Lake County Broadband sold to Zito Media

Business North reports…

Lake Connections, the broadband company established by Lake County, Minn., is being sold to Zito Media.

“We are just waiting on our franchise permits. At that point, the Lake County fiber network will be 100 percent Zito owned,” said Zito President Jim Rigas said.

Zito, a small cable and data operator based in Pennsylvania with operations in 17 states, intends to maintain the Two Harbors office and local staff.

The article does a nice job outlining the trials and tribulations of Lake County Broadband and recognizes the people who forged ahead to make broadband happen for their county…

Lake County Commissioner Rich Sve has the unique perspective of watching the journey of county-owned broadband from the beginning. Sve had just been elected as commissioner for the first time in 2009, and midway through that year, the county began its grant application to introduce a fiber network reaching into rural Lake County.

With a couple of options already available for high-speed internet service within the cities of Lake County, Sve said, it was the rural regions that were neglected and no incumbent service would step up.

“There was no one else who would do it, and we recognized that to be part of the world we live in requires that type of bandwidth.”

The county board in 2010 foresaw a future with many basic needs, such as healthcare, elders aging in place and education, that would rely on all county residents having access to high-speed internet. For the county to thrive, attract companies and entrepreneurs and develop economically, it was a must, the board decided.

“I’m most proud of bringing broadband infrastructure to so many people,” Sve said, “and in the same breath, I regret that we did not get to every corner of the county as we had hoped to.”

And…

Lake County Administrator Matt Huddleston had also just begun in that position at the start of the broadband project.

“It felt like it was uphill the whole way, but the board stepped out on a limb for something it believed in even with the risk involved,” he said, “and without that, I’m not sure such a big portion of the county would have been reached.”

Huddleston expressed disappointment that the last miles of fiber were not yet laid to the farthest reaches of the county, however, he feels confident that the county board’s perseverance brought the project through obstacles that a private entity might not have managed.

Huddleston said he is hopeful those final connections and more fiber placement will continue under new ownership, and added that the county intends to work cooperatively with the new owners to advocate for grant opportunities.

It sounds like Zito is looking at moving forward…

Going forward, Rigas said, Zito Media’s focus is to connect as many customers as possible. He noted a significant number of people live next to fiber that has already been placed, but their homes are not yet connected to the network.

“The county has collected 600 or more expressions of interest in being served by us,” said Rigas, adding that the company would first like to connect customers already next to the fiber lines.

The second step for Zito will be looking at the areas where deployed conduit is only partially complete, with evaluation taking place over the course of the next year, according to  Rigas.

Paul Bunyan Communications Announces Construction of New Customer Service and Technology Center in Grand Rapids

Great news for Grand Rapids from Paul Bunyan

Paul Bunyan Communications has announced they will be constructing a key, new facility in Grand Rapids beginning this summer and opening in the late spring of 2020.

“It’s our hope that our new customer service and technology center will be a great addition to the Grand Rapids community and reinforce our cooperative’s commitment to the city and region.  It will also position us to better serve this important and expanding part of our service area well into the future.  I’m very excited that our employees, growing membership base and potential new customers will soon benefit from this great new facility,” said Gary Johnson, Paul Bunyan Communications CEO & General Manager.

The member-based, non-profit cooperative began expanding its all-fiber optic network to the Cohasset and Grand Rapids areas in 2004. Since then, Paul Bunyan Communications has continued to aggressively expand to rural areas of Itasca and St. Louis counties providing state of the art, gigabit Internet and other communication services to areas lacking these critical services  Paul Bunyan Communications is now the largest broadband cooperative in the state of Minnesota.

“I’m really excited that Paul Bunyan Communications is investing in a new customer service and technology center here.  The cooperative provides first class communication services to the region and with their commitment to local customer service also provides many good paying jobs in the technology field.  I can’t wait to see their operations move to this beautiful new facility next year,” said Rick Blake, Grand Rapids City Councilor

“We are excited that Paul Bunyan has committed to expanding their office and service delivery in Grand Rapids.  They are an important partner in our community.  Economic development is currently one of the priorities of the County Board.  Expansion of high speed internet is vital to that growth and improved customer service will certainly add benefit,” said Davin Tinquist, Itasca County Board Chair.

