[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
    HEARING TO REVIEW THE ROLE OF BROADBAND ACCESS IN RURAL ECONOMIC
                              DEVELOPMENT

=======================================================================

                                HEARING

                               BEFORE THE

    SUBCOMMITTEE ON RURAL DEVELOPMENT, RESEARCH, BIOTECHNOLOGY, AND
                          FOREIGN AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                  SEPTEMBER 24, 2011, SPRINGFIELD, IL

                               __________

                           Serial No. 112-24


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov



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                        COMMITTEE ON AGRICULTURE

                   FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois         TIM HOLDEN, Pennsylvania
STEVE KING, Iowa                     MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas              LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas            JOE BACA, California
JEFF FORTENBERRY, Nebraska           DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio                   DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania         HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida            JIM COSTA, California
MARLIN A. STUTZMAN, Indiana          TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia                LARRY KISSELL, North Carolina
SCOTT R. TIPTON, Colorado            WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida        CHELLIE PINGREE, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  JOE COURTNEY, Connecticut
MARTHA ROBY, Alabama                 PETER WELCH, Vermont
TIM HUELSKAMP, Kansas                MARCIA L. FUDGE, Ohio
SCOTT DesJARLAIS, Tennessee          GREGORIO KILILI CAMACHO SABLAN, 
RENEE L. ELLMERS, North Carolina     Northern Mariana Islands
CHRISTOPHER P. GIBSON, New York      TERRI A. SEWELL, Alabama
RANDY HULTGREN, Illinois             JAMES P. McGOVERN, Massachusetts
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin
KRISTI L. NOEM, South Dakota

                                 ______

                           Professional Staff

                      Nicole Scott, Staff Director

                     Kevin J. Kramp, Chief Counsel

                 Tamara Hinton, Communications Director

                Robert L. Larew, Minority Staff Director

                                 ______

Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
                              Agriculture

                 TIMOTHY V. JOHNSON, Illinois, Chairman

GLENN THOMPSON, Pennsylvania         JIM COSTA, California, Ranking 
MARLIN A. STUTZMAN, Indiana          Minority Member
AUSTIN SCOTT, Georgia                HENRY CUELLAR, Texas
RANDY HULTGREN, Illinois             PETER WELCH, Vermont
VICKY HARTZLER, Missouri             TERRI A. SEWELL, Alabama
ROBERT T. SCHILLING, Illinois        LARRY KISSELL, North Carolina

                Mike Dunlap, Subcommittee Staff Director

                                  (ii)

                             C O N T E N T S

                              ----------                              
                                                                   Page
Costa, Hon. Jim, a Representative in Congress from California, 
  opening statement..............................................     5
Johnson, Hon. Timothy V., a Representative in Congress from 
  Illinois, opening statement....................................     1
    Prepared statement...........................................     4
Schilling, Hon. Robert T., a Representative in Congress from 
  Illinois, opening statement....................................     8

                               Witnesses

Schroeder, Raymond E., Professor Emeritus and Director of Online 
  Affairs, Center for Online Learning, Research, and Service, 
  University of Illinois at Springfield, Springfield, IL.........     9
    Prepared statement...........................................    11
Bartlett, P.E., Jay C., President and Chief Executive Officer, 
  Prairie Power, Inc., Jacksonville, IL..........................    14
    Prepared statement...........................................    16
Campbell, Sue, Chief Executive Officer, Community Memorial 
  Hospital, Staunton Hospital, Staunton, IL......................    20
    Prepared statement...........................................    21
Crum, Jim, beef producer, U.S. Wellness Meats, Virginia, IL......    23
    Prepared statement...........................................    24
Fowler, Lester D., Legislative and Government Affairs Manager, 
  McDonough Telephone Cooperative, Colchester, IL; on behalf of 
  National Telecommunications Cooperative Association............    26
    Prepard statement............................................    27

                           Submitted Material

Clark, Drew, Executive Director, Partnership for a Connected 
  Illinois, submitted statement..................................    45
Illinois Farm Bureau, submitted statement........................    47


    HEARING TO REVIEW THE ROLE OF BROADBAND ACCESS IN RURAL ECONOMIC
                              DEVELOPMENT

                              ----------                              


                      SATURDAY, SEPTEMBER 24, 2011

                  House of Representatives,
      Subcommittee on Rural Development, Research, 
            Biotechnology, and Foreign Agriculture,
                                  Committee on Agriculture,
                                                    Springfield, IL
    The Subcommittee met, pursuant to call, at 12:19 p.m., at 
the University of Illinois-Springfield Public Affairs 
Conference Center, One University Plaza, Room C-D, Springfield, 
Illinois 62703, Hon. Timothy V. Johnson [Chairman of the 
Subcommittee] presiding.
    Members present: Representatives Johnson, Thompson, 
Hultgren, Schilling, Costa, and Kissell.
    Staff present: Mike Dunlap, Mary Nowak, Lauren Sturgeon, 
Andy Baker, and John Konya

OPENING STATEMENT OF HON. TIMOTHY V. JOHNSON, A REPRESENTATIVE 
                   IN CONGRESS FROM ILLINOIS

    The Chairman. The hearing to review the role of broadband 
access for rural economic development will come to order.
    I assume most of you know, I'm Congressman Tim Johnson. I 
am privileged to serve as the chair of this Subcommittee. And I 
want to introduce my colleagues, but I also want to make a 
couple of contemporaneous remarks before we actually start the 
hearing.
    To my right is Mr. Jim Costa from California, who is the 
Ranking Member of the Subcommittee. And I must say this is not 
anything other than just factual. We are effectively co-
chairmen. Congressman Costa is extraordinary in terms of his 
service not only to his district, but to agriculture around the 
country. This is a privilege for him to be here with us. And I 
am just honored, Jim, Congressman Costa, that you are able to 
be with us.
    Mr. Costa. Thank you.
    The Chairman. To my left is my good friend, Congressman 
Glenn Thompson from Pennsylvania, also a distinguished Member 
of the Committee. To his left is my colleague from Illinois on 
the Subcommittee and the full Committee, Congressman Bobby 
Schilling. And to our far right, my colleague, Congressman 
Larry Kissell from North Carolina.
    Congressman Hultgren, who is also from Illinois will be 
here relatively shortly, but is a running a bit behind his 
schedule. And so, we are going to proceed.
    Before I actually get to the reason we are here, I just 
want to tell you, these individuals with whom I am sitting are 
just an extraordinary group of people. This Subcommittee 
epitomizes what America wants, and that is bipartisanship, 
cooperation, civility, cooperation in an era when that is all 
too lacking.
    [Applause.]
    The Chairman. In the nearly year that this Subcommittee has 
been in existence, Congressman Costa and I, Congressman 
Kissell, Thompson, Schilling, we have never had one conflict on 
any major or minor point. Our ability to deal with things, and 
I give credit to my colleagues more than I frankly, it is 
really extraordinary. And, again, in an era when you see 
everything contentious, everything partisan, everything 
divided, these gentlemen serve as the total contrast. Our 
ability to deal with issues, our ability to get through the 
agenda is in no small part due to the fact that Jim Costa, my 
co-Chairman, as well as Larry Kissell, Glenn Thompson, and 
Bobby Schilling, represent that spirit. And I am just grateful 
for what you are able to do and what you do for your districts.
    And I will say this: I think all of us up here, with the 
possible exception of Congressman Costa, may or may not have 
contentious elections this year. I would be unequivocal in my 
saying that these individuals are extraordinary public 
servants. And I am not going to get into the election process. 
I will simply say they are good to serve with, good people. 
They serve the country well, and they serve their constituents 
well.
    So, with those introductory remarks, let me recognize 
Ranking Member Costa. And I have already recognized 
Representatives Thompson, Kissell, Hultgren, and Schilling. And 
the chair would request, and I am going to make an opening 
statement, too, if the other Members would submit their opening 
statements for the record so that the witnesses can begin their 
testimony and ensure there is ample time for questions.
    I do have a brief opening statement to make, and 
Congressman Costa will have a similar statement to make. So, 
let me start.
    Good afternoon, and welcome to this beautiful University of 
Illinois-Springfield campus. And let me also extend my 
appreciation to the chancellor, the administration here at the 
university. They have been wonderful hosts. We are very, very 
grateful for this great university and your willingness to host 
us here today.
    For this hearing to review rural broadband access and 
economic development, we are delighted to have an opportunity 
to hear directly from businesses and institutions from this 
region who are doing the hard work of building and serving our 
rural economy.
    This Subcommittee oversees several areas which are 
important to small towns across America. In addition to 
providing oversight on rural development issues which we will 
be discussing today, we pay careful attention to issues of 
research, biotech, and trade promotion. Along with the private 
sector, investments through our land-grant colleges and 
universities help to spur innovation in agricultural 
technologies to keep our farmers and ranchers competitive in a 
global market. And in those markets, we work with our exporters 
to overcome unfair trade barriers to high quality American 
products.
    Today we are taking a close look at broadband access and 
how economic development can be sustained and accelerated 
through connecting rural communities with information, 
services, and markets. Through the discussion today, we hope to 
gain a better understanding of whether infrastructure programs 
are effective in reaching the most remote areas as a lender of 
last resort.
    Through our hearings this year, we have to work to identify 
opportunities to streamline programs and application processes, 
and identify where scarce Federal resources should be deployed.
    The Internet is supposed to be a great equalizer to break 
down the traditional barriers of distance. We can narrow the 
gap between urban areas, like Springfield, and rural areas like 
Calhoun County and Moultrie County when it comes to access to 
jobs, education, and markets. That is why rural broadband 
access is so important; it drives economic growth.
    Another purpose for today's hearing is to highlight the 
demographic and economic challenges that face rural America. 
Just here in Illinois, as evidenced by the loss of a 
Congressional seat, Illinois lost nearly 3.5 percent of its 
population. According to the 2010 Census, a large number of 
counties in Illinois, particularly rural counties, declined in 
population. The loss of population could be attributed to the 
lack of opportunity, particularly economic opportunity. 
Illinois is plagued with unemployment higher than the national 
average. Most striking, when one reviews unemployment county by 
county, you will notice that rural counties, such as nearby 
Montgomery County or Vermillion County over in the eastern part 
of the state, vary between 11.5 and 10 percent, respectively.
    Economic opportunity is linked to a variety of factors, 
whether that is the onerous regulations from the EPA, 
Department of Labor, USDA, or FDA that stifle entrepreneurship, 
or the lack of access to quality jobs, quality health care, 
technical skills training, or education to meet 21st century 
demands. Regardless of the driving factors, rural America is 
struggling. Schools are consolidating, corner grocery and 
hardware stores are closing their doors, and post offices could 
be closed in the near future.
    Our witnesses today will provide testimony on how access to 
rural broadband provides opportunities in rural health care, 
rural education, and market access.
    I am especially pleased that we have such a distinguished 
panel of witnesses with us here today. Each of our witnesses is 
here to provide a unique perspective on the rural economy and 
how they are meeting the challenges faced by every small town 
in America. They are broadband providers and users whose 
organizations provide health and education services, food, and, 
of course, access to high speed networks.
    I would like to thank each one of you for taking the time 
to prepare your testimony today and traveling from all over the 
state to be with us. We welcome you and look forward to your 
comments.
    Before I turn to the Ranking Member for his opening 
statement, let me say two things:
    First of all, we have a wonderful Majority and Minority 
staff. Mr. Costa works with them; we all do here. Mike Dunlap 
has been just extraordinary, together with my staff. Sam 
Pfister from Rochester, Illinois, and Kevin Johnson are just 
doing an extraordinary job for us. And the staffs have been 
wonderful. We appreciate you ladies and gentlemen for your 
helping us.
    I would also say just as a backdrop, and Mr. Costa will 
elaborate on this and the witnesses will as well. We are 
focusing today on broadband services, but the bigger issue to 
all of us at this table who represent predominantly rural 
areas, or at least significant rural areas, is arresting the 
decline in rural America. We want to do what we can to marry, 
so to speak, the public and private sector together so that 
rural America can realize its potential to rebound, because 
when rural America declines, America declines. And we have to 
make sure that we address that issue in the most four square 
way we can. I think all of us at the table are committed to 
that.
    [The prepared statement of Mr. Johnson follows:]

  Prepared Statement of Hon. Timothy V. Johnson, a Representative in 
                         Congress from Illinois

    Good afternoon and welcome to the beautiful University of Illinois 
Springfield campus for this hearing to review rural broadband access 
and economic development. We are delighted to have an opportunity to 
hear directly from businesses and institutions from this region that 
are doing the hard work of building and serving our rural economy.
    This Subcommittee oversees several areas which are important to 
small towns across America. In addition to providing oversight on rural 
development issues we will be discussing today, we pay careful 
attention to issues in research, biotechnology, and trade promotion. 
Along with the private sector, investments through our land-grant 
colleges and universities help to spur innovation in agricultural 
technologies to keep our farmers and ranchers competitive in a global 
market. And in those markets, we work with our exporters to overcome 
unfair trade barriers to high-quality American products.
    Today we are taking a close look at broadband access and how 
economic development can be sustained and accelerated through 
connecting rural communities with information, services, and markets. 
Through the discussion today, we hope to gain a better understanding of 
whether infrastructure programs are effective in reaching the most 
remote areas as a lender of last resort. Throughout our hearings this 
year we have been working to identify opportunities to streamline 
programs and application processes, and identify where scarce Federal 
funds should be deployed.
    The Internet is supposed to be a great equalizer--it can break down 
the traditional barriers of distance. It can narrow the gap between 
urban areas like Springfield and rural areas like Moultrie County when 
it comes to access to jobs, education, and markets. That's why rural 
broadband access is so important--it drives economic growth.
    Another purpose for today's hearing is to highlight the demographic 
and economic challenges that face rural America. Just here in Illinois, 
as evidenced by the loss of a Congressional seat, Illinois lost nearly 
3.5% percent of its population. According to the 2010 Census a large 
number of counties in Illinois, particularly rural counties, declined 
in population.
    The loss of population can be attributed to the lack of 
opportunity, particularly, economic opportunity. Illinois is plagued 
with unemployment higher than the national average of 9.2%. Most 
strikingly, when one reviews unemployment county by county you notice 
that rural counties such as nearby Montgomery County and Vermillion 
County between 11.5% and 10.3%, respectively.
    Economic opportunity is linked to a variety of factors. Whether 
that is onerous regulations from the EPA, Department of Labor, USDA, or 
FDA that stifle entrepreneurship or the lack of access to quality jobs, 
quality healthcare, technical skills training, or education to meet 
21st century demand. Regardless of the driving factors, rural America 
is struggling: schools are consolidating, corner grocers and hardware 
stores are closing their doors, and post offices could be closed in the 
near future. Our witnesses today will provide testimony on how access 
to rural broadband provides opportunities in rural healthcare, rural 
education, market access.
    I am especially pleased that we have such a distinguished panel of 
witnesses with us here today. Each of our witnesses is here to provide 
a unique perspective on the rural economy, and how they are meeting the 
challenges faced by every small town in America. With us are broadband 
providers and users whose organizations provide health and education 
services, food, and of course access to high-speed networks. I would 
like to thank each of you for taking the time to prepare your testimony 
today, and for traveling from all over Illinois to be with us.
    Welcome and we look forward to your comments.

    The Chairman. So, with those remarks--probably too long--I 
turn to my distinguished colleague, the Ranking Member of the 
Subcommittee and my very, very good friend, Mr. Jim Costa?

   OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. Costa. Thank you very much, Mr. Chairman, for inviting 
us to be here today in America's heartland. I think I can speak 
for Congressman Kissell and Congressman Thompson, we are just 
pleased to be in the Chairman's district and Mr. Schilling's 
district. I understand we are kind of in both of your areas 
here.
    But as I was flying over this beautiful part of our country 
yesterday afternoon, on the approach to the landing here at 
Springfield, seeing all the farmland, seeing the rural 
communities from which I come from as well in California, 
realizing that so much of what really is America, not only 
today, but historically, is part and parcel of this wonderful 
part of rural America that we have in every State in the Union. 
Sometimes, not here with this panel, of course, because we all 
represent various parts of rural America, but it is sometimes 
forgotten in the urban-centric districts in which our 
colleagues represent. And we have to continue to remind them 
that, not just of the incredible history, but our ability to 
produce food and fiber and to provide an ability in the 21st 
century on how the economies of scale in rural America apply to 
the success of getting out of this terrible recession that we 
have been in, a solid, sound economic recovery.
    And so, I am glad, Mr. Chairman, that you have taken the 
time to bring the Subcommittee here to the heartland of America 
to really talk and advocate not only on behalf of rural 
America, but the challenges we face, to focus on broadband and 
the interconnectivity that is so critical to the future success 
of rural America, as we consider changes in the 2012 Farm Bill 
that we will be dealing with, as it relates to the 
Subcommittee's focus, which is rural development, research, 
biotechnology, and foreign agriculture.
    So, this public hearing today on the role of broadband 
access has in the rural economic development is fitting, 
timely, and appropriate for us to hear from our witnesses and 
from the larger participation that is reflected in this room 
throughout the great State of Illinois. So, I really appreciate 
that.
    Before I read my statement, let me also say that I am 
compelled to underline the comments that Chairman Johnson has 
made, my friend, about the bipartisan cooperation on this 
Subcommittee. Having come from a tradition of bipartisan 
cooperation in the 1980s and the 1990s and the California 
Legislature, it is one of the great frustrations that Members 
of this Subcommittee daily feel in Washington. I mean, at the 
end of the day, what binds us together as a nation, and I was 
reminded of that this morning entering the Lincoln Library and 
visiting his home, is far greater--far greater as a nation than 
whatever disagreements or divisions we may have.
    And so, the spirit of bipartisanship that is exhibited in 
this Subcommittee I hope will continue so we can expand it to 
some of our colleagues who seem to forget that sometimes.
    But it is great to be in the Land of Lincoln.
    Let me begin, Mr. Chairman, by saying that both Congressman 
Thompson and I did have a chance to visit the Lincoln 
Presidential Library. And I do not have to tell you folks 
because you are from the Land of Lincoln, that President 
Lincoln was the first President really to truly embrace the 
benefits of the power of telecommunications through the 
telegraph, relying heavily on that new technology. Just as we 
look at broadband and the Internet today, the telegraph was the 
state of the art way in which they were able to communicate and 
deal with all the challenges and difficulties of the Civil War. 
And he understood that.
    You know, I was quickly going through a lot of the 
different exhibits and seeing the attacks that he faced, and 
the criticisms that he dealt with. But you talk about boldness, 
you talk about vision. Besides being a log splitter and being 
born in a log cabin, in the 1850s, and you can see it from the 
home that he lived in, which was truly an upper middle class 
home, he was a counsel not only on the circuit, but the Central 
Illinois Railroad. He tried a very important case in the United 
States Supreme Court.
    And in the middle of perhaps the most divisive time in our 
nation's history, the Civil War, when the fabric of our country 
was being torn apart, when we had rapid inflation, deficits to 
the max, and the printing of paper money--does that economic 
crisis sound familiar? He said we are going to build a railroad 
across the nation in 1862. I mean, talk about boldness. Talk 
about vision.
    So, it is fitting that we are here today as we talk about 
expanding our nation's telecommunications network. More 
importantly, how to harness the power of the broadband 
technology to realize not only the potential of all America, 
but rural America.
    I look forward to hearing from our broadband providers 
today on the panel regarding the Federal program, but more 
importantly, the private sector participation and how we can 
apply parts of that private sector participation to the areas 
of rural America that still lack broadband access.
    I am particularly interested in hearing the broadband users 
on the panel talk about how they are utilizing it to connect 
rural America with the global economy because clearly we are a 
global economy.
    Whether it is here in Illinois, or in my home State of 
California, or any of the areas that my colleagues, that we 
represent across our great nation, the importance of rural 
broadband is critical to all of our districts.
    Let me give you a few examples. We are going to hear the 
Illinois snapshot here in a moment. But you think of 
California, which has 38 million people, the most populous 
state in the nation. It is the home of Silicon Valley. They do 
not obviously have any problems with broadband in rural 
California. Not.
    According to the 2008 report by the California Broadband 
Task Force, California, while we lead in broadband penetration 
at 96 percent, but it is misleading; 1.4 million rural 
Californians lack access to broadband, and barely \1/2\ the 
state's residents--\1/2\ the state's residents out of 38 
million--do not have broadband access at home.
    For those households that have an annual income of less 
than $25,000 a year, and I represent a significant portion of 
them, an economically poorer district in the country, the 
situation is even bleaker, with less than \1/4\ of the 
households subscribing to broadband, if you make $25,000 or 
less a year, which, if you think about it, probably is logical.
    What this shows me is that despite the relative success in 
putting wires in the ground by the private sector participating 
with both our state and Federal Government, broadband providers 
and public institutions together, and that is the private 
partnership that Mr. Johnson was talking about in his opening 
statement, we still have a lot of work today in terms of 
bridging the divide between the haves and the have nots, 
especially in rural America.
    One of the challenges in my district and here in Chairman 
Johnson's district is the limitations that various definitions 
of rural that are placed under the United States Department of 
Agriculture's definition of what rural development programs 
mean. I think all of us share that frustration. We have had a 
couple of Subcommittee hearings on it, and I think I know what 
rural means, but it certainly does not apply to the definition 
under today's law. And we need to change that, whether it is 
looking at Census tracts or doing some other modifications.
    So, Chairman Johnson and I are continuing to pressure the 
USDA to provide a report to Congress that was required in the 
2008 Farm Bill on various definitions and recommendations on 
how the agency can provide more flexibility in administering 
the rural development programs, while still ensuring they are 
working for the benefit of rural America.
    I will tell you, folks, that you are well represented by 
Congressman Tim Johnson. He was relentless and tenacious in our 
last Subcommittee hearing on telling the USDA that the time is 
now. And as a result of that testimony, we can finally get the 
reports provided to us here in the next month.
    I look forward to hearing from our witnesses today on how 
they believe, who can better tell us how we can harness the 
power of broadband, not only in Illinois, but throughout rural 
America, and how the United States Department of Agriculture's 
broadband programs might be better able to suit our needs.
    So, once again thank you, Chairman Johnson, my friend Tim, 
for calling this hearing. It is great to be in an area that you 
always talk to me about, about the wonderful part of Illinois 
that you have the honor and privilege to represent. It is 
wonderful. It is great to be here today in the home of Lincoln. 
Thank you.
    The Chairman. Thank you, Mr. Co-Chairman. And I also want 
to thank, again, Mr. Kissell, Mr. Thompson, Mr. Schilling who 
will play an active role in the hearing today. And they make, 
together with our other Members of the Subcommittee, they make 
this Subcommittee work. And I would argue that our Subcommittee 
is as proactive, as active--Mike Dunlap and the Democratic 
staff as well do an extraordinary job in making sure that we 
are unified in our effort to represent our interests and 
represent rural America.
    I also want to acknowledge my good friend, Colleen 
Callahan, who is the state director of the United States 
Department of Agriculture and Rural Development. She is with us 
here today, and we appreciate you being here, Colleen.
    [Applause.]
    The Chairman. And also, Chancellor Koch at the University 
of Illinois-Springfield.
    Now, let me just pay a special appreciation, not only to 
this university, but to the City of Springfield. They have been 
extraordinary in their receptiveness in putting this together 
today. Matter of fact, when we finish with our various matters, 
I am going to go down to the Route 66 Festival, advertisement 
for Springfield. The Isles Park development--or not 
development, neighborhood party. And I will be in Springfield 
all day spending my money and giving my tax dollars. And I am 
really looking forward to my full day in Springfield.
    Mr. Costa. I saw it last night when I was downtown. I 
highly recommend it for all of you.
    The Chairman. I want to introduce our panel real quickly 
and then we will go on.
    The first member of the panel, and we will recognize you in 
order from right to left, is Mr. Ray Schroeder who I have known 
for, at least indirectly, for about 40 years. Director of 
Online Affairs, Center for Online Learning, Research, and 
Service, University of Illinois at Springfield. Mr. Jay 
Bartlett, who is the President and CEO of Prairie Power in 
Jacksonville, Illinois. Going quickly in between to the last 
two, for Mr. Schilling to introduce, Mr. Jim Crum, beef 
producer, U.S. Wellness Meats, Virginia, Illinois. And Mr. 
Schilling and I arm wrestled over who got to introduce Sue 
Campbell, but since he is currently representing her, and I am 
going to be, he won the arm wrestling contest. So, I am going 
to let Mr. Schilling introduce the other two witnesses, and 
then we will get on with the testimony. Mr. Schilling?

OPENING STATEMENT OF HON. ROBERT T. SCHILLING, A REPRESENTATIVE 
                   IN CONGRESS FROM ILLINOIS

    Mr. Shilling. Thank you, Mr. Chairman.
    I would like to give a warm welcome to Sue Campbell. She 
serves as the CEO of Community Memorial Hospital in Staunton, 
Illinois. Community Memorial is a critical access care 
facility. Sue has more than 25 years of health care management 
and more than 10 years of management experience in the hospital 
setting. And it is an honor. She came out and visited our 
office back in January, and we just kind of hit it off. She is 
a great person. Glad to have you here.
    And then next, I would like to introduce Mr. Les Fowler. 
Les recently introduced me at one of their main functions, so 
it is only proper that I get to introduce him.
    You know, he is the Legislative and Government Affairs 
Manager for McDonough Telephone Cooperative located in 
Colchester, Illinois, which is right by Macomb. He calls it the 
land of milk and honey, whatever that means.
    But I probably represent both of these areas. Les has been 
with McDonough for the past year. I have had several 
opportunities to meet with him. He does great work at McDonough 
to connect rural Illinois together. It is just great to be here 
with the panel.
    And I would like to thank my colleagues. Welcome to 
Illinois. And it is an honor to have this hearing here today. 
So, thank you, Chairman.
    The Chairman. We will proceed with the testimony, but I 
also want to point out to the audience, the media, and 
otherwise, that this is an extraordinary privilege having a 
House Committee field hearing. These aren't very often held 
around the country. This is an unusual thing, and we are 
really, really fortunate to have this field hearing in this 
great community. And this would not have happened without great 
staff, without Larry, and Jim, and G.T., and Bobby. And we are 
blessed and honored to have this hearing here today.
    So, with those introductory remarks, let me just call on--
in Washington we have a clock that ticks down. It is like the 
end of a basketball game. Do not worry about that. We are just 
honored to have you. And we will first hear from Mr. Ray 
Schroeder, and look forward to your testimony.

   STATEMENT OF RAYMOND E. SCHROEDER, PROFESSOR EMERITUS AND 
    DIRECTOR OF ONLINE AFFAIRS, CENTER FOR ONLINE LEARNING, 
                     RESEARCH, AND SERVICE,
     UNIVERSITY OF ILLINOIS AT SPRINGFIELD, SPRINGFIELD, IL

    Mr. Schroeder. Thank you very much. Mr. Chairman, Members 
of the Committee, my name is Ray Schroeder, and I truly am 
honored to be able to speak with you today.
    I am a Professor Emeritus and Director of the Center for 
Online Learning, Research, and Service here at the University 
of Illinois-Springfield. I have been engaged in online teaching 
for the past 15 years. I founded the Office of Technology-
Enhanced Learning in 1997, which more recently was expanded in 
our services to include the three missions of faculty members 
of teaching, research, and service.
    I have been honored to receive national recognition in a 
number of ways, including recently the Frank Mayadas Leadership 
Award from the Sloan Consortium. I have worked for 34 years on 
this campus and another half dozen over in Urbana.
    Among our three campuses, the University of Illinois offers 
more than 100 online degree and certificate programs. From the 
Springfield campus alone, this semester we serve 1,425 students 
enrolled in 17 online degree programs and multiple certificate 
programs. These students are located in 77 of the Illinois 
counties, 49 states, and 12 countries. The average age of our 
online student is 34, and they are, for the most part, early 
and mid-career professionals seeking to complete degrees and 
certificates to enhance their careers and their understanding 
of how this rapidly changing technological economic, social, 
and political environment impacts their lives.
    Our online programs are noted nationally for excellence in 
online teaching and learning, student engagement, and success 
of our graduates.
    The Sloan Consortium is the leading national association 
dedicated to quality in online teaching and learning. They 
reported more than 4.5 million U.S. students took at least one 
online class in 2009. And the estimates are that the new report 
to come out in November will show that we have far exceeded six 
million students; that represents more than 30 percent of the 
20 million students enrolled in post-secondary education in the 
U.S.
    Access to online learning in the U.S. is provided in most 
cases for those with disabilities, for those in urban and 
suburban areas, those with non-traditional work schedules, 
those who cannot travel to campus. But online learning is not 
provided to all Americans. Many of the Americans who reside and 
work in rural areas of our country are disenfranchised from 
this 21st century delivery mode because they are not served by 
affordable and reliable broadband connectivity, which is 
required now to fully participate in online learning.
    I teach online every semester. Among the courses I have 
developed and currently teach is one titled, Internet in 
American Life, for which I am the lead instructor of five 
section, which we are offering this fall. As you might suspect, 
the readings for our course come from the Pew Charitable Trust, 
which has an ongoing series of surveys of the same name.
    As part of the course for the past several years, we 
complete a module on broadband access in the United States. We 
look at rural, suburban and urban areas. The research, it 
remains consistent with our student reports, they say that 
broadband stimulates learning, economic development, and 
opportunity, and a lack of this is detrimental to the schools 
and the businesses, both small and large.
    From this class, I can report anecdotally as recently as 
last week that among our students residing in rural locales, 
there is great frustration with having to pay nearly $100 a 
month for less than reliable service delivered via satellite, 
and capped at a transfer rate of fewer of 1 gigabyte or a 
handful of gigabytes a month.
    The impact of this is huge. Parents who have subscribed to 
these services fear exceeding the limits because their bills 
will skyrocket, and so they restrict Internet access to their 
children who are students who are required to use the Internet 
for their school work. It is far different in urban areas of 
this country where smart phones and 4G connectivity allows 
students to just walk down the street and have access, or 
around the corner to a fast food store for free Internet 
access, or a coffee shop. Not so in the rural areas of this 
country.
    I would like to briefly relate the experience of my younger 
daughter, a graduate of UIS, who founded a small business in a 
rural area in between Cobden and Makanda, Illinois. That is in 
the far southern part of the state, Shawnee National Forest 
area. The business, called InBlue, specializes in leather bound 
journals, iPad cases--here is an example--with ink drawings, et 
cetera. Well, this small business began as a storefront on the 
boardwalk in Makanda, Illinois, a town of about 450, maybe 500 
people. It really was a dad funded business. The success came 
when she moved to a community, Carbondale, and later to 
Asheville, North Carolina, where she now has broadband service.
    More than 90 percent of her sales are made online. She 
credits her success to access to broadband that allows her to 
reliably connect to clients who now span the globe from U.S. 
cities to regular clients in Amsterdam, London, Sidney, Abu 
Dhabi, points around the world. This thriving small business 
employs several staff members. It utilizes American-made goods, 
leather from the U.S., ink from the U.S., thread from the 
United States. And she is creating a positive cash flow across 
the Atlantic to the United States from these international 
buyers and from larger cities to smaller rural communities 
where she has lived.
    Imagine how many such business in rural areas fail or fail 
to launch simply because we lack the access in those parts of 
the country, access to broadband Internet that is taken for 
granted in the more rural or, rather, the more urban areas of 
the United States.
    Speaking as an individual with some expertise in this area, 
I personally believe that the solution is in a fabric that can 
be woven among multiple technologies. I do not believe there is 
one single technological solution. I believe it is a fabric of 
3G, 4G services, support for telephone, power companies, cable 
companies, other rural entrepreneurials to expand their 
services, expanded use microwave frequencies, the old 
Instructional Television Fixed Service, ITFS, spectrum, perhaps 
even super WiFi where appropriate using UHF bandwidth, support 
for further expansion of satellite services in ways that enable 
asymmetric services to provide practical, affordable, and 
useful service levels, support for school systems, in 
particular, and libraries, related educational enterprises to 
offer broadband services for both educational and, where 
appropriate, general access within the rural area; and, 
finally, for support for higher education, including community 
colleges and universities to extend their programs online in 
support of degree completion as well as rural economic 
development.
    Finally, as we speak here in Springfield, Illinois, I 
remind you, as you have noted, this is the home of Abraham 
Lincoln. It is Lincoln who had the vision and foresight to 
bring higher learning to the people of our country through the 
Morrill Act of 1862 conceiving land-grant universities, 
including the University of Illinois. This vision of Abraham 
Lincoln is realized in the 21st century through online 
learning.
    In many ways, the Internet has become the land, the 
location of campuses and learning. We have that same obligation 
that we had 150 years ago when the Morrill Act was passed and 
enacted and signed by Abraham Lincoln to advance the learning 
opportunities and advantages to the citizens of all parts of 
the United States.
    Thank you, Mr. Chairman, and Members of the Committee.
    [The prepared statement of Mr. Schroeder follows:]

   Prepared Statement of Raymond E. Schroeder, Professor Emeritus and
 Director of Online Affairs, Center for Online Learning, Research, and 
    Service, University of Illinois at Springfield, Springfield, IL

