Massachusetts Broadband Institute Legislative Briefing 4/3/2019 Draft for Policy Discussion Only Massachusetts Broadband Institute Legislative Briefing 4/3/2019

Draft for Policy Discussion Only Issue Overview The Last Mile: To support and co-invest in broadband solutions for 53 Massachusetts towns - 44 completely unserved, 9 underserved. Program includes direct grants to municipalities and grants to private broadband providers to cover towns. Broadband: Federal definition is a speed of 25 megabits per second (Mbps) for downloads, 3 Mbps for uploads. Challenge: Utilize state funds to support projects which deliver broadband access to premises in rural municipalities that have low population density and high road miles. Goal: Expand connectivity to at least 96% of premises in each town.

Draft for Policy Discussion Only Issue Overview Funding Overview: Chapter 231 of the Acts of 2008 provided the initial authorization of $40M for the MBI Fund; These funds together with Federal funds built the MBI 123 Middle Mile serving 123 communities and Critical Anchor Institutions in MA. $50M in additional State funds were authorized under Chapter 257 of the Acts of 2014; A third authorization of $45M ($13M for MBI and a separate $32M directly provided to EOHED) was approved by Chapter 133 of the Acts of 2017.

Draft for Policy Discussion Only Summary Recognizing the failures of the ‘One Size Fits All’ solution to the Last Mile, Commonwealth moved toward a ‘No Silver Bullet’ strategy, supporting two distinct approaches that boosted town choice: Direct grants for fiber-to-the-home (FTTH) municipal projects and public RFPs to spur private provider proposals. What Didn’t Work: Due to geography and each towns’ unique financial situation, a regional FTTH network did not make sense. Ownership and leadership issues were also problematic. What Did Work: Giving towns options. For those that can manage a municipal FTTH, EOHED Last Mile Infrastructure Grant program provides a pathway. For towns stymied by bonding and management, private provider options offer a sensible path.

Draft for Policy Discussion Only Last Mile – April 2016 At relaunch of Last Mile (April 2016): 53 towns - 44 completely unserved and 9 ‘partially-served’ by broadband. 28K households

Draft for Policy Discussion Only Last Mile Today 53 Towns in April 2016 – 44 unserved, 9 partially-served. TODAY: 14 town projects materially complete, including all 9 ‘partially-served’ towns, Mt. Washington, Princeton, Hinsdale, Lanesborough, West Stockbridge. 2 towns serving customers, nearing full completion – Otis, Alford. 26 with either EOHED direct grant, covered by MBI grant – including remaining Charter & Comcast towns, plus Warwick and Petersham. 2 have approved private provider projects, awaiting formal state grant – New Marlborough, Middlefield. 4 working with state & WiValley on regional wireless project – Florida, Hawley, Monroe, Savoy. 4 towns working to formalize a path forward with state: Monterey - Received Charter proposal, declined; Tolland, Sandisfield – MBI previously supported bid by Frontier, which failed. Egremont – MBI made award to Charter but Town couldn’t negotiate CFA, moving toward Fiber Connect. 1 town with no defined path forward – New Braintree. Outreach being made.

