Illinois Broadband Deployment Council
Minutes of the November 9, 2005 Meeting
Capitol Development Board Room 349 C
Stratton Building
Videoconference location:
15 th Floor
James R. Thompson Center

Roll Call.

Springfield Attendees. Lt. Governor Pat Quinn, Tony Daniels (Central Management Services), Ed Feser (U of I), Jody Johnson (Southern Illinois Broadband Initiative), Herb Kuryliw (NIU Net), Donna McCann (County Boards and Commissioners), Deno Perdiou (SBC), Deborah Seale (SIU Telehealth), Terry Sullivan (TECH 20xx), Philip Wood (Verizon).

Chicago Attendees (videoconference). Kirk Brannock (SBC), Annie Collins (Fiber for Our Future), Carlos Estes (Rep. Connie Howard), Wendy Farley (Comcast), John Hester (Illinois Commerce Commission), Representative Connie Howard (34 th Representative District), Howard Kenner (Illinois Finance Authority), Melville Nickerson (CUB), Greg Robertson (Globalcom), Jill Rendleman (Illinois Finance Authority), Kelly Weiss (Ald. Manny Flores), Ray Williams (Department of Commerce and Economic Opportunity), Ted Young (Illinois State Toll Highway Authority).

Guests. Ellen Craig, Tammy Eighmy (ROCNET), Troy Fodor, Gerry Galloway (City of Aurora), Thomas Hampton (QWEST), Brad Housewright (Heartland Communications), John Lowrey, Kristin Richards (Governor's Office), John Scrivner (Mt. Vernon Net), Tony Hylton (City of Aurora), Alan Kraus (NIU Regional Development), Joel Mulder (Adesta), Doug Power (NIU Regional Development), Susan Satter (Attorney General's Office).

Other Attendees. Carolyn Brown Hodge, Steven Simon (Office of the Lieutenant Governor)

Call to Order and Opening Remarks. Lt. Governor staff opened the meeting as he was still in flight when the meeting began. All Council members and other attendees introduced themselves. The Council approved the September minutes.

Council Discussion.

Steven Simon began discussion of US Census and FCC Form 477 state broadband access rankings. Illinois is ranked 32 nd and 27 th , respectively, in the rankings. The Council discussed the meaning and methodology of the data. This led to a brief discussion of the demand-side problem in the Digital Divide, and the importance of computer literacy and demand aggregation initiatives.

Kirk Brannock cited SBC's $14.95 introductory rate for broadband service as a measure of how much access has improved since the US Census data was gathered (2003). Herb Kuryliw and Tony Hylton said that discount rates of that type are aimed at gaining new customers and don't reflect the actual cost to the customer of the service. Kirk added that even at $14.95 there has been a lower take-rate than anticipated. He also added that SBC's service has gone down steadily from $45 not long ago.

Mel Nickerson said that we need to address the question of where broadband is not available or affordable. Herb agreed that we have “no idea,” statistically, where infrastructure is.

Chicago Wireless Plans Kelly Weiss sent regrets from Alderman Manny Flores, who was attending City of Chicago budget hearings. She then gave a summary of the status of Chicago's wireless plans. The Finance and Economic Development Committee Task Force has held public hearings throughout the city. These hearings have proven to the city that there is need for better and more affordable access to Internet service. Kelly cited a CNT study that indicated that even small businesses in the city often do not have better access than dial-up.

At the behest of Aldermen Flores and Burke, the city has begun to draft a Request for Full Proposal to be used in determining who will build the network. The draft will be discussed at the next Task Force meeting. The Task Force is now a standing group instead of one whose only duty was to oversee the public hearings.

Kelly also noted that during public hearings, several people testified that the city should look beyond a Wi-Fi network to other technologies such as WiMax and fiber to the home.

Legislative Schedule The Lt. Governor arrived at the end of Kelly's summary. He began a discussion of legislative initiatives, requesting for all Council bills to be drafted by January 1 in advance of the January 6 Legislative Reference Bureau deadline.

Subcommittee Summaries Steven Simon gave a synopsis of the September meetings of all Council subcommittees.

Illinois Finance Authority Steven Simon introduced bond and loan program ideas drafted by Jill Rendleman of the Illinois Finance Authority. Jill gave an overview of the ideas, which were designed to fulfill the needs of various groups interested in broadband loans, including small communities, small business, and larger companies. She mentioned the possibility of two legislative initiatives: moral obligation bonds and state telecommunications bond tax exemption.

