Supreme Court says States can tax online purchases

USA Today  reports…

A closely divided Supreme Court upended the  nation’s Internet marketplace Thursday, ruling that states can collect sales taxes from online retailers.

The decision, which overturns an Supreme Court precedent, will boost state revenues at the expense of consumers and sellers who have avoided sales taxes in the past. But the justices did not specify what types of exceptions states may impose to limit the burden on small businesses.

Justice Anthony Kennedy wrote the 5-4 decision, jettisoning the court’s longstanding rule that states cannot require companies without a physical presence to collect sales taxes. He was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch.

Reactions were mixed…

Reaction to the high court’s ruling was mixed. State government groups hailed it as a boon for their revenue base, as well as a playing-field equalizer. But some lawmakers in Congress vowed revenge.

“The Supreme Court has given the green light for states to establish an underground, nationwide, privatized tax-collecting bureaucracy,” said Sen. Ron Wyden, a Democrat whose state of Oregon has no sales tax.

Although it seems small businesses may feel it most…

“The burden will fall disproportionately on small businesses,” Roberts said. “The court’s decision today will surely have the effect of dampening opportunities for commerce in a broad range of new markets.”

SouthernMinn’s take on the Farm Foundation Broadband Listening Session

The Faribault Daily News (part of the SouthernMinn family of newspapers) reports on the broadband listening session I attended earlier this week…

Jannine Miller, the senior advisor for Rural Infrastructure for the USDA, was the Trump Administration representative. She spoke on behalf of Secretary of Agriculture Sonny Perdue.

Cullman said Miller first brought the idea of talking about e-connectivity and broadband to the Farm Foundation.

“The upper Midwest and Minnesota was the first place they wanted to come,” she said.

Besides making Minnesota a priority, Miller said Perdue has made rural broadband a priority in general. She hoped to get on-the-ground feedback from farmers, business owners and residents alike.

“It’s exciting to be out amongst real folks,” she said. “It’s important to understand aspects on the ground that we don’t see inside the beltway.”

Broadband became a priority because it was integral to other priorities…

While rural broadband became a priority, Miller said it wasn’t the initial focus. Instead, Perdue sought his “Rural Prosperity” plan of strengthening workforce, innovation and quality of life in rural areas.

Broadband just happened to touch all three.

Whether it’s kids being able to access schoolwork, telemedicine, running a business or precision agriculture, Miller saw a great deal of utility in broadband internet expansion in places like Minnesota, but saw one major failure in the industry.

Federal broadband funding alone isn’t enough for Minnesota rural communities to meet state goals, finds new report

A press release from the Blandin Foundation about a new report written by Bill Coleman on the implementation of CAF 2 funded networks in two Minnesota communities…

A new Blandin Foundation report finds that telecommunications companies relying only on Federal Communications Commission’s Connect America Fund (CAF II) to build broadband networks in rural Minnesota will not equip residents with speeds that meet the state’s broadband goals. The paper, “Impact of CAF II-funded Networks: Lessons Learned from Two Rural Minnesota Exchanges Left Underserved,” explores the effects federal broadband investments are having in Lindstrom and Braham, MN.

The CAF II program is designed to spur broadband development in unserved, high-cost rural areas. The program will infuse $2 billion into broadband projects that make service of at least 10 megabits per second (mbps) download and 1 mbps upload available to more than 3.6 million homes and businesses across America by 2020. To date, four companies (CenturyLink, Consolidated Communications, Frontier Communications, and Windstream Communications) in rural Minnesota have received $85.6 million to bring Internet service to 170,355 rural homes and businesses.

Using GIS base maps and a GPS-enabled camera, lead researcher Bill Coleman of Mahtomedi-based Community Technology Advisors, conducted field research to identify CAF II-funded broadband equipment in two rural Minnesota communities, Lindstrom and Braham, MN.

After mapping available speeds to end customers based on their distance from the broadband-fed equipment, Coleman found that, even after CAF II investment, the majority of land within these two exchanges will have access to speeds less that Minnesota’s 2022 state broadband goal of 25/3 mbps. These improvements will fall severely short of Minnesota’s 2026 goal of 100/20 mbps.

“Minnesota has set ambitious broadband speed goals that position our communities for future success,” said Bernadine Joselyn, director of public policy and engagement at Blandin Foundation. “It’s important that decision makers know that, without weaving together local, state and federal resources, CAF II-funded projects will be inadequate to support most broadband-based economic and community development. This will hold rural communities back from reaching the potential they imagine for themselves.”

Minnesota can look to examples of communities that have partnered with Internet providers to combine local, state and federal resources to finance and build networks to offer faster service than CAF II-funded networks alone.

Fish Lake Township, located in Chisago County, rallied community residents to support a $1.23 million bond for broadband projects. They combined local money with a $1.8 million Border to Border Broadband Grant from the Minnesota Department of Employment and Economic Development and $1.5 million in CAF II funding to build a world-class, fiber-to-the-home network.

“There is a way forward for communities to get the network they want, but it will take collaboration at all levels,” said Joselyn. “Reaching Minnesota’s broadband goals will position our state – both rural and urban communities – to stay competitive in the growing digital economy.”