“Paul Bunyan has played an integral part in ‘connecting’ much of Itasca County through their broadband expansions,” said Tamara Lowney, President of Itasca Economic Development Corporation (IEDC).  “We value their partnership with IEDC and their continued investment into our area, both through their expansion and their community minded investments.  Their leadership in providing broadband to our rural communities in critical to attracting and retaining our workforce and families.”

The first Paul Bunyan Communications office in Grand Rapids was in leased space in the Central Square Mall from 2005-2008.  To meet growing customer demand, their current larger leased retail space was opened in 2008 on Pokegama Ave South which will remain open until the cooperative-owned facility construction is complete.

The construction manager of the project is Kraus-Anderson (KA), one of the nation’s premier commercial general contractors and construction managers. Paul Bunyan Communications and KA have put a priority on hiring local contractors who are members of the cooperative for the project whenever feasible.  KA has a deep and valued relationship with Paul Bunyan Communications, having constructed portions of their cooperative headquarters in Bemidji along with several additions, network facilities and remodeling projects.

 

AT&T Invests More Than $325 Million Over 3-Year Period to Boost Local Networks in Minnesota

The latest news from AT&T…

At AT&T1, we’ve invested more than $325 million in our Minnesota wireless and wired networks during 2016-2018, including nearly $250 million in the Minneapolis-St. Paul metropolitan area. And from 2010 to 2018, AT&T invested more than $1.1 billion in our Minnesota networks. These investments boost reliability, coverage, speed and overall performance for residents and businesses, and has given AT&T the most wireless coverage in Minnesota. We’ve also improved critical services that support Public
Safety and first responders using the FirstNet communications platform.
AT&T’s wireless network covers more than 99% of all Americans and has become the fastest wireless network in the nation, according to the first quarter 2019 results from tests taken with Speedtest® and analyzed by Ookla®.2
In 2018, AT&T made 1,339 wireless network upgrades in Minnesota. We added new cell sites, additional network capacity, enhanced back haul and small cells. By building out our 4G LTE network, we’re boosting network speeds and capacity, as we continue to expand the availability of our network and upgrade our technology.
In 2019 we will deploy our mobile 5G+ mmWave network in parts of Minneapolis. Some of our early customers using 5G delivered over millimeter wave spectrum, which we call 5G+, have experienced speeds in the range of 200-300 megabits per second – and even as high as 400 megabits per second.3

“We are proud of the significant investments we have made in our networks across Minnesota, including the upgrades we have made to prepare Minneapolis for the future of
next generation connectivity,” said Paul Weirtz, state president, AT&T Minnesota. “The investments we’re making not only keep our businesses and residents connected, but they help prepare us for the future of 5G and innovations like smarter cities, telemedicine and virtual reality.”
“For Minnesota to continue to thrive and attract new jobs and innovation, sustained investment by the private sector is crucial,” said Steve Cramer, president and CEO of the
Minneapolis Downtown Council and Downtown Improvement District. “By continuing to build state-of-the-art infrastructure in our state, AT&T is making business growth possible and making sure our residents have the tools to stay connected and entertained.”
Additionally, for the 5th consecutive year we’ve landed on Fortune magazine’s list of the “World’s Most Admired” companies. It’s also the 6th year in a row we’ve appeared on the Global Top 50 list – no other telecom company made the Top 50.

