[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
FIELD HEARING: HUDSON, NY: CLOSING THE DIGITAL DIVIDE:
CONNECTING RURAL AMERICANS TO RELIABLE INTERNET SERVICE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
OCTOBER 4, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-048
Available via the GPO Website: www.govinfo.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
37-894 WASHINGTON : 2019
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina
Adam Minehardt, Majority Staff Director
Melissa Jung, Majority Deputy Staff Director and Chief Counsel
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Antonio Delgado............................................. 1
WITNESSES
Mr. Tim Johnson, CEO, Otsego Electric Cooperative, Edmeston, NY.. 5
Ms. Shannon Hayes, Owner, Sap Bush Hollow Farm Store and Cafe,
West Fulton, NY................................................ 7
Mr. David Berman, Co-Chair, Columbia Connect, Ghent, NY.......... 9
Mr. Jason Miller, General Manager, Delhi Telephone Company,
Delhi, NY...................................................... 11
Mr. Brian Dunn, Superintendent, Middleburgh Central School
District, Middleburgh, NY...................................... 13
Dr. Cliff Belden, Chief Medical Officer, Columbia Memorial
Health, Hudson, NY............................................. 14
APPENDIX
Prepared Statements:
Mr. Tim Johnson, CEO, Otsego Electric Cooperative, Edmeston,
NY......................................................... 22
Ms. Shannon Hayes, Owner, Sap Bush Hollow Farm Store and
Cafe, West Fulton, NY...................................... 31
Mr. David Berman, Co-Chair, Columbia Connect, Ghent, NY...... 33
Mr. Jason Miller, General Manager, Delhi Telephone Company,
Delhi, NY.................................................. 35
Mr. Brian Dunn, Superintendent, Middleburgh Central School
District, Middleburgh, NY.................................. 41
Dr. Cliff Belden, Chief Medical Officer, Columbia Memorial
Health, Hudson, NY......................................... 42
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
CLOSING THE DIGITAL DIVIDE: CONNECTING RURAL AMERICANS TO RELIABLE
INTERNET SERVICE
----------
FRIDAY, OCTOBER 4, 2019
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 1:17 p.m., at
Columbia Greene Community College, 4400 Route 23, Hudson, New
York, 12534, Hon. Antonio Delgado presiding.
Present: Representative Delgado.
Chairman DELGADO. I want to, again, thank all of you for
joining us this morning, and a special thanks to Geoffrey
Starks, the FCC Commissioner, and the witnesses for being here
today. I want to open with an observation.
As you will notice, there is no service in this auditorium.
This is unfortunately the rule and not the exception here in
the Twin Counties, and all across upstate, and New York's 19th
Congressional District. Small businesses, families, schools,
and healthcare providers in upstate suffer daily from a lack of
consistent access to high-speed broadband services. This is due
in large part to lack of investment in broadband
infrastructure. Broadband services should not be treated as a
luxury, but as a basic utility, and essential for all
communities.
Rural communities like this one have been left behind
because high cost and low subscription promises little profits.
But small businesses and families in rural communities deserve
equal access to affordable broadband services at comparable
speeds. We all realize it is more difficult and expensive to
build out broadband networks in these areas, but that is no
excuse. We must take swift and deliberate action to close the
digital divide between our urban and rural economies. Over 26
percent of Americans in rural America lack access to high-speed
broadband compared to 1.7 percent in urban areas. Unequal
access to high-speed broadband reduces economic opportunity for
millions of Americans and small businesses.
Small businesses in rural America are already struggling to
compete with their urban counterparts and falling further
behind as technology rapidly advances. Now, I hear from
businessowners through my small business advisory committee and
time here at home that there are small businesses, which serve
as the backbone of our economy, that can't complete simple
payment transactions because their internet service goes down
over 100 times a day. Others say that they are paying for
enterprise-level, high-speed service to get 100 megabits per
second speeds, but are only getting 1 or 2 megabits-per-second
speeds.
Standard broadband service has devasting impacts on small
business. In fact, small firms that are digitally connected
each earn twice as much revenue per employee, experience 4
times the revenue growth year over year, and are 3 times more
likely to create jobs. These limitations harm rural small
businesses and the communities that they serve. A startling 58
percent of rural Americans believe that lack of access to high-
speed internet is a problem in their hometowns.
Congress must work to coordinate Federal resources and make
commonsense investments in targeted infrastructure projects.
That is why I joined the majority with Jim Clyburn on the House
Rural Broadband Taskforce to ensure that investments in rural
broadband are included in any comprehensive infrastructure
package that passes through the House. For many years, the FCC
and USDA's rural utility service have made strides to foster
the development of broadband networks in rural communities
through grants and loans, but this is just one of many steps we
can take to address the lack of access to rural broadband, and
much more must be done.
If you have heard me talk about broadband before, you will
know I am deeply committed to addressing the flawed mapping
process that undercounts our rural communities. The Federal
government must have accurate data to ensure that funds and
resources are being efficiently allocated to expand coverage to
underserved areas. However, reports and widespread public
outcry confirm that the FCC's maps are grossly overstated, and
the National Telecommunications and Information
Administration's outdated map was decommissioned. There is
strong evidence that the percentage of Americans without
broadband access is much higher than the FCC's numbers
indicate, so we took action.
On the Small Business Committee, we held hearings on
broadband mapping and rural broadband access, calling for the
FCC to improve its Form 477 data collection and require
carriers to submit more granular data. Last month, the FCC
issued an order requiring a new data collection that will
capture more accurate data and potentially phase out Form 477
altogether. The FCC also voted to open a rulemaking proceeding
to establish a new fund, as the commissioner noted, offering
$20.4 billion in funding over a 10-year period using data from
the improved data collection.
I will be keeping a watchful eye on the FCC's progress on
this improved data collection and implementation of its new
fund. As a member of the House Committee On Agriculture and
Democratic Rural Broadband Taskforce, I will continue to push
legislation that delivers Federal funding for broadband
infrastructure investments both at the FCC and the USDA.
I have also heard from small businesses, farmers, and
students about the impact of slow download speeds and
unreliable connections. Without access to reliable internet,
small firms in rural areas miss opportunities to connect with
new customers and can't take advantage of cost-saving tools,
like digital payment processing and online distribution
services. Schools and the healthcare providers are also
impacted by a lack of access. Today, more than 70 percent of
teachers assign homework that requires access to broadband. The
students that don't have access suffer from the cruelest part
of the digital divide. Small rural healthcare facilities also
need access to telehealth services to reach specialists at
larger urban hospitals offering connected care to monitor
chronic health problems and save lives. Without reliable access
to high-speed internet services, the opportunities are missed,
and loved ones are lost.
The small internet service providers that do operate and
serve these communities need additional resources to get
broadband infrastructure projects off the ground. Operators,
like rural electrical co-ops, have made use of the valuable
infrastructure to serve rural households and businesses, and
small ISPs have made significant investments in fiber networks,
but lack the access to Federal funding to expand their efforts.
