Analysis shows that broadband access gap in Minnesota shrinking; More households have access at State and FCC Speed Goal Tiers

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St Paul, MN – New research unveiled today by Connect Minnesota shows that the broadband availability gap in Minnesota is shrinking, with 85.09% of Minnesota residents now having access to broadband speeds of 6 Mbps download/1.5 Mbps upload, compared to 81.20% last October. In addition, 59.92% of Minnesota households can access broadband at speeds of at least 10 Mbps download/6 Mbps upload – the minimum speed threshold for Minnesota’s goal of ubiquitous broadband availability – a nearly 3% increase from October 2011.

“It is encouraging to see that the efforts of providers and all state stakeholders to increase broadband access are showing clear results,” said Connect Minnesota Program Manager Bill Hoffman. “These efforts, however, must continue in order to bring the empowering technology of broadband to the roughly 2 percent of Minnesota residents who remain unserved. And while the majority of the state can access basic broadband speeds, our 2011 survey results show 28% of the population still does not use broadband at home.”

Nonprofit Connect Minnesota has been working since 2009 to ensure that Minnesota residents have access to the economic, educational, and quality of life benefits derived from increased broadband access, adoption, and use. Part of that work includes mapping Minnesota’s broadband availability and providing analysis to the Broadband Taskforce, broadband providers, policymakers, and community planners.

Among the findings of the new broadband availability research are:

• 85.09% of Minnesota households can access broadband at advertised speeds of 6 Mbps download/1.5 Mbps upload, meaning that 311,000 households are in areas that may be eligible for Universal Service Fund broadband deployment subsidies.
• 59.92% of Minnesota households can access broadband at speeds of at least 10 Mbps download/6 Mbps upload – the minimum speed threshold for Minnesota’s goal of ubiquitous broadband availability*.
• 94.83% of rural households in Minnesota have access to broadband.
• 67.66% of Minnesota households have access to broadband speeds of at least 100 Mbps download/1.5 Mbps upload. In October 2011 only 45.30% of households in Minnesota had access to these broadband speeds.
• Broadband at the basic 768 Kbps/200 Kbps tier is available to 97.77% of Minnesota households, up from 97.08% last October.
• 88.1% ofMinnesota households have the ability to choose broadband service from two or more non-mobile broadband providers

Note: The data in this report are subject to data validation.

*Minnesota Statute 237.012 indicates upload goal of 5 Mbps. Data collection only conforms with speed tiers as represented in the SBI NOFA where 6 Mbps is the most comparable upload speed tier. This means that across the state, approximately 837,000 households are not connected to services that meet the state’s target.

Last month, Connect Minnesota released an innovative new broadband mapping tool called My ConnectView offering unmatched views of Minnesota’s technology landscape. Residents and businesses are encouraged to use the interactive map to find area providers and help validate the data.

Connect Minnesota’s research was conducted as part of the State Broadband Initiative (SBI) grant program, funded by the National Telecommunications and Information Administration (NTIA). The data were gathered in accordance with the requirements of the Notice of Funds Availability (NOFA) and subsequent clarifications set forth by NTIA. The process begins by contacting all known providers in the state and providing information about the broadband mapping project. Information on broadband service areas is collected from each willing provider through voluntary participation. A nondisclosure agreement (NDA) is offered to all providers prior to the submission of data; the data protected through the NDA is limited to highly sensitive network infrastructure information, including middle-mile locations. Connected Nation strives to maintain a flexible mapping process in order to be able to collect data from providers in a variety of formats based on providers’ technical capabilities and resources.

As MPR reports…

Bemidji-based Paul Bunyan Communications, which provides service to some 28,000 phone customers, is slowing down an aggressive expansion of fiber optic cable because the Federal Communications Commission is shifting how it allocates money in what is known as the Universal Service Fund.

The company could receive from $3 million to $5 million less from that fund each year as more money flows instead to such large carriers as AT&T and Verizon, a company spokesman said.

I’ve heard the same sentiment from other folks, such as at the CLE Day on Broadband last week. The Local Exchange Carriers (LECs) feel as if they are paying into a system from which they can’t make a withdrawal. At that meeting Joseph Cavender from the FCC explained that the recent changes are the first of several phases, indicating that the next round of changes may help LECs. I think that feels like cold comfort right now – first because it doesn’t help today. Second, because that just leads to more uncertainty and it’s difficult to build (or sustain) a business plan or make investments based on uncertainty – as seems to be the case with Paul Bunyan.

It’s hard on the companies; it’s hard on the communities as well. A recent report from the University of Minnesota Extension (Economic Contribution of Telecommunications Companies Serving Greater Minnesota) indicates that the total economic contribution of the telecommunications industry serving Greater Minnesota in 2011 was an estimated $1.3 billion. So anything that hampers growth will hamper the economic impact. Also with the negative impact and uncertainty communities are not getting broadband.

David W. Collins, Executive Director of Hubbard County Regional Economic Development Commission has sent a email to several folks outlining the potential problems with these changes on his community and asking policymakers and community leaders to consider the impact…

We need your help!

The Hubbard County Regional Economic Development Commission (HCREDC) for several years has been trying to bring high speed broadband services to ALL of our rural areas. Approximately 4,000 homes and businesses within the Park Rapids (MN) phone exchange currently are not served, and have to rely on satellite or dial up service. These options are unacceptable. Bringing state of the art, underground fiber optic cable to these areas is vital to our future economic growth for numerous reasons, a few of which are:

1) the ability for consultants and others to operate / manage their business from home;
2) students / parents / teachers / schools being able to communicate and student being able to complete assignments (they are currently at a disadvantage compared to other students);
3) resorts being able to take reservations and market themselves, plus the ability of guests to communicate while visiting;
4) people want to live in this area, but are choosing to purchase real estate only where broadband is available;
5) medical care / monitoring plus emergencies;
6) the list goes on and on.

After communicating with several industry providers in our area, the HCREDC partnered with Paul Bunyan Communications (cooperative, based in Bemidji) and supported efforts to obtain a Rural Utility Service loan (RUS loan) thru the United States Department of Agriculture (USDA). This effort was successful and Paul Bunyan Communications was awarded a $17 million loan in September 2011 to build out fiber to each home in the Park Rapids area. It was expected that work would begin immediately with fiber going into the ground beginning Spring of 2012, with project completion estimated to be early 2014.

HOWEVER, in late October and again in November, the Federal Communications Commission issued an order to “reform” universal service fund (USF) and intercarrier access compensation. This “reform” would cost local telecoms millions of dollars annually in lost revenue. It would dramatically change the business model for these telecoms from a system that has worked and been in place for years. The “reform” would significantly reduce their annual revenues and in almost all cases eliminate their ability to invest in rural broadband / phone infrastructure. It is my understanding that one of our local area telecoms stands to lose over $3 million annually due to this “reform”, which would be implemented over the next 9 years. This “reform” will make it extremely difficult for these businesses to repay existing loans, let alone invest in further developing a broadband infrastructure in rural areas.

This is not just a Hubbard County problem. It is not just a Minnesota problem. It is a problem for rural areas nationwide!! This “reform” will negatively impact the development of rural broadband infrastructure nationwide. Imagine if rural areas did not have land phone lines or electricity? We are basically talking about the same issue for our times! And this is much more important than keeping rural post offices open!!!

But back to Hubbard County. The build out of fiber in our area has been for the most part “put on hold” because of the “reform” and its impact locally. Tough for Paul Bunyan Communication (or anyone else in our area) to build out a $17 million broadband infrastructure when the revenue model is being so drastically changed.

