JOINT LEGISLATIVE COMMISSION ON RURAL RESOURCES
ASSEMBLY STANDING COMMITTEE ON LOCAL GOVERNMENTS
PUBLIC HEARING
RURAL BROADBAND
Hearing Room A, 2nd Floor
Legislative Office Building
Albany, New York 12247
September 17, 2019
11:00 a.m. - 5:30 p.m.
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SENATORS PRESENT:
SENATOR RACHEL MAY -- Chair, Legislative Commission on Rural Resources SENATOR JEN METZGER SENATOR DAPHNE JORDAN SENATOR PATTY RITCHIE SENATOR JAMES TEDISCO SENATOR PAMELA HELMING SENATOR JAMES SEWARD SENATOR BETTY LITTLE SENATOR THOMAS O’MARA
ASSEMBLY MEMBERS PRESENT: ASSEMBLY MEMBER ANGELO SANTABARBARA -- Chair, Legislative Commission on Rural Resources ASSEMBLY MEMBER FRED THIELE, JR. -- Chair, Assembly Standing Committee on Local Governments ASSEMBLY MEMBER ROBERT SMULLEN ASSEMBLY MEMBER CARRIE WOERNER ASSEMBLY MEMBER CHRISTOPHER TAGUE ASSEMBLY MEMBER DAVID BUCHWALD ASSEMBLY MEMBER JACOB ASHBY ASSEMBLY MEMBER BRIAN MILLER ASSEMBLY MEMBER JOHN SALKA ASSEMBLY MEMBER DANIEL STEC ASSEMBLY MEMBER BILLY JONES
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INDEX
Page PANEL: Jeffrey Nordhaus 36 Executive Vice President, Innovation and Broadband Empire State Development
Thomas Congdon 47 Executive Deputy Department of Public Service
WITNESS: Kate Powers 139 Director of Legislative Affairs New York Attorney General’s Office
PANEL: Honorable William G. Farber 149 Chairman Hamilton County Board of Supervisors
Honorable Carolyn Price 153 Supervisor Town of Windsor
Honorable James Monty 157 Supervisor Town of Lewis
WITNESS: Jen Gregory 168 Executive Director Southern Tier 8 Regional Board
WITNESS: Lynn Gislason 180 Resident Port Byron, NY
PANEL 4: Rebecca Miller 188 Deputy Legislative Director Communications Workers of America
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Christopher Ryan 198 President Communications Workers of America
WITNESS: Gretchen Hanchett 209 Executive Director Greater Allegany County Chamber of Commerce
WITNESS: David Wolff 215 Chair, Broadband Committee AdkAction
PANEL 5: Bryant Dillon 234 CEO Steuben Rural Electric Cooperative
Tim Johnson 229 CEO Otsego Electric Cooperative
Keith Pittman 236 CEO Otsego-Madison Electric Cooperative
WITNESS: Dr. Todd M. Schmit 248 Associate Professor of Applied Economics & Management Cornell University
PANEL 6: David P. Berman 255 Co-Chair Connect Columbia
Annabel V. Felton 260 Chair Duanesburg Broadband Committee
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WITNESS: Robert Puckett 277 President New York State Telecommunications Association (NYSTA)
PANEL 7: Thomas Ciaccio 289 Superintendent of Schools Fonda-Fultonville Central School District
David A. Little 293 Executive Director Rural Schools Association of New York State
Caroline Bobick 299 Governmental Relations Representative
Brian Fessler 299 Deputy Director of Government Relations New York State School Boards Association
Robert Lowry 302 Deputy Director for Advocacy and Communication NYS Council of School Superintendents
WITNESS: Freda Eisenberg 313 Commissioner Division of Planning and Community Development Sullivan County
WITNESS: Renée St. Jacques 318 Assistant Director of Public Policy New York Farm Bureau
WITNESS: Taier Perlman 325 Staff Attorney, Rural Law Initiative Government Law Center at Albany Law School
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2 (The public hearing commenced at 11:00
3 a.m.)
4 SENATOR RACHEL MAY, CHAIR, LEGISLATIVE
5 COMMISSION ON RURAL RESOURCES: Welcome everybody
6 to the public hearing on rural broadband. I’m
7 Senator Rachel May, from the 53rd Senate
8 District, which includes Syracuse but also a lot
9 of rural Onondaga County and all of rural Madison
10 County. And I chair the Legislative Commission on
11 Rural Resources, together with Assemblyman
12 Santabarbara. And I’m very pleased to host the
13 first statewide hearing on rural broadband
14 issues, together with Assemblyman Santabarbara
15 and Assemblyman Thiele.
16 I first want to thank my colleagues in
17 both chambers and the many people that we will be
18 hearing from today. We have members and
19 stakeholders from all across the state who are
20 concerned about this issue and we can see here
21 today here on the dais and on the witness list
22 just how broad the interest is in this issue and
23 I want to welcome my colleagues, Senator Metzger,
24 Senator Jordan, Senator Ritchie, Senator Seward,
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2 Senator Tedisco, Senator Helming and Senator
3 Little is here too. And I’ll let Senator (SIC)
4 Santabarbara introduce his colleagues.
5 So our witness list spans the public and
6 private sector. We’ll hear from agency leaders,
7 citizen action committees, school
8 superintendents, rural electric cooperatives. The
9 range of speakers mirrors the range of those
10 invested personally and politically in the one
11 thing we all seem to find it hard to live
12 without, which is connectivity. This is an issue
13 that affects every person living in rural New
14 York.
15 Access to the internet is vital to the
16 success of our communities. Without reliable
17 high-speed internet, kids can’t do their home
18 work. People can’t work from home or successfully
19 run their small businesses. And our rural
20 schools, libraries and communities are at a
21 competitive disadvantage. Bad internet access can
22 to lead to lower home prices and less economic
23 development. Access to the internet is vital to
24 our democracy. It is how we get information and
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2 in the coming years, it’s going to be how the
3 government runs the census and without access to
4 the internet, it’s going to be harder for people
5 to be counted in the census. So for all of these
6 reasons, we really need to get a handle on this
7 problem. I look forward to today’s discussions. I
8 hope we’ll see thoughtful discussion on how we
9 build on the progress that has already been made
10 and the state has done a great deal so far. And
11 it will learn what the legislature needs to do to
12 ensure that all New Yorkers are fully adequately
13 and equitable served. So about five years ago New
14 York made a commitment to invest in rural
15 broadband and there is no question that more
16 people are being served now than they were in
17 2015. This hearing is a chance to take stock of
18 those developments to see where the successes
19 have happened but also to find out what we still
20 need to do to ensure border to border broadband
21 access in the state of New York. I hear from
22 constituents all the time about their problems,
23 either they have no access or they’re paying for
24 service that in no way measures up to what
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2 they’re actually receiving and so I want to make
3 sure that we are serving those people and the
4 constituents of my colleagues up here and people
5 all over the state. I want to do just a moment of
6 housekeeping before we begin. We have agreed that
7 members can have opening remarks, make opening
8 marks of two minutes or less. We are going to be
9 strict about that because we want to make sure
10 there is time for the witnesses to speak and for
11 us to follow up with questions. I also want to
12 encourage my colleagues to focus on policy
13 issues. If you have very specific concerns about
14 a constituent or a neighborhood that we can
15 address in a more effective way outside of this
16 hearing, I encourage you to bring that
17 information to my staff and we will be happy to
18 pass it along to the right, through the right
19 channels. Final reminder to everybody here thanks
20 to the internet, this hearing is being live
21 streamed and can be viewed from the New York
22 senate.Gov website, another way our democracy
23 depends on internet service and we want to make
24 sure that everyone in New York can see this so
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2 that is one of our goals here. With that, I will
3 pass it along to my colleague Assemblyman
4 Santabarbara.
5 ASSEMBLY MEMBER ANGELO SANTABARBARA,
6 CHAIR, LEGISLATIVE COMMISSION ON RURAL RESOURCES:
7 Thank you, Senator May and thank you for your
8 partnership on this commission. I’m Assemblyman
9 Angelo Santabarbara and I’m pleased to co-chair
10 this on the Assembly side with Senator May. I
11 represent the 111th Assembly District which
12 includes areas of Albany, Montgomery and
13 Schenectady Counties, a lot of the rural areas
14 we’ll be talking about are in my district. Some
15 of my constituents are here actually to testify.
16 I want to thank -- the room is full, so I want to
17 thank everybody for attending, for making the
18 time to be here. Thank you to my Senate
19 colleagues, my Assembly colleagues for being here
20 and I think it’s going to be a very productive
21 hearing.
22 It’s very crucial that we put this
23 together, because as you heard it’s affecting
24 many of the rural communities in New York State
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2 and again, many of the communities that I
3 represent. Lack of access to high-speed broadband
4 has had a really significant impact and we’ve
5 heard over the years, especially on the rural
6 economies, economic competition, we heard about
7 schools, businesses, households, they’ve all come
8 to rely in this day and age on internet service
9 and the quality of that service. Minimum
10 broadband speeds, people struggle even to achieve
11 that. And it’s a barrier for students in rural
12 areas. It limits their research, it limits their
13 college and career choices and the list goes on.
14 There’s also reports out there to show
15 that by increasing broadband in these areas, we
16 can also increase employment I these areas.
17 That’s a fact at this point, so we have to do a
18 better job of making sure we’re penetrating in
19 these rural areas. That being said, as I said, I
20 deal with this as Senator May pointed out in her
21 district as well, I deal with this on a daily
22 basis with calls, constituents that contact my
23 office. I know people are here representing the
24 town of Duanesburg that will be, and Schenectady
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2 County, will be testifying, I’ve heard from them
3 how lack of access is a real problem, it’s a real
4 issue. So we’ll hear more about that from people
5 testifying today.
6 Just in rural areas across the state,
7 broadband limitations, the main thing is
8 education, but also again economic opportunities,
9 including farming, which is a significant factor
10 for our state, a significant economy in our
11 state, so we’ve got to think about the farming
12 industry and how they also have come to rely on
13 broadband services.
14 The New NY Broadband Program that was
15 launched in 2015, we made a big investment in
16 this, $500 million and we’re looking to provide
17 access to everyone in the state. The program has
18 a mission to get to those unserved and
19 underserved communities. We’ve been through three
20 rounds of funding at this point and with the
21 state taking advantage of federal funding from
22 the FCC’s Connect America Fund. Some stats that
23 hopefully we’ll talk about today, the Broadband
24 Program Office estimates that through the round
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2 three of the new New York Broadband Program, 99.9
3 percent of New Yorkers should have broadband
4 access and the FCC data shows that New York State
5 has 100 percent coverage. So despite what we’re
6 hearing, the fact is, and we are going to hear it
7 today, not every individual and not every
8 location has broadband.
9 That’s what we are here to talk about
10 today and how we can address this situation, how
11 that discrepancy can be addressed. And it comes
12 down to how they determine who has access and who
13 doesn’t. A 2019 Congressional Research Service
14 Report identifies this overstatement is a
15 significant issue and I hope to address that
16 during this hearing. Basically, a Census block is
17 considered served in there is broadband service
18 or the strong potential for broadband service at
19 one or more location, so you see the problem.
20 This is especially problematic in rural areas
21 which have large Census blocks and may be
22 considered serve, even if a single neighborhood
23 in that Census block has broadband service, so
24 that’s a real significant issue.
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2 So that being said, I hope to talk more
3 about this and how the FCC is making some changes
4 to USHAY files and calling on carriers to look at
5 that data closer and also provide us an online
6 portal that would give us a chance to dispute
7 these areas of coverage.
8 So some progress has been made but
9 there’s still more to do. High-speed internet
10 shouldn’t be a luxury limited to highly populated
11 areas. Broadband, as you heard, has become an
12 essential part of everyday life and we have to do
13 more to ensure businesses, families and schools
14 in our rural communities have equal access to
15 broadband and all the opportunities that it
16 provides.
17 So I’m looking forward to today’s
18 hearings to hear more about the impacts and more
19 importantly, what steps can be taken to
20 prioritize and expedite broadband deployment into
21 rural areas of New York State. So I’m going to
22 end my comments here so we can proceed with
23 today’s hearing and I’m very pleased to see this
24 commission taking the lead here to focus on this
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2 very important issue in the rural communities of
3 New York State. Thank you.
4 ASSEMBLY MEMBER FRED THIELE, JR., CHAIR,
5 ASSEMBLY STANDING COMMITTEE ON LOCAL GOVERNMENTS:
6 Good morning everybody. My name is Fred Thiele.
7 I’m the state assemblyman from 1st Assembly
8 District which is on Long Island and is part of
9 Suffolk County. It’s the eastern most district.
10 Montauk, is, you’ll see those bumper stickers,
11 Montauk, the end. Well, that’s where my district
12 ends or begins, depending how you look at it.
13 But in addition to representing eastern
14 Suffolk County and eastern Long Island in the
15 State Assembly, I am also the chair of the
16 Assembly Committee on Local Governments. I’m
17 completing my first year as the chair of Local
18 Governments and it is our pleasure on behalf of
19 the Local Governments Committee to co-sponsor
20 this hearing today with the Commission on Rural
21 Resources.
22 I want to thank our co-chairs for taking
23 the initiative with regard to this extremely
24 important issue. As we look forward to the 2020
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2 session, it’s important to assess what the
3 efforts the governor’s program, which began in
4 2016, which Assemblyman Santabarbara alluded to
5 and the efforts that have been made so far, it’s
6 important to assess how well that program has
7 worked. But more importantly, where can we do
8 better in the future to ensure that every citizen
9 in New York State has broadband. As I said this
10 is my first year so I will be listening intently
11 and want to hear from our witnesses and whether
12 it be local government or the business sector,
13 community groups, whoever wishes to testify
14 today.
15 I just wanted to also present a little
16 bit of housekeeping. I look forward to hearing
17 each of you testify, but first try to limit your
18 comments to no more than ten minutes. I know we
19 have a clock here somewhere for ten minutes. Your
20 written testimony will be included as part of the
21 public record, so you should feel free to
22 summarize your testimony rather than reading it
23 to us word for word. Please also be sure to state
24 your name for the record prior to speaking. Those
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2 of you who did not have the opportunity to
3 testify and would like to submit written
4 testimony should submit your testimony via e-mail
5 or mail as soon as you can but please no later
6 than two weeks from today. It will be added to
7 the written hearing record. And again thank you
8 in advance for participating today and I turn it
9 back to our chairs.
10 SENATOR MAY: Alright, thank you. So as
11 chairs, we each have the privilege --
12 ASSEMBLY MEMBER THIELE: Of, if may,
13 Chairman May, I also wanted to introduce the
14 members of the State Assembly who are
15 participating with us today and having been,
16 being from Long Island, this is one of the few
17 days where I feel outnumbered by upstate instead
18 of being outnumbered by the City of New York. So,
19 welcome to all of you, but our members here today
20 are Assembly Member Woerner, Assembly Member
21 Smullen, Assembly Member Tague, Assembly Member
22 Ashby, Assembly Member Buchwald, Assembly Member
23 Brian Miller, Assembly Member Salka, Assembly
24 Member Dan Stec and Assembly Member Jones. Those
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2 are the, I think the members that are here thus
3 far today, so I did want to introduce our
4 colleagues. Thank you.
5 SENATOR MAY: So let me introduce
6 Senator Jen Metzger and I’m going to try not to
7 have the timer actually make that obnoxious noise
8 but we are going to keep to it two minutes if we
9 can from here on in, thanks.
10 SENATOR JEN METZGER: Thanks. So first
11 of all, I just want to thank Senator May,
12 Assembly Member Santabarbara, Assembly Member
13 Thiele for organizing this very important
14 hearing. I represent the 42nd District which
15 covers portions of the Catskills and Mid-Hudson
16 region, including all of Sullivan County and
17 parts of Ulster, Orange and Delaware Counties. I
18 also chair the Agriculture Committee and I’m a
19 member of the Rural Resources Commission.
20 I want to just start out by saying that
21 I am very pleased that this state has, even --
22 I’m a first term senator, before I came here --
23 prioritized this issue and has done a lot to date
24 to extend broadband service in the state. But on
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2 the other side of that, since I’ve been in
3 service, it is probably the single greatest
4 complaint I get from my constituents in Sullivan
5 County and parts of Ulster. It is in my mind,
6 broadband is as much a basic need as electricity
7 is in today’s world. It is absolutely essential
8 for closing the gap, the rural urban gap in
9 access to educational resources, to
10 opportunities, to skilled jobs. It’s so important
11 to farming. It’s so important to closing the
12 income inequality gap in our state and ensuring
13 the long-term viability of our rural communities.
14 I brought, I just want to, a map of
15 Sullivan County. This was provided by Sullivan
16 County Planning. It’s a 2014 map, but they’ve
17 said this is the most accurate map of cell
18 service. And the yellow areas, there’s no service
19 at all. So there’s work to be done there. It only
20 tells part of the story, though because most of
21 my complaints, most of the complaints I receive
22 are about poor service and speeds, broadband
23 speeds that just make it impossible for kids to
24 do their homework, for people to really use it.
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2 And this one comment kind of sums it up from one
3 of my constituents. David says, slow internet
4 speed, no customer service and a take it or leave
5 it attitude.
6 So there are real issues that we have to
7 address. And I will wrap it up by saying I’ve
8 introduced legislation that aims to close that
9 gap. I appreciate and look forward to learning
10 from all of you about your experiences elsewhere
11 in the state. Thank you.
12 SENATOR MAY: Thank you. Shall we go one
13 at a time?
14 ASSEMBLY MEMBER THIELE: Do we have
15 other members of the Assembly who would like to
16 make an opening statement?
17 ASSEMBLY MEMBER CARRIE WOERNER: Hi, I’m
18 Assemblywoman Carrie Woerner, I represented the
19 113th Assembly District. And many of the themes
20 that I’m hoping that we can touch on in today’s
21 testimony have been introduced by our chairs who
22 I would like to thank for calling this very
23 important hearing today.
24 But my concerns really sort of get
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2 summed up by the dichotomy between the
3 statistics, which show that there is broad
4 spectrum coverage across all of New York and the
5 anecdotal evidence that the we hear from
6 individuals that either say they don’t have
7 access or their access is not at a level that is
8 of sufficient quality to be effective. And it
9 gets summed in a little anecdote. I happened to
10 be in Salem, New York this summer at a farm that
11 I had been to earlier in the spring and I had
12 access in the spring to some data on my laptop,
13 which I could access. But in the summer, I didn’t
14 have access. And I said I thought you guys had
15 broadband here, well, how come I can’t get on?
16 They said, well it’s wireless and the corn is too
17 high so the signal can’t come through. And I
18 think that is, you know, in a rural community
19 that kind of sums it up, that because we’re not
20 delivering fiber to the home, we are dependent on
21 wireless and wireless can get gummed up with a
22 lot of geographic issues that are relevant in
23 rural communities that aren’t relevant in urban
24 and suburban communities.
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2 So I’m interested to hear what we are
3 thinking about in terms of understanding latency
4 issues, issues of reliability that have and are
5 plaguing those who might have access to broadband
6 through wireless, but it is not an effective
7 service to meet their needs. So thank you all
8 very much for coming and I’m looking forward to
9 hearing all have you to say.
10 SENATOR MAY: Thank you, Senator Jordan.
11 SENATOR DAPHNE JORDAN: Thank you,
12 Senator May. Thank you to all the chairmen of
13 this hearing today. It’s well needed. High speed
14 broadband is necessary in today’s world for
15 education, everyday information, for families or
16 individuals, businesses, not only for the
17 benefits of the business but for customers as
18 well as towns and their people for economic
19 development. I’ll also add that it’s very
20 important so that early voting works properly.
21 Those without high-speed broadband and
22 in a good number of instances, no broadband, are
23 at a severe disadvantage in so many avenues of
24 life. Broadband is still not for all. I hear the
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2 complaints of the people in the 43rd Senate
3 District. Broadband is not working for them.
4 In looking at Microsoft’s report of
5 February from this year, two of the four counties
6 I represent are sorely lacking. Columbia County
7 is entirely within the 43rd Senate District that
8 I represent and is ranked number three worst
9 where 49,000 or 80.7 percent of the people don’t
10 use internet at broadband speeds. Washington
11 County, where I represent the towns of Cambridge
12 and Easton is ranked number five worst, where
13 49,000 or 79.7 percent of the people don’t use
14 internet at broadband speeds. Saratoga County is
15 number 40, where 123,000 or 54.4 percent of the
16 people don’t use internet at broadband speeds.
17 Rensselaer County is ranked 45 where 81,000 or
18 50.4 percent of the people don’t use internet at
19 broadband speeds.
20 We have to ask why. Why aren’t people
21 using internet at broadband speeds? The minimum
22 figure that the FCC categorizes as high-speed is
23 download speeds of 25 megabits per second. Round
24 three of the New NY Broadband Program set a goal
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2 of achieving statewide access to internet
3 download speeds of at least 100 megabits per
4 second and only 25 megabits in the most rural and
5 remote areas, disadvantaged by plan as it were.
6 Obviously, that has not been achieved.
7 Why? I hope today we’ll learn why so we can fix
8 it and truly have broadband for all.
9 SENATOR MAY: Thank you. And I’ll just
10 call everyone’s attention, there’s a clock over
11 here, so if you can keep your comments below two
12 minutes I would really appreciate it, because
13 there are a lot of us and we need to get to the
14 witnesses.
15 ASSEMBLY MEMBER THIELE: Assembly Member
16 Smullen.
17 ASSEMBLY MEMBER ROBERT SMULLEN: Thank
18 you, Chairman. I’m Assembly Member Robert Smullen
19 and I represent the 118th Assembly District which
20 is Fulton, Hamilton, Upper Herkimer, parts of
21 Oneida and St. Lawrence Counties. It’s one of the
22 largest assembly districts in the Western
23 Adirondacks and the Mohawk Valley. And I’m new to
24 the Assembly but I’m not new to communications in
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2 remote places.
3 This five-year commitment that we’ve had
4 has left pockets of isolation, including in my
5 district. This is the number one technology issue
6 that I hear from our citizens and from our local
7 governments. Towns like Stratford and Ohio and
8 Lake Pleasant are being left behind in this move
9 into the 21st Century. Put simply, our businesses
10 need to it compete, our children need it to grow
11 and learn. This is like the post office was in
12 the 1800s, it’s like rural electrification was in
13 the 1900s. It’s become a modern technological
14 necessity.
15 Like I said, I’m new to the conversation
16 here but I think the time for polite conversation
17 is coming past due and that it’s time to
18 accelerate our actions here in New York State for
19 our citizens to be properly connected to the 21st
20 Century. Thank you very much.
21 SENATOR MAY: Thank you. Senator
22 Ritchie.
23 SENATOR PATTY RITCHIE: I just want to
24 start off by saying thank you also to the chairs.
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2 I represent three rural counties, Oswego,
3 Jefferson and St. Lawrence. And though we have
4 made I think great improvements, there is still a
5 real need and one of the things that I hear on a
6 daily basis is the concerns with the last mile.
7 There’s nothing that makes my constituents
8 angrier than when the person who lives at the end
9 of the road has high-speed internet service and
10 they’re less than a mile away and they can’t get
11 hooked up, so I thank you for the opportunity. I
12 hope that we have a conversation about how we can
13 invest in the last mile and make sure all our
14 constituents have access to good service. Thank
15 you.
16 SENATOR MAY: Thank you.
17 ASSEMBLY MEMBER THIELE: Assembly Member
18 Tague.
19 ASSEMBLY MEMBER CHRISTOPHER TAGUE:
20 Thank you. I also want to thank the three chairs,
21 Chairman Santabarbara, Chairman Thiele, Chairman
22 May, thank you very much for bringing us together
23 on this very important issue. I probably
24 represent the most rural area in the state of New
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2 York. I have seven all, or parts of seven
3 counties, 26 school districts and I’ve heard the
4 stories of kids driving to the nearest library at
5 8:00, 9:00 o’clock at night to be able to get
6 coverage to be able to do their homework. And
7 what’s really sad, that we’re the Empire State
8 and that in 2019, okay, big communities like
9 Catskills and Saugerties don’t have cell phone
10 coverage or broadband. You can stand right across
11 the street from the Greene County office building
12 and not have cell phone service. And I think it’s
13 sad and I think this broadband is very vital to
14 upstate’s economy.
15 I think we look at it more as an
16 investment. If you invest in the broadband, it
17 will bring people here. Today most people have
18 home-based businesses and if they can’t run their
19 home-based business out of their home, they’re
20 not going to move there. So I think we need to
21 concentrate on a real tough plan. I think that
22 economically, this will be the best thing that
23 ever happened for upstate New York.
24 I thank you very much for giving me the
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2 time this morning and I look forward to listening
3 to the conversation. Thank you.
4 SENATOR MAY: Thank you. Senator Seward.
5 SENATOR JAMES SEWARD: Thank you. I want
6 to also thank our chairs for organizing today’s
7 hearing.
8 SENATOR MAY: Is your microphone on?
9 SENATOR SEWARD: Obviously there is a
10 great deal -- can we restart the clock?
11 [laughter] I want to also start out by thanking
12 our co-chairs for organizing today’s hearing.
13 Obviously there is a great deal of interest in
14 this very important topic. I’m very honored to
15 represent the 51st Senate District. It’s a swath
16 of all or parts of nine counties right in the
17 center of the state, mostly rural. It’s a great
18 place to live, work, raise a family. The area has
19 a lot to offer.
20 But, and it’s a big but, there are still
21 far too many rural areas that lack high-speed
22 broadband services. And that holds the entire
23 region back. In these areas where they’re
24 discussing education, economic development,
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2 community development and growth, the
3 conversation inevitably turns to the lack of
4 high-speed broadband availability. It hurts our
5 businesses, it hurts individuals and families who
6 are looking to perhaps move to a rural area but
7 don’t because of the lack of broadband. It hurts
8 those who are trying to sell their home, but
9 can’t because they don’t have broadband at their
10 location. And of course as has been pointed out,
11 there are countless number of students who just
12 can’t do their homework at home because of the
13 lack of broadband services.
14 Now over the years, I’ve advocated for
15 state funding to address this problem. We’ve had
16 federal dollars that have come into the state as
17 well. And the investments that have been made are
18 paying off. No question. There are more people
19 with broadband services today. And I want to
20 congratulate the Broadband Office for the job
21 that they are doing and also the Public Service
22 Commission, where their agreement with Spectrum,
23 that’s helped to some extent as well.
24 However, there is so much more that
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2 needs to be done, much more work that needs to be
3 done to reach the goal of high-speed broadband
4 for all. There are wide swaths of upstate New
5 York that may have some service, satellite,
6 wireless, but from what I hear, from my
7 constituents, these services are not reliable and
8 they lack quality of service. There are serious
9 issues there.
10 We in the rural areas should not have to
11 settle for second rate service. My constituents
12 contact me every day. They feel excluded and
13 forgotten because they do not have high-speed
14 broadband. We need to change that and I’m hoping
15 that today’s hearing will start that process,
16 develop a strategy for going forward, so that we
17 can have truly universal high-speed broadband for
18 all New Yorkers.
19 SENATOR MAY: Thank you.
20 ASSEMBLY MEMBER THIELE: Assembly Member
21 Ashby.
22 ASSEMBLY MEMBER JACOB ASHBY: Thank you
23 to the chairs for holding this meeting and thank
24 you for everybody coming together today to have
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2 this conversation. You know, I look forward to
3 hearing the testimony and I share much of my
4 district with Senator Jordan, who read off a lot
5 of statistics and I’m grateful that she did that.
6 But one of the concerns that I have and
7 I’m hopeful to hear about today too, is not only
8 in the rural areas that are farther out, but the
9 rural areas that border on the suburban areas
10 that are in my district and even in the suburban
11 areas themselves, there are numerous pockets of
12 areas that are not covered. And there is a large
13 disparity between the households there in terms
14 of their ability to communicate within that
15 community, whether it’s through education, small
16 business, a variety of issues. And I look forward
17 to hearing about those as well today. Thank you.
18 SENATOR MAY: Thank you, Senator
19 Tedisco.
20 SENATOR JAMES TEDISCO: Thank you very
21 much, chairman. What we’re talking about today is
22 you can see is something very valuable for our
23 state. It’s communication and the ability to
24 communicate. The promise of statewide broadband
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2 has not been fulfilled and it should be
3 fulfilled. Imagine representing or living in the
4 49th Senatorial District, a corner of it, where
5 you not only don’t have broadband, but another
6 component where you can communicate and that is
7 cell phone usage. In my district, several areas,
8 several constituents, can’t get an emergency
9 vehicle or report an emergency and I say that
10 tongue in cheek unless they know smoke signals or
11 homing pigeons and that’s not a reliable source
12 to protect your constituents. This is about
13 commerce. This is about education. This is about
14 the nexus between those two.
15 And in my district it’s about public
16 safety. If you don’t have cell phone and you
17 don’t have broadband, and I know, because when I
18 go into it, I can get neither one of those and my
19 constituents can’t. It’s dangerous, not only to
20 the economy of your community, not only to the
21 educational aspects but to the public safety. Now
22 ESDC, it’s not only about providing one internet
23 provider. ESDC provides grants. I think some of
24 those ESDC grants should be provided for grants
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2 for several of these internet providers so
3 there’s competition, because right now there are
4 some providers they’re terrible providers and
5 they’re singular in many of our areas. And we get
6 reports every single day, cell phone usage goes
7 down, broadband, the ones that have it, goes
8 down. We’re in the Adirondacks in many areas.
9 Fulton, Hamilton County, Herkimer County,
10 Saratoga County, I have Schenectady County. We
11 need statewide rural broadband and we need cell
12 phone access also because it’s not only an
13 economic issue, it’s a public safety issue. Thank
14 you.
15 SENATOR MAY: Thank you.
16 ASSEMBLY MEMBER THIELE: Assembly Member
17 Miller.
18 ASSEMBLY MEMBER BRIAN MILLER: Thank you
19 for putting this hearing together. Broadband is
20 one of the most important aspects of my district
21 I go from the Mohawk Valley all the way to Orange
22 County. So I pass through or next to most of my
23 colleagues here and there’s pockets throughout
24 that region, you know, I’m looking at the map up
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2 there, you know, the district’s 204 linear miles
3 long. I pass through seven counties. Probably one
4 of the most rural parts of New York State other
5 than the Adirondacks but cell phone coverage is
6 spotty, broadband is nonexistent in parts and as
7 some of my colleagues have talked about, the
8 broadband coverage not far from the suburban
9 areas is really one of the bigger issues we have.
10 For many years I worked as a sales
11 engineer from home. If I were to live in outside
12 Delhi in Delaware County, I couldn’t have lived
13 there and pursue my profession. This is truly an
14 economic driver and I’m glad we’re putting this
15 all together and I’m looking forward to hearing
16 some testimony. Thank you.
17 SENATOR MAY: Thank you, and Senator
18 Helming.
19 SENATOR PAMELA HELMING: Good morning,
20 everyone. I’d like to thank our host for holding
21 this important public hearing today and to thank
22 everyone who is here to listen to the hearing on
23 rural broadband and its impacts or lack thereof
24 on local communities throughout the state. As the
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2 ranking member on the Legislative Commission on
3 Rural Resources, and the ranker on the Committee
4 on Commerce, Economic Development and Small
5 Business, and as a senator for the 54th Senate
6 District, which is comprised of many rural
7 communities, I hear every single day countless
8 complaints about our state’s broadband resources.
9 These complaints and concerns come from
10 people who are unserved or underserved. In
11 addition to the testimony that we’ll hear today,
12 I have submitted written testimony to the host of
13 this meeting on behalf of many, many, many
14 residents, business owners, libraries, schools,
15 economic development groups and local elected
16 officials from my district. Each of their
17 testimonies demonstrates how, without quality
18 access to broadband, our small farms struggle,
19 our businesses struggle, access to online
20 education is limited, that digital divide that
21 we’re working so hard to combat continues to
22 grow. Access to healthcare is limited and in this
23 day and age when telemedicine is becoming an
24 important component of healthcare, especially in
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2 the field of mental health, it’s absolutely
3 critical that we provide internet services.
4 And also my, colleague Senator Tedisco
5 mentioned the importance of having access to
6 cellular services and broadband services to deal
7 with public safety and emergency management
8 issues. I saw that firsthand a year ago in August
9 when we had significant flooding in southern
10 Seneca County and our emergency management
11 command post struggled because of a lack of
12 broadband services.
13 I want to thank you again our hosts and
14 say I look forward to today’s testimony so we may
15 work together to expand high-speed internet at a
16 reasonable cost to our communities. Thank you.
17 SENATOR MAY: Thank you, and I guess our
18 last person is Senator Little? No? Okay, that’s
19 it then, so thanks to everybody for your
20 comments. I want to invite up Jeffrey Nordhaus
21 and Thomas Congdon as our first witnesses.
22 Greetings, hi, and we’ll start with Mr. Nordhaus,
23 please.
24 MR. JEFFREY NORDHAUS, EXECUTIVE VICE
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2 PRESIDENT, NNOVATION AND BROADBAND, EMPIRE STATE
3 DEVELOPMENT: Good morning. Good morning Chairs
4 May, Santabarbara and Thiele, members of the
5 legislature. I’m pleased to be here today to
6 update you on progress that has been made on the
7 New NY Broadband Program and more broadly
8 unprecedented steps that the state has taken to
9 ensure that all New Yorkers have access to high-
10 speed affordable broadband regardless where they
11 work or live.
12 My name is Jeffrey Nordhaus. I serve as
13 executive vice president of Innovation and
14 Broadband at Empire State Development. I oversee
15 the New NY Broadband Program and the Broadband
16 Program Office which administers it.
17 The $500 New NY Broadband Program was
18 created with legislative support in 2015 and
19 provides grant funding to broadband providers to
20 deploy service in unserved and underserved areas
21 of the state. The program’s goal is to ensure
22 that all New Yorkers have access to high-speed
23 internet. Much of the focus of the program is in
24 upstate New York.
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2 When the program was launched in 2015,
3 approximately 30 percent of New Yorkers lacked
4 access to high-speed broadband. The gap was most
5 acute upstate where 65 percent of New Yorkers
6 lacked access. However, Governor Cuomo recognized
7 that in today’s economy, as has been noted today,
8 high-speed broadband is not a luxury. It is a
9 necessity. It’s an integral part of life for
10 students, families, and small businesses. From
11 economic development to education, to healthcare,
12 access to broadband is a vital tool.
13 For these reasons, the governor launched
14 the New NY Broadband Program to close this
15 digital divide. The New NY Broadband Program,
16 coupled with commitment secured from Charter
17 Communications has allowed New York State to
18 address 2.4 million unserved and underserved
19 locations in less than five years. We are
20 extremely proud of this accomplishment and I look
21 forward to sharing the details of that with you
22 here today.
23 The New York broadband program is by far
24 the largest and most successful state program of
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2 its type in the nation. The program supports
3 projects providing speeds of 100 megabits per
4 second with 25 acceptable in the most rural areas
5 of the state where fiber connections were found
6 to be prohibitively expensive. In total, the
7 program has catalyzed more than $1 billion in
8 public and private investment across New York.
9 The economics of broadband often require
10 state investment to incentivize rural providers.
11 For a company to build a mile of fiber
12 economically, for example, it needs enough
13 potential customers, enough density along that
14 mile to recoup its investment profitably. Rural
15 areas generally lack that density, which is why
16 the government needs to step in and help
17 providers get service to New Yorkers who need and
18 deserve it. To accomplish that, the program
19 supports public-private partnerships by offering
20 state funding to incentivize providers to build-
21 out to unserved and underserved locations lacking
22 access to broadband. The BPO selected awardee
23 providers using an innovative and groundbreaking
24 reverse auction process that ensured the highest
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2 broadband speed would be available for the lowest
3 state cost for each unserved and underserved
4 location. In addition we conducted these auctions
5 regionally, which ensured that funding would be
6 distributed across the entire state rather than
7 just to the areas with lower costs.
8 As was discussed earlier, the program
9 has taken place across three phases. In 2016,
10 phase one resulted in $75.8 million in new
11 broadband investment including $54 million of
12 state investment to 25 projects addressing more
13 than 36,000 locations. In 2017, phase two
14 resulted in $256 million in new broadband
15 investment, including $202 million of state
16 investment to 51 projects, addressing more than
17 85,000 locations. In 2018, phase three resulted
18 in $389 million in new broadband investment
19 including $230 million of state investment to
20 support 50 projects and address 134,000
21 locations.
22 The public can find state and private
23 funding numbers, an interactive map, build-out
24 status and a municipal search tool on the BPO’s
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2 website NYSbroadband.NY.gov. The BPO and our
3 broadband partners also engage with communities
4 and constituents across the state including
5 providing updates on status of ongoing projects
6 across New York.
7 During the program’s implementation
8 another development took place that is important
9 to highlight. The FCC withdrew funding from its
10 Connect America Fund that was earmarked for a
11 number of states across the nation including New
12 York. The withdrawal was a direct result of
13 Verizon’s decision to decline its CAF allocation
14 which supported the provision of broadband to
15 consumers in rural areas. Governor Cuomo and the
16 BPO knew that the declined funding had the
17 potential to enhance the program and make a
18 difference in the lives of thousands of New
19 Yorkers.
20 So rather than allow the funding to be
21 diverted to states outside of New York, we
22 undertook a year-long effort in coordination with
23 the New York Congressional Delegation that
24 resulted in the state securing up to $170 million
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2 of incremental additional funding on top of the
3 $500 million from the FCC for phase three of the
4 broadband program. This funding greatly expanded
5 the BPO’s ability to attract broadband providers
6 into phase three including notably Verizon
7 Communications. Verizon will expand Fios service
8 to over 18,000 unserved locations across five
9 upstate regions in an agreement the company
10 reached with the PSC, which Tom will speak about
11 further, at the same time will result in a total
12 of 50,000 Fios new connections upstate, mostly in
13 upstate New York and those are still currently
14 under could be instruction.
15 In total, the New NY Broadband Program
16 will cover approximately 256,000 locations across
17 the state, representing a total of $721.9 million
18 in private, state and federal investments
19 excluding the value of the homes that are being
20 up graded by Charter. When all state secured
21 upgrades and build-out commitments pursuant to
22 the broadband initiative are included, as
23 mentioned earlier, more than 2.4 million homes
24 are being addressed.
