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Tom Koutsky on Minnesota brNational Broadband Policy and Implications for Minnesota

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Tom Koutsky from Connected Nation spoke about what’s happening in the federal level and the impact on Minnesota at the Fall Broadband Confernce 2011

Tom Koutsky from Connected Nation spoke about what’s happening in the federal level and the impact on Minnesota at the Fall Broadband Confernce 2011

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  • 1. National Broadband Policy Developments Minnesota Broadband Summit Tom Koutsky Chief Policy Counsel Connected Nation [email_address] November 16, 2011
  • 2. Broadband in Minnesota
    • 1.1 million Minnesotans – 28% – do not subscribe to broadband
    • More than one-in-four of these non-adopters are low-income
    • The majority of low-income, Hispanic and senior households in Minnesota do not subscribe
    • Not all community anchor locations are ready for future bandwidth needs
    • Mobile broadband is a significant economic opportunity yet challenges in widespread deployment, capacity and overall adoption remain
    “ The future is here. It’s just not widely distributed yet.” William Gibson
  • 3. From Broadband Gaps to Chasms
    • 80% of Fortune 500 companies post job openings online only – and require online applications
    • 50% of today’s jobs require technology skills – growing to 77% in by 2020
    • Federal Reserve: students with computer and broadband at home 6-8% more likely to graduate high school
    • And yet… adoption has stalled as the economy has stalled
  • 4.
    • The federal ACCESS subsidy system is changing dramatically
    • Broadband ADOPTION has stalled – with profound impact upon the economy and opportunity
    • USE of broadband by many businesses and institutions is improving – but more needs to be done to improve connectivity options and use by schools, libraries, health care institutions
    2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
      • National Broadband Policy is shifting towards a multi-faceted approach that encompasses
      • ACCESS, ADOPTION, and USE
  • 5. Shift in National Broadband Policy
      • “ Universal Service”
      • … in which the success of a policy is judged by the speed of the wireline network that reaches all residents – even the most rural
      • “ High Performance America”
      • … in which all “troubling gaps and unrealized opportunities” in broadband technology ACCESS, ADOPTION, and USE are closed
  • 6. The Shift
      • Subsidies for Providers
      • Results for Communities
      • Comparable Service at Comparable Rates
      • Innovative Devices and Networks, Digital Literacy, Broadband Value
      • Established Business and Government Practices
      • New Applications that Drive Adoption and Access
  • 7. Broadband Policy Areas
    • An increased focus on Mobility and Spectrum Policy
    • Infrastructure Policy
    • Connect America Fund: Transforming subsidies that support voice service in rural, “high cost” areas to a program that supports broadband directly
    • Affordability and adoption initiatives
    • Efforts to maximize the benefits of broadband both directly and indirectly
      • Education
      • Healthcare
      • Public Safety
      • Government Operations
  • 8. Spectrum Policy
    • President’s Wireless Innovation Initiative
      • Reach 98% of Americans with high-speed “4G” wireless infrastructure
      • Reallocate broadcast spectrum through incentive auctions ($27.8 billion projected)
      • Divide auction revenue between deficit reduction, subsidies to ensure universal availability, and construct public safety network
    • Bipartisan support for auction framework
  • 9. Infrastructure
      • Many of these often-hidden infrastructure costs can have disproportionate impact in rural areas
      • As much at 20% of costs of fiber construction are related to cost of pole access, permits, rights-of- way, and related charges
      • More than half of the cost of trenching fiber can be shared or avoided through “dig once,” open-trenching, or conduit policies
  • 10. Pole Attachments Costs …before the Plan Source: FCC, National Broadband Plan, Figure 6-A
  • 11. … and after FCC April 2011 Order Source: FCC, Report and Order, FCC 11-50 (April 2011)
  • 12. Shifting Federal Universal Service Program to Broadband
  • 13. Federal Universal Service Fund 2010 projected outlays
      • Current subsidies aimed at providing voice service ubiquitously at relatively uniform and affordable rates
