Colorado s Broadband Legislation: A Big Step in Connecting Colorado

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1 Colorado s Broadband Legislation: A Big Step in Connecting Colorado

2 AGENDA Review of recent legislation HB HB Where does the money come from? What s next?

3 HB : The Broadband Incentives Bill Streamlines and codifies tower permit timelines 90 days for colocation 150 days for new Allows for consolidated applications for multi tower plans Confirms broadband providers have same access to public rights of way as telecommunications companies Creates a requirement to notify of any construction activity on state highways that would allow for joint trenching Creates sales tax exemption for broadband equipment Focused on unincorporated areas of less than 30,000

4 HB : The Broadband Bill Establishes the Broadband Fund to provide access to broadband services through broadband networks in unserved areas Creates the Broadband Deployment Board an independent board created to implement and administer the deployment of broadband service in unserved areas from the fund

5 Broadband Deployment Board 4 Positions from state government DOLA, OEDIT, PUC, OIT (3 voting) 3 Positions from local government County Commissioner, Mayor/City Council, Other 6 Positions from Industry Wireless, wireline, satellite, cable, rural LEC, CLEC 3 Positions from the general public Western slope, Eastern plains, unserved urban

6 Implementing the Fund Only for unserved areas Currently defined as 4 down, 1 up but could move to 10 down, 1 up 6 month notice to incumbents before applications Any recipient must match 25% of project Technology neutral Right of first refusal Grant funds for capital only Recipients must be For profit organization Telephone cooperative Rural electrical association

7 Where will the Broadband Funding Come From? HB (3) THE COMMISSION MAY ALLOCATE THE COLORADO HIGH COST SUPPORT MECHANISM, ESTABLISHED UNDER SECTION AND REFERRED TO IN THIS SECTION AS THE "HCSM", FOR THE DEPLOYMENT OF BROADBAND SERVICE IN UNSERVED AREAS OF THE STATE PURSUANT TO THIS SECTION ONLY. THE COMMISSION MAY TRANSFER TO THE BROADBAND DEPLOYMENT BOARD ONLY THE MONEYS THAT IT DETERMINES ARE NO LONGER REQUIRED BY THE HCSM TO SUPPORT UNIVERSAL BASIC SERVICE THROUGH AN EFFECTIVE COMPETITION DETERMINATION.

8 Where will the Broadband Funding Come From? HB (2)(a) Universal service support mechanisms The commission shall require the furtherance of universal basic service, toward the ultimate goal that basic service be available and affordable to all citizens of the state of Colorado (5)(a) Universal service support mechanisms In order to accomplish the goals of universal basic service, universal access to advanced service, and any revision of the definition of basic service under subsection (2) of this section, the commission shall create a system of support mechanisms to assist in the provision of basic service in high cost areas THAT ARE WITHOUT EFFECTIVE COMPETITION FOR BASIC SERVICE, APPLYING THE FACTORS STATED IN SECTION ; EXCEPT THAT SUPPORT PROVIDED IN A PARTICULAR GEOGRAPHIC SUPPORT AREA IS NOT AFFECTED UNTIL THE COMMISSION MAKES A FINDING APPLYING THE FACTORS LISTED IN SECTION (2) (a) (I) High cost support mechanism The commission is hereby authorized to establish a mechanism for the support of universal service, also referred to in this section as the "high cost support mechanism", which must operate in accordance with rules adopted by the commission. The primary purpose of the high cost support mechanism is to provide financial assistance as a support mechanism to local exchange providers IN AREAS WITHOUT EFFECTIVE COMPETITION to help make basic local exchange service affordable.

9 Who Gets HCSM Funds Today? *Rural ILECs primary subsidy received from Federal Universal Service Fund

10 CHCSM Summary of Rur al Carr ie rs Calendar Year Calendar Year Calendar Year Calendar Year Calendar Year Calendar Year Calendar Year Calendar Year Calendar * Year 2014** Agate Mutual Telephone Co. $1,305 $1,305 $14,361 $16,941 $16,941 $16,941 $16,941 $16,941 $16,941 Delta County Tele Comm $93,447 $165,721 $165,721 $165,721 $165,721 $165,721 $165,721 $165,721 $165,721 Nucla Naturita $165,483 $0 $221,852 $242,020 $242,020 $242,020 $282,162 $321,867 $321,867 Nunn Telephone Company $0 $36,588 $22,482 $58,540 $58,540 $47,485 $47,485 $47,485 $47,485 Peetz Cooperative Telephone $9,562 $5,464 $47,485 $26,441 $26,441 $26,441 $26,441 $26,441 $26,441 Co. Phillips County Telephone Co. $204 $168 $168 $30,847 $30,847 $30,847 $30,847 $30,847 $30,847 Pine Drive $465,019 $450,075 $450,075 $450,075 $839,269 $681,059 $681,059 $681,059 $681,059 Rico Telephone Company $1,255 $13,015 $13,015 $13,015 Roggen Telephone $5,587 $4,648 $35,345 $51,614 $51,614 $51,614 $51,614 $51,614 $51,614 Willard $0 $0 $0 $0 $11,366 $29,042 $29,042 $29,042 $29,042 Non Rural Car rier Qw est Corp. $57,947,414 $57,241,560 $56,787,689 $53,952,430 $50,346,487 $50,069,355 $48,553,314 $47,951,148 $47,356,450 Wireless Carriers Northeast Colorado Cellular $2,085,706 $2,115,605 $2,026,785 $2,409,718 $2,608,961 $2,787,574 $2,796,321 $2,921,676 $3,052,650 NNTC $31,509 $152,974 $170,000 Unde signate d Car riers Projected Additional Carriers $0 $0 $0 $0 $0 $0 $0 $0 $200,000 Totals $60,773,727 $60,021,134 $59,771,963 $57,404,347 $54,398,206 $54,149,354 $52,725,471 $53,316,719 $52,163,133 * The disbursements f or 2013 are actual information f or January September 2013 and estimated f figures f or October December * * Disbursements f or 2014 are estimated.

11 View The Full HCSM Annual Report

12 Has The Commission Determined Any Areas To Be Effectively Competitive? Proceeding 13M 422T On April 28, 2014 the Commission issued its final decision classifying 56 CenturyLink wire centers as Effective Competition Areas thereby reducing regulation and invoking a six month window within which CenturyLink could file an application to retain HCSM funds if currently received in any of the 56 wire centers. HB & HB Signed into law on May 9, 2014 establishing CHSM funding only for areas without effective competition

13 What is Next? Commission to determine applicability of new laws to existing ECA determination from 13M 422T Therefore, the HCSM funds currently allocated to certain of the 56 wire centers and the broadband fund is at issue and will be determined in the near future by the Commission Commission to determine appropriate procedure for analysis of additional wire centers Commission to determine appropriate procedure for analysis of additional wire centers When wire centers no longer eligible to receive HCSM funds Commission Staff, as HCSM administrator, will determine fund amount available for transfer to the broadband fund taking into consideration: Any HCSM funds already encumbered Projected HCSM funds required for ongoing support of basic voice service The current HCSM fund balance Project HCSM fund contributions

14 Where do we go from here? Board nomination process under way Board s responsibilities begin 3 months after initial moneys are allocated to broadband fund DORA must provide staff support Other agency involvement Policies and procedures must be developed

15 QUESTIONS? Brian Shepherd Broadband Program Manager, OIT Lynn Notarianni Telecom Section Chief, PUC