DEED Awards Broadband Grants Totaling $19.4 Million

Congrats to the 17 recipients. What a great opportunity for state funding to have an impact on local infrastructure and economic development – and a great opportunity for local planners to show the state what an investment a little help can be!

ST PAUL – The Minnesota Department of Employment and Economic Development (DEED) today announced grants totaling $19.4 million to help 17 entities in Minnesota develop broadband infrastructure in their communities. The awards will help serve 6,095 households, 83 community institutions and 150 businesses in unserved or underserved regions of the state.

DEED awarded the funding from its Border-to-Border Broadband Development Grant Program, which Gov. Mark Dayton signed into law in May of 2014. The grants will provide up to 50 percent of the cost of developing broadband for improved high-speed Internet in communities across the state.

“Minnesotans have a proud history of innovation,” said Lt. Governor Tina Smith. “Ensuring that all Minnesotans have access to high-speed broadband Internet is critical to unleashing the next generation of dreamers and innovators. These new infrastructure investments will help Greater Minnesota communities compete in the global economy.”

This week, Smith will travel to Chisholm, Brainerd, Fergus Falls and Luverne for broadband roundtable discussions with grant awardees and key stakeholders.

DEED’s Office of Broadband Development, which directs broadband planning and policy statewide, managed the grant program and application process for projects. Projects were selected by a DEED team based on several criteria: percentage and number of unserved or underserved households and businesses in the project area, amount of funding requested, project readiness, project sustainability, community support and partnerships, the economy of the area, and technical assistance and other support available in each project area.

Altogether, DEED received funding requests for $44.2 million and 40 projects around the state.

“When we launched the state’s first Broadband Grant Program, we sought to meet the needs of the 450,000 Minnesota homes and businesses that lack high-speed broadband access,” said DEED Commissioner Katie Clark Sieben. “This is an economic development and quality of life issue that is essential to Minnesota’s ability to compete, and will move us closer to our goal of ensuring all state residents, schools and businesses have access to high-speed Internet.”

The Legislature originally approved $20 million for the program. The $19.4 million that DEED awarded represents 100 percent of the total amount that was available to the Office of Broadband Development. Three percent of the legislative funding is being used to cover administrative costs for the grant review and oversight process.

A map at www.tinyurl.com/DEEDBroadbandMap shows the location of each project and the amount awarded. More details about the broadband program are at www.tinyurl.com/DEEDBroadbandProgram. The following list provides more details on each project:

Arvig (Mainstreet Communications LLC), Sauk Lake area. Awarded $536,702 to build broadband infrastructure to serve 217 unserved premises in the Sauk Lake area, which is located primarily in Todd County (with some project area in rural Stearns County) just north of Sauk Centre. This is an unserved area where no wired broadband infrastructure is available. The full project cost is $1.07 million; the remaining $536,703 (50 percent) will be supplied by a private investment made by Arvig.

Community and Economic Development Impact: It is estimated that 20 percent of the premises to be served are either a business or running a home-based business. In addition, students will gain household Internet connectivity, enabling online homework and other distance learning applications in local school districts.

CenturyLink Foley, Benton County–Balkan Township. Awarded $382,883 to build broadband infrastructure to serve 162 unserved households in Foley, Benton County and Balkan Township (near Chisholm in St. Louis County). The full project cost is $995,977. The remaining 62 percent match is to be provided by the Iron Range Resources and Rehabilitation Board (IRRRB) ($230,211 for the Balkan project) and CenturyLink ($382,883).

Community and Economic Development Impact: Rural areas benefit from high- speed broadband connecting home-based businesses. Ten businesses in the project area will have access to increased broadband service. Community institutions including a fire department, community center and town hall, will be connected, as well as connectivity for lifelong learning opportunities.

Consolidated Telephone Cooperative (CTC), Region 5 Virtual Highway Project. Awarded $2 million to bring high-speed Internet to 247 unserved and 90 underserved premises in Cass, Crow Wing and Morrison counties. This is a shovel-ready first phase in a regional broadband development effort. The full project cost is $4.22 million. The remaining $2.22 million (53 percent) in matching funds will be supplied by a private investment made by CTC.

