Lawmakers to propose $100M to bring broadband to the borders

  • Article by: JENNA ROSS , Star Tribune
  • Updated: February 26, 2014 - 11:25 PM

Nearly 500,000 households still lack high-speed Internet.

More than 70 miles northeast of Duluth and another six from Schroeder, Minn., the Internet gets iffy.

Tina McKeever knew when she moved there from the Twin Cities that she’d have fewer options. But she didn’t expect that to work remotely, she’d have to pick between pokey ISDN and slower dial-up. No broadband, no wireless. Satellite wouldn’t sync with her system.

“I thought, ‘You’ve got to be kidding me,’ ” McKeever said.

Despite a goal to put broadband in the hands of all residents by next year, a quarter of households — nearly 500,000 — still don’t have it, a new report from the Minnesota Broadband Task Force shows. Minnesota also will likely miss its goal to land in the top five states nationwide for access to speedy Internet by 2015. Today, the state ranks just 23rd in broadband availability.

Some lawmakers say that after years of goals, it’s time to spend state money to fix the problem.

This week, Sen. Matt Schmit, DFL-Red Wing, will announce a bill that would create a $100 million matching grant program to help build broadband infrastructure.

“We’ve been talking about this for a long time,” Schmit said. “We’re ready for action.”

The task force estimates that the competitive grants — funded with surplus dollars and matched by private, local or federal funds — could connect more than 100,000 households to Internet with download speeds of at least 10 megabits per second, its definition of broadband.

“It’s the perfect place to spend one-time dollars,” said Margaret Anderson Kelliher, the group’s chairwoman.

But the proposal has detractors. The conservative Freedom Foundation of Minnesota argues that there’s been no shortage of public funding thrown at broadband in recent years.

“What we see too often is that public investment doesn’t go to unserved areas — in fact, it goes to areas that already have incumbent providers,” said Jonathan Blake, the group’s vice president.

“Having government in the business of competing with private companies is a waste of taxpayer money.”

In one city, an outrage

Kelliher and other public officials say that speedy Internet has become as essential as electricity or telephone service and communities without it will fall behind. U.S. Sen. Amy Klobuchar recently called it “the infrastructure challenge of our generation.”

Connecting rural areas is expensive and the government ought to step in when private businesses won’t, they say. It’s trickier when the service exists but residents don’t think it’s good enough.

Every so often in Annandale, Minn., the Internet stops working. Shops can’t swipe credit cards. Nurses can’t access patient records. Pharmacies can’t fill prescriptions.

A recent study there showed that 82 percent of residents surveyed — more than nine out of 10 who use Windstream Communications — were dissatisfied with their Internet provider.

More than 86 percent said they would be “very likely” to switch to a competitive provider if there were one.

“This has outraged the community,” said Kelly Hinnenkamp, city administrator. “The majority of the time, customers here are getting less than half the speeds they’re paying for. Then when you have outages, you’re getting nothing.”

Pete Kormanik picked Annandale for his third McDonald’s because of location, traffic and an active chamber of commerce. But just before opening in 2012, Kormanik got worried.

Downloading data for a digital menu board — a task that would have taken 30 minutes at his other restaurants — dragged on for more than four hours.

After delays in processing credit cards, watching training videos and transmitting orders, Kormanik switched to an AT & T antenna. But a cloudy day can slow that service.

“If you can’t stay current with [connectivity], you’re just going to fall behind,” Kormanik said. “And businesses won’t go into those locations.”

Annandale is studying how to attract other providers — or maybe build a network itself. A matching grant from Minnesota could help, Hinnenkamp said.

Internet provider Windstream said in a letter to Annandale leaders that it spent $125,000 in 2013 upgrading the city’s system, “a considerable investment given the relatively small customer base.” The company pledged $500,000 in upgrades in 2014.

“Explosive growth” in demand for streaming video and other things has tested the network’s capacity, Charles Bruggemann, division vice president for field operations, said in an interview.

Bruggemann said Windstream is doing its best to eliminate congestion and that using state money to help bring in another provider would increase costs for everyone. “Quite frankly, we think that’s a duplication of efforts.”

Rep. Joe McDonald, R-Delano, said he’s gotten “countless e-mails” from Annandale residents complaining about Internet service.

Folks in his conservative Wright County district “don’t have many needs,” because they first assume that “we can pull ourselves up by our bootstraps,” he said.

“So when they do call and say, ‘There’s a need here,’ I want to help in any way I can,” McDonald said. A state grant program is “something I could get behind.”

‘Paralyzing the rural poor’

Schmit envisions the “border to border” grant program as a way to encourage “creative” partnerships. “There’s no shortage of local energy around this,” he said.

Rural broadband was one of two topics at a precinct caucus in Itasca County, where about 54 percent of households have access to broadband, said Aaron Brown, a community college instructor and blogger. The other? The minimum wage.

“Those are the two issues paralyzing the rural poor,” he wrote.

Brown depends on the Internet to teach online courses, among other things. Most months, he and his family exceed the max bandwidth on their $134-a-month satellite service and have to drive to town to finish their work.

“I get about a movie a month,” said Brown, who lives outside Nashwauk. “We actually have arguments — is that 5-minute YouTube video worth it?”

In 2011, Arrowhead Electric Cooperative began building a high-speed, fiber-to-the-home network in Cook County with the help of more than $16 million in federal grants and low-interest loans.

It’s one of 23 counties where less than a fifth of households have broadband with download speeds of at least 10 megabits per second, the task force report shows.

Without high-speed Internet, “the neglected, small-population community was really becoming isolated,” said Molly Wickwire, a subscriber accounts representative.

The cheapest monthly subscription for download speeds of 20 megabits per second will cost about $47.

So far, about 75 percent of 5,200 homes and businesses have asked Arrowhead to build the line to their property at no cost to them.

Building that kind of network — 431 miles of aerial and buried mainline fiber so far — without federal and local funding “just wouldn’t have been feasible,” Wickwire said.

McKeever, 45, recently took a laptop to Arrowhead’s headquarters to test the speeds she could soon get.

A document that at her home downloads in 30 minutes took just seconds.

She believes that with greater connectivity, people with cabins will extend their stays in the region — or even move there full-time.

“This is going to open up a huge opportunity for the county,” she said.

 

Jenna Ross • 612-673-7168

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