So, we are asking that:

1) our congressional delegation (Senator Klobuchar, Senator Franken, Congressman Colin Peterson & Congressman Chip Cravaack) make this issue a top priority; [See note from Klobuchar/Franken]
2) we need our congressional delegation work to have the FCC order nullified or reversed or amended in a way that our project could proceed;
3) and we may need our congressional delegation to extend the deadline for using the $17 million dollar RUS loan authorization. Time is ticking away on us as this issue is being “discussed” in Washington. The “reform” issue needs to be resolved, but when that happens we still need to be able to access the $17 million RUS loan;
4) the Association of Minnesota Counties to actively become involved in this issue. Perhaps by asking each county to pass a resolution of support, and by actively engaging their Minnesota and Washington lobbyists and political action network;
5) Bill Richards, Richards Policy Group, representing Governor Dayton & Minnesota, become actively involved in resolving this issue;
6) Impact 20 / 20 (Northwest Minnesota Foundation) to become involved and mobilize their network;
7) Blandin Foundation Broadband Initiative become involved and mobilize their network;
8) Governor Dayton and his staff to make this a priority and communicate the same to the Richards Policy Group and entire MN Congressional delegation;
9) that the Rural Broadband Alliance (based in Washington, D. C.) continue to work with us towards a satisfactory solution.

Apparently challenges to the “reform” have been, or will shortly be, filed in the 10th Circuit Courts (Denver). However, this route to remedy the situation could take years at best. Congressional action is needed and needed now. The intent of the USDA’s RUS program is solid, the FCC needs to keep its USF and inter-carrier access fees in line with and supportive of that intent.

I offer the content of his email almost in its entirety as a roadmap for anyone who has similar concerns.

Here’s a picture painted from a recent report (The Broadband Imperative: Recommendations to Address K-12 Education Infrastructure Needs) from the State Educational Technology Directors Association (SETDA).

Broadband is Essential

It is a simple fact that access to high-speed broadband is now as vital a component of K-12 school infrastructure as electricity, air conditioning, and heating. … In fact, out-of-school access to broadband by students and teachers is now arguably as important to the overall quality of the student learning experience as access at school.

Broadband Supply is Inadequate

While a 2010 Federal Communications Commission survey of E-Rate funded schools found that most had access to some form of broadband service, nearly 80% of respondents reported that their broadband connections were inadequate to meet their current needs. Outside of school, home broadband adoption rates have all but stalled since 2009, leveling off at roughly 65%.

STEDA made four recommendations:

1. Recommendation 1: Move to Address K-12 Broadband Infrastructure Needs. The set a target for 2014-2015 of at least 100 Mbps per 1,000 students/staff for an Internet connection and at least 1 Gbps per 1,000 students/staff for the WAN.
2. Recommendation 2: Ensure Broadband Access for Students and Educators
3. Recommendation 3: Build State Leadership
4. Recommendation 4: Advocate for Federal Funding

I want to interject a note here from a recent The DLTCL Electronic Newsletter that brings home the importance of Federal funding…

The Federal Communications Commission recently released information outlining the fund demand for the July 1, 2012, E-rate year. Here are some (sobering) highlights.

• Total demand for 2012 is $5.237 billion. This is an increase of 21.5 percent from the demand for 2011 of $4.310 billion.
• Demand for Priority 1 funding (telecommunications and Internet services) is $2.444 billion. For the first time in the program, the Priority 1 demand exceeds the $2.3 billion in funding available, without rollover funds. (Each year there are some funds not used from previous years. It is estimated that for 2012 this “rollover” may be about $400 million.)
• Demand for Priority 2 funding (internal connections) at a 90% discount is $1.379 billion.

What does all this mean? Assuming no major changes in the above figures, all eligible Priority 1 applications will be funded. However, most Priority 2 applications cannot be funded. State E-rate coordinators were in Washington recently and met with Federal Communications Commission (FCC) and Schools and Libraries Program staff to review various E-rate issues, including the 2012 fund demand. Federal officials do not know how they will address the funding issue, although FCC regulations say that when there are not enough funds, they are to prorate discounts. (Note: DPI has routinely filed comments with the FCC requesting that the discounts be reduced to address this funding issue.)

It is expected that schools and libraries will start to be notified of approved applications for the July 1 funding year later in May.

Clearly access is a bottleneck, at home and at the schools. I think that the numbers can be overwhelming for most people. What’s the difference between 100 Mbps or 1 Gbps? The SETDA report does a nice job of explaining what a school can do with various speeds; I’ve abridged the scenarios below. To put it into perspective think about which experience you’d like to see your kid or your future employee to have. In other words – how are we preparing future workers?

Basic Connectivity for Supplemental Enrichment – 10 Kbps per student/staff broadband connection

Students are scheduled to visit a central lab to access locally-run software applications, go online to conduct research for term papers, and compose occasional papers and presentations. Faculty and staff might use the network primarily for email and to post newsletter updates.

Emerging Reliance on Online Educational Tools and Resources – 50 Kbps per student/staff broadband connection

The school implements a partial 1-to-1 laptop program (9th and 10th grades only) and encourages its students to use their devices to access the web for more dynamic content, collaborate with other students, download videos, and receive and post assignments on the school’s learning management system.

Transformation to a Technology-Rich Learning Environment – minimum of 100 Kbps per student/staff broadband connection

Students actively use their laptops in class to access rich, multimedia-enhanced educational content from the Internet. They post their content (including audio and video podcasts) to school learning management systems, access their e-textbooks and get their assignments online, and collaborate daily across the network with other students via wikis and other Internet-based applications.

To be fair the limit seems pretty generous – 300 gigabytes for basic Internet plans.According to the Minneapolis Star Tribune, only 1 percent of U.S. Internet users use that much data in a month.  (Although I could see a family of 5 going through that quickly enough – especially if viewing HD video.) And the charge is not exorbitant $10 for every 50 gigabytes over that limit. And this does replace a lower cap (250 gigabytes/month) that led to customers getting cut off rather than charged. But it’s the precedent that seems to be the issue here – especially since the Xfinity video service does not count against that monthly limit.

As is often the case the most interesting part of the story is the comments section. Some folks are happy that the “basement nerds” will pay their share. Some worry that this is a slippery slope and that soon customers will be charged for every download. Some feel that this is a reaction to folks getting video from places other than traditional TV/cable. And some just want to talk about the favorite or most hated politicians/businesses/neighbors.

• The focus is on consumer savings, jobs and economic development
• The FCC is aware that changing funding mechanisms presents issues for incumbents and other businesses. That’s why they are trying a gradual approach. But there are winners and losers (although who they are depends on who you ask).
• The last chapter of FCC has yet to be written and that’s making it difficult for businesses to plan
• There is still a focus on the US and comparing Minnesota to other states. Folks weren’t asking a lot about international perspective.
• Privacy was one issue where international perspective came up. The EU and other areas puts a premium on privacy; the US does not.
• Minnesota is unique in that broadband has become a county-level issue.

Full Notes…

Broadband Perspectives from the Dayton Administration

Members of Governor Dayton’s Sub-Cabinet on Telecommunications will discuss the creation of the Sub-Cabinet, the goals of the Sub-Cabinet and the goals of their respective Departments.

Commissioner Rothman – Dep of Commerce

Top goals for Governor

• Job creation
• Border to border broadband

We have regulatory job at Dep:

• Wireless
• Cable
• Telecommunications

We think this is critical:

• Monitor broadband development across MN
• Issues in Aug
  • Task Force – charged with doing analysis and comprehensive action plan by end of this year.
  • Establish a subcabinet: Rothman, Phillips & Parnell
  • Created a BB development office in Commerce

We have high goals for Minnesota. We need everyone to work together.

Commissioner Phillips – DEED

Lots of studies that indicate that communities with broadband have an economic development advantage. We work with site selectors. Broadband is now lumped in with common infrastructure such as sewer.

• California did a study saw 6 percent advantage for areas with broadband.
• Dep of Commerce found that broadband was an advantage to businesses especially for IT
• Online sales is $6.2 billion industry
• Broadband is a great equalizer especially for rural areas.

