Yesterday the MN House Commerce Finance and Policy Committee heard about telecommunications. The presentation is brief (30 mins) and I have notes below. One observation is that the speakers were industry heavy in an industry where nearly everyone is a consumer. It would have been nice to hear from consumers too – through a consumer protection group, from the Minnesota Public Utilities Commission or the Minnesota Broadband Coalition. While technically the discussion is about telecommunications, the line between telecom and broadband is blurred to everyone and this may have been the group to help address the situation of the federal RDOF money going dismissed with LTD Broadband’s rejected applications.

It’s not that the groups didn’t represent a clear picture; they just represented one side of it. But from that side we can glean that if there’s a push it may be on leveling the regulatory playing field between wired and wireless services, looking at ways legislation might help with what providers find are the main challenges: shortages in labor, copper theft, permitting delays and legacy regulations.

One speaker also asked for the state to help nudge providers from copper to fiber. That would help bring up broadband speeds and I suspect the broadband speed goals are intended to do just that.

House Legislative Analyst Bob Eleff gives a brief update on the state of telecommunications starting with the fact that the State has very little jurisdiction over telecommunications. He gave a history of telecommunications history of Telecom advances, Federal Laws and Actions taken in MN

Traditionally regulation makes up for lack of competition in an industry. That was true through much of the 20^th century. As cell phones expanded, landlines because less important. Federal legislation in 1995 was a big changer. Rules were loosened and rules were loosened in the State (2016) especially around price issues. Telephone companies are held to same standard as other businesses. There are a few other rules – can’t charge customer for things they don’t order, can’t switch providers without telling them, must make prices clear, can’t intentionally impair speed or quality and must collect for Telephone Assistance Plan and Telecommunications Access Program to help with equipment for people with disabilities and in low cost households.

In 1993, new bill said that no state shall be able to regular wireless service entry or rates. Internet increased this reach. In 1996, US decided to preserve free competitive market without regulation. VoIP showed up and really blurred the line between traditional phones and calls over broadband.  There are some rules for cell/smartphones.

Brent Christiansen from Minnesota Telecom Alliance also gives an overview. Telecom is the only competitive utility. There are 3 main business lines: POTS (landlines), broadband and video services (cable TV over phone). How are they regulated?

POTS (Telecom)

• MN Public Utilities Commission
• MN Dep of Commerce
• MN Atty General
• FCC

POTS (Competitors)

• FCC

Broadband (Telecom & Competitors)

• FCC
• Limited MN PUC if accepting certain federal dollars

Video (Telecom & Competitors)

• Local Franchise Agreements
• FCC

Q: I have 2 options for Internet Lumen (DSL) and cable. And I’m not really sure that’s a choice. What percentage of Minnesotans have choice?
A: Almost 100 percent if you include wireless – especially if you look at phone service.

Andy Shriner from Lumen (aka CenturyLink) gave info on their company. 75 percent of their revenue comes from non-residential services. The focus now on cyber security and network security. In MN they have 930,000 connections. The 1997 regulatory changes had a big impact especially looking at competition. We consider the wireless technology a direct competitor of ours. Voice service is going away. We’re losing customers to wireless. Many people have wired and wireless at home. The number of people who have wired only is very small. Consumers demand higher broadband speeds. We find the MN broadband speed goals to be challenging. We rely on state and federal grants.

We are challenged by shortages in labor, copper theft, permitting delays and legacy regulations. We hope to talk to folks about that. Also our industry is at a transition from copper to fiber – nudges from the state would be helpful.

Q: Thinking about wireless … will we still need broadband with wireless now with satellite? Now service at home is as good as the cabin?
A: That reinforces impact of competition … but you need wire to get wireless from the towers. Starlink – some folks have good service, some don’t especially if there are many subscribers.