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Transcript MPUC hearing on ARRA and Broadband

March 25, 2009

MAINE PUBLIC UTILITIES COMMISSION AUGUSTA, MAINE IN RE: ) ) Docket No. 2009-092 MAINE PUBLIC UTILITIES COMMISSION ) March 17, 2009 ) Notice of Inquiry into PUC's Response to Federal Agency Requests for Information Regarding Broadband Stimulus Funds APPEARANCES: ANDREW HAGLER, Hearing Examiner SHARON REISHUS, Maine Public Utilities Commission VENDEAN VAFIADES, Maine Public Utilities Commission JOHN CASHMAN, Maine Public Utilities Commission RICH KANIA, Maine Public Utilities Commission JOEL SHIFMAN, Maine Public Utilities Commission AUDREY PRIOR, FairPoint Communications BEN SANBORN, Telephone Association of Maine JIM SANBORN, TAM/Lincolnville companies ERIC SAMP, GWI FLETCHER KITTREDGE, GWI PHILLIP LINDLEY, Connect Maine Authority NICK WINCHESTER, Mid-Maine Communications/Pine Tree Networks BILL DURAND, New England Cable & Telecommunications Association ANDY VAMVAKIAS, Premium Choice Broadband BOB PANOFF, Stratham Broadband CYNTHIA DILL, District 121 State Representative

CONFERENCE COMMENCED (March 17, 2009, 2:03 p.m.) MR. HAGLER: We're here on docket number 2009-92, which is an inquiry into the Public Utilities Commission's response to federal agency requests for information regarding the federal broadband stimulus funds. My name's Andrew Hagler. I'm the Presiding Officer. With me are Commissioners Vafiades and Cashman and Chairman Reishus. Also from the staff, Rich Kania and Joel Shifman. Before we begin, if everybody could just announce your presence. I've got a sign-in sheet which I encourage you to sign, but it'd be helpful for us to know who's here for today's public meeting. So we'll go around and start with you. MR. SAMP: Eric Samp, GWI. MR. KITTREDGE: Fletcher Kittredge, GWI. MR. LINDLEY: Phil Lindley, (Inaudible) Authority. MR. B. SANBORN: Ben Sanborn, Telephone Association of Maine. MR. J. SANBORN: Jim Sanborn, Telephone Association of Maine and the Lincolnville companies. FEMALE SPKR: (Inaudible), Telephone Association of Maine and Unitil Incorporated. MALE SPKR: [John Lewellyn], Pioneer Broadband. MR. MCAFEE: Tim McAfee, Pioneer Broadband. MR. PANOFF: Bob Panoff, (Inaudible) Broadband (inaudible). FEMALE SPKR: (Inaudible). MALE SPKR: (Inaudible). MALE SPKR: (Inaudible), Oxford Networks. MR. VAMVAKIAS: Andy Vamvakias, (Inaudible) Broadband. MR. LANDRY: Andrew Landry, Preti Flaherty. FEMALE SPKR: (Inaudible). MALE SPKR: (Inaudible). MALE SPKR: (Inaudible), (Inaudible) Company. MALE SPKR: (Inaudible). MALE SPKR: (Inaudible), Communications. MS. PRIOR: Audrey Prior with FairPoint Communications. MR. BALLANTINE: Bruce Ballantine, FairPoint Communications. FEMALE SPKR: (Inaudible), (Inaudible) Communications. MR. WINCHESTER: Nick Winchester, Mid-Maine Communications, Pine Tree Networks. MS. BRAGDON: Trina Bragdon, Mid-Maine Communications and CRC. MR. HAGLER: Okay, great. Well, thank you all for coming on what was ultimately very short notice. Today at the deliberations of the Commission, the Notice of Inquiry was officially opened. We sent the invitation out last week and you can see that on the virtual case file probably some time this afternoon. Also of interest to you, and we have some copies but we can also direct you to the website where this information can be had if you haven't seen it already, is the Federal Registry entry by NTIA and RUS requesting comments of persons -- to them of persons or other entities regarding their rulemaking and other procedures that they're considering as they implement the federal act. Similarly, there's a notice of comment date issued by the FCC on the same matters. Those comments are due April 15th, and that's the date we have -- or April 14th, and that's the date we have in mind as we're preparing to get the Commission's thoughts together. I believe that the Commissioners may have some comments they wish to make before we begin. MS. VAFIADES: I'd like to just highlight a few things, just in -- in -- so you understand what we're focusing on about what we have for information about the state's role at this point. And I might be a little redundant for information you already know, but at least we can start out where you know what our thinking is because we issued the NOI this morning, and we're really appreciative that so many people have come here to talk with us about how to take a position -- an appropriate position and assist all of you in seeking out broadband funds. Now we understand that the -- I'm not sure how the discussion will go this afternoon. I hope that you will speak up to the extent that you have non-proprietary information that you can share with us. We probably won't be able to answer a lot of questions because we know what you know which we're all reading as the proceedings that are ongoing. But we would hope that you would share any thoughts and information that you have, any information that's not proprietary about what you're thinking about doing. We'd appreciate it in a kind of general way, and also we're seeking advice for our own comments and what we can do to assist you. The -- the public comments have started at NTIA yesterday, and certainly the NTIA and RUS can consult with state officials in developing criteria and evaluating applications received from bidders. And both of the agencies have made clear that they intend to do that. As you know, RUS has 2.5 billion for loans -- loan guaranties and grants in rural areas, and NTIA has 4.7 billion. The NTIA funds are broken down with 250 for mapping, 250 for competitive grants for innovative programs, 200 million for competitive grants for expanding public computer center capacity including community colleges and libraries, and 10 million for audits and oversight. So that leaves about a little under four million for distribution for general broadband programs. Now, the -- the officials at NTIA so far have indicated that they're looking for projects that would not have happened except for an infusion of taxpayer money and that the projects are going to be ongoing to be self-sustainable down the road. They're also leery of projects that would have to tap into universal service funds for ongoing support. They indicated that they don't want to add additional burden to USF. And they're having proceedings to develop criteria for wording the funds and general input for a national broadband plan. And they're also seeking information on available speed threshold for un- and underserved areas. I tell you that or suggest -- offer that to you because comments in those areas would be helpful. Under the federal rules and under the federal joint request for information/notice of public hearings, under NTIA there's a section on role of the states that the broadband technology opportunities program, which is the little under four million that's available -- four billion. I'm sorry, I keep saying the wrong number. We'll take the four million here. But four billion that they will be consulting the states and that the broadband technology opportunities program that the intent is to award at least one grant to every state. They're planning to consult with the states on state priorities in awarding grants, the appropriate role for states in selecting projects, how the agency would resolve differences among competing constituencies in the state. They expect us to have a role in that. How the states could help in making sure that the projects are well executed and produce worthwhile, measurable results. The only other guidance that I was able to find in terms of states' roles directly from Congress at this point was in the Conferees' Report when they were having -- they were coming together and making a -- hopefully got their act together. The Conferees said about consulting with the states is that they directed NTIA to consult with the states on the identification of unserved and underserved areas within their borders and the allocation of grant funds to projects affecting each state. The Conferees recognize the states have resources and a familiarity with local economic, demographic, and market conditions that would contribute to the success of the broadband program. And states are encouraged to coalesce with stakeholders and partners, assess community needs, aggregate demand for services, and evaluate demand for technical assistance. They -- the Conferees expect and intend that NTIA will seek advice and assistance from the states in reviewing grant applications as long as NTIA reserves the sole authority to approve the awards. So after reading all of this, it impressed upon me that at least in the primary inquiry, now we don't now what the final rules or parameters of the programs will be, that there is an expectation that the states will be active. Now that doesn't mean -- they explicitly have indicated that the states will not receive grants to disburse. We won't receive a pot of money that then we will be disbursing. But they certainly perceive the states as being active in assisting and making evaluations about what will happen within their borders and also doing what we're doing today. We actually got some trade press notice of the fact that we're doing this today because I think we're the first state that's done it in sort of a public position. I noticed that California's doing one next week. So I think that this is an appropriate process. We hope that you'll be vigorously involved in it. We want to indicate that whatever we come up with for recommendations or how we want to manage this process that we can be of assistance to you and all of our recipients of broadband services which will hopefully be many