I love to see Minnesota getting broadband attention, I’m especially pleased to see a smart MN Woman featured in an interview with ISE Magazine – Kristi Westbrock, CEO at CTC. You can read about CTC and fiber…
ISE: What are your priorities in terms of fiber investments in 2019? What are the challenges you face when working with your own team and/or contractors to deploy fiber in rural Minnesota? What are some of the tactics and solutions you employ to get them expedited and completed on budget?
Westbrock: Fiber is the name of our game at CTC. While we’ve dabbled in alternate service offerings, CTC has committed that our long-term investments will be designed as FTTP.
Challenges always surround making financial models in fiber builds sustainable and eventually profitable. CTC has been using several tools to determine the feasibility in areas of high demand that serve as expansion projects for us. Knowing our committed take rates have been critical in determining the success of each build. Gaining customer commitment prior to building fiber in a neighborhood, township, or rural community, has also been critical to the return on the investment. Churn of a customer, once they have a fiber connection, is nearly non-existent for CTC, which is a testament to the service quality fiber brings.
The largest challenge in building FTTP in Minnesota is simply the weather. Our build season is short, typically May to October, and then construction is put on hold. This creates long delays when those who are anxiously awaiting Internet service in rural areas can’t get it due to the weather. Because of the short time to build, the plow needs to go into the ground as soon as the frost is out, and State and Federal permitting needs to be expedited.
And on life as a cooperative…
ISE: Share the differences and nuances about working with a telco cooperative. Why is that type of structure a strength for CTC? How can it impede network transformation?
Westbrock: The first 10 years of my career were spent working for private and publicly traded companies. Bottom line and profits drove strategy. Then I transformed to working for a Cooperative. It was a learning curve to understand the 7 Principals of a Cooperative and tying those into the short- and long-term decisions that are made.
The Cooperative has a Board of Directors that is elected by the membership, which are the owners. The overriding goal of a telecommunications Cooperative is to bring services to those that are unserved while ensuring stability for the member owners.
Being a Cooperative is the magic ingredient in what we do each day. We focus each day on members, employees, and communities, to provide life-changing technology solutions for a sustainable future. Sometimes this means that the models don’t work out to have payback in a normal business model. Serving unserved areas is and will continue to be a focus of CTC. We are thankful for programs through the RUS. We also are deeply engrained in the communities we support, therefore having high recognition of being the local provider. Recently we underwent a full customer journey study; through this we learned that customers in our communities want to purchase from a local provider with local service.
Great news for folks in the area. It’s always good to hear about folks who are willing to expand fiber to rural Minnesota…
RS Fiber Cooperative (RS Fiber) has announced the formation of a long-term operating relationship with Hiawatha Broadband Communications (HBC), giving RS Fiber the opportunity to meet and expand on the original goals for the project.
RS Fiber hired HBC to build and operate the gigabit fiber-to-the-premise (FTTP) network when the project was launched three-years ago to bring high-speed broadband to Renville and Sibley Counties. RS Fiber and HBC recently struck a partnership agreement where HBC will provide funding for the continued operation and growth of the network.
To build the network, RS Fiber acquired financing through several sources. Many financial institutions deem the construction of broadband networks as high risk, resulting in higher interest rates. After the network is built and customer numbers grow, the lender risk is reduced allowing for more favorable interest rates. This past year, RS Fiber has been working to restructure its high interest loans in an effort to create a longstanding and sustainable Cooperative. The culmination of that work has resulted in an arrangement between RS Fiber and HBC that strengthens their business relationship for years to come and keeps the RS Fiber mission and vision intact.
“We knew we had the right vision and great support from the cities and townships in our project area,” said Kevin Lauwagie, Chairman of the RS Fiber Board of Directors. “We have held strong to the commitment we made to our patrons and residents of our region. This relationship with HBC will help us continue to provide advanced services that rural Minnesota deserves.”
“This network and RS Fiber’s commitment to rural broadband is right in line with HBC’s vision and values” stated HBC President, Dan Pecarina. “We are committed to small town and rural broadband deployment, so operating this
network with our RS Fiber friends provides the opportunity to advance this much needed service.”
RS Fiber has completed construction of gigabit FTTP networks in 10 communities located in Renville, Sibley, McLeod, and Nicollet Counties of west central Minnesota. RS Fiber has also used this rich fiber network to connect to tall structures such as towers and grain elevators to provide high speed fixed-wireless services to the rural areas of the region.