The FCC's matching partnership with the New York State
Broadband Program Office has invested millions of dollars in
funding and connected thousands of homes and small businesses,
but we need to see more Federal and State government
partnerships in order to close the divide in rural areas around
the country, and ensure that all communities have access to
reliable service.
It is painfully clear that private investment is not
enough. We need connectivity now. High-speed broadband is not a
luxury. It is essential to economic development of the
communities and the survival of small businesses. However,
these connections could only be realized with swift and
deliberate action, Federal investment, and accurate maps. I
hope that today's discussion will shed light on ways to improve
connectivity in rural communities. I look forward to working
with my colleagues and Congress to increase Federal investment
in broadband infrastructure and bridge the digital divide. I
thank each of the witnesses for joining us today. I look
forward to your testimony.
Now I would like to just take a minute to explain the time
and rules. Each witness will get 5 minutes to testify, and
members--in this case, member--will get 5 minutes for
questioning. There is a lighting system to assist you. Now, the
green light, which typically would be the case if we were in
Washington, we are not in Washington, so there are no green
lights. But typically, there would be a green light, and with
about 1 minute left, you see a yellow light. I am going to get
a yellow light as well, and then there will be a red light, and
I will get a red light. And when the red light pokes up, you
will then have to stop, and I will politely ask you to conclude
your testimony. That way we can keep the conversation going.
And now I would like to introduce the witnesses for today's
panel.
Our first witness is Tim Johnson, who hails from Edmeston,
New York. Mr. Johnson is the CEO of Otsego Electric
Cooperative. Mr. Johnson has been the chief executive office
and general counsel of Otsego Electric Cooperative and the only
connect fiber subsidiary since May 2016. Prior to that, Tim was
a lawyer in private practice for 27 years from 1985 to 2012
with offices in Edmeston, Morris and Cooperstown. During this
time, Tim represented Otsego Electric Cooperative, other rural
electric cooperatives here in New York and numerous other non-
profits, charities, and municipalities. He left private
practice in 2012 to become assistant general counsel at the
National Rural Electric Cooperative Association in Arlington,
Virginia. Tim studied at the University of Rochester in
Rochester, New York where he received bachelor's and master's
degrees. He obtained a law degree at Albany Law School of Union
University. Tim is married, has 3 children, and resides in
Edmeston. Welcome, Mr. Johnson.
Our second witness, Ms. Shannon Hayes. Ms. Hayes is the
owner of Sap Bush Hollow Farm Store and Cafe in West Fulton,
New York. Ms. Hayes grew up in the Sap Bush Hollow Farm in the
heart of Schoharie County, which she now operates with her
husband, parents, and her 2 daughters. In 2016, she added a
community cafe to the farm's offerings and could be found in
there cooking breakfast on Saturday mornings. When she isn't
flipping eggs, she is homeschooling her 2 daughters, writing
books, or just hanging out in the wilderness. Shannon holds a
Ph.D. in sustainable agriculture and community development from
Cornell University. Her work has been featured in numerous
publications, including the New York Times, Brainchild
magazine, U.S. News and World Report, Farm Quarterly, Elle
magazine, and many other publications. Ms. Hayes' weekly essays
about her attempts to live a balanced and sustainable life can
be found on her blog, ``The Radical Homemaker.net.'' Welcome,
Ms. Hayes.
Our third witness is Mr. David Berman. Mr. Berman is Co-
Chair of Columbia Connect in Denton, New York. A resident of
Denton, Mr. Berman is a technology media consultant with a long
career in those complementary fields. His career began in the
world of closed-circuit television where he produced the
broadcast of several of Mohammed Ali's biggest fights. I am a
fan. This led to a 5-year stint at CBS Sports where he was
managing director of the European operation based in London. He
returned to New York as vice president of CBS Broadcast
International in charge of production, operations, and
administration for 11 years. That was followed by 7 years at
the first global private satellite company, PanAmSat.
Currently, he is a consultant to several Silicon Valley
companies while serving as the Co-Chair of Connect Columbia,
Chair of the Get Broadband Committee, on the Columbia County
Broadband Committee. Every facet of his career, from the
beginning to present day, has required more and more [Audio
malfunction in hearing room]. Welcome, Mr. Berman.
Our fourth witness is Mr. Jason Miller. Mr. Miller is
general manager of Delhi Telephone Company in Delhi, New York.
Jason Miller is the vice president, treasurer, and general
manager of Delhi Telephone Company and DTC Cable. Jason started
with DTC in May of 2008 and has held various roles within the
company over the past 11 years, becoming general manager in
2013. DTC currently maintains the following business lines:
local telephone, long distance, internet, television, security,
and I.T. consultant. DTC has over 35 employees and over 3,500
customers. DTC has partnered with Margaretville Telephone
Company and Delaware County Electric Cooperative on the
Delaware County Board Initiative--I am sorry--Initiative since
2015. Jason currently is Chairman of the NYSTA Government
Affairs Committee, is a member of the NCAA Government Affairs
Committee, is on the Board of Directors with the New York STA
and the NTCA Rule Broadband PAC, P-A-C. Jason has a bachelor's
degree in accounting from Syracuse University and master's of
business administration degree from Binghamton University.
Jason currently resides in Delaware County in the Town of
Masonville with his wife, Julie, and 4 children, Lilly, John,
Ben, and AJ. Welcome, Mr. Miller.
We are getting there. Our fifth witness, Mr. Brian Dunn.
Mr. Dunn is the superintendent of Middleburgh Central School
District in Middleburgh, New York. In his 20 years of working
the field, he has been an English teacher at Albany High
School, assistant principal at Troy High School, and principal
of Troy Middle School. He attended Christian Brothers Academy
in Albany, New York and attended college at the College of St.
Rose and SUNY Albany. He is a passionate mountain trail runner,
fly fisher, and reader of history. He is a strong supporter of
rural schools, the First Amendment, and World Peace. He lives
in West Charlton, New York with his wife, 3 children, and cat
named Twinkles.
Mr. DUNN. Thank you.
Chairman DELGADO. Welcome, Mr. Dunn.
Mr. DUNN. Thank you.
Chairman DELGADO. And our final witness, Dr. Cliff Belden.
Dr. Belden is the chief medical officer of Columbia Memorial
Health here in Hudson, New York. Dr. Belden is a
neuroradiologist by training, and prior to coming to Columbia
Memorial Hospital held leadership positions in both rural and
urban environments, having served as the Chair of Radiology at
Temple University in Philadelphia and the Chair of Radiology
and chief clinical officer at Dartmouth in rural New Hampshire.
Dr. Belden attended RPI for his undergraduate work in Albany
Medical College where he graduated as a valedictorian. His
radiology training was at the University of Florida and John
Hopkins University. Dr. Belden served as a physician in the
U.S. Army at Brooke Army Medical Center, San Antonio, Texas,
from 1998 to 2002, where he achieved the rank of lieutenant
colonel. He also received a master's in Healthcare Delivery
Science from Dartmouth. Outside of his medical work, Dr. Belden
and his wife, Marian, have a 100-acre farm in Hoosick, New
York, which they actively farm, selling to local restaurants
and at farmers markets. Welcome, Dr. Belden.