ARRA Investments

• 18 programs received $229 million in MN
• We’re going to need to see more programs like this
• We’re going to need to get creative.
• We’ll have to consider options – maybe FTTH doesn’t make sense.

QUESTIONS – none

Practice Perspectives from the Federal Communications Commission
Hear an insider’s perspective on the practice before the FCC.
– Joseph Cavender

Practice Perspectives from the FCC – Joseph Cavender

USF supports 4 areas:

1. High Cost
2. Low Income (Lifeline/Link Up)
3. Schools & Libraries (E-Rate)
4. Rural Health Care

Why reform?

System was designed to support PSTN – not broadband networks. Led to waste and inefficiency. Caused disputes and left hidden costs to consumers.

Objectives:

• Advance universal service
• Fiscal responsibility
• Business realities

Policy Innovations:

• No subsidy for areas served by unsubsidized competitor
• Dedicated support for high cost areas
• Dedicated support for mobile service
• Competitive bidding (reverse auctions) for the first time to award universal service support
• Explicit accountable public interest obligations
• Budget for CAF support

Connect American Fun $4.5 billion annual budget

1. Remote Areas Fund
2. Fixed Locations
   1. CAF Phone I in Price Cap areas
   2. CAF Phase II in Price Cap areas
   3. Rate of Return carriers
   4. Mobility Fund
      1. Phase I (including tribal areas
      2. Phase II (exclusively tribal)
      3. ICC Recovery

CAF I

• Existing legacy high-cost support to price cap carriers is frozen
• Additional $300 million in CAF funding in 2012
• Carriers have 90 days to accept funding; carriers electing to receive Phase I incremental support will be required to deploy broadband to 1 unserved location for each $775 in support accepted

CAF II

• No support for
  • Areas with unsubsidized competitor
  • Low cost areas
  • Extremely high cost areas
  • Incumbent price cap carriers may receive support if they commit to serve support locations within their service territories

Rate of Return Carriers

• Support continued broadband investment, while increasing accountability and incentives for efficient use of public resources
• Think 500 carriers will see increased support
• Reducing support artificially low consumer rates – may have an impact on rural areas that charge low costs

For Mobile Carriers

• For first time Commission recognizes mobile voice and broadband service as an independent goal of universal service
• Phase I; $300 to upgrade areas with no 3G
• Phase I (tribal) Additional $50 million
• Phase II: Ongoing annual support for areas that depend on USF for service up to $500M/year & $100M/year for tribal

What was wrong with ICC?

• Quite complex
• Carriers faced declining revenues
• Uncertainty related to VoIP traffic
• Arbitrage led to phantom traffic
• Consumers were ultimately bearing the burden

ICC Reforms

• Adoptions rules to deter access stimulation
• Adopts bill-and-keep methodology
• Adopts prospective default for VoIP-PATN traffic
• Created a recovery mechanism for incumbent LECs Access Recovery Charge (ARC)

Further Rule Making

• Bringing remaining rate elements to Bill-and-Keep
• Bill-and-Keep implementation
• Reform end user charges and CAF
• IP-to-IP interconnection

Connect America Fund Panel
The new Transformation Order fundamentally changed the allocation of high cost support and intercarrier compensation. This panel will discuss the impact of the Order on ILECs, CLECs and wireless carriers. It will also review the pending appeals.
– Joseph Cavender
– Philip Schenkenberg
– Jim Campbell
– Dan Lipschultz
– Shannon Heim, moderator

CONNECT AMERICAN FUND PANEL

CLEC need the following:

• Pricing of network elements (unbundled or special access) is still open issue
• CLEC are denied access to fiber networks (old FCC issue)
• No compensatory measure for CLEC
• CLECs pay into CAF, but cannot get money out

What do CLECs get? Lower revenue, no compensation, required to pay into a fund, can’t get fiber.Are we funding our own demise?

Silver lining? There are pending issues that may change this situation. They are taking graduated approach.

CenturyLink

• Maybe a winner, maybe we loser with CAF. (Depends on decisions moving forward)
  • Hope to get some funds.
  • We do lose a lot of access revenue
  • We are debating CAF Phase I funding mechanism
  • Entitled to $89.9M – must decide by July 24
    • But includes significant obligations (need to get to unserved customers for every $775 et al)
    • Need to decide where to spend money
      • CAF shoots for low hanging fruit
      • 83% of unserved are in Price Cap carrier territory so it made sense to go to the source
      • CAF II – need to serve remainder of eligible unserved areas (4/1Mbps) – by state
        • Cost model is important – too low will slow down process

 WIRELESS

• By USF – yes we were winners
• Large wireless providers have already seen shrinking USF (via merger permissions)
• Can anyone put together a business plan to take CAF?
• In 1996, FCC recognized wireless as emerging business
  • Policies were friendly to all technologies, esp wireless
  • There were 44 million wireless connections (in 1996) – now we have more connections than people
  • We are coming closer to 100% coverage)
  • ICC – we’re happy with bill-and-keep, we’ve always worked that way
  • ICC – we’ve had agreements with incumbents – but is there still a need?

 RURAL CARRIERS

• We have high cost areas
• We have pushed out phone service, via USF
• Now we’re transitioning to broadband
• Esp rate-or-return are getting cut
  • It will hurt some help others – but dice are still rolling
  • Hoping to maintain budget
  • Stranded investment is a very big deal
    • Investments have been made based on old rules
    • How do we continue to serve these loans

 QUESTIONS

Are CLECs funding their own demise?

FCC answers – it’s true everyone contributes. Some people get more out of it than others. Wireless providers might say the same. Interconnected VoIP have been paying too –without hopes of recovery.

CLECs are in line for possible support in Phase II. (Without taking full state commitment.)

The Commission is no longer supporting duplicative service in any one area (Mobile being different.) If there isn’t support for one provider, tax payers should not have to support a second provider.

 If you win funding in Phase I – are you ineligible for Phase II? If you get money to build – can you still get money for operating funds?

Phase II is not set in stone yet – but that is not the plan.

It’s tough to accept Phase I when we don’t know the rules for Phase II. Tough to create a budget plan with so many unknowns. DO how can one bid on the reverse auction?

The FCC understands the issue. Phase I is no designed to bring Phase I everywhere. It’s meant for areas that really just need one short of support. Most areas see that it’s an OPEX issue, not a CAPEX. But the folks who need CAPEX are the best case scenario for Phase I.

The wireless bureau did an analysis of 2G areas that would be ready for 3G. There were enough areas that would benefit from one-time investment to move this forward.

How are Mobility Phase I areas being identified?

Done on a census block area – there’s a map on FCC of qualifying areas.

Reverse auction for high cost areas is new (planned for Sept 27). What are the thoughts?

Know about it from Spectrum. Haven’t been very involved but seemed effective with Spectrum. Like it in terms of land lines.

What did FCC not allow common (aggregate) bidders?

To prohibit collusion.

Unfortunately it does make it more difficult for small providers to participate.

Who does reverse auction favor?

Favors whoever can most efficiently provide service.

Carrier of last resort. Will our notion change?

CenturyLink – we tried to get the FCC to lose the idea of carrier of last resort. That obligation has largely been addressed. If you’re going to focus on broadband – getting rid of carrier of last resort will help folks move forward. Funding is required for broadband carrier of last resort.

If you maintain carrier of last resort –the regulators should support those networks. However if there is no carrier of last resort, do we leave it to end user?

The rural folks are more supportive of carrier of last resort. We maintain the last resort connections, and we get support for it.

Sometimes our problem (in rural area) is the middle mile.

Generally people will build where they can make money – and that’s an issue for building out to areas of last resort. So carrier of last resort forces regulators to look at how to build out to those last resort areas.

IP-to-IP will be another issue.

