Yesterday the House Committee on Job Growth and Energy Affordability Policy and Finance met to discuss broadband – Representative Baker’s Bill HF 2381. He had made some pretty big changes to the bill since it was discussed last week. (I have copied the handouts from the session – but they’re pretty awkward.)

The good news is that the funding allocated (In discussion) has been bumped from $35 million to $100 million.

The big topics are the speed goals. Everyone seems to be in agreement that 25/3 by 2022 is a goal. The questions are whether 10/1 should be used to define unserved areas (or do we use 25/3). Also there were misunderstandings about whether or not broadband projects should be required to be scalable to 100 Mbps as was required in the past. And the Task Force goal of 100/20 by 2026 seems to have gotten lost or maybe just obscured by the goal with the closer deadline.

Also there was a lot of discussion of wireless networks. There’s some concern about a wireless project that was funding through the Office of Broadband Development for middle mile deployment where end users are not yet seeing expected speeds. So (and I’m going based on what I heard today) it seemed like there was some interest shifting definitions to accommodate wireless providers.

The objective of today was to continue conversations. At one point they did vote to adopt (not unanimous) – but despite being able to re-watch the vote on the video below, I’m not entirely sure what that means – especially since after the vote Rep Bake said he would be OK taking out recent changes if that made the bill more palatable to his colleagues.

Rep Baker introduces Amendment– A8

Rep Johnson –

• We need to hear from the author why these changes were made

Rep Mahoney –

• It changes the bill – I would ask the author explain the change

Overview from Rep Baker

• The Grater MN Workforce committee brought about these changes.
• We want to clarify last mile language
• We want to use technology, not limited to wireless.
• We want to have VoIP-friendly broadband – 10/1
• We want to make sure that providers do not need to give out proprietary info.
• Incumbent language – we don’t want to force anyone who doesn’t want to move ahead

Rep Johnson

• Last mile minimum –
• Biggest problem is that these changes water down the broadband grant to 10/1 speeds and wireless. 10/1 is the dialup access of our age. It doesn’t make sense to invest state funding in 10/1 access. We need a network that will scale.
• Wireles is a good complement to broadband – but we don’t want to bias the grants to wireless providers.

Rep Garafalo

• He’s just changing definitions – what’s wrong with that?

Rep Johnson

• We don’t want to bias 10 10/1.

Rep Baker

• We are all aiming for 25/3 by 2022.
• I want to keep the moving target of speeds goals.
• We don’t want to aim for 10/1
• Everything we talk about has to hit 25/3.

Rick Heller

• Who decides on accessibility?
• Was MNIT involved with functionality of networks? – No.
• Why did you change the speeds from 100 to 10 Mbps.

Margaret Anderson Kelliher

• On scalability and 100 Mbps – I would prefer that not drop it down to 10/1 – that would be a big step backwards.

Rep Baker

• 10/1 is a way to include wireless as an option
• We want 25/3 to be a scalable goal.

MAK

• Unserved – defining unserved at 10/3 is a good move – those guys will be first to get funding
• BUT we want scalable to 100 Mbps so that the investment is more valuable.
• Measure unserved at 10/3

Paul Weirtz AT&T

• The changes are not meant to limit middle mile – but to open the door to last mile – especially for MVTV Wireless – this is exactly like a program that we’re doing in Wisconsin. It’s not new technology – it’s just local loop. They provide 5-10 Mbps connections via spectrum.

What about?