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2 The vast majority of BPO project are
3 fiber to the home networks, which are capable of
4 download speeds of 100 megabits and in fact, are
5 generally gigabit capable. These build-outs which
6 are occurring statewide from the North Country to
7 the Mid-Hudson, to the Southern Tier are
8 deploying 21,000 miles of fiber, enough to nearly
9 circumnavigate the globe. This is a game changer
10 for upstate New York for businesses looking to
11 grow or to resettle, for New York tourism or for
12 residents and hamlets across our state who are
13 looking to stay connected.
14 After full implementation of the
15 commitments announced in connection with the
16 program, approximately 99.9 percent of all New
17 York households will have access to high-speed
18 broadband with 99 percent at download speeds of
19 100 and the remainder at speeds of 25 megabits.
20 In terms of network construction, where we stand
21 today, 98 percent of houses have access to these
22 speeds and the remainder of projects are still in
23 the process of construction. The BPO used grant
24 funding to provide enhanced satellite service for
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2 the last one percent of the state where the cost
3 of building fiber infrastructure was found to be
4 prohibitively high or where no other bids were
5 received at all.
6 The program utilized this low cost
7 solution which met key speed and cost
8 requirements in order to ensure that no New
9 Yorkers would be left behind. The program
10 stipulates 25 megabits as the minimum tier for
11 qualifying service and the new Hughes satellite
12 launched during our program meets that
13 requirement. Previous generations of satellite
14 provided speeds of 15 megabits or even less. In
15 addition, the satellite service we have supported
16 has no hard data caps, so usage is never cut off
17 during the month. Approximately 79,000 locations
18 will receive satellite from HughesNetwork
19 Solutions.
20 The BPO Program also requires
21 affordability. All providers have to offer 25
22 megabits for no more than $60 per month.
23 Installation fees cannot exceed $49 on a one-time
24 basis and additional fees and connection charges
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2 cannot be applied. State investment has also
3 reduced the cost of satellite dishes which are
4 often priced at over $400 and service can be over
5 $100 a month. In areas served by satellite, we
6 still expect that more that more homes will
7 convert to fiber as providers continue to build-
8 out to new locations over time, even in those
9 satellite areas.
10 From a network construction standpoint,
11 phase one and phase two projects are generally
12 complete and all remaining projects are currently
13 in active construction. The Broadband Office has
14 hired a technical validation firm to review all
15 completed projects. BPO funding is dispersed on a
16 reimbursement basis, which means providers will
17 only receive reimbursement when projects are
18 complete and validated.
19 As part of our effort, the BPO works
20 closely with the PSC. As you know, as a condition
21 to the merger with Time Warner Cable, the PSC
22 required Charter Communications to offer faster
23 broadband speeds to all past homes and businesses
24 in its footprint and to provide service to an
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2 additional 145,000 unpassed locations. Charter’s
3 recent settlement agreement with the PSC also
4 allocated $12 million as a reserve fund for any
5 unexpected gaps left in coverage. My colleague,
6 Tom Congdon, will address the Charter agreement
7 further.
8 In conclusion, I cannot emphasize enough
9 how transformative the New York broadband program
10 has been for New York, especially for upstate New
11 York. We’re proud of the program’s efficient
12 implementation. It’s been held up as a model by
13 other states and even recently by the federal
14 government. I want to thank the governor and the
15 legislature for their foresight in identifying
16 broadband as a key priority for New York, and for
17 their support during the program’s
18 implementation. We should be proud of the work
19 we’ve done and the accomplishments we’ve made in
20 providing this critical service to so many New
21 Yorkers. Thank you very much and I’m happy to
22 answer your questions.
23 SENATOR MAY: Thank you. That was
24 exactly ten minutes, that was impressive.
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2 [Laughter] I think we’ll direct questions to you
3 before we go on to Mr. Congdon. Is that --
4 MR. NORDHAUS: Well, if might, if you
5 want to hear about Charter and how they fit
6 together but it’s up to you, though obviously.
7 SENATOR MAY: Okay. Why don’t we go
8 ahead then, and we’ll get the whole picture and
9 then we can address directions to either one.
10 MR. THOMAS CONGDON, EXECUTIVE DEPUTY,
11 DEPARTMENT OF PUBLIC SERVICE: Thank you. Good
12 morning Chairs May, Santabarbara and Thiele and
13 other distinguished members. My name is Tom
14 Congdon, I’m the executive deputy at the
15 Department of Public Service. Availability and
16 access to broadband is crucial to driving
17 economic growth and opportunity and we welcome
18 this committee’s focus on rural New York
19 communities that may be unserved or underserved
20 by this essential service.
21 While states do not directly regulate
22 broadband, New York’s Public Service Commission
23 and the staff at the Department of Public Service
24 are helping expand access to broadband services.
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2 Under state law requiring cable and telephone
3 mergers to produce a public net benefit along
4 with other regulatory initiatives, the Commission
5 has required substantial private investment in
6 broadband infrastructure throughout New York.
7 Commission ordered network expansions by Charter
8 Spectrum, Altice, FairPoint and Verizon are well
9 under way and the Department’s oversight of these
10 projects will continue until they are complete,
11 which is help ago chief Governor Cuomo’s vision
12 for universally available broadband.
13 The Department works closely with ESD’s
14 Broadband Program Office to maximize coordination
15 of the projects we oversee with the projects
16 under way with BPO funding. Today, I’ll briefly
17 summarize the Department’s activities that are
18 contributing to a nation leading an unprecedented
19 build-out throughout the state, starting with
20 Charter.
21 Charter is the largest cable provider in
22 the state. It provides digital cable television,
23 broadband internet and VoIP television service to
24 more than two million subscribers in New York
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2 State, in more than 1,150 communities. They have
3 a potential customer base of five million
4 households in its franchise areas. On January 8,
5 2016, the Commission approved Charter’s
6 acquisition of Time Warner Cable, subject to
7 several regulatory conditions to advances the
8 public interest.
9 The most notable conditions for today’s
10 discussion are a requirement to increase
11 broadband speeds to 300 megabits per second by
12 the end of 2019 and a requirement to build-out
13 its network to pass an additional 145,000
14 unserved or underserved homes and businesses in
15 the state’s less densely populated areas. In
16 early 2017, the Commission determined that
17 Charter would miss its first milestone to pass
18 36,250 premises by May 18, 2017 and we commenced
19 enforcement proceeding.
20 A settlement was approved by the
21 Commission in September 2017 that established a
22 new enforceable build-out schedule with interim
23 milestones, and required Charter to pay $1
24 million for missing the first milestone and up to
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2 $3 million for up to each of the remaining four
3 milestones going forward. But in early 2018,
4 Charter and department staff disagreed on the
5 eligibility of certain addressed claimed by
6 Charter including New York City addresses and
7 addresses awarded by the BPO, which led to the
8 Commission issuing several additional enforcement
9 orders, culminating in a July 2018 order revoking
10 the Commission’s approval of the merger.
11 After months of intense negotiations on
12 April 19, 2019, Charter and staff reached a new
13 settlement which the Commission approved in July.
14 This summer’s settlement includes the following
15 compliance obligations. Charter is required to
16 complete the build-out of 145,000 passings
17 entirely in upstate New York and remove all New
18 York City addresses that it had previously
19 claimed for compliance purposes. Charter the
20 restricted to only a small number of addresses
21 that overlap with PBO awarded areas. Charter is
22 required to pay $12 million for further broadband
23 build-out or build-out by other companies, in
24 addition to the 145,000. Charter must comply with
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2 a new build-out schedule that includes
3 enforceable milestones every four months, with a
4 final project completion by September 21, 2021.
5 The penalty for missing milestone is $2,800 per
6 passing and any funds collected through this
7 mechanism will also be used for additional
8 broadband build-out.
9 The Department estimates Charter will
10 invest between $600 million and $700 million to
11 complete the build-out pursuant to the 2019
12 settlement, which is more than double the public
13 benefit value estimated by the commission in its
14 2016 merger approval. As of the time of the
15 settlement, Charter had passed approximately
16 65,000 of the required 145,000 addresses across
17 the state and they are required to pass more than
18 76,000 homes and businesses by the end of this
19 month.
20 Under the settlement, Charter must
21 maintain the communications plan and web portal
22 established in an earlier settlement agreement
23 which provides local governments and individual
24 consumers with information to determine whether
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2 or not they’re included in Charter’s build-out
3 plans. Consumers can see if their address is
4 included in the Charter’s expansion plan by going
5 to www.bldlkup.com, build-out lookup.
6 Altice and FairPoint are the next two
7 companies I’ll talk about. In June 2016, the
8 Public Service Commission approved Altice’s
9 acquisition of Cablevision and in June 2017,
10 Consolidated Communications acquisition of
11 FairPoint and both orders required system build-
12 out and service improvements. Cablevision had
13 nearly two million customers and served Long
14 Island, New York City and the Lower Hudson
15 Valley. FairPoint and its subsidiaries had nearly
16 23,000 customers and served Chautauqua, Columbia,
17 Dutchess and Rensselaer counties.
18 The Commission required Altice to
19 provide cable facilities without extension fees
20 to all unserved or underserved residential and
21 nonresidential premises in the town of Milan,
22 Dutchess County and to make good faith bids into
23 the BPO program to provide broadband service to
24 the barrier island communities of Oak Beach and
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2 Gilgo Beach.
3 For the remainder of Cablevision’s New
4 York service areas, the Commission requires
5 Altice to establish a fund to absorb customer
6 line extension fees that otherwise would be
7 assessed for the construction of cable
8 facilities. Altice has completed its broadband
9 expansion in the town of Milan, which was
10 approximately 730 locations and both barrier
11 island communities. With regard to line
12 extensions, Altice has extended its network to
13 approximately 45,166 households and small
14 businesses at an estimated total cost of about
15 $27 million since the close of their transaction.
16 For Consolidated, in addition to
17 requiring them to fulfill prior commitments with
18 the BPO, the Commission required a minimum
19 investment of $4 million in network reliability
20 and service quality improvements including
21 expansion of its DSL internet access service to a
22 minimum of 300 additional locations with an
23 emphasis on the Taconic service territory. This
24 approval provided enhanced service for customers
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2 in Chautauqua, Columbia, Dutchess and Rensselaer.
3 And Consolidated completed the BPO commitments in
4 March of this year to bring broadband service to
5 approximately 10,300 locations in the upstate,
6 Mid-Hudson and western parts of the state.
7 With respect to Verizon, in a July 12,
8 2018 order, the Commission approved a joint
9 proposal, which is sort of like a settlement,
10 that was reached between Verizon, the Department
11 of Department of Public Service, the
12 Communications Workers of America and the Public
13 Utility Law Project of New York. This agreement
14 addressed service quality problems experienced by
15 the company and its customers.
16 The settlement requires Verizon to make
17 fiber-based broadband service available to
18 certain additional households in the area covered
19 by any BPO grants it receives beyond those
20 households required under the term of the BPO
21 grants. This commitment will result in
22 approximately 20,500 additional houses being
23 served by its fiber-based broadband network. The
24 settlement also required Verizon to make fiber-
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2 based services available to 12,000 homes and
3 businesses, approximate 4,000 of which would be
4 in the mid-state and upstate regions within one
5 year of the agreement. Verizon has made fiber-
6 based services available to about l1,569
7 residents and business customers as of July 2019,
8 with 3,600 of those located in the upstate
9 region.
10 I’m going to briefly turn to wireless
11 and a couple of other areas of the Commission’s
12 activities. The Commission has also taken actions
13 to facilitate private investment in next
14 generation wireless infrastructure that will
15 further expand broadband coverage. Wireless
16 carriers are on the cusp of deploying their next
17 generation of wireless networks known as 5G,
18 which will provide high-speed broadband over
19 wireless networks.
20 Wireless carriers design, build, own,
21 monitor and maintain small-cell and distributed
22 antenna system networks in New York. These
23 networks are constructed and used by FCC licensed
24 wireless carriers to serve the public in many
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2 areas of the state and the deployment of the
3 infrastructure is typically co-located on
4 preexisting infrastructure like utility poles,
5 lamp posts and buildings. One of the barriers to
6 5G deployment is regulatory and cost uncertainty
7 regarding how the carriers access this
8 preexisting infrastructure.
9 In March, the Commission acted to
10 eliminate one of those barriers by making it
11 easier and less costly for telecom companies to
12 attach wireless devices to existing utility
13 poles. As a result, wireless companies will be
14 able to improve broadband capabilities and
15 rollout the new generation of cellular mobile
16 communications that will provide greater data
17 service functions, higher system capacities and
18 better device connectivity. Gaining access to
19 utility poles is essential to 5G deployment and
20 existing 4G networks. And the Commission’s action
21 in March provides certainty of a clear,
22 regulatory framework which the industry believes
23 will result in substantial private investment.
24 Lastly I’ll just wrap up with the role
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2 we play with respect to franchise agreements. We
3 do set minimum standards for cable franchises to
4 go to certain densities. The franchise agreements
5 themselves then can go beyond the minimum
6 standards and the Commission reviews and approves
7 those. Many of the BPO grantees are also
8 providing cable television, which come before us
9 for franchise approvals and we’ve added
10 approximately 25 of those due to the BPO
11 Programs.
12 In closing, look, broadband is crucial
13 to driving growth, improving our education
14 system, connecting New Yorkers to the 21st
15 century economy and it remains an essential
16 component for creating and sustain the economic
17 opportunity in rural areas throughout the state.
18 Thank you. We’d be happy to answer any questions.
19 SENATOR MAY: Thank you. Thank you both
20 for your testimony. It’s a little complicated
21 because I think many of us have questions for
22 each of you so we’ll --
23 MR. NORDHAUS: We’ll both stay.
24 [Laughter]
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2 SENATOR MAY: But I’m going to start
3 talking to Mr. Nordhaus, and this is a general
4 question that I think a lot of us may have at
5 this table. So I agree with you the state has
6 been doing a lot. But if our rhetoric is that we
7 are having all this success and what we’re
8 actually hearing from our constituents is that
9 they are deeply frustrated or completely
10 uncovered by service, how do you account for the
11 disparity between the hard work that you’re doing
12 and the experience that customers are actually
13 having?
14 MR. NORDHAUSE: Sure. Well, I think one
15 thing we can all say and by all the opening
16 comments is that broadband is essential. And I
17 think when we launch the program, the lieutenant
18 governor came and I remember her saying broadband
19 is like oxygen. You just kind of assume it’s
20 there and when it’s not there, it’s a very big
21 deal. And I think that’s the way we all feel at
22 this point about broadband, and so I think to the
23 extent that there are people that don’t have
24 broadband, you know, they contact our office and
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2 they contact you and we want to work with them to
3 address that.
4 We are still in the process of rolling
5 out the projects so if you look at, you know, the
6 one percent that has satellite and certainly
7 people would probably rather have fiber, we do
8 often hear from those constituents and then we
9 have an additional two percent of the state which
10 is still in the process of either being addressed
11 by Charter or being addressed by the BPOs, so
12 that’s, you know, a couple hundred thousand folks
13 who don’t have broadband, oxygen as it were, and
14 we would expect to hear from them. We are very
15 focused on making sure that all New Yorkers have
16 access to broadband and continue to diligently
17 pursue that.
18 SENATOR MAY: Thanks, so let me follow
19 up about the satellite. So Hughes got one of the
20 larger grants in the phase three process and it
21 was aimed at the majority of locations that were
22 you were planning to cover in phase three, but
23 that’s going to be satellite service. I did the
24 math, it’s like $400 per location as opposed to
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2 $4,000 to $10,000 per location for a lot of the
3 other grants that you were giving out. So how are
4 you going to monitor actually the quality of the
5 service, because we hear a lot about HughesNet
6 being inadequate, providing inadequate service.
7 MR. NORDHAUS: Well we also hear a lot
8 of that and we are very focused on, you know,
9 that consideration and working closely with folks
10 to make sure they’re satisfied with the service.
11 As you point out, it was large by number, but by
12 dollar volume it was a relatively small grant.
13 And it allowed us to cover the last one percent
14 where as I mentioned before we generally didn’t
15 get bids or we got uneconomic bids. So our choice
16 was basically to award satellite or they would be
17 left behind. And so we thought that for the $400
18 let’s say total cost, the state portion being
19 $200 or less in some cases -- we had two
20 different structures -- that that was a very
21 economic way to make sure that those folks do
22 have some access to the online experience.
23 The other thing about satellite is it’s
24 only again on a reimbursement basis, so to the
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2 extent that customers sign up and take the
3 service, we would reimburse on a one-for-one
4 basis. We have found that because of the
5 structure of Census blocks, this was referenced
6 in one of the opening comments as well about
7 mapping -- because of the structure of census
8 blocks we have actually service in many areas
9 that were awarded to satellite with fiber that’s
10 adjacent and we’ve found dozens, if not hundreds
11 of cases, where the fiber is actually going to
12 serve across the street. So that’s a very
13 exciting kind of upside of the satellite award.
14 One other thing I just want to say on
15 the mapping is that in our program, we require a
16 full Census block to be served, so we have been
17 speaking publicly about the problems with the
18 federal maps for I think three to four years and
19 we agree we are not satisfied with those maps. So
20 we have taken steps to make our own state map
21 more accurate. And one of the things that we did
22 in our program is it’s an essential core
23 condition that if there is a census block with a
24 number of homes, they all be served, not one
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2 served, all served.
3 SENATOR MAY: Oh, great, that was
4 important. That was one of my next questions. I
5 wanted to ask the technical validation firm you
6 mentioned. Can you say how they’re going to
7 report their findings for one thing? Will we know
8 when they make their report? If you can just say
9 more about that.
10 MR. NORDHAUS: Sure, sure, right. So
11 it’s a great question. So we’ve retained a group
12 called Tilson, which has worked with us for the
13 past four years. They’re a leading communications
14 firm, they help structure our auction and they
15 have many, many engineers on staff and so we are
16 actually doing a two-step process to validate all
17 our projects. First, we, meaning the BPO staff
18 works with Tilson to do a desktop audit where all
19 the providers have to submit maps and shapefiles
20 showing these are the homes, these are the routes
21 and then showing where all the fiber was laid
22 along the street and then the huts and all the
23 equipment. So we first validate that on a desktop
24 basis, obviously for cost reasons. Because if we
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2 found they missed 12 houses, then the provider --
3 and we have found cases where 12 houses were
4 missed -- you’ve got to go back and build-out. So
5 we save the physical trip based on that map to
6 preserve, costs, you know, obviously. Then once
7 the desktop audit checks out, they actually go
8 and drive the route, so we sent them out and they
9 validate. We also do some speed tests.
10 So we are, you know, working with them
11 to prepare those reports and we’ll be happy to
12 follow up with you about any appropriate further
13 inquiries you’d have on that.
14 SENATOR MAY: Yeah, so we hear about
15 people who supposedly have service, but it gets
16 interrupted 100 times a day or something like
17 that. Will they be able to measure that?
18 MR. NORDHAUS: Yes, I did see from
19 Madison County, I think maybe that e-mail as
20 well. I believe that, and I’m sure you’ve heard
21 that more than once perhaps. We are quite sure
22 that is not in a BPO awarded area. We have not
23 heard complaints about our -- we are deploying
24 our providers in those areas and others as I
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2 mentioned earlier, are providers are providing
3 fiber optics, which is basically the gold
4 standard in terms of fiber. It’s scalable, it’s
5 fiber, so speed of light and it can be scaled
6 through multiplexing. You can continue over time
7 to add more equipment to make more and more data
8 go through that. So we expect that to be a really
9 superior service for all. And if we ever hear any
10 complaints about broadband projects, they have to
11 be fixed. And we haven’t had many but if we have
12 any, we immediately make them fix.
13 Now there also are complaints as was
14 referenced, service quality and others outside of
15 BPO grants, so in the case of an individual may
16 have dropped service, may complain about a
17 provider, a lot of those are in non-BPO areas
18 which need to be addressed through those
19 channels.
20 SENATOR MAY: Okay. And I guess really
21 my last question is to both of you, from what you
22 said, and from what I hear all the time,
23 broadband is coming more to be understood as a
24 utility than just some kind of privilege or a
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2 service. How would it change your, what you do if
3 the legislature were to pass legislation
4 declaring broadband to be a utility and to need
5 to be regulated the way phone service or
6 television service is regulated?
7 MR. CONGDON: So I think that the FCC at
8 the federal level actually went down that road
9 when it was or dealing with net neutrality during
10 the Obama Administration and then recently under
11 the new FCC that was reversed. So it’s a
12 determination sort of made at the federal level,
13 it’s an interstate information product that has
14 been deemed a federal jurisdiction. And so any
15 state law that would seek to regulate broadband,
16 I think would have to be carefully reviewed to
17 make sure it doesn’t get tripped up with any of
18 the federal preemption issues.
19 SENATOR MAY: How would it change what
20 you do if we were to --
21 MR. CONGDON: Well, I mean I think it
22 really depends on what you put out in terms of
23 the requirements and like any state law, you
24 know, as an agency, we’re ready to implement
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2 whatever it is the legislature throws at us and
3 so we’d be happy to review any of those kinds of
4 proposals.
5 SENATOR MAY: I believe Senator Hoylman
6 has a bill similar to what was done in
7 California. That would be, I think, what we’d
8 likely be looking at. Thank you.
9 MR. CONGDON: Thank you.
10 ASSEMBLY MEMBER SANTABARBARA: Thank you
11 to both of you for your testimony. Thank you for
12 being here today. I just want to circle back to
13 the estimates. I know there were a lot of
14 estimates in both of the testimony you provided,
15 they’re high numbers. And I think, as Senator May
16 talked about the maps and how those relate to
17 what’s actually out there. All of us, I think
18 you’re going to hear that have constituents,
19 locations that just don’t have service or we just
20 went through this with the Upstate Cellular Task
21 Force coverage areas where the maps show
22 coverage. You go out there and either it’s not
23 what has been stated, the quality of the coverage
24 or the coverage is nonexistent and we see the
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2 same thing kind of happening here. As I mentioned
3 in my opening statement, FCC data shows New York
4 State is 100 percent covered at this point but we
5 all know that that’s not true because of what we
6 hear in each of our districts.
7 So that being said, last month the FCC
8 issued a new order, that required broadband
9 providers to produce new maps showing data using
10 shapefiles rather than Census block and it’s
11 going to provide better detail to identify these
12 underserved areas. So, my first question is and
13 maybe you can explain what the state is doing in
14 anticipation of these maps. Is the state -- how
15 are you coming up with the estimates? How are we
16 coming up with these numbers on who is served and
17 who is not?
18 MR. NORDHAUS: Right. Well, first of
19 all, good to see you and thank you for the
20 question. The mapping has been, I don’t know, a
21 thorn in our side, but it’s been a challenge for
22 us for many years. We’ve complained about the
23 federal maps, so we basically decided they were
24 not good enough for the New York State purposes,
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2 that we had to get down to a level of granularity
3 that exceeded what they were doing. And in
4 particular, we were dissatisfied with one served
5 all served. That just doesn’t kind of work.
6 So, what we did with our program was
7 took many, many steps within the constraints of
8 what information was available to us. One thing
9 we did, as mentioned a moment ago, was for our
10 program, we require full census blocks be served
11 with, I can’t think of any exception to that. So
12 if you, so when we talk about a Census block that
13 was awarded to a provider in a BPO program, if it
14 has got 50 homes in that Census block, all those
15 50 homes are going to be served. So we have
16 obviously, a sort of high degree of sort of
17 certainly around anything in the BPO build-out
18 area so that part of the map is very well
19 understood by us.
20 Another thing that we were able to do as
21 a result of really Tom and the PSC’s hard work is
22 we were able to, the Charter process, to execute
23 a non-disclosure agreement to get house-by-house
24 data on the Charter build-out area. So we had,
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2 for their footprint, basically what we call the
3 green dots and red dots. The green dots were
4 areas that were unserved that they were going to
5 built to for the build-out and the red dots were
6 the areas that they were not. And we have and we
7 created in our phase three, and due to the scope
8 and scale of Charter in the state, that obviously
9 covers a huge amount of area. So we took the
10 areas that were unserved by Charter and we’ve
11 auctioned those off in our program as well.
12 So if you take the sort good visibility,
13 excellent I would say, visibility on all BPO
14 areas and then you take sort of the Charter
15 mapping that we’ve done, which the federal
16 government doesn’t have the benefit of that
17 because providers aren’t actually required to
18 turn over maps to the federal government.
19 But if you take all those and you build
20 up the steps we’ve taken, you have a much better
21 picture -- we have a much better picture of the
22 state than would be available through the federal
23 maps.
24 The other thing that we did though just
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2 in case that wasn’t sort of enough and we worried
3 about unserved areas, is we put into our auction
4 any area that is a Census block which is one
5 served all served, so even if the Census block
6 was served, we said if you can come to us and
7 show us that a federal map is inaccurate and you
8 want to bid for a part of that, meaning the
9 unserved part of an otherwise served block, that
10 was an acceptable part of our program and we did
11 have a couple cases like that, not a lot.
12 So I think through -- and by the way the
13 last point I’ll say is the folks who did the map
14 for the FCC are actually the same folks who did
15 our mapping, so we have really good insight into
16 the technique. So mapping is a huge issue. You
17 are absolutely right to point it out and we’ve
18 tried to take steps to really close the gap
19 between what’s publicly available and what we can
20 see and know on the ground.
21 ASSEMBLY MEMBER SANTABARBARA: And this
22 is still ongoing, the maps are not completely
23 updated at this point?
24 MR. NORDHAUS: Our maps are updated.
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2 ASSEMBLY MEMBER SANTABARBARA: They’re
3 all updated?
4 MR. NORDHAUS: Yes.
5 ASSEMBLY MEMBER SANTABARBARA: And
6 they’re available?
7 MR. NORDHAUS: Yes. We have a map on our
8 website and also the Charter look up tool that
9 Tom mentions also on our website.
10 ASSEMBLY MEMBER SANTABARBARA: So when
11 it comes to the rural communities that we’re
12 talking about, you know, how are these projects
13 being prioritized to get service expedited in
14 these rural areas or the areas we’re talking
15 about today that don’t have service or don’t have
16 quality service?
17 MR. NORDHAUS: We’re holding the
18 utilities to an extremely tight timeframe and,
19 you know, failure is not something that’s an
20 option. Any failure will be, we have contracts
21 with them and we’re going to enforce those
22 contracts so all our phase one and phase two
23 projects are done. The phase three projects,
24 which were pushed back a couple months in order
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2 to get the alignment with the FCC and get the
3 $170 million, those are well underway and will be
4 wrapped up next year and from the PSC’s
5 standpoint, Tom and the PSC are closely
6 monitoring. He can speak to it too, the Charter
7 rollout. So getting the projects out there
8 expeditiously is the top what have we try to do
9 every single day.
10 ASSEMBLY MEMBER SANTABARBARA: And I
11 guess, yeah, I’ll transition to you. With regards
12 to the Charter merger that was revoked, now
13 there’s been settlements, you talked about new
14 agreements, things that they’re responsible for
15 doing. So what steps -- in the past, we’ve seen
16 that they haven’t delivered on what they said
17 they were going to deliver. Are we are still
18 seeing rural areas that were just not served or
19 skipped over or whatever the case may be. What’s
20 being done now with the new agreements, the new
21 settlements to make sure they’re in compliance
22 and to make sure they’re doing what they said
23 they were going to be doing?
24 MR. CONGDON: Right. So first, one of
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2 the benefits of the settlement is that it
3 eliminates a lot of ambiguity that the company
4 had tried to suggest existed and that’s why there
5 was a different interpretation of what an
6 eligible passing was and what wasn’t. And with
7 due respect, when we’ve talked about bringing
8 broadband to the less densely populated areas of
9 the state, the Commission did not mean New York
10 City, but that was one of the biggest
11 disagreements on eligibility. The settlement now
12 completely eliminates that kind of ambiguity. And
13 so there’s very clear eligibility guidelines as
14 to what is supposed to happen in the build.
15 The other thing that is also very clear
16 is the enforcement milestones and any miss of
17 even a single passing toward the milestone is
18 subject to a $2,800 per passing penalty that has
19 to be paid automatically into escrow. So, they’re
20 out that money at the time of the milestone, and
21 so that’s a much bigger stick than had existed
22 prior before the settlement.
23 We require monthly reports on status. We
24 know where they are actively building so we can
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2 send staff out into the field and witness and
3 observe the build in construction. The
4 milestones, as I mentioned, that are enforceable
5 by the $2,800 per miss penalty are every four
6 months, so that’s a more frequent milestone than
7 existed prior. And the overall build-out
8 schedule, I think, is achievable and so we are
9 expecting them to stay on it.
10 The other thing I’ll mention and this
11 applies also to the BPO grantees. We’re as
12 impatient as the customers without service and so
13 where the BPO grantees and Charter need some
14 assistance in coordinating project work with the
15 utility pole owners. We’ve really engaged in that
16 process. It’s a very intense logistical challenge
17 to get to the hundreds of thousands of utility
18 poles and to hang equipment on those poles in a
19 manner that is safe and protective of the
20 electrical reliability and the other systems that
21 are utilizing those poles. So there is a PSC
22 approved process for how utilities approve access
23 to their poles. The BPO grantees and Charter
24 relies on that process to be able to get timely
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2 approval to safely hang the network. And we at
3 the PSC are facilitating that logistical work to
4 ensure that there are no barriers when it comes
5 to the interrelationship between the providers
6 and utility pole owners.
7 ASSEMBLY MEMBER SANTABARBARA: So with
8 the maps, the updated map now, the new
9 information we have, the data, the funding that
10 we have, the new agreements, are you confident
11 that all areas will at least have the ability to
12 be covered by broadband or are there areas that
13 still are in question?
14 MR. NORDHAUS: Well, we have, yes, we
15 are confident. All areas are covered with the
16 following sort of clarifications. One is that
17 we’re talking about coverage according to the
18 terms of the program, which is 100 everywhere or
19 25 in the most rural area, including satellite
20 for that one percent, which we spoke about. And
21 then, the other piece of it is that you know,
22 Charter has a build-out plan which is fairly
23 large. And one of the issues that we’ve had is
24 that Charter has the ability to change where
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2 they’re building. So they told us we are building
3 this area and we auctioned off the balance and
4 then there were changes made. So when we are
5 counting on them to do a certain job and they
6 change the job, it sort of creates a challenge.
7 So the PSC, we’ve worked together on
8 this complex issue for many months, if not years
9 and Tom can talk more about it. But there are now
10 sort of very strict limits on what Carter can do
11 in terms of the changes. But to the extent that
12 there are changes in their plan, we have to see
13 this through to the very end to make sure that
14 Charter completes the job on time according to
15 the plan and if they leave any gaps we have to
16 make sure they’re addressed, so with that caveat,
17 yes we are confident.
18 ASSEMBLY MEMBER SANTABARBARA: And is
19 there a timeline?
20 MR. NORDHAUS: Yes, absolutely.
21 ASSEMBLY MEMBER SANTABARBARA: Okay. So
22 what is the timeline?
23 MR. NORDHAUS: Well, for the BPO, like I
24 said, everything next year and then for Charter
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2 2021.
3 ASSEMBLY MEMBER SANTABARBARA: Okay.
4 Thank you.
5 SENATOR MAY: Thank you, so we have
6 questions from Senator Metzger, Senator Seward,
7 Senator Ritchie and senator Helming and Senator
8 Little. So we’ll start with Senator Metzger and I
9 guess we’ll go the same way, alternating.
10 SENATOR METZGER: Thank you, Senator
11 May. So, I’ve got questions for each of you.
12 First of all I want to thank you for all the work
13 you have done to date. And I had mentioned
14 earlier I represent many Delaware communities.
15 That’s an incredibly rural district and it’s
16 going to be entirely built out with fiber which
17 is pretty amazing, working with rural electricity
18 cooperate and local telephone companies. But in
19 other parts of the district, and you talked
20 about, sort of confirming who is going to get --
21 verifying who is going to have broadband and, you
22 know, where they’re falling short.
23 My concern is, I think it’s very
24 difficult to monitor or confirm the quality of
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2 the service. It’s not whether you have it or not.
3 It’s are you getting poor service and I want to
4 hear from you what you’re going to do. We get a
5 lot of complaints about HughesNet and the fact
6 that they’re not -- the customers are not getting
7 their promised speeds. So how can you verify that
8 they’re getting the quality of service they
9 should be getting? I’ll start with that one
10 question.
11 MR. NORDHAUS: Sure. Well, like I
12 mentioned earlier, we have a contract with these
13 providers and they have to perform on the
14 contract. So to the extent that they’re not
15 performing, then they will be in violation of the
16 contract with the state and we will take
17 appropriate actions under that. In general, I
18 will say I believe we enjoy very good relations
19 with all the partners who are working with us. If
20 someone in the BPO office calls and says we have
21 a problem with this location or this town where
22 service doesn’t seem to be working, we haven’t
23 had that situation but whenever we call, they’re
24 extremely responsive.
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2 We are also deploying state-of-the-art
3 networks and so I think in general, with regard
4 to the fiber, one of the big benefits of fiber,
5 in addition to the speed is fiber is far more
6 cost effective to run, it requires lower cost of
7 maintenance over time, copper is subject to, it
8 can fray, it expands in the summer and winter it
9 can be cut, you know, it’s more fragile
10 essentially, whereas the fiber optics is going to
11 be a benefit going forward. So I expect across
12 the board to see upticks in customer satisfaction
13 in any areas served by fiber. And certainly if
14 there are complaints about a BPO service, let us
15 know.
16 Outside of BPO service, that’s another
17 issue, obviously not under the broadband program,
18 but the attorney general I believe is going to be
19 speaking and they’ve done some investigations and
20 can speak about service quality and advertising
21 and those points. On satellite, I think one of
22 the confusion points that has come up is that
23 there are multiple generations of the satellite,
24 the prior two generations of the satellite were
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2 significantly slower. It’s only the new
3 generation five that offers 25 megabits. I
4 personally, before we awarded it, I personally
5 speed tested it. I went down to their
6 headquarters like two years ago when they first
7 launched it. I speed tested it over the summer.
8 So I mean I have been able to achieve those speed
9 levels. I’m not saying that, you know, that
10 person was on the wrong generation, but we do
11 have a very direct dialogue with Hughes. If
12 there’s any customer that’s not getting what they
13 were promised, call me, please.
14 MR. CONGDON: Can I just add briefly
15 that the department also has specialized
16 equipment and we speed test to validate the speed
17 upgrades that were committed to in the merger
18 approval order.
19 SENATOR METZGER: Great. And two more
20 questions related to actually the Charter
21 agreement. So Charter failed to meet its
22 responsibility to extend coverage to these
23 145,000 residents. It’s a long time, two years
24 can be -- for these residents to, that’s part of
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2 the agreement, before they’re going to get
3 service. Is that set in stone? Is there a way to
4 speed that up, given the fact that they were
5 already supposed to have that service?
6 MR. CONGDON: So, I think there’s just
7 physical limitations. We are trying to go as fast
8 as we possibly can. There was litigation and a
9 dispute in that litigation that lasted for close
10 to a year. And so with that resolved, I think
11 we’re now on track and for us it was critically
12 important to get the build where it was intended,
13 to actually hold the company accountable so that
14 they knew that we were serious about achieving
15 the build-out where we intended it.
16 So the settlement, I think, achieves the
17 policy goals and it establishes much more
18 stringent penalties for future noncompliance. And
19 as I said earlier, I think one of the critical
20 things is that it removed any ambiguities as to
21 where the build-out needs to occur.
22 MR. NORDHAUS: By the way, if I could
23 add one thing. That’s the end date for the last
24 home, so they’re radically, I think every six
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2 months there is a --
3 MR. CONGDON: Every four months.
4 MR. NORDHAUS: -- every four months.
5 MR. CONGDON: They’re making progress
6 towards the milestones. The first milestone under
7 the new settlement agreement is this month.
8 Supposed to hit 76,000 and change so we will look
9 very closely at that for compliance purposes.
10 SENATOR METZGER: Now I’ve had
11 constituents say that they’ve been quoted a price
12 from Charter for $9,000 or $10,000 to get
13 broadband service to their home. I’m trying to
14 imagine if our electricity provider wanted to
15 charge that much to get electricity to the home.
16 So what’s going on in those instances?
17 MR. CONGDON: So that is, you’re
18 referencing what is called in the regulatory
19 world, the line extension fee. And so to the
20 extent that there is someone near the Charter
21 network, but not within the required network of a
22 franchise or if they’re not in the build-out plan
23 pursuant to the regulatory requirements of the
24 commission’s merger approval, those customers, if
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2 they want Charter service or another provider
3 service that’s nearby, will contact that company
4 and the company will give them a quote as to how
5 much it would cost to run the network to their
6 premises.
7 As a service, you know, under our
8 jurisdiction, it’s cable and telephone. It’s not
9 broadband and so it is distinct from a regulatory
10 standpoint. You compared it to electricity. There
11 is not a universal service requirement by law or
12 reg. There are standards on density that they
13 have to meet for sure. There are regulatory
14 requirements pursuant to our merger approval and
15 through franchise agreements that we will
16 absolutely enforce. But where there is a premises
17 that exists outside of that, they quote these
18 kinds of line extension fees and that represents,
19 you know, a customer that would be outside of
20 their area.
21 MR. NORDHAUS: Yeah, just to add a
22 little bit the way, the franchises work with a
23 lot of towns because cable is not regulated in
24 the way that Tom was explaining, they have a
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2 franchise which says they’re required to build-
3 out in the areas that are of a certain density,
4 like we talked about earlier with the
5 profitability. So those tend to be 30, 35 homes
6 per mile. There’s different metrics. And then,
7 when there’s someone outside of that, they often
8 have to give them a quote. So we say, okay I’m
9 not in the density but I want service, how much
10 would it cost?
11 Those homes are not considered served by
12 Charter in our program. We don’t consider, if you
13 can call Charter and get quoted $12,000, we don’t
14 say, oh, great, you’re served. You’re not served
15 if you have to pay $12,000. So those would be
16 considered outside of the Charter footprint from
17 our standpoint and we would be under our own sort
18 of self-imposed obligation to make sure the BPO
19 had a better option than that. And maybe that
20 person didn’t like their current provider or
21 maybe the service is still being constructed,
22 whatever it is, we should look into that. But
23 that’s not something that we would consider a
24 normal sort of acceptable solution for coverage.
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2 SENATOR METZGER: Okay. Thank you.
3 ASSEMBLY MEMBER THIELE: Thank you. So
4 today, we heard percentages today. How many New
5 Yorkers do not have broadband service as you are
6 defining it?
7 MR. NORDHAUS: SO we look at how many
8 have access to broadband, in other words, if you
9 want it you could call up and get it. And those
10 are the statistics as opposed to who physically,
11 the number of customer subscription, so today 98
12 percent of the state has access.
