Here are notes and video on the MN Senate Committee on Agriculture, Rural Development, and Housing Finance. Spoiler alert – they laid over broadband bills for possible inclusion in omnibus.

Everyone was positive about the bills (esp SF9 and SF1231). There were no speakers in opposition. Senators had good questions but nothing negative.

S.F. 9-Koran: Broadband grant program appropriation.

S.F. 1231-Draheim: Broadband grant program appropriation.

Intro from Steve Grove & Danna Mackenzie

Nancy Hoffman – Chisago County & MN Rural Broadband Coalition
Representing more than 80 organization
SF9 is the top goal of our Coalition
$70 million for grants is a top priority
We (communities and providers) need consistent and stable funding to make border to border broadband happen.

Daniel Lightfoot, LMC
Boradband means jobs, education, healthcare
120 MN cities lack wires broadband at speeds of 25/3
We need to plan for 2026 goals of 100/20

Ann Schwagerl, MN Famer Union in Big Stone County
We got a MN grant and now we have fiber. It helps me as a farmer and business owner. Broadband helps me maximize economic opportunity. I can buy and sell directly. I am a better farmer with better broadband.
Question – what happened in Big Stone?
FTTH to everyone. Half funded through the state, bonding through the county. Worked with Federated/Farmers Telephone and the County.

Brent Christensen, MTA
Support SF9
We have 4 years of data that proves that these grants work to build out broadband with public and private funding. If MN Grants were available this year, our members would have applied for $27.7 million in investment (state) leveraging $31 million grants to build better broadband.

John Dukich, MHTA
Support SF9 & SF 1231
We still have houses that need broadband. Funding will help us reach the 2022 goals.
$35 million each year for 3 years should help us get to the 2022 speed goals of 25/3.

Barbara Droher Kline, Le Sueur County Broadband Coalition
We had only Frontier dialup when we moved to the County. We first upgrades to fixed wireless, which was OK until bad weather and more people started using it. I can’t run my business. I’m ready to write a grant. We wouldn’t be here without Blandin.
Frontier accidentally cut off my neighbor’s phone and internet for days. Her friends, family and healthcare providers were worried.

S.F. 807-Ruud: Mountain Iron economic development authority fiber optic broadband network extension appropriation.

$3,200,000 in fiscal year 2020 is appropriated from the general fund to the commissioner of employment and economic development for a grant to the Mountain Iron Economic Development Authority to extend an existing fiber optic broadband network operated by the Northeast Service Cooperative from Willow River to Pine City and from Cromwell to
Aitkin.

John Loffler, NESC – our backhaul is at 4 Gig – with this we could upgrade to 200 Gig. Second goal would be to help broadband providers access our infrastructure.

Joe Buttweiler – CTC – we are a provider that would like to use NESC

What’s up with the grant challenges? We need to call people out when providers challenge potential grant applications and don’t follow through.
NESC applied, incumbents challenged, we stepped back, we don’t know if the challengers built up.

This is a project that is really needed.

All bills are laid over for possible inclusion in the omnibus bill.

I’m on the road today so I wasn’t on site but I was able to listen to Rep Stephenson introduce HF 136. Here is the short description of the bill:

Internet service providers servicing Minnesota customers and those under contract to the state or political subdivisions certain activities prohibited.

The hope was to move the legislation to Government Operations. (And it is moved.)

Here is an overview from MN House Research…

This bill prohibits certain activities that were previously prohibited under the net neutrality rules adopted by the Federal Communications Commission, when those activities are done by Internet service providers who provide services to state agencies or political subdivisions. The bill also requires Internet service providers to provide content neutral services and prohibits paid prioritization of traffic when providing Internet service to people in Minnesota. The bill provides for enforcement mechanisms through investigation by the Department of Commerce, consumer protection remedies from the Attorney General, or criminal prosecution.

Testifiers:

Professor from U of M (Joseph Contane?): spoke about Net Neutrality in general and how it works. Mentions that while many businesses (Google, Facebook) are making money from greater traffic on the Internet, providers don’t. Because they are like a utility. He compares it to the roads not getting more money when traffic if high. Compares the end user’s story to the provider’s story. Ends up asking if we think the Free Market will solve some of these problems and has the internet already been buoyed by public funds.

John Gordon (ACLU): Supports HF 136 – 2 dozen other states are already working on Net Neutrality because free info is the lifeblood of democracy. Gave examples of providers blocking customers based on the content of messages that they tried to send. Reiterate stories providers have given in other states such as, net neutrality is unnecessary as providers plan to adhere to premise with or without regulation, impossible to adhere to law in different states, the FTC will look after consumers.

