Minnesota Broadband Task Force: Full Notes

I suspect the second video on the position at the Office of Broadband Development will be of interest to some. The plan is for DEED to post info on the job next week.

It was interesting to hear about provider investment. I know many Task Force members appreciated the presentation from Trent Claussen (CenturyLink), which I was also able to record below.

One note on the videos – they are really posted for audio, as you’ll see right away. (I’d like to say it’s a tribute to Minneapolis’ Soul Asylum and their early music videos – but really it’s a matter of room layout.)

  • 10:00 –      Welcome, Introductions, Approval of Minutes
  • 10:10 –      Welcome by CenturyLink
  • 10:20 –      Public Comments

Al Juhnke (AJ) is now working telecommunications – with 2 other staff people in DC. Here are some of the current issues

  • Tracking USF funds and others (USDA, E-Rate for example)
  • Watching Farm Bill
  • Watching privacy and NSA issues
  • Franken is interested in leading telecommunications

Questions:

MAK (Margaret Anderson Kelliher) – Rural connectivity is a big issue. We see the adoption & deployment gap closing – but rural, low income folks do not seem to be catching up. If we want to meet goals – we need to up our game in rural Minnesota. How can we do that? We may be coming up with recommendations for incentives to partner with federal funding.

AJ – Unfortunately earmarks are gone but perhaps we can target or write language that is favorable to broadband in rural areas. The median wage is $17/hour but it’s much less in rural areas. If you make $13/hour, it’s tough to budget for a monthly broadband bill.

Broadband is also a great tool for economic development. It’s an investment.

GE (Gary Evans) – FTTH Council just came out with paper on focus on the FCC Gigabit community race to the Top – it would be worth considering.

AJ – I’m concerned about mapping after funding ends for Connect MN. The maps have been valuable. We need those to continue – it might make sense to fund MN mapping until we see what the federal folks will create.

MAK – the Task Force doesn’t lobby but I have had the opportunity to speak to the Legislature several times this year and there are other folks in the room who do lobby, such as the MTA.

General Catch up —

SW (Shirley Walz) – EveryoneOn – they focus on digital literacy. You can now text them and they will send you more info on digital literacy training in your area.

DW (Dianne Wells) – Attended a FirstNet (first responder network for broadband – to be built by FirstNet under NTIA) meeting with 9 others from MN. They will have $9 million to build the network. They met to learn what the states currently have in place and what they will need. Minnesota is actually in good shape in terms of first responder network – so one concern is that the new federal model be at least as good and as cheap as what we currently have in place. FirstNet is looking to build up on what is already in place.

Secondary use of spectrum was brought up. Spectrum will be available in non-emergency times but the question is if that’s enough for some areas. Or as towers are built, it might make sense to allow another provider to build as well for a primary-public network. Although secondary use could be a revenue generator for FirstNet.

GE – FTTH Council is holding annual symposium Sep 30 – Oct 2. They focus is on applications. Also BB Properties Magazine is holding regional meetings – closest to MN is Chicago. Focus is on economic development in Midwest and agribusiness.

BH (Bill Hoffman) – Connect MN will be hosting a one-day broadband summit on December 4 in  Roseville.

BJ (Bernadine Joselyn) – Blandin is thinking about an event for Q1 2014 – where advocates, champions and policymakers could talk about how to deploy and build upon the recommendations of the Task Force. It would be nice to leverage the work of this group with other state efforts.

  • 10:30 –      Discussion of Office of Broadband Development with Robin Sternberg, DeputyCommissioner, Minnesota Department of Employment and Economic Development

We need to work with HR and Commerce and other sub-cabinet members (Carolyn Parnel, Katie Clark Sieben, Yvonne Prettner-Solon & Mike Rothman)to get job description together. We’ve done most of that. We’ve talked about how to position the role.

The OBD director will report to Robin Sternberg.

The Office will have its own office in DEED. Although it is still part of the Agency.

There is a job description. Sub-cabinet has approved description. They will be posting the job position next week.

Timeline – They plan to post in the next week. Will give 3-4 weeks for people to apply. Give a few weeks for assessing résumés. Thinking about interviews in September. Will distill to 8-12 candidates. There are usually 2-3 rounds of interviews.

MAK – The Broadband Task Force has had input on the job description already. They talked about skills and experiences that will be important. The Task Force will be part of the Office of Broadband Development deal. The Task Force has been responsible for setting outline for annual report, which has largely been written by Diane & Bill. We want to make sure that this will be a good fit for the Task Force. The Task Force is great for recruitment. MAK would be happy to help review.

RG – there are a couple of ways that the Task Force might be helpful. I can talk to HR about it.

MAK – It would be nice to make sure that the new person is in place for the Legislature.

RG – We will also be determining the review committee – which can be a challenge.

BJ – who will make the final decision?

RG – The Governor – we will be in conversation with them throughout the process. DEED may offer a couple options depending on the pool. Sometimes we rank candidates; sometimes there’s a clear candidate and if so, we might note that too.

My job is to expedite getting this person hired.

DA (Dennis Ahlers) – the Commissioner has told us to continue forward until this position is filled.

