COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES
CONSUMER AFFAIRS COMMITTEE PUBLIC HEARING
STATE CAPITOL HARRISBURG, PA
MAIN CAPITOL BUILDING ROOM 60, EAST WING
WEDNESDAY, MARCH 22, 2017 9:34 A.M.
PRESENTATION ON THE TELECOMMUNICATIONS INDUSTRY
BEFORE: HONORABLE ROBERT GODSHALL, MAJORITY CHAIRMAN HONORABLE BRIAN L. ELLIS HONORABLE JOE EMRICK HONORABLE FRANK A. FARRY HONORABLE DOYLE HEFFLEY HONORABLE WARREN KAMPF HONORABLE CARL WALKER METZGAR HONORABLE ERIC NELSON HONORABLE TINA PICKETT HONORABLE THOMAS QUIGLEY HONORABLE MIKE REESE HONORABLE MARTINA WHITE HONORABLE THOMAS CALTAGIRONE, DEMOCRATIC CHAIRMAN HONORABLE RYAN A. BIZZARRO HONORABLE MARGO L. DAVIDSON HONORABLE TINA M. DAVIS HONORABLE MARTY FLYNN HONORABLE ROBERT F. MATZIE HONORABLE ED NEILSON HONORABLE BRANDON P. NEUMAN HONORABLE PAM SNYDER * * * * * Pennsylvania House of Representatives Commonwealth of Pennsylvania 2
COMMITTEE STAFF PRESENT: AMANDA RUMSEY MAJORITY COUNSEL; MAJORITY EXECUTIVE DIRECTOR STEPHEN BALDWIN MAJORITY RESEARCH ANALYST JANE HUGENDUBLER MAJORITY LEGISLATIVE ADMINISTRATIVE ASSISTANT NED SMITH MAJORITY LEGISLATIVE AIDE
ELIZABETH ROSENTEL DEMOCRATIC EXECUTIVE DIRECTOR KURT BELLMAN DEMOCRATIC RESEARCH ANALYST BRETT BIGGICA DEMOCRATIC RESEARCH ANALYST TIM SCOTT DEMOCRATIC RESEARCH ANALYST 3
I N D E X
TESTIFIERS
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NAME PAGE
GERRY KEEGAN ASSISTANT VICE PRESIDENT, STATE LEGISLATIVE AFFAIRS, CTIA...... 5
FRANK BUZYDLOWSKI DIRECTOR, STATE GOVERNMENT RELATIONS, VERIZON...... 35
STEVE SAMARA PRESIDENT, PA TELEPHONE ASSOCIATION...... 42
SUBMITTED WRITTEN TESTIMONY
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(See submitted written testimony and handouts online.) 4
1 P R O C E E D I N G S
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3 MAJORITY CHAIRMAN GODSHALL: Good morning. The
4 hour of 9:30 having arrived, I ’d like to call the meeting
5 to order. The hearing is focused on the telephone
6 industry, both landline and wireless. And we'll also hear
7 testimony from representatives on the local telephone
8 companies, also called ILECs, related to Chapter 30
9 broadband compliance.
10 And the meeting today is going to be recorded and
11 televised.
12 And, you know, we're not going to have
13 introductions. We're not going to call for introductions
14 because it's not a formal meeting as such.
15 And, Tom, do you have anything you want to add to
16 it? If not, we're going to get started right away with the
17 meeting.
18 And presentations, there's going to be open floor
19 for questions from Members after each presentation. I note
20 that while each will not be providing individual testimony,
21 representatives of various ILECs and wireless phone
22 companies are present, will be able to respond to Member
23 inquiries if needed.
24 Our first presenter this morning is Gerry Keegan,
25 Assistant Vice President of State Legislative Affairs for 5
1 CTIA. Gerry, it’s all yours. If you want to call your
2 fellow members up with you at the table, it’s fine.
3 MR. KEEGAN: Chairman, Members of the Committee,
4 Gerry Keegan with CTIA. CTIA is the trade association for
5 the wireless communications industry. Our members include
6 wireless carriers, everyone here, AT&T, Sprint, T-Mobile,
7 and Verizon, as well as handset manufacturers, Apple, LG,
8 HTC, Samsung, and supplier component companies like
9 QUALCOMM and Intel.
10 I want to thank you again for having me back here
11 this session. The last time I was here in 2015 we went
12 through a presentation that was similar, and I ’d like to
13 talk first off by just addressing the state of the industry
14 in Pennsylvania, then go into detail about the state of the
15 industry nationally, and then discuss what we see on the
16 horizon with the future of the industry.
17 But before I do that, I just want to take us back
18 to where we were 10 years ago today, March 22nd, 2007. At
19 that point the top-selling phone was a flip phone. There
20 was no iPhone. There was no app store. There was no
21 android operating system. Thirty percent of wireless -
22 MALE SPEAKER: And they still work.
23 MR. KEEGAN: They are still great, yes. Only 30
24 percent of wireless consumers were using their device to
25 send and receive text messages, only 8 percent were using 6
1 them to check for email, and only 7 percent were using them
2 to access the Internet.
3 In Pennsylvania back in 2007 there were about 9.6
4 million wireless subscribers. That equaled a wireless
5 adoption rate of 80 percent. We go to our first slide,
6 we'll see what has changed in that 10-year period.
7 Today, there are more than 12.7 million wireless
8 subscriber connections here in Pennsylvania, equating with
9 an adoption rate of 99 percent. When I was here in 2015,
10 the adoption rate was 96 percent, so subscriber connections
11 in Pennsylvania continue to grow. Over one-third of
12 households in Pennsylvania are wireless-only, meaning they
13 have cut the cord. They no longer have a landline or a
14 VoIP coming into their house. Sixty-nine percent of all
15 high-speed broadband connections in Pennsylvania are
16 serviced by mobile providers.
17 There are nine service providers competing every
18 day in this State for wireless consumers based on price,
19 customer service, coverage, et cetera. Wireless jobs pay
20 twice as much as the average job in Pennsylvania, and
21 Pennsylvania ranks number 13th in app-economy jobs.
22 When you look at the next slide, we're not only
23 talking about app-economy jobs but the economic impact of
24 this industry in this State is great. There's over 144,000
25 jobs attributed to the wireless industry, $9.5 billion in 7
1 wages, $45 billion in economic impact. The industry is
2 responsible for over $2.1 billion in taxes paid to the
3 State.
4 If you look at the next slide, what you will see
5 -- and you may have to advance in your presentation one -
6 that as wireless subscriptions have increased in
7 Pennsylvania, they have done so nationally. There are now
8 more than 378 million wireless subscriber connections in
9 the United States. That equals an adoption rate of over
10 115 percent, meaning there are more wireless subscriber
11 connections in the U.S. than there are population.
12 If you look at the next slide, you'll see that in
13 order to keep up with continuing demand and continuing
14 subscribership for wireless, carriers have to continue to
15 invest in their networks. They need to continue to upgrade
16 their networks and maintain their networks. In 2015 alone
17 wireless carriers spent over $32 billion nationally to
18 maintain and upgrade their networks. That number doesn’t
19 include the $41 billion that wireless companies spent in
20 the AWS-3 spectrum option in which they paid to the U.S.
21 Treasury. So all in all over $70 billion in 2015 alone was
22 invested by wireless companies in this country.
23 The next slide you’ll see that the wireless
24 industry has become an enormous part of the U.S. economy
25 overall. It is larger than the movie production industry. 8
1 It is now larger than the lodging industry. It is larger
2 than the oil and gas industries. It’s larger than the
3 agricultural industry and the computer technology industry.
4 And how is the industry growing so large and so
5 important to the economy? You’ll see from the next slide
6 it’s because consumers are continuing to demand wireless
7 service. In 2015 there were 9.7 trillion megabytes of data
8 across U.S. wireless carrier networks, almost double what
9 it was in 2014. Every category for wireless data voice
10 increased. The only one slight decrease was in the number
11 of text messages sent. One point nine trillion text
12 messages were sent in 2015, a slight decline from 2014.
13 But that doesn’t mean consumers aren’t using their device
14 to message. They’re just using different platforms to do
15 so.
16 So there is a range of competition in this area.
17 You no longer have to use carrier networks to message. You
18 could use WhatsApp, you could use Twitter, you can use
19 LinkedIn, you can use Facebook Messenger. So, again,
20 there’s fierce competition in this part of the industry.
21 If you go to the next slide, you’ll see what we
22 expect to see in the future. By 2020 we predicted that
23 mobile data usage will increase six-fold to over 60
24 trillion megabytes of data across carrier networks.
25 Mobile-connected devices will increase by 30 percent by 9
1 2020. Internet-of-things devices, what's called IoT in
2 industry jargon, will be more than twice the number of
3 connections than we have now. And those IoT connections,
4 they're just not what you would think of as a wireless
5 device, a phone, or a tablet. They're going to be
6 connections to the home where you will have sensors to
7 monitor your heating and ventilation systems to make sure
8 nothing is in disrepair. You'll have them in your
9 dishwasher; you'll have them in your refrigerator. You'll
10 have them in your office buildings to make sure that, for
11 example, the office building is using the most efficient
12 lighting systems.
13 You'll have them on the roadways. When we talk
14 about connected cars and we talk about autonomous vehicles,
15 wireless carrier networks will be essential to the
16 operations of those. You'll have them on our roadways,
17 whether you have a smart parking solution where a citizen
18 will be able to download an app to show where he or she can
19 find the nearest parking spot instead of driving around
20 constantly looking for one.
21 You'll have them on your street corner. There
22 will be sensors in garbage bins so that the DPW can
23 determine which garbage bins need to be picked up, when and
24 where, instead of constantly looking to monitor the bins.
25 So those types of things are going to be ushered in by what 10
1 we think is going to be the next generation of wireless
2 services.
3 If you go to the next slide, that next generation
4 is what we call fifth-generation or 5G. Five-G will be
5 five times more responsive meaning that there will be lower
6 latency. This will usher in the arrival of using virtual
7 reality, augmented reality in the real-world situations.