more now in un- and underserved areas, that we went through a deliberative process and got input from stakeholders in trying to move forward. So, thank you for being here today and, Andy, I did -- however you want to handle it from now. Thank you. MR. HAGLER: All right. Do you have anything? Would anyone like to speak? MR. KITTREDGE: I'll start. MR. HAGLER: Okay. MR. KITTREDGE: I'm still Fletcher Kittredge from GWI. And I'm working with a consortium of carriers, and -- and state agencies, and nonprofits to try to put together a plan that will meet the criteria hopefully for a -- a grant on the large end of what is available. MS. VAFIADES: NTIA grant? MR. KITTREDGE: Yes. MS. VAFIADES: Okay. MR. KITTREDGE: And some quick background to -- this may sound a little bit unusual the way we're thinking of doing this, but some quick background of why we'd do this. The driving equation of the networking industry is Metcalf's law which says the value of a network is proportional to the number of people connected to it, which makes this different than other industries, say, electricity. You don't -- if you're Bangor Hydro, you probably don't care a whole lot if CMP adds an additional customer, one way or the other. But the odd thing that's kind of neat about this industry actually is that the more people you add to the net, the more value every network connection has. So when our competitors add people, particularly if it's outside an area we serve, it makes the connection more valuable to our customers, their connections because they have more people they can talk to. People connect to the 'net to communicate with other people and companies. And the more you can do that, the better it is. So Metcalf's law has been around a long time. There's a corollary that people don't really discuss as much but is also true, and that is the better the network is, the greater the value. And it's the better the network is: speed, reliability, quality of service. Imagine I'm someone who has a really fast network connection, but I'm the only one who has a really fast network connection. Any connection -- or any connection I make to someone else is going to be at the speed of their connection. And I don't get a connection just to connect to the 'net; I get a connection to connect to other people. And if -- if -- you know, whoever I'm connecting to, they're -- if I'm talking on a cell phone to someone, for example, and they've got a lousy connection, I'm going to have a lousy connection. It's the same with -- with broadband. Having a very fast connection if every website you connect to is slow does you no good. And it's generally been somewhat of a peer-oriented industry. So there has traditionally been a lot of cooperation going on, particularly in Maine because one of the things about Maine is we see the same set of people year after year. The industry is such, and regulators and state people and -- and -- included, you know, we're all --- most of the people in this room are going to be dealing with each other in five years. So if we cooperate, we feel good about that, and there's more opportunities for us than if we don't, then -- never piss anyone off in this state because it will come back to haunt you. So a group of us decided the best thing to do was to get together and put in a group grant. And this is in its early infancy. There are -- we're one of them; there are three other carriers and there are two not-for-profits. We would hope that it gets better -- bigger. And there -- the most we have is -- is at this point a vague sense of what we might do, but we're not -- we don't feel that that's a bad place to be at this point because they're still figuring out what the criteria are. If we had a crystallized plan, it would probably be a mistake. My personal sense is this process is going to be a little slower than -- than people might wish. It's going to take a while for the government to put together the criteria and to properly judge things. But there -- there are -- the plan basically at this point, right now, is to -- to have a set of principles, and we have a vague sense of the architecture, how we meet it. And the principles are this is one, you go for unserved and underserved areas. And, two -- and that's relatively straightforward, but another one that I think is important and it hits our goals, hits Maine's goals, and I think hits the goals that I see developing at the NTIA is that we build a superior network. And I should -- to give credit where credit is due, this plan originally came out of the University of Maine, which is one of the -- one of the non-profit partners. The idea -- okay. Another goal is to maximize this stimulus effect for the Maine economy, and I think the NTIA cares about stimulus. They don't -- the way we think of it is get the most money to come to Maine, which is probably not the way we would word it in any grant proposal. But that is a general goal of all the people. And a fourth goal is that it be open access, and I'll get to why that's important. There are some non-goals, at least from my perspective, and this is -- I'm not speaking for all the consortium members, but one of the -- at all. But from our perspective, we don't care who builds it, as long as they do something like -- that meets the other goals. We don't care who owns it, we don't care who operates it, and we certainly don't care that this be the only grant. In fact, we would be very happy -- a goal of this would be to stimulate other -- other -- other people's work. That's one of the whole points. And I should say that I'm speaking -- in that part I'm speaking for myself. But the idea would be to build a large high-speed fiber ring around the state of Maine basically starting out -- I think of it as it's a ring so I don't know where you pick a start and an end point, but basically starting at the border of northern New Hampshire where there's a hope that we may be able to interconnect with other states' similar projects, and then go up through the less-populated parts of western Maine, up to Fort Kent, and then back down the less-populated of the other side of Maine to Machias, hitting all the towns along the way, Presque Isle, Caribou, places like that, and then back down along the coast all the way to Portsmouth. And that -- and deliberately that would not be along the coast proper but would be somewhat inland because if you look at where the unserved and underserved areas, right along the coast is okay, tends to be okay. It's more 20 or 30 miles inland. And then back up through -- believe it or not, there are unserved and underserved areas of York County, Cumberland County, and -- and through the western mountains back up again. And the technology, this ring would be designed in such a way that it's a high fiber count. You would hit the unserved and underserved people directly along the route or within a relatively short distance of the route, close enough to hit with fiber to the home with that, probably with a PON architecture. But the -- a big part of it -- well, it would be used for local. It would also be used for distribution or IOF, and the idea would be you'd hit as many places as you could have towers for wireless for cable head ends if they wanted it or COs or whatever, and that it -- or remote terminals, for that matter. And that would be a big part of this. And the hope would be that people would then be able -- it would significantly lower the cost of building out to all of the unserved and underserved areas which tend to be -- MS. VAFIADES: Can I just interrupt you? MR. KITTREDGE: Yeah. MS. VAFIADES: What are you defining as un- and underserved? MR. KITTREDGE: That's one of the -- you know, that's the reason -- one of the reasons we're still vague on this because I'm not going to -- I mean, it's pointless for me to define that, if we're going for a grant where we're going to use the grantors' definition. MS. VAFIADES: I know, but we're trying at this stage influence the grantor. So we're trying to -- MR. KITTREDGE: Okay. MS. VAFIADES: -- you know, if we -- one of the -- MR. KITTREDGE: Well -- MS. VAFIADES: -- I see -- wait a sec. MR. KITTREDGE: Okay, go ahead. MS. VAFIADES: One of the ways I see this working out is if we see some models that make sense that you're already thinking of, you think are workable, everyone in the room -- MR. KITTREDGE: Right. MS. VAFIADES: -- and we would try to influence the grantors to develop rules that would be -- those models -- would fit for those models. I mean, we want to advocate for the needs of what you think will work. MR. KITTREDGE: All right. All right. MS. VAFIADES: All right, so if you -- so un- and underserved, some (inaudible) are talking about, you know, geographically nothing, or -- or a speed, you know, speed can define underserved. MR. KITTREDGE: Uh-huh. Yeah. MS. VAFIADES: But you can build out a system and if you don't have a take rate so costs can -- so there's a lot of factors that go into this. So what are you thinking? MR. KITTREDGE: Okay. All right. I'm putting a point here, stop talking about the people we're working with. I'm just going to talk about my personal opinion. MS. VAFIADES: On those definitions of those two terms. MR. KITTREDGE: All right, personally on those definitions. One of the things that drives it is, my belief and I'm absolutely positive of this, is that this job is get it done till everyone has fiber. When I got started in this, believe it or not -- MS. VAFIADES: Now, wait, wait, wait. Fletcher, I'm sorry. I don't mean to be rude. MR. KITTREDGE: Yeah. MS. VAFIADES: I really just want to focus on un- and underserved at this point because I want you to finish