VOLUME 11, NUMBER 1               JANUARY 7, 2005

To: Members

From: David Crothers, Executive Vice President

The 59th Legislative Assembly opened this week with Governor John Hoeven giving the State of the State Address on Wednesday. Governor Hoeven cited the many economic success stories that are taking place in North Dakota. We are reminding people that a modern and affordable telecommunications network is the very foundation of all economic and educational advances in the State.

It promises to be a busy session for the independent telecommunications industry this session. The North Dakota Public Service Commission has prefiled a number of bills affecting their jurisdiction, the Information Technology Department has prefiled three bills and additional telecom drafts will be forthcoming.

Throughout the session we will be publishing a Legislative Report on virtually a weekly basis. For faster delivery of your Legislative Report, please contact Carla at 663-1099 and request that your Report be emailed to you.

The Association's board of directors has named a Legislative Committee to serve throughout the session. Individuals from the independent telephone industry on the committee are: Jerome Tishmack, manager of BEK Communications; Paul Schuetzler, manager of Consolidated Telcom; Keith Larson, manager of Dakota Central Telecom and chairman of the N. D. Manager's Group; Mark Scallon, manager of Dickey Rural Telephone; Kent Klima, director at Dickey Rural Telephone; Mark Wilhelmi, manager of Midstate Telephone Company; Jim Simonson, director at Northwest Communications and president of the N.D. Association of Telecommunications Cooperatives; Hilman Anderson, director at Reservation Telephone Cooperative; Jim Newman, director at SRT; and, Mick Grosz, manager of West River Telecommunications Cooperative.

As you will note, the session's first full week features 10 legislative hearings on issues of interest to the independent telephone industry.
As the session progresses, please feel free to contact any of the Legislative Committee members or myself with your thoughts.

HB 1008- The two-year appropriation for the North Dakota Public Service Commission (PSC). The Commission is asking for $11.1 million and anticipates income of almost $6 million. The requested appropriation is approximately the same as for the last biennium, but for $900,000 additionally for a complaint against rail rates.

HB 1105- Legislation giving the Public Service Commission the authority to bar competitive local exchange carriers (CLEC's) from "slamming" or "cramming" services on their customers' bills. Although CLEC's are subject to PSC jurisdiction in a number of areas, including cross- subsidization, discrimination, dialing parity, quality of service, refunds and others, they have not been previously been part of the slamming and cramming statute. The Association is supportive of the legislation.

HB 1106- A bill to modify the Public Service Commission's "Performance Assurance Fund" to ensure that it continually has a balance of $100,000, rather than funding it once to that level. The Performance Assurance Fund is a special fund within the North Dakota treasury that is part of Qwest's section 271 agreement with the Public Service Commission. It is related to the Commission's approval of Qwest's petition to offer long distance telecommunications service within the State.

HB 1056- Legislation that will require telecommunications companies that are not incumbent telcos to register under a new system developed by the State's Public Service Commission. Those telephone companies that are not incumbents will have to register with the State prior to offering service to North Dakota residents.

HB 1207- A bill that would reduce the amount that counties can assess from $1.00 to 75 cents to fund emergency communications systems, which are more commonly referred to as Public Service Answering Points (PSAPs). The assessment is collected by telecommunications companies and remitted to individual counties. It applies equally to wireline and wireless telecommunications companies. There is a provision within the draft legislation that exempts 911 surcharges that were adopted prior to August 1st, 2005 if the assessment does not exceed the 75 cent threshold. The intent of the legislation is to roll-back the amount that most counties in the State are assessing.

HB 1219- Language has been drafted to modify the reverse E 911 statute to allow Public Safety Coordinators to include unpublished telephone numbers in the calls that the PSAP makes. Under the current statute only the identity and location of the individual with an unpublished telephone number may be used. If this legislation is approved the E 911 coordinator or Public Safety Answering Point may contact the unpublished number directly and notify them of an emergency.

SB 2021- The appropriation bill for the Information Technology Department. ITD is requesting a spending authorization of $109,640,934 and anticipates income of $98,830,575. A majority of their income is received from other State agencies entities that ITD provides service to throughout the State. There is also language in the bill extending the amount of time the agency can finance the acquisition of equipment or software from three years to five years.

SB 2037- This legislation is the Information Technology Department's revisions to their policies and operating procedures. It is a substantial piece of legislation that makes both large and small changes to the way the agency operates. Included within the 12 page bill is language that gives the State board of higher education the right to manage and regulate information technology planning and services for institutions under its control. It is a significant policy change from ITD's central planning for all of those who receive its services. The bill language also significantly modifies the content that ITD must provide in their annual report. Additionally, agency also seeks to exempt "any policy, standard and guideline" they adopt from North Dakota's Administrative Agencies Practice Act.

SB 2038- A bill to establish a statewide information technology improvements revolving fund and to appropriate $1 million. The fund is to be used by a State agency or agencies working together to improve efficiency. The agency will submit a proposal to ITD's chief information officer for review and recommendation. For worthy projects the CIO will recommend to the Legislative Council's Budget Section that they fund the initiative. Only the Budget Section will have the authority to fund a project. Funds dispersed under the program will have to be repaid into the revolving fund by the agency receiving the money.

SB 2090- Legislation introduced at the request of the Public Service Commission to expand the agency's jurisdiction to implement Lifeline and Link-Up programs. The Commission is seeking the increased authority following the Federal Communications Commission's revision of existing Lifeline and Link-Up rules. The independent telecommunications industry in North Dakota has been working with the PSC to implement the new Federal rules. There has been discussion that telcos within the State may wish to advocate for some parameters around the Commission's jurisdiction in this legislation.

SB 2091- A bill relaxing the requirement that telecommunications companies file price
schedules with the Public Service Commission. Under existing rules a telco must file schedules showing all prices with the Commission. The legislation, however, would modify the standard by requiring only schedules for "essential" services be filed. The Association does not believe that this section applies to cooperatives or telecommunications companies with fewer than 8,000 access lines.

SB 2134- Legislation to expand the Public Service Commission's jurisdiction to be able to order refunds when a utility has charged an "unreasonable" rate. There is no definition of the word "unreasonable" in the statute. The Association is very concerned about this bill and will be working with members of the legislative committee to ensure that independent telecommunications companies are not harmed by a capricious application of the rule.

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