8 It will be at least 10 times as fast -- some are predicting
9 100 times as fast -- as 4G networks. And it will connect
10 over 100 times more devices than what we have now.
11 Looking at the next slide, you’ll see that 5G
12 will impact everyday lives: over $1.8 trillion in savings
13 from smart grid-enabled devices being able to be put on the
14 grid, over $305 billion in healthcare savings as we monitor
15 better chronic diseases. Five-G applications will also
16 allow public safety, our first responders, to more
17 efficiently and safely attack an emergency than they can do
18 today. And finally, as I said, automated and autonomous
19 vehicles will lead to savings of 20,000 lives on our
20 roadways each year.
21 If you look at the next slide, you’ll see that 5G
22 will also revolutionize our economy. In January 2017
23 Accenture, the consulting firm, put out a report that found
24 that 5G networks will add a half-a-trillion dollars to the
25 U.S. GDP over the next seven years. Up to 2030 there will 11
1 be $2.7 trillion in economic efficiency savings because of
2 5G.
3 If you look at the next slide, you’ll see that 5G
4 will also create jobs. Three million new jobs will be
5 created. Those jobs will be carrier jobs; they’ll be
6 construction jobs and network engineering jobs for those
7 who need to build and maintain the new networks. They’ll
8 also be supplier-impact jobs for those who provide
9 equipment to the carriers in order to build the network.
10 So, in short, 5G means jobs and economic development.
11 If you look at the next slide, you’ll see that
12 this has a direct economic benefits to Pennsylvania.
13 Accenture ran a study that looked at cities within
14 Pennsylvania and, for example, showed that for the city of
15 Philadelphia, 5G will create nearly 15,000 new jobs, over
16 $900 million in smart-city benefits, over $2.3 billion in
17 GDP growth; for Pittsburgh, nearly 3,000 new jobs, over
18 $176 million in smart-city benefits and $465 million in
19 additional GDP; in Harrisburg, over $14 million in Smart
20 city benefits and over $75 million in GDP growth. So
21 again, 5G equates with jobs and economic development.
22 If you go to the next slide, you’ll see that in
23 order to prepare for the full deployment of 5G, which is
24 within the next three years, we need to make sure that our
25 networks are ready. So we have 5G trials happening 12
1 throughout the country, including here in Philadelphia
2 where we will monitor and test before we deploy. Again,
3 this is to ensure that what we say is actually going to
4 happen and that the customer experience is a positive one.
5 In the next slide you'll see that we have to have
6 a framework for the future in order to realize the benefits
7 of 5G. This industry will spend over $275 billion to build
8 out 5G networks. In order for that to happen, we will need
9 to have three things essential for the development:
10 Number one is more spectrum. Spectrum is the
11 lifeblood of this industry. If we don't have spectrum, we
12 cannot further our networks.
13 Number two, we need to be able to site our
14 infrastructure in a more efficient manner than we have
15 today. I'll touch on this a little bit more in additional
16 slides, but it's absolutely essential that we have
17 streamlined processes in place to site our infrastructure.
18 And number three, we need sound tax policy that
19 will allow us to invest in our infrastructure and not
20 hinder those investments.
21 Now, this first issue, the spectrum issue, that
22 is mainly a Federal Government issue, and the FCC and their
23 sister agencies at the Federal level determine what can
24 happen with regard to spectrum. But the other two points
25 you all hear in this room can help us undertake, 13
1 streamlined tower-siting policy and sound tax policy to
2 encourage investment.
3 Now, if you look at the next slide, what you’ll
4 see is what we mean by siting of infrastructure. In order
5 for 5G networks to operate efficiently or to operate at
6 all, we will need to site what we call small-cell
7 technology. Small cells will be typically the size of
8 pizza boxes. They will be sited on existing
9 infrastructure, whether that be a utility pole or a
10 streetlight. They will be able to harness the delivery of
11 5G more efficiently than the large towers that we know of
12 now.
13 The greatest things about 5G is that we are able
14 to use spectrum that delivers more data faster and with
15 lower latency. One of the issues with 5G is that we are
16 speaking in communication mode by meters as opposed to
17 miles. So whereas a monopole large tower was able to
18 communicate over several miles, the 5G network will require
19 densification, and that means small cells usually typically
20 on street corners depending on where you have carrier
21 interaction. You may have them on one streetlamp; you may
22 have them on two streetlamps. But that is essential for
23 the deployment of 5G.
24 If you look at the next slide, you’ll find that
25 in order for us to site these small-cell facilities, we 14
1 need three things:
2 Number one, we need access to the public rights-
3 of-way. There are some localities not necessarily here in
4 Pennsylvania but in the United States that have barriers
5 for us to enter into their markets and their rights-of-way.
6 We need to correct that.
7 Number two, we need fair payment structures based
8 on the actual and direct cost for the locality to manage
9 its rights-of-way.
10 And number three, we need streamlined application
11 processes in place so that we can efficiently site this
12 equipment and not have it hindered by unnecessary
13 application and delays.
14 So in all, as I said, 5G equals jobs, equals
15 economic development. We need to be able to site small
16 cell technology not only for 5G but also to densify our
17 networks and meet consumer demand for our 4G
18 infrastructure.
19 That’s all that I have, Chairman. I ’d be willing
20 to answer any questions that you may have.
21 MAJORITY CHAIRMAN GODSHALL: Yes, we do have some
22 questions. Brandon?
23 REPRESENTATIVE NEUMAN: Thank you. You just
24 threw a lot at us, but thank you for all this data. I
25 really appreciate it. 15
1 Starting from the back, streamlined local zoning
2 barriers, generally the General Assembly has not had any
3 luck with the Supreme Court in dealing with any local
4 zoning barriers because of our Constitution, and generally,
5 we have been overruled. I generally vote no on those
6 bills, but they pass the Legislature. Is there any idea
7 how we could effectuate change in local zoning and make it
8 constitutional?
9 MR. KERR: Sure. Good morning. Dave Kerr.
10 Thank you. Dave Kerr with AT&T.
11 The General Assembly, led by this Committee and
12 the Chairman, I believe it was four years ago, enacted Act
13 191, which was the Wireless Broadband Collocation Act.
14 That was a good effort. It was a good bill. At the time
15 it was really a landmark bill. This bill facilitated
16 collocation on existing facilities, so think about a water
17 tower, think about a building whereas one of our carriers
18 was already on a facility to streamline the zoning process
19 to collocate. If one carrier was on and another carrier
20 wanted to come on, it moved it to a situation where it was
21 by-right zoning, so that was good.
22 I think in Gerry's testimony we talked about the
23 small cells, and I think we're interested in reviewing and
24 working with you potentially on building on Act 181 to do
25 some more of that through those efforts. 16
1 REPRESENTATIVE NEUMAN: Thank you. In terms of
2 the $2.1 billion in State taxes paid, is that fees and
3 taxes that the consumers are paying? How is that broken
4 down?
5 MR. KEEGAN: That number doesn’t include the fees
6 and taxes that wireless consumers pay on their service.
7 REPRESENTATIVE NEUMAN: It does or does not?
8 MR. KEEGAN: It does not.
9 REPRESENTATIVE NEUMAN: Then what is the 2.1
10 million -
11 MR. KEEGAN: That includes corporate taxes. That
12 includes taxes from supplier downstream efforts. That
13 includes taxes from wages and salaries.
14 REPRESENTATIVE NEUMAN: Okay. And do you have a
15 figure on how much corporate net income tax the companies
16 are paying here in Pennsylvania?
17 MR. KEEGAN: I can find that out. I don’t have
18 that broken out -
19 REPRESENTATIVE NEUMAN: All right.
20 MR. KEEGAN: -- but I could look into that.
21 REPRESENTATIVE NEUMAN: Thank you. And I look
22 forward to seeing the language. Has that been challenged
23 in court, the Act 181?
24 MR. KERR: It has not been challenged -
25 REPRESENTATIVE NEUMAN: Okay. 17
1 MR. KERR: — no.
2 REPRESENTATIVE NEUMAN: Thank you.
3 MAJORITY CHAIRMAN GODSHALL: Carl Metzgar.
4 REPRESENTATIVE METZGAR: Thank you, Mr. Keegan.
5 You laid out a national outlook on proliferation of
6 cellular. It looks to me like this is crucial and
7 necessary for the country. Would that be your assessment?
8 I mean, this is really important to us at this point.
9 MR. KEEGAN: Yes.
10 REPRESENTATIVE METZGAR: Okay. Your members, do
11 they meter data, your -
12 MR. KEEGAN: Do they -
13 REPRESENTATIVE METZGAR: Do you meter, measure
14 data and charge your group -- do they measure it and then
15 charge according to that measurement?
16 MR. KEEGAN: Charge the consumer?
17 REPRESENTATIVE METZGAR: Correct.
18 MR. KEEGAN: Each carrier has their different
19 rate plans. There are certain carriers that have no
20 contract plans, and it’s all-you-can-eat. There are some
21 that provide an option -
22 REPRESENTATIVE METZGAR: Okay.
23 MR. KEEGAN: -- depending if you’re not a heavy
24 user and you don’t want to pay for all-you-can-eat. You
25 can have a smaller bucket. 18
1 REPRESENTATIVE METZGAR: But some do?
2 MR. KEEGAN: Yes.
3 REPRESENTATIVE METZGAR: Okay. And then you said
4 that, you know, you're having trouble. You want to have
5 these -- what did you call those small-cell sites?
6 MR. KEEGAN: Small cells.
7 REPRESENTATIVE METZGAR: Okay. And so those
8 small-cell sites, you want to be able to put those on our
9 public rights-of-way is what you want to do?
10 MR. KEEGAN: Correct.
11 REPRESENTATIVE METZGAR: Okay. So I guess if I'm
12 looking at this, you're saying that your program and what
13 you provide to the public is absolutely necessary. You
14 meter it, and now you want public rights and access to
15 public right-of-way. I mean, that does seem to me like
16 you're hitting almost every portion of the definition of a
17 public utility. Do we need to start looking at you like a
18 public utility?
