG   said  each   provider  would  be   asked  to   sign  a                                                              
nondisclosure  agreement  which  will  protect each  of  them  for                                                              
proprietary  and confidential  data.  That data  will  be used  to                                                              
create  a  visual  depiction  of  broadband  service  availability                                                              
which will  be applied to a  GIS-based map. Once the  agreement is                                                              
executed with  each of the providers,  the mapping team  will work                                                              
to  transfer the  data  to them  in a  useable  format. Once  that                                                              
transfer process  is complete and a visual depiction  of broadband                                                              
service  availability has  been depicted  and placed  onto a  GIS-                                                              
based map, each  provider will have an opportunity  to approve the                                                              
map  before   the  information   is  applied  to   the  aggregated                                                              
statewide map and before that map is released publicly.                                                                         
                                                                                                                                
MR. LEGG said  once the map is  complete, it will be  available to                                                              
the   public  via   an  interactive   address  searchable   online                                                              
application  called "broadbandsat,"  which will  be available  via                                                              
the  Connectak.org  website.  Per  the  federal  notice  of  funds                                                              
availability   that  governs   the   state   broadband  data   and                                                              
development  grant  program,  they  are  required  to  submit  the                                                              
overall  collected  data to  NTIA  at the  census  block level  of                                                              
detail  according  to established  deadlines.  That  data will  be                                                              
submitted  to NTIA  sometime between  the end  of March and  April                                                              
and  be continuously  updated  every  two years,  and  up to  five                                                              
years if  NTIA chooses  to make  those remaining funds  available.                                                              
Their engineering  and technical  services  division will  work to                                                              
validate the data  that is represented on the map  and insure that                                                              
it is  accurate. They  will also  be inviting  public scrutiny  of                                                              
the map  to insure  that it  is accurate  and the  public will  be                                                              
able to provide  feedback on their website. The  inquiries will be                                                              
aggregated and they will all be addressed as they come in.                                                                      
                                                                                                                                
MR.   LEGG   explained   that   the   "broadbandsat"   interactive                                                              
application will  allow the public  and the steering  committee to                                                              
search  for   and  identify  broadband   service  at   a  specific                                                              
location;  if  addresses  are  available,  they will  be  able  to                                                              
search for  connectivity at a  specific address.  That information                                                              
will  include available  speeds and  service provider  names at  a                                                              
specific location.  Satellite imagery  will be available  in cases                                                              
where street  addresses don't exist.  Users will be able  to apply                                                              
a satellite  view on  the map and  see where individual  buildings                                                              
and  structures are  located. This  will also  allow the  steering                                                              
committee  to  understand  and  track  broadband  deployment  over                                                              
time. It  will allow them to  analyze and prioritize  unserved and                                                              
underserved   areas  using   population   and  household   density                                                              
information.  It  will  also  allow them  to  track  "Act"  funded                                                              
broadband projects  and to  build and  evaluate scenarios  to help                                                              
score and  prioritize future  broadband infrastructure  proposals,                                                              
and allow  them in  partnership with the  University of  Alaska to                                                              
track   broadband  adoption   rates  and   barriers  to   adoption                                                              
community by community over time.                                                                                               
                                                                                                                                
3:07:30 PM                                                                                                                    
MR.  LEGG  said they  are  very  excited  to  be engaged  in  this                                                              
partnership; it  is going to  be a very  intense project  over the                                                              
next couple  of months,  and it will  be customizable  to Alaska's                                                              
very unique needs.                                                                                                              
                                                                                                                                
3:08:00 PM                                                                                                                    
MARTIN  CARY, Vice  President, GCI,  said in  August 2009  through                                                              
its wholly-owned  subsidiary, United Utilities, applied  for a RUS                                                              
grant  to  build  a  system  throughout  southwest  Alaska.  Their                                                              
application was  funded for  an $88 million  project with  a 50/50                                                              
grant/loan (that GCI is guaranteeing) ratio.                                                                                    
                                                                                                                                
The  project  is   called  "Tariff  Southwest,"  and   it  is  the                                                              
beginning  of the  implementation of  GCI's statewide  terrestrial                                                              
vision,  which is  to move  as much  of  rural Alaska  off of  the                                                              
satellite  and  onto  terrestrial  facilities  as  possible.  This                                                              
project  is enabling  them  to take  those  first  steps. It  will                                                              
interconnect 65  villages in the  Bristol Bay and  Yukon Kuskokwim                                                              
(YK) regions,  Dillingham  and Bethel.  It is  a combination  of a                                                              
hybrid  fiber  system and  microwave  network  and will  serve  22                                                              
villages  in the  Dillingham  region  and 43  villages  in the  YK                                                              
Delta.                                                                                                                          
                                                                                                                                
