VOLUME 12, NUMBER 12             MARCH 23 , 2007

To: Members

From: David Crothers, Executive Vice President

Today marks the final day of a critical juncture of the Sixtieth Legislative Assembly with the requirement that all bills and resolutions be reported out of committee by the end of business today.  All bills must be forwarded to the floor with all of their amendments and a recommendation by the committee of jurisdiction.

The deadline is important for members of the Association, as well.  As you will recall, members of the Association have been advocating amendments to the Northern Tier Network that will ensure that the taxpayer-funded University System does not begin competing with Dakota Carrier Network or any other telecommunications company for traffic that should be carried by private providers.

The amendments crafted by Senator Randy Christmann of Hazen are very narrowly tailored to achieve that goal.  It will still allow the University System to carry the research data they want to carry, but prohibit them from putting other traffic on the network.  We anticipate that it is going to be a difficult fight.  There are members of the Senate Appropriations Committee who live in university legislative districts and others who just think it is a good idea.  The Association is working very hard to demonstrate that government-sponsored competition with the private sector is always a bad idea.

Finally, as you review the following pages of the Legislative Report you will note that virtually all of the other pieces of legislation have been resolved.  With the passage of the E-911 bill (SB 2159) on Wednesday by the House of Representatives there are no more bills whose outcomes affect the telecommunications industry.  The Association was very gratified to get the legislation through both houses with the 5 percent independent telcos receive for administering the fund and the “two business days” language for reporting subscriber changes to the database.

It has been a tremendous session to date for the customers and members of independent telecommunications companies in the State of North Dakota.  Each of the objectives set out by the Association’s board of directors at the beginning of the session has been met and surpassed.  However, the amendment to the Northern Tier Network is of critical importance and the Association will devote 100 percent of its time to it until the legislature adjourns the third week of April.

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 1003- The legislation is the appropriations bill for all of the institutions of higher learning in the State, as well as the board of higher education.  While the independent telephone industry does not advocate positions regarding the level of spending we are concerned about a provision within the bill to fund northern tier network, which is sometimes called “Internet2”.  Northern Tier Network is reported to be a “research” network for institutions of Higher learning in the State.  The Association believes that the scope of that network’s use should be limited to “research” and not available for the universities to resell to private users, make available to their student bodies or migrate other university telecom traffic to it.

Jan. 3 Introduced in House.
Feb. 15 Appropriations Committee Recommended "Do Pass", as Amended, 23-1.
Feb. 15 House Passed 65-26
Feb. 21 Introduced in Senate.
Mar. 1 Appropriations Committee Hearing.

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.
Feb. 13 Approprations Committee Hearing.
Feb. 15 House Passed 76-16.
Feb. 21 Introduced in Senate.
Mar. 7 Appropriations Committee Hearing.

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. 15 Industry, Business and Labor Committee Recommended "Do Pass" 13-1.
Jan. 19 House Passed 91-0.
Feb. 13 Introduced in Senate.
Feb. 26 Industry, Business and Labor Committee Rocommended "Do Pass" 7-0.
Mar. 1 Senate Passed 46-0.
Mar. 6 Signed by Governor.

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. 15 Industry, Business and Labor Committee Recommended "Do Pass" 14-0.
Jan. 19 House Passed 88-3
Feb. 13 Introduced in Senate.
Feb. 26 Industry, Business and Labor Committee Recommended "Do Pass" 7-0.
Feb. 27 Senate Passed 46-0.
Mar. 7 Signed by Governor.

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.
Feb. 5 Transportation Committee Recommended "Do Not Pass", as Amended, 10-2.
Feb. 7 House Defeated 21-70.

HB 1226- A proposal to prevent certain nonprofit organizations from having ownership interests in for-profit organizations that competes with other for-profit companies. The legislation is specifically directed at those non-profits registered with the IRS under Section 501(c) (3), 501(c)(10), 509(a)(1), 509(a)(3), or a trust described in Section 4947 for which a deduction is allow-able under Section 170. The legislation mandates that an entity organized under one of these sections and that directly or indirectly receives Federal, State, or local tax revenues may not have an ownership interest in for-profit companies. Members of the NDATC Legislative Committee reviewed the bill thoroughly and expressed their concerns over any potential impact it may have on any of the entities that telephone cooperatives use to deliver services in North Dakota. Members of the Association were pleased during the bill's committee hearing when its sponsor, George Keiser (R-Bismarck) asked that it be converted into a study resolution.

Jan. 8 Introduced in House. Referred to Political Subdivisions Committee.
Jan. 12 Request Return from Committee.
Jan. 12 Rereferred to Industry, Business and Labor Committee.
Jan.30 Industry, Business and Labor Committee Recommended "Do Pass", as Amended, 12-1.
Feb. 5 House Passed 82-9.
Feb. 13 Introduced in Senate.
Mar. 1 Industry, Business and Labor Committee Recommended "Do Pass" 4-2.
Mar. 2 Senate Defeated 34-11.

HB 1316- Legislation introduced to add additional protection to a consumer's telephone records. The language will make it illegal for someone to attempt to procure another person's telephone records without the permission of the telco's customer. It will also make it illegal to sell or attempt to sell another's telephone records. The proposal seems to be an attempt to avoid the problems that arose during the Hewlett-Packard "pretexting" scandal in California in 2006. Of concern to the Association is language that will impose obligations on telecom companies to develop policies and constraints on the use of customer information. The Association was extremely pleased this week when the sponsor of the bill, Representative Lois Delmore (D-Grand Forks) appeared before the Committee and asked that the proposal be converted into a study resolution.