19 MR. KEEGAN: No, I would not say so. With nine
20 carriers competing in the market, we don't have a utility
21 structure. We don't have a monopoly structure. Customers
22 now with no contract plans can leave their carrier without
23 issue, without early termination fees, et cetera.
24 What we are seeing is that consumers are
25 demanding the services more and more. That's the necessity 19
1 of siting the infrastructure. It isn’t because w e ’re in a
2 monopoly or duopoly. It isn’t because we have rate of
3 return. These folks compete every day in the marketplace
4 for customers, and the market has set the structure of
5 winners and losers. And -
6 REPRESENTATIVE METZGAR: So I guess my question
7 then is what do you say to a landowner that whenever one of
8 your -- you know, say that you get this ability to go on
9 the public right-of-way and you can put up a new pole in
10 someone’s yard and, you know, that would be within the
11 purview if you would have the rights of a public utility.
12 So what do you say to that landowner whenever they’re
13 saying, well, who regulates them then if they can just
14 decide to come but that pole in without any permission from
15 me because it’s in the PennDOT right-of-way so to speak?
16 MR. KEEGAN: Right now, what w e ’re looking at is
17 siting this infrastructure on existing structures, so
18 streetlamps that are already in place -
19 REPRESENTATIVE METZGAR: But still, on that —
20 MR. KEEGAN: -- [inaudible] that are already in
21 place.
22 REPRESENTATIVE METZGAR: So you’re still adding
23 to that structure I guess is my question, or you could put
24 a new pole in if you would get that right and authority to
25 do that. 20
1 MR. KEEGAN: Well, right now, initially what
2 w e ’re looking for, as I said, is to site on existing
3 infrastructure. I don’t know whether legislatively that’s
4 something w e ’re looking at in putting up a new pole. We go
5 through all of the zoning processes as applicable at the
6 locality level. What w e ’re seeing now is that in some
7 jurisdictions that same zoning process for a monopole, for
8 a single pole, it’s very high. It is being used to site
9 small-cell infrastructure, which w e ’re talking about a
10 pizza box. So -
11 REPRESENTATIVE METZGAR: Understood, but that’s
12 not what I ’m asking, though. I ’m asking about, you know,
13 your ability to go on and either -- onto the public right-
14 of-way and do that into which most people consider their
15 yard and they don’t realize that that’s actually PennDOT’s
16 right-of-way, but you could conceivably do that.
17 My issue is that you’re asking for the benefit
18 without the burden of being a public utility, and so that’s
19 I guess, you know, my concern representing my constituents
20 is that if you’re asking for that and yet not wanting any
21 of the burden of being that public utility, you know, I
22 think that we might have a problem with that.
23 The follow-up to that is are you aware of any
24 provisioning of fiber to cell sites using public utility
25 status to do that? Is that something that your members do 21
1 on a frequent basis?
2 MR. KEEGAN: I don't know if any of our members
3 do so.
4 REPRESENTATIVE METZGAR: They don't contract with
5 anyone to do that or -
6 MR. KEEGAN: Not to my knowledge. I don't know.
7 REPRESENTATIVE METZGAR: Last question, you
8 mentioned that you needed more spectrum, and that doesn't
9 have anything to do with us. But my question to you is, is
10 that spectrum finite?
11 MR. KEEGAN: Yes.
12 REPRESENTATIVE METZGAR: Okay. And so if we
13 continue to move all of our data from a wireline to a
14 wireless system, will we eventually run out of spectrum?
15 MR. KEEGAN: There is some concern. There's ways
16 of looking at engineering so that you can dice the spectrum
17 up more efficiently and use it. There's also, you know,
18 some entities that may not be using spectrum most
19 efficiently, and that's what the Federal Government is
20 looking at, the SEC is looking at, the Department of
21 Commerce is looking at is how do we make sure that if
22 entities have rights to spectrum they use them most
23 efficiently, and if not, then let's auction them off to
24 wireless companies.
25 REPRESENTATIVE METZGAR: So I guess maybe I need 22
1 to restate the question. If we move all data transmission
2 to wireless, will we run out of spectrum?
3 MR. KEEGAN: Not necessarily.
4 REPRESENTATIVE METZGAR: Okay. Thank you.
5 MAJORITY CHAIRMAN GODSHALL: Pam Snyder.
6 REPRESENTATIVE SNYDER: Thank you, Mr. Chairman.
7 And thank you for your testimony.
8 You did give us a lot of information today, and I
9 would like to follow up a little bit. The small cells, you
10 know, I ’m listening to you talk about the 5G and how
11 important that is, and I do have all of my devices here and
12 I do want them to be working whenever I pick them up, okay,
13 but I have entire school districts in my district that
14 would kill for 1G. These small cells, will they help with
15 that?
16 And I’m listening to Representative Metzgar’s
17 questions, you know, and it looks real nice here, you know,
18 to attach them to streetlights. I ’ve got a lot of areas in
19 my district, they don’t have streetlights. So, you know, I
20 guess my question is twofold. Number one, what’s the
21 industry doing about the folks that can’t even have cell
22 phone service in their area? And what do we do in rural
23 America to attain 5G when we maybe don’t have the ability
24 to have streetlights through every community?
25 MR. KEEGAN: On the first question, the networks 23
1 for the industry change. You know, I can probably say
2 three years ago, two years ago when I was here, additional
3 cell sites have been added. Service coverage has improved.
4 And that’s something that we do have a challenge with as an
5 industry without a doubt, whether it’s topography, whether
6 it’s change of seasons that challenges the bandwidth, the
7 radio waves from reaching certain locations.
8 But this industry is not stagnant. What you see
9 today with regard to coverage is not what’s going to be
10 happening a year or two from now. Carriers and their
11 partners continuously add cell sites.
12 On the rural side with 5G, there’s some trials
13 that are being undertaken by some companies to determine
14 the best way to get 4G, 5G out to rural areas. It’s
15 probably not going to be the small-cell infrastructure that
16 I’ve shown you in those pictures. It may be similar nodes
17 using different technology to cover greater areas, but
18 those trials and tests are underway. It’s happened, I
19 believe, over the last year or so. I ’ve not seen any
20 results from those, but there are definitely members of my
21 organization, my association that are looking at this and
22 looking at ways that we can expand 4G and 5G to rural
23 communities.
24 REPRESENTATIVE SNYDER: So what might I be able
25 to go back after this hearing and tell my constituents? I 24
1 have eight school districts in my district -- it's very
2 large geographically -- and I probably have three school
3 districts that are challenged with no cell phone service.
4 What can I go back and tell those folks when they might be
5 able to expect that in this century?
6 MR. KEEGAN: I would have to look at where you
7 represent the area that you represent and determine where
8 the buildout has been in that area. In the short term, I
9 think you can tell your constituents that we are looking at
10 ways to expand 4G and 5G to rural communities. As I said,
11 I'm not going to promise that it's going to be the same way
12 that we've outlined here. But there are companies that are
13 looking at it, member companies of mine who are doing
14 trials, who are doing tests, who hope that they can deploy
15 similarly along the same timeline as 5G small cells over
16 the next three years. That would be something that I could
17 tell you to tell your constituents.
18 REPRESENTATIVE SNYDER: Okay. Thank you.
19 Thank you, Mr. Chairman.
20 MAJORITY CHAIRMAN GODSHALL: Rob Matzie.
21 REPRESENTATIVE MATZIE: Thank you, Mr. Chairman.
22 Thank you for your testimony.
23 It's interesting in the last 24 hours I've heard
24 a lot of testimony in a couple of hearings yesterday. In a
25 transportation hearing we were talking about automated 25
1 vehicles, and today, w e ’re talking about the rollout and
2 the continuation of -- the buildout I should say of
3 wireless across the Nation. Is it fair to say, considering
4 the new Administration’s love of technology specifically as
5 it relates to the wireless technology, that the Federal
6 Government is on board, has made a statement or a case that
7 the desire is for more spectrum as you asked for in this
8 testimony today?
9 MR. KEEGAN: Yes. I think two parts to that.
10 The first part is that the FCC under the previous
11 administration acknowledged the importance of 5G. And they
12 did so by providing for high bandwidth spectrum, which is
13 essential to 5G deployment. And that was a huge victory,
14 and they expedited that for the industry in order to begin
15 these trials.
16 On the second phase the Administration, whether
17 it’s the previous Administration or the current
18 Administration, recognized the importance of more spectrum,
19 more spectrum being commercially provided to wireless
20 carriers. It is just a problem of identifying the spectrum
21 that will be brought to market.
22 So we’re currently undergoing a spectrum auction
23 now, which was an incentive auction to allow broadcasters
24 who may be underutilizing or not using their spectrum to
25 auction that off. That auction process has ended, but 26
1 there are still down-payments and other processes that need
2 to happen.
3 The second area that I think that Congress is
4 looking at is whether there are agencies within the Federal
5 Government that are also underutilizing or not using
6 spectrum efficiently and whether they can identify those
7 agencies and encourage them to bring that spectrum to
8 auction for commercial use.
9 REPRESENTATIVE MATZIE: But before I ask the
10 question, from a layman’s perspective specifically as it
11 relates to people watching, explain spectrum for folks so
12 they understand what exactly that means.
13 MR. KEEGAN: Sure. So spectrum allows for the
14 radio waves to be sent and to be able to communicate,
15 whether voice or data traffic, onto carriers’ network. It
16 is basically what I would like to say the lanes on a
17 highway. So if you don’t have a lot of spectrum, you’re on
18 a two-lane highway. And if you’re on a two-lane highway in
19 Philadelphia or Pittsburgh, you’re going to be stuck in
20 traffic. What w e ’re trying to do is expand those lanes to
21 bring more spectrum to market. The more spectrum that we
22 have, the more lanes of traffic we can open up in order to
23 meet our consumers’ needs, whether data or voice.
24 REPRESENTATIVE MATZIE: So based on your previous
25 answer relative to looking at the spectrum, it’s my 27
1 understanding the Federal Government actually has some
2 radio waves reserved or are basically on hold to -
3 MR. KEEGAN: Correct.
4 REPRESENTATIVE MATZIE: — you know, and this is
5 obviously before wireless technology even entered -- see,
6 I'm an old radio guy that worked for a daylight radio
7 station that we powered off at night and played the
8 National Anthem and powered on again the next morning at
9 6:00 a.m. So I get the radio wave aspect of it all, but is
10 that the case? Is that what they're looking at, some of
11 the stuff that they've even had reserved?
