The authors point out…

Without sufficient policy-based investment support, the future is clear. Telecommunications companies will have no choice except to focus on economic clusters of population and withdraw from offering broadband and voice services to high-cost customers. Where broadband does not exist at present and will not be supported sufficiently, all terrestrial universal service—for voice and broadband—will cease. Universal Service, as legislated in the Telecom Act, appears to be at risk.

Federal and state regulators and legislators stand on the threshold of a new era as they survey their direct and complicated responsibility for the welfare of citizens who live in a vast expanse—most of the land mass—of this country.

They also lay out the issues succinctly…

Emerging Problems for Rural Customers

The state’s policy challenge. States must begin immediately to analyze policy, costs, and their willingness to supplement federal support that will be offered within the next six to nine months. Regulators and legislators stand on the threshold of a new era as they survey their direct and complicated responsibility for the lives and welfare of citizens who live in a vast expanse—most of the land mass—of this country. State policymakers will have to choose whether and how to support customers’ communications needs in many high-cost, rural regions in the wake of sharp reductions in universal service and intercarrier compensation support for those areas.

Deep cash flow reductions. USF/ICC support benefiting rural customers served by larger price-cap carriers could be reduced by an estimated 85%-90% in many areas from 2012 to 2020 and, for smaller carriers, by approximately 35%; cash flow percentage losses will be well higher. The analysis excludes CAF II funding due to the uncertainties surrounding the costly new obligations and the potential that a significant percentage of the funding, if insufficient, will be declined by carriers. The cumulative effect by 2020 could be a loss of customer-facing investment support of up to $6 billion and $5.2 billion available to larger and smaller carriers, respectively. The predictable result is reduced investment in many areas.

Investment is already collapsing in many areas. The two largest rural lenders report sharply lower recent loans for infrastructure investment. The major cooperative bank, CoBank, reports no 2012 loans for network improvements. The Department of Agriculture’s Rural Utilities Service (RUS) has annually loaned all its available funds . . . until 2012 when rural telcos tapped only 11.6% of the $690 million available. In 2012, only 9.4% was borrowed of the $736 million available for RUS broadband loans.

Critical telecom services. Because traditional USF is terminated, the reforms could put at risk even terrestrial voice and 911 services if a carrier decides it cannot justify accepting federal support with the new broadband mandates. The potential loss of combined state and federal support could affect customers who likely need services the most. Carriers will have no choice except to focus on economic clusters of population and withdraw from offering broadband and voice services to high-cost customers.

Wireless broadband rate problem. Wireless is not a replacement broadband service, not only due to reliability issues, but because wireless broadband pricing is increasingly volume-based and is expected to remain prohibitively high compared with far more affordable terrestrial services.

On a high level the report shares some basic observations – broadband is necessary, federal funding is declining and competition in competitive areas makes it more difficult to serve high-cost areas. The report is very detailed and would be a good primer for local leaders and policymakers. I suspect there will be little news in it for the providers on the frontlines. One detailed note I wanted to emphasize was the need to recognize the difference between subsidy and support – where aligns with another TED theme – public-private partnership (or government-business-civil society partnership)…

“Support” is different from a “subsidy.” Opponents of USF often use disparaging references to “subsidies” when arguing against the USF policy program. “Subsidies” are, in the strictest sense, assistance to a troubled business or to an economic sector to help the producers or the industry remain viable, including against other competitors, which are often foreign entities. However, USF is not fundamentally “assistance” to help a struggling carrier or sector, nor is it a protection for the carriers. In fact, wireline carriers can often have successful businesses if they are able to concentrate their operations on profitable services and customer clusters. If there is a “protection,” it is to assure that customers are served in regions where no provider—on its own—is able to offer an economic service. The “support” payments are part of a partnership—clearly established in federal legislation—between private carriers and policymakers who choose to “purchase” another “product-set” in high-cost regions, which is customer service that otherwise would not be provided in those regions. The distinction is important at the start of this White Paper, as USF is a policy commitment to customers not to companies. And companies will be compelled to drop high-cost services without that ongoing policy commitment.

Finally the paper stresses the need for urgency at a state level. The FCC is working on Connect America Fund (CAF) II, which will lay out funding support options for providers. Then the FCC will turn to reserve auctions to see who will provide service, but there is skepticism about the funds available. Minnesota must recognize the risk in these changes – starting, the report explains with recognizing costs…

Specifically, the states should assess immediately what it actually costs to provide broadband telecommunications services, particularly in more vulnerable high-cost regions that may or may not be funded by CAF II.

