Post Bulletin supports broadband access for everyone

The Post Bulletin posts an editorial in support of state broadband funding…

In 2015, the Blandin Foundation and the Minnesota Office of Broadband Development hosted a conference entitled “Border to Border Broadband: Better Together.”

That conference produced two significant outcomes; namely, the formation of the Minnesota Rural Broadband Coalition, and a mission statement that “Everyone in Minnesota will be able to use convenient, affordable world-class broadband networks that enable us to survive and thrive in our communities and across the globe.”

The coalition, whose membership includes counties, cities, townships, utility companies, nonprofits, telecom companies, advocacy organizations and four state technical colleges, is at the forefront of the effort to ensure that by 2026, all Minnesotans will have access to internet speeds of 100 Mbps/20Mbps.

They outline recent history of state broadband funding in Minnesota, including a look at last year and prediction for this year…

Border-to-Border Broadband isn’t a partisan issue. In its end-of-session report last year, the Minnesota Broadband Coalition specifically thanked six Republican legislators and two DFL legislators for their support. Sen. Jeremy Miller, a Republican from Winona who is now the youngest Senate president in state history, was among those whom the coalition singled out for praise.

We think that bodes very well, and we urge all legislators in Southeast Minnesota to join Miller in a renewed effort to offer broadband access to everyone.

What about a state infrastructure bank like North Dakota?

A smart reader asked me about a state infrastructure bank in Minnesota, like they have in North Dakota to pay for things like broadband. (Well help finance things like broadband.) I won’t pretend to be an expert or have an answer but I thought it might be worth sharing what I learned when he asked.

From Wikipedia I learned….

The Bank of North Dakota (BND) is a state-owned-run financial institution, based in Bismarck, North Dakota. It is the only state-owned facility of its type in the United States other than the Puerto Rico Government Development Bank.[2]

Under state law, the bank is the State of North Dakota doing business as the Bank of North Dakota.[3] The state and its agencies are required to place their funds in the bank, but local governments are not required to do so.

Other entities may also open accounts at the Bank; however, BND offers fewer retail services than other institutions, and it has only one office. These limit its competitiveness in consumer banking.

[4] The bank does have an account with the Federal Reserve Bank, but deposits are not insured by the Federal Deposit Insurance Corporation, instead being guaranteed by the general fund of the state of North Dakota itself and the taxpayers of the state.[4] BND also guarantees student loans (through its Student Loans of North Dakota division), business development loans, and state and municipal bonds.[4]

From the North Dakota Bank site I learned…

Several sections of the North Dakota Century Code address the creation of the Bank, its oversight and role in the state. Today, the North Dakota Legislature will appropriate funds from BND when needed through the budget process or state law.

Chapter 6-09 The Bank of North Dakota

BND has responded to the state’s needs since its inception.

From the Institute of Local Self Reliance I learned…

The core mission of the Bank of North Dakota is to cultivate the state’s economy by supporting local banks and credit unions.  The more these community-based financial institutions flourish, the thinking goes, the more capacity they have for financing new and growing businesses.  BND works with almost all of the state’s 89 local banks and many of its credit unions.

One of the chief ways BND fulfills this mission is through its lending.  The bank’s $3.9 billion loan portfolio has four main components: business, farm, residential, and student loans.

Its business and farm loans, which comprise half of its lending, are almost exclusively “participation” loans.  These loans are originated by local banks and credit unions, but BND provides part of the funds. In doing so, BND expands the lending capacity of the state’s local financial system.  At the end of 2014, BND had almost $2 billion in participation loans in its portfolio, an amount equal to 10 percent of the total value of loans outstanding on the books of the state’s small and mid-sized community banks and credit unions.  This partnership helps local banks compete is by enabling them to make larger loans than they could on their own.  As their business customers grow and require larger loans, North Dakota’s local banks, with the support of BND, can continue to meet their needs, rather than lose these borrowers to large out-of-state banks.

Banking is not my specialty. I’d be interested in hearing opinions. I like the idea of a bank that’s mission is to support economic development and I think in rural areas part of the recipe for economic development is broadband. We’ve seen that’s true per household (to the tune of $1850/household/year); I have to think business potential is at least as good. Would a state bank supporting/backing the local portion of financing make the broadband grant program even stronger?