Jan. 8 Introduced in House.
Jan. 30 Industry, Business and Labor Committee Recommended "Do Pass", as Amended, 13-0.
Feb. 5 House Passed 81-9.
Feb. 13 Introduced in Senate.
Feb. 26 Industry, Business and Labor Committee Recommended "Do Not Pass" 4-2.
Mar. 1 Senate Defeated 39-7.

HCR 3026- A resolution that asks the Legislative Council and members of the legislature to study the appropriateness of implementing fines and other civil penalties for violating North Dakota's One-Call statutes. There has been discussion within the one-call community for many years regarding the inability of anyone to fine violators of the "call before you dig" rules without any resolution of the problem. In fact, members of the One-Call board of directors originally had a bill draft circulating that would have given themselves the ability to issue fines. A further provision made the State responsible for defending the board in courts of law. That idea was not very warmly received.

Jan. 25 Introduced in Senate. Referred to Industry, Business and Labor.
Feb. 8 Industry, Business and Labor Committee Recommended "Do Pass" 12-0.
Feb. 13 Second REading, Adopted.
Feb. 26 Introduced in Senate.
Mar. 12 Judiciary Committee Recommended "Do Pass" 6-0.
Mar. 15 Senate Adopted.
Mar. 20 Filed with Secretary of State.

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.
Feb. 13 Appropriations Committee Recommended "Do Pass", as Amended, 14-0.
Feb. 15 Senate Passed 46-0.
Feb.21 Introduced in Senate.
Feb. 27 Appropriations Committee Hearing.

SB 2169- Legislation advocated by the North Dakota Association of Counties that will begin to assess prepaid wireless phones and VoIP providers for a county's E-911 assessed fee. Additionally, the bill comprehensively revises the relationship between the counties and the Public Service Answering Points (PSAP's), while renaming an existing committee that oversees E-911 best practices. The Association has spent a substantial amount of time negotiating with the counties over the language that would be included within the bill. Earlier drafts included language that would have reduced the amount that telecom companies were able to retain for administration of the monies and a separate proposal to prohibit telcos from charging counties for their work changing the data base. The Association was very pleased that these items were not included in the bill's final version.

Jan. 8 Introduced in Senate.
Feb. 2 Political Subdivisions Committee Recommended "Do Pass, as Amended, 5-0.
Feb. 7 Senate Passed 47-0.
Feb. 13 Introduced in House.
Mar. 15 Political Subdivisions Committee Recommended "Do Pass", as Amended, 13-1.
Mar. 21 House Passed 78-15.

SB 2195- Legislation that expands the technologies covered under prohibited practices that telephone solicitors must abide by in North Dakota. The new language extends the prohibitions to those using satellite, VoIP, broadband "PSC" (there is currently a typo in the bill), microwave and other terrestrial phone service. The proposal does not currently add or subtract from the substantive language of the existing statute regulating telephone solicitors.

Jan. 15 Introduced in Senate.
Jan. 25 Industry, Business and Labor Committee Recommended "Do Pass", 7-0.
Jan. 26 Senate Passed 41-0.
Jan. 31 Introduced in Senate.
Mar. 8 Industry, Business and Labor Committee Recommended "Do Pass" 14-0.
Mar. 13 House Passed 91-0.

SB 2255- Another "pretexting" piece of legislation that will, if adopted, criminalize the unauthorized or fraudulent procurement of another's telephone records. It also bans the sale and receipt of those same records. The bill imposes far fewer obligations on telecommunications companies than previously introduced legislation addressing the same subject. The Association continues to have a number of concerns and have met with representatives of the Attorney General's office. The Association requested that no greater obligations be imposed on telcos than the already stringent standards imposed by the Federal Communications Commission and existing CPNI rules.

Jan. 15 Introduced in Senate.
Feb. 2 Judiciary Committee Recommended "Do Pass", as Amended, 6-0.
Feb. 7 Senate Passed 47-0.
Feb. 13 Introduced in House.
Mar. 6 Judiciary Committee Recommended "Do Pass", as Amended, 14-0.
Mar. 8 Referred to Judiciary Committee.
Mar. 13 Judiciary Recommended "Do Pass", as Amended, 12-0.
Mar. 15 House Passed 92-0.

SB 2383- A bill that is a mechanism to implement an accompanying Senate Concurrent Resolution that calls for an amendment to the North Dakota Constitution reducing the size of the Public Service Commission from 3 commissioners to one. The change becomes effective under the legislation on January 1, 2011.

Jan. 22 Introduced in Senate.
Feb. 2 Government and Veterans Affairs Committee Recommended "Do Not Pass" 4-2.
Feb. 6 Senate Defeated 14-32.

SB 2409- Legislation that codifies the obligations of wireless companies to disclose a multitude of items to their customers and make those facts available online. It also requires the Public Service Commission to develop rules regulating the form and substance of the contents of the contract between the wireless provider and subscriber. The bill also requires wireless companies to develop maps detailing where wireless coverage is available on a county-by-county basis.

Jan. 22 Introduced in Senate.
Feb. 13 Industry, Business and Labor Committee Recommended "Do Not Pass", as Amended, 4-2.
Feb. 15 Senate Defeated 33-13.

SCR 4014- A resolution that proposes to replace the three-member Public Service Commission with a single public service commissioner and to change the term of office from six to four years. The North Dakota Constitution would have to be amended by the voters in 2008 to make the change.

Jan. 22 Introduced in Senate.
Feb. 2 Government and Veterans Affairs Committee Recommended "Do Not Pass" 6-0.
Feb. 6 Second Reading. Failed to Adopt.