Expanding Rural Electric Member Coop broadband coverage in Indiana could mean benefits of $12 billion

Purdue University just released a report that looks at the quantitative benefits of investing in broadband – they look specifically at extending/expanding networks deployed by Indiana’s Rural Electric Member Cooperatives (REMCs) – but expanding the network ubiquitously across the state. Here’s what they found…

We estimate the net benefits of broadband investment for the whole state of Indiana is about $12 billion, which is about $1 billion per year annuitized over 20 years at six percent interest rate. Year after year, added government revenues and cost savings would amount to about 27 percent of net benefits in the seven REMCs each year. If the rest of rural Indiana is like these seven Cooperative service areas, then 27 percent of the $1 billion per year would be government revenue and health care cost savings, or $270 million per year. In terms of total net present value of benefits, 27 percent of $12 billion is $3.24 billion in added government revenue and health care cost savings.

It’s interesting to see that 27 percent of the net benefits would be government revenue and health care cost savings. That’s a number taxpayers can use to determine the return of public investment in broadband. Last fall, I looked at community return on public investment in broadband – which came to about $1,850 per household. Taking it a step farther, figuring out how much benefit is there in government revenue and health care savings make it even easier to balance cost with benefit.

Minnesota Broadband County Ranking for speeds of 100/20 for 2018

I’m starting to work on County Broadband Profiles and in the process, I found a map that highlights percentage of households served by wireline service as defined by at least 100 Mbps down and 20 Mbps up by county. So I pulled out the numbers from each county to see how various counties rank. (I looked at rank for speeds of 25/3 earlier this year.)

Here are the top 10 ranking counties:

  1. Rock (99.93% covered)
  2. Ramsey (99.82 % covered)
  3. Hennepin (98.97% covered)
  4. Big Stone (98.91% covered)
  5. Anoka (97.86% covered)
  6. Lac qui Parle (97.35% covered)
  7. Stevens (96.747% covered)
  8. Beltrami (96.30% covered)
  9. Washington (96.10% covered)
  10. Cook (94.50% covered)

And the bottom 10 ranking counties:

  1. Otter Tail (2.36% covered)
  2. Kandiyohi (10.64% covered)
  3. Becker (12.95% covered)
  4. Mahnomen (13.53% covered)
  5. Blue Earth (14.13% covered)
  6. Aitkin (17.55% covered)
  7. Todd (17.58% covered)
  8. Norman (20.55% covered)
  9. Mower (23.31% covered)
  10. Pope (23.67% covered)

Given these lists – all things being equal – where are you going to move, start a business or invest?

Clearly some counties are in good shape and some need a good kick start. But what is interesting is the swing between top and bottom – from 99.93 percent covered to 2.36. I think it’s worth nothing that Rock County – the top county was a recent recipient of a Minnesota broadband grant. And congrats to them for edging out the metro counties.

Many people seem focused on the 2022 speeds goals (25/3) but I think these are the ones to look at if you want to be ready for the future. There’s only one county that is on the lowest ranking list for both speeds of 25/3 and 100/20 (Aitkin). Being prepared for 2022 may give some counties a false sense of security for the future.

I’m going to include a table with the full list – but that rarely transfers well to the website – you can download the Excel file too.

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FCC Broadband maps shown unreliable

The Institute for Local Self Reliance recently looked at what the FCC reports for broadband coverage in Rochester MN and what’s actually there. They found…

Our results confirm what a bipartisan group of U.S. Senators has expressed concern over: federal broadband data is deeply flawed.

The FCC data comes from self-reporting via Form 477. What I’ve heard from providers over the years is that these forms are overwhelming to complete. The report recognizes the flaws of self-reporting…

The overwhelming failure of broadband mapping results from several factors. Large, de facto monopoly providers have incentives to overstate their coverage and territory to hide the unreliable and slow nature of their service in many communities. Small providers often have trouble completing the FCC Form 477. This form requires 39 pages of instructions on how to properly complete it. Providers are supposed to submit it every 6 months, but many small providers find it confusing and frustrating- taking too much time to produce data that has dubious value given the flaws. Larger providers have plenty of staff to handle the form and seem to benefit the most from its flaws, as this data is often used to determine whether government programs should invest additional funds into an area, often by a competitive grant program. Areas that appear to be well covered will not result in more investment, leaving the incumbent providers without fear of competition.

Here is the coverage (number of providers versus population) for speeds of 25 Mbps down and 3 up

Versus 100 Mbps (which is the state speed goal by 2026)…

There’s a ten-fold difference in number of unserved residents.

They also compare coverage of wired-only access:

Versus wired & wireless service…

What they found is that there is much greater competition, pricing and speeds in town as compared to the outskirts or outside of town…

The rural communities surrounding Rochester, Minnesota have few fast, affordable, and reliable Internet service options. The urban areas enjoy some limited broadband competition. Still, most residents can only access broadband with speeds greater than 100 Mbps through Charter. A majority of the rural communities around Rochester rely on fixed wireless connections. The broadband tiers from fixed wireless providers are often more expensive than wireline broadband. The two fixed wireless providers that advertise Internet access at broadband speeds around Rochester are Hiawatha Broadband Communications’ Air Internet division and RadioLink. Hiawatha Broadband Communications charges $64.99 per month for a 25 Mbps download and 10 Mbps upload connection.8 RadioLink charges $85 per month for a 30 Mbps download and 10 Mbps upload connection.