He explained  that today GCI  owns a microwave  system in  YK that                                                              
is  essentially  a  broadband  island;  it  has  very  high  speed                                                              
connectivity, but  it needs  to connect to  the rest of  the world                                                              
via  satellite.  The  Terra  Southwest project  is  now  going  to                                                              
enable  them  to build  a  fiber  system  from Anchorage  down  to                                                              
Homer,  across Cook  Inlet  up over  the  mountains, down  Iliamna                                                              
Lake  and ultimately  around  the  corner interconnecting  to  the                                                              
Delta  network  and  moving  all   of  that  traffic  off  of  the                                                              
satellite  and onto  fiber and  microwave systems.  Along the  way                                                              
they will be  interconnecting those 22 villages  in the Dillingham                                                              
region.                                                                                                                         
                                                                                                                                
3:11:28 PM                                                                                                                    
MR. CARY said work  began on the system in 2009  and the year 2010                                                              
will be spent  primarily on engineering logistics,  permitting and                                                              
an  upgrade  of   the  Delta  net  system  to  get   it  ready  to                                                              
interconnect  with  the  main  backbone  that will  head  back  to                                                              
Anchorage.  In 2011  about half  of  the microwave  sites will  be                                                              
constructed  and the  fiber cable  will be laid  from Levelock  to                                                              
Pile Bay  at the  end of  Lake Iliamna  and then to  Williamsport.                                                              
Then  in 2012,  final  construction of  the  microwave sites,  the                                                              
underwater   system  that   will  be   interconnecting  Homer   to                                                              
Williamsport,  will  be  brought   on  line  and  at  that  point,                                                              
terrestrial  broadband service should  be available  to all  65 of                                                              
those communities.                                                                                                              
                                                                                                                                
3:12:33 PM                                                                                                                    
GCI is  committing to at  least 100 megabits  of capacity  to each                                                              
community  and residents  should  be able  to enjoy  multi-megabit                                                              
Internet service  with very  low latency as  a result of  being on                                                              
the ground as opposed  to being on the satellite.  The region will                                                              
have improved  telemedicine services,  improved distance  learning                                                              
services,    more    opportunity   for    the    University-system                                                              
organizations   like  AVTEC  to   deliver  services   directly  to                                                              
people's  homes. They  are hoping  for economic  development as  a                                                              
result  of broadband  deployment  into  these communities  and  an                                                              
overall  better quality  of  life.  He said  the  system would  be                                                              
serving about 35,000 residents.                                                                                                 
                                                                                                                                
3:14:37 PM                                                                                                                    
JASON OLSON, Director,  Regulatory Issues, AT&T Alaska,  said they                                                              
are committed to  expanding broadband across the  US; they believe                                                              
that  Internet has  "the  ability to  transform  our society,  our                                                              
economy  and our  way of  life." He  said that  AT&T has  invested                                                              
over $140  million in the state  of Alaska between 2006  and 2008,                                                              
and in  2009 they spent  tens of millions  to add in excess  of 20                                                              
new cell  sites throughout  Alaska with  more sites being  planned                                                              
in 2010. He said  AT&T continues to roll out its  third generation                                                              
(3G)  mobile broadband  network  and has  significant 3G  coverage                                                              
already in Anchorage, Fairbanks and Juneau.                                                                                     
                                                                                                                                
It  has  been  AT&T's experience  that  consumers  not  only  want                                                              
broadband,  but   demand  that  it  be  mobile.   Following  these                                                              
industry  trends,  AT&T has  supported  the deployment  of  mobile                                                              
broadband   in  Alaska.   Rural  Alaska   is  probably  the   most                                                              
challenging place in  the US to achieve this  development. He said                                                              
that  AT&T  looks  forward  to   working  with  all  the  industry                                                              
participants to address Alaska's broadband needs.                                                                               
                                                                                                                                
3:17:49 PM                                                                                                                    
TED MONINSKI, ACS  Broadband Team, said that ACS  is an integrated                                                              
and diversified  communications  company that operates  throughout                                                              
Alaska.  Their wireless  communications history  began many  years                                                              
ago,  but around  2004  is when  ACS  deployed  its CDMA  wireless                                                              
platform and  began deploying its  3G broadband wireless  service.                                                              
At  that time,  Alaska, Fairbanks,  and  Juneau joined  Washington                                                              
D.C. and  San Diego, California,  in being the first  markets that                                                              
were  EVDO [Evolution  Data Optimized]  broadband  capable in  the                                                              
country.                                                                                                                        
                                                                                                                                
3:19:46 PM                                                                                                                    
In  subsequent  years,   ACS  has  expanded  its   EVDO  to  other                                                              
locations  in  Alaska including  Kenai,  Soldotna,  Homer,  Sitka,                                                              
North  Pole,  Dead Horse  and  Kuparek.  More recently  they  have                                                              
invested hundreds  of millions of  dollars to both acquire  and to                                                              
build  undersea   cable  systems   for  high  speed   connectivity                                                              
throughout  the  state.  Their   instate  network  has  also  been                                                              
expanded  and   upgraded  to  provide  fiber   optic  connectivity                                                              
between Anchorage  and Fairbanks  and between Anchorage  and Homer                                                              
to  facilitate the  Internet  hand off  handoffs  to the  undersea                                                              
fiber  systems that  take the  Internet  traffic to  the Lower  48                                                              
Internet peering locations.                                                                                                     
                                                                                                                                
