Last week I met with CTEP (Techie AmeriCorps) members and Travis Carter from US Internet (USI). The CTEP crew is looking at equitable, affordable broadband in Minneapolis. USI is a piece of that puzzle because where they offer access, it is affordable and they have a 4.7 star rating on Google. I look forward to the CTEP findings.
In the meantime, I wanted to share some of the things I learned in the conversation that I thought might be of interest to communities in rural areas.
USI is a private company. They have no outside shareholders. They don’t get state or federal funding. They did get a contract to deploy a wireless network for the City of Minneapolis (around 2007). That gave them a relationship with the City and with many customers. Their goal is to provide FTTH to every inch of Minneapolis in 5-6 years. So inquiring minds want to know – how to get them to my neighborhood first?
Sounds a lot like the conversations I hear in rural Minnesota. “I know that provider is growing? How can I get them to come to me/us?” The following might help.
Here’s what I learned about the barriers to broadband deployment:
- Contiguous networks are easier – seems obvious enough that building from the network you have means you have backhaul access, you have people on the ground and people near (if not in) the community know you.
- The Minneapolis Park Board is hard to work with – especially because they don’t have a right of way concept to use in decision making. Their goals do not include broadband. They don’t have a “regular way” to deal with requests. Their incentives aren’t high.
- It’s good to have an anchor tenant (such as the City) to help pay the bills.
- There needs to be demand. USI needs a 30 percent take rate to break even. (Rural areas need a higher rate because population density is lower and costs are often higher.) Some neighborhoods take longer to get to that 30 percent.
- In Minneapolis, the wealthier neighborhoods are not the best for USI. The people are older, more set in their ways and the prospect of saving money on a month bill is not compelling enough to get them to switch providers. (Even USI still has 2,900 dialup customers!)
- The best customer is a household with two working parents and kids. They know they want access; they are interested in lower costs.
- There are people who aren’t online and aren’t interested.
- USI cannot get access to poles in many areas – due to policy restrictions. So, they bury all of their fiber and that takes longer.
- Many multi-dwelling-units (apartments) have exclusive contracts with existing broadband providers. Once those contracts expire, USI will be able to approach the units about offering services.
- Word of mouth advertising works best. Because the service is offered on a block-by-block basis larger scope advertising is impractical. (They don’t want calls from people they can’t serve.)
- They want to grow – but they need to grow at a manageable pace to mitigate risk of debt and quality of service.
- Minnesota winters are a killer for deployment!
So how does a neighborhood or community help a provider overcome these barriers (and get picked first)? Some items are easier to address than others. Here are three ideas:
- Extending the network is helpful. USI is deploying service in St Louis Park because has made it easy for USI. They have dark fiber, they have conduit, they will lease fibers. Dakota County has made an effort to get ready for third party providers for years.
- Smoothing regulatory barriers is helpful. (We saw the State do that for wireless providers in time for the Super Bowl.) A community may not have power to make regulatory change but they might be able to build partnerships to help build incentive with agencies or local landlords.
- Building demand is also helpful. Travis mentioned that one industrious hopeful customer got a petition/database of 600 customers near her interested in fiber. (That pushed that neighborhood to the shortlist!) We’ve heard stories from Paul Bunyan and HBC on the impact of community demand too.