VOLUME 12, NUMBER 9             MARCH 2 , 2007

To: Members

From: David Crothers, Executive Vice President

Members of the Association were very pleased this week with the Senate’s passage of House Bills 1142 and 1143.  House Bill 1142 is the proposal extending price regulation exemption from 8,000 to 18,000 subscribers, while House Bill 1143 gives the Public Service commission “suspension and modification” jurisdiction.

Both bills were deemed necessary by members as rural providers face increased competition from other providers.

Members of the Association demonstrated during legislative hearings that archaic monopoly regulations literally prevented rural telephone companies from offering the same discounts or services as their competitors without going to the PSC for permission.  It was both time consuming and expensive.  House Bill 1142 resolves this problem by regulating those companies in North Dakota with more than 8,000 lines, but fewer than 18,000 by regulating them identically as the cooperatives and other small commercial companies.

House Bill 1143 was introduced to resolve a problem that has been faced repeatedly by rural telcos who receive “interconnection” requests from competitors.  The Federal Act of 1996 permitted competitors to use an incumbent’s network facilities to offer their own services.  To accomplish that a competitor needed to “interconnect” with an established telco’s network. Congressional policymakers recognized that competition would not be appropriate, however, in all rural exchanges so they included language permitting State Public Service Commissions the ability to “suspend or modify” that competitors interconnection request.  In North Dakota, though, it is a well-established principal that the PSC can only exercise those powers explicitly given to them by the legislature.  The “suspension and modification” authority did not fall under that category.  The Commission, as a result, cited this fact on a number of occasions when denying the rural industry’s petitions for relief.

Passage of both House Bills 1142 was due to the hard work of Representative Craig Headland, who was a sponsor of both measures.  Roger Del Fiacco of Missouri Valley Communications, Dave Dircks of North Dakota Telephone Company and Dave Dunning of Polar Communications made the trip to Bismarck, testified before the House and Senate and worked diligently to ensure passage of both initiatives.  They did an outstanding job.

Members of the Association also owe a debt of gratitude to Mick Grosz, the general manager at West River Telecommunications Cooperative, and Evan Hass from Dakota Carrier Network for meeting with the Senate Appropriations Committee this week.  The Committee was hearing the budget requests of the North Dakota university system.  Mr. Grosz and Mr. Hass appeared on behalf of the Association to express our industry’s concerns over the Northern Tier Network’s expansion into areas beyond university research.   

Members of the Association have long been concerned about the State of North Dakota constructing networks and moving telecommunications traffic…be it video, data or voice…from what belongs on private facilities to a governmentally subsidized network.  Mr. Grosz and Mr. Hass did an outstanding job of telling our story to the committee and meeting with Senators individually.  Please convey your appreciation to them for their efforts when you have the opportunity.

I was unavailable to join Mr. Grosz and Mr. Hass in Bismarck because I had been asked to testify before the U.S. Senate Committee on Commerce, Science and Transportation regarding the “Status of Universal Service” in the United States.  The Association is extremely appreciative to Senator Dorgan for making our voice heard in the deliberations over this critical element of our industry.

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 - 9:00 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. 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.

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.

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.
Feb. 28 Industry, Business and Labor Committee Recommended "Do Pass" 4-2.

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. 7 Judiciary Committee Hearing - 11:00 a.m.

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. 1 Political Subdivisions Committee Hearing.

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. 7 Industry, Business and Labor Committee Hearing - 8:00 a.m.

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.
Feb. 28 Judiciary Committee Hearing.

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 13-33.

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.