Legislators need to be aware of the broadband planning occurring in Greater Minnesota.  Counties are taking the lead and banding together to achieve cost savings and scale.  They share a goal to provide a long-term, high quality broadband solution that meets 2026 state broadband goals for all of their county residents, while rejecting partial solutions that leave all or part of their county behind.

The following projects vary in their readiness, but local teams are working with consultants on feasibility studies to gather market demand, cost and financing data while attempting to build partnerships with willing providers for an expected September 2017 Border to Border Broadband Grant deadline. These feasibility studies are expensive, but are essential to create a broadband business and financing plan.  Moving from community broadband discussion to feasibility study to private public partnership is a multi-year, resource-intensive process.

While there are always uncertainties in competitive broadband deployment, the annual uncertainty at the Capitol wreaks havoc on these broadband business plans.  Everyone recognizes that these projects, by incumbent or competitor, require subsidy to be sustainable.  Without state funding, these projects become more improbable.  Yet, these communities persist because they now know the stakes are high!

These projects represent more than 120,000 households that do not have broadband services at the 2026 state broadband standard.   Funding all of these projects would be a considerable investment, but would move rural Minnesota considerably closer to achieving the 2026 goal while leveraging significant private and other public sector investment.  State leaders should recognize that a lack of broadband will leave these places permanently behind.

Aitkin County
With only 3.7 households per square mile, Aitkin County is extremely difficult to serve.  The county economic development office has been working on broadband for a decade with little progress made until a 2016 broadband grant to Mille Lacs Energy in partnership with CTC.  CTC staff advocates for a higher grant percentage in places like Aitkin County as a necessity for their continued investment.  Such a heavily forested area is an unlikely candidate for a wireless solution

Kandiyohi County
While Willmar has competitive broadband services, the rural Kandiyohi county are left behind.  The county was fortunate to have two providers receive grant funding in 2016, but the remaining areas are considerably more rural and will require higher subsidies to facilitate projects.

Kanabec County
This historically poor county has pursued better broadband for many years, including the investment in a broadband feasibility study.  To date, they are unable to find a partner with which it can find an effective financial solution.  A small portion of the county has seen CAF2 investment, but the reach and quality of service is still uncertain.  Even with the county’s willingness to provide long-term loans, providers have lacked interest in Kanabec County.  They continue to talk with incumbents, cooperative telephone companies and their local electric cooperative to find a solution within the financial capabilities of the county.

Otter Tail County
Otter Tail County is one of the larger rural counties in both geography and population.  As a desirable tourism area, the county has had success encouraging telework as an economic development destination in areas where broadband is available.

Redwood County
Redwood County has been working on broadband for several years and has completed a feasibility study.  They have achieved some limited success as existing providers have edged out their broadband services to the rural areas still leaving large unserved areas.

Six SW MN Counties
Chippewa, Yellow Medicine, Lincoln, Lyon, Murray and Pipestone Counties are collaborating on a regional feasibility study to gather data and to consider prospective partnerships.  These very low-density population counties need broadband in rural areas to support precision agriculture and farm families.

Traverse County
Traverse County has completed a feasibility study and is pursuing a partnership with a wireless provider.

Pope County
Pope County has completed a feasibility study and has emerging partnerships with a number of providers delivering services in served areas of Pope County and surrounding counties.

Isanti County
Isanti County is in process of selecting a feasibility study consultant.  They have been communicating with existing wired and wireless providers in hopes of agreeing to partnership terms with one or more providers.

Roseau County
Roseau Electric Cooperative is considering broadband deployment strategies.

