Broadband makes short list of DevelopMN goals of Regional Development organizations in Minnesota

The Minneapolis Star Tribune recently ran a letter from Cheryal Lee Hills and Dane Smith outlining the role (and importance) of the regional development organizations (RDOs) in Minnesota…

The RDOs still are very much in service to employers, present and would-be, in the local economy. They swing deals and find capital, public money or tax breaks. But Region Five and all 10 of the entities allied as the Minnesota Association of Development Organizations are also broadly concerned these days about all the pieces crucial to healthy community development, which in turn foster more sustainable and equitable business growth.

This broader vision was recently distilled in a remarkable document, “DevelopMN 2016: Comprehensive Development Strategy for Greater Minnesota.”

We believe that this document can make a positive and constructive difference and that it can be of great value to candidates and voters during this year’s election season. More than ever, the so-called urban-rural divide and in particular the future of greater Minnesota will be front-and-center, as voters assess an unusually large number of candidates for governor and other offices, to determine who casts the most credible vision for a statewide economic growth formula that appeals to Minnesotans in every region.

And explaining DevelopMN, a framework for the future (a framework that recognizes the role of broadband)…

The DevelopMN framework, based on decades of local hands-on experience, pinpoints 17 goals and 58 strategies for growth. Those include: improving local and vocational employment training; building affordable housing; addressing a child-care-shortage crisis; accelerating our statewide transition to renewable and local energy; protecting water quality and natural resources (a huge asset that makes rural living attractive in the first place); building out broadband and high-speed internet access; bringing many more arts and cultural amenities to Main Street; supporting existing local businesses; and all the while emphasizing the need to welcome and be more attractive to newcomers and immigrants, whether from Minneapolis or Myanmar.

Importantly, DevelopMN does not throw shade on the Twin Cities as a competitor and says nothing, for instance, about stopping transit investment in St. Paul to pay for roads and highways in St. Peter. The new framework and the tone of DevelopMN turn out to be similar to that of Greater MSP, the large and well-funded organization launched almost a decade ago by large corporations and Twin Cities governmental leaders to promote metro growth and attract new employers.

If you’re interested in more discussion of future plans and the interconnections between rural and urban, I might suggest attending the Thrive by Design conference happening in Granite Falls next week.

Letter to the Editor – AT&T is investing in northwestern Minnesota

The Crookston Times posts a letter to the editor from Paul Weirtz, state president of AT&T Minnesota…

Mobile internet coverage is always a hot topic these days, especially in northwestern Minnesota. That’s why I wanted to take an opportunity to highlight some good news AT&T has to offer residents here.

Over the last five years, AT&T has made 115 upgrades to expand our network and boost coverage and reliability in Polk County and the surrounding counties of Kittson, Marshall, Pennington, Red Lake and Rosseau. This includes 36 network upgrades in Crookston, East Grand Forks, and Thief River Falls.

Just last month, we expanded our 4G LTE wireless network in the area with upgrades to an AT&T cell site on Highway 64 west of Thief River Falls. With these enhancements, AT&T customers will experience faster, more reliable wireless service.

We know residents and businesses are doing more with their wireless devices than ever before, and our goal is to give them an effortless network experience, not only in northwestern Minnesota but throughout the state.

That’s why AT&T is committed to investing in our wireless networks across Minnesota. We invested nearly $350 million in our Minnesota networks from 2014 to 2016. In 2017, we made 976 network enhancements across 299 communities in the state, including new cell sites, network upgrades, and capacity expansions. And we are continuing to invest in our networks this year. In fact, expanding our network in Minnesota has given AT&T the most wireless coverage in the state.

Not only do these investments boost reliability, coverage and speed, they also improve critical services that support public safety and first responders.

This is important because last year, Minnesota opted in to FirstNet, accepting a plan from the FirstNet Authority and AT&T to deliver a wireless broadband platform to the state’s public safety community. We are very proud that AT&T, in a public-private partnership with the FirstNet Authority, will build, operate and maintain a highly secure wireless broadband communications platform for Minnesota’s public safety community for the next 25 years at no cost to the state. The FirstNet experience will deliver innovation and create an entire system of modernized devices, apps and tools for first responder subscribers of the service.