The full report is online at https://blandinfoundation.org/content/uploads/Impact-of-CAF-II-funded-Networks_WEB.pdf

Broadband listening session: recipe for broadband success in MN and questioning why federal funding goes to DSL

Earlier today I attended a broadband listening session in Faribault hosted by Farm Foundation, NTCA, CoBank, National Rural Electric Cooperative Association and National Rural Utilities Cooperative Finance Corp. and USDA.

The morning was divided into three sessions:

  • E-Connectivity Needs in the Upper Midwest with Bill Esback (Wisconsin State Telecom Association) and Steve Fenske (Minnesota Association of Townships)
  • Connecting Rural America with Danna Mackenzie (Office of Broadband Development), Kristi Westbrock (CTC) and Brian Zelenak (Mille Lacs Energy Coop)
  • Update from DC with Jannine Miller (USDA)

I was able to record most of it and I’ll share my notes below ASIS. There were just a few moments I wanted to highlight.

Bill Esback spoke about CAF 2 – federal funding from the FCC that is used to build out broadband at speeds of 10 Mbps down and 1 up (10/1). A gentleman from Jaguar asked what the price cap carriers are putting into the ground. Esback said CenturyLink & Frontier are using DSL. AT&T is using fixed wireless. The follow up question was – why would the government want to fund a technology that’s already outdated? One upload will not be enough to push the technology up? Esbeck said it was a matter of resources – we did the possible, not the best.

Danna MacKenzie noted key pieces of the Minnesota broadband model – a model that at least 18 other states have looked at:

  • The broadband TF
  • Getting state speed goals in statute
  • The state surplus made it easier to get funding.
  • Establishment of the Office of Broadband Development – in economic development agency was helpful too
  • State mapping
  • Grants are helpful to encourage partnerships

An interesting recipe that other states want to follow. But more importantly in a year when the Task Force is scheduled to sunset and the funding wasn’t allocated – I think this could be a goal list for Minnesota. If we lose pieces of this roadmap, we may lose ground in being a national broadband leader.

Also I’m going to ask for a kind eye when you read the following more complete notes. After I left the meeting, we started the family drive to pick up a kid in Winnipeg. And we’re still on that drive. BUT I wanted to get these notes to people while it was still news. Continue reading

How do you get a business to rural Main Street? Broadband!

Minn Post recently ran an article on a new 3D printer business in Gibbon. It’s a great example of what happens in a rural area when they have broadband. (Gibbon is in Sibley County – one of the areas we featured in our report about the Community ROI of public investment in broadband.)…

“Our downtown is really struggling and has been for a while,” she [City Administrator Dana Lietzau] said. “The question is: ‘How do you find businesses to come here?’ ”

The answer that landed one entrepreneur is clear: high-speed internet access.

Like many rural towns in Minnesota, this village of 750 people in Sibley County has the standard fare of small businesses: a hardware store, a bank, an auto repair shop, an insurance agency, two bars. Also, like many small towns, it has few retail outlets. The grocery store closed years ago.

So when Adam Stegeman, an engineer with a background in 3D printing technology – a growing form of manufacturing – opened a 3D printing business in an old bank building here, residents took notice. “Any employment in this city is huge,” Lietzau said.

They talk about how they got broadband…

In 2015, Gibbon joined nine other cities and 17 townships in creating a cooperative that promised to bring broadband Internet access to 6,200 residents across both Renville and Sibley counties. RS Fiber Cooperative laid fiber optic cable through Gibbon in 2016 – about the time Stegeman began thinking seriously about striking out on his own. Each of the cities involved in the cooperative now has fiber optic cable, with speeds of up to 1 gigabyte; the second phase of the project – to bring broadband to the countryside – should begin in 2020, according to a spokesman for RS Fiber.

The cost to bring broadband to the cities involved in the project was about $15 million; Gibbon sold bonds to raise its share, which was $813,000. Lietzau, the city manager, said civic leaders pitched broadband access as at least one way to encourage businesses to locate in Gibbon. The Stegeman venture has helped to validate that hope.

And details the need for high speed broadband…

To fill orders, Stegeman must download large files of designs over his broadband connection. He can download 10 gigabytes in an afternoon, which he said was a major factor in his decision to locate in Gibbon.

“It really speeds things up,” he said. Without a connection that can transport huge digital files, he would need thumb drives sent through the mail – a much slower and more inefficient way to do business, he said.

Stegeman hopes his business will grow so that he can eventually employ some people who live in the area. He looks 10 years ahead and sees stability, three or four employees and profits. That is the plan, anyway.

Broadband makes short list of DevelopMN goals of Regional Development organizations in Minnesota

The Minneapolis Star Tribune recently ran a letter from Cheryal Lee Hills and Dane Smith outlining the role (and importance) of the regional development organizations (RDOs) in Minnesota…

The RDOs still are very much in service to employers, present and would-be, in the local economy. They swing deals and find capital, public money or tax breaks. But Region Five and all 10 of the entities allied as the Minnesota Association of Development Organizations are also broadly concerned these days about all the pieces crucial to healthy community development, which in turn foster more sustainable and equitable business growth.

