Dave Peters has a great article today about Sibley County and their conundrum about providing fiber. His article is definitely worth reading in its entirety but I’m going to borrow his succinct description of the issue…
Here are the questions: Should the county of 15,000 (18,000 if you add the neighboring town of Fairfax) create a project to serve eight small towns with Internet speed far greater than what is available now through phone and cable companies? Assume it would borrow about $34 million and have an expected breakeven in five years. Or should it build a project offering the same service to the same towns plus all the farms in the county, borrowing $61 million, finding another $2 million in equity and breaking even in seven years?
And — here’s the really interesting part for residents to tussle with — if they lay fiber to all the farms, should farmers pay more?
Chris Mitchell gave a heads up on this issue earlier this fall when he spoke about the Sibley community meetings to talk about broadband. And it is an issue that will be familiar to anyone who thinks a lot about broadband in rural areas – but just because we’ve been thinking about it doesn’t mean there’s a good answer.
Yesterday, I had the pleasure of speaking with a number of providers at the Minnesota Broadband Advisory Task Force meeting. As Dave points out – the providers in Sibley County are part of the landscape as well. In his article, Dave alludes to the Sibley project needed 70 percent of the residents to use the service. Funny enough yesterday we were talking about take rates (not in Sibley County) and we noted that a 70 percent take rate was very desirable, but perhaps not realistic, especially when there’s competition.
An Open Access model might be worth considering – where the cost of building the network could be shared. I don’t know that all providers are interested in the open access model, but some are. I know that both the State Report and National Broadband Plan encourage public-private partnerships. A definite step in the right direction is the community meetings that Sibley County is hosting in the area.
Blandin on Broadband 
I was in attendance last night at a Sibley County meeting in Gaylord. There were about 30 people in the room, a mix of Gaylord and rural residents.
The presentation was interesting. The 70% take rates noted above was referring to people taking any two services of the voice, video and data/Internet offerings. Most of the rural residents now have telephone from one provider, satellite TV from another and no broadband.
It seems that the money people, the ones who finance the bonds, will not participate without a pre-sale commitment of 60% penetration.
I commend Sibley County and other places who are defining their community as something more than the city limits of their town. In rural farm areas, the economy is driven by what is produced on the farm, much of which is processed for added value in the nearby communities. Failing to connect the producers to the value-adding companies is missing the potential. In addition, the ability to connect every school to every student of all ages has great potential. Same with health care professionals to patients.
A wireless ISP, who does not provide service in the area, stated that the only benefit of high bandwidth is in entertainment and that 2 Mb is all anyone needs for other purposes. For me that was a real head-scratcher!
It was also interesting that many in the audience started their comments with something like “I am a conservative who believes in limited government, BUT they support this project because they believe that this is the only way a project like this will happen.”
Serving the rural areas are a challenge with significantly higher costs and lower revenues. A key cost is the length of the drop from the road to the farm house. In the city, that might be 50 feet. In the country, it might be 500 feet. Maybe the farmers might find a way to earn some sweat equity by installing their own fiber drop as a way to lower cost!