Posted by: Ann Treacy | February 18, 2011

Preview of County-Wide FTTH Projects in Minnesota

It was a full room for this month’s TISP meeting. There were folks from local governments, broadband providers, law offices, media resources, students and more. As Milda Hedblom pointed out in her introduction county network is a powerful resource.

We got a nice look at how counties have and are working to bring broadband to their area. I tried to take good notes…

COOK COUNTY/ARROWHEAD ELECTRIC PROJECT – Danna MacKenzie, Cook County IT Director

The goals in Cook County are reliable, resilient current communications tools. They recognize that they need public involvement. They have been working on it for 15 years. They have been balancing great need with some individuals and a notion that this wasn’t a role for government with others. In the last couple of years more businesses have become more interested in getting broadband and more aware of how inadequate access is in the area. Here are some issues that pushed the issue:

  • In 1994 – Tourism wants broadband
  • 1998 – only has 23 lines going up gunflint trail
  • 2000 – statewide move to enhanced 911 leave folks in Cook County with 7-second delay in service.
  • 2007 – Ham Lake fire – broadband not enough for emergency cell service or reverse-911 for evacuations
  • 2008 – fishing license requires broadband
  • 2008 – local business quoted $600,000 for T1 installation
  • 2009 – cut in service leaves everyone off the grid (no 911, no credit card processing…)
  • 2009 – Did a feasibility study with help from Blandin Foundation. It demonstrated need – but also illuminated potential cost. Timing was good for ARRA possibility.
  • 2009/2010 – applied for round one ARRA stimulus grant – and county went through process of 1% sales tax referendum / and 65% referendum to become municipal telecommunication provider did not pass (only 57%)

NESC was awarded funds for middle mile network (hospital, school, reservation)

Partnered with Arrowhead Electric and NESC for ARRA Round 2 funding.
2010 – Arrowhead Electric gets ARRA funding

Current Situation?

This is not a county-based project. It’s Arrowhead Electric’s project. Counties are not necessarily looking to go into telecommunications; they do it to serve a need.

Sep 2010 – Arrowhead gets $16 million in grants and loans to build 550 miles fiber network for FTTH for anyone on the grid (not everyone in Cook County is on the grid)
Partners – Pulse Broadband, walkout to be complete Deb 2011, Construction RFP in early March. They are waiting to hear from state historic registry office. Video is not included at this time. Goal is to provide service before 2012. Losing the video is a sticking issue with tourism folks – but it’s costly.

What’s Next for the County?

We try to assist projects. Provide some oversight (looking a ubiquity & redundancy) looking at how to use the network. For example offering education opportunities via Blandin’s MIRC project.

LAKE COUNTY PROJECT – Russ Conroe, former County Atty

Lake County is sparsely populated. They have a mix of providers. (Frontier, Mediacom, Qwest…) A lot of people choose to live off the grid. The area is largely underserved. The highway 61 corridor is served – but head north and it gets dark.

In March 2009 – start looking for folks to help build broadband. National Public Broadband steps in and there’s a contract to write the ARRA application. Did not get Round 1 funding. In Round 2 they added more communities up highway 1. They went from proposing to serve 11,000 people to 20,000 people. The application was successful.

Working with contractor, builder and contracts. Also working on funding issues. They said they’d provide $3.2 million through subordinate bond. That didn’t work out. The RUS was having trouble with our funding scheme.

The Commissioner had said there’d be no public money to pay off debt. But in the end they did decide to invest in the community network.

We also ran into troubles with the contractor. Many of the negotiations between the contracts were made public, because of open meeting laws. It captured the public’s interest. They ended the relationship with National Public Broadband. Very recently Jeff Roylan and Gene South [I’ve done my best spelling here] have been hired to get the project back on track.

SIBLEY COUNTY PROJECT – Mark Erickson, Winthrop City Manager/EDA Director

Mark kindly gave a nice nod to Blandin Foundation and Hiawatha Broadband.

Project area = Fairfax, Gibbon, Gaylord, New Auburn, Arlington, Green Isle, and Henderson. They will serve residents for $100/month for voice, data video. It will include 20 Mbps symmetrical service (100 Mbps within the network). The County really stepped up to say – let’s include rural areas. It means ubiquity but a huge leap in cost. (Adding rural areas nearly doubles cost to build.)
The plan is to be cash positive in 7 years. The estimated customer savings will be $9,000.

They are working on a cloud computing environment – which they feel will especially appeal to older residents.

Some assumptions

  • Add 8 employees to grow to 15
  • 30-year financial at 5.5%
  • Total capital investment of $5,600 per passing
  • Network mgmt. by third part of ownership by cities and county
  • Pre sign up campaign and hope to get 55%
  • Penetration rate by year four of 70%

What about incumbents?