13 ASSEMBLY MEMBER THIELE: Okay, so two
14 percent, what does that two percent translate
15 into as far as number of --
16 MR. NORDHAUS: Well, we roughly think of
17 the state having 8.1 million households, so rough
18 numbers, every point is around 80,000, so around
19 160,000 plus or minus, I’d have to get the exact
20 number for you, but --
21 ASSEMBLY MEMBER THIELE: And that’s
22 today?
23 MR. NORDHAUS: Today.
24 ASSEMBLY MEMBER THIELE: A lot of talk
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2 about quality. Is there a measure? Is there a
3 standard that you use to measure quality? I can
4 tell you on Long Island when it comes to service,
5 as we heard this morning, there are areas that
6 are dead zones for cell phone service or for Wi-
7 Fi. Out on the east end of Long Island when the
8 population doubles and triples, your quality of
9 service of Wi-Fi and cell phone services is not
10 very good. How do you define what is good
11 quality? I mean it’s one thing to say you have
12 access to broadband or you have access to service
13 but how do you measure quality? What is the
14 standard that we’re using?
15 MR. NORDHAUS: So, you know, first of
16 all, I think you know this, but a lot of people
17 do call our service office and say hey, this is
18 great we have a big broadband program but my cell
19 phone still doesn’t work. And we explain cell
20 phone coverage is a different mandate. In fact,
21 we’re working on that mandate now. So we do want
22 to make sure that folks know that that’s also a
23 top priority of the state is better cell phone
24 coverage. But that would be outside of the BPO
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2 and outside --
3 ASSEMBLY MEMBER THIELE: I understand.
4 MR. CONGDON: I can speak to areas that
5 are in the PSC’s jurisdiction like landline,
6 telephone and cable. We measure service quality
7 through a number of measures. Complaint rates,
8 both to the company and to our office, is one
9 measure. Through our merger approvals, we do
10 require and in a number of instances on the cable
11 infrastructure, improvements to provide broadband
12 speeds and we’re out in the field and actually
13 validating and testing those speeds to ensure the
14 quality is what was envisioned with the
15 regulatory requirement. As Jeff mentioned with
16 respect to cell phone coverage, that is a very
17 topical subject that we’re now investigating on
18 this Cellular Coverage Task Force.
19 MR. NORDHAUS: And the sort universal
20 sort of metric that people do use for broadband
21 is really speed, I mean that is the key metric
22 that is used in the industry. It’s megabits per
23 second, download speed, also upload speed is
24 increasingly becoming important for people who
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2 want to do a communication from your home, let’s
3 say you want to do a video conference. It
4 requires a symmetrical service and of course, you
5 would look at outage time. But in general, it’s
6 speed is the key metric and that’s the one that
7 our program is based on and the FCC is based on.
8 ASSEMBLY MEMBER THIELE: Okay. You
9 talked about fiber kind of being the gold
10 standard, you talked about satellite and the
11 difficulty. What percentage of New Yorkers get
12 their service through fiber or satellite or
13 cable? What are the --
14 MR. NORDHAUS: Well, in general, we
15 don’t have subscription information in terms of
16 how people are actually paying for service right
17 now, but in terms of the sort of metrics of our
18 program, we have 99 percent that can achieve 100
19 megabits or better, which could be through fiber,
20 it could be through cable like Charter and then
21 the last one percent is satellite. Of course
22 satellite is available in other areas, too.
23 So in general, we are approximately 99
24 percent at the 100 megabit, or better, which is
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2 generally fiber or cable.
3 ASSEMBLY MEMBER THIELE: I haven’t heard
4 anybody say 100 percent yet, today. I’ve heard
5 98, 99, 99 plus. What would -- nobody has said
6 we’re going to get to 100 percent. What would it
7 take to get to 100 percent? I think the people we
8 represent, you know, at some point there is an
9 expectation that everybody should have this
10 service. How do we get to 100 percent and what is
11 it we should be doing to get there?
12 MR. CONGDON: Well, I think one of the
13 challenges with the build-outs that are underway
14 is that our state is dynamic. There’s new
15 development that pops up, there’s some premises
16 that close or, you know, get out in the field and
17 what looked like it was a home on a map doesn’t
18 actually exist when you get out in the field to
19 serve it. And so there’s a dynamic aspect to this
20 that will always be there and we will have to
21 react to. As the build-outs get completed and it
22 becomes clearer to all of us where there may be
23 pockets that are left. Under the settlement with
24 Charter there’s a $12 million fund that is meant
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2 to be used as sort of a cleanup to get at any
3 pockets that may exist when the build-outs are
4 complete. And so that would be one resource that
5 can be tapped. And all of us will need to look
6 and see how that does, and to the extent that
7 there are other pockets that can’t be reached
8 through that mechanism, then we can consider
9 other mechanisms.
10 ASSEMBLY MEMBER THIELE: What’s your
11 timeline on that?
12 MR. CONGDON: The build-out under
13 Charter is scheduled to go through September of
14 2021. That’s the current build schedule with the
15 enforceable milestones along the way.
16 ASSEMBLY MEMBER THIELE: Thank you.
17 SENATOR MAY: Thanks, Senator Seward
18 needs to leave at 1:00 so I’m going to let him go
19 next.
20 SENATOR SEWARD: Thank you, Senator May.
21 First of all, I want to thank both of you
22 gentlemen for being here today and
23 SENATOR MAY: I think your microphone
24 still isn’t on.
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2 SENATOR SEWARD: Is this better? There
3 we go. First of all I want to thank both of you,
4 Mr. Congdon and Mr. Nordhaus for being here today
5 and also for your willingness to work with us to
6 reach our mutual goal in terms of providing a
7 broadband service to all New Yorkers. But having
8 said that, I wanted to go back to something I
9 thought I heard you say, Mr. Nordhaus in your
10 testimony that there is still fiber that’s being
11 built into areas that are currently served by
12 satellite. And isn’t that a recognition that
13 fiber is better service than the satellite? And
14 if so, shouldn’t our goal be fiber to every home
15 in New York? Shouldn’t that be our goal, to
16 address the reliability and quality of service of
17 issues that we’re all hearing from these other
18 forms of providing service, such as satellite?
19 MR. NORDHAUS: Well, thank you, Senator
20 Seward and good to see you. Yeah, I think that
21 fiber is pretty much widely viewed as the gold
22 standard. It certainly, objectively speaking,
23 offers much higher speeds than satellite is
24 capable of and also lower latency, which is an
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2 issue of satellite being 22,000 miles away. So
3 from a technical standpoint, fiber and in that I
4 would include cable, because a lot of cable is
5 actually built with fiber in the backbone as
6 well, it a tremendous product for broadband. The
7 issue frankly is just cost. It really just comes
8 down to money. I mean if you could have gold
9 plated service everywhere, you’d probably say I
10 want fiber and cable in every single home, and
11 it’s literally just a question of cost and trying
12 to earn some kind of return on that. But from a
13 service standpoint, I think what you said is
14 right on the mark.
15 SENATOR SEWARD: A couple more quick
16 questions, to the issue of the complaints that we
17 are hearing on the speed, reliability, quality of
18 service from the satellite providers, you
19 mentioned that complaints within areas that are
20 part of the BPO projects should be directed to
21 you. But outside of those BPO areas, where should
22 we be sending our complaints and concerns that we
23 hear about the service? Because, and I think I
24 speak for everyone on this panel, we hear
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2 complaints and I’m just trying to get it straight
3 in my head the difference from what we are
4 hearing from constituents and what we are hearing
5 from you today in terms of how it has improved a
6 great deal. Where do we send complaints in terms
7 of reliability of service?
8 MR. CONGDON: Well, I would say it
9 depends on the nature of the complaint and to the
10 extent it relates to what you know to be a
11 requirement of Charter, we want to hear it. To
12 the extent it relates to video services that we
13 regulate, we want to hear it. To the extent that
14 it relates to telephone service, which is often
15 provided over broadband infrastructure, we want
16 to hear it and we can do something about it. So I
17 think my answer is depending on the nature of the
18 complaint, by all means, send it to us. We have a
19 complaint hotline. We have a very dedicated
20 consumer complaint staff that handles a lot of
21 incoming every day. And they often get good
22 results for customers that are experiencing
23 hardships.
24 SENATOR SEWARD: Okay. Thank you. You’ll
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2 be hearing from us. [Laughter] One final question
3 for Mr. Nordhaus. We’ve gone through the three
4 phases, and one and two are completed and three
5 over the next year will be completed. The $500
6 million that was directed toward this effort a
7 few years ago, in 2015, as I recall, has been
8 used up or fully committed. In order to meet the
9 needs of New Yorkers, should we be looking at a
10 phase four or a phase five which would require
11 some additional state dollars directed toward
12 this effort? But it just strikes me that our work
13 is not done and may not be done once phase three
14 build-out is completed and the Charter and other
15 build-outs are completed.
16 There is still going to be some areas
17 unserved or served in kind of a second class way.
18 And so do we need a phase four and five if the
19 governor and legislature could agree on
20 additional monies to be directed toward this
21 effort?
22 MR. NORDHAUS: Well, you know, there
23 still will be, I mean it depends ultimately on
24 the goal. If the goal is to have you know, what
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2 was the goal of this program 100 megabits and 25
3 in the most basically prohibitively expensive
4 areas and maximize the use of the $500 million
5 through an auction, I think we feel that we were
6 able to accomplish that. That we took that money
7 through getting the federal money and the auction
8 and just stretched it, partnering with the PSC to
9 have Charter covered 150,000 homes. Through all
10 these different measures, we did everything we
11 could to make that funding stretch as far as it
12 possibly could. We still have one percent that’s
13 through wireless. Some of your constituents and
14 collectively have said that they want something
15 better, and so to the extent your discretion and
16 the governor’s direction to do that, of course we
17 standby to implement. So it’s ultimately a policy
18 and funding decision, but there is a number of
19 homes that are with the satellite and that is
20 something that obviously you brought to our
21 attention. So if that was the decision, we would
22 be happy to help.
23 SENATOR SEWARD: So if the legislature
24 and the governor could agree on some additional
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2 funds here, you could put them to good use?
3 MR. NORDHAUS: I think so. I think so. I
4 mean I think that, you know, you always want to
5 think what is the right sort of policy and sort
6 of the cost per home that makes sense, and we
7 were seeing in the last stages of our auction
8 that the cost per home was getting very, very
9 high. And we did a lot of analysis into other
10 state and federal programs as to how much capital
11 does it make sense to subsidize to bring
12 broadband service to a home. And so through our
13 auction, you know, it started in round one as you
14 might expect at 2,000 or there were some cases
15 that were below that. Then we saw it tick up and
16 then in round three we were seeing, we funded
17 some projects at 7,000 to 8,000 per home. But we
18 were seeing some proposals come in substantially
19 north of that. We saw some over 10,000. We, I
20 believe, even saw some over 20,000. So there
21 becomes a point where you say what’s the most
22 effective use of capital?
23 I think in the remaining kind of one
24 percent, there’s probably some in the portion of
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2 that that you could still do quite cost
3 effectively. We’d have to do analysis around that
4 and then there might be some that you’d say this
5 person lives 20 miles off the grid, and as much
6 as we want them to have broadband, is would cost,
7 you know, pick a number, 500,000 a million. Is
8 there a point that you say we want everyone but
9 that home is just too uneconomic based on its
10 location?
11 So I think that in general we could put
12 that money to use. We also want to balance that
13 against sort of making sure, you know, it’s still
14 an economic use and that we are using alternative
15 technologies to cost effectively get to some
16 folks whether satellite or another wireless
17 technology including wireless or other options
18 that are out there.
19 SENATOR MAY: Thank you.
20 ASSEMBLY MEMBER THIELE: Assembly Member
21 Woerner.
22 ASSEMBLY MEMBER WOERNER: Thank you very
23 much. Thank you both for your testimony. It was
24 very informative. I want to make sure that I’ve
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2 got the facts right here. So when the Broadband
3 Project Office finishes with round three, it will
4 be 256 new locations which equates to 2.4 million
5 homes that will now have broadband coverage at
6 the 100 megabits level. Is that, do I have that
7 right?
8 MR. NORDHAUS: A little -- can I like
9 sort of take that in a couple of pieces. So
10 256,000 is the amount that is done by the
11 Broadband Program so that’s the number of
12 locations served by the broadband program.
13 ASSEMBLY MEMBER WOERNER: And how many
14 homes does that equate to?
15 MR. NORDHAUS: That’s essentially homes,
16 256,000 locations, essentially homes. So there
17 will be obviously multiple people in the homes
18 and often businesses will be in addition to that.
19 So we don’t count businesses, but they’re usually
20 picked up along the way, because they’re not in
21 the Census block. And in addition, you have the
22 145,000 Charter locations on top of that.
23 ASSEMBLY MEMBER WOERNER: Right. So
24 somewhere in your testimony you used the number
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2 2.4 million homes.
3 MR. NORDHAUS: Yes.
4 ASSEMBLY MEMBER WOERNER: And it
5 appeared to be used interchangeably with the
6 locations number, which is why I don’t -- so what
7 is the 2.4 million homes?
8 MR. NORDHAUS: 2.4 million is sort of
9 the grand total that I referenced that includes
10 the 256,000 in our program, the 145,000 locations
11 and also the speed upgrades of its existing
12 network, which was agreed as a merger condition.
13 So when we started it was 50 megabits and by
14 2018, 100, and now this year 300 megabits. So we
15 included that condition, which was negotiated by
16 the state in that number.
17 ASSEMBLY MEMBER WOERNER: So that
18 includes the underserved?
19 MR. NORDHAUS: That includes the
20 underserved, exactly, yes.
21 ASSEMBLY MEMBER WOERNER: Got it. Okay.
22 So the 256,000 locations, at one point in your
23 testimony, you said the vast majority of these
24 will be fiber to the home. What does a vast
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2 majority equate to?
3 MR. NORDHAUS: Well, what I was
4 referring to was the vast majority of the grants,
5 meaning the dollars, because the cost per home
6 for satellite. So, I, you know, the vast majority
7 of the dollars expended through our program are
8 to serve fiber to the home. I’ll have to get that
9 exact percentage for you.
10 ASSEMBLY MEMBER WOERNER: So what
11 percentage of the 256,000 then are actually fiber
12 to the home?
13 MR. NORDHAUS: Well, it would be around
14 188,000 because 79,000 are satellite.
15 ASSEMBLY MEMBER WOERNER: So I’m going
16 to try to say this in a way that doesn’t sound
17 snarky.
18 MR. NORDHAUS: Okay.
19 ASSEMBLY MEMBER WOERNER: But I’ve
20 traveled all over some rural communities that I
21 represent. I’ve been in some in the Adirondacks
22 that I don’t represent. And I see telephone poles
23 throughout it and they all have wires running on
24 them so I know that, except for the ones that are
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2 choosing to be off the grid, they all have access
3 to electric utility and landline phones and
4 somebody -- and the density hasn’t gotten any
5 greater in many of these area, than when those
6 lines were originally run. So somebody at some
7 point thought, I’m going to have to run these
8 lines even though on paper I can’t make it work
9 from a profitability standpoint.
10 So given that, I find myself asking why
11 is it that we can’t figure out how to get fiber
12 on those telephone poles to locations that are
13 served by electricity and landline phones without
14 having to consider whether it is as profitability
15 to do it in those areas as it is to run those
16 lines in say Wilton, New York, where we’ve got
17 lots of people living.
18 So I just am, I’m really scratching my
19 head at this notion that -- because the issue,
20 for many people, is that satellite’s not good
21 enough. The latency problem means that it doesn’t
22 work for business. The latency problem means that
23 they can’t use -- we can’t do telemedicine over a
24 satellite network. And it’s sort of a fundamental
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2 flaw in the strategy. So again I’m just like why
3 is it we have to make a profit consideration
4 here? Why is it that we can’t just regulate this
5 the way they must have for electric and landline
6 phones to say, gosh, you want to work in our
7 state, you got to serve these communities, the
8 poles are there, run the lines.
9 MR. NORDHAUS: Well, I don’t think it’s
10 snarky. I think it’s actually a great point and
11 something that’s we, through this program, have
12 sort of, you have to ask those fundamental
13 questions, right? When you see something that is
14 an essential utility and absolutely necessary
15 like broadband, which our office has been living
16 and breathing for four years, we ask the same
17 question, right.
18 And I’ll start and I’ll turn it over to
19 Tom, because I think the question is
20 fundamentally a regulatory one. But if you go
21 back to telephony, and when I was growing up,
22 when we were growing up there was something
23 called the Universal Service Fund and it was not
24 economic to put phone lines -- those same phone
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2 lines you saw would not have been there but for
3 the Universal Service Fund which was people in
4 the cities are paying into the fund which is
5 disbursed to the rural areas to support the
6 deployment of phones in the rural areas.
7 And what happened is broadband just grew
8 up in a different way. And it’s come up under a
9 different regulatory regime and that’s the answer
10 is that a lot of it actually grew out of the
11 cable business which was granted on a franchise
12 base just like cable TV, right. It was on a
13 franchise basis from towns and grew out. And I
14 think what’s happened is over time, it’s become
15 more of a utility which is what you’re talking
16 about.
17 ASSEMBLY MEMBER WOERNER: So then I’ll
18 go back and I’ll let you jump in, Tom, in a
19 second, but then I go back to the question and I
20 can’t remember whether it was Senator May or
21 Senator Metzger asked you, which is wouldn’t we
22 be better off regulating broadband as a utility
23 in order to ensure that the coverage is, in fact,
24 universal?
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2 MR. CONGDON: So that is a core policy
3 question that is being asked all across the
4 country and the broadband issues generally, it’s
5 been viewed to date as something that has
6 innovated, because it wasn’t regulated and you’ve
7 got people on both sides of that policy question.
8 With respect to how the constituents in your area
9 got electricity service, I mean those investments
10 were made by a utility with a regulated rate of
11 return and the rates are set by the commission.
12 We simply don’t regulate the rates that are
13 charged even for cable, but certainly not for
14 broadband. And so if there was a regulated rate
15 of return, that would be a different calculation
16 that a company would make with respect to where
17 it’s deploying its networks.
18 ASSEMBLY MEMBER WOERNER: Thank you.
19 SENATOR MAY: Thanks, Senator Ritchie
20 had a question.
21 SENATOR RITCHIE: Just along the lines,
22 and I guess I will give you constituent issues so
23 I can make my point a little easier. I think, you
24 know, the progress being made has been very
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2 helpful and a lot of people are really happy with
3 the service, but sometimes it’s actually making
4 the situation a little worse for some of my other
5 constituents when their neighbor has now high-
6 speed and they can see their house and it’s not
7 been extended. And an example of that is we have
8 a constituent and the Census blocks to the north
9 and south of the property have been bid on by the
10 companies and those constituents are very happy;
11 however, this customer, or this constituent is
12 only a tenth of a mile away from both of those
13 blocks and wasn’t able to get service.
14 I understand, you know, if it’s 20 miles
15 away, that person probably would want the service
16 but I understand the cost for 20 miles away. But
17 when it’s less than a tenth of a mile, how can we
18 possibly tell these people that they shouldn’t be
19 entitled to, you know, fiber, that they have to
20 sign up for the satellite service that, along
21 with all my other colleagues, I hear quite a few
22 complaints about. So is there a plan to address
23 that, if it’s somebody who is less than a mile or
24 a tenth of a mile away who is kind of left in the
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2 pockets?
3 MR. NORDHAUS: Right. Well, thank you,
4 senator for the question and I understand that
5 situation from what you’ve described. You know,
6 at the end of the day, I would say two things.
7 One is, you know, coming back to first principles
8 in terms of the Census blocks, like we did feel
9 based on the conversation we had very earlier in
10 this meeting that it was very important to
11 maintain the integrity of these Census blocks.
12 That once you open the door to somebody just
13 serving okay, there are these four on the edge, I
14 just want to serve them but I’m going to leave
15 the other ones out. You know, Assembly Member
16 Santabarbara had pointed out the problem of
17 having Census blocks that are only partly served
18 and what that can do to our maps. So we really
19 wanted to sort of keep that principle, that you
20 have to serve everyone. And so that was the first
21 thing and that’s why it was very important that
22 we do that.
23 With respect to folks who are just over
24 the edge in another Census block, we’ve had
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2 extremely good luck working with our carriers to
3 sort of say to them, hey, it would be really
4 helpful if you would sort of go over there. So if
5 you wanted to, you know, we do receive those
6 types of letters and we do want to support those
7 folks on a case-by-case basis. There is no
8 obligation for them to serve but we say look, we
9 spell it out and we try to assist in any way we
10 can on any individual case so if you want to
11 follow up with me and we’ll see if that tenth of
12 a mile, you know, is possible.
13 But in general, the principle of it is
14 that there might be a tenth of a mile, it might
15 be ten miles. And then, if you go into that
16 block, there’s also people who are probably
17 behind them, so we’ve got to stick with getting
18 them to serve everybody and over time, I think
19 that person will get served. But we are happy to
20 work with you to try to have it addressed in the
21 meantime.
22 SENATOR RITCHIE: We forward quite a few
23 constituents’ names to the Broadband Program
24 Office. Can you just tell me what happens from
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2 that point? Does somebody reach out and
3 specifically try to address that issue or just do
4 they just go on a list?
5 MR. NORDHAUS: No, I mean we have staff
6 who go through e-mails and we try to respond to
7 every single inquiry, so if you want to reach out
8 to me directly or to that e-mail, we will
9 absolutely follow up.
10 SENATOR RITCHIE: Well, it would just be
11 helpful when we’re sending names over if whoever
12 is doing the follow up on your end, if they could
13 just shoot us back an e-mail just because it
14 would be good to know where they ended up,
15 whether the company was willing to go forward and
16 connect service or it’s a constituent we need to
17 continue to follow for the next phase.
18 MR. NORDHAUS: Okay. We’d be happy to.
19 SENATOR RITCHIE: And then my last
20 question is, I’ve gotten a few complaints that
21 there has been a hold up on the fiber optics, the
22 right of way because of the new easement, the new
23 DOT easement and some are saying the delays are
24 as long as 30 days because of it. So I’m just
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2 wondering if either one of you have heard about
3 delays with regards to the new DOT easements?
4 MR. CONGDON: I’m not sure which
5 specific issue you are referring to. But we have
6 heard some DOT issues can come up from time to
7 time. As we mentioned earlier, you know, we’re
8 dealing with hundreds of thousands of utility
9 poles and thousands of miles of projects. And so
10 things like that do come up. And when it’s
11 another state agency, either the BPO or the
12 department reaches out to them to help figure out
13 what the problem is and what can be done to help
14 accelerate a solution.
15 SENATOR RITCHIE: Okay. Thank you.
16 ASSEMBLY MEMBER THIELE: Assembly Member
17 Smullen.
18 ASSEMBLY MEMBER SMULLEN: Thank you. My
19 question Mr. Nordhaus, you mentioned a couple of
20 times the one percenters here. In this case, one
21 percent isn’t necessarily a good thing. It’s
22 either unserved or highly underserved is how I
23 would describe many of the people in my district.
24 Because according to a presentation that was
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2 given at the Adirondack Park Agency last year,
3 round three awards in the program said that the
4 program’s mission will be accomplished for 100
5 percent of the New Yorkers in the Adirondack Park
6 region. The citizens I represent know what that
7 means. It means they have satellite that’s spotty
8 at best and doesn’t work most of the time or
9 they’re in these pockets of isolation where they
10 have the lines run through the area. Some people
11 have it and some people don’t and that’s what 100
12 percent coverage means to those citizens today.
13 Now you’ve given us some reason for hope
14 here and I’m hoping to ask you what today you’ve
15 talked about 25 megabit per second satellite
16 coverage that’s coming, that’s anticipatory. But
17 five years from now, what is 100 percent coverage
18 going to mean for the Broadband Program Office
19 from a process standpoint? That’s what people
20 want to know? What we are doing or do we need to
21 change public policy and legislate a different
22 scheme here? So if you could please let us know
23 what is five years from now going to look like
24 for 100 percent coverage for the people in the
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2 Adirondack Region?
3 MR. NORDHAUS: Right. Well, thank you
4 for your question and I understand what you’ve
5 outlined. First of all, I just wanted to sort of
6 state that, you know, the goals of our program
7 were set forth by legislature and Governor Cuomo
8 when the funding was approved in 2015, which is
9 the $500 million program and the goals were to
10 achieve 100 megabit coverage with 25 in the most
11 basically rural remote areas where the cost to
12 achieve 100 megabit connection was prohibitively
13 expensive. So it was clear that, you know, when
14 we issued awards and obviously Adirondack Park
15 received a substantial investment of capital,
16 both for fiber and then of course, for filling in
17 the gaps as you talked about the 100 percent
18 meaning every location known to us was covered
19 according to the principles of the program, not -
20 - I was not stating it was 100 percent at 100
21 megabits, it was 100 percent coverage. So I
22 wanted to clarify that and we have gone through
23 that today. I think everybody at this point is on
24 the same page in terms of the, what the program’s
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2 goals were and how it sort of set about trying to
3 achieve those possible.
4 The second thing is just to clarify that
5 satellite, the 25 megabits, that has been
6 launched so that is now available for
7 constituents today and they can access 25
8 megabits through that service.
9 You know, in terms of five years out, I
10 think we expect to see certainly on the fiber
11 side because of the scalability of fiber, that
12 those networks will continue to grow and
13 proliferate and the speeds will be even faster.
14 But if you had any specific other questions, I’ll
15 be happy to answer them.
16 ASSEMBLY MEMBER SMULLEN: Are there any
17 jump the curb technology things that we can look
18 forward to be able to let our citizens know that
19 higher speeds are coming?
20 MR. NORDHAUS: That’s a great question
21 and actually that’s one we received many times
22 during the formation of this project because back
23 in 2015, when we did town hall meetings and went
24 around the state to gather information before the
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2 program rules were established, we did a request
3 for information and we tried to get constituent
4 feedback on what were their concerns and try to
5 identified issues upfront before the program was
6 launched. And one of the questions that hit
7 memory lane, but one of the questions that came
8 up was essentially. You know, my background is
9 kind of investment, how do we know this is a good
10 investment? We want to make sure this $500
11 million is being invested well. One of the things
12 we don’t want to find out that is that ten years
13 from now, we’ve invested in a technology that’s
14 no longer viable.
15 And the good thing is that we feel very
16 good about that because we know we’ve invested in
17 fiber optics and there is nothing better. As I
18 say, all roads lead back to fiber, even cellular,
19 if you want to expand. We want to expand cellular
20 networks. How do we do that in the Adirondacks?
21 Well, we put up towers and those towers have to
22 link into fiber. So we’ve laid the infrastructure
23 of the future. Fiber optics basically carries
24 data at the speed of light It is not possible to
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2 be leapfrogged. Nothing can go faster so I think
3 we feel really great about, you know, the
4 infrastructure we put in place and we want to
5 continue to move to a fiber based infrastructure.
6 ASSEMBLY MEMBER SMULLEN: Thank you for
7 your testimony and for your work.
8 MR. NORDHAUS: Thank you very much.
9 SENATOR MAY: Alright, thanks. Senator
10 Tedisco.
11 SENATOR TEDISCO: Just one question. We
12 get a lot of complaints, as you’ve heard. One of
13 my constituents in my senate district, I mean
14 there’s several and this is just an example of
15 it, none have gone this far, but has had a
16 customer service ticket out for four months. Is
17 that possible? Why would that ever happen? How
18 could that ever happen? Four months? They’ll be
19 there, they never show up. They’ll be there, they
20 never show up. They’ll be there, they never show
21 up.
22 MR. CONGDON: This is a broadband outage
23 or cable or all three? Cable, telephone?
24 SENATOR TEDISCO: Broadband.
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2 MR. CONGDON: You know, I think that
3 doesn’t sound like a very good business model for
4 that provider, if it’s a provider.
5 SENATOR TEDISCO: You think?
6 MR. CONGDON: If it’s a provider that
7 is, you know, receiving BPO funding.
8 SENATOR TEDISCO: It’s Frontier.
9 MR. CONGDON: Frontier?
10 SENATOR TEDISCO: Yeah. We get a lot of
11 complaints from Frontier.
12 MR. CONGDON: So, you know, that’s
13 unacceptable.
14 SENATOR TEDISCO: It is.
15 MR. CONGDON: I think that everyone
16 would agree. The question is what can be done. If
17 it’s a pure broadband play versus something
18 that’s a regulated service, but we’d be happy to
19 look into it further, if you want to have that
20 constituent reach out to the PSC, we’d be happy
21 to look into the specifics of the complaint.
22 SENATOR TEDISCO: Because it kind of
23 seems they don’t have the manpower or the
24 numbers, because many of these individuals are in
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2 isolated areas. So it seems like they’re waiting,
3 let’s wait for five to ten complaints from those
4 same closer proximities, then we’ll send some
5 people out there, but that’s unacceptable if
6 we’re going to have statewide service.
7 MR. CONGDON: I think we agree. It’s
8 unacceptable, and we’d be happy to look into the
9 complaint in more detail.
10 SENATOR TEDISCO: Okay.
11 SENATOR MAY: Senator -- we’re done on
12 this side? Okay. Yes, so Senator Helming.
13 SENATOR HELMING: Thank you. Thank you,
14 gentlemen both for your testimony. It’s
15 interesting, when I was driving to today’s
16 hearing, I was flicking through radio setations
17 and I landed up on NPR because the subject was
18 broadband. And what stuck in my head at the base
19 of the Grand Canyon, you can get reliable
20 internet service. And I think to myself, well how
21 the heck do we not have reliable service in the
22 Finger Lakes? We’re not that rural. We’re between
23 Syracuse and Rochester. Why do we have so people
24 many people who are unserved.
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2 You shed some light today and I
3 appreciate that. But what I’m wondering about too
4 is our -- is ESD, is it PSC, whoever it is, are
5 they working with -- are you working with town
6 and community leaders to establish where the
7 priorities are, where the precedence should be?
8 And one of the reasons that I bring up the
9 question, I provided written testimony from a
10 number of the counties, the six counties that I
11 represent today. And in Wayne County, I found it
12 interesting, including their testimony is the
13 fact that of the 41,000 plus housing units in the
14 county, almost 7,000 are unserved. That’s 17
15 percent of the population, or 17 percent of the
16 county’s housing units.
17 And that’s significantly higher than the
18 New York State Broadband Office estimate of a
19 total of 772 unserved or underserved areas. So
20 again, I’m wondering, are you working with local
21 leaders, whether it’s at the county level, the
22 town level, to figure out where the priorities
23 are.
24 MR. NORDHAUS: Thank you for your
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2 question and that’s interesting about the Grand
3 Canyon, so a good anecdote to keep in mind, I
4 think. With respect to the county data, we would
5 have to look at that. I’m not sure, I mean there
6 are, as we’ve discussed, a lot of problems with
7 the maps that are out there on the federal level.
8 They do tend to overstate things and kind of, you
9 know. So we don’t really spend much time looking
10 at the federal data because ours has a lot more
11 granularity.
12 And basically our goal has been to get
13 broadband to all, 100 megabits wherever possible
14 and then the remainder at 25. So we coordinate
15 closely with all leaders, including county
16 leaders who reach out to us. We are always
17 available for those types of meetings or calls
18 and we would be happy to follow up with you. But
19 our overarching goal and the principal we follow
20 is we need to get broadband to everyone, so we
21 don’t really sort of prioritize one area over the
22 other. We say everyone needs broadband, because
23 it’s an absolute necessity.
24 SENATOR HELMING: Working with your
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2 office, I’ve been told that within my district,
3 almost 8,000 locations without prior access will
4 be served. I just want to clarify. There are a
5 number of questions about does a location equal a
6 household, or is it something else. Is it a
7 regional? Can you clarify just really quickly for
8 me.
9 MR. NORDHAUS: I would have to look at
10 the 8,000 number, but I believe it would be
11 households, because what we do is we cover, we
12 look at the data contained in the Census block
13 and then you’re actually required to build-out to
14 every location inside that Census block. So
15 sometimes, the Census block, the Census data may
16 say a given Census block has 20 homes in there,
17 and then we award it to somebody. It turns out it
18 has 24 homes in there. They’re still required to
19 build out to the 24 homes, not just 20.
20 SENATOR HELMING: And real quickly, so
21 we’ve talked a lot about the state mapping today.
22 The state website that’s available. My office, we
23 do direct constituents there, but just a
24 question. So when we direct a constituent, and
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2 they put in their address and what pops up is,
3 project completion is subject to validation by
4 the Broadband Program Office. If the BPO field is
5 empty there is no award applicable at this
6 location. What’s the next step?
7 MR. NORDHAUS: Sorry, could you repeat
8 the second part of that? I understand we do the
9 validation, but what was the second part?
10 SENATOR HELMING: If if the BPO field is
11 empty, there is no award applicable at this
12 location.
13 MR. NORDHAUS: Oh, I understand.
14 SENATOR HELMING: So, what -- I mean,
15 what does that say to a constituent? What’s their
16 next step other than to call us back and say,
17 well, how do I get on the list?
18 MR. NORDHAUS: Right. Well we can, you
19 know, with your staff, to walk them through the
20 website and what the various terms mean. But, I
21 think you read sort of two, sort of maybe
22 footnotes that are on that BPO page. And we have
23 a column which states the status of the BPO
24 project. And, if there’s a star or a check, it
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2 would say, okay, there’s a project that’s
3 complete. And what we’re noting is, yes, it’s
4 complete. They’ve told us it is complete, they’re
5 offering service, but we’re not satisfied until
6 the validation is done. So, we want to make it
7 clear that we’re still validating it to make sure
8 it’s done.
9 If there is no star there and people are
10 saying well why is it just blank, that would
11 mean, if there is no comment there, it’s either,
12 in processor or it’s complete. There’s no other
13 choice. If it’s blank, that means there’s no BPO
14 project, which means, it’s either already served
15 or, it could potentially be in a Charter
16 location.
17 SENATOR HELMING: So, then, there would
18 be a second step to go to the map to find out if
19 it’s in a Charter location? Why can’t it just say
20 right there, for ease for legislative staff or
21 constituents, you know, put in my address. You
22 get a list of four different service providers,
23 and then you get what I just read to you.
24 MR. NORDHAUS: I am extremely familiar
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2 with what you’re saying and I completely
3 understand where you’re coming from. So, that was
4 also my goal for the website, as a person who
5 likes to use websites and have them be very easy
6 and very simple, that would seem extremely
7 logical. So the way we structured the website is
8 enter the address and all existing providers are
9 there, and, the BPO provider is there. So
10 everything that we have access to is there.
11 In addition, we do have the Charter
12 data, which is the only piece that’s missing. But
13 unfortunately, that is subject to a non-
14 disclosure agreement and we have tried very hard
15 to, you know, have that relaxed so we could
16 include it on the website. But Charter has
17 refused to allow us to do that. We’ve asked many,
18 many times. I welcome any support on that. I have
19 kind of tried and can’t get further on that. But,
20 it would be a lot easier if it would be
21 integrated into our map so a constituent could
22 just go and find out, so I agree.
23 That being said, we were able to,
24 through a lot of hard work to at least get a
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2 separate portal, which people can do, so they
3 need to take a second step of -- they go there
4 and there is nothing there, there is another
5 dropdown on the exact same page which they can go
6 to and see if they’re in the Charter buildup. But
7 I do understand it’s two steps and I understand
8 why that could be a little frustrating.
9 SENATOR HELMING: Thank you. Just real
10 quickly, is there -- Assemblywoman Woerner asked
11 about getting fiber on poles. In New York State
12 right now there is fiber that is up on poles but
13 is, I’m sure the right terminology. Is it lit up?
14 Do we have some fiber that’s installed? It’s
15 running past people’s homes, it’s running by
16 business but it is not yet lighted or lit up?
17 MR. NORDHAUS: Well, I know Tom can
18 speak more to it, but we have we have a lot of
19 finder in the state. We have lit fiber, as you
20 said, and we have dark fiber, which is fiber that
21 is generally not necessarily on the poles but it
22 could be underground in ducts. Some of it is lit
23 up. Some of it is dark fiber. Some of it is lit
24 up, some of it is dark fiber. In general, the
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2 state does have a lot of fiber. The challenge
3 that we face with this program and in general,
4 that we talked about it today, is the so-called
5 last mile, which is getting that fiber down those
6 streets and right in front of those homes
7 especially when they are very sparse. But there
8 is sort of mainline fiber as you point out,
9 that’s out there.
10 SENATOR HELMING: So, that last mile, I
11 hear from constituents, like my colleagues do,
12 about getting that last mile done. But, it is
13 frustrating when it’s sitting right in front of
14 your home and you cannot connect to it.
15 MR. NORDHAUS: I am not familiar with
16 that exact case but I could understand that would
17 be frustrating, yes.
18 SENATOR MAY: Okay, thank you. And I
19 also want to welcome Senator O’Mara and I guess
20 he has some questions. And just, to let people
21 know, because I appreciate your patience, you’ve
22 been here a long time. This is the last person as
23 far as I know who has questions. The two of us
24 have a few brief follow ups we’d like to do and
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2 we’d like to do and then we’ll be done. And for
3 the audience, so you know in future, as witnesses
4 come up, we’re going to limit to five minutes and
5 question and answer portions for each member up
6 here. So that we’ll -- we’ll try to get you out
7 of here before midnight. Okay. Senator O’Mara.
8 SENATOR THOMAS O’MARA: Thank you,
9 senator, thank you, gentlemen, for being here
10 today. Hopefully I didn’t miss this and this has
11 not been covered already by the two of you, but I
12 just wanted to get a sense of how you are making
13 the demarcation between what’s going to be
14 necessary to be served by 100 megabits per second
15 versus down to 25 megabits per second.
16 MR. NORDHAUS: So, we touched on it a
17 little bit but, to answer sort of specifically,
18 the way the allocation was run was through a
19 reverse auction process, which we talked a little
20 bit about that as an innovative process for
21 allocating the state capital, state funding. And
22 what we did was we looked at all of the unserved
23 areas of the state and then we ran auctions in
24 each of the upstate regions separately. And
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2 basically anything unserved was awarded funding
3 in order of basically the highest fee for the
4 lowest cost. And we funded the entire program
5 until we had essentially expended all of the
6 capital. And, then we expended the last, around
7 $15 million for a satellite service to fill in
8 the remaining gaps, essentially to ensure that no
9 one was left behind at that point.
10 SENATOR O’MARA: Okay. Did that, making
11 those determinations, how much did that do you
12 think increased the cost of serving some of these
13 areas, where it might have been cheaper to do
14 less than 100 megabits per second but you went
15 with 100 megabits per second.