Collaborative Community Applications

1. Ely, Winton and surrounding area
2. Orr, Cook, Bois Forte, Mountain Iron, Buhl, Kinney, Hibbing, & Chisholm

Compiled by:
Bill Coleman
Community Technology Advisors
651-491-2551
bill@communitytechnologyadvisors.com

As originally posted in Blandin on Broadband…

Those readers that know me know that I can go on about broadband for a long time.  I can talk about broadband demand, technologies, economic impact, private-public partnerships and just about any other broadband topic.  So, I am facing a considerable challenge when I consider how to best use my allotted three minutes before a legislative committee this week. http://wp.me/p3if7-3U9

My key points will be:

1)      The pain felt by unserved rural Minnesotans is real.  From lower property values to increased costs of high priced satellite and cellular services or too frequent trips into town to get online, the lack of broadband hurts students, small business owners, farmers and all who live in the countryside.  For a

better understanding of how important broadband is to rural Minnesotans, I suggest that you read some of the posts on some of our broadband providers’ Facebook pages.  You will share the excitement of those just hooked up to real broadband services and feel the pain of those left behind with little or no broadband or unreliable broadband.

2)      Please know that rural elected officials are hungry for real and effective public private partnerships.  While every project is different, creating legal and smart pathways to public-private partnerships that minimize legal expense and maximize broadband investment would be of high value and low cost.  Every community or county should not have to create their own unique way to partner and finance projects, often by bending existing tools to fit broadband investment.  In addition, broadband providers willing to engage in real partnerships should be rewarded for their commitment to rural Minnesota.  A real partnership means that providers have some skin in the game.

3)      We cannot solve rural Minnesota’s broadband problems one township at a time.  We need countywide and multi-county projects that address large geographic areas and that do not leave pockets of people behind.  These larger projects will probably require

multi-year funding commitments and, in some cases, more than 50% public funding.

4)      We need broadband infrastructure that will support rural Minnesotans for a generation.  We should not fund marginally upgraded networks that will require additional upgrades to meet the 2026 state goal of 100 Mb/20 Mb.  Remember, the future business case to upgrade these networks will be no better than the current business case that requires subsidy.  Dig once and do it right.

5)      Finally, going beyond “served and unserved”, communities need providers that are responsive to existing and prospective economic development opportunities and community needs; communities need real broadband partners.  Current and prospective businesses, health care providers and schools need providers ready to make the necessary investments and provide the services that allow these organizations to survive and thrive.

As originally posted on the Blandin on Broadband blog…

More thoughts on partnering…

Based on the number of prospective Border to Border grants that I have been hearing about,  I was thinking about how competitive this grant round will be.  This is a new world for both providers and communities.  At a recent Blandin Foundation Broadband Strategy Board, one member was smart to remind us “These are not partnerships, they are business transactions.”  It would be smart to remember some economic development basics as communities negotiate these deals with providers.  As in most site selection competitions, there are many more communities than expanding provider companies.  This smaller set has the advantage as they negotiate with multiple communities and know what each community is offering as incentives.  Communities, possibly under non-disclosure agreements, will be tempted to sweeten the pot to become a selected community partner of that limited set of providers.  With such a new program, the parameters of a good deal are more uncertain than more standard manufacturing or housing development deals.

Many communities will be talking prospective partnerships with CAF2 providers.  In some ways, this will require a more sophisticated approach than dealing with a competitive provider building a new Fiber to the Home network.  In the latter case, there is likely a feasibility study done by a third-party consulting firm on behalf of and paid for by the community.  That consultant generally has a legal and professional obligation to represent the best interests of the community.  Prospective costs, revenues, take-rates and pro forma financial statements can be used to determine the financing gap and reasonable local partner share. In addition, the new network will already be able to provide services well in excess of the 2026 state broadband standard of 100 x 20 Mbps and probably up to a Gigabit of service on Day One so future risk is minimized.  That network is a permanent community asset.