I think that information may be difficult to get. But we need it to further discussions…

The fundamental financial question is about the realistic revenue and cost projections for providing service in unserved / underserved areas, so that legislators and commissions can better understand whether there will be problems in achieving the policy goal of universal availability of basic voice/911 and advanced communications services. Based on an improved perspective regarding the financial challenges and opportunities in serving high-cost areas, policymakers should have a clear-eyed view about whether economically rational companies and investors will invest scarce capital and operating resources to provide services in these areas.

Earlier this month the Monticello city council approved a “term sheet” providing a road map for addressing default on the  revenue bond. This term sheet was developed through negotiations with the attorney and will be presented to bondholders to accept as Class Action or not.

The plan today is for the city to continue to operate the system for the foreseeable future.

Here are excerpts from the Term Sheet for Settlement…

The City, the Trustee, and Bondholders’ Counsel agree to the Settlement: settlement amount covering all claims and obligations arising out of or under the Indenture, contingent on, among other things, approval by the Directing Holders of the settlement described below.

Directing Holders will agree in the Class Action to release all claims against the City arising from the City’s actions and inaction related to the Bonds, including but not limited to claims arising under the Indenture, claims arising under federal and state securities laws, common law fraud and misrepresentation claims, and any claims inlaw or equity, known or unknown at this time, which were asserted or could have been asserted at any time against the City based, directly or indirectly, upon the Bonds.

Directing Holders will also agree in the Class Action to release all claims, if any, against the Trustee relating to the Bonds and the Indenture, and any claims in law or equity, known or unknown at this time, which were asserted or could have been asserted at any time against the City based, directly or indirectly, upon the Bonds or the Indenture.

The Trustee will release the City from its liens and all obligations respecting the Indenture and the Bonds as described below in the heading “Trust Instruction Proceeding”).

(i) The City agrees to pay into a settlement fund for distribution to the Directing Holders and payment of attorneys’ fees and other expenses of Bondholders’ Counsel a single payment of $5,750,000 (“Settlement Amount”) no later than one hundred days after the later of (i) the date that a final, nonappealable order is entered in the Class Action (“Class Action Order”), or (ii) the date that a final, nonappealable order is entered in the TIP.

(ii) The parties agree that, as part of the settlement, the City will cede its interest, if any, in any funds remaining in the trust funds held under the Indenture (the “Trust Funds”).’ The Trustee will be authorized to distribute the Trust Funds to all holders of the Bonds as of a special record date to be established under the Indenture following the approval of the Settlement by the court in the Class Action and immediately following the approval of the Settlement by the TIP Court, reserving therefrom all then unpaid Trustee’s fees, costs and expenses, including attorneys’ and other professional advisors’ fees. The distribution shall be made as required by the Indenture.

By 2007 we had raised over $30 million for this company that we had launched in a coffee shop with wi-fi. It seemed as if every person in Montana was part of our success. From the brilliant advice we received (pre-sell to customers), to the contacts we made (so you need to talk with ESPN?), to our investors (angels, a Montana telco), public relations support (the local economic development folks helped us “buzz up”) and our amazing team (rock stars all), so many people and businesses in Montana supported us that some days we felt like a statewide effort rather than a start-up struggling to pay our tab at the coffee house. I have said this many times before, but I don’t believe we would have had nearly such swift success had we been located in a more populated community or state.

She stresses the importance of wireless…

All broadband technologies are important, but wireless broadband is particularly important for entrepreneurs who frequently work out of their homes, from the road and in ways that require substantial mobility. Like earlier mobile technologies, 4G networks bring opportunity closer than ever to a budding entrepreneur’s front door but at much faster speeds. These lightning-fast networks rolling out across the country are transforming how we conduct our business and are empowering rural entrepreneurs.

That’s critical. Broadband connected businesses bring in approximately $300,000 more in annual median revenues than non-broadband adopting businesses ($400,000 annually vs. $100,000 annually), according to Connected Nation. Nearly one in three businesses earns revenue from online sales that account for $411.4 billion in annual revenues for U.S. companies. Sixty-five percent of home-based businesses use the Internet to stay in touch with customers, while 59% advertise or sell their goods online. Add to this the fact that 98% of U.S. counties had at least one high-tech business establishment in 2011 and it becomes pretty clear that mobile broadband is as vital a tool for entrepreneurs as money and brains.