What’s the process that FCC provides guidance to USAC? Any efforts to make current process more transparent to public?

We’ve talked about it. We’ve been trying to formalize the process and make it more transparent. We’ve issued guidance documents to USAC.

We do work near each other and there is less formal communication as well.

They are the repositories of info – and we occasionally ask them for info.

There’s a sense that there’s a lot of chatting that we don’t know about. There’s speculation on how much happens.

Artificially low rates – how do you factor in calling scope? IN rural areas I might only be able to call 900 people, in urban areas phone users can call thousands of people.

FCC looked at rates and they varied greatly. We thought that folks should be paying comparable rates. We ask about rates; we don’t ask about calling areas. Traditionally we’ve looked at areas where rates have been “too high”, looking at rates that are too low.

Other issues

Transition to Bill-and-keep

Two legal issues:

• Does FCC have authority to step into state areas
• Does FCC have authority to do bill-and-keep

Broadband in Minnesota
Update on broadband enrollment and deployment progress in Minnesota and a review of the impact of BTOP and BIP grants in the state of Minnesota.
– William Hoffman
– Lyle MacVey
– Christopher Sandberg, moderator

BROADBAND IN MINNESOTA

Bill Hoffman on Connect Minnesota

Primary Program Components

• Data Collection & Mapping
• Survey & Research
• Planning
• Program Development

Statewide Availability – Percentage of households reaching MN Broadband Goals:

• In Oct 2011 57.4
• In April 2012 59.92 (not yet confirmed or published, will be released within the week)

 Lyle MacVey – NESC

• Working on ARRA-funded Middle Mile – Regional Network serving Community Anchor Institutions in Northeast Minnesota.
• Working with Cook County and Lake County for last mile services

ARRA Funded Projects

• Anoka
• Carver
• LqP
• SMBS (Southwest Minnesota)
• Lake County
• Arrowhead Electric
• NESC

Other projects in Development

• Sibley County
• Todd County
• Cloquet Valley
• Redwood County
• Kanabec County
• City of Prior Lakes

We are looking at possible impacts of CAF and ILEC/CLEC response

In rural areas – you can build FTTH if you have the density. It’s the long haul (to TCs, to Chicago) that is expensive.

Trends in Projects

• Movement to Countywide projects
• Movement to public-private partnership
• Majority of projects fiber based
• Projects are rural in nature
• Looking for ways to bypass referendum requirements
• Biggest challenge is lack of funding sources other than bonding

Rate Trends

Consumer and Small Business (DSL/FTTH)

• Baseline holding steady – rates not falling
• Multiyear contract incentives

Carrier & Large Enterprise (Middle Mile)

• Greater Competition
• Prices in rural markets state to fall
  • 100 Mbps @ $675/month
  • Price matching and network leveraging

Challenges

• NTIA/USDA funding releases slower than expected
• Construction costs higher due to David_Bacon impacts
• Changes in Design or Scope
  • Result in lengthy reviews and project delays
  • Transparency difficult to assess both in terms of access to and release of; MN Data Practices Act (have had 5 intentional fiber creaks)
    • Business plan, rate structures

Result

• Projects falling short of original milestones and scope

Opportunities

• Technical Assistance Survey Results
• Leveraging Community Assets
  • Tower leases and public lands
  • Equal Opportunity and Access
    • Establishing Ground Rules
    • Public Common Carrier VS ISP
    • Education
      • Understanding FCC rules.

 QUESTIONS

How are people answering question about computer ownership? They aren’t counting smartphones and tablets.

Connect MN will change the question.

You mention engineering as project issue and 20% over cost. Can you say more?

It’s primarily in underground topology in NE Minnesota. Part of engineering is also inspection – and that can take longer.

How does Minnesota compare to other states?

Mid pack. Working on adoption would help.

Keynote Address: Assessing Broadband in Minnesota
The former Speaker of the House of Representatives and current Chair of the new Minnesota Broadband Task Force will provide her perspective of the state of broadband in Minnesota
– Margaret Anderson Kelliher

NextGen 911
The shift to broadband and IP is changing the way 911 services are used and delivered. With the explosion of mobile devices and data services, calls for emergency response are not just coming from telephones anymore. In this panel we’ll hear about what is happening at the national and state level regarding how emergency response networks must change to become next generation emergency response networks.
– Trey Forgety
– Anthony Mendoza, Moderator

NextGen 911

Tony Mendoza

• Need to access and locate different types of media – VoIP & Text
• Legislation was raised (didn’t pass) concerning all IP 911 network

Trey Fogarty at the 911 Association

• Primary standards development organization for 9-1-1 systems and service processes.
• 7000+ public safety and 9-1-1 industry  members
• The only professional organization solely focused on 9-1-1 policy, technology…

How we communicate

• By 2014, most Internet traffic will be mobile
• Voice communications account for only 1/3 of mobile usage; 2/3 are apps, test & video
• Approximately 32% of adults and 36% of children live in wireless-only households
  • Exception – folks will get the phone if it gets bundled with broadband
  • More than 8 trillion texts were send last year
  • Teens text 5,500 times per month
  • 35 million Americans who are deaf or hard of hearing rely on texting
  • IP-based messaging services such as iMessage are beginning to displace SMS

What’s driving NG9-1-1?

• The need to mainstream 911 technology
• Needed improvements in survivability
• The critical need to improve interoperability and information sharing
• A desire to increase competition and innovation in public safety technology

Built-In Interoperability

NG911 is:

• An open standards-based platform
• Using modern, flat IP Architecture
• With robust security and resilience features
• Based on Commercial Off the Shelf (COST) technology
• Designed to be originating-service agnostic

NG911 Responder Benefits

• Allows seamless flow of data from consumer to call-taker to dispatcher to responder
• Leverages existing national standards for interfaces and data structures
• Provides an adaptable platform to meet future responder needs

Recent Legislation – http://www.nena.org/?page=Standards

• Now is the time to start thinking about NG9-1-1

QUESTIONS

What kind of consumer education do you see happening?

The FCC asked in the rulemaking – should we do something now to deal with Americans communicating via text? The answer was yes – especially for folks with disabilities.

Text to 911 mandate may appear this summer – with a 3-5 year expectation.

If you’re a carrier a best practice – text back to people who text 911 to tell them to call 911. In the long term, start planning. Verizon is doing a text to 911 rollout.

Municipal Broadband
A review of municipal broadband projects in the state of Minnesota.
– Milda Hedblom
– Christopher Mitchell

Municipal Broadband: Milda Hedblom & Chris Mitchell

How did National Broadband Plan support municipal network?

States had the right to tell communities that they couldn’t build a networks and/or put stipulations on building the network. But the NBP gave a clearer sense that it wasn’t’ the case.

How does MN fit in compared to other states?

Minnesota is unique in that there’s a focus on counties.

You have looked at exemplar projects (such as Bristol, Chattanooga). Are there lessons to learn?

Chris just released a paper on the topic. They all of Gig to anywhere in the city. Here are some characteristics they share:

• Municipal electric department (only 2000 cities have this)
• They were prepared to act as a business (get, take customers)

Comment on counties…

Minnesota wants to be one of top 5 states by 2015. Counties have found that it’s hard to run a modern business without broadband. Folks with good access are often getting it from coops. Groups of people in the county are realizing that if they don’t act, they will be left behind.

Minnesota’s counties are looking at public-private partnership, community networks, working with private providers.

USF reforms will be interesting but so far seems insufficient.

There is no one-size-fits all solution. Different counties have different assets. Almost all counties are looking for partners of one form or another.

Ramsey County has aspirational plans. Sibley County has now made a commitment via Joint Power with ambitious goal of bringing fiber to farms.

