One of Gary Johnson’s fears when he announced the 5,000-square-mile “GigaZone” ultrahigh speed Internet service last week in Bemidji was that someone might reach the badly mistaken conclusion that it was easy to build that kind of rural broadband capability.
It was nothing of the sort — which is what makes Johnson’s Paul Bunyan Communications an interesting case study in broadband Internet access outside of the Twin Cities.
Subsidized capital wasn’t what made the difference. More like patience and a particularly long-term view.
The GigaZone service wasn’t exactly what was envisioned years ago when Paul Bunyan started building its fiber-optic network. Its far more modest ambition was to incrementally add territory and services. The company connected its first customer house via fiber-optic cable all the way back in 2004.
The company, based in Bemidji, had about $54 million in 2013 revenue. That makes it an awfully small company to be installing miles and miles of fiber. Johnson said that he was even a bit surprised to learn, after tallying up all the capital investments made in its fiber-optic network, that the total thus far is about $150 million.
“It really wasn’t thrown out there like ‘Do you want to spend $150 million?’ ” said Johnson. “We are a cooperative. So it’s in our DNA to look through the lens of ‘what to our members need?’ Not ‘Is it going to be super-profitable,’ that kind of thing.”
The cooperative has borrowed money from a program of the U.S. Department of Agriculture. But those were loans, not grants. Beyond that, he said “it’s just been our own investment. It’s been pay-as-you-go, for over a decade.”
Not only does Johnson explain that there was nothing easy about it, he’s nothing but a fan of public financing for broadband like Minnesota’s new $20 million broadband grant program. The company would take any help it could get to continue to expand Paul Bunyan’s network.
Paul Bunyan’s service territory extends east to Grand Rapids, with parts of it extending all the way to just east of International Falls. Johnson called the network “99 percent” ready for the first 1-gigabit customers to be turned on early next year, at a price of $100 per month for Internet access.
And it’s important to understand just how fast 1 gigabit really is.
Johnson said he’s not quite sure what the Federal Communications Commission now calls broadband, but he knows it’s less than the 10- to 20-megabit speed that’s the aspirational goal for the state of Minnesota in 2015. One gigabit is 1,000 megabits.
“From 4 to 6 megabits per second, and we are now talking 1000 megabits,” he said. “That’s the leap here.”
And it’s quite a leap for Grand Rapids and Bemidji, although it would be for darn near any town. The phone company CenturyLink is just this week advertising a promotional price on DSL “high-speed Internet” in St. Paul “with download speeds up to 10 megabits per second.”
An Internet download speed 100 times faster than what CenturyLink is pitching as high speed means being able to download a high definition Hollywood movie in about two seconds. Imagine watching a movie while in St. Paul they are sitting down to watch a download progress bar.
The significance of that capability — and an equally fast upload speed for tasks such as video conferencing — hasn’t been lost on the greater Bemidji business community. “What I can say to the question of ‘why Bemidji?’ is that we happen to have the fastest fiber-optic speeds in the nation,” said Dave Hengel, the executive director of the Greater Bemidji economic development group.
Johnson can only speculate on how many consumers will value that enough to sign up for the fastest speed at $100 per month. If that sounds like a lot, compare it to the $66.95 per month for 20 megabit speeds Paul Bunyan customers get charged now, although local phone service is bundled with that.
“We hope it’s affordable,” Johnson said. “It’s nothing for people to spend $200 a month on their mobile device.”
And in that pricing discussion Johnson’s touched on yet another policy goal that seems to be driving public broadband funding, and that’s making reliable service available that people can afford. It’s really not a question of broadband access even in remote parts of the state. It’s a question of how much it costs for a service faster than the old dial-up.
That is why if you look, the roots of recent broadband initiatives really go back to things like the Rural Electrification Administration created during the New Deal.
In 1934 only about 10 percent of American farms had electric service, but even so it was possible to string wires from the end of the grid out a remote farm out in western Minnesota — provided the farmer had the money to pay for it.
That’s much the case right now in looking at broadband Internet. In looking through the interactive map of broadband service on the website of Connect Minnesota, there wouldn’t appear that many places in the state where it’s just not available.
A good-faith effort to find one led to a friend’s cabin northwest of Ely, well beyond the limits of the GigaZone. It’s a wonderful northern Minnesota retreat overlooking a small wilderness lake located at the end of a long dirt road, miles past where the county stops maintaining it.
It’s so remote that keeping a snowmobile gassed up in the late fall may be a good idea in case the SUV has to be left there until spring.
But according to that interactive map, this wilderness cabin is not so remote that guests from St. Paul wouldn’t be able to stream the TV show “Orange Is the New Black” from Netflix and watch on their iPads.
That is, if my friend weren’t too cheap to pay the $129.99 per month plus tax for satellite service fast enough to make it possible.