Community and Economic Development Impact:This project builds on a multi-sector, multi-year and multi-community strategic planning and implementation process for sustainable community and economic development led by the Region 5 Development Commission. Region 5 is the only region in the state where all five counties are classified as economically distressed.

Dunnell Telephone Co., City of Dunnell, Martin County. Awarded $625,000 as a 42 percent match for a $1.49 million project to build connections at state speed goals for 174 unserved households in Dunnell in Martin County. The remaining $867,650 (58 percent match) will be provided by Dunnell Telephone Co.

Community and Economic Development Impact:In addition to connecting local home-based businesses and providing local online learning opportunities, this project also increases access to health care services, as there are no local health care facilities in the area.

Federated Telephone Cooperative, Big Stone County. Awarded $3.92 million to construct broadband infrastructure that will make service available to 1,072 unserved premises. The full project cost is $7.92 million; the remaining $4 million (51 percent) in matching funds will be raised through tax abatement bonds, with the county loaning the bond proceeds to Federated. This project will cover the north half of Big Stone County, as well as the western tract that runs from south to north surrounding the city of Ortonville. The area will include the communities of Barry, Beardsley and Johnson along with the rural parts of western and northern Big Stone County.

Community and Economic Development Impact:In addition to connecting local businesses and providing local online learning opportunities, 45 percent of the new service drops are farming operations that now can make use of high-tech agricultural and agribusiness applications.

Halstad Telephone Co., Halstad Tract MN 11902500 FTTH. Awarded $1.65 million to provide broadband service to 249 unserved locations in Polk County. The full project cost is $3.3 million; the remaining $1.65 million (50 percent) match will be provided by a private investment made by Halstad Telephone. This project surrounds the outskirts of Crookston on all sides except the west side. Halstad’s existing service area will help provide middle mile redundancy to the proposed project area.

Community and Economic Development Impact:The project area is highly agricultural. U.S. Department of Agriculture research shows employment grows faster in counties that have greater broadband Internet access than in similarly situated rural counties without broadband access. The research also states the farm sector is more likely to embed broadband Internet access into productivity, as its basic inputs are more fixed than other sectors of the economy.

Ultimately, broadband technology will ensure farmers and ranchers can stay on top of the market and diversify their industry offerings.

Interstate Telecommunications Cooperative (ITC), Hendricks Town FTTP. Awarded $700,000 to bring the town of Hendricks in Lincoln County service that surpasses state speed goals. Underserved customers that would benefit include 377 households and farms, 57 businesses, three home-based businesses and eight community anchor institutions. The full project cost is $1.87 million; the remaining $1.17 million (63 percent) match will be provided by a private investment made by ITC.

Community and Economic Development Impact:The Hendricks Town FTTP Project will promote rural economic development by providing access to state-of-the-art broadband services to 100 percent of the households and businesses in the funded service area. It will expand the educational, economic and health care opportunities for the community. It will also address public safety concerns in the area by delivering highly desirable broadband services to community anchor institutions and wireless towers in the area. The proposed network has the ability to provide broadband data speeds of 1 Gbps or more in the future. ITC and city leaders believe that sustainable broadband adoption will transform this underserved, low- income area into a highly productive community.

Mediacom, Pintar Road. Awarded $137,848 to provide broadband services to 122 unserved homes and businesses on the southwest edge of the city limits of Hibbing. The full cost of this project is $275,697; the remaining $137,849 in matching funds (50 percent) will be provided by a private investment made by Mediacom.

Community and Economic Development Impact:Residents will be able to access the latest telemedicine innovations and will be able to telecommute. Existing commercial accounts that currently contract with Mediacom will be able to expand their telecommuting employee bases by leveraging the broadband services made available to their employees’ homes.

Entry costs for advanced services will be lowered for all businesses as a result of this project’s extension of service. It will also provide for future public-private partnerships with St. Louis County by leveraging the expanded fiber optic network.

