COMMITTEE OF THE WHOLE

FEBRUARY 13, 2009

** APPROVED **

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Members Present: Chairman C. Crandall, G. Benson, D. Burdick, W. Dibble, D. Fanton, W. Hall, K. Kruger, D. Pullen, B. Reynolds, D. Russo (Absent: T. Hopkins, M. McCormick, T. O’Grady, R. Truax, N. Ungermann)

Others Present: D. Button, A. Finnemore, J. Foels, K. Hooker, J. Margeson, T. Miner, B. Riehle, T. Ross; Guests: Joe Starks, President of ECC Technologies; Gary Roberts, Alfred University; Tom Dawson and Carl Rahr, Alfred State College; Jay Livingston and Don Haingray, Houghton College; Billy Foster, Jones Memorial Hospital; Media: J. Loyd, Olean Times Herald; B. Quinn, Wellsville Daily Reporter

Call to Order: The meeting was called to order at 1:10 p.m. by Chairman Curtis W. Crandall, who then led in the Pledge of Allegiance to the Flag. The Invocation was led by Legislator Pullen.

Chairman Crandall explained that the purpose of the meeting was to discuss a potential broadband fiber optic project in Allegany County. Background: Several years ago, Ontario County began investigating their telecommunications, and they are currently involved in a project to install two fiber optic loops in their county. Chairman Crandall distributed copies of information from the Finger Lakes Regional Telecommunications Development Corporation, which is overseeing that operation (copy attached to original minutes). While at a NYSAC meeting a year ago, several Allegany County Legislators sat in on a presentation by Ontario County about broadband technology, which was followed by other conversations, and the subject was recently brought back up. There have been discussions and questions about available funding and what might be included in the stimulus package. Joe Starks, from ECC Technologies, was invited for a presentation. They are the technical entity behind the Finger Lakes Project and are involved in all but one of the projects across New York State.

Broadband Fiber Optic Technology, Joe Starks, ECC Technologies:

As recently as five years ago, no one at the municipal level understood the importance of broadband telecommunications technology and how communities got involved. Everyone throught it was someone else’s problem. Businesses need it, and if we want those jobs in the community, we need to have the foundation to support it. Broadband is just a form of telecommunications, but it’s more than broadband that makes the community successful for technology. Mr. Starks quoted what he feels is his company’s motto, “By developing solutions that only meet the needs of today, you will surely miss the opportunities of tomorrow.” We need to plan ahead.

Successful technology infrastructures for communities:

· Public/private partnerships

· Community-wide approach (can be owned by anyone but controlled by the community)

· Includes fiber optics, wireless, electronics, pathway and resources to support it all (mapping has been completed for existing infrastructure and services in our County; just waiting for the GIS layer)

· Vary by community

· Generally thought to be someone else’s problem

· A new focus by progressive communities (30 counties in New York are addressing it in some form. A three-county project is currently being done by Southern Tier West.

· A key component of economic development programs (Ontario County reported creation of 100 technical jobs last year resulting from their fiber investment.)

Issues faced by rural communities:

· Lack of investment

· Lack of competition

· Cost competitiveness (rural areas pay more – supply and demand)

· Need for redundant infrastructure. The reason this municipal broadband and fiber industry got started was that technology industries can’t afford to lose their telecommunications. Communities without effective infrastructures are being left behind (the old “digital divide”).

Recognizing the issues:

· Getting involved

· Taking responsibility (During Ontario County’s telecommunications study, two major technology-based companies announced they were leaving, resulting in the loss of 750 jobs. That was the main impetus for their project.)

· Developing community-wide telecommunications strategies and plans

· Realizing options and resources (options include fiber optics or wireless or both – every situation is unique)

· Re-defining the digital divide (those communities that get involved vs. those that don’t)

· It’s a community-wide issue and needs a community-wide response

To move forward:

· Vision required to move community forward

· Create community-wide awareness

· Get buy in and support of political leaders

· Enable a community sponsored technology and telecommunication task force

· Include and expand the roles of traditional information technologies professionals

· Establish a foundation for a community-wide telecommunications plan

Goals of an effective plan should:

· Consider the needs of the entire community (can’t be a burden to taxpayers and has to be sustainable)

· Prioritize economic development by focusing on the strengths and addressing the weaknesses (we have one of the best technical schools in the area, and the hope would be to keep those graduates in the area by providing and keeping the technical jobs for them to go to)

· Promote telecommunications competition (want investment in the community; it takes time and it can happen)

· Create a foundation to support new technology development regardless of ownership

· Create a competitive advantage for communities (fiber optics does that; global competitiveness)

Who is generally involved in planning:

· Public school systems

· Municipalities, EDA/IDA efforts

· Public safety

· Public and private colleges

· Hospitals and major employers

· Carriers and utilities (major users; public/private partnerships; they would use if available, and would maintain and support if created; grant funding?)