    Mr. Chairman, Members of the Committee, my name is Ray Schroeder. I 
am a Professor Emeritus and Director of the Center for Online Learning, 
Research and Service at the University of Illinois Springfield.
    I have been engaged in online learning for the past 15 years, 
including founding the Office of Technology-Enhanced Learning in 1997 
that more recently became the Center for Online Learning, Research and 
Service on our campus. I have been humbled to receive national 
recognition in a number ways, most recently as the inaugural recipient 
of the Frank Mayadas Leadership in Online Learning award from the Sloan 
Consortium. I am fortunate to have worked on this campus for the past 
34 years and another half dozen years on the Urbana campus of the 
University of Illinois. Among our three campuses, the University offers 
more than 100 online degree and certificate programs. From the 
Springfield campus, we now serve 1,425 online-only students enrolled in 
our 17 online degree programs and various certificate programs. These 
students are located in 49 states and 12 countries this fall semester. 
The average age of our online students is 34. They are, for the most 
part, early and mid-career professionals seeking to complete degrees 
and certificates to enhance their careers and understanding of the 
rapidly changing technological, economic, social and political 
environment in which we live. Our online programs are noted nationally 
for excellence in online teaching and learning; student engagement; and 
success in degree completion.
    The Sloan Consortium, the leading national association dedicated to 
quality in online teaching and learning, reported that more than 4.5 
million U.S. students took at least one online class in 2009. That 
number has since risen to an estimated more than six million students 
in the past year. This represents thirty percent of the twenty million 
students enrolled in post-secondary education in this country. In the 
State of Illinois, the Illinois Virtual Campus has been tracking the 
growth of online learning for the past dozen years. It is an impressive 
record of annual increases in enrollments among students in community 
colleges as well as private and public colleges and universities across 
the state: http://www.ivc.uillinois.edu/report/pdf/Spring11.pdf.
    Online learning provides access to higher education for those busy 
Americans who are working, caring for families, and/or seeking to 
advance their careers. The University Professional and Continuing 
Education Association (UPCEA) and the Association of Continuing Higher 
Education (ACHE) just last week cosponsored a national Summit on the 
Future of Online Learning in Chicago. The Summit examined the important 
and growing role of online learning in adult, professional and 
continuing education. UPCEA will convene the organizations represented 
at the Summit in a follow-up conference to be held in Washington, D.C. 
in the coming months. Several organizations with a stake in adult and 
online programs will develop a joint policy agenda and a blueprint for 
expanding access to quality online learning programs.
    Access to online learning in the U.S. is provided, in most cases, 
for those with disabilities, those with non-traditional work schedules, 
those who cannot travel to a campus. But, online learning does not 
provide access to all Americans. Many of those Americans who reside and 
work in rural areas of our country are disenfranchised from the 21st 
century delivery mode because they are not served by the affordable 
broadband connectivity required to fully participate in online 
learning.
    I teach online every semester and most summers. Among the courses I 
have developed and continue to teach online is ``Internet in American 
Life'' for which I am the lead instructor of the five sections we are 
offering this fall. As you might suspect, the readings for our course 
are from the Pew Charitable Trust ongoing initiative of the same name. 
As part of the course, for the past several years, we complete a module 
on broadband access in rural, suburban, and urban areas. The research 
is consistent with our student anecdotal reports--broadband stimulates 
learning, economic development and opportunity; the lack of such access 
is detrimental to schools and business (both small and large) 
development. From that class, as recently as last week, I can relay 
comments from students residing in rural locales reporting their 
frustration with having to pay nearly $100 a month for less-than-
reliable broadband service capped at as little as one or a few 
gigabytes. The fear of exceeding the limit causes parents to restrict 
Internet access to children doing schoolwork. It is far different in 
urban areas where smart phones connect at 4G speeds and free access to 
high speed WiFi is available at libraries, McDonald's and coffee shops 
around the corner.
    I would like to briefly relate the experience of my younger 
daughter, a graduate of UIS, who founded a small business in a rural 
area near Cobden, Illinois in 2008. The business, InBlue, specializes 
in leather bound journals; iPod and iPad cases; wallets; and related 
leather bound articles that are personalized with ink drawings and 
lettering. This small business began as a storefront on the boardwalk 
in the small community of Makanda, Illinois. The business only became 
successful when she was able to move to Carbondale, and eventually to 
Asheville, North Carolina. Her success in both communities was not due 
to local sales, a scarcity of workers or supplies, but to the more than 
90% of her sales that are made online. She credits the success to 
access to broadband services that allowed her to reliably connect to 
clients who now span the globe from large U.S. cities, to Amsterdam; 
London; Sydney; Abu Dhabi and other points around the world as she 
sells online at http://inblue.etsy.com. This is a thriving small 
business that employs several staff members utilizing American made and 
produced supplies (leather, ink, thread, etc.), creating a positive 
cash flow into the small City of Asheville, NC, through sales to other 
countries and elsewhere. Imagine how many such small businesses in 
rural areas fail, or fail to launch, simply because of lack of access 
to that which we take for granted in more urban areas, broadband 
Internet service.
    Speaking as an individual with expertise in this area, I personally 
believe that among the fabric of solutions that may be woven to address 
this problem are:

   Expansion of 3G and 4G services to deep rural areas--not 
        just along the interstate highway system.

   Support for telephone and cable companies--as well as rural 
        entrepreneurs--to expand services to connect rural residents.

   Expanded use of available microwave frequencies to serve 
        areas where this distribution mode is practical.

   Support for further expansion of satellite services in ways 
        that enable asymmetric services that provide practical and 
        useful service levels.

   Support for school systems, libraries and related 
        educational enterprises to offer broadband services for both 
        educational, and where appropriate, general access.

   Support for higher education, including community colleges, 
        colleges and universities; to extend programs online in support 
        of degree completion as well as rural economic development.

    As you meet here in Springfield, Illinois, I remind you that our 
great forefather, Abraham Lincoln, had the vision and foresight to 
bring higher learning to the people of our country through the Morrill 
Act in 1862, conceiving land-grant universities, including the 
University of Illinois. The vision of Abraham Lincoln is realized in 
the 21st century through online learning. In many ways, the Internet 
has become the land, the location, of campuses and learning. We have 
the same obligation 150 years after the first Morrill Act to open 
learning opportunities and advantages to the citizens of all parts of 
our country.
    Thank you, Mr. Chairman, and Members of the Committee, for your 
kind attention.

    The Chairman. Thank you, Mr. Schroeder.
    I might also note that we have been joined by my colleague 
and good friend, and frankly many years a Member of the 
Illinois General Assembly here in Springfield, Randy Hultgren, 
who represents the area that is a little bit to the north, and 
then somewhat to the northeast of here, and does an 
extraordinary job, and is really a part of our whole center 
aisle caucus mentality. And we are honored to have you with us, 
Randy, as well.
    I also mentioned to people here and otherwise that to the 
extent we can with the time constraints we have when we are 
done, we are going to go out in the western portion of the 
city, go out to Stone Seed, and then have the opportunity to 
visit with them a little bit on GPS and a number of other 
technological aspects of the subject matter with which we deal.
    I am going to recognize Mr. Bartlett. Feel free, any of the 
four witnesses here, to do what you need to do. We do have your 
written statements, and feel free to do that, reread them if 
you want, but if you want to kind of summarize for us so we can 
get into a little more questions, we would be glad to do that. 
We will be glad to do whatever you would like to do, but just 
for the record, we do have your written statements, which are 
extraordinarily well prepared and most gratefully received.
    So, with that, let me introduce Mr. Bartlett of Prairie 
Power, Inc.

    STATEMENT OF JAY C. BARTLETT, P.E., PRESIDENT AND CHIEF 
            EXECUTIVE OFFICER, PRAIRIE POWER, INC.,
                        JACKSONVILLE, IL

    Mr. Bartlett. Thank you very much, and good afternoon, 
Chairman Johnson, Ranking Member Costa, and Members of the 
Committee. I am Jay Bartlett. I am the President and CEO of 
Prairie Power, Inc., commonly referred to PPI.
    Thank you very much for giving me this opportunity to speak 
to you about rural broadband. This is something that is near 
and dear to our hearts. It is something that we approach with a 
great deal of urgency in our business.
    PPI is a not-for-profit electric generation transmission 
cooperative headquartered in Jacksonville, Illinois. PPI is a 
Touchstone Energy Cooperative that is owned by ten rural 
electric distribution co-ops.
    Our service territory covers about 17,500 square miles of 
rural Illinois. To put this in context, that is the same areas 
of New Jersey, Connecticut, Delaware, and Rhode Island combined 
approximately. However, the number of customers that we serve 
is just slightly less than the number of people that are in 
Springfield, Illinois. I hope that gives some context to the 
idea that we serve a very sparsely populated area.
    PPI itself is a technology oriented company, and our core 
business is absolutely dependent on high speed data 
communications.
    Two trends have thrust PPI into taking a proactive role 
within the development of rural broadband. First, PPI has 
experienced a steady decline in our ability to obtain high 
quality data communication services from our traditional 
service providers. Second in striving to reduce costs and 
lessen the impact on our environment of producing electricity, 
PPI is taking a very proactive stance in the development of 
smart grid services. The development of the smart grid means to 
PPI that we need to change from moving megabytes of data from 
our remote locations to terabytes of data to our remote 
locations.
    So that is one of the comments that I would like to make, 
and I am going to paraphrase a lot of my testimony.
    The next point that I would like to make in terms of making 
sure that the rural economy is served well is that we believe 
it is essential that rural broadband be looked at in two 
separate tiers. One I call tier one, which is wireless 
services. Some of our members sell and deliver wireless 
services to their members, both 3G and advanced 4G services. 
The other is fiber optic services. We believe that both of 
these are very, very important, and it has been troubling to us 
that there has been a tendency for people to lump generally 
broadband services into one category, and they are not the 
same.
    Fiber optic services are going to be needed in rural areas 
to support things, such as telemedicine. I was fortunate enough 
to be involved in the development of a metropolitan area fiber-
optic network here in Springfield. We built a 160 mile fiber-
optic network here. Every medical institution in Springfield is 
linked. The medical schools are linked; 51 public school sites 
are linked. We have tremendous and have seen tremendous 
economic growth happen due to the presence of that advanced 
technology. So, I have seen what it can do. I see when it does 
not happen in the rural countryside.
    To date, we have been very appreciative of the fact that 
the Federal Government, USDA in particular, has tried very hard 
to support broadband development. Unfortunately, we have not 
seen much of it materialize in the remote parts of Illinois. 
That is not due to anything less than Herculean efforts on 
their part, but nonetheless it is not there yet.
    So, we have moved to a place where we need to seek 
solutions. I mean, like I said, we need to do it with urgency.
    What we are doing is we are forming a consortium of not-
for-profits like PPI to come together and essentially make it 
happen. And it will be a combination of both wireless solutions 
and fiber solutions in the countryside. And I will speak a 
little bit more about that.
    Of course, the absolute requirement for broadband access is 
of no surprise. It has been known for some time that it would 
be a requirement for the economic stability and growth of the 
rural economy. It is also just common sense to understand that 
achieving this goal is more expensive in lower population 
density than urban areas. Last, it is will understood that our 
cities, indeed many parts of the world, depend on the rural 
U.S. for sustenance. There is no room for failure, none 
whatsoever, in keeping rural America economically healthy. It 
is a symbiotic relationship between us and not just the United 
States, but I believe the rest of the world, is so important. 
We feed so much of the world.
    So, the importance of broadband quality to improve the 
rural economy is not just common sense; it is something that we 
can do. It is attainable.
    PPI is, again, you are looking at a common sense approach 
really needs to dictate what we do and how we move forward. It 
is a not a highly profitable venture to build broadband 
infrastructure into the countryside. If it were, it would have 
already been done, and that is why we are here talking today. 
In light of this fact, we took a fresh look at what resources 
we could marshal, and trying to accomplish the goal of getting 
the broadband, the quality, taken care of.
    The following is a synopsis of the elements we intend to 
use to reduce the cost and yield greater availability of both 
wireless and wired broadband solutions in rural Illinois.
    First, we are creating a consortium of not-for-profit and 
for profit entities to construct and operate broadband 
infrastructure. We believe the not-for-profit cooperative 
business model is ideal to accomplish much of the task at hand. 
The cooperatives have conquered the task of building capital 
intensive electric networks to serve sparsely-populated areas. 
We believe that the same cooperatives are ideal candidates to 
facilitate the deployment of advanced telecommunications 
facilities.
    Rural co-ops already have a great deal of infrastructure in 
place that can be used to accomplish broadband proliferation at 
low costs. The development of relationships between our 
members, the local businesses, and the economic development 
communities are already in place.
    There are not enough resources available to build on 
wisely, and our relationships, I guess, give us the knowledge 
to know where we have to build.
    To finally sum things up, here is what I will say. I want 
to make four points. Self-help is what is important with us, a 
major part that we think is very important that is commensurate 
with the importance of the rural America to the entire country. 
Finding ways to leverage each dollar spent to gain multiple 
benefits, including both increasing broadband access, but also 
helping smart grid and other initiatives that help the 
environment are important. Local control and governance is very 
important and absolutely essential to make sure we utilize the 
sparse resources that are available. And finally an emphasis on 
the limitation of the one size fits all solutions.
    So, Mr. Chairman and Members of the Committee, thank you 
for inviting me to testify today. I will be happy to answer 
questions.
    [The prepared statement of Mr. Bartlett follows:]

   Prepared Statement of Jay C. Bartlett, P.E., President and Chief 
        Executive Officer, Prairie Power, Inc., Jacksonville, IL

    Good afternoon, Chairman Johnson, Ranking Member Costa, and Members 
of the Subcommittee. I am Jay Bartlett, and I am the President and CEO 
of Prairie Power, Inc. (PPI). Thank you for the opportunity to testify 
on the importance of access to broadband telecommunications to support 
economic development in rural areas. More specifically, I would like to 
share with you some of the challenges we face in serving rural areas 
due to the lack of suitable broadband communications infrastructure, 
and our plan to overcome these obstacles. There are certainly many ways 
to accomplish rural broadband proliferation. It is my honor to present 
the solution we are pursuing to deploy broadband infrastructure in that 
part of central and western Illinois served by PPI's member 
distribution cooperatives. This solution was conceived with rural 
economic development as a primary goal.
    As a matter of background, PPI is a not-for-profit electric 
generation and transmission cooperative headquartered in Jacksonville, 
Illinois. PPI is a Touchstone Energy Cooperative that is owned by its 
ten members which are all rural electric distribution cooperatives in 
Illinois. PPI and its member distribution cooperatives provide electric 
service to rural residential, farm and business members in a combined 
service territory that covers approximately 17,500 square miles. PPI's 
primary mission is to generate, procure and deliver reliable electric 
energy to its members via approximately 78 electrical transmission or 
distribution substations. It is also PPI's function to support economic 
development and to support energy efficiency initiatives on behalf of 
its members. PPI's member cooperatives understand the challenge of 
delivering service to sparsely populated rural areas. To put this 
challenge in perspective, the combined service territories of PPI 
member cooperatives cover an area slightly smaller than the combined 
area of New Jersey, Connecticut, Delaware and Rhode Island, while the 
number of member/consumers that the PPI member cooperatives serve is 
just slightly less than those located in just Springfield, Illinois.
    Prior to joining PPI in 2009, I had been directly involved in the 
construction of a metropolitan-area fiber-optic network. As a result, I 
have witnessed firsthand the positive impact that the availability of 
an advanced telecommunications network infrastructure can have on 
economic development, education and improved delivery of healthcare 
services.
    PPI is a technology-oriented entity, and our core business is 
absolutely dependent on reliable, secure high-speed data 
communications. Two trends have thrust PPI into taking a proactive role 
in the development of rural broadband. First, PPI has experienced a 
steady decline in our ability to obtain data communications services 
from the traditional commercial service providers. Second, in striving 
to reduce costs and lessen our impact on the environment, PPI requires 
drastically increased bandwidth to realize the benefits to be derived 
from implementation of new smart-grid technologies. Stated differently, 
PPI suffers from the lack of rural broadband access, and we are in a 
prime position to witness and understand the impact this lack of access 
has on the rural economy and quality of life. PPI is also in a prime 
position to attack the problem. It is not in our nature to complain or 
stand by idly in the face of adversity. It is our job to find and 
implement solutions to benefit our distribution cooperative members 
and, in turn, their residential, farm and business members, no matter 
how challenging the endeavor.
    PPI commends the commitment made by the Federal Government and the 
Rural Utilities Service of the U.S. Department of Agriculture in 
particular for striving to improve access to broadband for rural 
citizens. It is our hope that this commitment is sustained and improved 
upon until ubiquitous broadband access is attainable to all. Our 
distribution cooperative members were founded to provide the benefits 
of electric energy to rural America at a time that commercial entities 
had little interest in serving rural locations. The result of this 
effort has contributed to the evolution of the greatest and most 
efficient agricultural system in the world. It is our belief that to 
sustain and advance this advantage, the delivery of broadband services 
to rural America will be equally as important as was rural 
electrification. Perhaps even more important, the lack of broadband 
services to rural areas is akin to depriving those citizens of both the 
energy to mechanize and the libraries to learn.
    We believe it is essential to separate the rural broadband services 
issue into two distinct tiers that both have merit, but require 
separate consideration. These tiers, which I will define as tier 1 and 
tier 2, differ in the level of service provided and in the type of 
technologies which are generally used to deploy them. Most rural 
broadband discussions to date have centered on expanding broadband 
access in general terms, a one-size-fits-all approach that is noble in 
its cause. But, in our opinion, this approach is insufficient to 
realize the full range of benefits that remain unrealized by fully 
engaging rural America.
    Tier 1 is the lowest cost technology to deploy and can be 
categorized generally by wireless, point-to-multipoint broadband 
delivery. These deployments oftentimes also use wireless connections to 
support backhaul of network traffic to a point of aggregation for 
connection to the Internet. This broad category of technologies that 
has been rapidly developing in terms of its capabilities minimally fits 
the above-mentioned analogy of access to libraries for rural citizens. 
These technologies also certainly can support many forms of e-commerce 
that can help spur economic development.
    However, we believe that access to higher speed, highly reliable 
symmetrical bandwidth is just as important to rural areas. There are 
various technologies employed to deliver these services, but they are 
generally characterized by the transport of data via optical or 
``wired'' means. From an economic development standpoint, this type of 
service must be part of the rural broadband deployment plan for the 
United States. Many business operations, and more in the future, will 
depend on this level of network to thrive. We believe this fits the 
electrical energy part of the previous analogy. Unquestionably, there 
is overlap between the two loosely-described technologies that I have 
mentioned, and the proponents of each technology pervasively argue 
their respective merits. However, we believe it will require a 
deployment of a mixture of both types of technologies ultimately to 
close the digital divide and place rural areas on an even footing with 
their urban counterparts.
    Tier 1 broadband access is important for many reasons to support 
economic development in rural areas. This level of service is capable 
of improving rural quality of life by allowing rural residents to join 
the growing social networking fabric of the world and to participate in 
non-critical or non-time-sensitive e-commerce with other businesses. 
This level of service also allows for non-time- or non-bandwidth-
critical maintenance of remotely hosted (cloud-based) business 
solutions located in remote data centers with higher speed, higher 
reliability network access. Finally, this level of service also 
provides alternative means of supporting voice communications.
    Tier 2 broadband services are required to attract and enable an 
entirely different segment of business activities. In our opinion, it 
is vital to ensure this segment is not overlooked. Examples of entities 
that require this tier 2 level of service are many, and the following 
are some examples.

   Financial and commodities service businesses which require 
        highly reliable, low-latency access to remote trading systems.

   Warehousing and order fulfillment centers which require 
        rock-solid reliability to ensure transaction processing is 
        available continuously.

   Telemedicine applications which require both high 
        reliability and high bandwidth to support applications such as 
        remote radiography with distant medical centers.