JoAnne Johnson – U-reka update

1. Did feasibility for Todd County. We’re meeting with community and updating them. There was about 1 year between first meeting and completion of report. They are working with Arvig to match Blandin support.
2. We’re finding more enthusiasm from private partners. And more trust from public partner to work with private partners.
3. Working with Kanabec County – approved last night. It will be a marketing survey, 10 year financial study…
4. We’ve seen success with Middle Mile project – and now we’re investigating access to the home.

There are obstacles for public participation…

• There are 19 states with some form of barrier for private sector getting into providing/building broadband service.
• Municipal network has barrier of super majority referendum  for providing phone services – maybe it makes sense to make that 50%

Monticello – it went into operation with an overhang of debt (due to lawsuits). It’s been a huge obstacle. Perhaps we need to judge them not based on economics alone.

Serving the Underserved
A review of the legal requirements and programs designed to serve low-income families with broadband services. The programs of Comcast and CenturyLink will be featured.
– Karly Baraga Werner
– Jim Campbell

SERVING THE UNDERSERVED

Comcast

• The digital divide is a real problem and it is growing. 92% have access only 65% have adopted broadband
• Half of non-adopters are low-income families
• So we need to focus on low income families
• Big barriers – Internet Essentials was developed with FCC to address all issues
  • Cost (36%) – connectivity and equipment
  • Digital Literacy (22%)
  • Relevance (19%)

What has the FCC done?

• Supporting Connect to Compete (piloted in California right now)
• Feb 2012 – FCC released the Lifeline Reform Order
  • Permit eligle customers to apply Lifeline discounts to bundles that include voice and broadband
  • Creates a Pilot Program to study application to the adoption challenge of a subsidy for the price of BB service.

Details on Internet Essentials – http://www.internetessentials.com/default.aspx

• $9.95/month – XFINITY Internet Economy Service (currently 3 Mbps down)
• Option sot purchase computer for $149
• Free Internet training
• Can remain on program as long as kids are in school and qualify for free lunch

We’re trying to get the word out.

CenturyLink

Internet Basics – http://www.centurylink.com/home/internetbasics/?rid=internetbasics

• Service discount $9.95
• Equipment discount ($150 notebook)
• Training – and 24/7 tech support
• Committed to spend $2 million on the project over next 2 years
• We focus on families and seniors

QUESTIONS

How is enrollment?

It was slow to start. But we’re seeing an uptick and we (CenturyLink) will be working with school next year.

Comcast is at 5% of eligible students.

Is childcare assistance a qualification for CenturyLink?

Not sure.

What issues were there in Minneapolis (for Comcast)?

We found that when we can get a brochure in a backpack, we have success. But there are some reservations with some schools to have an appearance of supporting one business. And principals are busy.

Making the parallel between reduced lunch programs and reduced broadband rates helps.

Comcast has brochures in 13 languages. And we have a partnership with Hmong American Partnership.

Are there avenues to reach seniors that have been successful?

Going to where the seniors are has been helpful. Also we can direct mail to phone customers. And we’ve gone back to paper – we bring paper applications to meetings.

Privacy/E-Commerce
Our speakers will provide an update on developments in privacy law, including a discussion of the new FTC Privacy Report, the EU Privacy Directive, Google’s new privacy policy, the Obama Consumer Privacy Report and the impact of recent developments on mobile applications.
– Jamie Nafziger
– Professor William McGeveran
– Brad Bolin

PRIVACY / E-COMMERCE

Dorsey Whitney – Ways that our data is getting collected

• Fear of privacy may be holding back adoption

This is the info an App Developer can access

• Unique Device Identifier
• Contacts in your address book
• Current GPS coordinates
• Photos in your photo gallery
• Email account info
• Phone info
• Videos watched and searched.
• Web search history
• Keyboard cache

Facebook OpenGraph Apps (Frictionless Sharing)

• What you read
• Songs you listen to
• TV shows you watch
• Movies your watch (outside US)
• Your exercise results
• What you cooked
• What you are wearing
• What you want
• Where you are traveling

Ad Network/Data Broker

• Age
• Gender
• Income
• Ethnicity
• Sexual Orientation
• Political Views
• Parental status

Best Buy –

Think about the power that a business has in terms of having all of your info – but also understanding relationships based on info and that the business has the ability to feed you info when they choose it.

UMN Law School Professor –

We have a class to give our students an edge.

A lot of this is driven by what info can be gathered but also the algorithms that give even more info.

There aren’t a lot of laws out there now. But the Future Privacy forum are active.

• Slow movement towards increased federal role in regulation (FTC report and Obama/Commerce report)
  • Both reports pretty much say – there’s a lot to think about
  • They are looking for best practices
  • They are inclined to ask for privacy by design
    • Set defaults
    • They don’t want to kill the goose that lays the golden egg
• The rest of the world is proceeding in a different direction – data protection (not privacy)
  • Looking into right to be forgotten
  • Providing end users with access to info
  • Changing from guidelines to regulation
• Emerging US privacy strategy

QUESTIONS

Differences between EU & US have been ongoing. EU have made information a right. If agreements are 20 years long – is that part of US companies’ strategy to avoid stricter rules for a while?

The gulf between EU and US is growing.

One key concern is that less certainty is not good. The agreements led to more certainty.

There is drive in US policymakers to try to increase harmony between US and other places.

The powerful companies will hold out for US rules are long as possible.

On right to be forgotten – is it like right of withdrawal?

Loosely, yes. The US has longstanding rule on freedom of speech. And we prioritize that. We’re kind of libertarian on it.

EU countries see rights differently. They also have identity rights, rights of attribution, right of withdrawal.

Is common law developing on shrink wrap agreements?

Yes in FTC – mostly Section 5 deception trade practices.

Here’s the situation as stated in the Subcommittee memorandum…

More than three years after the American Recovery and Reinvestment Act of 2009 (ARRA) allocated $7.2 billion for broadband grants and loans, the jury is still out whether taxpayers are getting their money’s worth. Despite claims of ARRA projects being “shovel ready,” recipients of 233 National Telecommunications and Information Administration awards worth $4 billion have spent just $1.6 billion of it so far. Less than a dozen of the projects have been completed. Six of the awards worth $124.5 million have been returned or revoked. Recipients of 320 Rural Utility Service Awards worth $2.4 billion have spent $968 million. Five projects have been completed. As of July 2011, $124 million in grants and $35 million in loans have been rescinded or revoked. Allegations also persist that NTIA and RUS funds are not bringing broadband to unserved areas but instead are subsidizing competitors to overbuild privately financed networks.

Here are the numbers:

NTIA
Budgeted $4 billion
Spent $1.6 billion
Revoked $124.5 million
11 projects completed

RUS
Had $2.4 billion
Spent $968 million
Revoked $159 million
5 projects completed

Congress is convening a panel of experts to talk about what’s happening, the panel includes:

• The Honorable Larry Strickling, Assistant Secretary for Communications and Information and Administrator, NTIA
• The Honorable Jonathan Adelstein, Administrator, RUS
• The Honorable Todd Zinser , Inspector General, U.S. Department of Commerce
• Mr. David Gray, Deputy Inspector General, U.S. Department of Agriculture

Causes of Current Problems

Telecompetitor notes that there are some extenuating circumstances that have made finishing projects more difficult…

The telecom industry has cited several factors (not mentioned in the memo) to explain the apparent spending slowness such as an often long approval process for environment impact studies or a shortage of fiber cabling that resulted when the April 2011 tsunami took a key vendor offline. No doubt Strickling and Adelstein will review some of these factors at the hearing.

I’ve heard from folks that both are real issues – but I’ve heard that from projects that are otherwise on track and seemingly making progress. I don’t know that the main concerns here are the projects that are running somewhat behind – but rather the projects that seem to still be hovering around the starting blocks.