I will now recognize each witness for 5 minutes to provide
their testimony. Mr. Johnson, you are recognized for 5 minutes.
STATEMENT OF TIM JOHNSON, CEO, OTSEGO ELECTRIC COOPERATIVE,
EDMESTON, NEW YORK; SHANNON HAYES, OWNER, SAP BUSH HOLLOW FARM
STORE AND CAFE, WEST FULTON, NEW YORK; DAVID BERMAN, CO-CHAIR,
COLUMBIA CONNECT, GHENT, NEW YORK; JASON MILLER, GENERAL
MANAGER, DELHI TELEPHONE COMPANY, DELHI, NEW YORK; BRIAN DUNN,
SUPERINTENDENT, MIDDLEBURGH, CENTRAL DISTRICT, MIDDLEBURGH, NEW
YORK; AND CLIFF BELDEN, M.D., CHIEF MEDICAL OFFICER, COLUMBIA
MEMORIAL HEALTH, HUDSON, NEW YORK
STATEMENT OF TIM JOHNSON
Mr. JOHNSON. Okay. Do I need a microphone?
Chairman DELGADO. That one, yeah.
Mr. JOHNSON. Is this on? Can everybody hear me? Thank you
for this opportunity to testify about broadband and its
importance to rural areas. I am Tim Johnson. I am sorry?
Chairman DELGADO. Talk into the mike.
Mr. JOHNSON. A little bit closer.
Chairman DELGADO. There you go.
Mr. JOHNSON. I speak into the mike, and I can't move my
head then. All right. I am Tim Johnson, CEO at Otsego Electric
Cooperative as I was introduced. We are located near
Cooperstown. Our cooperative serves approximately 4,500
electric meter locations in the Otsego County area. Primarily,
these are consumers that investor-owned utilities bypassed
partially due to our sparse population.
In early 2017, Otsego Electric was awarded New York
broadband grants of $14 million, including $4 million in CAF
funds. We announced plans to begin offering high-speed,
affordable broadband to help our consumer members fully
participate in the 21st Century economy. Ultimately, OEC will
make service available to all our consumer members with fiber
speeds of up to 1 gigabit.
At this time, we actually already do that. The electric
cooperative industry serves over 40 million Americans and
covers 56 percent of the U.S. landmass. More than 100 electric
cooperatives across the country are currently working toward
meaningful solutions to bridge this digital divide. We believe
electric co-ops are ideally suited for this task. However, we
have several policy concerns that we believe you all can help
with. First is the Federal Tax Code. Cooperatives desperately
need your help fixing a 2017 Tax Cuts and Jobs Act mistake that
happened in 2017, but we need it fixed by the end of this year.
OEC unexpectedly stands to lose as much as $3 million
dollars of our broadband grants to taxation. This makes
absolutely no sense. We bid under 2018 pre-tax law rules, so
the train had already left the station, so to speak, when the
new tax bill arrived. Most rural electric cooperatives are tax
exempt under 501(c)(12), and no more than 15 percent of our
income can come from non-member sources in order to remain tax
exempt. The Tax Act mistakenly made all public grants
potentially taxable to cooperatives. This includes FEMA grants,
a terrible mistake. If a Federal legislative fix is not passed
by the end of this year, we will also lose our tax-exempt
status. Fortunately, a bipartisan legislative solution has been
introduced in the House and Senate, co-sponsored by our host,
Congressman Delgado. This past April, the legislation will
allow co-ops to accept grants without jeopardizing their tax
status, but the bill has not been scheduled for a vote yet. We
need your help and support on this bill.
Mapping. I would like to mention mapping. I suppose some of
our other panelists will mention this, and it has already been
mentioned, but a critical step for us in deploying rural
broadband is to improve our maps. We need to do away with the
one served, all served census block concept. We need to gather
more granular standardized data on coverage and performance
levels, and we should incorporate crowd sourcing as a way to
fund projects. We need a better challenge process to flag
issues with data and maps. We are encouraged by the FCC, and
Congress are already working on these issues.
Public funding. As a nonprofit cooperative, we operate at
cost, and our access to capital is limited by what our member
consumers are willing to contribute through the rates they pay.
The current Federal programs at the USDA and at the FCC, geared
toward reducing the upfront capital investments, are necessary
to achieve widespread expansion of high-speed broadband. The
upcoming RDOF, or Rural Digital Opportunities Fund, will
distribute $20 billion dollars by a reverse auction to help
build service of at least 25 up and 3 down megabits-per-second
to large segments of rural America. We believe added auction
points should be given to gigabit expandable fiber to the home
service projects where feasible. This is the gold standard we
should all strive for everywhere.
Chairman DELGADO. One minute.
Mr. JOHNSON. Thank you. One quick comment on New York's
broadband program. It has been a great program so far. However,
it left many gaps due to mapping and funding problems. Over
70,000 locations in New York were relegated to satellite
services, many of us know. We need funding for gigabit fiber in
the home services to be fair to all. The bottom line is we need
public money. There isn't enough rate of return for private
investors to get involved in many of these projects.
In conclusion, Otsego Electric and electric cooperatives
all over the country are ready and willing to take on this
challenge. We did it 75 years ago with electric service, and we
can do this project, as well. We look forward to working with
you and everyone in expanding all the benefits broadband has to
offer.
[The statement of Mr. Johnson follows:]
Chairman DELGADO. Thank you, Mr. Johnson. Ms. Hayes, you
are now recognized for 5 minutes.
STATEMENT OF SHANNON HAYES
Ms. HAYES. Can everybody hear me okay? All right. Quick
storytelling now. My name is Shannon, and I live up in the
hills of Schoharie County up against a 2,000-acre State forest
5 miles from my family farm, and I am a child of the farm
crisis. It forced youth out of my community like insects in the
spray line of pesticides. It was whispered in the halls of my
school that only the losers stayed around after graduation.
Everybody else fled. So dutifully I went away to college, but I
came home every other weekend because I love being a part of my
family's farms, and I hated to be away from those dirt roads,
and the farm-grown food, and the woodlands, and the neighbors,
and the stone walls that define my world.
I eventually got a Ph.D., as you heard about, and my
husband and I were qualified to take on careers in any of the
land grant colleges around the country. But we weren't
qualified to come back to our own beautiful, yet economically
depressed, Schoharie County. We didn't go job hunting. We
bought a cabin up in Middleburgh Telephone Company service area
as opposed to my parent's farm a few miles down the road, which
was in Verizon's area. And after graduation, I told my parents
that I had come to only one certain conclusion, and that was
that our family, our community and our farm could not afford
this continued loss of the brains--the brains--the creativity
and the energy of the next generation. And the idea of
commuting to a job someplace just filled us with abject misery.
So we stayed put and we lived cheap, and we worked with my
parents to grow Sap Bush Hollow. And in a few years, Bob and I
actually had an opportunity to cash in on our cabin in the
woods and buy a farm next to mom and dad. But if we moved, we
would be giving up our local provider and moving into a Verizon
district, and at this point, I was the primary communications
person for our business. Moving our home offices would put us
on the service fringe of an urban phone company, and it was an
area that had long suffered from telecommunication's neglect.
