The 1st meeting of the Kentucky Broadband Task Force was held on Tuesday, June 7, 2005, at 1:30 PM, in Room 131 of the Capitol Annex. Senator Ernie Harris, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Charlie Hoffman, Co-Chair; Senators David E Boswell and Tom Jensen; Representative Marie L Rader; Patsy Judd, Christopher Lilly, Daniel Logsdon, Bill Magruder, Libby Marshall, Darrell Maynard, Andrew McNeill, Mark Romito, Tony Taylor, Brad Tracy, Charles Watkins, James Welch, and LaJuana Wilcher.
Guests: Brian Mefford, CEO, Connect Kentucky; Beth O'Donnell, Executive Director, Kentucky Public Service Commission; William Kehoe, Senior Counsel, Competition Policy Division, Bureau of Wireline Competition, Federal Communications Commission; Janet Lile, COT; Prentice Harvey, MCI; Kim Phelps and Laura Taylor, Connect Kentucky.
LRC Staff: Todd Littlefield and Rhonda Carter
Chairman Harris welcomed members of the Task Force and outlined the goals and objectives of the Task Force and how the Co-chairs anticipate that it will function. Chairman Harris stated that a major goal of the Task Force is to assist the General Assembly as it works to keep up with developments in broadband technologies in a measured and careful way always being aware of the impact of its actions. Senator Harris also noted that the actions of the Task Force may be complementary to and supportive of Governor Fletcher’s broadband deployment program by ensuring that legislation keeps up as best possible with the plans that are best for Kentucky.
Chairman Harris introduced Mr. Brian Mefford, CEO, ConnectKentucky. Mr. Mefford discussed the origin and role of ConnectKentucky and its ongoing project for mapping broadband deployment in Kentucky. ConnectKentucky combines the collective knowledge of state, local, and federal government; universities; numerous private sector companies; and economic development organizations to accelerate the growth and economic development of technology in Kentucky. It has been charged by Governor Fletcher with leading his broadband “Prescription for Innovation” program. Mr. Mefford outlined how ConnectKentucky is carrying out that role by four major activities: (1) developing a statewide inventory of existing broadband service; (2) working with local leaders to assess and increase computer and internet use; (3) increasing e-Government services; and (4) achieving full deployment of broadband by 2007.
Following Mr. Mefford’s presentation, Chairman Harris asked if ConnectKentucky would be able to provide updated data for future Task Force meetings showing progress in terms, for example, of percentages of households served in each county. Mr. Mefford stated that ConnectKentucky would be happy to provide such data.
Chairman Hoffman asked if the low percentage of broadband use by Kentuckians who can currently access it is due in part to the cost of the service. Mr. Mefford stated that it is definitely a factor although no set price can be cited as being a barrier. Adoption of broadband is closely related to the value that people and businesses place in having it.
Commissioner Lilly asked if the cost of equipment were a large impediment. Mr. Mefford stated that it is, but recycled and basic computers are now available at much lower cost than in recent years.
Ms. Marshall asked how the 200 kilobits per second definition of broadband in HB 627 compares with other definitions and what platforms might achieve larger bandwidth. Mr. Mefford stated that more speed is better and that the typical United States definition of 200 kilobits per second is not enough bandwidth for the “triple play” of data, voice, and video; however, many technologies are being developed to achieve the higher bandwidths.
Mr. Watkins asked if data are available that show how many people could access broadband if the price and interest were positive and to show where broadband providers plan to deploy in the future. Mr. Mefford stated that, outside the urban triangle, about 24 percent of people would obtain broadband if it were available in their area. ConnectKentucky is collecting deployment data to show where providers will be in 12 months and where gaps will exist. Mr. Watkins asked if satellite has been considered as a deployment option. Mr. Mefford stated that it is being considered. The ideal would be hardline into every home, but that may be very difficult to achieve in some areas.
Mr. Maynard asked if ConnectKentucky plans to recommend a higher level of broadband speed. Mr. Mefford stated that it is being considered and that the Task Force seems a good forum for consideration of such a recommendation. The ideal and the achievable in terms of speed vs. cost of deployment must be balanced. Chairman Harris stated that a topic for a future agenda may that of the definitions of broadband in terms of speed and bandwidth so the Task Force can know what employers, for example, are really looking for. He will have staff look into this as a future agenda item.
Mr. Magruder stated that a number of counties, including rural counties, have 100 percent availability of broadband and asked if ConnectKentucky had considered doing a case study of availability vs. deployment in one or two of these. Mr. Mefford stated that ConnectKentucky is analyzing these in 40 counties and will be able to address the issue in every county over the next couple of years.
