Advanced Communications and Insurance & Commerce House and Senate
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Gathering in, we'll get going here in just a minute.
Representative Stephen Meeks
Unverified
8:00
And for those in the public that are attending, who would like to make public comment to the committee on
the desk over there, there's a sign up sheet, so please make sure you sign up.
Representative Stephen Meeks
Unverified
9:25
All right, we're going to go ahead and get started. I appreciate everyone coming this afternoon to the joint meeting of the Advanced
Communication Information Technology and the Insurance and Commerce Committees. We've got a lot of ground to cover today, so we're going to get going into this real quick. My co-chair, do you have any comments to make before we get started? Do not. Okay. All right, so we're going to jump right into this. first off for members of the communications committee we need to
approve the minutes from our last meeting motion from anybody okay got a motion to adopt any discussion hearing none all in favor please say aye any opposed oh I'm sorry I've just been informed I need a second can I get a second okay I got a sec all right all in favor please say aye again any opposed all right thank you so let's go ahead we're gonna jump right into the the meeting first off we've got a presentation by mr. Larry Frazier mr.
Frazier was the former director of the Arkansas high-cost fund so he's going to come and give us some background about the high-cost fund how it works and how it's being utilized for the benefit of our citizens so mr. Frazier when you get seated there if you would just introduce yourself to the committee
Speaker 13
11:10
sir and then you're recognized Hello, I'm Larry Frazier, I am Vice President of Arkansas Rural Broadband Association.
is formerly the Rural Arkansas Telephone Systems in Arkansas, comprised of most of the small rural telephone companies and broadband providers in the state. My past history is I was Arkansas High Cost Fund Administrator for five and a half years. I have 34 years in Arkansas telecommunications experience. i was actually one of a group or committee that kind of created the idea of the current
arkansas high cost fund how it operates the fund before that so i've got a lot of knowledge there i speak at many national trade association meetings on high cost funds creation high cost funds as well as other matters. Currently, I am manager of Central Arkansas Telephone Cooperative, which is just south of Hot Springs on Highway 7, and it flows over to Donaldson
and runs along I-30 there. We are currently deploying fiber-to-the-home technology throughout our service territory. According to the FCC's latest cost models, there should be 4,400 locations that we will be able to serve. It's an estimated cost of $15 million. We're 70% completed. And I'll tell you today that we couldn't do that unless we had the Arkansas High Cost Fund.
uh you know it's it's it's that important uh mr chairman with uh that i'd like a brief presentation and then i'll open up to any questions you might have if that's okay okay uh you know the and you'll have a handout there the arkansas high cost fund uh you know because arkansas is a real state there's many rural and remote areas that do not have sufficient population base to support broadband services. They are considered high-cost areas.
Arkansas is a very high-cost state, by the way. High-cost support fees, also once known as universal service fees, were created to ensure all customers, regardless of locations, are offered comparable services at comparable rates as those to their urban counterparts. Both federal and state governments have adopted the concept of high cost support. It is understood that broadband networks are very expensive to build and to maintain. It is important to bear in mind that once the networks are built, it is imperative that
they be properly maintained. There's federal and state universal service fees that provide support to assist telecommunication companies with multi-million dollar investments in infrastructure. service fees, like the service fees on many other industries, have always been broad-based as low as possible and used to help keep the cost to service in rural areas comparable to urban areas. Both federal and state funds have caps which increase manageability.
Companies receive support calculated on investments made two years previously. Because of statutory caps, there's already a shortfall in the amount of support the formula would otherwise provide based on extensive infrastructure investment to companies that they've already made. Transition from the Universal Service Fund to the Arkansas High Cost Fund. Over the last 20 years, this fund has morphed into several different components, and the fund that supports rural investments in telecommunication services in high-cost areas.
Historically, the fund provides support for telecommunication services, and today supports broadband deployment in these same rural areas of the state. The focus of today's discussion, I assume, will be on the current state and the use of the funds. There was a trend back in 2003 across the states to base support on actual current rather than historic company cost with added transparency,
that meaning public records and things to see the actual cost that the FCC prescribed. In 2007, a new AHCF was patterned after the Federal High-Cost Fund Support System. The HCF, as it's called, uses the same specific method of recovery of investments on actual investments in high-cost areas. This method is based on individual company costs that are publicly available through federal filings.
Each company certifies the accuracy of the data to the National Exchange Carrier Association and the Universal Service Administrative Company. And the certified data is subject to federal communications audits. The National Broadband Plan that was released in 2010 was really the game changer as far as federal support and in turn state support. The plan set out a roadmap for initiatives to stimulate economic growth, spur job creation, and boost America's capabilities in education, health care, homeland security, and more.
The National Broadband Plan encouraged states to accept a role in supporting the investment in these broadband deployments. The plan includes a recognition that full broadband deployment cannot recur without active participation of the states through their own state high-cost fund. The plan created increased demands on the Arkansas high-cost fund due to increased demands on broadband deployment and more stringent FCC deployment requirements.
Today, all telecommunications carriers, with the exception of one, provide individual cost data, which is used to determine their federal support. These costs are certified by the companies and are subject to federal oversight. One eligible telecommunications carrier, AT&T, provides access line counts for their rule exchanges, and those counts are multiplied by an average cost per line developed through an FCC census model years ago. Today's telecommunications companies, rate of return companies as we call them, who accept federal high cost support are required to deploy 25-3 to the specific number of households in a specific time frame.
The FCC dictates what investment costs can be included in the recovery. Those FCC-dictated costs, minus the federal support they receive and the local support that they receive, are the basis of the Arkansas High Cost Fund calculations for the state support. So the Arkansas High Cost Fund that once was supported for telecommunication service is now highly effective using state dollars to support broadband deployment.
So with that, Mr. Chairman, I will ask for any questions you might have.
Representative Stephen Meeks
Unverified
18:55
Okay. And just for the committee's knowledge, roughly
$40 million a year is what this generates that goes to broadband. There's little pieces chunked out, but roughly $40 million a year. That's correct. one of the concerns that we hear from our constituents is it doesn't seem like we're seeing any progress on this front that you know there's still a lot of people who are not
getting access to us can you give us an idea of how far does this 40 million dollars go every year how how many people are we getting connected to broadband because we're making this investment every year. And then the second question I had is, as you said, the request to the high-cost fund are much more than what's available. Can you give us an idea roughly what those requests are every
Speaker 13
19:48
year? Yes, based on public knowledge that's located at the Public Service Commission,
you can see the requests from the most rural companies, and that is about last year, I think was 38 million dollars was the amount of amount they could receive however they were capped at 28 million dollars uh for and i'm just going off memory for a century link they are capped at a little over 4.9 million dollars however their cost generated about 10 million uh at and t the same and wind stream is kept at uh right at 780 000 and uh i can't remember what their cost was but
it was significantly higher than that on that uh so now again remember the this this formula we use and it was developed back in 2007 was used as a proxy model how could
Speaker 21
20:49
we show our cost to be able to receive support and it's based on two years prior deployment
Speaker 13
20:58
okay and and it's so it's a running it's a running total it's it's uh the federal algorithm takes the cost that uh you incur
through the year and it multiplies it by a rate of return it adds an amount for expenses and then uh uh you're eligible to save
Speaker 21
21:21
that amount as far as what it's being spent for all of the rural companies now are under stringent fcc requirements to provide 25-3 to their territories and some of them are required
Speaker 13
21:36
to all the big companies are required in certain areas to
provide 10-1 to those same areas I couldn't give you a specific number of locations they are available through the USAC website that you can actually look at each of the the carriers that receive federal connect America fund money and you can see what they input each year as a number of locations they're hitting my company i i hit 1 000 locations last year and so i had to input
those locations into it's called the hub under the universal service website uh each carrier now each year uh with the changes that were made by the fcc last uh last december you will see those every year be input the number of locations they hit from year to year to equal their requirement to provide services throughout the the remainder of the the five year for rate of return 10 years for
Representative Stephen Meeks
Unverified
22:44
uh model support and uh before i jump to my colleagues the um high cost fund is it a reimbursement where the carriers spend the money and then get reimbursed for it or do they apply get the money
Speaker 13
22:58
and no it is a reimbursement program if if you don't have the cost if you don't make the investments your federal support decreases all right so
Speaker 25
23:08
you have to you have to invest in order to receive funds okay representative Brown you're up first
Speaker 28
23:21
mr. Fraser I'm just trying to understand all this and how it works and you were we're talking about the FCC and the deployment to a specific area and and towards the end of your presentation you said something about this being highly effective can you tell me what highly effective means okay if
Speaker 13
23:47
if you'll look there's a there's a map on the back that looks at some of the support that small companies have received and what they're actually providing in those territories. The FCC came out and said, hey, if you take federal support, you're going to provide 25-3 to a number of locations. And when I'm saying federal support, I'm talking about telecommunications, rate of return, and alternate cost model support you're going to provide 25-3 out to that territory now federal
support 25-3 means 25 I'm sorry 25 down one three up yes ma'am it does it does I'm sorry and and 10 is 10 down and and one up yeah 10 down and one up can be provided mostly over copper 25-3 is mostly you do that over fiber or you do that over some sort of wireless technology. So if
Speaker 21
24:51
you look at that map, I think that map shows the amount of support that the rural
Speaker 13
24:58
companies can get, and I can tell you that because of the Arkansas High Cost Fund, it's allowed companies to go out there and invest in significant numbers. You know, a small company like myself, if I can use mine as an example, I've just in last two years spent 11 million dollars i didn't have 11 million dollars in my in my pocket i had to go out and get long-term loans to secure that those long-term loans are going to have to be paid out over a 20-year period you know it's it's funds like the federal high cost fund support and
the state high cost funded support that
Speaker 30
25:36
allowed me to even get that loan and then pay it back
Speaker 28
25:42
over a number of years and one quick follow-up a location is that like one
Speaker 33
25:47
home farm or is that like a larger geographic area no ma'am the
Speaker 29
25:52
the FCC quantifies a location as a home as a
Speaker 13
25:57
farm as a business if that that is a location and the the Arkansas high cost fund along with the federal
high cost fund is how we recover high cost between a central office that's located in a town and a location that's located down a country road. That loop cost, that connection to that is the recovery that we're making. And today, just like as in 1934, when the Federal Communications Act was created and it listed the universal service fund is to provide rural areas with the
Speaker 21
26:40
same type services as urban areas for a comparable price.
Speaker 36
26:48
Thank you very much. Thank you. Senator Hammer, you're next, sir. Thank you, Mr. Chair. I'm over here to your left. Okay.
Senator Kim Hammer
Unverified
26:54
Afternoon. You're the one that's, you're referring to the broadband development and high cost area arkansas handout i mean that's what what you've been referring to correct yes sir i just as a yeah okay the numbers on the page the numbers on the map does that reflect the 40 million
you were referring to um in the previous year could you explain that or the numbers that are on here what time frame do
Speaker 21
27:23
those numbers represent that that that represents the amount of support they
Speaker 13
27:28
received for that year okay that's that was probably based on 2018's uh annual determination by the administrator and that's the amount that those companies received okay and i didn't take
Senator Kim Hammer
Unverified
27:40
time to add them all up do you know what the total number of dollars represented on that right there
Speaker 21
27:48
probably represents about 28 million dollars that does not
Speaker 13
27:51
include the at&t windstream and century link uh amount of support that's just the rule company's high cost fund and then what they're doing with it okay and how they're deploying it and and help
Senator Kim Hammer
Unverified
28:06
me connect the dots between the numbers on the map and the 40 million uh that was referenced a while ago please okay
Speaker 13
28:15
the 40 million dollars is a total annual support of the arkansas high cost fund to the uh eligible telecommunications
carriers in arkansas the the top three which is at&t windstream and centurylink receive about 11 million so it's it's really 39 8 is the total to the eligible telecommunications carriers minus the 11 gets us down to the 28 million to the smaller rural companies and i guess the the
Senator Kim Hammer
Unverified
28:44
the roadmap moving forward as far as the areas that are not getting the attention is there a
master plan for how to progressively move across the state because you know we all have areas that are underserved i agree kind of kind of curious what
Speaker 13
29:01
the pecking order is i think i think there's a big master plan and i think there's a big master plan at the fcc okay uh the fcc is just fixing to implement the and don't get me on the language but all in the industry call it calf three connect america fund 3 which is the rural opportunity digital fund where they will look at all areas
that are not colored here and are providing 10-1 or lower and they will do auctions to to support those areas i say all areas some of these areas that are not colored were part of the CAF II funding auction that took place a couple of years ago where there was several million dollars coming into the state of Arkansas to hit some of these rural areas. This map hadn't been updated to color those in.
But all the remaining areas, except for the urban areas like Little Rock and Russellville, Texarkana, the big areas that are not urban, are not rural, uh there will be a calf 3 auction takes place and the fcc is estimating that it'll be over 20 billion dollars awarded over the next year or two to provide 25-3 to those locations so we're expecting a lot of activity over the next year or two to start that process
Speaker 45
30:29
um i think does that answer your question sir it does the last one thank
Senator Kim Hammer
Unverified
30:38
you mr chair that i'm i want to get to is when i look at the map and i see some of these i mean these are cities and i was always under the impression maybe fault on me that you know what we did was intended to push it to the most rural areas and the funding that's represented on this map are going to some pretty good sized towns so i'm just help me remember what we did and what we did that it that it's
not pushed out more to the rural areas as opposed to some of the
Speaker 21
31:08
cities represented on here most of the most of these are very rural areas uh these colored areas
Speaker 13
31:15
are uh most of the very rural areas are covered by the small telephone companies you take my exchange which is the middle one that 1.2 million dollars i don't even have a city that has 500 people in it uh incorporated town that has 500 people in it uh you know if if you look down in southwest arkansas that is all rural
areas around texer canna not including texer canna representative hammer
Representative Stephen Meeks
Unverified
31:44
too i want to make sure you're not confused this is not the governor's 25 million dollar initiative which we're going to get to later all right thanks for the clarification yep and and also colleagues that the money in Arkansas high-cost fund only goes to the telco so this is not money that will go to cable companies or ISPs or this is strictly for the
telephone companies next up we have Senator Rice
Senator Terry Rice
Unverified
32:17
okay you got me now thank you mr. chair I'm not on the committee and I've tried to keep up with this uh because of the rural area that i serve uh and i'm familiar with what some rural telecoms have been able to do that join uh scott county and and uh north part of my district south sebastian clarify for me i'm i'm not
understanding the century length the money that you're quoting on them which services this large rural area the money they get are they
spending it on their infrastructure, or are they required to collect it and put
Speaker 13
33:01
it into the small telecoms? They are spending it. That $4.9 million that they are receiving is based on their cost of their... CenturyLink used to be some small telephone companies, and then they bought all the GTE properties. Their cost is based on those smaller telecommunications companies that they're
receiving that $4.9 million. Now, where they're spending that money, I'm not for sure. I think they could probably give you a better example of it, but it's based on the cost of, I think they had four smaller companies before they bought the old GTE properties, and that's
Senator Terry Rice
Unverified
33:45
what their cost is based on and let me clarify some what what the background is on this one a lot of people along to myself after 47 years cut them off because of the degrading service and the area that that i
serve is lost service has lost contact even if they still have service waiting two weeks or more to get a phone back on, and we're worse off than we used to be. So what I'm trying, in a company that you can't get a hold of, and even at a governmental level, when I ask to talk to somebody, I can't get a hold of it. I've tried it the last three years, to talk to somebody, just give us your plan, what it is.
