Peggy Schaffer currently serves as Executive Director of ConnectMaine. She is known and celebrated in the broadband community, a long-time champion of local partnerships, and a pioneer of many of the key concepts found in IIJA.
As Executive Director of ConnectMaine, Peggy manages the Authority’s rulemaking efforts, investment decisions and policy recommendations. Peggy was the Small Business Advocate for the Secretary of State's office, and served as the Co-chair of the Maine Broadband Coalition, a statewide group advocating for high speed broadband. Peggy was the Chief of Staff in the Senate Majority Office and the Senate President's office. Peggy also worked as the lobbyist for the Department of Economic and Community Development where she helped develop and implemented many of the State’s key economic initiatives under both King and Baldacci and was part of the team of people that created Maine’s Research and Development infrastructure.
Peggy lives in Vassalboro, Maine, and has ambitions to travel the USA in an Airstream someday.
Drew Clark: We are live.
Jase Wilson: Alright, awesome, Drew. Thank you so much. [laughter] There's a bit of a delay, so I'm gonna drop the feed, but... It's awesome. Well, everybody, welcome to the first edition of Ask Me Anything with the amazing Peggy Schaffer, who's the Executive Director of ConnectMe. Peggy, thank you so much for making time to connect with us today and for all you've done to help with connectivity in the past. I'm very excited to get to hang out with you for a little bit of time, and there's some really wonderful questions that the folks have teed up so...
Peggy Schaffer: It's a great time to be a State... It's great time to be a State in Broadband.
Jase Wilson: And you... I would argue lead in a lot of ways. You've been doing this for many years and you've been fighting the good fight, and a lot of states are sort of following in the Maine example, and that's a big part of why we're open to having this conversation with you today, Peggy, and to grill you and to ask you lots of interesting questions about what you're thinking about for broadband and connectivity, and especially community partnerships. Real quick folks, special thanks also to Drew Clark, who's on the call and who's helped to set this infrastructure up and... He's done many, hundreds of these types of events and is a master of them. This is my first one so, please forgive me and he's there, if things go to hell in a hand basket, I'm sure he'll step in and rescue us, but thank you, Drew for everything that you're doing at Broadband Breakfast and all your hard work.
Drew Clark: You're welcome and I'm happy to stay in the background, but welcome, Peggy. Welcome, Jeff. It's exciting.
Jase Wilson: Yeah, and Drew there is a child in the background, I don't know what's going on there, but...
Peggy Schaffer: Not in my background.
Jase Wilson: It's not on mine either so... Drew, is there a way to share not just the screen, but also Peggy so the folks can see Peggy as well, is that at all possible with this contraption? 'Cause we were hoping to sort of share the screen. And folks that are following along, if you're at the event page and you're logged in, if you want to ask Peggy any questions or if you wanna weigh in on questions that are asked, this is an interactive format, okay, so please do weigh in, and please also bear in mind that it's a web page and we're all here doing our best, so any smack talkers go to different forums and do your thing over there.
Jase Wilson: Well, that being said, let's jump in real fast, and Peggy, we've posted your background and some of the work that you've done for ConnectMe, we've shown that you live in Vassalboro, Maine, which is an amazing state. I've never been to your town, but heard wonderful things about it from postgres Falun. And I'd love... Now, Peggy, if you could just start us off with a quick background of a view in your career, and in particular, why are you working in connectivity? What drew you into connectivity and why are you still there? Because you've been doing some really great things for many years and...
Peggy Schaffer: So I actually come from a background of community organizing, I worked for the Girls Scouts for a while, and then from there, I organized a number of political campaigns, I think I've run about 13 political campaigns. And as a result of that, I ended up doing... Working for legislators in the State House, I once worked in the Speaker's Office and then the Senate President's office. In between there, I worked for the Department of Economic and Community Development, lobbying for the department.
Peggy Schaffer: And what sort of always motivated me was this idea of how we create a more equal society, how do we bring... How do we raise all our boats? How do we bring people together and how do we make sure people have the tools they need to be successful? And there's lots of ways you can do that. Economic development is really one of the ways states go at it, education... But when I was working for the Secretary of State's Office in Maine, I was the Small Business Advocate and I had a small internet service provider, GWI, come to one of... Come to a meeting and begin to talk about the problems they were having with particularly pole attachment, quite frankly, around connectivity.
Peggy Schaffer: And so I began to get engaged in broadband. That year we created... There was... Put forward a bill to change the ConnectMe Authority. It gave them the ability to do community planning and then created a Maine Broadband Coalition, and I was the default director, a head, unpaid, of the Maine Private Coalition for a number of years, that's very deeply engaged in how both policy pieces, how we change policy to make sure Broadband worked, as well as the importance of the community voices that you really need to make broadband work.
Peggy Schaffer: When we got a new governor, I became the director of the ConnectMe Authority in 2021. Sorry about that. In 20... Excuse me, in 2019, and so ConnectMe has been around since about 2007. We have a small amount of money, about a million dollars a year, mostly based on a fee and land line, so it's sort of a declining revenue source. And we have two basic programs, one is an infrastructure grant and one is community planning, and that's... On a million dollar budget a year with two staff, two grants, we do not really... You're not making a lot of progress. And then the pandemic happened and it was...
Jase Wilson: Oh, that whole thing.
Peggy Schaffer: That whole thing. For people in broadband, it was sort of a silver lining because the things that we have been talking about with communities about the importance of broadband and what it brings to your communities suddenly it was brought front and center. And that the pandemic, as bad as it's been, has changed the egos around broadband. It's changed community conversations, it's moved them faster, it's changed funding streams. Before, we were all fighting for a little bits of money, and between last December, Like Whatever package passed last December, up until the job sack just past this year, so in nine months, the amount of funding coming to broadband is mind-blowing, right? So the infrastructure, I mean, the package last December included 300 million dollars for Broadband Program through NTIA, which they're in the process of deciding right now, and then they all have acronyms, The American Rescue Plan included equity capital states and towns and counties, and one of the activities that could be used if you can use it for is broadband. Many, many states put money into broadband, and Maine has put about $21 million of that money into Broadband. Also in the American Rescue Plan project there's a fund called the Capital Projects Fund, which is being run for treasury, which is $10 billion now going directly to states.