  • 11:00 –      Presentation by Cable Companies (how investment decisions are made)      Richard Sjoberg, Sjoberg’s, Thief River Falls, Minnesota
    Steve Johnson, Midcontinent Communications, Cold Spring, Minnesota
    David Pratt, Arvig, Perham, Minnesota

Dick Sjoberg (DS)

As we’ve been able to get concentrations of people  enough to make a business case, we’ve built infrastructure. Building was done by private capital. We got the ARRA BIP grant, which allowed us to serve much lower density areas.

One interesting factor on low population density areas – sometimes you get influential people building in those areas.

Sometimes we have to be our own customer when we’re building especially to get route diversity/redundancy. (For example out to Warroad.) As we looked at it we realized that there were pockets of population (low density but there) generally close to the road – probably to make it easier/quicker to get to work. So we’re working on FTTH based on the backbone we have to Warroad.

The primary cost of building has been our connections from town to town.

We really need a 6 year customer contract to make a business case – but folks are too conservative. They want 2-3 year contracts.

The electronics becomes the second challenge. Most FTTH includes a node to the home – but we need a way to get fiber to connect to devices (computer, TV…) to make the connection practical. (DOCSIS)

Original systems we low-band and one-way. We’ll need to upgrade it to go to DOCSIS 3.1 It’s capacity is 10 Gig down and 1 Gig up.

Steve Johnson (SJ), Midcontinent Communications

MidContinent acquired a number of systems in North & South Dakota. We started as cable TV and progressed. The ring in central Minnesota was established w/ relationships with counties and schools.

PC Mag did an analysis in 2012. Midcontinent Communications was viewed as fastest ISP in Midwest. We do it with 4 tiers of service.

Steve Holland was director of ECMECC – we connect with that network. We base our business on getting enterprise customers as anchor tenants and using that to serve local residents.

MC has invested $17.5 million a year into Minnesota since 2008. They serve small towns and rural areas.

Losing tax incentive has been a blow to us. It would be nice to have that legislative change reanalyzed.

How do we analyze our investments?

We bring 100 Mbps service to libraries in Central & East Central MN. We have a good relationship with CMCRDC (bandwidth for schools & libraries).

Diane & Bill spoke to cable folks on Monday. The reference to the non-adopters struck me. People seem to focus on 3-4 percent of rural areas that aren’t served. We need to look into those folks who aren’t adopting. They don’t see the purpose. Only 10 percent of non-adopters don’t adopt due to lack of access.

We go to areas that show us the need.

I’m on the broadband task force for Kanabec County. There are areas north of Mora (Knife Lake) that are unserved. Maybe we can work with hotspots.

David Pratt (DP), Arvig, Perham, Minnesota

We have a lot of hats. We provide telephone service (LEC), we provide cable service and we’re an ISP. We serve very rural areas in Minnesota. (38,000 internet customers – generally from Fargo to Walker to Cass Lake to Melrose)

How do we consider new areas –(outside our footprint)?

We look at it on a case by case basis. We do a marketing survey. We’ve moved from build it and they will come to recognizing that we can’t afford that. We do an engineering evaluation. We have contract construction group. We design a network. We know our standard operating costs. We know what it costs for billing, help desk… Then we try to create a business case with a rate of return that will fit our structure.

Density and seasonality can kill you in a rural area.

We know provide a Gig network in Melrose.

This evolution of broadband to rural areas as economic development tool – is happening. There are pocket that are underserved. We budget for those areas and try to serve them as we can. But some of those areas have not been maintained and so the cost to serve them is even higher.

We do look at best rate of return. We always serve rural areas.

It’s hard to have a rule of thumb in terms of cost per mile can vary so much. Is it farm land, is it wetlands, is it rocky, is it a lake…?

MAK – Seems like we are focusing on access a lot today. The goal is ubiquitous broadband access. But we have expanded our role to focus on adoption. So we get what you’re saying. But the reality is that we’ll be measured on access.

We’ve talked about incentives for unserved areas. Underserved gets tricky because that often means competition. SO for the unserved areas – how do we make that delta shrink? This will probably be a question for the Office of BB Development. I just heard you say this is really a case-by-case issue. So how do we best help you providers.

DP – A bag of money would help BUT those bags tend to come with more baggage than they are worth. So many strings is a disincentive.

SJ – It’s like roads. Are we going to furnish a super highway to everyone? Are we going to try to get everyone a gravel road? We will then continue to provide superhighway but will also focus on gravel. The cheapest way to do that is working with wireless companies and hotspots. Supporting those models makes sense. Incentives need to be in place to make that work. I’m not saying fiber to every town will work either.

MAK – have past programs allowed for that level of collaboration among providers? We think we might be able to write the next piece of incentive – so we’re looking for more info.

SJ – We’ve already done it. We’ve partnered with CenturyLink, Savage Communications, the State of MN…

DP – The subject of partnerships has come up quite a bit. Gravel roads do get paved as building happens on the far end. And you can move that analogy to broadband.

BJ – Do you have promising practices of partnership to share? Or advice to communities in your service areas. How can a community make it easier for you to work with them?