· Regional efforts as available (getting outside of the area is part of the goal)

Other considerations for the technology plan:

· To interconnect all municipal, educational, and healthcare entities (collaboration)

· Consider infrastructure owned and controlled by the community as a strong tool for economic and business development (make use of available resources; make the project known and form partnerships)

· The creation of services which will reduce costs and attract employment

A simple process:

· Perform infrastructure/telecommunication service analysis, identify the holes (being done by Southern Tier West)

· Perform feasibility studies on the development of a community-based infrastructure

· Identify and consolidate the community needs (get them on board)

· Identify and secure grant, institutional and other sources of funding that can help (this is key; there is not enough big business in this area to support a revenue-based model)

· Grants will be key, but they can’t be the long-term answer

· Must be sustainable (it’s the community that sustains the network)

Formal business plan: (A well thought out plan should be the foundation of the process. Needed for funding and to garner support of community partners and carriers.)

· Public/private partnerships

· Governance (Local Development Corporation, partnership with utility company?)

· Funding

· Operations

· Sustainability (need in order to get support)

Comments and questions:

Legislator Kruger questioned how we can implement this project if Verizon can’t. Mr. Starks responded that we have the capability of getting others involved for collaboration. Verizon operates for a profit and has its shareholders, so they would need a quick return, whereby a municipality could do it on a long-term basis. Mr. Kruger remarked on the sparse population over which the cost would be spread, and Mr. Starks reiterated the long-term funding and noted that the municipal model looks at beginning with municipalities, health agencies, schools, and business, then opens it to everyone else. Mr. Kruger questioned if the reason IDAs were mentioned was the difficulty in working public/private partnerships. Mr. Starks pointed out that we’d want to keep it from being a burden to government. It has to be flexible and work in public and private, and work for everyone, and that’s hard to do for government. It’s best done under the governance of a Local Development Corporation (LDC). Mr. Kruger commented that it would be difficult to market this right now as a public/private endeavor in light of current economic problems and banking issues. Mr. Starks responded that the timing is right for telecommunications. The Obama administration is earmarking $6 billion for building infrastructure in rural areas with open access telecommunications as a focus.

Legislator Dibble introduced the educational and health care institution representatives present at the meeting. Billy Foster from Jones Memorial Hospital noted that they are paying premium prices for broadband. Building and paying for infrastructure would help them to be competitive as employers. They need this. Mr. Starks noted that it doesn’t help that we’re so far removed; infrastructure is key. Chairman Crandall pointed out that if Verizon or a company like that went ahead with a project similar to Ontario County’s, their pay-off would be different than ours would be. Ours would be the creation of jobs. Ontario County reported industry development resulting from their project, and also several smaller businesses that needed the technology capabilities chose to stay in Ontario County. Verizon may not see the project as something they’d want to participate in because they’re driven by the stock market and are not concerned with the tax base and creation of jobs like we would be. Mr. Starks commented on the cultural, quality of life issues of living in rural communities. People want to live in this type of area. Broadband access and technology are changing the way we live. The whole point he wanted to make was that our community is at a junction, and there are options in going forward. We need to recognize that technology and telecommunication is important to the community. Whether we ever build anything or not, it’s important to get involved in it and keep moving forward, and whatever the community needs will shake out of that.

Legislator Pullen commented that what we would be proposing is to provide the network, and someone else, such as a utility carrier, would do “the last mile.” We would save them the capital outlay for infrastructure, and they would also gain new subscribers. Mr. Starks noted that’s the model we would want if we can make it work. The County wouldn’t want to jump into the competition and be a provider. The best approach, if building the infrastructure, is to have the utilities come in and finish it. They can save a lot by using community-owned infrastructure at a cheaper rate and have better quality and more capacity, and in turn they invest more in increased service. The utility companies are very in tune to these models, because they can’t afford both the infrastructure and the services.