Jase Wilson: It's a cartoonishly large amount of money, right?
Peggy Schaffer: Yes. Well, you know for us, for state of Maine, so we've had a million dollars a year, right?
Peggy Schaffer: In July 2020, they passed a 15 million dollar bond. First big, first big funding we ever had, and we were like, "Yay". The Capital Projects money is $128 million. So $15 million, $128 million plus the $20 million gotten from the community. So those two projects alone, we're looking in Maine at $150 million, which is 10 times more than we've ever gotten before, and we've never gotten before, we only got a year before that, so it's a significant change, and then the...
Jase Wilson: Right.
Peggy Schaffer: Jobs and infrastructure that they just signed on Monday, every state gets a guaranteed $100 million, right? And then the rest of it is dependent on how the FCC does the maps, which will probably be sometime next year, probably, more like 2023, and that will... There's a formula in the law and that dictates sort of who's gonna get the money, but if you think of it this way, $10 billion in the Capital Projects Fund, and Maine got $128 million of that, California got $550 million of it.
Peggy Schaffer: Many times at 42.5 is the next chunk coming into states, and just that's four times what we had before, and so states are probably gonna have four times more or less, four times what they have right now in the Capital Projects Fund. So for Maine, that could mean 200, 300 million dollars on top of the one. So it's a significant amount of money, right? Significant amount of money. Important thing is that it shouldn't change how we work, it should change the pace of how we work, but it shouldn't change how we work, it shouldn't change our drive to bring fiber to people's homes, it shouldn't change our interest in community planning, and community voices in these activities, all of those things need to stay in place, right? 'Cause those are the underpinning, you can't really take what we've learned throw it out the window because it's stupid, we... I mean, if we've gone learned a lot, we should just continue on these kinds of paths, but it opens up new opportunities, right? New money means new opportunities, and it's a way for states to really begin to think a little differently about how we fund these things.
Peggy Schaffer: Is there a role for private capital? Probably not everywhere, because some of these areas that we're trying to serve in states are like very rural. But is there other places where there's private capital? Either way that we can bring better service to inner city areas. I say that we said that in Maine, 'cause everybody's like city, but to the inner city areas...
Jase Wilson: Inner city Portland.
Peggy Schaffer: [0:10:34.2] ____ reception, right? Is there ways that we can do that that will...
Jase Wilson: Everywhere.
Peggy Schaffer: So those are all these challenges states are looking at on a regular basis.
Jase Wilson: Everywhere right, Peggy? I mean...
Peggy Schaffer: Yes.
Jase Wilson: You've long been a champion of communities teaming up with providers, right? And...
Peggy Schaffer: Yes.
Jase Wilson: And it makes so much sense now with your background in community organizing, and then you listened to GWI when they showed up and said, "Look we've got, we can connect people and that's what we do, that's why we're here, that's our job, but we've got these problems," and you help them solve those problems. And so this sort of like you bringing those two sides together in a really interesting way all those years ago, and sort of carrying that theme, and we see echoes of that even in the IIJA you know, and some of that by way of some of the rules that remain for Maine.
Peggy Schaffer: And there's a reason that stuff is in the IIJA, right? Because the state broadband leaders talked to their senators, and talked to their house reps, and they listened, and so a lot of the stuff that we wanna see that we'd love to see happen, and the way that we work is represented in that package, so it's just... It's a significant opportunity for states, and I will also say it's a huge shift in federal policy, right? Before all of the money mostly went through the FCC, right?
Jase Wilson: Right.
Peggy Schaffer: I think we have all have Adolf art off to thank for the FCC... For that money from the FCC to states. And I think there's gonna be a significant difference in how this money gets distributed as a result of the fact that it's going through the people who are closest to the problem which is the states.
Jase Wilson: Yes. So the NTIA, they got it and they said, no, here states and then states are like, "Well, you know there's maybe a broadband directory, broadband office." I think Maine was one of the first to establish something along the lines of the broadband authority, which is amazing. And then we're seeing a lot of folks that are, "Okay, now we're gonna line up conversations with every single community in the place," and that's so exciting, right? Like...
Peggy Schaffer: Yes.
Jase Wilson: And your idea of like communities is sort of teaming up to some extent with providers rather creating their own networks in some cases, sometimes they'll do open access, that marriage of the two sides and not like one at the expense of the other, or one sort of getting in the way of the others. It's got us really excited that there's... It's gonna be... Results in a lot better connectivity for a lot more people and a lot more places, like fiber to the farm, fiber to the forest in the Maine context. This is a really, really cool idea to see it play out, so thank you again for pushing on that.
Peggy Schaffer: It is a significant opportunity for us to really do some good, and I think that we're all committed to doing that. I know state broadband leaders were a little nervous about it 'cause it's a lot of money and a lot of responsibility, and most of our offices have very few people, but states are staffing up quick, they're staffing up quick. They're hiring people and they're looking for specific skills. They're looking for finance people to make sure we spend the money right. They're looking for grants management. They're looking for community people. So they're really... States are thinking about, "Okay, we have this money coming over the next five years, how is it we wanna manage that money and how is it we wanna go forward with that?" And so I think the states are working on it, so...