As a member of the Governor’s Broadband Task Force, I know full well the benefits of broadband deployment.

I’m very proud of AT&T’s commitment to investing in our networks in Minnesota, and I’m excited for what the future holds.

Paul Weirtz, state president
AT&T Minnesota

 

NBC draws from Lake County for story of broadband success and cites recent Blandin report

NBC recently wrote about the impact of broadband in rural America. They make the point that with better broadband, rural communities can see greater economic impact and they use Lake County as the example…

A contractor building high-end houses in Minneapolis swung by Greg Hull’s sawmill on Friday, a timber operation located in deeply rural Lake County, Minnesota. The builder had seen Hull’s website and driven nearly 250 miles to the mill to inspect Hull’s high-end lumber as potential building material for his homes.

These days that’s not unusual. In the past year-and-a-half, Hull has seen orders balloon and interest grow, and a significant factor is his recent ability to gain access to high-speed internet. That’s made a huge difference for the saw mill, located at the end of a power line in an area that knows only gravel roads and limited cellphone coverage.

“Before, if you wanted to download or do anything on the internet, back when it was a phone line system, you couldn’t do anything,” said Hull, who lives and works on 100 acres of Minnesota woodland. “I had to go to the library or hire someone to do stuff, but now we can do it all. We have an improved website. It’s made the whole internet presence a lot more viable, which has in turn opened the exposure.”

That’s something largely new to Lake County, an area that covers 3,000 square miles and stretches from the shores of Lake Superior to the Canadian border. About 10,000 people call this area home. But local leaders there decided they needed high-speed internet, and after nearly eight years and the investment of more than $80 million — much of it coming from the 2009 American Recovery and Reinvestment Act (also known as former President Barack Obama’s stimulus bill) — access to the internet is beginning to boost the local economy.

That could mean a long-term impact of tens of millions of dollars in household economic benefit and residential real estate value, a report by the Blandin Foundation claimed.

The economic upside of internet access is being pushed by rural broadband advocates across the country who say that there isn’t enough being done to connect rural communities. Building out the necessary infrastructure, they argue, could function as an economic and informational driver for some of the country’s most cash-strapped regions.

Blandin report on Public ROI for Public investment in rural broadband in Daily Yonder

It was fun to talk to Tim Marema from the Daily Yonder in Austin (Texas) after presenting with Bernadine Joselyn on the Case Studies Measuring the Impact of Broadband in Five Minnesota Communities – which I worked on with Bill Coleman. Then it was funny to see that interview in the Daily Yonder yesterday.

One question I really liked was sort – why do the study?

Marema: What interested me in this report is that someone could look at this for their own community and, in a rough and ready way, come up with a back-of-the-envelope estimate on what the public return on investment might be in high-speed fiber-to-the-home. Are the methods you used useful to other communities that are looking at broadband investment? 

Treacy: I think it would be …  Because all of a sudden if you’re having a conversation about how much tax money are we willing to put into a solution, well that factors in. I mean if it’s going to increase taxes by only $100 a year, and you know that you’re going to see an increase in value on your home, and an increase in economic benefit of $1,850 [on average for each house], well that $100 seems pretty minor. 

We’re looking at helping people do that back on the envelope math at the broadband conference this fall. (That’s still in development.)  I do hope people are able to use the formulas to figure out ROI for the community and household.

US Farm Bill doesn’t pass – including support for broadband in rural areas

The Benton Foundation reports…

The House of Representatives failed to pass a massive farm bill as Republicans were unable to shore up support from their conservative members. The 641-page bill addresses a range of issues related to agriculture, such as livestock disaster programs, conservation, feral swine, farm loan programs and broadband services in rural areas, just to name a few.

