VOLUME 10, NUMBER 2                JANUARY 17, 2003

To: Members

From: David Crothers, Executive Vice President

The fifty-eighth Legislative Assembly got off to a torrid start this week with committee hearings on eight telecommunications related matters, including the State's efforts to bypass local telecom providers by offering videoconferencing directly to the public (SB 2042). In addition, several new bills were introduced.

Also, many of the Public Service Commission's prefiled bills were heard by the House's Industry, Business and Labor Committee during the week. Those measures included proposals to require resellers to register annually, establish $100 fees for all regulated utilities in the State, redefine who must provide "essential services" and expand the Commission's jurisdiction over numbering issues and the scope of their orders.

Early in the week the Association testified before the Senate Education Committee that offering telecommunications services directly to the public in competition with private providers was bad policy and would lead to decreased investment in North Dakota infrastructure. Members of the Association believe that a possible compromise was achieved mid-week when the Committee adopted an amendment to remove the provision allowing sales to the public. Committee members eventually gave SB 2042 a "Do Not Pass" recommendation, as amended, after a vote to give it a "Do Pass" recommendation failed. While the Association was pleased with the amendment, it still must survive a vote on the floor, which is usually a formality.

The Association also testified against a measure in the Senate that established a complicated matrix of customer notification laws when governmental regulations, changes in terms or conditions or price changes lead to any increases (SB 2116). The Association distributed telephone company newsletters, inserts and newspaper advertisements demonstrating how we were doing this already and that additional governmental regulation was unwarranted.

We were also extremely gratified by the outstanding turnout at the Association's Legislative Dinner in Bismarck on Tuesday. Following meetings by the organization's board of directors and legislative committee, over 275 legislators, elected executive branch officials, legislative staff, guests and independent telephone directors and managers had an opportunity to socialize and discuss telephony in North Dakota.

The Association also anticipates additional telecommunications-related bills will be introduced in the near future, including Qwest's efforts to eliminate the Essential Telecommunications Price Factor (ETPF) from State law. Also, the attorney general's Do Not Call list measure should be introduced sometime next week. This week there were two pieces of legislation of note. First, supporters of the soil testers introduced a bill (HB 1314) that would lower the depth that excavators and others can dig without calling North Dakota One Call to 24 inches, from its current 18 inches. Second, a proposal to prohibit telecommunications company from selling customer information or profiles to other companies (HB 1284).

If you have questions regarding any of the telecommunications legislation included in this report or thoughts on our approach to an issue, please contact me. Also, we will be posting Association position papers, as well as some testimony, that were approved by the Legislative Committee on our website by early next week.

HB 1022 The legislation provides for the Information Technology Department's two-year appropriation, as well as allowing the State to sell $20 million in bonds to fund ConnectND. The Information Technology Department is requesting $108.1 million for the biennium and anticipates recovering $97.6 million in revenues.

Jan. 7 Introduced in House.
Jan. 7 Appropriations Committee Hearing.
Jan. 16 Appropriations Committee Hearing.

HB 1043 The bill seeks to resolve a number of issues for administering the Information Technology Department (ITD) regarding the date State agencies must submit their "technology plans" to ITD, eliminates obsolete microfilm units and eliminates the State Information Technology Advisory Committee. The Committee's role is to advise ITD regarding statewide information technology planning, including providing electronic government services for citizens and businesses, developing technology infrastructure to support economic development and workforce training, and developing other statewide information. This bill also expands the authority of ITD to purchase, finance or lease "implementation services" to carry out their mission.

Jan. 7 Introduced in House. Referred to Government and Veterans Affairs Committee.

HB 1052 The proposal reflects the agreement between Qwest and the Public Service Commission to monitor the telephone company's compliance obligations in providing interstate long distance services. Before Qwest was allowed to provide those long distance services they demonstrated to the Public Service Commission their compliance with a 14 point checklist determined by the Federal Communications Commission. This legislation established a Performance Assurance Plan, which will be used by the Public Service Commission to monitor the operation and effect of Qwest's entry into the interstate market.

Jan. 7 Introduced in House.
Jan. 9 Industry, Business and Labor Committee Recommended "Do Pass", 14-0.
Jan. 10 House Passed 89-1.

HB 1053 The proposal sought to continue the life of the Regulatory Reform Review Commission (RRRC) through December 31, 2004. The RRRC's authority to exist ended on the last day of December 2002 and needed to be reinstated by the legislative body. The 5 person Commission is designed to review ongoing telecommunications developments, both legislative and regulatory, and report back to the full legislature with recommendations for preserving and advancing telecommunications services for the State's citizens.

Jan. 7 Introduced in House.
Jan. 13 Industry Business and Labor Committee Recommended "Do Not Pass", 14-0. Jan. 14 House Defeated 89-1.

HB 1105 Legislation introduced at the request of the Tax Commissioner to amend and clarify telecommunications taxation laws. Among the changes is language to include mobile wireless carriers in the tax statute, refund procedures for telephone companies and customers, and gives the Tax Commissioner discretion to waive penalties.

Jan. 7 Introduced in House.
Jan. 4 Finance and Tax Committee Recommended "Do Pass", 13-0.
Jan. 15 House Passed 91-0.

HB 1132 A bill that would require resellers of telecommunications services to acquire an annual license each year before they would be allowed to do business in the State of North Dakota. Public Service Commissioners Wefald and Clark testified that the measure was necessary to monitor which resellers were still offering service in the State. Position Papers

Jan. 7 Introduced in House.
Jan. 6 Industry, Business and Labor Committee Recommended "Do Pass", 12-1.

