Update on MN Broadband Policies: HF1686 (public investment fund authorized) & HF389 (fees on prepaid phones for broadband fund)

Yesterday I attended the House Taxes Committee Meeting. There were two topics that touched upon broadband and both were quick discussions. The super condensed notes on the sessions (vis a vis broadband):

HF1686 (Lenczewski) Public fund investments authorized, energy improvement repayment provided for, capital equipment financing requirements changed, and street reconstruction bond election requirements changed.

Quick Notes: Anything related to fiber was taken off the table once the legislators realized that this amendment might conflict with other policies. They may rework the language – but really the momentum seemed to be to remove it. Some discussion on whether or not the fiber was intended for government-only use – but again momentum was to drop it.

HF389 (Lesch) Collection of 911 fees from prepaid wireless telecommunications services and prepaid wireless E911 services provided for, broadband development grant program established, and money appropriated.

Quick Notes: Legislators were not in favor of the broadband development grant program – more (I believe) based on prepaid phones not being connected enough to the cause than the actual fund. Again They may rework but momentum was to leave off the fund and the higher level momentum was to avoid any controversy.

Below is video and more notes on the session. It was interesting to watch the Tax discussion when what I was listening for was broadband because tax involves some deep ideologies and so it’s clear to see that broadband is not the issue – money is.  From that perspective I think the second video I have posted is interesting. Someone mentioned the need to represent the private sector – to which someone else asked who represented the public sector? Just an interesting glimpse.

Discussion on HF1686 (Lenczewski) Public fund  investments authorized, energy improvement repayment provided for, capital      equipment financing requirements changed, and street reconstruction bond election requirements changed.

Lynnette Slater Crandall – Dorsey Whitney Bond Lawyer – MIPF introduces the amendment.

Questions –

Fiber optic – does that have to do with municipal telecom systems?

Yes – but we just realized that it might be controversial so we ask that we remove that part.

We are looking at Section 4,7,8. We would want to delete the fiber portion from each section (or remove the first mention and subsequent referrals).

Mr. Carlson –

This only refers to intergovernmental fiber connections, not to serve residents or commercial entities. So I question the controversy. Some wealthy counties are already doing this. They are self-funding fiber networks for government use.

Brent Christensen (Minnesota Telecom Alliance) –

The MTA opposes the portiorn of the bill that relates to government funded and constructed networks. (Lines 3.3, 3.4, 5.3, 5,.4, 5.29 & 5.30.) It creates an uneven playing field. Also it permits local government to make investments that may lead to long-term debt for equipment and expenditure in the competitive telecom world for equipment that may become obsolete. Finally the amendment conflicts with Minnesota law that requires a referendum before a city can enter the telecom business.

Mike Martin (MN Cable Communications Association)–

We share MTA’s concern. It opens the door to government sponsored competition. The issue is the ability to lease capacity. There’s no definition of what local governments serve, which could leave to reselling. Dakota & Scott Counties are already doing this. There are transparency issues.

Are governments selling fiber now? Yes – for example Carver County got ARRA funding to build a network and used some bonding to match. Then they asked providers (competitors to existing providers) to come on board too. It means governments might be able to compete at below market rates.

We might not object in areas without service but that’s not necessarily the case here.

Question: This is the tip of the iceberg. Maybe we need to reconsider the referendum with increased transparency. Maybe people need to understand the risk. Monticello is a deal that hasn’t worked.

Dorsey Whitney: It’s not the intent to submit a controversial topic. We’ll try to make a change to accommodate these issues or delete fiber pieces.

General Questions:

Question: We don’t want anything that would be controversy for the private sector – but who is watching for the public sector?

We do work with League of Cities. Sometimes one governmental agency has a diverging view from other types of government entities.

Questions: If it’s all technical why do we need to do this?

It might help the bond owners sleep better at night. There is expanded authority that matters to our constituency.

HF389 (Lesch) Collection of 911 fees from prepaid wireless telecommunications services and prepaid wireless E911 services provided for, broadband development grant program established, and money appropriated.

We fund 911 services in MN by charging a fee on phone bill. More phones don’t have phone bills; they are pre-paid services. One of the leader in pre-paid phones was paying the bill but they quit. So we’d like to get pre-paid phones back

Representing AT&T

We think this is a bill whose time has come. We need to resolve this as the customers change and move away from landline. Prepaid is 23 percent of market .

Questions:

We’re laying this bill over. I have concerns. We talked about adding 4 cents for broadband grant fund. That seems beyond the scope. I hope if this comes back in Omnibus Tax Bill that this gets dropped.

There is one other amendment – delete section 16.

The date for report from Commission of Public Safety from 2014 to 2015. One concern – how do we come up with an adequate fee without a more precise estimate? The sooner we get a report the better we’ll be.

I agree but the department didn’t think they’d have adequate data in the time previously provided.

The need for data and the quicker the better would be helpful. We don’t want to collect more than is necessary.

Dep of Revenue

We want to express concerns. It puts us in the position of being a collector for another agency’s fees. We do collect some fees for other agencies. This puts us in the place of using sales tax system, which puts us in an awkward position given relationship with retail providers.

Question – but you’re already doing it.  Department of Public Safety isn’t geared up to collect fees.

Question – Who else could do it?

We could do it, but it’s a bad precedent. We collect annual drycleaner bills. We do solid waste fees. But these are smaller projects. Not of this magnitude.

Jamie Pool – MN Grocers

We are concerned with local business collecting taxes for national providers. We support e-911. The bill goes into effect when minutes start to get used. The fees must be itemized. We’d need to set up systems and start collections. The language also says any fee changes will be announced on the website – requiring us to keep up and opening the door to inconsistency. We understand we don’t’ need to sell these cards – but we want to provide one-stop shopping.

Jackie Mines Emergency Services

We currently collect 911 fees. We distribute it. We provide backbone for infrastructure. We support this bill. It’s a mechanism for fair and equitable fees. With migration to prepaid it’s important to public safety to keep fees coming into the fund. We are happy to make reporting available when we can. We would be happy to send out letters as well as post fee changes on our website. We might need to get contact info on grocery shops.

This entry was posted in Conferences, MN, Policy by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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