12 MR. KEEGAN: Yes.
13 REPRESENTATIVE MATZIE: Okay.
14 MR. KEEGAN: Yes.
15 REPRESENTATIVE MATZIE: You know, I think, quite
16 frankly, from a consumer's perspective and I think
17 obviously in the business world there's that level of
18 expectation. And the level of expectation is when you pick
19 up your telephone and you flip on Twitter and you go online
20 and you want to see what folks are posting or you're ready
21 to post yourself that it's going to work and have that
22 ability and have that access. So, you know, I look forward
23 to seeing how this all rolls out and specifically as it
24 relates to the technology.
25 And I think Representative Snyder, when we've had 28
1 some hearings down in her district that, you know, rural
2 America, you know, I think is really something that needs a
3 focus from the industry, whether it’s small-cell technology
4 and advancing that or some other technology to allow for
5 those folks to have that access because it’s difficult as a
6 policymaker to put forth policies to help the industry when
7 we still have constituents that are being deprived from the
8 ability to have that access. So that’s the difficult
9 challenge we face I think as policymakers.
10 But we appreciate your testimony and look forward
11 to continuing working with you and see how the industry
12 continues to thrive. So thank you.
13 MAJORITY CHAIRMAN GODSHALL: Representative
14 Reese.
15 REPRESENTATIVE REESE: Thank you, Mr. Chairman.
16 And thank you for your testimony.
17 So if the General Assembly expedites your request
18 dealing with zoning for the small cells, from your
19 perspective, where do you see that investment going? Do
20 you see it going towards Pittsburgh and Philadelphia or do
21 you see it going to more rural areas like I represent? Can
22 you talk about that for a moment?
23 MR. KEEGAN: Sure. I ’ll be perfectly upfront
24 with you here. The first part of 5G rollout, small-cell
25 technology rollout is going to occur in the urban centers 29
1 and the suburban areas. That is where we are seeing the
2 most data traffic, and we need to densify our networks in
3 order to keep up with that immediately.
4 And then one aspect that we would have if we had
5 more efficient siting and application processes is that
6 there's a bucket of money with each company, cap X, that
7 they look out for each State. And they determine they're
8 going to invest this much in this State and that's what
9 they can afford to invest. The more that we have to spend
10 on dealing with siting processes and application fees and
11 attorney's fees and court costs is less money that we can
12 actually put in our networks.
13 And how we see this being a more efficient use of
14 our capital is the less that we have to spend on those
15 processes, the more that we can spend in the rural
16 communities, the more they will get of that money. It's
17 just how capital expenditures work within the companies.
18 REPRESENTATIVE REESE: So if we go down this road
19 with this industry, I mean, I guess what I'm hearing -- and
20 I understand that that investment in the more urban areas
21 is necessary. I understand that. And I understand it's
22 important to our economy. But the folks that I represent
23 might not see that benefit or Representative Snyder's folks
24 might not see that benefit any time in the near future. Is
25 that a fair statement? 30
1 MR. KEEGAN: Well, as I said earlier, we are
2 looking at testing trials to determine the best way to
3 deliver advanced mobile broadband services in rural
4 communities. That is something that our companies are
5 looking at. I can’t promise you that it’s going to be
6 delivered by X point or X date, but it is something that
7 has been going on over the last year. Again, it’s not
8 going to be the pizza box that I showed you on a lamppost.
9 There may be something else that is being done. But it’s
10 definitely something that the industry is taking seriously
11 and is looking at.
12 REPRESENTATIVE REESE: Thank you.
13 MAJORITY CHAIRMAN GODSHALL: Okay. W e ’re running
14 a little behind, you know. Ed.
15 REPRESENTATIVE NEILSON: Thank you, Mr. Chairman.
16 I ’ll try and be quick.
17 I ’m from Philadelphia so we know w e ’re going to
18 get it first. And something we did when we had the cable
19 companies come through Philadelphia and they wanted to do
20 infrastructure, we made them go into communities that
21 nobody wanted to go into. Would we be justified as part of
22 this legislation that w e ’re going to create here that we
23 make certain that some of these other communities that the
24 Reps talked about today make certain that they are part of
25 that legislation and you must invest in them? Because you 31
1 said you’re going to save a lot of money on us. So if we
2 say, okay, well, 20 percent of the infrastructure that you
3 do must be in there, would you be open to us mandating that
4 within the legislation for your rights-of-way?
5 MR. KEEGAN: Well, one of the challenges that we
6 have is not similar to a fixed broadband connection in
7 rural communities. There’s other issues that may be
8 involved like topography, like change of seasons. So there
9 are challenges there.
10 REPRESENTATIVE NEILSON: But to make no effort —
11 we ’re trying to avoid a no-effort here because what w e ’re
12 saying is hey, look, if we have anything left over from
13 Philadelphia, Pittsburgh, and all, w e ’ll take care of you.
14 We ’re looking at that lack of effort. If we mandate that
15 you must hit some of these areas first prior to doing a
16 Philadelphia buildout and stuff like that, I mean, I ’m just
17 thinking out loud so we can all talk about this because I
18 think that’s something that we need to move forward.
19 And I don’t want to take -- the Chairman is going
20 to yell at me -- I won’t take up too much time.
21 State highways, State roads, State infrastructure
22 that w e ’ve been paying for for a long time, you’re going to
23 make a $275 billion investment in Pennsylvania. You have
24 to do that, as you said, because you’re running out of
25 room. And eventually the end-user is going to pay for 32
1 that. Do you think that the State should be compensated
2 for putting these on our State infrastructures that the
3 taxpayers pay for, say, our turnpike and all our poling
4 along the turnpike? What kind of fair compensation do you
5 think the Commonwealth should get for allowing your
6 equipment to be in our rights-of-way? I mean, do you have
7 some kind of structures that you are going to help us
8 propose so these smaller communities in the Commonwealth
9 can be compensated?
10 MR. KEEGAN: For siting within the public right-
11 of-way we have no problem paying for application fees, we
12 have no problem paying for rental fees, as long as it is
13 the direct and actual cost for managing that right-of-way.
14 What we don't want to be seen as is, okay, here's a new
15 player in the marketplace and they're wireless carriers;
16 let's unfairly tax them; let's unfairly adopt fees against
17 them.
18 So, again, in the public rights-of-way -- and I
19 don't know, your State law may have specific, you know,
20 provisions with regard to the turnpike and the Department
21 of Transportation areas. And I don't know if we're going
22 to be looking at those areas immediately. But we would
23 have no problem with siting within the public rights-of-way
24 to pay our fair share.
25 REPRESENTATIVE NEILSON: Thank you today for your 33
1 testimony. I have nothing further, Mr. Chairman.
2 MAJORITY CHAIRMAN GODSHALL: Thank you. We have
3 one final question, Chairman Caltagirone.
4 DEMOCRATIC CHAIRMAN CALTAGIRONE: I ’m curious
5 about your security because I hope we have something in
6 place. And add onto that, if something were to interrupt
7 the systems, is there any kind of backup that you may have?
8 MR. KEEGAN: Sure. So cybersecurity is an issue
9 that we take important at CTIA and within the wireless
10 industry. We have a dedicated cybersecurity working group
11 that operates out of CTIA with all of the major wireless
12 carriers, regional carriers, equipment manufacturers,
13 handset manufacturers that participate in that working
14 group. We just met last Thursday and Friday in Washington
15 to discuss the latest issues that are out there.
16 One thing about wireless networks in the United
17 States is that they are some of the most protected networks
18 that there are. When you look at cyber attacks on wireless
19 networks compared to a wired broadband fixed network, it’s
20 dramatically 100-fold lower than what you see in those
21 areas. So our networks are secure. As I said, we have
22 dedicated personnel at CTIA within all of the companies
23 that work to ensure that those networks are protected and
24 to examine any of the latest threats to the networks.
25 DEMOCRATIC CHAIRMAN CALTAGIRONE: Do you have a 34
1 backup, though, if something happens, if something’s
2 happened or there’s a cyber attack or, you know, with
3 what’s going on with North Korea -
4 MR. KEEGAN: Sure, sure.
5 DEMOCRATIC CHAIRMAN CALTAGIRONE: — and
6 everything else -
7 MR. KEEGAN: Yes. We have resiliency plans in
8 place. CTIA has a resiliency plan that all of the major
9 carriers and the regional carriers sign onto to ensure that
10 there are backups, to ensure that if one part of the
11 network goes down, it doesn’t bring down the entire
12 network. And CTIA certifies carriers’ network to ensure
13 that they are in line with those resiliency plans.
14 DEMOCRATIC CHAIRMAN CALTAGIRONE: Thank you.
15 MAJORITY CHAIRMAN GODSHALL: Thank you very much.
16 MR. KEEGAN: Thank you.
17 MAJORITY CHAIRMAN GODSHALL: I think all this
18 might mean I ’m going to get more emails than I do now,
19 which doesn’t help me. And I ’d sure as heck like to say
20 something about the form emails. You know, I ’d like to see
21 them eliminated altogether. When some company says, hey,
22 give us your name, w e ’ll send out an email in your name,
23 which is becoming more and more prevalent and sometimes 50,
24 60 of those, you know. It’s not a pleasant thing when
25 you’re on the receiving end. 35
1 MR. KEEGAN: I agree.
2 MAJORITY CHAIRMAN GODSHALL: So thank you.
3 MR. KEEGAN: Thank you.
4 MAJORITY CHAIRMAN GODSHALL: Thank you very much
5 for your testimony.
6 I'd like to call the next two presenters, who
7 will be Steve Samara, President of the Pennsylvania
8 Telephone Association; and Frank Buzydlowski, Director of
9 State Government Relations for Verizon.
10 And if you can summarize to some degree your
11 testimony, I would appreciate it. And we want to make sure
12 we have time for questions before we run out of time. So,
13 gentlemen, the microphone is yours.
