Subsidies for Rural Broadband Supported; Casino Timing Discussed

A proposal to subsidize expanded access to broadband internet, especially in rural Nebraska, drew widespread support in a public hearing Monday. But testimony suggested significant details remain to be worked out. And the Appropriations Committee heard testimony on when casinos could open at Nebraska racetracks.

The broadband proposal was introduced by Sen. Curt Friesen, chair of the Transportation and Telecommunications Committee, for Gov. Pete Ricketts. It would spend $20 million in each of the next two years to pay half the cost of connecting mostly rural Nebraskans to broadband internet services. Ricketts compared the need for broadband to the need for roads or rural electrification.

“Broadband is infrastructure that we need to make sure that we are also being ranked very highly on to be able to allow our state to grow,” Ricketts said.

Sen. Bruce Bostelman said while residents who live in towns and cities may have access to high-speed internet, that’s not true for many people who live in the country. Ricketts said the proposal is designed to address that.

“This is really what this is supposed to be for. Because what we’re trying to do is connect that last mile. That part that a lot of telecommunications companies don’t want to pay for, because it’s just not economically viable for them to do that,” he said.

The proposal targets areas of the state that lack service at speeds of at least 25 megabits per second for downloading and 3 megabits per second for uploading, but funds would also be available to areas that had more than that, with the goal of building capacity for 100 by 100 service. It would pay for half the cost of projects to reach that capacity. The Public Service Commission would be in charge of overseeing testing to determine if those speeds were being met.

Julia Plucker of the Nebraska Internet and Television Association, a group of cable companies, suggested that testing standard should be relaxed, to match the speeds that customers need and are willing to pay for.

“More than 80 percent of peak traffic on broadband networks is video streaming, gaming and social media. These applications require significant download capabilities, but do not require as much bandwidth on the upload side. Even with increased usage of Zoom, Webex and two-way video applications, this did not change the longstanding nature of asymmetrical nature internet use. For example, the most commonly used video conferencing platforms that we all use on a regular basis require upload speeds of less than three megabits per second for high definition streaming,” Plucker said.

But Brad Moline, CEO of Allo Communications, urged senators to maintain the requirement for higher speeds.

“We believe all residents in the state deserve only modern speeds. Especially when the public is subsidizing the network. Don’t subsidize something that is inferior and wastes the public’s money,” Moline said.

According to the website highspeedinternet.com, speeds of 0-5 megabits per second work for things like checking email, streaming music on one device, or searching on Google; 5-40 work for streaming video on one device, video calling with Skype or FaceTime, or online gaming for one player; and speeds of 40-100 work for streaming HD video on a few devices, multiplayer online gaming, and downloading large files.

Gina Ragland, representing AARP Nebraska, said broadband access is important for telehealth, education, and civic engagement. But she said people have to know how to use it.

“Broadband access is a necessity, just like utilities such as water and electricity, but differs from other utilities because people need to learn how to use the applications that access to the internet offers. And unlike simply turning on a faucet to get water or turning on a switch to light a room, using the high speed digital access pipe requires one to have digital literacy,” Ragland said.

Ragland said that could be a challenge for older Nebraskans. She recommended senators consider ways to reach them, and also ways to subsidize the cost of broadband access for customers who can’t afford it, even if it is available.

The Transportation and Telecommunications Committee took no immediate action on the proposal, one of several dealing with expanding broadband access this year.

Also Monday, the Appropriations Committee heard several proposals dealing with setting up a Gaming Commission to regulate the casinos at racetracks approved by voters last November. Committee chairman Sen. John Stinner said one proposal is for $225,000 to get the commission set up to operate between now and June 30. The commission is going to be a combination of the existing 5-member Racing Commission with the addition of two members appointed by the governor.

Lynne McNally of the Horsemen’s Benevolent and Protective Association said as soon as it’s set up, it will have applications to deal with.

“The day that they announce they are willing to accept an application, you will have three applications on your desk. One for Omaha, one for Lincoln, one for South Sioux City. So that, along with three $1 million checks will also be sitting on Tom’s desk. So the day that that’s available is the day that we apply. We are ready, willing and able to do that,” McNally said.

In addition to the three tracks whose casino applications McNally is involved with, there are also tracks in Columbus, Grand Island and Hastings that will be eligible to run casinos. Tom Sage, executive secretary of the Racing Commission which will receive the $1 million license applications, said things could move quickly once they’re received.

“What I’m being told by gaming operators, if everything’s going right and the commission’s able to receive applications by July 1, we more than likely could see some type of devices installed by the end of the year. That’s not a sure thing. But that’s a possibility,” Sage said.

Sage said the state would be getting tax revenue from a 20 percent tax on gross receipts, the difference between what’s wagered and what’s paid out, which he estimated at $245 million two years from now. Sage acknowledge it was just an estimate, leading to an exchange with Sen. Steve Erdman.

“It seems like a high number, but that’s all I had to go on,” Sage said.

“It doesn’t just seem like a high number, it is a high number,” Erdman replied.

“It is a high number, I agree,” Sage said.

“It’s $250 million,” Erdman declared.

“Correct,” Sage said.

“How many social costs do you think we’ll have to offset that?” Erdman asked.

“What?” Sage asked.

“Social costs. The issues we’re going to have,” Erdman said.

“Senator, I couldn’t answer that,” Sage replied.