Today the MN Broadband Task Force heard from some very frank providers that produced a series of “aha moments” for everyone. Here are some snapshots:

It started when Travis Carter from US Internet asked “so broadband – are we talking Gig?” Everyone sort of hemmed and hawed and finally said – actually we’re talking 10-20 Mbps up and 5-10 Mbps down. Gulp!

Then providers got down to brass tacks and budgets. Access (Gig) to the backbone in Minneapolis costs a provider 50 cents a month. In Red Wing it’s more like a dollar. In Thief River Falls, it’s $10,000-$20,000 a month. Clearly when wholesale costs vary so much, retail is a different game in remote areas.

Unserved areas are willing to do what they can to attract providers – offer space on towers, help promote service, discuss funding. Areas with decent service are more difficult to work with – they want to know how a provider will camouflage equipment. But many/most providers will deal with the minor headaches when the business case is better to go into an existing market. Discouraging but we’ve certainly seen this play out. The Google Checklist was offered as a tool for communities to use to try to make themselves an easier sell to providers.

I also took full notes, which include two videos.

9 – 9:15: Welcome/Approval of Minutes

9:15 – 9:30: Update from Office of Broadband Development

We have been busy working on the elements of the broadband infrastructure program. It involves a lot of moving parts. From application to scoring to grant contracts. Our next step is a road tour around the state starting on July 18. We will review the grants and get feedback from the public.

Lots of people want to talk about the opportunity and figure out the best position. It’s been great to meet with different groups.

Participated in recent TISP meeting.

9:30 – 9:45: Review of Upcoming Meeting Schedule and Agendas

• July 23 – noon to 3:00 at DEED focused on budget
• Aug Farm Fest meeting – opportunity for public testimony
• Sep – meet in TCs
• Oct – meet in TCs
• Nov – to coincide with Blandin/Connect MN conference – be nice to have report done by this meeting

Margaret Anderson Kelliher provided a quick description of the Task Force for the panel members…

Conversation based on questions from Travis from US Internet

So there are areas in Minnesota without broadband? What are the business reasons that keep people out?

• Population density
• Geographic structural issues
• Take rate
• Infrastructure costs

We are concerned about the people who live just outside of town. The people with businesses. In rural areas who don’t have connectivity. Many tourism-based businesses that need infrastructure. Farms also need connectivity.

Broadband is now a need; not a want.

Are there examples from electricity that we can draw from?

It’s amore blended model of private and public infrastructure.

Also there’s a part of the population that just doesn’t want broadband

If broadband was a utility it would be easier to use the electricity model.

More and more education and health care are being tied to broadband.

We are also trying to figure out which government services are available only online.

In some ways it’s a literacy issue.

What is the priority of these families to have broadband?

Adoption can be an issue – but there’s evidence that indicates that if you can subsidize business for 18 months, the household will continue and will pay themselves. The barrier of cost, technology literacy, access to hardware are all issues.

On Fond du Lac some kids want to hang out at the parents’ offices just to get broadband.

Metro school districts have help desks for parents.

Household income goes up where people have broadband.

9:45 – 10:45: Gigabit Readiness Panel

Gary Evans – Hiawatha Broadband

Just returned from FTTH Expo. They are having conference in Minneapolis September 2-4. US Ignite was an initiative.

Trent Clausen – Century Link

Omaha is one of my projects. We are deploying Gig there.

Sam Turner – US Internet

Are US communities really ready for Gig access?

ST: Yes. We see that people are ready in Minneapolis. We run into challenges. We needed to go through a conditional use permit to deploy. So cities aren’t necessarily ready for permits.

20% know what a Gig means an are ready. 80% are ripe to understand. SO long as prince point is good; people are ready.

TC: We have a mix between aerial and underground deployment. Communities aren’t ready for massive programs. As pointed out in the Google checklist.