And it's finally come down to where the backroom chatter is. uh we're not going to put any more money in rural areas so just east of us we've got a fantastic rural telecom company in a different county that has served that it's evidently a model for for rural america that i would love to see is there anything in what you're talking about and you're talking about the scc too that any of us that are representing our districts can contact and say give
us a time plan that is is credible over the next five years 10 years if it's 20 years i don't plan on probably being around be nice for one i'd like to be able to tell these people something because it's life risking when they don't have a telephone they can depend though and i'm talking about they've had one a wired service and they they've got some they can't depend on that's where we're down to now can you tell me who to
Speaker 13
35:37
contact well that that that is an issue of course uh as far
as telephone service you can always contact the arkansas public service commission about quality of service and and and i'm sure they they can address that now uh that that doesn't answer your question i know where you're getting to how are we going to get broadband when we're going get it. That's what you're asking. You know, CenturyLink, Windstream, and AT&T took Connect America Fund back in 2013 to provide 10 download, one up, to certain
areas in Arkansas. They didn't take the money for all of their areas because it was going to cost way more than what the federal government was going to pay them. but your saving grace i think is this new rural opportunity digital opportunity fund which the fcc is coming out because all of those areas including the areas they took 10-1 service will be open for reverse auction uh federal support so that will be a big help to the rural
Senator Terry Rice
Unverified
36:42
areas of arkansas i do believe and i appreciate the work and support the work you're doing in areas you can but
i'm being told even on that money through through the rural electrification companies is that right
Speaker 66
36:57
no this isn't through that okay yeah i may get with you i just like to have some contacts because i understand
Speaker 49
37:03
completely and and i can get you in touch with some people uh up in washington that
Speaker 13
37:08
can help you understand the program that's going to come out of course the rules hadn't been written but everything that says this is going to provide
20 bash 25 download three up and in fact uh there is federal legislation i think fixing to be introduced to require the fcc instead of 25-3 to do 100 meg service so uh fund 100 meg service instead of 25-3 of course if you're you're doing fiber deployment you know you can provide up to gig for what you can provide 10 meg for so you know but i'll be glad to to get you in contact
that's that's going to be a i think a game changer for the state of arkansas to help this you were talking i'm sure you was talking about arc west communications is who you're talking about in danville i actually worked for them for 23 years uh prior to to me leaving in 2008 and yes they They did that, and I can tell you that without the Arkansas high-cost fund, they would have a hard time paying back those loans. So that is a success story that I'm kind of talking about.
Just like central Arkansas, you know, being able to provide fiber to the home to all of our customers, I can do that with the knowledge that that fund's going to be there to help me pay those loans back after I get it in there. Thank you for the info. Thank you,
Representative Stephen Meeks
Unverified
38:37
Mr. Chair. Thank you. Senator Johnson, you're up, sir.
Senator Mark Johnson
Unverified
38:52
Thank you, Mr. Chair. Mr. Frazier,
let me preface my remarks by saying anything that's a little bit aggressive is not aimed at you, but perhaps at others in this business that we've heard a lot from. I appreciate you being here and helping us understand this. When I hear the term rural, I look at it
a little bit askance because I have a very rural district, but I live within five
minutes of the city limits of Little Rock and we have a horrible broadband service and I have a good friend who is a dedicated study employee
who is often in this room who lives about two and a half miles west of me and has zero broadband service and he's supposedly in an area that's supposed to have service according to those maps that the FCC likes to put on on the internet that you can download say oh you've got service in this area well uh in the immortal words of a famous
arkansas politician just because they said it doesn't make it so
exactly and i'm as i travel my five counties i've learned that that is not an uncommon thing for the fcc to say oh yes this area
it has a certain level of service and they don't have it uh senator rapert and i talked about an area in the western part of Perry County called Hollis that might as well be on the moon as far as even cell service and there's not a lot of folks live there but we're about to go into deer season
and they're going to be in this I know this is more the the 911 thing than the broadband but but the wireless telecommunication falls under the same category is that there's probably a thousand hunters up there in tree stands that if one of them falls out and breaks his leg he doesn't you can't even call for help and i see this all as part of the same problem is that i don't think that all of these alphabet soup federal programs and the ones that connect america two and three
and and the newest one you just said the digital opportunity fund and all this you can create new acronyms but the bottom line is the folks out there aren't getting the service And I have struggled with this to the point that I'm sick and tired of my wife beating me over the head about it when she can't watch a movie on Netflix because it's too slow a connection. And I realize that we've got 5G coming. We've got some other non-wired options out there.
But when I hear from my constituents that say, you know, the governor did a great job of wiring all the schools, and our school has great broadband but our teachers give our kids homework and they send them home and they have to use dial-up and they can't even do their homework and I was visiting with Senator Irvin about the other day and she says in Mountain View parents drive to the parking lot of the McDonald's so their kids can sit in the car and do their homework because that's the easiest way for them to get a broadband connection. Now I know I've thrown a lot at you
but how do we, A, get
some real data on, when I see these big white areas on here, most of that's, the central Arkansas anyway, is my district, and
I'm wondering, okay, I'm thrilled to death that Grubbs and Gosnell and Bassett has 100 megabits per second. That's wonderful. But, you know, what about Hollis and Perryville and Perry and Opolo and Northern Conway County and Center Ridge, you know, where Representative Beck is and things like that?
What about those folks? They're not on here. They're just kind of quiet areas. Is there some way through, one of the things I know we passed a bill in session that allows some joint ventures, public-private partnerships even between, I presume that could include the co-ops, it could include a municipality or something to go in with a private firm to build out these systems. Where are we on all that? And I apologize for the length of my question.
Speaker 13
43:21
No, that's quite fine. I share your frustration. I see it on a daily basis. I even see it in my territory. In fact, two days ago, I had a lady call me and she said, when are you getting to me? My daughter had a homework and I had to go to the McDonald's in Arkadelphia and let her download it. And I said, you know, we're less than two miles from you. We're getting there. But I know your frustration. I know your frustration. You know, the FCC, in all their wisdom,
whenever they allowed the larger companies to become price cap companies is what it's called. It's a different type of regulation. You know, most of those carriers serve huge urban areas like Little Rock. the the the thought of the scc was that well they'll spread that cost out over their whole area and they'll serve their whole area that that hasn't come to fruition i don't know what the rural opportunity divide program will do in your area you're right though there are certain areas that
are probably classified as urban that will not be be allowed in this this grant fund uh you know the the the governor has has come up with his plan to look at communities with 500 or more that that do not have uh sufficient broadband uh in order to put that in i would assume some of these communities would be able to partner with the municipality and go in and apply for a grant
too you know uh that is going to be a long drawn out process uh considering that there's going to be so much interest in that in that program uh but you mentioned center ridge uh my daughter used to live there so i know center ridge well uh i assume that will be eligible for this this new uh calf 3 program uh again i don't know if your l area will be but uh that that is a problem
i can tell you there's places in hot springs that that don't have you know broadband either so uh there it's not just you it's other ones and uh uh hopefully with uh this joint venture type deal with the governor's plan we can expand
Speaker 49
45:49
broadband to some of these areas with the help of the municipality. Just a
Senator Mark Johnson
Unverified
45:59
quick follow-up, Mr. Chair. Are there cases that you see programmatically
of the right hand not knowing what the left hand's doing and some consumers kind of falling in the
Speaker 21
46:16
gap? Well, you know, are you talking about from a company standpoint? A service standpoint, yes. service standpoint oh i'm sure there are you know especially when you get in those uh larger companies where you know
Speaker 13
46:28
their main headquarters is in dallas texas they they don't really know you know uh what what they're doing in in different locations i i can probably see that i don't know
of any actual instances of it but i would assume so okay thank you
Speaker 21
46:43
very much thank you thank you you mr. chair thank
Representative Stephen Meeks
Unverified
46:46
you and just for food of thought for our colleagues one of the things I'm going to try to propose
with your support is that we take some of our state surplus and directed toward this problem to invest in our citizens but we'll we'll have that discussion down the road senator Raper you're next sir thank
Senator Jason Rapert
Unverified
47:05
you mr. chairman I appreciate you for having this joint meeting so that everybody could be involved in the process so
appreciate your leadership on this. Mr. Frazier, I wanted to see if you could help me. Maybe I just hadn't had enough coffee today. You rattled off several entities that you're involved with, and so I wanted to make sure I got that straight so that I really understand your comments and your perspective on this. You used to be the administrator of the high-cost funds, correct? That's correct. And you were the original administrator. I
Speaker 30
47:38
was not the original administrator the original administrator was neca services and then it went to roca and signing
Speaker 13
47:44
for a number of years and then i took it over in 2011 2012 time frame i'm with you okay
Senator Jason Rapert
Unverified
47:52
and and currently my understanding because i was refreshing my memory on this the way this operates that you really your only immediate oversight is the public service Commission, right? You turn in information
Speaker 21
48:07
to the Public Service Commission, correct? There is really the annual determination that is made by
Speaker 13
48:15
the administrator is made once a year,
and that information is filed at the Public Service Commission. It has oversight by every company. Any company can contest that annual determination based on the format that it was presented in I'll give you an instance back when Ronan and Sinan was the administrator it was contested nearly every year because of just clerical mistakes that was made in it so it's
published the companies have 30 days to object to the determination but once that a period is over then that determination is set and the determination is made on a one thing about the Arkansas high cost fund it has detailed instructions about how that cost is developed and so it's it's an administrative function you know you you take this form you you do this calculation and that's how that's filed to determine how much support each company is
Senator Jason Rapert
Unverified
49:21
eligible for and then the participating companies in the high cost fund there are certain of those companies that are high contributors to the fund but really don't pull back out the
Speaker 13
49:39
same amount and return from that fund is that correct well it is the right now the fund the the revenue that is put in the fund is based on telecommunications revenue. So that's all intrastate telecommunications
service revenue. So any company that provides residential or business telecommunications service in the state of Arkansas is required to assess that revenue a certain percentage. That is the money that flows into the fund. Everybody regardless of who receives the fund. So if you had a large population base in your company, yes, you would be paying in a lot more. There's a lot of companies that pay in that do not receive funds. Say that one more time so that everybody hears that.
There's companies that pay in that do not receive funds. It's their customers paying in based on retail telecommunications revenue. And it's all under the guise of universal service. It's to provide universal service to these very rural
Speaker 25
50:42
areas at comparable prices to urban areas. So, for
Senator Jason Rapert
Unverified
50:47
instance, you basically could say because John lives in the city and he's chosen to live there, he's also one of these customers, he's being charged a fee on his bill that really is not inuring to his benefit.
it helps, let's say, Jack that decides to live on the side of a mountain furthest away from everyone in our county somewhere. Is that correct? Yeah,
Speaker 70
51:11
but it also allows John to connect to Jack. Yeah, maybe he don't like Jack. Well, maybe he does. But maybe that's why Jack lives on
Speaker 90
51:20
the side of a hill. But, you know, Jack may start
Speaker 21
51:24
up a business out there, and John orders online from it. And
Senator Jason Rapert
Unverified
51:29
I get that. and we need a little levity in here.
I understand. Now, I want to come back to you to make sure I understand because I'm really trying to dig in. As you know, this was a very contentious issue back during the session when it was discussed about having it in the bill that we did for 9-1-1 restructure. It ended up coming out, and I don't think anybody was happy by the end of that whole thing. But it's allowing us to go much deeper into the way the fund operates and how actually that money is split up. So I want to make sure, because you're really not testifying today as the former administrator,
because you actually work for a company that is benefiting from the high-cost fund now. Is that right? You're exactly right. So would you mind to just, again, I didn't get to it. We got off on a rabbit trail.
Speaker 30
52:20
Who do you represent? What's your interest now? I am here representing the Arkansas Rural Broadband Association.