Costs and logistics of running the cable were questioned. Mr. Starks noted that the standard budget number they use is $40,000 per linear mile, but the actual cost is usually between $32,500 and $33,000, including the right of way on the poles. The cable is run above ground on existing poles or sometimes underground, which is more expensive. There is no difference in reliability of the above vs. below ground cabling if built correctly. A backhoe excavating in the area can break a line, and utility companies sometimes cut a line during an electrical safety issue, whereas a downed pole doesn’t always cause a break. The fiber optics material is glass, but the cable is wrapped in steel strand and is strong enough to hold up a broken pole. Ring architecture is key, for example, a loop could start in Belmont, provide service around the County, and end in Belmont, giving everyone two paths out. Cabling is typically 144 strands in busier areas and 72 strands in more remote areas. The major contributor to the cost of building a system is not in the cable, but in the labor. You should put in as much as you can afford. Ontario County budgeted $7.5 million for their project, and actually spent a little over $6 million. It was paid for under a payment in lieu of taxes by a gas company wanting to run gas lines through the county.

Chairman Crandall asked that out of the 30 counties in the state building or considering fiber networks, what models they are using to approach this if not on a legislative level. Mr. Starks responded that every community is different: some are creating wireless service in under-served areas, some are doing fiber, and others are doing fiber but not open access. They are tracking over 600 municipalities in the nation building fiber networks, and they’ve seen the open access model in rural communities, Local Development Corporations, and various funding streams. Mainly urban areas are building for municipal purposes and opening it little by little to non-profits, education, and healthcare. When they eventually open it to carriers, they would switch over to an LDC as well, because it would be too much for a municipality to handle.

Mr. Pullen questioned what it would take to get started. Mr. Starks replied that we have already started and parts of the process are being done. We need to identify the needs and potential users and do a feasibility study of supporting and operating the network. We don’t want it to be a taxpayer issue. When the grant dollars come in, we need to know what we’re doing and have costs and impact nailed down.

Chairman Crandall asked about a general statement on the enthusiasm within higher education and healthcare entities for the community-based model. Mr. Starks noted they are key for helping to get grant dollars. Telemedicine is very big right now, as are schools, colleges, public safety, and healthcare, and a regional approach is even better. He didn’t know of any college not supporting this type of endeavor because of computer-based learning. They can’t get the technology they need without this.

ECC Technologies’ role in the process, other than consulting and assisting with the budget and language for the grant, can be whatever role the community needs. They are very versatile and can assist with the entire process.

Legislator Hall commented that we have hospitals, colleges, businesses, a number of entrepreneurs, and people writing grants. All of them could bring more redundancy to the County, but what isn’t here is coordination. We haven’t brought all these entities together to create partnerships, and we need to start developing that. We may be farther along in technology and resources, but we’re behind in communicating and getting people together to develop a plan. Mr. Starks noted that Tioga County has done an excellent job in bringing people together and are on a shoestring budget, but they are pushing and getting results. Allegany County needs to do the same thing. We need to get all interested entities together and move toward a goal. The project won’t be successful unless there is a team behind it. After the people are in place, there needs to be a well thought out plan.

Chairman Crandall pointed out that although there has been conversation, some information gathered, and a map and narratives put together, the process of grant funding applications has not been started, and that will require direction from the Board. Also, there are preliminary partnerships, conversations, and work that need to be done for a solid foundation, and assessment of needs and feasibility. There needs to be some kind of direction from the Board, and the Development Director is important also. The hospitals, colleges, and municipalities should all be brought together, information gathered, and an analysis of existing fiber should be done. Maybe we would be surprised to find out what’s there. Southern Tier West has started the analysis. Mr. Starks noted that our mapping is done and they’re waiting for the GIS overlay to be done. There is quite a bit of fiber out there. The needs assessment is also being done. Mr. Crandall asked when a company like ECC Technologies is brought in for this process. Mr. Starks replied that once the team is set up, they look at resources and try to fill the gaps. Most communities can do a lot of it themselves. What they are usually needed for is the planning process, and once that is done, just the execution remains.

Legislator Fanton asked how this project would tie in with existing broadband. Mr. Starks noted that users will request services; then providers would use our broadband infrastructure to provide the services. We’re talking about providing service to areas without any. In Ontario County, nearly 40 miles of their 187-mile network is provided by carriers, which saves them that much in installation. Allegany County’s map shows approximately 150 miles of cabling, so we’re looking at close to $7 million. We’ll be asking for $8 million. That’s not going to “light” it for everyone, but once partners are in place and the system is built, we can identify electronics by need.