“Flexible Grant Program” The tapestry of pathways is matched by a tapestry of funding and contract models NOTE: The starting point for grant amounts to the towns is the original MBI allocation published for each town in ‘15 and based on desktop “Cartesian” model. Funding Model Impact on Towns Adopted by Towns Partially-served Towns Cable contract covered by legislative earmark released. No cost solution to the towns. Buckland, Chester, Conway , Hardwick, Huntington, Montague, Northfield, Pelham, Shelburne 1st Round Cable Co. Responses Cable contracts are covered by each town’s allocation. No cost solution to the town. West Stockbridge, Lanesborough, Hinsdale, Princeton, Peru, Tyringham, Hancock 2nd Round Cable Co. Responses “Flexible Grant Program” Cable contracts exceed the town’s allocation. Overage split between state and town. Contract fully funded by state, and town cherry sheet reimbursement agreements in place (avoids town borrowing) $800 per household estimated New Marlborough, Worthington, Middlefield Municipally-owned Fiber Networks State allocation covers about 40% of the cost. Local resources cover approximately 60% (debt exclusions, town borrowing, free cash, etc.) Many are eligible for federal CAF funds which would help offset local contribution. Eligible for Last Mile Contingency Fund implemented through emergency authorization signed by Gov. Baker in November 2017. Alford, Ashfield, Blandford, Becket, Charlemont, Chesterfield, Colrain, Cummington, Goshen, Heath, Leyden, Mount Washington, New Ashford, New Salem, Otis, Plainfield, Rowe, Shutesbury, Washington, Wendell, Windsor Municipally-owned Wireless Networks Low or no cost to town. Utilizes local knowledge and expertise. Royalston, Warwick MBI Unapproved Partners Partner failure to disclose financials, assurances of performance, agreement on contract terms, etc. Towns assume all risk. Not eligible for Last Mile Contingency Fund because no local contribution by citizens is made. No cost solution for the town, however towns carry the risk of overages. State allocation is paid in arrears after network is operational and covers 96%. Petersham, Monterey, Egremont Municipal Coalition Towns agreed to aggregate their allocations. Hybrid-wireless solution. No cost solution to the towns, however agreement in place for shared responsibility for overages. Florida, Savoy, Monroe, Hawley

Draft for Policy Discussion Only Town by Town   PARTNER SUMMARY of STATUS Total Premise Count (28,100 total) Comcast Summary of Status Total Premise Count/Running Total 1 2 3 4 5 6 7 8 9 Buckland Chester Conway Hardwick Huntington Montague Northfield Pelham Shelburne 9/6/18: Comcast & MBI hosted an event with the Lt. Governor’s office to publicly announce all 9 towns have 96% or more broadband coverage. Expanded connectivity to 1,303 households, more than 200 over initial contract. 2,578 or 9% of total. Premises remaining: 25,522 / 91%. 10 Montgomery Make Ready is complete. 3/26/19: 44 Comcast customers have access to service. 11 Worthington 12/28/18: Grant to Comcast announced by MBI. 12/11/18: Cable Franchise Agreement signed between Comcast and Town. 8/8/18: Worthington contract signed between MTC and Comcast. Make Ready in progress. 12 Middlefield 3/25/19: Cable Franchise agreement signed by Town officials.

Draft for Policy Discussion Only Town by Town   PARTNER SUMMARY of STATUS Total Premise Count (28,100 total)   Charter Summary of Status Total Premise Count/Running Total 13 West Stockbridge Network completely built and operational. 7,115 or 25% of total. Premises remaining: 18,407 / 66%. 14 Lanesborough Network completely built and operational 15 Hinsdale 16  Princeton Network completely built and operational   17 Peru Make Ready is complete. Network Installation being built. 18 Tyringham Make Ready in process. 19 Hancock 12/18/18: Cable Franchise agreement signed. 20 New Marlborough 11/29/18: Charter files pole applications 1/14/19: Cable Franchise Agreement signed by town. 1/28/19: MBI grant to Charter executed. Make Ready in progress.

Draft for Policy Discussion Only Town by Town   PARTNER SUMMARY of STATUS Total Premise Count (28,100 total)   Westfield Gas & Electric (Whip City Fiber) Summary of Status Total Premise Count/Running Total 21 Alford Make Ready complete. Network completely built and operational. 12,898 or 46% of total. Premises remaining: 5,509 / 20%. 22 Ashfield Make Ready in process 23 Blandford 24 Becket Make Ready in process - Eversource considering upgrading services in town 25 Charlemont 12/6/18: Town meeting vote 90-70 to move forward & build a municipal network. Pole applications pending 26 Chesterfield 27 Colrain 28 Cummington 29 Goshen Pole Applications pending 30 Heath 31 Leyden 32 New Ashford 33 New Salem 34 Otis Make Ready complete - Installations occurring - Network is operational 35 Plainfield 36 Rowe Make Ready complete - Installations occurring 37 Royalston Wireless pilot operational; town-wide build-out in design and engineering 38 Shutesbury Make Ready complete - Installations occurring. 39 Washington 40 Wendell 41 Windsor All Towns dependent on completion of pole applications and Make Ready in a timely manner from Verizon, National Grid, and Eversource. WG&E, the owner’s project manager for each of these 20 towns, was approved by the FCC to participate in the July 24th reverse auction. Any monies WG&E secures in this auction will be passed along to benefit the debt service to each town. WG&E notified towns unofficially that $10.3 million has been secured in CAF II money.