If you look at high speed service – people are ready. Three years ago people weren’t ready. The computers weren’t ready. The modems weren’t ready. Today consumers are making demands. But there is still opportunity for education – but once you have it, you don’t want to give it up.

As it gets closer to being economical, people get more interested.

Travis: We get calls from people saying, where are you deploying? We want to move there. And once people try it, they don’t’ want to give it up.

It’s a price issue; it’s a technology issue. People want low latency. Since May 1995, we have had more application that capacity. For the first time, we have more bandwidth than application.

None of the homes we serve us a Gig access; but they have what they want and need. 88% of our bandwidth is video. Is that really the Internet? Kids want video. And the hardware can handle it. But latency is the issue.

Where is the Gig price point or where could it be?

TC: You can have connectivity to a residence. But there’s always a bottleneck. It’s not just the end user connection that drive cost or connectivity. It’s the entire network. You need the backbone.

Connecting the customer is pretty easy. It’s the network that costs. But economies of scale and general lowering of costs of technology will drive costs down.

Travis: We have benefits that bigger companies don’t have. We have greenfield deployment. We wanted to be technology agnostic. We run fiber to each house. We use bidirectional options. Costs are pretty affordable from technology perspective. But it required capital and time to grow.

It’s slow but it’s built to last.

We talk about community readiness. Is there anything providers can do to help that situation?

ST: Our fear is that word gets out to people we don’t serve. We only serve Minneapolis. Part of getting a city ready is spreading the word.

Travis: You have to fly under the radar or people who don’t’ have access get angry. We build as quickly as we can. And because we build with our own nickel, we pick areas that will have a fast, good ROI.

It’s not always a cost issue for the end customer, it’s a priority issue. We don’t have poles or towers. We deploy underground. Since Google got into the game, our job has gotten easier.

How do you manage the fibers?

It is inefficient. But it allows us to be technology agnostic. I pay $30 Gig optic. We roll out Ethernet at the end of the day.

Initially we wanted cabinets in the community – but no community wants that. We keep our Central Office relatively close to the customers.

Tech support cost is much lower with this method. Yesterday we have 4 tech support calls.

GE: This is what they did in Burlington VT

TC: Cities could be helpful in preparing citizens to recognize what fiber looks like – in terms of the actual hardware required.

Maybe government space could be earmarked for some of the cabinets and other hardware required.

As new building go up, owners could think about broadband Or maybe we could change building code to be fiber-friendly.

Areas that have acceptable broadband are resistance to fiber. Areas without broadband are begging you to come to their area. How can we get you to provide service to those unserved areas?

TC: It’s back to ROI. It comes down to population density and cost to reach them.

How much do we need to make a profit?

Industry can estimate take rate. But what’s the cost per household that makes is attractive.

What type of facilities are you offering? Access to city poles? That makes it much easier. After that it’s a density play. Give us access to land for a building. Get people interested in signing up. Google has hit on these too. We still have 4,000 people with dialup because they think it’s good enough.

Google surveys the whole community to see who really wants a connection.

Can you take the business process to the bank and get a loan? That’s the basic question.

Cost to the backbone is an issue too.

Operations cost for a Gig is $10,000-20,000. You need to have 3 times the available broadband for every 100 customers. That gets pricey from Thief River Falls. That cost is $1 or 50 cents in Minneapolis.

Maybe there’s government fiber heading to that area – taxpayers have paid for that. It would be nice to be able to use it.

Interesting debate between how many customers a Gig will serve – 100 or 1000.

Backhaul may be the biggest issue in rural areas.

TC: CenturyLink is a Tier One provider. We pay for that. Every transport dollar, we also pay for peering and core transport. There’s another cost that goes into it too.

We are looking at population density too – with 5 homes per mile.

What gets us to the capability?

This is a big area. Kansas City is small.

Ask the people you serve first.

What percentage of a community has to have fiber before it makes a difference to the economy of the community?

There is a magic in the network. We saw it in Burlington. The college has one of the finest digital programs and the spurred hundreds of startups.