Jase Wilson: Well, that's a good lead into the next question, Peggy, and it's "How?" [chuckle] The "Why" makes sense in this sort of... The outline of "what", both sides like, "Quit your arguing and team up and get together." But then how does that work, how should providers think about engaging communities, how should communities think about, "Well, we're busy with our community and we've got other things going on, and these providers, they know what they're doing, how do we figure how to engage the right ones?" How does that work, do you have any tips for that?
Peggy Schaffer: So in Maine, how that works is that we... Communities come forward to us and they... We have a planning grant process so we give a little money out, and they begin to talk to people in the community, do surveys, they look around and see what's on the polls to figure out what the community is most interested in in terms of connectivity, and also the conversation about why, why we need broadband, what's it gonna do for our community, and how do we make sure everybody in our community gets connected, and that of course, there's three pieces to it. It's the wire running by their house, it's also the ability to afford it, and the understanding of how to use it. So those are the critical pieces that community voices bring in.
Peggy Schaffer: And usually what happens is they invite providers. They are very open. They invite every single provider to the table and say, "What is it that you would like to partner with us on? How can we help you, how can you help us? Here's what we'd like to do. We'd like universal service. How can that best happen?" And we're lucky in Maine. We have a number of providers, we have... Our providers are generally... Some of them are regional-based so they're not... If their office is in Houlton, they're not gonna go to some place far. I mean, I was... The question is, "Who's gonna roll the truck?" But people are willing to have the conversation about what it is their company can do and how they'd like to operate.
Peggy Schaffer: And so the other thing that we have going on in Maine, is that we have... Because we have a number of, I guess they call them silex, which are just internet service providers that don't have a physical footprint, they're not telecommunication companies. They're very willing and interested in different business opportunities. So they are interested in community ownership, where the community owns the network, they come in, the ISP might come in and design it and build it and then operate on it. They might operate in an open access place, or they might... It's like, "We do not wanna own this infrastructure." There are providers who are like, "No problem. We'll be happy to own it." And so there's a very interesting flexible business model that many of our small ISPs are very interested in.
Jase Wilson: Okay. So it kind of varies and then you've seen a couple of successful examples, and I've seen an artifact coming out of a lot of really interesting projects in Maine that's shaped like a letter of support from the community saying, "We endorse this provider or this network or... "
Peggy Schaffer: Yeah, we have been lucky. We've never, so far... Well, I should say we had one case, but generally, there's a lot to do in Maine, right. There's really a lot of different areas that people can work on. We haven't had people come... We've not had two proposals come in through the same area, it just doesn't happen. It might now, that there's more money, which is one of the evidences that the community voices are important, because if the community is selecting the provider, then that's the one that should go to that area, it isn't the who knows [0:17:52.8] ____.
Jase Wilson: We agree.
Peggy Schaffer: "I'm gonna fix it for you." And so that community conversation isn't just about liking the provider and understanding them, it's understanding that they have a commitment to that community to run and maintain that network and to be responsive to their customers. And so those are all really important pieces. Customer services is a huge deal in this industry. It's not done very well, but it's a huge deal in this industry. And for communities...
Jase Wilson: You're kidding, right?
Peggy Schaffer: They have that personal relationship with their provider that they can depend their that customer service.
Jase Wilson: I think the industry with the lowest net promoter score of all industries, and that's like saying something because it's behind banks and dentists and... Those folks do really valuable services, but...
Peggy Schaffer: Somebody told me once that everybody has the God-given right to hate their internet service provider.
Jase Wilson: But there's some really skilled new providers that are coming up that see that and say, "That's the opportunity. To be the killer app that actually care deeply about the customer and try to solve their problems."
Peggy Schaffer: It's also the opportunity to separate yourself from your competitors...
Jase Wilson: Spot on.
Peggy Schaffer: Based on quality of service.
Jase Wilson: Exactly, Peggy.
Peggy Schaffer: In both speed and latency and how you treat them.
Jase Wilson: Yeah, so this is exactly why it's so cool to get to talk to you about this. You've seen it from so many angles and you've been thinking about it for many years longer than most of the other states that are now tasked with like... [chuckle] What...
Peggy Schaffer: At all.
Jase Wilson: Well, what the hell are they gonna do? I know, but in the sense that you've been at it for a few years of when other folks maybe weren't thinking about it, and we get to learn from you on these points, but...
Peggy Schaffer: Yeah, there are other really interesting things happening across the country, so we do not, in Maine, have electrical co-ops, it's just you know... We have one, but we don't really... So that is a model that's working in a lot of states, whether you have the added local ownership of the co-op, who then expands their network into broadband. So that is a model that's working across the country, rural electrical co-ops are there, and that's a very interesting model. You have California who is spending what is it? $7 billion. They're building state-owned middle-mile. They're building last-mile. California is always on the edge, right? They're always on the cutting edge.
Jase Wilson: Yeah.
Peggy Schaffer: And so that's a really exciting model. And then there's tiny states like Vermont, who have picked a path, which is the CUDs... I forget exactly what U stands for, but they're communications district, and they're sort of like a water-sewer district and the state...
Jase Wilson: The utility.
Peggy Schaffer: And the state has said this is our model. New towns, if you wanna get connected, you need to join a CUD and we're gonna help you with all the feasibility studies and all that kind of stuff but you need to pick your own partner, but here's how it's gonna work, and in Vermont, it's worked very well, I mean they like it, and it's caused... They have 34 towns in the Northeast Kingdom joined, and these are rural towns, joined together to create a CUD to bring broadband to everybody, and so there's different models out there, but the important piece about community ownership, whether it's through a co-op or a CUD or in our case, utility district or municipally owned is, it has to be part of the equation. It's not for everybody, but it needs to be part of your conversation.