Draft for Policy Discussion Only Town by Town   PARTNER SUMMARY of STATUS Total Premise Count (28,100 total)   WiValley Summary of Status Total Premise Count/Running Total 42 43 44 45  Florida Hawley Monroe Savoy Foundational documents in motion: Action Plan; Professional Services Grant for OPM; Inter-Municipal Agreement; Grant Agreement with WiValley. Phase I construction in progress. 1,031 or 4% of total. Premises remaining: 4,478 / 16%. OTHER PARTNERS 46 Petersham 9/5/18: MBI Board votes to award Petersham a Payment in Arrears contract to reimburse the town for Make Ready costs to have Matrix build a Broadband Network. 4,099 or 15% of total. 47 Monterey Monterey is in negotiation with Fiber Connect requiring a Payment in Arrears. 12/13/18: FC has connected 136 customers out of 874 households. 3/5/19: MBI accepts Town’s letter of interest in MBI FP and asks for documents. 3/29/19: Select board provides 102 page document seeking to reengage and to access their $1.1M allocation to finish building the town’s broadband network. 48 Tolland Tolland looking at a 60% coverage proposal from Crocker augmented with USDA loan and/or CAF II funding to expand coverage. Comcast has made an offer 2/4/19 currently being reviewed by MBI. 49  Sandisfield   Sandisfield is looking at a 60% coverage proposal from Crocker augmented with USDA loan and/or CAF II funding to expand coverage. Charter is considering making an offer and is in discussion with town officials. 50 Warwick Warwick is a fixed wireless network being town-managed. 51 Mount Washington Mount Washington network is operational and uses Crocker as their network operator/ISP. Jointly supported by MBI and EOHED grants. 52 Egremont  10/15/18: Egremont town officials vote to withdraw their support from the Charter proposal and are considering a Payment in Arrears arrangement with Fiber Connect 12/13/18: FC has connected 313 customers out of 920 households. REMAINING TOWNS 53 New Braintree While New Braintree has a proposal from Crocker, MBI attempting to engage town on pursuing a solution. 2/4/19: Comcast has made an offer to build a network in NB. Currently under review by MBI Premises remaining 379 / 1% 53 Towns 28,100 premises 100%

Last Mile Today - Lit Towns Draft for Policy Discussion Only Today 20 of the 53 towns have subscribers receiving service. Last Mile Today - Lit Towns 53 Towns in April 2016 – 44 unserved, 9 partially-served. TODAY: 14 town projects materially complete, including all 9 ‘partially-served’ towns, Mt. Washington, Princeton, Hinsdale, Lanesborough, West Stockbridge. 2 towns serving customers, nearing full completion – Otis, Alford. 26 with either EOHED direct grant, covered by MBI grant – including remaining Charter & Comcast towns, plus Warwick and Petersham. 2 have approved private provider projects, awaiting formal state grant – New Marlborough, Middlefield. 4 working with state & WiValley on regional wireless project – Florida, Hawley, Monroe, Savoy. 4 towns working to formalize a path forward with state: Monterey - Received Charter proposal, declined; Tolland, Sandisfield – MBI previously supported bid by Frontier, which failed. Egremont – MBI made award to Charter but Town couldn’t negotiate CFA, moving toward Fiber Connect. 1 town with no defined path forward – New Braintree. Outreach being made.