We could all move next to the 511 building. Although eventually there will be more 511s.

We also have a critical issues redundancy issue. If you can’t justify the cost of a primary network – how do you justify a redundant network?

Redundancy should have a requirement for ARRA funded networks.

11-12: Working Lunch – Initial Discussion of TF Budget Recommendations

The Governor was off and on broadband

Is there any way to fund this aside from general dollars?

We could add a fee to something or carve out a portion of some allotment. But that didn’t seem to work well.

Pre-paid wireless cards was one attempt. But it wasn’t very popular.

Adoption – we could do more research on what other states are doing. Maybe there are subsidies that would help support programs or services. Just to encourage end users to put skin in the game.

Maybe the Office of Broadband Development could work on something like that – compiling info on programs that offer low cost service.

We will also be looking into E-Rate programs. Teachers noted that there were restrictions in use of E-Rate funded networks (like using YouTube).

We realize that if you can provide a computer, the take rate for broadband service is higher. But XP computers are not helpful because they are no longer supported.

DEED has programs that are first come first serve.

The Task Force might want to be more specific in their infrastructure recommendations.

About backhaul….

What would the options be?

Could we ask the state about sharing wireless backhaul – such as with ARMER or FirstNet?

For a long time the State was hesitant to share – but it seems like they are opening up.

How extensive is the State infrastructure?

We need to think about an advertising budget. Adoption isn’t just affordability – it’s selling non-adopters on the idea of broadband. Also we need to tell rural communities about the funding that is out there. Getting some of those big dollars would offset the backhaul charges.

Maybe we need a rural backhaul study.

Adoption isn’t really part of our mandate but boosting adoption does boost the market demand.

We would like to look at adoption from a county-wide level. Connect MN doesn’t do that. But that would be a nice study for the Office of Broadband Development.

12 – 12:30: Full TF Discussion of Subgroup Efforts – Report out, Exchange of Ideas for Focus, Expectations of Subgroup Work Product

Dick: We talked about environmental policies for building infrastructure in rural areas. Pole rates are expensive. Building underground – you need to do an environmental impact study looking at SHIPPA(?) act to looking at historical building, cultural artifacts, nature and potential impact.

Are there ways to lessen the burden on these studies?

OBD should work with Revenue to grants to be contribution to capital (not taxed).

Boa is working on programs serving minority communities. Maureen is working on telehealth reimbursement.

We are looking at programs that allow seniors to stay in their home through remote monitoring.

Shirley: Looking at government services that are available online.

Looking at inequity of costs.

Talked about marketing programs for low income households.

Looking into E-Rate restrictions.

Identify programs that would use funding.

Andy: We talked about fiber and deploying Gig networks. We talked about Google fiber. We are going to look into the Google fiber checklist.

Is the Google Fiber Checklist something we want to include in the report? Yes. Maybe as a best practices example.

12:30 – 1:30: Subgroup Breakouts I sat in the middle and tried to take notes on both sessions.

Advanced Networks:

• Policy to focus on security
• Discuss Google checklist
  • It’s 20 pages long maybe we need to distill
• Find ways to highlight broadband apps in Minnesota
• Maybe get US Ignite to present
• Need to prioritize recommendations
• Nothing we looked at had budgetary implications
• Should we reconvene after looking at the Google list?
• There is a report on broadband in ag in rural NY
• Backhaul is an issue for rural areas
• Rights of way might be bigger issue in urban areas
• Maybe we need a report to highlight the issues based on different areas or types of areas
• Poles get replaced frequently
• Cable franchising issues are interesting because of the “cheaper by the bundle” deals
• Do we want to open some of the policy cans of worms
• Infrastructure cabinets in the community have not been a big issue in MN. They have been issues in other states

Adoption Notes

• How can we pull together adoption info?
  • From providers?
  • From FCC. (But the 477 forms are a year behind)
• With data on take rates by county or community we might be able to track down successful programs.