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Minnesota Local Governments Advance Super Fast Internet Networks

Publication Date: 
March 19, 2014
Author(s): 
Christopher Mitchell
Author(s): 
Lisa Gonzalez

Local governments in Minnesota have been at the forefront of expanding fast, affordable, and reliable Internet access - often in some of the most challenging areas of the state. ILSR has just released a policy brief to explore some of these approaches: Minnesota Local Governments Advance Super Fast Internet Networks.

The full report is available here.

The brief examines five communities that have taken different approaches to expanding access, from working with a trusted local partner to creating a new cooperative to building community-wide FTTH networks.

Lac qui Parle County has worked with Farmers Mutual Telephone cooperative to bring fiber networks to those who had been stuck on dial-up. Finding itself in a similar situation with no reliable partner, Sibley County is creating a new coop to work with.

Scott County built a fiber ring to connect community anchor institutsion to dramatically expand access to high capacity networks and lower telecommunications budgets. That network has helped to lure several major employers to the area by leasing fiber to them.

Windom and Monticello have built FTTH networks in extremely challenging conditions. Though Windom is far smaller than most have believed is feasible to build such a network, it has thrived and is now connecting many of the small towns surrounding it. It was essential in retaining jobs in the community that would have been lost without it and has attracted new jobs to the region. Monticello is a younger network and has remarkably benefited the community even as it has struggled financially due to dirty tricks from the telephone and cable companies.

The policy brief makes some policy recommendations while focusing on some local solutions to difficult problems in ensuring all Minnesotans have fast, affordable, and reliable Internet access.

WindomNet Creates Jobs, Benefits for SW Minnesota - Community Broadband Bits Episode #64

The small town of Windom in southwest Minnesota has long been one of the smallest FTTH networks in the nation. I have long wanted to bring WindomNet General Manager Dan Olsen on our show because it has some of the best anecdotes in the world of community owned networks. We finally got him!

To understand WindomNet, you should know that it has fewer households than what many of us consider to be the minimum threshold for a viable triple-play FTTH network. Not only have they made it work, they have attracted numerous employers to town, as our interview discusses. It also kept a local employer located just outside of town in the area after a massive telelphone company operating in Minnesota found itself unable to provide the service that business requested. Tiny Windom ran a fiber out to the business and kept them in the region.

The network has expanded to nearby farm towns with the help of a broadband stimulus award. Even now, after bringing connections to a rural region that the big providers have largely ignored,
the big cable and CenturyLink lobbyists that live in the capital in Saint Paul have relentlessly lied about Windom, calling it a failure and presenting skewed figures to suggest the investment had not succeeded.

In our discussion, Dan and I explore the reality of WindomNet and how it is benefiting a much larger region beyond its own borders. Read all of our coverage about Windom here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 18 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Break the Bans for the music, licensed using Creative Commons.

To Improve Minnesota Broadband, Look to Lessons of Electrification

Steve Downer is the Associate Executive Director of the Minnesota Municipal Utilities Association, MMUA, and he previously served on the Blandin Foundation Strategy Board. He offered these thoughts on page 4 of the "The Resource" [pdf] from January 2013 and has allowed us to reprint them below.

According to online reports, House Commerce Chairman Joe Atkins has listed his top 10 issues for his Committee in 2013. Included on the list, at No. 4, is Telecommunications and Broadband Law Update. As municipal involvement has been a hot-button topic over the years, this should be of interest to municipal utilities.

The idea of re-writing state telecom law was a priority of the Ventura administration but, even with agreement among various parties that state law was antiquated the discussion never gained much steam, largely because the telecom companies decided the law was just fine after all. Efforts have been made over the years to remove or reduce the super-majority referendum requirement to build a municipal telephone exchange, but have withered in the face of vociferous opposition.

On the other hand, efforts to further restrict municipal provision of broadband service, a concern in recent legislative sessions, have also languished. So, what does Chairman Atkins have in mind?

Perhaps local interests, working through organizations like MMUA, could suggest the state needs to be more open to partnerships and local government projects, if it is ever to reach its broadband goals.

