"An Act relating to retail tariffing standards in a competitive local exchange service area; and to exemptions from retail tariff filing requirements and certain other provisions in competitive telecommunications markets; setting a policy regarding unbundled network elements in the telecommunications market; relating to depreciation expense rates for certain telecommunications utilities; requiring the Regulatory Commission of Alaska to conduct an investigation, take certain actions, withhold certain actions, and issue a report; and providing for an effective date."

The regulatory policies we have in place today have performed admirably in providing incentives for competitors to enter the local exchange service business. However, now that we have effective competition in local markets, these policies need to change. As the regulators have been slow to respond to changes in Alaska's telecommunications marketplace, it is incumbent upon us, the duly elected policy-making body of the State of Alaska to provide greater direction and guidance to the Regulatory Commission of Alaska in order to make responsible decisions in changing market conditions.

What we currently have is a system that provides incentives to competitors by obligating legacy carriers to lease their facilities at rates substantially below cost. It is plainly apparent that competitors will be successful if they have a substantial cost advantage over the incumbent carrier. As an example, in Anchorage, the main competitor now has approximately 45% of the market share. If we maintain these policies, the competitor's market share could foreseeable grow to an extent that the incumbent carrier's operations may cease to be profitable, effectively removing them from the marketplace, removing competition, and thus ultimately harming the consumer.

Where competition exists and consumers have a choice of facilities-based carriers, Alaska must remain consistent with provisions of the federal Telecommunications Act of 1996 and allow market forces to work. Alaska has been in the forefront with the most competitive local exchange markets in the country and it is imperative that we continue to lead the country by demonstrating that where competition exists, retail pricing should be deregulated.

Alaska's major cities no longer suffer from monopoly control of local exchange markets. All consumers in Anchorage, Fairbanks, and Juneau now have a choice of facilities based carriers. It is time to update Alaska's laws to reflect this new reality and I urge your support for CSHB 106.

Last Updated: 05/19/2003

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