Striking a deal with a CAF2 provider on an improved fiber-copper hybrid network will be more complicated both financially and strategically.  Obtaining financial information from these larger providers may be more difficult and communities will be relying on the prospective partner rather than a third party under contract to the community. In addition, with the larger company, the financial accounting is likely to be complex.  Most challenging will be understanding the net result of the network investment.  With fiber-copper hybrid networks, delivered speeds will be inconsistent depending on loop lengths and condition of existing copper lines  both outside and inside the customer homes.  While DEED OBD requires that networks be scalable to deliver 100 Mb x 100 Mb services, significant additional future investment may be required to obtain that network capacity, and unless contractually agreed to, the company is under no obligation to make those future investments.  And the same difficult rural countryside business investment case will be present that exists today.

In the economic development world, clawback provisions are often included in incentive packages.  If a company fails to meet the goals set in the contract agreement, it must pay back all or some of the paid incentive.  Communities should consider inserting clawbacks into their agreements with provider partners.  For example, the state’s 2026 goal for broadband is 100 x 20 Mbps to all households in Minnesota.  Committing to reach that goal by 2022 or 2026 would be a minimum standard to include in any agreement with a provider partner.  Clearly, with gigabit services being increasingly common today, setting a standard of one-tenth of that to be met in ten years seems almost inadequate. More aggressive agreements could be negotiated, including the idea that any local funds would only be committed if all affected residents would have access to the 2026 goal with this project is completed in 2017-18.   If the community can not reach an agreement to get the network they need to compete for residents and businesses, it may be best to wait for the next grant round and to seek a different partner.

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As originally posted on the Blandin on Broadband blog…

As the legislative session passes the midway point, it seems like a good time to review the hot broadband topics. These are my own personal reflections on the discussion.

The question of how much money should be appropriated is still open. The Governor and the Senate have each talked about $100 million and the House’s starting bid was $35 million. Doing the simple math might indicate a fund of $75-80 million.

The Governor’s Broadband Task Force recommended two new broadband goals. I am extremely disappointed that the 25/3 Mb by 2022 goal seems to be taking priority over 100/20 Mb by 2026. There are three reasons why this is extremely disappointing.

First, the current state goal is 10-20/5-10 Mb. 25/3 would mean an embarrassing decrease in upload speed in our goal from 2010 to 2022. Second, tying our state goal until 2022 to the FCC current definition of minimum broadband speed is deflating. The FCC’s definition has increased thirtyfold over the past eight years. What might it be in 2022? Third, some now dismiss the 100 Mb goal is “aspirational.” By definition, all goals are aspirational. Some are challenging, others are too easy so as to be meaningless.

There is also controversy around broadband access versus broadband based economic development. We need both. A rural industrial park without fiber is now by definition, deficient. There are many ripe opportunities to get fiber installed in critical locations through public private partnerships.

There was even discussion about providing state grants for wireless services meeting a very low 10/1 Mb standard. In my opinion, state funds should only be used to support projects with long term, useful benefits, not quick fixes that won’t satisfy anyone very long. Where providers are installing fiber, these areas are set for decades no matter what the standard. These networks can also support any emerging wireless technologies. The current 100 Mb scalable standard (upgradeable without extraordinary delays or costs) seems reasonable to me.

These are my thoughts. I am sure others have a different point of view.

As originally posted in Blandin on Broadband blog…

I am faced with two contradictory observations about broadband right now.  First, the intensity of desire for and the impatience for improvement of broadband has never been higher if our Blandin Broadband Communities are representative of rural Minnesota.

Infrastructure and service discussions are dominating our recently completed vision and project development meetings.  Over the years, I have told countless communities that the lack of high-speed broadband was going to be a significant detriment to their community’s economic competitiveness and quality of life.  That day is here.

Community leaders now tell me how the lack of quality broadband is having negative effects on business recruitment efforts and business retention programs.  School superintendents talk of the haves and have-nots of connected students and that impact on homework and curriculum.  Throughout the community, negative impacts are felt. Interest in Blandin Foundation’s Robust Network Feasibility Fund is stronger than ever with many communities gearing up to examine market, costs, business models and finance in preparation for an expected round two of DEED broadband grants.