14 MR. BUZYDLOWSKI: Good morning, Chairman
15 Godshall, Chairman Caltagirone, and Members of the House
16 Consumer Affairs Committee. My name is Frank Buzydlowski,
17 and I am the Director of State Government Relations for
18 Verizon in Pennsylvania. In that capacity, I deal with the
19 General Assembly on all matters relating to Verizon,
20 landline, wireless, and Internet, representing all Verizon
21 corporate entities. I also advocate for our companies to
22 every agency of the executive branch of this Commonwealth.
23 I've been with Verizon and its predecessor
24 companies, Bell Pennsylvania and Bell Atlantic, for over 30
25 years, spending the last 23 years in State Government 36
1 Affairs. I am very proud that my career has allowed me to
2 stay so long with an organization that has such a wide
3 national and international reach and yet has such a rich
4 history in our State that reaches into the very fiber of
5 our local communities.
6 Please allow me to share some facts and figures
7 about us. Verizon has over 8,000 employees and over 38,000
8 shareholders living in our Commonwealth. Our company pays
9 over a quarter-billion dollars annually to approximately
10 20,000 retirees living here. We contribute over $320
11 million annually on health care for our employees and
12 retirees living in this Commonwealth. We operate thousands
13 of buildings and locations throughout Pennsylvania,
14 including landlines, central offices, and remote terminals,
15 wireless towers, and small-cell sites about which you heard
16 a lot just a few minutes ago. And this is something of
17 which I ’m especially proud: We contribute over $1,400,000
18 annually to approximately 1,300 charities and civic
19 organizations in this State.
20 Throughout my tenure working with Chairman
21 Godshall and you, the Members of this Committee and staff,
22 the most important legislative and regulatory issues
23 impacting my companies and our industry have come before
24 the Consumer Affairs Committee. Since I ’ve been your
25 lobbyist on the Hill, you have passed Representative 37
1 Adolph’s legislation, House Bill 30, which updated Chapter
2 30 of the Public Utility Code; Senate Bill 1000, exempting
3 the Internet from State Government regulation; and Senate
4 Bill 1345, the Wireless Broadband Collocation Act, which
5 partially streamlined the process for deploying more
6 cellular service throughout Pennsylvania and which to my
7 colleague David Kerr referred in the last panel, his
8 testimony.
9 This session you will likely take up House Bill
10 284, Representative Matt Baker’s bill, to change the way
11 that Pennsylvania’s One Call, also known as Call Before You
12 Dig is administered. And I just saw, Mr. Chairman, that
13 you’ve scheduled a public hearing on that subject in April.
14 And I predict that this Committee will see many other
15 issues this session that will affect Verizon such as the 5G
16 small-cell deployment about which we heard earlier.
17 Looking in the rearview mirror, it’s amazing how
18 much things have changed in such a short period of time.
19 When Chapter 30 was last updated with the enactment of
20 House Bill 30 in 2004, there were no smartphones, no iPads,
21 no tablets, no Facebook, no Twitter. Cable telephony was
22 in its infancy. Voiceover IP or Internet protocol services
23 like Skype, Vonage, and Magic Jack were barely heard of.
24 And not many people would have imagined giving up a
25 landline altogether in favor of just using a cell phone. 38
1 Today, it is difficult to even remember a time
2 when we did not have all those options at our fingertips,
3 and statistics show that consumers continue to abandon
4 traditional landlines in favor of the wide array of
5 sophisticated services, devices, and networks we now have
6 to choose from.
7 Allow me to share with you a few statistics, and
8 I will summarize, Mr. Chairman, because some of these
9 you’ve seen in the last testimony. In 1999, Pennsylvania’s
10 ILECs, the incumbent local exchange carriers, served 8.5
11 million landlines, and your constituents had very few
12 options for service other than the incumbent local exchange
13 carriers. Yet by the end of 2015, the ILECs served just a
14 little over 3 million of those lines. And you see the bar
15 graph that is in my testimony with the decreasing numbers.
16 As of June 2016, 49.3 percent of the households
17 in the United States were wireless only. They’ve
18 eliminated landline services entirely from their
19 households. Another 15 percent considered a cell phone to
20 be their primary line. So that means two-thirds of
21 households now rely only or primarily on mobile phones. By
22 contrast, only 7.2 percent of households are landline-only,
23 and that portion continues to shrink.
24 And most of this cord-cutting has occurred over
25 the last decade. In 2003, only 3 percent of households 39
1 were wireless only. The dramatic change in consumer
2 preference for wireless technology is illustrated in the
3 graph before you, the bar graph again between landline and
4 wireless-only households.
5 Even those customers who continue to use
6 landlines have plenty of choices besides Verizon. The FCC
7 reports that as of December of 2015 in Pennsylvania
8 competitive local exchange providers, or CLECs, and
9 interconnected VoIP providers, mostly the cable companies,
10 serve 47 percent of the landlines and a full 55 percent of
11 business landlines.
12 With wireless lines in the mix, the picture for
13 the incumbent local exchange carriers is even more
14 dramatic. All of Pennsylvania’s incumbent telephone
15 companies taken together, that would be Verizon and all the
16 companies that Steve represents, serve only 16 percent of
17 the State’s landlines today. And you’ll see that on the
18 pie chart that’s before you. Clearly, consumers have
19 chosen to abandon regulated services in droves. The
20 monopoly era of landline telephone is a thing of the
21 distant past.
22 Now, I would like to relate all of that to
23 Chapter 30. We should never lose sight of the fact that
24 Chapter 30 has always been about making Pennsylvania a
25 technologically advanced State in which to live and work. 40
1 Under that law, Verizon has invested billions of its own
2 dollars in this Commonwealth, bringing broadband technology
3 to all urban, suburban, and rural communities and providing
4 residents and businesses in those communities with high
5 speed Internet service. The modern broadband
6 infrastructure we created supports the data-driven economy
7 that raises productivity and creates jobs, and we did all
8 that without one dime of government money.
9 We at Verizon have been 100 percent compliant
10 with the mandates in Chapter 30 since the fall of 2015,
11 finishing our deployments several months ahead of schedule.
12 Since that time, we have made high-speed Internet access
13 available to all of our customers in Pennsylvania,
14 including rural Pennsylvania. To meet our obligation, we
15 deployed a modern array of services that includes high
16 speed Internet service; HSI, also known as DSL; Fios; 4G
17 LTE fixed wireless; and for a very small percentage of our
18 customers, satellite Internet service, which we only use
19 for that rare customer who is too far from an LTE cell
20 tower or a copper line that is able to carry the high-speed
21 Internet signal.
22 Today, any Verizon customer can call 1-800-
23 Verizon or go online and order Internet service for his or
24 her specific location. To accomplish that feat, we
25 invested over $16 billion of private capital and deployed 41
1 over 4.5 million miles of fiber-optic cable, made our
2 interoffice facilities 100 percent fiber-optic, and
3 deployed fiber to connector central switching offices to
4 over 2,500 remote terminals that bring high-speed Internet
5 technology to your communities, including rural
6 communities.
7 Verizon fiber-optic lines also provide the
8 backhaul to bring 4G LTE wireless high-speed Internet
9 service to Pennsylvania. We deployed 190 4G LTE cell
10 towers in rural Pennsylvania, 190 in rural PA, and of
11 course many others throughout the State. Even after
12 meeting our obligations under Chapter 30, last year alone
13 we invested over $380 million in our network.
14 The other key point I ask you to never lose sight
15 of is as Chapter 30 was negotiated in a time when everybody
16 had a landline and nobody even imagined that there would
17 come a day when everyone didn’t have a landline. So when I
18 was asked to include in my testimony what our biggest
19 Chapter 30 challenge is, the answer is clear: managing
20 change, change from a time when virtually every household,
21 urban, suburban, and rural, subscribed to the landline
22 public telephone network to the modern world with the vast
23 array of telecommunications choices that we have today.
24 I was also asked to address our compliance with
25 Chapter 30. Our network modernization plan was filed with 42
1 and approved by the Public Utility Commission. And I ’m
2 very proud to state that Verizon is 100 percent in
3 compliance with that plan.
4 I ’d like to conclude my remarks by stating that
5 in this complex new world of communications, Verizon’s goal
6 and my personal goal is to provide excellent service to our
7 customers, your constituents. And let me add that you, the
8 Members of this Committee, and all Members of the General
9 Assembly and your respective staff can contact me any time
10 that you or a constituent has a question about high-speed
11 Internet service or any Verizon service.
12 On behalf of the 67,000 Verizon employees,
13 retirees, and shareholders who reside in this great
14 Commonwealth, I thank you for this opportunity to appear
15 before you, and I ’d be happy to answer any questions that
16 you may have after Steve and I have concluded our
17 testimony.
18 MAJORITY CHAIRMAN GODSHALL: Okay. Steve, it’s
19 up to you.
20 MR. SAMARA: Thank you, Chairman Godshall,
21 Chairman Caltagirone. Good morning, returning and new
22 Members of the House Consumer Affairs Committee. I
23 appreciate the opportunity to be here before you again.
24 New Members are in for a wild ride if you haven’t figured
25 that out already. But we welcome you and look forward to 43
1 working with you going forward.
2 I ’m Steve Samara. I ’m President of the
3 Pennsylvania Telephone Association. I want to take just a
4 minute or two to talk about the PTA and then focus in on
5 the broadband questions that were posed in the memo that
6 was sent out to us because I know we want to talk about
7 broadband deployment here in Pennsylvania.
8 My member companies serve rural Pennsylvania.
9 They range in size from several hundred access lines to
10 hundreds of thousands of access lines. But there are a
11 couple unique characteristics about my member companies,
12 which you should be aware of from a public policy
13 perspective. First of all, my member companies are
14 carriers of last resort. They are COLR companies, which
15 means they have to serve everyone in their service
16 territories with landline service. They do not get to pick
17 and choose where they want to serve. This is not a model
18 designed to maximize profitability. It is a model designed
19 to make sure that everyone in Pennsylvania has access to
20 affordable voice service. As w e ’ll see, as we talk about
21 broadband, you need that network, that basic landline
22 network to provide all the bells and whistles of broadband
23 services as well.