Jase Wilson: Okay, this is awesome, Peggy, thank you. And you know, folks, they're tuning in, it's a big part of the upcoming programs, and you know you gotta get with communities, you can't ignore the communities, and you know, we already think of it as something like an antiincumbent mechanism where incumbents had many decades and many billions of prior programs that could have connected all the folks, and it would have done away with the need for another set of programs, like you said, Peggy, earlier in the call like this... These numbers are very large, they're 10x in the case of the programs you mentioned, and probably 10x still coming from the IJA funding and that antiincumbent mechanism is, well, you know, you kind of screwed a lot of people over... And it's gonna be really hard for you to get a letter of support from this community.
Jase Wilson: So thank you for baking that into the model and all you did to champion that and help folks understand because we see your work and influence in what these programs are doing with communities, and it brings up another thing that I really wanna talk to you about, Peggy. You touched on something in a prior convo we had that kind of blew my mind, Maine you were thinking about, you wanna make the most of the money, you know that you can use the money to sort of incent the private capital to come off the sidelines and maybe to steer the private capital in some ways in ways that you want the money to go to the areas where it's gonna be the hardest to connect, it's gonna be the most advantageous to get the people there connected, and you describe something like a funding algorithm almost like where you're thinking about it in the sense that there's gonna be a match requirement, and you know that you'll be able to adjust those levers when it's time to adjust them, and then you had an interesting idea of... Well, in areas where we want the funding to flow, we could do something like either reduce the match or hire a match in other places, and it kind of tilted that way, so that the economics of it makes sense. And I was wondering if you could talk a little bit more about that and the mechanics of it.
Peggy Schaffer: Sure. So, this is a significant change to our grant program, and it will be in effect for the next round of our, last chunk of bond money, and what we are doing is we are essentially... So we've stolen it from a whole bunch of places, right? So the NTIA broadband infrastructure thing, they had essentially priorities, so they had priorities where they want the funding to go, and some of those were set by Congress, so we took the idea of, okay, this is an interesting idea. Priorities, where do we want the funding to go, and in Maine, we want the funding to go to the least best served, so the people who have got the worst service, but we do totally understand the way this network and most networks are wired is that there's... You have to go through the willis to get to the wags.
Jase Wilson: Hey, wait, this is maybe the mannerism...
Peggy Schaffer: Right, right.
Jase Wilson: Can we...
Peggy Schaffer: Some not so badly served to get to the really badly served.
Jase Wilson: I collect, I collect mannerism, so I wrote it in my journal for mannerisms, willis and wags, you have to go through the willis to get to the wags.
Peggy Schaffer: And so you wanna build a network and you wanna make sure you're bring universal service, and it's not really fair to go to the people with less than 25-3 and then the people before that who have maybe 50-10 or maybe just better... Just slightly better to leave them out of it. So, what we're doing is we... Our grant, we'll pay for all of that, we'll pay for the whole building, but we are going to wait in your grant application heavier, the more locations you're serving that are less than 25-3, so we're gonna weight it on a per-location basis, so it's not by grant, it's by per location, so we look at... When we boil this down and look at it, your score is gonna be based on the number of locations to serve and the cost per location, but that cost is weighted so that you're gonna get a higher score if you serve more people with worse service and you're gonna get a higher score if you're improving service by a lot, right?
Peggy Schaffer: So if you're going... So the quality of service you're bringing is gonna give you a better score, and also we are weighting a little heavier, the community contribution to this activity, so there's levers in there to encourage what we would like to have happen on a policy basis, so it's not just come in with your grant, we're gonna look at what it costs per pass and then if you have the biggest match, we're gonna give you the money, 'cause what we've discovered is...
Jase Wilson: That's nice.
Peggy Schaffer: That leaves orphan sometimes and orphans are really hard to get back to, so we wanna make sure we don't leave orphans. And the other thing it does is it really doesn't allow you to emphasise where you really want the most of the state or federal funding to go, which is the people with the worst service. And so it allows us to really make sure that our funding is flowing to the people with the worst service first, and then, but not leaving people out along the line. It isn't one or the other, we understand it's a flow. And so our scoring mechanism recognises that.
Jase Wilson: Absolutely wonderful. Peggy, thank you. I got another question for you too, and it's not quite a follow on to that, but you brought up a Mainerism, and I'm in the business of collecting mannerisms, I think that there's some of the great turns of speech in the history of the English language, mostly English language. And so we're going to deviate a bit 'cause you're a Mainer for life right, like you grew up in Maine.
Peggy Schaffer: No, I didn't. I grew up in Connecticut.
Jase Wilson: Connecticut. Connecticut. Then you moved to Maine. Maine drew you in. What drew you to Maine?
Peggy Schaffer: Went to school and worked in Vermont, and then I came to Maine.
Jase Wilson: Got you. Well, since you've been there enough time that you know about Whoopie pies. This is a very serious question, and I need to know, Peggy. Whoopie pies, Do Mainers actually eat Whoopie pies, or is that like a tourist trap trick, funny joke on people that visit Maine?
Peggy Schaffer: No, it's a true thing. And actually, we have a whole industry that makes them. There's a whole industry sector that makes Whoopie pies. We have shops, we have shops and all they make is Whoopie pies. And the history on them is that essentially it's two globs of chocolate cake with a lot of frosting in between. And the frosting can be, I don't know, vanilla cream or marshmallow. And the folklore history is that, you had cake leftover and I know that actually happens, we have cake leftover, instead of throwing it out, you make these globs. And so Whoopie pies are about like this. They're not small.
Jase Wilson: No.
Peggy Schaffer: This much filling to them. So they're a significant sweet hit. And now I'm not a big fan of Whoopie pies. I'm not a big fan of chocolate. I'm not a big fan of [0:28:33.4] ____ icing. But now we make them in lots and lots of flavours. So they make them in strawberry and they make them in pumpkin, and they put cream cheese filling in the middle, or they make them in red velvet. There is a whole industry in Maine around Whoopie pies.
