indicated the biggest concern is the rural areas where 90-95% of the connectivity is through U.S.
West. In that regard, he said part of the role of government is to ensure all individuals have the
opportunity to be properly connected to the new network world and that Utah is well-positioned
to take advantage of being properly configured to provide all residents connectivity. According
to Mr. Peterson, this RFP focuses on the needs of the citizens as opposed to the state's needs and
he emphasized the state needs to have a competition and choice.
Rayleen Ireland, stated her purpose in being present is to address concerns the Committee
has about the state's network. She said that the department fully supports the guiding principles in
the RFP and emphasized the state does not have an extensive telecommunication system nor did
she see a situation where the state would emerge as a competitor. She noted that the state's
resources would play a role in helping to bring about the opportunity for more choice and
competition.
John Stucki, ITS, Strategic Network Planner, testified that ITS acts as a broker and
coordinator to combine the needs of all state agencies. He stated they purchase
telecommunication services from public providers by issuing RFP's to the private sector and
asking them to bid competitively to supply the state's needs. He explained the division's plan to
avoid duplicative costs by arranging a public/private partnership where telecommunication
companies would have an opportunity to take advantage of I-15 reconstruction reduce the cost
for everyone. He noted the focus of ITS was not the conduit along the interstate as much as
providing broad-band, multi-media capabilities to state agencies. He explained the fiber optic
backbone and referred to a map showing where fiber optic and digital microwave lines exist for
the Utah Exchange carriers. He reviewed the hub sites and the current fiber optic configuration.
Gordon Peterson explained the newly formed Utah Telecommunications Coordinating
Committee (UTCC), who the members are, and their function. He stated their charge is to help
develop the optimum government networking in Utah using the guidelines.
Kevin Taylor, US West, drew on Mr. Stucki's map the location of U S West's fiber optic
lines between Logan and St. George, as well as proposed lines going east from Salt Lake City.
He stated there are four fiber optic systems that have been built by companies other than U S
West. He stated U S West has not come even close to using their lines to full capacity. He stated
their feeling is that the free market should drive the growth of infrastructure.
Rep. Goodfellow expressed concern the Legislature is being asked to make decisions to
run new fiber lines as requested in the RFP, but legislators don't know where the existing lines are
and companies are hesitant to divulge that information.
Dennis Wood, U S West stated that U S West supports the Federal Communication Commission (FCC) mandate that was passed last year, but it was challenged in court on the basis
of the default pricing mechanism. He indicated U S West is not opposed to the concept of
interconnection and that it is presently available. He noted the law that was passed in Utah in
1995 required the final rules to be adopted by the Public Service Commission (PSC).
Sen. Jones advised that the committee would like to bring this issue back to the next
meeting and invite the other competitors to be present and give their testimony.
3. Update: Competitive Market Telecommunication Issues
Sen. Jones moved to item five on the agenda since one of the speakers for item three was
not present.
4. Information Technology: Tax Review Commission Recommendations
Mr. Gary Cornia, Tax Review Commission, reviewed the taxation of telecommunication
and stated the position of the TRC is to look for ways to broaden the base and lower rates. He
suggested the Legislature wait since there is proposed model legislation being drafted.
5. Federal Communication Comm.: Access & Universal Service Fund Ruling
David LaFrance, Telecommunication Analyst for the PSC, distributed a handout and
Gave an overview of the FCC report and order in the matter of the federal-state joint board on
Universal Service docket no. 96-45. He reviewed changes in the most recent order and recent
definitions of the ruling. He discussed high cost funding.
Sandy Mooy, Legal Counsel for the PSC, reviewed the FCC report and order in the
matter of the federal-state joint board on Universal Service Docket No. 96-45. He explained
price cap regulation and how it impacts businesses as well as residents.
6. Natural Gas Service To Unserved Rural Areas: Draft Legislation
Representative Tom Hatch introduced Charles Greenhawt, Legal Counsel Division for
Mountain Fuel Supply, who reviewed the draft legislation authorizing PSC to allow natural gas
service into unserved rural areas.
Rep. Hatch asked for the endorsement of the committee.
Claire Geddes, Director, United We Stand, expressed concern about this legislation and
the subsidy. She noted that the subsidy is going to the company and not necessarily to help rural
Utah.
Sen. Jones suggested holding this issue and reviewing it further at the next meeting.
MOTION: Rep. Hatch moved for the Committee to adopt this as a committee bill.
SUBSTITUTE MOTION:
Sen. Jones made a substitute motion to hold any action on this item until next
meeting. He noted that there is other similar legislation and asked the committee
to consider giving themselves time to look at this bill. The substitute motion
passed with Iverson, Holmgren, and Hatch voting in opposition and Senator
Craig Peterson absent for the vote.
7. Electrical Deregulation And Customer Choice Task Force Update
Sen. Jones asked for this item to be held to the next meeting. There was no opposition.
8. Adjourn
MOTION: Rep. Cox made a motion to adjourn the meeting. The motion passed unanimously.
The meeting was adjourned at 12:00 noon.