Cities have proven fully capable of providing a full range of telecommunications services over the years. Counties are providing cutting-edge communications services. The Southwest Minnesota Broadband Services project (a consortium of eight cities) shows how ordinary people, working through their local governments, can work together to provide high-quality voice, video and data service at reasonable prices.

Renville Sibley Fiber Project

After much work, a similar project in Renville and Sibley counties has recently been stymied due to concerns over the ability of city-county partnerships to issue bonds. The project itself has been enthusiastically supported by rural and city interests and was well on its way to construction before last-minute legal concerns were voiced.

This is just the type of project the state should be fostering.

Yet, instead of recommendations to clearly allow this type of partnership in state law, it appears there may be efforts to stack the deck against local interests heading into the session.

The Minnesota Governor’s Task Force on Broadband, for example, recently released its Annual Report and Broadband Plan, including recommendations for the 2013 legislative session. The Report, while the result of much good work, bears the traditional hallmarks of large group writing efforts, and tilts toward the input of private interests that comprised the bulk of the members.

The report notes the obvious, saying, the private sector will play the leading role in expanding broadband access (it might as well have said ‘the sky is blue’).

Two sentences later, the report promotes “public-private broadband projects” but makes no specific mention of how to foster such projects.The recommendations that are made generally provide “incentives” (read tax breaks or subsidies) to private companies and doesn’t even mention local government, which has played a leading role in broadband provision in certain locales.

A number of recommendations are made, but a clear and consistent road map is lacking.

Some recommendations prove the point that governmental ‘pork’ is money that is going to somebody else. Current perks have apparently not been enough to ‘incent’ private providers to extend highspeed service in many areas. Yet, in some of these areas locals are more than willing to invest their own money to provide the service if they could just get the lawyers out of the way.

Minnesota Seal

On the other hand, calls for new positions in state government, to untangle the web of available programs, only seem to prove the point that if bureaucracy grows large enough, you will need more of it to make its purposes clear.

Then there is this recommendation, rich in irony: “to coordinate highway construction and broadband deployment projects,” and have the state install conduit that would presumably contain privately owned fiber optic cable.

Does anybody remember Connecting Minnesota? This was a late-90s proposal for MnDOT, in cooperation with a private partner, to lay 2,000 miles of fiber optic cable in interstate highway right-of-ways. Legal battles, largely with US West (now CenturyLink) led to the demise of this public-private initiative.

A perfect example of public-private partnerships exists in the electric utility industry. Despite animosities, largely in the formative years, municipal, investorowned and cooperative utilities jointly invest in capital-intensive projects on a regular basis.

Utilities do this because they recognize the level of capital needed to improve service to their customers, and realize an effective way to raise the needed capital is to partner with others willing to invest, regardless of philosophical differences.

Enacting guidelines to allow similar investment in our broadband infrastructure would similarly benefit citizens of Minnesota.

We are encouraged by Rep. Atkins’s inclusion of telecommunications on his 2013 session “To Do” list and encourage him to recognize the important and effective role municipals can play to help the state reach its 2015 broadband goals.

Fiber Route Construction Nearing Completion In Southwest Minnesota

In April, we reported on Spring construction of fiber installation by the Southwest Minnesota Broadband Services (SMBS) in the Jackson area. This is a stimulus-funded expansion growing out of the community-owned WindomNet. The original plan was to have construction completed in Jackson by the end of August, but the job was 97% completed in July freeing the way for business and residential installs.

The Jackson County Pilot reported on the July Kiwanis Club meeting where SMBS's Naomi Pederson presented an update:

As of this past Monday, Pederson said 176 miles of the 181-mile main line had been built.

“People have been thrilled with the service,” Pederson said. “I’m sure businesses will be too.”

Pederson said crews will begin residential installs in Jackson July 16. She anticipates crews will be able to hook up around 100 homes per week.

“Jackson has been one of our best towns, with 73 percent sales — much more than anticipated,” she said. “People are very receptive and are signing up for more services than people in our other towns. More services and more sign-ups mean we’re trying our best to keep up.”

