USDA Invests $11 Million in Broadband for Rural Minnesota and Iowa Communities

I already posted details on the CTC project, but here’s the general info on the USDA money coming into Minnesota (and Iowa)…

Today, U.S. Department of Agriculture (USDA) Deputy Secretary Stephen Censky announced USDA has invested $11 million in three, high-speed broadband infrastructure projects that will create or improve rural e-Connectivity for more than 1,395 rural households and nearly 120 businesses throughout several counties in Minnesota and northern Iowa. This is one of many funding announcements in the first round of USDA’s ReConnect Pilot Program investments.

“When Americans are connected to high-speed internet, productivity and prosperity skyrocket,” Censky said. “This task of providing rural Americans with broadband is of the highest importance for President Trump and his Administration. We cannot leave millions of Americans out of the successes of this booming economy simply because they do not have access to the internet.”

Harmony Telephone Company will use a $2.7 million ReConnect Program loan and a $2.7 million ReConnect Program grant to construct a fiber-to-the-premises (FTTP) network to connect 577 households, a health care center and a critical community facility spread over 143 square miles in several counties bordering southern Minnesota and northern Iowa.

Osage Municipal Utilities (OMU) in northern Iowa will use a $397,749 ReConnect Program grant to provide broadband service to underserved households, farms and businesses in Mitchell County. This will be accomplished by directly accessing a fiber trunk line that runs through the heart of Mitchell, Iowa, and up to the border of Minnesota, allowing OMU to increase its service area bandwidth. The funded service area includes 151 households spread over 20 square miles.

Consolidated Telephone Company (CTC) will use a $5.2 million ReConnect Program grant to construct a fiber-to-the-premises (FTTP) network of up to one gigabit of symmetrical high-speed internet to nearly 700 homes and public facilities in portions of Cherry and Great Scott townships in Minnesota’s famed ‘Iron Range.’ CTC will leverage existing middle-mile infrastructure, in partnership with Northeast Service Cooperative, and require only an additional 157.1 miles of new FTTP construction. The funded service area includes 667 households, two educational facilities and two critical community facilities in St. Louis County.

Background:

In March 2018, Congress provided $600 million to USDA to expand broadband infrastructure and services in rural America. On Dec. 13, 2018, Secretary Perdue announced the rules of the program, called “ReConnect,” including how the loans and grants will be awarded to help build broadband infrastructure in rural America. USDA received 146 applications between May 31, 2019, and July 12, 2019, requesting $1.4 billion in funding across all three ReConnect Program funding products: 100 percent loan, 100 percent grant, and loan-grant combinations. USDA is reviewing applications and announcing approved projects on a rolling basis. Additional investments in all three categories will be made in the coming weeks.

These grants, loans and combination funds enable the federal government to partner with the private sector and rural communities to build modern broadband infrastructure in areas with insufficient internet service. Insufficient service is defined as connection speeds of less than 10 megabits per second (Mbps) download and 1 Mbps upload.

In December 2019, Agriculture Secretary Perdue announced USDA will be making available an additional $550 million in ReConnect funding in 2020. USDA will make available up to $200 million for grants, up to $200 million for 50/50 grant/loan combinations, and up to $200 million for low-interest loans. The application window for this round of funding will open Jan. 31, 2020. Applications for all funding products will be accepted in the same application window, which will close no later than March 16, 2020.

A full description of 2020 ReConnect Pilot Program funding is available on page 67913 of the Dec. 12, 2019, Federal Register (PDF, 336 KB). To learn more about eligibility, technical assistance and recent announcements, visit www.usda.gov/reconnect.

In April 2017, President Donald J. Trump established the Interagency Task Force on Agriculture and Rural Prosperity to identify legislative, regulatory and policy changes that could promote agriculture and prosperity in rural communities. In January 2018, Secretary Perdue presented the Task Force’s findings to President Trump. These findings included 31 recommendations to align the federal government with state, local and tribal governments to take advantage of opportunities that exist in rural America. Increasing investments in rural infrastructure is a key recommendation of the task force. To view the report in its entirety, please view the Report to the President of the United States from the Task Force on Agriculture and Rural Prosperity (PDF, 5.4 MB). In addition, to view the categories of the recommendations, please view the Rural Prosperity infographic (PDF, 190 KB).

USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit www.rd.usda.gov.

CTC Receives $5.2 million from USDA to serve Cherry and Great Scott townships on the Iron Range

Big news from CTC for parts of the Iron Range…

Today, U.S. Department of Agriculture (USDA) Deputy Secretary Stephen Censky announced that USDA has invested $11 million in three, high-speed broadband infrastructure projects that will create or improve rural e-Connectivity for more than 1,395 rural households and nearly 120 businesses throughout several counties in Minnesota and northern Iowa. This is one of many funding announcements in the first round of USDA’s ReConnect Pilot Program investments. CTC was awarded a $5.2 million ReConnect Program grant to construct a fiber-to-the-premises (FTTP) network of up to one gigabit of symmetrical high-speed internet to nearly 700 homes and public facilities in portions of Cherry and Great Scott townships in northeastern Minnesota’s Iron Range area. CTC will leverage existing middle-mile infrastructure, in partnership with Northeast Service Cooperative (NESC), and require only an additional 157.1 miles of new FTTP construction. The funded service area includes 667 households, two educational facilities and two critical community facilities in St. Louis County. CTC will invest $1,743,169 in the project; a 25% match. “We’re thrilled to receive this award,” said Kristi Westbrock, CEO and General Manager at CTC. “Residents and business owners in the Cherry Township area have made it very clear that they need high-speed internet in order to thrive. We look forward to partnering with NESC and to serving this area for years to come.”