16 MR. NORDHAUS: Well, I think what we
17 heard today was that, you know, the benefits of
18 fiber are things that the communities really
19 appreciate. And so I think that, you know, what
20 I’ve heard today is that people, if anything,
21 want more fiber, not less. So, certainly you
22 could do satellite in the whole state and save
23 money, but I’m not sure that would meet the
24 objective of trying to make sure that the service
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2 is something that people are really looking for.
3 SENATOR O’MARA: No, but what I’m
4 suggesting is there’s a cost benefit analysis
5 that you can make for the more remote areas where
6 it would have cost X to require the fiber to be
7 run for the 100, rr you could run something sub
8 from that at lesser expense and cover more
9 ground, hit more homes.
10 MR. NORDHAUS: I see what you’re saying.
11 SENATOR O’MARA: Yeah.
12 MR. NORDHAUS: Yeah, so in that case,
13 now I understand better. Our program was open to
14 all technologies, so it wasn’t like 100 or
15 nothing. I mean you have the ability to --
16 basically, we were technology neutral. So, you
17 could do fiber, you could do cable, you could do
18 fixed wireless, we had multiple different
19 technologies. We actually do have all of those
20 technologies. We have fiber, exactly, we have
21 fiber. We have cable, we have fixed wireless, we
22 have DSL and we have satellite. So we have pretty
23 much every technology that I’m aware of and we
24 also, from a provider standpoint, we have large
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2 providers, as large as Verizon, we have family-
3 owned telcos and we have electric cooperatives.
4 So through provider, sort of flexibility on our
5 providers and flexibility on technology, we had
6 sort of open to any type of model. And, then
7 according to the auction, if a less expensive
8 product was available, we would certainly have
9 considered that in the auction. That would have
10 been part of the process.
11 SENATOR O’MARA: Okay. I think you said
12 you’ve exhausted the $500 million funding that
13 was appropriated to this point?
14 MR. NORDHAUS: Well, it’s been fully
15 deployed, it’s been fully invested, yes.
16 SENATOR O’MARA: So that money’s out the
17 door. It’s been spent on existing, working
18 connections right now?
19 MR. NORDHAUS: Well, it’s been fully
20 committed and we, as discussed a little bit, we
21 invest the capital on a reimbursement basis, so
22 the providers have to go do the work, they have
23 to complete the work and then we do a validation.
24 We send in a validation firm to make sure it was
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2 done properly. Once it’s done all properly, then
3 the reimbursements can be completed. And so, it’s
4 has been fully committed, but it isn’t fully out
5 the door, if that makes sense but it’s all spoken
6 for.
7 SENATOR O’MARA: No, no. To what
8 percentage has it been committed, but not spent
9 yet? Or not deployed yet?
10 MR. NORDHAUS: Well, it’s all been
11 committed, so, you know, the full amount of the
12 fund, less the sort of internal operating
13 expenses of what it just takes to, you know, keep
14 the lights on and so forth. That is all fully
15 committed and then the actual reimbursement level
16 varies. I mean every week we’re sending out, you
17 know, we have a team that looks at the expenses
18 and sort of once they get validated, sends those
19 out, so I don’t have that exact data but it’s --
20 SENATOR O’MARA: Do you have a rough
21 idea of how much of that $500 million is really
22 yet to be deployed?
23 MR. NORDHAUS: I mean, as far as we look
24 it a, it’s fully committed. And then it’s just a
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2 matter of timing on the expenses of the
3 reimbursement. But, nobody is waiting for these
4 reimbursement checks to do their work. They
5 complete it and we reimburse when it’s done and
6 it depends on the status of the review of the
7 reimbursements we get in. Somebody says I bought
8 12 reels of fiber and I bought 18 switches and I
9 bought this and we have to go the through that
10 and validate it so it’s just a timing issue.
11 SENATOR O’MARA: No, I get all that and
12 maybe I’m not asking the question the right way
13 but of the $500 million, and the private
14 investments from the companies, what percentage
15 of that is actually out there functioning right
16 now, and how much do we have -- are we waiting on
17 to be actually functioning for consumers?
18 MR. NORDHAUS: I mean, it’s all
19 effectively out there. I mean, the full 500. If
20 we looked at the stuff that I mentioned earlier,
21 we’ve -- including the state money, the private,
22 we require a private match as well, so it’s
23 either 50/50 or 08/20, so there’s a private match
24 and then there’s federal funding as well, so in
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2 total, we have $721 million of capital working on
3 these projects. And then that is in addition, the
4 Charter projects are on top of that, so all that
5 money is essentially working for us in the field.
6 And, none of it has been held back at this point.
7 Did I answer that?
8 MR. CONGDON: I mean, I think one more
9 thing to add, because of the contractual
10 obligations of awarding the grants, there’s a
11 tremendous amount of activity and billed activity
12 that’s happening in the field and already
13 benefiting consumers. Whether or not the
14 reimbursement check has been cut, the fact that
15 it was committed has resulted in the activity,
16 the construction work, and in many cases, already
17 lit fiber serving customers.
18 SENATOR O’MARA: But you can’t give me
19 an idea of what amount of work is left to be done
20 that has been?
21 MR. NORDHAUS: Yes. I mean in terms of
22 the work that’s been done, I mean, if you want, I
23 can give you the exact number of dollars that
24 have been -- if you want to contact me after this
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2 I’ll give you the exact number, but in terms of
3 the work, the physical work, which is what I
4 think really matters here, the phase one and
5 phase two projects are complete. We’re still
6 going through the validations and so, some of the
7 payments don’t get issued until we validate. And,
8 then in terms of the phase three, those are
9 underway and will be complete next year because
10 of the need to align those with the federal, $170
11 million of federal money, federal funding took a
12 little bit longer to secure, so those were pushed
13 back into next year. But, all the phase one and
14 phase two are essentially complete at this point.
15 SENATOR O’MARA: Okay. Do we know if the
16 executive will be looking for further allocations
17 in next year’s budget?
18 MR. NORDHAUS: I don’t have any
19 awareness of the status of that at this time.
20 You’ll have to ask others on that.
21 SENATOR O’MARA: Are you seeking further
22 allocations?
23 MR. NORDHAUS: I’m just answering the
24 questions, whatever, you know, committee. I’m not
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2 here to do that.
3 SENATOR O’MARA: Thank you.
4 SENATOR MAY: Okay, thank you, just a
5 few quick follow up questions. I asked earlier
6 about that technical validation firm, but I
7 blanked on your answer, whether you actually said
8 that their report would be made public.
9 MR. NORDHAUS: I had said that we are
10 working through all of the reports with them and
11 there is additional follow up, I’ll talk to you
12 about, I can certainly look to provide you the
13 results of that or to make those public in some
14 way. So we’re happy to follow up with you on
15 that.
16 SENATOR MAY: Okay, thanks. And I know
17 Assemblywoman Woerner didn’t want to be snarky.
18 I’m going to be a little bit snarky here because
19 I know this isn’t directed at you, Mr. Congdon.
20 se get a lot of complaints about internet
21 service, but we also get complaints about the PSC
22 not being responsive to complaints. And so I’m
23 wondering if you have an internal process to
24 judge your responsiveness, or if you’re taking
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2 steps to become more responsive, if this is
3 something that you have heard.
4 MR. CONGDON: Well, I think some of the
5 frustration comes from what we regulate and what
6 we don’t, so we can be helpful if the complaint
7 pertains to a service that we actually regulate.
8 If it’s a service where we have no jurisdiction,
9 then it’s hard for us to satisfy that consumer.
10 And, so I get their frustration and we need to be
11 real clear on the phone when we get those
12 complaints as to where we can be helpful and
13 where we can’t be.
14 In some cases even where we don’t have
15 direct jurisdiction, if it’s a provider say
16 providing sort of a triple play of broadband,
17 phone and cable, there’s a complaint about their
18 internet service, but because their internet
19 service also is the same technology that provides
20 something that’s within our jurisdiction, there
21 we can be somewhat helpful in trying to get the
22 problem addressed. It’s really case specific.
23 And, that being said, we do, to answer
24 your question, track the volume of calls that we
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2 get, how long it takes us to answer the
3 complaints, how many complaints once we have
4 heard the initial complaint get escalated,
5 meaning one party wasn’t satisfied and then how
6 quickly we can address the escalated complaints
7 and the appeals process that can follow.
8 And we take all that very seriously and
9 do a lot of training with our staff to make sure
10 they understand where our jurisdiction is, where
11 it isn’t, how to interface with the public and be
12 as helpful as possible.
13 SENATOR MAY: Thank you. Two other
14 questions, one is about this issue of the last
15 might. So thinking about how expensive it can be
16 to build-out on the last might, we passed a bill
17 this past year about minimum maintenance roads
18 where people build houses in very remote
19 locations, often a second home, a summer home or
20 something like that. And then, after the fact,
21 they want snow plowing to that home, and it’s
22 very costly to municipalities to provide that. Do
23 you ever take into account whether these are
24 primary residences, or second homes? Are those
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2 things when you’re thinking about, is it worth it
3 to put taxpayer money into building out internet
4 service to remote properties?
5 MR. NORDHAUS: We ultimately, we think
6 about it, we’re aware of the issue but ultimately
7 we don’t, because at the end of the day, we
8 believe that broadband is necessary to all homes
9 even second homes. I mean there are people who go
10 there and they want to work on the weekend and
11 they need access to broadband so ultimately we’re
12 looking to get it to every location. This is very
13 important for, you know, the economy as you know
14 of these local areas. Sometimes it’s tourism,
15 sometimes it might be weekend homes. I think
16 we’ve talked about that.
17 In addition, you might want to run a
18 small business from there, you might be able to
19 sell, you know -- and also, just in terms of real
20 estate, you know, from a real estate standpoint
21 in terms of getting people in to rent your home,
22 we’ve heard these anecdotes of people talk to us
23 I tried to rent my home and they -- I got all the
24 way down to the last part of it and then they
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2 said how is your broadband and we said well,
3 don’t and suddenly the deal wasn’t happening.
4 So from the standpoint of home
5 ownership, of economic inclusion, all of the
6 things we’re talking about, they do apply to
7 first and second homes and obviously, those are
8 taxpaying homes as well. In terms of sort of very
9 long private driveways, we do make some
10 accommodations for that, in the sense that if
11 someone builds a private road, or an extremely
12 long driveway, that might be like a five mile
13 driveway, the carrier is not required to wire the
14 five mile driveway. They have to do a sort of
15 standard length driveway, which is, you know, we
16 have a certain -- I think it might be 350 or 400
17 feet, which is the definition, the federal
18 definition of a standard driveway, which is
19 included in the $49. If it’s more, then, custom
20 charges can be discussed. So there’s a little bit
21 of an accommodation for it. But in general, we do
22 want to try to get broadband to all of the
23 locations.
24 SENATOR MAY: Okay. Thanks. And then, my
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2 last question was about the website. So I wanted
3 to give that web address again, it was
4 bldlkup.com, right?
5 MR. NORDHAUS: You got it.
6 SENATOR MAY: Bldlkup with no vowels
7 except the last u, dot com. And do you have a map
8 on your website that shows which regions of the
9 state are in your jurisdiction?
10 MR. NORDHAUS: Just so you know, that
11 website is also embedded in our website, so if
12 you want to remember one, it’s a little more
13 intuitive, NYSBroadband.NY.gov. So we have a
14 resources tab, a dropdown menu, we have the map,
15 we have the address lookup and we have the
16 Charter lookup.
17 SENATOR MAY: Great. Thank you very
18 much. I appreciate it.
19 MR. NORDHAUS: Thank you.
20 MR. CONGDON: Thank you.
21 SENATOR MAY: I very much appreciate
22 your patience and your good questions. Thanks.
23 MR. CONGDON: Thank you.
24 SENATOR MAY: I mean good answers to the
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2 questions. And next on our list is Kate Powers
3 from the New York Attorney General’s Office. And
4 as I said, from now on, we’re going to do a five
5 minute limit on the question and answer periods
6 for members. Welcome.
7 MS. KATE POWERS, DIRECTOR OF LEGISLATIVE
8 AFFAIRS, NEW YORK ATTORNEY GENERAL: Good
9 afternoon, Co-Chair May, and Thiele and
10 commission and committee members. My name is Kate
11 Powers and I’m the director of legislative
12 affairs at the New York State Attorney General’s
13 office. Thank you for the opportunity to provide
14 testimony on this important issue.
15 In December 2018, the Office of the
16 Attorney General entered into settlement
17 agreements with five major providers of
18 residential internet service in New York State,
19 Verizon, Charter, formerly Time Warner Cable,
20 Frontier, Altice and RCM Telecom Services.
21 SENATOR MAY: I’m just going to ask you
22 to pull your microphone little closer.
23 MS. POWERS: Our offices investigations
24 and subsequent settlements in these cases were
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2 focused on misrepresentations by the internet
3 service providers that violated consumer
4 protection laws. Our investigation was not
5 initially aimed at the lack of internet service
6 options in rural areas, though through our
7 investigations, we identified two issues that had
8 a particularly disparate impact on rural areas,
9 lack of quality infrastructure and the failure of
10 internet service providers to supply state of the
11 art customer premises equipment to subscribers.
12 In the early days of dialup, internet
13 service was fairly universal. However, disparity
14 in internet service level has increased with
15 time, due in large part to infrastructure
16 disparities in more populated versus less
17 populated areas. Digital subscriber line service,
18 more commonly known as DSL offered faster service
19 but is largely impacted by distance from
20 subscriber to a centralized network device. So
21 the service level in rural areas is typically
22 worse than in urban areas.
23 It is often not economically desirable
24 for DSL provider to repair this aging
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2 infrastructure. Some DSL customers are already
3 starting to experience the effects of this aging
4 infrastructure, for example, outages for several
5 weeks at a time.
6 Cable internet offered a significant
7 upgrade, but was not available in all areas.
8 Cable internet also evolved in a way where
9 disparity increased over time as cable internet
10 providers prioritized high density areas for
11 upgrades. Fiber offered an even more significant
12 upgrade, but is less available than cable.
13 As a condition of our settlement with
14 Frontier, a provider for my rural areas, Frontier
15 was required to invest $25 million to improve
16 infrastructure and/or provide consumers with
17 access to internet services. While this
18 investment was significant and resulted in
19 improved internet service for 97,000 New Yorkers
20 to date, it likely will not be enough to solve
21 the infrastructure issues in all of Frontier’s
22 coverage areas.
23 Charter, which operates in a number of
24 upstate markets, also made investments that
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2 resulted in improvements for subscribers in rural
3 areas. All of the service and urban areas remain
4 superior due to more robust network
5 infrastructure in these markets.
6 Our investigation also revealed that
7 failure on the part of providers to supply state-
8 of-the-art modems was another reason many
9 subscribers had suboptimal internet service. In
10 the past, providers allowed or even encouraged
11 users to purchase their own modems. However, they
12 now tend to push them into a monthly lease
13 agreement for a provider-supplied modem, often
14 sold with a promise of ensuring the most up to
15 date equipment.
16 The Attorney General observed a pattern
17 of prioritizing prime markets for equipment
18 replacement initiatives. This practice was a
19 central focus of the Attorney General’s
20 investigations and particularly, affected New
21 Yorkers who typically -- rural New Yorkers who
22 were typically the last to get their modems
23 replaced.
24 We also discovered that Time Warner
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2 Cable provided many subscribers with legacy
3 modems. Legacy modems can only receive data on a
4 single data over cable service interface
5 specification, DOCSIS channel. A DOCSIS channel
6 has a maximum throughput of 36 megabytes per
7 second. Time Warner Cable believed such modems
8 were sufficient for many subscribers in rural
9 areas who were only on plans of 15 to 20 megabits
10 per second and while such modems were
11 theoretically sufficient to support speeds 15 to
12 20 per second, DOCSIS channels are shared by a
13 cluster of users, so a single user can only get
14 the unused band width on a channel.
15 Our settlement with Charter required
16 that all subscribers be provided with modems that
17 had been shown to be capable of reliable
18 delivering the subscribed internet speed through
19 field testing under normal network conditions.
20 Charter has now provided almost all subscribers
21 with multi-channel modems.
22 The problems associated with the limited
23 bandwidth on the channel have been greatly
24 exacerbated by the advent of streaming video.
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2 Early internet usage was bursting, meaning that
3 for example, a user load as website and photos
4 must be downloaded. The usage then drops until
5 the next page is loaded. In contrast, the
6 streaming video that is more common today
7 involves a continuous delivery of internet
8 packets. Streaming a movie on Netflix can require
9 between 5 and 12 megabits percent second,
10 depending on the quality of the video.
11 By 2015, Time Warner Cable estimated
12 that over half of all of the internet data
13 transmitted to its subscribers was video
14 screaming. This presented a particular challenge
15 to subscribers in rural areas, where average
16 internet speed was 15 megabits per second. Since
17 the conclusion of our investigation, Charter has
18 addressed this issue by phasing out single
19 channel modems for almost all users.
20 The final issue that I would like to
21 discuss with you today that impacts access to
22 adequate internet services by rural New Yorkers
23 is net neutrality. Net neutrality rules provide
24 internet service providers from blocking,
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2 throttling, imposing paid prioritization and
3 otherwise interfering with the provision of
4 internet service.
5 In 2018, New York led a coalition of 22
6 states and the District of Columbia in suing to
7 reverse the Trump Administration’s repeal of net
8 neutrality regulations and the federal
9 government’s effort to assert preemption over
10 state net neutrality laws. Collectively, the
11 state coalition represents over 165 million
12 people, approximately 50 percent of the U.S.
13 population.
14 In February 2019, the Attorney
15 General’s office, together with counsel for
16 private parties and local governments presented
17 oral arguments in the case in the U.S. Court of
18 Appeals for the D.C. Circuit and a decision is
19 pending.
20 A repeal of the federal net neutrality
21 rules will be felt acutely by rural New Yorkers
22 who generally only have one choice of a fixed
23 internet service provider. If the only fixed
24 internet service provider operating in a rural
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2 area takes advantage of the net neutrality repeal
3 to block, throttle or require businesses or
4 customers to pay for fast lanes to service, rural
5 subscribers will not have the option to switch to
6 a different provider who continues to adhere to
7 net neutrality principles.
8 While some subscribers in urban areas
9 may be able to choose from two or three different
10 providers, the overwhelming majority of rural
11 subscribers do not have such option. Even if some
12 rural areas might have a choice of mobile
13 internet service providers, mobile internet
14 service is not an adequate substitute for fixed
15 service. Thank you again for allowing me to take
16 the time to provide testimony on this important
17 issue.
18 SENATOR MAY: Thank you. Appreciate your
19 testimony. Are you willing to take some
20 questions?
21 MS. POWERS: I can certainly take
22 questions. I’m not a technical expert so I may
23 have to take some of them back.
24 SENATOR MAY: Okay. Well, my question is
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2 fairly general and it is again about the net
3 neutrality issue. As I mentioned before, there is
4 a bill that I assume we’ll be taking up next year
5 about net neutrality within the state. And, my
6 question is, to what extent could we affect this
7 issue within the state, in the absence of federal
8 support for net neutrality and I guess also just
9 in the legal arena, just with that, with net
10 neutrality, does net neutrality give you more
11 latitude to help people and especially in rural
12 areas get the service that they need?
13 MS. POWERS: Regarding the first part of
14 your question, we have looked a fair amount at
15 that. We are, as I recollect, somewhat limited in
16 what we can do in the state. Particularly, until
17 the decision of the D.C. Circuit is, until that
18 litigation is resolved. But if you have a
19 specific bill, we would, you know, appreciate the
20 opportunity to take a look and give you specific
21 feedback. And then second part of your question,
22 involved -- could you restate it?
23 SENATOR MAY: Well, it was just in --
24 you make a good case for why net neutrality is a
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2 valuable thing. Does it give the Attorney General
3 more tools to or how could it give the Attorney
4 General more tools to be standing up for people
5 who need this service?
6 MR. POWERS: Yeah, I’m not sure it
7 specifically give us more tools but I could
8 certainly, you know, other than us fighting in
9 the litigation, I could certainly, you know, take
10 that one back and see if there is something more
11 specific we can, yeah.
12 SENATOR MAY: Thank you. So, does anyone
13 else have questions? No? Okay, well, thank you so
14 much for your testimony. I appreciate you being
15 here.
16 MS. POWERS: Okay. Thank you.
17 SENATOR MAY: And next we have a panel.
18 We’re going to bring a number of supervisors up
19 here to be here at the same time. William Farber,
20 James Month and Carolyn Price. I’m just checking,
21 do I have that right? Okay. So, ten minutes.
22 Okay, we’re going to try to keep this to ten
23 minutes for all three of you. I hope you can make
24 that work. I don’t know who wants to go first.
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2 HONORABLE WILLIAM G. FARBER, CHAIRMAN,
3 HAMILTON COUNTY BOARD OF SUPERVISORS: We can go
4 in the order that they were listed on the program
5 and we can certainly, I can shorten what I had
6 intended to say. I think the panel has covered a
7 lot of the issues that I was going to raise.
8 Chairperson May, senators and assembly members, I
9 really appreciate the opportunity to provide
10 testimony on the state of broadband in Hamilton
11 County. I’m William Farber, I’m chairman of the
12 Hamilton County Board of Supervisors.
13 I would say at the local government
14 level, we tend to be where the rubber hits the
15 road. The people, I don’t tend to get calls from
16 them, they tend to come in my office and say why
17 is it this way? Why aren’t we seeing what we’ve
18 heard we should be seeing? Hamilton County is the
19 third largest county in the state geographically,
20 so we are a huge rural challenge when you look at
21 the size of our population. We’re also 100
22 percent within the Adirondack Park.
23 It’s been my privilege for several
24 decades to serve the people of Hamilton County
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2 and one of the most profound challenges in recent
3 years has really been trying to keep up on the
4 technology front. I think it was nearly two
5 decades ago that I was in a meeting with other
6 EMTs, I was an EMS provider for 30 years. And we
7 were talking about cellular service and how that
8 would impact our ability to provide first
9 response, how much quicker we could get on a
10 scene, how much better the care would be that we
11 could provide to people. And as we started to
12 delve into that, it was shortly thereafter that
13 we were confronted by one of our school
14 superintendents in Hamilton County that came in
15 and talked to the entire board making the plea
16 for the fact that if we didn’t find the way to
17 keep up on the broadband front, our students in
18 the next generation of folks that were raised in
19 Hamilton County would have a decided disadvantage
20 from an education and technology standpoint, that
21 in his opinion we couldn’t afford to let that
22 happen.
23 I think it’s fair to say that based on
24 that, several of us in the county embarked upon
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2 what was about a two decade mission to try to
3 figure out how to position the county so that we
4 could keep pace on the technology front. That
5 mission included multiple trips to Washington,
6 multiple trips to Albany, talking really to a
7 variety of people where the levels of empathy
8 have been high for the plight of rural New York
9 and rural America.
10 However, I have to confess, we didn’t
11 really start to make substantive progress until
12 the REDC structure was put in place, the Connect
13 New York and the New NY Broadband Program. Does
14 that mean I think that we’re at a perfect place
15 and time now? Absolutely not. You’ve covered a
16 lot of the challenges of the situation.
17 So I’m going to skip through the
18 portions of my testimony, where I was going to
19 talk about status of the county because we’re
20 really not that different than what you’re seeing
21 throughout. I think the stats bear out the fact
22 that we are serving through the New NY Broadband
23 Program, 256,000 households customers, if you
24 will, but, a full nearly a third of that is
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2 through satellite service. I think that we cannot
3 treat technology as if it was a static finish
4 line in New York. I think we have to think about
5 what’s next, how do we do better. We’re the
6 Empire State because we lead, not because we set
7 goals and say that we’re satisfied with this.
8 So, I think that we’ve done an
9 extraordinary job building far more fiber than
10 any other state. But, that doesn’t mean that we
11 should stop there. That’s really an opportunity
12 to extend the fiber to that final mile. It’s an
13 opportunity to look at other technologies. You
14 know, we jumped to, for a large portion of our
15 population, to satellite. There are opportunities
16 for fixed wireless that yes, there were some
17 phase three awards, but I think we could do more
18 with that. Several of us are involved with a
19 Cellular Task Force and some of the technologies
20 when you look at towers and our ability to
21 connect up to fiber, connect up to power and
22 transmit those signals, there’s some synergy
23 there that we need to be exploring as part of
24 this to figure out how to build-out the system
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2 and the network.
3 SENATOR MAY: I want to make sure that
4 your colleagues get some time too.
5 HONORABLE FARBER: Yeah, so let me just
6 wrap with that point, and then if there are any
7 questions, I’m happy to take them.
8 SENATOR MAY: Thanks.
9 HONORABLE CAROLYN PRICE, SUPERVISOR,
10 TOWN OF WINDSOR: Okay. Alright. First of all,
11 thank you Senator May and Assemblyman Thiele for
12 chairing this very important topic and all the
13 senators and assembly people that took time out
14 of I’m sure busy schedules to do this.
15 SENATOR MAY: Can you pull your
16 microphone a little closer?
17 HONORABLE PRICE: I’m speaking today
18 first of all on behalf, as president of the
19 Upstate New York Towns Association. And this has
20 been a very important goal of ours for six years
21 that we’ve been working on. And, I’m also
22 speaking as supervisor of the town of Windsor in
23 Broome County, a town of 93 square miles. I’m
24 also speaking for people who make huge sacrifices
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2 every day, because they have no internet access,
3 such as a person that has to drive 40 miles round
4 trip to do banking because they can’t do it on
5 the internet.
6 My remarks will focus on recommendations
7 to identify and reach the unserved and
8 underserved with broadband in rural areas of New
9 York State. New York State broadband is delivered
10 via wire line technologies, and wireless
11 technologies. However, we don’t know how much
12 broadband coverage we truly have, particularly in
13 rural areas. To continue to move forward and have
14 access for the unserved and underserved, we need
15 to know what we have, where it is, and options to
16 reach the unserved and underserved. Why don’t we
17 know what we have and where it is? The maps are
18 faulty because the FCC allows internet providers
19 to claim on form 477 an area that is served if
20 only one home on a Census block has internet
21 service. My first recommendation is to work with
22 the FCC to get a better reporting requirement so
23 there are more accurate maps. Mr. Nordhaus stated
24 that New York State is now requiring full Census
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2 blocks and this is progress.
3 Fiber is the optimal broadband
4 technology. There is fiber in parts of rural
5 communities, do we really know where the fiber is
6 and where it doesn’t exist? Through utility data
7 pole surveys, we could get answers. These surveys
8 entail getting the GPS location of each pole,
9 identifying the pole numbers, finding out who
10 owns the poles, and determining what is actually
11 on the poles.
12 SENATOR MAY: I’m going to just suggest
13 that you go through your recommendations just
14 briefly so we’ll have a little time for some --
15 HONORABLE PRICE: Okay, so what I can do
16 is rather than talk more about the need, I’ll
17 just do the recommendations from here on?
18 SENATOR MAY: Yes.
19 HONORABLE PRICE: So my second
20 recommendation is to fund utility pole data
21 surveys. Recommendation three, require companies
22 applying for state funding to describe how
23 municipalities were involved in the application
24 process, and require signoff in the application,
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2 by the chief municipal officer. And I believe
3 that Senator Helming was asking questions about
4 that.
5 And I do want to show this map. This is
6 phase two, and this is our town. And, the colored
7 areas show where the funding was awarded. And in
8 the box is the village of Windsor, which sits in
9 the town of Windsor. They have complete cable in
10 the village. The mayor was shocked also. They
11 didn’t need fiber. They have excellent cable. So,
12 I believe that almost $2 million was spent there.
13 But, down here, in the southwest corner of our
14 town, we believe, not sure, we need a pole
15 survey, we believe there is no fiber. These
16 people are trying to exist on satellite, and hot
17 spots on their cell phone which are spotty. So,
18 this is why I’m saying, the municipalities need
19 to be involved in this.
20 My fourth recommendation is to move the
21 Broadband Program Office from New York City, or
22 establish a satellite office in an upstate town
23 or village, so that people doing this work are
24 close to the communities with the largest
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2 broadband needs. And my fifth recommendation, be
3 in involved with emerging technology. Have staff
4 from the New York State Broadband Program Office
5 and New York State officials study Google’s
6 Project Loon and consider trying an experiment
7 with this technology in a high need rural area.
8 And I’ll briefly describe it. You can
9 see a video on the internet. Google has started a
10 project back in 2012, where they can take
11 antennas and put them in very large balloons,
12 that they send into the stratus sphere about 12
13 miles up. They control them from the ground and
14 have antennas on the ground and then they connect
15 it to a local provider. They’re also extremely
16 helpful if you have a disaster, because they can
17 move in quickly and help have internet service.
18 SENATOR MAY: Thank you. And we’ll give
19 you a little bit of extra time, let’s say four
20 minutes.
21 HONORABLE JAMES MONTY, SUPERVISOR, TOWN
22 OF LEWIS: Thank you so much, Chairman and thank
23 everyone for allowing me to speak here today. I
24 think broadband is very important. I’m not going
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2 to go through a lot of what I wrote, because I
3 think each and every one of you must have been in
4 my mind at one time, because the questions that
5 you have asked are questions that we, we have.
6 Again, I’m Jim Monty, I’m the town
7 supervisor for the town of Lewis, in Essex
8 County. I’ve shared this conversation with
9 Assemblyman Stec, Assemblyman Jones, Senator
10 Little on several occasions. And I’ll just go to
11 the points that I would like to make.
12 My first concern is the fact that the
13 energy companies in Essex County historically
14 have ignored their infrastructure. So their
15 infrastructure is, you know, old, and now they’re
16 asking these ISPs to come in and replace their
17 infrastructure at the tune of $5,000 to $15,000
18 per pole. Who’s holding that accountable? That’s
19 money that should be spent on lighting up
20 broadband, yet, they need to replace the poles
21 and these energy companies are getting those
22 poles provided for them, and yet, they ask for an
23 increase in rates. So, to me, that’s a pretty
24 good deal for the energy companies, so who’s
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2 holding them accountable? I think that’s
3 something we really need to look at.
4 Recently, we hired a consultant within
5 Essex County to map out what we don’t have. So
6 the consultant is taking everything that is
7 provided already before any of the phases, phase
8 one, phase two and phase three, taking the
9 information from phase one, and implementing it
10 on our map, on GIS mapping, phase two, the same
11 thing, and the phase three so we’ll know what we
12 don’t have. And we will gladly share that
13 information with the broadband agency because
14 when I took over as supervisor, it wasn’t as
15 sophisticated as GIS, but we had a group of
16 people that formed a group within our town of
17 Elizabethtown and Lewis who actually mapped out
18 our broadband, just visually mapped it out. We
19 provided it. I’m not sure what happened to that
20 data. But, I think that’s something that we as
21 communities can do, and Essex County has done
22 that.
23 Again, and I heard it mentioned here, is
24 accountability. Who is actually holding the ISPs
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2 accountable? You know, I heard Mr. Nordhaus talk
3 about his validation, but are they validating
4 these Census blocks that were bid, or are they
5 actually physically going out and seeing what is
6 actually being provided. So that would be a
7 question that I would like answered.
8 One of the last things that I would like
9 to make and I just heard it here, local input. At
10 no time in my four years as a supervisor has
11 anyone reached out to me, and said, hey, Jim what
12 do you have, what don’t you have in your
13 community. I would think that would be a great
14 benefit moving forward is if there is more local
15 input.
16 Lastly, I just want to leave you with an
17 example of what this means to a small community.
18 The town of Lewis has 1,352 residents, a very
19 small, beautiful community in Essex County. And
20 we have two local businesses who are trying to
21 get established, two small businesses. They both
22 could use hard wired internet for their business.
23 They have -- their two locations are less than a
24 half a mile from hard wire, and yet they’re told
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2 they have to get satellite. Half a mile for two
3 viable businesses that could employ six to 12
4 people in my town, and I can’t tell you for a
5 town of 1,352 what 12 employees would do for us.
6 And thank you. I really appreciate your concern
7 on this. Your sentiments and your comments
8 previously, echo how we feel in Essex County and
9 we’re here to help in any way possible. Thank
10 you.
11 SENATOR MAY: Thank you. Thank you all
12 for really good recommendations. This is very
13 helpful to have concrete proposals that we can
14 take back to the PSC and the Broadband Program
15 Office. Just one question that I have is, we
16 heard some numbers about what they estimate are
17 the number of people who are not covered in the
18 state, but I think those of us sitting up here
19 feel like those numbers were pretty low, actually
20 from what we hear in our own districts, that
21 there are an awful lot of people not covered. I’m
22 just wondering if any of you has actually done a
23 census, as it were, of how many people don’t have
24 jurisdiction.
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2 HONORABLE FARBER: We haven’t
3 specifically done a census, but I share the
4 observation that the committee has made. I think
5 there are a couple of reasons for that from our
6 experience. One is, has been the significant lag
7 time in the build-out. As you know, we made
8 announcements for phase one, phase two and phase
9 three at the point when were making the awards.
10 The patience that people demonstrate from there,
11 myself included, has been tested a couple of
12 times with now seeing phase three pushed out into
13 2020. That is consistent with a number of
14 problems that we’ve had with the build-out,
15 dealing with the CAFII funding that came through
16 from Verizon and the tiering of that, some of the
17 problems working with the Public Service
18 Commission to make sure the make ready stuff
19 happened quickly enough to get things done. We
20 have had the experience of the Broadband Program
21 Office being very helpful in some right of way
22 work and helping to move those projects along.
23 But I think there was lag time there that
24 stretched out some projects.
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2 And then frankly, you’ve got those
3 people that were left with HughesNet as the only
4 option that you’ve already talked significantly
5 about how frustrated those people are,
6 particularly when they feel that they are
7 proximate to the build-out where Frontier or
8 Slick [phonetic] or one of the other providers
9 are going to be and they aren’t going to get
10 access.
11 SENATOR MAY: Okay. Thank you.
12 HONORABLE PRICE: I think I could answer
13 it Senator May, again, by my map. I think that I
14 heard one person say about 17 percent. In this
15 area of our town is probably about, a quarter of
16 the population. So it’s probably somewhere around
17 that 17 percent you heard before.
18 SENATOR MAY: Thank you.
19 HONORABLE MONTY: One brief concern I
20 have, Chairman, if you allow me, is the non-
21 disclosure act Charter has for not announcing
22 what they’re building out. How can we know what
23 they are not doing? I think, I recently have come
24 across some evidence that, eight locations in my
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2 town alone were included in the build-out that
3 they agreed to. And I know for a fact, those
4 eight residents paid $25,000 to have fiber run to
5 them.
6 SENATOR MAY: Alright. Thank you.
7 Questions or any others?
8 ASSEMBLY MEMBER THIELE: I have a
9 question too.
10 SENATOR MAY: Okay.
11 ASSEMBLY MEMBER THIELE: First of all,
12 it’s good to see town supervisors. Mr. Farber,
13 it’s good to see you again. Having been a former
14 town supervisor, it was the hardest job that I
15 ever had. And I used to say when I was town
16 supervisor, when I went to grocery store, the
17 list I came out with was always longer than the
18 list that I went in with. [laughter] And just,
19 you’ve alluded to it indirectly a little bit.
20 But, you know, we’ve had the commitment over the
21 last three phases, and $500 million and 256,000
22 locations. What’s your conclusion? I mean, has
23 this worked well? Are things going forward that
24 we in the legislature should be looking at to
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2 change mid-course or, do some things different
3 going forward? What would you suggest that as we
4 come back in January of 2020, what should we be
5 doing.
6 HONORABLE FARBER: I think it’s a great
7 question. I would probably answer it a little
8 differently than the earlier panel did in that I
9 absolutely believe there should be a phase four.
10 I think we learned enough from the first three
11 phases that we’ve got some additional room to
12 grow and get some other areas done. I think we
13 compensated well for the poor FCC data that one
14 served all served for a Census track and so we
15 said to any provider before they could bid on a
16 Census track, you have to serve 100 percent of
17 the residents, the potential customers in that
18 Census track. That in my area, because we have
19 these huge Census blocks in rural areas, cause
20 some issues where we could have gotten to some
21 customers that we didn’t.
22 I will grant you those will be tough
23 decisions in how to get there, but I frankly
24 think part of this was the funding ran out before
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2 we got it as far as we ideally could have gotten.
3 So, my lesson learned would have been you made
4 progress, are there issues of accountability that
5 continue to bubble up that you need to be
6 concerned with? Absolutely. But, we need a means
7 to make sure that we build-out further.
8 And I do think that, the conversations
9 around this particular issue have been really
10 interesting in that it isn’t a utility, and yet,
11 in rural areas we probably aren’t going to have
12 competition, and so how do we deal with that so
13 that we actually force the providers to do what
14 they should be doing for our customers, for the
15 turnaround on service and things when there isn’t
16 competition to drive them and there isn’t the
17 regulation of a utility to drive them. How do we
18 get the outcome that they’ve promised?
19 SENATOR MAY: Okay. Quickly, are you
20 running the time?
21 HONORABLE PRICE: I think also, and we
22 need to stop and know where we are. I don’t know
23 if you’re aware, of course the federal government
24 provides a lot of money also. In 2018, they
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2 realized they didn’t know where they were and
3 they stopped their funding and did an assessment
4 of where they were. And, I think that, we need to
5 put the money there first and then I agree, move
6 on. But I’m concerned that we truly don’t know
7 where we are right now.
8 SENATOR MAY: I have a bill to require
9 that assessment. [laughter]
10 ASSEMBLY MEMBER THIELE: Thank you.
11 SENATOR MAY: Okay. Senator Metzger? And
12 anybody on this side want to ask questions? No?
13 have you got folks who want to talk? No? Alright,
14 I guess that’s it. But thank you very much.
15 ASSEMBLY MEMBER THIELE: Thank you very
16 much.
17 SENATOR MAY: And thank you for your
18 specific recommendations. That was really
19 helpful. We’re going take a little break. A ten-
20 minute break and then --
21 ASSEMBLY MEMBER THIELE: Your timing is
22 perfect.
23 SENATOR MAY: That’s right. And, when we
24 come back, we’ll have our next witnesses. Thank
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2 you.