Causes of Future Problems

The memo itself outlines another issue that I think may be even bigger moving forward; the FCC has made substantial changes to USF, thereby requiring changes in business plans of many ARRA grant/loan recipients…

More problems may lie ahead. The FCC has recognized the need to reform the USF’s high-cost program for a decade, with proposals in 2008 and a reiteration of that view in the 2010 National Broadband Plan. The RUS nonetheless apparently guaranteed loans under the BIP and its Telecommunications Infrastructure Loan Program on the assumption that applicants would continue to receive the same level of high-cost USF funding for the life of each loan. Now that the Commission is reforming the high-cost program, the RUS has asked loan recipients to revise and resubmit their financial projections to demonstrate sustainability.

It will be interesting to see how the Subcommittee and panel of experts addresses those issues. It’s a byproduct of the funding coming out before the National Broadband Plan – perhaps an unintended consequence but not unforeseeable.

Minnesota Projects Mentioned

Finally, two Minnesota projects were mentioned specifically in the memo. First the Leech Lake Reservation Business Committee in Minnesota declined its $1.7 million grant on the grounds that it would not be able to meet its grant requirements. And the Lake County project…

Nevertheless, industry observers have suggested that the BTOP’s and the BIP’s infrastructure loans and grants have been used to overbuild existing systems rather than extend service to unserved areas. The Government Accountability Office confirmed these suggestions at the Feb. 10, 2011, subcommittee hearing, noting that the NTIA and the RUS had performed “due diligence” with respect to overbuilding but “made a decision to go forward nonetheless” with projects that would overbuild existing facilities. Indeed, the Energy and Commerce Committee’s Subcommittee on Oversight and Investigations is already investigating recently publicized allegations by cable company Mediacom that the Lake County government in Minnesota is not only using $66 million in BIP funding to overbuild Mediacom, but committed fraud by misleading the RUS in its application.

The Lake County project has had its share of ups and downs. (Some might note that disruptions from incumbents may be one reason some projects are running behind.) Last we heard Lake County celebrating new location in Two Harbors. I did notice that their last couple of meetings had been cancelled.

The Subcommittee meeting will be held tomorrow, May 16, 2012, at 10:00 a.m. in room 2123 of the Rayburn House Office Building. I haven’t seen any notice of online broadcast.

The FirstNet plan is to build a broadband network for police, firefighters, emergency medical service professionals, and other public safety officials. FirstNet is really just getting going – but there are some plans. First plan is for FirstNet to work with state, local and tribal governments. A goal is to create an interoperable, cohesive, countrywide network. That being said, states can opt-out of FirstNet. Apparently the plan (and I’m gleaning this from the webcast) is for FirstNet to come to the states with an assessment of what the state has and what they need. And RFP will be created from these assessments.

A Minnesota Public Safety Broadband Wireless Data Network Requirements Study has recently been released…

This comprehensive study was conducted through 2010-2012 to assess the needs of public safety wireless broadband in Minnesota. It is available in five sections, which each focus on a different interest area in public safety broadband. This study will form the foundation of Minnesota public safety broadband planning efforts and our interaction with national entities such as Firstnet.

I thought it might be helpful to share the recommendations from the report…

1. Establish a body under the Statewide Radio Board to officially sanction public safety broadband planning activities and to represent the State before the FCC, NTIA, Firstnet, and standards bodies including 3GPP.
2. Develop a Minnesota Public Safety Wireless Broadband Plan based upon its existing planning activities and current research.
3. Develop applications and data interoperability standards, including standardized SDKs, APIs, and network interfaces as well as media codecs, signaling formats, and container formats.
4. Execute formal MOUs with potential partners for the public safety broadband network to clearly identify all feasible avenues for alternative financial models for both construction and maintenance of the network.
5. Expand public safety broadband planning on a regional basis to ensure interoperability with adjacent states and the provinces of Manitoba and Ontario.
6. Work actively in larger planning and standards-setting with organizations including the FCC Technical Advisory Board, PSCR, NPSTC, 3GPP, and Firstnet to support development of national standards and a national network model that fully support the needs of the state of Minnesota.
7. Continue requirements research and planning efforts including expansion of its existing financial models, network design, network requirements, and user needs.
8. In the near term, construct a small public safety wireless broadband pilot network to identify transition and implementation issues specific to Minnesota, collect live user data, and serve as test-bed for innovative end-user applications.
9. In the long term, facilitate, through whichever means best meet the needs of our public safety community, integration into the national safety broadband network that introduces operational and technological efficiencies and enhances the performance of public safety services in the state of Minnesota to maximize the protection of human health, property, and safety.

Todd County FIBERBAND 40 people in attendance Nate Burkett, county coordinator goal of meeting -
Inform, gather information from users, find partners, not make decisions

Timeline on project:

• April 2011 – County board approves resolution seeking broadband
• May 2011 – Countywide meeting
• August Blandin grant
• January 2012 – feasibility study completed and presented to county board.
• March 2012 – interest survey through tax statements – 400 responses.
• April – meeting with Arvig to discuss partnership possibilities

What’s next?
Community decision making.

Mark Birkholz – ACS

No current business model works for FTTP now PP partnership might work – evaluate… Breakeven – 25, 36 to 43 years Be ready if BB stimulus funds become available.
Be positioned for USF changes – proposed changes will not help project.
Fiber is the end all – be all for broadband deployment.

John Schultz U-reka Broadband Ventures

Cites the county for moving relatively quickly. John recognizes Blandin, Toni Merdan and Alex Weego.

Starting does lead to action.. Todd County has started!
Marketing study, Build options, Capital requirements, Business modeling, possible next steps.

Residential
96 % of people still have a land line telephone.
53% Internet penetration

• Rural customers less satisfied
• Customers want faster speeds, more bandwidth 74% cable and satellite penetration
• Charter in town
• Dish in rural areas
• Where ACS has capacity, they also offer video

65% “likely” to change providers
same percentage in rural and urban

Expected bundle pricing
39% – $85-100 per month
20% – $101 – 110
18% – more than 110 dollars

Business survey

• 86% of businesses use a broadband connection Only 37% have a web site those not using cannot get broadband 62% would like higher speeds at work
• 100 % want faster service at home

A few Todd County customers have FTTH through ACS or Consolidated Telephone or WCTA.

Rural outside ACS
Town/city outside ACS
ACS Service Areas

Total build cost with 100% penetration – $65 million 65% penetration used. ACS competitive pricing model – Staples and Wadena
30 year model – $42 million capital cost and operational costs based on 65% penetration. Includes electronics refresh.

Cash flow positive in year 3.

Intangible benefits

• Savings due to competitive environment – 30%?
• Economic development surrounding the network development
• Significant jobs impact
• Improved governmental and educational services

Jobs – construction and operations and permanent new business and jobs and telework.

Now

• further discussions with ACS
• Sales/education and marketing program to demonstrate 65% penetration Discussions with funding sources – bonding, etc.
• Meet with RUS
• Follow USF discussion and exploit opportunities

Questions -

Recruiting market/education team.

Issues around multiple devices and the use of bandwidth.
Cannot take online classes due to poor broadband.
K12 districts need students with broadband; new online training enabling college courses. Schools need the bandwidth too!
Bundling would be a big saver for residential and business.
Rural people may be/would be willing to pay more.
Move forward as a county .
Wireless did not work when it rains, snows, etc.
Timelines on decision-making.
County goal 20/10 Mb by 2014 in towns, in rural areas by 2016.
Hoping for federal action.
3 year build out to spend $65 million.

Wireless as the solution. Many limitations to wireless; it is significantly cheaper. Fiber is future proof. Copper is definitely limited.

Need to work to get the discussion going across the county, with lots of people participating. Make it easy for the county board to say yes.

So many people want and need broadband. We need a local partner, one with local customer service. People in rural MN understand the needs and value of both rural and city livers.

Discussion about enhanced competition. and the effect on pricing and take rates. Schultz indicated that they need 65% take rate and around $100 ARPU.