  • 14. Federal Universal Service Fund 2010 projected outlays
      • Current subsidies aimed at providing voice service ubiquitously at relatively uniform and affordable rates
    No money for digital literacy
  • 15. Federal Universal Service Fund 2010 projected outlays
      • Current subsidies aimed at providing voice service ubiquitously at relatively uniform and affordable rates
    Most spent on dialtone No money for digital literacy
  • 16. Federal Universal Service Fund 2010 projected outlays
      • Current subsidies aimed at providing voice service ubiquitously at relatively uniform and affordable rates
    Most spent on dialtone No money for applications or telemedicine equipment No money for digital literacy
  • 17. Federal Universal Service Fund 2010 projected outlays
      • Current subsidies aimed at providing voice service ubiquitously at relatively uniform and affordable rates
    Most spent on dialtone No money for applications or telemedicine equipment Multiple wireless companies receive funds -- but not for areas without wireless Most of this money does not go to areas without broadband No money for digital literacy
  • 18. Federal Universal Service Fund 2010 Outlays in Minnesota $105.7 million for network deployment to high-cost areas $3.125 million in subsidies for rural health care communications $22 million in subsidies to connect schools and libraries $6.35 million in discounts for basic telephone service for low-income households 2010 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
      • Minnesota carriers receive $9M more from the federal USF every year than Minnesota customers pay into the fund
  • 19. FCC’s Connect America Fund
    • FCC announced shift of its USF program on October 27, 2011 – details still forthcoming
    • Shifts voice-only subsidies to broadband networks that provide 4 Mbps down/1 Mbps up and voice service in areas that need subsidy
    • Creates Mobility Fund to subsidize ubiquitous Mobile Broadband
      • $300 million allocated in 2012-13 via competitive bidding – which will reward communities that are organized
      • $500 million per year thereafter
      • Specific additional funding ($50M initially, then $100M per year) for Tribal Wireless Fund
    • Provides a pathway for anchor institutions to receive enhanced network connectivity
    • Program will be on strict budget
    2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
  • 20. Significant Changes in Approach
    • Broadband mapping information and ongoing tracking/reporting will be used to target subsidies efficiently
    • Phased and targeted approach, designed to build infrastructure quickly
    • Subsidies for multiple voice networks in high-cost areas will be eliminated ($22M/year in Minnesota)
    • Providers will not receive subsidy to provide service in an area in which broadband and voice are available from an “unsubsidized competitor”
    • FCC will not subsidize more than $3000 per location per year
    • Rural carriers immediately required to provide 4 Mbps down/1 Mbps up upon “reasonable request” as condition of receiving current voice subsidies ($69M/year in Minnesota)
    • Dec. 2011: FCC will announce funding for public/private Broadband Adoption Pilots targeted at low-income population, as part of reform of $1.2 billion Lifeline/Link-Up program
    2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
  • 21. Target Subsidy Areas 2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
  • 22. Where are the Opportunities?
    • Fostering Ubiquitous Mobile Access
    • Application Development: healthcare, USIgnite, energy
    • Job and Workforce Training focused on Skills Gap
    • Community Empowerment and Engagement
    • Technology Penetration programs
    • Local Gigabit Testbed networks
    • Research & Education Networks
    2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
  • 23. Opportunities for Minnesota
    • Minnesota Communities that are organized now have the opportunity to affect the flow of federal broadband subsidies to their areas, through…
      • Infrastructure policy innovation
      • Anchor institution engagement and partnerships
      • Adoption and digital literacy training programs
      • Expanded use and applications by government and institutions
    2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
      • Creative approaches executed properly can lower the federal subsidy needed to expand broadband in Minnesota – and that will speed the deployment and adoption of broadband in Minnesota
  • 24. Thank You Tom Koutsky [email_address] (202) 674-8409 2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.