Jill also summarized a draft Request for Qualifications. RFQ respondents would bid for a contract with IFA to tailor funding sources to the different interested parties (small communities, private sector, etc.). She said this would cost the IFA between $50,000 and $100,000 dollars.

Tony Hylton added that any loans would need to be available to mid-sized communities such as Aurora. Such communities are often made uneligible for funding that is targeted to low-population areas.

Jill mentioned that the lack of assets for collateral makes it harder to secure loans for many telecommunications projects. Credit enhancements, such as moral obligation bonds, are one possible solution to this problem.

The Lieutenant Governor asked if the IFA could use the moral obligation of the state to back bonds. Jill responded that the ability to do that is limited without legislation establishing bonds.

Deno Perdiou asked how a state tax exemption would work. Jill responded that the exemption would be on interest from telecommunications bonds.

Health Care Funding Deborah Seale gave an overview of rural health care funding issues. Sixty-nine Illinois counties are eligible for Universal Service Administration Company (USAC) funding. During 2004 these counties received $450,517 of an available $14 million in USAC funding.

Representative Howard arrived during Deborah's discussion of rural health care funding.

John Scrivner of Mt. Vernon Net described obstacles to e-Rate access for small rural providers. In particular, there is no system in place facilitating use of e-Rate funding for schools purchasing Internet access through smaller providers. He explained that small operators work and make a profit at a much smaller scale – citing his own establishment of technology centers and 100% broadband penetration in Bluford, Illiois, which cost $300,000.

Increasing state infrastructure Herb Kuryliw circulated for discussion a draft map of state infrastructure goals. Subcommittee discussion of state-owned infrastructure led to this map. In particular, Herb suggested that a goal should be having state-owned fiber-optic infrastructure available for non-discriminatory lease within 20 miles of every city and town in Illinois. His draft map indicates that this can be done by laying fiber along highways running throughout the state.

Herb discussed this as a goal that would allow creative solutions for last-mile access using wireless or other technologies.

Herb then discussed the progress on the Northern Illinois Technology Triangle project, including the planned construction of fiber along I-39. The group plans to meet again with IDOT on November 21. In addition, all partners have signed agreements about their role in the project, and the NITT is now seriously looking at funding.

Herb stressed that the I-39 project is replicable once it is finished, and that similar projects can be done throughout Illinois, though not all at one time.

Ted Young added that IDOT and CMS are working together to light fiber along I-55 and fill the necessary gaps between fiber routes. Tammy Eighmy asked if this would be done by a private vendor, and Herb replied that such an approach is a “dead end,” and that non-discriminatory access should be a goal instead.

Tony Daniels said he is concerned that we focus too much on fiber and that we need to keep in mind the use of wi-fi, emerging WiMax options, satellite, and traditional carriers. He stressed that we should pick an area of the state to achieve recognizable connectivity goals. This effort should bring to the table all interested parties, including cable and telephone companies.

Deborah Seale replied that the Southern Illinois Broadband group is doing just this, meeting with all communications providers, health care providers, county officials, and other entities throughout the southern counties. Jody Johnson added that one of the group's major goals is to leverage federal dollars that may be available.

Lieutenant Governor Quinn stressed that we need to focus on getting similar regional efforts going. Herb replied that a key to this would be installing telecommunications infrastructure on all state roads where it does not already exist. Regional groups could access this to bring down costs of broadband deployment.

The Lieutenant Governor responded that we might introduce a bill requiring installation of publicly available fiber and conduit whenever the state makes infrastructure improvements.

ROCNET Tammy Eighmy gave a presentation of the ROCNET (Regional Optical Cooperative) 10-County Broadband project. The project successfully located dark fiber throughout northern Illinois at a good price. They have worked to aggregate demand and successfully brought prices for access down to an affordable level. ROCNET is funded through members and recently secured its first “angel investor” – Amcor of Dixon, IL – and DCEO is also contributing $300,000. Freeport has secured $1 million of private funding for the project as well. All contracts have negotiated, and the network has twenty customers, with another fourteen planned within 120 days. ROCNET is planning an event to announce the network in January.

ROCNET has taken 35,000 man hours to get off the ground, but Tammy stressed that it is replicable in much less time.

RTC Carolyn Brown Hodge brought up her plans to apply for Illinois to be considered as the location of the 2006 Rural Telecommunications Congress Conference. She stressed that hotel costs should ideally be less than $100. She added that anyone who would like to contribute ideas for locations to be considered should speak with her about it.

Adjournment The time of the next meeting was set for December 9, 2005 at 1:30 PM. Attendees moved to adjourn, and then seconded. Meeting was adjourned.