• Unserved vs underserved
• Wireless – is not capable of 100 Mbps
• Integration with CAF

Paul Weirtz AT&T

• MVTV got funding through old rules

Bill Coleman – CTAC

• State Goal is 25/3 by 2022 and 100/20 by 2026 – we ne
• 25/3 standard in 2008 that standards was 768K – we shouldn’t be tying funds to last year’s technology.
• US Internet in Mpls serves a Gig – even 10 Gig in Minneapolis. That’s what people want in the Cities – why shouldn’t we give that to rural areas now.
• Wireless deployment does not require big money – private business
• Q: Why 100 Mbps not 25 Mbps?
  A: Businesses need better broadband – Internet of Things need better broadband. There’s not one killer app it’s accumulation
• Q: Seems like 25 Mbps is enough
  A: The question is whether we want to invest for today or for tomorrow. Demand is growing. The FCC standard is increasing
• Q: What’s the difference between upload and download.
  A: The internet has been designed to sell products to people – like YouTube. But anyone wanting to work needs better broadband – even just to upload a PPT required broadband. There’s a business in Chicasgo with a 5Gig catalog. They do international business but need broadband to do it.

Rep Johnson

• For grants – We’re changing the definition of broadband from 25/3 to 10/3

Rep Garafalo

• Right now we’re funding a wireless project as a lower (than scalable to 100 Mbps) level – so does it really matter what the definitions are

Rep Johnson

• I think we need even more discussion to pass a bill like this.

Rep Mahoney

• Will there be an Omnibus bill or not?

Rep Garafalo

• Historically the House has wanted to fund individual finance items and the Senate does an Omnibus – we’re going to caucus tonight to figure out what we want to do. I suspect there will be at one Omnibus.

Rep Mahoney

• I understand that when we lower the standards for anything – 99.9% of the time those that we ask to hit that bar – hit it and don’t go any farther. If we set the bar lower – people will aim lower. What’s the incentive for a provider to go above 10/3? There’s a bill to have a public campaign to get people in their middle years to go to Greater Minnesota. Are they going to go there without broadband?

Rep Baker

• I don’ think this bill sets us back. I think these goals are reasonable and attainable. The speed goals will change every year. Having wireless will serve the people who have nothing. It won’t be 100 Mbps everywhere it would be hard to do that. I respect the work for the Broadband Task Force – we don’t want to exclude wireless. I want to get more people plugged in. We can’t lose by focusing on technicalities.

Rep Garafalo

• This doesn’t chance speed goals down. We funded one project at a lower rate. This is like wastewater treatment. In urban areas they have individual septic systems – and in urban areas we have water pipes. Wireless is going to be 10 Mpbs soon – do the rural areas really need a Cadillac solution?

Rep Mahoney

• On a farm or cabin you have a water source – underground. Sewers are 60 inch pipes that are built to grow in the future. But what we see is that people build to the minimum. It’s the rare person who builds beyond the requirement. Industry will go to the lowest rate where there dollars will stretch. We want people to be able to work from home. They need bandwidth to do it. Lowering the s

Adopted despite a few nos.

Rep Simonson

• Q: Under the current program are for middle mile, last mile infrastructure that scales to 100 Mbps. So did we give a grant for wireless technology that doesn’t meet the needs?
  A: No – but the end customers are not getting the service they want.
• Q: The TF Chair is asking us not to reduce the broadband scalability below 100 Mbps – why aren’t we listening to her? Currently the grants can only be spent for middle and last mile scalable to 100 Mbps – most of us understood that we were investing in something that wouldn’t need to be replaces in 5-10 years. We’ve taken out the clause that helps service in the future. What do you think about the future?

Rep Garafalo

• We are not talking about eliminating the needs to scale to 100 Mbps.

Rep Baker

We provide wireless as an option.

• I know 10/1 is a bad speed – but we can’t shut the door on wireless.