Chairman Harris asked if ConnectKentucky can provide the updates that HB 627 required of the erstwhile Office of New Economy and, if so, could the data measure progress in terms of households in counties. Mr. Mefford stated that ConnectKentucky can provide the updates and that it needs to be able to measure progress in terms such as those suggested by Senator Harris. This can be done with the next round of data from providers sometime in October, or September at the earliest.
Chairman Harris thanked Mr. Mefford for his presentation and introduced Ms. Beth O’Donnell, Executive Director, Kentucky Public Service Commission (PSC) to address the issue of regulation of broadband in Kentucky. Ms. O’Donnell surveyed the changes in PSC jurisdiction since its creation and explained that the regulation of telecommunications has changed in response to major changes in federal regulation. PSC jurisdiction over the cost, rates, and terms and conditions of telecommunications services extends only to services provided by incumbent local telephone companies. The PSC has jurisdiction over landline and wireless voice telecommunication services with respect to consumer-related issues such as quality of service infrastructure and billing matters. The PSC mandate extends to overseeing competition among the providers of telecommunications services, consistent with applicable state and federal regulations. The PSC has never exercised significant regulation over broadband services. With the passage of the Kentucky Broadband Act, the PSC has a very limited jurisdiction over broadband services, in regard to complaints, Ms. O’Donnell stated.
Senator Boswell asked why the PSC does not regulate municipals and electric cooperatives served by the TVA. Ms. O’Donnell responded that this was likely due to federal jurisdiction over TVA.
Mr. McNeill asked if the Kentucky PSC retains jurisdiction over complaints and services in basic telephone service and broadband such as 911. Ms. O’Donnell responded that the PSC has never regulated the Internet. The Kentucky Broadband Act had little effect on PSC regulation of the public switched network in Kentucky. To the extent that federal regulation has preempted state regulation of the public switched network, the jurisdiction of the PSC may have changed, but this is not due to the Kentucky Broadband Act, Ms. O’Donnell explained.
Chairman Harris asked if the PSC has review authority over end-user complaints against a broadband provider concerning service and internet service provider (ISP) complaints concerning access to the facilities of an incumbent local exchange carrier (ILEC). Ms. O’Donnell responded that the Act reserved to the PSC jurisdiction over complaints but it is too early to be certain of impact on end-user complaints. The Act provides that the PSC has the authority to arbitrate and enforce interconnection agreements and to investigate and resolve service complaints. But, because of the complexity of these interactions and because of the impact of various decisions of the Federal Communications Commission (FCC), it is not very clear exactly what the PSC can do in regard to an access complaint brought by an ISP. The PSC would hesitate to speculate about the impact of both the Kentucky Broadband Act and FCC decisions for two reasons. First, some of the issues could at some time come before the PSC, and second, the actual meaning of the complaint jurisdiction under the Act will have to be addressed case by case by the PSC and perhaps ultimately by the courts.
Senator Boswell stated that legislative action may be needed at some time to further define the PSC authority provided in the Act.
Mr. Taylor asked if calls to the PSC concerning when service might be available relate more to telecommunications or to cable modem. Ms. O’Donnell responded that these are the majority of such calls and that, although she does not have data readily available, it would seem that the calls would be more related to telecommunications, specifically digital subscriber line (DSL), since persons looking for help concerning cable modem would likely look elsewhere.
Senator Jensen asked if the staff of the PSC has information or data to show where broadband is available. Ms. O’Donnell stated that the PSC staff has such information and data.
Chairman Harris thanked Ms. O’Donnell for her presentation. Chairman Harris introduced Mr. William Kehoe, Senior Counsel, Competition Policy Division, Federal Communications Commission, and stated that the Task Force wants to be make sure that it knows what is going on at the federal level so it can complement FCC actions and not put any Kentucky companies or people who want to serve Kentucky at a disadvantage.
Mr. Kehoe surveyed the development of telecommunications regulation at the federal level and discussed, first, conflicts between the traditional methods of regulating telephone service and new methods for regulating broadband and, second, the issue of appropriate federal and state roles in broadband regulation. A major case concerning the methods of regulating broadband is the Brand X case, on which the U.S. Supreme Court is expected to rule very soon. The issue in this case is whether cable modem is a telecommunications service or whether it is an information service. If found to be the former, it may be required to provide access to its high-speed Internet networks to competitors at reasonable cost and might also be subject to some state regulation.
