Update: House OKs RCA compromise
But Taylor, other senators raising ethics issues
Sen. Robin Taylor honed in today on what he says is inappropriate conduct by
the Regulatory Commission of Alaska, even as the House voted 34-4 to extend
the agency for two more years.
On the second day of a special session called by lame duck Democratic Gov.
Tony Knowles, the Republican majority overturned the governor's veto of a
campaign finance bill.
And even though leaders of veterans organizations held a press conference
with Knowles to support his request for $2.6 million in increased funding
for the Pioneers' and Veterans' Homes, key House Republicans said it
probably wouldn't happen.
Taylor, chairman of the Senate Judiciary Committee, last month refused to
act on a bill extending the Regulatory Commission of Alaska, already passed
by the House with just one dissenting vote.
Knowles called the special session to avert a one-year "wind-down" of the
agency that would start Monday and lead to its expiration, if the
Legislature didn't act next year.
"The only difference between solving the RCA's problems today and solving
them during the next legislative session is that Tony Knowles won't be here
to protect a special interest group," Taylor told reporters.
Knowles has received campaign contributions from GCI executives, while
Taylor has been supported by ACS, its rival in the so-called "phone wars"
that have been the source of numerous RCA rulings.
Taylor says a pending telecommunications study should be completed before
the RCA is reauthorized.
But Knowles said an independent regulatory commission needs to protect
consumers without the distraction of preparing to go out of business.
"Don't forget it's the consumers that are going to pay the price for the
political manipulation that takes place here," Knowles said.
The House bill passed today includes detailed timelines for the commission
to make decisions, creation of a committee to study possible reforms and a
requirement for monthly meetings involving the RCA, regulated utilities and
the public to talk about the commission's procedures.
"I would accept this compromise," Knowles said in a news conference this
morning.
Meanwhile, Taylor's committee began today's hearing with testimony critical
of RCA, which the chairman called "one petty little agency."
The RCA has an "apparent reluctance to decide issues," said Bruce Davison,
board chair for Chugach Electric Association. That results in excessive
paperwork and cost for utilities, he said.
Generally, though, the battle is between ACS and GCI, now competing for
local telephone customers in Juneau.
"This commission is a good commission," Dana Tindall, senior vice president
for GCI, told the House Finance Committee Monday evening. "It is vastly
superior to the former Alaska Public Utilities Commission."
But ACS President Wes Carson said that more than 80 percent of RCA decisions
involving the two companies have gone GCI's way, indicating bias. ACS is
being forced to lease infrastructure to GCI below its actual cost, and thus
is subsidizing its competitor, he said.
"This non-compensatory rate gives GCI a cost of goods advantage over ACS,"
Carson said.
Tindall said today that the federal Telecommunications Act of 1996, as
interpreted by courts, means that regulatory bodies must err on the side of
competition.
"I think ACS has a problem," she said. "That problem is that they don't have
the law on their side."
Carson contends the RCA isn't applying the law, citing a federal circuit
court decision in the Lower 48 that said the incumbent telephone provider
shouldn't bear the burden of proving that it would be irreparably harmed by
competition.
The U.S. Supreme Court didn't review the ruling, making it "the law of the
land," he said. "Yet the RCA refused to comply with the law ... (in) a clear
case of the RCA ignoring a federal decision that did not comport with its
own policy to force competition in rural areas."
But Tindall said that court "stayed" its own decision and that there are now
no federal regulations on burden of proof only the decision of the Alaska
Supreme Court that the burden should fall on ACS. That court decision set
the stage for termination of the previous "rural exemption" from competition
that ACS enjoyed in Juneau, Fairbanks and North Pole.
Carson had called on RCA Chairwoman Nan Thompson not to partake in any
future decisions involving ACS, and he expressed concern that the commission
has retaliated against the company for its criticism of past decisions.
But Thompson said she relies solely on the law and the case record. "I don't
have an agenda. And I don't have biases for or against any particular
company. I'm not the only commissioner, and I don't make decisions on my
own. All of our decisions are the product of at least three of us."
"You don't own a large bloc of GCI stock?" Rep. Con Bunde, an Anchorage
Republican, asked her in jest.
"No, I don't," Thompson responded with a chuckle. "I don't own any utility
stock."