Speaker 13
52:26
that is made up of 11 or 12 small rural companies that that receive support from the arkansas high cost fund okay you're exactly right i'm also general manager of a small telephone company
that receives funds from the arkansas high cost fund
Senator Jason Rapert
Unverified
52:40
right okay uh the there's a couple things i want to do and i'm going to be done mr chairman so you can move on but i was asking about the high cost fund and the administration on that the what apparently in statute when it was originally set up and again you've already mentioned that there was been multiple administrators because of maybe some complaints in the past we've set this up and this information is reported to the
public service commission but they really don't have anything to do with the actual administration of it and really just you you give the information to them to publish and that's it but yet there is a contract with one entity and that entity only has one customer which is the state the state of arkansas in this situation with the public service commission so this one entity out here has this contract uh do you happen to know does that contract come up periodically for rfps and
Speaker 13
53:40
yes yes it does uh uh and i think it's the same way now as it was back when when i got it it's it's an initially a two-year contract uh it can be extended for one year periods after that um uh you know normally it comes up uh
Speaker 49
54:00
from a july to a to a june time frame because of the
Senator Jason Rapert
Unverified
54:05
uh but and really all that this is is a matter of just some pretty simple accounting you've got a
formula and you're just an administrative function basically well why is it that the state of arkansas set it up that it had to be an outside vendor rather than just having maybe the public service
Speaker 21
54:29
commission or dfna just handle the simple accounting yeah i i can't i can't address that i
Representative Stephen Meeks
Unverified
54:35
don't know have you ever thought about it no i really really haven't uh um senator and and you know
of course commissioner thomas is here but
in talking with them in the past, the PSC told me it would actually be more
Speaker 13
54:50
expensive for them to do it than to farm it out. And I will tell you this, I know when I was there, of course it was John Bethel was, I think, in charge of telecommunications and Bill Dennis was over, I guess phone there was quite a bit of communications and understanding and and
those types of things you know making sure that they were aware and how it functions and what the issues were so there it's not just hey this guy's doing it and and there's no oversight because there there was constant questions back and forth in all the information that was filed and I've had no complaints about that
Senator Jason Rapert
Unverified
55:31
I'm just interested in that and and I would say to Mr. Chairman one thing that would be interesting for us actually to know is how much work is actually having to be done because yes the contract amount may be cheaper than it would be to have the
resources of the public service commission but if the public service commission happened to know that all this could be done on a half a day one day a week that might be a very interesting thing to see. So I'm just saying out of the interest of all this transformation in government that we're doing, I just wondered why that we have this set up that it must be an outside source, and that source happens to have only one client. So anyway, it's just interesting. My last question on this, and it's really a comment, but it is a question, and the question is preceded by one word, and that
is why is this? When I look at data, and this is part of what has gone into a lot of the discussion that ended up with the rural broadband initiative that we're going to talk about next you know in 2018 Arkansas is 48th out of broadband connectivity and I don't know where we fall today where we're at on this list but you know we're only one percent of the American population why is it after all these years and all these tens of millions of dollars
that we're still here talking about feeding even more money into these companies and we can't seem to get the connectivity look we can get over here and all drive to hollis in less than an hour and they're sitting there on the edge of hot springs village they're sitting on the edge of hot springs it just is baffling to me to see that even in part of my district my district used to encompass a lot of the area that is impacted by this issue now I'm more compact but the eastern
Perry County which sits on the edge of Conway Arkansas and Faulkner County which has some of the greatest speeds not only in the state but in the country you cannot get good service and some of the very companies that has been recipients of money from the high cost fund are the ones that serve that area but yet for some reason they just can't get it done and now I know it gets down to economics so i want to ask you why is this not happening you're in this business now where you're trying to get that that service there but if we i don't have the number on how much money
has gone through this fund completely but i bet you it would drop all of our jaws to really have that total number and maybe somebody has it here today can mention that but it's funny to me how that we've got one percent of the american population and we see some of these states on here for instance utah number 11 on that list and arkansas's 48 utah's pretty rugged yeah it got dispersed population but they seem to get it done but we don't
Speaker 13
58:34
so why well i let me let me just say this i can't answer for at&t windstream and
central link area it's kind of like you asked me who was i representing here today i can answer for all these other small guys they are getting it done you know uh and the way they're getting it done is because they have sufficient funding to in order to make these long-term loans so they can go out there and do what they need to do they're doing it you know today i can't address why at&t central link and wind stream is not getting it done now uh just historically you know at&t tells tells me i can tell you every dollar i spent on high cost fund and and what
areas i hit they've got a lot of areas you know uh it kind of goes back to what i said earlier they've got a lot of urban areas you know uh that cost should have been spread out over the rural areas it's my personal opinion that's
Senator Jason Rapert
Unverified
59:33
just me well i'm finished mr chairman i there'll be more than i've got on it we had a lot of issues that we've had to take care of during this last session but i will voice my support now uh working with representative meeks and whoever that as of the the upcoming session of 21 we're going to do a deep dive on this one way or another
it has to be done because i can't see that arkansas with all the tens of millions of dollars that have flowed through there we seem to not be making much headway on that list now the schools districts we've had areas where we have but when you see us in relation to the rest of the states and our peers out there we're just not moving and it's unacceptable there has been a lot change and so i appreciate your input and hope you'll be very very helpful to us you've got a lot of knowledge that nobody else has because you've sat in that unique spot where you've managed that
money as it's come through and make sure it's distributed but i believe that representative Meeks, Representative Gray, who I don't know if she's here today, Senator Davis and others, we want to see connectivity. We want to see this taken care of, and I just don't think it's responsible to see the money continue to flow the way it has in the past if we're not going to see the coverage be made. So thank you, Mr. Chairman. I understand. Thank you, sir. Alright, just to give everyone
Representative Stephen Meeks
Unverified
1:00:51
a head up, I still have five folks on the list and we're an hour into this, so just keep that in mind, but
I do want to make sure everyone has ample time to get their questions answered. Senator hill you're
Senator Ricky Hill
Unverified
1:01:15
up sir okay there we go i want to start out by saying i love the name high cost funds i'm actually from rural arkansas we call that a subsidy so uh that's the way i'm going to refer to this as a government subsidy on this this issue yeah you you alluded a while ago to
4,400 locations that you work with that you've worked with on this and 15 million dollars spent that roughly ends up being three thousand four hundred nine dollars per location is what y'all's expense has been on that how what is the difference between that thirty four hundred dollars and what it cost you in another area where your population a little bit greater let's use hot springs for example you said you're working south of hot springs and so what's the difference what is it costing on a per
basis rough figure subsidized figure on that well
Speaker 13
1:02:03
if you take the population base of hot springs and what it costs to provide service it's going to be a lot less than that $3,400 right and it should be yeah it should be so I really don't know what the cost is hot springs I don't know the the ground quality or if they give me a
Senator Ricky Hill
Unverified
1:02:26
similar i didn't mean to interrupt you there but give me a similar area where you've worked in let's visit a
Speaker 13
1:02:33
hundred dollars but it costs for them i have i have uh prior to being the
the high cost fund administrator i was a uh consultant for a number of the rural companies in arkansas and the car costs do vary greatly i have seen uh the cost is low down in the south uh you know under a thousand dollars per line again it depends on the uh the number the population and versus the soil
Senator Ricky Hill
Unverified
1:03:02
quality right and i understand all that uh well i guess what i'm trying to use
the same geographical area you said you're working hot springs the the soils will be pretty consistent in there you're going to have some rocks you're going to have this you go you've got hills you've got mountains i got a lot of rock understand i understand all that i guess that's when i was trying to stay in the same geographic area yeah yeah is a subsidy for the
rural area outside of that town is it three thousand dollars is it two thousand dollars on a
Speaker 49
1:03:31
per household basis well uh i it's really not a subsidy we're we're receiving a a return on our investment is what
Speaker 13
1:03:38
we're receiving so we've spent the same word farmers use yeah exactly that you know it's a subsidy service yeah okay uh so you know i don't know what the cost it would be in hot springs i would assume that it would be quite a bit lower
Senator Ricky Hill
Unverified
1:03:55
yes sir okay thank you i'm gonna ask a question for senator hammer i can ask it quicker than
he can uh i just had to throw that in there for him what makes a company
Speaker 13
1:04:09
uh qualify for this funding uh it's specifically written in law and and trust
me i didn't review the the law uh there are eligible telecommunications carriers in the state of arkansas as of a certain date uh you can apply to the public service commission to become an eligible telecommunications carrier for the uh state fund you would be required to uh provide all of the quality of service to a customer, delayed payment agreements, all those kind of things.
But there is a process where you can become an eligible telecommunications carrier. And
Representative Stephen Meeks
Unverified
1:04:54
then remind me, once you become a carrier to be out when you're eligible for the fund, I
think the fund is broken up into like four different levels or three different levels based on the number of
Speaker 13
1:05:06
subscribers as far as what you're eligible to get. And they would be put in a category, and the language in the law says that the administrator develops a method to
Speaker 30
1:05:16
determine the cost of the incoming company in order to figure their annual determination.
Representative Stephen Meeks
Unverified
1:05:21
You're correct. Representative Bentley, you are up next. Thank you, Chairman. Larry, thank you
Representative Mary Bentley
Unverified
1:05:28
so much for being here today. You know where I live quite well over there, Western Perry County, and supposedly Windstream covers a good section of that, yet they refuse to bring service out there to my constituents. So what, and I know you have a lot of knowledge base, that's why I'm asking this question, what can I do to help those constituents out there? When I call Windstream and they say there's no way they're going to bring Barbara in there, but they're covering that area.
How do we get that changed to, I'd love to see ARC West just cover
my whole district, actually as good a job as they're doing. So what can I do to change that?
Speaker 49
1:06:06
what can we as legislators here do to change that well uh i guess is besides putting more pressure on
Speaker 13
1:06:13
wind stream to uh to deploy facilities in your area um i guess we've got to look to and i i know this sounds repetition and i've said it so many times to this new fund to provide services
in your area uh you know what's going to be so attractive with this new fund is some of the electric co-ops out in those areas that have utilized calf 2 funding in the last round to receive funds to help deploy services
Representative Mary Bentley
Unverified
1:06:39
okay now the quick question it's okay
chairman um just because of your good your knowledge base there larry um i'm concerned about the fund of the governor is suggesting now to connect towns and municipalities is it going to hurt because you
know where my district is is it going to make those spots out there even less able to get if those towns and cities get it is it going to make that my part my district even less attractive to say windstorm to bring power out there if they're just if all of a sudden even a little bit more of the smaller towns are connected is it going to make my part out there in western perry can even less attractive to windstorm or whoever to put
Speaker 19
1:07:18
broadband out there if that if that makes any sense at all it makes it makes perfect sense to me
Speaker 13
1:07:23
uh um you know it's all about developing a
business case you know in in my rural area i couldn't develop a business case unless i had federal and state support it's just the way it is and that's the problem with the wind stream areas they're looking at it as a business case proposition so i can understand your concerns and i can agree that that could be a possible issue uh on the other hand if you get a a good provider that is doing a town that's close to your area you know that may give them more an incentive
to go out further to expand their service area outside what is part of this grant i would hope so
Representative Mary Bentley
Unverified
1:08:03
but unfortunately i'm looking at little rock and where they got all the money when They were supposed to expand. They didn't even expand out to, you know, Senator Johnson's area. But I really appreciate you coming here, Larry, and for your support, and we'll get back to you with some more
Representative Stephen Meeks
Unverified
1:08:17
questions. Okay. Thank you. Representative Flowers, you're next. Thank you,
Representative Vivian Flowers
Unverified
1:08:27
Mr. Chair. In looking at this map and getting a little bit of clarity in these sidebar conversations I've been engaged in,
I'm clear that the map that we're looking at doesn't reflect what exists, right? it reflects movement process in the intent to deploy, and I'm also clear that it might not be the most updated map, but as I look at this map that at one point reflected intent and plans, I'm struck by number one, the very first page when it describes Arkansas high-cost
areas. And so when I see what a high-cost area means and look back at this map, there are so many gaping holes of emptiness south of Little Rock. And so when I look at the entirety of South Arkansas and how little is being done, I'm wondering what is the process to determine what those high need areas are and who gets the attention? Because there's so many tiny areas.
So I get what you're talking about in the conversation about priority, money, cost, and all of that. But if the intent is to provide service and infrastructure to areas where there are fewer people and less access to that infrastructure, how in the world is it that so little is being done in South Arkansas is my question.
Speaker 49
1:10:11
Well, I would assume that the areas in Arkansas that you're talking about
Speaker 13
1:10:16
are probably Windstream, CenturyLink, or AT&T areas.
If you'll look at this map, that's the ones that aren't colored in in some part. You know, the intent of the Arkansas High Cost Fund was to help provide broadband out to rural areas in support of the Federal High Cost Fund program. uh at&t and windstream century link again get 11 million dollars a year to expand out to their their areas uh you know i i don't i'm not sure where they're spending that money uh i would
i would think that they could probably tell you where they're spending it they've got a large amount to spend and this doesn't include where they're currently providing calf to or calf funds too and i don't know if any of those are in south arkansas i would probably tell you they did not take calf funding in south arkansas i don't know that for sure i shouldn't even shouldn't even say that uh because where they provided where they took federal support for was areas where they
could make a business case for it to work you know outside of benton and and uh some areas uh CenturyLink took some outside of Russellville and are providing services out there. I don't know the total areas that they did. I can get that information to you and provide it to you, though. I
Speaker 134
1:11:43
appreciate that. Mr. Chair, if I could just
Representative Vivian Flowers
Unverified
1:11:46
ask for very specific information, just so that as we're looking at this,
we can get a better sense of what the focuses of the companies
affiliated with your association might be and then sort of what's off-limits based on what you're telling us with regard to the Big Three, is there any way we could get a map that would reflect what areas are already covered by AT&T, CenturyLink, and Windstream so that we can see then what's left
and then what you're doing? I think I could work with AT&T plus look at some
Speaker 13
1:12:18
FCC maps and try to determine that. Okay, good. I would hope that they would provide that information to me.
Representative Stephen Meeks
Unverified
1:12:28
Thank you very much. Yeah, and Representative Flowers, to that, if you've not
already, you might download the Broadband Manager's Report. It's a report that's produced every year. I think like in mid-summer it comes out that has a lot of those maps on. Some of the information that you're requesting can sometimes be considered proprietary, competitive, you know, that kind of stuff. So companies are reticent to supply that information. And so one of
the challenges we've had through the years is getting those accurate maps.
Representative Vivian Flowers
Unverified
1:13:01
And, Mr. Chair, though, if we could get it where I don't have to know which area is specific to AT&T, which area.
If we could just get a map that shows generally what is covered by those three without specifying what areas, I think that would address that. And there's some maps,
Representative Stephen Meeks
Unverified
1:13:18
like I said, in the broadband manager's report that you might look at that will help. But if, you know, the carriers want
to provide that or we can get that, then all the more better, definitely. Let's see. Senator Hammer, we're back to you, sir.
Senator Kim Hammer
Unverified
1:13:33
Thank you, Mr. Chair. Can you tell me as far as the federal requirements of auditing to make sure that the funds are being spent according to what the federal guidelines,
Speaker 21
1:13:47
what the state guidelines are? AT&T, we audit them. AT&T receives federal funds based on a number
Speaker 13
1:13:54
of locations they chose to pick okay that and again I know just as an example there's one south of Benton so there they receive they what the FCC
did is they looked at this FCC model and they said hey AT&T you pick which census blocks you want to cover and here's the dollar amount that we'll give you for each one of those census blocks and you are required to provide 10-1 service in those census blocks within a six-year period that six years is fixing to be up okay same thing with CenturyLink and Windstream they do this very same
thing. It was CAF funding. It was original Connect America funding for those price cap companies. So they all picked what census blocks they wanted, and they're required to provide that, and they have to submit those locations that they hit to the Universal Service Administrative Company and put in a thing called, a system called the Hub. Okay, and you can actually access that and see exact locations that they have done with that CAF fund money. Same thing with rural companies as far as
now the rural companies have to provide audited financials and cost information that it really ends up at the Universal Service Administrative Company but it goes through the National Exchange Carrier Association. There are rules about what investments can be included, what expenses have to be excluded uh you know what you can put in it what you can't put in it you know you you don't put in uh uh advertising you can't you can't get recovery on advertising so there's there's
specific rules that go in there all of this is subject to review and audit by NECA by the Universal Service Administrative Company and by the FCC so there's a lot of review on the smaller companies as to what they provide and what they do not provide did that make sense so on the
Senator Kim Hammer
Unverified
1:16:08
statement you just made they they can pick and choose which areas they want to accept based on the money that's offered for them to go in and provide those services they had they had to pick
Speaker 13
1:16:22
back in i think 2013 uh what areas they wanted in this calf funding that they picked that a long time ago and now they had six years to provide services in those areas uh the fcc says they may give them another year i don't know if that'll that'll fly but uh but that they they had to pick what areas they wanted and what areas they did not want and they didn't take all of their areas you know some of their most rural areas they didn't
Senator Kim Hammer
Unverified
1:16:55
take so do we know if do you know based
on the fact they're coming up on that six-year time frame if they're going to make it or not and if they don't are we able to retrieve the money from them because they didn't fulfill their obligation or what's our callback the the
Speaker 21
1:17:10
fcc will take back their money if they don't the the money
Speaker 49
1:17:15
they got from the fcc they will take that back if they didn't do it and how
Senator Kim Hammer
Unverified
1:17:21
are we going to know is that information going to be reported this committee mr chair we We've just got to go get it on our own as individual legislators.