But a few miles down the road, we had the benefit of being
covered by a rural telecommunications company that specialized
in people like us.
So at that moment we had to make a choice about the future
of our farm: increase production or guarantee our
telecommunications. Without good telecommunications, we would
lose marketing opportunities and the ability to be in contact
with our customers, to handle our finances efficiently without
constant trips to town. Without the telecommunications, we
would lose the ability to order supplies online, and we would
have to take a day's work away from the farm just to drive into
Albany. We would lose out on access to online veterinary
diagnostic resources, the ability to network with other farmers
about changes in the industry, and the ability to participate
in online professional development opportunities, like seminars
for improving grazing practices or learning more humane and
ecologically responsible growing practices.
So we stayed put. Instead of buying the farmland, we made a
radically different choice. We bought our community's post
office building and former firehouse and moved our farm center
of commerce off the farm and into our rural hamlet. Part of
this decision was to give the community an economic jumpstart.
Part of it thought that, hey, why not in the middle of Upstate
New York? Who wouldn't love an espresso bar and farm-to-table
cafe? You all come, please. Okay. And the final reason, the
internet there was decent. Our industry is changing fast with
online developments, and if we don't keep up, we are going to
lose our farm for all of the reasons that I just mentioned.
Throughout this time now, we started a family and chose to
homeschool our daughters. Our oldest, she practically taught
herself to read, but the youngest would pick up books and hold
them upside down. And she would bounce into things, bump into
things. She confused people's names and faces, and we
eventually learned she's legally blind in one eye, and she had
reduced vision in the other, and she has a condition called
cerebral visual impairment. She's smart, she's motivated, but
she was severely academically learning disabled.
Our rural school, which you will hear from today, did its
best to help us, but it did not have all the resources we
needed, and we faced walking away from this whole family
business just to get our daughter the education because the
only schools that could help us were in Canada or Boston, and
they were going to cost us about $40,000 dollars a year, far
more than our annual income here in Upstate. But what if we
could get our learning environment equipped to accommodate her?
If we could outfit our house with fast internet, I could make
huge academic inroads with my kids.
[Disturbance in hearing room.]
Is that for me? Oh, no. Okay. If we could----
Chairman DELGADO. Maybe somebody is timing you out there. I
don't know. You do have about 1 minute.
Ms. HAYES. Okay. If we could equip our proposed community
cafe with good internet, then we could become a hub for all
those other neighbors in the Verizon area. So we asked MIDTEL
for help, and within a year's time, we came up with a solution,
and we had better, faster internet than what you will find in
downtown Albany. My oldest daughter enrolled in online classes.
My youngest got enhanced visual access to any book or audio
book in the world, and she became an avid fan of science
podcasts. And she has gone from being a child that they did not
think would read or write to this funny, articulate, and
artistic preteen.
I encourage you to say hello to both of them today. And the
cafe, hey, it is open Saturdays only. That is pretty good.
Folks come for food and to socialize, and to check their email
and download media. And since we worked out our arrangement,
our family farm has experienced 100 percent growth, evidence of
what you were talking about, Mr. Delgado, through our cafe, our
farm store sales, our farm market, and our online sales. A
small eco resort has now opened up in our hamlet, and the
community has gained a farmstead cider tasting room, two local
arts groups, and a yoga studio. Each of them are certain that
they could move forward with rural businesses because they
could be guaranteed high quality internet. There is talk that
West Fulton, New York is pulling itself up by the bootstraps.
We started an Airbnb above the cafe, and we now bring tourists
from all over the world here to West Fulton where people want
to experience our farm fresh food and our waterfalls.
Chairman DELGADO. Right. You are coming up on the end now.
Ms. HAYES. Okay. All right. So the long story is talk to my
kids afterwards if you want to find out what their future
holds. They are not thinking about running away like I had to.
They are thinking about staying here in upstate New York
because there are opportunities now. We are losing the rural
brain drain, and I am appreciative of what broadband has done
for us. Thank you.
[The statement of Ms. Hayes follows:]
Chairman DELGADO. Thank you. Thank you, Ms. Hayes. Mr.
Berman, you are recognized for 5 minutes.
STATEMENT OF DAVID BERMAN
Mr. BERMAN. Thank you, Congressman. Can everyone hear me?
Thank you, Congressman Delgado, for this opportunity. I am the
Co-Chair of Connect Columbia, a citizen's action committee made
up of elected officials and interested residents that have
banded together to bring true broadband to the people of
Columbia County. My Co-Chair, Patti Matheney is also here.
Let me define ``true broadband'' in 2019 terms: a minimum
of symmetrical 100 megabits per second growing to a symmetrical
1 gigabit per second within 5 years. The FCC Commission's
definition is considerably out of date and needs to be upgraded
immediately. Many of our international competitors are already
at the gigabit level.
With that out of the way, let me just take a moment to
describe the current conditions in Columbia County. We were
fortunate to receive over $30 million from Governor Cuomo's
broadband initiative with the help of our assemblywoman, Didi
Barrett, and Connect America funding. This has taken us to
coverage for most of our residents, but still leaves huge gaps
in our geography. Why? Because the economics require density of
potential subscribers, which effectively penalizes rural areas.
The State and CAF money were used to fiber those areas
where density made the economics work, and then a very
confusing satellite overlay was applied to theoretically give
everyone access, which it decidedly did not. As I am sure the
commissioner is aware, the use of high-latency moderate-to-low
through put satellite technology is merely a band-aid that
cannot meet current demand, much less the exponential growing
demand.
So how do we fill in the holes to give everyone access to
true high-speed broadband that has scalable technology to meet
growing speed and capacity requirements? Even though current
Federal programs are constructed to fix the basic problem of
access, their requirements effectively preclude those they are
designed to help. An example is a recent program that required
an area to have 90 percent of the population that lacks
coverage. Sounds logical, doesn't it? So, consider a farming
area with central village. The village population
overwhelmingly exceeds the farming one and, therefore, 90
percent can't be achieved. The measurement is correct
economically from a cost-per-person served basis, but fails
miserably to provide access to rural areas where modern
agriculture requires cutting-edge technology to effectively
manage the process of growing our food supply, not to mention
the children of farmers who need access to all the educational
tools and resources that are now required.
The only solution to this issue is to base local, State,
Federal programs on the goal of reaching every address in the
United States. That means scrapping the use of census blocks to
define coverage availability, financing, etc. Very simply,
census blocks are both confusing and lead to some bizarre
results. A perfect example is a street behind my house in
Ghent, German Church Road. Like many streets, it bisects 2
census blocks so, under the State program. One of those blocks
was granted money for broadband and the other wasn't. So, a
provider doesn't get reimbursed for providing service to the
other side of the street. Clearly every address that gets
electricity should get broadband just like electricity which
runs many devices essential to our lives, large-capacity
communication capabilities are far more than the voice
internet, email, and tweets. We are still in the early stages
of what big connectivity can do beyond those mentioned with
efficiencies in healthcare at the top of the list. It is no
longer practical to separate access from voice and television
since they all come over the same wire, fiber or frequency. Two
out of 3 can't be ubiquitous while 1 remains unavailable. It is
more important than ever in this economy to ensure every
business and every person is connected to the content they want
just as they can speak to anyone via traditional, what is known
as POTS in the telephone world. It is called plain old
telephone service. The Commission as a regulatory body needs to
expand its vision to encourage expansion of existing
technologies and leave the door wide open for new ones that
will enable even more ways to connect and ensure security.
