Pennsylvania Broadband Stimulus Initiative

1. Commonwealth of Pennsylvania Broadband Stimulus Initiative National Telecommunications & Information Administration (NTIA) Washington, DC May 6, 2009

2. Attendees Commonwealth of Pennsylvania • Naomi Wyatt, Secretary of Administration; Governor’s Office of Administration • Brenda Orth, Chief Information Officer; Governor’s Office of Administration • Rebecca Bagley, Deputy Secretary for Technology; Department of Community & Economic Development • Luc Miron, ARRA Broadband Project Manager; Governor’s Office of Administration

3. Commonwealth Broadband Initiatives Chapter 30 Amended by Act 183

4. Pennsylvania Background Pennsylvania Background • Most aggressive rural broadband deployment program in Nation according to United States Internet Association • $193 million in total cumulative local rate increases from 2005-2008 to fund broadband deployment • Projected rate increases in place of $98 million for 2009. • Rate increases are continuing into the future • “Shovel ready” unmet aggregate demand stemming from state broadband initiatives • US Census: 3rd largest rural population behind TX and NC; 3rd largest elderly over age 65 behind FL and W Va

5. Pennsylvania Chapter 30 • Chapter 30 originally enacted in 1993 to achieve early deployment of universally available state-of-the-art broadband network in Pennsylvania, re-enacted in new form in November 2004 (Act 183) • Authorized several ambitious initiatives that will substantially increase the investment in Commonwealth telecommunications infrastructure • Act 183 mandate for Department of Community and Economic Development (DCED) to create an Inventory of Services database • Collection, compilation, and maintenance of a comprehensive listing of broadband services available from all broadband providers operating in the Commonwealth, regardless of technology used

6. E-Fund Education Technology Fund (E-Fund) of November 30, 2004 (Act 183) • Purchase or lease of telecommunications services, infrastructure, or facilities to establish and support broadband networks between, among, and within school entities (Intermediate Units and School Districts) • Purchase or lease of premises telecommunications network equipment and end-user equipment • Distance learning initiatives using the foregoing broadband networks

7. Pennsylvania Proposals For Consideration by NITA

8. Update on Activities • Responses to FCC solicitations and joint NTIA/RUS RFI • Intra-agency coordination – Governor’s Office, Office of Administration, DCED, PUC, DGS, Health, Education, others • Coordination with telecommunications carriers and interested stakeholders • Public meetings in rural PA • Development of plan / prospective NTIA application • Identification of potential ‘shovel ready’ projects • Updates to state mapping inventory

9. Discussion Items PA is poised to execute on BTOP project • State strategy in place • Availability of preexisting and documented demand for broadband services – shovel ready • Mapping inventory points to “unserved” and “underserved” priority areas • Statewide public safety tower network could help extend reach into last-mile areas • Statewide telecommunications procurement being finalized; could help direct deployment of long-haul and middle mile trunks

10. Discussion Items Prior positive action by states should be further leveraged by ARRA: • Landmark state legislation with statutorily mandated (accelerated) broadband deployment by regulated incumbent local telephone companies • Establishment of outreach & aggregation mechanism (with funding) for pre-existing unserved broadband demand • Aggregation program with statutorily mandated “business case” upon reaching threshold of committed customers • Financial assistance to schools for connectivity, equipment, content, technical assistance ($10M per year) • Statewide mapping and public inventory of services

11. Discussion Items Prior positive action by states should be considered • Pennsylvania is net contributor to the federal USF at a level of $125 - $135 million annually • Implementation of extensive intrastate carrier access charge reforms at corresponding high cost • As a net contributor to the federal USF, PA already supports deployment of broadband facilities in other states

12. Discussion Items NTIA Programmatic considerations • Requirement for state plan and mapping as condition precedent to receipt of deployment funds • Importance of State’s Role in project awards: • Endorsement or recommendation by States • Alignment with state plan • NTIA approves State plan and States approve/recommend projects that are aligned with State plan

13. Discussion Items Funding Determinations; Equitable Distributions to States • ARRA stipulates at least one project award per state • Recommend “per capita” formula for BTOP in event of “per state” distribution • Particular circumstances of states should be taken into consideration

14. Discussion Items BTOP Program Administration • Consider enlisting assistance of states to administer portions of BTOP program • NTIA approves State plan and States approve/recommend projects that are aligned with State plan • Mutually beneficial arrangement to ensure fulfillment of goals and timelines

15. Discussion Items Project match considerations • Prior financial investments by States should be given consideration, such as: • Allow statutorily approved rate increases to secure broadband deployment commitments as 20% match required under ARRA • State investment made through state towers or other related infrastructure • Award of state funds which yield aggregated demand and ‘shovel-ready’ projects (BOAF) • Award of state funds under state E-Fund for deployment of broadband networks linking school entities

16. Discussion Items Wireless broadband deployment • Discussions mostly focused on residential and commercial availability • Recognize emergence of hand-held devices and mobile applications • Important for economic development, public safety, tourism, quality of life

17. Discussion Items Project Sustainability • ARRA provides initial capital expense allowing deployment of infrastructure • Sustainability of ARRA projects is an essential component of project approvals • Identification of anchor tenants & community partnerships

18. Discussion Items Competition & Choice • Business case may not always allow for multiple providers and/or multiple broadband access technologies and services, e.g., landline telecommunications, CATV, wireless, broadband over power lines, etc. • Shared or neutral collocation facilities, common infrastructure, and potentially common carriage requirements under pre-existing and applicable federal (e.g., Telecommunications Act of 1996) and state law. • Usage of state infrastructure (towers) as a means of accelerating deployment and extending reach of network

19. Discussion Items Administrative Considerations • State Procurement & Contracting Mechanisms • Reimbursement of State planning funds

20. Open Discussion or Questions