While the 58th legislative assembly has not adjourned sine die at the time this edition of The Buzzer went to press, only a handful of bills remain before legislators draw to a close this year's legislative session.

As members of the Association know, it has been a tremendously busy session with grave consequences for members of the telecommunications industry. More than 20 telecom-related bills were introduced that would have affected rural telco rates, regulations, the relationship between company and customers and a host of other measures. While all of the bills were significant to the Association, perhaps none had greater consequences than a handful of proposals that would have permitted the State's Information Technology Department (ITD) to offer telecom services directly to members of the public.

Under current law, ITD is allowed to provide telecommunications services to State agencies, higher education facilities, counties, cities and school districts. This legislative session, for the first time, saw attempts to increase that authority and to provide service to the public in direct competition with independent telecommunications providers.

The first proposal was for the State of North Dakota to offer videoconferencing to the public through educational facilities. Proponents argued that videoconferencing was an expensive service and the State could provide it cheaper than private industry. The Association strongly disagreed and cited the fact that the State pays no Federal or State income tax, does not pay for rights-of-way, pays no interest on its money and has the residents of North Dakota to subsidize its operations.

Fortunately for members of the Association, a majority of Senate Education Committee members strongly believed that State government competition was inappropriate and bad public policy and amended the bill to remove the danger. We have commended them for their support of private enterprise.

The second initiative was far more dangerous and did not come in the form of legislation, but rather a plan by the State Health Department to put every hospital, nursing home and private clinic on what is called the "State's Network". Under the proposal, the Information Technology Department would have provided Internet, videoconferencing, date, e-mail and other services to those healthcare providers. Private industry, including the locally-owned independent telephone industry, would have been forced out of providing those services to the healthcare industry and would have struck a severe blow to our individual customers. The Health Department said it was necessary to fight bioterrorism.

Members of the Association met repeatedly with Governor Hoeven, the majority and minority leaders of both legislative houses, legislators, state officials and others to stress what bad public policy it was and the severe impact it would have on rural telephone providers if the Health Department's proposal was adopted. The Association told policymakers that if the Health Department prevailed the independent telephone industry would be forced to curtail investment in rural telecommunications infrastructure and that the jobs of some of our 900 employees in rural North Dakota would be in danger. We stressed that the State of North Dakota cannot come in to the telecommunications marketplace and displace us from serving some of our best customers without severely impacting our ability to do business.

It was a difficult battle that lasted almost three months, but with Governor Hoeven's support, the legislature adopted language in House Bill 1043 and 1022 that limits the ability of the Information Technology Department to serve the public and prohibits the agency from extending its service to any additional private, charitable or nonprofit entity.

Further, the legislature passed, and the Governor signed, a measure that says, "The department may not exercise its powers and duties in a manner that competes or otherwise interferes with the provision of telecommunications service to a private, charitable, or nonprofit entity by a privately or cooperatively owned telecommunications company."

It was a tremendous victory for members of the independent telephone industry and, perhaps more importantly, marked the first time the Association has placed a marker on the table indicating what State-sponsored competition is unacceptable. Members of the Association have watched other States offer telecommunications services unabated and the result has always been bad for State government, telecom providers and the public. The State does not have the ability to invest and consistently offers outdated technology. Rural telecom providers are committed to a far different future for North Dakotans.

There were also numerous other telecom-related measures during the fifty-eighth legislative assembly that are fully detailed in the Association's Legislative Report. A comprehensive, final version will be mailed to members and available on the Association's website...www.ndatc.com...next week.

Members of the Association have been extremely gratified by the support of legislators for the rural telecommunications industry during this legislative session. Proposals for additional and costly regulations, registration fees, expanded Public Service Commission jurisdiction and notices were defeated. Measures to protect the interests of telecom companies in foreclosures, anti-spam rules, clarification of telecommunications taxes, protection of buried telecom infrastructure and the elimination of the Essential Telecommunications Price Factor (ETPF) were passed. In addition, a handful of tax measures, regulatory proposals and other suggestions harmful to rural telecom providers never made it into bill form because of policymakers high regard for members of the independent telephone industry.

