Minnesota Broadband Task Force September Meeting Notes: E-Rate, CAF and Speed Goals

Today the Task Force met. They heard from the FCC about CAF and E-Rates. I thought the most compelling part of the discussion was the way the rules have changed to open a door to allow a school or library to become an even stronger anchor tenant in rural areas in terms of offsetting costs of building and supporting fiber networks. Also the folks from the FCC were pretty clear that fiber is the gold standard but that when (as in some rural areas) no one will look at deploying fiber that the FCC will look at other options.

There was also an interesting discussion on speeds – from the perspective of how/why should the Task Force update the State Speed Goals. Most folks seemed to feel that it was essential to define a numerical goal – because what gets measured gets done. But there was a push to also include non-numeric goals as well – such as becoming a world class leader. While the current goal is 10/5 MB, there was discussion about changing it to the FCC definition, which is 25/3 MB. That is clearly a decrease in the upload goal. Some folks thought that it made sense to go with a recognized standard or even to leave out the numbers and just go with “using the FCC definition” then when it changed so would the state goals. The discussion appears to be an ongoing topic.

I have posted full notes below. Immediately after the meeting the folks from the FCC presented at a webinar for the Blandin Foundation. That webinar was recorded and will be posted very soon. Once posted I will include the link here – it is more complete that my notes below.

Welcome.

Update from Office of Broadband Development:

The grant applications are due September 15. Expressions of interest are due October 1. We have been keeping up with projects funded last year and participating in meetings.

There’s a position open at the Task Force because Angie Dickinson is now in Wisconsin working on broadband there.

FCC SPEAKERS

Jonathan Chambers, Chief of Policy and Strategy, FCC

The FCC adopted two orders last year. A concern was whether the funds were sustainable. The goals were not in line with the practice. We were paying for T1 and cell phone and we needed to pay for investment in infrastructure.

Goals from industry:
FCC speeds goal for schools – 1 Gbps per 1000 kids
This really means fiber to schools. (The difference in cost between 1 Gig and 10 Gig is not big.)

We raised the budget to $3.9 billion per year
We included internal network
Limit is $150/per students for library it’s a footage equation (And rural libraries get funded more per foot)

We saw the shift from computer labs to access at the desk – and that means robust WiFi. We got $1.6 billion for internal network this year – and we will fund them all – and that means funding over the next 5 years. That really changed the way schools can plan.

We decided the issue of the day was high speed broadband – we are phasing out support for voice. We eliminated other services (cell phone, cellular data…)

We are looking to invest with schools/libraries with long terms investment in IRUs. We want schools and libraries to build or have someone build an asset that allows them to get what they need for education.

If there is a state fund that funds special construction – we will increase our match. Average across the US is 70 percent paid through Feds. We will increase up to 10 percent if there’s a state program to help reduce costs. Then the school is left with the rest. That payment could be made over time. We would expect a recurring payment especially with custom construction. We expect monthly payments to decrease and become more transparent. Part of our emphasis is making sure schools/libs get the best deal by facilitating comparisons.

We want to see fiber to the school and better internal networks.

From the provider perspective – this might be an opportunity to build fiber.

If you’re a school – don’t look at this as a discount. Look at it as a way to build the infrastructure for the next 20 years. You can be “the place” for connectivity in the community – especially for the library. It would be a point of pride for the community.

QUESTION – where does money come from? From voice/phone lines. BUT maybe we want to look at assessing broadband – not just voice.

QUESTION – Do you have info on how much Minnesota accesses in funding? I can get that. The info on such information has been opaque. We are working to make all of the information publicly available so that schools and libraries can compare their costs with their cohorts. Right now the data is messy but we’re working on it. The data is available, it’s a matter of accessing and manipulating it. We will run reports as we need them but are working on more. OBD is working with the Education Superhighway on getting that information for Minnesota.

QUESTION – Is the Minnesota equity program aligned with e-rate? It isn’t now. The K12 interests are concerned with making changes. It aligns up with recurring costs.

QUESTION – Case studies are a good way to let people know what’s happening. We will be doing more. This is a local issue (district by distract) – and we need to be able to get to that level of analysis.

Joe Freddoso, Co-Founder and COO of Mighty River LLC, a telecommunications consulting firm.
Technology should not be a roadblock to learning – ever.

We want to give applicants more options (including dark fiber) to scale with what the need is. We found three ways to do this:
Provides capital to give to a provider to build out to them – over a multi-year contract. The funding is made available upfront and the non-discounted portion (that the school pays) is able to pay over time so long as the provider agrees to that.
Schools can also look at exploring the option to build themselves BUT they need to have priced out the other options too. Cost needs to be a prevalent factors but not predominant factors. The shift is focused on managed service. Cost allegation rules for providers – e-rate will fund construction. You must include 12 strands but you can include more and simply pay incremental cost of fibers – UP TO the school/lib location.

You want to set forth an image for your schools and libraries launch from where you are to where you want to be. K12 schools are such a priority in MN. This is an area where infrastructure has to keep up if education is going to keep up.

SPEED GOALS

We wanted to go with “reasonably comparable”. In urban and suburban areas (82%) is covered with DOCSIS 3 – gets 50-100 MB; yet 18% has 4/1MB access? That doesn’t make sense. The 4/1 came up because is suited copper restrictions in rural areas. You can do some video streaming, some video calls. We could say that but it doesn’t seem comparable. We need a level that we thought was right and what others would agree to?