3 [OFF THE RECORD]
4 [ON THE RECORD]
5 SENATOR MAY: Our next witness is Jen
6 Gregory from the Southern Tier 8 Regional Board.
7 MS. JEN GREGORY, EXECUTIVE DIRECTOR,
8 SOUTHERN TIER 8 REGIONAL BOARD: Thank you,
9 Senator May and thank you to the rural commission
10 and this committee for accepting these comments
11 today. A lot of what folks have talked about has
12 been discussed, so I’m going to brief what I
13 brought in paper here. I just wanted to showcase
14 a map to show you where I’m coming from here in
15 the Southern Tier because our name is a little
16 vague here. But we represent the counties of
17 Broome, Chenango, Cortland, Delaware, Otsego,
18 Schoharie, Tioga and Tompkins, south of the thru-
19 way and north of the PA border.
20 That area is home to just under 580,000
21 residents. The five small cities you may
22 recognize there are Binghamton, Cortland, Ithaca,
23 Norwich and Oneonta. Outside of those five small
24 communities, the population is just 84 people per
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2 square mile so we’re pretty rural. And sometimes
3 we are not quite recognized for that.
4 I am coming from the regional board.
5 We’re one of ten in this state, your regional
6 boards that help with long-term planning issues.
7 We also are the local partner for the Appalachian
8 Regional Commission and that’s your federal
9 funding partner, state, local and federal and the
10 Department of State is the office that we work
11 with from the state level.
12 This organization, Southern Tier 8 has
13 been working with this issue, trying to raise
14 awareness over the last 15 years for this. And we
15 were one of the key agencies to work in the
16 development of the Southern Tier Network, the
17 municipal open access fiber, dark fiber ring. I
18 think we discussed some of the challenges. Our
19 terrain and our small population we have, which
20 is pretty relevant to a lot of the folks around
21 here.
22 And I think the New NY State Broadband
23 Program, what that’s represented, maybe most of
24 all, is an experiment of disinvestment in rural
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2 New York State. I think that was a great effort
3 to say look, we are offering incentives. If you
4 build your private sector business, your last
5 mile in our community, we will help you fund that
6 and now we are left with communities that are
7 still unserved.
8 And Caroline Price was right to the
9 point where we don’t know where that is. On the
10 state’s Broadband Program Office map, and they do
11 have a beautiful map, they’ve made a lot of
12 headway in the past year with that. But the
13 problem and concern that we have is that they’re
14 considering satellite as a service that’s doable
15 for the communities and it’s not. Clearly, we’re
16 still caught in the digital divide.
17 If you’re from the southern tier and
18 call up HughesNet for satellite service, they’ll
19 be happy to offer that at $80 per month. And I
20 think this is a little bit higher than what the
21 goal was when we started the New NY State
22 Broadband Program but they’ll also tell you the
23 bandwidth for instant gaming, so if you have
24 children with Xbox or Play Station, this will not
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2 work for them. So that’s a disadvantage to our
3 younger generation that we would like to have
4 here are families.
5 Second, that technology does not support
6 VPN. VPN is your virtual private network, so if
7 you come north and you would like to tie into
8 your service downstate, if you are vacationing,
9 that log-in, that won’t work. Or if you have two
10 office locations that are secure that you’d you
11 like to serve, the technology will not work. So
12 the satellite doesn’t work for the status quo nor
13 for any future growth. And I think that’s the big
14 misnomer with this. It’s not good enough.
15 If you do have Time Warner or Spectrum,
16 all under Charter now, if you’re fortunate enough
17 to have that fiber run, most residents are paying
18 $200 a month for that service of triple play. And
19 this puts us at a disadvantage too when we want
20 to encourage folks to stay in New York State
21 because in other areas of the country, that’s
22 offered for $70 a month. Those are some things
23 that we talked about when the New NY Broadband
24 Program rolled out that’s kind of been put in the
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2 background at us, did we achieve our goals?
3 Again the claim of being served, this
4 was touched upon, too, the telephone poles. Some
5 of the companies work together very well. We need
6 that map because we have an issue with
7 redundancy. In the same areas that fiber is being
8 run and in the most rural hard-to-get areas where
9 the return is not that good, there isn’t fiber
10 run there at all, even with that investment.
11 I guess our other challenge too, is our
12 limited local resources. We do not have the
13 community capacity to be checking up on the
14 broadband office and then requesting this
15 assistance. I would like to bring up just the
16 Southern Tier Network model to give you an idea
17 that that has worked. In Elmira City Schools,
18 where Verizon was projected to increase their
19 service in 2013 at $230,000 a year, the Southern
20 Tier Network brought that to the school district
21 for $64,000 per year.
22 SENATOR MAY: So I’m going to cut you
23 off there in the interest of time because we need
24 to stick with this, but I will ask you as my
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2 first question to say a little bit this how does
3 the Southern Tier Network work and is it a model
4 for the rest of the state?
5 MS. GREGORY: Absolutely, I think it’s a
6 model and I’d like you to look at the other
7 resources you have. Not only do you have the
8 Broadband Program Office, but we have probably
9 one of the best GIS clearinghouse teams in the
10 state. They can map, when you combine what the
11 Broadband Program Office has and the
12 clearinghouse, they can map to the parcel. And
13 the county GIS administrators that are there can
14 help you achieve that broadband pole model there
15 to assess where you’re at.
16 Maybe it’s time to look at that
17 municipal model and say okay, we know in rural
18 areas that we’ve had the best private sector
19 investment possible. Maybe we look at a public
20 infrastructure model statewide and not put that
21 burden on each municipality to solve, but say
22 statewide these are the pieces, these are the
23 blocks that are in satellite coverage that still
24 need your help.
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2 SENATOR MAY: Thank you.
3 ASSEMBLY MEMBER THIELE: Carrie?
4 ASSEMBLY MEMBER WOERNER: Thank you so
5 much. So in this Southern Tier Network model, I’m
6 a little confused.
7 MS. GREGORY: Sure.
8 ASSEMBLY MEMBER WOERNER: In the
9 Southern Tier, can municipalities band together
10 to seek grant funding from the federal government
11 to build-out their own municipal utility network?
12 Is that what you are saying?
13 MS. GREGORY: Absolutely. And
14 unfortunately what has happened -- and we
15 attempted that back in 2009 under ARRA Stimulus
16 funding to build a 200-mile loop that would go
17 across all of the eight counties to do so and
18 have that dark fiber ring so you could run the
19 long stretches of fiber from community to
20 community and then that would make it affordable
21 for the smaller internet service providers to
22 build within their communities.
23 This also gets run to hospitals,
24 schools, the universities, 911 centers as well.
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2 The tough part is that some of this build-out has
3 happened in the state program has, so all the
4 anchors to achieve that return on investment have
5 kind of been cherry-picked. So now, we’re left
6 with very rural stretches without those anchors
7 to support and make that business model work.
8 ASSEMBLY MEMBER WOERNER: So were you
9 granted special authority to be allowed to do
10 this or can any combination of municipalities
11 work together and apply for this funding and
12 build-out their own regional networks?
13 MS. GREGORY: We did, we worked through
14 the two regional boards, Southern Tier 8 and
15 Southern Tier Central and because of our board
16 structure and representatives of each of the
17 legislative bodies, they were able to work
18 through our non-profit and essentially create
19 their own non-profit to apply for this funding.
20 We had a plan in place where we had a solid map,
21 because and they started collecting this data in
22 2005 to say where is this fiber not run. There
23 was not a need for investment. They fought that
24 case and applied for federal funding to rollout
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2 this infrastructure. And Southern Tier Network
3 was also one of the recipients from 2013 before
4 the New NY State Broadband Program rolled out. So
5 they received state and federal dollars and we
6 piecemealed another application through the New
7 NY State Broadband Program that was awarded in
8 the first round of funding.
9 ASSEMBLY MEMBER WOERNER: Okay. I’m sure
10 I can get your contact information. I’d like to
11 understand more how that whole thing got set up
12 and how we would make that be a statewide model.
13 MS. GREGORY: So, if you had a non-
14 profit office that would be dedicated to this,
15 because right now broadband program is through
16 Empire State Development, maybe it’s not -- I
17 don’t know if there’s anything in the legislation
18 for that or your Association of Counties, that
19 may be a method to start that because they would
20 still need to assess, and then you would have
21 that input from a smaller municipal level to
22 assess these are indeed where the gaps are and
23 yes we need this to go to the legislature.
24 The funding mechanism that maybe also
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2 useful is through Department of State has the
3 Shared Services Program and this seems like a
4 really good approach for the municipalities to
5 share this service. You know, as we develop
6 technologies with automated cars, weatherization
7 on DOT roads, this fiber, this infrastructure
8 runs along our roadways, those telephone poles.
9 Maybe through the Department of Transportation
10 and Department of State through their shared
11 services, maybe there is a method there. I’m not
12 familiar how that’s structured.
13 ASSEMBLY MEMBER WOERNER: Okay. Thank
14 you very much.
15 MS. GREGORY: Thank you.
16 SENATOR MAY: Does anyone else have
17 questions? I did want to say in talking to Jen
18 that one thing that came out, that the
19 Appalachian -- what’s the funding source? It’s
20 not available to most of the state. It’s only in
21 that Southern Tier region.
22 MS. GREGORY: That’s correct. The
23 Appalachian Regional Commission runs along the
24 Southern Tier from Lake Erie over to Schoharie
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2 County. And we were dedicated through this in and
3 seeing what’s happening in the other parts of the
4 county that gave us a head start. However, still
5 at that local level, we didn’t have the capacity
6 to implement as much as we wanted to.
7 SENATOR MAY: Okay. Thank you. Anyone
8 else have questions?
9 ASSEMBLY MEMBER THIELE: So I had to
10 Google this while I was waiting to ask you a
11 question. But so Southern Tier 8, you’re like
12 under the general municipal, you’re a regional
13 planning agency, right?
14 MS. GREGORY: Correct.
15 ASSEMBLY MEMBER THIELE: And then you
16 use the inter-municipal agreement provisions to
17 kind of put all of the counties together?
18 MS. GREGORY: Absolutely. And you have
19 ten of those, too, under the New York State
20 Association of Regional Councils that cover most
21 of the state. So we have a team, too. We have
22 addressed state issues with DEC in meeting their
23 storm water requirements so.
24 ASSEMBLY MEMBER THIELE: MS-4?
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2 MS. GREGORY: Pardon?
3 ASSEMBLY MEMBER THIELE: The MS-4?
4 MS. GREGORY: The MS-4, so we have that
5 structure in place and we work with DEC and we
6 could also be structured that way through
7 different funding programs, whether you run it
8 through the CFA.
9 ASSEMBLY MEMBER THIELE: You have a
10 unique set of circumstances, right. You had this
11 inter-municipal agency that you set up and then
12 you’re part of this Appalachian, you’re in that
13 zone too, so all of those things kind of --
14 MS. GREGORY: But those councils cover -
15 -
16 ASSEMBLY MEMBER THIELE: But it still
17 sounds cumbersome though. There should be a
18 simpler way to do this, right?
19 MS. GREGORY: It should be simpler.
20 ASSEMBLY MEMBER THIELE: Yeah.
21 MS. GREGORY: It should be simpler. But
22 you do have those ten organizations covering most
23 of your rural areas that could provide assistance
24 at a local level and then we report to our
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2 boards.
3 ASSEMBLY MEMBER THEILE: Right. Thank
4 you very much.
5 MS. GREGORY: Thank you so much.
6 SENATOR MAY: Okay. Thank you. Next we
7 have Lynn Gislason, resident of Port Byron, New
8 York.
9 MS. LYNN GISLASON, RESIDENT, PORT BYRON,
10 NY: It’s Icelandic, nobody pronounces it
11 correctly. Hi, my name is Lynn Gislason. I live
12 in Port Byron, which in the town of Montezuma and
13 would I like to thank Senator May for this
14 opportunity to come here and speak with all of
15 you. I’d also like to thank Senator Helming and
16 her office for giving me a focus for my
17 frustration with this issue.
18 On May 17th, I contacted Spectrum, spoke
19 with a very nice woman who informed me that I was
20 eligible for broadband services. She convinced me
21 to get cable, internet and home phone service
22 through Spectrum. This was all supposed to be
23 installed June 1st. On June 1st a technician came
24 out and suggested we run the line under the
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2 driveway. As a result, we would have to wait
3 until that was completed. That was completed on
4 June 7th. I then called to set up another
5 installation and on the day of the install, I got
6 a call from Spectrum and a technician named Dave
7 told me that I couldn’t have cable so the
8 appointment was canceled. I made several calls
9 before I knew I had cable -- because I knew I had
10 cable because it had been installed beneath my
11 driveway and connected to my house. All in all, I
12 have spoken with no less than 30 Spectrum
13 employees who are telling me different things,
14 all of them read my call history in their system
15 and they all seemed surprised and confused with
16 what they referred to as infighting going on
17 between departments at Spectrum.
18 I finally spoke with someone named
19 William Locky [phonetic] at the local Auburn
20 office. He explained the town of Montezuma didn’t
21 have a signed video franchise agreement. I
22 contacted the town supervisor, John Malenick, who
23 stated that he had not been presented with one,
24 however he was open to signing it. I called Mr.
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2 Locky back and asked if I could speak directly
3 with their legal department to get this signed. I
4 was later told that the area VP of Spectrum was
5 applying for a waiver to install my cable due to
6 all of the problems and that should have only
7 taken a couple of days. That was June 12th. It’s
8 now September. My calls then began going to Mr.
9 Locky’s voicemail more often than not. Based on
10 the assurances from Spectrum that I would have
11 service, I it canceled my Direct TV and Verizon
12 home telephone service.
13 I was put in touch with John Bub
14 [phonetic] from Spectrum who attempted to help
15 me. He explained there was confusion between the
16 Spectrum sales team and the Spectrum technology
17 team and I was the unfortunate victim. I live
18 just over the border between the town of Aurelius
19 in the town of Montezuma. The company that
20 spectrum subcontracted with to run the lines
21 unknowingly ran the line into the town of
22 Montezuma, therefore, when I would call Spectrum,
23 their sales team would tell me that I was
24 serviceable but when it went out to the technical
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2 team, they realized that the town of Montezuma
3 doesn’t have the signed video franchise agreement
4 and ultimately cancelled multiple install
5 appointments before all of this was discovered.
6 In an attempt to get this moving along,
7 I tried to connect all of the parties to get this
8 accomplished. Spectrum has now presented the town
9 of Montezuma with a right of way agreement. This
10 agreement would allow them to continue to lay
11 additional cable, turn my service on, as well as
12 19 to 20 other households who are also in my
13 predicament. The town of Montezuma could then
14 work out the details of the video franchise
15 agreement.
16 I attended the town meeting on August
17 20th and was informed that the attorney Kevin Cox
18 is not authorizing the town supervisor to sign
19 off on the right of way agreement due to some
20 pipes that were damaged by Spectrum
21 subcontractors, as well as wanting to work out
22 the financial video franchise agreement money
23 that they would get.
24 It is now the rural community that is
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2 standing in the way of this moving forward over
3 the issue of reimbursement from Spectrum for some
4 damaged pipes. I’m being used as a pawn in this
5 situation, while I am trying to get this
6 accomplished. In the meantime have I no cable, no
7 internet and now no landline service since June
8 1st.
9 If the town supervisor would sign the
10 right of way agreement and someone at Spectrum
11 could flip a switch, this problem for me and
12 several others in my situation would be solved
13 immediately and Spectrum could continue to work
14 on laying more cable.
15 I was on the phone with Mr. Bub again
16 September 6th, because I’m still trying to get my
17 Verizon service back now and they need to port my
18 phone number back. The problem is Spectrum never
19 turned on my account so they can’t release my
20 phone number so now my phone number is even being
21 held hostage. And I call Iceland a lot and I’m
22 whack racking up a huge amount of long distance
23 bills. It has not only been inconvenient and
24 frustrating to be dealing with all this
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2 unnecessary nonsense but out of pocket a lot of
3 money. I continue to not have any television
4 provider because have I to sign up for a one-year
5 contract and I’m hoping to get this issue
6 resolved.
7 My two daughters attend the Port Byron
8 School District. Our school superintendent, Neil
9 O’Brien, has ensured us that our school has
10 cutting edge technology available to students.
11 Every single student in our school district is
12 given a Chromebook from the school to complete
13 their school work. My daughters are in the top of
14 their classes in the ninth and tenth grade. Both
15 of them are taking online college courses this
16 semester and it is not made any easier with the
17 lack of broadband service in our town.
18 I spent countless hours trying to be
19 helpful and solve this issue and the town of
20 Montezuma won’t help me and Spectrum can’t help
21 me and I’m hoping someone can. Thank you.
22 SENATOR MAY: Well, thank you for
23 recounting that harrowing tale. We are not able
24 to help with a very local issue like this but it
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2 seems like your issue, it will resonate with a
3 lot of people in this state who are having
4 similar problems of crossing jurisdictions or
5 just simple frustration with trying to reach
6 people who can help. I very much appreciate your
7 bringing this to our attention. Is there anybody
8 want to ask a question? Any follow up?
9 SENATOR HELMING: I would like to make a
10 comment. Lynn, I want to thank you so much for
11 coming out and sharing your frustration with your
12 service provider, sort of service provider. You
13 want them to be your provider but you’re not
14 getting anywhere with it. And I think this
15 highlights just another area where we have these
16 gaps and people fall through the cracks for one
17 reason or another. It seems like in our rural
18 communities, if it’s not poor satellite service,
19 it’s you’re at the end of the road or there’s
20 service running by you, but you can’t connect to
21 it. There’s one issue after another and I think
22 this hearing will help address some of those
23 issues. But also as I said to you, I appreciate
24 your reaching out to Senator May to testify here
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2 and now that my office is aware of it, as I said,
3 we can help you with this as well and I know
4 you’re going to your local town board this
5 evening.
6 MS. GISLASON: They love me.
7 SENATOR HELMING: I wish you the best of
8 luck. Keep me in the loop and let me know how it
9 goes.
10 MS. GISLASON: I will.
11 SENATOR HELMING: Thank you.
12 ASSEMBLY MEMBER SANTABARBARA: I want to
13 thank you for coming and sharing your story your
14 assembly member? Do you know who?
15 MS. GISLASON: I don’t actually.
16 ASSEMBLY MEMBER SANTABARBARA: Okay. I
17 was going to reach out to them as well, if you
18 knew.
19 MS. GISLASON: Okay. I would appreciate
20 that.
21 SENATOR HELMING: We’re all set.
22 MS. GISLASON: I didn’t know if there
23 was someone else I was missing.
24 SENATOR METZGER: And I just want to
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2 mention, you know, it’s really, they’ve been a
3 disservice provider in so many ways in my
4 district, I mean we have, regularly get
5 complaints about Spectrum and their service and
6 that’s a huge issue that we’re -- it’s not just
7 about broadband access. It’s about the service
8 you’re getting from the company and it is they
9 control that market, so that’s something we need
10 to address.
11 MS. GISLASON: You mentioned HughesNet
12 before and we used to have HughesNet and I wanted
13 to make a t-shirt that was of my kids yelling
14 “we’re out of internet now”, so.
15 SENATOR METZGER: Right. Exactly, yeah.
16 SENATOR MAY: Alright. Thank you very
17 much. Next we have Rebecca Miller and Chris Ryan
18 from CWA.
19 MS. REBECCA MILLER, DEPUTY LEGISLATIVE
20 DIRECTOR, COMMUNICATIONS WORKERS OF AMERICA:
21 Good afternoon.
22 SENATOR MAY: Hello. Thanks for your
23 patience.
24 MS. MILLER: Thank you to you all. I
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2 want to start by thanking the chairs Senator May,
3 Assembly Member Santabarbara, Assembly Member
4 Thiele and of course, the entire committee and
5 the Commission on Rural Resources for this
6 important hearing and for inviting us to testify.
7 My name is Rebecca Miller. I am the deputy
8 legislative and political director for New York
9 State for CWA District 1. District 1 represents
10 more than 145,000 workers belonging to nearly 200
11 CWA local unions in New York, New Jersey and New
12 England.
13 Our members work in telecom, healthcare,
14 higher ed, manufacturing, broadcast and cable
15 television, commercial printing, newspapers and
16 state, local and county government. Nationally,
17 CWA represents over 500,000 workers in these
18 industries. I’m pleased to be joined by Chris
19 Ryan, who is the president of CWA Local 1123,
20 which is based in Syracuse and represents nearly
21 700 workers, mostly at Verizon. Chris has been an
22 outside plant technician at Verizon for the past
23 22 years. He also represents the town of Geddes
24 and the city of Syracuse and in the Onondaga
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2 County Legislature, where he served for the last
3 ten years.
4 Without question, broadband is an
5 essential infrastructure of the 21st Century.
6 Given the opening statements provided by you all,
7 it doesn’t seem like I need to convince you of
8 all that. It’s central in terms of economic
9 development, education, healthcare, public safety
10 and all of the things listed today. Additionally,
11 it doesn’t seem that I need to convince you that
12 already many communities, particularly rural
13 communities who have been left behind. This is
14 due to more than three decades of deregulation
15 which have left policy makers with few tools to
16 require universal deployment of affordable high-
17 speed networks to all communities.
18 The promise of the Telecom Act of 1996
19 and the subsequent deregulatory measures taken by
20 the New York Public Service Commission was that
21 deregulation would open the telecommunications
22 market to robust competition, which would in turn
23 guarantee customers the most advanced services at
24 the most affordable prices.
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2 For millions of New Yorkers that promise
3 has gone unrealized. Without competition or
4 regulatory oversight, cable monopolies can charge
5 high prices, deliver poor service and have fewer
6 incentives to invest in new services and
7 technology. Furthermore, they can displace good
8 union jobs with lower wages and often contract
9 labor employment, as we’ve heard in the last
10 case.
11 CWA is absolutely committed to
12 affordable broadband access for every New Yorker
13 and good jobs in the industry. But most of our
14 efforts to encourage Verizon to build-out its
15 fiber network beyond current service area in New
16 York have fallen short, besides the company’s
17 agreement last year to build 18,000 units as part
18 of phase the of the New York State broadband
19 program. This is due to deregulation and the
20 deregulated environment in New York State.
21 The reliance on competition alone has
22 resulted in a lack of good data, a lack of good
23 policy levers to ensure universal high quality
24 service that meets the needs of all New Yorkers.
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2 Too many communities are being left behind,
3 particularly in rural areas, where costs are
4 higher and in upstate cities, where median
5 incomes can be lower.
6 Broadband policy must recognize that
7 competition alone results in market failures and
8 a race to the bottom for workers. The
9 achievements of the New York State Broadband
10 Program should be applauded. When the program
11 launched, 30 percent of New Yorkers lacked access
12 to broadband. This lack of broadband coverage was
13 most acute in the eight upstate REDCs. Over the
14 course of three phases, the broadband program
15 provided a total of E487 million to subsidize
16 broadband deployment to approximately 255,000
17 units. Frontier won a total of $46.7 million to
18 build-out to 19,000 units while Verizon during
19 phase three won $85.3 million to deploy broadband
20 to 18,000 units. In addition Verizon voluntarily
21 agreed to wire an additional 21,500 homes in
22 areas contiguous to the subsidized areas, as well
23 as 7,000 additional homes on Long Island and
24 4,000 in the mid and upstate regions.
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2 As a result of the state broadband
3 program the state now claims there is universal
4 access. However, we know that far too many New
5 Yorkers lack access or experience inadequate
6 speeds or are forced to pay too much due to lack
7 of competition. As we’ve heard today, it’s clear
8 that from the discrepancies between the state’s
9 assessment of universal access and the complaints
10 legislators are hearing from their constituents
11 about lack of access or poor access that we need
12 better data.
13 We already heard about Census blocks so
14 I won’t tell you about those, but the point is at
15 the very least, that we need more granular and
16 accurate data to identify which areas do and do
17 not have access to true broadband and true
18 broadband speed. It’s worth noting that 25 megs
19 up and three megs down are actually relatively
20 low speeds compared to what other folks
21 experience throughout the world. So according to
22 one recent study, residents of Taiwan enjoy
23 average internet speeds of 85 megs up, residents
24 of Sweden get slightly over 55 and in most
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2 competitive markets of Verizon Fios, you can see
3 100 megs up, 100 down. And if you’re willing to
4 pay for it, you can go as high as 940 down and
5 880 up.
6 CWA is committed to affordable broadband
7 access. In addition we are weary of unproven
8 solutions. We understand the desire for
9 localities that have not seen broadband
10 deployment by private cable and telecom companies
11 to look to municipal fiber to fill the gap.
12 However, with some exceptions, most publicly
13 owned municipal owned broadband projects have not
14 been successful. Burlington, Vermont and Provo,
15 Utah are two well-known examples of failed
16 municipal broadband.
17 There has been some success in cities
18 where municipal utility has experienced
19 delivering electricity to customers’ homes and
20 sometimes in smaller communities. Even the
21 extremely well Google fiber, which is really well
22 capitalized, has dropped its plans to build fiber
23 networks beyond a handful of cities. The widely
24 cited example of Chattanooga, Tennessee has
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2 unique characteristics. It is operated by a
3 municipal electric utility that was created
4 during the Great Depression and their municipal
5 network received a significant amount of federal
6 funding thanks to 2009 federal stimulus package.
7 There are some workable models for
8 municipal broadband, but municipalities should
9 also carefully examine the feasibility of
10 launching those programs. Municipalities might
11 look towards public-private partnerships which
12 are less financially risky than owning a network
13 outright. Partnership between Verizon and the
14 City of Boston allowed Verizon to build their
15 network through the One Fiber Initiative that
16 expanded residential broadband and provided the
17 city with smart transportation technology.
18 CWA continues to support a regulatory
19 regime that holds incumbents accountable to build
20 universal quality fiber internet and telecom
21 networks, but in the current regulatory
22 environment, such tools do not exist and large
23 gaps persist. If and when communities embark on
24 municipally owned fiber projects, we believe they
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2 should include creating a public-private
3 partnership, competitive bidding process to
4 select one or more public entities to build and
5 operate the network in exchange for access to the
6 public infrastructure, guaranteed government
7 contracts and possibly some public funding.
8 However, we want to emphasize that
9 wherever public funds are being invested to
10 build-out broadband, strong labor standards must
11 be implemented. At a minimum, we believe that
12 muni fiber projects must be covered by a project
13 labor agreement and other strong health and
14 safety training standards.
15 At the same time as communities and
16 consumers are seeking high-speed wired
17 connections, wireless companies are deploying
18 hundreds of thousands of small cells on utility
19 and light poles to increase the capacity and pave
20 the way for next generation 5G. It should be
21 noted that 5G is still in development and a
22 wireless is no substitution for fixed broadband
23 and therefore, it may not be a good solution for
24 rural broadband.
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2 However law and policy makers decide to
3 move forward, we encourage you to implement
4 strong labor standards to protect workers and
5 ensure quality service. It must be grounded in
6 policies that support the growth of good jobs,
7 fair labor standards and respect for workers
8 rights in the telecom industry. To achieve these
9 goals, state legislatures should require that any
10 recipients of public funds or other public
11 support mechanisms designed to foster broadband
12 infrastructure investment and any recipients’
13 affiliated enterprises, contractors or
14 subcontractors abide by the following four labor
15 protections and then I’m done, I swear.
16 SENATOR MAY: Alright.
17 MS. MILLER: One, pay prevailing wage
18 and benefits. Two, file certified payroll records
19 which will be made available to the public.
20 Three, comply with all federal state and local
21 laws and regulations including but not limited to
22 those involving labor employment, environmental
23 and workplace health and safety. And four,
24 respect existing collective bargaining agreements
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2 and related telecom work jurisdiction.
3 We’re super thankful to be here and
4 grateful for this opportunity and we’re committed
5 to being an engaged stakeholder throughout the
6 process. Thank you very much.
7 SENATOR MAY: Great. Thank you so much.
8 And I appreciate having someone from my district
9 here, so Chris, thank you for being here. Using
10 my questioning time, I want to ask you to talk
11 about how good a job are we doing with the labor
12 practices in building out broadband in our
13 district?
14 MR. CHRISTOPHER RYAN, PRESIDENT,
15 COMMUNICATIONS WORKERS OF AMERICA: Well, let me
16 say just specifically I think we’re, as far as
17 the labor practices go, labor standards specific
18 to our area and our union local, I think we’re
19 doing well. I think more specifically where we’re
20 doing the broadband in our area has been good.
21 And I understand that the number of people that
22 are getting on the network is good, right, so
23 we’re going down to areas that are more rural. We
24 are going down to southern parts of Cayuga
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2 County, Onondaga County, north up to Oswego
3 County, but as far as that goes with Verizon, but
4 I can’t speak to other companies that are doing
5 it. I know there are kind of contractors from out
6 of state that are doing other places for other
7 companies. But as far as the labor practices go,
8 but I will say though, specific to our area, we
9 do have a significant, we have one of the five
10 call centers, fiber solution centers, a little
11 plug for the town of DeWitt and Senator May
12 there.
13 So we employ over 350 people and I think
14 that that speaks to the heart of Assemblyman
15 Santabarbara’s opening statement about jobs. We
16 have right now about 40 or close to 40 or 50 new
17 temporary employees that have been put on for
18 this area and they’re linemen. I’ll say my father
19 started with New York Telephone in 1968. He was
20 in the Navy, he was a Seebee, he came out and
21 said okay, your job’s at the phone company and
22 then when I started there, I didn’t really plan
23 to make a career out of it, but I also, I’ve been
24 a lineman for over 20 years, and not doing a lot
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2 of it now as my current role as president of the
3 union local. But we have a new group of, and I’m
4 old right, so we’ll call them kids and they want
5 jobs, too.
6 So I’m really, really, really looking
7 forward to employing this next generation of
8 people that want to come up and do this type of
9 work because it’s not easy work. But the point,
10 but it’s not just the linemen, right. The linemen
11 build it. To Senator Helming’s point, firing up
12 and lighting up the cable splicers, to the inside
13 people who install and maintain, it to the 350
14 members, 300 members that we have who do the
15 customer service and technical support, it’s a
16 really good job opportunity and I think it’s
17 worth noting.
18 And again I can’t stress enough that
19 we’re happy that Verizon is building and I think
20 it’s significant and I just hope we do more and
21 lastly I’ll stop right now, but we also have --
22 that’s the good news, the bad news is we have a
23 long way to go and I don’t need to convince
24 anybody up there that there are pockets without.
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2 And we go from all the way from Madison County to
3 the Monroe County border, north to Oswego and
4 down to Penn Yan, and Watkins Glen and there are
5 people that, I mean we can talk about who gets
6 what service, 98 percentages. But if you want to
7 talk to the people that are very, very frustrated
8 because they’re livings off of DSL or less, then
9 that’s not a good option.
10 SENATOR MAY: Let me just follow up. So
11 I understood from your testimony basically you
12 want better regulation of internet providers but
13 not necessarily municipal broadband programs. But
14 that wasn’t where I was going with this. We just
15 heard a harrowing story from somebody who lives
16 on the border between two municipalities and
17 there are all kinds -- and we often hear, like
18 someone just said to me, you know, we have poles
19 on our property with fiber on them but we can’t
20 get it connected to our house.
21 So I’m wondering from the labor
22 standpoint, do you run into this a lot? And I’m
23 just wondering, is there a role for the line
24 workers, for example, to have input into where we
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2 could, how we could do this better and more
3 efficiently provide to homes. Does that make
4 sense?
5 MS. MILLER: I mean is the question is
6 there opportunity for people who are directly
7 participating in the market to impact it?
8 SENATOR MAY: Right.
9 MS. MILLER: Absolutely. I think we’re
10 absolutely member led and member driven. And the
11 experience of our members is critical to all the
12 work we do and any policy proposal that we would
13 ever support.
14 MR. RYAN: And I’ll speak for the line
15 workers. The line workers of Verizon and CWA
16 Local 1123 would gladly wire up everywhere,
17 anywhere and however they could do it, not just a
18 shameless plug for our union local, that’s not
19 what I’m saying. What I’m saying is it provides
20 an option, right. We just heard this horror story
21 from Fort Byron, where we got somebody across the
22 street. That happens everywhere. That happens in
23 every jurisdiction. It happens in the city of
24 Syracuse, where in the town of DeWitt they have
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2 it, but across the street literally they can’t
3 and it’s there. Like, literally that is across
4 the street and you can have an option for the TV,
5 you can actually have high-speed internet, but I
6 don’t have the same opportunity and they won’t. I
7 think that competition, if competition
8 flourishes, then I think that drives down the
9 price. I think that consumers have a significant
10 advantage in that they can have high-speed
11 internet, and they can also have not high-speed
12 internet, but world class internet.
13 SENATOR MAY: Thank you. I’ve gone over
14 my time so I have to call myself on that and see
15 if anybody else has a question. Let’s start with
16 this, oh, go ahead, Assemblyman Smullen.
17 ASSEMBLY MEMBER SMULLEN: Thank you,
18 Senator May. In my 19 years of public service on
19 the school board and as town supervisor and now
20 the privilege of being a state assemblyman, I
21 found that some of the best places to get
22 information on your community are at the local
23 coffee shop or barber shop or convenience store.
24 And in my town, I have an opportunity to talk to
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2 some of the workers for Frontier. And one of the
3 biggest complaints that they have is that as
4 they’re getting older and retiring, they’re just
5 not getting replaced, or the job training
6 programs that should be available to the new
7 linemen and to the new workers is slow in coming.
8 Is that a problem that you see across the
9 industry? Because now we have wait times of two,
10 three, four weeks to have a repairman come out to
11 your home and to work on a very vital service,
12 obviously. So this something, from your
13 standpoint that you are on the frontlines with
14 the workers, is some something you find across
15 the industry that they’re just simply not
16 replacing and of course their complaint is the
17 money is going to management. I can’t say that
18 for sure, but I know that these guys, men and
19 women, are burning the candles at both ends in
20 all kinds of weather, God bless them for what
21 they do. But do you notice some being something
22 that’s kind of chronic to the industry?
23 MR. RYAN: Yes. I would say that. And
24 too, with town boards, before I was on the county
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2 legislature I was six years on the town board
3 too.
4 ASSEMBLY MEMBER SMULLEN: Thank you.
5 MR. RYAN: So I’m with you, right. So
6 that’s the heart of democracy, right, in the
7 coffee shop, true. But yes, we do see that. We
8 have, previous to this new round of linemen that
9 were put on, and there has been a couple of
10 installation repair technicians put on, we hadn’t
11 hired anybody since I think 1998. So I mean there
12 is a significant gap and there’s, you know, with
13 the aging workforce and I’ve been there for 22
14 years and I’m 46 and I’m not slowing down yet,
15 but there’s a lot of other people who are. And
16 I’m hopeful that we can replace them. But it is,
17 there was a point in time, but there was also, I
18 think deregulation has a little bit of a play in
19 that, too, where we used to have service quality
20 standards that companies were fined for lack of
21 those service quality standards. And then when
22 those went away, I think the willingness to spend
23 money to repair went away and that’s industry
24 wide.
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2 But I think going forward, I think we
3 have an opportunity. I think going back to how it
4 connects with the New NY Broadband, if we’re
5 adding more customers and more customers are
6 signing up and more rate payers, then I think we
7 have an opportunity to hire more people, which
8 again is in the sense the return on the
9 investment. If we’re incentivizing companies to
10 add the infrastructure and provide a service and
11 consumers are willing to purchase that service,
12 then we’re hiring more people to do it and you
13 know, we pay because we are union and we
14 negotiated a very, I think the best contract, we
15 it’s a significant compensation.
16 MS. MILLER: I do just want to add, I
17 think that’s a really important point here on how
18 deregulation has impacted the service quality
19 standards. I mean in 2004, I believe Verizon,
20 I’ll have to double check, was fined $70 million
21 for not keeping up with the requirements at the
22 time. And then in 2005, the penalties and fees
23 were taken away due to Comp Three of the PSC
24 proceedings. So I think those service quality
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2 standards that were in existence a few decades
3 ago are no longer here, so yeah, it’s taking a
4 long time to get the work order repairs done.
5 ASSEMBLY MEMBER SMULLEN: I mean we’re
6 going to make all these high level decisions and
7 all this money being tossed around and when the
8 rubber hits the road and you’ve got to have the
9 guys that are actually doing the physical work,
10 if you don’t have them, nothing can be
11 implemented. So thank you.
12 MS. MILLER: Yeah, and if they’re not
13 required to do it, it might be more difficult.
14 ASSEMBLY MEMBER SMULLEN: That’s a good
15 point.
16 SENATOR MAY: Thanks. Senator Metzger.
17 SENATOR METZGER: First of all, thank
18 you so much for your testimony and I appreciate
19 that you brought up the 5G issue, because for
20 rural areas that’s not going to be a solution and
21 that fixed broadband investment is so important.
22 I also appreciate that you brought up the
23 importance of labor protections and I think phase
24 four that we’ll be considering needs to make
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2 provisions for that. I’m curious to see what you
3 see as standing in the way of reinstating the
4 service quality standards?
5 MS. MILLER: I mean that is the
6 jurisdiction of not me and not CWA. I think, you
7 know, increasing those the ways that we can put
8 pressure on the different companies to provide
9 these services to consumers is something that we
10 certainly would be in favor of. But that is
11 certainly more of a legislative on the state
12 level and then of course, as we have discussed
13 before, there are preemption issues but I think -
14 -
15 SENATOR METZGER: Right. I guess my
16 question is really the interplay of the federal
17 and state and whether there is an obstacle at the
18 federal level.
19 MS. MILLER: The action that was taken
20 that I just referred to in the early 2000s and
21 that was part of a process I believe that started
22 with the PSC in the early 1990s, was a state
23 level action.
24 SENATOR METZGER: As we can also see the
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2 parallel in the utility, in the electricity
3 industry, deregulation has not given the promised
4 benefits so it’s a very similar situation.
5 MS. MILLER: Exactly.
6 SENATOR MAY: I guess we have no more
7 questions. Thank you very much for your
8 testimony.
9 MS. MILLER: Thank you all.
10 MR. RYAN: Thank you very much.
11 SENATOR MAY: It’s good to see you both.
12 And coming up, Gretchen Hanchett.
13 MS. GRETCHEN HANCHETT, EXECUTIVE
14 DIRECTOR, GREATER ALLEGANY COUNTY CHAMBER OF
15 COMMERCE: I think my testimony started out good
16 morning, but I’ll say good afternoon, Senator
17 May, Assemblyman Santabarbara, senators and
18 members of the Assembly. It’s a pleasure to be
19 here and it’s my first opportunity to come before
20 you in a hearing. And almost literally everything
21 that I have in my testimony has been covered with
22 a few exceptions. So as a matter of time, I will
23 try to summarize but I practiced reading it over
24 and over again so I’ll do my best.