Ubiquitous, serious broadband is a long term game – but short term wins help

MinnPost has an article that does a nice job summarizing the broadband and broadband policy situation in Minnesota. MinnPost reports…

Now a group of DFL and Republican lawmakers are pushing to narrow that broadband gap by injecting $70 million over the next two years into a grant program for internet projects. But while the new money would keep Minnesota on track to meet one of its broadband access goals by 2022, the state has a long and expensive road ahead to reach a more ambitious pledge — to bring much faster universal internet to the state by 2026, said Danna MacKenzie, executive director of the state’s Office of Broadband Development.

“We absolutely will be celebrating that we’ve done something that I don’t think too many other states have done,” MacKenzie said about the prospect of reaching the state’s 2022 goal. “But at the same time, no, we aren’t necessarily done yet.”

It’s a realistic look at what it takes to keep up with broadband. It feels like a moving target because it is. And it can be expensive for the private sector to take it all on…

The biggest obstacle to high-speed internet outside of large cities has always been money. In remote areas, it’s expensive to build infrastructure, and there are fewer potential customers to offset the costs.

Justin Forde, the senior director of government relations for Midco, a Midwestern telecom company, said there can be a “tremendous” price tag for running wireline internet services, such as fiber-based broadband or digital subscriber lines (DSL), to rural houses and businesses.

“It’s tough to do that with only private capital because the return isn’t there for some of these last-reach spots,” he said.

Providers need help and the fund would help cover some of those costs…

MacKenzie said there isn’t an estimate for how much it will cost to reach the 2026 goal for now, partially because it’s difficult to forecast what will happen with federal and private dollars in the future. But she stressed that the state will not be finished working on broadband once it reaches the lower speeds of the 2022 goal.

“I want to be a little bit careful about not establishing the expectation that 2022 is a hard stop and we’re done,” MacKenzie said. “And I know that a lot of people are anxious to find that ‘when do we get to say we’re done’ and, and to be frank, we live in a world that’s constantly changing and it’s not clear when we’re going to be done. But we are making what I think is significant progress.”

But it looks like it’s a topic of interest to policymakers…

For now, Ecklund said the fight at the Legislature will likely be about how much money to give the broadband program. But he said the slow internet service hits close to home, affecting his neighbors, local businesses and even his own house: Rob and his wife, Joan, cannot each have a laptop on the internet at the same time “because neither one of us will get service. In a nutshell, that’s why I’m pushing it.

Rep Ecklund introduces broadband bill in MN

Mesabi Daily News reports…

Broadband connectivity has plagued rural areas and the Iron Range for a number of legislative sessions, even as technology use has increased tenfold in education, business and health care, to name a few industries.

State Rep. Rob Ecklund, DFL-International Falls, hopes to change that. He unveiled a bill Wednesday to expand high-speed broadband in Minnesota through a two-year $70 million investment. The bill was part of the “Minnesota Values” agenda released by House Democrats pm Wednesday and based on a plan developed by the caucus in September.

“Broadband is more important today than ever before and will play an increasingly important role in the lives of Minnesotans for decades to come,” Ecklund said in a news conference. “While significant progress has been made, we still have work to do to make sure all Minnesotans have access to high-speed connections.”

His House 3A district, which includes International Falls and Ely, are among the most remote in northeastern Minnesota and lagging behind in connectivity. As a whole, rural areas are vastly underserved by high-speed broadband, according to a 2018 report by the Minnesota Broadband Taskforce.

In that report, the taskforce said just 79 percent of people have access to speeds of 25Mbps down and 2 Mbps up in rural Minnesota, compared to 91 percent statewide. The state’s goal of 100 Mbps down and 20 Mbps up reaches just 49 percent of rural Minnesotans.

Ecklund is proposing to fund the connectivity upgrade through the Border-to-Border Broadband Development Grant Program, which is a competitive program providing matching grants for internet providers to expand access across the state.

“Expanding broadband expands educational opportunities through programs like distance learning, enables our great Minnesota businesses to compete in today’s global economy, and helps people stay in touch with health care providers to receive care and monitor their health conditions,” Ecklund added. “Future technologies will rely on high-speed connections as well.”

