Connecting Rural Indiana 2008 PolicyProgramsProgress Indiana Office of

Connecting Rural Indiana 2008 Policy-Programs-Progress Indiana Office of Utility Consumer Counselor David Stippler Indiana Utility Consumer Counselor 317 -233 -3232 Dstippler@oucc. in. gov

Connecting Rural Indiana 2008 Policy-Programs-Progress “Broadband deployment helps build economic development and business growth in Indiana, especially in our small cities and towns. A strong telecommunications infrastructure in our state will keep us competitive in today’s global marketplace. ” Becky Skillman Lieutenant Governor, State of Indiana

Connecting Rural Indiana 2008 Policy-Programs-Progress Broadband Deployment continues to expand in our state - Post HB 1279 -- Market forces continue to work; consumers want it and providers are deploying the service. § Significant increase in providers since passage of deregulation. § OUCC able to track 25% more wireless broadband providers since 2007. - Latest FCC reports also support OUCC conclusions that market forces are working.

Connecting Rural Indiana 2008 Policy-Programs-Progress Cable Industry Evolving - Technology allows consumers/small business to connect through coaxial cable modems § Typical speeds from 512 KBps to 1. 5 MBps; § Biggest problem today is fluctuating speed – the more usage, the slower the connection speed for each customer. Companies are switching from coax and upgrading to all-digital networks – FTTH and Next Generation Network Architecture (NGNA) – to offer full packages of service in response to competition and consumer demand - Availability throughout state fairly ubiquitous, particularly in the east central and northeast parts of Indiana

Connecting Rural Indiana 2008 Policy-Programs-Progress DSL Near Term Future Steady - Digital Subscriber Line -- According to INdiana INterconnect, DSL is available in Indiana’s populated areas § Limited to consumers/business within @18, 000 ft of the Central Office (CO). § Past 12, 000 ft – line quality and other factors may inhibit speed. § Next generation DSL offers 25 Mbps speeds while very high-speed asymmetrical systems can achieve 100 Mbps within a few hundred feet of the CO. - AT&T, Verizon, and Embarq deployed extensive DSL networks in rural areas as a result of pre-HB 1279 Alternative Regulatory Plans under IURC jurisdiction.

Connecting Rural Indiana 2008 Policy-Programs-Progress Wireless Broadband Continues Growth and Evolution - Continues to be a panacea for rural broadband connectivity § Operating in the licensed and unlicensed spectrums § Capable of speeds from 3 MBps to 11 MBps § Licensed wireless providers can reach 82% of U. S. population and almost 100% of Indiana population, offering viable competition to unlicensed providers. - Unlicensed provider deployments continue and new providers continue to appear, especially in southern Indiana. - Wi-Fi hotspots and muni-networks on the upswing.

Connecting Rural Indiana 2008 Policy-Programs-Progress BPL Technology Evolving - Broadband Over Powerline § Deployment continues but is trending more to utility usage to improve service – system monitoring, deployment of smart grid and advance metering. § Speeds on consumer internet access systems remain symmetrical and average around the 2 Mbps

Connecting Rural Indiana 2008 Policy-Programs-Progress Satellite Broadband Remains An Option - Satellite Broadband § Satellite access still an option for other providers do not offer service. § Although continuing to evolve, still does not meet FCC definition of advanced service. • Latency will always remain an issue • View of southern hemisphere also required § New Ka-band systems promise improved coverage and potentially higher upstream/downstream speeds. § Satellite systems evolving to provide last-mile connectivity to mobile platforms – airplanes, ships, vehicles.

Connecting Rural Indiana 2008 Policy-Programs-Progress Fiber-Optic Experiencing Explosive Growth - Fiber-optic § The absolute fastest conduit for data transfer • Speeds are unlimited • Fiber rings around major metropolitan areas, along I-69, I-65, and I-70; fiber also connects state’s major universities. § Dramatic increases in deployment – providers responding to consumer demands for package voice/video communications, full spectrum entertainment, high-speed internet access, security, and new technology. • RBOCs slow to deploy outside urban and suburban areas. • RLECs are deploying within historical operating territories and absorbing adjacent territory, especially since passage of HB-1279.

Connecting Rural Indiana 2008 Policy-Programs-Progress Indiana Companies Changing How They Do Business - Highly responsive to consumer demands – they hear what consumers want and are providing it. § Sensitive to generational differences – generations younger than Baby Boomers want mobility and ability to stay connected § Companies changing themselves physically and operationally to meet the “generational demand”

Connecting Rural Indiana 2008 Policy-Programs-Progress Indiana Companies Changing How They Do Business - Boomers (1945 -1964) - They want technology and are willing to pay for it - Need to feel young - Tech savvy but need more hand holding - Xers (1965 -1982) - EXTREME child involvement -- make purchasing decisions based on their kids - Millennials/Gen Y (1982 -2004 / 2005 - ) - They live online - word of mouth/social networking is all important Influence the majority of purchasing decisions - $200 billion per year Will probably never have landline phone service They don’t care much about quality or service

Connecting Rural Indiana 2008 Policy-Programs-Progress Where Will We End Up? Consumer demands, global economic requirements and the evolution of technology points to one conclusion: Indiana and the nation is shifting to a Fiber-Optic network with a robust wireless network overlay