The Association also acknowledges the dedication, determination and insight of its Legislative Committee, which was appointed by the board of directors, during the Annual Meeting in December. Those committee members are responsible for the Association's position papers, technical expertise and insight into the legislative process.

Members of the committee include, Ken Lund, manager of Northwest Communications; Paul Schuetzler, manager of Consolidated Telcom; Jerome Tishmack, manager of BEK Communications, Mick Grosz, manager of West River; Mark Wilhelmi, manager of Midstate Telephone Company; Keith Larson, manager of Dakota Central; Hilman Anderson, a director at Reservation Telephone Cooperative; Kent Klima, a director at Dickey Rural Telecommunications; Jim Newman, a director at SRT; Jim Simonson, a director at Northwest Communications; and Ron Steinke, a director at Polar Communications and the President of the North Dakota Association of Telecommunications Cooperatives.

Two United States Senators introduced legislation earlier this month seeking to cut down on "spam," the unwanted junk e-mail that some estimate accounts for 40 percent of e-mail traffic worldwide.

The bill, sponsored by Montana Republican Senator Conrad Burns and Oregon Democratic Senator Ron Wyden takes aim at a popular spam tactic, according to Reuters News Service, by requiring Internet marketers to provide legitimate return addresses on their messages. Spammers, according to the Senators, often hide behind false return addresses to avoid direct contact by those who receive the mail and to slip through filtering software. Marketers would also be required to honor requests to be taken off customer lists.

The legislation does not allow consumers to sue spammers directly, but requires state attorneys general to sue on their behalf. The Federal Trade Commission could also fine violators, and Internet providers could block spammers from their networks.

The averaged "wired" American computer user received more than 2,200 spam messages last year, according to Jupiter Research, while the British government said last month that spam now accounts for 40 percent of global e-mail traffic. The problem has become so acute that the Direct Marketing Association, a trade group representing telemarketers and direct mailers, switched its position last year and said it would support a national anti-spam law.

The Nebraska Telecommunications Association has told the State's Public Service Commission (PSC) that 82 percent of the State's residents live in an exchange with broadband services. The Nebraska Information Network conducted the study submitted to the Commission. The report was submitted within a PSC proceeding investigation of telecom infrastructure development in Nebraska.

Of the 597 communities counted in the study, 41 percent can access digital subscriber line service and 31 percent have cable modem availability.

The Commission noted that availability of high-speed Internet access is less meaningful if the price exceeds the customer's ability to pay. According to a sample of DSL rates provided by the Association, DSL rates vary with the upstream and downstream speed and by customer location. The Commission found that prices for DSL service and cable modem services don't vary significantly from State to State.

NOKIA TO CUT 10 Finnish telecom equipment maker Nokia said earlier this month that it would cut over 10 percent of its struggling "Networks" unit as the firm struggles to match costs with diminished demand. The company said the majority of the 1,800 eliminated jobs would be in Finland, and would be made in research and development, operations, sales and marketing, and other areas.

QWEST VOLUNTEERS TO GO DOOR-TO-DOOR

Qwest has created door hangers specifically for the campaign and will support the employees visits with print and broadcast ads that highlight the price, product and service differences between the telco and Cox. If successful in Omaha, the program will be rolled out to other markets where Qwest is facing stiff challenges.

"When you sign up for a wireless service, you really won't have any idea how it's going to work for you since you can't ‘road-test' it while you're sitting there in the store," said Senator Debra Bowen (D-Redondo Beach), the bill's sponsor and chairwoman of the Senate Energy, Utilities, and Communications Committee. She continued, "Since most wireless service plans require you to sign a one or two year contract, a 30 day right of rescission is more than reasonable, especially considering CD players, toasters and most other products come with a mandatory 60 day warranty."