HB 1133 Legislation introduced at the request of the Public Service Commission that would require each telecommunications company, electric utility, gas utility and pipeline utility to pay the PSC a $100 fee annually. The PSC estimates 650 utilities would be subject to the measure. The Association testified against the proposal and told committee members that there should be some demonstration of need for the money. The bill, as written, would require the monies to be deposited in the States general fund. Position Papers

Jan. 7 Introduced in House.
Jan. 14 Industry, Business and Labor Committee Recommended "Do Pass", 11-2.

HB 1134 In North Dakota, it is law that customers have the right to purchase "essential telecommunications services" separate from other telecom services that a telephone company offers. Under this proposal, only telephone companies that "provides essential telecommunications services" must be required to offer essential services only.

Jan. 7 Introduced in House.
Jan. 14 Industry, Business and Labor Committee Recommended "Do Pass", 14-0.

HB 1135 The Public Service Commission in this bill is requesting the authority to resolve numbering issues such as the recent implementation of 211 (Mental Health), 511 (State Transportation) and future N11 assignments, as well as jurisdiction over future area codes. Separately, the Commission also seeks to have language dropped that limits their authority to impose obligations on telephone companies that are greater or different than Federal obligations. The Association has joined Qwest in opposition to the Commission's attempt to expand the scope of their rulemaking. Position Papers

Jan. 7 Introduced in House.
Jan. 14 Industry, Business and Labor Committee Hearing.

HB 1284 Legislation that would prohibit telecommunications companies from selling or disclosing information, including any profiling information, about their customers. Telecommunications companies that violate the proposed law would be subject to both criminal and civil prosecution.

Jan. 13 Introduced in House. Referred to Industry, Business and Labor Committee.

HB 1314 A bill to expand the North Dakota One Call ( Call Before You Dig) law to exempt excavations down to a depth of 24 inches. Under the current law, a excavator can only dig to 18 inches before calling North Dakota One Call. Additionally, sponsors of the bill have also added language that would allow excavations down to a depth of 18 inches in the right- of-way of a road or highway. The Association believes that sponsors of the bill are responding to the requests of soil testers operating in the
State who take many, many samples from a single field.

Jan. 13 Introduced in House.
Jan. 24 Political Subdivisions Committee Hearing.

SB 2008 The two-year appropriation for the North Dakota Public Service Commission (PSC). The Commission is asking for $10.1 million and anticipates income of $6.1 million during the biennium.

Jan. 7 Introduced in Senate.
Jan. 20 Appropriations Committee Hearing.

SB 2042 A bill introduced at the request of the Information Technology Department (ITD) that would allow school districts or institutions of higher learning to allow members of the public to use State facilities for "videoconferencing or associated network services" when a private provider is unavailable and allowing the access "does not inhibit future private provider service." The Association testified against the proposal and said it was bad public policy for government to compete against private enterprise. Position Papers

Jan. 7 Introduced in Senate.
Jan. 13 Education Committee Recommended "Do Not Pass", As Amended, 4-2.

SB 2064 A State Radio proposal that requires fees collected under the 911 wireless provisions of State law to be charged and paid to the political subdivisions that enter into contracts with State Radio. Current statutes allow counties with fewer than 20,000 residents to receive their 911 service from State Radio. Today, there are 23 Public Safety Answering Points (PSAP's) in the State. An additional 22 counties have their calls answered by State Radio. A representative from the Association of Counties testified that Phase I, which will give the wireless telephone
number and location of the tower, to be operational by mid-summer 2003.

Jan. 7 Introduced in House.
Jan. 15 Industry, Business and Labor Committee Recommended "Do Pass", 7-0.

SB 2116 Legislation introduced at the request of the Public Service Commission (PSC) that would require local telecommunications companies, as well as providers of intrastate telecommunications services a notice to customers any time there is a price increase. Local telcos would be required to give notice at least fifteen days beforehand if there is an increase of more than 1 percent for essential local exchange service, as well as a 1 day notice if there is in increase of more than 5 percent for any nonessential local exchange service. Providers of intrastate service would be required to give any presubscribed customer a 1 day notice if there was a change in the terms or conditions of that service that results in a price increase. The Association testified against the measure and told members of the committee that local telephone companies and North Dakota Long Distance has an outstanding record of notifying customers of changes in their telephone bills. Position Papers

Jan. 7 Introduced in Senate.
Jan. 15 Industry, Business and Labor Committee Hearing.

SB 2117 This proposal is captioned as modifying the jurisdiction of the Public Service Commission to assess costs to public utilities for their rate hearings, but the language limits the PSC authority to rate proceedings affecting gas or electric public utilities. It is not applicable to the telephone industry.

Jan. 7 Introduced in Senate.
Jan. 15 Industry, Business and Labor Committee Hearing.

SB 2192 Legislation that extends the immunity from liability that telephone providers receive when providing access to emergency systems to include automated notification systems. Those systems are identified as, "a telecommunications system that provides rapid notice of emergency situations to the public through a public safety answering point." The
immunity is also extended to public agencies, public safety agencies and wireless providers, as well as employees and agents of those entities. The immunity does not exist in instances of willful misconduct or gross negligence.

Jan. 13 Introduced in Senate. Referred to Judiciary Committee.