Margaret Anderson Kelliher

• The future is telehealth – my mother can’t get online know – but we want
• CAF 2 has huge restrictions – they can only go to some places.
• This is a $3 billion job.
• IN 3 years the State has invested $30 million, which has leveraged $41 million more.
• There’s a goal between a goal and what the fund has. It’s good to have a goal that we can measure and compare so the FCC made sense.
• The 100/20 is a stretch goal – the 100 scalable is also a goal.
• We think our goals are just right

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Andy Shriner

• CAF 2 will get broadband out to rural areas.
• There is a provider-required match.
• There are risks to providers – we had to estimate costs and ROI
• Service requirements – can’t have data caps, can’t price different than urban areas, speeds will be testing
• Buildout scheduled 40% build needs to be done in first few years
• Q: What is CAF 2
  a: $85 million per year for 6 years

Brent Christenson

• CAF 2 comes from the USF
• 75% of MN grants went to MTA members in first year
• 13 of 17 MN grants went to MTA members in second year
• Member investment:
  705 million invested in 2015
  716 million invested in 2016
  That goes to maintenance and deployment
• BB investment – 4 providers got CAF funding – the rest of the members are still waiting to see what happens. Right now we get USF money – but tha’ts frozen.
• CAF 2 isn’t enough – we need grants. The last thing we want to do is make a lot of changes to curren program

Paul Weirtz AT&T

• $525 million invested since 2012 – roughly $100 a year in MN
• The wireless industry is moving quickly. We have moved from 3G to 5G in the last few years. It’s being tested now.in 2020 we should see deployment of 5G.
• We are focused on Internet of Things – cars, heath. Apple watches can
• Average household has 5 devices. That will increase to 500 devices in next few years.

MAK

• Where there’s market failure- that’s where the money should go.
• I know there are people who want this funding to support economic development in cities in towns but that’s not what we’ve been focused on. We are focused on the furthest corners.

Rep Baker

• I want to talk about wireless. If wireless and speed are a problem – I’ll pull it. But we’re taking away choice when we take away wireless – but I can do that.
• I want to make sure that the speeds are clear. 25/3 is a goal we can live with.

This is a conversation that will continue.

Pleased to have a guest post from Senator Matt Schmit today with notes on the upcoming Senate Hearings on SF 2448 and SF 2447 …

Dear Broadband Advocate:

Earlier this week the Governor announced his supplemental budget proposal — including a renewed call for a $100M investment in broadband infrastructure.  Of course, this is welcome news for Minnesotans still struggling to access high-speed broadband Internet service essential for life in the 21st century.  And it’s a great opportunity for continued partnership among communities, hard-working providers and service cooperatives, and the state.

Next Monday our Senate Jobs, Agriculture, and Rural Development Committee will hear a pair of bills that propose to update our state speed goals per recent Broadband Task Force recommendations, apply the speed goals to our broadband fund parameters, and — most importantly — fund the broadband fund at a level appropriate to the need.  Specifically, the bills propose the following:

• Per Broadband Task Force recommendations, set state speed goals at 25/3 by 2022 and 100/20 by 2026
• Apply the goals to our definition of “underserved” areas as we did in 2014 when the broadband fund was created
• Fund the fund at an appropriate level of $100M to inspire collaborative planning, applications, and deployment across the state

When we created the broadband fund in 2014 we spent considerable time debating how to set eligibility parameters.  We agreed to set the definition of “unserved” areas at the level the Federal Communications Commission (FCC) recognized as its definition of broadband; that level was 25/3 in 2015 — and it was the threshold for “unserved” areas in Minnesota during the 2015 funding round of our broadband grant program.  During that round and the one preceding it, MN’s Office of Broadband Development was directed to prioritize these unserved areas in administering the grant program.

For 2016 and beyond, the current Senate language would not change this approach.  Rather, we propose to keep the threshold for “unserved” areas the same and continue to prioritize these areas above all others.  In addition, we propose to apply the state speed goals to our definition of “underserved” — just as we did in 2014 when we created the fund.

With all that said, it’s important for those with a stake in state broadband funding to remain active in the discussion — both here at the Capitol and also in your respective corners of the state.

If you can, please join us on Monday 3/21 for our 2pm hearing in room 1100 of the Senate Building.  And whether here in St Paul or back home, please make an effort to reach out to your legislators and emphasize the importance of providing the full $100M for broadband infrastructure in 2016.  Use of Minnesota’s one-time surplus funds for one-time broadband infrastructure needs is a perfect match!

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

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