what you have for a format here. MR. KITTREDGE: Okay, quickly. Yeah, all right. So even within a few years, I mean, there are millions of people with fiber connections now in the U.S. who have 50 megabits. In a sense, you could say anybody who has less than that is -- is underserved. MS. VAFIADES: Okay. Going both ways, up and down? MR. KITTREDGE: Personally, I feel that's the way it ought to be, but 50 over 10 -- MS. VAFIADES: Okay. MR. KITTREDGE: -- is a common rate in fiber-based systems. What -- you know, we sell -- our standard rate is three-over-one and, you know, I'm not sure that that's really broadband when we sell it over copper. I mean, cable's six-over-one, I think. In competitive areas, Time Warner's rolled out 10, 15-over-2. So I would say underserved if you don't have speed. Latency is another thing. I mean, you can hit everyone with satellite basically in the region, but people don't buy that because -- partly because the latency is so terrible you can't use it for a bunch of things, but also it's expensive. And I would think that cost would have -- be a real factor here. I mean, realistically probably if it costs more than 30, $40 a month, you're pricing a lot of people out of the market. So I would consider them all to be underserved. I think if you -- I -- from my perspective, if what we're selling which is three-over-one is broadband, anything under that isn't. I mean, it's -- and so I would consider all that personally unserved. MS. VAFIADES: Okay, thank you. MR. HAGLER: Three-over-one is the cap for unserved. MR. KITTREDGE: Yeah, from my perspective, less than that is not broadband. There's a whole slew of things that you want to be able to do with a connection that you can't, and that will be more so as every year goes by. MR. HAGLER: Okay. MS. VAFIADES: Now, I interrupted you so -- MR. KITTREDGE: Okay, well, -- MS. VAFIADES: -- your architecture, your system. You were talking about -- you kind of wound up to going through the western mountains and close enough for fiber to every home that it went past. That's where I interrupted you, so I'm sorry. MR. KITTREDGE: All right. Yeah. From -- so, you know, the idea is to drive really inexpensive, very high speeds out there. And this -- this will not hit every unserved area, but we -- we hope that there will be other people who will do that, and it will very significantly lower the cost to them. When it comes to open -- MS. VAFIADES: Who's the state agency you're involved in -- with? MR. KITTREDGE: Right now we're working with the University of Maine. MS. VAFIADES: Okay, but you said that was -- I have two non-profits, a state agency, and three other carriers. So is it -- MR. KITTREDGE: If they want to talk about it, they can talk about it. MS. VAFIADES: No, no, I'm not asking you -- the others -- MR. KITTREDGE: Okay. Okay. MS. VAFIADES: -- the state agency would be public information. But you're considering UMaine as a non-profit and a state agency? MR. KITTREDGE: No, I was counting them -- MS. VAFIADES: As a non-profit/state agency? MR. KITTREDGE: I don't know which they are really. I mean, all that's a little vague to me. MS. VAFIADES: I gotcha. Thank you. And you were going to talk about open access. MR. KITTREDGE: Okay, open access. I don't think -- when we're talking to other people in the consortium about this, one thing is that I think we're all really clear at this point is the cost and the benefit have to match up or people aren't going to do it. And for the for-profit people, I think they've all become clear at this point that there's large amounts of -- if 80 percent of something's going to be paid for, there has to be a lot of public benefit to match that. So the government's not going to hand out money for people to build something and then make money off of it. Or definitely make money off of it but not, you know -- not build something and then have a monopoly on it. Likewise, Jeff Letourneau was very clear, I know, that if he's going to get private people to work with them, they've got to have a way of making money. So the private companies aren't going to invest unless they have a rate of return that matches their investment at least. And the public companies aren't going to -- the public sector's not going to invest unless it sees a public benefit greater than the amount of money invested. I think that a key on this is coming up when this is all done with something that returns the cost for the public -- the private companies who put the money in, and at the same time there's -- there's no question there is a public benefit, that the hospitals and schools, as you can imagine, since the university's evolved, is a big part of doing this, and a major goal is to provide connectivity to them. But there's still -- there's got to be a way for the private companies to make money, too. So we believe -- there being some (inaudible) of open access where some sort of rate is calculated from the -- with the money spent by private entities, and there's a way of them recovering that because if you don't have a business (inaudible), no private company's going to participate. Yes? MR. KANIA: I'm sorry, Fletcher, could you give us your definition of open access? It's a little fuzzy to me what people mean. MR. KITTREDGE: Sure. What I mean by open access is there's a set of reasonable, published terms that all people who use the network can use those components. A couple things about this. One is I would think that those rules would only apply to the parts of the network built with public money. Two is -- again to stress we don't care who builds this. I don't have a problem, for example, if -- you know, one of the issues we're going to have is this is a superior network and you're going to be building it across territories by companies that have an existing network. So potentially you're building a competitive network with public money that's running across someone's territory. I would think one way to solve that is to have that portion -- I don't have any -- you know, personally a problem with that portion of the network being owned, operated, and built, and all those sorts of things by the people whose territory it is. MR. HAGLER: Fletcher, I'm going to just pause you for a second to see if there's anyone else that wishes to speak. MR. KITTREDGE: Okay.. MR. HAGLER: We need to try to allocate the time now. MR. KITTREDGE: Okay. MR. HAGLER: There will be -- I'm going to encourage written comments, but I just want to take a sense of the room. Could you raise your hand if you intend to speak? MS. VAFIADES: Have them maybe come up to the table. MR. KITTREDGE: Okay, well, I'm pretty much done. MR. HAGLER: Please, come. If you could sit at the table or at the microphone. MR. WINCHESTER: Nick Winchester from Mid-Maine Communications/Pine Tree Networks. I think it would be helpful for me, as opposed to talking about what we would want to do with the money or what we plan to do with the money, if the state or the Commissioners had a desire for what they would like to see happen within the state boundaries relative to any investment that would be made. It would be helpful if we're going to try to put forward some sort of plan that is unified in nature that helps increase the success of actually achieving or receiving some of these funds that if there was a concerted or common approach to what we were going to do with the money, it might be helpful. And it may actually help define where the parties go to try to put together a plan that could be useful and beneficial to the state, to its actual constituents, and to the use of the money that we would have. So my interest today was to actually understand if there was a specific use or goal or objective for these monies that might be available that the state would want to put them to use for, if they have an ultimate common goal or objective. MR. HAGLER: I can speak to the notice, if you want me to. MR. CASHMAN: Go ahead. MR. HAGLER: Yeah, let me -- not for the Commission, but let me just speak to the notice -- MR. WINCHESTER: Sure. MR. HAGLER: -- to the notice. The one identified value that the Commission believes that it can most definitely have is advocating before the federal government, before the agencies that will be responsible for distributing funds, for rules and procedures that they will undertake in deciding what projects should be -- should receive funding. And to the extent we can be -- the Commission can be helpful in doing that, that is a clearly identified objective of the Commission in terms of formulating a comprehensive broadband plan to -- and then become a grantee. The Commission has not to date -- I mean, that's a possibility as I understand it but -- MS. VAFIADES: I don't think we're going to get any direct money. MR. WINCHESTER: Get into, say what, directing -- MS. VAFIADES: Direct money. MR. HAGLER: Direct money. MS. VAFIADES: Let me take a little bit of it -- more of a shot at that. As you know, Connect Maine used to be part of the Commission and now is independent, and maybe Phil would like to say some things at some point and I'd certainly encourage him to. One thing's clear, that we need to get some -- you know, I'd like to see that we complete our broadband mapping project. I know that Connect Maine's moving quickly to get that to happen and there's -- there'll be resources for that somehow. I know they're going to be attempting to get some of the NTIA money for the mapping project for Maine. So that will inform, we hope, down at the street level, of a better picture of what goes on. The one thing is that the industry, in my opinion, has been pretty forthcoming in terms of giving information