2014 MN Broadband Task Force is out: recommends $200 million for infrstructure grants

The 2014 Minnesota Broabdand Task Force report is out. The highlights are:

  • Minnesota will not meet the 2015 goals of 10-20 Mbps down and 5-10 Mbps up. Right now 78.16 percent of Minnesota households have such broadband speeds available via wireline providers and 88.90 percent when mobile wireless service is included.
  • They are recommending funding for the Office of Broadband Development ($2.9 million) and for more Border to Border Infrastructure Grants ($200 million)

The focus on further funding from a group that has been successful in recommending it in the past is very exciting! The proposed $200 million doesn’t touch the estimated $900 million to $3.2 billion to build ubiquitous broadband but funding gets people to the table to discuss solutions!

2015 chart 2

Here are their specific recommendations:

The Task Force strongly encourages policy makers and legislators to give serious consideration to advancing its recommendations to further the deployment and adoption of broadband. They include the following and are detailed on page 8:

  • Authorize $2.9 million for the Office of Broadband Development
  • Authorize $200 million for a Border to Border Infrastructure Grant Program
  • Create an Office of Broadband operating fund to promote broadband adoption and use
  • Increase School and Library Telecommunications Aid for the 2016-17 biennium
  • Expand video health care and telemedicine initiatives for 3rd party payer reimbursement
  • Support efforts of schools utilizing 1:1 devices via development of best practices
  • Make sales tax exemption for telecommunications permanent
  • Review existing permitting criteria to see where there might be possibilities to streamline

Digging in a little deeper… Affordability

The report opens the doors to many meaty discussions in 2015 – the most interesting I think it affordability at the household and community level.

2015 mapI noticed that while the stats are given for coverage with and without inclusion of wireless connections in the reports, the introductory letter refers only to the stats that include wireless coverage. (There’s a 10-point differential in the numbers.) The difference may unearth an issue that has come up in Task Force meetings. The Task Force is technology agnostic but the inherent costs in wireless connections (data caps for end users) raise the question – should affordability factor into the accessibility equation? The subject is broached on page 11 where the report states that this will be a topic of further discussion in 2015. It will be an interesting discussion!

And affordability isn’t only an issue at the hosuehold level. The root of the issue in rural areas is cost of backhaul to rural areas. (And the Task Force recognized that access is largely a rural issue on page 10.) The report outlines the issue…

A provider in metropolitan Hennepin County currently pays about $.50 per Megabit to connect to the Internet backbone; the average cost of three providers in rural Pennington County is $15.33 per Megabit to connect to the Internet backbone.

Making the situation more challenging for all providers, there is a great discrepancy in the number of potential customers in Hennepin County versus Pennington County; population density in Hennepin County is 2,081.7/sq. mi and in Pennington County it is 22.6/sq. mi. Median income (2009-2013) also differs: in Hennepin County it is $64,403 and in Pennington County it’s $45,633. For these reasons and more, the business case for offering broadband in Pennington County Falls is far more challenging than in Hennepin County.

Digging Deeper – role of government

At a time where there is a lot of discussion on the balance of public and private partnerships (I posted two views on the issue last week – one form the private sector and one from the public) for broadband these recommendations are private-friendly. There’are recommendations for sales tax exemption and streamlining permitting. There is no discussion on the laws on the book that make it more difficult for a municipality to become a broadband provider. (That is the type of issue that President Obama targeted in his speech in Cedar Falls two weeks ago and therefore it may be addressed by the FCC.)

Digging Deeper – adoption (and more affordability)

The Connect Minnesota reports on adoption – specifically the barriers to home adoption – are valuable in determining what could be useful in closing the digital divide. Cost it turns out is the top issue. (Good news – the Washington Post claimed a 15 percent discount in monthly fees would persuade a third of non-adopters to look again.) The report offers some other suggestions for adoption on page 23.

Minnesota ranking for connectivity/speed does not meet the 2015 goals. Broadband adoption does. At least according to NTIA reports, Minnesota ranks fifth for adoption with 82.4 percent. As a national study, they aren’t using the Minnesota state definition of broadband but probably the national definition (4 Mbps down and 1 Mbps up). The report itself seems to use Internet and broadband interchangeably. (They ask “if” you’re connect; then ask how but the options include dialup and satellite.)

So while it’s good to know that Minnesotans are adopting – this survey doesn’t take speed or access to broadband (as opposed to satellite or dialup) into consideration. So it’s difficult to know when access to better broadband or cost of better broadband might be a barrier.

Looking forward…

Having gone to Task Force meeting for years, I can tell you that affordability and role of government have consistently been two of the most difficult questions to discuss. Building upon the good work of prior Task Forces, the current Task Force has been successful is establishing an Office of Broadband Development and garnering state grants for broadband expansion. (Both discussed in the report.) It will be interesting to see what happens to these issues in 2015.

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