How much is a public infrastructure project? Putting $22 million for fiber in Yellow Medicine County in perspective

Government Technology reports on the prospective cost of better broadband in Yellow Medicine County (MN)…

A newly completed study looking at bringing broadband service to rural areas of the county calculates that it will cost $20 million to $22 million to lay the fiber optic network needed.

It’s a matter of the county’s geography and dispersed population, according to Doug Dawson, president of CCG Consulting, and Chris Konechne, project engineer with Finley Engineering. They presented the study to the County Board of Commissioners on Tuesday in Granite Falls.

Their study found that the county would need to lay fiber optic cable along 955 miles of roadway to serve 1,862 homes and businesses in the rural areas that are currently not served by broadband.

They also look at a lower cost option…

The study provided another option for the county. The consultants said the county could consider a combined wireless and fiber-optic “hybrid” system for a $5 million investment. A 52-mile network of fiber-optic cable could connect towers and reach the rural areas with a wireless system delivering 25 megabytes of service per customer, the minimum speed for broadband. Dawson described it as a less costly, first step toward eventually developing a more comprehensive broadband network.

But recognize the limitations…

And, he noted at the onset of his presentation, that while a 25-megabyte capacity would meet today’s needs, it will certainly become outdated. Since 1980, internet speed has doubled every year, he said.

I’ve said many times, there is room for fiber and wireless. Wireless is a great interim solution for rural areas and even after fiber is deployed, customers will want the mobility of wireless. You can access the feasibility study on the County web site. And I recently reported on discussions in Yellow Medicine and noticed that Farmers Mutual Telephone submitted an application to the Office of Broadband Development – so it looks as if things are moving forward.

But for some reason these numbers jumped out at me. It’s hard to put my arms around $22 million. So I wanted to do a little comparison and found some pricing (albeit from 2015) on cost of maintaining roads. The Pioneer Press reported…

How much does it cost to fix a road?

Anywhere from $167,000 to $3.7 million or more per lane-mile.

That’s to fix – not build. So the cost to build fiber 955 miles is $20-22 million. The cost to fix a road is $166 million to $3.5 billion.

And an interesting fact for the rural-urban eyes out there, here’s some info on building roads…

f the road’s substructure is in good condition, then rough pavement can be fixed by just applying a new surface. A typical asphalt resurface costs about $167,000 per lane-mile — meaning double that for a two-lane road and more if the road is wider. Concrete is sturdier but more expensive: a new concrete surface costs about $488,000 per lane-mile, according to MnDOT.

If a road deteriorates to the point where its substructure also needs replacement, fixing it becomes a lot more expensive. A full reconstruction costs about $1 million per lane-mile for a rural road, and $2.2 million per lane-mile in a town.

Because of the denser population in the Twin Cities, metro-area projects can be significantly more expensive — up to 70 percent more. That means more than $3.7 million for a lane-mile — or $7.5 million per mile for a two-lane city street.

I’m not saying $22 million isn’t a lot of money. I guess I’m just saying it depends what you do with it.

Broadband Update in Yellow Medicine Broadband: partner, plan, local investment

The Yellow Medicine County Board met to discuss their broadband plan – investment, grant applications and partners in a plan to being providing fiber service to the county. Sounds like they have a willing partner and community investment. They are hoping for a Minnesota broadband grant – and I’d say that’s the linchpin here in the project. They are asking good questions. The Independent reported on the meeting.

Scope of work…

Two methods were being looked at, Konechne said. First, to build fiber into the entire area or building a hybrid model with fiber to towns and branch off of that.

In the rural area, YMC is looking at a potential of 1,862 customers.

“That includes a large pile of homes and a handful of businesses without internet service,” Dawson said. He and Konechne went into the details of the 52-mile width of land to cover, he called it the backbone. It adds up to about 955 miles of rods, weaving down township roads because there seems to be a household down each one, he said.

The investment…

They are looking at delivering the service on poles, like telephone wires.

The next steps for the county to consider were half done, the consultants said, because the first step was to find a partner for the project. Which, depending on getting a grant, the board had made that agreement at the last meeting.

The YMC Board approved a $4 million broadband agreement with Farmers Mutual Telephone Cooperative (FMTC) in August pending the cooperative receiving a grant to cover half of the costs for the project.

The details…

The grant would only cover about 49 percent of the project FMTC had asked the county to loan it the other 51 percent if the grant came through. The county could bond the funds at a minimum of $4 million with the repayments coming from FMTC.

