In Rochester, the Rochester Police department will use advanced analytics software from IBM to mine, share and extract intelligence from critical data in order to improve police investigative and prevention programs. Law enforcement will then be able to identify local “hot spots,” and allocate resources in advance.

The application, IBM InfoSphere Identity Insight, provides users with specific data from existing law enforcement and public safety databases to aid in investigations and prevention. “The technology will allow law enforcement officials to see broad patterns about activity in their city and focus on prevention,” Cleverley explains.

Saint Paul, Minnesota nonprofit organization PCs for People is leading a mobile computer refurbishing project funded by the Blandin Foundation, Otto Bremer Foundation and the American Recovery and Reinvestment Act (ARRA). The project seeks to reduce electronic waste while simultaneously helping bridge the digital divide in greater Minnesota.

“We have created a mobile unit to travel to cities across the State of Minnesota, refurbish donated computers on-site and give them right back to families in the local community”, said Casey Sorensen Executive Director of PCs for People. “We are very excited about the project, last month we gave 113 computers to families in Duluth and saw overwhelming demand. Families were extremely grateful since over 80% were receiving their first home computer!” noted Casey. Over the next 7 months PCs for People will travel to 10 communities to replicate the successful Duluth event:

1. Alexandria
2. Bemidji
3. Crookston
4. Fairmont
5. Austin
6. Marshall
7. Hutchinson/Litchfield
8. Faribault/Rice County
9. Cambridge
10. Hibbing

The project will focus on getting computers to two demographics that generally do not own home PCs; low income families and senior citizens. Recipients are identified through partnerships with local community organizations such as Boys and Girls Clubs, Head Start programs and Senior Centers. To be eligible for a computer each recipient attends a basic computer training session and they must be below the 150% poverty level.

Two critical components to making sure the computer is useful are an internet connection and ongoing technical support. Each computer comes with free support from a local computer repair shop and self-paced basic computer skills training. For internet, recently ISPs such as Comcast and CentruyLink have created $10 a month high speed internet programs exclusively for low income households. Sorensen said, “Families that receive a computer through our organization have never had the opportunity to search for jobs or use search engines from their homes. It is a big deal for them.” With an average income under $12,000 per year recipient families generally can’t afford $50-60 a month for internet. Sorensen mentioned, “In most cases families want a computer for the Internet and for school work. Even though they can’t afford the most expensive service we have found they are able to prioritize a $10-20 internet bill.”

According to Michael Graif, project lead for PCs for People’s Mobile Refurbishing, finding people in need of a computer is the easy part. “What we need now to make sure these events are successful is to find local businesses willing to donate their old computers.” Prior to arrival in each city, PCs for People will reach out to local businesses to source at least 100 computers. “This is a win-win for businesses needing to manage their end-of-lifecycle digital assets in a cost-effective way, and for the community,” said Michael Graif. “Not only are we offering businesses valuable data wiping and hardware recycling services for free, but it’s an opportunity to help their local community.”

Businesses looking to participate in the program and donate their equipment should contact Michael Graif at: mgraif@pcsforpeople.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it. or by calling (651) 243-0093.

PCs for People, a non-profit organization dedicated to collecting and refurbishing used computers for distribution to those who lack this essential communication and education tool. Since 1998, the organization has distributed refurbished computers to over 10,000 Minnesota families.

Most of the time the group was focused on looking at a draft report that had been created by staff based on notes from the last meeting. The plan is to use these notes to create a final version of the report – and from the report they will create a spreadsheet of tasks to help guide their progress throughout the year. It sounds very similar to how the National Broadband Plan was rolled out.

To help track the discussion, in bold I have abbreviated the high level goal being discussed. These aren’t the official notes so I didn’t want to retype the whole document – but did want to provide enough context for the discussion to make sense – even if you weren’t there.

Read on for the full notes…

I. Greetings and Introductions 10:00 – 10:10

Audience: Dennis Fazio, Dave Frankel, Tim Johnson, Heather Rand, Ann Treacy , Brent Christiansen , Ann Higgins. Mike Martin, Tony Mendoza.

