1. Commonwealth of Pennsylvania Broadband Stimulus Initiative National Telecommunications & Information Administration (NTIA) Washington, DC May 6, 2009 1

2. Attendees 2 Commonwealth of Pennsylvania  Naomi Wyatt, Secretary of Administration; Governor’s Office of Administration  Brenda Orth, Chief Information Officer; Governor’s Office of Administration  Rebecca Bagley, Deputy Secretary for Technology; Department of Community & Economic Development  Luc Miron, ARRA Broadband Project Manager; Governor’s Office of Administration

3. Commonwealth Broadband Initiatives Chapter 30 Amended by Act 183 3

4. Pennsylvania Background  Most aggressive rural broadband deployment program in Nation according to United States Internet Association  $193 million in total cumulative local rate increases from 2005-2008 to fund broadband deployment  Projected rate increases in place of $98 million for 2009.  Rate increases are continuing into the future  “Shovel ready” unmet aggregate demand stemming from state broadband initiatives  US Census: 3 rd largest rural population behind TX and NC; 3 rd largest elderly over age 65 behind FL and W Va 4

5. Pennsylvania Chapter 30  Chapter 30 originally enacted in 1993 to achieve early deployment of universally available state-of-the-art broadband network in Pennsylvania, re-enacted in new form in November 2004 (Act 183)  Authorized several ambitious initiatives that will substantially increase the investment in Commonwealth telecommunications infrastructure  Act 183 mandate for Department of Community and Economic Development (DCED) to create an Inventory of Services database  Collection, compilation, and maintenance of a comprehensive listing of broadband services available from all broadband providers operating in the Commonwealth, regardless of technology used 5

6. E-Fund Education Technology Fund (E-Fund) of November 30, 2004 (Act 183)  Purchase or lease of telecommunications services, infrastructure, or facilities to establish and support broadband networks between, among, and within school entities (Intermediate Units and School Districts)  Purchase or lease of premises telecommunications network equipment and end-user equipment  Distance learning initiatives using the foregoing broadband networks 6

7. 7 Pennsylvania Proposals For Consideration by NITA

8. Update on Activities  Responses to FCC solicitations and joint NTIA/RUS RFI  Intra-agency coordination – Governor’s Office, Office of Administration, DCED, PUC, DGS, Health, Education, others  Coordination with telecommunications carriers and interested stakeholders  Public meetings in rural PA  Development of plan / prospective NTIA application  Identification of potential ‘shovel ready’ projects  Updates to state mapping inventory 8

9. Discussion Items PA is poised to execute on BTOP project  State strategy in place  Availability of preexisting and documented demand for broadband services – shovel ready  Mapping inventory points to “unserved” and “underserved” priority areas  Statewide public safety tower network could help extend reach into last- mile areas  Statewide telecommunications procurement being finalized; could help direct deployment of long-haul and middle mile trunks 9

10. Discussion Items Prior positive action by states should be further leveraged by ARRA:  Landmark state legislation with statutorily mandated (accelerated) broadband deployment by regulated incumbent local telephone companies  Establishment of outreach & aggregation mechanism (with funding) for pre-existing unserved broadband demand  Aggregation program with statutorily mandated “business case” upon reaching threshold of committed customers  Financial assistance to schools for connectivity, equipment, content, technical assistance ($10M per year)  Statewide mapping and public inventory of services 10

11. Discussion Items Prior positive action by states should be considered  Pennsylvania is net contributor to the federal USF at a level of $125 - $135 million annually  Implementation of extensive intrastate carrier access charge reforms at corresponding high cost  As a net contributor to the federal USF, PA already supports deployment of broadband facilities in other states 11

12. Discussion Items NTIA Programmatic considerations  Requirement for state plan and mapping as condition precedent to receipt of deployment funds  Importance of State’s Role in project awards:  Endorsement or recommendation by States  Alignment with state plan  NTIA approves State plan and States approve/recommend projects that are aligned with State plan 12

13. Discussion Items Funding Determinations; Equitable Distributions to States  ARRA stipulates at least one project award per state  Recommend “per capita” formula for BTOP in event of “per state” distribution  Particular circumstances of states should be taken into consideration 13

14. Discussion Items BTOP Program Administration  Consider enlisting assistance of states to administer portions of BTOP program  NTIA approves State plan and States approve/recommend projects that are aligned with State plan  Mutually beneficial arrangement to ensure fulfillment of goals and timelines 14

15. Discussion Items Project match considerations  Prior financial investments by States should be given consideration, such as:  Allow statutorily approved rate increases to secure broadband deployment commitments as 20% match required under ARRA  State investment made through state towers or other related infrastructure  Award of state funds which yield aggregated demand and ‘shovel- ready’ projects (BOAF)  Award of state funds under state E-Fund for deployment of broadband networks linking school entities 15

16. Discussion Items Wireless broadband deployment  Discussions mostly focused on residential and commercial availability  Recognize emergence of hand-held devices and mobile applications  Important for economic development, public safety, tourism, quality of life 16

17. Discussion Items Project Sustainability  ARRA provides initial capital expense allowing deployment of infrastructure  Sustainability of ARRA projects is an essential component of project approvals  Identification of anchor tenants & community partnerships 17

18. Discussion Items Competition & Choice  Business case may not always allow for multiple providers and/or multiple broadband access technologies and services, e.g., landline telecommunications, CATV, wireless, broadband over power lines, etc.  Shared or neutral collocation facilities, common infrastructure, and potentially common carriage requirements under pre-existing and applicable federal (e.g., Telecommunications Act of 1996) and state law.  Usage of state infrastructure (towers) as a means of accelerating deployment and extending reach of network 18

19. Discussion Items Administrative Considerations  State Procurement & Contracting Mechanisms  Reimbursement of State planning funds 19

20. Open Discussion or Questions 20