Blandin Broadband eNews: Fall Broadband Conference, Grants

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Blandin Broadband Conference: Sep 13-14
You’re Invited to the Fall Broadband conference, Border to Border Broadband: Advancing the Vision on September 13-14 in the Greysolon Ballroom in Duluth, MN. It is an opportunity to continue the work from last year’s conference where attendees crafted the well-received state broadband vision. http://wp.me/p3if7-3Cu

Minnesota Cooperatives Talk Broadband
Blandin Foundation, Calix, Co-Bank and Great River Energy host a meeting of communities, providers and community leaders who want to learn more about a cooperative approach to local broadband access. http://wp.me/p3if7-3Cm

Border to Border Grant
The Office of Broadband Development is now accepting applications for the Border to Border Broadband grants. Details are available http://wp.me/p3if7-3CQ as are updated maps. http://wp.me/p3if7-3Cw

Minnesota Broadband Task Force Meeting: Cyber Security
The Broadband Task Force discussed cyber security, especially from the broadband provider and business perspectives. http://wp.me/p3if7-3CC

Research Indicates Rural Still Behind Broadband Access
The FCC’s reports that 39 percent of rural areas lack access to the newly defined broadband, while only 4 percent of urban areas lack it. http://wp.me/p3if7-3Ce

Senator Klobuchar asks FCC to Improve Rural Broadband
Senator Amy Klobuchar has urged the Federal Communications Commission (FCC) to expand access to reliable, high-speed mobile broadband in rural America. http://wp.me/p3if7-3BO

Local Broadband News

Alexandria
Senator Franken’s staff meets with community members to talk about infrastructure, including broadband. http://wp.me/p3if7-3BU

Elk River
High school tech tutors offer training in the senior center in Elk River http://wp.me/p3if7-3CJ

Iron Range
Aaron Brown, longtime advocate of broadband on the Iron Range, celebrates the upcoming upgrade in his community. http://wp.me/p3if7-3C2

Kandiyohi County
Kandiyohi County talk about the success and challenges with deploying their public hotspots. http://wp.me/p3if7-3Bx

Kandiyohi County finds broadband partner in Consolidated Telecommunications Company http://wp.me/p3if7-3Bz

Montevideo
Montevideo American News looks at Montevideo’s municipal broadband history http://wp.me/p3if7-3BG

Nobles and Kandiyohi counties MVTV Wireless serves corners of Minnesota where fiber doesn’t reach http://wp.me/p3if7-3C6

Owatonna, Stewartville and Winona
Senator Franken’s staff meets with community members in Southern Minnesota to talk about infrastructure, including broadband. http://wp.me/p3if7-3CS

Pine Island
Pine Island learns all about the Border to Border Broadband Grants with Senator Schmit http://wp.me/p3if7-3CY

Rochester
Rochester MN looks at $50 million broadband plan http://wp.me/p3if7-3D1

Savage
Savage is test site for Mediacom community Wi-Fi project http://wp.me/p3if7-3Br

Sunrise Township
Sunrise Township discusses options to improve on CenturyLink’s plan for CAF 2 funding in their area by bonding for funds to get FTTH. http://wp.me/p3if7-3CE

Upper Minnesota Valley Area
Upper Minnesota Valley Area uses social media to promote their region http://wp.me/p3if7-3Cj

Willmar
AT&T expands its 4G LTE network in the Willmar area http://wp.me/p3if7-3BW

Upcoming Events

Looking for more events? Check out TechDotMN’s calendar http://tech.mn/events/. Many events are based in the Twin Cities but it is a comprehensive list. (If you have an upcoming event, consider submitting it.)

Stirring the Pot –

bill right

More thoughts on partnering…

Based on the number of prospective Border to Border grants that I have been hearing about,  I was thinking about how competitive this grant round will be.  This is a new world for both providers and communities.  At a recent Blandin Foundation Broadband Strategy Board, one member was smart to remind us “These are not partnerships, they are business transactions.”  It would be smart to remember some economic development basics as communities negotiate these deals with providers.  As in most site selection competitions, there are many more communities than expanding provider companies.  This smaller set has the advantage as they negotiate with multiple communities and know what each community is offering as incentives.  Communities, possibly under non-disclosure agreements, will be tempted to sweeten the pot to become a selected community partner of that limited set of providers.  With such a new program, the parameters of a good deal are more uncertain than more standard manufacturing or housing development deals.

Many communities will be talking prospective partnerships with CAF2 providers.  In some ways, this will require a more sophisticated approach than dealing with a competitive provider building a new Fiber to the Home network.  In the latter case, there is likely a feasibility study done by a third-party consulting firm on behalf of and paid for by the community.  That consultant generally has a legal and professional obligation to represent the best interests of the community.  Prospective costs, revenues, take-rates and pro forma financial statements can be used to determine the financing gap and reasonable local partner share. In addition, the new network will already be able to provide services well in excess of the 2026 state broadband standard of 100 x 20 Mbps and probably up to a Gigabit of service on Day One so future risk is minimized.  That network is a permanent community asset.

Striking a deal with a CAF2 provider on an improved fiber-copper hybrid network will be more complicated both financially and strategically.  Obtaining financial information from these larger providers may be more difficult and communities will be relying on the prospective partner rather than a third party under contract to the community. In addition, with the larger company, the financial accounting is likely to be complex.  Most challenging will be understanding the net result of the network investment.  With fiber-copper hybrid networks, delivered speeds will be inconsistent depending on loop lengths and condition of existing copper lines  both outside and inside the customer homes.  While DEED OBD requires that networks be scalable to deliver 100 Mb x 100 Mb services, significant additional future investment may be required to obtain that network capacity, and unless contractually agreed to, the company is under no obligation to make those future investments.  And the same difficult rural countryside business investment case will be present that exists today.

In the economic development world, clawback provisions are often included in incentive packages.  If a company fails to meet the goals set in the contract agreement, it must pay back all or some of the paid incentive.  Communities should consider inserting clawbacks into their agreements with provider partners.  For example, the state’s 2026 goal for broadband is 100 x 20 Mbps to all households in Minnesota.  Committing to reach that goal by 2022 or 2026 would be a minimum standard to include in any agreement with a provider partner.  Clearly, with gigabit services being increasingly common today, setting a standard of one-tenth of that to be met in ten years seems almost inadequate. More aggressive agreements could be negotiated, including the idea that any local funds would only be committed if all affected residents would have access to the 2026 goal with this project is completed in 2017-18.   If the community can not reach an agreement to get the network they need to compete for residents and businesses, it may be best to wait for the next grant round and to seek a different partner.

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