II. Approval of January 10, 2012 Minutes 10:10 – 10:20

done

III. Public Comments 10:20 – 10:30

none

IV. Discuss and Finalize Broadband Plan Outline 10:30 – 11:45

Goal is to go through document to turn in at end of month.

Any high level concerns:

• The goals we have set are note achievable without taking steps. We need to recognize that these significant actions must take place if we need to meet our goals in the next few years.
• Yes, let’s emphasize the sense of urgency.

Specific notes – these notes got very specific – so I’m going to try to provide context from the draft reports (highlights anyways) followed by discussion on those items.

1. Pursue collaborative strategies to expand broadband use through advanced applications

• The Commissioner asks that the Task Force try to have a plan in place by Dec 2012 – and that in the future, the reports will reflect back on these notes. The notes will be an action plan.
• Let’s make sure that infrastructure is mentioned earlier in the report. It is the call in the executive order. Also makes sense organizationally.
• Let’s consider using more active verbs – forget about exploring, instead use promote.
• How many dates do we want to specify in the report?

1. There are 4-5 spaces where we can add space. We’ll at least need to prioritize those dates.
2. We might not need to include a timeline – but it might be helpful internally.
3. Actually, let’s include a timeline in the appendix and remove the dates in the document.

Create & maintain an up-to-date public-facing information dashboard describing progress towards reaching the state ubiquitous goals

• Who is currently tracking progress towards goals?

1. ConnectMN is currently tracking some resource. Although ConnectMN is not tracking success stories or including info such as conferences.
2. Are we trying to target the consumer?
3. Consumers, policymakers, anyone…
4. Who is our target audience? We could better define that? Well we don’t want to limit the definition.
5. One of our charges is to gather best practices.
6. We also need to step back to see which of these makes sense –and where we might use our resources best.
7. We need to discuss this next time and be honest about how much time we can spend pursuing some of these things. We can draw from DEED for help too. We could also look outside of government for help.

• Shouldn’t we try to find places where we have one provider too – not just unserved and underserved areas?

1. We find in the communities having one provider can also be an indicator of underserved areas.

Dig once – coordinate infrastructure construction projects with broadband projects

• We made some changes. Do we want to single out Dakota County at this point? It’s nice to know there are leaders – but maybe we want to be more general.
• Also do we want to propose legislation?
  • Might want to add date here.
  • How about Jan 2013.

Evaluate and determine the funding resources necessary in order to reach the broadband goals and methods for funding.

• Maybe we want to say identify instead of determine. Maybe add suggest.
• Maybe we can create a bundle/packet of info.
• We might broaden that to include options other than tax incentives.
• In fact we might broaden the suggestion even more – otherwise it does seem like we’re focused on 3-4 specific suggestions.
• Can we talk to someone in Revenue to get specifics?
• Maybe we can get into specifics later.

Promote current broadband mobilization efforts and fund ways to incent formal community planning.

• Why are we focusing on counties? Shouldn’t we include everyone at the community level?
• Focusing efforts does give us a finite group to survey.
• We might consider using land use management structure. It gives us a ready-made structure.
  • How would that work in practice? Could we survey folks based on that structure?
  • We’d need to check on that.
  • Let’s note that we need better language.
  • We refer to support – who will support?
    • We were thinking moral support.
    • So maybe we go with encouragement.
    • But everything we suggest is not necessarily going to be done by the Task Force or the State – we want to coordinate efforts and tap into a wide range of resources.
    • The state has been supportive – but not financially. Maybe we want to say promote.

Examine best practices

• Let’s review legislation as well.

Focus on adoption issues

• Does the Task Force want to evaluate programs?
• We want to collect and share more than evaluate.
• Maybe the Task Force can shift from “taking steps” to “identifying steps”
• Maybe we want to get presentations on adoption and can we catalog that info?
• Next meeting we will talk about how to turn this outline into a spreadsheet that will track out success.
• Will one of our tasks for next meeting will be to create working groups. Would be nice to have a draft before the meeting.

