From time to time a little light shines in the Wilderness. Thanks for
the article, Sylvie. I'm sending it along to my cousins who are among
those sturdy, self reliant Minnesotans.
Carl Jarvis
On 8/12/16, S. Kashdan <skashdan@xxxxxxx> wrote:
Tired of Waiting for Corporate High-Speed Internet, Minnesota Farm Towns
Build Their Own
By Ben DeJarnette
YES! Magazine, Sunday, August 7, 2016
http://www.truth-out.org/news/item/37135-tired-of-waiting-for-corporate-high-speed-internet-minnesota-farm-towns-build-their-own?tmpl=component&print=1
Seven years ago, Winthrop, Minnesota, population 1,400, decided it needed an
internet upgrade.
Most local residents were served by companies like Mediacom, which Consumer
Reports consistently ranked among the country's worst internet providers.
Slow connection speeds made work difficult in local schools and businesses,
but farmers outside of town, who increasingly rely on connectivity to do
business, experienced the worst of it.
Fourteen miles from Winthrop, in Moltke Township, population 330, one
soybean- and wheat-farming family reported its sluggish DSL connection often
made it impossible to upload reports to business partners.
Organizers in Winthrop knew they were too small to fund a major internet
infrastructure-building project on their own, so they reached out to other
neighbors, the town of Gaylord, population 2,305.
And the towns attracted 25 more municipal allies.
Today, in this sparsely populated swath of Minnesota, a grassroots,
member-owned cooperative spanning more than 700 square miles and four
counties is poised to expand high-speed broadband access--without relying on
federal funding. After seven years of development led by local leaders and
volunteers, RS Fiber, now in its first phase of construction, is expected to
deliver high-speed broadband internet to more than 6,000 rural households by
2021. And unlike companies like Mediacom, the co-op is owned by local
customers who have a say in rates and how it's operated.
Attracting investors to build a high-investment network in low-density
communities wasn't easy. To help raise seed funding, ten local governments
issued bonds that covered half of the approximately $16 million required for
the project's first phase. This model got local banks interested.
As long as local demand meets projections, revenue from the broadband
network will more than repay government loans, and taxpayers won't owe a
dime.
"That's the win-win," said Chris Mitchell, director of the Institute for
Local Self-Reliance's Community Broadband Networks Initiative, who has
studied the project. "It's a model in which local governments can take on
the risk if they're willing, and local banks can get a very reasonable
return."
High-speed internet has become as critical to economic development and
quality of life as electricity was a century ago--a reality that's sparking
community broadband investment from Greenfield, Massachusetts, to
Independence, Oregon, to Cedar Falls, Iowa, where President Obama traveled
last year to announce his plans to scale up broadband.
"We're going to clear away red tape. We're going to foster competition.
We're going to help communities connect," he said to the crowd in Cedar
Falls. "And the good news is we know it works because of you."
"FROM AN ECONOMIC DEVELOPMENT STANDPOINT, FIBER OPTIC HIGH-SPEED INTERNET IS
THE FIFTH UTILITY."
The president's highlighting of Cedar Falls was an obvious choice. Thanks to
investments Cedar Falls made in community broadband two decades ago, the
city's residents and businesses now have access to internet speeds faster
than 1 gigabit per second (Gbps)--nearly 100 times the national average.
That's an asset that has attracted businesses that might otherwise have
settled in larger cities with high-speed broadband networks. This
distinction as a "Gigabit City" has helped turn Cedar Falls, population
40,500, into a Midwestern tech hub with unemployment below 3 percent. The
early bet on broadband has helped the city attract and retain high-tech
firms like Spinutech, a web design and digital marketing company, and host
events like Product Camp Iowa, a conference for entrepreneurs and startup
leaders.
"From an economic development standpoint, fiber optic high-speed Internet is
the fifth utility," after electricity, gas, water, and sewer, said Lisa
Skubal, vice president of economic development for the Cedar Valley Chamber
of Commerce. "We live in such a globalized society right now that having
broadband connectivity is imperative for businesses."
But even as the Gigabit City movement has caught fire, "Gigabit
Farmtowns"--rural areas and very small towns with high-speed Internet--are
difficult to find.
Last summer, Politico reported on the failure of dozens of rural broadband
projects that received grants under the American Reinvestment and Recovery
Act, the stimulus package that Obama signed in 2009, because of alleged
mishandling of funds by the federal Rural Utilities Service (RUS).