The State's three month old "Do Not Call" registry has reached one million members and continues to add consumers at a brisk pace, according to State Telecommunications Reports. The first sign-up period, which ran from January 1st to March 1st, included just over 870,000 residential phone lines and has grown significantly-- --gaining almost 130,000 new names in the last 30 days.

Massachusetts has 2.8 million residential phone lines.

Wi-Fi uses a short-range radio antenna to broadcast Internet signals to a limited area. The antenna is hooked up to a conventional landline-based broadband Internet connection. When the Wi-Fi system is operating in Winston-Salem, anyone with a wireless-enabled device will be able access broadband without a charge.

Dennis Newman, the city's chief information officer, said, "We see this as an economic development tool. Anyone can come down with a laptop or a hand-held device that is wireless-enabled and have free access to the Internet. It will encourage people to come downtown and dine at our sidewalk restaurants and go to our other venues along Fourth Street."

The "MCI"name has long been familiar to consumers because WorldCom continued using the name for its consumer long distance operations after buying the former MCI Corporation in 1998. WorldCom acquired MCI in a $40 billion merger.

WorldCom's decision to change its name has been widely expected, and is a clear attempt, according to the Wall Street Journal, to distance itself from the company's still mounting accounting fraud, which could total as much as $11 billion.

There is currently legislation (Senate Bill 28) to establish a "Do Not Call" list under consideration in the Ohio legislature.

Under Section 271 of the Federal Telecommunications Act of 1996, a Bell company must demonstrate that it has sufficiently opened its local markets to competition before receiving FCC authority to enter the in-region interLATA market.

Currently, Salem serves all of the same jurisdictions through an electric distribution system it operates, and the city said it wants to expand its offerings to include high-speed broadband Internet service. It added that it may eventually become a local phone service provider, as well.

Salem becomes the second municipality recently seeking to enter the telecommunications market in Virginia. Bristol, Dannville and Front Royal have previously been granted permission to offer telecom services by the Corporation Counsel in their own communities and neighboring counties. The city of Staunton has a petition pending.

The Rural Utilities Service (RUS) has announced that a study commissioned to streamline and determine the viability of Rural Telephone Bank (RTB) privatization has been released and is available on the agency's website.

The study, compiled over the past 13 months, examines the Bank's operations, as well as issues and options that should be pursued during the process of privatization; from asset and liability management to organizational and operational strategies.

The study may be viewed or downloaded in its entirety from the Bank's webpage at the following address:

http://www.usda.gov/rus/telecom/rtb.index.rtb.htm

Legislation that stipulates that rates, prices, tariffs or charges for local service provided by independent telephone companies wouldn't be subject to any rules imposing rate or price restrictions is heading to the House floor for its third reading. The bill cleared a House committee earlier in the session.

The bill would also provide the independent telephone companies with increased authority over expanding local calling areas. The telcos could expand their customers' local calling areas by written notice to the Public Service Commission. Under the proposal, calling to the expanded areas would need to be local and it would need to be an optional service for customers. The telco, however, would be able to determine how many calls would be included in the expanded calling area package, the prices for the expanded calling service and whether the service should be offered alone or in combination with one or more unregulated services. The company would not be required to offer unlimited flat-rate calling to the expanded local calling area.

NTCA said that wireless carriers are wrong when they claim that Section 332 ( c) ( 8) of the 1996 Telecommunications Act prohibits the FCC from adding equal access to the definition. NTCA asserts that the section in question prohibits the FCC from requiring CMRS (commercial mobile radio service) or wireless carriers from mandating equal access as part of their obligations as a common carrier, according to the Association's Washington Report.