The vote was 198-213. While Republican leaders said they were confident ahead of the vote, it was clear the bill was in jeopardy, and members of leadership could be seen on the floor holding last-minute negotiations, as conservative Republicans sought a promise of a vote on their preferred immigration bill. In the end, the farm bill, a measure with huge implications for low-income families and the agricultural industry, became little more than a bargaining chip in the heated intraparty battle over immigration, President Trump’s core cultural and political issue.

Broadband service spreading in rural Murray, Pipestone counties

The Globe reports on a process that Nobles, Murray and Pipestone Counties have used to move to better broadband in their areas…

The widespread utility of broadband has led several southwest Minnesota counties to invest their time and money into researching the topic, and make serious progress in the process.

In 2016, Nobles County conducted a broadband feasibility study with CCG and Slayton-based Finley Engineering. Shortly after, the state’s Border-to-Border grant program awarded Lismore Cooperative Telephone nearly $3 million to create a hybrid fiber and wireless network that will provide baseline broadband speeds to most of the county and ultra-fast fiber to hundreds of homes. The project is expected to be completed by mid-2018.

Last year, Murray County and Pipestone County partnered with four other southwest Minnesota counties and the Blandin Foundation to conduct feasibility studies — also done by Finley and CCG — in hopes of getting a similar outcome.

Pipestone County’s study was completed in February 2017, and later that year, Ruthton-based Woodstock Telephone received a $363,851 grant from the Minnesota Border-to-Border Broadband to provide fixed wireless broadband to rural Pipestone County.

Murray County is still working on access…

“The county does not plan to build a broadband network but is open to talking with providers who are interested in extending service to our citizens and may need financial assistance to do so,” Rucker said. “Murray County had the feasibility study completed so that any provider who wants to extend broadband service to our unserved and underserved areas could use the study as background to apply for state or federal grants to do so.”

The county has seen significant broadband investment from Woodstock since 2015, when it installed two wireless broadband towers around Lake Shetek. It continued over the last two years, installing eight internet coverage sites in the area, including towers in Lake Wilson, Slayton and Edgerton. The company plans to add another tower south of Chandler this year.

The towers, which are fed with fiber, provide 50Mbps download speeds at a range of six miles, according to Terry Nelson, Woodstock general manager. The speeds and service can vary, however, as wireless internet can be disrupted by geographical features such as hills, trees and windmills.

“We’ve done wireless in a lot of these areas, but there’s still little pockets that we can’t hit with some of our wireless,” Nelson said. “I would definitely never say the county is 100 percent covered, because it’s not.”

An October 2017 report from the state found 99.8 percent of Murray County households have access to 25/3 broadband — up from 50.47 percent in July 2016 — and more than 52.9 percent can access 100/20 — up from 41.56 percent. The numbers in Pipestone County are 97.87 and 79.73 percent — up from 79.36 and 44.54 percent, respectively — but Dawson said the numbers shouldn’t be relied on.

Counties recognize wireless as a means to meeting 2022 state goals, but at looking for fiber to reach 2026 goals…

Minnesota wants 25/3 speeds mandated statewide by 2022. By 2026, the required numbers will be raised to 100/20. Reaching those speeds consistently is nearly impossible with wireless internet, Dawson said.

“The wireless that we’re talking about is capable of that within a mile or so, but you would have to put a cell site at every farm — that’s not going to happen,” he said.

Instead, broadband experts agree the ultimate solution is delivering fiber-to-the-home, reliably delivering 1-gigabit (1000Mbps) speeds.

Lismore Telephone is installing fiber to every household in Leota and Wilmont and hundreds of homes along its 135-mile fiber ring, but it is expensive. In addition to $6 million between the state and Nobles County, the county had to throw in an addition $1 million in cash and $2.57 million in taxable general obligation tax abatement bonds to make it work.

That’s with fiber costing around $20,000 per mile, and the price won’t be coming down any time soon, Dawson said.

“You are already in a state where fiber is as cheap as it will possibly be,” Dawson said. “With 50-foot deep soil, they can get it in real easy. Minnesota can bury fiber for $20,000 a mile, where in a lot of parts of the country, that’s $50,000 a mile.”