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2 Allegany County, I am not sure if you
3 know where Allegany County is, but it is a very
4 rural area. We have approximately a population of
5 48,000 in the whole county. Tourism is growing
6 but our biggest part of our tourism spending for
7 Allegany County is second homes. The camps, the
8 houses on our two lakes there and we need to be
9 able to have broadband in order to grow.
10 Our manufacturers are continually
11 leaving our area, as they are in many areas in
12 the state, so we look for other ways to start
13 growing. Entrepreneurship, working at home, many
14 businesses are paying their workers to work at
15 home. It’s cost effective for them and it’s
16 certainly a way to have people live in a
17 beautiful, quiet, serene area where they want to
18 live and be able to be connected to the world.
19 Allegany County is a gorgeous rural
20 county nestled under a canopy of a huge number of
21 beautiful trees. Sometimes that’s a blessing.
22 With internet, it is not. We believe our location
23 is ideal for access to natural resources, clean
24 water and outdoor recreation, but at the same
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2 time being close to interstate, rail
3 transportation and easy access to airports.
4 We also believe high-speed internet
5 service is no longer a luxury, as we’ve heard
6 over and over again this morning. In the 21st
7 Century, it is a necessity. Unfortunately in
8 rural western New York there remains significant
9 areas where it is only a dream or perhaps a
10 promise, but certainly not a reality. Internet
11 service across our nation and state is
12 predominantly provided by a few large companies
13 that understandably have responsibility to their
14 equity holders to maintain acceptable return on
15 investment, thus we run into those problems of
16 expanding.
17 The consequences of this situation also
18 means that sparsely populated areas, much like
19 Allegany County are not as high of a priority as
20 more densely populated areas. Companies such as
21 Spectrum, Verizon, AT&T, Frontier Telephone
22 continue to invest in technology needed to
23 provide services mainly in areas that have higher
24 population density which we talked in great
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2 length about. So let me see if I can scoot down a
3 little bit.
4 And we certainly are appreciative of
5 Governor Cuomo recognizing the need to bring
6 broadband to New York State. This program has
7 provided great funding to support the deployment
8 of high-speed internet access to underserved
9 areas throughout New York, providing substantial
10 support to companies willing to make that
11 investment in those lower density areas including
12 much of Allegany County.
13 And I did attach two maps. This one
14 right here shows phase round two and round three
15 for Armstrong, which was an awardee. And they are
16 the bright pink and the lighter pink and
17 unfortunately I cut off the letters. The green is
18 HughesNet. It looks like we are pretty much
19 covered. But in reality, this is HughesNet and
20 this is not broadband and that’s the majority of
21 our county.
22 To try to simplify a very complex
23 situation, using Armstrong as an example, the New
24 York State Broadband Program Office provides
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2 support for that company to build-out to specific
3 areas and again we will go into the Census block
4 area. That is an issue. They may have two or
5 three houses in a census block. Armstrong cannot
6 provide that fiber in that area. Our local SBCA
7 raised millions of dollars and built a beautiful
8 facility and it takes in several different
9 counties. The fiber is being put on a pole but
10 they cannot hook it up to it.
11 SENATOR MAY: I’m going to interrupt you
12 because your time is up. But I have time, so I’ll
13 ask you for what are your recommendations? What
14 would you like to see us do?
15 MS. HANCHETT: Well, let’s see. That
16 time went fast. Some of our opportunities that we
17 have, better mapping was brought up over and over
18 again so I don’t need to go on to that. Barrier
19 to entry, irrespectively of technology type or
20 solution there is always overarching obstacles
21 associated with broadband deployment and that is
22 access to the poles. In the case of fiber
23 deployment, as previously stated, the permitting
24 process, make ready, has been very difficult. We
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2 talked about wireless internet. Their solutions,
3 for example, pioneering joint program with
4 wireless internet services. And our county
5 started that program and received $5.6 million a
6 several years ago. And in the county, the program
7 used emergency 911 towers that the county has
8 erected to serve public safety needs. This
9 permits the county to use same infrastructure for
10 two critical needs of the county residents and
11 businesses. The use of 911 towers and private
12 wireless internet providers has extended high-
13 speed internet services to areas of the county
14 that were previously underserved. So I think we
15 need to look into those other solutions because
16 there are places fiber will never make it. The
17 population is just not large enough.
18 So I think there are currently multiple
19 programs available at the federal, state and
20 local level. Unfortunately, there doesn’t seem to
21 be a great deal of coordination or cooperation in
22 these different levels of government and I think
23 that needs to be addressed. They should also
24 encourage local innovation and experimentation to
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2 address unique local needs and I know it was
3 brought up about talking to the locals, going to
4 local officials because they really do know what
5 the needs are and where we need the internet.
6 Our rural areas have many advantages and
7 present unique opportunities. Our rural citizens
8 are entitled to enjoy these benefits while still
9 receiving basic services. As I said before, many
10 of these subjects were covered over and over
11 again and I was trying to figure out how to cut
12 all this out. I’m glad you’re all on the same
13 page. We appreciate you looking into it and we
14 really need to look at several different
15 opportunities, because there is not just one
16 answer in rural areas, so thank you.
17 SENATOR MAY: Thank you. Any other
18 questions? No? Alright. Thank you very much for
19 your testimony.
20 MS. HANCHETT: Thank you.
21 SENATOR MAY: David Wolff?
22 MR. DAVID WOLFF, CHAIR, BROADBAND
23 COMMITTEE,ADKACTION: Good afternoon. I would
24 actually ask that I get the eight minutes because
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2 I want to talk to mapping, the issue that has
3 come up here and I would like to point out the
4 next steps I think that we need to take to be
5 able to get to what I believe what we should do
6 which is a phase four. My name is Dave Wolff. I
7 was born and raised in Saranac Lake New York.
8 I’ve retired back to Saranac Lake after a 31 year
9 career with IBM, IBM Consulting. I’m on the board
10 of AdkAction, the details --
11 SENATOR MAY: I’m going to interrupt you
12 because there is a little feedback or something.
13 If you can speak a little more slowly, I think
14 we’ll understand you better. Thanks.
15 MR. WOLFF: Okay. I probably should step
16 back from this, too.
17 SENATOR MAY: Yeah.
18 MR. WOLFF: I’m on the board of
19 AdkAction, the details about that organization
20 are in the handout. And I’m also the chair of
21 their broadband committee. I would like to
22 challenge you all and challenge the State of New
23 York. I think the goal for broadband in the state
24 of New York should be 100 at 100, i.e., 100
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2 percent of the homes should have access to
3 broadband speeds of at least 100 megabits or
4 better. I believe it’s a public policy issue.
5 It’s not an issue about cost. My grandfather’s
6 generation, if you will, did this with federal
7 and state funding to provide connection to
8 electrical power. My father’s generation did it
9 with phones. I think it’s time that we do in the
10 state of New York, we connect every household
11 with either fiber or coaxial cable.
12 Before I start talk about the mapping
13 issue, I need to at least talk about the
14 definitions that we’ve thrown around unserved and
15 underserved. The State of New York’s definition
16 of unserved is anybody that has access to
17 broadband speeds of less than 25 meg, if you are
18 between 25 and 100 you are underserved.
19 And you heard from Jeff Nordhaus earlier
20 that when the New NY Broadband Program is
21 completed and the Spectrum 145,000 address
22 network expansion is done, roughly this time in
23 2021, that there will be only one percent of New
24 York State households that won’t have access to
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2 100 megabits.
3 The rest of my testimony, I want to talk
4 to you today is, okay, how do we identify that
5 one percent? If we are going to achieve the goal
6 that I’m proposing, which is 100 at 100, we need
7 to figure out who they are, where they are and
8 that information is required before you can then
9 turn around and say what’s it going to cost to in
10 fact bring fiber or coaxial cable to those folk.
11 And by the way, you’d like to know, I
12 think you, yourselves, as well as of the local
13 officials, to identify who those people are and
14 where they are, so when the next constituent
15 calls you and asks when is my poor broadband
16 service going to get fixed, you would have an
17 answer.
18 There are two categories of unserved and
19 underserved. And if you’d go to the handout that
20 hopefully you just got, on page two of the
21 detailed charts is a chart that shows the first
22 category. This is what we’ve been talking a lot
23 about, which is everybody that’s been awarded a
24 Spectrum -- excuse me, a HughesNet, my mistake,
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2 award -- what I’m showing you is a map of the
3 state of New York. Every Census block awarded to
4 HughesNet is highlighted in yellow, a fairly
5 extensive portion of the state of New York is
6 being given that service. The good news is
7 everybody in those Census blocks was unserved by
8 definition before they got the HughesNet award.
9 HughesNet Service though, the bad news is, that
10 we’ve been talking about is 25 megabits with a
11 soft cap, which by definition means everybody is
12 underserved. That’s the first category. We know
13 where they are. That’s the good news.
14 The second if you go to page three, the
15 second category of unserved or underserved is,
16 I’ll call it the elephant in the room and what
17 I’m going to show you on the chart on page three
18 and the charge page four --
19 SENATOR MAY: Let me ask you to lift
20 that up a little higher so other people can see
21 it. There we go. Thanks.
22 MR. WOLFF: The elephant in the room on
23 this one is this category, all the households
24 that are outside, beyond the boundary of the
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2 Spectrum networks in Spectrum rural franchises.
3 Spectrum’s expanding their network by 145,000
4 households. There’s no way that is the total
5 number of households in their franchises that
6 don’t have access to high-speed 100 megabits.
7 So the question is how do we identify
8 the folks that are not addressed? And what we’ve
9 done is there is a GIS application that Jim Monty
10 referred to earlier that we have developed, being
11 used in the North Country that this chart and the
12 next chart will explain what’s going on, which is
13 to be used to help us identified the unserved and
14 underserved households that are beyond the
15 boundary of Spectrum inside the rural franchises.
16 Starting on the left-hand side, what
17 you’re doing is this is a county level showing
18 Franklin County, the center as we layer a layer
19 on top that puts all the Census blocks that are
20 state land, by definition you can’t live in state
21 land, so in this Census black that’s green in the
22 center is going to be unserved or underserved.
23 On the right-hand side, you see where
24 we’ve now layered in any provider that received
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2 monies from the state of New York under the New
3 NY Broadband Program. Per Jeff Nordhaus earlier,
4 everybody in those Census blocks must be
5 addressed. So what’s left is the blocks that are,
6 if you will, areas in this case, Franklin county
7 that have no color. That’s where we want to focus
8 our attention.
9 Going to the next page, this is just a
10 further example of how to use the map. Starting
11 on the left-hand side of Franklin County, what we
12 do is now drive down to the local town, I’m going
13 to pick the town of Harrietestown, which is my
14 town. It is a town that has a Spectrum franchise.
15 Driving down to my local neighborhood, 50 homes
16 around Lake Kiwassa, and on the right-hand side
17 what you see is, with the GIS capabilities, we
18 have identified all 911 addresses in my
19 neighborhood. That is the universe of, if you
20 will, the addresses that we have to make sure
21 have acceptable internet.
22 And what I’m going do is now use this
23 information, this map, going to the next page to
24 show you how you might now identify the unserved
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2 underserved outside the boundaries of our local
3 Spectrum network. Since I know the neighborhood,
4 I know where Spectrum’s network ends. They bring
5 service to the north part of the lake and to the
6 east part of the lake. The two bronze ellipses
7 are circling addresses that have no Spectrum
8 internet. They’re outside the boundaries of the
9 internet, excuse me, of the service from
10 Spectrum. I’ve gone on the Spectrum URL that was
11 talked about earlier. I have verified that two
12 days ago, that every address in those ellipses,
13 it is still unserved. It is not going to be
14 addressed by their network build-out. So when
15 they’re done in September of 2021, everybody
16 inside those two bronze ellipses will be
17 unserved.
18 The other way we’re using this
19 application is the last chart, which and I took a
20 screen shot from the application and I backed it
21 up, if you will, so I have my local address
22 neighborhood around Lake Kiwassa and I’ve now
23 included parts of the neighboring village of
24 Saranac Lake. Again, you see the two bronze
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2 ellipses down in my neighborhood. I happen to
3 know, again, with local knowledge, the closest
4 wire line competitor to Spectrum’s network is
5 where you see the red X. That’s two miles, over
6 two miles from the nearest ellipse. There’s no
7 way that that competitor competitively could
8 provide service to those bronze ellipses better
9 than Spectrum could. My point here is Spectrum is
10 the only game in town and I point out that
11 basically Spectrum has a de facto monopoly on the
12 unserved and underserved in its rural franchises.
13 SENATOR MAY: I need to ask to you wrap
14 up.
15 MR. WOLFF: So, with a goal of 100 by
16 100, we need to identify the unserved and the
17 underserved. And what I’m recommending we do is
18 this GIS application I talked about is I would
19 recommend providing that application, taking it
20 statewide. The rough cost estimate to do that is
21 on the order of a quarter of a million dollars
22 and we could do that for every town, rural town
23 in the state of New York.
24 The second piece I recommend is that you
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2 all request of the PSC to require Spectrum to
3 publicly make available where does their network
4 end by street, by town in aggregate across the
5 state. I’m not asking for their customer
6 subscriber information. I just want to know where
7 the network ends, so now local officials, people
8 like myself can sit down and figure out who is
9 beyond that border and identify the households
10 that will continue to fall through the cracks as
11 it were.
12 And so the only way we can achieve, the
13 goal I’m talking about is 100 by 100 is to get
14 this information, then you can turn around and
15 figure out what it’s going to cost and hopefully
16 then at that point, come back to you all and say
17 we’re going to have to raise the money somehow.
18 But if New York does achieve 100 by 100, it will
19 now be addressing one of the key limitations to
20 economic development in rural parts of New York
21 State. Thank you.
22 SENATOR MAY: Thank you. So, I’m going
23 to come back to a question that I asked our first
24 witnesses just, I mean if you have somebody who
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2 decides they want to live off the grid, they
3 build a cabin way, way, way out off the grid
4 literally and then they decide oh, well, I want
5 to have a home office here and I need to get on
6 the grid, I think it’s legitimate to ask is that
7 -- should the taxpayers be footing the bill to
8 connect people who are very far away from the
9 grid? I imagine in the Adirondacks there are
10 quite a few circumstances like that.
11 MR. WOLFF: I think it’s a fundamental
12 question about policy, is it a public good like
13 electrical power, like phone access or is it an
14 issue of cost benefit. I believe it’s a public
15 good. I believe the future economic welfare of
16 the State of New York would require everybody in
17 the state to have 100 at 100.
18 SENATOR MAY: Okay. Thank you. Other
19 questions? Please.
20 ASSEMBLY MEMBER JOHN SALKA: Thank you.
21 Thanks, Dave, for coming down and thank you for
22 all the work you’ve done on this. We’ve had many
23 conversations about this and you have, you’ve
24 gone leaps and bounds to get this information for
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2 us. So what you are saying is, essentially, even
3 if and I kind of shudder to look at this map that
4 you provided. We have a lot of coverage in the
5 Adirondacks and the North Country provided by
6 satellite service. Even if that coverage was
7 grade A, let’s say, for example, we’re still
8 saying we can’t -- under your method, many parts
9 of New York State, we cannot identify what the
10 unserved areas are. We can but we haven’t, even
11 if that coverage is good. Even if the Time Warner
12 coverage is everywhere they say it is, we’re
13 still at a shortfall in providing some areas.
14 MR. WOLFF: Yeah, the, you have the New
15 York State, New NY State Broadband Program and
16 you kind split the state with Spectrum. And as
17 part of the merger agreement, Spectrum then said
18 they would go out to 145,000. So the New NY State
19 Broadband Program, we know where exactly where
20 they are and they are requiring all providers to
21 touch everybody in a Census block. That leaves us
22 back over here with Spectrum and I’m saying after
23 the 145,000 network build-out from Spectrum,
24 there will be an unknown number of households
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2 outside the limits of their, the endpoints of
3 their network that still will not have access to
4 broadband and we need to identify those folks.
5 ASSEMBLY MEMBER SALKA: And what Mr.
6 Monty said before was we don’t know what we don’t
7 know, or --
8 MR. WOLFF: That’s it. We don’t know if
9 --
10 ASSEMBLY MEMBER SALKA: He said it a
11 little more elegantly than I did.
12 MR. WOLFF: We don’t know what we don’t
13 know.
14 ASSEMBLY MEMBER SALKA: How do we know
15 where we are with that until they say they’re
16 done?
17 MR. WOLFF: And that’s why I’m
18 suggesting that we go to the local level with the
19 data, at literally the 911 address level with
20 local people that know what’s going on in their
21 town to identify by address who’s at risk.
22 SENATOR MAY: Absolutely.
23 ASSEMBLY MEMBER SALKA: Sure. I agree
24 totally. Thank you again. I do want to make the
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2 point for the North Country and my district in
3 particular, I live in a geographically diverse
4 area. A lot of the Adirondacks there are a lot of
5 valleys, a lot of flat farmland that always is
6 being underserved or unserved right now. But when
7 we get down to it the solution that you said is
8 hardwire every place in New York State. Is there
9 any other technologies out there beside
10 satellite, which we’ve all agreed here I think,
11 on the panel, is not serving our constituents as
12 well as it should be, is there any other
13 technologies out there that we can use? And I say
14 this because maybe we won’t get to that goal of
15 hardwiring everyone. What are the other
16 technologies?
17 MR. WOLFF: The one of interest to me is
18 the low level satellite solutions which, I think
19 there are four companies that have been approved
20 to try and pursue that technology, in which case
21 you’re bringing the satellites down much closer
22 to the earth. The problem is you need a lot more
23 satellites and then you have issues about how you
24 trade off calls and stuff as the satellite moves
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2 around. But as the satellite gets closer, the
3 bandwidth speeds can go up and your latency
4 period goes down. But that is how many years in
5 the future? Don’t know.
6 ASSEMBLY MEMBER SALKA: Okay. Thank you.
7 SENATOR MAY: Thank you.
8 MR. WOLFF: Thank you very much.
9 SENATOR MAY: So next, we have three
10 CEOs of electrical cooperatives. After them,
11 there is still 11 witnesses on our list, so we’re
12 really going try to keep it to the five minutes
13 to the extent that we possibly can.
14 ASSEMBLY MEMBER SANTABARBARA: Five
15 minutes each?
16 SENATOR MAY: That would be --
17 ASSEMBLY MEMBER THIELE: Nice try.
18 SENATOR MAY: You think we can do ten
19 minutes for all three of you?
20 MR. TIM JOHNSON, CEO, OTSEGO ELECTRIC
21 COOPERATIVE: We hope so. Yeah, we’ve been
22 redacting and crossing out since you started
23 saying this.
24 SENATOR MAY: Okay. Good, let’s set it
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2 at 10 minutes then, thanks.
3 MR. JOHNSON: Okay. So I’m Tim Johnson,
4 I am the CEO of Otsego Electric Cooperative in
5 the Cooperstown, New York area. Bryant Dillon and
6 Keith Pittman are with me. We are New York State
7 Rural Electric Cooperative Association members.
8 There’s only four co-ops represented by the
9 association. The other one is not here. He is --
10 they are in Senator Metzger’s district and they
11 have participated in the New York Broadband
12 Program in the form of a partnership with local
13 telcos.
14 Otsego Electric did not have that
15 option. We did not have local telcos that were
16 stepping in the gap to provide this service, so
17 we, although we were an electric cooperative
18 providing service to about 4,500 metered
19 locations, we felt that we needed to step forward
20 and we applied for and received $10 million of
21 New York State funding and $4 million additional
22 from federal CAF funds to build-out a fiber
23 network. With that, we also get the benefit of
24 increasing our smart grid capabilities to
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2 position those in the future.
3 So we feel it is a twofold benefit and
4 the other benefit is underestimated in my opinion
5 greatly. We plan to make gigabit service -- we
6 are already making gigabit service available at
7 very fair prices with no data caps, of course.
8 This is a fiber to the home project. We’ve built
9 over 600 miles of fiber to this point and with
10 only 525 miles that were grant eligible, so our
11 cooperative has undertaken quite a bit of capital
12 investment in the form of debt to make this
13 available to 100 percent of our members. That
14 would involve more than 5,000 locations. We’ve
15 also taken on as part of the bid process, about
16 another 1,000 locations that are in the New York
17 State electric and gas service territory.
18 Do let me jump ahead to what we see as
19 some of the public policy issues. Mapping had
20 mentioned by many. Funding obviously is the other
21 one. The driver for all of this is money. Make
22 read costs, we know and have a very firm grasp on
23 what the construction costs are, but make ready
24 is a blank check that we sign up for when we
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2 apply for permission to attach to investor owned
3 utilities outside of our network. Within our
4 network, absolutely no problem, outside of our
5 network, this is a very big issue, even the
6 application fees and the initial stages to find
7 out how much your eventual make ready might be.
8 And quite honestly, make ready costs including
9 pole replacements may double the cost per mile to
10 build-out so that cannot be underestimated.
11 The mapping issue that was discussed
12 this morning, we see pockets or islands of
13 properties that are unserved and although we may
14 qualify for financing out to a census block
15 bounardy, the last household might be a mile
16 away. So the next guy, who’s like a half-mile
17 into the unawarded area is a mile-and-a-half so
18 we’re talking tens and tens of thousands of
19 dollars to get to that last mile customer. We
20 would love to get to them. But we can’t do that
21 purely on debt financing. There isn’t a rate of
22 return available for that, so public funding is
23 critical for that.
24 I haven’t heard anybody mention crowd
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2 sourcing as an easily accessible process to
3 identify parcels that need to be flagged. And
4 also we need an easily accessible challenge
5 process and maybe this is at the federal level at
6 the FCC, but something that needs to be addressed
7 as well.
8 We feel that the Rural Development
9 Opportunities Fund may provide some
10 opportunities, I doubt that it will be very much
11 for New York State. At the federal level, that
12 could be $20 billion. I don’t know how much might
13 come to New York. It’s possible, but I’m not sure
14 it will be very much money.
15 We think that gigabit fiber to the home
16 project should be given preference over less
17 robust technologies such as fixed wireless and/or
18 DSL and/or cable.
19 SENATOR MAY: I’m just going to
20 interrupt. Are you going to take the whole ten
21 minutes?
22 MR. JOHNSON: How much time have I taken
23 already?
24 SENATOR MAY: Five minutes already, so.
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2 MR. JOHNSON: Thanks, let me skip to one
3 other major topic which has just arisen and that
4 is local jurisdictional taxation. We have been
5 notified that our fiber assets are going to be
6 assessed locally by a municipality and that will
7 cut into our ability to expand in the future by,
8 we estimate, at least 25 percent based on the
9 experience that we’ve seen locally. So we need
10 clarification and I’ll defer to my partners.
11 SENATOR MAY: Okay.
12 MR. BRYANT DILLON, GENERAL MANAGER,
13 STEUBEN RURAL ELECTRIC COOPERATIVE: Alright. As
14 Tim mentioned, my name is Bryant Dillon, I’m the
15 general manager for Steuben Rural Electric,
16 located in Bath, New York. I’ll skip ahead to
17 some topics that haven’t been covered. We at
18 Steuben Rural Electric have been working closely
19 with telecommunication companies to make our
20 infrastructure available. We’re doing this with
21 as few barriers to entry as possible and as
22 safely as possible. Between all phases of the New
23 York State Broadband program approximately 3,000
24 of our underserved or unserved members will now
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2 have access to high speed internet. Again,
3 satellite was awarded for a large portion but
4 we’ve covered that in great detail today so I
5 won’t go into that.
6 Another concern that we have is many of
7 you are aware as a condition of Charter
8 settlement agreement they were required to expand
9 their footprint in rural territories. As such,
10 we’ve received numerous pole attachment
11 applications which seem to overlap geographic
12 regions covered by the New York State Broadband
13 Program funding. This appears to be
14 counterproductive to the goal of expanding
15 broadband in rural communities. They have since
16 withdrawn a lot of their applications and have
17 not submitted any further applications to date.
18 Regardless of future plans, we feel that
19 it would be sensible to require that Charter
20 build-out to locations that are unserved or
21 covered by satellite service. At the very least,
22 we feel that consideration should be given for
23 these overlapping coverage areas and should not
24 count towards Charter’s obligation to serve rural
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2 communities. We’re aware that this concern is
3 being addressed to some extent, but we hope it
4 continues to be monitored to pursue the most
5 efficient expansion of broadband coverage.
6 SENATOR MAY: Okay.
7 MR. KEITH PITTMAN, CEO, ONEIDA-MADISON
8 ELECTRIC COOPERATIVE: Good afternoon. I’m Keith
9 Pittman from Oneida-Madison Rural Electric
10 Cooperative in Bouckville, New York. With my two
11 minutes here, I’d just like to share a little bit
12 about our area. Our experience resembles much
13 what we’ve heard about today. We have certain
14 areas that are multiple served with broadband,
15 multiple providers, exceptional situation. We
16 have folks just starting to see things happen,
17 thanks to the rural broadband programs and so
18 forth. And then we have some areas where people
19 are hopeless and desperate, which I think are the
20 folks you hear from regularly. They feel like
21 we’re never going to see anything happen here.
22 So one of the challenges I would
23 recommend is that folks take a look at things
24 like the cooperative owned business model.
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2 Seventy-five years ago people didn’t have power
3 in our area, same situation and eventually money
4 was made available. It takes money, as Mr.
5 Johnson said. You are not going to get past the
6 25 or fiber to the home without money. But the
7 challenge would be how does that money get spent,
8 who does it get allocated to and how can it best
9 work at the local level?
10 And would I argue it’s not the same
11 everywhere. People know in their neighborhoods
12 where they need things and so things can be done
13 at the local level, at the municipal level, at
14 the electric cooperative level, so I would
15 encourage that there be paths for folks to take
16 local control.
17 Electric cooperatives have subscribed to
18 that theory for 75 years and went from separate
19 folks to today in New York, the electric
20 cooperative memberships are some of the best
21 served and happiest consumers of electricity in
22 this state. So I would just mention that that’s
23 kind of a forgotten business model. But if you
24 look around the countryside, I’m actively
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2 involved with the National Rural Electric
3 Cooperative Association as well as the Northeast
4 Electric Cooperative Association. There’s plenty
5 of success stories and efforts being made to
6 approach, rather than sending money to large
7 profit-seeking out of town agencies to direct
8 more of the money and resources to local non-
9 profit mentality, such as what is going on at
10 Otsego Co-op, which I think is a shining example
11 of a great use of money owe over there for the
12 local benefit. Thank you.
13 SENATOR MAY: Thank you. You guys did a
14 good job, yeah.
15 ASSEMBLY MEMBER SANTABARBARA: Thank you
16 for your testimony. The overlapping areas, I
17 agree with you, that is an issue that we do need
18 to look into and I think that’s something this
19 commission should look into, is Charter receiving
20 credit for areas that are already covered and
21 should they focus their efforts elsewhere. I
22 think that’s a very good point. I made note of
23 that and we will add that to our list, long list
24 of things we need to follow up on. And as far as
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2 challenging the maps and the process for that, I
3 know the FCC, as I said in my opening statement
4 and some of the other comments that they did
5 issue an order to fine tune these maps, not use
6 the census blocks, use the shapefiles, but in
7 addition to that, they also are creating, I don’t
8 know if it is available yet or will be available
9 at some point, an online portal that’s available
10 to state, us here, but also local entities to be
11 able to challenge those areas. And hopefully that
12 will give us better information as to the
13 properties and the communities and the areas that
14 we are talking about because, yeah, there’s areas
15 that are missed.
16 And then, you know, the other issue you
17 mentioned is affordability and how much is it
18 going to cost if we do need to get to these
19 remote areas or a property that’s maybe a few
20 miles out. Can we get it there? And if it is not
21 affordable, you know, that sort of defeats the
22 purpose of even getting service out there if
23 nobody can afford it. So I just wanted to mention
24 those items. I appreciate your testimony and
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2 thank you for being here.
3 SENATOR MAY: Yeah, thank you. Senator
4 O’Mara?
5 SENATOR O’MARA: Yes, thank you all for
6 being here. I applaud you for the efforts that do
7 you in your rural communities in providing low
8 cost electricity. I have one question from to Mr.
9 Dillon, since you’re from the district I
10 represent, so I’ll target you. In your written
11 remarks, at the bottom of the first page, you
12 said the time constraints set forth impose a
13 significant challenge. Can you expound on that a
14 little bit on what kind of time constraints you
15 have that you’re dealing with?
16 MR. DILLON: Yeah. The Broadband Program
17 Office set forth time constraints for the
18 funding. That has been quite challenging because
19 in our particular instance, system wide we have
20 about 23,000 poles. We had to go out and inspect
21 about half of those and about half of our
22 infrastructure in a very short timeframe. But we,
23 we’re a very small organization, we have 30
24 employees companywide. We scaled up and we were
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2 able to meet the deadlines that were set forth
3 but it has been quite a challenge. It’s very
4 important.
5 SENATOR O’MARA: For any internet
6 companies that are utilizing your poles and this
7 could be answered by any of the three of you, are
8 you actually setting those yourselves or are you
9 allowing the other company to just access your
10 poles?
11 MR. DILLON: In our case, we’re actually
12 contracting that out ourselves to control the
13 process and make sure it moves at a fast pace
14 because we’ve heard a clear message from our
15 membership that the expansion needs to happen in
16 a timely manner, so we’re scaling up to address
17 that.
18 MR. JOHNSON: In Otsego, since we are
19 building our own project, we did our own pole
20 setting internally. We’ve contracted out for one
21 set. In phase three we’ve seen a significant ramp
22 up in make ready costs, because of particular
23 engineering standards on delta type systems,
24 which is unfortunate. We’re replacing, out of 147
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2 poles, we are replacing 47 for instance. So
3 that’s a pretty high rate of pole replacement. In
4 some cases, we need two feet to attach to a pole
5 sometimes and we’re being asked to replace a 35-
6 foot with a 50-foot or 55-foot pole, which makes
7 very little public policy sense. Privately it
8 makes a lot of sense.
9 SENATOR O’MARA: Thank you.
10 ASSEMBLY MEMBER SANTABARBARA:
11 Assemblywoman Woerner.
12 ASSEMBLY MEMBER WOERNER: Thank you very
13 much. I’m very intrigued about the rural electric
14 cooperative model and how it could be expanded to
15 address broadband. So is it your recommendation
16 that one of the things we might do is create a
17 section of law that establishes rural broadband
18 cooperatives modeled on the rural electric
19 cooperatives model? Because there are only four
20 rural electric cooperatives in New York State and
21 you’re all pretty much centered in one part of
22 the state. The rest of us didn’t get on the
23 bandwagon. So is that your -- am I -- is that the
24 your recommendation?
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2 MR. JOHNSON: This is something that I
3 have not contemplated at all, but my reaction is
4 that we’re non-profit tax exempt organizations,
5 however, we do pay local property taxes. But we
6 feel that as a member-owned democratically
7 controlled organization, that we’re ideally
8 suited to conducting electric distribution
9 facilities and/or broadband and many other types
10 of services.
11 MR. PITTMAN: I would add to that, yes.
12 I think the business model is well proven in the
13 realm of electric utility and as folks here have
14 mentioned today, broadband is becoming more like
15 a utility, right? Isn’t it a necessity? So not
16 saying rural electrification, rural broadband is
17 the only answer, but it certainly provides a
18 yardstick or a standard of competition, a
19 standard of, another way of doing something that
20 sometimes proves educational in the broader
21 field. So I think it’s something that makes a lot
22 of sense to at least contemplate how that would,
23 another way of getting the result that may be
24 desired.
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2 ASSEMBLY MEMBER WOERNER: So with the
3 following of that thought process, if we were to
4 recommend a round four or phase four or phase
5 five investment, would it make sense to condition
6 that the rural electric cooperatives and if there
7 were rural broadband cooperatives that they be
8 given some sort of priority in the build-out
9 because you’re doing fiber to the home?
10 MR. JOHNSON: We wouldn’t be opposed to
11 that. [Laughter]
12 ASSEMBLY MEMBER WOERNER: I didn’t think
13 so, I didn’t think so, but that’s sort of where
14 we are headed, right? Is to say these are locally
15 controlled entities that are in tune with the
16 needs of local communities. You’re prepared to
17 make the investment to deliver fiber to the home
18 because you don’t have the same profit and loss
19 issues that the larger companies are, so
20 therefore if our goal is to get to the 100 by 100
21 that giving preference to locally controlled not-
22 for-profit entities is a better use of the money
23 to achieve that goal?
24 MR. PITTMAN: I would say that the
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2 minute you take profit out of the equation,
3 you’ve free up money for achieving your goal.
4 ASSEMBLY MEMBER WOERNER: Great. Thank
5 you very much.
6 SENATOR MAY: Senator Seward?
7 SENATOR SEWARD: Yeah, thank you, first
8 off, I just want to say thank you to our electric
9 co-ops who are represented here today as well as
10 the Delaware County who was not able to be here
11 today. Back in the ‘30s I guess it was, the
12 electric co-ops were instrumental in bringing
13 electricity to rural areas. And here we are in
14 this day and age you are very, very helpful in
15 delivering high-speed broadband in our rural
16 areas and for that I want to thank you.
17 I did, since Tim Johnson is from my
18 district, I want to ask him a question and
19 perhaps all of you could also answer as well. But
20 you had mentioned and of course, we’re very
21 familiar, we have talked many times about your
22 build-out in Otsego County and you even went
23 beyond what the broadband dollars provided.
24 MR. JOHNSON: Over 100 miles, yes.
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2 SENATOR SEWARD: Right, utilizing, did
3 you say borrowed funds?
4 MR. JOHNSON: Borrowed capital.
5 SENATOR SEWARD: Right. Now, my question
6 is and we’ve talked a little bit about whether or
7 not we should be coming in with a phase four or
8 five in terms of additional broadband money. My
9 question is the remaining unserved households
10 that you’re familiar with, that you just couldn’t
11 get to, are they, shall I say, lower hanging
12 fruit? I mean it wouldn’t be that expensive if
13 there was funding available or are we down to
14 those prohibitively expensive households?
15 MR. JOHNSON: There are still
16 prohibitively expensive households out there
17 where somebody has maybe had the second thought,
18 thinking oh gosh, now I’m out here, it would be
19 nice to be connected and they initially wanted to
20 be off the grid. We’ve provided electric service
21 to people of that nature as well. They share the
22 expense. We ask for a private contribution and
23 that may be a solution. It’s worked well for co-
24 operatives across the nation. It hasn’t been
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2 entirely publicly financed, sometimes privately.
3 But yeah, there’s some low hanging fruit
4 out there. There’s quite a bit. I have an example
5 of a map. We’re all the way around it, but we’re
6 a mile and a half from this one farm. They want
7 service. They have used satellite available to
8 them. We would probably be able to get to them.
9 It involves about 15 electric poles outside of
10 our system so, you know, just the application
11 fees alone to get on those poles is $5,000 or so,
12 I forget the number, $6,000 maybe. So that can be
13 prohibitive just by itself. So yeah, any amount
14 of money in phase four would get us much closer.
15 I think we’d be able to close a lot of the gaps.
16 There may still be gaps, especially in the
17 Adirondacks. There are some real low sparsity out
18 there and where it is sparse, the business model
19 starts to really fall apart.
20 SENATOR O’MARA: Thank you.
21 MR. PITTMAN: I would add to that a
22 little bit, too, that the cooperatives are well
23 positioned to deal with the local issues, because
24 as we heard earlier about a place where there was
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2 a chance to grow jobs and so forth. Well, with
3 local control, local ownerships, as Mr. Johnson
4 described, there may be those in between cases
5 where it can be partially funded by the consumer
6 and the cooperative or the local entity provider.
7 So I think there’s good opportunity there to
8 maximize the use of money once again.
9 SENATOR O’MARA: Thank you.
10 SENATOR MAY: Alright. Thank you very
11 much. I appreciate it.
12 MR. DILLON: Thank you.
13 MR. JOHNSON: Thanks for having us.
14 SENATOR MAY: We have David Berman from
15 Connect Columbia. Oh, I’m sorry, Dr. Todd Schmit
16 from Cornell.
17 DR. TODD M. SCHMIT, ASSOCIATE PROFESSOR
18 OF APPLIED ECONOMICS AND MANAGEMENT, CORNELL
19 UNIVERSITY: Before I begin my testimony, I want
20 to thank the scheduler for putting me right after
21 the rural electric co-ops. That will become
22 evident in about two minutes. Good afternoon. My
23 name is Todd Schmit. I’m an associate professor
24 and agricultural economist in the Charles H.
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2 Dyson School of Applied Economics and Management
3 Unit in Cornell’s College of Ag and Life Sciences
4 in the SC Johnson College of Business.
5 Thanks for holding this public hearing
6 about the status of rural broadband in New York
7 and to identify methods to encourage its
8 expansion. My team at Cornell conducts applied
9 research and extension programming in the area of
10 agribusiness development with a particular focus
11 on implications for rural economies. As part of
12 our portfolio, we examine cooperatively
13 structured businesses and opportunities for new
14 cooperative development.
15 It is in this area that I come to you
16 today to speak to you about research I’m involved
17 in regarding the financial feasibility and
18 potential for rural broadband cooperatives owned
19 and governed by local rural residents. As you
20 know, traditional internet providers are less
21 likely to offer high-speed internet to lesser
22 populated rural areas, as the returns on
23 investment are insufficient. Rural residents
24 faced a similar situation in the 1930s regarding
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2 electricity and telephone services and many
3 utility cooperatives were formed across the
4 country. Access was deemed a necessity for
5 economic development and as a means to recover
6 from the economic downturn of the Great
7 Depression. Many of those original cooperatives
8 are still in existence today.
9 With respect to rural broadband, a
10 number of federal programs have provided grants,
11 loans, loan guarantees to expand broadband access
12 in rural areas and state and local governments
13 continue to patronize and support its expansion.
14 In particular to New York, as was mentioned
15 earlier, the New NY Broadband Program provides
16 financial assistance. Applicants must agree on
17 cost share provisions and offer a minimum speed,
18 maximum price option to improve access to all
19 residents.
20 My team investigated the financial
21 feasibility to expand high-speed fiber to
22 unserved and underserved areas in five rural
23 townships in Franklin County. We considered the
24 startup of a new cooperative and for an existing
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2 cooperative utility to expand into broadband
3 services. The area is characterized by low
4 population and housing densities, full-year
5 residences and many seasonal and recreational
6 residences, some rustic and designed for seasonal
7 use while others are single family homes that
8 could be used year round. We considered a two-
9 tiered monthly service pricing structure for
10 members, one price for high-speed users and
11 another price for lower speed users. Initial
12 market prices were based on existing prices near
13 the study area and consistent with the New NY
14 Broadband Program for a minimum speed, maximum
15 price offering.