Why 25/3 MB? Most applications are download heavy apps. It relates to the number of devices that people use in their homes and what they want to do online with them. A family of four has a lot of devices. My phone is connected all of the time – doing stuff (like app upgrades) even when I’m not really doing anything. BUT 25/3 MB isn’t the right number either. You need a number for policy reasons – but when you look at the future, you see that people are building fiber. And that’s what’s changed in the last few years. Once Verizon gave up Fiber to the Premise – so the industry though that FTTP was no longer necessary but that has changed (maybe due in part to Google), people are building FTTP people are wanting FTTP now. Google got around saying they would serve everyone by not saying they would serve everyone.

For CAF the FCC looked at the cost to build and the expected ROI on meet the delta in rural/high cost areas. We need a 6 year business model to make FTTP work – but the FCC used 5 years.

You may need a number for policy – something to measure against. BUT before you come up with that number it makes sense to figure out beyond the number what your goal is and make sure that number supports the goal. We don’t fund areas with cable because we think that’s broadband. If the Minnesota goal is

QUESTION – The FCC has set a practical goal. We need to decide whether to go with practical or aspirational goal. DO you know when the FCC might revisit? Not any time soon but as we roll out rules for funding you may see that there are other qualifiers other than speed. We have shown a strong preference to fiber to schools et al. If one if willing to build FTTH, that is in line with other FCC goals. But if no one is willing to build FTTH then we need to look at alternatives.

It’s helpful to know that there’s no magic in the speed goal numbers. Clearly negotiation comes into play. BUT we also hear that a number is important as a way to measure.

How do we go about measuring? Are we talking peak or average and how do you know? Speed test capabilities would be valuable. A new mapping solution should include a speed test to help verify results.

The problem with speed testing is that it measure what people buy not what is available to them.

We’re going to have to find a way to measure speed goals with service. But that allows on truth testing – also plenty of people don’t know what they buy.

BACK TO ERATE

If you want to use digital learning in a school yet some folks can’t do homework online, that’s a problem.

E-rate today permit the use of funds for internet access on school/library grounds – but not outside. You can do that as a school but cost allocate the cost to serve people across the street. There is a movement to provide wireless in a neighborhood. We don’t’ allow it. BUT there’s a spectrum band (EBS band 2.4?). It was mostly licensed to schools (last one 1995); schools do have them and they are meant for education. Sprint has lease arrangements with most license owners. What about using the EBS to create a network off the campus? You could get the school experience. It would require of the waiver of the cost allocation.

Wisconsin is doing this at one college – and includes bus service. It would be nice to have more pilot tests to try this out. – Minnesota can connect the FCC with the right people at MNSCU.

First Task Force came up with a compromise – that’s who we got that number and this was before the FCC updated their definition.

Symmetry – doesn’t matter adequate upload matters
Tie state goal with federal goal

SPEED GOALS DISCUSSION

Comments from the public:


Everyone seems to believe that a number is necessary. The numbers are for the legislators.

Should we pick a number that is practical or aspirational?
Legislators would like to see investments focus on infrastructure that supports 100 MB.
Can we mix numerical goals with other aspects.
DO we want to raise the low bar or lift the high bar?
The FCC has 25/3 numbers but they fund differently. They too focus on higher speed goals for investment but take lower solutions when the higher goals aren’t practical.

We seem to hovering on deciding that 25/3 is a good new goal. Is there most documentation that we can

The upload was selected to be technology neutral. 3 MB is the highest speed you can get with some technologies. The Task Force has also tried to be technology neutral a move to 3 MB would support being technology neutral.

Should we keep in an international comparison? We could do something more valuable in that space.

Maybe we want to look at amount spent per capita in Minnesota.

Do we have to use the FCC numbers? Could we be aligning with someone else?
I work with people who look at Gig access. We think Netflix is the killer app – but back in the day they would have said that the light bulb was the killer app of electricity.

Are the FCC numbers a goal or a definition?

It might be helpful to look at what other states are doing?

OUTLINE/CONTENT FOR 2015 REPORT

• Let’s think about a way to share guest speakers from Task Force meetings.
• This report is for the Governor on the State of Broadband in MN and a plan on how we’re going to get border to border broadband
• We’ve asked for $100 Million each year. What don’t they understand?
• Talk about CenturyLink, AT&T, cable companies, telecom companies who are stepping up to the plate to serve Minnesota. If we have one person unserved, our job isn’t done. Providers know we need this as a state; we are working toward it. Maybe not fast enough – but that’s where state funding can help.
• Let’s talk about what’s in it for the people of Minnesota and what it means to them. We need to make the numbers more tangible and goals meaningful.
• I want us to provide an education to legislators too. It’s like the state version of the FCC reports. We need to make the case for our pinpointed goals – funding for OBD.
• Let’s talk about progress made toward the goal. Talk about CAF. Talk about OBD grants. Educate people about schools and other use of broadband.
• Devote space to how close we came to the goal. Be technology neutral. CAF is a game changer. Tell story of the small telecom companies – we could advocate for them. Don’t like to talk about a specific numeric goal for funding. Need to talk about adoption. We need to modernize telecom laws.
• State of state of broadband in Minnesota. Let’s look at business, schools, community. Add infographics to reach people who don’t eat, sleep, dream this. And stories. Need to talk about E-Rate. Need to identify obstacles.
• Need to include tribes and reservations.
• I want to see the report be a catalyst for the next legislative session to talk about more reforms and funding. Maybe it could be a broadband bill. These are not necessarily a partisan bill at the local level. We have a track record (sales tax for telecom).
• We need to add more stories. Help people find the highlights.
• Use this document to get some action. Help people to understand that this is a once in a lifetime opportunity (like CAF) and get them to do something.

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