Finally, Congress must act to rationalize the myriad number
of competing programs that ostensibly are in place to
facilitate the expansion of broadband, and then expedite the
actual work being done, completed, and, importantly, measured
so that suppliers meet the needs of consumers. And I apologize
to my wife and children for not including them in my biography.
[The statement of Mr. Berman follows:]
Chairman DELGADO. But you ended within 5 minutes. How about
that?
Mr. BERMAN. [Off audio.]
Chairman DELGADO. Thank you, Mr. Berman. I now would like
to recognize Mr. Miller for 5 minutes.
STATEMENT OF JASON MILLER
Mr. MILLER. Am I close enough to the mic? No? All right.
Congressman Delgado, thank you for the opportunity to testify
in the importance of rural broadband and closing the digital
divide. My name is Jason Miller. I am currently the vice
president, and treasurer, and general manager of Delhi
Telephone Company, DTC, which was founded in 1897. We also have
DTC Cable and they are both headquartered in Delhi, New York. I
started with DTC in May of 2008 and have held various roles
over the last the last 11 years, becoming GM in 2013.
DTC currently provides our customers with local telephone,
long distance, internet, television, security, and IT
consulting. DTC has over 35 employees and 3,500 customers. In
2015, we partnered with Margaretville Telephone Company and
Delaware County Electric Cooperative for the Delaware County
Broadband Initiative. We call it DCBI. As part of this
partnership, DTC has received $30 million dollars in projects.
That is our portion, just DTC's portion, in New York State
grant awards. DTC will be completing 1,200 miles of fiber optic
builds, passing approximately 15,000 homes mostly outside of
our regulated telephone franchise territory. With this build,
DTC will be in 17 communities.
Deploying broadband takes time and includes many hurdles.
Through our company's long experience in industry, combined
with much-needed support from the Federal and State
governments, we have been able to successfully deploy these
networks in and around Delhi, New York for the rural residents
of our community. Rural areas present unique issues to DTC, and
more than 850 rural broadband providers represent by NTCA, the
Rural Broadband Association that serves nearly 35 percent of
the Nation's land mass, but less than 5 percent of the
population.
Low population densities and significant distances are the
root cause of why it is very difficult to build a business case
to provide broadband in these high-cost areas left behind by
large providers, and to then sustain these networks and
services once deployed. In order to succeed in delivering
reliable internet service, it takes support of the Federal,
State, and/or local levels along with the aforementioned
commitment to the community. It is the public/private
partnership model that has resulted in getting broadband to our
customers and to serve as a model for reaching and then
sustaining the delivery of broadband in the remaining unserved
rural areas.
Rural broadband has far-reaching effects, creating
efficiencies in healthcare, education, agriculture, energy, and
commerce. A report released in 2019 by Purdue University, in
conjunction with the Foundation for Rural Service--FRS--found
that in 2017, small rural communication providers in the United
States contributed to more than 77,000 jobs and supported more
than $10 billion in economic activities across a wide range of
industries. Additionally, a Cornell University study found that
rural counties with the highest levels of broadband adoption
had the highest levels of income and education and lower levels
of unemployment and poverty.
Despite this great progress, many parts of rural America
still need better connectivity, and even where broadband has
been deployed, sustaining it in areas where consumers are
scattered across great distances is itself a substantial and
often underappreciated challenge. As policymakers consider
potential initiatives for broadband infrastructure deployment,
including USDA's Broadband Reconnect Program, the FCC's
upcoming rural, digital opportunity fund, I believe, is
essential to build upon was work to date. In doing so, there
are several key principles that should guide next steps on
infrastructure policy. These principles include providing
Federal support to make the business case for investment in
ongoing operation, leveraging existing experience and
expertise, making long-term capital investments, targeting
resources for new construction, coordination of efforts among
many governmental programs, streamlining construction
processes, and ensuring accountability for any recipients of
scarce Federal resources
Accurate broadband mapping data is also critical to the
ability to deliver and sustain service in rural America, and
bad mapping data risk leaving rural consumers stranded without
broadband. Even as there is a push to improve the standards in
the granularity of how providers report, it is equally
important not to forget the importance of making sure that
there is some opportunity to double check the accuracy of the
data being self-reported by providers.
Chairman DELGADO. One minute.
Mr. MILLER. The FCC has taken significant strides recently
to move toward more granular and accurate broadband
availability, data collections, and maps, but Congress has an
important role here and can and should provide vital guidance
and direction to the FCC on how to proceed next. Due in large
part to the commitment of leaders, like Congressman Delgado and
others on this Committee, small rural broadband providers, like
DTC and others, and NTCA membership have made great strides in
reducing the digital divide in rural America, but the job is
far from done. Robust broadband must be available, affordable
and sustainable for rural small businesses and underserved
populations to realize the benefits that advanced connectivity
offers.
On behalf of DTC and NTCA, the Rural Broadband Association,
your commitment to identifying and solving these challenges is
greatly appreciated. Thank you for inviting me to be with you,
and I look forward to your questions.
[The statement of Mr. Miller follows:]
Chairman DELGADO. Thank you, Mr. Miller. Mr. Dunn, you are
now recognized for 5 minutes.
STATEMENT OF BRIAN DUNN
Mr. DUNN. Thank you, Congressman. Good afternoon, everyone.
It is an honor to be part of this Committee and to have an
opportunity to express my own meager experience and voice to
this very complicated problem.
I am a superintendent in Middleburgh, and you can't talk
about Middleburgh unless you go back to 2011, Hurricane Irene,
which devasted our community. Literally, the school was flooded
up to 4 feet into the basement, and so where we work and where
we learn is undergoing another renewal. And when you talk about
rural renewal, you have to talk about high-quality schooling.
If you don't have high-quality schooling with innovative
technology, with great teachers who care and are invested and
who stay for the long haul, you are not going to experience a
high-quality renewal that lasts and sustains itself over time.
My new friend, Ms. Hayes, to my right, you could hear the
spirit in her voice, the hope in her voice when constituents
are connected to information across the globe. It empowers our
citizens, it empowers our youth, and it empowers our schools to
join together to meet several wolves at the door. As a
superintendent, the number one wolf at my door is safety and
security. The second wolf at my door is never mentioned in any
meeting, and that is the digital divide. So, I thank you for
bringing it up.
But also deeper in the question of digital division is
artificial intelligence and its impact on local economies and
on schooling, and how we teach and learn. The working class
jobs continue to morph and change and go away. What is going to
happen when driverless trucks, and cars, and trains take over
the market in the next 10 to 15 years? That is a reality that
is coming, and so the best way to inoculate our students and
our families and to impart them with the skills they need, we
have to have excellent broadband, not only in the schools but
most importantly, in all homes.