Isaackson then brought up a coverage glitch. The project is to service the central and northeast portion of the county, not the southeast where he lives.

“How are we covered?” he asked.

Heglund said that the county was looking at Arvig to cover that area since it is already in parts of the southeast end of the county.

“They have five to 10 years to complete the project,” she said.

Some specifics…

“Fiber to towers will enhance MVTV service,” Antony said.

“The 52-mile backbone does hit a lot of their spots,” Konechne said. A successful combination is high elevation (towers) and solid backbone (fiber).

The second step is to find the other half of the financing for the unserved area. Another partner to help with that would be ideal.

Repaying a loan was weighing on Greg Isaackson’s mind. Isaackson, from Cottonwood, is the treasurer for MVTV. He wanted to know what happens if the annual payment on the bonded amount doesn’t get paid.

“The fiber is collateral,” Heglund said. “We’d have to find another partner.”

She went on to explain that there would be precautions up front. The county has to get at least a 63 percent take rate (subscribers). Farmers Mutual Cooperative would have to show it financials, that it can make these payments, before the deal went through.

Grant and other funding opportunities that could be stretched to support broadband

I know I’ve mentioned some of these before – but it’s easy enough for me to skim off the broadband grants when I’m posting the Minnesota Rural Partners newsletter and I figure folks never mind hearing twice about funding opportunities…

–Foundation for Rural Service is offering grants to nonprofits seeking to create programs that promote business development, community development, education or telecommunications in rural communities served by National Telecommunications Cooperative Association (NTCA) members. Awards range from $250 to $5,000. Preference will be given to proposals that foster collaboration among and community engagement, and that can be fully funded by the grant or have 75 percent or more of the project currently funded. Deadline: 9/15/2017. To learn more and apply, click here.

–Blandin Foundation Broadband Grants: Broadband Innovation and Robust Network Feasibility Fund grant award amounts range from $1,000 to $25,000, and matching funds are required. Grant application deadline September 22

Lowe’s Toolbox for Education Program  Grants to help schools and parent teacher groups with school improvement and to provide for the basic needs of their students. Application Deadline: Sep 29, 2017.

Rural Broadband Access Loan and Loan Guarantee Program This U.S. Department of Agriculture, USDA Rural Utilities Service  program furnishes loans and loan guarantees to provide funds for the construction, improvement, or acquisition of facilities and equipment needed to provide broadband service in eligible rural areas. Application Deadline: Sept 30, 2017.

Minnesota Department of Health helps eligible applicants establish, operate, or subsidize clinic facilities and services to offer health services to American Indians who live off reservations in Minnesota through its Indian Health Grant Program. Nonprofit organizations, governmental and tribal entities are eligible to apply. Deadline: 10/18/2017. To learn more and to apply, click here.

Laura Jane Musser Fund has the following grants open. Rural Initiative Grants – Deadline: November 2, 2017 DETAILS

–The Seventh Generation Fund for Indigenous Peoples is offering funding in the following program areas: Arts and Creativity, Health and Well-Being, Rights of Mother Earth, Sustainable Communities and Economies, Leadership Development, and Rights, Equity, and Justice. Grants from $250 to $10,000, with an average of $5,000, are provided to Native communities that address one or more of the Fund’s program areas. The remaining postmark deadline for 2017 is 12/1/2017. (Mini-grants of up to $500 are reviewed throughout the year.) Application guidelines and forms are available on the Fund’s website

Hearst Foundations Grants to support well-established nonprofit organizations working in the fields of education, health, culture, and social service.

Walgreens Community Grant Program  provides funding for access to health and wellness, pharmacy education programs and mentoring initiatives, civic and community outreach, and emergency and disaster relief.

Minnesota broadband grants a model for Ohio

The (Ohio) Tribune Chronicle reports…

A new bill introduced Wednesday in the Ohio Senate would set aside $50 million a year for grants to expand broadband internet access to rural parts of the state.

Sound familiar to Minnesota readers? There’s a good reason…

The program is modeled after one in Minnesota and companion legislation is expected to be introduced in the Ohio House of Representatives.

It’s great to see that we’re onto something so great other states want to replicate it! It’s also worth sharing that Ohio is looking to invest $50 million – considerably more than Minnesota has invested in a single year. Maybe we can learn a little bit from them too.