I'd kind of like to know, coming up on that six-year time frame, where they are. I think
Representative Stephen Meeks
Unverified
1:17:37
it will be published. Yeah, that's a federal program that we'd have to go out and get the information. Okay. All
Representative Rick Beck
Unverified
1:17:44
right. Thank you. Last but not least, Representative Beck. Thank you, Mr. Chair. Thank you, Larry, for coming and talking with us. I want to give you a promotion, actually. as an engineer i look at this thing sort of as an engineer does and and i think the project that you're seeing over here from
the legislators is how do we get broadband to arkansas
and as i listen to what we're saying it seems like we have a lot of piecemeal things going on here which are people selecting areas that they want getting funding from various sources to provide service there. So we really have two different focuses as to what the project is. We're looking to say we want Arkansas to have broadband. The other areas are trying to say where can we get, you know, and they're for-profit companies. Where can we get the most bang for our buck on these things?
So my question is related to now you're the project manager and you're our project manager. we want broadband in Arkansas do you feel like what we're doing now and with the governor's plan everything is the right way to approach that and if so if you do feel that way explain to me how these holes are going to be filled like areas one of the statements that you made that kind of went to me was was when you said if you were in an area and if you had a good player that might
help you out next to a city you might get brought well that's if if if so the question is is how do we have a system that, first of all, I'm assuming we're holding people accountable for what they're providing and not, and I'm not picking on any company in particular, but how do we make sure that people don't fall, areas don't fall through the cracks, and that people are doing what they're supposed to do, and by the way, we're putting the right amount of carrot or whatever you want on these rural areas, because I disagree with you somewhat
When you make the statement that providing service to these small towns might help in the rural area, I think it will do just the opposite because what it will create is, if you think about it, we went out, these companies went out, and they got all the low-hanging fruit, right? We got that low-hanging fruit, big bucks were gone. So we put some incentives out there, and now they're getting a little bit higher fruit, but there's still fruit at the top of the tree. And the more that we get off the bottom of the tree, the less attractive it is to come back and try to get that.
So I'm very concerned about these rural areas that might be left out there really waiting for technology to come up with something that allows them to get something because it doesn't seem like the companies are going to do that. So my question is, as I mentioned, I'll just repeat it one more time, is you're the project. You've got to get all of Arkansas. Are we on the right track? And if you think so, explain how these pockets are going to make
Speaker 13
1:20:41
sure that they're served. well uh thanks for the promotion i don't know but i will tell you this that uh the fcc
i think is committed to providing broadband to unserved areas and uh along that route the next step is this calf three uh that should work in conjunction with the arkansas high cost fund support you know the arkansas high cost fund support is not a total cost to provide this service and we rely on the fcc also to help provide these services i am hopeful and this is just me i am hopeful as a project manager that i would look to this new calf 3 that is coming out
as an answer to a lot of the rural areas especially in south arkansas and some of the areas now as far as around the city of little rock i don't know what the answer is there except for maybe this governor's plan with the with part of the city municipality going in with some sort of grant uh opportunity with uh with the governor's fund all right just one
Representative Rick Beck
Unverified
1:21:53
more question because i'm trying to get a better feel for this now all the areas in white that are on this map yes sir that you
provided us those are all covered
someone here like AT&T Century or Windstream has those areas I would
Speaker 69
1:22:10
say that they do now what this map doesn't show
Speaker 13
1:22:15
it doesn't show the CAF 2 funding that was awarded last year by the FCC which is a lot of Northeast Arkansas there's electric cooperative that that received CAF 2 funding for a lot of that area up there the electric co-op at
Arkadelphia received some CAF 2 funding in that area the Ozark electric co-op received some in Northwest Arkansas so there are some more areas there that received funding and they have to provide one gig service is what they have to provide over a 10-year period to a number of locations and I can
Speaker 49
1:22:55
get you those locations and i would appreciate that
Representative Rick Beck
Unverified
1:23:00
thank you mr chair and uh
Representative Stephen Meeks
Unverified
1:23:03
mr frazier uh how many high
cost funds are how many states have high cost funds like we
Speaker 13
1:23:12
do there's only a couple dozen right uh yeah there's a couple dozen uh and and they they vary with with how
Speaker 49
1:23:20
they collect funds uh to fund them uh you know some of them are are uh just lifeline funds to to hit lifeline customers
Speaker 13
1:23:30
but there's a couple dozen a lot of them are uh still based on telecommunication service revenue
a lot of them have moved to a connections based approach which is kind of what we wanted to do in the last session so okay uh representative vod you are up it's for you
Representative DeAnn Vaught
Unverified
1:23:46
mr chair so can we get will everybody be able to get the information that representative flowers asked for and
can we get what he was just talking about also in that same uh because i'd like to know the calf 2 funding and and where it went not necessarily who who had it but where it went and how far it went and if you don't mind
Representative Stephen Meeks
Unverified
1:24:06
mr frazier if you just get that to mr gillam here and then he can distribute
Speaker 29
1:24:10
it to the committee for us. There's a lot of maps available that show that on the FCC website. I'll try to track that down
Representative Stephen Meeks
Unverified
1:24:19
and get it to you. And again, definitely check out the broadband manager's report because that'll have some of that as well. Alright,
Senator Jason Rapert
Unverified
1:24:35
I'll last call. Any other questions for Mr. Frazier? Okay. Alright.
Alright. Last thing on this. we've talked for over an hour probably here the bottom line is this is actually
payers money we're talking about this isn't really phone company money this isn't state tax money that's been just this is money right out of the pocket of everyone in the state that actually is paying that phone bill so when we're talking about this money and how much money is going to the universal uh fund etc at the end of the end of the day this is right out of the pockets of every arkansan that has this phone service right you're correct all right i just
want to make sure to get that on the record for us as we
Speaker 13
1:25:21
discuss it going forward thank you mr chair every every company that passes it on to their customers there there are a couple that do not pass it on to their customer but but the far majority of them pass it
Speaker 25
1:25:32
on to their customers yes sir thank you you're welcome all right back to you uh thank
Representative DeAnn Vaught
Unverified
1:25:38
you mr chair sorry i just thought about this does our rural broadband the people that you're representing do they get federal funding also yes they do and then about how much federal funding do y'all get uh it depends on the
Speaker 13
1:25:53
company and it depends on their cost uh that's that's information that is publicly available and i can get that to you also that's perfect
Representative Stephen Meeks
Unverified
1:26:02
thank you mr chair mr frazier thank you so much for being here and for answering our question and we appreciate you sharing with us today thank you anytime so next on the agenda mr. Gary will let him start making
his way forward of course he is the director over at the Arkansas Department of Emergency Management as part of this discussion this course this
last session we updated our 9-1-1 laws here in the state so I've asked him just
to come give us a brief update on how the implementation of that law is going and once you get settled in if you all would just introduce yourself
Speaker 173
1:26:40
to the committee and then you'll recognize all right thank you mr. chairman I'm AJ Gary I'm the director of the division of emergency management and under Act 660 that title also put me as the chairman of the newly created or I should say
Speaker 176
1:26:54
revamped 9-1-1 board I'm Renee Hoover I'm the administrator
Speaker 173
1:27:06
for the Arkansas 9-1-1 board okay so just kind of a quick quick update the the legislation went in went into effect on July 1 so once the appointments were made for the 9-1-1 board we had our first of three meetings we had the first one in August 19th subsequent meetings September 19th and October
17th and we'll have our next meeting uh next week i believe it is um so you know the first uh the first meeting was was basically trying to get the the new board new board situated we were also concurrently running the etsb board because they were both running at the same time during that transferring duties from the old etsb board to the new 911 board so we just finished those that transfer up at the last meeting i think we closed out the etsb board so during the uh
during the september meeting we had some presentations from shelby johnson who arkansas gis office and he is also a member of the 911 board and we discussed some of the data for the counties and city addressing and the importance of making sure that we had you know know a good system and we had everything in place for for that addressing because that's a key part gis is a key part as we move the state forward in next gen 9-1-1 during the arc the october meeting
we had some presentations from arkansas law enforcement training academy on the currently required training for our telecommunicators so we discussed that a little bit, working on whether or not, you know, what kind of enhancements to training for those telecommunicators that we will need in the future. We also had a presentation from a 911 company organization that talked to us about the possibility
of coming in and doing some additional work as far as our next-gen 911 plan. if y'all remember we we did one of those before this legislation was passed so we've looked at the possibility of having somebody in and coming in and doing that for our for our next meeting well let me back up just just a little bit the an additional task that the division of emergency management has is managing that newly created public safety fund so as those fees come into
the public safety fund uh you know that the administrative division of adam will be pushing those funds out some of that will go um to uh alita arkansas law enforcement training academy for funding the training uh part of that money will go to awin and then the rest will go to the 9-1-1 board and then from there uh renee as the administrator of that board will push that money out to the individual PSAPs through the counties or cities throughout the state.
In addition to those meetings, several of the members of the board also attended a kind of a panel discussion at the APCO-NINA conference this year in Little Rock, where we had an opportunity to hear from many of our stakeholders in the state, many of the telecommunicators, 911 operators throughout the state and got some feedback from them we also at at our individual meetings we try to set aside about 10 or 15 minutes at the end of our the board discussion
for open discussion with our stakeholders and we've had quite a few attend our all three of our meetings so there is a a lot of interest in what the board is doing from our telecommunicators throughout the state and it's been really good for the board to hear that feedback from all of them so as they're sitting there and listening to our discussions we're also able at the end of that meeting to hear back from them and kind of get an idea of what their thoughts are um you know we
believe they're a big big player in this uh in this process um we are also at our next meeting we'll be discussing kind of what the steps would be to bring in some consultants to look at two main areas that we've been tasked with. One of those is the how do we get Arkansas to next-gen 911, some of the more technical pieces of that. So we're going to be discussing bringing somebody in to basically put a plan,
steps together to how we're going to get Arkansas there. The other consulting issue that we're going to be discussing is bringing someone in to help us work on the consolidation piece. As you know, we've been tasked with reducing the number of PSAPs in the state of Arkansas. That's going to be a big undertaking, and there's a lot of things that go into that, so we're looking at the possibility of bringing some of those consultants in to help us do that. We are not the only state in the nation that's going through this,
so there's other states that are a little bit ahead of us. So we're going to be pulling from information from there. We want to do this quickly, but we want to do it correctly, and we want to make sure that we're taking the right steps. So that's kind of, Mr. Chairman, that's kind of where we're at now. This board that we have together, thanks to the legislators, they're not getting compensated, of course, for this, but they have been doing a lot of work on it,
and I think it's going to be a great
Representative Stephen Meeks
Unverified
1:33:00
benefit as we move forward. Awesome. We definitely appreciate your work in this arena. Representative Lowry, you're up
Speaker 180
1:33:09
for a question for us, sir. Thank you, Mr. Chairman. Thank you, Mr. Gary, for your report. I'm assuming that when
Speaker 182
1:33:16
this bill did come to the legislature that you were at least engaged in knowing what the bill was going to do? Yes, sir. Okay. Well, my question is going to be related to some complaints that I've received about how much the increase has been in the 911 fee.
And, you know, I get really troubled when I hear us try to defend fee increases by saying, well, they're user fees, that this is not government fees. Well, it's, you know, we're here to represent the people. and i've got uh i'm looking at the bill it points out that it increases from 65 cents to a dollar 30 well that's not a big increase but i have a bill that was sent to me on a prepaid phone where it goes from 65 cents to five dollars and 50 cents it's a 500 increase i can't find anywhere
in the bill where it references that huge of an increase on phones that are mostly bought and used by the people who can least afford 500% increases in any fee. So can you give me direction on whether this is something that was promulgated through rules or through an action of the board, or is it in the
Speaker 180
1:34:34
bill? it is it is in the bill uh in the
Speaker 173
1:34:40
legislation that was passed and i think the way it's worded
is a 10 increase on uh prepaid i think renee isn't that correct that
Speaker 186
1:34:50
is correct it is in the bill and it uh references a 10 um 10 of the access
Speaker 187
1:34:57
um or the transaction amount of a prepaid transaction and it's
Speaker 182
1:35:04
it's my understanding in other words it's worded differently than the language about what the 9-1-1 fee would be that it strikes out 65 cents and it puts in language a dollar 30 and
i'm pointing this out because i know a large number of my uh colleagues co-sponsored the bill voted for it i was in the minority that didn't vote for it and it's and it's because when a 43-page bill comes across our desk, I know that there's something like that hidden in it. And I think we would all be troubled for our constituents if we knew that those who can least afford a 10% increase, for instance,
that we're really putting it to them. So I hope that you'll... I know it's good work. I do know my mayor has pointed out to me that there's some concerns about Maumelle and how they're being, and I asked for him to send me an explanation, and I don't know exactly what it is, but it's something about them being a server or something like that where they're kind of being cut out of it.
So I'll actually ask him to contact you and see if, I know there's a mayor that represents the Municipal League. Right. I wish it was my mayor so that he could actually have some say-so in that. But anyway, I hope that we'll continue to watch this very closely as we come into future legislative sessions and see if we can't give some relief, especially on
Speaker 173
1:36:44
those prepaid bills. Right. And just for clarification, the board does not set those fees, and certainly the Division of Emergency Management doesn't set those fees.
they're just managed the division of emergency management is managing that public safety fund so i just wanted to point that out understand thank you very much
Representative Stephen Meeks
Unverified
1:37:03
senator rapert may have some more information for you representative thank you mr chair yes and and i
Senator Jason Rapert
Unverified
1:37:08
appreciate my chair on the house committee for bringing this up i actually have answered personally answered some people that have sent in obviously on the senate end i carried the bill for this um just like you who's paying for this how much does it cost them and how are you doing it
we did have conversations about the prepaid portion of that during the legislation because I thought it it looked a bit odd when I first saw that as memory serves me and you know we've covered a lot of issue a lot of time since then as memory serves me we looked around and there was other states of what they were doing as I recall and we can go back and try to put that information together uh representative lowry as i recall uh some of the other states were even
heftier on that so it was a discussion of what we were going to do i know that the dollar 35 that equates for one line for one user now if that's all you've got i've got seven of them right now so i'm paying i'm paying exceptionally amount more than what i did however for one line user that's about point zero four four cents a day to have the nine one one service and so as you know there was huge support that came in from around the state to try to get this done but that portion of it I think we can look
at that and say is this something that needs to be looked at but here's what I think is something that's overlooked in the discussion and the reason I could say something on this is that I've been feeling these questions and thinking about this a prepaid service they'll buy that a set amount and it's not just it's not a month-to-month fee and some people may blow through that in 30 days but some people may they may not use that up for two and a half months and so I think that's the that's the key it's kind of like forgive me
for using the analogy but it's kind of like the highway funding bill with people with the hybrid vehicles and the electric vehicles that wanted to know why they were getting a hundred dollar fee on top of everything for the registration and it amounted to the fact that they're not using as much fuel they're not paying as much in fuel taxes and so there was an effort to try to square is everybody paying their fair share if they're using the service and that Mr. Chairman both of you I think is where you see that difference I hope that helps a little bit
because, again, if you see if somebody's not paying a monthly fee, you can see where that they equated this measure to get it. But I definitely am open. If there is a better way to do that in the future in maybe another state that has modified what they've done, I would be very much open to looking at that because I feel we want to be fair. At the end of the day, we had an outcry for next generation 911, have better service, and that's why I went with it. Um, and, but I believe that definitely if there is a way to modify it, we could do it,
but I hope that helps you as you field some
Speaker 182
1:40:16
questions, uh, Mr. Chairman. Thank you. And Mr. Chairman, thank you for allowing me to sound in again. Uh, I do appreciate the explanation. Of course, then it does get us to another point where we're now that cost is even more because if someone does blow through a prepaid, they're out there minutes in less than a month, they're paying that 500 percent increase several times over if they go back and recharge the phone
or buy some more minutes so I do think it does it is something that bears us looking at further especially if we can get some type of apples to apples comparison when we are looking at legislation so that we know what the burden is going to be and I understand now why you have to bill it based on a 10%, you can't do it on a monthly bill because these are not monthly bills. But there has to be some way to give an approximation of what that increase is going to be on a
prepaid line if it were treated the same way as a regular monthly bill. So thank you very much. Thank you for your answers. Thank you, Senator.