when they come to meet with -- the times that I've met with the industry, they've been very open and forthcoming. I don't feel that I had a -- well, I don't think we have a street-by-street picture of what's available. So I'm very interested in the gross sense of what we have now that -- the information that Connect Maine has, and that we have a sum by population area. If we some decent information, not terrific, because it really only matters if you can find -- if on your street you can get it and what you can get. So overall, what I'm interested in is some of the goals -- and I'm just speaking for myself now because I haven't -- we don't have a planned statement on this issue so I'm only speaking for myself, but I -- I agree with Fletcher about a strong backbone, that we need that. And we have some of that and some of our adjudicated decision has been to try to drive that agenda. And in terms of unserved, I see unserved as making available on the street level speeds fast enough and cheap enough that most people can take them. Because it doesn't make sense to me to run a really expensive, fast service down a street and you only have a take rate of ten percent. I'd rather do something a little more modest that was cost effective to the industry and have at least a 50 percent take rate. I don't know how your economics work out; I'm only speaking for the consumer perspective, not -- not with an in-depth understanding of the economics. And, you know, some of the process to fill that gap has been directed by the projects that have been proposed by Connect Maine in terms of looking at trying to fill those -- trying to fill those gaps primarily driven by the industry. I also think that the focus -- Congressional focus on healthcare institutions and R&D as part of healthcare institutions, making sure that they have -- they're shored up and have high accessibility and cost effective accessibility to a reliable, fast network is crucial for healthcare reform in this country. So I'd like to see Maine as part of that. And the university piece -- Fletcher, I don't know that -- I don't know exactly how that all fits in, but partnering with our higher educational institutions to make them more interconnected in a -- in a more comprehensive way would also be a goal. And that's pretty broad, but that's personally my interest. MR. WINCHESTER: Anything to add, Phil? MR. LINDLEY: Well, I was -- I was going to wait until everybody else talked before -- because the primary reason for me to be here, just like you guys, is to hear what the other providers have in mind for things like what's unserved, what's underserved, what -- what -- what projects should be priorities. Certainly, the Connect Maine Authority is going to likely apply for some of the mapping money. The goal of the RFP that we put out last week is geared or patterned, mirrored maybe even is a better term, after the Broadband Data Improvement Act so that we can gain funding to do a very comprehensive mapping and inventory project of the state of Maine. That's -- that's a living kind of project so it's constantly updateable. If we know where broadband is, obviously we'll know the more important of where it isn't. And we've also got a short-term data request out there too because, as you said, one of the NTIA's goals is unserved areas and they're going to look right to the state for what's unserved. And, frankly, we don't have a good idea on a very granular basis of what's unserved. And hopefully after the data request that we've got out comes in next month, we will have it at least to the town or possibly census-tracked level of where basic broadband is, using the -- using the FCC's basic tier one speed, which is 768 -- 768 down, that's their -- they had to struggle to get to that because they didn't want to give up the 200K speed. So that's what the Connect Maine Authority's going to do there. I mean, we're definitely going to apply for that money. We have been in discussion or I have been in discussion with people at OIT and the university to talk about the project that -- or a project similar to what Fletcher's talking about. Whether the Connect Maine Authority would directly fund that or not remains to be seen. As you know the Connect Maine Authority is fairly modestly funded, but if a project -- a 20 or 40 or $60 million project is out there and needs -- and gets 80 percent, state agencies, the Connect Maine Authority or others, could help with that -- MS. VAFIADES: That match. MR. LINDLEY: -- that match. But what we're vigorously involved in today and for the next week or so is participating in those NTIA meetings and briefings. The ones yesterday were pretty illuminating about coordination between RUS and NTIA. And I brought this up last week with one of Senator Collins' staffers that the biggest thing that Maine needs is a simple application process, something that's online that bears no resemblance to the RUS/USDA application process. And maybe bears some resemblance to the Connect Maine application process which is pretty simple and straightforward. We've been doing that already. So I think that's where we can be strongest in fashioning or crafting how this program's going to look down the road. MR. HAGLER: Do you have any ideas regarding how, in response to the NTIA and RUS requests for comments, if you had your druthers, what would you -- what might -- what would you recommend that those agencies should adopt for unserved or underserved and should they -- should (inaudible) unserved or underserved is whatever the state at which the project is to be built says is unserved or underserved? Or is there a nationally applicable standard that you think the Commission might advocate for? MR. LINDLEY: There is no national standard. As I said, trying to get the FCC to raise their standards, they're now getting reporting in different tiers. Unserved, and it's what the Connect Maine Authority has been funding for the past year and a half, is areas that have no access to any form of broadband service. And when we first -- MR. KANIA: Sorry, define how broadband -- the 768 -- MR. LINDLEY: Anything above dial up. Nobody -- what we've been working with as unserved is the best that people had was either dial up or satellite. MR. HAGLER: And is that a definition you'd advocate for the federal agencies? MR. LINDLEY: No. I mean, that's -- well -- MR. HAGLER: We've got to comment -- MR. LINDLEY: It would have to be two steps. You'd have to say somebody that's unserved is somebody who has access only to dial up or satellite service. But then the next part of that question is so what is -- what do you fund to be served? And the Connect Maine Authority, as their initial standard in the rulemaking, recognizing that most of the projects we're going to fund are going to be wireless -- fixed wireless projects that struggle to 500K to a meg, meg and a half of service -- so we said last -- year and a half ago what we would fund was projects that provided at least 500K of always on internet access service. That's quite low as well, and -- and I think what we're going to be going forward with in the mapping RFP is to show us where at least the FCC's first tier of broadband service exists, and that's 768. As Fletcher said, you know, if -- if we really want to be, you know, a future-proof kind of system, it should be fiber to everybody's home, but we're not going to be able to fund that. Most people that I talked to that don't have service would be happy with anything above 500 or a meg. And so I think when we think about reviewing these grant projects and all other things being equal, the one that has the highest speed service should be the one that's funded. You just kind draw a hard, fast line and say, you know, in Indian Township where they've got zero that we're not going to fund a project that can be 500 because we want two megs of service there. I just -- I don't think that would be responsible. MR. HAGLER: Thanks, Phil. Just for the sake of making sure that everyone gets an opportunity, and then we'll come around if we've got time, was there anyone else who -- your name? MS. DILL: My name is Cynthia Dill. MR. HAGLER: Okay. MS. DILL: Would you like me to -- MR. HAGLER: Yeah, it's helpful because we're recording it so that we can make a transcript. MS. DILL: Thank you. Yes, good afternoon. My name is Cynthia Dill; I'm the state representative from District 121 in Cape Elizabeth. In my private life I'm an attorney. I'm here today to speak to, really, the sort of institutional angle of the stimulus bill or the AARA. I believe that as a state we really need to approach this sort of in a holistic and comprehensive way, and that the broadband needs or broadband opportunities that present themselves in the stimulus bill apply to so many facets, both the public and the private sector. And I know there's many people here speaking from the private sector. I think the reality is that if we're going to have a strong telecommunications infrastructure, we're going to need a public and private partnership for the most part. But I'm really here to speak to the more institutional side of the telecommunications infrastructure. And by that I mean our public safety agencies, our Department of Transportation, our -- our judiciary system, our state government, as well as others that I'm forgetting right now, all have a need for broadband. And increased access to broadband by these state agencies and these institutions will not only elevate service to consumers and constituents but reduce the cost of government and, more importantly, sort of provide a platform from which economic development and some of these private companies