If rural broadband is too expensive how can Paul Bunyan be doing it?

heat-mapMyth: It’s too expensive to bring high speed broadband to rural areas.
Reality: Providers are bringing high speed broadband to rural areas!

At the right is a map of broadband in Minnesota. You can see that there are communities in rural Minnesota with good broadband (colored in blue). There are a handful of providers who offer that service. Some have been kind enough to agree to talk to me about how they are able to deploy, expand and upgrade broadband networks in rural Minnesota. I spoke with Brian Bissonette at Paul Bunyan Communications about how they were able to support broadband in rural areas notes on that conversation.

Paul Bunyan is a cooperative and “meeting the needs and expectations of our members and other customers” is a top priority. They began to upgrade their network in 2004 – 13 years ago! – and are nearly finished now. As a cooperative they are willing to invest in their communities and they have a different threshold for success than commercial providers and they have different parameters than larger national providers.

What is the business case?

Paul Bunyan is not focused on high or fast profit margin. They’re goal is to break even in 10+ years. Their investment is in the community as well as the business – supporting customer retention also supports business (and resident) retention and economic development for the community. Federal support, largely in the form of RUS (Rural Utility Service) low interest loans have made a difference. The Minnesota Border to Border grants have been essential for the very hard to each places.

Paul Bunyan has received Minnesota grants and without them probably would not have been able to make the business case to go into areas south of Park Rapids or Northern Itasca County. Paul Bunyan (and Minnesota) are getting to the stage where a larger percentage of unserved areas are unserved because they are the highest cost areas – due to distance, population density, difficult terrain, natural barriers and permitting issues (dealing with railroad crossings, forestry issues…). In those cases the state funding is necessary.

How do you decide where to go next?

Paul Bunyan focuses on a contiguous footprint. It’s much easier to extend a network than build in a new area – although they have looked at some new projects recently. And building is only one portion of the cost of expansion. Paul Bunyan wants to make sure they have people in the area to be responsive to customer needs, which means customer support and technicians nearby.

Economics are also important – they need to meet that 10+ year time for return on investment. They look a issues that define the high cost areas: distance, population density, difficult terrain and natural barriers and permitting issues (dealing with railroad crossings, forestry issues … and opportunities for low interest loans or grants as they plan.

Finally, a key driver is  engagement with a group or community that has done their homework, measured their needs and interest levels, and can provide Paul Bunyan with both valuable data on interest as well as the sense that they will be our partner in making it happen rather than a barrier.  Investment by that partner is likely important as well.

Ultimately, it works for them because they are more willing to take financial risk, borrow, make long term investments, etc., to continue the mission of providing services to those that need it.  As they said – That’s why we were formed in the first place and that continues to be our DNA.

Why does it work for Paul Bunyan?

Geography helps Paul Bunyan stay focused and committed. They served about 5,000 square miles. They are growing but managing the growth of their area so that they are able to keep customers happy. Larger providers are in a more difficult position because they have so much more ground to cover and so many more customers to keep happy, which requires a lot more upgrade/expansion projects. And they have difficult decisions on where to upgrade and serve areas where the business case is much easier than rural Minnesota.

Even for Paul Bunyan it is difficult to make long term plans because so much depends on current upgrades. One rainy month can set a project back. A hike in the cost of fiber, a delay in required permit, surprisingly tough terrain all slow down a project, which delays future projects. There’s only so much they can do at a time and again that’s where their size and ability to manage growth are assets.

This entry was posted in MN, Rural, Vendors by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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