Connecting Rural Indiana 2008 Policy-Programs-Progress Why Fiber-Optic? - Ability to evolve almost instantaneously with a capability limited only by transmission equipment. § Only technology to offer full range of services: communications, internet access, entertainment, security, energy management, etc. § Providers see the future – deploying rapidly at local level while backbone providers remain aggressive at the state level. - Fiber-optic technology makes Indiana globally competitive. - Fiber fundamentally changes the landscape § Once deployed by a provider, overlaying competitive networks not competitively viable § Quickly degrades value of copper and coaxial networks – they can’t match capability

Connecting Rural Indiana 2008 Policy-Programs-Progress Why A Wireless Overlay? - First and foremost – Consumers. They want to stay connected while on the move. § Generational – While Baby Boomers want the capability, younger generations DEMAND it. § Economic – in today’s evolving environment, business has to stay connected while on the move to remain competitive. § Security and Emergency Response – Technology allows responders to get up-to-date information while responding. • Kosciusko County 911 Dispatch – leading the way. - Cell phone providers quickly becoming the leader in nationwide networks – 3 G, 4 G § Voice, data, entertainment access already in place § Cards enable laptops and PCs to access networks

Connecting Rural Indiana 2008 Policy-Programs-Progress How Does Indiana Look Today? - Indiana has penetration in over 90% of all zip codes by some type of high-speed access provider. § OUCC database increased to approximately 250 service providers – 25% increase since 2007. - Almost 100% coverage with cellular 3 G or comparable technologies. § Viable competition to unlicensed wireless provision - Unlicensed wireless broadband provider coverage continues to expand, especially in southern part of the state.

Connecting Rural Indiana 2008 Policy-Programs-Progress How Does Indiana Look Today? - Existing copper network will remain viable in rural areas for the short term. - Rural LECs deploying and expanding fiber networks – absorbing new territory as they expand. § Big three losses will continue & losses likely to be permanent. - DSL deployment will slow down. § Low hanging fruit is almost gone – without significant technology advance, 18 K limitation makes deployment in low population density areas not viable for business investment considerations.

Connecting Rural Indiana 2008 Policy-Programs-Progress How Does Indiana Compare To The Region? - Illinois, Kentucky, Ohio and Michigan have agencies or organizations directly or indirectly associated with state government examining broadband development. - Indiana – no dedicated authority or agency. § Hands-off approach within guidelines of HB 1279 to allow market forces to work. § Not enough data to support conclusion yet, but Indiana seems to be moving much more rapidly deploying globally competitive high-speed access networks.

Connecting Rural Indiana 2008 Policy-Programs-Progress So Why Do The Experts and Reports Say Different? - Reports do not provide accurate assessments at the state level § Generally rely on inaccurate and incomplete FCC data. § Few offer any analysis of what providers in each state actually offer. § No real understanding of “mom and pop shops” provision. § Feed off each other. - International comparisons between U. S. and other countries do not account for cultural, generational, or geographic factors that have dramatic effects on deployment strategies § Iceland, Japan, Korea

Connecting Rural Indiana 2008 Policy-Programs-Progress What Hurdles Still Exist? - Funding • Potential revenue deploying to low-density rural areas with fiber, cable, or DSL circuits is usually not sufficient to off-set costs to deploy the technology and provision service. • No state or federal Universal Service Fund or USF-type programs available yet to offset costs of provision to rural areas like we have for telephone service • Currently, only viable options for consumers living in deep rural areas continue to be wireless and satellite broadband service

Connecting Rural Indiana 2008 Policy-Programs-Progress What Hurdles Still Exist? - Education § If consumers don’t understand what broadband is, they won’t want it. • • Information Resource – weather, news, the new “encyclopedia” Social Resource – getting connected – staying connected Educational Resource – teaching, learning Economic Resource – shopping, business, financial management § Only true for the “older” generations!! • Although we enjoy the technology, we grew up with the Eight-Track Player § Younger generations want the technology at younger ages. • Younger generations don’t consider it a luxury – they want the technology to stay connected to each other

Connecting Rural Indiana 2008 Policy-Programs-Progress Education Must Be At All Levels - Schools have to remain the first level § Teach/expose students to technology at an earlier age § Require it for informational / educational purposes daily - Government continues the need § Offer services online - be responsive to citizens § Promote broadband education § Teach independent business operators (small business owners, farmers, etc. ) to become more effective and efficient using broadband technology § Promote global marketing and expansion - Service Providers already marketing and changing § Educate older consumers why they should have it § Working to stay on top of what younger generations want.

Connecting Rural Indiana 2008 Policy-Programs-Progress Any Other Hurdles? - Information Availability § Once consumers want the technology, who can they contact? • Some online search site available ü Not complete; inaccurate information ü Many not updated regularly • Small or start-up providers rarely have enough funding to maintain operations and do extensive marketing ü Valuable resource in areas not served by larger well-known companies ü Typically offer good packages, reasonable rates, and excellent service quality § Until 2007, no single source existed in Indiana to get consumers connected to providers. • OUCC developed online search tool to help consumers get connected • Designed to get consumers and companies connected; not designed to detail specific deployment of specific services ü Consumers can get connected to small start-up providers

Connecting Rural Indiana 2008 Policy-Programs-Progress QUESTIONS?