Since 2014, according to the House DFl, the state has funded $85.2 million and used $110.6 million in investments to better broadband across more than 34,000 homes, 5,000 business and 300 community institutions.

The bill was part of 10 unveiled Wednesday by House DFL leaders, including a proposal to let all residents buy into the MinnnesotaCare health program, which is currently reserved for the working poor.

MN Watchdog take on Lake County Network sale

MN Watchdog has posted about the recent Lake County sale of Lake Connections

The project received $66 million in grants and loans through the U.S. Department of Agriculture’s Rural Utilities Service (RUS) as part of President Barack Obama’s stimulus legislation. Including federal and local money, more than $80 million was sunk into Lake Connections.

After seven years of operations, Lake Connections has 2,500 customers, with 750 more interested parties waiting for service, and ironically the Board of Commissioners sought to sell its government network because it felt a private provider could do a better job of hooking up eager customers sooner.

The commission had hoped to sell the network for $20 million, but found that estimate grossly overvalued. Instead, according to a July 27, 2018, Lake County News Chronicle article, Pinpoint Holdings offered an initial bid of $3.5 million before a higher price was agreed upon. Taxpayers get to eat about $40 million that’s still owed on the debts. RUS agreed with the county that the sale price will fulfill the balance of the loan.

Freedom Foundation of Minnesota founder Annette Meeks previously told Taxpayers Protection Alliance (TPA) that Lake Connections is one of the worst examples of the detriment effects of municipal broadband projects. Local taxpayers were forced to sink $17 million into the project, money that would have been better spent on other projects improving the quality of life of the area.

Research we did for the Blandin Foundation two summers ago found that people in Lake County were happy with the network and policy makers did not regret their decision. Each household with broadband reaps on the average a $1,850 economic benefit annually – at 2,500 homes that’s $4.6 million a year.

Rural legislative interests including funding for broadband

MinnPost recently wrote about rural Minnesota’s high hopes for the 2019 legislative session

When groups representing rural Minnesota interests released their wish lists for the 2019 legislative session, some of the items looked familiar: a boost in funding for the Local Government Aid program, proposals to generate housing, more money for broadband expansion.

Yet while the issues might not be new, some of the players at the Capitol are, including Gov.-elect Tim Walz, the former U.S. congressman from Mankato whose campaign theme – “One Minnesota” – heartened some rural leaders who have long felt left behind by the Twin Cities metropolitan region.

The specifically outline some hopes for rural broadband…

Broadband expansion: Rural groups plan to continue their push for the expansion of high-speed internet service into underserved regions. Last year, the Legislature set aside $20 million for the Border to Border Broadband Development Grant Program, which provides grants to help providers pay for the infrastructure they need to expand their reach. The Greater Minnesota Partnership is asking for $50 million for the Border to Border program, with at least half of the money targeted to areas that lack access to 2026 state speed goals — 100 megabits down, 20 megabits up. Rural leaders argue that they have little chance of luring businesses, like this high-tech one in Gibbon, without solid internet service. “We hope this is something that gets more funding, given the jobs and the industries and the schools that rely on this,” said Irene Kao, the intergovernmental relations counsel at the League of Minnesota Cities.

Iowa is looking to catch up with MN with state Broadband grants

A great example of Minnesota leading by action. But to keep a ahead of the curve, we need to keep investing. The Des Moines Register reports

This summer, Gov. Reynolds created the Empower Rural Iowa task force, and rural broadband is one area where the citizen-led commission has made recommendations to bolster rural Iowa housing, leadership and overall quality of life.

Empower Rural Iowa was initially focused on broadband, housing and rural leadership.  The recommendations made this month for broadband include identification of a sustainable funding  source for the state’s broadband grant fund.  That makes sense, since the main impediment to further expansion of broadband networks and services is financial – it’s expensive to serve rural, sparsely populated areas.

The timing for this action is critical because our neighbors are already moving.  Over the past several years, Minnesota’s broadband grant funding has ranged between $10 million and $35 million per year.  Wisconsin’s broadband fund has grown to $14 million per year.  Its latest round of grants totaled $7 million, distributed among 37 recipients who serve 1,100 business locations and 14,000 residences.