VOLUME 12, NUMBER 1               JANUARY 8, 2007

To: Members

From: David Crothers, Executive Vice President

The Association welcomed members of the 60th Legislative Assembly this week in Bismarck. We believe that additional "educational" work will be necessary, as well as our normal activities during the legislative session due to the substantial number of new members. Twenty-three new members began their legislative careers this week.

As you will note in the following pages, legislation has been introduced that will expand rate deregulation from cooperatives and telcos with 8,000 lines or fewer to those with less than 18,000 lines. The Association believes the change is necessary to give the affected companies more regulatory flexibility in the face of increased competition. The regulatory burden experienced by those companies today is identical to those of regulated telephone companies 50 years ago despite the fact that their competitors have virtually no regulation. We are appreciative of the leadership shown by Representative Craig Headland on this issue. Mr. Headland worked hard on the issue and was eloquent in explaining the importance of adopting the changes to his distinguished cosponsors on the legislation.

Representative Headland was also instrumental in authoring HB 1143, which will give additional jurisdiction to the Public Service Commission to allow for "suspension and modification" authority during "interconnection" hearings. North Dakota telephone companies have been told by the Commission that their requests for additional time…even though it is authorized by the Federal Telecom Act…cannot be granted because the legislature has not given the agency that authority. The result has been increased expenses for the Association's member telephone companies.

The Association has also been in discussions with representatives of the counties this week discussing appropriate amounts of compensation for telcos who handle and remit 911 payments, as well as changes to the 911 database. We expect that legislation will be introduced in the coming week, but have not been privy to details of their bill.

In the coming week the Association intends to have a conference call with members of the NDATC Legislative Committee to brief them on legislation and seek direction on specific issues. Serving two year terms on the Legislative Committee will be: NDATC President Brenda Volesky, Paul Schuetzler, Keith Larson, Derrick Bulawa, Jeff Wilson, Kent Klima, Mark Wilhelmi, Hilman Anderson, Jim Newman and Mick Grosz.

If you have any questions, please contact either myself or members of the Associations Legislative Committee. To call your legislator toll free the number is 1-888-635-3447. Bismarck-Mandan residents should call 328-3373. Members of the Legislative Committee can be found at the Association's homepage at www.ndatc.com.

HB 1021- The bill provides authority for the Information Technology Department to increase their ability to borrow money during the biennium. Specifically, it will allow ITD to borrow money from the Bank of North Dakota in the event that e-rate funding is not received from the Schools and Libraries Division of the Universal Service Administrative Company. The Department would have to receive prior approval from the Emergency Commission before borrowing the money.

Jan. 3 Introduced in House.
Jan. 15 Approprations Committee Hearing at 8:30 a.m.

HB 1142- The legislation increases the benchmark for rate deregulation for cooperative and independent telecommunications companies from 8,000 to 18,000 subscriber lines. Currently, all telephone cooperatives and those commercial companies with fewer than 8,000 lines have rate deregulation

Jan. 4 Introduced in House.
Jan. 4 Referred to Industry, Business and Labor Committee.

HB 1143- This proposal would grant additional authority to the Public Service Commission and give the agency the ability to issue "Suspensions or Modifications" when considering rural exemptions. That expanded authority would be limited to Commission's consideration of independent telephone companies' requests for exemptions from interconnection. Although the Federal Telecommunications Act of 1996 envisions State Commissions having the ability to grant suspensions or modifications, the North Dakota legislature has never specifically authorized that jurisdiction for them.

Jan. 4 Introduced in House.
Jan. 4 Referred to Industry, Business and Labor Committee.

HB 1196- Legislation that will prohibit minors from using wireless devices or cellular phones while they are operating a motor vehicle. There are many variations of this legislation throughout the United States and include a mandate to use "hands-free" devices, complete prohibitions for adults as well as minors and complete bans for minors. Similar legislation has been proposed unsuccessfully in North Dakota in the past

Jan. 5 Introduced in House.
Jan. 5 Referred to Transportation Committee.

SB 2008- The appropriations bill for the Public Service Commission. The legislation does not envision great changes from their appropriations bill of two years ago, although it provides for a new employee to handle GIS specialist. The bill again asks for approximately $900,000 to pursue a rail rate case on behalf of North Dakotans.

Jan. 3 Introduced in Senate.
Jan. 12 Appropriations Committee Hearing at 8:30 a.m.