SMBS is offering Lifeline discounts – learn more about Lifeline by seeing how they do it

Kudos to SMBS for going through the paces to be eligible to received Lifeline. They aren’t the only ones doing it. But the article in the Lakefield Standard does such a nice job detailed what it means and what it required I wanted to share it for folks who might qualify and for folks who might be in a position to replicate the effort or make policy decisions to support extensions and expansions…

From its beginning, Southwest Minnesota Broadband Services has offered the discounts to qualifying customers through a program dubbed “Lifeline,” but more recently has been actively working to make known the fact that telephone and Internet service discounts are available through the multiple-municipality-owned utility.

“We started offering it to our qualifying customers from the very beginning, but then, in October of 2015, petitioned the Minnesota Public Utility Commission and federal government to become an eligible telecommunication provider of the Lifeline service,” said Travis Thies, SMBS general manager. “That eligibility has opened it up for us to promote it more and make it available to the people, our customers, qualified for the service.”

Lifeline is both federally and state funded through SMBS, providing a credit toward voice service; the federally funded credit helps cover the costs of both voice and Internet service.

“One piece of it is federal and one piece of it is from the state with the voice service,” Thies said. “If people qualify for the federal, they also qualify for the state. But at this time, the state funding is only for voice service, while the federal funding is for both voice and Internet service. People are more dependent on Internet service and the federal help in funding the service can be applied to Internet service or both Internet and voice service, while the state funding can only be applied to voice right now. It has been only very recently that the federal side has been made applicable to the Internet too.”

To qualify for Lifeline, SMBS customers only need to come into the SMBS office in Lakefield and fill out an application. Customers who are receiving federal public housing assistance, Medicare/Medical Assistance, Supplemental Nutrition Assistance, Supplemental Security Income or Veterans Pension or Survivors Pension benefits and those with income at or below 135 percent of the federal poverty guidelines may qualify for the Lifeline discounted services.

Details on the money…

The Lifeline telephone and Internet discounts come as a flat dollar amount and vary with a customer’s service. The state credit for voice or telephone service is $3.50, while the federal credit for both voice and Internet is $9.25. If a person chooses to have only Internet, his or her credit will be $9.25; if a person decides to have both telephone and Internet service, which Thies noted is the better deal, he or she would receive the state $3.25 credit and the federal $9.25 credit for those services.

Nobles County broadband grant plan seeks alternate match due to state statute on county borrowing and ownership

According to the Worthington Globe

Two weeks after Nobles County commissioners discussed a proposal that involved First State Bank Southwest — with Kinetic Leasing of Fargo, N.D., financing a $2.75 million loan to Lismore Cooperative Telephone Co. for completion of a broadband project in the county — the plans have to be tossed out.

Nobles County Administrator Tom Johnson announced during Tuesday’s board meeting that issues arose with the lease arrangement that was discussed.

“The county has to own the asset if we’re the ones borrowing or leasing,” Johnson said, noting a bank loan would not be feasible under state statute.

As a result, commissioners ultimately approved Tuesday a professional services agreement with Northland Securities, at a cost not to exceed $7,480, for guidance through the tax abatement bond process. Commissioner Gene Metz, who serves on the LCTC board, abstained from the vote.

Rice County is applying for MN Broadband grants

The Faribault Daily News reports

Rice County will try for a second year to connect more of its residents.

The Board of Commissioners on Tuesday voted unanimously to back a grant application that would extend broadband service into unserved or underserved parts of northwest Rice County including areas around Webster and Veseli. The application will be made by three area internet service providers: Lonsdale Telephone Co., BEVCOMM and Jaguar Communications.

The article points out a difficult conundrum…

Kathy Feldbrugge, Rice County economic development coordinator, said she’s not yet certain how much the companies will request from DEED, which has $20 million to disperse in this grant cycle. Paperwork is due to DEED by Sept. 11. Feldbrugge said the awards should be announced by year’s end.

Grants can provide up to 50 percent of project development costs with a maximum of $5 million, according to DEED’s website. In the last three years, DEED has provided about 75 grants.

Last year, the county supported an application to extend service to areas south and southeast of Lonsdale. The grant wasn’t approved, Feldbrugge said, because other areas had greater need.

The go around, she said, the providers looked for an area most wouldn’t move into.

“That’s part of the dilemma for greater Minnesota,” she said. Providers need to make it profitable.”