Transforming Public Safety Communications FirstNet is Public Safety’s dedicated, nationwide communications platform. It is for all first responders – career and volunteer, urban or rural. It’s bringing public safety
communications into the 21st century with new, innovative capabilities, helping first responders connect to the critical information they need – every day and in every
emergency.
Building upon our current and planned investments in Minnesota, we continue to extend the reach and increase the capacity of the FirstNet communications platform:
– Deployed Band 14 spectrum in more than 600 markets nationwide, including Duluth, Moorhead, Rochester and St. Cloud. Band 14 is high-quality spectrum provided by
the First Responder Network Authority. Its signal covers larger geographic areas with less infrastructure to better support rural communities, and it can better reach inbuilding in more urban areas as compared to higher-MHz spectrum.
– Minnesota first responders enjoy the fastest overall experience on FirstNet, compared to any commercial network in the nation, thanks to the specialized
capabilities enabled by the physically separate and dedicated FirstNet network core, like always-on priority and preemption. 4
– Public safety agencies subscribed to FirstNet have 24/7 access to a nationwide fleet of 75 deployable network assets. These assets can either be deployed for planned
events or called upon in emergencies to help first responders stay connected and operate faster, safer and more effectively when lives are on the line.
FirstNet is built with AT&T in a public-private partnership with the First Responder Network
Authority – an independent agency within the federal government. This helps ensure that the FirstNet communications platform and service offerings meet the short- and long-term needs of the public safety community.
To learn more about our wireless coverage in Minnesota, or anywhere in the U.S., visit the AT&T Coverage Viewer. For updates on the AT&T wireless network, please visit the AT&T network news page.

AcenTek Improves Time to Revenue for New Services by Simplifying Operations with Calix AXOS

For the most technical in the crowd, or folks on the very front lines, Calix reports…

Calix, Inc. (CALX) today announced that AcenTek has deployed AXOS GPON as it expands gigabit broadband throughout its service area spanning Michigan, Minnesota, and Iowa. With AXOS, AcenTek has radically accelerated its deployment capabilities of next generation services while automating and simplifying operations to enable its network to scale. The AXOS E7-2 Intelligent Modular System and SMx Services Management Connector enable AcenTek to use a common operational service model, regardless of the physical technology layer supported or access network deployment location. AXOS SMx allows AcenTek to dynamically drive operational process automation, decreasing time to market for new service introductions, shortening OSS integration timelines and markedly improving subscriber experience. Additionally, with the real-time network troubleshooting capabilities of the AXOS Diagnostics Toolbox, AcenTek can maintain an always on network at a dramatically reduced operational cost.

MoffettNathanson says CenturyLink might as well keep residential customers

There’s a lot to unpack here. Back in May, CenturyLink said they were looking at their options for their consumer/residential service…

Could the CenturyLink consumer business be sold or spun off? CenturyLink CEO Jeff Storey said yesterday that CenturyLink has enlisted advisors to assist the company in a strategic review of the company’s consumer business. Although he emphasized that it is “really early in the process,” he noted on the company’s first-quarter earnings call that the company is “very open” in the options it would consider.

“Let me be clear, we’re early in what I expect to be a lengthy and complex process,” said Story, according to a SeekingAlpha transcript of the earnings call.

At that time, Storey elaborated:  “During our review, we will not modify our normal operations or our investment patterns. I can’t predict the outcome or the timing of this work or if any transactions will come from it at all. Our focus, though, is value maximization for shareholders. If there are better paths to create more value with these assets, we will pursue them.”

He added, though, that the company is doing a good job of growing broadband where it invests in improving the customer experience and profitably expanding the network.

The company’s consumer revenues were $1.4 billion in the first quarter of 2019. The consumer business saw a 1.3% year-over-year and a 2.7% increase over the previous quarter in broadband revenues. While the company lost subscribers purchasing speeds below 20 Mbps, it gained subscribers purchasing higher-speed services.

I’ve added the emphasis. Interesting that CEO Storey  revealed  that  while CenturyLink “grow[s] broadband” where they invest,  decisions about where to invest are driven by a focus on maximizing shareholder value, not community benefit.  Because they are a business, profitability, not community needs, drives CenturyLink’s investment decisions.

Fast forward a month and it looks like the analysis is in

CenturyLink wouldn’t gain much by spinning off its consumer business, argued telecom financial analysts MoffettNathanson in a research note issued today. The cost of a CenturyLink consumer spinoff would leave the company with little in the way of financial benefits, the analysts said.