Community questions about making things happen. How do we get the word out? How does this work get done?

geography differences – what are they?

New worker in Todd County – tech consultant. Able to get high speed in town. This is critical for business and education. Colleges and high schools are becoming increasingly intertwined. Bandwidth is the link to connect students and educational institutional . Lives in Clarissa. Ready to help get things going using social media and local contacts!

The big issue is that Comcast is giving priority to its online video service Xfinity. The NY Times paints a picture of what’s happening in terms that are accessible to most folks…

“If I watch last night’s ‘S.N.L.’ episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all,” Mr. Hastings wrote on his Facebook page. “In what way is this neutral?”

Earlier this week, Senator Franken sent a letter to the FCC asking them to look at the situation…

The Minnesota Democrat today sent a letter to the Federal Communications Commission and the Department of Justice asking the agencies to take a closer look at a new service Comcast announced in March that will stream Xfinity on-demand content to Microsoft Xbox consoles.

Comcast maintains that their service agreements are in compliance with net neutrality because it relates only to its own network – tranport does not involved the Internet at large…

Comcast’s On Demand service, a service used hundreds of millions of times by our customers every month for the past several years, is indisputably part of our Title VI cable service which is not subject to the FCC’s Open Internet Rules – and we are not aware of anyone who has taken a contrary view. When Comcast streams its own services over the open Internet (including XfinityTV.com or nbc.com), such streaming is subject to Comcast’s broadband Internet data usage standards. But the Xfinity app for the X-Box does not stream content over the open Internet and is also part of our Title VI cable service. As such, it is not subject to the FCC’s open internet rules.

Franken counters…

Still, Franken said in his letter that even if Comcast is not technically in violation of the rules, its intent is to favor its own services over services offered by potential competitors.

The NY Times article explains why this should matter to the average consumer…

Today, 96 percent of Americans have a choice of at most two broadband providers — a cable company and a phone provider. For consumers who desire very high speeds, cable is often the only choice — along with Verizon’s FiOS and AT&T’s U-verse in small pockets of the country. If given free rein, these gatekeepers could determine which services get to drive through the pipes that make up the Internet at what speeds and prices.

The NY Times even offers a solution of sorts – or at least points out in hindsight what they feel was a crucial policy error in the US…

There is little mystery here. About a decade ago, the government forced France Telecom to lease capacity on its wires to rivals for a regulated price, allowing competitors like Iliad to storm in. The United States took a different path: the Telecommunications Act of 1996 had opened the possibility of similar unbundling, but the F.C.C. decided against such action out of concern it would discourage investment in physical infrastructure.

The F.C.C. appears to have made the wrong call. Iliad started piggybacking on France Telecom’s wires, but soon began laying wires of its own. In 2002, the United States had the sixth-highest broadband penetration among all O.E.C.D. countries. Last year it was in 15th place. Of 34 industrialized countries, the United States ranks 17th in terms of average download speeds. Among the 31 countries that have very-high-speed broadband access, the United States is more expensive, trailing only Turkey, Israel and Chile.

So a new chapter on net neutrality begins. Increased access to fiber as a competitive solution may solve some of the problems. But it’s the OECD ranking that has me a little nervous. Are current providers fighting over deck chairs on the Titanic? Are we focusing too much on maintaining the local market status quo and forgetting that we’re not in competition with ourselves anymore – but that the Internet has opened up a world of global competition and we’re no longer leading that pack?

Yesterday I attended the Task Force meeting in Winona. It was held at Winona Health. It was fun to hear how Winona Health is using technology and moving towards implementing telemedicine. In short, the effort started 10 years ago with digitizing health records (EHR), centralizing them and allowing different facilities to share records. That was the building block making is possible to now deploy remote consults.

It sounds as if broadband and reimbursement have been two big issues in getting all of this done. Without broadband none of it would be possible. Without reimbursement, it will be difficult for it to be sustainable. (And reimbursement needs to include reimbursing healthcare providers for remote visits as well as reimbursement for equipment and technology maintenance.)

Two of the Task Force small groups met during the session: Broadband Adoption and Monitor/Understand Impact of FCC/PUC Decisions. Both seem to be moving forward with action items to help the state get closer to the broadband goals.

The next meeting will be June 12 in Deer River/Cass Lake.

Governor’s Task Force on Broadband
Winona Health, 855 Mankato Avenue, Winona, MN 55987
Tuesday, May 8, 2012
10:00 a.m. to 2:30 p.m.

10:00 10:15 Greetings and introductions, approve meeting minutes

Dick Sjoberg, Maureen Ideker, Steve Lewsader, Gary Evans, Shirley Walz, Dennis Ahlers, Dianne Wells, Bill Hoffman, Andy Shriner (on phone) Dan Richter, Steve Peterson, Boa Vang (Shirley will be acting as Chair)

Minutes Approved

10:15 11:30 E Health Presentations
Welcome and Background on Winona Health Mike Allen (CIO)

One message – the connection from broadband is incredibly important. It’s critical to our mission. We’re an independent provider; we’re considered rural – although Winona isn’t as rural as some areas. Broadband brings us quality and lower costs.

We’ve been working on EMR for 10 years. We’ve been working on moving to the cloud for all of that time. We couldn’t make that move without adequate broadband.

Working on meaningful use – we’re currently meeting requirements.

Progress of moving data:

Infrastructure -> Health Info Exchange (with Mayo, move data around Winona) -> moving to HIE à building a telemedicine networks – where we move healthcare beyond our four walls

A main goal is to make healthcare cost effective – but we need broadband to do it – especially in terms of telemedicine.

We don’t want to wait until people get sick enough to come to the hospital; we want to visit them where they are and keep them healthy.

Mayo Beacon Project—Lacey Hart (www.semm.org)

We’re one of 17 projects in the US focused on using technology to change healthcare. Beacon starteed 2 years ago – we’re on a 5 year plan. We’ve been focusing on EMR, EHR and data exchange.

We work with all of the schools – and most of the healthcare providers in the area. We are aligned in communities in practice:

• Healthcare providers
• Public Health
• Non-Traditional healthcare providers (schools et al)

The healthcare transformation happens on the backbone of technology.

• We have moved to a Peer-to-Peer HIE
• 100% HER Adoption Rate
• NwHIN Connectivity
• CCD’s parsed into discrete data and persisted
• Created a Clinic Data Repository

Indiana (Reagan? Street Institute) – is the best at normalizing data so we send info to them.

Things we want to do with technology:

• Diabetes Medication Choice Web App
• Patient Reported Outcomes/Quality of Life

Beacon Project and A Vu Media—John Goodman

Beacon is a technology challenge.

FCC supports infrastructure and gives support for maintenance support. Winona has two rural clinics: Rushford and Lewiston.

• Clinic-to-Clinic broadband need is the greatest. They are looking at needing 100 Mbps.
• Provider –to-Community means connecting with other anchor institutions. It requires significant broadband starting at 5 Mbps
• Clinic-to-Home – not a lot of systems yet. They can get health info – but rare to get access to provider that are HIPPA compliant and qualify for reimbursement. (Recommend 2 Mbps)

Big Issues in Online Health Care

• Adoption & utilization
  • Ease of Use is biggest factor!
  • Lack of HIPPA compliant Security/Privacy
  • Lack of Face-to-Face
  • Reimbursement
  • Cost

We are using remotely managed system. We have our own customer interface. We use multipoint. We have one internal medical operating system.

Each report location has two-way cameras so that provider can zoom to great extend and rotate and move. It requires HD images – so broadband is needed.

Peak demand is a big issue too. You need to schedule accordingly to get buy in from users.

Beacon has been working to integrate everything using best in class business solutions. They have altered the solutions to meet needs of healthcare providers – for example giving power to doctors so that they can decide who sees what via video.

