During a stop in Minnesota last month, U.S. Secretary of Commerce Gina Raimondo made a promise: The $652 million earmarked for Minnesota to help build infrastructure for rural high-speed internet would be enough to finally cover every part of the state.
“This is enough money to finish the job,” Raimondo told reporters, gathered at the Association of Minnesota Counties’ office near the Capitol in St. Paul.
Is that true? It depends, it turns out, on how you define a finished job.
When calculating who has access to proper broadband, the federal government counts much slower internet speeds compared to Minnesota’s definition. As a result, the cash may be enough to hit federal goals for universal broadband, but not state ones.
They had a few responses to this news…
1) The money probably won’t arrive for years
Congress approved the $42.5 billion broadband funding package two years ago. But state officials say it could take another two years before Minnesota can spend its share.
Why the big delay? Where there’s a lot of money, there’s a lot of logistics. …
2) It’s (still) not enough to fully hit state goals for speed
Even if the federal money were to arrive faster, it still wouldn’t be enough cash to fully hit the state’s broadband goals, because the state has higher standards for speed than the federal government.
The federal government believes the $652 million is enough to cover the whole state because of their definition of an area that is “unserved” by broadband. The feds count any location with access to internet that can potentially reach speeds of 25/3 Mbps as “served.” Maki said that includes “fixes wireless” technology — internet distributed through a device placed on a high location like a water tower — that state officials view as less reliable than fiber-optic cable. Maki said the federal definition leads to a count of 134,850 unserved businesses and households. …
By contrast, in Minnesota, the state’s broadband task force estimated in October there were 291,000 unserved locations because they’re operating on a much higher speed standard of 100/20 Mbps. “There’s a gap there,” Maki said.
Using the Minnesota Task Force report, Minn Post points out that there’s an expected shortfall of $326 million…
One estimate by the state broadband task force expected about $426 million in new state or federal money — on top of the $652 million from the infrastructure bill — needed to hit the 2026 goal, though the price tag could be larger if developers need bigger subsidies to reach the hardest-to-serve areas. Since the Minnesota Legislature approved $100 for broadband subsidies earlier this year, the leftover sum necessary is roughly $326 million.
3) Officials are keen to prevent another LTD debacle
The last time Minnesota was in line for such a large influx in cash for broadband infrastructure, it turned into a bona fide debacle.
The company LTD Broadband was awarded $311 million in Minnesota by a program run through the Federal Communications Commission. But the relatively small company had little experience in the fiber-optic cable required by the Rural Digital Opportunity Fund. LTD faced a litany of questions from competitors and broadband advocates about its ability to actually meet its promises and build infrastructure.
Eventually, LTD came under state investigation and then had its awards revoked by the FCC, almost two years after winning them. The company CEO always maintained LTD could do the work. But either way, Minnesota was left in the lurch.