Regulatory panel bills go to House

Posted: Sunday, May 18, 2003

JUNEAU A committee forwarded two bills to the House on Saturday concerning the future of the agency that regulates state utilities in what is a repeat battle between two telephone companies.

House Bill 111 and House Bill 106 now go to the House floor for consideration.

HB 111, favored by General Communications Inc., would make no statutory changes in the Regulatory Commission of Alaska and would extend its work two years until 2005. The bill requires the commission to review its telecommunications regulations, hold public hearings and propose regulations for improvement no later than Nov. 15.

HB 106 is a more complicated bill requiring RCA to make more drastic procedural changes, particularly in how it sets rates and determines costs in competetive phone markets. The bill also requires RCA to conduct a thorough review of its policies and regulations.

A similar battle referred to as the ''phone war'' played out last session between the two companies over the same issue and resulted in a special session. Ultimately, the Legislature voted to extend the life of the regulatory agency for another year.

ACS would like to phase out RCA as soon as possible. GCI would like to have the agency continue its work as it has until now.

Rep. Lesil McGuire, R-Anchorage, chair of the House Judiciary Committee, said the first bill does not tell the commission what to do but asks it to conduct a thorough self-examination, clarify its policies, while setting fair rates, protecting the consumer and treating competitors equally.

''We are encouraging RCA to take a fresh look,'' McGuire said.

She told RCA chair Dave Harbour that the committee believes a thorough review is important to the consumer.

''I can only assure you ... I am confident the decision-making process is based on fairness and justice,'' said Harbour.

The commission was to be phased out June 30, but Gov. Frank Murkowski asked that it get a four-year extension. HB 111 is an amended version of the administration's bill. The Senate is considering a similar bill.

The other bill, HB 106, is favored by Alaska Communi-cations Systems, Inc. ACS has long complained that the rates set by RCA effectively mean that it subsidizes competitor GCI.

ACS owns about 300,000 phone lines. GCI leases some of the lines to bring telephone service to customers. Both companies offer both local and long-distance service. ACS has about 10 percent of the long-distance market in Alaska. GCI has about 47 percent.

ACS attorney Leonard A. Steinberg told the committee that ACS subsidizes GCI to the amount of $500,000 a month. He said in Fairbanks it costs ACS $32 a month on each line it leases to GCI, but is allowed to collect only $19.

Steinberg also said ACS wants changes in how the company's costs are calculated. He said RCA uses national models to estimates those costs, and they don't accurately reflect the higher cost of bringing service to Anchorage and Fairbanks. And the company wants to be allowed to use an accelerated depreciation schedule for tax purposes.

Rep. Les Gara, D-Anchorage, told Steinberg that he though the company went overboard in bill HB106.

''I think we did the best we could. We saw proposals we could not support,'' Gara said.

McGuire, who commended committee members on their work on both bills, also expressed reservations about HB106.

''I don't know the fate of the bill. I would like to get it out of here,'' she said, after several hours of discussion.

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