MN Senate Committee Meeting on Broadband SF980 and SF234

Yesterday the Senate Committee on Jobs and Economic Growth Finance and Policy met and hear from Senator Wrestom on S.F. 980 (Border-to-border broadband grant program modification and appropriation.) and from Senator Simonson on S.F. 234 ( Broadband grant program appropriation).

Senator Wrestom introduced modifications to allow Border to Border projects with only 25 percent match (rather than require a 50 percent match), amend the prevailing wage to include any portion of a broadband project (not just last mile)  and appropriate $35 million for 2018 and specify that no more than $5 million may be for grants to underserved areas.

Senator Erickson introduced an appropriation of $100 million for broadband grants for 2018.

Here is video & handouts from the sessions.

And my notes, which are a little rough…

S.F. 980-Westrom: Border-to-border broadband grant program modification and appropriation.

Prevailing wage – was driving up cost of grants. Big Stone County costs went from $3.2 million to $4 million when prevailing wage took effect

Added the appeal process that was put in place last year. It allows incumbents to knock out proposals. A challenge is OK but there needs to be sufficient evidence that they plan to build and penalties if they don’t. As it stands the company has 18 months to build that leaves a community 18 months behind.

Testifier Adam – ABC (Builder association) – folks who choose not to belong to a union

We support this effort. Lack of broadband is hurting communities

Prevailing wage cause project costs to go up 10%.

We are also concern about imported wages compared to the county where work is happening.

We let the market decide how much the provider can charge for the product – why can’t we let the worked decide how much to make.

Testifier – Dan Dorman Greater MN Partnership

A2 amendment – we can talk about dollars we need in to spend on the bill but they need to serve unserved and underserved.

The challenge process is very anti-competitive. The idea is that the providers were about to make the investment and a new provider is sneaking in – but that’s really not how it works. A community with poor service often hold a meeting to discuss it. If there was a provider who was about to invest would attend that company.

Why spend the money to apply for a grant again if you’ve been challenged once. We’re losing opportunities. We’ve only had this in place for a year and already there are projects that were put on hold.

Question – let’s take up amendment A1 (SF 980) that gets rid of prevailing wage. (Delete section 2.)

Westrom: Maybe we can change how to calculate prevailing wage. My providers are telling me that prevailing wage is cost them money and that’s taking up more of the Broadband Fund.

The goal is to help build out unserved areas – and prevailing wages are causing us to be able to afford less of that. Getting rid of prevailing wage would help stretch the dollars.

Simonson: Prevailing wage is complicated and there are a lot of interested parties.

I speak in opposition

What about unserved and underserved? Why only $5M to underserved areas.

This is how it was last year.

Westrom: Open for discussion. There are only so many dollars available. Unserved areas are still not getting built out because the funding goes to underserved areas. Unserved areas would love to get something better than dialup. The City of Wheaton – a business owner had to send a PDF in 28 different emails. Outside of town it’s even worse.

Question: It seems like if you’re concerns about unserved areas – you’d want all of the funding to go to unserved areas.

This is the same language as last year. Priority is on unserved area.

It seems like not as many grants came in from underserved areas.

Simonson: Broadband is complicated and there are a lot of interests. I think we all agree that building out a broadband to everyone is on the priority. My language doesn’t have policy because I don’t want it to get bogged down in details. We just went through a funding process – there were 62 applications / 42 awarded/ about half to unserved and half underserved.

Getting rid of policy will simplify the bill.

Westrom: There’s great demand for broadband in rural areas. They are sparsely populated. We need to find ways to stretch the grant dollars.

S.F. 234-Simonson: Broadband grant program appropriation.

We’d like to invest $100 million for broadband. To date we’ve invested more than $65 million; it sounds like a lot but the need is great. That funding has gone to:

  • 10,000 homes
  • 1,000 businesses
  • 100 anchor institutions

Adequate broadband is the wave of the now – not the age of the future.

Laura Ziegler

Broadband is a legislative priority. We sent a letter to the Task Force outlining some of the items Sen Westrom brought up.

This is an issue of equity as well as economic development.

