Blue Cross layoffs in Virginia (MN) remind us that diversification via broadband is key to economic vitality

WDIO reports on 40 layoffs at the Blue Cross Blue Shield of Minnesota Office in Virginia. Representative Julie Sandstede uses the event to remind the audience that assets such as broadband will help diversify the local economy…

State Rep. Julie Sandstede, DFL-Hibbing, added this statement: “I’m frustrated and saddened to learn of these job losses. This decision by Blue Cross Blue Shield is a huge blow to families across the Iron Range. While the number of positions eliminated may be fewer than those at their office in the Twin Cities, proportionally, there will be a much harsher impact in northern Minnesota.

“This news should be alarming to all of us. As we continue to see signs of a slowing economy, this highlights the need to diversify and invest in what will keep our region strong. This includes excellent schools, expansion of infrastructure like high-speed broadband, targeted assistance for economic development opportunities, and other steps forward to ensure all people on the Iron Range can experience an excellent way of life for generations to come.”

MN Farm Bureau and Farmers Union priorities include broadband

AgriNews reports on agricultural issues at the Legislature…

The state’s Farm Bureau and Farmers Union priorities provide a blueprint that would benefit rural communities. Creating an environment that encourages more readily available and affordable health care is hugely important. It involves motivating more institutions, doctors and other health care professionals to set up shop in underserved rural areas.

Programs to better protect Minnesota’s invaluable natural resources is another area where a consensus for action seems apparent. Protecting water resources and conserving top soil are keys to maintaining a sustainable future.

Improving broadband access to rural communities is another. Increasing broadband access would help motivate businesses and families to live and work in rural communities and improve educational opportunities.

There is broad agreement on the need to reform property taxes to produce greater fairness for farmers.

Gov Walz talks budget and includes broadband as a necessity

The Wadena Pioneer Journal posts a letter from Governor Walz on his budget…

I am the first Greater Minnesota governor in nearly three decades. I understand the beauty of living in Greater Minnesota. I also understand the challenges. That is why I am proposing a budget that makes historic investments in Greater Minnesota. …

Access to high-speed broadband is no longer a nice-to-have, it is a necessity. Students shouldn’t have to log long hours at Perkins to finish their coursework, and farmers shouldn’t be hurt financially because they can’t use the internet to conduct business. My budget invests in a One Minnesota border-to border-broadband grant program to ensure all households have high speed internet access by 2022.

PUC needs more info from Frontier and the investigation might start in Ely

Just a day after Senators Smith and Klobuchar ask the FCC to step in to look at Frontier’s service, the Timberjay also asks deeper questions the allegations made against Frontier and the report filed by the PUC.

The PUC ordered the DOC investigation last spring in response to reporting by the Timberjay in late 2017 that highlighted the poor service quality provided by Frontier and its local affiliate, Citizens Telecommunications, or CTC-Minnesota, in northern St. Louis and Lake counties. The DOC investigation revealed that similar problems are widespread among customers in Frontier’s service territory in Minnesota.

Frontier and CTC, operate in the state under what’s known as an Alternative Form of Regulation, or AFOR, as opposed to the more traditional regulatory rules which are tied to return on investment. As part of approval of an AFOR plan, companies must make certain commitments regarding service quality. As part of approval of its AFOR plan in 2015, Citizens committed to upgrading Internet speeds in Ely, Ranier, and several other communities, to as high as 40 megabytes per second (mbps).

But has the company delivered on that promise? State regulators say that Frontier has provided too little documentation to know the answer. That’s why they want the PUC to require that Frontier document whether it’s kept its word— and it suggests starting that investigation in Ely. DOC investigators, in their January report, recommend that Frontier be required to submit the following information:

1) The number of residential and business customers it has in Ely.

2) The number of customers that have a Frontier Internet service product.

3) The number of customers, including the names and addresses, that receive download speeds of nearly 40 mbps. The DOC suggests that state officials should contact a test sample of the names to confirm the information provided by Frontier.