Survey, research, data: (ongoing surveys of how MN is doing)

• This feels like a lot more doing that we are able to do. Maybe we need to focus on finding the folks to gather and collect data – rather than collecting and gathering ourselves
• ConenctMN already does this.
• Maybe we need to be clearer about what we are doing, as opposed to what we will be getting from others.
• Do we want to explore satisfaction measure rather than specific speed goals? As folks who measure – we all want to see the numbers but maybe the end users should be able to speak about whether their speeds meet their needs.
  • Maybe this is worth exploring – maybe there’s a partner to help.
  • A satisfaction measure is a nice addition – but not a good replacement. When we’re building infrastructure – we need to know where we’re going. We want to build on future need – not today’s need. (Just as we do with bridges.)
  • Yes – those in this game for a while have been professing the need to look at the future.
  • Realistically broadband systems last 3 years – so it’s tough to budget in a way that bridges can last for 15 years.
  • It is nice to look for trends in satisfaction.
  • But our goal is to look at speed, availability & adoption. How doe s this fit in?
  • This does fit into availability and speeds. It’s an idea that’s not totally fleshed out – but it worth considering.

V. LUNCH

VI. Discuss and Finalize Broadband Plan Outline (cont.) 12:30 – 1:30

Coordinate across government

• No comments

Evaluate the impact of FCC actions

• Is the intention to track FCC actions related to CAF?
• Broader than that – but specifically the recent FCC orders. This would be done primarily by the department – that is evaluating and reporting on what’s happening.
• The Greater MN Telehealth Initiative (ongoing for 4 years) will be participating for 3 more years and it will bring $5.4 million in reduced rates. (It’s a pilot project.) There’s another project happening in the NW corner and North Dakota. It would be nice to track what’s happening.
• Will we have the capacity? Maybe we want to include data but not collect ourselves.
• This does seem like this is the first step in doing our homework. So it’s a good piece to leave it. It’s very helpful in planning.
• Tracking the impact would be good – maybe evaluating is too strong. Maybe we need to monitor and understand.
• What’s the CAF program?
  • Connect America Fund – transition from USF to CAF
  • Isn’t anyone tracking that already?
    • The info is so new that no one knows what it will involve.
    • Maybe we want to find someone who might already been doing this (or open to doing this) and tap them?

Establish an ongoing mechanism within state government for high-speed broadband focused efforts.

• Let’s include the support required. So that we don’t have an unfunded mandate. (Not thinking money necessarily but staff support.)

Conclusion – Includes Schemata created by 2009 Broadband Task Force in their report.

• DO we plan to add amendments to this plan?
• Or maybe this is an outline from which we’ll create a plan.
• This can give the larger context in terms of road mapping – but maybe it will work better as an executive summary.

Can we get the next version of this draft by Friday noon? Then folks can look over and approve it.

VIII. Getting Info Out to Members-What and How 1:40 – 1:55 

How are things going?

• The members seem to get info well now.
• This meeting was exactly what was expected.

What’s the plan for the future?

• For the next meeting we’ll need good ideas for work groups.
• We’ll want to think of where we might want to travel.
  • Bernadine said she’d help get folks out in the communities.
  • We’ll turn the report into a spreadsheet for operations
  • Next meeting is a working planning meeting.
  • Next meeting: Feb 14 – Bloomington
    • Need capacity for conference call

VII. Additional Public Comments 1:30 – 1:40

Dave Frenkel (from satellite) – satellite is booming – especially since government is getting out of the business. Why isn’t it mentioned?

• The satellite association has offered to talk to us – and we’ll have them in.
• I think our plan is technology neutral
  • Yes, not it alludes to wired (with Dig once) but doesn’t talk about dish reimbursement.
  • Also no representation from industry
    • This isn’t a self-elected group
    • And Dan is from wireless, Bob is from wireless, no one from Satellite.
    • It’s important to meet with all folks from industry if we want to meet the statewide goals.

Heather Rand – with start of legislation, we may see broadband access come up. Do you intend to delve into those issues?

• From the plan outline, I think we look forward to ideas we might put together, but might not be in the position to evaluate legislation for this year. In fact it might not be within our scope even in later years.
• It would be nice to track legislation through this group.

IX. Other Business/Next Meeting Agenda 1:55 – 2:00

Adjourn Early (12:45)

We were talking (emailing) a little but about how those articles were connected. I think both speak to a great schism in economic development strategies.