Northeast Service Cooperative (NESC) – Frontier Communications Corp., Border to Border Phase I. Awarded $1.96 million for their Phase I project that extends fiber from NESC’s middle mile network to 877 unserved end users and to serving nodes. The total project costs are $4.35 million; the remaining $2.39 million (55 percent local match) will be provided by IRRRB ($1.5 million), Frontier ($750,000) and NESC ($135,000).The proposed project is in scattered locations in St. Louis County, including areas in and around Crane Lake, Alborn, Meadowlands, Brookston, Forbes, Kelsey, Soudan, Kabetogama, Ely and Tower.

Community and Economic Development Impact:This project will provide single office/home office businesses with greater speeds to improve operational capacity and bring reliable, steady connections to the Internet. It will also provide access to remote health care solutions that require higher capacity connections and will link citizens to educational resources and local school districts from their households.

Otter Tail Telcom, Swan Lake West. Awarded $438,937 to expand existing infrastructure and bring fiber-to-the-home services to 110 unserved locations, including permanent residences with work-from-home employees near Swan Lake, on the outskirts of Fergus Falls, along the I-94 corridor. The total project costs are $877,874; the remaining $438,937 (50 percent local match) will be provided by Otter Tail Telcom.

Community and Economic Development Impact:Fergus Falls calls itself the “telework capital of Minnesota.” This project will continue the build-out in and around Fergus Falls to make that goal a reality for a growing number of people living, working, and operating or starting businesses in the Fergus Falls region.

Otter Tail Telcom, Stuart Lake. Awarded $105,364 to expand existing infrastructure to bring fiber-to-the-home service to 47 unserved locations, including 46 homes and one business near Stuart Lake, just north of State Highway 210 and east of Fergus Falls (between Clitherall and Vining). Total project costs are $210,729; the remaining $105,365 (50 percent local match) will be provided by Otter Tail Telcom.

Community and Economic Development Impact:Fergus Falls calls itself the “telework capital of Minnesota.” This project will continue the build-out in and around Fergus Falls to make that goal a reality for a growing number of people living, working, and operating and/or starting businesses in the Fergus Falls region.

Otter Tail Telcom, 245th. Awarded $108,553 to serve the northeastern outskirts of Fergus Falls near 245th Street. The project will expand existing infrastructure to bring fiber-to-the-home service to 39 unserved locations, including permanent residences and work-from-home employees. The total project costs are $217,105; the remaining $108,553 (50 percent local match) will be provided by Otter Tail Telcom.

Community and Economic Development Impact:Fergus Falls calls itself the “telework capital of Minnesota.” This project will continue the build-out in and around Fergus Falls to make that goal a reality for a growing number of people living, working, and operating and/or starting businesses in the Fergus Falls region.

Palmer Wireless, Becker Industrial Park. Awarded $151,934 to deploy 3.4 miles of fiber passing 21 underserved businesses in the Becker Industrial Park (city of Becker) as well as to 12 vacant city-owned lots covering 70 acres. In addition, one of the vacant lots is the future site of the Northstar station. The total project costs are $303,870; the remaining $151,936 (50 percent local match) will be provided by Palmer Wireless via a line of credit.

Community and Economic Development Impact: Superfast broadband improves the performance of existing firms, enables new businesses to emerge and encourages flexible working patterns – all positives for business and workforce needs now and into the future. Improving broadband service to the industrial park was the No. 1 priority for Becker based on a local broadband survey of residents and business owners.

Rock County Broadband Alliance (RCBA), FTTP project. Awarded $5 million to deploy fiber-to-the-premises (FTTP) service for approximately 1,085 underserved and 265 unserved locations in Rock County. The total project costs are $12.85 million; the remaining $7.85 million (61 percent local match) will be provided by Alliance Communications Cooperative as an equity infusion to RCBA, which is a wholly owned subsidiary of Alliance. Locations include 1,261 households and farms, approximately 68 businesses and 21 anchor institutions in the Jasper, Beaver Creek and Hardwick town and rural areas surrounding Luverne.