   Enterprises that generate substantial amounts of data 
        locally in their operations that require high-bandwidth 
        connections to support off-site backup and disaster recovery, 
        such as local government entities and utilities.

   Educational institutions seeking to apply high-quality 
        distance learning. These applications require high bandwidth 
        and low latency to allow real-time multimedia interaction with 
        remote participants. Highly reliable, high bandwidth 
        connections also greatly expand the suite of offerings 
        available to small, rural school systems.

   Any business that has multiple locations which can realize 
        efficiency benefits by collapsing its information technology 
        infrastructures to fewer centralized locations to reduce 
        expenses if it has access to reliable, high bandwidth 
        connections.

   Finally, this infrastructure can provide ideal backhaul 
        support of tier 1 systems.

    As mentioned earlier, PPI and its member electric cooperatives 
serve as a prime example of how tier 2 level services could create 
economic development opportunities by lowering energy prices and 
improve the environment through lower emissions by implementing 
elements of the smart grid. This result will not happen without drastic 
increases in the availability of bandwidth to our remote locations. 
PPI's rural electric cooperatives are already well poised to take 
advantage of these new technologies, as the vast majority of our 
members have already installed advanced customer metering systems. To 
gain the next level of benefits from this investment will require the 
transmission and storage of terabytes of usage information, and the 
ability to signal large numbers of electric loads (member/consumers) in 
near real time.
    PPI can realize the benefits of such a system through the use of 
wireless technology at less cost to PPI than it can with fiber-optic 
cable. But, by using wireless technology, rather than fiber-optic 
cable, PPI would miss an opportunity to support future economic 
development. By striving to drive fiber-optic deployment to the 
electric substation level, PPI would ensure that tier 2 network 
services are within reasonable distances of other potential users 
throughout most of PPI's cooperative members' service territories. This 
fiber-optic proximity would then allow for selective build-out of 
fiber-based solutions where needed and provide excellent tower 
locations for tier 2 services.
    The point of these efforts is very simple. The rural areas served 
by PPI and its members are in desperate need of economic development to 
support the continued health of the nation's breadbasket. The service 
territories of the PPI members offer many unique advantages to 
businesses. Relatively low-cost labor and real estate, a more flexible 
workforce due to the cyclical labor demands of agriculture, and an 
attractive quality of life are all ready and waiting to enhance the 
productivity and efficiency of America's businesses. The one factor 
that is missing is the requisite connection to the digital fabric on 
which businesses now run.

Seeking Solutions
    The absolute requirement for broadband access is of no surprise. It 
has been known for some time that it would be a requirement for the 
economic stability and growth of the rural economy. It is also just 
common sense to understand that achieving this goal is more expensive 
in areas with lower population densities than urban areas. Lastly, it 
is also well understood that our cities, and indeed many parts of the 
world, depend upon the rural United States for sustenance. There is no 
room for failure in the endeavor of keeping rural America economically 
stable, as the symbiotic relationship between it and the rest of the 
world is too important.
    PPI was very pleased to see the tremendous importance the Federal 
Government placed on rural broadband development and hoped these 
programs would lead to the necessary investments for businesses like 
our own to continue to evolve. In our area, this has not been the case. 
Despite funding opportunities offered through the American Recovery and 
Reinvestment Act, and the programs offered through the USDA, the 
telecommunication systems needed for our communities to thrive have not 
materialized. So, we have elected to ``go it on our own''.
    Common sense dictates that it is not a highly profitable venture to 
build broadband infrastructure into low population densities. If it 
were, it would already have been done. In light of this fact, we took a 
fresh look at what resources we could marshal to accomplish our goal of 
establishing broadband equality. The following is a synopsis of the 
elements we believe can be marshaled to reduce costs and yield a 
greater density of both types of broadband services previously 
described.

   Endeavor to create a consortium of not-for-profit and for-
        profit entities to construct and operate the infrastructure. We 
        believe the not-for-profit cooperative business model is ideal 
        to accomplish the task at hand. Rural electric cooperatives and 
        rural telecommunication cooperatives have stood the test of 
        time, and serve as a proven example of how to accomplish 
        essentially the same task now at hand. The cooperatives have 
        conquered the task of building extremely capital intensive 
        electric networks to serve sparsely populated areas. We believe 
        the same cooperatives are ideal candidates to facilitate the 
        deployment of advanced telecommunication facilities.

   Utilize the existing right-of-ways already possessed by 
        rural electric and telecommunication cooperatives to minimize 
        expenditures on easements and right-of-ways.

   Leverage the existing close relationships between our member 
        cooperatives and the local businesses and economic development 
        officials to ensure we build the correct infrastructure to the 
        right places. There are not enough resources available to build 
        unwisely, and the cooperatives have detailed knowledge of the 
        local requirements.

   Find multiple, non-competitive uses for the same dollar 
        spent. In our case, PPI has needs and limited funds available 
        to support smart-grid development and electric system control. 
        The same optical fiber that we construct to accomplish this 
        goal can be used by telecommunication providers to deliver 
        broadband services. In kind, the telecommunication cooperatives 
        can provide access to their existing fiber-optic 
        infrastructures to facilitate PPI's accomplishment of its 
        smart-grid and electric reliability enhancement goals without 
        constructing unnecessary, redundant communications facilities.

   Seek ways of leveraging staff from the member consortiums to 
        reduce overall labor costs. For example, PPI already operates a 
        continuously-manned control center that can be utilized for 
        network monitoring and maintenance dispatch, while the 
        telecommunication providers can provide provisioning services 
        and fiber-splicing services.

   Both the telecommunication cooperatives and some of the 
        electric cooperatives are already providing third and fourth 
        generation wireless Internet services. We will strive to 
        streamline service and support of these ventures and provide 
        more robust data backhaul means.

   The electric cooperatives own many communications towers, 
        some of which are already also in use to provide Internet 
        services. We believe these towers could be used to a greater 
        extent to help facilitate providing tier 2 services.

   Last, accountability is essential to successfully tackling a 
        challenge of this magnitude. Accountability is a cornerstone of 
        the cooperative business model, as it is wholly-owned and 
        democratically-controlled by the members that we serve.

    In summary, we are attempting to use many of the same principles 
that were used to accomplish rural electrification \3/4\ of a century 
ago. In some ways, we are clearly ahead of our position 70+ years ago. 
We know who our customers are and much about their needs, because they 
are our owners. We already have established rights-of-way, and we know 
how to conduct business in the rural environment.
    What is different, is that we will be moving forward largely 
without the financial support of the government which was a prominent 
part of enabling rural electrification. We are hopeful that by 
demonstrating successful, responsible and effective solutions to 
bringing modern telecommunications capabilities to rural areas, state 
and Federal Government will recognize this unique approach to solving 
the rural broadband issue is worthy of special consideration. With the 
addition of governmental support, we will be able to provide deeper 
network penetration at a more rapid rate.
    Mr. Chairman, thank you for inviting me to testify today. I am 
happy to answer any questions you or the Members of the Committee may 
have.

    The Chairman. We appreciate it, Mr. Bartlett.
    And I am going to politely ask the next three witnesses if 
we can do the best we can to try to meet--we have some time 
objectives in terms of being able to ask questions and be able 
to do our tours and so forth. So, we want to hear everything, 
but we appreciate your willingness to help us move along here.
    Now, since I lost the arm wrestling contest, Mr. Schilling, 
I get to introduce Sue Campbell now. I was with she and her 
husband a week ago at a function down in beautiful southern 
Macoupin County, and really enjoyed the opportunity to meet you 
and your family. And we are privileged to have you today.
    So, with that I would introduce Sue Campbell, the CEO of 
Community Memorial Hospital in Staunton, Illinois, right down 
in God's country.

 STATEMENT OF SUE CAMPBELL, CHIEF EXECUTIVE OFFICER, COMMUNITY 
       MEMORIAL HOSPITAL, STAUNTON HOSPITAL, STAUNTON, IL

    Ms. Campbell. Oh, absolutely. Thank you so kindly, Chairman 
Johnson, also Ranking Member Costa, and Bobby Schilling, my 
Congressional Representative. Thank you for the invitation. It 
is indeed a pleasure and a privilege to be here.
    I am currently the CEO of a critical access hospital in 
Staunton, Illinois. We are one of 51 critical access hospitals 
within Illinois, and we have the privilege and the honor to 
provide medical services to some of our more elderly and poorer 
people within our county and out state.
    Critical access hospitals also are usually one of the main 
driving economic factors in the communities that they serve. 
They are usually one of the larger employers, and they provide 
critical health services to these people.
    I had a personal experience back in 2007. Our hospital was 
getting ready to upgrade our CAT scanner from a single slice, 
which was very limited on the studies that it could perform to 
a state of the art 64-slice CAT scanner. This was a huge step 
for our small hospital. However, we quickly determined our 
Internet access was served by a T1 line, which really provided 
less than one megabyte. We shared this T1 line with the local 
public library and the high school. It was not dependable, it 
often broke down. it would not serve our purposes.
    We were very fortunate. We have an excellent local 
provider, Madison Communications. We partnered with them. They 
rapidly assessed the situation, and they were able to bring 
fiber optic connection to our door. We were able to then have 
broadband with 5 megs, which was extremely like a super highway 
for us, totally met our needs at that time. And soon our CAT 
scan studies were flying down the highway, and the reports were 
coming back. Our cardiologists that come and visit were 
extremely happy. We were able to do much more extensive studies 
with less radiation exposure to the patients. It was wonderful.
    Hospital administration thought, we have solved our 
broadband needs for years to come. We were wrong.
    As equipment upgrades have come along, new technology that 
we have added to the hospital, the platform has moved from 
analog to digital. It all requires a connectivity of greater 
broadband width. And it will not be too long before we are 
going to have to consider doubling our broadband width from 5 
megs up to 10 megs.
    Teleradiology is a huge and wonderful new adaptation. Many 
of our critical access hospitals throughout this nation have to 
staff their ERs with mid-level practitioners, nurse 
practitioners, sometimes EMTs, because they do not have the 
ability to attract a physician to come in and provide that 
service. These are the departments that provide life-saving 
services to the members of these communities.
    Through teleradiology, it has enabled that mid-level 
provider to have access to a physician many, many miles away at 
a remote location. It is fast, it is economic, and it is the 
best thing for the patient. They are able to assist in the 
diagnosis and the treatment plan for those patients, and it has 
been life-saving in many, many instances.
    One of the huge needs that we are experiencing in our ER 
today is mental health patients that are in treatment for both 
substance abuse as well as mental health and emotional issues. 
In our rural, remote areas, we do not have local psychiatrists, 
local psychologists, local social workers. The wonderful SIU 
School of Medicine here in Springfield has initiated a 
collaborative program with many of our critical access 
hospitals to provide access to their psychiatric department to 
help assess and determine a treatment plan and proper 
disposition of a patient that enters our ER. This, again, is 
cost saving.
    Many times a patient will come in with mental health or 
behavioral health issues, and they literally have to be held 
over many, many hours until we can determine a proper treatment 
plan for the patient. That costs lots of money. With this new 
connection to telemedicine and the psychiatric access, it has 
really helped to promote the service to these patients.
    One last thing I really would like to address is I would be 
very remiss if I did not talk about the expansion of the 
electronic medical records that is required by the Health Care 
Reform Act today. Every single hospital and every single health 
care provider is being required to convert to electronic 
medical records and to reach meaningful use, and this is a 
wonderful initiative. However, every single provider will have 
to have a very dependable, secure, rapid Internet connection to 
accomplish this initiative.
    Just, please, as you take consideration of the need for 
broadband throughout this country, that those are the huge 
needs within health care, and it will continue to grow.
    Thank you for the honor to be here.
    [The prepared statement of Ms. Campbell follows:]

Prepared Statement of Sue Campbell, Chief Executive Officer, Community 
           Memorial Hospital, Staunton Hospital, Staunton, IL
September 24, 2011

To: Subcommittee Members on Rural Development, Research, Biotechnology, 
    and Foreign Agriculture

    My testimony will focus on both the challenges and the 
opportunities for the expansion of broad-band service into the offices 
and facilities of rural and remote healthcare providers throughout the 
nation.
    In the fall of 2007, our hospital, Community Memorial in Staunton, 
IL, was planning the upgrade and installation of a state of the art 64-
slice CAT scanner to replace a single-slice cat scanner that had been 
in place for well over a decade. The new 64-slice scanner would enable 
the hospital to perform a much broader scope of testing with 
significantly improved images at a much faster rate and less radiation 
exposure for the patient. However, the images had to be transmitted 
electronically to a Radiology Group over 50 miles away for 
interpretation due to the fact that our small, rural hospital does not 
have a Radiologist on staff on a full-time basis.
    Up to that point in time, the hospital's broad-band connection 
consisted of a T1 line that was shared with the local high school as 
well as the city library, and connectivity was often interrupted or 
extremely slow. This connection would not begin to meet the 
requirements of the new cat scan equipment and enable the hospital to 
perform teleradiology. It quickly became apparent a significant upgrade 
in the broadband width, quality, speed and security must be made.
    We were fortunate! Our hospital was able to partner with the local 
communication provider, Madison Communications, and they were able to 
deliver a fiber-optic connection to the hospital that provided 5 megs 
of high quality, dependable, rapid and secure broadband service. Soon 
the cat scan studies were flying down the cyber super highway. Hospital 
Administration thought they had secured sufficient broadband width for 
many years to come, but we were wrong! As additional medical equipment 
has been replaced with newer and upgraded models, the technology has 
been upgraded from analog to digital, and each piece of equipment 
demands a fast, dependable and secure broadband connection. We continue 
to consume the broadband width we presently have and will soon have to 
make a decision to increase and most likely double it.
    The advancement of telemedicine has opened up a multitude of 
opportunities for improved medical care especially in rural and remote 
areas. It literally allows a physician many miles away to look directly 
into the exam room and provide consultation to another physician, 
nurse, or other care-giver and greatly increases a better out-come for 
the patient, and often at a lower cost.
    It is a well-documented fact that the nation faces a shortage of 
primary care physicians as well as specialty care. This fact is 
glaringly evident in the rural and remote healthcare facilities 
throughout the nation. Many rural hospitals are forced to staff their 
Emergency Departments with mid-level practitioners such as Nurse 
Practitioners, Physician Assistants, or Emergency Medical Technicians 
who work under the direction of a physician at a remote location. This 
could not be done without the development of telemedicine. This 
technology provides a window into the Emergency Department, or any 
other department within the hospital such as the Operating Room, and it 
greatly aids the local care-giver in establishing a diagnosis and 
treatment plan for the patient. This is especially beneficial and can 
be life-saving for the patient that may have suffered a critical 
cardiac episode or stroke. In addition, telemedicine can help reduce 
costs and help keep the patient at the local facility. The specialty 
physician can consult via the computer terminal and assist the local 
primary care physician develop a course of treatment that does not 
require a transfer to another larger facility. This save time and 
money, and the patient can remain in their local hospital and closer to 
their home and family.
    A number of the Critical Access Hospitals within Illinois are 
presently talking with the SIU School of Medicine in Springfield to 
collaborate and develop pathways to access mental health specialists 
such as Psychiatrists. This collaboration has been driven primarily due 
to the increased number of behavioral and mental health cases showing 
up in the rural Emergency Departments, and the rural health facilities 
do not have the resources or access to local mental health specialists 
to adequately treat these patients. These patients are often ``held-
over'' in the Emergency Department until an appropriate transfer to a 
mental health facility can be arranged. Access to a mental health 
provider such as a Psychiatrist via telemedicine would greatly enhance 
and expedite the proper treatment of the patient. In addition, cost 
savings would be recognized because the patient would not be ``held-
over'' for hours in the Emergency Department waiting for a mental 
health evaluation.
    Broadband connectivity is also enhancing opportunities for the 
members of the medical staff to participate in continuing education and 
Grand Rounds at some of the teaching institutions through-out the 
country. Physicians that are living and practicing in the rural and 
remote areas of the country have little opportunity to shut down their 
practice for a day or two and travel a distance to attend a conference 
to interact and learn from their peers. The Internet has totally 
changed and increased the opportunity for continuing education for not 
only physicians but all members of the clinical staff, and it is a very 
cost effective method to reach many students at the same time.
    I would be remiss if I did not discuss the huge demand for 
broadband connectivity throughout every corner of this country that has 
been created by the Affordable Care Act of 2010, also known as the 
Healthcare Reform Act. The requirement of all healthcare providers to 
adopt an electronic medical record and reach meaningful use in order to 
meet the requirements of this law and maintain their level of 
reimbursement, has been staggering. There is not a single physician's 
office, hospital, or healthcare facility that has not been impacted by 
this law. Every provider will have to be able to successfully transmit 
electronic health records to a Health Information Exchange (HIE) site 
and have the capability of sending and receiving electronic health 
records. The demand for high-quality, rapid and secure broadband 
connectivity will be greater than ever in the history of this country. 
The demand for access to this connectivity does not come without a 
price, and many rural and remote healthcare providers will be hard-
pressed to find the money to invest in certified computer systems that 
meet the requirements of meaningful use as well as the access to 
broadband connectivity to carry their data. This is indeed a 
challenging time.
    I thank you for the opportunity to submit this testimony to the 
Subcommittee.
            Respectfully Submitted,

Sue Campbell, CEO,
Community Memorial Hospital,
Staunton, IL.

    The Chairman. Thank you, Ms. Campbell. We appreciate your 
testimony.
    And now, we will go to our fourth witness, Mr. Jim Crum, 
from U.S. Wellness Meats in Virginia, Illinois?