Meanwhile, projects without government support face even rockier odds of
survival because utility companies and banks often consider it too risky to
build expensive broadband networks in sprawling rural counties, where small
populations don't support the same kind of market.
As a result, about half of rural residents still don't have access to
high-speed broadband Internet.
ABOUT HALF OF RURAL RESIDENTS STILL DON’T HAVE ACCESS TO HIGH-SPEED
BROADBAND INTERNET.
"Those projects generally haven't done well," Mitchell said. "They couldn't
crack the code for how to get them financed."
However, the RS Fiber project in rural Minnesota could soon flip that
script, Mitchell says, because unlike other rural broadband co-ops, RS Fiber
relied primarily on county and city bonding authority--not federal loans or
grants--to finance the $45 million project. These local government partners
then agreed to be repaid last if financial projections don't pan out, making
it easier to recruit secondary investors, such as community banks.
"It's an incredible [approach] because it doesn't rely on states or the
federal government," said Mitchell, who co-authored a case study about RS
Fiber. "It allows communities to tap into their existing financial resources
and borrowing capacity."
The stakes for RS Fiber's success are high in southern Minnesota, where
access to broadband service is becoming increasingly critical for farmers
using "smart" machinery, local businesses with e-commerce operations, and
even students trying to keep up with their homework. One school district in
RS Fiber's coverage area, for example, recently spent $335,000 to buy iPads
for every high school student--only to find that inconsistent broadband
access severely limited their use.
"We'll see students outside our local libraries or on the steps of school
after hours, trying to find places to get access to the internet and do
school work," said district superintendent Tami Martin.
District officials hope RS Fiber can help close that connectivity gap,
though it's still not clear whether the co-op will offer a service option
that's affordable for low-income families in the district. Under existing
plans, the least expensive plan would cost $49.99 per month.
Still, Martin says she's optimistic, in part because the co-op and its
leaders have roots in the community. "RS Fiber is out there asking us what
we could use," she said. "It feels like more of a team effort than when
you're trying to work with a big corporation."
Construction on the fiber optic network is already underway, but RS Fiber
still faces some potential stumbling blocks, including the threat that rival
Internet Service Providers will lower their prices to siphon away demand. If
that happens, the venture could end up losing money, leaving taxpayers on
the hook to repay government bonds.
But Mitchell thinks that's unlikely. "People who don't care about their
quality of access might take service from Frontier or Century Link at
rock-bottom prices," he said, referring to the fact those companies don't
offer high-speed fiber. "But I don't think either of those ISPs are likely
to engage in a round of updates to be at all competitive on speed."
"WE'LL SEE STUDENTS OUTSIDE OUR LOCAL LIBRARIES OR ON THE STEPS OF SCHOOL
AFTER HOURS, TRYING TO FIND PLACES TO GET ACCESS TO THE INTERNET AND DO
SCHOOL WORK."
Once complete, the RS Fiber network is expected to match the 1 gigabit top
speeds of cities like Cedar Falls, a milestone that would make southern
Minnesota the envy of rural America. According to recent data, only 55
percent of rural residents have access to broadband internet faster than
even 25 Mbps (compared to 94 percent of urbanites). Moreover, the investment
already holds promise for boosting the local economy. In May 2015, the
Minnesota College of Osteopathic Medicine announced plans to set up services
in an old school building in Gaylord--a decision officials said was because
of RS Fiber's infrastructure investment.
"There's a lot of need out there," said Brandon McBride, who took over as
administrator of the then-embattled Rural Utilities Service in 2015.
"There's a great opportunity to work in these local communities and build
out the infrastructure." The RUS is helping expand broadband access to
places like McCreary County, Kentucky, and Burnsville, North Carolina, but
its annual budget is nowhere near enough to make broadband access
universal.
That's why experts like Mitchell are excited about RS Fiber, which could
offer other rural communities a framework for financing rural broadband
networks without government support. "I don't want to say that everyone can
do this, but a lot of places could do it if they had this effort," Mitchell
said. "And I don't think anyone's going to have to go through the same level
of challenge again, because now there's a model."
Ben DeJarnette is a freelancer writer based in Portland, Oregon. His work on
rural economic issues has been featured in print and online for
InvestigateWest, High Country News, Oregon Business and others. Follow him
on Twitter at @BenDJduck.
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