He said  that most providers would  agree that the  cost effective                                                              
way  to advance  broadband  Internet  access is  through  wireless                                                              
technology.  As a  result  ACS is  exploring  4G technology  which                                                              
should  be available  in  the next  several  years.  It has  great                                                              
potential  to   deliver  several   times  the  current   level  of                                                              
bandwidth.                                                                                                                      
                                                                                                                                
Where  feasible,  he  said,  ACS  deploys  its  infrastructure  to                                                              
enhance  both within  and  between  communities,  but rural  areas                                                              
remain  a  challenge. He  said  that  4G  "backhaul" would  be  as                                                              
equally constrained  to the  extent that  the only opportunity  to                                                              
get from  the customer to the  Internet peering location  is via a                                                              
satellite  connection.   The  challenges  are  driven   mainly  by                                                              
economics  and the  typical lack  of "business  cases" that  would                                                              
support the  cost of investment to  build the networks.  It is not                                                              
just  construction costs,  but the  operations costs,  as well.  A                                                              
combination  of   these  costs   is  typically  going   to  exceed                                                              
forecasted  revenues.  On top  of  that, a  lack  of adequate  and                                                              
affordable  backhaul  between  very   rural  communities  and  the                                                              
Anchorage,  Fairbanks,   and  Juneau   hubs  poses   the  greatest                                                              
challenge.                                                                                                                      
                                                                                                                                
MR. MONINSKI  noted that many  tasks and  goals in SB  175 overlap                                                              
the current activities  that have been undertaken by  the FCC, the                                                              
NTIA,  the  RUS,  the Denali  Commission  and  the  University  of                                                              
Alaska.  To some  extent  the  role and  mission  of  the two  new                                                              
entities  that   are  proposed   by  the  legislation   also  have                                                              
overlaps. He  encouraged them to  analyze them carefully  to avoid                                                              
duplications where possible.                                                                                                    
                                                                                                                                
3:23:48 PM                                                                                                                    
He said a  reference to the "Internet cost  equalization program,"                                                              
in  Section  2 was  unclear  and  needed  to be  clarified.  Also,                                                              
pursuing   a  "dial-up   connectivity   objective"   is  a   dated                                                              
technology  and does  not produce  a broadband  connection to  the                                                              
Internet. But,  he said, while  dial up is  unlikely to get  a lot                                                              
of attention  or a lot or  resources going forward,  the broadband                                                              
goals in  the legislation  are commendable. But  to say  that they                                                              
can be  achieved within the next  five years simply  doesn't speak                                                              
to  those underlying  economic  impediments  that  he referred  to                                                              
earlier.                                                                                                                        
                                                                                                                                
MR.  MONINSKI said  if  the costs  of  deployments  are funded  by                                                              
grants and  ongoing operating  expenses are  supported by  federal                                                              
or   state  universal   service  programs,   the  private   sector                                                              
providers  will   likely  be  incented   to  deploy   and  operate                                                              
broadband  that works  to most  rural locations.  The converse  is                                                              
true,  though,  that  if  that  funding  is  not  available  those                                                              
incentives  simply won't  exist.  Current  revenue forecasts  that                                                              
support  infrastructure  investment   are  sustainable  only  with                                                              
grant  and  loan   funding  and  universal  service   support.  He                                                              
explained  that the current  federal universal  service system  is                                                              
supported  by a series  of surcharges  that are  paid by  business                                                              
customers and consumers;  it is currently 14 percent  and growing.                                                              
Also  a  considerable  amount of  pushback  from  communities  and                                                              
policy makers  throughout  the country exists  that would  suggest                                                              
people  believe that  the  fund is  growing  too large;  so it  is                                                              
unclear if current support mechanisms can continue to grow.                                                                     
                                                                                                                                
3:27:02 PM                                                                                                                    
MR. MONINSKI  stated that absent  such multi-level support  on the                                                              
deployment  and the  operations,  the state  could  at some  point                                                              
face the alternative  that it might have to support  some of these                                                              
networks, particularly  the middle mile that aggregates  the rural                                                              
traffic and gets  it to the urban hubs and then  down to the Lower                                                              
48.                                                                                                                             
                                                                                                                                
3:29:45 PM                                                                                                                    
CHAIR PASKVAN thanked  everyone for their comments  and finding no                                                              
further business  to come before  the committee, he  adjourned the                                                              
meeting at 3:29.                                                                                                                

Document Name Date/Time Subjects
SB 175 Bill Packet.pdf SL&C 2/2/2010 2:00:00 PM
SB 175
Overview of Broadband Vol I.pdf SL&C 2/2/2010 2:00:00 PM
Overview of Broadband Vol II.pdf SL&C 2/2/2010 2:00:00 PM
Overview of Broadband Vol III.pdf SL&C 2/2/2010 2:00:00 PM