DP – Sometimes we have onerous tasks such as getting permits. Streamlining that process would help. It removes a hurdle.

SJ – Lots of people seem to nickel and dime the provider. That makes it a struggle. But for the most part communities are not a point of pain. Some people seem to think there should be free service – so people who deploy their own network seems to think it’s free but building the private network isn’t free and takes away some of the business incentive to enter certain areas.

  • 11:30 –      Presentation by Telephone Companies (how investment decisions are made,      CAF update)

Trent Clausen (TC), CenturyLink

Investment has changed with shift from Qwest to CenturyLink – we’re interested in local investment. And we work differently inside as well.

We do about $100 million per year.

Opportunities to grow the network

  • Customer inspired network extensions for large customers
    • We make a business case decision on these issues
    • Organic budget for capital investment
      • We rehab networks and that’s a big portion of the budget
      • We are trying to get out in front of DOT projects to minimize conflicts and issues
        • We’re getting into design-build business
        • Working with other providers – such as wireless
          • In MN we have 750 towers that we provide for multiple carriers – at least 2/3 more in development
          • A good way to reach into deeper/new pockets
          • We are seeing convergence (for example GPON)

We are good for 100 Mbps – but distance is a player in that speed.

ROI model – we look at cost per mile/customer but we also look at take rate. So efforts to foster higher levels of take rate help develop a business case for deployment.

ARRA

  • Access to rights of way – we are seeing good cooperation with municipalities
  • Permitting can be an issue – consistency would be nice. It can take up to 2 months to get a permit and that’s too much.

MAK – Maybe we need you to speak to the Legislators about the rudimentary technical details

  • 12:00 –      Lunch

Notes on the 2013 Report

Last year we included consensus items, other items and discussion. Do we want to do something different?

How can we make our arguments stronger with Legislators?

We probably can push only 1-2 items. That was true last year and will be true this year. This isn’t a budget year.

If we have something that might fit a bonding bill that might work.

We might have thrown too much at them last time. If we can wrangle harder on distilling that could prove fruitful.

People bought our argument that everyone needed broadband and that it was beneficial. We had two larger problems – one the technical gap in understanding. We need to figure out devices that might show how everything works. The other problem is the question of investment.

BJ – When we were at the Department of Human Services, Roger Root helped us to think about the innovation economy. It’s all about getting time and attention. Broadband is an economic development issue – maybe we can minimize broadband, move away from the wonky, and focus on Minnesota as an Innovative Economy.

MAK – is going to Finland in August. Maybe that’s an opportunity to learn more and get new ideas.

AC (Andrea Cassleton) – It would be interesting to take a look at what our goals would look like.

MAK – This is an opportunity for us to make changes before the Office of Broadband staff comes in. So the report will be — Similar formatting with stories – with a stranger narrative that will help people see what broadband means.

GE – There are examples of how communities and government entities have changed their way of doing things.

DM (Danna MacKenzie) – It would be great to get folks to talk about that.

GE – Tom Cohen may speak at the next meeting.

MAK – The librarians are ready to talk in Alexandria.

BJ – A lot of this is about getting attention. Blandin has a lot of video on broadband – it might be nice to have a multimedia resources to add.

FU (Fred Underwood) – One member of our tribal council was really not interested in the tech details. So I set up some models of different broadband speeds to help people understand the difference.

  • 12:30 –      Subgroup Breakout Session 1
    (Best Practices/Incentives and Broadband Adoption subgroups)

Best Practices/Incentives

Talking about what sessions might be possible, desirable for future meetings:

  • There will be an open house after the next meeting in Red Wing.
  • In Alexandria – it might be nice to have FCC rep.
  • October might be nice for CAF.
  • 1:00 –      Subgroup Breakout Session 2
    (Mobile/Wireless and Coordination Across Govt./Monitor FCC & PUC      Decisions/Cost of Broadband subgroups

Best Practices/Incentives

  • Let’s restore sale tax exemption for central equipment and expand sales tax to include outside plant equipment (part 2 as seen in last year’s recommendations)
    • Need central office equipment to reach rural areas
    • Need to phrase this is a way that connects it to goals
    • Sales tax exemption is different than other incentives
    • Create and fund new telecom trainer programs – they used to exist
      • Do we have evidence of this being a problem? We have plenty of anecdotes

Maybe we could ask for a program operating budget to the Office of Broadband Development.

Maybe John can work on the list to determine whether they need state legislative action or cooperation with other departments. They we can identify key objectives, price them out and give that to legislators. And some points we might be able to pass onto others. This would also be helpful to new Office of BB Development director.

The feds will build a map off the 477 forms, which indicate where they have broadband and at what speeds. Based on the forms, the FCC will build maps. But those maps are not as good as the Connect MN maps. In some respects the FCC info is more granular – but in other respects it’s less helpful.

I think that even if we ask for funding – it would be a future thing. The mapping will be an immediate problem. This is an urgent issue.

  • 1:30 –      Task Force Discussion of December Report
  • 1:50 –      Wrap‐up, Upcoming Meeting Information
  • 2:00 –      Adjourn
This entry was posted in Minnesota Advisory Task Force, MN 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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