This week – most of the month really – I am living the life of the mobile worker. I’m on a train in Scotland as I write this. So long as I have access to the Internet I can get my job done. It allows me to go places for extended periods. It’s been a huge game changer for anyone able to work remotely – but especially I think to entrepreneurs. If I weren’t able to work on the road, I wouldn’t be able to go – and access to broadband is one of the first questions I ask when making plans.

Google will announce Saturday it has 30 balloons floating over New Zealand to provide free Internet access to disaster-stricken, rural or poor areas. Eventually, as the balloons move across the stratosphere, consumers in participating countries along the 40th parallel in the Southern Hemisphere could tap into the service. …

These projects also help Google extend its sprawling reach into the lives of global Internet users, amid an intensifying debate over Internet privacy. Already, the company has the leading Web search, e-mail service and Internet video site, while its Android mobile software has become the most popular in the world.

These tools have enabled Google to track a wide range of consumer behaviors, which the company sells to advertisers. In recent weeks, privacy advocates have raised concerns over how much of this data is being shared with the U.S. government.

I understand the privacy concerns, and I am an advocate of privacy. But I also understand the price of free. I am more interested in the mechanics and the opportunities for broadband in less temperate areas than New Zealand. It turns out the balloons fly twice as high as airplanes so it seems that cold and snow might not be a huge issue. Apparently the range for the balloons is 24 miles. Also I didn’t realize that the Army has been using balloons to communicate for some time now. The potential is there!

But a lot of people have access to broadband yet don’t use it. So about $5 million also went to the Blandin Foundation in Grand Rapids to encourage residents and businesses to get on board the 21st Century’s transformational means of communication. That money has now been spent and the project known as Minnesota Intelligent Rural Communities has wrapped up. What did it buy?

Blandin picked 11 places to focus its efforts and enlisted the help of non-profits, regional development commissions, University of Minnesota  Extension, state agencies, the Intelligent Community Forum and others. As a result, in those communities schools got better computer equipment, local governments enhanced services available online, hundreds of business operators received training in how to put their stores and services on the digital map.

…

A big question, though, is whether the money moved the needle on adoption.  An analysis of the project by the Economic Development Administration Center at the University of Minnesota Crookston says it did, at least to some extent.

The number of broadband subscriptions in all of rural Minnesota rose by a little more than 10 percent during the time the project was in effect. In almost all of the 11 communities Blandin focused on, the increase was greater — almost 16 percent in Cook County and almost 13 percent in Thief River Falls, for example. Leech Lake band adoption grew more slowly than rural Minnesota overall, by less than 10 percent.

MinnPost reports on the latest technology developments at the Mayo Clinic…

There are demonstrable care upgrades with the telestroke program on all fronts, Demaerschalk points out. Those include better outcomes for patients, especially those who would otherwise be at a disadvantage because of rural-urban disparities in availability of care, and viability for rural hospitals that lack specialists and often must transfer patients far from home and lose those billings. And it also helps the Rochester-based Mayo Clinic system with new revenue from subscription fees that smaller hospitals pay for the telestroke service, not to mention growing Mayo’s business geographically without building or buying facilities.

Throughout the health care industry, people are looking for big wins from “telehealth,” the umbrella term for a whole range of ways to provide care through digital and telecom connections between clinicians and patients.

Telehealth is one major way that the health care system seeks to reform itself. It’s a means to reach the much-discussed “triple aim” of improving the quality of care for patients, improving the health of populations, and reducing per capita cost. Telehealth could contribute to achieving those goals because it has the potential to bring about big shifts in health care system capacity.

And other local health care facilities…

About two years ago, Fairview equipped all of its hospital ICUs with telehealth technologies—webcams, remote monitoring, a suite of capabilities resembling the Mayo telestroke platform—and connected them to a central hub and an advanced ICU team at the University of Minnesota Medical Center, a Fairview affiliate. The goal, says Dr. Terry Martinson, Fairview’s design principal and executive medical director for innovation and transformation, is to raise care to a consistent standard across all Fairview ICUs without having to move patients to a different hospital. As with the telestroke program, Martinson says this leverages the scarce resource of skilled, specialized physicians.

At the same time, he says, virtual care “keeps less complex patients out of the university ICU, so they have capacity and can accept the more complex patients.”

The task force was welcomed by Joseph Nayquonabe, Commissioner of Corporate Affairs.