Speaker 193
1:41:26
Thank you. Representative Beck, you're up, sir. Thank
Representative Rick Beck
Unverified
1:41:31
you, Mr. Chair. Thank you for coming in and testifying. I have a couple questions. The first was, I
think the word you used was consolidate. You were going to consolidate some of the centers, the T-STATs or are they P-STATs?
Speaker 195
1:41:48
Yes. Yeah, the primary answering points, public safety answering points. So when
Representative Rick Beck
Unverified
1:41:52
you're consolidating it, I assume you're talking about possibly eliminating some and covering.
When I was first looking into this, there seemed to be a lack of standards as far as actually the operation. It seems like everybody kind of wrote their own rule book and everybody did what they wanted to do and everybody got funded based upon what they thought they needed.
and so one of the one of the I did support the bill but one of the concerns that I had was is that we need to try to get these standards and so that the pay the Arkansas is not paying for people that are not necessarily providing a good service so my first question is is during the consolidation are we going to be putting standards back down sort of a bare minimum standard I guess as far as funding and as far as operations. And then the other thing that I've heard some concerns
from some of the people back in my district about when is the money going to start flowing? Right. And, you know, some of the counties are being hurt right now. Their budgets are being
hurt by these things. So I was just concerned about that, if you could help me out with
Speaker 173
1:43:09
that. You bet. So the answer to your first question on consolidation is the board is going to be looking at all of that um uh again this is you know we're we're early on in this process and we want to make sure that especially when we get into those issues that
we're looking at everything but i i think you know and just you know and i know i'm speaking for the board here but in the conversations we had um that we've had you know having that standard service those things throughout the state is certainly of interest to everybody. As far as the money going out, and I may ask Renee to help me out here, but the money is coming in, so I think the first
Speaker 199
1:43:49
distributions of that will be after the first of the year. Is that correct, Renee?
Speaker 187
1:43:58
the funding, the 65 cents, the period for that ended September 30th, So those funds are still coming in to what was the ETS board, now the 9-1-1 board. Those funds will be distributed out for the third quarter in December, like normal. And all the new funds will begin to come in mid-November. I think the statute requires that the providers remit the funds 15 business days after the close of each month.
So 15 business days after the close of October 31st, we should begin to see those funds coming in to the Public Safety Trust Fund. And then those funds will accumulate there. Beginning in January, the statute requires the 9-1-1 board to pay an average of what has been paid out the previous year to the PSAPs for the interim period of six months in which the trust will be holding the excess funds
that have been coming in from the increase. And then after that six-month window is when the 911 centers will begin to see that increased amount. Good. So
Speaker 203
1:45:29
June? i believe it'll probably be april may time
Speaker 187
1:45:33
frame but remember they will still be receiving
fundings one of the changes um effective in january is they'll be receiving funds monthly instead of during the quarterly time period that they receive them today so through the end of the year they'll continue to receive funding as they normally would uh first quarter second quarter third quarter and for the third quarter will be in december and they won't actually receive a quarterly distribution in march but of 2020 but they will be receiving an average amount
each month beginning in january and that will be equivalent to what they would have received
Representative Stephen Meeks
Unverified
1:46:20
the previous year one question that that constituent has brought
to me is with the the next gen 9-1-1 system are the PSAPs locked into a certain vendor or are there opportunities for competition among vendors I mean
Speaker 173
1:46:38
I hope that at the
end of the day there will be competition because I think in my personal opinion that's what gets us some of the best prices but again you know as far as what we're looking at it's it's I can't tell you what this is going to look like here in the next few months because we are still going through that process we are still working on on what that's going to look like for
Speaker 161
1:47:02
Arkansas all right you definitely y'all have a big big challenge ahead of you but I think Arkansas I'll be
Representative Stephen Meeks
Unverified
1:47:09
better off for it. Last word for this witness, Senator Ripper.
Senator Jason Rapert
Unverified
1:47:13
Thank you, Mr. Chairman. I just wanted to comment. I didn't say when I had the opportunity that thank you for your work on this. Not only do you have oversight over the emergency management, I see now that you're picking up a lot of extra duties as we go along with different statutory concerns, and you've been on the levy task force. I want to thank you for that. And I also think the legislature, if we do need to tweak this legislation going forward, we should look at it. But definitely, we all know we did what had not been able to be accomplished for many, many years.
And there was a tremendous outcry. And just knowing that there are going to be situations now where people are not being bounced around from operator to operator when you have life and death situations and that we actually have funding that's going to be able to make this situation better is something we should be proud of, and so I want to thank you for what you're doing on it, sir.
Speaker 173
1:48:10
Thank you, Senator, and we're, you know, we understand that this is a big task, but we're going to continue moving the needle forward on it. All right.
Representative Stephen Meeks
Unverified
1:48:18
Thank you, both of you, for your work and for being here today,
and we'll look forward to updates as we go into the future. Yes, sir. Thank you. Next, we're going to get a brief presentation by Ms. Kerkera. she is the co-chair or chair of the data and transparency panel as I think everyone knows this is our effort to try to get data sharing amongst our state agencies for the benefit of our citizens but if you would let y'all get seated there introduce yourselves and give us a brief update
Adita Karkara
Unverified
1:48:54
Good afternoon chairs and members of the committees. My name is Adita Karkara and I'm serving as the Deputy Chief Data Officer with the Department of
Speaker 211
1:49:10
Transformation and Shared Services, Division of Information
Speaker 213
1:49:16
Systems. And I am Robert Magoo, serving as Deputy CDO with the Transformation and Shared Services Division of Information Systems.
Adita Karkara
Unverified
1:49:25
On behalf of the Data and Transparency Panel, I want to thank you for giving us an opportunity to provide you an update on our activities today. For a quick background, the Data and Transparency Panel and the position of the Chief Data Officer was formed by Act 912 of 2017. One of the first activities conducted in 2017 was a gap analysis to assess Arkansas data needs. were held with leadership from executive divisions, and then their input was categorized and summarized.
The resulting report identified key gaps in the areas of data sharing, data access, data quality, data standardization, data governance, and data integration. My next topic is the State Data Catalog. Act 912 required the Office of the Chief Data officer to establish a data catalog, which is nothing more than a listing of data assets housed within state divisions. This will help us identify what data the state currently has, ultimately to be able to better
understand information supply chains for effective governance, data sharing, and informed policy decision making. So today we have an online searchable portal of our data catalog. To clarify further, this is only a listing of our data assets that are available with each agency. It does not include any data specifically. For example, eOMIS, Electronic Offender Management Information System, is a system hosted by our Department of Corrections.
So the data asset listing just simply states eOMIS as an item. It does not include what is inside eOMIS or what is the data inside eOMIS. Many members of the data and transparency panel are the ones participating in this effort. However, through transformation, departments are seeing the benefit from additional divisions within their department, and they are going to start thinking about contributing to the data catalog as well. Moving on to my next topic, once data assets were cataloged, we needed to establish the
operating framework for implementing data governance. And by data governance, I mean creating some sort of a framework that defines who has access to what data, how data is flowing between different agencies, the dependencies around it, the regulations around it, and the compliance requirements around it. The Data and Transparency Panel realized that in order for divisions to continue to contribute to the data catalog, create data governance and other data-related efforts, a point of contact is needed in each division.
Students now have identified existing state employees that are already working on similar data efforts and who would also coordinate activities with the Office of the Chief Data Officer on data request, data management inquiries, or concerns. These data contacts from each division were brought together to create a group focused on data governance. My next topic is about a data warehouse study, and I'm going to hand it over to Robert for act
Speaker 213
1:52:40
912 of 2017 required the data and transparency panel to form a study on the development of a
statewide data warehouse program in support of this research was conducted on best practices and successful approaches from 15 other states the feasibility of various approaches was assessed for use in addressing Arkansas data needs and recommendations are made towards the development of an arkansas data hub the findings and recommendations report was finalized by the data and transparency panel in july of 2019 and i'll pass
Speaker 219
1:53:13
it back to auditor for coverage on the
Adita Karkara
Unverified
1:53:16
statewide longitudinal data system one of the recent initiatives of the office of the chief data officer and the data and transparency panel is a statewide longitudinal data system act 936 passed by the General Assembly earlier this year added an additional responsibility to the Data and Transparency Panel for creating and developing a unified longitudinal data system that links existing agency information from education and workforce systems to provide insights into the states of our evolving economy and effective pathways from education to workforce.
In support of this effort, the Data and Transparency Panel decided to create a sub-panel of the DTP to focus on the implementation of the statewide longitudinal data system. The subpanel, as of today, is in the process of gathering requirements from these agencies and looking at other successful implementations from other states and working on a proposal to present back to the data and transparency panel for follow-up. In addition to all the activities identified by the legislation that we are working on
currently. The chief data officer's office has also assisted with several additional initiatives identified by stakeholders where collaborative data sharing integration or use would be beneficial. I want to talk about one recent example which was an effort to bridge the gap between healthcare and criminal justice sectors to benefit the crisis stabilization units for Arkansas. In 2018 the office of the chief data officer with support from the governor's Office, applied for an award with the National Governors Association for
technical guidance and assistance with policymaking around healthcare data. Arkansas was one of the eight states who received this award. In collaboration with the National Governors Association, the Office of the Chief Data Officer coordinated data sharing discussions between state, county, law enforcement, hospitals, community health providers for improving efficiencies and service deliveries for individuals that are dealing with mental health crisis and coming in contact with law enforcement.
Additionally, State Bill 266 was codified into Act 519 by the General Assembly earlier this year that now provides a method for sharing criminal justice data with non-criminal justice agencies. The DTP and the Office of the Chief Data Officer also coordinated data sharing for SHARE, which is the state's health information exchange with the crisis stabilization units and the jail medical centers. I would like to close out this presentation with a success story about Arkansas's effort
for being a data-driven government. Results for America has the Invest in What Works state standard of excellence program that sets a national standard for how state governments are consistently and effectively using evidence and data in budget policy and management decisions to achieve better outcomes for their citizens. In 2019, the State Standard of Excellence Results for America identified 125 examples of data-driven and evidence-based practices, policies, programs, and systems
as of June 2019 in 33 states across the country. Overall, five states came out as leading the way with their use of data-driven and evidence-based practices. These leading states were Colorado, Minnesota, Oregon, Utah, and Washington. Although Arkansas was not one of the five listed there, Arkansas was rated as a promising example of data use for three different criteria. Number one, having a statewide data inventory portal, the online data catalog.
Number two, having the vision for creating a data and transparency statewide panel and for having a data-driven decision-making task force, and lastly, Act 519 that was passed earlier this year to allow criminal justice data to be shared with non-criminal justice entities. That concludes my presentation. Thank you very much for giving me this opportunity to provide updates here. And again, I just want
Representative Stephen Meeks
Unverified
1:57:27
to publicly thank you guys for the work
that you're doing. For my colleagues who are not familiar with this effort, this effort
has the ability or has the potential to transform the way we're doing state government, the way we physically just transform the way the bureaucracy is laid out. Just a simple case study they did earlier, I think it was this year or late last year, involved looking at the prisoners that are incarcerated and comparing those with social security numbers. And I know you guys won't be surprised to learn that they found dozens and dozens of prisoners who are incarcerated in Arkansas that have numerous social securities they're using social security numbers of people who have been deceased or completely made up social
security number so just something as simple as that we have the data getting it to talk to each other and it's going to allow us to as lawmakers to make more decisions that are smarter better
Senator Jason Rapert
Unverified
1:58:23
and data-driven senator Raper you're up sir thank you I've got two primary questions thank you for your presentation number one, in terms of the effort that you're undertaking, I guess the best way to put this is when some of our regulatory agencies, specifically the financial regulatory agencies, and I'm thinking bank
commission, securities commission, insurance commission, their direct reports through our insurance and commerce committees, all three of those. How is what you're doing taking into account the demand, many times statutory demands, to protect proprietary information that those entities deal with as regulators and maybe even include possibly even the economic development agencies. But I know primarily the three regulatory entities that I'm speaking of,
they have a myriad of statutory mandates as it relates to the protection of the personal data, that personal information, and then the proprietary information of the entities that they regulate. So has that been a discussion within, because really I think, and correct me if I'm wrong, you're looking at pooling a tremendous amount of data amongst all the agencies. Now, if I'm getting that wrong, please let me know, but I just want to make sure that as you continue to go through this
and as people are speaking into these panels, and I think a lot of times because I've been on cybersecurity forces at National Council of Insurance Legislators, and a lot of times you have people that are typically from the technological background, they're not necessarily even thinking about the proprietary data itself, but they're just trying to prevent cybersecurity breaches overall. but protecting the data as it relates to their specific areas of responsibility.
Adita Karkara
Unverified
2:00:21
What is the level of discussion on that? So we have had discussions with several different entities, the divisions and departments like you were talking about, and for that purpose, when Act 912 created the positions of the chief data officer and the data and transparency panel, it also created the position of a chief privacy officer for the state. So, as we're continuing on with our data sharing and data integration discussions, we are working closely with the Chief Privacy Officer to ensure that this data sharing is happening
in compliance with the regulatory needs of these specific entities that you're talking about. Okay. Well, I hear that. And
Senator Jason Rapert
Unverified
2:00:59
so, in terms of the actual, and I don't
know, somebody's shaking their head out here, I don't know who that is, if that's with your agency or not. I don't know if they have something they want to input. Who are you with? Who is this with? She's the director of DIS. Okay, Jessica. Yeah, yeah, Ms. Jones, if you want to. I wondered if that was you. I hadn't talked to you in a while. But, and I don't know, Mr. Chairman, I'll let you handle that since you're running the show today.
