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 2011TRANSCRIPT
National Broadband Policy DevelopmentsMinnesota Broadband Summit
Tom KoutskyChief Policy Counsel
Connected [email protected]
November 16, 2011
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
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
• 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
National Broadband Policy is shifting towards a multi-faceted approach
that encompasses ACCESS, ADOPTION, and USE
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
“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
“High Performance America”…in which all “troubling gaps and unrealized
opportunities” in broadband technology ACCESS, ADOPTION, and USE are closed
The Shift
Subsidies for Providers
Subsidies for Providers
Results for CommunitiesResults for
Communities
Comparable Service at
Comparable Rates
Comparable Service at
Comparable Rates
Innovative Devices and Networks,
Digital Literacy, Broadband
Value
Innovative Devices and Networks,
Digital Literacy, Broadband
Value
Established Business and Government
Practices
Established Business and Government
Practices
New Applications
that Drive Adoption and
Access
New Applications
that Drive Adoption and
Access
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
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
Infrastructure
Many of these often-hidden infrastructure costs can have
disproportionate impact in rural areas
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
Pole Attachments Costs…before the Plan
Source: FCC, National Broadband Plan, Figure 6-A
…and after FCC April 2011 Order
Source: FCC, Report and Order, FCC 11-50 (April 2011)
Shifting Federal Universal Service Program to
Broadband
$4.6 billion for network
deployment to high-cost areas
$1.2 billion in discounts for
basic telephone service for low-income persons
$2.7 billion in subsidies to
connect schools and libraries
$214 million in subsidies for
rural health care communications
Federal Universal Service Fund2010 projected outlays
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
$4.6 billion for network
deployment to high-cost areas
$1.2 billion in discounts for
basic telephone service for low-income persons
$2.7 billion in subsidies to
connect schools and libraries
$214 million in subsidies for
rural health care communications
Federal Universal Service Fund2010 projected outlays
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
No money for digital
literacy
$4.6 billion for network
deployment to high-cost areas
$1.2 billion in discounts for
basic telephone service for low-income persons
$2.7 billion in subsidies to
connect schools and libraries
$214 million in subsidies for
rural health care communications
Federal Universal Service Fund2010 projected outlays
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
No money for digital
literacy
Most spent on dialtone
$4.6 billion for network
deployment to high-cost areas
$1.2 billion in discounts for
basic telephone service for low-income persons
$2.7 billion in subsidies to
connect schools and libraries
$214 million in subsidies for
rural health care communications
Federal Universal Service Fund2010 projected outlays
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
No money for digital
literacy
Most spent on dialtoneNo money for
applications or telemedicine equipment
$4.6 billion for network
deployment to high-cost areas
$1.2 billion in discounts for
basic telephone service for low-income persons
$2.7 billion in subsidies to
connect schools and libraries
$214 million in subsidies for
rural health care communications
Federal Universal Service Fund2010 projected outlays
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
Current subsidies aimed at providing
voice service ubiquitously at
relatively uniform and affordable rates
No money for digital
literacy
Most spent on dialtoneNo 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
Federal Universal Service Fund2010 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
Minnesota carriers receive $9M more from the federal
USF every year than Minnesota customers pay
into the fund
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 budget2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
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.
Target Subsidy Areas
2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.
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.
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
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
Thank YouThank You
Tom Koutsky Tom Koutsky [email protected] (202) 674-8409(202) 674-8409
2011 © Connect Minnesota ® All Rights Reserved. Do Not Copy Without Written Permission.