Telecompetitor goes into detail…

Spinning off the CenturyLink consumer business would generate what the researchers refer to as “dis-synergies” that would result from the difficult task of dividing a network and other operations that serve both the consumer and business sides of the house. These dis-synergies would “simplistically imply roughly $300 million to $600 million in value destruction from separating the businesses,” the researchers argue.

Another concern about a spinoff is whether it would receive necessary approvals from state public utility commissions.

The analysts also question how much upside there is for CenturyLink’s consumer business. They argue, for example, that the company’s opportunity to provide connectivity for small cells is limited because small cells will be deployed only in densely populated areas and CenturyLink is the incumbent local carrier in only two of the nation’s 50 most densely populated cities.

Again, the emphasis is mine. The worry about value destruction is real for any business; you don’t want to lose value. BUT the worry for communities is that this isn’t really a rousing rationale for investing in upgrading  residential service, rather a recognition that the cost of disaggregating business customers is just too high.

Also of note in the analysis is recognition that small cell technology (necessary for 5G) will only be deployed in densely populated areas. This is not new news, but does reinforce the fact that 5G is not coming to  rural areas anytime soon.

Finally…

Not all of MoffettNathanson’s analysis of CenturyLink opportunities is so downbeat, however.  For example, the researchers see the recent news about FCC plans for a replacement for the Connect America Fund, due to expire in just a couple of years, as a positive, as CenturyLink was one of the largest recipients of CAF funding.

The “potential upside risk is what keeps us on the sidelines,” the researchers wrote.

The upshot is that MoffettNathanson sees CenturyLink’s consumer business remaining within the merged company, where it would be better off anyway.

Again, emphasis is mine. I have heard  industry insiders question the wisdom of CenturyLink accepting CAF funding. The main problem is that they didn’t receive enough funding to adequately cover upgrades to areas where the potential for ROI is slow or uncertain. And the required buildout speeds aren’t fast enough to satisfy all customers. It’s a lose-lose situation.

To create a win-win for both providers and communities, federal funding must be adequate to incent providers to invest in networks that meet consumer needs. The current CAF II requirements of a 10/1 network don’t meet community needs: economic development is in the upload speed. Minnesota state speed goals of 100 Mbps down and 20 Mbps up by 2026 seem much closer aligned to the community needs than the 10/1 speeds currently required by the Connect America Fund (CAFII).

The final line in the industry analysts’ research note reminds us that this is a look from and for the company of CenturyLink – not for the communities they serve…

The upshot is that MoffettNathanson sees CenturyLink’s consumer business remaining within the merged company, where it would be better off anyway.

Blandin released a report in 2017  that points out that industry ROI and community ROI are different. Households with broadband realize $1850 in economic benefits per year. So, the communities need better broadband. The gap is between that community need and the business needs of the provider to deliver profits to their shareholders.

“Fiber is the name of our game at CTC” Kristi Westbrock featured in ISE Mag

I love to see Minnesota getting broadband attention, I’m especially pleased to see a smart MN Woman featured in an interview with ISE Magazine – Kristi Westbrock, CEO at CTC. You can read about CTC and fiber…

ISE: What are your priorities in terms of fiber investments in 2019? What are the challenges you face when working with your own team and/or contractors to deploy fiber in rural Minnesota? What are some of the tactics and solutions you employ to get them expedited and completed on budget?

Westbrock: Fiber is the name of our game at CTC. While we’ve dabbled in alternate service offerings, CTC has committed that our long-term investments will be designed as FTTP.

Challenges always surround making financial models in fiber builds sustainable and eventually profitable. CTC has been using several tools to determine the feasibility in areas of high demand that serve as expansion projects for us. Knowing our committed take rates have been critical in determining the success of each build. Gaining customer commitment prior to building fiber in a neighborhood, township, or rural community, has also been critical to the return on the investment. Churn of a customer, once they have a fiber connection, is nearly non-existent for CTC, which is a testament to the service quality fiber brings.