Information Channels as Economic Development Tools

The first article talks about the shift from an economy based on dollar value vs an economy based on knowledge. Specifically the article looks at Twitter. It’s difficult to monetize the value of Twitter and Tweets – because the value isn’t in the technology; the article claims that the value is in the database of information that’s being collected.

Tweets are unique bits of information in that their lifespan is brief. So even the value of the information is sort of misstating the value. (Although I’m sure there is value to be gleaned from looking back at Twitter trends.) The real value lies in that stream of information – and immediate access to users. The value will be reaped by those who listen, act or react to the information.

So we’re seeing a change in the value chain. Value shifts from that which we can monetize today, to information – and I’d claim to information channels. Folks who have access to technology and broadband have access to those channels. Others do not and will therefore be at a disadvantage – regardless of what else they do. (You can get the information – but that’s yesterday’s coin of the realm – today you need to have access to the source.)

A great underpinning in this shift is that money loses its value once it’s spent. If I have a dollar, I can keep it or give it to you. We can’t both have it. With information, we can both have it. And I think folks who learn to retain the value while sharing have the greatest opportunity to succeed in today’s economy.

The Recipe for Success Has Changed

The second article dispels the myth of the “rural brain drain” by telling two stories. First the story of the smart rural people who never left. Second by telling the story of the people who left for the promise of something bigger beyond, who are not finding that the rules have changed. Young people are leaving school and there are not enough jobs to fill. Families are finding that the security and homes they built are slipping away with economic uncertainty. These people are looking for new opportunities for success and rural areas are part of the equation. (I would defer to Ben Winchester’s research on the “Brain Gain” to back up this point.)

The author of this article makes the point that rural communities saw the economic uncertainty before other areas – and one positive reaction has been the birth of the New Farmers – fueled by, “first, an increasing consumer preference for locally grown and organic food and second, the economic downturn and increased unemployment.”

While this article doesn’t mention technology, I read with technology-colored glasses, and I remember speaking with a “New Farmer” about her use of broadband. It was an essential utility for her. There were many things she was able to give up to start her new rural life, but broadband was not one of them.

Also I think that success in rural and urban areas requires a connection between the two worlds. There is a report from Minnesota Rural Partners that quantifies the economic connection between rural and urban Minnesota – but even more directly I think that broadband removes the barrier of geographic distance that in the past has also kept an economic distance between rural and urban. I think rural communities felt this first and not in a positive way. Consider local bookshops closing once Amazon emerged. But I think that local entrepreneurs are realizing that broadband goes both ways. Or at least those who have access to broadband are able to realize that it’s a two-way street, which brings us back to the original article. Broadband opens a new channel for commerce – but it also opens the door to accessing the information channels.

Using the arena’s Wi-Fi, the Minnesota Wild App enhances the fan experience during games at Xcel Energy Center with a number of unique features, including:

Food Ordering: Hungry fans can use this interactive feature to locate vendors throughout the Xcel Energy Center and even place food orders from their seats and be notified by text when their order is ready to be picked up. Xcel Energy Center is the first venue in the Twin Cities market to use this technology.

Live In-Stadium Instant Replays: Minnesota Wild fans attending a game at the Xcel Energy Center can access instant replays not shown on TV or the center-hung scoreboard.

Fan Zone: This feature provides integrated social networking that lets users inside the arena join groups, post updates and more.

Arena Guide: This venue map helps fans find what amenities are near their seats.

Additional features that are available to fans inside or outside the arena include:
Team Information and News: Sports fans at home and at the Xcel Energy Center can stay on top of their team with a player roster, stats and news right at their fingertips.

Access to Social Networking Sites: Easy access to the Minnesota Wild on Twitter, Facebook and Foursquare.

Events Calendar: Fans inside and outside the arena have access to a calendar of sponsored events at the arena.
MyWildNet: Games, arena information, replays and more can be accessed via the app.

“The Minnesota Wild App allows Wild fans to follow their team at an unprecedented level,” said Jim Ibister, Vice President, Facility Administration/General Manager, Saint Paul RiverCentre. “Whether at Xcel Energy Center or at home, fans can stay connected with latest Wild news and statistics at the touch of a fingertip.”