For Woodstock, a successful fiber formula has been delivering directly to large businesses, where the return on investment makes it doable.

Apparently some ISPs aren’t making enough money serving some areas – but some are

The Electronic Frontier Foundation (EFF) has an interesting article on broadband, profitability and net Neutrality. They report….

ISPs misrepresent to policymakers the true cost drivers of broadband deployment as a way to stave off pro-consumer protections. In fact, the biggest cost barrier for an ISP’s creation is the initial construction of the network (as opposed to its future upgrades) and the civil works that entails. That is what the Google Fiber deployment has taught us and that is what studies in the European Union concluded when analyzing how to improve the market entry prospects of ISPs.

Some estimates suggest the cost of deployment can be close to 80 percent of the entire cost portfolio of an ISP. Note that means operations and maintenance of the network (that includes all of the broadband usages of its customers) could be as little as 20% of the ISP’s costs. This is acutely true when it comes to a fiber to the home deployment where the infrastructure (fiber optic cable) is effectively future-proof and can be upgraded cheaply with advances in electronics.

EFF maintains that there are providers that can make profit and adhere to net neutrality principles…

EPB Fiber Optics, a community broadband company run by Chattanooga, Tennessee, offers both gigabit broadband and 10-gigabit broadband as well. A decade of their financial information, including how much they invest, how much the network costs, and how much profit they are making, is available here.

The EFF article details the financials but the gist is…

EPB is able to deploy a 21st Century ISP with the world’s fastest service with just 90,000 customers today while following network neutrality and forgoing extra profits from monetizing personal information like web browsing history.

They also mention Sonic…

Being able to provide affordable high-speed Internet for a profit while respecting network neutrality and user privacy is something the competitors to the incumbents have repeatedly demonstrated.  Take regional provider Sonic for an example and their Brentwood, California deployment where the city’s infrastructure policies eliminated a majority of the costs of building the ISP. Right now Sonic sells gigabit broadband in the city of Brentwood at $40 a month, one of the lowest priced offerings for gigabit service. Again, they are doing this for a profit all while following network neutrality and protecting their customers’ privacy (Sonic regularly supports laws codifying their commitments as well).

I’d maintain that we don’t have to go that far to find examples of providers that are able to serve rural areas and remain profitable. Last year I spoke with HBC and Paul Bunyan about how they were able to offer FTTH in rural areas – here’s what they said.

HBC

What is the business case that makes sense for them?

They have done the numbers and have found that they are able to go into an area if the cost per passing is $1500 in a rural area or $1000 in a town. In a rural area, there is little competition so they have found that the are able to get 90-95 percent take rate, as opposed to 70 percent in town.

The real costs often surpass $1500/$1000. Rural areas can be tough for deployment. Some areas are built on stone, some are in valleys. The terrain can be more challenging than the distance. So they need a partner to help offset that cost. The partner could be the community or a grant like the Border to Border grant or a combination of both.

Paul Bunyan

What is the business case?

Paul Bunyan is not focused on high or fast profit margin. They’re goal is to break even in 10+ years. Their investment is in the community as well as the business – supporting customer retention also supports business (and resident) retention and economic development for the community. Federal support, largely in the form of RUS (Rural Utility Service) low interest loans have made a difference. The Minnesota Border to Border grants have been essential for the very hard to each places.

Paul Bunyan has received Minnesota grants and without them probably would not have been able to make the business case to go into areas south of Park Rapids or Northern Itasca County. Paul Bunyan (and Minnesota) are getting to the stage where a larger percentage of unserved areas are unserved because they are the highest cost areas – due to distance, population density, difficult terrain, natural barriers and permitting issues (dealing with railroad crossings, forestry issues…). In those cases the state funding is necessary.

I was just in Austin talking about the case studies we did last year showing that a community benefits when it has broadband – to the tune of $1850 annually per household. That money goes to the household, not the provider but it does help secure a customer, maybe encourages some recruitment to the area maybe even big businesses – it may create more business and that helps the business case.