  STATEMENT OF JIM CRUM, BEEF PRODUCER, U.S. WELLNESS MEATS, 
                          VIRGINIA, IL

    Mr. Crum. Thank you, Mr. Chairman. I am one of the members 
or people that have put a company together starting in 1996. A 
dozen farmer producers got together and went to a meeting with 
Allen Savery's people that put together how to lead a 
sustainable business to rural communities. With that came the 
idea of rotational grazing, grasslands, to increase the 
productivity of the grasslands, capture carbon by creating 
organic matter from the grasslands. And we decided to sell 
grass-fed beef online on the Internet.
    We formed a company in 2000 and started marketing grass-fed 
beef, killed some cattle, and put them in boxes, and thought 
the world would beat a path to our door. But they did not. We 
had dial up at that time. We were sort of ahead of the curve on 
all the local food. We were ahead of the curve on the health 
food. And we sort of sat there and wondered when it was going 
to happen.
    Along the way, we had some Value-Added Producer Grants that 
helped us put a road map on to create where we wanted to go. We 
had feasibility study marketing plans, business plan. Marketing 
was a main idea that we had to come up with to reach the 
people. We had updated Internet service along the way also. And 
with that, you will see in the presentation the map of the U.S. 
where our customers are. It is mainly East Coast, West Coast 
locales where most of our customers are based. Population 
centers, partly people that are more health conscious.
    Plus also we feel that the Internet access might be part of 
the reason for it.
    It is a growing business. Along with starting with grass-
fed beef, we added poultry and lamb, pork, all natural 
products. And we have them fabricated, and then put in cold 
storage facilities in Ames, Iowa. And then, people get on the 
Internet and find our company, and then find our products, 
order off the Internet, and then they are shipped directly to 
their door, frozen.
    Internet is an invaluable tool to our company. The service 
we have is very good, but things could always be better. We 
have several You Tube videos that we have with our websites, 
and they are shown along with it.
    It is an Internet-based company that markets 90 percent 
direct to the consumer. It adds value to the rural communities. 
Via the Internet, we buy other producers' products, so it is 
not just our products that are sold; it is other producers' 
products.
    And we applaud you for your diligence on improving Internet 
access to the rural communities because we feel that is where a 
lot of this starts, whether it is food production or families. 
But, all people, in general, have some agriculture tie either 
in their family, a few generations removed. We are trying to 
improve it, and maybe the rural communities will prosper in the 
future.
    Thank you.
    [The prepared statement of Mr. Crum follows:]

  Prepared Statement of Jim Crum, Beef Producer, U.S. Wellness Meats, 
                              Virginia, IL
Date: September 24, 2011

To: Congressman Timothy V. Johnson,
Chairman,
Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
    Agriculture,
House Committee on Agriculture,
Washington, D.C.

From: Jim Crum,
U.S. Wellness Meats.

RE: Testimony on Role of Broadband Access in Rural Economic Development

    Grassland Beef LLC dba U.S. Wellness Meats is honored to 
participate in this crucial discussion on Broadband Access in the rural 
community.
    Grassland Beef was well ahead of the retail Internet curve when we 
opened for business on November 7, 2000. We had the right idea but 
failed to understand the art of building trust and sales with online 
marketing. To say we were pioneers is an understatement. With 
determined persistence we were able to build the business from the 
ground up over time.
    Key points of our journey:

   Forty-five total sales orders in November and December 2000 
        with only two orders from customers we did not know, pointed 
        out the degree of difficulty in being found online and creating 
        trust for actual cash sales.

   In the beginning, we were dealing with dial up Internet that 
        was painfully slow. Ten years later we have access to 3 mbs 
        down and 2 mbs up, which is a significant improvement from dial 
        up, but not where the rural community needs to be. We would 
        prefer to see 10 mbs up and down and can only dream of 25 mbs 
        up and down which is available in some areas of the country.

   Broadband technology is a lifeline for the rural economy. 
        The ability to tap into all fifty states and the international 
        market is the wave of the future for small business like ours. 
        Entrepreneurs will change the business landscape in our 
        lifetime and corporate America will take note as some of the 
        brightest and most ambitious choose to make their own destiny. 
        In a struggling economy with unemployment at record highs, we 
        should be encouraging start-up companies and small business and 
        making Internet access available to them is a very strong step 
        in the right direction. In one sense, the unrest in Northern 
        Africa this past summer is a result of technology not available 
        10 years ago.

   Grassland Beef has enjoyed a growth rate of 30% per year to 
        date from our inception in 2000. This would have been nearly 
        impossible without the unlimited access available online. 
        August of 2011 was a record for revenue when we received 2,837 
        sales orders during that one month.

   Our local Fed Ex sales representative reported in 2009 that 
        half of their volume was edible, which demonstrates how many 
        consumers are now buying food online. Please remember that the 
        rural community is where an abundance of our food is produced.

   Direct to consumer food marketing grew 104.7% between 1997 
        and 2007 while total ag sales only increased 47.6% (source page 
        3 http://www.ams.usda.gov/AMSv1.0/
        getfile?dDocName=STELPRDC5076729) GLB is in a perfect position 
        to capitalize on this direct to consumer link.

   Grassland Beef has over 700 affiliates that use the web to 
        direct clients from their websites to ours. By utilizing online 
        resources such as these, we are able to gain market growth and 
        increased sales.

   In 2006, Grassland Beef utilized a VAPG USDA Rural 
        Development Grant which has been instrumental in our growth to 
        a better business platform and left us with tools we use every 
        day to successfully manage the business.

   In 2009, GLB recognized the marketing power of social media 
        and devoted one employee full time to tap into Facebook, 
        Twitter and blogging. Being able to point traffic to an online 
        website helped push sales further up the marketing ladder of 
        success.

   90% of our business is direct to the consumer via Fed Ex. 
        Most of our competition has chosen to sell direct to 
        distributors and grocery chains. The online technology we 
        employ in order to sell direct to consumer reduces the risk of 
        large client turnover which will occur when you are selling in 
        large volume to any one customer.

   The majority of our online sales are centered around urban 
        areas. There are several factors that lead to this, but one is 
        certainly the fact that decent Internet service is not readily 
        available in the Midwest and other rural areas. This can be 
        seen clearly in the map below:
        
        
        Data compiled March 31, 2011.

   In closing, we have been enjoying high demand and riding a 
        strong wave of Internet success over the last 3 years. We are 
        able to operate a complicated business without debt thanks to 
        being able to open this local region to every county in the 
        USA, as well as some international business, mainly through 
        Internet access.

   We are hopeful that the Subcommittee on Rural Development, 
        Research, Biotechnology, and Foreign Agriculture will see the 
        unlimited potential for putting high speed broadband in the 
        rural community.

   Time is money, and speeding up communications between the 
        producers of smart foods and consumers is a win-win situation 
        for everyone in the chain.

   Finally, there will be new uses for the inherit speed of 
        broadband that no one in this room can envision today but these 
        will certainly amaze all of us within the next 5 years.

    The Chairman. Thank you very much.
    Now, we are at our last witness, Mr. Les Fowler, McDonough 
Telephone Cooperative in Colchester. And I must say, my 
grandparents, until they passed away, lived in Macomb, so I 
spent a good part of childhood, about every week, in Macomb and 
Colchester and the surrounding area. So, I have a special 
relationship with that area.
    Glad to have you here, Mr. Fowler.

         STATEMENT OF LESTER D. FOWLER, LEGISLATIVE AND
             GOVERNMENT AFFAIRS MANAGER, McDONOUGH
 TELEPHONE COOPERATIVE, COLCHESTER, IL; ON BEHALF OF NATIONAL 
                 TELECOMMUNICATIONS COOPERATIVE
                          ASSOCIATION

    Mr. Fowler. Thank you, Mr. Chairman, other Members, for 
this invitation to participate in today's discussion on rural 
broadband access and rural economic development.
    For the past year, I have served as the Legislative and 
Government Affairs Manager on the McDonough Telephone 
Cooperative, which is headquartered in Colchester. Our industry 
is uniquely qualified to participate in today's discussion 
because we are small businesses that lead the way in deploying 
high speed, sustainable broadband in rural America.
    McDonough serves over 3,400 customer lines. Our 1,016 
square mile service area is spread across the western portion 
of Illinois. We employ 48 people who help provide 5 megabyte 
broadband to our entire service area, with plans to deliver 
higher speeds.
    America's 11,000 rural telecom providers serve 
approximately 40 percent of the nation's landmass, yet only 5 
percent of that population. Thanks to rural providers, rural 
Americans enjoy universal voice service, broadband Internet, 
and enhanced emergency preparedness.
    The American economy runs on broadband. As the Federal 
Communications Commission stated earlier this year, broadband 
infrastructure has become crucial to our nation's economic 
development and civic life. Businesses need broadband to start 
and grow. Adults need broadband to find jobs. Children need 
broadband to learn. As important as these benefits are in 
American cities, broadband could even be more important in 
America's more remote small towns, rural, and insular areas, 
and tribal lands.
    Yet as many as 24 million Americans, 1 in 13 of us, live in 
areas where there is no access to any broadband network. 
Broadband's economic benefits are well known. Areas that gained 
broadband from 1999 through 2006 realized a 6.4 percent 
employment growth on average. Polls reveal that 66 percent of 
consumers see the lack of broadband access as a disadvantage to 
identifying job opportunities. Rural providers have made basic 
levels of broadband service available to over 90 percent of the 
rural customers.
    The Universal Service Fund and intercarrier compensation 
are crucial in deploying telecommunications in rural areas. USF 
is a public-private partnership that built quality, affordable 
voice service to nearly every American. The FCC is reforming 
USF and ICC to support broadband service, and may finalize a 
rule as early as October.
    The rural carriers, large price cap carriers, recently 
submitted a consensus framework that represents a landmark 
agreement among parties that are often at odds. Difficult 
compromises were made for the sake of regulatory certainty 
needed to build out to high cost, sparsely populated areas.
    The U.S. Department of Agriculture's Rural Utilities 
Service provides essential financing for broadband for 
broadband deployment in rural areas that must be paid back with 
interest, creating a win-win situation for rural broadband 
consumers and taxpayers.
    Our U.S. lending has become crucial to broadband 
provisioning as private lenders withhold financing due to 
regulatory uncertainty created by USF and ICC reform under way 
at the FCC.
    We sincerely thank the Subcommittee Chairman Johnson for 
leading the House in March of this year to encourage the FCC to 
implement reform carefully and consider the impact on our U.S. 
borrowers' ability to repay loans.
    We gratefully also thank Ranking Member Costa and 
Congressman Schilling for joining. The Subcommittee has had a 
long history of allocating our U.S. telecommunication program 
in a manner best suited to ensure the high cost of sparsely 
populated rural areas receive service.
    For those not familiar with what rural providers and USF 
and RUS can provide, I will provide you an example.
    McDonough Telephone Cooperative completed a network upgrade 
in 2003 that deployed fiber to within 2 miles of our rural 
customers, every one of them. And it was made possible by a $14 
million loan from RUS.
    American needs a strong USF and vibrant RUS.
    The rural industry has been the leader in deploying 
advanced telecommunication services in America's rural areas. 
The rural providers and associations are eager to continue 
working with you to fulfill a national objective of making 
broadband universally available. Thank you.
    [The prepared statement of Mr. Fowler follows:]

   Prepared Statement of Lester D. Fowler, Legislative and Government
 Affairs Manager, McDonough Telephone Cooperative, Colchester, IL; on 
     Behalf of National Telecommunications Cooperative Association

I. Introduction
    Thank you for the invitation to participate in today's discussion 
on the role of broadband access in rural economic development. 
Broadband has quickly become an essential service that plays a key role 
in creating and keeping jobs in rural America.
    For the past year I have served as the Legislative and Government 
Affairs Manager of McDonough Telephone Cooperative, which is 
headquartered in Colchester, IL. Prior to my current position, I served 
as a data processing commercial office supervisor for 29 years. I 
regularly work with the National Telecommunications Cooperative 
Association (NTCA), which represents small, community-based 
telecommunications cooperatives and other small telecom providers in 
Washington, D.C. My remarks today are on behalf of McDonough, as well 
as NTCA and its more than 570 small community-based members that 
provide a variety of communications services throughout the rural far 
reaches of the nation.
    We believe our industry is uniquely qualified to participate in 
today's discussion because we are consumer-centric small businesses 
that are leading the way in deploying high-speed, sustainable broadband 
to rural America. McDonough, similar to nearly half of NTCA's other 
members, operates and functions as a cooperative. In a cooperative 
structure, the consumers are also the owners, so every idea and every 
action is made from both an owner and a consumer perspective--the two 
are truly one and the same. Likewise, with regard to the other half of 
NTCA's members, those that are family or commercially owned and 
operated, again their focus is consumer-centric because they are 
locally owned and operated. And, very importantly, in both cases these 
companies exist to provide service rather than to generate owner value.
    McDonough's top priority has always been to provide every one of 
our consumers, who are also our owners, with the very best 
communications and customer service possible. McDonough has several 
lines of business, including ILEC, CLEC and ISP. Make no mistake--while 
our headquarters are in Colchester, we in fact serve over 3,400 
customer lines across our 1,016 square mile rural service area that is 
spread across the western portion of the State of Illinois. This 
constitutes about 3.4 customers per square mile. We employ a total of 
48 people and in 2010 our annual operating revenue was about $6.5 
million. Our service area is rural and sparsely populated, requiring 
great effort to get advanced services to our customers. In our 
industry's parlance, as a small rural provider of this size, McDonough 
is a Tier 3 carrier.
    Let me give you a quick snapshot of how McDonough compares with 
several other industry entities. Verizon, AT&T, and CenturyLink are 
classified as large, or Tier 1 carriers, and also operate in multiple 
states. Verizon has a workforce of nearly 194,000 and annual revenues 
of $106.6 billion. AT&T has a workforce of 266,590 and annual revenues 
of more than $123 billion. CenturyLink has a workforce of 45,000 and 
operates in 37 states. Clearly with operations of this size, the 
priorities, objectives, and sources of capital are generally far 
different from McDonough's community-based limited-scale approach to 
doing business.
    The entrepreneurial spirit of McDonough is representative of our 
approximately 1,100 small rural counterparts in the industry, who 
together serve approximately 40% of the nation's land mass, yet about 
5% percent of the population. Like the vast majority of our rural 
colleagues, McDonough has always been an early adopter of new 
technologies and services. McDonough currently has 5 Megabit broadband 
service available to 100% of our service area and we are currently 
working on a strategic network plan to deliver even higher speed 
services that our members are demanding. Rural Americans throughout 
McDonough's service area, and indeed throughout the markets of NTCA 
members, are enjoying universal voice service, access to broadband 
Internet services, and enhanced emergency preparedness.

II. Broadband Drives Economic Development
    The American Economy runs on broadband. As the FCC stated in its 
February Notice of Proposed Rulemaking for Universal Service Fund and 
intercarrier compensation reform:

        Ubiquitous broadband infrastructure has become crucial to our 
        nation's economic development and civic life. Businesses need 
        broadband to start and grow; adults need broadband to find 
        jobs; children need broadband to learn. Broadband enables 
        people with disabilities to participate more fully in society 
        and provides opportunity to Americans of all income levels. 
        Broadband also helps lower the costs and improve the quality of 
        health care. As important as these benefits are in America's 
        cities--where more than \2/3\ of residents have come to rely on 
        broadband--the distance-conquering benefits of broadband can be 
        even more important in America's more remote small towns, rural 
        and insular areas, and Tribal lands. Furthermore, the benefits 
        of broadband grow when all areas of the country are connected. 
        More users online means more information flowing, larger 
        markets for goods and services, and more rapid innovation.\1\
---------------------------------------------------------------------------
    \1\ Connect America Fund, A National Broadband Plan for Our Future, 
Establishing Just and Reasonable Rates for Local Exchange Carriers, 
High-Cost Universal Service Support, Developing a Unified Intercarrier 
Compensation Regime, Federal-State Joint Board on Universal Service, 
Lifeline and Link-Up: Notice of Proposed Rulemaking and Further Notice 
of Proposed Rulemaking, WC Docket No. 10-90, GN Docket No. 09-51, WC 
Docket No. 07-135, WC Docket No. 05-337, CC Docket No. 01-92, CC Docket 
No. 96-45, WC Docket No. 03-109, FCC 11-13, at para. 3 (2011) (NPRM).