  • Lobby to derail project
  • Public misinformation campaign
  • Will cite other failures
  • Will claim this will cause tax increase
  • Will say that current services are adequate
  • Will eventually match our prices.

This isn’t an anti-telecommunication project. We’d invite conversations with providers but we need to serve the whole area. We spoke to some but the conversation didn’t go far.

Next steps

  • Get buy-in from cities
  • Create Joint Power Board (will solicit competitive bids)
  • Budget for next phase
  • Pre-sell campaign
  • Financing (Revenue Bond, Capital Lease – other words non-tax routes)
  • Legal
  • Solidify engineering estimate
  • Issue an RFP for a management company to operate the business
  • Continuous education campaign

There is no assurance that this will work. We have a large rural contingency that is supportive of this effort. Some folks get broadband (as defined by 1.5 Mbps) but that’s not 20 Mbps. If people won’t support it, we won’t do it.
www.scfiber.com

Questions

Cook County
Video won’t be done in Cook County – will telephone be offered?

Yes. Arrowhead is not a municipality so that issue is gone.

Is fiber network going to be a co-op or will service be available to anyone?

We think that the people who purchase service in Grand Marias will not necessarily be co-op members?

How will it be delivered?
They will use Arrowhead pole attachments. 70 percent use poles; 30 percent is buried. The drops will go right to the house.

Was there organized opposition in the referendum vote?

There was a little bit; not like in North St. Paul. At community meetings the local telcos voiced concern.

Lake County

We should have no areas in Minnesota without access. Young people need the access.

Sibley County

70% penetration – that’s a number that sticks out. Why aren’t you counting government services to make those numbers easier?

We wanted a model that worked only on residential. (Doug Dawson did the feasibility.) If we only serve cities that penetration rate drops to 55%. We don’t know how many schools we’ll get. There’s a good co-op. OET will serve some government entities. (Maybe OET can buy from you.)

General Questions

What about Wisconsin sending money back to ARRA?

The money seems to have more to do with politics. There was an issue with that project in that most of the circuits came from AT&T. Some expansion promised was less likely due to AT&T equipment.

How optimistic are you on Sibley County?

We have towns and individuals who aren’t as optimistic. We need to figure out how to do it right. We have good people around us – some of it will go to getting the Joint Powers Board that works. People are asking good questions – and the better news is that we seem to be able to answer them.

Take rates in Sibley county – what percentage do you need in the cities?

There are about 7500 passings; all towns but two are Mediacom. We’re not sure what mix we’ll need. We’ll probably need 50-55% by year three.
We are working on local programming. Residential network (internetwork) will be 100 Mbps networks – which will be great for remote video meetings. Local calling will also be available within the county and to the Metro Area. (That is no there now.) Frontier can’t compete with video. CenturyLInk is looking at IPTV so that would be good.

That means 30 percent are happy with their service – and Sibley county has some broadband patched so there may folks who don’t want to move.

We would be happy to partner with a provider. We don’t necessarily want to build the network – but we could be helpful in promoting the service.

Frontier does serve NE Sibley County. We provide DSL to 95% of customers (6 Mbps down and 1.5 Mbps down).

Backbone and middle mile vs last mile? Fiber is a great solution for middle mile. Spectrum can be great too – especially for a public safety network.

Sibley County went with fiber because the hope is that it’s future-proof.

Cook County looked too – but the terrain and mineral content an foliage made it difficult.

Did anyone look at White Spectrum that’s coming out?

We need something we can deploy. The Spectrum is interesting but nor workable today.

The incumbents point to Windom as a municipal failure. But Windom does not consider it a failure. They could make a profit if charged more – but that’s not necessarily a goal of a municipal network.

Connect American Fund – is there any role there?

Blandin County has found that Pine, Todd, Kanabec are also interested in looking at fiber. The counties are finding that to serve the remote folks (farmers, resorts) they need to look at countywide plans.

People are finding that the providers have done what they are going to do – especially now that the stimulus money is gone. So for un-served county, they may need to look internally.

Sibley County – interesting times. The fiber is incredible and applications will grow economy. The problem is that the incumbents are stuck with legacy networks. We need to look at public-private partnerships to help incumbents build/upgrade their networks.


Responses

  1. Wow – thanks for the in depth notes (as usual). These are fascinating times. I’m alternately jealous of these folks and glad I’m not in their shoes as they make tough decisions that could substantially change the future of their regions.

    I am glad to see all the work that has gone into education in Sibley. Anyone who says they are not aware of the risks is not paying attention – these people have their eyes wide open.

  2. I think you’re right about Sibley – they’ve done their research. And I think Mark was clear that they weren’t a solution looking for a problem; they genuinely are looking for a solution to a real issue – infrastructure that will meet their growing needs and meet their needs to grow.


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