The Minnesota Wild App is available for free from the App Store on iPhone or at www.itunes.com/appstore.

I won’t pretend like the replays would be a big hit with me – but anything that shortens the food line, has to be good!

• Bingham Lake,
• Brewster
• Heron Lake
• Jackson
• Lakefield
• Okabena
• Round Lake
• Wilder

The project has been going very well – and even hooked up their first customer in December. So that part of Southwest Minnesota is going strong.

Unfortunately, according to Watch Dog, not all of Southwestern Minnesota is faring as well..

The recipient of a major federal stimulus grant and loan in southwestern Minnesota appears to be having second thoughts about proceeding with a broadband project spread out over three counties. The $15 million project which planned to expand broadband service in 15 communities may be in danger of going into the financial red zone, apparently due at least in part to the escalating costs of fiber optic cable.

Woodstock Telephone Company was approved by the Rural Utilities Service (RUS) to receive a $10.6 million grant and a $4.5 million loan from the American Recovery and Reinvestment Act (ARRA) to expand its fiber network by installing Fiber-to-the-Premise (FTTP) to an additional 3,600 premises in Lyon, Pipestone and Rock counties.

While there’s evidently been no formal announcement, the Minneota city administrator told the Freedom Foundation of Minnesota (FFM) that Woodstock Telephone informed her the company no longer intends to build a key facility in their community to house equipment for the network. FFM calls to Woodstock Telephone had not been returned at the time of this post.

I haven’t spoken to Woodstock, but I spoke to others who also indicated that Woodstock seemed as if it was running into some roadblocks.

Last night was an opportunity for the public and elected officials to hear from the various project partners. Each partner gave a presentation on their role and progress and/or plan for their role in the project.

There were well over 100 people there. Closer to 150, I’m sure – despite the fact that it was a bitterly cold night.

I took outline-type notes on the presentations – mostly because I thought it might inform and inspire other communities who are (or should be) looking at creating broadband options. Towards inspiration, I wish that I had a camera on Gary Evans from HBC, he spoke passionately about the need for broadband. I’ll paraphrase just one of his remarks…

“Broadband is an essential utility for a community. And the window for bringing it in to remain vital is closing.”

Here are some of the quick takes from the project…

Their plan is to bring FTTH. If all goes well, they’d like to build the backbone this year and start bringing it to residents next year. The estimate cost is $50 million; they are looking for revenue bonding for $70 million. (Revenue bonds are paid back from revenue from the project – not with taxes. However, parties involved (Joint Powers and members) are responsible for keeping the reserves replenished throughout the project.)

The project is expected to have a positive margin by the end of year two. There are a couple of wildcard factors. First: take rate – the business plan assumes a 65% penetration rate where customers subscribe to at least two services (of the triple play offering). Second: interest rate – they need to get better than 6% interest rate.

There are other wildcards – such as ensuring other numbers are correct, and assuming there are no roadblocks, such as a lawsuit – but I think these that the take rate and interest rate are two biggies because they are outside the scope of the partners to a large degree.

Not surprisingly, attendees seemed most concerned about mitigating risk – starting with the bonding but also with potential lawsuits. They were clearly up on the history of Monticello’s project – but a lawyer has determined that the situation here is different, in part because as a countywide project they can escape some roadblocks set out for municipalities.

Here are more complete notes…

 1. Welcome & Call to Order – Mayor Jim Kreft, City of Arlington & Commissioner Swanson, JPB Chair

 2. Doug Dawson, CCG Consulting

Doug Dawson of CCG Consulting will provide an update regarding the financial model for the project.  Doug will discuss his thoughts regarding the project given the progress that has been made in marketing, management, project finance, and the estimation of construction cost.

Financial Model:

• They went to towns a year ago to introduce this model. This is an update.
• Added 4 new towns (Lafayette, Stewart Buffalo Lake & Browntown)

• 6 year project – to be cash positive by year 5.
• Requires $49.2 million in assets (fiber is biggest ticket item)
• Requires a $69.4 million (will take care of working capital for few first few years)
• Positive margin at very end of Years 2 (Revenues exceed direct expenses)
• Customer savings $970,000 per year by year 4.
• Breakeven penetration rate is 64.5%
• Profits over year after bond retired.

