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, 12247

September 17, 2019

11:00 a.m. - 5:30 p.m.

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SENATORS PRESENT:

SENATOR -- Chair, Legislative Commission on Rural Resources SENATOR SENATOR SENATOR SENATOR JAMES TEDISCO SENATOR PAMELA HELMING SENATOR JAMES SEWARD SENATOR SENATOR THOMAS O’MARA

ASSEMBLY MEMBERS PRESENT: ASSEMBLY MEMBER -- Chair, Legislative Commission on Rural Resources ASSEMBLY MEMBER , JR. -- Chair, Assembly Standing Committee on Local Governments ASSEMBLY MEMBER ASSEMBLY MEMBER ASSEMBLY MEMBER ASSEMBLY MEMBER ASSEMBLY MEMBER ASSEMBLY MEMBER BRIAN MILLER ASSEMBLY MEMBER 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 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 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 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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