24 As COLR providers, w e ’re fully regulated by the
25 Pennsylvania Public Utility Commission. We file reports 44
1 with the PUC. We pay assessments to help fund the PUC’s
2 budget along with our colleague utilities that are also
3 regulated, and we respond to customer and constituent
4 complaints about our service to the Public Utility
5 Commission.
6 Another key characteristic of my member companies
7 is self-evident in the RLEC designation, our Rural Local
8 Exchange Carrier, which is rural. My member companies,
9 regardless of size, serve rural Pennsylvania. My larger
10 member companies just serve more square miles of rural
11 Pennsylvania than my smaller members do.
12 It’s not easy serving rural Pennsylvania. It’s
13 not inexpensive serving rural Pennsylvania, but my member
14 companies are good at it. Not to boast, but they’re good
15 at doing it. Some have served this Commonwealth for a
16 century or more and, you know, I welcome and invite you to
17 come and meet with any of those member companies at any
18 time.
19 Finally, the PTA is proud to be a resource for
20 this Committee, for the staff. We are very good at
21 responding to inquiries from this Committee. We do have
22 several events throughout the year that we will invite you
23 to, small company committee meetings, spring conference,
24 fall conference, annual convention in Hershey. It’s good
25 for you, I think, to come out and rub elbows with the folks 45
1 who are climbing the polls, who are out there providing the
2 service instead of just listening to a paid spokesman,
3 which I am, to tell you about the industry. I hope I serve
4 a role. I ’m still here; I guess I do. But it’s nice for
5 you guys to get out and meet the people who are actually
6 out there working on the lines.
7 Finally, any constituent inquiries you have about
8 services which my member companies offer I will offer Buzz
9 as well for his territories. We take pride in the fact
10 that w e ’re responsive to inquiries that your constituents
11 may have about our services. If you call Buzz’s cell
12 phone, he will give you specific directions that if it’s a
13 constituent inquiry, here’s what you do. I ’ll give you his
14 cell phone number in a minute so you can reach out to him
15 whenever you have a problem. But I think both Buzz and I
16 have been around here long enough that we pride ourselves
17 in our ability to answer constituent inquiries that you
18 folks may have with his company or my member companies.
19 So on to broadband. There are a couple of
20 broadband deployment questions that I want to address, and
21 obviously we want to answer any questions you may have
22 today or going forward. How is Chapter 30 compliance
23 evaluated? As Buzz mentioned, all of the folks, all the
24 companies that fell under Chapter 30, Act 183 of 2004, were
25 required to file network modernization plans, NMPs, with 46
1 the PUC.
2 These are substantive documents. I mentioned in
3 my testimony that they are competitive in nature. They’re
4 highly proprietary in nature, and I don’t mention that for
5 any other reason than to tell you and press upon you that
6 this is not w e ’re 25 percent done, check the box, and hand
7 it over to the PUC and go on about your business. They are
8 substantive documents. They are specific documents. They
9 talk about what w e ’ve done as far as deploying broadband in
10 our service territories.
11 Also Act 183 included provisions which are
12 intentionally punitive in nature, which is if you didn’t
13 meet those broadband requirements, you’re required to
14 refund money to customers if you didn’t get there, also
15 something the PUC is involved with. And provisions of that
16 process are elucidated in Act 183.
17 And finally, the PUC is accepting complaints
18 about broadband service. So the impression I want to leave
19 upon you is that this isn’t something that w e ’ve done under
20 the cover of darkness. We have all been involved in Act
21 183, Verizon and my member companies, in getting 1.544 meg
22 out to everyone universally and have that service available
23 to everyone by a date certain. My smaller member
24 companies, the end date was 2008. My larger member
25 companies are 2013, and I know Buzz’s Verizon was 2015. So 47
1 we take pride in meeting that.
2 The second question was what funding do RLECs
3 receive to deploy broadband? There’s no state-specific
4 fund devoted solely to broadband deployment. The
5 Pennsylvania Universal Service Fund indirectly helps in
6 broadband deployment by keeping the traditional landline
7 network viable in a good spot you can get all the bells and
8 whistles of broadband. I know this Committee heard from
9 several testifiers in Waynesburg last summer that you need
10 the Pennsylvania Universal Service Fund to keep the
11 traditional network there so you can get all the bells and
12 whistles. And that is something I think we should focus on
13 going forward because there is no State-specific fund to
14 deploy broadband here.
15 On the Federal level you probably heard about the
16 Connect America Fund, CAF fund. That is something that the
17 FCC started back in 2011. It’s still running through the
18 process of deciding who gets the money and how they get it,
19 but there has been, obviously, some serious money devoted
20 to Pennsylvania to get increased broadband speed out to the
21 rural parts of Pennsylvania.
22 I’d like to tell you it is a godsend that it gets
23 10 meg everywhere, but it doesn’t. There were conditions
24 put on that money by the FCC. There was a model that the
25 FCC uses to dictate who gets the money, how much they get, 48
1 and how that money is to be spent. It’s different from my
2 larger member companies than it is for my smaller member
3 companies. You don’t get money for extremely high-cost
4 areas, which seems kind of crazy because that’s where you
5 want to get, but you don’t get money for those extremely
6 high-cost areas. You don’t get money for low-cost areas
7 that aren’t economic to serve. You don’t get money if
8 there is one competitor in the area providing service. So
9 there’s lots of conditions on that. So while the CAF has
10 been helpful in getting 10.1 out to a variety of areas that
11 may or may not have gotten it, you know, it’s not the
12 answer to everyone’s prayers.
13 And I would tell you that 10.1 is a number that
14 the FCC has put on what we need now. It is not a magic
15 number. It is magic in the sense that the FCC has decided
16 that’s the number that you need to hit to get the money but
17 it’s not a magic number. Quite frankly, a lot of my member
18 companies are offering 10.1 throughout their service
19 territories and take rates for that service that are very
20 low honestly. So that’s a problem.
21 For my smaller member companies, they had by
22 November 1st of last year a decision to make on how they
23 wanted to receive CAF money. Some of them chose the
24 Connect America Fund model or the A-CAM model to get that
25 money and deploy a certain amount of speed to a certain 49
1 amount of areas. Some chose to stay with the way they
2 routinely receive money from the Universal Service Fund at
3 the Federal level. In either case this is not found money.
4 This is not new money that is sent to companies where they
5 say do your traditional service and here’s a pot of money
6 where you can do broadband as well. The FCC has made a
7 conscious decision to move money out of the traditional
8 landline model and move it to broadband. So I don’t want
9 anyone to get the impression that all of a sudden there’s a
10 new pot of money that we can use to start funding
11 broadband. That’s just simply not the case.
12 In addition to CAF, a lot of my member companies
13 have used Rural Utilities Service money, which is out of
14 the U.S. Department of Agriculture. Over the years, we
15 have taken advantage of grants and loans from RUS to help
16 deploy. And this goes back decades so this was just to
17 maintain the traditional landline network and now to do
18 broadband. There’s another round of funding coming up
19 through RUS so we have a speaker scheduled to speak to our
20 small company committee meeting in the next couple months
21 to talk about how we can avail ourselves of that money. So
22 w e ’re always looking at other options and ways to get
23 increased speeds to the rural corners of Pennsylvania.
24 Challenges to continue to broadband deployment,
25 we faced a lot of challenges as RLECs since 2011, since the 50
1 FCC’s CAF order, ICC order. W e ’re receiving significantly
2 less money to keep and maintain the traditional landline
3 network up and running, so we have to do more with less,
4 which is part of the reason that we introduced House Bill
5 1417 last year was to keep the Pennsylvania Universal
6 Service Fund intact so we could continue to do that in
7 light of all the changes at the Federal level.
8 There was also a provision in there, which I
9 know, Representative Snyder, you and I talked about a
10 couple times, to have the PUC take a look at what we need
11 to do for increased broadband speeds in Pennsylvania,
12 whether the PaUSF could be used as a mechanism to get
13 support out for those types of activities.
14 We continue to explore alternatives to help us do
15 that and push the broadband out as far as we can, but it’s
16 tough when you are essentially a provider of last resort
17 for landline service and a provider of last resort for
18 broadband service under Act 183.
19 So we have some challenges going forward. We
20 look forward to working with you on all those challenges.
21 And Buzz and I are happy to answer any questions you might
22 have. Thank you, Chairman.
23 MAJORITY CHAIRMAN GODSHALL: Thank you, Steve.
24 The first question is from Representative
25 Neilson. 51
1 REPRESENTATIVE NELSON: Thank you, Mr. Chairman.
2 Thank you, gentlemen, for your testimony.
3 My question is a blend between each of you as
4 Frank or Buzz. I appreciate the use of Buzz because I was
5 really struggling with the pronunciation of that last name.
6 MR. BUZYDLOWSKI: That’s quite all right.
7 REPRESENTATIVE NELSON: In Westmoreland County we
8 seem to struggle with our more rural areas as it relates to
9 Internet speed. And particularly in your testimony as you
10 say that high-speed access available and, you know, in your
11 testimony you were sharing a little bit more about the true
12 difficulties of the speed. Is it that the definition of
13 high-speed Internet has lagged behind the reality
14 particularly with listening to constituents who are having
15 significant upload issues? Our schools have converted to
16 laptops, and our rural students have significant
17 difficulty. It’s easier to download, but it is terribly
18 difficult to upload. And so though it’s a statement that
19 there’s high-speed, it does not seem to be keeping pace
20 with the needs, even the educational needs.