can hopefully operate from. So I'm here to encourage you to be a strong advocate for Maine and also just to make you aware of a piece of legislation that I have before the state legislature right now and that is L.D. 1012, which is an act to create the Maine Broadband Commission. And essentially it's going to have to be tweaked because the language isn't perfect. But essentially what it is is it's a bringing together of who I see as the critical Maine stakeholders: representatives from the Department of Public Safety, the governor's office, the legislature, the judiciary, public television, Connect Maine, the university, the community college system, everyone who has sort of a state interest in broadband who can formulate a kind of comprehensive and strategic plan and then use that to advocate for broadband funds under the stimulus act. Now, it may be that that's not what happens and it may be we need to sort of alter the Connect Maine Authority to broaden it. It seems to me, though, that economic development really has to be at the table when we're talking about broadband deployment. Public transportation has to be at the table. The Department of Safety, all these other various agencies need to be there because they bring to the conversation the parts of the stimulus bill that they've been operating under. Healthcare, you know, there's opportunities for broadband that -- that hospitals may have that we can leverage with some of the broadband opportunities that are presented just in the section of the bill that talks about the -- what do you call it, the broadband technology opportunities program. And I would just urge the PUC to be thinking about a strategy that includes a state-wide strategic approach, consists of diverse members representing various stakeholders. We need to as a state, I think, establish clear deployment, adoption of goals, and accountability, provide a forum for public/private participation, and -- and -- in addition to protecting municipal rights and that sort of thing. So I know that there's a lot of people here to speak and I'm happy to -- to talk with you more, but I just wanted to let you know that it's a -- I have a great passion and interest in this area, and I think it's important that we all who are working on this kind of come together and share the work that we're doing and so we don't overlap. I attended the conference at Dartmouth College thanks to the invitation by Mr. Lindley, and certainly people there had success stories and then there's a few people who said this is what you don't want to do. In New Hampshire, for instance, they gave an example of the various state agencies duplicating efforts and spending excess amounts of money on a substandard system when, had they come together and collaborated, it would have been more effective and the best use of a public resource. And I think the broadband bill really presents an opportunity for state stakeholders to come together and bring to the table their needs, their opportunities, and work out a sort of a comprehensive broadband plan from the state's perspective. And I think if you look at the language of the federal legislation, there is a lot to be said about hooking up the end user with broadband and clearly one of the priorities is to expand broadband in rural and unserved areas. But there's also a message, I believe, in this legislation that directs state governments to think large about institutions and connecting institutions so that our universities can talk to other science and education universities and that we can trade with Canada in an efficient way and utilize the broadband from that perspective. MS. VAFIADES: Thank you. Now, does your bill have a date for public hearing yet? MS. DILL: No, it just got referred to the -- if it's been scheduled, I'm unaware of it. MS. VAFIADES: Okay. MS. DILL: I just checked it this morning and it hadn't been. MS. VAFIADES: Is it going to the Utilities -- MS. DILL: Yes, it is. It's been referred to the Utilities Committee. MS. VAFIADES: Thank you. MR. HAGLER: Thank you. MS. DILL: Thank you. MR. VAMVAKIAS: Good afternoon. I'm Andy Vamvakias; I'm the president and CEO of Premium Choice Broadband. And I apologize that, to a large extent, I'm just going to kind of read the comments, but then I'll also be happy to answer any questions you have directly for me. Premium Choice Broadband's a Bangor-based provider of fixed wireless internet solutions with a particular emphasis on deploying service in unserved and underserved areas. In the last year alone, we've installed transmission equipment in over 40 locations in Maine, hooked up over 800 customers. We believe the state of Maine can most effectively achieve the greater deployment of broadband to the largest number of unserved and underserved customers -- and I'll get to definitions of those in a moment -- in the most rapid manner by supporting commercial providers in their efforts to obtain funding under the federal stimulus programs. A process whereby commercial providers submit their proposals directly to the NTIA and RUS and receive amounts from the NTIA and RUS directly to the providers, we believe, would be the most efficient and expedient way to get federal funds converted into increased broadband in Maine. We believe that respectfully the role of the state in this process should be consistent with generally identifying and supporting those commercial projects, applying for funding, and to the extent identified needs are not being addressed by commercial providers, the state may take other actions to encourage providers to address those areas or pursue alternative approaches. We believe, given the existing broadband deployment in the state of Maine, particularly rural areas, the use of available funds should be directed to deploy broadband service with speed of at least 1.5 megabits per second to as many unserved and underserved customers as possible. We believe strongly that the selection process should include criteria that gives priority to entities that can demonstrate a track record of efficient and rapid deployment of facilities, both in terms of how quickly service is made available to customers following authorization and how many customers are reached per dollar expended. Specifically, we believe that the -- we ask the Commission to consider the following positions for inclusion: that the NTIA should determine that private entities described in Section 6001(e)(1)(C) of the AARA should be eligible for funding by the NTIA; that the NTIA and RUS should define broadband service to include service of at least 1.5 megabits per second and greater; underserved areas being defined as geographic areas, however you define the geographic area, with less than 75 percent availability of broadband and unserved as less than 25 percent availability. And we would define a minimum level of broadband at 512 megabits per second download. We believe the NTIA and RUS should give priority consideration to entities with expertise, experience, and a track record, and that the NTIA and RUS should structure the review and approval process so as to facilitate the presentation of proposals directly by the providers to the NTIA and the RUS and awards by the NTIA and RUS directly to the providers. Thank you. MR. HAGLER: Do you have any thoughts -- oh, I'm sorry. Do you have any thoughts on -- about what role a state agency, whether it's the PUC or another state agency, might have in helping NTIA or RUS evaluate proposals, or -- or not? MR. VAMVAKIAS: Yeah. I think there is a role that can be played. I think it would be a strong advocacy role. The appropriate agency, the PUC, Connect Maine, could come up with criteria that they would determine a grant as -- as worthy of support and then assist the applicants in pushing that through the NTIA and RUS as aggressively as possible. MR. HAGLER: How do you do that without slowing things down? MR. VAMVAKIAS: That is just the great question. I don't know. MR. HAGLER: Okay. How do we answer April 13th the question what should the state agency's role be to make sure good projects are quickly approved? I'm not -- I don't want to put you on the spot -- MR. VAMVAKIAS: No. MR. HAGLER: -- but it's something that we'd love to hear from you. MR. VAMVAKIAS: I would think that one way to do it would be to -- to mirror on Phil's comments -- with as little administrative burden as possible to see if they can -- they can get at the -- at -- at substantiating an applicant's claims of their past success. How many customers have you hooked up? At what level investment? What did it cost you per customer? Quite frankly, there are -- there are grants that were awarded under Connect Maine in 2007 that have not been completed yet by applicants. So I think that might be an efficient way to do it, to say, "Yes, this entity, RUS/NTIA, we've audited to this sort of level and they can demonstrate a record of success and speed that would get this out there quickly." MS. VAFIADES: Can I ask a question? There's a national organization that the state Public Utilities Commissions belong to, and they're advocating the states coordinate and rank in-state applications for NTIA. In other words, you know, we'd have -- the NTIA would set certain standards, there might be a subset of standards that the state -- to respond to Mid-Maine's question, that the state might have as priorities, and that the state would not have the money or award the money but would rank -- MR. VAMVAKIAS: Uh-huh. MS. VAFIADES: -- the competing projects. I mean, I'm not necessarily -- I'm not advocating that position because there's some down sides to it because, you know, we want to