Roxy Traxler spoke about the East Central Broadband Initiative Five county broadband initiative – Pine, Kanabec, Mille Lacs, Fond du Lac, Mille Lacs Band, Carleton County, Aitikin County

People need broadband!  Mille Lacs County job application portal does not work for many residents because of no connectivity.  Spouses cannot Skype with loved ones deployed to foreign lands.

50 – 75% of this region’s population lives outside of communities.  Communities have broadband; most rural residents do not.

Topography deters wireless.

East Central Region is generally lower income, lower educated region.  We need broadband to improve our access to jobs and education and health care.

Slower access speeds are insufficient to access advanced applications.

East central region is working on this…

• four Blandin Foundation BBC communities
• Continuing presentations to local governments, (county, city and townships), chambers of commerce and others to increase awareness.
• trying to work with providers to identify deployment barriers and develop partnership possibilities.
• East central regional Broadband Summit

Panel Discussion

Wayne Gilman of Pine City Schools

Being unconnected means lack of access – broadband, content, interaction

Schools are emerging from being fixed in place and time – it is now 24 x7 available.  School is emerging as the place for testing and increasing understanding rather than information is gathering.

Broadband is now required for everyone – an essential public utility.  There is a market failure that private industry has not yet been able to overcome.  There is a public interest in making this happen – we need to find a way.

Steve Hallan - Pine County Commissioner, former ECMMEC Made extraordinary efforts to get broadband extended to his home.  His neighbors are not so lucky.  Rural people need broadband – accessing the John Deere web site is an essential activity for rural people.  People who are connected use broadband in a myriad of ways, everyday!  Some for fun and convenience, others are increasingly required for daily life.

Pine City is a commuter town – with broadband, many of these people could be telecommuting.  Many already do, but a good number are precluded from telecommuting by the lack of broadband.

Infrastructure serves local government and schools, leaves out residents.  Students at Pine Tech have to hang out at the school to take online classes.   Also terrible wireless service outside of the I-35 corridor.  County staff are frustrated by this lack of mobile connectivity.

County has 700 miles of roads, 700 miles of township roads, 200 miles of city roads.  We have a mechanism for funding these roads, no matter where you live, you have an adequate road.  Rural people do not pay more gas tax than city dwellers.  Why if we can develop this system, can we not find a way to fund rural broadband.

Doyle Jelsing, People’s National Bank of Mora.

Bank developed internet based product to reward online bank customers.  Only people within 2.5 miles of CL central office can access this system.  Customers end up angry at the Bank!

Mora is served, but the majority of the county residents are rural.  The Kanabec Broadband Initiative has opened his eyes to the depth of the problem.  4H is now broadband dependent to deliver online courses, reference materials, etc.  Doyle’s son seeking info from MES totally frustrated with lack of connectivity.

Job training/retraining is now delivered via webinars and online training.

FirstLight Health was denied a home telehealth grant because of grant reviewer concerns that most rural people would not be able to connect.  New Allina manager says that remote monitoring and broadband will be essential to controlling health care costs.  No broadband – no health care monitoring!

As Doyle’s awareness has grown, he now recognizes that lack of broadband will increasingly negatively impact quality of life.  And economic development.  And job access.

Lack of broadband increases loss of talent – people expect it, young people want it.  What is the economic cost of the lack broadband???  BIG!!

For the young, for the unemployed, for the sick who cannot connect?  Again, the tie to the essential utility service.

Access and affordability go together.  High costs are just as powerful as lack of access.

MAK – the east central region has done the best presentation of any at a task force meeting.  She will be bringing this team to the Capitol so that legislators can hear their story.  She appreciates the spirit of collaboration between counties and tribes; she appreciates the recognition of the possibilities of public private partnerships.

 

Maureen Ideker reflected on the importance of home telehealth as a key tool in working with older people and avoiding long term care costs.  THe other driver is the personal health record (PHR).  These two items are converging!

Al Hemming, Mille Lacs Band member

District 3 Lake Lena resident from a bit west of Hinckley.

Al would like to hear more of the proposed strategies that the task force is planning on pursuing.  MAK talked about the reports and the work group activities.  MAK – lack of adoption is a statewide problem that inhibits public policy development.  Al replied that younger tribal members are hungry for technology access

Sheldon from health care division regarding EHR.  Network redesign is happening to enable the use of EHR.  Also clinical care with x-rays and other images.  Health service is increasing its use of web technology so that people can see their own records.  Increased emphasis on serving mobile health workers.  And mobile phone application development.

David Minke – Pine County administrator.