RS Fiber currently serves more than 2,200 customers, with plans to rapidly expand its customer base. “Fiber-Optic networks provide more speed, capacity, and reliability and those features will help drive more innovative services to RS Fiber customers,” stated Pecarina.
“We are already seeing tremendous economic growth within the RS Fiber communities, like the medical school coming to Gaylord” added Lauwagie, “along with education, telemedicine, and precision agriculture benefits.”
RS Fiber will soon be announcing several new service options for customers to enhance their video, telephone, and broadband Internet experience. RS Fiber is also looking to expand its network to bring the benefits of the high-speed broadband to more rural residents and businesses in the region.
It seems like my weekend is being spent catching up with smart people. Doug Dawson on 5G and now the ILSR Community Networks folks on tax laws and cooperative broadband potential.
Community Networks have been keeping up on the topic…
Last November, we reported on a change to the tax code that is deterring rural telephone and electric cooperatives from leveraging government funding to expand broadband access. We were alerted to the issue by the office of Senator Tina Smith (D-MN), who sent a letter to Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig requesting that they remedy the issue and announcing her intention to introduce corrective legislation.
Good news is that changes are being proposed…
Federal elected officials have introduced such a measure, called the Revitalizing Underdeveloped Rural Areas and Lands (RURAL) Act. Senator Smith together with Senator Rob Portman (R-OH) introduced the Senate version of the bill, S. 1032, in early April, followed by Representatives Terri Sewell (D-AL) and Adrian Smith (R-NE), who introduced a companion bill, H.R. 2147, in the House a few days later. The RURAL Act would ensure that co-ops, which are many rural communities’ only hope for better connectivity, could take full advantage of federal and state funding for broadband networks. …
To end the legal uncertainty that electric and telephone co-ops are now facing, the RURAL Act would explicitly exclude government funding for broadband infrastructure and other important investments from the member income test. Specifically, the bill would exclude the following funding sources from a co-op’s gross income for the purposes of determining tax-exempt status:
“any grant, contribution, or assistance provided pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act or any similar grant, contribution, or assistance by any local, State, or regional governmental entity for the purpose of relief, recovery, or restoration from, or preparation for, a disaster or emergency” or “any grant or contribution by any governmental entity . . . the purpose of which is substantially related to providing, constructing, restoring, or relocating electric, communication, broadband, internet, or other utility facilities or services.”
News from Senator Smith…
Senators’ Legislation Seeks to Spur Rural Broadband Expansion and Make Sure Rural Health Clinics Continue Serving Minnesotans, Americans Across the Nation
WASHINGTON D.C. [04/04/2019]— This week, U.S. Senator Tina Smith helped introduce a pair of bipartisan bills to expand investments in rural communities: one designed to help improve rural broadband, and one to improve rural health care.
Sen. Smith has been contacted by several Minnesota cooperatives—which are a vital part of the effort to build out rural broadband in the state—that are at risk of losing their tax-exempt status due to a mistake in the 2017 tax law. The mistake in the 2017 law put the tax-exempt status of co-ops at risk if they receive government grants to expand broadband or to recover from a natural disaster. The Revitalizing Underdeveloped Rural Areas and Lands (RURAL) Act, that she introduced with Sen. Rob Portman (R-Ohio) would fix that error that hinders rural broadband expansion. Their bill would ensure that co-ops can retain their tax exemptions in efforts to expand rural broadband or in providing relief from, or preparation for, a disaster or emergency.
Right now, there are 96 Rural Health Clinics in Minnesota and over 4,400 across the country, which help provide care to over 7 million people in 47 states. But these clinics are governed by a set of regulations that haven’t been updated in decades. Sens. Smith introduced the bill with Sen. John Barrasso (R-Wyo.)—called the Rural Health Clinic Modernization Act—would modernize these decades-old rules that are preventing communities from getting the best possible care at Rural Health Clinics. For example, the legislation would expand the ability of physician assistants and nurse practitioners to provide care in these clinics, and improve the ability of clinics to offer telehealth services.
