$100 million for MN Broadband is a start to reaching state goals – not a closer

Hutchinson Leader reports on the $100 million proposed funding in the Minnesota Legislature. Here’s how the math used indicates that even with that funding and optimistic estimates of federal funding, we’re going to need another  $426 million…

About 88% of households and businesses in the state had access to that level of broadband in October, according to estimates released in a report by the Governor’s Task Force on Broadband. In rural areas, about only 62% have what the state deems to be adequate broadband, an issue that became even more of a problem during the COVID-19 pandemic when many more people were forced to work at home and kids attended school online.

The gap in broadband coverage is because of money. Developers say some areas are too sparse, or the terrain is too difficult, to make building infrastructure worth the cost. That’s why the state and federal government subsidize construction of infrastructure — like digging routes to deploy fiber-optic cable — to entice internet providers into rural areas.

State officials estimate it would cost $2.76 billion to serve the 291,000 households and businesses that lack the infrastructure for fast service. It’s an eye-popping price tag, but most of the money would not come from the Minnesota Legislature.

State grants typically require a 50% match from broadband developers or others involved in the project, like city and county governments, meaning the state government is only responsible for half the cost.

The federal government has also pitched in a great deal to help Minnesota cover the remaining $1.38 billion of that $2.76 billion. The task force estimated Minnesota could get $968 million from the feds, most of it coming from the infrastructure bill that passed Congress in 2021.

That leaves a roughly $426 million price tag for Minnesota to reach its goals, an estimate that includes administrative costs and is based on a 50% match program. The price tag is still speculative, said Bree Maki, director of Minnesota’s Office of Broadband Development at the Department of Employment and Economic Development. That’s because factors like construction costs can be a moving target.

This entry was posted in Funding, MN, MN Broadband Fund Awards, Policy by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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