Project will have

• Starts with 7 employees to grow to 15
• Total investment per passing is $5,590
• Assumes private management by owned by cities and county

Financing assumptions

• 30 year bond of $69.4 million
• Guaranteed by overall revenues of the business (not backed by tax dollars)
• Reimburses the cities for the start-up costs
• The project will not cash flow at 6% interest rate

Issues

• Start time will depend on prep (design) complete before bonding.
• It would be nice to start building dark fiber this year – and next year start with customers.
• Need to finalize deal with HBC – figure out headend

Next Steps

• Continue pre-sale and marketing
• Finalize deals with partners and a financial model
• Develop policies
• Bonding process (should take 90 days)

QUESTIONS:

Might we have trouble getting fiber?
There were problems this year – due to ARRA funding and a fire in one of the few fiber factories. We have already pre-order some fiber

Did you budget for equipment upgrades?
In 30 years we assume the electronics will be changes twice.

Does 64% penetration take into consideration the triple play?
We assume that 64% will take at least two services. We think telephone will be dropping eventually.

Who is responsible for changing pledge cards to orders?
The marketing committee will be involved. HBC will probably hire people to help – but the Joint Powers will be involved too.

Do you know how many pledge cards have been collected?
I heard 2900.

 3. Ralph McGinley, Oppenheimer & Co., Inc.

Ralph McGinley of Oppenheimer & Co., Inc. will be summarizing the draft terms sheet that has been presented regarding project financing.  The terms sheet summarizes the obligations of the Joint Powers Board and units of government that are members of the Joint Powers Board if project financing is to be obtained through Oppenheimer & Co., Inc.

Their business is to raise debt capital for projects such as these. We take the bonds to the marketplace to get financing.

We have made a commitment to broadband – and fiber.

We believe FTTH is a very valuable component to communities.

Underwriting Standards

• Need to see clear commitment from community – we’d like to see more than 64% take-rate
• Like to see separate of business from politics
• Need to see a good business plan
• In a market like this we need to see a municipal component and we need to see a conservative pro forma

We will be selling revenue bonds. They will not be backed by tax. They will be backed by revenue from the project.

Bond maturity is 30 years – they will be fixed rate – no payments for first 3 years.

We assume bonds will go to market as an investment grade category. We assume BBB category – conservatively. That is the lowest end.

We are looking at 5% interest rate on tax exempt bonds.

A debt service reserve fund is initially funded by bond. It will be one year principal and interest. It will act as a rainy day fund.

It will also be available for final payments.

A critical component is the debt service reserve fund replenishment guarantee. It means if you have to draw on debt fund – then the participating communities will agree to make up the difference. This is made on an annual appropriations. So the Joint Powers communities will be asked to make up the difference. (So if one community drops out – then the rest will need to make it up to the tune of 1.5 times their originally agreed upon rate.)

Bond holders will want to know that in the event of default – they can step in and take over the project.

We look for investors of high net worth

What’s necessary to complete financing?
Need legal documentation, due diligence, need to get all necessary permits. It’s about a 90 day process.

QUESTIONS:

With revenue bonds what guarantee do we have that cities and county will be sued by investors if funding falls short?
There is no assurance. However bonds will be sold with very full disclosure that these are revenue bonds and there is no pledge by cities/counties to pay bonds with tax. (In fact under MN law you can’t.) The buyers should be aware of what they are buying; we will be clear and they are savvy buyers. Courts have shown in the history that such suits have not been successful.

The Joint Powers board has looked into this issue as well. We have looked at the Amberfield bonds to make sure that we don’t fall into a similar issue.

Debt service replenishment – can we use that for multiple years (for the next ten year for example)?
Yes. But however – but by the time we take the funds to market, we are clearly on your site of the table. SO we will have the same objective – to have a successful project. But things can go wrong. So if we see that in ten years there’s been a draw every year – well that’s a bad sign. SO we’ll go to operations to adjust what needs to be changed to get the project on track.

Is any individual  community obligated to replenish debt reserve?
It’s up to the community on an annual basis. But we strongly suggest that cities consider it. We ask for 1.5 times is simply a limit to give bond holder some opportunity for recovery. And yes at some point communities will be responsible for reserve replenishment.