As part of this round of funding, Harmony Telephone Company was also awarded a $2.7 million ReConnect Program loan and a $2.7 million ReConnect Program grant, while Osage Municipal Utilities in northern Iowa was awarded a $397,749 ReConnect Program grant. “When Americans are connected to high-speed internet, productivity and prosperity skyrocket,” Censky said. “This task of providing rural Americans with broadband is of the highest importance for President Trump and his Administration. We cannot leave millions of Americans out of the successes of this booming economy simply because they do not have access to the internet.” In March 2018, Congress provided $600 million to USDA to expand broadband infrastructure and services in rural America. On Dec. 13, 2018, Secretary Perdue announced the rules of the program, called “ReConnect,” including how the loans and grants will be awarded to help build broadband infrastructure in rural America. USDA received 146 applications between May 31, 2019, and July 12, 2019, requesting $1.4 billion in funding across all three ReConnect Program funding products: 100 percent loan, 100 percent grant, and loan-grant combinations. USDA is reviewing applications and announcing approved projects on a rolling basis. Additional investments in all three categories will be made in the coming weeks. More information about the ReConnect Pilot Program is available at http://www.usda.gov/reconnect. CTC is a technology advisor and full service telecommunications company based in Brainerd, MN. Formed in 1952, CTC has grown into a complete communications provider offering telephone, high-speed internet, digital television, and IT services to businesses and individuals throughout central and northern Minnesota. More information about CTC can be found at http://www.goctc.com.

Minnesota has 134,000 locations eligible for FCC Phase I Rural Digital Opportunity Fund funding

The FCC reports on how many locations (homes and businesses) are eligible for Phase I funding later this year. There are 134,000 locations in Minnesota that are eligible. More info from FCC

Federal Communications Commission Chairman Ajit Pai announced initial estimates of how many homes and businesses in each state could benefit from Phase I of the $20.4 billion Rural Digital Opportunity Fund. In total, about 6 million rural homes and businesses could be eligible for bidding in an auction slated for later this year to receive funding for high-speed broadband. This state-by-state list is for Phase I funding, which would target a total of $16 billion to census blocks with no broadband service at all meeting the Commission’s minimum speed standards. The remainder of the funding would be disbursed during Phase II. As recently announced, the FCC will vote January 30 on launching the Rural Digital Opportunity Fund.

“The digital divide affects many people in many rural communities. I’ve said that the Rural Digital Opportunity Fund would be our boldest step yet to bridge this divide, and today we get a glimpse of the broad impact this investment in rural America would have across the country,” said Chairman Pai. “Our staff’s initial estimate shows that in 25 states there would be more than 100,000 locations that would be eligible for Phase I of the Fund, and the benefits would be felt from the Pacific Coast to the Great Plains, and from Appalachia to the Gulf Coast. The Rural Digital Opportunity Fund is critical to bridging the digital divide. I hope that my colleagues will join me in voting for it on January 30.”

Supply and demand for broadband in rural areas and what can help make the business case work: Gov Report

Congressional Research Service recently published a report (Demand for Broadband in Rural Areas: Implications for Universal Access) that looks at the challenges of expanding or upgrading broadband in rural areas. The report includes lots of good number and research but at a really high level there are some of their points:

  • Rural areas are expensive to serve (because distance and lower population density make networks expensive) and the cost to deploy may surpass expected return on investment (ROI).
  • Rural areas tend to populations that are older, less educated and earn less money – each characteristic makes them less likely to be broadband (or generally tech) users. So even when there is broadband the adoption rates are lower.
  • Even in areas where the adoption is high and deployment costs are lower (so town centers) the potential for ROI is lower than in an urban setting.

These ideas aren’t new – but they are well documented in the report. The next section of the report looks at what the Federal government is doing to offset these challenges. I’m going to try to outline the options they mention. Most are funds that go to the provider, I’ve tried to note where that’s not the case:

  • Rural Utilities Service Programs
    • the Rural Broadband Access Loan and Loan Guarantee Program
    • Community Connect Grant Program
    • ReConnect Program
  • Universal Service Fund Programs
    • High Cost program (has morphed in the Connect America Fund although this report doesn’t go into that)
    • Lifeline program (funds offset cost to end users)
    • Schools and Libraries program and Rural Health Care program (schools, libraries and healthcare facilities apply directly)

There’s a quick and interesting discussion of FCC’s broadband definition. Key here is using legacy infrastructure to help define future needs. It’s practical but is it like asking your barber if you need a haircut?…

The 25/3 Mbps threshold is meaningful in both technical and policy terms, because the legacy copper-based connections utilized by some broadband providers would likely require significant upgrades in order to meet higher thresholds

The rest of the report looks at what Congress can do moving forward to make best use of resources:

  • Oversight or Legislation Addressing the Lifeline Program
  • Research on How the Costs of Broadband-Enabled Services Affect Rural Broadband Demand
  • Broadband-Focused Education and Outreach Grants
  • Incentivizing Adoption via the Terms of Federal Infrastructure Buildout Programs
  • Oversight of FCC Section 706 Process

OPPORTUNITY: Bush Foundation Ecosystem grants up to $300,000

From the Bush Foundation...