Tony Mendoza (MN Cable): Supports Net Neutrality at the federal level – not on a state by state basis. Gives a lot of explanation of terms in the bill, including definitions. The question is how to regulate the internet. MN Providers have invested $1 billion in broadband deployment. The MN Broadband Grants are a model of how to continue the investment but this regulation would impact the interest grants.

Anna Borroff (MN Cable): Cable companies adhere to Net Neutrality principles; but we think it’s a federal issue.

Jim Beatty (BEVcomm/MTA): MTA companies have invested $118M in 2018. Afraid that this bill might have a negative impact on the MN Broadband grants. We adhere to net neutrality principles but we have issues will drastic measures when we don’t always have ultimate control of access. (Think of escalated traffic on a snow day.) Tough to understand limits of reasonable network management.

Paul Wertz (ATT): Invests more than $100 million annual in MN. Net Neutrality is a federal issue. Net Neutrality has not come up with MN Broadband Task Force.

John Dukich (MHTA): Regulation should happen at federal level.

Here are the amendments that were discussed:

H0136A2.pdf (2/13/2019) – didn’t pass
H0136A3.pdf (2/13/2019) – didn’t pass
H0136A4.pdf (2/13/2019) – didn’t pass
H0136A5.pdf (2/13/2019) – adopted
H0136A1.pdf (2/12/2019)

Discussion

We hear from industry that this should be a federal level. BUT MCCA needs to talk to their members about a unified message on Net Neutrality. And they speakers seem to have more confidence in the federals policymakers than we do.

What is the issue with the edge provider (like ESPN 360)? They seem to charge access fees to providers. What will happen with that? It could put small providers in a bad position.
It seems like providers are covered. It has more to do with charges than network management, but it seems worth deeper inspection.

How will this impact school/business (edge) providers?

It is not with edge providers.
BUT now we have providers without legal people who will not know the answers and may influence their broadband grant eligibility. It make decrease interest in the grants.

It seems like there isn’t enough money for grants anyways – so why are we worried about people not taking advantage of it.

This bill only applies to providers not edge providers. We can have that discussion in the next Committee Stop.

We have a $100 million broadband bill coming up later this week.

Why are we questioning intent? I don’t want to hear about lobbying contracts – because it’s not gentlemanly.

Net Neutrality is a rural issue. In many areas the market will take care of some issues. This will not happen in most rural areas.

Suburban legislators should not support this. CAF money is good enough for Minnesota. There are no unserved areas in MN because satellite serves everyone. This bill doesn’t impact satellite. Why not?
We can think about that.
It’s not worth talking about this – it will never pass.

Many people say they don’t have access, we need to respect that.
Some people don’t believe in the moon landing.

Here is a reaction/press release from Industry folks:

Minnesota High Tech Association
Minnesota Telecom Alliance
Minnesota Cable Communication Association
CTIA – National Wireless Trade Association

Joint Statement on Proposed Net Neutrality Legislation

“We are committed to the open internet and to protecting consumers online.  That’s why we support permanent, federal bipartisan legislation that would protect internet openness and freedom and ensure consistent rules for all companies and across all websites.

Any state attempts to regulate the internet will not only result in a patchwork of inconsistent laws impossible to implement, but will also be preempted by federal law.  In addition, it makes no sense for Minnesota to consider its own net neutrality legislation when litigation is currently pending on the issue at the federal level.

The bottom line: Congress must pass a national policy to preserve the open internet and protect consumers.”

###

Minnesota Cable Communications Association (MCCA) statement on Rep. Zach Stephenson and Senator Ron Latz legislative proposal (HF136) on net neutrality in Minnesota.

St. Paul, February 13, 2019 – The Internet is a staple of almost every American’s life. It links us together in the digital world and drives innovation and technological expansion. It is a valuable tool responsible for nearly 10% of the U.S. GDP. It should not be subject to politics.

“Today’s proposal by Senator Latz and Rep. Stephenson would create a Minnesota Internet island and disadvantage Minnesotans,” said Anna Boroff, Executive Director, Minnesota Cable Communications Association. “If further regulations are deemed necessary, the proper place for legislative action is the United States Congress, not Minnesota.”

HF136 would have negative consequences for broadband investment, competition and innovation in Minnesota. Data travels without regard for state lines. For a consumer, opening a website or streaming a TV show is a simple action. For operators, it is a complex chain of events involving servers, backbones, content delivery networks, and exchange points. Many of these steps cross multiple state boundaries, making broadband a prime example of an interstate service. Congress and the courts have also consistently held that the federal government has primacy on Internet and data network regulations.