16 The New York broadband program funds up
17 to 80 percent of project costs through a grant,
18 with the remaining 20 percent sourced from other
19 funders. Funding from commercial lending sources
20 is often necessary to capitalize businesses fully
21 and where lenders often require business owners,
22 in this case the member owner users, to invest.
23 In our analysis, capital construction
24 costs were covered 80 percent by the grant, ten
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2 percent by a term loan and ten percent by member
3 investment distributed equally among all
4 household members. Under the new co-operative
5 scenario and using prevailing market prices in
6 the study area, operating expenses for the
7 cooperative exceeded total sales in each year,
8 resulting in a negative cumulative cash flow of
9 nearly $6.5 million over ten years. Even under
10 the co-operative expansion scenario where some
11 expenses on existing fixed assets, poles,
12 equipment, workers were reduced, the cumulative
13 cash flow was still negative.
14 Importantly, the high degree of
15 financial infeasibility at market prices was not
16 due to burdensome capital loan servicing
17 requirements, okay. Ninety percent of the capital
18 costs were covered by a grant and member
19 investment. In other words, financial
20 infeasibility had less to do with the upfront
21 capital investment cost for these systems than
22 the annual operation and maintenance costs
23 required to sustain them long-term.
24 SENATOR MAY: Dr. Schmit, your time is
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2 up but I’m going to use my time to ask you, what
3 are your conclusions and what are the policy
4 implications?
5 DR. SCHMIT: Okay. Sorry. I thought I
6 had 10 minutes. So let me jump to my conclusions.
7 SENATOR MAY: Okay. Thank you.
8 DR. SCHMIT: Numerous concerns exist
9 about the long-term impact to the study area.
10 They’ve been mentioned today. Tourism is an
11 important driver, people visiting the area,
12 seasonal use property owners expect long-term
13 broadband. Without it, you can expect lower
14 stays, ultimately lower property values.
15 When a minimum return on investment is
16 replaced with meeting member needs, the advantage
17 of a cooperative venture is clear. You just heard
18 from the colleagues before me. However, the
19 willingness and ability of members to pay
20 relatively larger user prices remains an open
21 question and deserves community input.
22 Our other pricing scenarios indicated
23 for an existing cooperative venture, the prime
24 premium above market prices is actually quite low
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2 and consistent with broadband expansion coming
3 from rural telecoms and some rural electrics in
4 the United States.
5 However, we need to consider fully the
6 other public benefits that you mentioned in terms
7 of education, public safety and business
8 expansion. The case was made for electricity and
9 telephone services in the 1930s and similar
10 arguments hold for this technology today. We can
11 compute what those numbers are, we can compute
12 what the premiums are, we can talk about what
13 parameters would be necessary under potential
14 public-private partnerships. Thank you.
15 ASSEMBLY MEMBER SANTABARBARA: Just, the
16 sustainability costs just to maintain the lines
17 and you briefly mentioned. How does that compare
18 over time? Does that just compare to the capital
19 costs?
20 DR. SCHMIT: Yeah, we had an upfront
21 capital cost for this system that served about a
22 thousand users in those rural towns and that was
23 about $8.3 million I believe. Operation --
24 maintenance and repair costs are about 300. The
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2 other top three were, in this case, there are no
3 electric utility co-ops there. The next three
4 after maintenance and repair were pole rental at
5 about a quarter of a million a year, property
6 insurance and property taxes.
7 ASSEMBLY MEMBER SANTABARBARA: Thank
8 you.
9 SENATOR MAY: Thank you.
10 DR. SCHMIT: Thanks.
11 SENATOR MAY: So next we have David
12 Berman and I’m going to ask Annabel Felton to
13 come up at the same time just because some of the
14 questions may be similar questions, but you’ll
15 each get five minutes for your testimony. We’ll
16 start with you, Mr. Berman.
17 MR. DAVID P. BERMAN, CO-CHAIR, CONNECT
18 COLUMBIA: Okay. I’m going to zip through this
19 being an old TV guy, we’re going to do the
20 highlights of every page. Thank you for having
21 me. I represent a Connect Columbia. It’s a
22 citizens’ action group comprised of both elected
23 officials and citizens. We have labored long and
24 hard over the last few years and with the
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2 outstanding help of our Assembly Member DiDi
3 Barrett, succeeded in getting some $30 million
4 from the Broadband Program Office.
5 I’m one of the few insomniacs who has
6 read the PSC merger agreement multiple times. We
7 were thrilled to see that legacy Charter would be
8 upgraded in Columbia County over the objections
9 of the Time Warner Charter management. Because I
10 am a suspicious sort, I had every town in
11 Columbia County that had a franchise agreement
12 exercise their right in their franchise right
13 agreement to request and obtain an as built map.
14 You will note now, Spectrum will not
15 provide a detailed as built map, so I actually
16 know where they were in each of those towns. So
17 first of all, if you take what the Broadband
18 Program Office did and said, forget their
19 statistics, I don’t know where they came from. I
20 would say that in the town of Ghent, where I am
21 from and in most of Columbia County, that you
22 would have probably 75 percent of the population
23 having access to broadband but somewhere between
24 50 and 60 percent of the geography, because what
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2 we’ve all failed to address here is geography.
3 Secondly, when it comes to people saying
4 I’m legacy Charter, you call Charter and they
5 will tell you no, you’re not, but for $20,000, we
6 will do that. I then take a picture of the as
7 built map and say your line’s across the street.
8 Let’s knock it off. I have saved innumerable
9 amounts of money for people. I wouldn’t say that
10 they’re out to defraud the consumer. I would say
11 they’re blazingly incompetent most of the time.
12 I’m the snarky one, you see. Moving on
13 to the others, and just a final thought on
14 Charter. One of the provisions in that merger
15 agreement was an improvement in customer service.
16 Now, it was also benchmarked by comparable to
17 other cable companies and boy, everybody knows
18 nobody likes their cable company.
19 Looking at the other small operators
20 that took more than money in Columbia County,
21 Consolidated, formerly FairPoint, GTel and Mid-
22 Hudson Cable all got substantial money. One of
23 the issues we had was an overlap because much of
24 legacy Charter were considered franchise areas,
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2 this is all in the document if you want to read
3 it. So, for instance, I went from 61 DSL line to
4 a choice between Spectrum and Consolidated’s
5 fiber to the home. I go to the street behind me,
6 which was a BPO award to Consolidated where the
7 census block goes down the middle of the road and
8 therefore, people on that side of the road don’t
9 have service, people on this side of the road
10 some of them do, because while people are
11 supposed to provide service for everyone in the
12 census block, they do not.
13 So that brings me to where I’m at with
14 my wonderful Assembly Member DiDi Barrett who has
15 with our prodding and poking and her excellent
16 work we have requested that we get beyond this
17 war between BPO and the PSC and have Mr. Dinapoli
18 do what he does so well, which is an audit, so
19 that we know where they have installed, where
20 they were supposed to installed, where they got
21 paid to install, where they should be fined for
22 not installing and then use that as the reap map
23 of where we should be, where we aren’t.
24 Lastly on that issue, get rid of census
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2 blocks, don’t use 911, because I can tell you
3 there’s probably ten percent in my town who are
4 not on the 911 map and go to the ultimate gold
5 standard which is the tax rolls. Because now you
6 have something that you can physically address
7 and walk up to. And before I just get to my last
8 point, people look up. Look up at every pole. On
9 the top is electricity. Next step down is
10 probably old style copper telephone. If you see
11 thick black cable that’s fiber, it’s there. Make
12 people pay attention to it.
13 And on that note of, with Spectrum’s
14 non-disclosure agreement with Public Service
15 Commission, forcing an audit would give you
16 public disclosure getting the results of an audit
17 that would be made public would be just an
18 amazingly wonderful thing. Let’s get past 100
19 service, we’re way behind the times, we need
20 gigabits service, I will be there quickly.
21 And you should learn one last acronym
22 which is IOT, the Internet of Things. Everything
23 needs to be connected. There are huge programs in
24 third world countries where large farms and small
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2 farms installing in effect dumb terminals that
3 measure every measurement that you need to farm,
4 we need to be able to do that here. We are a farm
5 to table operation, especially in Columbia
6 County, since you can’t hire anybody now because
7 restaurants are closing because you can’t hire a
8 waiter or I can’t get my car fixed because car
9 mechanics have left. You need to automate, and
10 that’s the way to do it.
11 SENATOR MAY: I need to ask you to wrap
12 up.
13 MR. BERMAN: Other than that, I will be
14 quiet.
15 SENATOR MAY: Okay. Thank you. And we’re
16 going to start again with five minutes I think
17 for Ms. Felton then I think some of the questions
18 may be similar to both of you.
19 MS. ANNABEL V. FELTON, CHAIR, DUANESBURG
20 BROADBAND COMMITTEE: Thank you pairing me with
21 Mr. Berman who speaks so eloquently. I came today
22 because of a simple question that my then 14-
23 year-old daughter asked me five years ago. Good
24 afternoon, my name is Annabel Felton. I’m chair
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2 of the Duanesburg Broadband Committee. I live
3 with my family in western Schenectady County.
4 We’ve a short commute to Albany where both my
5 husband and I worked. When we built our house in
6 the rural suburbs and moved there in 1996, we
7 were aware that there were no cable lines. We
8 bought satellite television dish and went on with
9 our lives.
10 Little did we know that cable and high-
11 speed internet would never come down our road.
12 the question my daughter asked, mom, why can’t we
13 get internet at home like normal people. By 2014,
14 we all needed internet to do our jobs to, do our
15 homework, to work from home. So I told my family,
16 I will get us wired broadband. How hard can it
17 be?
18 I’ve learned it’s very hard. I’ve
19 learned a lot and I’ll skip all the list of
20 things I’ve learned. But among the things that I
21 learned is that something that doesn’t exist that
22 could have helped this problem is mutual benefit
23 districts for broadband. They don’t exist. I’ve
24 spoken to the staff for Mr. Santabarabara on that
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2 issue before. Create a county law providing for
3 mutual benefit districts that would at least
4 allow local communities to pull themselves up by
5 their boot straps.
6 My town is very supportive and
7 sympathetic. They formed, the town board formed
8 the Duanesburg Broadband Committee and asked me
9 to chair it, and so I sit here before you. Our
10 goal, it was formed for the purpose of advocating
11 for high-speed broadband to everyone, all
12 residents in our town. We expect 100 percent
13 service with fiber. In order to serve all the
14 locations anywhere, we need to know who is served
15 and who is not served. We are a Time Warner, now
16 a Charter franchise town. Despite the franchise
17 agreement with our town, Charter has steadfastly
18 refused to provide service availability maps.
19 The maps posted by the New York
20 Broadband Program Office are still based on 477
21 data, that first tab. It is notoriously
22 inaccurate. Unfortunately, the public believes
23 the information on the Broadband Program Office
24 maps is correct because it’s provided by our
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2 government. People have purchased homes because
3 the maps told them service was available when it
4 was not. A bad map is worse than no map. Fix the
5 maps or take them down.
6 My committee used boots on the ground
7 information and surveys of town residents to
8 determine who was and who was not served. We then
9 created our own Google map precisely showing the
10 location of unserved homes. Duanesburg has about
11 2,000 residences and in May of 2018 when we
12 created the maps, one-third of the homes were not
13 served. This is commuting distance to Albany. Of
14 those unserved, more than half, 313, had no BPO
15 award because they are incorrectly reported as
16 served by Charter. It’s beyond time to fix New
17 York State broadband availability map, remove any
18 information from it based on the FCC Form 477
19 submission.
20 Now that we have accurate service maps,
21 my town, town of Duanesburg is pursuing broadband
22 line extension on a road by road basis. We’re
23 using franchise fees and $100,000 dollars
24 provided to us by Schenectady County to provide
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2 trenching on roads to bring the cost down so
3 Charter will serve us.
4 Even after settlement with the Public
5 Service Commission, Charter continues to hide its
6 build-out plans and the Public Service Commission
7 allows this information to be redacted. If
8 Charter’s required expansion will not serve all
9 256 homes remaining unserved in my town, we need
10 to know that now, not after September 2021.
11 Charters claim that their expansion information
12 is trade secret is disingenuous at best and
13 fraudulent at worse. Other providers have told me
14 they can get the information directly from the
15 BPO.
16 The only possible reason for Charter’s
17 non-disclosure to allow them to cheat. They want
18 to count homes previously served as newly served
19 under the 145,000 required in the settlement.
20 This is not a victimless ploy. For every location
21 left unserved Charter may ultimately receive 80
22 to90 percent grant funding from the BPO. For the
23 public, Charter’s build-out plan can only be
24 ascertained by tedious searching on the Spectrum
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2 address lookup. The plan is an ever changing
3 hodge-podge of addresses, sometimes dropped in
4 the center of an unserved road. My address is one
5 of them. With no coherent strategy for serving
6 contiguous areas or for future build-out.
7 Charter, as it has always done,
8 continues to cherry pick the more profitable or
9 annoying customers like me, in our town leaving
10 behind isolated, noncontiguous pockets of
11 unserved homes. Presumably in the future, they
12 will seek grant funding to serve these difficult
13 to reach areas while simultaneously preventing
14 any other internet service provider from building
15 into the franchise area.
16 SENATOR MAY: I need you to wrap up.
17 MS. FELTON: To wrap up, there are two
18 more recommendations that I have. And they
19 involve the Department of Public Service. The
20 Department of Public Service should require
21 network build-out within franchise areas by
22 incrementally lowering the density requirement
23 for rural build-out by seven homes per mile each
24 year. This would eliminate unserved locations in
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2 franchise areas within five years. Franchise
3 holders cannot be permitted to leave isolated
4 pockets of unserved homes. If franchise owners
5 don’t like it, they can leave.
6 The DPS, number two, should require pole
7 attachment contracts by franchise area, not by
8 pole. This will reduce the incentive to cherry
9 pick profitable homes within franchise areas by
10 reducing the extra cost of serving homes on lower
11 density roads.
12 I just want to say last month my husband
13 and I drove our daughter to her new apartment at
14 college. I asked her if she was sure there was
15 good internet connection at her new apartment.
16 She looked at me like I was nuts, three heads.
17 She said, mom, of course there is, internet is
18 included in the rent, it’s a utility. Ladies and
19 gentlemen, I still don’t have broadband internet
20 at my home. Fix the maps and keep the grant
21 funding coming. Thank you.
22 SENATOR MAY: Thank you. Just want to
23 say I think you mean Public Service Commission
24 not the Department of Public Service.
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2 MS. FELTON: No, I mean both.
3 SENATOR MAY: Is it the same?
4 MS. FELTON: I mean both.
5 SENATOR MAY: I mean it’s not the same,
6 but it’s, yeah, DPS is --
7 MS. FELTON: I mean both.
8 SENATOR MAY: But in any case, yeah,
9 thank you. I can hear the emotion in your voice
10 and obviously --
11 MS. FELTON: To some degree that’s --
12 SENATOR MAY: -- there is good reason
13 for this. Does anyone have questions? I want to
14 know more about mutual benefit districts. Is that
15 something you write about in your testimony?
16 MS. FELTON: I don’t, actually I didn’t,
17 no. But a mutual benefit district would allow a
18 town or municipality, well depending on whether
19 it’s part of town law or county law, would allow
20 that municipality to create a benefit district,
21 just as they would a lighting district. But since
22 it is not provided for in the law, it is not --
23 it is left to the state. That is, it would have
24 to be provided for specifically under county or
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2 town law.
3 SENATOR MAY: Okay, thank you.
4 SENATOR METZGER: First, I have a
5 question. How you obtained the legacy maps, how,
6 when?
7 MR. BERMAN: Oh, before the merger,
8 under our franchise agreement.
9 SENATOR METZGER: Oh, so you’ve had
10 them, okay.
11 MR. BERMAN: We requested them from the
12 old Charter management. The minute that we got
13 moved into the Time Warner management here in
14 Albany, we --
15 SENATOR METZGER: Lost access, yeah.
16 MR. BERMAN: There’s any number of
17 people who would like to draw and quarter the
18 [unintelligible] [05:08:19] --
19 SENATOR METZGER: And I have a question
20 about the surveys you did. So, this is what I
21 kept thinking with our first panelists this
22 morning, the Public Service Commission and the
23 governor’s office, surveys of people, that’s of
24 residents, and that’s not just whether or not
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2 they have service but what their service, their
3 level of service is. Did you also ask about that
4 in terms of speeds or did you just focus on
5 service, no service?
6 MS. FELTON: We focused on whether or
7 not a broadband line was provided to individuals.
8 We had very, I have a very smart person on our
9 committee that knows GIS mapping so we have a
10 Google map that’s open to anyone who wants to
11 look and on it is a flag for every home that’s
12 unserved. I have provided that information to
13 both the BPO, I’m willing to provide it again.
14 We’re keeping it up to date as the build-out
15 progresses.
16 MR. BERMAN: Similarly in Columbia
17 County we did speed tests of everyone around the
18 county to demonstrate just how dire the situation
19 was, even after we built.
20 SENATOR MAY: Okay. Thank you.
21 ASSEMBLY MEMBER SANTABARBARA: Yes,
22 Annabel, thank you for the hearing, I know
23 Annabel is my constituent we’ve talked about this
24 issue for a long time.
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2 MS. FELTON: Indeed.
3 ASSEMBLY MEMBER SANTABARBARA: And
4 hopefully, we can make some progress here with
5 this commission moving forward. One of the things
6 that just seems to be recurring is maps that
7 everybody is talking about, how inaccurate they
8 are. And that is true of what we have seen, we
9 saw this with cell coverage, too, is that they’re
10 showing service you go out there and there’s no
11 service and whatever that could be attributed to,
12 we need to find out.
13 I think in this case, they’re, at least
14 the FCC is looking to update their maps with the
15 shapefiles and more accuracy, but what you’re
16 doing locally certainly is very helpful in the
17 rural community that I represent. You mentioned
18 one-third, you said about one-third is not
19 covered. Does that include the school district?
20 Does that include buildings like that or just
21 residences?
22 MS. FELTON: Well, fortunately, our
23 school has been served for some time. It’s in the
24 village of Delanson, and the village of Delanson
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2 has service from originally Time Warner and now
3 Charter, so the one-third were residential homes.
4 ASSEMBLY MEMBER SANTABARBARA: And you
5 have dealt with the Public Service Commission,
6 you said, is it seven homes per mile or density,
7 you asked them to change some of the
8 requirements. Can you just go over those again?
9 MS. FELTON: So the town of Duanesburg
10 has a franchise agreement with Charter Spectrum
11 and the density required for them to serve
12 without a contribution in aid of construction is
13 20 homes per mile.
14 MR. BERMAN: The PSC minimum is 35,
15 [unintelligible] [05:11:29].
16 ASSEMBLY MEMBER SANTABARBARA: Thirty-
17 five, okay.
18 MS. FELTON: So we are at an advantage,
19 but that leaves many, 257 now after phase three,
20 257 homes are still unserved.
21 ASSEMBLY MEMBER SANTABARBARA: And, you
22 know, everybody is talking about Charter, of
23 course, today. And I did make note of what you
24 said with the comptroller’s office and looking
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2 for accountability here and what the new
3 agreements are. And I think I asked this question
4 earlier when testimony was given as to, we have a
5 new agreement, we have settlements, now they’re
6 back out there. Are they doing what they’re
7 supposed to do? Who is holding them accountable?
8 That is a question we’re going to be asking,
9 that’s a question we’re going to be looking for,
10 what’s the accountability here, is this going to
11 happen all over again and we also talked about
12 density where -- the overlapping coverage where,
13 are they getting credit for homes that are
14 already served and then someone is out there not
15 getting the service that they promised.
16 So I think those are all very good
17 questions that we’re certainly going to add to
18 our list. This will be a focus of this commission
19 going forward so hopefully we’ll get some answers
20 and we’ll hold the company accountable.
21 MR. BERMAN: There’s a term Jeff
22 Nordhaus used, which you should pay close
23 attention. He said they did a desktop audit,
24 which means they sat at their desks and looked at
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2 a map and clicked off the poles that were claimed
3 to have been done. It is not an eyes-on audit.
4 And that’s a huge --
5 ASSEMBLY MEMBER SANTABARBARA: That’s a
6 big difference.
7 MR. BERMAN: It’s a big difference.
8 ASSEMBLY MEMBER SANTABARBARA: Yeah, and
9 again, and I go back to cellular coverage. You
10 got coverage on this road, you travel on the
11 road, the phone doesn’t work. So it’s the same
12 thing with this, where the map --
13 MR. BERMAN: And this will all lead to
14 cellular coverage because without fiber, you
15 cannot implement 5G.
16 ASSEMBLY MEMBER SANTABARBARA: Exactly.
17 SENATOR MAY: That’s right.
18 ASSEMBLY MEMBER SANTABARBARA: So I want
19 to thank you both for being here. I’m know
20 Assemblywoman Woerner has some questions for you,
21 I’m going to give it over to her.
22 ASSEMBLY MEMBER WOERNER: Yeah, thank
23 you. I’m not familiar with whole attachment
24 contracts. Can you give me -- I think I
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2 understand conceptually what you’re saying, which
3 is that this particular contracting model allows
4 them to only select certain houses that they want
5 to go to. But can you give me, I mean can you
6 just give me more information on what that means?
7 MS. FELTON: So maybe you’re more
8 equipped to talk about pole charges?
9 MR. BERMAN: Right now, depending who
10 owns the pole, whether it’s the electric company
11 or the phone company, you have to go to each of
12 them and get permission and pay rent to hang your
13 wire on that pole. And what I think my colleague
14 here is proposing is that we do something, sorry,
15 that we do something -- that you can do it in a
16 broad swath so that the entire town or entire
17 area was approved at once.
18 Right now, if you request from a utility
19 the right to hang on the pole, they’re obligated
20 within certain time period to give you an answer.
21 They ignore that. So, while you may go to NYSEG
22 or whomever and say, I wish to rent space on the
23 pole to hang my broadband wire, they are
24 obligated under law or under regulatory procedure
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2 to answer you within 30 days. It is easy to go
3 180 days, 270 days without an answer. It’s one of
4 the biggest problems of the whole expansion
5 problem of just getting the permission. So now
6 you have to back your construction crews, your
7 fiber optic orders and all to meet those delays.
8 ASSEMBLY MEMBER WOERNER: So in essence
9 if you’ve got a neighborhood, so your
10 neighborhood, for example, you might have ten
11 utility poles in a neighborhood. And you have to
12 have a separate contract for each pole?
13 MS. FELTON: I believe they do. And my
14 suggestion is that in a franchise area, there
15 would be one pole fee for all poles. Because I
16 believe it’s a monthly fee that’s ongoing, it’s a
17 continuing cost.
18 ASSEMBLY MEMBER WOERNER: Right. Yeah,
19 that’s crazy.
20 MR. BERMAN: Thank you. That’s really --
21 wow. No wonder it’s so difficult to get fiber
22 run, if you’ve got to ask permission by pole?
23 MS. FELTON: And pay rent by pole. I
24 mean that’s an ongoing cost.
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2 ASSEMBLY MEMBER WOERNER: Well, I’m
3 assuming rent would end up being rent times ten
4 but just the process of having to ask permission
5 for each one, get a separate contract for each
6 one, and then they could say I don’t really want
7 to you use this middle pole, so now you’re stuck.
8 MS. FELTON: Well the real issue is that
9 in rural areas where there’s more distance there
10 are more poles for the density. If you say that
11 this will be the pole charges for all poles in
12 this franchise, there’s no incentive for them --
13 it doesn’t cost them more to do the lower density
14 roads.
15 ASSEMBLY MEMBER WOERNER: Got it. Okay.
16 Yeah, I can see where this is a great
17 recommendation, thank you very much.
18 MS. FELTON: Thank you.
19 MR. BERMAN: Thank you.
20 SENATOR MAY: Thank you all very much.
21 ASSEMBLY MEMBER SANTABARBARA: Thank
22 you.
23 SENATOR MAY: So next we have Robert
24 Puckett from the New York State
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2 Telecommunications Association. As just as a
3 heads up, after that, we have four school-related
4 representatives, and we’re going to bring them
5 all up at the same time.
6 MR. ROBERT PUCKETT, PRESIDENT, NEW YORK
7 STATE TELECOMMUNICATIONS ASSOCIATION (NYSTA):
8 Thank you, Chair May. I will obviously not read
9 my testimony and I don’t even think I’ll go over
10 my notes that I made. Instead I just thought I’m
11 with the Telecom Association, we’ve been around
12 for 98 years, we’ve got about 40-plus carriers as
13 members all the way from Verizon, large carriers
14 to smaller carriers such as TDS that serves the
15 town of Augusta in your district.
16 I thought what I would do is Assembly
17 Member Woerner was earlier asking about why don’t
18 we just order companies to deploy broadband. The
19 phone lines are there, the electric lines. And I
20 think what you’ve heard today from some of the
21 folks is back in the ‘20s, ‘30s, ‘40s, about when
22 we were organized as an association, there were
23 federal fundings to deploy electricity in the
24 rural areas, as well as telephone. And also back
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2 then, the telephone industry as the old telephone
3 company was a monopoly. And therefore, the
4 pricing structures of things were developed and
5 approved by the states and regulators to extract
6 subsidies from some ratepayers to help pay for
7 things where the rates charged don’t nearly cover
8 the cost of those services. You remember when
9 long distance was 30 cents a minute. Business
10 subscribers used to pay more than residential
11 subscribers. Urban subscribers pay more than the
12 cost of providing service in urban areas. And
13 those were all internal subsidies that flowed
14 from Urban America to Rural America to help build
15 these networks.
16 Now, with competition what happens? You
17 can’t build in subsidy to long distance rates
18 when you’re competing with other providers who
19 don’t have any obligations to provide service.
20 They can go and provide service wherever they
21 want. Same thing for urban rates. The first
22 competition was in urban areas. So the telephone
23 companies are competing now with wireless and
24 cellular, cable TV. They can’t necessarily build
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2 in subsidies to help cover the cost of deployment
3 in the rural areas, where it’s basically
4 uneconomic.
5 So that’s why we think that more needs
6 to be done and I think from what I’ve heard
7 today, a lot of folks would agree with that. We
8 still support the public-private partnership
9 model that has been used in New York. And I’ve
10 got to say as it was said by earlier folks, New
11 York really leads the nation, nobody has come
12 close to what the state has committed in
13 resources to try to solve the rural broadband
14 dilemma. So those are my comments.
15 Just a couple other thoughts, CWA
16 mentioned the elimination of service quality
17 measures. Nobody told my members that because
18 just last year Verizon reached a settlement with
19 the PSC after a multiyear service proceeding,
20 this year, just several months ago, although
21 Frontier is not a member of my organization, I
22 believe they reached a settlement agreement with
23 the PSC, again on service quality issues and
24 meeting the PSC’s service standards.
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2 Lot of talk about maps, I’ll just note
3 that that’s also occurring on the federal level,
4 the FCC has issued some orders on that. Congress
5 has held hearings on that. Even a gentleman
6 mentioned earlier, Jim Stegman [phonetic], who
7 did a lot of work for New York in the New York
8 grant program has put forth a proposal with some
9 national associations on how to make the maps
10 better. So with that, if you have any questions
11 I’d certainly like to hear them, now or contact
12 us any time.
13 SENATOR MAY: Okay. Let me start,
14 because I do have -- thank you for your testimony
15 and for keeping it short. We have been hearing
16 about these proprietary maps, that in particular
17 Charter Spectrum will not release. What is the
18 conceivable justification for that and what can
19 be done about that?
20 MR. PUCKETT: I certainly can’t speak
21 for Charter, because they’re not a member of my
22 organization. But it’s competitive sensitivities.
23 If they, again if they let the world know where
24 they’re going to build, somebody else come before
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2 them to try to beat them to the market is my own
3 personal thought. I have no basis -- I don’t know
4 what Charter’s thinking is, that is what I would
5 offer.
6 SENATOR MAY: And the -- we’ve heard a
7 lot about the problems of lack of competition and
8 then also the problem of monopolies that aren’t
9 doing what they should, so they’ve got region but
10 they’re not building -- taking the next step and
11 covering sort of stranded properties that are
12 near them or something like that. Tell me what
13 your association, talk about these kind of issues
14 and what sorts of position do you take?
15 Well, yes, we do talk about it. You’ve
16 got a competitive world now and company as a
17 whole has to for-private, private company has to
18 make a profit. It used to be guaranteed, that’s
19 not the case anymore. So making those investments
20 have to have a return on investment and so you
21 have a service area, some geographic area you
22 have to decide where to deploy and where can you
23 deploy with your money, investor money,
24 shareholder money, versus if there’s grants
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2 available then certainly that makes that decision
3 much easier to make sure that it’s economically
4 feasible. I’m not sure if that answers your
5 question, but certainly we support the grant
6 program. Again, if additional actions are needed,
7 we think another round as mentioned earlier,
8 round four or five would be the appropriate way
9 to go.
10 SENATOR MAY: Well, we also heard a lot
11 about the need for regulation and really, since
12 effectively this is a utility in the sense that
13 people can’t get [unintelligible] [05:23:21]
14 without it.
15 MR. PUCKETT: And we’ve always
16 advocated, there is a difference in regulation
17 between the industries, whether it’s the old
18 telephone company, cable company, wireless, there
19 are different levels of regulations. We’ve always
20 thought that there should be a need to review all
21 of that and see where things stand. And in some
22 ways, the horrific story I heard from the poor
23 lady from Port Byron, I was pulling my hair out
24 listening to that. The reason she’s going through
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2 that problem is because there’s a regulation that
3 requires Spectrum to have a franchise in every
4 municipality they want to serve.
5 We’ve always advocated that there should
6 be a statewide franchise just like they gave the
7 cable TV companies a statewide franchise to
8 provide telephone service, they could go anywhere
9 they wanted, whenever they wanted. We’ve always
10 argued that the telephone company should be able
11 to provide video services on a statewide
12 franchise basis where they want to go without
13 having to go to every village, every town.
14 I mean, unfortunately in her situation,
15 Spectrum was willing to provide her service only
16 to find out they didn’t have a franchise
17 agreement with this particular town that she
18 happened to live in and they were unfortunately
19 following the rules that they couldn’t go in
20 there unless they had a franchise.
21 SENATOR MAY: Is that -- we also hear
22 about poles and wires that are fiber that goes
23 right past somebody’s house but they can’t
24 connect it into their house is that also --
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2 MR. PUCKETT: That does occur. Well,
3 there’s different -- I don’t want to get too much
4 in the weeds, but there’s backbone fiber and then
5 there’s local fiber. And I do know in several
6 situations in the grant program, fiber runs down
7 the street, and this is one census block and
8 other side of the street is outside of that have
9 census block. I know a lot of my members are
10 going ahead anyway and going to provide or have
11 provided drops to those homes so that they could
12 provide them fiber optic service even though
13 they’re right over the line from the grant
14 program. Now, are there situations where maybe
15 that’s not happening, I suspect there would be.
16 SENATOR MAY: I’m out of time, but I do
17 want to ask if you oversee or include satellite
18 service in your association.
19 MR. PUCKETT: No, they’re not members
20 either. We’re basically the land line telephone
21 companies, both the incumbents that have been
22 around for a hundred years, except for Frontier.
23 And the new competitive local exchange carriers,
24 not cable companies but telecom carriers, such as
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2 Century Link, companies like that.
3 SENATOR MAY: Okay. Thank you. Anyone
4 else?
5 ASSEMBLY MEMBER SANTABARBARA:
6 Assemblywoman Woerner.
7 ASSEMBLY MEMBER WOERNER: Thank you. You
8 started your testimony by attempting to compare
9 the 1930s to today. And you said back then when
10 we were electrifying rural communities, there was
11 a monopoly, there were public dollars to
12 subsidize and then there was the Universal
13 Service Fund that basically taxed the urban
14 communities to the benefit of the rural
15 communities. I would just suggest to you that we,
16 for all intents and purposes, most of the rural
17 communities are dealing with a monopoly. There’s
18 a monopoly. There’s one provider and that’s it.
19 And we have tons of public dollars that
20 have just been spent, $497 million, has just been
21 spent to provide broadband service to the rural
22 communities. We have this mechanism for the
23 Universal Service Fund whether we’re using it or
24 not, that’s a different question. But it would
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2 seem to me that the conditions exist today that
3 are very similar to the conditions in the ‘30s.
4 So I go back to, what do we need to do
5 to fully create those circumstances, because
6 clearly we’re not -- what we’re doing while it’s
7 getting us -- it’s moving the needle slightly,
8 it’s not moving the needle far enough for our
9 communities because as fellow before you said,
10 we’re shooting at 100 megabit target but really
11 the rest of the world’s on a one gig target. And
12 for us to have economic development upstate,
13 which is what I think we’re all trying to do, we
14 need to be able to support one gig and beyond
15 that as the technology becomes available.
16 So I’m going back to, tell me why you
17 think we shouldn’t try to recreate the conditions
18 of the 1930s, because we’re almost there now, to
19 ensure that we get the achievement of true
20 broadband, fiber to every home. It seems like a
21 laudable goal. And it seems like we’re close in
22 terms of the practical conditions to being able
23 to do what we did in the ‘30s with
24 electrification.
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2 MR. PUCKETT: Maybe I wasn’t clear when
3 I talked about universal. I was talking, in the
4 subsidies, I was talking about the telephone
5 industry side of it, the electric. There was
6 federal funding for that as well, but also for
7 the telecom side. And I don’t disagree with some
8 of your thoughts. I think New York, yes, they’ve
9 spent $500 million, 475 of grant money. I think
10 it’s moved the needle a lot. Is there stuff still
11 have to occur, certainly I would agree with that
12 as well.
13 ASSEMBLY MEMBER WOERNER: You know, the
14 bulk of the dollars went to a relatively small
15 percentage of fiber to the home and the rest of
16 it is satellite. I mean that’s the reality. And
17 that’s what has become clear out of all this
18 testimony is that only a relatively small number
19 of people actually got fiber to their house. Most
20 of it is satellite, which is I think everybody
21 agrees, is not really broadband, and this is --
22 therein lies our problem is that we’ve got to
23 stop being satisfied with satellite and really
24 step up to the plate and say, this is about
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2 getting wire to each house, because that’s the
3 platform on which we’re going to get 5G and on
4 which we’re going to be grow the technologies to
5 achieve some service levels that actually make us
6 competitive upstate with the rest of the world.
7 MR. PUCKETT: Yeah, my members out of
8 the 175,000 landline of the grant money, the
9 units, the locations covered about 112,000 were
10 awarded to our membership, if you include the
11 Time Warner Spectrum merger build-out
12 requirements, you’re up to 325,000 additional
13 homes, businesses, across the state. So I think
14 that certainly is trying to attack the issue. And
15 again, if the legislature and governor feels that
16 additional steps are necessary, we certainly
17 would support it and we believe again that the
18 private-public partnership is the best way to go
19 about it.
20 SENATOR MAY: Great. Anybody else?
21 ASSEMBLY MEMBER SANTABARBARA: Thank
22 you.
23 SENATOR MAY: Thank you very much. So I
24 mentioned our schools. I guess there are five on
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2 my list. I hope everyone’s still here, five
3 people. We’ll try to get five chairs at the
4 table. You’ll have to share microphones. This
5 isn’t to take time away from you but just because
6 once again I think there may be common questions
7 for you and also we would like to move this
8 along. Let’s start with Mr. Ciaccio. Did I get
9 that right?
10 MR. THOMAS CIACCIO, SUPERINTENDENT OF
11 SCHOOLS, FONDA-FULTONVILLE CENTRAL SCHOOL
12 DISTRICT: Very good. You did a good job. I just
13 want to first thank everybody for allowing me the
14 chance to come here and speak on behalf of our
15 school district and school districts like ours.
16 This is a very significant issue in our school
17 district and I want to kind of put it in a
18 context that maybe you can understand what
19 students go through on a daily basis. So first,
20 my name is Tom Ciaccio and I’m the superintendent
21 of the Fonda-Fultonville Central School District.
22 And we are a small, rural school district about
23 40 miles west of here. We have about 1,350
24 students about 40 percent of our entire district
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2 does not have access to broadband internet. And I
3 live six miles away from the school I’m one of
4 those people and I have two children in the
5 school district.
6 Just like any school district across the
7 state, we do everything we can to set our
8 students on a path to success and we think what’s
9 important to that mission is technology and the
10 development of those technological skills in our
11 students. So I want to paint a picture of kind of
12 what our students look like compared to other
13 students. My first student is Gianna she’s a
14 student that is in an urban school district.
15 She’s in a school district that has a one to one
16 initiative where she’s given a Chromebook to take
17 to her classes and take home each and every day.
18 Her school district and everybody in their school
19 district has 100 percent access to broadband
20 internet. She goes home at the end of the school
21 day, she takes this Chromebook out of her
22 backpack, she opens it up, she gets online, she
23 starts doing everything that her teacher has
24 downloaded. She downloads videos, she downloads
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2 pages of documents, she works on homework, she
3 sets up chats with the people in her group that
4 are her classmates to work on research reports
5 and things like that. Everything at Gianna’s
6 disposal is one click away.
7 Let’s take Joseph, who comes from a
8 rural school district where 50 percent of the
9 students in that school have access to broadband
10 but Joseph is not in that group. His family does
11 not have exposure to that. He has the same
12 Chromebook that’s given to him by the school
13 district. He goes through the day, just like
14 Gianna does and getting exposed to all the skills
15 this necessary. When he goes home he takes the
16 Chromebook, and he sets it on the coffee table.
17 That’s where it has to stay because he can’t open
18 it, he can’t get to the things that he needs to
19 get to. So then he goes to his room and he gets
20 out his phone. Because that’s only access he has
21 from a cellular perspective and his provider to
22 get on that Google classroom, to be able to
23 access the pages of articles he has to read on a
24 four-inch screen, trying to download those videos
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2 to help with his research, but spotty cellular
3 service in rural communities is just not going to
4 happen. So for him, the information is not a
5 click away, it’s miles away.
6 And I bring those two examples because I
7 think looking at it through the eyes of a child
8 allows you to see that if you compare those two
9 students, the absence of broadband stunts a
10 child’s ability to excel, stunts their ability to
11 achieve and to get to an area where these
12 technological skills are second nature to them.
13 And it puts that child at a distinctive
14 disadvantage. So if Gianna is a freshman and
15 Joseph is a freshman, just think of every day
16 that Gianna goes home, she’s able to hone those
17 skills every day. Every day Joseph goes home,
18 he’s trying to figure out how he can get on to
19 these things to be able to access what he needs
20 to do. And over a four-year period of time, that
21 gap grows.