HCO is another provider in Winona. We have been able to help them too – for example they can use video rather than live bodies for overnight care in different facilities.

We are working on connectivity through the TV – due to ubiquity of TVs and ease of use.

Able to put equipment on mobile cart – so that the technology can go to the patient.

Dedicated 5 Mbps symmetrical connection is really required for video checkups.

Telemedicine Applications:

• Nursing home
• Assisted Living
• Remote Clinic Primary Care
• HCO Remote Psych Counseling
• HCO Resident in-home health are
• HCO Internal residential management
• Winona Home Health care
• Winona County Home Health Care
• Diabetes and Nutrition Education
• Mayo Remote Cardiology Consults
• Winona School Programs

Factors in rural American that make telemedicine essential

• Population is aging much faster than metro
• Physicians numbers are declining
• As people age, the number of people who are able to transport people to healthcare also decreases

**You need a partnership with healthcare provider and broadband provider.

You need symmetrical service for telemedicine

Higher bandwidth produces higher quality (or risk latency and video quality)

QUESTIONS:

How many patients are using this?

Limited number now. In Rushford, we’ve identified 700 patients with 19 provides; we’re working with 4 of those providers. Nursing homes are unique. We think the cost reductions will come in fewer trips to healthcare providers.

How are doctors accepting the system?

Everyone has a high degree or interest – in part due to quality video and custom interface. Also it helps to have technology support. Also as we hire, we set up an expectation for using technology.

Once everyone is used to the technology, you could service patients anywhere?

Yes. We have the advantage of being a trial market.

Are you partnering with other communities?

We haven’t yet – but once we have this down, we certainly could.

Maureen Ideker – FCC Rural Health Care Pilot Project

In Nov 2007, the FCC authorized $417 million for connecting rural and urban health care providers. Here are the five that

• Minnesota Telehealth Network
• North Region Health Alliance (MN & ND)
• Medi-Sota (SW MN)
• Minnesota Assn Community Mental Health Programs’
• SISU Medical Systems

Wanted to use open architecture – which means anyone can participate. Wanted to improve quality of service.

• Managed by SISU
• Points of Presence: Duluth, Brainerd, Willmar, Grand Forks, Fargo
• 144 participating health providers joined.
• Steering Committee includes representation

Minnesota has a competitive model. At first we weren’t thrilled with the competitive model – but it’s helping us get stuff done.

QUESTIONS

How has consolidation had an impact?

Consolidation in healthcare and technology has had an impact.

It’s taken a lot of work to just get partners to talk about what they do need. As far as broadband we’ve said 10/10 Mbps. Some clinics and providers have IT departments – but the smaller guys don’t.

Is reimbursement an issue? If so where does CSM fit in?

If we’re just talking broadband – no. But reimbursement for telehealth – it’s in place. IN 2007, we were getting reimbursement for 97% of visits. We haven’t seen many problems – but we’d like to see more types of providers get covered.

When we talk about equipment to the home MN Medical Assistance will help cover cost of equipment and ongoing maintenance.

LUNCH

After lunch two of the sub-groups met to discuss their work. I was able to take notes on the Broadband Adoption session. And I was able to capture audio/video of most of the other session, Monitor/Understand Impact of FCC/PUC Decisions. (Might want to skip first 2.5 minutes.)

Broadband Adoption: (Shirley Walz)

We have two documents:

• A growing list of resources
• A proposal to Task Force to create ‘Benton County” brochures, which highlight providers and options in regional areas

When surveying people about adoption it no longer makes sense to start by asking about computer ownership, since there are other means for accessing

Connect Minnesota will be doing their next residential survey this summer and the results will be available in October. It will be available before the Task Force report is due.

Availability Stats will be available in two weeks – that’s an update to speed tiers and locations. That will include updates on the broadband goal.

Maybe we could present that at the broadband conference – Bill Hoffman will be giving that presentation.

Has Connect MN changed their questions?

Having the survey results will help us figure out where we are and what are the percentages. We’ll have info at county and statewide level. It will be a matter of getting the best starting point.

In terms of broadband adoption, it’s good to have that.

The Connect MN map (speed) can we overlay adoption maps?

About the brochure –

• We might not want to include prices – since things change. Also don’t want people to find out different.
• We might want to post online
• We want to find distribution channels
• Always good to have info at the library
• My library has a lot of computers – maybe we could get them to point to Connect MN map.
• When you move into a rural area – you do get a welcome package
• One trend is to create community portals in rural areas – maybe a link there would be helpful.
• What if we link to resource that talks about how to decide how much bandwidth you need.
• We could pilot these in the area where the Task Force plans to visit.
• Where could we put this? (What website?)
• Maybe Julie could talk to MIRC coordinators at the upcoming MIRC meeting.
• Some broadband champions have gone away.
• Community ed could be another partners/channel.

Broadband Adoption Toolkit

We’re trying to overcome reluctance to spend time and money on adopting broadband. It might help to have testimonials from folks who have started to adopt broadband.

It might be nice to include sites like the one we showed last time.

We need for everything to be very simple. No computer terminology. Adults respond well to color. We could become progressively more complex. Motion and music are also good for helping people learn. Videos shorter than 3 minutes are always good.

We might also want to look at getting devices to people. PCs for People might be a good fit. There are other resources that might be available as well.

Others to include:

• MIRC
• Libraries
• Digital Literacy Council
• UMN Extension

REPORT OUT – subgroups report back to the group

Monitor/Understand Impact of FCC/PUC Decisions

• Looked at education credit for broadband. So give people credit for taking classes to learn how to use excel or something.
• Income tax for broadband equipment – still trying to flesh that out.
• Extend central office tax exemptions for fiber –and other related broadband
• Telecommuting tax credit – either for employer or employee.
• Want to talk with Dept of Commerce 179 expensing on state tax returns to get in line with federal returns
• Get sales tax exemption for low income households to get computers and other items to help them get online. Need to work on how to do it.
• Planned to meet with Revenue yesterday – but meeting did not happen. We plan to reschedule. There may be a way to find incentives to build out to unserved areas.
• We looked at options for promoting adoption. Maybe Shirley’s group has some ideas there.
• Looking for subsidies for transporting Middle Mile.
• Do we need incentives to get healthcare facilities together.
• One conclusion – Winona could serve the whole world OR the whole world could serve Winona.
• We need to prioritize – can’t go to Legislature with too many things.
• How can we get an Advocate?

Adoption

• Part of the MIRC project, Benton County created a directory of broadband options. We liked that idea and think it would be worth replicating in other areas.
  • We talked about some distribution channels: libraries, community portals, welcome packets, et al
  • How about if we try something like this?
  • Yes let’s try it in some areas where we plan to meet.
  • We talked about how to fund – it might make sense to talk to a local chamber or realtor or other to get it going.
  • We’re looking at a broadband awareness site – maybe created at a state site.
    • Start with the basics
    • Use testimonials
    • QUESTION/COMMENT: It’s important that the State maintains the site.
    • Everyone is OK with us moving forward?
    • Workshops and Instructor Led Training
      • There are lots of things happening – maybe we just need to help promote activities that are happening.
      • Bill is looking at things in other Connected Nation States
      • Devices for Folks in Need
        • Again this may be a question of compiling info
        • iPads are easily swept clean of info from the prior owner – that’s not as true with many smartphones

Next Meeting is June 12 – Deer River / Cass Lake

There will be some discussions about future out state meetings. Today we have 7 out of 15 Task Force here. One is a sub. Margaret may send out a message on this.

As a realist – Cass Lake is 4 hours from the Cities. We’ll how it goes. Thief River Falls is 6 hours away.

Almost everyone in the room has some business in the Twin Cities; but that may not be true in other areas.

Maybe we need to ask everyone to make the commitment. There are just things that are easier and better in person. And maybe we need to make a bigger event of the meetings.