Importantly, Minnesota’s cable companies adhere to the principles of net neutrality. They do not block, throttle, or discriminate against lawful content and are transparent with their consumer practices. Additionally, these principles are in their binding commitments to customers, and are enforceable by the Federal Trade Commission.

“If Senator Latz and Rep. Stephenson believe they need to ensure net neutrality for Minnesotans, they should lobby their Member of Congress,” added Boroff.

Recode recently ran an article on the FCC and the info it collects to create the broadband maps (Form 477). If Form 477 is new to you, the article will be super helpful. If it isn’t the article is still interesting. It looks at the FCC maps and the recent Microsoft maps that measure usage. It outlines the reasons that Form 477 is not the best way to track the digital divide. Here’s a very abbreviated list of their reasons:

• The info gathered from the providers. The way the forms are set up (and read the article for greater detail), an area is considered served even if it is only partially served. The providers have said that the forms are very cumbersome to complete. So the providers aren’t happy with the process. The public isn’t happy with the results. There must be a better way.
• The info only gauges availability, not usage. It’s not enough to just have access. It needs to be affordable. People need to have a computer/device and the skills to use it. Only then do the people and the community reap the benefits.
• People need broadband. They list many reasons, again you can check the article.
• Financial investments are made based on the results of the FCC maps.

What I thought was most helpful – was the table comparing FCC’s measure of availability versus Microsoft’s measure of usage in each county of Minnesota. (Or download the chart in a Word Doc.)

The Minnesota State Republican Caucus reports…

Senator Torrey Westrom (R-Elbow Lake) is co-authoring legislation to expand broadband access in Greater Minnesota. Senator Westrom, Chairman of the Senate Committee on Agriculture, Rural Development, and Housing Finance, held a committee hearing on January 16 to discuss rural broadband expansion. Recently, his committee was given jurisdiction over the funding of rural broadband in Minnesota.

“Ranging from health care, education, to small businesses, broadband access is essential to our way of life in the twenty-first century,” said Senator Westrom. “I consistently hear from rural residents and small business owners that a lack of broadband limits their ability to flourish in Greater Minnesota, much like a lack of electricity did 75 years ago. We need to continue to address that problem and I look forward to spearheading that effort this upcoming session.”

Senator Westrom has long been a proponent of rural broadband expansion, authoring multiple bills that funded projects to expand broadband access in Greater Minnesota. This session, he joins a bipartisan group of senators authoring legislation to invest $70 million in broadband expansion over the next two years.

During the hearing Westrom’s committee held, experts from the broadband industry testified that the state program helps leverage private and federal broadband investments, multiplying their benefits many times over. Additionally, they stated the state program “works like a scalpel,” filling-in broadband coverage gaps where private or federal funds do not provide enough resources.

“Broadband expansion benefits everyone, from students doing homework to businesses in Greater Minnesota,” added Senator Westrom. “By working across the aisle, we can improve our state, economy, and way of life.”

The Center for Indian Country Development reports…

The lowest category, in light yellow, shows reservations where fewer than 55 percent of households have broadband access. This access rate is well below the national average of 78 percent as well as below the average rate in completely rural counties of 65 percent,⁵ and is evident in several geographically large reservations in the Southwest, Northern Plains, and Intermountain West. However, other large reservations in the same areas have rates closer to national and rural county norms. It is also evident from Figure 1 that a few reservations match or exceed the national average.

Broadband access levels for many geographically small reservations are hard to discern in Figure 1 but can be analyzed statistically. Across 262 federally recognized reservations, in the typical (median) reservation, 61 percent of households have broadband access. This percentage is significantly lower than the percentage of households with broadband access in the typical U.S county which is 69 percent. In the typical county that overlaps at least one reservation, 70 percent of households have broadband access.

The Census Bureau has shown that counties’ rates of broadband access are positively correlated with income.⁶  We have found the correlation between income and broadband access for reservations is very similar as to counties.

They recognize that not only is lack of broadband more prevalent in lower income households, it may be a contributing factor…

However, the relatively low rates of broadband access in reservation communities may also add to their economic development challenges. Enhanced Internet access may not boost all types of reservation economic activity. For example, if reservation residents increasingly purchase consumer goods online from remote suppliers, employment at local retail outlets may fall. However, the net effects of enhanced access are generally considered positive for economic vitality, including through channels such as increased productivity at local businesses, increased sales to consumers outside the reservation, improved life-style and government services that attract residents, improved medical and educational services, and more.⁷ For these types of reasons, tribes and tribal organizations are taking steps to enhance Indian Country’s broadband access

Earlier this month, I wrote about the USDA’s new ReConnect Program; $600 million for better broadband (loans and grants). CNS has created a mapping tool to help potential providers determine whether the ReConnect funds make sense in their area. Their video describes it all: