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Questions & Answers about the PUD Telecommunications Bill

  1. Why is PUD telecommunications authority important?
  1. Many rural areas served by PUDs do not have high-speed telecommunication facilities and services, because private utilities are unable or unwilling to offer them. During the summer and fall of 1998, the Washington Technology Alliance interviewed more than a dozen telecommunications companies, and concluded, "many areas of our state have no provider who plans to install fiber anywhere nearby anytime soon". (Policy Initiatives to Increase the Availability of Advanced Telecommunications Services Throughout Washington State, published by the Technology Alliance)

By providing high-speed telecommunications, PUDs can help address one of Washington’s most pressing problems: the huge gap between rural and urban economies. While the unemployment rate in King County (Circa 2000) is 3.1 percent – the lowest it has been in three decades – 23 rural Washington counties are classified as economically depressed. Modern telecommunications infrastructure is necessary for business, education, and other services. Rural communities have turned to PUDs for an economical way to develop the telecommunications infrastructure necessary to strengthen rural economies.

In some cases, urban areas also have unmet telecommunication needs. PUDs may be able to help meet these needs as well.

  1. What does the PUD telecommunications bill do?
  1. SSB 6675 adds a new section to RCW 54, the PUD law, giving PUDs explicit authority to provide wholesale telecommunication services.

The following are some important provisions of the bill:

bulletA PUD may provide wholesale telecommunications within its district and by contract with another PUD.
bulletRates, terms, and conditions for wholesale telecommunication service cannot be discriminatory or preferential.
bulletIf a wholesale customer believes that rates, terms, and conditions are discriminatory or preferential, that customer may request a WUTC review. The WUTC can order a PUD to comply with the law.
bulletA PUD must account for wholesale telecommunication functions separately from other utility services. The PUD must dedicate wholesale telecommunication revenues to paying off the bonds or other financing used to develop the telecommunication facilities.
bulletA PUD cannot exercise the power of eminent domain to acquire existing telecommunication facilities.
bulletBefore developing wholesale telecommunications, a PUD must develop a plan that must be presented to the commission and made available to the public. Three public hearings must be held. The commission must act on the plan by resolution. For up to ninety days after a plan is adopted, the public may submit a petition signed by at least ten percent of the registered voters in the district, requiring that the issue be put on the ballot at the next general election.
  1. After the PUD bill becomes law, how will PUD authority be different than in the past?
  1. Until now, the PUD law did not give PUDs explicit authority to provide telecommunications to others. However, PUDs were able to develop telecommunication systems as part of their utility operations, and an Attorney General’s Opinion stated that PUDs could lease excess capacity on such systems to others. In the past few years, several PUDs opened their telecommunication facilities to others on this basis. The new law gives PUDs express authority to provide wholesale telecommunication services to others, and also states that nothing in the new section of the PUD law is intended to limit the existing authority of PUDs.

In addition, senators held a colloquy on the Senate floor before the final vote on the bill. A colloquy is a conversation intended to establish legislative intent for the record. In the colloquy, Sen. Lisa Brown stated that the bill does not limit any current authorities or activities but clarifies new ones. A colloquy is not law, but could be referred to by a judge in a case concerning PUD authority.

  1. Who supported the bill?
  1. Gov. Gary Locke requested the bill. Sen. Lisa Brown, Chair of the Senate Energy, Technology, and Telecommunications Committee was the prime sponsor and the key driver behind the legislative effort. Reps. Erik Poulsen and Larry Crouse, co-chairs of the House Technology, Telecommunications, and Energy Committee, provided leadership in the House. Sen. Harold Hochstatter and Reps. Richard DeBolt, Jim Buck, and Mike Cooper helped move the bill through the Legislature.

Final votes on the bill demonstrated strong bipartisan support for PUD telecommunications authority. The vote in the Senate was 46-1. The vote in the House was 70-28.

People in PUD communities also supported PUD telecommunications authority. Approximately eighty organizations, including Chambers of Commerce, economic development councils, schools, county and port commissions, and farm groups adopted resolutions in favor of PUD telecommunications authority. A number of newspapers published supportive editorials.

  1. Does the bill have anything to do with NoaNet, the PUD organization that is leasing fiber optic cables from the Bonneville Power Administration?
  1. PUDs’ authority for the NoaNet project was not dependent on this legislation. Language in the bill stating that PUDs can provide wholesale telecommunications by contract with another PUD makes it clear that NoaNet can perform its intended function.

(BPA has strung fiber optic cable along its transmission system throughout much of the Pacific Northwest. NoaNet is leasing cables that it will make available to utilities and the communities they serve.)

  1. If a PUD gets into telecommunications, will that dampen competition from the private sector?
  1. Just the opposite. PUDs intend to create a public information infrastructure analogous to a superhighway; publicly owned, open to the public. PUDs will offer open access to their telecommunication facilities on a non-discriminatory basis. In other words, a PUD will offer available capacity to any customer who wants it, and the charge will be the same for all users in a customer category. This approach will give telecommunication service providers an opportunity to offer new choices in communities served by PUDs.
  1. Telecommunication systems are expensive. Will electric and water rates go up if PUDs get into telecommunications?
  1. The new law requires PUDs to account separately for separate utility functions.

Remember, too, that many PUDs already have or are developing telecommunication systems for utility operations.

A publicly elected board of commissioners makes all PUD investment and rate decisions. This process ensures accountability to the public.

  1. PUDs have technological expertise in electric and water utility operations, but isn’t telecommunications a different field? Do PUDs have the expertise to provide telecommunications facilities and services?

    PUDs in fact do have experience and expertise in telecommunications. PUDs have maintained and operated communication systems as part of their utility systems for many years. Utilities use telecommunications to direct the delivery of electricity where it is needed, to network among remote utility facilities, to detect outages, to read meters remotely, to offer energy management services, and for other purposes.

    PUDs also have years of experience-and an excellent track record-in the maintenance of poles and wires. PUDs have in place round-the-clock systems for identifying and repairing outages.

    In some cases, PUDs may contract with others to provide expertise, just as they contract with others for a variety of utility services.

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