21 MR. BUZYDLOWSKI: Representative, that’s an
22 excellent question, and I think it goes to the nub of, you
23 know, the issues in rural PA. Speed in most cases is a
24 function of distance meaning that if, for instance -- first
25 of all, if you’re in Verizon territory but the same I think 52
1 would go for Steve’s member companies’ territories because
2 I think -- I don’t know if it’s self-evident or if
3 everybody realizes that, unlike the previous panel that was
4 on, w e ’re wireless. We all cross each other’s -- there are
5 no boundaries and we compete with one another. On the
6 landline side, it’s a vestige of the Communications Act of
7 1934. You know, w e ’re divided into territories. So
8 Verizon landline has a boundary before we get to one of
9 Steve’s member companies.
10 I think the same holds true for all of us. If
11 it’s a landline product such as DSL, it’s over a copper
12 line and the signal degenerates, as any electrical signal
13 does with distance. So if you’re right next to a central
14 office, you might be able to get a very high speed, but if
15 you’re 18,000 feet, which is the max from our office, we
16 have to put in a remote terminal, and then we get another
17 18,000 feet and so on and so forth. But when you get
18 toward the end of that, you’re going to get 1.544 megabits
19 per second. That’s the statutory minimum in Pennsylvania.
20 And when the law was first passed -- and that’s
21 before my time in 1994 -- that speed was unheard of. And
22 also, w e ’re the only State that has that mandate and that
23 minimum speed. People couldn’t imagine what you’d do with
24 1.5 megabits but it sounded like a good number, and that’s
25 what DSL could provide and off we went. 53
1 Since that time you’ve had -- and I won’t repeat
2 all the previous testimony. I think, you know, everybody
3 realizes what the demand is. And that’s why w e ’re looking
4 at densification on the wireless side. And that’s one of
5 the reasons that we at Verizon -- and w e ’re fortunate that
6 we have both wireless and wireline -- went to wireless
7 solutions and especially in rural Pennsylvania. We can get
8 up to 12 megs out of a fixed wireless product. So we have
9 a tower and we have 4G LTE and we can provide those speeds.
10 But again, you have to be within the reach of that tower,
11 and then we have to have another tower to provide the
12 service and so on and so forth.
13 So we are able to meet those speeds but
14 technology, as I think is always the case, is always going
15 to outpace what the government can possibly predict. So we
16 find ourselves in the situation today where the kids aren’t
17 just doing homework, w e ’re also watching Netflix. And, you
18 know, if you’re getting 1.54 megabits per second and you
19 have a couple kids watching Netflix and another couple kids
20 doing their homework and you’re online, there’s competition
21 for that bandwidth that was explained earlier. And -
22 MAJORITY CHAIRMAN GODSHALL: Okay. I have six
23 more questioners.
24 MR. BUZYDLOWSKI: Uh-oh.
25 MAJORITY CHAIRMAN GODSHALL: Yes, I know. W e ’ve 54
1 got to get the questions to the point -
2 MR. BUZYDLOWSKI: Oh, sure.
3 MAJORITY CHAIRMAN GODSHALL: — you know, and the
4 answers to the point. I ’m going to talk to the people that
5 didn’t have a chance yet. Representative Davidson.
6 REPRESENTATIVE DAVIDSON: Thank you,
7 Mr. Chairman. Gentlemen, I want to thank you for your
8 testimony this morning.
9 And it seems to me that you have some very
10 important equations to solve that have not been presented
11 here today. And I ’m particularly interested in the amount
12 of investments that you’ll make and economic impact that
13 you’ll have. You listed six cities here where a
14 significant amount of those investments will be made, those
15 six urban areas and their suburbs. And I ’m just guessing
16 and you let me know if this is true or not, but the reason
17 you’re not investing as heavily in rural areas is that the
18 customer base is not there to offset the capital
19 expenditures that you would need to expend in order to ramp
20 up to 5G in those rural areas.
21 So have you calculated how to offset those costs
22 when you can’t generate that organically from those rural
23 areas by investments in the urban areas that you need to
24 invest in to reach the market that you need to reach? Have
25 you calculated how to do both, seeing that you’ll lose 55
1 money in the rural areas?
2 MR. SAMARA: That’s a good question. I ’ll turn
3 it over to Buzz here in a second, but unfortunately, my
4 member companies don’t have the urban areas to offset. You
5 know, we are strictly rural so we don’t have Philly,
6 Pittsburgh, Erie, Scranton, State College to do that. But
7 your question is a good one because, you know, how do you
8 do that because the cost to provide service where there are
9 50 households per square mile as opposed to 200 households
10 per square mile is a different equation.
11 And unfortunately, my -- not unfortunately. The
12 fact of the matter is my member companies, the rural folks,
13 are providers of last resort. They don’t have a choice
14 where they go and serve. They have to serve everywhere.
15 So, like I said, it’s not a business model to maximize
16 profitability. It’s a business model that makes sure that
17 everyone has service. So maybe it’s good that we don’t
18 have those decisions to make about balancing between urban
19 and suburban and rural. It’s not. We don’t have that
20 luxury. We have to serve everywhere and it’s very
21 expensive to serve everywhere. Buzz’s company has those
22 decisions to make about how they balance between urban,
23 suburban, and rural so -
24 MR. BUZYDLOWSKI: Briefly. I thought you were
25 going to say don’t. 56
1 Well, the good people of Upper Darby, okay, do at
2 least, you know, as -- the laws of economics cannot be
3 repealed or amended, okay? They are always in our business
4 going to be subsidizing the people who live in rural areas
5 because, quite frankly, the more densely populated areas -
6 and I ’ve been to your district. There is a greater
7 opportunity to turn a profit. When you go into more rural,
8 more sparsely populated areas, it’s lessened but the
9 investment is the same. You only cover the same number of
10 square miles for the same number of dollars but you have
11 less people paying. We I think have done a good job of
12 balancing that, but there’s always room for improvement.
13 REPRESENTATIVE DAVIDSON: And it’s important that
14 you find a solution to that equation. And I ’m speaking to
15 the gentleman that spoke previously as well -
16 MR. BUZYDLOWSKI: Gerry Keegan.
17 REPRESENTATIVE DAVIDSON: -- because you have the
18 equation of all the rural legislators that would have to
19 give you the access to the urban areas like mine, suburban
20 areas, in order for us to, as the Legislature, decide we
21 want to help here and make these investments in
22 Pennsylvania. So I encourage you to solve that equation so
23 that we can move on with making the investments that would
24 be important to my district, but I can’t do it without my
25 fellow rural legislators. 57
1 MAJORITY CHAIRMAN GODSHALL: W e ’ll send those
2 lines down from Montgomery County.
3 REPRESENTATIVE DAVIDSON: Thank you.
4 MAJORITY CHAIRMAN GODSHALL: Representative
5 Heffley.
6 REPRESENTATIVE HEFFLEY: Thank you, Mr. Chairman.
7 And as a new Member to the Consumer Affairs
8 Committee, this is a great learning process. But I just
9 wanted to just touch on something real quick. As a Member
10 who represents a rural area and doesn’t have cell phone
11 service at my location, I still rely on my landline and my
12 phone number is still listed in the phone book. But we are
13 very fortunate throughout Carbon and Monroe Counties and
14 the surrounding area to have a great company -- I ’ll just
15 put a plug-in for one of our local companies, Blue Ridge
16 Cable and PenTeleData. They do a very good job of
17 providing high-speed broadband Internet connections to the
18 area. I can watch Netflix and everything at the house. We
19 have a great provider, a great company.
20 And just as we go forward with this, I just want
21 to ensure that companies like PenTeleData and Blue Ridge,
22 which are making those investments in the community which
23 are located in the community and building their facilities
24 in the community, providing great-paying jobs in the
25 community, I don’t want them to have to be competing 58
1 against public dollars to build out infrastructure and then
2 have to compete with them to provide that. These are
3 taxpaying companies that are doing a good job in the
4 community, and I just want to make sure that the public
5 sector is not going to come in and compete against them and
6 drive down those rates. And that’s just something that as
7 we go through this I think is something that we need to be
8 cognizant of is to make sure that w e ’re keeping those
9 companies that are doing a good job in mind and not
10 affecting their service. Thank you.
11 MAJORITY CHAIRMAN GODSHALL: Anybody want to
12 comment on that?
13 MR. SAMARA: I agree.
14 MAJORITY CHAIRMAN GODSHALL: Okay.
15 MR. SAMARA: I ’m glad that the Representative has
16 a landline no matter whose it is.
17 MAJORITY CHAIRMAN GODSHALL: Okay. Pam Snyder,
18 Representative Snyder.
19 REPRESENTATIVE SNYDER: Thank you, Mr. Chairman,
20 and thank you for your testimony.
21 It’s no secret in my district when you say the
22 word telecommunications we’re challenged on every level.
23 I ’m very happy to hear that in your rural area you have
24 good high-speed Internet. That’s not true in my district
25 in many areas. In the last several months not only have I 59
1 fielded complaints about the lack of high-speed broadband,
2 I have fielded multiple complaints about the lack of
3 landline service. So I am challenged on every level from
4 cell phones to broadband to landlines.
5 And I agree with you, Steve. You know, I think
6 this Committee and the PUC, we have to find a way to be
7 able to solve this problem for every Pennsylvanian. And I
8 recognize the fact that the industry needs to be in the
9 urban areas to make a profit, but that doesn’t take away
10 the fact that the student in my local high school should be
11 able to go home and be able to do his homework that was
12 assigned to him or an adult in my district should be able
13 to take an online course that they can’t now. And while we
14 are challenged by population, I will quote one of my
15 favorite movies, that if you build it, they will come. If
16 I have good infrastructure in my district, more people will
17 want to build homes there and come there perhaps.
18 So I think we need to take a look at the
19 Universal Service Fund, of what we can do there with
20 landlines continuing to be depleted. Maybe we need to look
21 at repurposing those funds for bigger investment in
22 broadband. So I look forward to this dialogue to continue,
23 and I really am committed and hope we can find a solution
24 for all Pennsylvanians. Thank you. Thank you, Mr.
25 Chairman. 60
1 MR. SAMARA: Thanks, Representative Snyder. I
2 just want to say repurposing is one way to look at this
3 thing. That’s what modernizing what the Universal Service
4 Fund is designed for. The only caution I have is be
5 careful if you’re robbing Peter to pay Paul because you
6 still need that landline network to get all the bells and
7 whistles of broadband. But we have talked numerous times
8 about challenges that your constituents face, and we know
9 that, and we want to work with you to try and get that
10 there.
