Bill Coleman and Chris Mitchell ask – Are CAF II Investments Helping Rural Minnesota?

The podcast is a good listen. Here’s the intro from Community Networks

In the most recent report from the Blandin Foundation, Researcher Bill Coleman from Community Technology Advisors and his crew put boots to the ground to examine the results of Connect America Fund (CAF II) investments. Bill recently visited our office in Minneapolis to discuss the report with Christopher for episode 318 of the  podcast.

You can download the report, Impact of CAF II-funded Networks: Lessons From Two Rural Minnesota Exchanges here.

Bill and Christopher discuss the challenges Bill and his team encountered when they initially decided to gather documentation on what services CAF II funded projects brought to rural Minnesota. In order to get past those challenges, the researchers devised a methodology that other communities can reproduce.

Once the team had answered the technical questions about infrastructure, they analyzed the results and applied them to Minnesota’s statewide goals for broadband access. They determined that, in addition to lack of transparency regarding CAF II network plans, the tendency to invest in slower speeds, including DSL, will not help Minnesota achieve its goals.

For people living in urban areas who have grown accustomed to broadband within reach, it’s hard to imagine the situation in rural Minnesota, where there are still homes that have no access to the Internet at all. The disparity in speeds and availability complicate the idea that rural folks should have access to high-quality connectivity at the same levels as people living in urban centers.

Gubernatorial candidate Erin Murphy visits Worthington talks about broadband

The Worthington Globe reports

Gubernatorial hopeful Erin Murphy is focused on building toward the future, which means investing in priorities like health care, child care, education, infrastructure and broadband.

And gets into a little of the details…

Continuing with the theme of investment, Murphy said she would dedicate new revenue from online sales taxes — in lieu of the Wayfair v. South Dakota Supreme Court case that allows states to tax all online sales — to expand the state’s broadband infrastructure.

Lake County network – might cost locals money but it has opened economic opportunity

Earlier this week, I posted about Lake County receiving the first bid for their network. (Quick recap – Lake County got federal funding in 2010 to build the network; it is for sale.) Now the Lake County News Chronicle reports…

While getting out from under a $48.5 million debt for less than $5 million seems like a sweetheart deal for Lake County and the winning bidder, local property taxpayers are still on the hook for more than $25 million.

When the Lake County Board of Commissioners voted last week to approve a $3.5 million purchase agreement for Lake Connections, the county’s municipal broadband internet project, there were some gasps that the federal government and taxpayers could lose up to $45 million in the deal.

And there’s more owed by locals…

However, $45 million spread over the entire nation could be just the beginning of the pain for local taxpayers. According to the county’s 2016 financial statement prepared by the Minnesota Auditor’s Office — the latest statement available — the county’s broadband enterprise fund owes more than $14.3 million to the general fund and $3.3 million to the Health and Human Services fund.

In addition, the county bonded for $7.24 million in April to settle its debts with Rohl Networks and MP Nexlevel, the two main contractors on the Lake Connections project. The 15-year bond’s 3.17 percent interest rate means the county will owe an additional $2 million in interest and will owe an average annual payment of $610,000 — roughly the same amount the county has dedicated to supporting the broadband network over the past few years.

The broadband project encountered numerous hiccups and cost overruns during and after construction, forcing the county to dip into its general and health and human services funds to make up the difference in its broadband fund.

But if the county’s funds dedicated to the network remain at current levels, the county will still be more than $17 million in the hole when the bond is paid off.

All things being equal of course it would be nice to see the network more solvent for the ones who built it. And there’s a lot of math going on in the equation so I’ll go with the largest number, which was quoted in the headline – $25 million. The county taxpayers may still owe $25 million for the network.

I mentioned in my last post that I happened to look at Lake County last year for a research report. We found that the increased economic benefit to the county was $13,695,550 annually – that comes to $1,850 per household connected. As more people get connected the annual community economic benefit will increase. So within two years, the economic benefits for the community members (taxpayers) will surpass the amount owed.

That doesn’t mean the community/taxpayers will be cutting a big check at the end of each year. I assume there will be longer terms with which to work. But as a taxpayer, I’d be happy to pay back a portion each year for the increased economic benefit. Also – with broadband my house value increases 3 percent. In Lake County (tallying all of the houses with fiber) that total increased value is $38.5 million.

Again, we’d like to see everything succeed – but when the community members benefit, it’s difficult to see this as a loss.

FCC is looking for good telehealth pilot project ideas

It would be great to see some projects spring up in Minnesota. We have some awesome healthcare minds – just imagine what could happen…

FCC SEEKS COMMENTS ON LAUNCHING

TELEHEALTH PILOT PROGRAM

Highlights the Benefits of Broadband to Deliver ‘Connected Care Everywhere’

  —

WASHINGTON, August 2, 2018—The Federal Communications Commission today took steps to explore the creation of an experimental “Connected Care Pilot Program” to support the delivery of advanced telehealth services to low-income Americans.

 

The Commission’s top priority is bridging the digital divide, and nowhere is that more critical than in the area of health care.  Today, whether it’s through remote patient monitoring or mobile health applications accessed via smartphones, tablets, or other devices, advances in broadband-enabled telehealth technologies are allowing patients to receive care wherever they are.  These connected care services can lead to better health outcomes and significant cost savings for patients and health care providers alike.  But many low-income consumers, particularly those living in rural areas, lack access to affordable broadband and might not be able to realize these benefits.