The Bush Foundation works to inspire and support creative problem solving — within and across sectors — to make our region better for everyone. We know problem solving is hard. Our Ecosystem grant program is designed to provide operating support to the programs and organizations that do the most to support the people doing this work.

Some might call these infrastructure organizations or intermediary organizations or just can’t-do-without organizations. We call them Ecosystem organizations because they create the environment for organizations and leaders to solve problems and make the region better for everyone.

APPLY NOW

WHAT WE FUND

Ecosystem grants provide operating support to programs and organizations that our grantees, Fellows and other organizations rely heavily on to:

  • Provide critical data and analysis.
  • Spread great ideas and build capacity.
  • Advance public awareness and policy.
  • Build and support leadership networks.

We are looking for Ecosystem grantees that support organizations and leaders working to advance the goals of our focus areas.

Organizations may apply to receive as much as $300,000 over three years in operating support. The annual grant amount is typically 25% of the organization’s expenses, up to $100,000 per year. All Ecosystem grantees will receive an additional $10,000 in capacity building funds to build or increase their skills to work across differences.

Mankato Free Press reacts to Blue Earth County broadband feasibility study

Earlier this week, I mentioned the Blue Earth County broadband feasibility study, which outlined the high cost of getting fiber to everyone in the county. Mankato Free Press reacts to the study…

The shortage of broadband creates a kind of decision with multiple bad choices: Expand millions to create networks and expect to lose money or require broadband providers to build those networks, or, of course, do nothing and leave the market to push business out of rural areas and to big cities.

In these times where rural America is being left behind, according to certain politicians, it seems there would be some kind of push to subsidize rural broadband or require some telecom and broadband providers to contribute to a development fund.

Broadband is to the 2020s what rural electricity was to the 1930s. We know rural America got its electricity. Now it needs its broadband.

They seem to suggest greater funding for the State Broadband grants…

Minnesota Democrats have typically favored more funding with past proposals by the DFL in the area of $100 million to $200 million, while Republicans have favored less funding. Gov. Mark Dayton’s Broadband Task Force, a nonpartisan group, said in a report two years ago, that $1.4 billion would be needed to hook up everyone in the state to broadband. More recently, Gov. Tim Walz and Republicans have been agreeing on funding of about $35 million a year, still far short of needs.

Blue Earth County’s broadband feasibility study outlines some tough costs

Mankato Free Press reports…

If Blue Earth County wants to have rural broadband internet, it’s going to have to pay a potentially unworkable amount of money.

That’s what consultants recently found in a broadband feasibility study, which they presented to the Blue Earth County Board Tuesday.

According to the study, it could cost more than $35 million to install 1,067 miles of fiber to connect all rural areas of Blue Earth County, excluding the Mankato area and larger cities such as Lake Crystal and Madison Lake. A combination of wireless networks and fiber, about 161 miles in total, would cost about $11 million to install.

Consultants at Finley Engineering and CCG Consulting say internet service providers are far more likely to favor the hybrid wi-fi/fiber approach just based on cost alone. An all-fiber network that could offer internet speeds of at least 100 mbps downloading and 25 mbps uploading likely wouldn’t break even after customers are hooked up and paying for services.

“This is hard to make back when you charge somebody $60 a month for broadband,” said Doug Dawson, president of CCG.

Yet a hybrid project would not only break even but make money after a few years, according to consultant projections.

The article goes on to talk about the potential role of the MN border to border broadband grants and the strong desire from the community to have better broadband…

To solve that issue in Blue Earth County, local officials plan to partner with providers to encourage expanding broadband access. Consultants recommend the county pay for a resident survey gauging how much interest Blue Earth County homeowners and businesses have to get better internet.

Such a study could be used as part of a state grant, which Chris Konechne of Finley Engineering said is what Bevcomm is doing with a potential project in Le Sueur County.

It could be difficult to find providers to start a project within the next few years, as consultants say several companies working in the area are waiting to see whether Midco (Midcontinent Communications) expands its services within Blue Earth County.

Yet commissioners say securing better broadband is important to Blue Earth County’s growth.

Grants do help offset the costs to the provider. And a hybrid network can be a step toward ubiquitous fiber; build fiber to more profitable areas first and upgrade to other areas as you can. We’ve seen with communities across Minnesota that it is expensive – but we’ve also see that the community reaps the benefits when they have better broadband and as more and more communities get fiber, there will be a cost of not upgrading.