Policy recommendations

#1 – focus on state broadband goal.    Say it out loud and pursue it.  10 – 20 Mb; MN Top Five in access and use; and top five internationally.

#2 – maximize the impact of the Office of the Broadband The task force needs to be the top supporter of the Office of Broadband and enable its partnerships.

#3 Recognize the power of the task force.

Policies are not solutions- they set the framework Educate, Educate, Educate.  Collaborate, collaborate, collaborate.

Educate – leaders do not understand much of broadband.

Promote, educate, own.

Push the envelope on collaboration between public sector and within the public sector.  Push the envelope on public-private collaboration.

Margaret Anderson Kelliher provided an update about the Office of Broadband within DEED.  The members of the Broadband sub-cabinet are creating the job description.  The chair invited members to provide input into the job description by forwarding suggestions to her within a week.  A likely timeline for hiring the Office of Broadband  director would be by September 1.

Before the task force broke into the work groups, the task force adjourned.

GRAND RAPIDS, Minn. (May 31, 2013) – Through the work of local leaders in dozens of rural Minnesota communities, more than 250,000 rural Minnesotans have been introduced to online resources to find jobs, continue their education and monitor their health.

Connecting rural Minnesotans with tools they can use to plug into the benefits of broadband was a key goal of the Minnesota Intelligent Rural Communities (MIRC) project, a $6.6 million broadband adoption and use project in rural Minnesota between 2010 and 2012. The project was funded through a $4.8 million Broadband Technology Opportunity Program (BTOP) grant through the U.S. Department of Commerce and $1.6 million in MIRC partner matches. Blandin Foundation administered the grant on behalf of the initiative partners.

Now complete, the MIRC project brought a network of resources and support to rural Minnesota individuals and communities—especially those unemployed and seeking employment, small businesses, coalitions of government entities, and local leaders. It leveraged resources of coalition partners to extend small business technical assistance and training, expand hours for access to workforce centers, distribute refurbished computers to low-income families, train individuals and businesses and create courses for knowledge workers.

A group of 11 rural “MIRC demonstration communities” received $100,000 each to identify and implement nearly 100 projects that fit local broadband needs and helped communities boost their overall ability to participate in the Internet-based economy.

“Rural towns, cities and counties stand at the threshold of the broadband economy,” said Robert Bell, co-founder of the Intelligent Community Forum (ICF), who helped demonstration communities evaluate their broadband readiness. “They already have the sense of place their residents treasure. Through broadband services, they have the chance to add the richness and complexity of life that their urban neighbors have long enjoyed.”

Efforts like MIRC are one factor in Minnesota’s ability to maintain its place as a leader in rural broadband adoption and use. Broadband adoption, as measured by broadband subscriptions, increased from 64 percent to 70.6 percent in rural Minnesota during the MIRC project. In the demonstration communities, adoption jumped from 61.7 percent to 68.8 percent — close to 15 percent faster than the rest of rural Minnesota.

“The communities that experienced the fastest growth reported higher percentages of awareness and participation in MIRC activities,” said Dr. Jack Geller of The EDA Center at the University of Minnesota – Crookston and lead MIRC researcher. “Such evidence allows us to conclude that overall, intervention works. It’s hard not to connect the MIRC project … as a contributor to Minnesota’s leading position in rural broadband adoption.”

Local leaders drive progress on broadband in rural communities. In MIRC demonstration communities, dozens of leaders gathered community members to plan and implement nearly 100 local projects, including:

• Boreal.TV in Grand Marais, a new local-access online video site that connects residents of and visitors to this far-flung northeastern Minnesota community with local activities from government meetings to local sports events.
• Lac qui Parle County in far west-central Minnesota created the Computer Commuter — a mobile computer lab (retooled hotel shuttle bus) that brings free broadband access to communities in one of Minnesota’s most sparsely populated regions.
• The University of Minnesota Extension’s Center for Community Vitality (CV) conducted training for more than 2,400 small rural Minnesota businesses on how to use high-speed internet for marketing, sales and operations. Businesses that participated in training had a bigger digital presence than those who did not, according to CV’s follow-up research.

“Blandin Foundation is all about Minnesotans imagining, leading and growing vibrant, resilient, rural communities,” said Dr. Kathleen Annette, CEO of Blandin Foundation. “Though rural broadband faces challenges, local leaders are making inroads. ‘Plugging in’ to broadband allows the small businesses, government entities and individuals in communities from Worthington to Thief River Falls to Grand Marais to fully engage in

“We applaud and stand with rural leaders with the vision of a strong, connected future, who know that to reach their vision they have to do it themselves, but they can’t do it alone.”