But I will say that, and I'm just, this is just a statement, even the integration, the transformation, which I see one of the transformation folks out here, the executive team, and that is that there's a lot of these entities that once made sure the privacy was very easy for them because there was no one else that had access outside of their departments. Now you've got some of these that are being housed together and some of those are in cubicles with information that's lying around
that normally never actually had anybody access to that. I think that we need to be interested in how that you're fundamentally
Representative Stephen Meeks
Unverified
2:02:04
handling those kinds of issues. so yeah and and and to that point senator when
we drafted the legislation that was part of the reason for the chief privacy officer and the all the major agencies have representation on the data panel so for example the you know department of health dfna education higher ed all those
have places on the chair so as they move forward part of their job besides coming up with case uses and how we can best utilize the data is to make sure that those protections are in place because they'll have the expertise from their people and their agency so um so yeah so that's a good point and we have yeah and I would say
Senator Jason Rapert
Unverified
2:02:50
that a lot of that the concern there it's not it doesn't have to do with the
data breach it's just the fact that they have to protect that
information that's part of their statutory protection there are people in other agencies that have no business looking at what the bank commission or the insurance commission or the securities commission has is dealing with and so i appreciate you let me put that on the table so that we as this thing grows out further we can i said the second question i'm going to be done mr. chairman second question is just a few months ago the state of Oklahoma the Securities Commission actually had a data breach and I believe that got that
right I don't think it was the insurance it was the securities because I had a notice from the Securities Commission that they themselves is as the state of Oklahoma and the Securities Commission had a data breach and they had to notify everyone much like the private companies I want to know was Arkansas have the same obligation or do you have a plan in place that if data was breached that you're going to notify the citizens of Arkansas that their dates of birth or their social security numbers have actually been compromised? And if so, is the state of Arkansas, much like all private
entities, going to provide a level of 12 months or 24 months of monitoring of their credit reports because their data has been breached. And I may not be able to give you
Adita Karkara
Unverified
2:04:15
all the answers on that. I would be happy to follow up on that. I know we have a cybersecurity office that works on issues like this constantly, and I'll be happy to provide back a report on it. Mr. Chairman,
Senator Jason Rapert
Unverified
2:04:27
you might have heard it in some of yours, but I think it's important to know, because we've dealt with all this sovereign immunity stuff over the past few years.
I just would like to know if the state of Arkansas, especially now that this data is suddenly being shared widely and dispersed, is there something in place that protects the average Arkansas consumer if the state of Arkansas actually loses their data? You know, what's in place? So at this time, you don't
Speaker 217
2:04:55
know the answer to that. Well, I know our cybersecurity department is working on specific policies. As far
Adita Karkara
Unverified
2:05:01
as the data sharing discussions have gone on so far, all of those have been business case driven. And as we are formulating data sharing agreements or policies around that, we take into consideration the compliance and security requirements for those data sets.
Senator Jason Rapert
Unverified
2:05:14
But to my specific question, does the state of Arkansas provide payment for security monitoring with Experian for 12 months with Experian, you don't know that? I will be happy to follow up
Speaker 217
2:05:26
with the cybersecurity office and get back an answer. Yeah, thank
Representative Stephen Meeks
Unverified
2:05:29
you. I think the answer to your question is no and uh that's probably something that uh you know Senator English and
I actually were talking about this very thing this this morning so it may be something we're going to do further work on uh Senator Hammer you're up sir thank
Senator Kim Hammer
Unverified
2:05:46
you Mr. Chair in referencing the meeting this morning and I just can't remember where I saw it may have been in the notes you handed this morning or a newest article but I remember seeing something about the concern about the the age of the building and some of the technologies that are in our building across the state and the risk of cyber attacks and such as that does that have any relevancy to this discussion and does it cause you any concerns as far as the the concern that some of our
facilities may not be equipped to transmit that data and handle that data? I think that's actually
Adita Karkara
Unverified
2:06:26
an agenda topic that's further down in our agenda just now, but we're always concerned about the security of data that we're dealing with, and like I said, with every business case that we're dealing with, we are working on formulating and understanding what are the rules, regulations, and statutes that govern that data so we can create the right policies for data sharing around it and to secure that data so the costs that were and I'm not
Senator Kim Hammer
Unverified
2:06:53
trying to be argumentative to the intent of what we're doing here I'm all for it you know I think it'll help us make better decisions I just want to be conscientious about the cost because I know that we say that we can offset savings you know by doing this but when we talk about the cost to go through the transition we're going through are y'all considering the updates you know to the actual hardware and the actual service to the actual material that's going to be needed in the transitions in the buildings out in the state or is that even in consideration or needed to be
Speaker 228
2:07:27
talked about and the chief data officer office isn't involved in that capacity with data center optimization i
Speaker 219
2:07:39
think that would be something for our director to speak to
Senator Kim Hammer
Unverified
2:07:44
well whether you want to get into it now or not mr chair just think it's something we need to be mindful that if we've got issues throughout the state as far as the ability to transmit that data from buildings that are lagging in technology and we're going to have to look at a statewide cost to renovate those or to
modernize those i just think somewhere we need to get a we need to get a handle on what that number is going to be if we're going to use this as a justification for savings I think we
Representative Stephen Meeks
Unverified
2:08:15
need to make sure we get that in there the the the data project is is different from the project that you're speaking to the project that you're speaking to is something that dis has started I was been like two two years ago now so they are in the process of getting that worked out I think it's like a five-year period and so that has started and maybe at some point we can have
them come in and give us a full presentation on it about where they're at with that that'd be fine thank you all right any other questions for these witnesses okay all right seeing none thank you both and again keep up the good work
thank you at this time senator johnson has a isp that he would like the advanced communication committee to adopt so this is uh when this comes up for a vote this is only going to be for members of the
it committee so senator johnson just a real brief on your isp there it is
Senator Mark Johnson
Unverified
2:09:21
thank you mr chair uh i will just read the title and i think it sums it up this is about a study to create an inventory of the current state government buildings, building systems, supporting technology and data to assess the status of cybersecurity measures
in place to protect those state government buildings, the online systems, networks, and the data against cyber attacks, and to determine best practices and establish standards for state building cybersecurity that may be implemented to increase this cybersecurity and protect state government interest that's this title i think pretty well sums up what the isp is about and i would be grateful for members of the uh joint committee to uh accept this proposal and we will work on witnesses at a later time to be determined by the chairs okay all right any
Representative Stephen Meeks
Unverified
2:10:13
members of the it committee have any questions on this okay saying none i have a motion to adopt any discussion on the motion
I do need a second do I
have a second from anybody okay I've got a second motion a second all in favor please signify by saying aye any opposed all right we have that IP adopted
I also have a ISP for the Insurance and Commerce Committee Senator Raper Senator Lowry who wants to handle that Senator
Senator Jason Rapert
Unverified
2:10:44
Raper thank you mr. chairman this be for members of the
house and senate insurance and commerce committees
and i think chairman lowry has already spoken maybe with vivian flowers if you've not this is an isp dealing obviously with the pharmacy transparency issues as well as pbm issues and we simply would like approval today to get this interim study started and this sort of plays off of the work that's been done over the last two years in this particular arena and so unless anyone has a question uh
representative flowers Do you have any comments that you would like to make on it this time?
And this, by the way, I have discussed with Representative Flowers, and I believe, I don't know if it's on here or not, but I know that I think Representative Murdoch as well has
Representative Vivian Flowers
Unverified
2:11:36
been discussing. Yes, in his absence, I just wanted to indicate that this
is something where we wanted to make sure that we brought everyone to the table and gathered information to share with the committee at a later
Senator Jason Rapert
Unverified
2:11:51
date yeah so members they have any questions on that seeing no questions I have a motion for
adoption of the proposal I have a motion and a second all those in favor say aye all opposed no thank you thank
Representative Stephen Meeks
Unverified
2:12:09
you very much mr. chairman all right down to our last item for today mr. Clinton Moore is going to come and give us an update on the governor's broadband proposal and then after that I have four folks that are signed up who would like to speak to that as well if there was any last-minute entries to that please let us know we'll get you on
the list but mr. Moore if you would just introduce yourself to the committee and you're
Clint Moore
Unverified
2:12:36
recognized to make your presentation hello my name is Clint Moore I'm with the Arkansas Department of Commerce I work very closely with dr. Nathan Smith, who's the state broadband manager. I'm excited for the opportunity today to tell you about the good things we're doing in Arkansas broadband. It's a very big time for the state. I applaud the leadership of you as legislators, as well as the governor's office, to really move the ball forward and set up this new broadband fund. I have a statement that is authored by
Dr. Smith, and I would like to read, and then I'd like to open it up for any questions. I'd like us be on the same page as we move forward dear committee members thank you for the interest in the arkansas rural connect broadband grant program as you know the arkansas rural connect the rules of the arkansas rural connect are currently online at aedc's website under the data and reports sections and the public comment period for the rules is underway so we
We welcome the opportunity to hear feedback on our work so far from legislators and the public. Feel free to call or email us next week or in the weeks following to learn more about the program. I will be present for the public hearings next week as announced on November 12th and 13th at 8.30 to 11 a.m. The Arkansas Rule Connect is designed primarily to make progress towards the governor's goal announced last May in the Arkansas State Broadband Plan of making broadband available at the speeds of at least 25.3 in towns across Arkansas.
It takes advantage of Act 198 of 2019, which allows governmental entities such as municipalities to apply for the programs of grants and loans to deploy broadband. We will look to mayors of incorporated towns to represent the interest of their residents by working with the Internet providers to develop projects that will satisfy the governor's goal in their towns and then co-apply for grant funding. Mayors will then be asked to send us regular reports to confirm the ISPs are fulfilling their commitments.
We expect that with $25 million in funding, their Arkansas Rural Connect program will make strides forward in connecting small Arkansas towns to the 21st century broadband Internet service. Broadband is becoming a necessity rather than a luxury, crucial for business development and job creation, education, healthcare, agriculture, shopping, and keeping in touch with friends and family. In fostering widespread broadband access, public policy faces a similar challenge to the 20th century challenge of securing
reliable and reasonably priced electricity and clean water for the population, including people living in outlying areas. Though the Arkansas Rural Connect program and other policies and strategies are still under consideration we aim to achieve the governor's goal by 2022 and promoting rural broadband access for as many arkansans as we can regards nathan smith and dr smith had hoped to be here today
Representative Stephen Meeks
Unverified
2:15:33
but he's actually out of state in washington dc at a meeting so that's why he was not able to be here today
um so with that we will go to questions
Representative Vivian Flowers
Unverified
2:15:46
representative flowers you are up first Thank you. I couldn't help but notice that, especially after the earlier testimony, that unincorporated cities and towns were not included, nor are counties. Can you give us an idea as to why that
Clint Moore
Unverified
2:16:03
is? Yes, thank you for the question. It's well received. The rationale behind it was local municipalities have local governance that can help us monitor and really push the needle forward in terms of broadband deployment. We view this as a public-private partnership that truly benefits these localities, and having that local municipality there really ensures that we have that P3 arrangement.
this is just a starting point we don't mean this will solve all the problems and this isn't something that we think is the end of the road for us however 25 million dollars and focusing on rural communities and the municipality themselves is a great place to start how we have it set up right now in the rules is that you have to serve the municipality however you can go on into the unincorporated areas and we would encourage that for providers however we're trying to make this our main focus and then in the future possibly branch out if if time and money allows uh follow
Representative Vivian Flowers
Unverified
2:17:04
up mr. chair yeah so and i hear you i'm just i'm still not clear why
that would exclude counties for example so maybe i hear what you're saying about an unincorporated city or town and that that governmental infrastructure but obviously counties would have the same ability to provide that level of leadership and oversight and be able to branch out to several incorporated and unincorporated towns in the way that incorporated cities would.
Speaker 246
2:17:37
So why leave counties out? I think just for the reason of local control and monitoring. When we focus
Clint Moore
Unverified
2:17:45
on the municipality, there's boundaries that are associated with that city. So we can see when we audit this program for its effectiveness, we can really use those boundaries to see what was the bang for our buck that we got moving forward counties also have the county judge in the quorum court that we could work through however they're not as locally focused as what a mayor and a city council would be thank you and if that doesn't answer your
question representative flowers I'm happy to talk with the broadband manager and we can circle back with you at another time because
Representative Vivian Flowers
Unverified
2:18:21
I wanted to say that it didn't and I disagree but we'll talk later okay thank
Representative Stephen Meeks
Unverified
2:18:26
you very much and I think one of the other challenges is to going to the county levels is county is a much larger geographical area and as we
talked about earlier you know the the high cost fund is putting 28 million dollars a year into these areas and so if you
go to a larger geographical area that 25 gets more diluted and so but anyways Senator Hill you're up next sir
Senator Ricky Hill
Unverified
2:18:50
are we there yeah i want to add on or comment about what you just said about the uh about the counties you know you're spreading that money out over a larger area is your county judge not the ceo of the county can he not designate for a small incorporated areas they did and oversee that for them that's a question to you now i just want to make a comment on that i think i got about two follow-ups that one just popped in my head when he said
Clint Moore
Unverified
2:19:20
that okay I think he could and I understand
where you're coming from however to representative Meeks's point if we really start including a lot of unincorporated areas the bang for our buck goes significantly down we want to get to the unincorporated areas in the county areas for sure however we view the cities as a great place to start and really try to expand the footprint as much as we
Speaker 240
2:19:42
can from there okay you know when we look
Senator Ricky Hill
Unverified
2:19:46
at this thing overall we're looking at y'all
are not willing to do basically any of them that
have the population incorporated or unincorporated 500 and below correct population wise that aligns with the
Clint Moore
Unverified
2:19:59
governor's goal however there are provisions in the rules that are currently out for public comment that would allow areas that are incorporated but under 500 uh to be eligible for that
Speaker 246
2:20:09
list okay because whenever I look at
Senator Ricky Hill
Unverified
2:20:12
small rural towns I look at education as far as their schools and everything else when these kids go home they need to be able to do their homework okay and to me they are being left behind and we're not servicing those people the
way we should and that is the way this bill was presented is to go to rural small town Arkansas all and i believe that's the goal of
Clint Moore
Unverified
2:20:36
the governor as well to get there but well you're grabbing the low
Senator Ricky Hill
Unverified
2:20:39
fruit right now as we said earlier so let's start up here and grab some
Speaker 240
2:20:43
higher fruit to start with i completely understand your point senator hill okay uh the other thing can
Senator Ricky Hill
Unverified
2:20:47
you set aside a percentage of money so much for these areas that y'all are not wanting to service so we can see that y'all are wanting to go to those areas that would be a conversation between the state
Clint Moore
Unverified
2:21:00
broadband manager and the governor's office as well as secretary preston i believe can you make a
Representative Mary Bentley
Unverified
2:21:13
note of that yes sir i will thank you you're very welcome representative bentley you're up next thank you chairman and i would just uh again say i agree with wholeheartedly with my colleagues with the comments that they have made i'm just curious why we haven't thought about reaching all our candidates by possibly adding what i would say is a nurse a skeleton we're not put work to put a skeleton out there that would help all of our districts and not just cities and towns
because i'm afraid with what we're doing we're going to really even isolate more those parts of our state that are getting shrinking and desperately need some broadband so as we just sat there and listened through a two-hour conversation earlier how are those spots are getting left behind now and with the legislation that we passed last session i believe these cities and towns now can do private and uh locally and private and municipality bonds put out there with FCC and those things coming forward but my but our rural areas outside that are
not incorporated cannot so I'm just really afraid that why we're not doing a skeleton that
will reach those areas and try and reach all our Kansas and not just
Clint Moore
Unverified
2:22:13
isolate municipalities yeah I understand with that as I mentioned in the past we're focused on expanding the footprint from the towns we would encourage ISPs to go out into these unincorporated areas in the county areas and we would also help them apply for federal aid if that is something that they are interested in. However, with the governor's first round of this funding, we want to focus on the municipality.