The largest challenge in building FTTP in Minnesota is simply the weather. Our build season is short, typically May to October, and then construction is put on hold. This creates long delays when those who are anxiously awaiting Internet service in rural areas can’t get it due to the weather. Because of the short time to build, the plow needs to go into the ground as soon as the frost is out, and State and Federal permitting needs to be expedited.

And on life as a cooperative…

ISE: Share the differences and nuances about working with a telco cooperative. Why is that type of structure a strength for CTC? How can it impede network transformation?

Westbrock: The first 10 years of my career were spent working for private and publicly traded companies. Bottom line and profits drove strategy. Then I transformed to working for a Cooperative. It was a learning curve to understand the 7 Principals of a Cooperative and tying those into the short- and long-term decisions that are made.

The Cooperative has a Board of Directors that is elected by the membership, which are the owners. The overriding goal of a telecommunications Cooperative is to bring services to those that are unserved while ensuring stability for the member owners.

Being a Cooperative is the magic ingredient in what we do each day. We focus each day on members, employees, and communities, to provide life-changing technology solutions for a sustainable future. Sometimes this means that the models don’t work out to have payback in a normal business model. Serving unserved areas is and will continue to be a focus of CTC. We are thankful for programs through the RUS. We also are deeply engrained in the communities we support, therefore having high recognition of being the local provider. Recently we underwent a full customer journey study; through this we learned that customers in our communities want to purchase from a local provider with local service.

RS Fiber and HBC form Long-Term Agreement and plan expansions

Great news for folks in the area. It’s always good to hear about folks who are willing to expand fiber to rural Minnesota…

RS Fiber Cooperative (RS Fiber) has announced the formation of a long-term operating relationship with Hiawatha Broadband Communications (HBC), giving RS Fiber the opportunity to meet and expand on the original goals for the project.

 

RS Fiber hired HBC to build and operate the gigabit fiber-to-the-premise (FTTP) network when the project was launched three-years ago to bring high-speed broadband to Renville and Sibley Counties. RS Fiber and HBC recently struck a partnership agreement where HBC will provide funding for the continued operation and growth of the network.

 

To build the network, RS Fiber acquired financing through several sources. Many financial institutions deem the construction of broadband networks as high risk, resulting in higher interest rates. After the network is built and customer numbers grow, the lender risk is reduced allowing for more favorable interest rates. This past year, RS Fiber has been working to restructure its high interest loans in an effort to create a longstanding and sustainable Cooperative. The culmination of that work has resulted in an arrangement between RS Fiber and HBC that strengthens their business relationship for years to come and keeps the RS Fiber mission and vision intact.

 

“We knew we had the right vision and great support from the cities and townships in our project area,” said Kevin Lauwagie, Chairman of the RS Fiber Board of Directors. “We have held strong to the commitment we made to our patrons and residents of our region. This relationship with HBC will help us continue to provide advanced services that rural Minnesota deserves.”

 

“This network and RS Fiber’s commitment to rural broadband is right in line with HBC’s vision and values” stated HBC President, Dan Pecarina. “We are committed to small town and rural broadband deployment, so operating this

network with our RS Fiber friends provides the opportunity to advance this much needed service.”

 

RS Fiber has completed construction of gigabit FTTP networks in 10 communities located in Renville, Sibley, McLeod, and Nicollet Counties of west central Minnesota. RS Fiber has also used this rich fiber network to connect to tall structures such as towers and grain elevators to provide high speed fixed-wireless services to the rural areas of the region.

 

RS Fiber currently serves more than 2,200 customers, with plans to rapidly expand its customer base. “Fiber-Optic networks provide more speed, capacity, and reliability and those features will help drive more innovative services to RS Fiber customers,” stated Pecarina.

 

“We are already seeing tremendous economic growth within the RS Fiber communities, like the medical school coming to Gaylord” added Lauwagie, “along with education, telemedicine, and precision agriculture benefits.”

 

RS Fiber will soon be announcing several new service options for customers to enhance their video, telephone, and broadband Internet experience. RS Fiber is also looking to expand its network to bring the benefits of the high-speed broadband to more rural residents and businesses in the region.