Jase Wilson: I was concerned Peggy, that maybe there is a big Whoopie pies industry lobby and maybe you were like in their pocket or something, and you were talking all these glorious things about Whoopie pies but you're actually not a fan yourself, but you understand some people like them. And thanks for the context.
Peggy Schaffer: They do like them. It's actually officially honest to God, the state treat.
Jase Wilson: Okay. So it's recognised in Maine as an actual thing, and it's not just a funny joke that's like, "Hey, look at that, this guy's from Missouri. Hey check out these Whoopie pies." Alright.
Peggy Schaffer: It's a real thing. It's the state treat, can't be the state dessert. 'cause that's blueberry pie, but it's the state treat.
Jase Wilson: Now it sounds really good. Moving on from desserts. Question from TJ York, Will Maine's grant definitions of broadband change to harmonise with the definition in IIJA? And as a follow-up I think is, Are there other state grant funding definitions that may differ from IIJA definitions that grantees should be aware of? That's a good set of questions.
Peggy Schaffer: It's a good set of questions. I will say this to overview it, these federal funds all of them come with their own definitions of what the federal grant is. And they differ from program to program just to make it that much more complicated right. So the American Rescue Plan funding, that is 25-3ish which is, you should be going to places that have less than 25-3 or serving pieces that have less than 25-3. But not everybody has to be less than 25-3. So those final rules are not out yet. But that's what the interim final rules, is that really a thing, that's what they call it. And the frequently asked questions, that's the piece there. In the Capital Projects Fund, they look at 100 over 20 as unserved.
Jase Wilson: Yeah. See, every little definition and... It's not necessarily that Maine has to adjust its thinking about it to IIJA, but people shouldn't be aware that...
Peggy Schaffer: Right. And the IIJA, whatever it is, they're gonna have another [0:31:06.1] ____.
Jase Wilson: BEAD. I think it's BEAD now.
Peggy Schaffer: BEAD something or other programs through NTIA. That program, the way that is written is that, the first priority is 25-3. And you have to say you served all of the 25-3 in your state, which is a problem, for rural states, serving everybody is a problem. So you have to serve all 25-3 before you can go to the next tier, which is 100 over 20. So it does allow as you fix the worst serve, it does allow you to move to the least worst serve.
Peggy Schaffer: But I think that's going to be the trick in the NTIA Rulemaking, is recognising that sometimes you need to... Like I said, sometimes you need to serve the people who have got service of 50-10 or 120 to get to the other people and it really has to be a network. So that'll be the trick of how NTIA works that federal language. And states are wise because that funding requires a 25% match to save their micro rescue plan money and maybe some of their capital projects fund money.
Jase Wilson: Oh, interesting. They can use that right for the match check component.
Peggy Schaffer: Yes they can use that. It's actually in the legislation then you can use that. And the capital projects fund money will pay for those locations that are 100 over 20 if the infrastructure money will only pay for the 25-3. So we are really gonna have to, all of us are really going to think about how we use these funds, how we layer them in a way that gets to where we want to go.
Jase Wilson: Oh, that is spot on, Peggy. And that is a really natural segue into the next question from Ahmed, he says... He asks, What is the best way for applicants to keep track of who's been awarded the money, and I'm assuming he's meaning also from prior programs and then where they're planning to deploy networks, right, because at this point, you've got... What do you have, you have... There's still some work to be done on CAF-2, RDOF is starting to really come out in tranches, and that's $9 billion total, and then you've got ARP that you mentioned, and then you've got the treasury program that you mentioned, and then the program that comes along and is more than the sum of all of those other programs combined. How do you keep track?
Peggy Schaffer: So most states... So most states are not going to build over RDOF areas, there's federal funding there, and they really don't have any interest in building them over. There's a time frame for that. That's gonna happen... Most states will be looking at how we enhance that RDOF money, so what is... So RDOF serves the very edges, right. How do we make... How we create a project that uses that RDOF money to serve the very edges, but then serves the people who are not in RDOF zone, but still have really bad service.
Jase Wilson: Right.
Peggy Schaffer: So states are gonna be trying to think about that with the RDOF recipients. And in our state, it's pretty easy 'cause we have essentially two who are gonna do wired service and they know us, we know them, it's a small state, so but in other state's a little... It's a little trickier, states do put all of their grant... We're public, we are public. All of our grant applications, not the applications, but all of our grant awards go up on our website, so you can look and see where we have awarded funds, and so that tells you sort of where the money is going.
Peggy Schaffer: And some of those networks may not be built, but it... You know that that funding has been awarded to that area, the... I don't think anything's gonna be built out per se with the American Rescue Plan money, that won't also use the Capital Projects Fund money or be part of a plan to use that, I think that's... These are... They come in separate tranches, but at the state level, we're not really thinking of them that way, with the exception of that they have maybe different requirements, and so we may have to use this little pot for this little thing, and then that makes their neighbor, maybe use the other pot. So, for us, it's more about how we blend the financing, and I think that's gonna get through throughout the states is that where people are thinking about these funds in total and how we work them together to get everything done.
Jase Wilson: Yeah, that's a fascinating point, Peggy. And you've always been good at in Maine... In your program, not just, here's a grant, you've got bonding authority, and they're resurrecting private activity bonds that can be used for broadband, for lack of a better term. You can see that there's gonna be not just the money from these programs, but also there's going to be a sort of catalysing effect on additional money, and you've built a nice algorithm to help sort of incent private sources and public sources that are part of the local match to flow into places that they've needed this help of it, if we sit down and they do the math, we look at the broadband money, state directory, there's 120-something million coming from the treasury program, and then there's... Our estimate is something in the range of 300 something million, and you can see easily, but it's under... Just get levered at you could see a billion, maybe $2 billion worth of direct capital injection into the state of Maine, and it's all for the purpose of sort of the banner of solving the problem of broadband connectivity and connect all the people, but that's a pretty significant thing. It's...