    To not have access to high speed Internet in this day and age is 
unimaginable to most people, but as many as 24 million Americans--one 
in thirteen of us--live in areas where there is no access to any 
broadband network. According to the FCC's National Broadband Plan, 14 
million people do not have access to terrestrial broadband capable of 
download speeds that ``can support today's and tomorrow's 
applications,'' and such housing units are more common in rural areas.
    The National Telecommunications and Information Administration's 
November 2010 report titled ``Exploring the Digital Nation: Home 
Broadband Adoption in the United States'' stated that home broadband 
usage went from 51% in 2007 to 64% in 2009.\2\ Since 2001, household 
broadband Internet use has grown from 9% to 64%, an increase of more 
than 600%. Sixty-six percent of urban (metropolitan) Americans 
subscribe to broadband at home, as compared with 51% of rural 
(nonmetropolitan) Americans. If rural America is going to keep pace 
with urban America, then rural Americans need to understand the 
benefits of broadband and have affordable access to it.
---------------------------------------------------------------------------
    \2\ http://www.esa.doc.gov/sites/default/files/reports/documents/
report.pdf.
---------------------------------------------------------------------------
    The economic benefits of broadband have been reported far and wide. 
Recent studies conclude that every one percentage point increase in 
broadband penetration in a state increases overall employment by 0.2% 
to 0.3% a year.\3\ Further, an area moving from no broadband providers 
to one to three providers during the years 1999 through 2006 realized 
6.4% employment growth on average.\4\
---------------------------------------------------------------------------
    \3\ http://www.brookings.edu//media/Files/rc/papers/2007/
06labor_crandall/06labor_crandall.pdf.
    \4\ http://www.ppic.org/content/pubs/report/R_110JKR.pdf.
---------------------------------------------------------------------------
    Consumers view broadband as an advantage: 66% of consumers see the 
lack of broadband access as a disadvantage in identifying job 
opportunities and gaining job skills, 62% see the lack of broadband 
access to be a disadvantage in obtaining health information, and 56% 
see lack of broadband as a disadvantage in using government 
services.\5\
---------------------------------------------------------------------------
    \5\ http://pewinternet.org/Reports/2010/Home-Broadband-2010.aspx.
---------------------------------------------------------------------------
    The numbers demonstrate that broadband is being deployed to rural 
America. USDA's National Agricultural Statistics Service's August 2011 
report on Farm Computer Usage and Ownership revealed that 62 percent of 
U.S. farms now have Internet access, compared with 59 percent in 2009. 
Broadband DSL is now utilized on 38% of U.S. farms. Dialup access on 
farms went from 23 percent in 2009 to 12 percent in 2011. Rural 
providers have made basic levels of broadband service available to over 
90 percent of rural consumers in sparsely populated areas.
    At the same time, USDA's Economic Research Service reports that 
over the course of the past decade the rural population has grown at 
less than half the rate of the metropolitan population. And as Chairman 
Johnson stated when he announced this hearing, many rural communities 
are experiencing ``more deaths than births.'' Broadband deployment and 
adoption in rural America must increase at a faster rate in order to 
reverse the trend of rural flight. As more and more commerce, 
government services, and education moves over broadband, it will only 
become more important to provide this service to rural areas to bolster 
economic activity that will be necessary to attract and retain more 
Americans.

III. Universal Service/Intercarrier Compensation Reform
    The Universal Service Fund (USF) and intercarrier compensation 
(ICC) have long played a role in supporting telecommunication services 
in rural areas. These programs enable a public-private partnership and 
have ensured that Americans living in rural areas of the country 
receive voice service comparable in performance and price to those 
living in more urban areas. However, the time has come to update these 
important network support mechanisms to ensure that all Americans have 
the opportunity to experience the benefits offered by a nationwide 
integrated advanced communications network.
    Today, telecom providers and policy makers alike are shifting their 
focus from voice services to broadband, which offers the promise of 
being the great equalizer between rural and non-rural areas of our 
nation. Rural communications service providers are working to replicate 
the success of their telephone service build-out by steadily deploying 
broadband infrastructure and related services to an increasing 
percentage of their subscribers.
    But this task is not easy, and more remains to be done. A typical 
self-sustaining business plan in an urban area is much more difficult 
to implement in rural markets. It is in these high-cost areas that 
universal service remains critical to overcome the economic challenges 
of deploying communications networks.
    The Federal Communications Commission (FCC) is currently undergoing 
a proceeding to reform USF and ICC and may act as early as October on a 
final ruling. As part of this effort, the rural local exchange carriers 
submitted a reform proposal in April 2011, and later modified it to 
reach a Consensus Framework agreement with larger providers. This 
agreement advances the Commission's objectives for reform while 
targeting the current budget as a goal and adhering to the principles 
for universal service mandated by the Telecommunications Act of 1996.
    The Consensus Framework reflects extensive discussions and 
development efforts among representatives of the nation's largest and 
smallest telecommunications service providers. It represents a landmark 
agreement among parties whose individual views of USF and ICC reform 
diverge greatly. Difficult and meaningful compromises were made in the 
negotiating process, as parties sought to promote broadband deployment 
and support network maintenance in a way that would meet Commission 
goals and restore regulatory certainty. Adopting the Consensus 
Framework will restore investor confidence in the telecommunications 
industry and better enable carriers to deploy broadband in rural areas.
    If implemented as proposed, consumers and businesses in the rural 
areas served by rural rate-of-return carriers will see continued access 
to high-quality, affordable broadband services, without loss of access 
to quality voice services or unreasonable increases in rates. In 
addition, the plan will lead to increased broadband build-out to areas 
currently unserved.
    While technological advances may help to reduce some costs 
associated with broadband deployment, it is still always going to be 
more expensive to serve rural America due to low population density, 
expansive distances, and often-rugged terrain. Without Federal policies 
such as universal service to ensure adequate and predictable cost 
recovery mechanisms for broadband, our national goal of universal 
broadband access may never be realized.

IV. Rural Utilities Service
    Another important tool that has helped achieve broadband deployment 
in rural areas is access to financing from the Department of 
Agriculture's Rural Utilities Service (RUS). Many rural communication 
providers were at one time RUS borrowers and many continue to borrow 
from RUS today. There can be no question regarding the ongoing 
essential nature of RUS's telecommunication programs.Broadband is 
critical to providing access to economic growth, job creation, distance 
learning, health care, and national security in rural America. As noted 
above, millions of Americans still lack access to effective broadband. 
Therefore, the job is not done.
    As Congress continues to grapple with deficit reduction efforts, 
it's important to note that RUS Broadband Loan Program and the 
traditional Telecommunication Infrastructure Loan programs are funded 
with loans that must be paid back with interest--creating a win/win 
situation for rural broadband consumers and taxpayers. To address other 
concerns with the program, including findings that some loans had been 
approved for areas that were not truly rural or unserved, Congress 
reformed the RUS Broadband Loan Program as part of the 2008 Farm Bill 
(new loans were not approved until these reforms were finally 
implemented in March 2011).
    In addition, as a result of the regulatory uncertainty created by 
ongoing cost recovery reform proposals at the FCC, private lenders have 
become less willing to provide financing for rural broadband projects, 
which has further slowed broadband penetration in high-cost areas. 
Therefore, the RUS Broadband Loan Program and other RUS communications 
programs have become more vital than ever before.
    We also would like to take this opportunity to thank Subcommittee 
Chairman Johnson for leading a letter in March of this year that 
encouraged the FCC to implement USF/ICC reforms in a manner that 
manages a provider's transition. In addition, the letter asked the FCC 
several important questions regarding the impact of such reforms on RUS 
borrowers' ability to repay loans. We appreciate your leadership on 
these important matters.
    Rural providers have a history of working with RUS to provide 
modern communications infrastructure to rural America, and we look 
forward to continuing that partnership.

V. Government Role in Broadband Deployment
    In my testimony thus far, I have outlined the status of broadband 
deployment in America today, and particularly how critical such 
deployment is to economic and community development. Additionally I 
have reviewed the commitment of rural providers to consumers throughout 
their markets and how essential the cost recovery mechanisms and 
structure they rely upon have been, and will be, to meeting their 
consumers' needs. And, finally, I have detailed the crucial reasons why 
reforms to the communications industry's cost recovery structure must 
closely adhere to the carefully crafted parameters of the industry's 
Consensus Framework.
    Truly, we can all be proud regarding just how far our nation has 
come over the course of the past decade regarding the evolution of 
broadband and the resulting penetration and adoption of this technology 
and its related services. I cannot state emphatically enough that this 
success has only been possible due to the unique cooperation that has 
existed between the industry, the American people, and policymakers to 
make this a reality. Together, through a spirit of entrepreneurship, a 
can-do attitude, and a deep national confidence, the appropriate mix of 
programs and policies have been cultivated and maintained that ensure 
widespread broadband deployment and adoption.
    This commitment and partnership will be essential to America's 
quest to secure and maintain a level of global broadband preeminence. 
To underscore this assessment I draw the Committee's attention to a May 
2009 U.S. Government Accountability Office report (GAO-09-494) that, 
among other things, considers the Federal Government's approach to 
broadband deployment. In the study's opening remarks it notes that 
according to government officials, ``the Federal approach to broadband 
deployment is focused on advancing universal access.''
    The GAO report goes on to state that historically the role of the 
government in carrying out a market-driven policy has been to create 
market incentives and remove barriers to competition, while the role of 
the private sector has been to fund broadband deployment. It continues 
that under this policy, broadband infrastructure has been deployed 
extensively yet, doing so in rural areas is more difficult and in some 
instances gaps remain, primarily due to the limited profit potential 
associated with such initiatives. The Rural Utilities Service (RUS) 
Telecommunications Program and the high cost element of the Universal 
Service Fund (USF) exist to help fund advanced telecommunications 
infrastructure deployment. Industry stakeholders credit such programs 
with helping to increase broadband deployment--especially in rural 
areas--and that to achieve universal access, support of this nature 
will be essential in the future.
    Despite the long history of success associated with these programs, 
a small but vocal minority of voices exists that refuse to accept this 
reality. Throughout this debate over the government's role in broadband 
deployment, the rural sector of the industry has routinely been 
directed to ``think outside the box'' in a search for more economical 
solutions to communications infrastructure deployment. If I do nothing 
else here today, it is my overarching desire to ensure that everyone 
participating and listening to this discussion ultimately leaves with 
the recognition and understanding that rural carriers always have and 
always will ``think outside the box.'' Truly, they have no other 
choice.
    What segment of the industry was the first to have completely 
converted to digital switched systems? What segment of the industry was 
a pioneer in providing wireless options to their hardest to reach 
customers? From what segment of the industry did the first company to 
deploy an all-fiber system come? What segment of the industry was the 
first to offer distance learning and tele-health applications? What 
segment of the industry was an early leader in providing cable-based 
video, then satellite video, and now IP video to their markets? What 
segment of the industry quickly moved into Internet Service Provision 
in the early stages of the Internet's public evolution? And what 
segment of the industry continues to lead in the deployment of high 
speed broadband capable infrastructure?
    In every instance the answer to those questions is--the small rural 
segment of the communications industry. Many might be asking why these 
carriers care or have this unique perspective and approach to their 
mission. The answer to that question is relatively simple, because in 
the case of cooperative and commercially structured systems alike, the 
businesses are owned and operated by members of the local community. 
Clearly, these are entrepreneurs who care about their communities and 
their nation and obviously these are individuals who are continually 
``thinking outside the box.''
    It is obvious to the rural sector of the communications industry 
that the Rural Development Subcommittee has an appropriate perspective 
on such matters. As the panel with oversight responsibilities over the 
RUS, this Subcommittee has a long history of allocating the RUS 
Telecommunications Program in the manner best suited to ensuring rural 
needs are met. But there may be others with us here today that are not 
as familiar with this program and what it, the USF, and the rural 
sector of the industry have accomplished. I invite them to take a 
closer look at what is happening in my company's service area as well 
as throughout out state. McDonough Telephone Cooperative completed a 
network upgrade in 2003. This upgrade deployed fiber to within 2 miles 
of our rural customers. This upgrade was made possible by a $14 million 
loan from RUS. We are currently in the application process for a $15 
million loan to take fiber to the home to our rural/rural customers. We 
began this process in May of 2009 and the engineering portion of the 
application has just been approved. Perhaps best of all, the Federal 
programs that have helped make this a reality have simultaneously 
helped ensure that all Americans can uniformly enjoy advanced 
communications connectivity that is comparable in price and scope.
    There can be no doubt regarding the grave nature of the debt crisis 
confronting our nation, the interest of the public in appropriately 
responding to it, and the absolute necessity of doing so in a manner 
that is consistent with legal precedents and mandates. Yet the Federal 
response to this calamity has at times given cause for concern that 
solutions under consideration could harm rural America and hurt 
taxpayers when the full effect of cuts is accounted for.
    Our concern first materialized upon reviewing the dangerous and 
defective recommendation in the December 2010 report of the National 
Commission on Fiscal Responsibility and Reform that identified the 
private USF and the venerable RUS as a source of public debt reduction. 
Some months later we were further troubled to learn that Congressional 
debt negotiators were giving serious consideration to raiding the USF 
program. And in recent days our alarm has grown as we have learned that 
the Joint Select Committee on Deficit Reduction may also consider 
raiding USF as well as cutting the RUS program which Congressional 
appropriators in both the House and Senate just agreed to maintain.
    With regard to the USF it is particularly imperative that 
policymakers and the public alike understand the unique nature of the 
federally mandated, yet privately funded and managed, USF. The USF has 
a long history and since its inception, has been maintained outside the 
U.S. Treasury and managed by a non-governmental entity. Were this 
private fund to be raided in the name of Federal debt reduction, it 
would amount to little more than a governmental taking and would 
qualify as a stealth tax on an unwitting public. Surely this is not the 
sort of deception the America people want or deserve.
    Today we are on the cusp of fully moving into a world where data, 
video, and mobility are the primary objectives of consumers and voice 
will be secondary, or even an afterthought. Yet, regardless of whether 
consumers are focused on voice or some other form of communication, 
they will still require the underlying infrastructure to ensure their 
communication gets to its destination. The only difference is that with 
regard to broadband and advanced-services-capable infrastructure, the 
costs and subsequent need for support are even greater than they are 
for voice-only infrastructure. Thus, again I underscore the ongoing 
need for a strong USF and a vibrant RUS.

VI. Conclusion
    America stands at a crossroads between a narrowband and broadband 
world. The choice is clear. The rural industry has long been the leader 
in deploying advanced telecommunications services to America's rural 
areas. The rural providers and associations are eager to continue 
working with you to move forward aggressively to fulfill the national 
objective of making broadband universally available as is envisioned by 
so many and indeed mandated by statute. Thank you.