But Senate President Rick Halford, in an interview, said he was "genuinely
disturbed" that Thompson once was a guest at a private GCI lodge, where she
was to give a crash course in telecommunications to an aide to U.S. Sen. Ted
Stevens.
Although Thompson decided afterward to pick up the costs of her trip, having
arrived too late to participate in the briefing, she did so at just a
fraction of the market value, contends Halford, a Chugiak Republican.
"That was terrible judgment, and it affects the credibility of all those
decisions" of the RCA, Halford said.
Thompson said she paid the cost of the plane ticket and also what she was
told was the rate at the lodge. Pending RCA cases weren't discussed, she
said.
Taylor and other Republicans on the Senate Judiciary Committee today
peppered GCI's Tindall with questions about the lodge and who has visited
it, whether Thompson's $1,200 reimbursement check was ever cashed and why
the company considered Thompson's trip official business, when it turned out
that she didn't. Tindall also denied that any pending business before the
commission was discussed with Thompson at the lodge.
And GCI regulatory attorney Jimmy Jackson was asked several questions about
a draft of proposed compromise legislation that he recently circulated among
officials of various utility companies. According to testimony, the draft
eventually made its way to the office of House Finance Co-Chairman Eldon
Mulder, an Anchorage Republican who sponsored the RCA extension bill. Some
elements of the draft were in the bill passed by the House.
Taylor also complained to reporters that RCA commissioners "participated in
negotiating" the bill that passed in the House during the regular session.
That's "totally inappropriate" and "bizarre" for a quasi-judicial body, he
said. "Can you imagine judges coming in here and negotiating in a back room
with leadership in the House about which rules they should have to live by?"
Despite the aggressive tone, Sen. John Cowdery, an Anchorage Republican who
sits on Judiciary, said the committee "probably" will move out a bill that
extends the commission. While usually defiant, at one point Taylor noted
that he's only one of five votes on the committee.
The only final action today was a 41-16 on a party-line vote of the whole
Legislature to override Knowles' veto of a bill that would regulate
soft-money "issue advertisements" that explicitly target specific
candidates.
Although there have been no laws to require disclosure of contributors or
set limits for such ads, Knowles said the ambiguity was preferable to
locking in a very narrow definition of when issue ads go too far. Instead,
the ads should be judged "as a whole" on whether they support the election
or defeat of a specific candidate, he said.
Knowles and Democrats have been outraged by television ads from a Virginia
group called Americans for Job Security, which say the Knowles-Ulmer
administration is responsible for economic stagnation in Alaska. Lt. Gov.
Fran Ulmer is the leading Democratic candidate for governor this year.
"These ads are not subject to regulation under current law," emphasized Sen.
Sen. Robin Taylor honed in today on what he says is inappropriate conduct by
the Regulatory Commission of Alaska, even as the House voted 34-4 to extend
the agency for two more years.
On the second day of a special session called by lame duck Democratic Gov.
Tony Knowles, the Republican majority overturned the governor's veto of a
campaign finance bill.
And even though leaders of veterans organizations held a press conference
with Knowles to support his request for $2.6 million in increased funding
for the Pioneers' and Veterans' Homes, key House Republicans said it
probably wouldn't happen.
Taylor, chairman of the Senate Judiciary Committee, last month refused to
act on a bill extending the Regulatory Commission of Alaska, already passed
by the House with just one dissenting vote.
Knowles called the special session to avert a one-year "wind-down" of the
agency that would start Monday and lead to its expiration, if the
Legislature didn't act next year.
"The only difference between solving the RCA's problems today and solving
them during the next legislative session is that Tony Knowles won't be here
to protect a special interest group," Taylor told reporters.
Knowles has received campaign contributions from GCI executives, while
Taylor has been supported by ACS, its rival in the so-called "phone wars"
that have been the source of numerous RCA rulings.
Taylor says a pending telecommunications study should be completed before
the RCA is reauthorized.
But Knowles said an independent regulatory commission needs to protect
consumers without the distraction of preparing to go out of business.
"Don't forget it's the consumers that are going to pay the price for the
political manipulation that takes place here," Knowles said.
The House bill passed today includes detailed timelines for the commission
to make decisions, creation of a committee to study possible reforms and a
requirement for monthly meetings involving the RCA, regulated utilities and
the public to talk about the commission's procedures.
"I would accept this compromise," Knowles said in a news conference this
morning.
