Posted by: Ann Treacy | March 18, 2016

MN House on broadband (HF2381): Unserved vs underserved, budget, incumbent rights and CAF 2

Yesterday Representative Baker introduced changes to HF2381. The quick take– the bill has moved on unanimously. There were issues about the funding amount recommended, which was $35 million. Many Representatives thought that number should be higher – but the chair decided that budget should not be discussed at a policy meeting and called the meeting out of order.

There were questions about:

  • Unserved versus underserved and where should grant funding go
  • Broadband speeds – is 25/3 (25 Mbps down and 3 Mbps up) fast enough
  • Giving incumbent providers first rights of refusal for projects in their coverage area
  • What is the impact of federal funding? (CAF 2)

Also there were a lot of testifiers. (And handouts.)

Here are full notes and videos:

Intro to bill from Rep Baker

  • Recognize speed goals from TF
  • Bring transparency to how to choose grant projects
  • We have federal money coming into MN and we need to know how that will be distributed – we need to communicate with those awards
  • Need to recognize unserved mission – we need to reach last mile – but we recognize undeserved speed goals too
  • My appropriation was $35 million
  • Put in funding for lower income households

Question on Speeds – is it fast enough (from Mahoney)

  • Related to speeds – what’s the difference
  • Change the goal from 10/5 to 25/3 to reflection change with FCC definition
  • Rumor says that’s still pretty slow – how fast is that speed?
  • Can’t answer. Connect Minnesota says what speeds are available in different parts of the State.
  • Can we have someone here next time to address that? How does it compare to SOB

Question – getting criteria for grants in advance (from Mahoney)

  • Don’t we have qualifications for grants on website now?
  • People who apply do know the criteria – we just want to make it clear.

Question – why are we giving out so much vendor/project info? (from Mahoney)

  • Why do we have info on vendors?
  • I talked to people who wanted to apply for grants but there was question about openness. And I want to make sure we’re as efficient as possible. We want to know how they got their team together – by asking them to open bid more.
  • One issue is having competitors know the inside work and the potential for bidding accordingly.
  • This part of the bill could use some work.

Question – What about unserved and underserved areas (from Norton)

  • We have talked about unserved and underserved so much in the past. We’re lowering the standards to 10/1 and now suddenly the medium sized cities will be cut out of so much funding. We’re setting up a situation where the smaller cities will qualify but larger cities won’t.
  • OBD goal is to get broadband to every corner of the state. CAF 2 speeds are 10/1 and that’s better than nothing. We don’t want to lose focus. Any municipality can apply. But $85 million in CAF 2 is coming through the door to provide service at 10/1. If you have a provider who has been making investments. We don’t want state funding to go to folks who will be competing with providers who got CAF 2 funding. So we give incumbents fist rights of refusal to expand.
  • Glad federal funding is coming. We need high speed cable. BUT we don’t need to focus on the same things. Maybe the State can focus on economic center hubs.

Question – $35 million is woefully inadequate (from Norton)

  • We need to look at more funding. (from Norton)
  • Governor recommends $100 million

Question – Need clarification: (from Miller)

  • Related to un/underserved – one of the challenges is knowing the difference between optimum speed and actual speed.
  • It doesn’t address that technical side of speeds – because of the rural complexities. When companies tell you their speed goals they are not trying to be misleading – but sometimes they predict an optimal situation (no other users)

Question – Why do incumbents get firs rights of refusal? It seems like that would hinder competition. (from Miller)

  • If their speeds aren’t what the incumbents say they are that leads to issues.

Question – the State Office Building has an 86 Mbps and 56 Mbps connection – we are asking rural Minnesota to get by on significantly less. (from Mahoney)

  • We can’t use CAF 2 funding to get broadband we want it to get good broadband.
  • Rural areas need better broadband

Question – on unserved/underserved

  • It’s hard for a city with more than 3300 people to get funding.
  • I have people who would be happy with 10/1
  • The providers are saying that once they get 10/1 they’ll work on 25/3.. Providers are smart and they’re getting the equipment that will upgrade more easily.