Jase Wilson: It is. It is. And I think what all the states are sort of grappling with, 'cause all of us have been sort of dealing with tiny bits of money, is the significance of this change and changing our mind shift, really our mind shift from one of scarcity, right? Don't really build fiber because we don't really have enough money, so you should build something to one of abundance. What is it you really want? This is infrastructure that's gonna be 50 years in your community. Think of it as a 50-year infrastructure. And build something that's going to... The electronics will switch out, but build basic infrastructure that's gonna be there for 50 years. And the other thing is really think about that when you think about who owns the network, who's gonna be around in 20... I don't know, who is gonna be around in 20 years, but I do know towns are gonna be around in 20 years, right. They've already been, we... Towns in Maine have been around for 200 years, so that is a... It's an interesting sort of way to think about if this is infrastructure that's gonna last this long, where is the best place for that infrastructure, the ownership of that infrastructure to be? And where is the community's ability to... The importance of the community as an economic development tool, as a social tool, as a tool of equality, where is that best seeded?
Peggy Schaffer: And I think those are the questions that communities are... Have always been battling with, and for us in Maine, the issue has always been around, we as a community, don't wanna borrow, we don't wanna... Our towns buy fire trucks in cash, we save up four years and buy a fire truck. If $350,000 of fire trucks. And so, we don't like to borrow... I don't know that we're, that any other states or any other... Or any different than us. Our towns are very conservative about their property tax base, and so this new money can change this conversation because before it's been about... We're not paying for it, and now it's about, Well, we don't have to pay for it all, we can pay for pieces of it and other funding will help, and there is a role for equity capital in there, I think we're all trying to think about what that might be and where it might go, right? I don't think equity capital, considering they want a pay-back, it's gonna go to the most rural areas.
Peggy Schaffer: When you're serving less than five homes per mile or maybe less than 10 homes per mile. It's really hard to get a payback on that, but are there ways that you can combine equity funds, federal funds, town funds, take rates, revenue streams, so that you can do a universal bill, and the equity is on the end that, where the federal funds won't go, which is people that are served, and the federal funds are where the equity won't go, and so I think there's lots of opportunities to think about this, it's a complicated thought process.
Peggy Schaffer: But there are other people like you guys and others who are able to help communities figure this stuff out. And I'm always surprised at who's in our communities, right? I mean, we were on these... We have these small community planning grants, these small community planning... And people pop up. And you're like, they live there? And then, they just some really talented people who live in our communities. They all don't live in New York City. They don't.
Jase Wilson: No.
Peggy Schaffer: They're all over the place. And these kinds of activities, if a community plan, broadband community brings out people with really interesting skills that come and bring that skill to this problem. So, it's a very interesting and a very exciting opportunity for communities to get to know each other and to use the talent that's actually embedded already in their community.
Jase Wilson: And maybe to some extent to Capital too, maybe there are ways to bring in that model together.
Peggy Schaffer: There are types of communities who've gotten... Who have used private investment for residents.
Jase Wilson: Yeah. Local folks pulling their resources. Yeah. That's a wonderful American tradition. You're absolutely right, Peggy. And I think you're even more right now than you were if you said that same thing two years ago because a lot of folks have gone back home to new places. They've sought new frontiers. And then, they got there and they realized that the broadband is total crap. [chuckle] So, this is perfect timing.
Peggy Schaffer: I get those calls everyday, everyday. [laughter] I just bought a house in the middle of nowhere. And I don't have broadband. And you think, " Did you expect to have broadband there?" [laughter]
Jase Wilson: I got another question from the not so serious questions. And it's another question regarding a Mainers preference on Maine things. And it's... Would you say Maine Brilliant Company or Allagash? And I'm asking for a friend.
Peggy Schaffer: Again, just like what we post. I'm not a big beer fan, but I will say Allagash White is a fabulous beer.
Jase Wilson: Indeed it is, that...
Peggy Schaffer: There is nothing better on an afternoon, after you've gone for a hike to come back and have a glass of that.
Jase Wilson: Oh, a glass? Interesting. Now, there's another preference. We have several talented engineers are ready to... I think they drink Allagash as a sort of form hydration.
Peggy Schaffer: There is a lot of good beer in Maine. We have a whole cottage industry of local breweries who is...
Jase Wilson: That you do. Talented. [chuckle]
Peggy Schaffer: Who's beer doesn't go any further other than their local brewery. Now, there's a brewery guild. And they do share taps. So, one brewery will have a tap from somewhere else, but there is a huge... It's a huge growing industry in Maine, the brewery. We have a beer tour. We have a map of beer tour, where you can go and visit the breweries there in Maine.
Jase Wilson: Good deal. Well, thank you. [chuckle] This next question is from Sarah. And she's citing an article that in a year ago, you said that Maine is working to create its own broadband mapping database so we can map the beer journey and where to go for breweries, but can we yet map... Is there an update? She asks is there an update on those efforts and how far have you gotten? And what obstacles that you encounter in that effort.
Peggy Schaffer: So, data is always an obstacle, right? So, we have worked to try to get better data from providers. And that's somewhat improving and some of them, it's not improving. Some people give us better data than others. But so we last year, in January, put out a RFP and got a hired VETRO Fiber, which is a Maine-based company to do a new thing for them. They have always... They've been working with ISPs for a long time and developing a really interesting platform for ISPs to both figure out how to build, the cost of building, and then afterwards to sort of monitor their network. And so, they came to us and said, "We have this idea. We kind of like to figure out if we can use our platform to help states." And we said, "Okay." And so, we put an RFP and they were the only bidder 'cause it was pretty complicated. And they have been building this broadband intelligence platform for us.
Jase Wilson: Nice.