Meanwhile, Taylor's committee began today's hearing with testimony critical
of RCA, which the chairman called "one petty little agency."
The RCA has an "apparent reluctance to decide issues," said Bruce Davison,
board chair for Chugach Electric Association. That results in excessive
paperwork and cost for utilities, he said.
Generally, though, the battle is between ACS and GCI, now competing for
local telephone customers in Juneau.
"This commission is a good commission," Dana Tindall, senior vice president
for GCI, told the House Finance Committee Monday evening. "It is vastly
superior to the former Alaska Public Utilities Commission."
But ACS President Wes Carson said that more than 80 percent of RCA decisions
involving the two companies have gone GCI's way, indicating bias. ACS is
being forced to lease infrastructure to GCI below its actual cost, and thus
is subsidizing its competitor, he said.
"This non-compensatory rate gives GCI a cost of goods advantage over ACS,"
Carson said.
Tindall said today that the federal Telecommunications Act of 1996, as
interpreted by courts, means that regulatory bodies must err on the side of
competition.
"I think ACS has a problem," she said. "That problem is that they don't have
the law on their side."
Carson contends the RCA isn't applying the law, citing a federal circuit
court decision in the Lower 48 that said the incumbent telephone provider
shouldn't bear the burden of proving that it would be irreparably harmed by
competition.
The U.S. Supreme Court didn't review the ruling, making it "the law of the
land," he said. "Yet the RCA refused to comply with the law ... (in) a clear
case of the RCA ignoring a federal decision that did not comport with its
own policy to force competition in rural areas."
But Tindall said that court "stayed" its own decision and that there are now
no federal regulations on burden of proof only the decision of the Alaska
Supreme Court that the burden should fall on ACS. That court decision set
the stage for termination of the previous "rural exemption" from competition
that ACS enjoyed in Juneau, Fairbanks and North Pole.
Carson had called on RCA Chairwoman Nan Thompson not to partake in any
future decisions involving ACS, and he expressed concern that the commission
has retaliated against the company for its criticism of past decisions.
But Thompson said she relies solely on the law and the case record. "I don't
have an agenda. And I don't have biases for or against any particular
company. I'm not the only commissioner, and I don't make decisions on my
own. All of our decisions are the product of at least three of us."
"You don't own a large bloc of GCI stock?" Rep. Con Bunde, an Anchorage
Republican, asked her in jest.
"No, I don't," Thompson responded with a chuckle. "I don't own any utility
stock."
But Senate President Rick Halford, in an interview, said he was "genuinely
disturbed" that Thompson once was a guest at a private GCI lodge, where she
was to give a crash course in telecommunications to an aide to U.S. Sen. Ted
Stevens.
Although Thompson decided afterward to pick up the costs of her trip, having
arrived too late to participate in the briefing, she did so at just a
fraction of the market value, contends Halford, a Chugiak Republican.
"That was terrible judgment, and it affects the credibility of all those
decisions" of the RCA, Halford said.
Thompson said she paid the cost of the plane ticket and also what she was
told was the rate at the lodge. Pending RCA cases weren't discussed, she
said.
Taylor and other Republicans on the Senate Judiciary Committee today
peppered GCI's Tindall with questions about the lodge and who has visited
it, whether Thompson's $1,200 reimbursement check was ever cashed and why
the company considered Thompson's trip official business, when it turned out
that she didn't. Tindall also denied that any pending business before the
commission was discussed with Thompson at the lodge.
And GCI regulatory attorney Jimmy Jackson was asked several questions about
a draft of proposed compromise legislation that he recently circulated among
officials of various utility companies. According to testimony, the draft
eventually made its way to the office of House Finance Co-Chairman Eldon
Mulder, an Anchorage Republican who sponsored the RCA extension bill. Some
elements of the draft were in the bill passed by the House.
Taylor also complained to reporters that RCA commissioners "participated in
negotiating" the bill that passed in the House during the regular session.
That's "totally inappropriate" and "bizarre" for a quasi-judicial body, he
said. "Can you imagine judges coming in here and negotiating in a back room
with leadership in the House about which rules they should have to live by?"
Despite the aggressive tone, Sen. John Cowdery, an Anchorage Republican who
sits on Judiciary, said the committee "probably" will move out a bill that
extends the commission. While usually defiant, at one point Taylor noted
that he's only one of five votes on the committee.