That contrasts with my observation that broadband is not the hot topic at the Capitol that it was last session.  Last year, it seemed that the Senator Schmit tour, the task force recommendation for $100 million combined with the excitement for the creation of the Office of Broadband that the broadband topic was near the top of everyone’s priority list. That enthusiasm now seems to be a bit on auto-pilot. Although I am not actively engaged in the nitty-gritty of the legislative session, I do know that the rewards go to those who show up and make their voices heard.  With many new legislators, broadband backers must reach out and make sure that your own legislators know what a priority broadband is for your community.

My advice – Do not just expect that DEED’s broadband grant fund will be renewed or increased to higher levels of spending. Broadband is competing with more traditional uses of state dollars with very organized constituencies – roads and bridges, human services, bike paths, k12 and higher education – the list is long and the interest groups well practiced in the legislative arts.  Turn your lone voice into a strong and clear community broadband voice.

As originally posted in the Blandin on Broadband blog…

Since the New Year, Community Technology Advisors has been working with the ten new Blandin Broadband Communities. We are helping them move from Steering Team formation to Vision creation and the resulting project development.   Participation has been fantastic with strong cross-sector attendance and leadership. Mayors, school superintendents, librarians, community education, chambers of commerce, citizen activists have brought their enthusiasm to the table. There is no shortage of project ideas. While some groan at the idea of a three-hour meeting, we have found the “after-meeting meetings” to be robust. We have already seen promise of problem solving, new resources and collaboration.

This is our third round of MIRC/BBC communities. More than ever, the gap between those who are connected at speeds that meet the state broadband goal or higher and those who lack anything but slow DSL (1 – 3 Mb), cellular or satellite is growing larger – in both absolute bandwidth speeds and in perception of capability. The un-connected struggle to do homework, work from home and all of the other common practice applications that the connected think are so easy. As most of our “communities” are counties or even larger, large areas of rural countryside fit into the unserved and underserved broadband category.   Local leaders are fierce in their determination to solve this puzzle, but are challenged to see the path forward. The recent DEED grant awards are encouraging, but sobering. The path towards a positive partnership and affordable finance alternative seems steep and rocky.

One of the strengths of the Blandin Broadband Communities program is that it provides a platform for communities to build knowledge and momentum on the infrastructure challenge while still driving adoption and use as the program’s main goal. This dual path requires strong understanding within community leadership that infrastructure initiatives may take considerable time to come to fruition. In the meantime, they need to continue to build on their existing infrastructure, institutional and people assets to improve their tech vitality. These ten communities have started down this path. It is our privilege to guide them as they make connections, learn new things, set priorities, create teams and make good things happen in the places that they call home.

As originally posted in the Blandin on Broadband blog…

So much going on with broadband these days. It is hard to keep up!

Ten new Blandin Broadband Communities have jumped in with enthusiasm and commitment over the past month of activities. Our kick-off meeting in Willmar opened the eyes of their coordinators and teams to the results that their community efforts might yield over the next two years in better broadband access and use. Several communities brought multiple steering team members and I think that this served as a multiplier effect on their thinking. With seven of ten initial steering team meetings held last week and three more upcoming, communities better understand that broadband is only the infrastructure that a more vital community will utilize rather than the end itself. Up next are our Community Vision Meetings. We are also lining up meetings in thirteen BBC Alumni communities to help them maintain their community broadband efforts.

As I write this, it is exciting to see the grant announcements for the DEED Office of Broadband Border to Border Grants. It is especially fun to see funding provided to communities that I have worked with over the years. Congratulations to all of those funded!

Finally, the policy discussion is fast and furious. The new MN Governor’s Broadband Task Force report, the call for new members of the task force, the new FCC definition of broadband of 25/3 Mbps, President Obama talking community broadband and net neutrality.   A key task of community broadband leaders is to become informed and pass on your thoughtful opinions to local, state and federal elected officials.