Question – what about satellite?

Question – I like priority on unserved?

  • 35 mils from here – in Anoka County – there are areas with dialup. You can’t run a business on that.

Question – on served/unserved (from Mahoney)

  • Dan Dorman from GMP- we have trouble supporting the bill
  • Our concern is funding allocation go to any cities – we want to see underserved communities qualify for funding too. Not to the exclusive of unserved but
  • 82 percent of rural Minnesotans do not qualify for funding right now
  • We want served to mean 100 Mbps symmetrical
  • We want business and industry to open up with the funding so we want communities with bus and industry to have a chance for funding

Question – it’s concerning that we can’t talk around/about dollar amount (from Norton)

  • Rule this amendment is out of order
  • People object

$35 million will help get a little bit better than dialup in rural MN – they deserve better

A2 Amendment – passes

Testimony

Greg Clarkson – from Austin

Working with school district to get better broadband – we want to see funding go to underserved as well as unserved. Economic development happens in cities. We need to optimize funding by investing in cities

Kristi Westbrock – CTC

CTC got $2 million (invested $2.2 million) State broadband funding. It’s been a public safety boon – especially after the hurricane last summer. We need to focus on private investment accrued through grant funding. Working with OBD has been easy. They have never impeded the project.

We support unserved definition of 10/1 and underserved definition of 25/3

Sam Romaine – Haug

We use drones to support precision ag. We take pictures but the farmers can download it. It’s hindering real time precision ag. It’s hindering business. We require a solid 5 Mbps connection to even view our corporate website.

Travis Bonema – JennyO turkey

We need better broadband to monitor food safety. Our sites are setup on DSL – that’s not broadband. G has been faster – but data caps become the issue.

Donna Bonestra – I have trouble watching career—related video. We have other businesses too who are unable to get their jobs done.

Dan Larson – spoke MN Rural Counties Caucus –

[I missed a few speakers]

Laura Ziegler – MN League of Cities

We have concerns of 10/1 definition

Dan Dorman & Chris Mitchell

We are arguing about unserved and underserved – we need to work together to serve everyone. We’re going in the wrong direction to get everyone up to adequate speeds.

There are tradeoffs with funding. It’s not just a matter though of choosing underserved and leaving unserved out. Building to areas that have a higher ROI builds necessary infrastructure and provides investment

Right of first refusal has led to lower levels of investment in other states (Penn. & ). Part of the problem is that incumbents don’t need to serve all areas with 25/3. That eaves some areas without. MN Telecom and Cable companies have invested more (or on par) with other states but we’re reach a point where they can’t do it all. In areas where there’s an interest in a new providers, that’s often a reflection of unhappy current customers.

Why isn’t underserved tied to state goals/definitions of broadband?

We haven’t seen more investment in areas where there is a right of first refusal – less fear of competition has not created more investments. And it hasn’t led to feaster broadband either.

Provider and communities are not likely to apply for funds if they know the incumbent can usurp the work.

Margaret Kelliher Anderson – Minnesota Broadband Task Force

This is a good start on the investment in broadband. I hope that the committee will look at deeper investment. And we have also suggested funding for broadband adoption.

Our goal is to focus on border to border broadband! We recommend new speed goals. We need to think about what is happening when you connect all Minnesotans. We talk about the CAF 2 funding in our report. CAF 2 says 10/1 for access; FCC says 25/3. We recommend 25/3 for state speed goals.

Our incumbents have done good work and it’s nice that they are getting federal funds. We might want to look at how to maximize the speeds of CAF 2 by layers state funding (and requirements) on federal funds.

It would also be nice to see some future view at 100/20 access in 10 years.

Story of 2 bears/broadband speeds

  • 100 symmetrical – too big
  • 25/3 – just right for 6 years out.
  • 10/1 – too small

Passes through committee.

 


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