    The Chairman. I appreciate that. I am going to forego my 
questions and call on the Ranking Member to begin with.
    I might point out that Mr. Schroeder, Terry McClennan in 
the audience, Joan Dyskter, district director, myself, as well 
as our staff are not only privileged to be here, we are making 
a major sacrifice by not being at the University of Illinois-
Urbana Champaign watching the Fighting Illini demolish Western 
Michigan, and increase its 24th ranking in the country.
    [Laughter.]
    The Chairman. So, we are putting in extra miles here.
    With that, let me introduce for questions, Mr. Jim Costa.
    I will also say one of the beauties about colleagues from 
North Carolina, California, obviously Illinois and 
Pennsylvania, we actually have a Member from Alabama, Georgia, 
is just the opportunity to understand about these states, and 
agriculture specifically. And one of the things Mr. Costa has 
pointed out to me, and I am going to visit his district at some 
point, is what stone fruit is and how that is a component, and 
it is obviously a critical component of our agricultural 
sector. And so, that is the beauty of it.
    Let me also point out before I recognize all my colleagues, 
and I am going to let them do the questioning. I point out this 
to the media. You know, my colleagues ask me sometimes, or my 
constituents ask me sometimes why do you all not get along? Why 
do you not stop the bickering? And I point out to them this. It 
is not news when people get along with each other. The news, 
the 24/7 cycle is when people conduct themselves in a street 
fight, a food fight, with each other. And to actually have this 
opportunity, and this is not just for show, this is for real. 
And to have these colleagues here with me, I just want to 
emphasize that there are people in Congress who do get along 
with each other, who try to work together for common solutions.
    And with that introduction and with my appreciation for his 
being here with us today, my distinguished co-Chairman and 
Ranking Member of the Committee, Mr. Costa of California, for 
questions of the panel?
    Mr. Costa. Thank you very much, Mr. Chairman. I could not 
agree with you more in terms of our working relationship. And 
maybe again we still hold ourselves up as an example on the 
right to legislate and do oversight. The oversight that we are 
doing is important, and I empathize with you are there in 
spirit with the Fighting Illini. I am tonight wanting to be 
with my Fresno State Bulldogs. They are in Idaho tonight. So, I 
will be flying somewhere over the country as they are playing 
the game.
    I want to, Mr. Schroeder, focus and with other witnesses on 
the issue of where we are and how we expand our efforts on 
broadband, and the challenges we face, and what exists within 
the loan program, or the guarantee, or the grants with regards 
to both the USDA and other efforts and funds.
    I was interested in your online program. You said you are 
in 12 countries. How do folks find out about Illinois, and how 
do you finance that?
    Mr. Schroder. Excellent question. The adage in our field is 
that one finds online students online, and the converse is 
true; they find the University of Illinois online. So, if you 
type the words ``online learning'' into Google, even in 
Washington, D.C. where I was earlier this week, UIS will appear 
on the top four or five listings regarding online learning.
    Mr. Costa. The various courses you offer.
    Mr. Schroeder. And then, of course----
    Mr. Costa. How much does that cost?
    Mr. Schroeder. We use e-tuition, so the tuition online is 
very close to that which is required in state.
    Mr. Costa. How does the university finance it?
    Mr. Schroeder. And each of the online programs is self-
sustaining. That was a stipulation back when we began, yes.
    Mr. Costa. So, if I am one of those foreign students, I pay 
for it at a different rate than if you are a----
    Mr. Schroeder. No, you pay the same rate, whether you are 
in North Carolina, California, or Illinois.
    Mr. Costa. What are the technological challenges that you 
face in expansion?
    Mr. Schroeder. The challenges for us are not in the 
delivery; it is, rather, in the students. And I will note that, 
of course, the largest number of our students are in Illinois. 
The second largest number are in California. And those 
students----
    Mr. Costa. Good.
    Mr. Schroeder.--we have a relationship with the----
    Mr. Costa. How can we provide better opportunities for you 
to expand your services?
    Mr. Schroeder. It really is to provide access in rural 
communities so that students or prospective students there can 
sign up for our programs. If they do not have broadband, it 
will not work. You cannot do it with dial up.
    Mr. Costa. I have more questions. I will submit them later.
    Mr. Bartlett, I loved your comment about we feed much of 
the world because we do. and something that regardless of what 
part of rural America you come from, it is part of our 
tremendous contribution.
    You talked about wireless versus fiber optics, and not 
being one and the same, in the broad geographical area that you 
tried to provide access. How did you finance it?
    Mr. Bartlett. Well, our build out will be a finance 
completely privately as it goes right now. Now, what I said is 
we are working toward a consortium, so what our job is, one of 
the members of our consortium will be Mr. Fowler's company. He 
will be using USDA funds, funds that PPI utilizes, generally 
come from our cooperative banks, private sources.
    Mr. Costa. And you talked about leverage in your statement. 
You leverage the USDA funds with private sector funding?
    Mr. Bartlett. Well, what we are trying to do is leverage 
our members' rates that they pay to us to make sure that each 
one of their dollars goes toward more than one thing. It goes 
toward improving the environment, the smart grid. It goes to 
helping us control the electric system and helping people like 
Mr. Fowler and small telecom companies provide much higher 
bandwidth and broadband services.
    Mr. Costa. This goes for all of the witnesses as I quickly 
go through because my time is running out. Suggest to us ideas 
on how we can improve the RUS rural loan program and the 
guarantee program within broadband, as well----
    Mr. Bartlett. Very quickly how I would recommend right away 
is that we streamline it and that we get more local control of 
the program. Right now it is managed----
    Mr. Costa. You mentioned that in your statement. What do 
you mean by more local control?
    Mr. Bartlett. More local control in that these are very 
difficult businesses or communities sometimes to do business 
because they are small. And the local knowledge of where build 
out is needed and where it is not is so hard to obtain in 
Washington compared to in the counties in which these things 
are carried out. I think a closer participation with the State 
Director and the local USDA offices, and local cooperatives is 
key.
    Mr. Costa. You work pretty closely with your State 
Director?
    Mr. Bartlett. Yes, we do. We have an excellent 
relationship.
    Mr. Costa. Ms. Campbell, you talked about going from 5 megs 
to 10 megs and all the expansion of providing better health 
care for your----
    Ms. Campbell. Yes.
    Mr. Costa.--communities. How are you going to finance that?
    Ms. Campbell. It is going to be privately. We have 
partnered with our local communications provider. They have 
been willing to work with us financially, but it is private 
funds that will pay for that.
    Mr. Costa. And does that include your comments about the 
electronic medical records efforts? And what is your timeline 
to make that transition?
    Ms. Campbell. We hope to reach meaningful use by June of 
2012. Right now, it is all private funding that has been 
invested to upgrade that technology. And then, we will apply 
for the RF funds by reimbursement.
    Mr. Costa. All right, Mr. Chairman, my time has expired. I 
have some additional questions, I appreciate the wonderful 
testimony that has been provided today and all your good 
efforts to make this a very substantive hearing.
    The Chairman. Thank you, Mr. Costa.
    And with that, I would call on the gentleman from 
Pennsylvania who has an update on the football scores.
    Mr. Thompson. I do.
    [Laughter.]
    The Chairman. Mr. Glenn Thompson.
    Mr. Thompson. Thank you, Chairman. Well, in the spirit of 
brotherhood and with good folks from Illinois who are playing, 
was it Western Michigan, Penn State is up 24 to 0 over Eastern 
Michigan.
    [Laughter.]
    Mr. Thompson. So, we have both sides covered.
    I want to, Ms. Campbell, come back to, first of all, 
congratulations on what you have done using telecommunications 
for access to health care. It is an important issue for me. I 
actually have introduced, passed out of the House the 
Servicemember Telemedicine and E-Health Portability Act, which 
frankly is a piece of legislation I wrote with folks at the 
Pentagon after--we have a son and daughter-in-law in the 3rd 
Infantry Division. When I looked at the alarming rates of 
suicides----
    Ms. Campbell. Yes.
    Mr. Thompson.--among our active duty servicemembers, those 
veterans, Guard, reservists, and it just relies on broadband 
access out to rural America.
    And so, a couple of questions real quick. One is kind of an 
observation. We talked about the electronic medical records and 
meaningful use. You referenced that. And I know the answer to 
this, but I want you to say, what are the consequences to our 
hospital if you are not in compliance with the meaningful use 
requirement put forth under the Health Care Act.
    Ms. Campbell. The consequences are that our reimbursement 
for Medicare begins declining, and it goes in increments, but 
eventually you would not reimbursed by Medicare at all. 
Medicare is at our hospital probably 75 percent of our volume.
    Mr. Thompson. Yes, which is paying 80 cents to 90 cents for 
every dollar of costs that you have.
    Ms. Campbell. That is correct.
    Mr. Thompson. At this point.
    Ms. Campbell. At this point, this is correct.
    Mr. Thompson. So it is incredibly important obviously----
    Ms. Campbell. It is.
    Mr. Thompson.--this access to broadband. I actually was a 
manager in one of the first critical access hospitals, and you 
talk about the importance of access to high quality health care 
services. You know, with the reimbursement rates, which are--
well, we just said what they were. They do not meet costs. 
Smaller economies of scale.
    Ms. Campbell. Correct.
    Mr. Thompson. You are limited by definition to the number 
of beds that you may have in terms of Census----
    Ms. Campbell. And the length of time they can stay, yes.
    Mr. Thompson. And the tremendous government mandates that 
you have to respond to. How does broadband access help deal 
with those issues, the fund balance in the end?
    Ms. Campbell. First of all, access to high quality 
specialty care is excellent. We do not have the opportunity to 
have cardiologists, neurologists, orthopedics in our campus 
every week, so this access through broadband has been 
tremendous.
    It also, though, helps contain some costs because we are 
able to access offsite providers that provide direction to our 
physicians, to our medical staff. Our physicians have also been 
able to participate in grand rounds, get additional education 
that has been very, very helpful. We have been able to provide 
also continuing education to our nurses and our staff where we 
do not have to send them offsite. And it has all been 
accomplished through broadband.
    Mr. Thompson. Less down time, that is great.
    Ms. Campbell. Exactly.
    Mr. Thompson. Congratulations.
    Mr. Crum, one of the problems we face in this country of 
the citizens and certainly Members of Congress, we are too many 
generations removed from the farm. We do not understand where 
our food comes from, although there does seem to be a movement 
towards what I call farms to the family dining table where 
people want to have confidence in their food.
    Using the direct marketing that you do with your beef, is 
that something that you are able to provide for public 
confidence when people reach out using that direct marketing, 
this is where your food is coming from, it is safe, it is high 
quality?
    Mr. Crum. Yes. The Internet has helped with that. We have a 
weekly newsletter. We communicate with our customers. We have 
You Tube videos, Twitter, Facebook, everything in the paper 
that I did not read is presented there.
    But that one-to-one connection, having an 800 number and 
calling up at all hours of the day or not, having access to the 
owners is a very important tool because it puts confidence in 
the product.
    Mr. Thompson. Thank you. Mr. Schroeder, I know we talked 
about earlier, I have a son and a daughter-in-law in the United 
States Army. They are doing their education online, and they 
are doing it no matter where they are in the world. It is 
pretty impressive.
    Your testimony mentions the affordability of broadband 
access as a barrier to online learning. I am on the Education 
Workforce Committee as well, and so I was interested to see 
what your knowledge is. Are some of the tools required 
currently for online learning--eligible educational expenses 
for financial aid, computer connection fees, other expenses?
    Mr. Schroeder. They are, yes. Right, yes. Those that are 
required for the courses, so if a course requires or a program 
requires the computer, then it is financial aid eligible.
    Mr. Thompson. All right. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. I might point out that our spirit of 
cooperation between Penn State and Illinois and all the 
civility is going to come to a quick end when they play----
    Mr. Thompson. They play in a couple of weeks.
    [Laughter.]
    The Chairman. In a couple of weeks, we are playing each 
other, and then you are going to see a food fight.
    Mr. Thompson. Want to guess which side I am on?
    [Laughter.]
    The Chairman. I recognize the gentleman from North 
Carolina, my good friend, Mr. Larry Kissell.
    Mr. Kissell. Thank you, Mr. Chairman. And to all the folks 
who made this possible, staff, people at the university, our 
witnesses, my colleagues, thank you for this because it is very 
important. And I know there is a risk of overdoing the fact 
that this Committee does get along, but it is very important 
for folks to hear that when you do get along, you get things 
accomplished. And with our Chairman and our co-Chairman and 
colleagues, our concern, our love is rural America, and that is 
what unites us, whether it is the different parts of rural 
America that we see, that common element of rural America is so 
important to all of us.
    Several important questions--Mr. Chairman, did I hear 
something about a Route 66?
    [Laughter.]
    Mr. Kissell. I have a Route 66 sign in my house. I grew up 
with that love with the mythology of Route 66, and I could not 
help but notice coming in, flying in today the beautiful 
farmlands. And it reminded me of a trip that I took with my 
daughters in the Dakotas and Iowa and Nebraska. And my 
daughters would get so excited when they would see trees 
because they knew if there were trees, there were going to be 
houses in a town. And there is something beautiful about this 
land which I appreciate tremendously. And some of the names of 
the communities. I could regale you with terms of North 
Carolina from Abner to Uwharrie, but I will not do that today.
    [Laughter.]
    Mr. Kissell. I have several questions. And, Mr. Bartlett 
and Mr. Fowler, we recently had the groundbreaking in North 
Carolina of around 1,200 miles, literally a highway of fiber 
optics that will encircle the state. And unfortunately there 
are still many counties that will not be there. Are you 
concerned about our ability, and Mr. Costa talked about the 
transcontinental highway. We know that the population went with 
where the railroad was. Are you concerned at all about creating 
a subdivision of have nots within our rural areas because they 
do not have access to broadband, especially to fiber optics in 
all of the hospitals, schools, universities, and things that 
will be associated with that? Are we creating a separate level 
of have nots?
    And how do you feel about our ability to reach those areas? 
Either one?
    Mr. Bartlett. I would be happy to start real quickly 
because the story maybe moves from me to him.
    There are communities of have notes, and Prairie Power 
being a long distance transmission provider, that is our role. 
We are moving in to take businesses like Mr. Fowler's and small 
communications companies from one market to the next that they 
cannot currently reach. That was the point of our consortium.
    Mr. Fowler. I believe he has basically answered the 
question, but we have seen some needs in some neighboring 
communities that we do not serve. And we have been able to use 
some local money to provide services, well, to Western Illinois 
University and Macomb. We have a 200 meg pipe into them.
    We have connected all the schools in Macomb with fiber 
optics. These were needs that people needed that they required. 
They came to us and we saw an opportunity to provide the 
service.
    In one of our latest ventures is we have taken fiber optics 
to two of the very large apartment complexes that service 
Western Illinois University. I believe it is 350 housing units 
that right now they are taking 60 meg and anticipate going up 
to 200 meg.
    Mr. Kissell. Well, I would ask everyone here, but obviously 
on our panel, to continue to feed ideas about how we can not 
have this subsection of have nots, because you talked about, 
Mr. Bartlett, just the vast geography of what you cover. We 
just got to watch that.
    And, Ms. Campbell, are you concerned with--you talked about 
you all went to--and I am computer illiterate, but you went to 
one level of service and you had to have another, went to 
another level, now you have to have another. Are you concerned 
that we are going to be perpetually in a we cannot get enough, 
and there is always going to be something else we need, and we 
just will not be able to--even with the haves to be able to 
have enough service. Are you concerned at all about that?
    Ms. Campbell. I am to a certain extent. I think once I 
reach a certain level as our particular hospital, I probably 
will have adequate Internet service. I am small. But the larger 
metropolitan areas that continue to grow, grow, grow, their 
needs may continue to do that.
    I do believe I will reach a level that I will be saturated 
and I will be fine. But it is just going to continue to grow 
and grow and grow.
    Mr. Kissell. So, that is going to be an ongoing challenge.
    Ms. Campbell. It is.
    Mr. Kissell. And, Mr. Schroeder, in my previous life before 
Congress, I worked 27 years in textiles, and the red light is 
flashing, so I will make this quick. I literally quit my old 
job on a Monday and started teaching high school on a Tuesday. 
They gave me a book and a key and said, good luck.
    I took two online classes as a preparation for getting my 
teaching certificate. Neither one involved visuals or audio. 
The online classes, how can you tell me that the education for 
online class--not seeing a professor, not seeing other 
students--can be measured in quality and be as good as 
something that is more traditional?
    Mr. Schroeder. We regularly run studies comparing the same 
faculty members teaching the same course on campus and online. 
And in fact, in many cases, we got superior outcomes online. 
Though mediating variables can be that the online students are 
a bit older, so a 35 year old may perform better than an 18 
year old. But in any event, with current technology, our 
emphasis is on interaction, engagement. They see the faculty 
member, many times have wide interaction in many of the online 
classes.
    Mr. Kissell. And just really quickly, it hasn't stopped 
yet. It is just flashing. Are most of your online courses that 
do involve a video back and forth between the students and the 
teacher?
    Mr. Schroeder. All of them involve exchanges. I have not 
yet taught a class with fewer than 2,500 exchanges with 25 
students in the class.
    Mr. Kissell. Okay. Thank you, sir.
    Thank you, Mr. Chairman.
    The Chairman. I now recognize my colleague and actually a 
former Member of the Illinois General Assembly, Mr. Randy 
Hultgren?
    Mr. Hultgren. Thank you, Chairman. Thank you for hosting 
this. And I want to thank the University of Illinois-
Springfield for hosting this. It is just a wonderful facility, 
a wonderful place. And I really appreciate you doing this. This 
is a very, very important discussion that really is the start 
of a discussion that we need to continue. So, thank you so 
much.
    I want to address my first question, Mr. Fowler, if I could 
to you. I think you had mentioned in your written testimony 
talking about the 24 million Americans who have no access to 
any broadband network. I wonder if you could expand on this a 
little bit and how wireless or satellite coverage plays a role. 
And from your perspective, what speed really is at least a 
minimally accepted speed for people to be able to survive and 
do business and be engaged in education?
    Mr. Fowler. I do not think there is any doubt that we need 
to concentrate on areas where people do not have any service 
today.
    I believe that there is a complement between wireless and 
wireline and fiber and satellite. There are different 
tendencies to each one of those technologies. Satellite still 
has a latency problem, which I do not know if that is ever 
going to be cured. But there probably needs to be a stronger 
consideration for those areas that do not have any service.
    From the rural standpoint, that is kind of where the USF 
and ICC has been helping address those problems or taking care 
of those problems for quite some time.
    Mr. Hultgren. Kind of getting into that next step of what 
really does start it? Is it private investment that really gets 
this going with assistance of public investment? Does it really 
have to be the public sector, do you think, or through 
governments, or some of these agencies, and some of the grants 
that are out there? Is that what is really going to start us to 
the next level? From your perspective, what is the key to get 
the funding that will take us to address this glaring problem 
with 24 million people without adequate access to broadband?
    Mr. Fowler. Well, unfortunately there is not a good 
business model for a lot of these areas. And getting private 
funding for that is probably going to be extremely difficult. 
There is not going to be a huge opportunity for a lot of profit 
taking in those scenarios. So, it is going to take a jump start 
from the public sector to get this going.
    Mr. Hultgren. Thank you.
    Mr. Crum, I want to just talk a little bit--I am interested 
in the amazing growth of your company, but also just been very 
interested and have been working on the Agriculture Committee 
quite a bit with the shift of how producers have really almost 
prepared the new insurances--hedging and using the commodities 
markets. I also know that is key in very rural areas if you are 
going to be involved in hedging or commodities, working with 
that as almost an insurance policy of uncertainty from year to 
year.
    First of all, has you company been involved in that, and do 
you have adequate technology to be able to be involved in that? 
Does that make sense?
    Mr. Crum. In hedging in particular?
    Mr. Hultgren. Yes.
    Mr. Crum. Currently we are not. I am not saying we will not 
be in the future, but it is a commodity and it is a volatile 
commodity in this day and age. And that is how you protect 
yourself with risk tools. But our producers as a general rule, 
the people that we buy products from, they do not.
    It is apparently a low input system with grass and fencing 
and rotational grazing that produce the product itself. We then 
assimilate it and put it out to the general consumers through 
the Internet. But currently we do not use any hedging, no.
    Mr. Hultgren. With the people that you are using, the firms 
that you are using, or those that are near you, can you share 
any experiences that they have had in accessing risk management 
tools from their farm? Has that been a part of it really, or is 
it really more the----
    Mr. Crum. It has not really been that big of a part of the 
risk management tools. As a general rule, these are established 
farms, and this is a fairly low input system with not very many 
high agriculture inputs as we are used to today. And mainly 
farm family operations that market their products through us.
    Mr. Hultgren. Thank you.
    Mr. Schroeder, with the little time I have left, I wondered 
if I could ask you a little bit, we talked some about the 
benefits of opening up education to rural areas and students 
who would not have access to coming to the schools. I wonder if 
you could just give me a feel for what you see some of the 
benefits to the institution, to the university, by having this 
new relationship.
    Mr. Schroeder. It is so important to us to be able to put 
together classes that represent a diversity of views. Our 
emphasis in so many of our online classes comes on discussions, 
case studies, analysis. And if we can bring to those classes a 
rural point of view, not just an urban point of view, our 
classes are enhanced.
    Mr. Hultgren. Let me ask you on that, too, does it also 
open up opportunities for professors that maybe would not have 
access, too. I wonder if you could just share a little bit 
about that as well.
    Mr. Schroeder. Yes. It certainly is two ways. And, in fact, 
just recently, literature has been published on access for 
faculty members with disabilities who cannot meet all the time, 
cannot make all the classes on campus. And this facilitates 
some who might be hospitalized part of the year, can then 
continue to teach their classes. And, of course, it allows us 
to bring faculty members on a visiting basis from other states 
around the country.
    Mr. Hultgren. Again, thank you all. I appreciate you being 
here today. So thankful to the university and the Chairman for 
putting this together.
    The Chairman. The last Member, certainly not least, my 
colleague, who actually represents Sangamon County, Bobby 
Schilling?
    Mr. Schilling. Thank you, Mr. Chairman.
    First, I want to say is this is music to my ears because I 
hear a lot of private sector jobs here, across the board, and I 
think that is totally awesome.
    I want to start out with Mr. Fowler. I have Henderson, 
Mercer County, Warren County. And I go to the school districts 
there. And I tell you, they are struggling because they do not 
have what other school districts have across the United States 
of America. And their concern, which I believe is legitimate, 
is that they are going to continue to fall behind. And with the 
budgets, as we have across America, specifically here in 
Illinois, we have a huge mess here.
    And I guess, what are we doing maybe to try to help those 
areas out, or what can we do to try to give that jump start, so 
to speak, and have those people reach out to you maybe?
    Mr. Fowler. Well, our local school districts, we provide 5 
meg connections. And as far as financing, I think possibly that 
could be shared between the state, the companies, and the 
Federal level. You know, between the three, a combination could 
probably help support that.
    I do not think we serve the schools in those counties, but 
possibly they might want to go to their provider first and see 
if they can offer some assistance to get them the broadband 
connections that they need.
    Mr. Schilling. Okay. And then quickly, rough idea of how 
much the cost of basic service is to a person?
    Mr. Fowler. Our lowest package is a 1 meg package that is 
$39.95 a month. And we offer residential packages up to 5 megs, 
up to $64.95. And we discount that if they bundle it with 
additional broadband services. We also offer a video product. 
So, that is just the range we are selling it at, yes.
    Mr. Schilling. Okay, very good. And then, I just want to 
hit over here to Mr. Crum.
    Your company, sir, since you got the Internet straight and 
around, roughly the amount of jobs that increased with your 
company?
    Mr. Crum. Currently there is roughly nine to ten full time 
equivalent employees. That includes the office staff and then 
the packing staff. The fabrication and killing is all custom 
hire, and that is not included in that.
    Mr. Schilling. Right. Yes, very good. And that has spin off 
would be, of course, great also. So, very good. Just kind of 
curious on that.
    And then, this is kind of like speed dating.
    [Laughter.]
    Mr. Schilling. Though I have never done that before.
    [Laughter.]
    Mr. Schilling. But, Ms. Campbell----
    Ms. Campbell. Yes?
    Mr. Schilling.--a couple of things I have for you is as you 
reduce costs and increase your capacity through telemedicine, 
does that free up capital to do other things?
    Ms. Campbell. Yes, indeed. Renovation to our facility is 
one our strategic goals within the next 18 to 24 months. And 
this should help free up some capital for us to a certain 
extent.
    It also opens a lot of opportunities with the advancement 
of technology, smart phones and iPads, to actually place those 
types of tools in patients' homes where they can connect 
directly with their primary care physician or the specialist. 
Also, our EMT providers when they are in the field, they can 
literally use a smart phone. We do not yet have that 
capability, but we have seen it. They can then connect to a 
physician to actually get a scan of the condition of the 
patient. That is life-saving technology.
    It is also cost saving technology. So, the more 
connectivity that they have and the more technology and tools 
that they can use, it should just help advance the medical care 
of the patient, and hopefully reduce costs, which we know 
reducing the cost of medical care is one of the biggest things 
for the government today.
    Mr. Schilling. Yes. And you have done a pretty darn good 
job with telemedicine. I mean, everything that I have read is 
phenomenal with what you guys have done with it.
    And I do not know if you know this: How many rural 
hospitals have been able to achieve what you guys have done?
    Ms. Campbell. Within Illinois, I have more knowledge of the 
critical access hospitals. There are 51, and I would say 
probably at least 75 percent of them are using some form of 
telemedicine whether teleradiology or actually telemedicine 
within their ER departments.
    Mr. Schilling. Okay, very good. Yes. You know, I live in a 
rural area, so I know how important those are. And I also have 
some slow Internet, but anyway.
    Ms. Campbell. But anyway.
    Mr. Schilling. I appreciate your answer.
    And then, Mr. Schroeder, you were telling the story about 
your daughter. I think that that's something that is 
imperative, and it is back to where I kind of started out with 
here is the fact that these are jobs. These are private sector 
permanent jobs that this is what our country needs, things that 
are going to be long term, not some short term things that are 
just going to be burdening our kids and our grandkids long 
term. And the key here is that these create taxpayers that pay 
in, which help make a lot of our problems in the United States 
of America go away.
    But I just want to say that it has been an honor to be here 
at this facility. This is a great facility, and we look forward 
to coming back. And thank you for having me, Mr. Chairman.
    The Chairman. I am going to go on with maybe a couple more 
questions, but also mention with the five witnesses here, Bob, 
my good friend, who has joined me in saying that one of the 
witnesses, that several years ago would have been extraordinary 
years of Senator Vince Demuzio, who was extraordinarily 
directly involved in this whole arena. And obviously his 
presence and his role in this area is something we will feel 
for generations.
    I have no intentions of asking any more questions. Mr. 
Costa said likewise. We do and be glad to take any other 
questions people have. We do have a little quick media session 
afterwards, and then we are going to start our tour around 2 
p.m. or thereabouts. So, hopefully we can wrap up accordingly.
    With that, I recognize whomever wants to ask a couple more 
questions. Anybody have anything? More questions?
    I am going to do a quick closing statement, Mr. Costa 
likewise, and then we will wrap it up and go from there.
    I think we may have on this panel or on the Subcommittee, 
the full Committee, a variation from time to time on some 
issues, maybe even the stimulus bill that was passed 2\1/2\ 
years ago. But regardless of our position on that issue, I 
think we can all agree with this: rural America faces a 
critical time, and broadband service, postal service, economic 
development in small town rural America is critical in the 
judgment of all of us to the future of America. This is one 
element of it.
    I think we can also agree that regardless of whether the 
stimulus was or was not a good idea, that a loan approval 
process and application process, funds that were intended for 
small towns that wind up in big cities, the lack of capacity is 
something we all want to address because it is in our common 
interest. And that is what we are about, is common bipartisan 
solutions to the crisis that rural America faces. And we want 
to do what we can as Members of the Committee, you all, and 
certainly as Americans, to try to arrest the potential decline 
of rural America.
    So, with my thanks again to that, turn it over to the 
Ranking Member, Mr. Costa, for his closing remarks.
    Thanks to all the panel. Terrific audience. Great 
witnesses, and a great university for their being willing to 
host us for what I think is a real privilege for downstate 
Illinois.
    And with that, Mr. Costa?
    Mr. Costa. Thank you very much, Mr. Chairman, for bringing 
this Subcommittee hearing to, as I said in my opening 
statement, to the heartland of America.
    The University of Illinois here at the campus in 
Springfield, we really appreciate everything that you are 
doing, and being a co-host for us today to hold this 
Congressional hearing. It is a wonderful campus, and it is a 
reflection of the tremendous universities that we have 
throughout our country. And I know that Chairman Johnson is 
very proud to have a chance to bring the Subcommittee here to 
hold the hearing on this campus.
    I think the testimony today by our witnesses really points 
out the need to build on what we have developed so far because 
we know that the way of the future for rural America is to be 
able to effectively compete on a level playing field. And that 
level playing field is the Internet, and the way that we 
provide access to the Internet is through the broadband that 
allows every American the same opportunities to be educated, to 
communicate, to do business, to provide all the functions that 
are really a part of this global economy that we live in today.
    So, as we look at reauthorizing the 2012 Farm Bill, we will 
take very carefully under consideration the suggestions that 
you have made here today. I know that Chairman Johnson and my 
colleagues here in a bipartisan fashion feel very strongly that 
one of our most important parts of our job is to advocate on 
behalf of rural America because those are our constituencies, 
and those are people that we represent. So, their voices must 
be heard through our voices.
    So, as we look at the RUS rural telephone loan and loan 
guarantee program, the broadband loan program, how we look on 
providing greater local control, as was suggested, as we look 
at dealing with the challenges of start-up business, when you 
want to provide good quality foods for our entire nation, that 
you have the opportunity to have that level playing field.
    So, Mr. Chairman, I want to thank you again. I want to, 
most importantly, thank our witnesses and all that were a part 
of this effort. You noted on several occasions that our staff 
did a terrific job in making this hearing a reality. They 
always do. Frankly, if it weren't for them, we would not be 
able to make this happen. So, I, too, want to commend the 
Majority and Minority staff that came to the Springfield campus 
for the University of Illinois to make this hearing a reality. 
Thank you, thank you, and thank you.
    Thank you, Mr. Chairman, for the terrific job you do. I am 
honored to serve as the Ranking Member on your Subcommittee, 
and we all look forward to working together as we reform the 
2012 Farm Bill, and make sure that rural America is an 
important part of that farm bill.
    Thank you very much.
    The Chairman. Thank you, Mr. Costa.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 30 calendar days to receive 
additional material and supplementary or written responses from 
the witnesses to any question posed by a Member.
    So now, with, again, my appreciation, this hearing on the 
Subcommittee on Rural Development, Research, Biotechnology, and 
Foreign Agriculture is adjourned.
    [Whereupon, at 1:49 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