Legislator Pullen noted that the process has been explained that it’s like building a thruway. Users pay a toll, and there’s open access. Traffic volume increases as the economy prospers. We don’t know who will use it. There is presently very little broadband available in the County. We need to move ahead to stay competitive. Maybe an ad hoc committee should be established to convene a summit of potential partners to see what the need is. Mr. Starks commented that the Elmira area is doing that. They’ve assembled a team to look at the issues and problems to establish a vision to move forward. That’s easy to do, and you don’t need an outside consultant for that. Chairman Crandall pointed out that industries and large institutions have their technical people, but we still need businesses and entities from other backgrounds. It can’t be a legislative committee to drive this. We have to have the community and users involved and people who understand the issues. Part of the assessment of resources and needs will springboard off what already exists. Maybe there will be segments where it will be a case of “if we build it, they will come,” but we need more for a foundation. Mr. Starks commented that eventually we will probably collaborate with the Southern Tier West initiative for a connection out, but we still need to provide access to under-served areas within the County.

A representative from Houghton College noted that they already have fiber connection through Time Warner, but they would be interested for redundancy. If the cost is right, they would be happy to look at it. The hard part at this stage would be to come up with the financial analysis and advantages. Mr. Starks pointed out that the role of partners wouldn’t be financial analysis, but to see if this concept makes sense – access to fiber and the competitive value. When we get into the business plan, we’d have to get into financial analysis. The college representative commented that broadband access would benefit the colleges for their on-line learning programs. Distribution to end users would play a big part in enabling them to expand their customer base, and getting broadband to them would probably influence their support. Mr. Starks noted that is why the public/private partnership is so important. You have to get out to the users.

Development Director John Foels made note of a meeting with Southern Tier West at the Crossroads Center on February 26. They have already had similar meetings in Chautauqua and Cattaraugus Counties. In a recent conference call, Southern Tier West listed a preliminary fiber project in their priorities for communication with the state. Their project is well underway. Mr. Starks pointed out that if they are successful, it helps us by providing a connection out and is good for everyone involved.

A representative from Alfred State College commented that their situation is unique in that they have campuses in both Alfred and Wellsville. They have fiber connectivity between the campuses through Time Warner, which is a very expensive link for them. One of their concerns is the subject of redundancy. If something happens in Alfred, both campuses are dead. Another concern is distance learning, which is increasing rapidly, with people wanting more and more from home, including full-time students picking up classes from home during off times and clients from all over the world. Broadband availability to people in their homes helps the college to provide service and the customer for access. The world is changing to digital, and people’s expectations are greater. They would be interested in anything to make their service better.

A representative from Alfred University commented that their distance learning initiatives may be a little behind, but they are expanding out all over the world in an aggressive fashion, which very quickly will result in telecommunication and video conferencing needs. They will need as much broadband access for end users as possible for as inexpensively as possible. Infrastructure is needed to drive down the price through competition. Redundancy is also needed, as down time costs thousands of dollars. They are also interested in ideas about using high performance network for telepresence, high-end video conferencing. They know of a proposal with NYSTAR to build a research network out through the Southern Tier to Buffalo. Once that infrastructure is in place, there’s no reason it couldn’t be used for both purposes. There is a lot of potential for partnerships.

Chairman Crandall recommended the formation of an ad hoc committee to gather information and input on a County-wide broadband fiber optic project. There will be potential users at the Southern Tier West meeting mentioned earlier, and maybe an ad hoc committee could put together a County-wide summit to get input and technical direction. A motion was made by Legislator Pullen, seconded by Legislator Dibble and carried unanimously to authorize the appointment of an ad hoc committee.

Chairman Crandall reported that several legislators attended the NYSAC Conference in Albany earlier in the week, and while there, they met with state leadership. The newly appointed person overseeing the stimulus process for New York, Timothy Gilchrist, met with him and Board Chairs from across the state regarding the stimulus monies and several areas this money will help to fund. Senator Schumer has put out some press releases on what’s going to education, transportation, healthcare, and so on. Chairman Crandall brought back some information, which he will give to the Clerk of the Board to disseminate. One issue was the FMAP money that will go toward reducing the counties’ share of Medicaid. This will be a big positive for us; it won’t be long term, but will be a shot in the arm. Another issue was project monies for municipalities. The list he submitted is being forwarded to Tim Gilchrist and the Governor, but what he gathered is that the projects really have to be “shovel-ready.” His understanding is that they will cull out projects that aren’t. He inquired if a project held up on an agency’s desk just needing to be approved or permitted would be shoved aside, and he was told they will have someone from each of the various agencies, such as DOT, DEC, and the Comptroller’s Office, to help move things along.

Legislator Dibble commented that he felt our priorities should be the Court Facilities Project, Crossroads Area Infrastructure Development, and Fiber Optic Infrastructure.

Adjournment: The meeting was adjourned at 2:45 p.m. following a motion made by Legislator Hall, seconded by Legislator Russo and carried.

Respectfully submitted,

Adele Finnemore, Journal Clerk