4) The number of customers in Ely who are receiving service at a minimum of 10 mbps download and one mbps upload.

DOC officials are recommending that all of the communities cited in Frontier’s AFOR plan eventually be surveyed. “But it may be more practical to select a single exchange, such as Ely— as there is more evidence from Ely customers concerning service quality, due to the location of a Commission’s public hearing. The PUC held a public hearing on Frontier in Ely last September, one of several held around the state to take testimony from Frontier customers.

Coop broadband noted as a Forces that will Shape the U.S. Rural Economy in 2019

CoBank recently listed 11 forces that they feel will shape the rural economy in this year. Broadband, especially provided by cooperatives, makes the list…

In 2019, electric distribution cooperatives will continue to build out fiber networks in underserved rural markets. Some rural communications providers are concerned about increasing competition, but CoBank continues to believe that over 90 percent of co-op fiber builds occur where service does not exist or is below the FCC standards for broadband.

U.S. Senators Tina Smith, Amy Klobuchar Call on FCC Chair to Launch Probe into Frontier Communications’ Business Practices Amid Troubling Minnesota State Report, Attorney General Investigation

From the Senators…

Frontier Received Millions in Federal Funding to Improve Rural Broadband While Delivering Shoddy Internet and Telephone Services; Senators Say Minnesotans Deserve Full FCC Investigation Into Use of Federal Funding

WASHINGTON, D.C. [03/13/19]—In light of Minnesota state investigations into telecommunications provider Frontier Communications Corporation (Frontier) and its subsidiaries—which have received millions in federal funding—detailing poor service to consumers, today U.S. Sens. Tina Smith (D-Minn.) and Amy Klobuchar (D-Minn.) pressed Federal Communications Commission (FCC) Chair Ajit Pai to launch an investigation into Frontier’s business practices.

Minnesota Department of Commerce investigation alleges that Frontier may have broken at least 35 state laws and regulations, prompting the Minnesota Attorney General to open an investigation into consumer protection complaints. The report details the experience of Frontier customers who incurred interruptions of service for months at a time, slow and insufficient repairs, and unauthorized charges or inaccurate billing errors.

Frontier has received millions in federal funding to build out broadband service to rural Minnesotans. Sens. Smith and Klobuchar are standing up for consumers by urging the FCC to conduct oversight into whether Frontier is appropriately using federal funds.

“Access to broadband is a core economic issue, and Frontier has received more than $100 million in federal funding over the last four years to improve broadband services in rural Minnesota,” wrote Sens. Smith and Klobuchar to FCC Chairman Ajit Pai. “However, the report claims Frontier may be underinvesting in its service areas for which it received federal subsidies to build out its broadband network. When rural service issues were reported to the company, the report alleges that Frontier would prioritize repairing requests in more densely populated areas with greater profit margins, and provide better service and equipment repair to those households. When pressed in the investigation, repair tickets for rural and remote customers, which presumably would show lengthy repair times or outages in service, would be “lost” or missing from records. The Department found Frontier’s recordkeeping to be deficient, and raised the question of whether Frontier was illegally concealing its discriminatory behavior.” 

“We respectfully request the FCC commence an investigation into the business practices of Frontier Communications, and its subsidiaries, serving our constituents in Minnesota to determine whether the company is in compliance with [the Connect America Fund] (CAF) funding requirements as designated by the agency.”

You can read text of the letter here or below:

March 13, 2019

The Honorable Ajit Pai
ChairmanFederal Communications Commission
445 12th St. SW
Washington, D.C. 20554

Dear Chairman Pai:

We write to request an investigation into the business practices of Frontier Communications Corporation (Frontier), and its subsidiary Citizens Telecommunications Company of Minnesota, LLC, which together serve approximately 90,000 mostly rural consumers in Minnesota. Last year, hundreds of consumer complaints across the state prompted the Minnesota Public Utilities Commission to request the Minnesota Department of Commerce (Department) to open an investigation into Frontier’s quality of internet and telephone service, billing practices, and customer service.