What happens if one community says no – and the rest follow suit?
There is the reserve fund for a year. But after that the bond holders may exercise the prerogative – and they can take over the project.

So if a bond deal is made – but before we get funding there’s a lawsuit – can we turn down bonds?
As the underwriter for the Monticello projects – it feels like deja vu all over again. You don’t need to accept the funding. You can choose to put the funds in reserve or choose to turn down funding.

In that event – and say the bond doesn’t close – then the issue is resolved – would it would be tougher to get bonding again?
It’s pure speculation – but probably yes.

Will the excess capitalized interest be available?
If you’re not using up the full interest, things are going really well. SO you might keep the cash for operations for later. Use the capitalized interest, keep the cash.

4. Robert Vose, Kennedy & Graven

Robert Vose of Kennedy & Graven will be discussing the legal authority that the project will proceed under, and challenges that the entities may face in implementation.

He is here as attorney for Joint Powers group; not a public funding expert.

Two kinds of authority:

• Regulatory – PUC cert of authority; local franchise – process is straightforward.
• Institutional  – local governments are creatures of statute. So how do we get into business? Via Joint Powers – so we must share same authority. It’s a way to get bonds

Possibly sticky statutes

Ch 237.19 – does not apply – two tricky terms (municipality & telephone exchange)

• - municipality may provide telephone exchange with super majority referendum if there’s an incumbent.
• - But in this example – we are not a municipality – we are county/Joint Power
• - telephone exchange must include switch – but this will not be a part of this project. There will not be a local switch

Ch 238 – applies and will permit Joint Power to provide cable

• Unless otherwise prohibited by law, any municipality may construct, purchase, and operate cable communications systems
• - municipal here is defined
• - cable communication includes TV, radio and other programs

QUESTIONS

Have there been any litigation to back up these decisions?
Yes – 237 has especially been litigated. (MediaOne has fought this case in Lake County.) There has been much less litigation of 238.)

Are we asking for trouble?
Yes – in the sense that there will be incumbents who will be unhappy? We may hear of opposition.

What would make necessary the referendum?
A change in the law – as counties are not included. You could pursue the referendum – except that if you win – the incumbent may claim that it doesn’t matter since we are a county.

You can’t proceed under 237 given the composition of the group.
Right.

Are townships include in 237?
Yes. Municipality does include townships.

Would it mitigate the risk to write this down?
There will be an opinion regarding authority. Oppenheimer needs permits.

Since the Joint Powers has increased – does the increase the chance of opposition?
Practically – yes because more incumbents will get involved which increases the chance of one of them opposing the deal.

5. Gary Evans, Hiawatha Broadband Communications

Gary Evans, CEO of HBC, will be discussing his company’s experience in building and operating other FTTH networks in Minnesota, the role they will play in implementing and managing the RS Fiber Project, as well as their company values and the importance of customer service in a FTTH operation.

The issue today is all about quality of live issues and rural America as a quality place.

New services – wireless telephone and Internet

We worked with Monticello
We worked in Burlington VT

HBC Differentiators – Local customer services & community involvement

HBC Penetration

• Cable
• 75% of units in three retail communities
• 63% of single-family
• Internet
• 83% of total Internet market
• 70% cable modem penetration
• 42% of business connected via direct fiber
• Telephone
• 68% of business market
• 64% of residential market

We’re not the low cost provider in any community we serve – but we are the dominant.

Monticello –

• The customer load in Monticello is where it was expected / forecasted to be (despite delays)
• We want to own the employees – that is not the case in Monticello. That was not a good idea. (Also a problem in Burlington)
• The city drops rates. We advised against it. Now the revenue is below what it should be. We are working to negotiate a contract where we have more authority; Monticello has requested this.
• Monticello is successful – customers are paying much less now than before Monticello went into business.
• In Winona Charter charges $30-40 less than other areas where we aren’t a competitor.

“Broadband is an essential utility for a community. And the window for bringing it in to remain vital is closing.”

We have seen populations grow in the communities that we serve.

QUESTIONS

Would you open a field office in this county?
I would open several.