Community and Economic Development Impact: The project will bring FTTP service to all remaining unserved and underserved locations in Rock County, bringing to 93 percent coverage all businesses and households in the county. Education, energy efficiency, public safety and health care will improve, stimulating new jobs and economic growth. In particular in Rock County, access to health care is becoming more reliant on broadband infrastructure for both patients and health care professionals. For example, in remote rural locations, physicians who are on-call from their homes would be able to log into a patient’s chart and respond to a nurse’s request or see follow-up testing. Home monitoring capabilities help patients of all ages remain in their homes with high quality care, reducing health care costs and ensuring stronger community quality of life. Full county broadband coverage will provide significantly more reliable and faster communications for first responders and public safety officials.

R-S Fiber Cooperative, FTTH Project. Awarded $1 million to bring fiber-to-the –home (FTTH) service to 62 unserved and 536 underserved locations in Sibley and Renville counties. Total project costs are $3.32 million; the remaining $2.32 million (70 percent local match) will be provided by a line of credit that R-S Fiber Telcom has committed and partner equity. This project is part of a larger cooperative project estimated at $38.46 million that will upgrade broadband services to several thousand locations in the region. Hiawatha Broadband Communications will provide operational capacity.

Community and Economic Development Impact: In 2013, Sibley County was added to the Metropolitan Statistical Area of the Twin Cities. Twin Cities metro regional economic development strategy indicates that access to high-speed fiber networks is a critical component that companies consider when deciding whether to relocate to an area.

The project’s affiliation with US Ignite will spur the development of incubator technology start-up businesses, bringing gigabit applications to life. US Ignite is a national consortium of 26 technology companies started through collaboration between the White House Office of Technology and the National Science Foundation. Because Hiawatha Broadband Communications is one of US Ignite’s initial 26 technology partners, the R-S Fiber project is eligible to be a US Ignite community.

When the network is operational, US Ignite will help member communities develop incubator technology start-up businesses whose mission will be to develop applications specifically for the R-S Fiber Cooperative network in the areas of education, health care, senior citizens and agricultural production. In addition, the project will have access to applications already developed through US Ignite partnerships.

Sjoberg Cable, Broadband Grant Proposal. Awarded $261,575 to provide broadband services to 107 unserved and 49 underserved locations using fiber-to- the-premise technology, predominantly in extremely rural and agricultural areas. The project would build-out in five areas in Roseau County near Roseau, Warroad and Salol. The total project costs are $523,150; the remaining $261,575 (50 percent local match) will be provided by Sjoberg’s Inc.

Community and Economic Development Impact: The project will connect several pockets of businesses, homes and farms to fiber, leveraging a recent middle mile build-out that was part of the USDA Rural Utilities Service’s Broadband Initiatives Program. Access to high-speed broadband services will enhance the overall quality of life, spur economic development, and improve services delivered by critical community and public safety entities.

High-speed broadband is critical to major businesses in the area, such as Marvin Windows and Polaris Industries that have local world headquarters here along with a worldwide footprint. High-speed connections for small businesses located in the grant project area will enhance their ability to be subcontractors to these larger businesses.

Wikstrom Telephone, Kittson, Marshall, Roseau Broadband Extension. Awarded $425,000 to bring fiber-to-the-home service to 73 unserved and 43 underserved locations in Kittson (15 premises), Marshall (50 premises) and Roseau (51 premises) counties. The total project costs are $943,827; the remaining $518,827 (55 percent local match) will be provided by Wikstrom.

Community and Economic Development Impact: The project leverages Wikstrom’s nearly 1,200 mile middle-mile and distribution fiber facilities to serve the grant project areas. Among other improvements in community and economic development capacity, broadband connectivity in these remote areas of northwestern Minnesota will enable more effective teleworking, which creates more and new employment opportunities for households. It also opens up additional labor force capacity for employers regardless of location.

DEED is the state’s principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and our services, visit us at http://mn.gov/deed/ . Follow us on Twitter at twitter.com/mndeed .

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