compete with others outside the state, not have a free-for-all within the state from my perspective. MR. VAMVAKIAS: Right. MS. VAFIADES: But that's one of the approaches being taken. What do you think about that? MR. VAMVAKIAS: That might have a role. I think that could get unnecessarily bureaucratic and cumbersome very quickly, if it was allowed to. You know, how do you advocate -- you know, we specialize in going to towns like Sangerville, Glenburne, and if -- not to be too -- MS. VAFIADES: I know where both of those places are, so -- MR. VAMVAKIAS: Well, for instance, we just signed a lease for location in Glenburne. And if I had access to $50,000 today, I could be hooking up customers there at 1.5 Monday. That's the speed at which we're able to move, and I think that's desirable to push out a certain level of service as quickly as possible. And I would respectfully disagree with Fletcher about the definition of broadband. I think that those people that are existing on dial up, if you bring them one meg or one and a half, they do cartwheels. I've had customers sign waivers that we require because we weren't able -- when we got there, we weren't able to get them a stability of signal that we like to see but they were just so thrilled that for the 20 minutes it might be out in a day, they were willing to accept that and continue to pay for the service as it kind of came in and out. They just don't have anything so our feeling is that we need to push out at least an improvement in service out there as quickly as possible. And I think technologies are always coming behind. I know the big word now is fiber. But, you know, history has shown everything that there's always a technology buster out there. And there's going to be something that comes behind fiber that's going to be even faster and even more efficient. But that's not to say that the goal of the fiber ring is not a desirable one. But how do you evaluate that and rank that over an entity like ourselves or Pioneer or Axiom that may want a grant for a specific town to hook up 50, 60 people? Both are extremely laudable, but I think that's where it to get too cumbersome and get bogged down, and we'd lose out. And I think we are going to be in competition -- it's very important to understand that we're going to be in competition with other states for this funding. There's no real guarantee of what sort of amount's going to come to the state of Maine. And I mentioned this the other day, with no disrespect intended, there are other states that have a better track record of lobbying for their business interests on their behalf and moving quicker than the state of Maine. And I want to make sure we don't put ourselves at any greater disadvantage than we may already be at because I think geographically speaking our state has one of the greatest needs for this money. MR. HAGLER: Thank you. MR. VAMVAKIAS: Thank you. MR. HAGLER: Is there anyone else? Sir? MS. VAFIADES: Andy, you might want to get (inaudible) so we can communicate with them. MR. HAGLER: The -- I guess I wasn't explicit enough on the sign-in sheet, but I'll send this around. If you could add your e-mail address, that'd be really helpful. MS. VAFIADES: And your speed of service. MR. HAGLER: So -- MR. DURAND: Good afternoon. I'm Bill Durand; I'm the executive vice president and chief counsel for the New England Cable & Telecommunications Association, NECTA. We represent substantially all the cable companies here in Maine and the other five New England states. The cable industry spent about $146 billion over the last ten years to upgrade our networks. The FCC in several reports has acknowledged that cable basically started the broadband revolution. It drove the ILECs into providing DSL as a retail product. And what has that gotten us? It's gotten us into 92 percent of the homes, at least in front of 92 percent of the homes. But despite all of our efforts, there's still about eight percent unserved, completely unserved. And one of the things that was very refreshing about the Commissioner's comments is that you addressed one of the major basic barriers to adoption, the first being affordability. Despite the drop in cost and the cost per megabit, there are certain people who just can't afford it, and I think that was a great statement you made. And the previous speaker was very accurate. I mean, if you're living on dial up and you get one meg, you're a happy camper. And I think that the cable industry is now investing 14 billion in upgrading our speeds to over a hundred meg because there are people that need that. But there are other folks, like Grandma that wants to check e-mail and get pictures of her grandkids when she's down in Florida, one meg will do the job just quite well. The second very obvious barrier to adoption is lack of a computer. And I think one of the -- one of the major things that this money should do is to find ways to get computers into the hands of people that can't afford them otherwise. And then there's another thing called digital literacy, and I've experienced that personally because in all six of the states that I work, I've got lawyers that report in to me. And on Sunday night I sent an e-mail out to all six of my lawyers saying, "I need some information. Very important I get this Thursday night before the hearing I had on Friday." No response from one person. And I couldn't figure it out so I called them up at home. I said, "Geez," I said, "you know, did you get my e-mail? I need this information for this hearing tomorrow." And he says, "Well, I only check my e-mail on Saturdays." So I said, "Okay, so I could use stamps with you?" I mean, this guy basically is a very intelligent, well-educated lawyer that will not adopt technology. He just refuses. He just got a fax machine. He has his secretary take bills off the state website and fax them to me. I don't get it. They haven't learned to use attachments. So that's a major barrier. But we're thinking that the Commission should -- should basically list as priorities, when you do write to the agencies in Washington, first and foremost is extending broadband facilities to unserved areas. If they don't have any facilities available to them, they're not going to adopt it. Supporting programs that enable underserved populations defined in terms of below-standard speed and our qualitative measures relative to today's current broadband speeds, and generally other educational programs that will take my good friend the lawyer who can't do anything but fax things to let them know the value of broadband services. So I think you've got a good story to tell here, and I think when Phil gets through with the mapping, the cable industry's going to look very good. I remember flying up to Presque Isle with the launch of Roadrunner Many years ago. And when I came back to my office in Braintree, Massachusetts, I found that Presque Isle had broadband before I did in Braintree. So it's -- you know, you've got a good story. I'm in all six state houses. I'm in all six PUCs. I practice before all of them. And I can tell you what Phil and you have done here, they're talking about it all over New England. You know, the Connect Maine program is the model. Everybody in New Hampshire's talking about it. Everybody down in Connecticut is talking about it. And there's, you know, the highest per capita income in the country in Connecticut. And they're talking about what Phil has been able to accomplish with Connect Maine and what you did as a PUC initially. So be happy to speak on any other topic. MR. HAGLER: Are your members planning applications before NTIA or RUS? MR. DURAND: We're filing comments and we're not sure. It's all going to on what strings they attach. You know, there's a group in Washington on what's called open access which we always called forced access -- MR. HAGLER: Okay. MR. DURAND: -- that will not allow us to manage our networks. And the concern we have is we will have a low product -- a low-cost product, 1.5 or 2 or whatever, but why should someone that can afford to pay for the service because they're a graphics company or they're -- it's kind of like saying that, you know, the shoe factory down the street wants to pay the same electricity as the resident next door. And that's the only barrier I think we're going to have to getting into it because we want to serve. Look, color us crazy, we want more customers. We'll go anywhere where customers will buy our product. But there may be -- we're hoping and we're arguing in our comments, at least the drafts that I've seen so far, is we're going to argue for no strings for existing providers to get into this. MR. CASHMAN: Did you say you're in 92 percent of the homes? MR. DURAND: Nationally, 92 percent. MR. CASHMAN: That answers the question. You're not in 92 percent of homes? MR. DURAND: No, no, we're in front of. And that's the big issue is the adoption. MR. LINDLEY: What is the adoption rate? MR. DURAND: Well, it varies. Sometimes it's ten; sometimes it's 40. It can be higher. It really -- I mean, I think it becomes a matter of economics for some folks. MR. HAGLER: Great. Anyone else? MR. DURAND: Thank you. MR. HAGLER: Thank you. MR. B. SANBORN: Thanks. I just want to comment really briefly from the Telephone Association of Maine and sort of following up on a lot of what's been discussed already this afternoon. The Telephone Association of Maine did participate in the earlier Connect Maine meeting similar to this one. We did -- we were aware of what Fletcher and others have been discussing with regard to the fiber (inaudible). We don't necessarily think it's a bad idea. The question is how it gets implemented.