“At the end of the day, it’s my job to make sure that when Minnesotans tell me what Washington needs to do in order to better work for them, they know that I’m listening and working with fellow lawmakers to get things done on their behalf,” said Sen. Smith. “So when I heard from rural Minnesota cooperatives and health clinics about fixes that need to happen, I got to work. These bipartisan bills are good for people in rural Minnesota, rural Ohio, rural Wyoming—and rural communities across the country. Democrats and Republicans alike supporting efforts to allow rural broadband to keep expanding, and to make sure rural clinics stay open, shows what we can accomplish when we come together with commonsense fixes to make life better for Americans.”
The RURAL Act would revert the tax-exempt issue back to pre-2017 tax bill rules and address longstanding issues with the tax treatment of disaster relief grants, and the Rural Health Clinic Modernization Act would:
- Ease the physician shortage in rural areas by expanding the ability of physician assistants and nurse practitioners to provide care in Rural Health Clinics;
- Make sure Rural Health Clinics that are not connected to a hospital—as are many in Minnesota—can still use hospitals’ lab equipment because it’s often more cost-effective for these clinics to use the hospitals’ lab equipment;
- Increase the cap on the amount that Rural Health Clinics are able to bill Medicare for services; and
- Remove a restriction that prevents clinicians at Rural Health Clinics from providing services via telehealth.
CoBank recently listed 11 forces that they feel will shape the rural economy in this year. Broadband, especially provided by cooperatives, makes the list…
In 2019, electric distribution cooperatives will continue to build out fiber networks in underserved rural markets. Some rural communications providers are concerned about increasing competition, but CoBank continues to believe that over 90 percent of co-op fiber builds occur where service does not exist or is below the FCC standards for broadband.
From the MN Broadband Coalition…
Your participation is vital. This is your chance to meet directly with legislators, share your stories about the importance of broadband to economic vitality and quality of life – especially in rural areas – and address the need for broadband investments.
We are planning a full day of activities to ensure that you will feel confident and well prepared to meet your representatives, satisfied that your time and energy were well spent, more connected with fellow advocates, and inspired to keep working.
Click here to register. The fee is $25 per person.
Minnesota State Capitol – L’Etoile du Nord Vault
(Room B15 – in the basement)
April 3, 2019 (8:30 a.m. Start – Full agenda for the day will be available soon!)
We have reserved a block of 25 rooms for the night of April 2, 2019, at the discounted government rate. RESERVE YOUR ROOM BY FRIDAY, MARCH 15, to receive the group rate.
To book your room call: 651-227-8711
Best Western Capitol Ridge (formerly the Kelly Inn)
161 St. Anthony Ave
St. Paul, MN 55103
Group Code: MNAPR2
How to Schedule Your Meetings With Legislators
Use the following link to access our easy guide on How to Schedule Your Meetings With Legislators.
If you have any questions, concerns, or need help scheduling your legislator meetings, please contact Nathan Zacharias.
IMPORTANT NOTE: If you are scheduling your own meetings, make sure to do so at the time you register for the Day on the Hill. Legislators’ schedules fill up quickly. If you don’t schedule far enough in advance, it will be difficult to get a meeting.
Looks interesting and there’s a link to the livestream at the bottom…
WASHINGTON – U.S. Sen. Roger Wicker, R-Miss., chairman of the Committee on Commerce, Science, and Transportation, will convene a hearing titled, “America’s Infrastructure Needs: Keeping Pace with a Growing Economy,” at approximately 10:15 a.m. on Wednesday, February 13, 2019. The exact start time is contingent on the conclusion of an earlier and separate Commerce Committee business meeting that will be open to the public in the same hearing room. The hearing will focus on opportunities for infrastructure improvement, including federal funding, financing programs, and permitting and regulatory streamlining.
- Mr. William Friedman, Chairman, American Association of Port Authorities, President and Chief Executive Officer, Cleveland-Cuyahoga County Port Authority
- Mr. Ian Jefferies, President and Chief Executive Officer, Association of American Railroads
- Mr. Matthew Polka, President and Chief Executive Officer, American Cable Association
- Mr. Chris Spear, President and Chief Executive Officer, American Trucking Association
- Mr. Larry Willis, President, Transportation Trades Department
Wednesday, February 13, 2019
Committee on Commerce, Science, and Transportation
This hearing will take place in the Dirksen Senate Office Building G50. Witness testimony, opening statements, and a live video of the hearing will be available on www.commerce.senate.gov.