And I have to say there is a strong voice of optimism
coming from Middleburgh and Schoharie County. Not only do we
have fired-up residents like Ms. Hayes organizing,
communicating, planning, working together, but we have a very
strong infrastructure project that is 90 percent underway, led
by our partner, MIDTEL, where 90 percent of our families are
connected with fiber. Now, that will make all the difference
for us in Middleburgh because in hopefully this year, we are
going to get a $1 million Smart Schools grant after waiting for
3 years. It is coming, and I am grateful for it, but we are
going to have to make great use of that in the school.
But like was mentioned earlier, homework is going to be on
a laptop computer that we are going to send home, and all the
families have to be connected with something they can afford
that is high quality because our kids, as you all know, are
competing globally. I always remember Thomas Friedman's book,
The World Is Flat. It is truly getting flatter. So with that, I
just want to remind everyone it is a complicated issue. We in
Schoharie County and Middleburgh, in particular, we are
grateful we are moving forward, but we always remember that
good is the enemy of great. And if you expect American, New
York's Schoharie kids to compete on a global stage, our
technology cannot be a one-shot deal. We have to continue to
get quality funding, quality support from local, State, Federal
levels, and we will work with you.
So with that, I hope my testimony meant something. I
appreciate the opportunity to speak. Thank you.
[The statement of Mr. Dunn follows:]
Chairman DELGADO. Thank you. Thank you very much, Mr. Dunn.
Dr. Belden, you are recognized for 5 minutes.
STATEMENT OF CLIFF BELDEN, M.D.
Dr. BELDEN. Thank you. Thank you for the opportunity to
provide some comments today on this important topic. My
testimony today is going to be focused on the impact that
broadband internet access and the lack thereof has on
healthcare and delivery of healthcare in rural areas.
So there are three broad areas where broadband impacts the
delivery of healthcare: the patient, the location of services
that you are able to get at any facility or the types of
services in that facility, as well as it has an important
impact on our workforce. So, first, the patient. The patient is
the center of why organizations like Columbia Memorial Health
exist in rural counties.
Twenty-five percent of the population of the United States
lives in rural counties, but only 10 percent of the positions
are in those same rural areas, creating a significant mismatch
between the need and the availability of physicians and other
healthcare providers. This mismatch is even greater in sub-
specialties, particularly in those where there is a nationwide
shortage such as obstetrics, dermatology and child psychiatry.
Telemedicine has been championed as a tool to improve care and
help bring the input and expertise of specialties and
specialists to rural communities and their patients.
Telemedicine has many different forms and I will touch on
two of them today: remote patient visits and remote
telemonitoring of patients. Face-to-face teleconferencing
between patients and a provider at their home or a medical
facility allows a patient, who is referred to a specialist or
perhaps needs follow-ups from one of their physicians, to see
that provider without traveling for an appointment. Generally
it is done over a secure videoconferencing platform. This
results in improved access to specialists, and the patients get
that benefit of not having to travel, particularly, during
inclement weather, as we all know what the winters can be like
around here.
At Columbia Memorial Health, we have a pilot project with a
local nursing home and our cardiology and pulmonary physicians
where they can evaluate patients without needing to transport
the patient to the hospital after they have been discharged. We
know there is over 50 percent more use of telemedicine visits
when a rural county has a high penetrance of broadband, and it
is such an important tool.
Remote patient monitoring is a second tool that involves
providing patients with certain medical conditions devices such
as scales, blood oxygen level monitors and heart rate monitors
in order to get that data back to their providers to get early
warning of any changes in their condition. Remote monitoring
with these medical conditions can have a dramatic impact for
the patients. For patients with congestive heart failure,
remote telemonitoring decreases hospital admissions and
readmissions up to 50 percent, and also has an impact on
mortality and quality of life. Similarly, treatment costs are
lower, and readmissions are lower for patients with chronic
obstructive pulmonary disease when you use remote patient
monitoring.
At Columbia Memorial Health, we have begun to use these
remote telemonitoring devices for some of our patients.
However, there are some challenges. Without broadband access,
the monitoring equipment requires a dedicated cellphone and
cellular service plan to be provided along with that. To offer
this service, we provide that cellphone, we provide the data
plan, and the expense exceeds what the government now
reimburses for the services, as well as limits our ability when
we apply for grants to start these programs. It is also
impossible to deploy in areas that don't have a cellular
signal.
Chairman DELGADO. One minute.
Dr. BELDEN. The second thing I would like to talk about is
how the location of medical facilities is impacted by
broadband. We have a lot of different types of medical
facilities, all of which require highly reliable connected
internet service. We have 2 outside clinics that still use
microwave transmission for their broadband access and one that
has a lower speed non-commercial grade access. That limits what
they can see and how quickly they access patient records.
Finally, I would just like to say for the healthcare, the
health provider, where you live matters, and if you are a
radiologist, orthopedic surgeon, many of the specialists, or
even primary care provider, you need high-grade internet access
in order to perform your job. Increasingly we are required to
make decisions quickly at home with the data that is sent to us
via the internet.
So in summary, our request is simple. People who choose to
live in a rural community should have the same access to tools
that improve their health as those who live elsewhere, and I
appreciate the efforts that you are making on that behalf.
[The statement of Dr. Belden follows:]
Chairman DELGADO. Thank you, Dr. Belden. I appreciate the
testimony from everyone, really informative, and really
appreciate the time that you put into the testimony. I will now
recognize myself to ask some questions.
First, I want to begin with Ms. Hayes. Your testimony was
very illuminating, and, as you know, we have a lot of farmers
in our district. As I alluded to earlier, we are a very rural
district. I think something like 5,000 farmers, about 8,000
farm operations or operators, and there is no doubt that
farmers want to be able to earn a livable income from their
business. Now, you have had to seek alternative business
opportunities to keep your farm operating. Could you please
share--I know you got a little bit into this in your
testimony--how access to affordable high-speed broadband can
help farmers and other small business owners expand their
business? What were the ways for you that it allowed the
expansion of business?
Ms. HAYES. Okay. First, I do want to underscore in the case
of my farm, we could go out to coffee and talk about the farm
bill, and the Nation's chief food policy, and the commodity
production but----
Chairman DELGADO. Happy to do that.
Ms. HAYES. Yeah, okay. So anyhow, I want to underscore,
though, that diversification in the case of my farm is a
choice. Diversification is ecologically beneficial and enables
us to serve local markets and the community more effectively,
and it has helped us here to become an anchor business and an
economic driver in our community. So one of the ways that it
has helped us, you know, you have already heard about the way
the business is diversified with providing local food, and
providing online services, and in terms of online shopping and
things like that.
We have to teach constantly. Basically, in our Nation's
agricultural history and food history, every generation since
World War II has forgotten how to cook. It is very true, your
people today, your constituents are time strapped. They are
economically strapped, and processed foods, every generation
gets a new processed food. But processed foods are what they
turn to and the next, and they are not teaching the next
generation. I am a farmer and I need people to buy real food. I
have to constantly educate, and this is where the broadband is
extremely important to me.