The only final action today was a 41-16 on a party-line vote of the whole
Legislature to override Knowles' veto of a bill that would regulate
soft-money "issue advertisements" that explicitly target specific
candidates.
Although there have been no laws to require disclosure of contributors or
set limits for such ads, Knowles said the ambiguity was preferable to
locking in a very narrow definition of when issue ads go too far. Instead,
the ads should be judged "as a whole" on whether they support the election
or defeat of a specific candidate, he said.
Knowles and Democrats have been outraged by television ads from a Virginia
group called Americans for Job Security, which say the Knowles-Ulmer
administration is responsible for economic stagnation in Alaska. Lt. Gov.
Fran Ulmer is the leading Democratic candidate for governor this year.
"These ads are not subject to regulation under current law," emphasized Sen.
Gene Therriault, a North Pole Republican who worked on the bill.
Therriault said the bill is a reaction to court cases and is constructed
cautiously to avoid constitutional issues that courts might be looking at.
"We're talking about freedom of speech here. ... It's frustrating to me we
can't actually ban this, but you run up against the United States
Constitution."
But Rep. John Davies, a Fairbanks Democrat, said that groups can speak all
they want but should have to say whose money enabled them to do so.
Otherwise, the campaign money "becomes laundered, in effect," Davies said.
Knowles issued an angry statement following the override.
"This action comes as little surprise as the Republican-backed, mis-named
'Americans for Job Security' initiated its third round of negative attack
ads in the Alaska media," he said. "The Republican super-majority in the
Legislature predictably flexed its muscle to open wide the floodgates of
soft money."
Citizens will turn to the initiative and referendum process in response to
"this underhanded, mudslinging, machine politics," Knowles predicted.
Meanwhile, on funding for the Pioneers' and Veterans' Homes, the House
Republican caucus apparently doesn't plan to grant the governor's request
for $2.6 million. The money would be used to fill up to 100 vacant beds by
hiring additional staff.
No hearings have been held, and House Finance Co-Chairman Eldon Mulder, an
Anchorage Republican, and State Affairs Chairman John Coghill, a North Pole
Republican, said it's unlikely the money will be appropriated.
Coghill said there are too many unanswered questions concerning the
availability of qualified staff to provide high-quality care in the
assisted-living homes, about federal rules and funding regarding veterans,
and about possible changes in the overall mission of the homes.
Knowles and leaders of several veterans organizations held a press
conference today to restate their call for the Legislature to provide the
money. There are 180 people on an active waiting list to get into the homes,
said Jim Duncan, commissioner of administration.
"They will address the issue, as far as I'm concerned," Knowles said. He
declined to say whether that was a threat to call another special session if
legislators don't act. "This issue has been on the table for the Legislature
for two years."
Senate Minority Leader Johnny Ellis, an Anchorage Democrat, said he has
resisted making a "discharge motion" to force the vets bill on to the Senate
floor, but he encouraged Republicans, who were to have a closed-door caucus
tonight, to support the bill.
"I'm holding back because we're going to try to do this in a bipartisan,
cooperative manner," Ellis said.
Finally, a Senate subcommittee is looking this evening at park closures
implemented by the administration, which officials blamed on the
Legislature's cuts in operating funds.
Halford said there could be an agreement simply that the funds could be
included in a supplemental appropriations bill next year.
"The problem will be getting people to forget all the things they've thrown
at each other," he said.
King said he's not sure if such an agreement can be struck. "I guess we need
to hear more specifics from Halford's proposal. That's not the way they
usually do business."
Anchorage Democratic Rep. Eric Croft said that Republicans want to have it
both ways on budget cuts.
"I thought they wanted to cut government," he said. "I guess now we expect
cuts with no impact."
Rep. Scott Ogan, a Palmer Republican, was expected to show up at the hearing
with park closure signs he removed from a Matanuska-Susitna Borough
campground recently.
Senate Finance Co-Chairman Dave Donley, an Anchorage Republican, said he had
hoped to take a look at road maintenance cuts, as well, to see whether any
"accommodations" were possible. The proposed end of winter maintenance of
the Steese Highway from Mile 44 to Central has triggered a furious lobbying
campaign by residents of that northern community to keep the road open.
Donley said late this afternoon that there's no agreement yet and he didn't
think he would have a meeting on that issue tonight.
Bill McAllister can be reached at billm@juneauempire.com.
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