Submitted Statement by Drew Clark, Executive Director, Partnership for 
                          a Connected Illinois

    Good morning, Chairman Johnson, and Members of the Subcommittee.
    The deployment and adoption of high speed Internet services and 
information technology has resulted in enhanced economic development 
and public safety for Illinois's communities, improved healthcare and 
educational opportunities, and a better quality of life for Illinois 
residents. Continued progress in the deployment and adoption of high-
speed Internet services and information technology is vital to ensuring 
that Illinois remains competitive and continues to create business and 
job growth.
    Partnership for a Connected Illinois, also known as 
BroadbandIllinois, is a 501(c)(3) nonprofit organization with a three-
fold mission: (a) to collect and publish broadband data; (b) to ensure 
broadband access throughout the state; and (c) to maximize broadband's 
impact and use.
    The PCI is the nonprofit association authorized under the High-
Speed Internet Services and Information Technology Act (Public Law 95-
684, enacted in 2007) through a contract with the Illinois Department 
of Commerce and Economic Opportunity. The Partnership for a Connected 
Illinois is the designated entity by the National Telecommunications 
and Information Administration (NTIA) under the State Broadband Data 
and Development grant program.
    The Act sets forth the goals of the Illinois' high-speed Internet 
deployment strategy:

   Ensuring that Illinois residents and businesses have access 
        to affordable and reliable high-speed Internet service;

   Improving technology literacy, computer ownership, and high-
        speed Internet use among residents and businesses;

   Establishing local technology planning teams to plan for 
        improved technology use; and

   Establishing and sustaining an environment that facilitates 
        high-speed Internet access and technology investment.

    At PCI, our activities are based on the Illinois General Assembly's 
findings that these efforts will result in enhanced economic 
development and public safety for our communities, improved health care 
and educational opportunities, and a better quality of life for 
Illinois residents.
    PCI works in partnership with the State of Illinois to ensure that 
Illinois remains competitive and continues to create business and job 
growth.
    PCI also works collaboratively with broadband providers and local 
leaders to ensure their communities benefit from high speed Internet 
access.
    In conjunction with the NTIA, PCI also develops a statewide 
inventory and map of existing broadband services and capabilities, and 
works to enhance the adoption of Federal and state investments in 
broadband to ensure they are sustainable.
    Both the Federal and state governments have had the foresight to 
advance investment in broadband technology. Many areas are well-served 
by existing broadband and telecommunication carriers. And in many 
places, particularly larger cities, there is robust competition. 
However, businesses and service providers are just beginning to scratch 
the surface on how broadband Internet service can be of benefit to 
consumers.
    PCI' s efforts are therefore also focused on ensuring that 
communities in Illinois understand how they can maximize the value of 
this technology in accordance with Federal Communication Commission's 
seven purposes: Jobs and economic opportunity, public safety, 
telemedicine, energy conservation, education, civic engagement and 
government performance. PCI is also focused on ways that broadband can 
assist rural Illinois and benefit agriculture.
    We are also beginning to see competition in some of our smaller 
communities. For example, where Verizon previously chose not to provide 
broadband service, its successor, Frontier, is now ambitiously offering 
competitive options.
    In many areas of the state, however, there is a lack of what we 
call middle-mile fiber. You could liken this middle-mile fiber to 
electric transmission lines that serve a variety of electric customers 
through investor-owned utilities, municipalities and electric 
cooperatives. Each has a role in transmitting bulk quantities of 
electricity to electric utility systems throughout Illinois. Some of 
these electric providers would not exist without the foresight of 
elected officials who created the Rural Utilities Service or pioneers 
in municipalities who wanted their residents to enjoy the benefits of 
electricity for their homes and businesses. In many respects, the goal 
of providing broadband service to rural Illinois is similar to rural 
electrification efforts of the 1930s.
    Just as we know electric service enables commerce to develop in our 
communities and state, so too will broadband Internet service. Better 
broadband means better lives.
    Historians recognize that Abe Lincoln once exhibited a passionate 
interest in infrastructure improvements as a means to overcome 
obstacles to equal opportunity and commerce. Broadband infrastructure 
and deployment is the mission of our time.
    PCI is helping to coordinate public and private partnerships, with 
a goal of filling the gaps necessary to link our communities to the 
rest of the nation and, indeed, the world.
    Allow me to share but a few examples of Federal and state 
investments are will enhance the quality of life:

   In the northwestern part of the state, Northern Illinois 
        University is working with community leaders, schools, 
        healthcare providers and public safety officials to install 870 
        miles of fiber that will be available for broadband deployment.

   In southern Illinois, Clearwave is installing 740 miles of 
        fiber that will connect communities in 23 counties. This 
        investment in broadband infrastructure is deemed vital to the 
        future success of Southern Illinois University and promises to 
        revitalize the economy in the southern region of our state--
        creating opportunities that otherwise might not have been 
        envisioned.

   In far southern Illinois, the Shawnee Telephone Company 
        serves among the most disadvantaged areas of the state in terms 
        of health care and economics. Many of its schools no longer 
        offer options like foreign languages or chorus or band. The 
        closing of coal mines has taken its toll on these communities. 
        Imagine the difference broadband can make with the installation 
        of fiber optic cable, which promises to bring distance learning 
        and advances in health care to help the region achieve 
        prosperity once again. Broadband infrastructure in Gallatin, 
        Pope and Hardin Counties can equate to prosperity and progress 
        in these communities and has the potential to lead to new 
        economic development opportunities.

   The Connected Living program in Cook, Kankakee and Will 
        Counties is offering Internet training to citizens with 
        disabilities and seniors so that they may participate in 
        commerce, on-line learning, manage their utility bills and 
        become more involved in community and government activities.

   The Smart Communities Program is a joint venture of the City 
        of Chicago, Chicago Public Library Foundation and Chicago 
        Community Trust to promote comprehensive technology adoption 
        among 270,000 residents and small businesses in five pilot 
        digitally-underserved Chicago neighborhoods.

    In summary, our objective is ensure that broadband and high speed 
Internet are available for all Illinois citizens so that they may 
benefit from broadband and technology advancements that otherwise might 
not be available to them.

Drew Clark,
Executive Director,
Partnership for a Connected Illinois,
Springfield, IL.
                               attachment
Illinois Broadband Coverage



        This map represents wireline and wireless broadband 
        availability at several tiers of maximum advertised speeds, and 
        areas with no broadband coverage.
        Green represents the highest speeds. Orange represents the 
        slowest speeds.
        Created by: Ruben Clark, GISP.
                                 ______
                                 
              Submitted Statement by Illinois Farm Bureau

September 21, 2011

    Please accept these comments from Illinois Farm Bureau' 
on the important role of broadband access in rural economic 
development.
    Illinois Farm Bureau is a nonprofit membership organization 
representing more than 75% of farmers in Illinois. Those farmers, along 
with our associate members, make up our more than 420,000 members.
    Agricultural producers, being rural in nature, are typical of the 
rural residents that stand to benefit from improved access to high-
speed Internet. Growing reliance on digital/electronic transfer of data 
makes access to high-speed Internet a necessity. More and more units of 
local government, businesses (including farming), education and health 
care providers are communicating electronically.
    Farmers are facing a number of proposed changes in the distribution 
of information necessary to operate their business. These changes 
include a switch from hardcopy distribution to delivery through online 
services. Farmers that are either unserved or underserved are facing 
significant efficiency challenges when considering the benefits 
broadband offers, including:

   EPA considering rules allowing a move towards web-based 
        label information for some pesticides

   Government farm programs and applications moving to online 
        distribution

   Up-to-date market information provided electronically

   Purchasing and ordering farm supplies through online 
        services

    Our policy, established by our members, calls for:

   Opportunities to work with rural electric cooperatives, 
        telephone cooperatives, and other entities that have existing 
        infrastructure and expertise to provide broadband service to 
        all rural areas. We encourage these entities to use grants and 
        other sources of monetary assistance to provide these broadband 
        services.

   Support for increased sources and levels of funding for 
        developing and expanding broadband telecommunications service 
        to rural areas.

    While building infrastructure is a key part in improving access, 
additional hurdles to establishing more private projects and carriers 
are adoption and utilization in rural areas. The Federal Communication 
Commission (FCC) reports in their Nation Broadband Plan that 22% of 
non-adopters claim ``digital literacy'' as an obstacle to broadband 
adoption. The report states that an additional 19% of potential users 
do not feel information delivered over broadband is useful to them.
    As a result, adoption and utilization barriers have the potential 
to reduce the number of ``customers'' in rural communities where 
potential users are already limited due to sparse population.
    By addressing adoption and utilization concerns through education 
and awareness in rural areas, private providers will gain a stronger 
``customer'' base. Creating demand provides incentives to private 
providers and the opportunity for price reduction for service in rural 
areas.
    Other needs as we see them include:

   Efforts to increase adoption and utilization of broadband in 
        rural areas

   Development of public and/or private training and consumer 
        education programs targeting rural residents

    Thank you for the opportunity to comment.
            Sincerely,

Illinois Farm Bureau.

                                  
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