The investigation issued a report in January 2019, detailing circumstances where consumers incurred interruptions of service for months at a time, slow and insufficient repairs, and unauthorized or inaccurate billing errors. Some consumers were charged for a service never provided, experienced a disconnection of service without notification, and were not refunded for outages or erroneous charges. The complaints and report detail that customers were routinely left unable to reach 911 emergency services. Some of those customers, including elderly, disabled, or other particularly vulnerable individuals, required the use of phone service to monitor pacemakers or other urgent medical needs. Frontier further posed public safety hazards where inaction by the telecommunications provider left cables unburied, tied to trees or propane tanks, or crossing private decks, for months, and in some circumstances years. Furthermore, several customers detailed their frustrations when they paid for an advertised—or “up to”—speed that frequently failed to be delivered by the company. Many of these consumers in our state live in areas that do not have another service provider available to them.

Access to broadband is a core economic issue, and Frontier has received more than $100 million in federal funding over the last four years to improve broadband services in rural Minnesota. However, the report claims Frontier may be underinvesting in its service areas for which it received federal subsidies to build out its broadband network. When rural service issues were reported to the company, the report alleges that Frontier would prioritize repairing requests in more densely populated areas with greater profit margins, and provide better service and equipment repair to those households. When pressed in the investigation, repair tickets for rural and remote customers, which presumably would show lengthy repair times or outages in service, would be “lost” or missing from records. The Department found Frontier’s recordkeeping to be deficient, and raised the question of whether Frontier was illegally concealing its discriminatory behavior.

In the report, the Department questions whether the information provided by Frontier to the Federal Communications Commission (FCC) proves sufficient for regulators to execute oversight of the company and to determine whether Frontier is meeting performance obligations. The report submitted by the Minnesota Department of Commerce concluded that “the information Frontier has submitted has been too minimal for the [Public Utilities] Commission to perform the duties delegated by the FCC, including the authority to investigate and make findings as part of the Commission’s obligation to certify to the FCC that the Connect America funds are used appropriately by Frontier.” The report recommends requiring Frontier to produce documentation of households where funding was used to serve previously unserved homes, and verify the service available to those newly served locations.

In filing complaints, Minnesota consumers sought assistance from the Minnesota Department of Commerce, the state Attorney General’s office, and the FCC. In its report, Minnesota regulators found that Frontier may have broken more than 35 state laws and regulations. Last week, the Minnesota Attorney General’s Office revealed it has also opened an investigation into the alleged violations of the state’s consumer protection laws. As the FCC is tasked with overseeing its Connect America Fund (CAF) program, it has the obligation to hold companies who receive federal funding accountable to ensure efficient and effective broadband deployment and services.

We respectfully request the FCC commence an investigation into the business practices of Frontier Communications, and its subsidiaries, serving our constituents in Minnesota to determine whether the company is in compliance with CAF funding requirements as designated by the agency.

Sincerely,

###

MN House committee bumps broadband funding to $100 million for biennium

Today the House Greater Minnesota Jobs and Economic Development Finance Division met to discussion a few bills, including two on broadband. In short – Rep Kresha introduced a bill (HF1137) that is very similar to an earlier bill but increases the appropriation for broadband grants to $100 million. The previous bill originally requested $70 million; but added a one time increase of $15 million just the other day.

The second bill (HF367) asked that a portion of that funding be set aside for deployment of middle mile infrastructure in Willow River, Pine City, Cromwell, and Aitkin.

Both were referred to Ways and Means. There was some concern that budgets were being set before the budget targets were handed down to committees. Although Representative (and Committee Chair) Pelowski seemed to feel that they should go big with bipartisan and enthusiastic support. There was also concern that HF367 might change how the popular grant program would be run.

(You can my live video via Twitter https://twitter.com/AnnT/status/1105891510816378880)

Here are more complete notes:

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