 

Through today’s Notice of Inquiry (NOI), the Commission seeks comment on creating a Universal Service Fund pilot program to promote the use of broadband-enabled telehealth services among low-income families and veterans, with a focus on services delivered directly to patients beyond the doors of brick-and-mortar health care facilities.

 

The NOI seeks comment on:

 

  • The goals of, and statutory authority for, the pilot program.
  • The design of the pilot program, including the budget; the application process and types of telehealth pilot projects that should be funded; eligibility criteria for participating health care providers, broadband service providers, and low-income consumers; the broadband services and other communications services and equipment that should be supported; the amount of support and how it should be disbursed; and the duration of the program.
  • How to measure the effectiveness of pilot projects in achieving the goals of the program.

 

Today’s decision reflects the Commission’s continued commitment to supporting broadband connectivity for those facing barriers to high-quality health care and to maximizing the benefits of telehealth for all Americans through enhanced digital access.

 

Action by the Commission August 2, 2018 by Notice of Inquiry (FCC 18-112).  Chairman Pai, Commissioners O’Rielly, Carr, and Rosenworcel approving and issuing separate statements.

 

WC Docket No. 18-213

 

 

USDA Invests $97 Million in Rural Broadband Infrastructure – $20 million loan coming to MN

USDA reports…

Agriculture Secretary Sonny Perdue today announced that the U.S. Department of Agriculture (USDA) is investing $97 million in 12 projects (PDF, 104 KB) to provide or improve rural broadband service in 11 states.

“A person’s location should not determine whether he or she has access to modern communications infrastructure,” Secretary Perdue said. “That is why USDA is partnering with businesses and communities by investing in state-of-the-art broadband e-connectivity to remote and rural areas. These investments will expand access to educational, social and business opportunities for 22,000 subscribers to help grow their rural communities and America’s economy.”

USDA is making the investments through the Telecommunications Infrastructure Loan Program and the Community Connect Grant Program.

Good news – one project is based in Minnesota. Here’s more info on that project…

Recipient: Garden Valley Telephone Company
Loan amount: $20,360,000
Project description: This Rural Development investment will be used to make system improvements in Polk, Clearwater, Pennington, Marshall and Red Lake counties, and in the vacation resort areas of Maple Lake and Union Lake. The borrower proposes to construct 295.1 miles of fiber-optic facilities and construct fiber-to-the-premises (FTTP) facilities. These improvements will enable Garden Valley to enhance services and provide voice, video and higher broadband speeds for subscribers.

Lake County gets first bid for Lake Connections broadband – what is the value of a community network?

The Lake County News Chronicle reports…

The federal government stands to lose up to $45 million on Lake County’s broadband project, Lake Connections, after the county accepted an initial bid of $3.5 million in its planned sale of the broadband network.

Pinpoint Holdings Inc. of Lincoln, Neb., submitted the bid for the network, which will serve as the minimum purchase price for the network in a sales procedure also approved by the county during its meeting Tuesday, July 24, in Two Harbors.

The article gives a succinct history of the finances of the network…

In 2010, the board received a $56 million loan and $10 million grant from the Department of Agriculture’s Rural Utilities Service (RUS) to construct the network and over three years, more than 1,200 miles of a fiber network was built throughout Lake County and parts of eastern St. Louis County. Most of the network was completed in June 2015, and the focus shifted to connecting eligible customers to the network with the county pledging $15 million of its own money to fund “drops,” or home connections, that also included a $3.5 million grant from the Federal Communications Commission.

On June 13, 2017, the county entered into a deferral agreement with RUS for principal and interest payments on the condition Lake County sell Lake Connections to provide the federal government with maximum recovery of the loan and grants. When the deferral agreement was executed, the county owed approximately $48.5 million on the RUS loan.

In August 2017, the county executed a memorandum of understanding with RUS in which RUS agreed to accept the sale price of Lake Connections in full satisfaction of the county’s debt for the construction of the network, according to documents provided by Lake County Administrator Matt Huddleston. If the Pinpoint bid is the winning bid, RUS will receive $3.5 million to satisfy the $48.5 million debt.

And the potential for next steps…

If more than five qualified bids are submitted, the top three bidders will be asked to submit a “best and final offer” within 10 days. If there are less than five qualified bids, each entity will be asked submit a final offer.

Lake County was one of five counties we looked at for the reports last year on Measuring Impact of Broadband in 5 Rural MN Communities. It looks at the value of the network in a different lens – specifically we looked at the benefits of the network to the residents. We found that community-wide the residents reap $13.7 million each year and the household value (community-wide) and increased by $38.5 million. We got to those numbers by looking at two formulas – the value of houses with broadband increase 3 percent (times the number of house with broadband) and annual economic benefit per household is $1,850.

That doesn’t pay for the network – but it does demonstrate the value of the network to the community. As part of the research for that report, we spoke to members of the community. Many were quick to say that given the chance, they would go ahead again to help the community reap the benefits.

Tim Walz calls for $300 million for broadband in MN

Earlier this week I wrote about Erin Murphy’s plan for $100+ million ongoing funding for broadband. It’s great to see that Tim Walz, also running for Governor, is talking about serious money for broadband too $300 million. MPR reports

Walz is also proposing an increase in the gas tax and a boost in local government aid. He wants to invest $300 million in high-speed internet access throughout the state.

Walz did not did not say how much the overall proposal would cost. He called it a work in progress and did not rule out tax increases.

“If I have to ask the wealthiest Minnesotans to pay, I will ask,” he said.