6. Linda Kramer – R/S Fiber Marketing Committee Update

An update on the activities and progress made by the marketing committee for the project will be provided.  Ms. Kramer will also discuss marketing activities that are planned in the upcoming months.

We are getting the word out on the project and gauging interest. We collect the cards.

We are not professionals; but we are passionate.

We have

• Sent out 2 mailings
• Held community meetings
• Had booths at county fairs
• Billboards
• Website et al
• Newspaper ads et al
• Now working with marketing firm

So far we have 2926 cards mailed in – towards a goal or 4220 (That’s 55% of drops)

7. Question & Answer Period

All of the presenters will be available to answer project related questions.  It would be appropriate to take this opportunity to ask questions about financial risk, potential legal challenges, business model, services to be provided, etc

What would the impact be if there was a draw?
We are still looking at that and we need to come up with some policies. We do have an equation for seed funding; that process may be different.

Is there a potential overlap of responsibility for funding with county and city?
We are looking at this.

Does our rate of return of cards compare with other comparisons?
Yes, it’s very cool.

Do you think we’re close to the numbers we need to be successful?
I think we need about 3200; we have 2900 before bonding.

How many projects has Dough worked on?
80 cities have FTTH; I’ve worked on about half – plus more than 100 commercial projects. None have failed. But there have been projects that have failed; I haven’t worked with them and there’s usually a story behind the failure.

Do we have a feel for the impact adding schools and large business could have?
Those businesses will probably sign up – but they are not usually early adopters. They need security and reliability. We have kept our business plan conservative.

Can we see the business plan?
It belongs to the Joint Power Board.

8. Request for Release of Funds

At the recommendation of the Joint Powers Board, a request is being made to each of the participating entities to release the second half of the project seed funds.  Funds will be used to finance additional marketing activities, legal expenses, and administrative expenses associated with continuing to move the project forward.   It is asked that the Joint Powers participants respond to the request by early March.

I am planning to attend this meeting and will take notes as best I can.

Governor’s Task Force on Broadband
TIES Building
Larpenteur Room
1667 Snelling Ave. N., St. Paul, MN 55108
January 24, 2012
10 AM – 2 PM

Agenda:
I. Greetings and Introductions 10:00 – 10:10

II. Approval of January 10, 2012 Minutes 10:10 – 10:20

III. Public Comments 10:20 – 10:30

IV. Discuss and Finalize Broadband Plan Outline 10:30 – 11:45

V. Lunch (working lunch if necessary) 11:45 – 12:30

VI. Discuss and Finalize Broadband Plan Outline (cont.) 12:30 – 1:30

VII. Additional Public Comments 1:30 – 1:40

VIII. Getting Info Out to Members-What and How 1:40 – 1:55

IX. Other Business/Next Meeting Agenda 1:55 – 2:00

Travis Fjeld’s new outlet store in Winnebago combines traditional second-hand and warehouse liquidation offerings with an array of Internet-based services for customers.

“Without the Internet access, we couldn’t do this in a small town,” said Fjeld of the community of 1,300.

He opened The Outlet Store on Main Street a few weeks ago. He sells other people’s items on consignment as well as warehouse liquidation inventory he purchases through online auctions.

I think it’s a nice example of economic development application of broadband – both for this individual business but for the community served by this business as well.

The technology behind DriveScribe has been licensed exclusively to Drive Power by the University of Minnesota’s Office for Technology Commercialization. Developed by U mechanical engineering researchers, DriveScribe combines several functions to promote safe driving. It provides real-time driver feedback and blocks phone calls, emails and text messages while the vehicles is in operation. The app will also notify parents of traffic violations and log activity to a web portal for later review.

Ironic that a cell phone can help someone drive better. I like the idea of fighting fire with fire – and while I suspect that tech savvy teens may find a way around it – I think that if they’re smart they won’t. And of course danger of losing car privileges is a big incentive to be smart, as I recall. The article goes on to say that while this app is starting with the teen driving market, there are other areas for them to grow…

DrvieScribe will likely expand beyond the teen market to help senior drivers, commercial vehicle fleets and insurance companies. For now, it uses social comparisons, points and rewards and a sophisticated scoring system to quantify the attributes of safe driving. It is known as the Safe Driver Score.