Unserved areas address equity

Undersreved areas address economic development

Mayor of Gaylord  -Tom Bayer

Our town is rural. We are getting a medical college in our community. One reason they selected Gaylord was the RS Fiber project. The stated invested $1 million; the community invested more.

Rural broadband is the best economic development tool we can have in rural areas.

Donna Martin (Pope County) – we are determined to bring broadband to our county. Our High school deployed a one to one program but found that 35 percent of the students had no access online. So kids had to stay 2-hours early or stay 2-hours late.

With funding from the Blandin Foundation, we are starting a feasibility study. We have 10 providers in our areas; we’ve met with 5 and one electric company has talked to us too.

We have 5333 residents in the county; 62 percent are underserved. We are building partnerships.

Kevin Vanhooser – Isanti County

We formed a Task Force to look into broadband. We have 38,000 residents; half are in rural areas. There are a lot of family farms and small businesses. We had a story of farmer up on a ladder – trying to get a signal on his iPad. Another farmer in another area has a tractor that’s wired.

Another farmer has to take the computer into town to place or accept orders. The service in Cambridge is OK. The local hospital tried to hire a doctor – he said no because he couldn’t get online from home.

Our judges can’t sign warrants electronically the way others can. That costs us money.

We are applying for a planning from Blandin Foundation to do a feasibility study.

Jason Atwater – CTC

CTC customer have access to symmetrical gig service – nearly 12,000 locations. It’s a major benefit to a community. We have received grants in all three funding rounds. The earlier programs are successfully completed. We’ve seen higher take rates than we even expected.

In June 2016 – we did a customer survey of grant funded projects. They found

  • Had had 4+ devices/computers
  • Our older customers are better connected that their cohorts.
  • 20 percent have a farm or homebased farm
  • 30 percent get healthcare services
  • 40 percent said they wouldn’t leave in a place without broadband.

$100 million is viable and needed in the community.

Stacy Cluff – Mille Lacs Energy

We support $100 million. We’ve like to see a two-year grant process to help providers plan. We’d like to see a 25% match (instead of existing 50% match)

Living without broadband significantly effects lives. Our rural members need service – so we’re partnering with CTC. We got a grant in the last round of funding.

We are willing to invest but we need support. Our territory has fewer than 8 customers per mile. Smaller cooperatives need help to serve our customers. State funding makes it possible. We can’t cost justify a project without.

Gary Peterson – Association of Townships

We represented 1700+ towns. This is very important to us. It’s been a top priority for years. We need funding to populated areas and the last farmhouse.

A new round of grants would be fabulous. We’d like get project done faster. The disparity between towns is concerning. I know what it’s like to have slow, poor access. Recently I wanted tickets to Billy Joel. I have satellite. I had to call my daughter to get the tickets because my connection wasn’t fast enough.

We have home-based businesses that need broadband. I talked to one person who had to let her business go because she couldn’t get online. Kids need broadband to do homework. Telehealth needs broadband. Emergency services need broadband.

We support the A2 amendment on the challenge process.

Brent Christensen – MTA

We support border to border grant. My customers serve the very rural areas. Grants help make the business case for low population area.

We have partnership success stories when providers and communities work together.

We support scalable networks (to 100/100). Also the match is important.

MTA companies have received $53 million and matched with $69 million.

The Office of Broadband Development is essential They keep people talking. Also they do the mapping.

The funding needs to be enough to

  • Get projects done.
  • It needs to be predictable.
  • Projects need enough time to be completed.

Nancy Hoffman – Chisago County

Talking about Sunrise Township.

Businesses looking to relocate expect broadband or they won’t come to an area. Once we started talking about broadband businesses started coming out of the woods – literally.

We had a manufacturer (60 employees) who was paying more for broadband than staffing!

Bruce Hampton – from Sunrise Township

We see broadband as a utility. I can make my own power but I can’t make my own internet.

Simonson – there’s an appetite for funding and not so much with policy changes.

Miller: We probably won’t get to $100 million for broadband but when the budget comes out we’ll know more.

This entry was posted in Conferences, MN, Policy 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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