Within Rochester, broadband is more affordable and has faster speeds than outlying areas. As of July 2018, Charter Communications charges $30 for 100 Mbps download for one year if the service is bundled with a cable subscription in Rochester, but the service appears to cost $65 without promos or bundling and before the many fees that are tacked on.10 CenturyLink has an online offer for 40 Mbps download for $45 in Rochester, but that only applies to addresses located very close to the DSLAM and again does not include the added fees.11 Jaguar Communications offers a Fiber-to-the-Home network in select portions of the city. In a phone call, they confirmed that fiber services cost $69.95 per month for 125 Mbps download speeds, where available.

One of the main reasons we need to care about what can be seen as the minutia of technology is that policies are written and public funds spent based on these numbers. The ILSR presents one example…

In 2015, City Council member Ed Hruska claimed, “We have 19 local broadband providers and, of those, we have two cable providers, six DSL providers, four fiber providers, three fixed wireless providers and four mobile providers.”4 Our analysis shows that broadband competition in Rochester is actually far more limited.

As a whole, this may (or may not) be true about Rochester – but people need to understand that is is not ubiquitously true. If we can recognize the digital divide within and around the city, the digital divide more is likely to deepen.

Scientists are working on making fiber even faster

Network World reports on research that’s happening to make fiber better. It’s fun to hear what’s happening on the top end of broadband but it really shine a light on the need to catch up with lower end.

The issue with fiber…

Signal noise and distortion have always been behind the limits to traditional (and pretty inefficient) fiber transmission. They’re the main reason data-send distance and capacity are restricted using the technology. Experts believe, however, that if the noise that’s found in the amplifiers used for gaining distance could be cleaned up and the signal distortion inherent in the fiber itself could be eliminated, fiber could become more efficient and less costly to implement.

An emerging solution…

The researchers at Chalmers University of Technology and Tallinn University of Technology said they can now send data 4,000 kilometers (nearly 2,500 miles) — or roughly the air-travel distance from Los Angeles to New York.

The team is using special, phase-sensitive amplifiers that handle both the noise and the distortion. The special amplifier functions using multiple pulses of different, very bright, compressed colors, polarized and then formatted into time division multiplexing, Chris Lee of Ars Technica explains in coverage of the research.

And they’re working on greater capacity…

In more progress, another group has been concentrating on increasing the amount of data the fiber can carry. That multi-scientist team, from DTU Fotonik, Technical University of Denmark, said it can show that it can pump 661 terabits per second down a piece of fiber. That’s “equivalent to more than the total Internet traffic today,” the publication Nature explains in an abstract on its website.

The Rural Broadband Association surveys anchor institutions in member areas to determine levels of service

The Rural Broadband Association (NTCA) surveyed anchor institutions in their members’ service areas about their connectivity. Here are some of the things they learned:

  • Fiber-to-the-premise (FTTP) was the most prevalent connection mode for all anchor institution types.
  • The maximum connection speed of broadband available to anchor institutions in the ILECs’ service areas averaged around 1 Gig (1 Gig = 1,000 Mbps/1 Gbps), except for public libraries where the average maximum connection speed available was less than 500 Mbps.
  • The average connection speed of broadband purchased by anchor institutions in the responding companies’ ILEC service areas was the highest for K–12 schools (238.7 Mbps) and the lowest for public libraries (43.3 Mbps).
  • For anchor institutions that are not connected via fiber, the average distance of those institutions from fiber facilities was 4.1 miles and the median distance was 0.6 miles. Approximately six in 10 of those institutions (59.4%) are less than a mile away from fiber facilities, while just over one-third (34.4%) are located between one and 20 miles from fiber facilities.
  • More than four in 10 respondents (41.3%) indicated that public libraries in their ILEC service areas had access to a maximum broadband speed of 1 Gig or more. For approximately one-half of the respondents (48.9%), public libraries had maximum broadband speed available ranging from 25.0 Mbps to less than 1 Gig. A very small percentage (2.2%) reported that connected public libraries in their service areas had access to a maximum speed of less than 10.0 Mbps
  • More than half of the responding companies (55.6%) had hospitals and medical clinics in their ILEC service areas with access to a maximum broadband speed of 1 Gig or more, and about one-fifth (22.2%) reported that hospitals and medical clinics in their ILEC service areas had access to a maximum speed greater than/equal to 100 Mbps but less than 1 Gig. The slowest maximum broadband speed available to connected health care providers, as reported by 6.3% of respondents, was greater than/equal to 10.0 Mbps but less than 25.0 Mbps.

NTCA represents nearly 850 independent, community-based telecommunications companies that are leading innovation in rural and small-town America

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.

Adoption is decreasing in rural areas. Benefit of broadband comes from access and use

Roberto Gallardo just released info on broadband adoption in rural, urban and suburban areas. There are lots of caveats to the research – it’s from 2015-2016, based on geographic definitions from 2010 and adoption means accessing broadband at speeds of 10 Mbps down and a1 Mbps up. BUT those are the best numbers out there right now.

So first the good news – adoption rates are improving…

In 2016, 15.4 percent or 48.9 million people lived in low adoption neighborhoods, down from almost one-fifth in 2015. So, yes an improvement.

Then the bad news – that improvement has not been evenly distributed. I think his chart makes this info most accessible. He shows levels of low adoption in rural, urban and suburban areas. As you can see below, low adoption decreased in urban and suburban areas but increased in rural areas.

Here’s where having that lower speed definition of broadband helps focus the attention on adoption. According to the Office of Broadband Development 94+ percent of Minnesota households have access to 10/1 speeds. That hasn’t decreased. Access isn’t an issue. The issue is helping people realize the value of broadband. Helping them learn how to use it.