Senator Bill Sample
Unverified
2:22:45
you're next. Thank you. And Mr. Moore, just for your record, I disagree with everything you said. That was the way the bill was presented. and the bill was presented to take and service all of Arkansas with Robant. You have left out in my county two unincorporated areas that have homes closely connected
that amount to about 20,000 population, one being Hot Springs Village, the other being Diamond Head. and so i just i disagree with the way the rules are made and i intend to take and voice my opinion on that and so i would like to you to carry that back to them yes sir i definitely will and i
Clint Moore
Unverified
2:23:34
understand where you're coming from your comment is well received and appreciated thank you thank you mr chair uh
Speaker 36
2:23:43
senator sample or excuse me senator hammer you're up i think mr chair it's
going to get a little bit redundant but i want to
Senator Kim Hammer
Unverified
2:23:49
commend you for sitting there and taking it today you've done a great job and appreciate you sitting there and taking it but I would join with what Senator Sample just said and that is the whole the way the manner with the manner in which it was presented the focus has been on rule so I'm just curious what's the definition of rule
Clint Moore
Unverified
2:24:10
as y'all look at it we haven't defined it in the rules with the governor's goal it was 500 or more by the end of 2022 because that's an attainable goal that we believe we can actually succeed in
If we expand it to all quote-unquote rural areas like where my parents are in Charleston or outside Charleston, that gets to be a very difficult goal to obtain by then. So in the current rules, we haven't defined rules such as the USDA would or another federal service. We're just focusing on town populations at this point. Why wouldn't you
Senator Kim Hammer
Unverified
2:24:43
go ahead and define rural as used in other areas such as, you know, underserved areas and DHS and, you know, other standards that are out there?
Why would you not go ahead and declare and define rural in the rural so that we could clear up some of some of this discussion today? Yes, sir. And that's something
Clint Moore
Unverified
2:25:04
we'll definitely look at since the rules are out for public comment. there still can be changes made and and that's something we'll definitely look at moving forward
Senator Kim Hammer
Unverified
2:25:13
okay and in tying on to the conversation earlier today one of the testimonies if I remember right was you know it seemed like AT&T and Windstream and the other one that they were kind of given
the option as to which areas that they want to pick we're being asked as legislators to come in and do things you know such as add to the fees and everything but yet the ones that it's being sold as the plan for are the ones that keep getting pushed back whether it's by the provided private providers or in the plans that are being presented and I think that's a misrepresentation of the way this thing has been sold if we if we take those county rural areas and say just get to the back and wait we'll get
to you sooner than later especially if we want to if we want to bring industry into the rural area as has been promoted it would seem like we would start there first and then work our way back um that would that would be my opinion but also in this last thing to the you know to the fact that the the county judges of which we're going to have some speaking in disclaimer one of them is going to be mine uh i think i have as much confidence in our county government as i do our municipalities no disrespect to them but to me i think they're
co-equal in their capabilities to be able to administer this plan thank you mr chair
Representative Stephen Meeks
Unverified
2:26:33
uh representative kavanaugh thank you mr
Representative Frances Cavenaugh
Unverified
2:26:36
chair over here i just want to say like everyone else i disagree a thousand percent with the way that you're going and the reason being i represent 30 000 arkansans by the 500 rule you're not even you're going to get 9 000 of my people Maybe, maybe, if their senses are correct.
This was to bring broadband to rural Arkansas. Rural Arkansas means that person sitting down in the middle of a bow duck that needs that to do their homework, to be connected to the rest of the world, and that allows us to have people to be able to remotely work these high-skilled jobs. when you limit it to 500 or above you limit the vast majority of my district
that is not what this bill was designed for this bill was designed to bring broadband to rural arkansas this is an issue for arkansas just like the electrification was for rural for rural america and we have to address it in that same way we can just keep pushing off these people because we say it's not profitable it's not profitable well we're giving them money to set it up so if we're going to use tax dollars then we need to service all our kansans not the few that
we feel that it's proper for them to do and i guess that's my statement would you not agree thank you thank you
Clint Moore
Unverified
2:28:09
representative kavanaugh and we'll definitely make a note of that and i will pass it to the broadband manager
Speaker 272
2:28:18
all right Senator Johnson you're up thank you Mr. Chair and Mr. Moore I'm
Senator Mark Johnson
Unverified
2:28:24
going to give you the same statement that I gave earlier to Mr. Frazier please don't take anything I say personally I'm
not aiming it at you but the issue is is as you can already see quite complex I really want to associate myself with what Senator Hill and Senator Sample and Senator Hammer said as well as Representative Bentley and she and I serve many of the same people and are dealing with the frustrations of a rural area. I think you hopefully have heard that we feel, many of us feel, that this legislation was sold to us as something different than what you described and that's very concerning
to me because we go out there and see the problems in rural Arkansas. I mean, we know we're going to have a census that's going to show that many, many people are leaving our rural areas. And why are they leaving? Well, because they can't get a job. Well, what do you have to do to get a job in a rural area? Well, I have a daughter who writes apps for these things. And she told me she could work anywhere in the world that she could get 30 megabits per second down and that's not rural
arkansas sadly we have sold this state as the natural state please come live here fish hunt boat float whatever enjoy the the beautiful state but we don't have a job for you and we saw this bill as a way to start fixing that problem and i'm hearing something totally different from you and would you consider taking back to dr. Smith and to the secretary that this is not what we think is the best way to go about this yes sir for sure thank you
Representative Rick Beck
Unverified
2:30:14
very much representative back your next sir thank you mr. chair I'm gonna repeat something I said earlier and then I have a question I think whenever you the state picks winners and losers, you're picking this little area here and you're saying, okay, you're going to get internet. By picking
an area and servicing those people, you make the other areas more remote and therefore it makes it much harder for those individuals to get service.
So you might be moving some of the low-hanging fruit forward, but you're pushing that other fruit even further out there so so be aware of that but but the other thing is and i i read the rules and if you could explain to me what in the rule would uh incentivize a city a municipality or town to take on an unincorporated area it seems to me it would do just the opposite and i'll just
because it looks like you're going bank for the buck, and I'm, okay, it's not rural. I mean, we've heard that here. It's not for rural Arkansas that you're trying to get bank for the buck, and I even understand that. I wish it would have been more transparent up front about that, but that's another story. So it looks to me like what's going to happen here is that if I'm a city, you're going to say, okay, if I give you this amount, you're going to connect these amount of people, and the more people I can connect for less dollars per person,
probably I'm going to be moved up the ladder there and get a grant.
Now, I'm anticipating that you're not going to have enough money. There will be a lot of applications that don't get it. So if I was a city, and let's say I thought I had enough to get in there, and I had an unincorporated area over here that's going to add a lot of cost to my application with not a lot more people connected to me, not connecting a lot more people why would I even mess with that I would just say you know
you go somewhere else so so my point is in this if you can explain to me and maybe I missed it I I just kind of read through it
but but what would incentivize a city to take on a rural or an
Clint Moore
Unverified
2:32:44
unincorporated area well I think we're looking at this as a public private partnership So we're not putting cities completely on the hook for the financial aspect of this. A lot of these assets are long-term, and the Internet provider might have it in their business plan
to go to that unincorporated area in the future. And hopefully an Arkansas Rural Connect grant would close that business case and they could expedite deployment to that
Representative Rick Beck
Unverified
2:33:13
area. Just a quick follow-up. Yeah, go ahead. Yeah, and I apologize. i missed my question wasn't clear i'm a
city i'm working with someone all right to do this if we allow this unincorporated area to come in the group with us we're going to lessen as i see
it i'm going to lessen my chances of having my program approved because now i have this rural area out there that you know
like i'll just tell some numbers here it's going to cost 500 a person to get my people in my city well out there it's going to cost three thousand dollars a person so why would i take on that load i would just say no i got enough people right
Clint Moore
Unverified
2:33:56
here yeah and i i see your point i don't want to speculate what a city or an internet provider might or might not do with this since it is a new program we're hoping that we can fill projects
award good projects that are requesting a small percentage of state grant not necessarily an absolute value. And just one quick and I'll be quiet.
Representative Rick Beck
Unverified
2:34:18
I'm asking you, the rules that you have set, what in those rules would allow that to happen? It looks to me like the rules do just the opposite of what they're supposed to do. That those areas would not, I would not go out there. And it's because of your rules are the rules that were set up.
That's one of them. What in your rule, what in your rule is going to make incentivize me as a city to go out
Clint Moore
Unverified
2:34:47
and incorporate those other areas yeah i would do you have a specific rule to to point to representative beck no i don't i try to ask the question so that would be something that i think we should look at and follow up with you at a future date if you're okay with that
Representative Stephen Meeks
Unverified
2:35:03
thank you okay thank you very much uh senator rapert you're next sir thank you mr
Senator Jason Rapert
Unverified
2:35:06
moore thank you for being here i think you've been quite the good soldier
here to have to take all this and so i do want to speak up on this because i agree and and since this is recorded now and your colleagues can actually review this this is a very important public comment period and you know i i've listened to this and again just like the others this isn't personal with you but rural by definition is of anything not related to as many of the definitions to a town or to a city it's the countryside so i believe that that everyone that has taken
exception to even calling this a rural broadband program they have every right to do so because what you're sounds like you're defining is the town connect program not the rural broadband connect program and so i also would say and again and i know sometimes the branches of government hit heads just a little bit but some of this could have been averted with a little input and discussion before you even get to the rule and announcing the rule and then asking for public
comment i've shared that with your superiors on that and i will say this for the record so it's part of the discussion a lot of great points have been made about these different areas and what it it would mean as representative Beck said if you having these issues between the town and then connecting the unincorporated but I want to point out something when you're talking about bang for buck literally outside of some of our major areas in the in the state that's considered rural and so
when you're by your definition and what they propose saying it's a bigger bang for the buck i can point to you many areas just outside of conway arkansas and faulkner county that have hardly any connectivity and they're sitting there looking at the promised land and they can't do anything because they get the circle that's going round and round and round and round and so i just want to make sure i speak up to put my voice with these others here that this was a rural broadband
connectivity program and to sit here and be told that that is not going to include by definition rural areas is pretty shocking so so we need to have a robust discussion about the definitions and what's going to be done here because I agree with what they've said I believe that this was sold as rural broadband and everybody on my side of the equation seemed to understand it was going to connect rural arkansas and here we go they're going to be put down at the bottom of the barrel
on this so please extend these remarks to your superiors and and hopefully we'll have a chance to discuss this going forward i think you'll see some of the committees begin to delve into some of these issues even further so thank you for your time representative lowry thank you mr
Speaker 182
2:38:16
chairman Well, I just want to go on the record. What little rural I have in my district, we're thrilled with our broadband. So I just want to shout out to the folks in Oak Grove and Marche if they're live streaming.
I hope you're not getting any bad interference. So in all seriousness, thank you for the work that you're trying to do, and I know that you're going to fully represent the comments that you've heard today, and I'm glad that you're not taking it personally. you're doing a great job uh coming here and in facing these comments so know if there's a lot of work to be done and part of the process is adjusting and adapting uh to the to the process as you get the proper feedback so thank you are any
Representative Stephen Meeks
Unverified
2:39:01
other questions from anybody okay before we go
just a quick comment or two since I received the mandate back in 2015 from
then Speaker of the House Jeremy Gillum to begin looking at the broadband issue in the state of Arkansas one of the challenges
that we have faced is the funding issue I mean ultimately it comes down to an issue of money and the 25 million dollars that the governor has
offered for this program is the first state money that has been offered to try to address this issue so first off I want
to say thank you to the governor for for be willing to to put a little bit of money in and based upon what we heard from Mr. Frazier this morning he told us that out in the rural areas he's spending about three thousand dollars to get a customer well if you take 25 million and divided by 3,000 that's roughly 8,000 Arkansans and so you can see 25 million doesn't go very far in this process. I don't know if you all have looked at it, but from numbers I've seen, we're talking hundreds of millions of dollars to do this across the state. So, you know, I'm encouraged
from my colleagues what I'm hearing here and hope that as we go forward that we maybe can find other state resources to put towards this so we can get more and more Arkansans connected because I do think it is a you know it needs to be a priority of this government to try to make sure these opportunities are made available to our fellow Arkansans with that we have four people currently signed up to address the committee so Mr. Moore will excuse you and the first
person on the agenda is Mr. Airey from St.
Lane County the county judge a few gentlemen would just uh saline sorry i'm from faulkner county you know tomato tomato right but anyways if you tell them i would uh we'll get settled in there if you
would introduce yourselves to the committee and then you're recognized to present your remarks to us mr chairman members of the committee
Speaker 280
2:41:10
thank you very much i feel like i'm for the most part preaching to the choir but i'm going to preach
it anyway my name is jeff airy i'm saline county judge and i thank you very much and i'll try
Jeff Airy
Unverified
2:41:24
to it be brief and to the point a few months ago like many county judges across the state of arkansas we were very excited to hear about the governor's announcement about the rule connect grant program this announcement was actually made in all places the arkansas sheriff's association 75 sheriffs who represent unincorporated communities all across the state of arkansas
who rely on connectivity to provide their services and protect the public 9-1-1 centers emergency services basic needs the sheriffs just like the county judges were very excited with the thought of a great opportunity for the people who have no connection to the digital world that most of us take for granted we were shocked and a little confused to be honest with you when we realized that the program with the rules as they are written now are intended to connect
not connect rural arkansans but to actually limit the applications to cities of 500 or more and completely leaving unincorporated areas out of the ability to be able to apply for state funding so if the rules are adopted currently the city with the population of 500 or above would be the only ones eligible and unincorporated areas no matter what their population would not be eligible even though we have many unincorporated areas some of them which y'all have mentioned
today that are certainly larger than 500 in population. So I want to take time just for a minute just to read to you the Arkansas Rule Connect Broadband Grant Program that they've put out to the public just section one the purpose where it says the proposed rule and intended to establish requirements for governmental entities to participate in the Arkansas Rural Connect grant program hereafter the ARC or the ARC program in order to provide or expand broadband services consistent with the broadband
plan report resulting in increased educational opportunities, healthcare opportunities, and economic development opportunities and ensuring that all Arkansans have equal access to the services they can use to improve their quality of life, community, and this state. So by limiting applicants to only cities are we meeting the purpose of what this program was intended for? I don't believe so. So section two the introduction
goes on to say as broadband access becomes more necessary to normal modern life there is a growing concern about a digital divide whereby some areas are cut off from opportunities for economic development by a lack of adequate broadband service. To help close the digital divide, the ARC program is being instituted to help communities incentivize providers to deploy adequate broadband service to their residents. The program will provide funds to the internet service providers, or the ISPs, to serve target municipalities at the request of those
municipalities ARC funds will be allocated on a competitive and transparent basis with efforts made to maximize the impact of scarce state funds you know members of the committee excluding unincorporated communities from the ability to even apply for this state funding is not going to bridge the gap of the digital divide it's only going to make that divide deeper and wider it's not going to bridge it but let me be clear I for me this is not a city
versus a county matter prior to my current position as county judge I served as a mayor of a small town for 16 years a town that would actually be available and qualify for this funding so it's not a city versus a county matter not not at all it's more about who needs to be served and let's don't worry about about where the boundaries are, but let's just pick the applicant based on their application and what is the better application and let them compete for themselves.