This broader vision was recently distilled in a remarkable document, “DevelopMN 2016: Comprehensive Development Strategy for Greater Minnesota.”

We believe that this document can make a positive and constructive difference and that it can be of great value to candidates and voters during this year’s election season. More than ever, the so-called urban-rural divide and in particular the future of greater Minnesota will be front-and-center, as voters assess an unusually large number of candidates for governor and other offices, to determine who casts the most credible vision for a statewide economic growth formula that appeals to Minnesotans in every region.

And explaining DevelopMN, a framework for the future (a framework that recognizes the role of broadband)…

The DevelopMN framework, based on decades of local hands-on experience, pinpoints 17 goals and 58 strategies for growth. Those include: improving local and vocational employment training; building affordable housing; addressing a child-care-shortage crisis; accelerating our statewide transition to renewable and local energy; protecting water quality and natural resources (a huge asset that makes rural living attractive in the first place); building out broadband and high-speed internet access; bringing many more arts and cultural amenities to Main Street; supporting existing local businesses; and all the while emphasizing the need to welcome and be more attractive to newcomers and immigrants, whether from Minneapolis or Myanmar.

Importantly, DevelopMN does not throw shade on the Twin Cities as a competitor and says nothing, for instance, about stopping transit investment in St. Paul to pay for roads and highways in St. Peter. The new framework and the tone of DevelopMN turn out to be similar to that of Greater MSP, the large and well-funded organization launched almost a decade ago by large corporations and Twin Cities governmental leaders to promote metro growth and attract new employers.

If you’re interested in more discussion of future plans and the interconnections between rural and urban, I might suggest attending the Thrive by Design conference happening in Granite Falls next week.

Frustrated citizen in Minnetrista wonders why the city doesn’t have broadband

Lake Pioneer reports on frustrated voiced at a city council meeting in Minnetrista on June 4…

Most recently, new resident Mark Feldman came before the council at their Monday, June 4 meeting to discuss this issue.

“My concern is that we have no access to high speed internet. Frontier apparently comes to our property but they themselves measured it at less than one megabyte per second so that’s not adequate for internet,” Feldman told the council. “I don’t know why we can’t have high speed internet at our residence.”

As city staff informed Feldman, unfortunately, internet companies are looking to make a profit. Different companies have different density requirements that an area needs to meet before they will invest in setting up high speed internet in that area, to ensure that they will make a profit on the investment. The difficulty that Minnetrista residents have encountered, and residents of other cities as well, is that internet companies set high density requirements, and often aren’t willing to collaborate or share resources with competing companies. Furthermore, their practices are not highly regulated, a fact that has generated some recent push-back for the Federal Communications Commission (FCC).

“The city of Minnetrista is roughly 36 square miles, with 7,000 people here, so we’re not really densely populated,” explains City Administrator Michael Barone. “We’re kind of at the mercy of the vendor and the marketplace that reacts to that. So they have marketing plans for rolling out additional high speed internet to their communities but as far as we know it’s going to be difficult for us to advocate to get additional high speed internet here.”

Poor internet connectivity is frustrating, and while much of it is beyond the City’s control, they are looking for a solution. “It is important for residents to know that the City is currently and has been actively searching for ways to increase internet access and speed,” says Director of Administration Cassandra Tabor. “Last year the City applied for the Minnesota Border to Border Broadband Development Grant through the State of Minnesota and DEED (Department of Employment and Economic Development). These monies were designated to be matched by cities applying and promote the expansion of access to broadband to all areas of Minnesota.”

Unfortunately, the City of Minnetrista was not successful in qualifying for this grant as they did not meet the criteria of ‘under-served’ for internet. “Our median income was too high, and current providers in the area submitted documents that showed intent to grow their services in our area by 2020,” Tabor explains. “The City does not have regulatory control over internet and cable providers but does work closely with residents to rectify service issues when needed.”

The city did have some recommendations for residents…

While city staff continue to work towards a citywide solution, they also recommend solutions for individual residents to pursue. “Residents can reach out to Frontier Communications, request to have their speed checked to ensure they are getting the internet speed that they are paying for, communicate any concerns with Frontier Communications directly and request changes to service or access,” Tabor explains. “Frontier has individual agreements with each customer they serve, including the City of Minnetrista for the administrative and police buildings, and the City does not manage individual agreements with Frontier on behalf of the customer. Some City residents have had luck with HughesNet and other dish or satellite based providers, this would be something residents could pursue if they desired.”

Unfortunately Minnetrista is not an anomaly. There are other towns – or spaces between towns that are left unserved or underserved. This is the dark side of what the report I did (with Bill Coleman) last Fall demonstrated. Local residents benefit when they get broadband (to the tune of $1,850/year/household) but the local broadband provider doesn’t necessarily reap the same benefits. So it’s difficult for a commercial provider to make the investment. Yet, also difficult for a city, county or other local ombudsman-type organization to see that barrier and not want to find a solution.