But the thing that we are consistently coming back to is the issue of how do you benchmark this, how do you measure this, what are we getting? Eighteen months after the funding is made, will there be more people with higher speeds at less cost or not? And we think that is an important criteria, if not the most important criteria, that what you need to be looking at is serve the unserved people. If there are areas where there's underserved, then see if there's a way to bring those speeds up or costs down. And make sure that the investments that are made through these funds are made in a way that they're going to be forward looking and that they're going to be sustainable. The concerns that we would have with state agencies directly obtaining the -- the funding to attempt to support state agency programs is that it makes it very difficult to not only continue those programs but to advance those programs as time goes on given the fact that the economy fluctuates. And what starts out as a really good program that gets funded by this one-time stimulus fund can rather rapidly turn into a really good unfunded program. MR. HAGLER: Do your members have plans to seek grants from NTIA and RUS? MR. B. SANBORN: We have certainly been discussing it internally. And we would like to be able to work with other groups to see if we can come up with the best plan for the state of Maine because we think it is important to have a -- a clear vision of what is going to be in the best interest of the state. And that would be where we would hope to be able to work with Connect Maine and with the Commission and with all the other parties who have been speaking today to try and figure out what is going to be in the best interest of the customers of the state of Maine, is going to have the best long-term impact, and is going to be the most measurable, where can we say that we have a benchmark that has been met. MR. HAGLER: The -- the Federal Registry notice, Ben, from NTIA and RUS has a lot of questions and a lot of subparts, and it's -- MR. B. SANBORN: Sure. MR. HAGLER: -- and if we wanted to respond to that, are the TAM companies going to provide comments to the Commission, tangible comments that help us formulate a response to what is, in effect -- I mean, it's a federal request for comments that we're in the position now of being asked to comment. And I think the Commissioners recognize that its comments are likely to be looked at carefully and that's what we're trying to grapple with. MR. B. SANBORN: Yeah, TAM would absolutely plan on filing comments with the Commission with suggestions as to appropriate paths for the Commission and Connect Maine to take to, as was earlier mentioned, really help support the business community because, frankly, it's the private investment that's going to have the most long-term impact. This is a stimulus to attempt to get to those areas that currently cannot be reached because of economic considerations, is to bridge that last mile. But for anything to be sustainable, it's got to be something that is going to be sustained with private investment. And so we strongly believe that the funding that gets obtained by anybody in the state of Maine has to be geared toward supporting those entities that are going to be able to sustain that private investment to not only get a one-time infusion of capital into the state for a one-time project, but actually have a sustainable infrastructure that's going to be able to grow with time and that is going to have ongoing and long-term benefits as opposed to individual short-term projects. MR. HAGLER: Thank you. Audrey, do you -- MS. PRIOR: Yeah, just a couple of comments. I came really prepared today to share with you what Fairpoint is thinking, the current thinking and also would be willing to file comments later with just a little bit of short notice and we're kind of busy doing some other things. But wanted to make sure you knew where we're at with our thinking. We do plan to seek stimulus dollars. We'll do so aggressively. Whatever we can and whatever makes sense, we will seek stimulus dollars. Having said that, we also want to be -- this is one of the reasons I'm here today -- we want to make sure and work with the state, partner in whatever way we can and whatever way seems to make sense to benefit the state as well. So we're going to be open to any and all kind of opportunities there. But what we will do is that, as most people in the room probably know, FairPoint has already made a commitment to build out broadband to 90 percent by the year 2013. So with any stimulus money that we receive, what we would be looking to do is to bring that back, essentially speed that up. And we would be looking to -- in our preliminary numbers and figures, we think it would cost us about $50 million to bring that -- speed that up to bring that commitment to about the end of 2010 or early 2011. So we'd be looking to immediately speed up the process, to get the funds deployed quickly, and bring in that -- it would take -- let me just make sure I got this right -- yeah, 21 to 24 months after the grant is awarded is when we would feel like we could have the broadband deployed. So, again, we'd be taking that year 2013 and bringing it back to 2010 or the first of 2011. We think obviously that'd be a big benefit of the state, to be able to bring that process closer and get the broadband built out more quickly. We actually are also thinking about in the grant whether or not we would be able to say that we could serve a hundred percent instead of the 90 that we committed. And we would be doing so with a wireless option in that grant application. And one of the things I have to apologize for, I wasn't able to get our building engineers here with us today so I can have that available, some additional information on that. But there would be a wireless solution in there to attempt to reach that other ten percent of the population that we have -- that we still have to build out to. So from our perspective we obviously feel like we would be immediately ready. We've already designed the -- because of the commitment that we already made to the Commission, we've already done the engineering design work and we'd be ready to hit the ground running so to speak. We also have looked just preliminary. We think it would add about 50 new positions that we would have to hire on to bring and build this out quicker, above what we have today. And, of course, those would be jobs, I think most of you know, in the well-paying range of 60,000 and above. But we would be looking -- we think it's about 50 jobs at this point. Again, a little bit preliminary there. And an important note is when we get this done, we're looking at speeds from six meg to one -- and I'm not an engineer -- but gigabit. Obviously a lot faster. So those are the speeds we're looking at as our engineers are building this design of this network. MR. HAGLER: Does -- does your proposal naturally recommend particular rules at the federal level? MS. PRIOR: Does our proposal -- what? MR. HAGLER: Well, the thing that comes to my mind, and I speak only for myself -- MS. PRIOR: Yeah. MR. HAGLER: -- is whether advancement of a proposal already proposed is a project that would not otherwise have occurred. MS. PRIOR: Yeah. MR. HAGLER: And is there -- is there rulemaking that you're advocating at the federal level that you're suggesting to the Commission that it likewise advocate that would address that? MS. PRIOR: We do believe -- the speed up of this, we do believe we could get stimulus dollars for; that is, but for this money, we would not be able to do this this quickly in the state. And that's the position we're taking. Now whether or not we'll have to -- and we have people at the federal level involved in the conversations as rules have taken place. Now, whether or not we would have to do something tangible to change any part of that, I don't know. And if we do and if there's something that I would -- that I would ask for help on, we could comment that. Let's see here. The other point that we wanted to make, and that we will make in our proposal, is that, of course, we're already -- we already operate today so we're ready. In other words, we have a NOC center, 24-by-7 network operations center in Manchester, New Hampshire, so there would be little time for us to -- no time for us to have to stand up that process. We already have that back office process in the NOC center. And the last point that I wanted to make is that we will be looking to seek additional broadband funds in some of the areas that were mentioned earlier, whether it's the broadband mapping or the other categories. We haven't fully vetted that out as to what that would look like and how we would do that. But in some cases there might be opportunities to partner with other people, entities in the state to see if we could bring some of those dollars into the state. MR. HAGLER: Okay. MR. KANIA: Audrey, do any of your legacy companies have any need for funding or are you pretty much close to a hundred percent in most of those companies? MS. PRIOR: Well, we're 90-plus. I don't know if we're a hundred. And I don't