11 I think that the reason that I mentioned the CAF
12 funding not being a godsend because you look at the number
13 and it’s like, well, geez, that’s millions and millions of
14 dollars. What have you been doing with it? Well, when it
15 costs $25,000 to $50,000 a mile to put fiber out there with
16 no guarantee you’re going to get more than 10, 15 -- I ’m
17 making up numbers here, but a low percentage of take rates,
18 you know, you have to make that business decision. So
19 Waynesburg and Carmichaels we want to serve. They aren’t
20 Philly and Pittsburgh, you know, so those are the issues we
21 have. That’s just economics. But we want to work with you
22 going forward to make sure that we can get to not only
23 Carmichaels and Waynesburg but everywhere in between.
24 REPRESENTATIVE SNYDER: And Aleppo and Rattan and
25 Brownsville. 61
1 MR. SAMARA: Yes. Right, right.
2 REPRESENTATIVE SNYDER: The list is endless.
3 MR. SAMARA: Yes.
4 REPRESENTATIVE SNYDER: But for the people at
5 home, since you brought that up, isn’t it true that all of
6 the providers, a lot of them use the same infrastructure to
7 get this service to people’s homes, and that that could be
8 why some companies are challenged on the speed? True or
9 false?
10 MR. SAMARA: That we use the same infrastructure?
11 REPRESENTATIVE SNYDER: Fiber versus copper
12 versus -
13 MR. SAMARA: Well, my member companies have
14 infrastructure in place just like Verizon does.
15 REPRESENTATIVE SNYDER: And multiple companies
16 can use the same infrastructure?
17 MR. SAMARA: Yes. Oh, yes. Those are -
18 REPRESENTATIVE SNYDER: That’s what I want the
19 people at home to hear.
20 MR. SAMARA: We charge access charges for other
21 companies, wireless companies, other landline companies to
22 use that network. Unfortunately, access charges are going
23 to be gone within the next five or six years so we won’t be
24 able to charge for using that network. That’s part of the
25 FCC order that I referenced earlier. That support to have 62
1 that revenue to do what we do with our networks is drying
2 up, which makes effort to stay at that level all that more
3 important.
4 REPRESENTATIVE SNYDER: Okay. Thank you.
5 MAJORITY CHAIRMAN GODSHALL: Okay.
6 MR. BUZYDLOWSKI: But I think it’s — sorry.
7 MAJORITY CHAIRMAN GODSHALL: No problem. We have
8 one final, Carl Metzgar.
9 REPRESENTATIVE METZGAR: Thank you, Chairman
10 Godshall. I appreciate it. Hey, just sorry, Steve, that
11 these are all for Mr. Buzydlowski. I apologize.
12 My first question, easy yes or no question, are
13 Chapter 30 monies being used to provision cell sites?
14 MR. BUZYDLOWSKI: When you say Chapter 30 monies,
15 we self-fund.
16 REPRESENTATIVE METZGAR: Understood.
17 MR. BUZYDLOWSKI: So it all comes out of the same
18 pot.
19 REPRESENTATIVE METZGAR: Well, I guess my
20 question is is that, you know, you sat up here for Verizon
21 Wireless and now you’re sitting here for Verizon
22 Wireline -
23 MR. BUZYDLOWSKI: Yes.
24 REPRESENTATIVE METZGAR: — two different
25 companies, correct? 63
1 MR. BUZYDLOWSKI: There’s two different
2 subsidiaries.
3 REPRESENTATIVE METZGAR: But they are affiliated
4 companies. They’re not -
5 MR. BUZYDLOWSKI: We are affiliated, correct.
6 REPRESENTATIVE METZGAR: Not the same company.
7 MR. BUZYDLOWSKI: I represent both.
8 REPRESENTATIVE METZGAR: So I guess my question
9 is Chapter 30 says that you can’t fund affiliated entities.
10 So is that happening?
11 MR. BUZYDLOWSKI: I understand your question.
12 The direct answer is no, but I think you should -- and I
13 believe you know some of this. You know, Verizon, like any
14 other company, budgets. And Verizon Wireline budgets
15 Chapter 30 money and invested, as I talked about, billions
16 of dollars to bring rural Internet service to everybody.
17 REPRESENTATIVE METZGAR: So if you or your
18 contractors are using public utility status to provision a
19 cell site, that would be considered Verizon and not Verizon
20 Wireless, right?
21 MR. BUZYDLOWSKI: There’s a transaction between
22 Verizon Wireline and Verizon Wireless to construct the 190
23 4G LTE cell phone towers that provide service pursuant to
24 Chapter 30.
25 REPRESENTATIVE METZGAR: All right. I only have 64
1 six minutes and the Committee only has six minutes. So you
2 said about your network modernization plan that you filed
3 that you were supposed to be in compliance in 2015 with.
4 MR. BUZYDLOWSKI: Yes.
5 REPRESENTATIVE METZGAR: And you said you were
6 100 percent in compliance?
7 MR. BUZYDLOWSKI: Yes.
8 REPRESENTATIVE METZGAR: Okay. Has anyone
9 audited that?
10 MR. BUZYDLOWSKI: The Public Utility Commission
11 has the power to audit. I know that they are in regular
12 contact with our people and go through processes to check
13 and -
14 REPRESENTATIVE METZGAR: So how do you report 100
15 percent compliance when Representative Snyder’s district
16 and my district and Eric Nelson’s district -- I guess we
17 don’t have dial tone let alone broadband, so I ’m still
18 confused how are we 100 percent compliant?
19 MR. BUZYDLOWSKI: Well, we are 100 percent
20 compliant, and I would challenge the assertion that they
21 don’t have dial tone -
22 REPRESENTATIVE METZGAR: Well, I guess the
23 definition of dial tone some days -- Pam and I will
24 maybe -
25 REPRESENTATIVE KAMPF: Mr. Chairman, might the 65
1 witness being cross examined be allowed to answer the
2 question?
3 MR. BUZYDLOWSKI: Thank you, Your Honor. No,
4 Representative Metzgar, first of all, we -
5 REPRESENTATIVE METZGAR: How much does —
6 MR. BUZYDLOWSKI: Don’t go there. We have an
7 obligation to provide dial tone to anyone who asks for it
8 in our territory, and we do so.
9 REPRESENTATIVE METZGAR: Okay. And if there’s
10 one example of one person who cannot get dial tone from
11 Verizon who lives in Verizon’s territory as opposed to most
12 Representative Snyder’s district is in one of Steve’s
13 member’s territories. But if there’s one example of that,
14 bring it to my attention and w e ’ll make sure that they get
15 dial tone.
16 REPRESENTATIVE METZGAR: Okay.
17 MR. BUZYDLOWSKI: Now, Chapter 30, also, in
18 addition to that, requires that we have to provide high
19 speed Internet service to all of our customers. And we do
20 provide it -- we make it available of course; they don’t
21 have to buy it -- to every one of our customers.
22 Now, in your district, as an example, there are
23 many people who get high-speed Internet service through DSL
24 or with copper landline network. We -- I just happen to
25 know this number -- constructed 45 4G LTE cell towers in 66
1 Somerset County for the purpose of making sure that the
2 people who couldn’t get DSL could get high-speed Internet
3 service over a more modern and faster network. And that’s
4 how we are complying. And I ’m speaking directly to
5 Somerset County, but we could talk about any location in
6 the State.
7 REPRESENTATIVE METZGAR: Could I ask a question,
8 Representative Kampf?
9 REPRESENTATIVE KAMPF: Absolutely, but please
10 give him the courtesy to answer when you’re done.
11 REPRESENTATIVE METZGAR: Thank you. So I guess
12 I ’m still trying to get an answer to my question. I have a
13 constituent that has no ability to get broadband, zero
14 ability, that there is none available to that person,
15 there’s no wireless availability, there’s no availability,
16 and I have that constituent, how are we compliant?
17 MR. BUZYDLOWSKI: So you are not asking a
18 hypothetical question. You’re saying you have a
19 constituent in that case?
20 REPRESENTATIVE METZGAR: Certainly.
21 MR. BUZYDLOWSKI: As you well know, you could
22 provide me that constituent’s name and information and I
23 will immediately attend to it.
24 REPRESENTATIVE METZGAR: Okay.
25 MR. BUZYDLOWSKI: And I ’m sure you realize that 67
1 on numerous occasions you and your district office staff
2 have come to me with people who have asked about getting
3 high-speed Internet service, and in every case we provided
4 the answer as yes, that they can get the service.
5 REPRESENTATIVE METZGAR: Certainly you’re most
6 helpful in regard to that. I guess I ’m just wondering how
7 would we go ahead with, you know, auditing that
8 modernization plan? I mean, does that need done I guess is
9 my question because it’s just something Verizon filed. No
10 one else has done anything other than the PUC has looked at
11 it, correct?
12 MR. BUZYDLOWSKI: Well, of course, but that’s who
13 we file with, the Public Utility Commission. By this
14 Committee’s legislation and this General Assembly empowered
15 the Public Utility Commission to analyze and approve and
16 then make sure w e ’re compliant with our network
17 modernization plan.
18 And it wasn’t just one filing. I think Steve
19 alluded to this. We didn’t just do a data dump one day.
20 It was an ongoing process that was completed in the end of
21 2015, and then we made a final filing that indicated 100
22 percent compliance.
23 Now, the Public Utility Commission, you know,
24 they have the power and authority to investigate
25 whatever -- 68
1 MAJORITY CHAIRMAN GODSHALL: At this time it’s 11
2 o ’clock, which we have to adjourn by matter of law. And of
3 course w e ’re on the floor at 11 o ’clock. So I just want to
4 mention that there’s written testimony here from Windstream
5 that’s been included and then also by CenturyLink that is
6 in your folders.
7 So thank you very much for your participation,
8 and thank you to the testifiers.
9
10 (The hearing concluded at 11:00 a.m.) 69
1 I hereby certify that the foregoing proceedings
2 are a true and accurate transcription produced from audio
3 on the said proceedings and that this is a correct
4 transcript of the same.
5
6
7 Christy Snyder
8 Transcriptionist
9 Diaz Transcription Services