Senator Harris asked whether a Supreme Court ruling that cable modem is telecommunications and, consequently, required to provide access to its facilities to competitors, would be applied by the FCC to other broadband service such as that over telephone lines. Mr. Kehoe responded that he could not answer, but it appears that providers of service over telephone lines, such as (ILECs), would want to be treated the same as cable if cable were not required to provide access. This might mean eliminating the “computer inquiry rules” that require common carriers to provide access to “enhanced services” at the same rates and conditions as they charge themselves. Competitors such as ISPs would likely argue that the FCC should, as a matter of policy, require both cable and DSL providers to provide access to competitors. The FCC is prepared to initiate rulemakings to follow the Supreme Court ruling, whatever it might be said Mr. Kehoe.
Concerning the appropriate federal and state roles in regulation of broadband, Mr. Kehoe explained how, in the Telecommunications Act of 1996, Congress federalized the state broadband regulation. Although the states were to retain a significant role and although the state and federal roles overlap, the Act required the FCC to set policy and the states to follow and implement the FCC policy. Specifically, the states were to implement FCC policy in their arbitrating and enforcing interconnection agreements between telecommunications (including broadband) providers pursuant to Section 252 of the Act. Courts, primarily the DC Circuit Court of Appeals, have ruled that the FCC cannot delegate its rule-making authority to the states.
The Kentucky PSC, along with the Commissions of several other states served by BellSouth, has been involved in a case in which the FCC ruled that the states could not impose certain conditions of service on providers of DSL beyond the FCC requirement that access to the copper loop be provided to competitors. In a related case, the FCC ruled in December, 2004, that the requirement that access be provided at deeply discounted rates was to be terminated within a year.
In a case involving the assertion of state jurisdiction over Internet-based telephone services offered by telephone, cable, and other companies, the FCC ruled in 2004 that Internet-based service is an interstate service and, hence, under the jurisdiction of the FCC and not the states. This freed these new services from meeting the various regulations of the 50 states. Recently, however, the FCC ruled that providers of Internet-based telephone services must provide 911 services comparable to those provided by traditional wireline service providers.
Chairman Harris stated that it seems that the FCC, assisted by federal courts, is leaning more toward deregulation largely because of the increasing number and complexity of voice, video, and data services and increasing types and numbers of competitors and asked if Mr. Kehoe agreed. Mr. Kehoe responded that he personally sees more deregulation for those reasons. The legacy legislation for monopoly entities is backing away to the extent that the marketplace allows.
Chairman Harris stated that he wants to be sure that Kentucky people and firms have some place to go for complaints. The PSC’s procedures are closer to the people and likely to provide for more rapid and effective resolution of complaints. Chairman Harris asked how the FCC is addressing the problem of providing for complaint resolution. Mr. Kehoe responded that competition might increasingly be the means of complaint resolution as people take their business to competitors if dissatisfied. It will be a challenge at both the state and federal levels to ensure forums for more complaints and for rapid action on them., Mr. Kehoe stated.
Chairman Harris asked if increasing bandwidth and speed will require the FCC and Kentucky to change law and regulation or if the current ones might be adequate. Mr. Kehoe responded that the increasing numbers and types of technologies and competitors would likely require substantial rethinking of regulation.
Mr. Watkins asked Mr. Kehoe if he could comment concerning how to prevent people in the areas, primarily rural, that are questionably economic for expansion of broadband service from being “red-lined” economically and in effect denied service. Mr. Watkins asked further if the way that basic telephone service has been extended to such areas by subsidy offers a model. Mr. Kehoe responded that President Bush has set the goal of affordable universal broadband service by 2007. And the Universal Service Program has resulted in penetration of wireline service in the high 90 percentile nationwide. There is no ready answer as to how to repeat this for broadband, The Universal Service Board has a large challenge to find ways to do so, perhaps by utilizing technologies such as satellite or wireless broadband.
Chairman Harris thanked Mr. Kehoe for his presentation and stated that staff will likely call on him again as the work of the Task Force goes forward.
Chairman Harris reminded Task Force members to provide to staff statements of issues, questions, and concerns. The co-Chairs want to be sure that the Task Force thoroughly reviews these, as this is a major purpose of the Task Force.
The co-Chairs will likely want to schedule a meeting within a month. Setting a date is not possible at this time, but members will be contacted Chairman Harris stated.
Chairman Hoffman stated that Representative Tanya Pullin should be commended for her work on HB 627 that led to the creation of the Kentucky Broadband Task Force. Chairman Harris agreed.
The meeting was adjourned.