Peggy Schaffer: And I will say so, we put in an NTIA grant. And we had a very short window, right? A very short window of applications. And we went to... We did two things. One, we did a request for information. So, providers came to us and said, "I'd like to build out this area. This is sort of what I think it's gonna cost." And then, we went to VETRO and said, "Okay, so here are the priorities of NTIA. Overlay them over the state, and let us figure out how we can score best in the NTIA score. What areas score best for us to get a grant." And so, we use those two processes. We picked some area... NTIA they had a thing, they were at the counties had to be less than 50,000. And so, I had some very rural areas that I had to tell them because they were on the edge of a big county, like they were in Piscataquis County, which is mostly in Bangor, right? And there's a lot of places that are in the middle of nowhere in Piscataquis County, but the county is more than 50,000 people. So, and to tell people in very rural areas, "You're too urban." Which is an odd conversation.
Peggy Schaffer: We... So, we picked areas based on the NTIA criteria, which VETRO helped us put into a map. And then, what the NTIA also asked us to do was to serve unserved location within traditionally served census blocks. So, census blocks at the FCC said, "Sir... "
Jase Wilson: Interesting...
Peggy Schaffer: They said deconstruct that, go in there, and figure out if there are locations within that service, within that census block that are un-served that can be part of this grant. And so, we pick the areas that they like, the general areas. And then, we actually... Then, we deconstructed those. We use the VETRO data. We have some consequence data in there. We have some community planning data in there. And we have that providers on the ground knowledge in there. And so, we deconstructed those census blocks and went in and picked out the areas that were un-served in those census blocks and put them into our grant applications. So, it was really useful for that and has been useful since. We've gotten a couple of challenges. We've had a couple of requests for more information. And we've been using the VETRO platform the whole time, to sort of identify...
Peggy Schaffer: Why we think our data is right? What is our methodology behind our data? All of that kind of stuff. So that has been central to this NTIA grant, and that's just one piece. Our next round of grants, we are using those, all that data and defining areas in the state that are eligible for grants. So before we would just like come in and if you're un-served we'll serve you now. We're saying, "Okay, here is what we think is what we think is eligible in this state. Here's what eligible for grants you gonna draw out your stuff on VETRO fiber map, which will have through our... Have it so that applicants can get into that platform, draw what you're gonna serve, make you serve a 100% of that area, right? If you're picking an area, you're gonna serve every location in that area, that's one way we're sort of not leaving orphans, and then we can look... We can... One of the things the VETRO does is to look at the cost so we can compare with the providers saying versus what the probable costs are gonna be. There's a whole number of things that we can do, so that's just... That's sort of on that level. It's also kind of potentially allow us to be proactive to really think about where is it we should go, because we can layer more information in here, right?
Peggy Schaffer: So we've census data in there, we have... We can layer more information in there around maybe it's telehealth or maybe it's education, so as we build it, we can layer your information in there and then really begin to think smartly, especially now we have 300 million dollars smartly about where is it that our priorities are as a state. Where are our policy in our economic development and our community development priorities as a state, and how do we make sure those areas get covered.
Jase Wilson: That was fantastic, Peggy. That's good to hear it.
Peggy Schaffer: The VETRO staff. Unbelievable. You know...
Jase Wilson: Yes, they are awesome people.
Peggy Schaffer: I don't know that much about mapping, like nothing, right. And first of I can use this platform like easy I know how to do it, right, it's totally amazing, but more than that, when we talk with them about sort of have these big kind of esoteric conversations about what they'd like to do, they sort of think. "Okay, well, we can do that, we'll re-adjust this, and we'll develop a new...
Jase Wilson: Awesome.
Peggy Schaffer: A new company will do this and we'll pull this down from here, and I think we can get that data over there. And so they're anticipatory of what we need and how they can... How this database is gonna help us do what we wanna do. Which is really phenomenal. It's really phenomenal to work with somebody who understands the field and understands where you're coming from and tries to figure out how to make their product work for you, so.
Jase Wilson: That's spectacular, that's an outstanding company, and that's great that you're partnering with them to offer something that I think most states are gonna be a little envious of you know. So that's really cool to hear, and especially at the sub-census block level, because that's a...
Peggy Schaffer: That's [0:49:17.5] ____ blow the census parts... I don't know, You blow them part.
Jase Wilson: That could be a lot of areas, so.
Peggy Schaffer: Putting back together? It's really pretty amazing.
Jase Wilson: Well, yeah, we have a question from Zoe, and it's a little more technical and it's "Can coalitions apply for both federal and state funding for one project? How would they do that and where can they get guidance on doing such a thing?
Peggy Schaffer: It really will depend on the state, how they're doing it. In Maine, we are sort of running out of strictly state money, so our bond money is up this next time, and then we're sort of out of sure state money for infrastructure, we're gonna continue our state... The assessment that we have is gonna be mostly bringing to use for planning and helping build up the platform to help communities come out, so that's... But every state's a little different in how they're doing it, but most states are gonna allow you to... They're gonna look at the... This is my guess, most states are gonna look at their funding, federal funding and state funding and combine them together to make a pot and so it won't... I don't think... This isn't like the FCC where it's a different organization, so you're applying for a state grant here and you're trying to get money from the FCC, this is all in one pot, in one entity, which is the state agency that's pushing this through, and so I know it's when states talk about how much money they have. They blend all of them. They're not saying, "We have this much money from this part of this much money from this part, they're saying we have 300 million dollars of funding for broadband, and so that's a blend of their funds of the federal funds of the new federal funds. So states are blending these funds in a way to make sure that people get served.
Jase Wilson: Excellent, so it's kind of already happening actually to some extent Zoe, and they give rules for that. So another question is from Justin Perkins, and he asked, "Peggy, thank you for offering your knowledge with the community, could you talk more about the role of private capital in broadband grants." And you touched on this a little bit, right with the matched capital. Can you talk a little bit more about the role of private capital and broadband grants and funding broadband infrastructure?