The next thing is it does create this multiplier effect, as
I mentioned. People are coming into the area to see Sap Bush
Hollow. They are staying, for example, in our vacation lodging,
and then they are putting that money in all the different
businesses in the area because they want to see what we are
talking about on the internet. They want to see the beautiful
waterfalls that we show. They want to taste the food that we
are telling them how to cook. So we constantly have to educate
to keep our heads above the water, and we are bringing people
in and getting them to experience the rest of the businesses.
Chairman DELGADO. Thank you, and I think the multiplier
effect pieces is critically important, and not just teach
folks, you know, where good food is, but also to connect the
folks who are providing it, right? And to the extent that we
can have connectivity and set up localized distribution
centers, food hubs, farm hubs, we can't do that in the absence
of broadband access, so I really appreciate that.
Mr. Dunn, yes, Mr. Dunn, as the superintendent of
Middleburgh Central School District, can you discuss, and I
know you have talked a bit about this, but, in more detail, how
improved broadband has impacted students in your classrooms?
Mr. DUNN. Well, in the context of the flood, our school
system took a dive, and I have only been there a short while,
under 2 years, but I took over an organization with an 82
percent graduation rate. And that is 18 percent of your kids
not getting a diploma, and that is, that is very significant.
And you also have to look at advanced regents diploma
acquisition as college ready.
So, a lot of our economic indicators were down, so that is
a whole complicated turnaround discussion. But how technology
influences turnaround locally in its schools, it provides
resources for people to research, to dialogue, and access best
practices to improve their pedagogy. And so, what you have is a
more highly-trained teaching force, you have more highly
trained and motivated administrators, and you have opportunity
and resources curricular-wise for kids to engage in project-
based learning, to improve their reading, to improve their
networking.
Don't forget distance learning. We have a lot of distance
learning, and one of the things we are working on right now I
am really proud of, you know, how do you engage in diversity
and inclusivity discussions in a school system that is 99
percent white? Well, we have distance learning. Well, who are
we distance learning with? We did a research project on it, and
it is mostly other white constituencies in schools. So now we
are investigating with a couple of partners. Well, how can we
get access to urban distance learning to mix it up a bit
because that is the world. That is the State university system.
Those are the big cities, and that is a big part of the Every
Student Succeeds Act, you know, creating equity and inclusion
for all. So technology and high-quality technology is a great
lever in a tool for progress and change.
Chairman DELGADO. Excellent. Thank you for that. And, Dr.
Belden, you kind of alluded to this, but I want you to unpack
it a little bit more, and it is kind of buried in everybody's
testimony is the power of the draw of broadband access and
recruitment of, you know, staff, caretakers, physicians, you
know, if you want folks to come. And we know how urgent the
need is for care in our rural communities. Can you speak a bit
about what the impact would be to recruit physicians and
specialists to the region with broadband access, and also the
cost piece? You mentioned the cost element that the hospital
has to bear. If you can get into more specifics about what that
cost really feels like for you?
Dr. BELDEN. Sure. So I can use my own self as an example.
When I moved to rural Hoosick Falls, the first thing we asked
our realtors was is there internet access? Where can we get
reliable service? Because as a radiologist, I know I am going
to need to look at images after hours. The farm we bought in
2003 happened to be the last house on the road that had
internet service. The only reason it had internet service was a
previous owner was a soccer coach of a team from Vermont, and
the head of the cable company wanted his son on the soccer
team. So the deal was struck that his son would travel overseas
with the team if cable came to my house. My neighbors down the
road, 16 years later, still don't have high-speed cable
broadband.
So that is the draw whether you are a physician or a
physician's assistant, or a transcriptionist. Our
transcriptionist--we had to switch our providers during a
recent upgrade of our system. The transcriptionist that we had
lived in an area where their internet wasn't reliable enough to
do the transcription work. We had to outsource it outside of
Columbia County for a period of time until the other system
came back on, so that is really important.
You asked about cost, and cost in healthcare is always
really sticky, because whose cost is it? If we, Columbia
Memorial Health, do telemonitoring, I know we can decrease the
number of readmissions and improve the health of patients. That
is the business we are in. That is what we want. We can absorb
that cost, but it would be nice if the reimbursed amount, (we
now have some codes where we can reimburse), at least covered
that cost for us. The people--that is, the entities--that save
dollars, real dollars when you don't readmit a patient or you
don't admit them at all, that is the insurance company or
Medicare or Medicaid. Again, good to save money.
I don't want to think we don't want to save money, we do.
We spend for the remote monitoring, but someone else
financially gets the benefit. Thankfully, the patients get the
health benefit, which is why we are exploring these
telemedicine projects, doing what can we do for patients with
the budget and the funding that is available.
Chairman DELGADO. Thank you. That is very helpful. Mr.
Johnson, as the CEO of Electrical Cooperative, and as someone
who has had to figure out how to disburse and implement the
grant funding from the State, could you just speak a little bit
to some of the limitations that you have encountered when
trying to ensure that you are best equipped to do the work that
you are asked to do for your members and the community at
large?
Mr. JOHNSON. Some of the limitations?
Chairman DELGADO. Yes, in terms of, specifically, you know,
if there are communities that you are being asked to implement
broadband, how that choice is being made and how are other
actors in this space, other cable providers, for example,
decisions being made that might affect where you are able to go
and to what extent.
Mr. JOHNSON. Well, according to the terms of the New York
Rural Broadband grant, we agreed to provide service in
specified census blocks. So we didn't have much choice as
during the past 2 years.
Chairman DELGADO. Uh-huh.
Mr. JOHNSON. After these 2 years, we will have some
opportunity, but the limitations are that, and the incentives
are to go toward density, the most dense area instead of the
most sparse area without public funding.
Chairman DELGADO. Right.
Mr. JOHNSON. So that is the critical limitation. One of the
other limitations, we know and can control the construction
cost. We don't know when we go into a particular project what
exactly the make-ready costs are going to be to get on poles
outside of Otsego Electric's network. That is an unknown and a
severe limitation without public funding to proceed down the
road----
Chairman DELGADO. Uh-huh.
Mr. JOHNSON.--where, you know, it could be tens of
thousands of dollars to go the next mile for construction. But
the make-ready, it could double that perhaps.
Chairman DELGADO. Right.
Mr. JOHNSON. And sometimes it doesn't, and, you know, a
hallelujah moment. But when it does, you are in a world of hurt
if you are trying to make it happen.
Chairman DELGADO. Right. Could you speak a little bit to
the tax law issue that you flagged and how it has, you know,
negatively affected OEC?
Mr. JOHNSON. Right. The tax law change happened after we
made our bids, put our application materials together, did our
feasibility studies. And we suddenly were confronted with the
fact that we might have a 21 percent loss of our grants
Federally, and 9 percent State. So obviously, that is on our
scale project, the $10 million project that is a 30 percent
adjustment in what we thought we were going to be able to do.
