Broadband expansion in Lincoln County through Woodstock

The Marshall Independent reports…

An expansion of broadband Internet possibilities in Tyler is scheduled to take place this year.

The community will be offered city-wide broadband service through Woodstock Communications. It will become part of the company’s efforts to use 21st century fiberoptics and wireless networking on behalf of rural southwest Minnesota communities.

Woodstock Communications General Manager Terry Nelson said the concept of city-wide service for Tyler has been on the drawing board for the past several years.

The upcoming project will resemble existing city-wide Woodstock networks in Westbrook and Balaton. They are one component of an expansion process that has also included targeted broadband service to schools, hospitals and other organizations. …

Woodstock Communications plans to install infrastructure for Tyler city-wide broadband during 2019, with a service start-up scheduled to begin in December.

Woodstock will have some competition…

Woodstock will become the third provider to offer Internet plans to Tyler residents. The others are Frontier Communications and Mediacom, both of which rank in the top 10 of all providers in terms of total nationwide subscriptions.

The article also includes interesting histories of several providers in the area.

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.

Frontier responds to negative PUC report

Earlier I wrote about the MN Department of Commerce filing a complaint against Frontier based on results of a fairly damning  PUC report.

Frontier has responded to the report…

“Frontier strongly disagrees with the assertions in the Department of Commerce’s initial comments and is reviewing the Department’s filing with the Minnesota Public Utilities Commission. Frontier and its employees work hard to provide reliable, affordable telecommunications services to approximately 90,000 customers in Minnesota, many in rural communities where no other provider will invest in providing service. Frontier recognizes we experience service issues and delays from time-to-time with some of our customers. We are an ethical company committed to our customers and the Minnesota communities we serve. We take this matter seriously and will respond appropriately before the Public Utilities Commission.”

MN Department of Commerce files complaint against Frontier with PUC

The St Paul Pioneer Press reports…

The Minnesota Department of Commerce on Friday filed an investigative report on Frontier Communications with the Minnesota Public Utilities Committee.

The report says it found Frontier has failed to provide adequate, reliable phone and internet service to its Minnesota customers. The report, which the Connecticut-based company disputed, recommends Frontier be required to refund or credit customers for service outages and unauthorized charges, add staffing to improve customer service and increase investments in infrastructure and equipment.

Frontier provides phone and internet service to communities across the state, including large portions of northeastern Minnesota.

You may recall, last summer the PUC held several meetings across Minnesota to hear from Frontier customers about their services. (I attended the meeting in Wyoming if you want to see the notes of video from the meeting.) And I wrote about the report when it came out in November.

The Pioneer Press asked Frontier about the report…

When asked about the report Friday, Frontier responded in a statement saying:

“Frontier strongly disagrees with the assertions in the Department of Commerce’s initial comments and is reviewing the Department’s filing with the Minnesota Public Utilities Commission. Frontier and its employees work hard to provide reliable, affordable telecommunications services to approximately 90,000 customers in Minnesota, many in rural communities where no other provider will invest in providing service. Frontier recognizes we experience service issues and delays from time-to-time with some of our customers. We are an ethical company committed to our customers and the Minnesota communities we serve. We take this matter seriously and will respond appropriately before the Public Utilities Commission.”

Lake County accepts $8.4M bid for Lake Connections from Pinpoint Holdings

Lake County News Chronicle reports…

The Lake County Board of Commissioners has awarded the highest bid, $8.4 million, for Lake Connections, the county’s municipal broadband project, during a meeting Tuesday, Dec. 18, in Two Harbors.

The highest successful bid was the best and final offer from Pinpoint Holdings Inc. in Cambridge, Neb. The board unanimously accepted the resolution to accept the bid; Commissioner Rick Hogenson was absent.

Pinpoint was selected from the final four bidders, which also included Mediacom Communications Corp., Cooperative Light and Power Association and Hanson Communications.

Mediacom’s best and final offer of $8.25 million was selected as the backup bid in the event Pinpoint doesn’t close the sale.

And a little background…

In 2010, the board received a $56 million loan and $10 million grant from the U.S. Department of Agriculture’s Rural Utility Service to construct the network. Over three years, more than 1,200 miles of a fiber network was built in Lake County and parts of eastern St. Louis County. Most of the network was completed in June 2015.

In June 2017, the county entered into a deferral agreement with RUS for principal and interest on the condition the county sell the network to a private company or entity. Two months later, the county executed a memorandum of understanding with RUS in which RUS agreed to accept to the sale price of Lake Connections in full satisfaction of the county’s debt for construction of the network.

When the deferral agreement was executed, the county owed approximately $48.5 million on the RUS loan.

This means the federal government stands to lose approximately $40 million on the broadband project.

I wrote about Lake County and the impact of better broadband in the community a year ago. Using a pretty conversation formula, we figured out the annual economic benefit for broadband in the community was $13.7 million, which means in less than 3 years the community will have seen an economic benefit of more than $40 million. Now I recognize that that benefit won’t go to the federal government. BUT it does help realize the cost to the community of not investing.

Charter Communication to refund $62.5 million in NY for slower than promised broadband speeds

The Washington Post reports…

In what regulators are calling the largest refund in U.S. history by an Internet provider to consumers, Charter Communications has agreed to give $62.5 million — and free subscriptions to HBO or Showtime — to New York customers who allegedly didn’t receive the Internet speeds they were promised, according to New York Attorney General Barbara Underwood.

The settlement puts an end to a months-long legal battle between the state of New York and the nation’s second-largest cable company, whose subsidiary Time Warner Cable was accused of providing slow routers and modems to customers that prevented them from accessing the download speeds they had signed up for.

As many as 700,000 New Yorkers will be receiving the direct refunds. Another 2.2 million will be eligible for the free premium and streaming channels, which are collectively valued at more than $100 million, Underwood’s office said in a release.

That is an interesting precedent.

Arvig Buys Windstream Fiber Assets in Minnesota (and Nebraska)

Light Reading reports…

Windstream (NASDAQ: WIN), a leading provider of advanced network communications and technology solutions, today announced that it has sold certain fiber assets in Minnesota to Arvig Enterprises, Inc. (“Arvig”), a Minnesota-based provider of telecommunications and broadband services. The all-cash transaction is valued at $49.5 million.

Windstream also announced that it has entered into a definitive agreement to sell additional fiber assets in Nebraska to Arvig for $11 million. The Nebraska sale is expected to close in the first quarter of 2019.

As part of the transactions, Windstream will establish a fiber network relationship with Arvig, allowing Windstream to utilize the assets to continue to sell its products and services in Minnesota and Nebraska. “These transactions monetize latent dark fiber assets in Minnesota and Nebraska, lower capital requirements in each state and allow us to focus on our core network offerings with minimal change to our operations going forward. The structure also sets a roadmap for future fiber monetization across our footprint,” said Bob Gunderman, chief financial officer and treasurer for Windstream.

“Expanding our broadband footprint is core to our strategic priorities and bolsters our fiber assets throughout Minnesota and across the Midwest,” said David Arvig, vice president and chief operating officer at Arvig. “The additional Nebraska transaction will provide a critical link for our network beyond Minnesota supporting our continued growth throughout the region.”