There's no reason to leave out unincorporated areas. It makes no sense. Currently, there are many state programs that unincorporated communities are eligible for through the sponsorship of their respective county. And why would this grant program any different than those. If the rules are adopted as written, this may be the last chance for rural unincorporated areas to receive the state support for broadband, thereby disenfranchising rural Arkansans in
unincorporated areas. We don't need to let this happen. In my opinion, the rules should be written to allow for local government, whether it be a city or a county to represent their respective communities local government should not even be leading in this or the lead applicant in my opinion local government really has no idea about broadband development I think for the last several hours most of us have been sitting with their eyes rolling up in
the back of our head trying to figure out what in the world is going on out there so in my opinion the ISPs are the one that should be lead applicant on this and we shouldn't be their partner but we should be a support and be part of it. We can certainly be on the ground roots and trying to help them figure out where these areas are and if so then we can be in support of their application. It only makes sense that this whole process should mirror what the federal applications are so that we can try to use the limited amount of state
funds that we have and take advantage of the federal dollars
Speaker 280
2:47:18
that are out there. I certainly appreciate you listening to me today and I would encourage each of you to make your comments known during this public comment
Speaker 250
2:47:28
period of time. Thank you. Judge would you be open to questions?
Senator Kim Hammer
Unverified
2:47:32
Absolutely. Senator Hammer. Thank you. So Judge Erie you just made a comment that based on some of the other comments made on this side as far as the county being able to be you know as competent as municipalities is it your position then that you don't think county or municipality ought to be
in the driver's seat on this thing that wouldn't be a responsibility that you would want you know cities and
Speaker 280
2:48:03
counties are not they don't know about deploying broadband that's not what we do is that I don't think government needs to be in the driver's seat of that I think we can we can work well with these isps and try to make application tour making sure that we are having citizens involved and making sure that the citizens are going to actually support the
infrastructure that's going to be put in because that's important if they don't support it then it's not going to all work but even if we are the lead applicant we're going to be leaning heavily on the isps to tell us where and how we're going to make this happen okay thank
Representative Stephen Meeks
Unverified
2:48:40
you Thank you Mr. Chair. Okay next we have looks like Justice
Keith Keck
Unverified
2:48:45
Keck from yes my name is Keith Keck I serve on the Saline County Quorum Court representing Western
Saline County. The over 8,000 Arkansans in my district all live in unincorporated areas of Arkansas to include Pear and Crows, Lonsdale and Hot Springs Village. In areas like this along with other areas of Saline County like East End and Sardis, over 52,000 county residents reside in unincorporated areas of our county. That's from a total population of 121,000 county residents. In other words, 43 percent of
the residents of Saline County are in unincorporated areas, and that's your sixth most populous county in the state, so I can only imagine what it is in many of the other counties out there. In many of these areas in Saline County, whether it's on the east side of Saline county or the western side of saline county that i represent broadband access is very limited by terrain we are a very hilly area this and by doing this and the current rules preclude us from competing for the 25 million dollars program to increase the broadband that is needed
in my western saline county district broadband access is needed for the many students who ride almost an hour one way to school whether it's into Bryant, Benton or the Fountain Lake school districts an hour back home they do not have access to broadband once they get home. They want to be able to compete with their the big city kids if you want to call them in Bryant and Benton it's nice for them to be able to have some ability at home instead of having their parents take them in like you had heard earlier in the testimony there. In terms of economic development in my
district there's a direct negative impact on the development and I'll use it as a current example we have a new pharmacy going in on a major state highway it's an unincorporated area there's only one service capability and this new pharmacy is going to get 20 megabytes that's it for 550 dollars a month so if you're looking if you're a small businessman there how much you're paying for your internet in this portion of the Saline County.
Lastly, broadband access is critical to the recruitment and relocation of work from home professionals and near and dear to Hot Springs Village to retirees in that if you want to get the folks here that have the checks, the retirement checks into the state of Arkansas, you've got to be able to provide them what they need. And I will use one example that we have a subdivision that has 30 homes up on the ridge line. is one mile from the main road to DeSoto Boulevard they just are getting off DSL and the major
carrier that has DSL up there is not upgrading them to broadband it is a one mile cable run up there and so now they are trying to work in satellite and this is in the houses 30 homes that are sitting in the middle of Hot Springs Village and you can go on look at many other areas that we have homes that have been built there over the 50 years we are coming up to that are in I want to say we talk about food deserts we have internet deserts within our community I would urge this committee and to go ahead and allow the unincorporated areas to at
least compete we may not win but at least allow the unincorporated areas to compete for this money because we just continue to get pushed back and when we try to work with the major providers they look at as a dollar and cents issue and we don't get anything and again if you want to get some folks coming into some of these on a rural areas unincorporated areas you got to give them some incentive thank you very much for letting me speak thank you
Representative Stephen Meeks
Unverified
2:52:39
sir would you be open for questions senator Johnson thank you
Senator Mark Johnson
Unverified
2:52:45
mr. chair and first let me thank judge Erie and Justice Stowers and Justice keck for their presentations and i'm very much in agreement with you i've the one question that i have and judge i'll address it to you as a chief executive officer uh you have entities in saline counties i know we have and i guess all 75 counties uh they're not governmental but are quasi-governmental these could include improvement districts or uh water authorities or such things
that that provide services to citizens without having the title of municipality in any way could an entity theoretically of course I'm not saying go get your water authorities in the internet business but theoretically I'm saying that there are there you have seen have you seen methodologies whereby you can use a slightly different organizational function as opposed to a city or town to provide a service to because we're really talking about services to households
and individuals could you see an opportunity like that maybe allow some creativity amongst people in the rural areas to come up with some proposed solutions to this problem yes senator that you're correct in the in that
Speaker 280
2:54:09
there are utility companies or improvement districts out there that provide utilities whether it be water or sewer and and others out in the unincorporated areas and I guess that could be utilized here but I don't know that it even needs to be so with regard to applying for a grant application like what is being set up in
the rules here. Counties have all the same abilities that the cities would have. The only one that was mentioned previously by a previous speaker or the reason that they were using it was so they could easily identify the particular area but we can
Senator Mark Johnson
Unverified
2:54:44
do that with GIS. And I'm in with you judge and I'm I'm simply looking for a way you know we try to encourage people
to think outside the box and instead of well you must be a municipality to do that is to me kind of tamps down those kind of create creative
juices I didn't justice kick I didn't think about something the size of Hot Springs Village which has many of the certainly has the density that they'd be you would think they'd be looking for to make this work but because they don't have a municipal charter would then be ineligible I think the whole thing is is is ridiculous especially and one of the things we do try and have been pretty successful in Arkansas is getting people to retire and come down here but if you got a beautiful golf course and your your phone doesn't work
and you can't connect to the internet then that's going to be a disadvantage in trying to get people to relocate but thank you
Speaker 280
2:55:43
all so much for your testimony. Senator you did mention Hot Springs Village and I would say that certainly that community is a very unique and it's how it is set up and certainly has the ability to be able to work with an ISP provider to provide incentives to get connectivity into their
Speaker 296
2:56:03
neighborhood. And then Justice Stowers from Pulaski County.
Yes, thank you, Mr. Chairman and distinguished members of the committee.
Phil Stowers
Unverified
2:56:09
My name is Phil Stowers. I represent District 13 on the Pulaski County Quorum Court. We think of Pulaski County as being urban. However, District 13 is about two-thirds unincorporated northwest Pulaski County with a little touch of Maumelle, North Little Rock, and Sherwood in my district. As you can imagine, I am here today from a county perspective. I'm going to be brief because it's starting to feel like we're preaching to the choir
and we're beating a dead horse. I really appreciate the last three hours. I've learned a lot listening to the members of the General Assembly who seems that the sentiments at least of this committee are very similar to those of us that are here as a representative from the perspective of the county. um Pulaski County you think College Station Gibson Hensley these are all unincorporated uh communities within our within our county Landmark like Almont Natural Steps Roland Scott
Sweet Home Little Italy um Macon on the north end of my district uh so you know as as we as we look at this in the governor's Rural Connect Fund that envisions cities not counties as applicants for the funding, it seems, and has been expressed here today, that it seems to go against the very intent of those that originated the legislation. If the rules are adopted as they are currently proposed, this may be the very last chance
for rural and unincorporated constituencies to receive state support for broadband, therefore disenfranchising rural arkansas and those in unincorporated areas i think that we all agree and we've heard it said here today that broadband is critical it's critical for public safety educating children people who work from home back to senator johnson's example of his daughter and definitely the economic development impact on our rural and unincorporated areas
arkansans in unincorporated areas deserve broadband service just like those that live in the cities i love the analogy that was used earlier uh where you know 80 100 years ago we were talking about how do we get electricity out into the the rule in the unincorporated areas i consider this endeavor to be very very similar I am fully supportive of the efforts to expand broadband access however I believe that counties
due to geographic coverage are in a better position to leverage a variety of assets to support broadband deployment versus cities I would respectfully ask you allow counties to be accountable for the deployment and the watch over the ISPs in a manner like the proposed rules suggests the cities should do and with that I yield. All right
Representative Stephen Meeks
Unverified
2:59:17
thank you sir. Any questions? Okay seeing none gentlemen thank you for
coming and for sharing with the committee
today. The last person I have signed up is Mr. Jeff Pitchford. Of course he's no
stranger to most of us but if If you would, sir, when you get settled in there, just introduce yourself to the committee,
Speaker 298
2:59:41
and then you're recognized. Thank you, Mr. Chairman, members of the joint committees. I'm Jeff Pitchford with Arkansas Farm Bureau. Appreciate the time and being here and allowing me to speak. I will be extremely brief. I think we've covered a lot of things and everything.
I first want to say we appreciate the governor and the state for putting in the $25 million for broadband, and we especially appreciate what Rural Connect is trying to do. We also want to say thank you to the legislature for passing Act 198 this past legislative session. That's what opened up the concept of having cities and or counties partner, if need be, with private providers to access money that would go for broadband services,
and we appreciate that and your all's work on that. we were supportive of that particular act. We do have concerns with the way the current rules are laid out on the 500 or more in cities. Probably if you poll any group of Arkansas Farm Bureau members, broadband, access to high speed and affordable broadband is probably going to be on the top three or four issues year in and year out. As you all know, and many of you have
rural areas and farming areas in your districts you know that you've heard that as well as we have the need the the absolute positively huge need for broadband access farming in the 21st century is high-tech and science-based and when you when you're dealing with expensive machinery and you're not able to connect that machinery it puts you at a disadvantage and disadvantages in farming with margins so thin that they are in today's world and trade and everything else thin
margins can can do you under as a farmer so we certainly are are concerned about that I guess I can sum it up by saying whether it be the federal government the state government counties cities our members need it and need broadband out into the rural areas they are a big disadvantage to those that have it and and so with that I think most of everybody else has said the same comments we're supportive of counties being able to to have access
and be a partner in this if need be we're also because we also support just the internet service providers being the ones that take the lead on this too we however it's done we just we just wanted out in rural areas in the unincorporated areas where a lot of farming takes place all right thank you any questions all
Representative Stephen Meeks
Unverified
3:02:29
right seeing none thank you sir all right colleagues
I want to applaud you for sitting through a three-hour meeting today
this is obviously a very important issue and something that we will continue to work on I think this is something that it's one of those rare issues in politics I think we all agree that we need to do whatever we can in order to get this service out to our our citizens so we will definitely be continuing these meetings on this and with that we are adjourned
Agenda
A. Call to Order
B. Comments by Chairs: Senator Blake Johnson and Representative Stephen Meeks
C. Consideration to Approve June 5, 2019 Meeting Minutes [EXHIBIT C]
D. Presentation on the Arkansas High Cost Fund - Mr. Larry Frazier, Rural Arkansas Telecommunications Systems
E. Presentation on the progress of 911 Board Setup - Mr. A.J. Gary, Director of Arkansas Department of Emergency Management
F. Presentation over updates from Data and Transparency Panel - Mrs. Adita Karkera, Chair of the Data and Transparency Panel
G. Consideration to Adopt Interim Study Proposal (ISP) – Advance Communications and Information Technology
H. Consideration to Adopt Interim Study Proposal (ISP) – Insurance and Commerce
I. Presentation over Arkansas Rural Connect Program - Clint Moore, Economic Analyst
J. Other Business
K. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — ADVANCED COMMUNICATIONS AND INFORMATION TECHNOLOGY - JOINT, Nov 6, 2019 | Agenda | 2 | Official source ↗ |
| Exhibit C Draft Minutes | Exhibit | 2 | Official source ↗ |
| Exhibit G ISP 144 · Consideration to Adopt Interim Study Proposal (ISP) – Advance Communications and Information Technology | Exhibit | 3 needs OCR | Official source ↗ |
| Exhibit H ISP 143 · Consideration to Adopt Interim Study Proposal (ISP) – Insurance and Commerce | Exhibit | 2 needs OCR | Official source ↗ |
| Handout 1 | Exhibit | 3 needs OCR | Official source ↗ |
| Handout 2 | Exhibit | 1 needs OCR | Official source ↗ |
| Minutes for 11-6-19 Approved | Exhibit | 3 | Official source ↗ |
Speakers
Representative Stephen Meeks
Unverified
Speaker 13
Speaker 21
Speaker 25
Speaker 26
Speaker 28
Speaker 30
Speaker 33
Speaker 29
Speaker 36
Senator Kim Hammer
Unverified
Speaker 45
Senator Terry Rice
Unverified
Speaker 66
Speaker 49
Senator Mark Johnson
Unverified
Senator Jason Rapert
Unverified
Speaker 70
Speaker 90
Senator Ricky Hill
Unverified
Representative Mary Bentley
Unverified
Speaker 19
Representative Vivian Flowers
Unverified
Speaker 134
Representative Rick Beck
Unverified
Speaker 69
Representative DeAnn Vaught
Unverified
Speaker 173
Speaker 176
Speaker 180
Speaker 182
Speaker 186
Speaker 187
Speaker 193
Speaker 195
Speaker 199
Speaker 203
Speaker 161
Adita Karkara
Unverified
Speaker 211
Speaker 213
Speaker 219
Speaker 217
Speaker 228
Clint Moore
Unverified
Speaker 246
Speaker 240
Speaker 135
Senator Bill Sample
Unverified
Representative Frances Cavenaugh
Unverified
Speaker 272
Speaker 280
Jeff Airy
Unverified
Speaker 250
Keith Keck
Unverified
Speaker 296
Phil Stowers
Unverified
Speaker 298