Level 3 applies to state commissions such as the North Dakota Public Service Commission and requests competitive local exchange carrier (CLEC) and interexchange carrier (IXC) status, as well as the Numbering Plan Administrator to set up a company that looks like a telecommunications provider seeking customers in the marketplace. Its business plan, however, envisions no such plan. Level 3 only seeks large, out-of-state Internet Service Providers (ISP's) as customers. The Level 3 business plan is to provide ISP's with a local calling plan with no local facilities and 1-800 internet access without the costs of long distance service.

If successful at the North Dakota Public Service Commission, Level 3 will be able to avoid access charges.

1-The business was conducted via a website on computer equipment in Washington and owned by an unaffiliated third party; and

2-The person's business was limited to:

a-storage, dissemination, or display of advertising;
b-taking orders, or
c-processing payments.

The law will expire when the United States Congress or a court grants States the authority to impose sales and use tax collection duties on remote sellers.

Qwest serves customers in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming.

The company said the expanded service will mean that customers in the Wahpeton, Grafton and Jamestown exchanges in North Dakota will have DSL access by this summer. With the build-out complete, Qwest will offer high- speed access in 7 exchanges in the State. North Dakota's independent telephone industry offers high-speed broadband in 255 rural communities.

Governor Tim Pawlenty has appointed Scott Brenner as the new commissioner of the State Department of Labor and Industry. He was most recently a government and regulatory affairs consultant for Western Wireless

Mr. Brenner previously served as a director of public policy for US West and has been a board member of the Minnesota High Tech Association and the Minnesota Telephone Association.

The department performs a variety of functions, including overseeing the State's workers' compensation system, certifying and monitoring the State registered apprenticeship program, monitoring compliance with labor laws, testing and licensing boiler and high-pressure-piping workers and equipment and inspection of boats-for-hire.

At a Senate hearing earlier this month on universal service, a coalition of rural telecom companies called for immediate congressional attention to Federal and State regulatory policies that risk jeopardizing the future sustainability of the universal service fund.

A witness for the coalition told committee members that their oversight over the Federal Communications Commission and State commissions was needed if universal service is to be protected. The long-term sustainability of the universal service fund is in danger, according to the

coalition, and a number of decisions need to be made including:

1-Expanding the base of who contributes to the fund to
ensure its sustainability;

2-Requiring the FCC and State commissions to accurately interpret the public interest when making determinations of whether or not to grant eligible telecommunications carrier (ETC) designations to competitive carriers;

3-Ensuring that competitive carriers are subjected to the same standards that incumbents are, in order to receive universal support;

4-Ensuring that current law be adhered to which mandates that universal service support be provided for actual cost recovery and not be used as a tool to incite artificial competition.

The testimony was made on behalf of the Independent Telephone and Telecommunications Alliance, the National Rural Telecom Association, The National Telecommunica- tions Cooperative Association, the Organization for the Promotion and Advancement of small Telecommunications Companies and the Western Alliance, which together represent the vast majority of the 1,200 independent and rural telephone companies, serving approximately 15 million lines nationwide in all 50 States.

May 12-15:
TOC
Holiday Inn
Fargo, N.D.

June 4:
Dakota Central Telecom.
Annual Meeting
Carrington, N.D.

June 5:
Polar Communications
Annual Meeting
Park River, N.D.

June 6:
West River Telecommunications
Annual Meeting
Hazen, N.D.

June 12:
BEK Communications
Annual Meeting
Steele, N.D.

June 17:
Northwest Communications
Annual Meeting
Ray, N.D.

June 19:
SRT Communications
Annual Meeting
Minot, N.D.

June 25:
Consolidated Telcom
Annual Meeting
Dickinson, N.D.

July 11:
Reservation Telephone
Annual Meeting
Parshall, N.D.

July 14-16:
NDATC Summer Conference
Medora Community Center
Medora, N.D.

July 23:
Co-op Day
State Fair
Minot, N.D.

Sept. 10:
Program Planning Meeting
Statewide Boardroom
Mandan, N.D.

Sept. 10:
NDATC Board Meeting
Statewide Boardroom
Mandan, N.D.