Home buyers will pay 7 percent more for a home with Gigabit service

Corning reports

Today, home buyers are shopping for more than just curb appeal. They’re looking for a quality internet connection. When you’re in the business of attracting new residents and keeping existing ones satisfied, you can’t deny that the value of reliable broadband connectivity at home is real.

Did you know …

  • High-speed broadband can increase the value of your home by 3.1%

  • Homes with Gigabit broadband sell for about 7.1 % more than similar homes with slower connections

Broadband failure is in the eye of the beholder – community members benefit

A recent letter to the editor in The Hill uses the Lake County broadband network as an example of when government should not get involved in providing services…

Armed with an infusion of federal stimulus money, Lake County, Minnesota, ran a network costing $80 million. By the time the project officially failed, the county was paying $22,000 per subscriber in subsidies and recently had to sell the network.

Also in Minnesota, 10 cities and 17 townships joined a cooperative that financed $13.7 million in taxpayer bonds to construct a $55 million fiber optic network. After only two-thirds of the needed subscribers actually signed up, a $1 million revenue shortfall developed. This resulted in a tax increase on much of the community to cover the bond payments.

I don’t know that they talked to the people in Lake County. Last year the Blandin Foundation published work I had done (with Bill Coleman)  looking at several rural communities with better broadband; Lake County was on our list. They recognized back when they accepted the money that private providers were not going to upgrade to fiber any time soon. The research that we used indicated that each house with broadband reaps an (average) annual benefit of $1850. And homes increase (on average) 3 percent. Of the counties we looked at, Lake County had the slowest ROI because they got the most public funding and that was in the form of a loan but even for them, the time that the community would reap the benefit of the investment was 7 years.

The cost was $83,418,170 – but the combined annual benefit to residents (with fiber) was $13,695,550 and the increase in home values came to $38,547,421.

What we found talking to people on the front lines was that homes without broadband didn’t sell. Areas with broadband attracted businesses. The faster internet made school, healthcare and work easier and faster for people. So it may take a while to repay the loan but without the faster broadband, the community would not be seeing these other benefits.

The article offers three alternatives to government-led networks:

  1. Rely on private industry
  2. Make broadband deployment cheaper and faster by streamlining state and local rules.
  3. Issue vouchers for rural and senior citizens.

Those alternatives seem very provider-centric. The vouchers and the accommodations used to lure providers to the area would need to be profitable enough to be attractive to encourage development – at least with commercial providers. Commercial providers focus on their bottom line because they are beholden to their shareholders. A middle ground solution would be to consider cooperatives where customer and the shareholders are the same people. Where you can balance profitability with investment with a different outlook.

Mediacom extends fiber to Fountain (Fillmore County) with MN State broadband grant

Bluff Country News reports…

Mediacom Communications announced it has built more than seven miles of fiber optic cable connecting the homes and businesses of Fountain to its Fillmore County broadband network.

By mid-December, Mediacom will activate the new portion of its network to deliver advanced telecommunication services, including robust one-gigabit-per-second internet speeds that are up to 40 times faster than the minimum broadband definition set by the Federal Communications Commission (FCC).

The project was made possible by a Border to Border Broadband Development Grant provided by the Minnesota Department of Employment and Economic Development (DEED).

Through this public/private partnership, DEED allocated funds to pay for up to 48-percent of the $400,000 network construction cost. Mediacom’s capital investment covered the remaining 52-percent of the project to create Fountain’s first facilities-based broadband network and makes gigabit internet speeds available to residents and businesses throughout the community.

Mediacom has been a longtime service provider in the Fillmore County communities of Canton, Chatfield, Lanesboro, Mabel, Peterson, Preston, Rushford and Spring Valley. With the addition of Fountain, 183 mid-sized and smaller communities throughout Minnesota are now connected to Mediacom’s fiber-rich broadband network.


Frustration with broadband providers in Orr, MN

The Timberjay posted an editorial of frustration written about the broadband providers’ lack of investment in last mile broadband. They note the state support middle mile technology but ask the state to take a closer look at what’s happening or not happening to get the homes and businesses connected…

There’s just one problem. We’ve forgotten to install the on and off ramps. The city of Orr, as we report again this week, has at least three separate fiber optic cables running right through town, but no one can get Internet. We report on the frustration of two local business owners in Vermilion Lake Township, who have fiber running right past their businesses, but who still must operate on Internet speeds that barely allow them to navigate the web— and that’s when their service is actually functioning.

The missing link in all this has been the corporately-owned service providers, companies like Frontier and CenturyLink, which have failed to uphold their role in the process. Bringing real and reliable broadband connectivity to rural Minnesota is, in theory, supposed to be a public-private partnership. The state or federal government provides the backbone of the system, while the local service providers like Frontier and CenturyLink are supposed to build the on and off ramps so local residents can begin to tap into that information superhighway that runs past their door.

While we’ve been critical of Frontier Communications in the past, the company has, at least, begun to make some upgrades to allow faster speeds in some parts of the region than have been available before. We’ll give credit where it’s due. It’s been a much more frustrating experience for customers of CenturyLink, such as those who live in Orr, given the company’s near-abandonment of parts of its service territory in northern Minnesota.

A partnership can only work when all the partners are willing to pull their weight. We certainly don’t want to discourage the Legislature from investing in bringing fiber to our region. The backbone is a critical part of the solution. But it has to be paired with strict and enforceable commitments by the local service providers to utilize that backbone to bring the level of service now possible to homes and businesses in our region. These service providers are regulated utilities and the Legislature needs to start addressing the lack of investment and follow-through that we’ve seen from some of them. If the Legislature can’t or won’t use enforcement mechanisms, they should explore incentives to encourage other providers to do the job. Ely is currently working with Brainerd-based CTC to facilitate fiber connections to downtown businesses. Orr is now turning to Back40 Wireless for a similar project, using a wifi signal. These are all hopeful developments which should be provided financial support where needed.

If CenturyLink or Frontier can’t do the job, the state should provide the resources needed to enable such organizations to expand the reach of their service.

Eighth Circuit Denies Petition for Rehearing of Charter VoIP Decision

You may recall that in September, Minnesota PUC ruled in favor of Charter by limiting state regulation.

On December 4 (2018), the Eighth Circuit Court issued an order denying the Minnesota PUC’s petition for rehearing of the Court’s September 17, 2018 decision affirming the Minnesota district court’s ruling that Charter’s VoIP service is an information service under the Telecommunications Act.

SDN expands broadband to Nobles and Watonwan counties in MN

SDN reports...

SDN Communications has added two broadband partners to its Minnesota network, which will improve business broadband reach into two counties of that state – Nobles and Watonwan.

Christensen Communications Company of Madelia, Minn. and Lismore Cooperative Telephone of Lismore, Minn. agreed to interconnect their networks to six other southern Minnesota telephone companies, an Iowa provider and SDN, which has 45,000 miles of fiber in South Dakota with its 17 owner companies, the independent telephone companies of South Dakota.

SDN’s partnership with the Minnesota and Iowa companies started four years ago. That interconnected network covers much of the southern third of Minnesota.

SDN CEO Mark Shlanta says Christensen Communications and Lismore Telephone add value to the growing broadband network. “These are strong independent telephone companies providing great services and value in their communities. In joining this network SDN manages, they become something bigger with more reach and they fill coverage gaps for this partner network.”