Note: I thought the BBCs might be interested because many have signed up to learn about community portals from Minnesota experts via webinar called Community Portals. That webinar is free and open to everyone and will be held Thursday, June 13, 2013 3:00 to 4:00 PM

Today in Edinburgh we learned about My Ideal City from Winka Dubbledam. It is a tool that has been used to develop downtown Bogota. I know it sounds a far cry from rural Minnesota and in many ways it, but I think the tool can still be helpful to build rural community because it is a tool that allows residents (and friends) play a role in local development. Through conversation the community can define local problems and offer local solutions.

My Ideal City is an online tool for civic engagement. They post regular questions that promote city pride, generate feedback on opportunities or projects in the area. It has led to crowdsourcing for largest crowdsourced building ever. Here’s the description (and video) video their crowdsource site…

This is not a research project or a crowdsourcing experiment, is an skyscraper of 66 stories financed by over 4000 crowdfunders who are the actual owners of small part of the building’s future profits. Each part is called FiDi, a real state right protected by the Colombian government that allows the BD Bacatá to be divided in more than 4.000 tangible parts.

Now think what you might be able to crowdsource in your rural community based on local population and friends, which might include past residents, local businesses and other investors with the right community portal. Sounds like an interesting way to help fund broadband in areas where the business case might need help. The advantage of local crowdsourced projects in the sense of investment that also leads to a sense of ownership that leads people to buy local!

the President is announcing a bold and transformative education initiative to breathe life into the classroom of the 21st century. The goal of the President’s ConnectED initiative is to bring high-speed Internet connections to 99 percent of America’s students – which he is calling on the FCC to do within five years.

The program is three-pronged with efforts focused on better connectivity, teachers training and private-sector innovation (but mostly related to devices).

The blog post paints the picture of need…

Yet this national vision of the 21st Century classroom is impossible with the level of connectivity that most schools have today. Only 20 percent of educators feel their classrooms have the connectivity to meet their teaching needs today. In fact, the average school has about the same level of connectivity as the average home, even though the average school has 200 times more people. Thousands of schools don’t even have the bandwidth to stream two videos into their school at the same time – let alone provide the kind of opportunities that can be seen in Mooresville, where students in classroom after classroom are learning on their own individual digital devices.

The President understands that we have to take bold action if we are to offer our young people the best education in the world so they can compete for jobs in the global economy. South Korea, which tops global rankings in reading and math, already has 100 percent of schools with high-speed connectivity – and by 2016, its schools are planning on eliminating textbooks from the classroom altogether. We have to move with force and speed if we are to lead – not follow – on developing the best learning opportunities for our young people.

Unfortunately the blog post doesn’t include a lot of detail or specifics. The Connected Nation blog does draw out some specifics based on earlier government proposals…

In 2010, the National Broadband Plan established a goal of Gigabit connectivity for schools, libraries, and other Community Anchor Institutions, and earlier this year, FCC Commissioner Jessica Rosenworcel outlined her “E-Rate 2.0” proposal, which shares many of the same elements as the President’s ConnectED initiative.

Funding for the ConnectED initiative would come from the FCC’s Universal Service Fund, which currently collects and distributes approximately $8.2 billion per year in subsidies to telecommunications providers, schools, libraries, and rural healthcare centers. Of that, approximately $2.3 billion annually is spent on connectivity for schools and libraries through E-Rate. The E-Rate Fund size has barely changed since the E-Rate program was created in 1997.

ConnectED would be a significant and substantial increase in broadband capacity at schools and libraries. Today, according to an FCC Report, only 10% of E-Rate schools and libraries have broadband speeds at or above the President’s goal of 100 Mbps. In fact, 45% of schools receiving E-Rate funds access the Internet at speeds lower than 3 Mbps. Eighty percent of schools and libraries report that their current broadband needs are not served by their existing service.

While broadband has proliferated in the nation’s homes and businesses since the E-Rate was created in 1997, the E-Rate program has been slow to catch up. Sixty-four percent of E-Rate funding goes to support antiquated, traditional telephone and voice services like telephones and pagers, and only 25% is used to purchase broadband Internet connections. This distribution of funds is largely the result of existing FCC program rules written in 1997 that assign priority for certain categories of services and which cap the size of the E-Rate program overall. As a result, many school and library plans to upgrade their broadband infrastructure are delayed for lack of access to adequate funding.