Peggy Schaffer: We have not seen a lot of that yet, anywhere in really except it... Well, let me pause on that, unless you're talking about private capital from the ISP, but so if you're talking about the ISP putting in part of their own money, that is a private capital piece. So we have seen that, but capital that's not from an ISP, it's like from the rich people, right, whoever... That... The caveat on private capital who want it back, right, so that's... They want back, and so... With a return. And so that is gonna be the tricky piece in this, how we all figure out how to serve these really rural areas which are really expensive and don't necessarily have a return on investment and get private capital in and if private capital is patient enough, meaning they're willing to wait 10 or so years, then there is gonna be a payback on it. Well, I don't know by how much, but they'll be a payback on it, so a lot of it will depend on... There's some... The people in Harvard are thinking about this have been thinking about this, and they really think that there is a patient capital that traditionally goes to some level of infrastructure around whether in roads or... That can also be used for broadband, and so that is... That I think is a new role and.
Peggy Schaffer: It hasn't happened yet, because we haven't had a lot of money being dumped into broadband, but now that we are...
Jase Wilson: Right.
Peggy Schaffer: I think... Opportunities...
Jase Wilson: That's a great point, Peggy, it's historically not been very big and it's happened in pockets, anecdotally, on case by case basis and it's heavily been through private equity, looking to purchase parts of private operators and this new money that's coming in it requires, right? That there's match capital and you had a really wonderful thought earlier Peggy about the idea of leveraging and using some of the existing money from ARP and potentially some, art off winners that can use, our prior art off funding as the source of match capital to unlock grants. But you're right, that it's a very different landscape from what has been historically...
Peggy Schaffer: And you know, there are... So there's sort of two pieces to it, right? So there's a potentially private capital that might come into a project, right? So it may be a community project, but it's like geographic area, we're gonna serve this area, and this piece of private capital might play a role in that. There's also private capital to support the internet service providers in how they're going to expand. And that's sort of a different, that's a traditional, so of speak, investor role in a company.
Jase Wilson: Right.
Peggy Schaffer: And we've had a couple of those, CCI's had, which is Consolidated Communications, sorry, has had a pretty significant private capital investment, that has changed dramatically how they think about their service. And so they're gonna use that private capital to build out in areas... Improve service in areas that are pretty dense.
Jase Wilson: Fantastic.
Peggy Schaffer: And, OTELCO, which is another regional partner in Maine, has some private capital and they are actually building out in areas that are pretty dense. So the good news on all of that is there are places where federal money's not gonna go, places that have a pretty big density and a pretty good service, but maybe not fiber, that this private capital encourages some of those incumbent providers to really upgrade their network and bring much better service to those areas that are pretty well served. And that's good, because you potentially have competition, which can drive down cost. And you're really upgrading the service in what actually is in most states, the economic centers, right? The economic engines of the states are really the urban... And more urban areas.
Jase Wilson: Oh, wonderful, Peggy. So we have a couple more questions. And we also have a couple more minutes. So I'm just gonna go through and rattle a couple of them off real fast. All right? You already mentioned, there aren't that many Electric Co-Ops in Maine, but in other states, what role could Electric Co-Ops play in implementing an IIJA? Because you touched on the benefits of the co-ops and we agree with you.
Peggy Schaffer: So the co-ops in many states, the electrical co-ops have been the ones like in Tennessee, they're the ones that are expanding service in Tennessee, and they're perfect for it, right? Because they have a customer base, they have poles, they run the electricity to that...
Jase Wilson: The poles.
Peggy Schaffer: The poles. They own the poles...
Jase Wilson: You touched on that earlier, right? That was one of the problems that you're helping to solve when GWI showed up and said, right of way.
Peggy Schaffer: And so they... And plus they need broadband if they're gonna smarten their grid, right? So it's like, "Wait, if we're gonna need broadband, if we're gonna need a couple of strands of fiber to monitor our grid better. Let's put in more strands in that and serve those same customers we're serving with electricity with broadband, is a different business. Broadband is a different business than electricity. But the basic infrastructure that they own is there, right? And so they're just... It's adding on a different layer of businesses, adding an on the ISP or they could contract out and...
Jase Wilson: I like the layer model. That's really cool. And we agree Peggy and we kind of see... We think of as like a pole utility future, we see a trend of energy providers that are becoming information providers and it's very natural. So that's good. We're run out of time. We got one minute left. And I got one last question for you, Peggy because I noticed in your bio that, it says that you have Airstream ambitions and so I'm curious to hear if you had an Airstream, where would you go?
Peggy Schaffer: So I don't own an Airstream. I owned a 1972 Shasta compact, which is a 13 by 8 to little tiny... We call it the pea pod.
Jase Wilson: I'm Googling it. Shasta the Compact. I'm looking it up...
Peggy Schaffer: But if... I'm not sure that... I'm a state employee, so I'm not sure we're gonna be able to afford an Airstream, right? But you know there's some really beautiful places in this country. Maine is a really beautiful place but there's some really beautiful places in this country that are wide open. Out west, down south...
Jase Wilson: You can visit...
Peggy Schaffer: That I would love to visit. I would just love to visit, the National Parks are a treasure and I would love to go see them.
Jase Wilson: Well, swing by in your Shasta or your Airstream if you're coming to California and Peggy and we're out of time but, this has been awesome to hang out with you. And I wanna thank you again, Peggy for... Not only for sharing your time with us today and your knowledge with us, but also the... All the important work that you've been doing over the years to help bridge communities with providers and making things happen in Maine. So thank you again.
Peggy Schaffer: You are welcome, and thanks for having me.
Jase Wilson: Yeah, it was really wonderful, Peggy you have a wonderful rest of your day.
Peggy Schaffer: Right, you too