22 So my students come out and try to
23 compete and do well in college and have these
24 skills that maybe take a while to acquire on that
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2 type of a basis, or they go out and compete at a
3 job where we find, when we talk to employers,
4 they don’t care if you come and you’re somebody
5 who understands their business or even the role
6 within the job that they’re looking for. Are you
7 resourceful? Can you go on the internet? Can you
8 access information at the drop of a hat and be
9 very quick to do that. And Joseph is going to be
10 behind the mark when it comes to that.
11 So for us, I’m going to echo what other
12 people have said. I appreciate everything that
13 you are trying to do, we truly believe like you,
14 that broadband internet should be basic utility.
15 Something that everyone has access to if they so
16 choose. And it shouldn’t come down to where you
17 live. Information in 2019 should be a click away,
18 it shouldn’t be miles away. So that’s kind of
19 consolidation of what I had to say in short
20 period of time, so thank you.
21 SENATOR MAY: Thank you. David Little.
22 MR. DAVID A. LITTLE, EXECUTIVE DIRECTOR,
23 RURAL SCHOOLS ASSOCIATION OF NEW YORK STATE: Hi,
24 I’m Dave Little. I run the Rural Schools
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2 Association and the Rural Schools Program at
3 Cornell. That’s more pictures than my mother has
4 ever taken of me in my entire lifetime, I think.
5 We’ve heard hours of testimony about the
6 what, the where, the how today, so let me give
7 you just a few minutes about the why. This is
8 just a circumstance that’s elemental to
9 education. If you go back to when I graduated
10 from high school, there was 17 million acres in
11 agricultural production in New York State. Today
12 there’s seven. When I graduated from high school,
13 rural New York had the economic capacity to be
14 able to bail out New York City from which we
15 commonly called bankruptcy, right now. And it’s
16 time to return the favor. The President of SUNY
17 Cobleskill says that our policies are what are
18 standing in the way of our progress.
19 And I think that’s true, both on two
20 major fronts, one of which we’re talking about
21 today, which is information access and the other
22 is the way that we fund our schools. In the past
23 ten years, we’ve had ten straight years of
24 declining sales tax revenue from rural New York.
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2 We’ve had a million people leave rural New York,
3 I rarely go to a school district, half of the
4 school districts in New York State are my members
5 and I rarely go to one that hasn’t seen a third
6 of their students decline from where they started
7 with.
8 So, and we hear all the time from a
9 policy perspective, well, you need to do things
10 differently, you need to consolidate. Digital
11 learning is the key in the rest of America. And
12 we’ve built in essence the Great Wall of China
13 around that in New York State, from a policy
14 perspective. We don’t fund our schools in a way
15 that allows them to take advantage of digital
16 learning. And from a labor standpoint we don’t
17 allow digital learning and from a labor
18 standpoint, we don’t allow digital learning in
19 the ways that others have.
20 We have this concept of digital
21 learning, I think in New York State that’s about
22 a generation behind. I mean, if you really want
23 to know about the capacity of digital learning,
24 ask the Pentagon what it thinks of the game Call
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2 of Duty. It educated an entire demographic of
3 exactly who they wanted to know the information
4 on things like military tactics, loyalty, chain
5 of command, battlefield operations, logistics,
6 weapons, everything that they would want to know
7 their demographic to know, they get it ready made
8 through digital learning.
9 We can think about things like a
10 surgical resident or an airline pilot, much more
11 individualized. It allows us to you try and
12 overcome things like English language learners,
13 the poverty gap, the language gap that students
14 in poverty come to schools with, can be overcome
15 with that. And, as everybody has said if the only
16 place that you can get that is in school, then
17 digital learning can overcome time and distance
18 in the way that the school bus overcame it a
19 generation ago to try to create these merged
20 school districts to bring people together to do
21 sequential learning and the things that we would
22 want to do.
23 We could do so much more if we had this
24 in place. People have talked about, it was almost
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2 a throwaway line five hours ago was that, and
3 kids can’t do their homework. Do you understand
4 the implications of that? It’s the demise of New
5 York State is the implication of that. If you
6 throw away the entire demographic of rural New
7 York, which is quickly happening before our very
8 eyes, at this very moment, I keep saying we’re in
9 crisis and if it were happening to any other
10 demographic within the state, it would be in
11 every major newspaper in America.
12 And the other thing that I would just
13 briefly touch on is the fact and I’m astounded
14 that I haven’t heard it today. Sprint is trying
15 to merge with T-Mobile. And they’ve gotten
16 federal approval to do that, based on verifiable
17 and enforceable contracts that they’ve offered to
18 create broadband in rural America. That’s the
19 whole point of their merger is to create
20 broadband in rural America. And we’ve been here
21 for almost seven hours and nobody has touched on
22 it.
23 And one of the reasons that nobody has
24 touched on it because the state of New York is
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2 suing over this, the Attorney general is trying
3 to block it in New York State. We need a
4 legislative commission to oversee this, we need
5 the public-private partnerships that people have
6 talked about on this issue. I’m not a
7 technological expert.
8 But I do know that if we don’t fix this
9 quickly, and I go out to more school districts --
10 for years I did the honors banquet for
11 Chautauqua, where they honor the valedictorian
12 and salutatorian of every high school. And every
13 time they would come up, where are you going to
14 school? Jamestown community college, Jamestown
15 community college, Jamestown Community College,
16 and yet rural students are dropping out of our
17 community colleges and four-year program at 75
18 percent rate. We graduate everybody according to
19 the state standards and they don’t have the
20 breadth of curriculum, they don’t have the
21 opportunities that were talked about here to be
22 able to be competitive once they reach the next
23 level. We’re not doing them any favors and in
24 turn, rural New York can’t do us any favors in
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2 the way that we did a generation ago.
3 SENATOR MAY: Thank you. Next on my list
4 is Carolyn Bobick and Julie Marlet.
5 MS. CAROLINE BOBICK, GOVERNMENTAL
6 RELATIONS REPRESENTATIVE, NEW YORK STATE SCHOOL
7 BOARDS ASSOCIATION: I let Brian take over for
8 Julie.
9 SENATOR MAY: Okay.
10 MR. BRIAN FESSLER, DEPUTY DIRECTOR OF
11 GOVERNMENT RELATIONS, NEW YORK STATE SCHOOL
12 BOARDS ASSOCIATION: Thank you, happy
13 Constitution Day.
14 SENATOR MAY: Thank you.
15 MR. FESSLER: I just want to highlight a
16 couple of points so I don’t repeat what you’ve
17 heard already or what you I’m sure will hear. You
18 heard about homework gap, the schoolwork gap
19 especially in terms of one-on-one technology
20 programs like Chromebooks, that’s all true,
21 that’s all important.
22 The couple of additional items that I
23 want to talk about, this isn’t just a teacher and
24 student dynamic. The vast majority of districts
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2 and increasing number of districts, communicate
3 online with parents of those students, making
4 sure in providing those parents of students with
5 the tools to support their children, their
6 students, as they complete their assignments,
7 making sure the parents are informed of the
8 student’s progress. That’s an advantage that
9 technology offers. But if those parents are in
10 communities and school districts where there’s
11 either no internet access or insufficient speed
12 in internet access, that additional tool that
13 those parents have is severely compromised.
14 We’ve heard over the past number of
15 years, the state’s desire to pursue and implement
16 computer-based adaptive testing. Obviously that
17 becomes problematic, if not unrealistic, for a
18 number of districts statewide, particularly in
19 rural areas as we’ve talked about. Even if
20 there’s access, if that bandwidth is not strong
21 enough, if that access is too slow in a number of
22 school districts and doesn’t meet the
23 recommendations or needs of whatever particular
24 program the school district is using for that
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2 testing, that becomes unrealistic and unworkable
3 as the state as a whole tries to move towards
4 that computer-based adaptive testing model.
5 The last piece I want to mention, I know
6 it was discussed a little bit earlier today, but
7 we at the School Board’s Association are fully
8 supportive and fully engaged on the issue of net
9 neutrality. It must be restored. Not only does it
10 offer affordable and more affordable access for
11 communities throughout the state, but it offers
12 greater program and content diversity for school
13 districts and students.
14 So it’s important that whether we’re
15 looking at a public investment or a private
16 investment or combination thereof, we need
17 investments that expand access. It’s critical for
18 not just the next generation of students, but as
19 we heard, it’s critical for the current
20 generation of students that are being educated in
21 our schools right now.
22 SENATOR MAY: Thank you. Robert Lowry.
23 MR. ROBERT LOWRY, DEPUTY DIRECTOR FOR
24 ADVOCACY AND COMMUNICATION, NYS COUNCIL OF SCHOOL
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2 SUPERINTENDENTS ROBERT LOWRY, DEPUTY DIRECTOR FOR
3 ADVOCACY AND COMMUNICATION, NYS COUNCIL OF SCHOOL
4 SUPERINTENDENTS: I’m Bob Lowry from the New York
5 State Council of School Superintendants and thank
6 you for holding this hearing and inviting us to
7 testify. In my written testimony, I try to
8 provide a portrait of rural school districts.
9 They tend to be smaller in enrollment, but larger
10 in geographic area. For example, the average
11 North Country school district is 177 square
12 miles. For perspective, New York City is 332
13 square miles, so try merging two of these
14 districts, you may be transporting kids over an
15 area the size of New York City. This makes it
16 hard for these districts to consolidate or even
17 just to do shared physical classrooms.
18 Also, they tend to be poorer, about half
19 the property wealth and income per pupil of the
20 state average. And as a result as I’ve said, they
21 tend to be, they’re capped by circumstances
22 before they were capped by law. The average high
23 need rural school district can raise only $67,000
24 with a one percent tax increase. So both physical
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2 and fiscal limits restrict the ability of rural
3 school districts to offer the opportunities that
4 we would want for our own children.
5 Recently, the Board of Regents announced
6 a plan to review diploma requirements. In some
7 reports, that’s been over simplified to should we
8 have Regents exams any more. Actually, it’s going
9 to be a much broader effort than that. Part of
10 what we will say in those deliberation is not --
11 what matters most for students is not how they do
12 on a single test on a single day or even five of
13 them. But do they have opportunities to take
14 classes that prepare them for success in whatever
15 they pursue after high school.
16 A year ago Education Trust in New York
17 did report on what they term gatekeeper classes,
18 things like algebra in eighth grade, calculus,
19 physics, chemistry, advanced foreign languages,
20 AP and international baccalaureate. Large cities
21 tend to not have calculus, physics, chemistry,
22 but high need rural districts are least likely to
23 offer their students even a single AP or IB
24 class. Technology, online learning, those those
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2 provide a tool that schools can use to offer
3 students opportunities that will prepare them for
4 success.
5 Also as Brian touched on, our members
6 think adaptive testing is the key to improving
7 the assessments that we have to give every year
8 to kids in grades three through eight in English
9 language arts and math. With adaptive tests, the
10 questions adjust in difficulty as students
11 progress through the test. That makes it possible
12 to have shorter tests, to get better information
13 back faster to families. There are districts that
14 use adaptive tests for their own diagnostic
15 purposes and [unintelligible] [05:47:53] aren’t a
16 problem because families and educators see the
17 value.
18 But frankly, in our conversations with
19 superintendants, they don’t talk about problems
20 with connectivity for their schools. The largest
21 share of the $1.4 billion in Smart Schools Bond
22 Act money that’s been allocated so far has gone
23 for school connectivity projects. They talk about
24 what Tom talked about, connectivity in the home
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2 and large numbers of families that aren’t
3 connected and the disadvantage that that creates.
4 Some of the solutions, you’ve heard already.
5 Superintendants who we’ve spoken with, they’ve
6 expressed frustration with the quality and
7 accuracy of the maps of service. They say they’re
8 aware of examples where cable has been strung
9 through rural neighborhoods, but the final step
10 of connecting homes has not happened yet. And so
11 they suggest we need intervention by a state
12 authority to make sure that that happens.
13 Also some other things that could be
14 done, in Washington right now the Federal
15 Communication Commission is considering a
16 proposal to consolidate funding for education,
17 the so-called E-rate program, with health related
18 internet projects. That would have schools and
19 hospitals competing against each other, something
20 that we’ve written to oppose and we would urge
21 you and colleagues in both parties to weigh in
22 with Washington.
23 We’ve also suggested in our written
24 testimony making the installation of Wi-Fi on
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2 school buses reimbursable. Because again you have
3 students traveling long distances, they may not
4 have the internet at home. That’s a simple step
5 that could be taken to help those students. So
6 again, thank you for inviting our testimony and
7 I’d be happy to try and answer any questions.
8 SENATOR MAY: Thank you. And thank you
9 all for keeping within the time limit, I really
10 appreciate it. It’s been a long day. I do want to
11 say I love the example that you gave of the two
12 students. And I have to say, as someone who lives
13 in Syracuse where a quarter of the students don’t
14 have internet access because it’s cost
15 prohibitive, there are lot of issues that we have
16 to deal with here. But, yeah, we’ve got to make
17 sure all our kids have got that. I don’t think I
18 have any specific questions for you.
19 ASSEMBLY MEMBER SANTABARBARA: First of
20 all I want to thank you all for coming up
21 together. Actually it was great to hear one after
22 another, voices surrounding the issue of
23 education and how this affects students of all
24 ages and it also affects our schools and ability
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2 to teach 21st Century technology, which is really
3 just basic technology now. So I want to thank you
4 for sharing your comments, I want to thank you
5 for being here. A couple of notes, the Sprint and
6 T-Mobile, I don’t know who mentioned the merger,
7 so that, I took note of that, I think that’s
8 something we should look into and should be
9 looking for some oversight on that because
10 certainly cellular coverage ties into this whole
11 discussion, so we’re going to take a look at
12 that.
13 The Wi-Fi on the buses that was just
14 talked about, that’s an excellent point, because
15 especially in rural communities, we have think
16 about the bus rides. Sometimes they’re very long
17 bus rides, and using that time effectively, kids
18 being able to access Wi-Fi on a bus would be very
19 advantageous to them. It would help them do
20 school work, help them use their time wisely.
21 Yes, you have a comment?
22 MR. LOWRY: Just to refer to you Watkins
23 Glen. Watkins Glen put Wi-Fi on to all of their
24 buses and instead of sending them back to the bus
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2 garage every night, they send them out to the
3 most remote corners of their school district to
4 create hot spots for the kids in those areas.
5 ASSEMBLY MEMBER SANTABARBARA: Yeah, and
6 that’s an excellent point. I think that’s
7 something that we will look into as a commission
8 here, I think that’s a good point. And the net
9 neutrality, that’s certainly something we’ve been
10 talking about here at the capital and I think
11 it’s very important. I want to thank
12 Superintendent Ciaccio, who is from my district,
13 Fonda-Fultonville. I visited many times in
14 Montgomery County and we’ve shared a concern over
15 this issue and it’s great to have a local voice
16 from my district up here.
17 How does, I guess one question, you said
18 don’t live far from the school, you don’t have
19 service. How does that compare to all the
20 students, what percentage would you say when they
21 leave the school, they have virtually no access?
22 MR. CIACCIO: In terms much broadband.
23 It depends on when you survey students. We
24 surveyed them a couple of years ago. Probably 40
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2 percent of our students do not have access to
3 broadband. Now they do use cellular and their
4 carrier. But something that one of my colleagues
5 here touched upon was, you know in a small rural
6 school district, you do everything you can to
7 offer your students opportunities, college-based
8 type courses that come with expectations that are
9 extremely important for those students to do
10 outside of school typically revolve around
11 digital access and being able to get on to their
12 computers, not their cell phones.
13 And from a school district standpoint,
14 we would love to provide hot spots and do those
15 types of things, but from a budgetary standpoint
16 when 40 percent do not have that, it’s almost
17 impossible for us.
18 ASSEMBLY MEMBER SANTABARBARA: And we
19 talked a few years back, I think there was even
20 an announcement at the school, the federal
21 government was looking at funding some of the
22 broadband service.
23 MR. CIACCIO: Yes, Senator Gillibrand
24 came and you. And you had a press conference at
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2 our school and that was two years ago. So two
3 years ago where I live, the closest house that
4 had broadband internet was half a mile away two
5 years ago. So fast forward, after that press
6 conference and all these things that we’re going
7 to try to hold Spectrum to at that time, and
8 other service providers, that access to my house
9 still half mile away at the same place that it
10 is. But going back to the maps and making sure
11 that things are accurate, I think I’m included in
12 the 98 percent that was spoken about this
13 morning, that about 98 percent of New York is
14 covered in broadband services. And that is, I
15 would say if they’re including me in that
16 category, it’s because I did the same thing that
17 someone else did and called Spectrum at the time
18 four years ago said I’d like to have Roadrunner
19 all those things at my house, sure, no problem.
20 We have it, we can offer it to you. At the end
21 conversation, they wanted to charge me $40,000
22 because they wanted me to pay for the line to run
23 up. So I’m counted in that 98 percent because
24 it’s offered to me.
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2 SENATOR MAY: Right.
3 MR. CIACCIO: But from realistic
4 standpoint, those things need to be fleshed out
5 to what is real and what is fictional, what’s
6 affordable, right.
7 ASSEMBLY MEMBER SANTABARBARA: And
8 through the rounds of the New NY Broadband
9 Program, have you seen a change -- I know some
10 funding was awarded in the area, in Montgomery
11 County.
12 MR. CIACCIO: Yes.
13 ASSEMBLY MEMBER SANTABARBARA: Have you
14 seen change in school district or in the local
15 community since the funding was awarded?
16 MR. CIACCIO: I would say from the
17 broadband perspective we have not seen a change.
18 But from the Smart Schools perspective and that
19 money that’s come our way, it has absolutely
20 allowed us to create an infrastructure in our
21 school that supports what we need to do at the
22 school, from a broadband sense and those types of
23 things, bandwidth and those things. So the Smart
24 Schools absolutely has helped us but it’s
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2 reaching those kids as, Bob said, we’re 140
3 square miles. Which is a pretty large when you
4 talk only 1,300 students. We definitely need to
5 see more of these people held accountable and the
6 price for doing business in New York is to
7 provide broadband percent all across our rural
8 communities.
9 ASSEMBLY MEMBER SANTABARBARA: Thank
10 you. Thank you for your testimony today.
11 SENATOR METZGER: Just couple of
12 comments.
13 SENATOR MAY: Sure.
14 SENATOR METZGER: Thank you so much for
15 your testimony, this is so important a topic. A
16 school in my district, in actually one of the
17 less rural communities, had a capital project
18 that included a distance learning classroom. And
19 when I went in and saw this classroom, I thought
20 this would be so great for my more rural
21 communities, cash-strapped school districts that
22 can’t offer those AP classes, that can’t offer
23 those -- a whole range of classes, languages and
24 the rest. But, of course you can’t have them
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2 unless you have broadband. And so this is really
3 important. I do, I love the idea about requiring
4 that Wi-Fi be on the buses, be reimbursable. You
5 need cell though, don’t you?
6 MR. LOWRY: You need something.
7 SENATOR METZGER: Unfortunately, we’re
8 actually on a cell service task force, rural cell
9 service task force and I know at least in my area
10 a lot of the main roads don’t have cell service.
11 So that issue has to be addressed for that.
12 SENATOR MAY: Okay, great. I guess
13 that’s it for us. I do want to say, it was great
14 to hear from all of the school representative and
15 I kind of wish we had a library person up here,
16 too, because they also are absolutely key to this
17 whole issue, I think.
18 MR. LOWRY: Thank you.
19 SENATOR MAY: Thank you all.
20 ASSEMBLY MEMBER SANTABARBARA: Thank
21 you.
22 SENATOR MAY: Freda Eisenberg.
23 SENATOR METZGER: Thank you, Freda for
24 waiting it out.
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2 MS. FREDA EISENBERG, COMMISSIONER,
3 DIVISION OF PLANNING & COMMUNITY DEVELOPMENT,
4 SULLIVAN COUNTY: Thank you for -- I want to
5 thank everybody --
6 SENATOR MAY: Yeah, I want to thank
7 everybody who is still here.
8 MS. EISENBERG: Thank you Senator
9 Metzger, thank you Senator May, for not only
10 inviting me to participate in this hearing but
11 also for the devotion that you’ve shown to the
12 subject matter. I’m Freda Eisenberg, I’m
13 commissioner of Planning and Community
14 Development for Sullivan County. And at this
15 point in the day, there’s really very little I
16 have to add for you, so I’m going to try and make
17 this short.
18 There are a few things I would like to
19 underscore. One, the maps cannot be emphasized
20 enough. Sullivan County is basically shown as
21 fully covered and we know we’re not fully
22 covered. And that’s hampered our ability to
23 participate in the broadband, the New NY
24 Broadband Program. It’s precluded us from certain
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2 eligibilities, so accurate maps are important. A
3 few years ago before the New York broadband
4 program Sullivan County GIS did our own maps and
5 we tried to identify areas that met the 20 unit
6 per mile threshold that we showed were not
7 covered. And we had a number of these and we went
8 to Time Warner at that time. And they said well
9 we have to verify this. And they had two separate
10 companies verifying it. At the end of the day
11 when we all came together there were still
12 discrepancies as to what wasn’t covered. So I
13 relay this anecdote to emphasize the importance
14 of on the ground verification of what does and
15 what doesn’t have service.
16 Other factors to be addressed in any
17 assessment are again the non-disclosure
18 agreement. That’s not only hampered our ability
19 to respond to constituents when they call with
20 questions about their service but it’s hampered
21 our ability to be an effective advocate for
22 service. If we don’t know what is not going to be
23 covered in any kind of agreement we can’t go and
24 fight or develop ways to provide that service.
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2 Capacity, capacity was mentioned. It was
3 mentioned that there’s been an attrition in basic
4 workers going out and doing the cables. But we’ve
5 also found that there’s been a reduction in,
6 we’ve lost our government service relations
7 people at Time Warner and there’s been turnover
8 at Frontier. And so our ability to get
9 information again, so important to be able to
10 advocate and plan, has also been hampered.
11 Sullivan County does plan to launch a
12 pilot program using county 911 communications
13 towers and Wi-Fi. I took note earlier today, one
14 of the speakers cautioned against this approach,
15 but we have been waiting out the solution for
16 years and our recent construction of new 911
17 towers plus the completion of new jail has
18 created an opportunity for us to test a pilot
19 approach where we will use Wi-Fi and extend
20 signals for about four miles around the area of
21 Monticello.
22 Monticello actually is a fairly well
23 served area of our county, but it’s also an area
24 where an issue that hasn’t been mentioned
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2 frequently today. It is relevant, which is the
3 cost of service. We have very high rates of
4 poverty in that area, and so the cost of service
5 is a barrier and our pilot will allow us to test
6 a lower cost approach. If that’s successful we
7 will want to roll it out to other areas of the
8 county, particularly areas that are not well
9 served, such as the Upper Delaware River corridor
10 which is an important tourism corridor. It’s a
11 national park in our area, where businesses and
12 residents lack sufficient service.
13 So to conclude, again to be short, I’d
14 like to ask that any future iteration of the
15 broadband program that there be funding for
16 municipal efforts as well as the public-private
17 partnerships.
18 SENATOR MAY: Great. Thank you.
19 SENATOR METZGER: So, I just want to
20 thank you again for coming out and being the
21 representative of our region and the issues we
22 face. Really appreciate it.
23 MS. EISENGERG: Sure. Thank you.
24 SENATOR MAY: Yeah, I appreciate it, too,
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2 thank you very much for being here, Freda. Renée?
3 Second to last. Thank you for staying.
4 MS. RENÉE ST. JACQUES, ASSISTANT
5 DIRECTOR OF PUBLIC POLICY, NEW YORK FARM BUREAU:
6 Well, of course, of course. I’ll keep it quick.
7 I’m Renée St. Jacques, I’m assistant director of
8 public policy at New York Farm Bureau, as some of
9 you know. We’ve heard a lot of the stories and
10 issues today and lot of it’s the same for the
11 farmers across New York. They are small
12 businesses, or large businesses and they still
13 need that capability for broadband. And it’s an
14 important tool, as you know. Communication with
15 current and prospective customers, advertising
16 their products, things like that and then you
17 think about grant applications or things like
18 that provide by the government.
19 Most of those applications are also
20 being made available online, so how are farmers
21 supposed to be filling those out? We get calls
22 about broadband access and they say well, can you
23 send me some information and I can’t do it by e-
24 mail they have to mail it, snail mail. So it’s
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2 definitely an issue across New York for a lot of
3 farmer.
4 And I just wanted to share some
5 statistics that our -- on the testimony that from
6 the National Agricultural Statistics Service,
7 they announced that their statistics, their
8 census for 2017 and 81 percent of New York farms
9 technically have access, but as we’ve been
10 discussing, access, that doesn’t mean that they
11 actually have reliable broadband. But only 25
12 percent of those farms said that they actually
13 conduct agricultural marketing activities over
14 the internet.
15 That’s a big problem. And whether that
16 means that it’s only available during certain
17 seasons, whether the corn is too high or maybe
18 during the winter it’s available, and then the
19 leaves go on the trees and it’s not available any
20 more. It’s definitely a problem across the state.
21 And I guess moving forward, there was a lot of
22 options, a lot of ideas for what we could do. I
23 think just trying to keep farmers in the
24 conversation going forward is very important and
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2 because we see it as a big issue and we would
3 definitely like to see more access across the
4 state. So, thank you for the opportunity to speak
5 today.
6 SENATOR MAY: Great, thank you. I have a
7 couple of questions. One has to do with
8 estimating the economic impact of lack of service
9 or building out service, would be really helpful.
10 I don’t know if that is possible to do.
11 MS. ST. JACQUES: Yeah, we do have the
12 [unintelligible] [06:05:30] statistics, but other
13 than that there really isn’t, other than hearing
14 from a lot of our farmers individually on
15 difficulty with access, I mean if they’re at the
16 end of the street a lot of the times, end of that
17 road, they’re not getting enough service or if
18 they are, that broadband service is unreliable.
19 And they can’t even go on Facebook page to post
20 to their customers saying that is what we have
21 available today or on their website, things like
22 that is really important. So that would be a good
23 thing moving forward to have some kind of
24 statistics on what the economics of that
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2 situation really are.
3 SENATOR MAY: Yeah. And then last week I
4 read an article about hi-tech in agriculture as
5 way of dealing with climate change and other
6 uncertainties. There were a lot of tools for
7 farmers to figure out where to apply water or
8 where and when to plant their seeds or whatever
9 it is. And that it’s all cloud based. So my
10 question was how do farmers get access to that if
11 they don’t have internet service?
12 MS. ST. JACQUES: Yeah, we can make all
13 these tools but --
14 SENATOR MAY: So I was wondering if you
15 have heard that from New York farmers because
16 this was all about the Midwest basically.
17 MS. ST. JACQUES: Definitely. We’ve
18 definitely heard it about the, having those tools
19 available but they cannot use them where they
20 live and where they operate their farms. That’s
21 also comes in the question of cellular service,
22 because some of these things you can use these
23 tools that you can use out in the field are, they
24 can’t use them and benefit from them. So that
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2 also comes into an issue. Definitely, I think
3 I’ve been trying to write down every time a
4 farmer calls me and gives me a different example
5 of what their problem or issue is when it comes
6 to broadband access, but also cellular capability
7 as well and just keeping that list going but it’s
8 difficult to put that in to numbers for sure I
9 think.
10 SENATOR MAY: Well I think we would love
11 fit you would share the list with us as you’re
12 putting it together because that kind of
13 information is really helpful.
14 MS. ST. JACQUES: I definitely can do
15 that.
16 SENATOR METZGER: And the potential is
17 just so great for managing pests, for reducing
18 the cost of inputs, it’s huge, and also just
19 access to information too, about seed varieties,
20 research and all the rest. There’s a lot you can
21 miss out on.
22 MS. ST. JACQUES: Most definitely,
23 agreed.
24 ASSEMBLY MEMBER SANTABARBARA: I just
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2 thank you for your testimony today. And I think
3 that’s something I highlighted that is the
4 uniqueness of some of the needs, like who would
5 think some of the equipment or some of the tools
6 are now connected, as the senator said is to the
7 cloud they can’t really function without having
8 this connectivity. I think that is an important
9 point. Because when we think of farming, people
10 don’t tend to think of that kind of technology
11 being applied. But technology has really changed
12 the way farms operate.
13 Also there’s a trend that you’re
14 probably aware that have we’re losing farmland.
15 So I think some of it does come down to people,
16 the farmers there that live out in these
17 communities, it comes down to quality of life,
18 too, because if you’re running a farm, you have
19 big property. So when it comes to quality of
20 life, you’re not connected to the internet you
21 don’t have basic technology. A lot of it is just
22 quality of life in general in the rural
23 communities where a lot of these farms operate.
24 So we have to keep that in mind as well as impact
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2 as we go forward try to make sure that our farms
3 continue to thrive. Thank you.
4 MS. ST. JACQUES: Agreed. We would love
5 to be part of that conversation and just to keep
6 sharing these different, unique aspects of
7 farming that as we go forward make sure those are
8 not lost as we’re trying to find a way to get
9 broadband to everyone in New York.
10 SENATOR METZGER: So, I’d be interested
11 to talk with you perhaps about a survey that we
12 could do of farmers of broadband access. I think
13 that could be --
14 MS. ST. JACQUES: That would be a great
15 idea.
16 SENATOR METZGER: -- really interesting.
17 MS. ST. JACQUES: Definitely.
18 SENATOR MAY: Thank you so much.
19 MS. ST. JACQUES: Alright. Thank you.
20 SENATOR MAY: And last but not least,
21 Taier Perlman. Thank you for being here and for
22 holding out until the last minute.
23 ASSEMBLY MEMBER THIELE: The patience of
24 Job.
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2 MR. TAIER PERLMAN, STAFF ATTORNEY, RURAL
3 LAW INITIATIVE GOVERNMENT LAW CENTER AT ALBANY
4 LAW SCHOOL: Yeah, the stamina that you guys have
5 all displayed has been amazing, well done. So,
6 given that I’m last but not least, I’m going to
7 keep my remarks short. I crossed out a lot of
8 portions of what I was going to say because it
9 was already said.
10 I’m kind of taking a new direction here
11 because what I’m going to be speaking about is
12 the impact that the shortage of rural broadband
13 has on the legal profession and administration of
14 justice in New York State and how that affects
15 rural residents. My name is Taier Perlman, and I
16 run the rural law initiative out of the
17 Government Law Center at Albany law school. The
18 Government Law Center’s mission is to provide
19 research and analysis to state and local
20 governments and policy makers so that they can
21 better serve their communities. And specifically
22 the Rural Law Initiative work has included
23 research on some of the important challenges that
24 rural communities are facing.
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2 I’m also the co-chair of the New York
3 State Bar Association’s Rural Justice Task Force.
4 What we’re charged with doing is identifying
5 viable solutions to support rural law practice
6 and greater access to justice for all of New
7 York’s rural communities, including making
8 recommendations for changes in law and policy.
9 This task force is comprised of rural lawyers,
10 members of the judiciary, legal service
11 organization leaders and invested stakeholders
12 from around the entire state. There’s 33 members
13 in total.
14 And we all unequivocally agree that the
15 rural broadband and telecom gaps in rural
16 communities is one of the primary challenges of
17 rural practice. And it’s not just for our
18 profession, obviously, but it’s also for all the
19 rural residents we serve. Without lawyers and a
20 well-functioning judicial system the rule of law
21 is not a reality. People in rural communities
22 depend on lawyers and the courts to help them
23 start businesses, make contracts, hire employees,
24 resolve disputes and pass their property on to
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2 their children. Also, lawyers are instrumental in
3 rural economic development efforts and getting
4 deals done and negotiating contracts and
5 partnerships.
6 Our research is showing us that there’s
7 a palpable failure in our legal system’s ability
8 to deliver justice for all New Yorkers. And part
9 of that reason is the failure that rural
10 communities don’t have technological capacity to
11 support the efficient administration of justice.
12 Rural law practices, town and village courts and
13 the rural residents they serve are being left
14 behind due to the broadband and telecom gaps and
15 this shouldn’t be happening.
16 This lack of access to technology means
17 that our legal system, which is increasingly
18 built upon assumptions of access to technology
19 just isn’t working. Lawyers can’t file their
20 documents electronically, which many courts now
21 require. Lawyers and clients can’t communicate by
22 video conference. And lawyers have to spend more
23 time driving across long distances, as well as
24 their clients when they have to meet with them.
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2 Legal research can only be done online and that’s
3 incredibly difficult for rural lawyers, and for
4 people who can’t afford lawyers so basically
5 learning about the law is effectively impossible
6 or incredibly difficult in rural communities.
7 If lawyers can’t take advantage of new
8 technology to streamline their practices, they
9 fall behind in the competitive market for legal
10 services, which means their clients do as well.
11 And if our local courts can’t take advantage of
12 new technology, everyone who depends on it
13 suffers from the inefficiencies that result from
14 that.
15 All of these problems get worse over
16 time. As the lack of technology makes it harder
17 to recruit new attorneys to take over the law
18 practices of attorneys nearing retirement, which
19 by the way, is three-quarters of the current
20 rural practitioners in upstate rural New York
21 communities. They’re on the verge of retirement
22 in the next 20 to 30 years. The failure to keep
23 up can then become a downward spiral.
24 Between August and October of 2018, the
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2 Government Law Center conducted survey of rural
3 practitioners across New York State. This was the
4 first of its kind effort to quantify and qualify
5 the growing shortage of legal practitioners that
6 was being anecdotally reported from the field.
7 This research has been memorialized in a report
8 entitled “Rural Law Practice in New York State”
9 which is now publicly available online. And many
10 lawyers reported that rural broadband and
11 telecommunication failures were one of the
12 primary challenges to rural practice.
13 I’m now going to read a few quotes that
14 came out from our survey. These are direct
15 qualitative responses that came back to us. I’m
16 not going to read all of them. I cut a bunch of
17 them out. When asked about the challenge of rural
18 practice, one respondent said, “researching cases
19 with horribly slow internet service and trying to
20 conduct business without effective cell phone
21 service is one of the greatest challenges to
22 practice”.
23 This is another one. “We need better
24 communications, like digital services, internet
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2 access, et cetera, for all purposes. Enhanced
3 technology and better access to affordable
4 technology for the school districts in rural
5 settings is also needed”.
6 Another one, “fewer services for
7 clients, more driving travel, difficulty for some
8 clients to get to appointments, courts should
9 permit video appearances for attorneys or parties
10 when the appearance is for a status review or
11 simply for scheduling purposes. This would allow
12 parties to make appearances without unnecessary
13 travel or missing work or needing to find child
14 care. It would also allow attorneys to meet the
15 clients’ needs without excessive travel costs or
16 billable time”.
17 Another one, “many clients have no phone
18 service or limited minutes and few have computers
19 or internet service, it can be very difficult to
20 communicate quickly”. There are many other such
21 quotes that came out of this rural practitioner
22 survey but I’ll stop there.
23 And this goes back to the earlier point,
24 but one of the most significant finding from our
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2 survey of rural practitioners is that 74.3
3 percent of them are at retirement age or soon
4 approaching it. Rural communities are dealing
5 with a rapidly graying bar with no viable
6 successors. Most new attorneys gravitate to urban
7 and suburban areas, leaving the time tested and
8 true small town lawyer out.
9 The rural broadband and
10 telecommunications gaps, prevalent in upstate New
11 York, only exacerbates this problem. Why would a
12 newly minted attorney open up a modern day law
13 practice or take over one in a place that doesn’t
14 have reliable and effective broadband and telecom
15 services? It just wouldn’t make sense for them.
16 And how about the rural practitioners that are
17 out there today? It’s not just a question of
18 practicality, the rule of law depends on judges,
19 lawyers and everyone else being able to learn and
20 understand the law.
21 Knowledge of the law, like everything
22 else these days, is something we get online.
23 Without access to broadband and telephone
24 industry communication services, the quality of
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2 lawyering will go down, which means quality of
3 justice will go down. The rule of law in 2019 is
4 online and communities that aren’t online don’t
5 get to be a part of that. The fair and equal
6 administration of justice demands that rural
7 broadband and telecom services be effectively
8 available for all New Yorkers. And I’m very
9 grateful that you all agree with that and are
10 making the effort to push this issue forward. So
11 thank you very much for your time.
12 SENATOR MAY: Thank you. That was whole
13 different perspective that’s really important to
14 hear. And I will just say it also extends to
15 rural health care and a number of other areas
16 that we didn’t hear about today. But it’s great
17 that you brought this up, because especially in
18 professional work it’s really hard to do it now
19 if you don’t have this basic connectivity.
20 SENATOR METZGER: But also, there’s the
21 direct connection to your professional work. But
22 there’s also just attracting professionals to
23 rural areas and it even extends to nursing and
24 other occupations that we have shortages of, if
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2 we need to have these services to attract them
3 for their quality of life.
4 MS. PERLMAN: Yeah, this cuts across all
5 professions, all industries. But without the
6 broadband and telecom services, you’re not going
7 to incentivize new professionals to come out to
8 these places, so it’s definitely great that you
9 understand that.
10 SENATOR MAY: Well, thank you. Thank you
11 for bringing the specifics and information.
12 SENATOR METZGER: Yeah, it’s helpful.
13 Thank you.
14 SENATOR MAY: Alright, I guess we’re
15 wrapping up. So I just want to belatedly thank my
16 staff who put all this together, Eric Vandervort
17 who worked with everybody on this list and did an
18 amazing job. Zach Zeliff and Hal McCabe have been
19 running things here in the office, I mean in the
20 room and Kristin Williams, wherever she is, has
21 been working behind the scenes and the tech staff
22 here, you’ve been wonderful. The sergeants-at-
23 arms who were here, thank you. And everybody who
24 stayed or even was here for part of the day, it
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2 was really a great hearing and I’m grateful to
3 all of you and to my colleagues up here. Thank
4 you so much.
5 SENATOR METZGER: Yes, I second that,
6 thank you.
7 ASSEMBLY MEMBER SANTABARBARA: Thank
8 you.
9 SENATOR MAY: The meeting is closed, the
10 hearing is closed. (The public hearing concluded
11 at 5:30 p.m.)
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CERTIFICATE OF ACCURACY
I, Ryan Manaloto, certify that the foregoing transcript of Public Hearing on Rural Broadband on
September 17, 2019 was prepared using the required transcription equipment and is a true and accurate record of the proceedings.
Certified By
______
Date: September 30, 2019
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