know if we'd be applying on behalf of the telcom group. MR. SHIFMAN: Audrey and Fletcher, I hear two strains coming through today. One, the building out what might be called -- MS. VAFIADES: Joel, you have to be at the microphone if you're going to speak. Why don't you sit right down there? No, sit right down there if you want? MR. SHIFMAN: I see two strains developing. One which is the building of backbone or middle-mile facilities; the second being a strain which is building local distribution channels or last-mile facilities. How would you dichotomize , this is more for Fletcher and for Audrey, what you plan to use the money for? Is it primarily going to be -- I hear people -- I hear the state representative talking about building services for state agencies which might be more applicable to the backbone or the underlying backbone or middle-mile infrastructure. Could you try and parse out your proposals and point out whether or not it's more last-mile or middle-mile infrastructure related? MR. KITTREDGE: Okay, first of all, I don't see a dichotomy between them, at least not where we're deciding. I don't see any reason why we can't use the same facilities for both. And that -- that would be our plan, one. But -- and -- and two is, you know, we don't see -- we see this as enabling other last-mile projects. And before you get to the last mile, you got to get the middle mile. And there is a middle-mile component of what we're doing and it is aimed at schools and hospitals and COs and -- and things like that. But why not use the same facilities? As you're going down -- as you're driving between Millinocket and Fort Kent via Sherman, there's lots and lots of unserved areas, and the people tend to be right on the road such as they are at those points. Why not use it for that at the same time? MR. HAGLER: Audrey, has Fairpoint addressed or thought about the open access issues that Fletcher discussed earlier? MS. PRIOR: Not enough so that I'd want to comment here. MR. SHIFMAN: Particularly for the middle mile. MS. VAFIADES: Yeah. That would be important information for us to know if you can disclose it -- whenever you can disclose it. MS. PRIOR: Okay. MR. HAGLER: Did we cut you off, Audrey? MS. PRIOR: No, I think that was it. That was my purpose of coming today, to share with you where we're at with our current thinking, like I said, and then to continue to come to the table and help figure out what's right for the state as well as Fairpoint. MR. HAGLER: Fletcher? MR. KITTREDGE: Yeah. I would love, as a person who really isn't very familiar with state government, to understand, to the extent you can, the different pieces that move together. Is it the PUC and Connect ME are the two things -- the parts of state government that are going to be working with this or are there going to be other agencies? Are there other people we should be talking to or is it just -- MR. CASHMAN: For broadband? MR. KITTREDGE: Yeah. MR. CASHMAN: For broadband, I would say the PUC and Connect Maine. MR. KITTREDGE: Okay. MR. CASHMAN: Unless I missed somebody. MS. VAFIADES: No, they're already talking to the University system -- MR. KITTREDGE: Yeah. Okay. MS. VAFIADES: -- and I assume big healthcare providers. MR. KITTREDGE: Yeah, okay. MR. LINDLEY: And I was -- MR. KITTREDGE: -- different components in the stimulus package to involve -- MR. LINDLEY: -- I guess -- MR. KITTREDGE: -- state government -- MR. LINDLEY: -- I was just focused on my stuff. MS. DILL: I would respectfully disagree, but we can have that discussion at another time. MR. LINDLEY: And it would certainly be the CIO's office too. MS. DILL: Yeah. MR. KITTREDGE: Okay. Thank you. MR. HAGLER: In five -- I just want to make a general announcement. In five minutes we're going to move to a room down the hall, Conference Room C, because there's a hearing that will take place I this room, and we will continue the conversation. I just wanted to have you all -- without the Commissioners. They'll be conducting a hearing in another matter, but we will continue to take notes, and -- and make other announcements. But, sir, you're -- MR. PANOFF: I'm Bob Panoff, Stratham Broadband. We're -- I'm here primarily -- I won't take five minutes -- but primarily to inform the Commissioners of an effort, and the rest of the people that are here, that is, some of the people in the room have been involved with. We're working with the seven northeastern states to coordinate a regional program -- a regional approach where hopefully it will help individual states coordinate their activities. Phil has been there. Cynthia Dill has been there. Jeff Letourneau. The initial meeting was at Dartmouth, and we have had ongoing discussions since then. The idea is that if we can coordinate a regional plan, we will maximize the benefit that each of the states can -- can take from leveraging the activities of its neighbors. Since none of the networks, (inaudible) like the rows and the power grid, stop at its borders, there's no reason why you should stop your focus on building a coordinated network. And it makes a lot of sense just from a reliability and resiliency and how to spread the costs associated with -- with the network. We're trying to take a holistic view that it goes beyond just focusing on the infrastructure but it maximizes the shared utility of the network across all -- all of the different constituencies, whether it be government, non-profits, or commercial because it's all about aggregation, particularly in the rural areas it's about aggregating traffic. And the more you can aggregate it, the better and more sustainable the network will be. The group, the catalyst group the NEREN group. It's an association of Northeast and Regional Educational Network. And I would anybody who's here who would like to work along with this group. We're taking a two-prong approach, top down through contacting the governors of the states and having them get together to coordinate this approach, and bottoms up working with really quite a large number of applicants in each of the states so that it's coordinated and leverage each other. Thank you. MR. HAGLER: Does that advocate for a particular federal rule or procedure in approving grants that the PUC should recommend to the federal agencies in response to its request for comments? MR. PANOFF: Right now I'm just trying to work with each of the different groups to generate a coordinated approach and not really focused on the rules so much. I think each of the constituent organizations, and there's a lot of them, have their own feelings about what the rules should be. And you've heard different ones already today. MR. HAGLER: Yes. MR. PANOFF: What we're -- our rule is to try and be a catalyst and to coordinate these efforts so they have maximum effect. MR. HAGLER: Okay. Thank you. Was there anyone else that had comments or questions or that wanted to go on in the next room? We don't have to take the other room. I will issue a notice asking for written comments. We welcome them as soon they're available. MS. VAFIADES: Short timeframe. MR. HAGLER: I mean, we have April 13th or 14th, whatever -- it's 30 days from March 12, so I think that's April 13th, but I'll have to check my rules again on how to count. But I think that if we had -- do we have an idea of the date? MR. KANIA: For? MR. HAGLER: To receive comments? MR. KANIA: Well -- MR. HAGLER: As soon as you can give the Commission comments, then the greater we have the opportunity to consider them as -- as staff drafts something for the Commission. I would think that -- MR. KANIA: No more than two weeks. MR. HAGLER: -- like April 2nd would be a good date if that's a weekday -- MR. KANIA: Yeah. MR. HAGLER: -- to receive -- and, again, I encourage early filing. MR. SAMP: Does the Notice of Inquiry give us some specificity about what you're looking for? MR. HAGLER: It doesn't, and we'll try to get something out. MR. SAMP: Okay. MR. HAGLER: But I can tell you that what -- at least at this moment in time, we're looking at the RUS and the NTIA request for comments because that's what we're going to address. And so you might look to them to help us formulate our response because that's what we are going to respond to. MR. SAMP: Okay. MR. HAGLER: Fletcher? MR. KITTREDGE: Yes. I think a lot of people on this are going to want to work together. Access to that list would be a useful thing. Is there any chance you could e-mail that out and if -- I understand you guys are short staffed -- if you give me a copy, I'll type it in and e-mail it out to everyone on the list. MR. HAGLER: Done. Done. No, no, we'll make a copy. MR. KITTREDGE: Why don't you make a copy and give it to me? I'll hang on for a bit. MR. HAGLER: Is there any other comments that anyone wanted to make. Well, again, thank you very much. I appreciate you coming on short notice. CONFERENCE ADJOURNED (March 17, 2009, 3:29 p.m.)

C E R T I F I C A T E I hereby certify that this is a true and accurate transcript of the proceedings which have been electronically recorded in this matter on the aforementioned hearing date.

D. Noelle Forrest, Transcriber

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