We were bound contractually, so we have gone out and borrowed
the additional money. And by December 15th, we will be sending
an estimated tax deposit based on these public grants that we
received in 2019, and in 2020, we will receive more.
Probably this year we will receive about $4 million, so we
are confronted about $1 million loss, and then next year we are
confronted with, on a $6 million grant, perhaps another $1.8
million loss. That goes directly to our bottom line. We go
directly to a borrower and, you know, ask them for the ability
to borrow. We believe we will get it, but in the meantime, we
would like to be able to go another mile, another 2 miles to
the next people who are down the road and we can't. For the
short term, we have to pay that debt, and just the interest
alone, you know, you can imagine about $1 million, about
$50,000 a year, maybe a little less at today's rates, severely
curtails our ability to reach out to those people who are
relegated to satellite service.
Chairman DELGADO. All right. Thank you. Mr. Berman, I want
you to speak. I know you have had been doing the work to access
and expand coverage to the residents of Columbia County for
some time, and I think you have alluded to obstacles that you
have encountered, specifically in the county. Can you speak a
bit more about what those challenges are and why it has been
such a challenge from your advantage point?
Mr. BERMAN. Sure. It is a simple question that I think we
all face here of density. Under New York Public Service
Commission rules for a television franchise, you must provide
service to homes where the density is 35 homes per linear mile.
Most of the cable companies will give you something better, but
when you look at the cost of modern fiber optic installation in
a green-field, meaning virgin territory, we are talking about
upwards of $40,000 a mile. So if there are 7 or 10 homes, those
homes are going to have to be contracted to you for the next,
oh, I don't know, 4,000 or 5,000 years before you will ever
make money.
Then you hit the issue of pole permits, which is one of the
big, nasty issues of, you know, just because you want to hang a
wire on a pole, if you don't own the pole, you have to get a
pole permit. And while the utilities are required to respond in
a timely manner, the small ones do. The large ones couldn't
care less. And so what we will find, a lot of the broadband
program office money that has been granted, they are behind
schedule because the larger utilities do not give them access
to the pole to hang the wire. And then you add in things like
commercial secrecy of nobody wants to tell you where they are
going in fear of others.
And one of the drawbacks of the State program is that they
sign various nondisclosure agreements with Spectrum, and so the
public has a hard time figuring out where commercial service is
available. The Chairman of the county broadband committee and
the elected official went from a 2-megabit DSL line for 50
bucks a month, and happened to see a guy going down the street
from one of the carriers, and asked if service was available.
And they said, oh, yeah, we can bring fiber to your house
tomorrow. And he went from 2-megabit DSL to a symmetrical
gigabit at $71 a month, and had no way of knowing that it was
available. So, you know, it is a problem of physically building
it and then actually making the public aware that it might
actually be available.
Chairman DELGADO. Right. And on that first point with
regard to population density, you know, it is interesting to me
because it is so important to recognize that while the market
has a rational way to operate, and that way in which it
operates is, you know, seeking out profit margins. So you don't
have to make a normative judgment one way or the other whether
or not the market is acting in the way it ought to make money,
right? So the question then becomes, what is the counterweight,
right? What becomes the way to make sure that while that market
operates the way that it does, it doesn't result in communities
being left behind? And this goes back, Mr. Miller, to your
point about public/private partnerships. And to the extent that
those things can be created via incentivization or subsidies or
tax credits, whatever the case might be, I think we at the
Federal level must take a hard look at forming those kinds of
partnerships. And where they cannot be formed, obviously,
taking this on in a more public works standpoint by investing
our revenue more directly into these projects.
I do want to just with our last question here, mapping came
up quite a bit over the course of the testimony. Census block
mapping clearly is flawed. Again, to reiterate, this is a
situation where you have one home covered in 1 block and the
whole block is deemed covered. And that makes a lot of sense
when you have people living on top of each other in densely
populated areas. But when they are not living on top of each
other, you might want to consider a different way to track who
has coverage and who does not. So what might those other ways
be? I mean, how important, for example, is it to incorporate
usage, or subscription to access connectivity or household
data? What are some of the ways we think that we can get to
more nitty gritty data to help us understand who, in fact, has
coverage and who doesn't?
Mr. MILLER. Well, you know, an important part of the self-
reporting is important, and the audits are important. I think a
lot of the small carriers would go from auditing of the data to
make sure that it is accurate, but the subscription model is
sometimes tough also because a customer can choose what speed
they need for their particular house. So even if they take a
10-meg service now or a 25-meg service, that may not be a
future proof network.
So part of the mapping really has to be what is the maximum
speed allowed available in that technology, and I think part of
the mapping solution shouldn't include future proofing the
network. You know, it is very frustrating to me. I am a type of
person that likes to build it once and build it right, and have
it there 20 to 30 years. So by using fiber optic cable and
dedicating a fiber to every single home, that house is future
proof for the next 30 years.
I can change out electronics on either side and go from 100
meg, to 1 gig, to 10 gig, to 100 gig. The glass that is on the
poles is there for the next 30 years. Sometimes we tend to limp
along with improving the speeds of copper by shortening the
distance, whether it is copper or coaxial, put in more
cabinets, shorten the distance. I can increase a 5-meg service
to 10-meg, and then I meet the Federal guidelines, so we are
good for this round of funding. But in 5 years, we are going to
have to do a whole new round of Federal funding, and it becomes
that kind of vicious cycle of continuously funding, upgrading
the infrastructure. So I think part of the mapping process
should be identifying where there is technology that is future
proof, and really making sure that is how we are spending our
money in infrastructure.
Chairman DELGADO. So it sounds like what you are saying is
an actual robust commitment to solving the problem and not just
putting a band-aid over it bit by bit.
Mr. MILLER. Absolutely.
Chairman DELGADO. Yes. Well, I know we are running long on
time. I want to just thank all the witnesses for sharing their
time with us and their testimony today. It has really been a
privilege. I just want to offer a closing statement before I
gavel this out, and then as noted, you know, we will stick
around and do some questions with the commissioner.
Connecting communities in rural upstate is of critical
importance to me and members of the Small Business Committee
for many years, but there have been too many Americans who do
not have access to the high-speed broadband connections they
need, and we have heard today what the implications are. Small
electrical co-ops and other broadband service providers do not
have the resources they need to build and sustain broadband
networks with our few subscribers in high construction costs.
Building out broadband infrastructure in rural America
requires accurate maps and targeted Federal funding, real,
robust, targeted funding so that billions of dollars of
infrastructure incentives can reach the towns and communities
that need them the most. Access to broadband can mean the
difference between businesses opening and closing, students
failing or passing and succeeding, and lives being improved and
saved. Closing the digital divide should be a top priority for
members of Congress. It certainly is one of mine. Representing
all districts, the FCC, and the USDA, we must continue to push
for policies until every community is served.
I would ask unanimous consent that members here have 5
legislative days to submit statements and supporting materials
for the record.
Without objection so ordered.
And if there is no further business to come before the
Committee, we are adjourned. Thank you.
[Whereupon, at 2:27 p.m., the Committee was adjourned.]
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