As of this past Monday, Pederson said 176 miles of the 181-mile main line had been built.

“People have been thrilled with the service,” Pederson said. “I’m sure businesses will be too.”

SMBS received $12.8 million in stimulus funds to develop an ftth network to Bingham Lake, Heron Lake, Jackson, Lake Okebena, Round Lake and Wilder. Check out a map of the fiber route on the SMBS website.

The high level of interest in these communities comes in the face of policymakers in Washington, DC, and many state capitals - they assume rural residents don't know how to use broadband or don't want it. This program shows that when you make good broadband available to people for a reasonable price, they take it in high numbers.

Thanks to BlandinonBroadband for alerting us to this story.

Southwest Minnesota Broadband Services' Construction Moves Forward

Good news for folks in Jackson, Wilder, and Bingham Lake in Southwest Minnesota! Your local broadband options are about to get much better. Southwest Minnesota Broadband Services (SMBS) just announced that construction is advancing on the new network. The 125-mile fiber ring is expected to be completed by September, 2012. If you live in their service area, give them a call.

Here are contact details from the announcement:

Wilder - A sales event has been held. Please call our Lakefield office at 507-662-7000 if you still need to sign up for services.
 
Bingham Lake - A sales event will be held on April 10th from 12 PM to 8 PM at the town hall/community center. If you are unable to attend, please contact our Lakefield office at 507-662-7000.
 
Jackson - Our first three construction phases have been identified. We intend to have phases 1-3 completed by June, 2012. Our web-site, mysmbs.com will be updated as construction dates are set for phases 4-9. The entire City of Jackson will be completed by fall, 2012.  Southwest Minnesota Broadband informational material will be delivered to homes according to construction phasing in the coming months. 

SMBS is a consortium of 8 communities: Bingham Lake, Brewster, Heron Lake, Jackson, Lakefield, Okabena, Round Lake and Wilder.  Stimulus finding of $12.8 million dollars is allowing the communities to offer ftth service in this rural area, building on the network first established in Windom by the local public power utility.

SMBS recognizes the need for a community owned network in a place where the private sector does not want to invest. On their FAQ page:

What is SMBS? Southwest Minnesota Broadband Services is consortium of cities that realize today’s incumbent service providers will not be able to provide the next-generation of broadband services that will keep this area competitive with the global marketplace. SMBS will own and operate the network, employees will be your friends and neighbors and dollars will stay in your communities.

Rates and more user information are also available on their website. Congrats to SMBS and all their prospective subscribers! We look forward to reporting more about how this community's investment is advancing through Southwest Minnesota and all the benefits that are sure to follow.

 

Rural Community Broadband Network in Minnesota Garners More Coverage

Minnesota Public Radio has once again covered some of the many benefits coming from the stimulus-funded Southwest Minnesota Broadband Services that grew out of WindomNet, a small muni network. It is now offering some of the fastest connections in the region to people who previously only had dial-up or slow DSL.

Schensted and his wife are the first in their southwest Minnesota community to connect to a new high-speed Internet service. He said the new service is everything it was advertised to be.

"We're getting anywhere from 50 megabits downloading and about 20 to 30 uploading," Schensted said. "It's just really incredibly fast."

Stimulus dollars spent on expanding publicly owned networks gets the most bang for the taxpayer's buck and should have been a much larger focus for the broadband stimulus.

The people and businesses served by this network have faster connections at lower prices than we can get in the metro area of Minneapolis/St Paul.

Schensted's house is connected to the nearly $13 million Southwest Minnesota Broadband Service project that will serve eight communities: Bingham Lake, Brewster, Heron Lake, Jackson, Lakefield, Okabena, Round Lake and Wilder.

Internet equipment
Schensted said he has never had that kind of Internet speed, even when he lived in the Twin Cities.

"This is perhaps overkill for even my home," he said. "I'm not complaining about it, but it's a wonderful overkill. My wife and I can both be using a computer, we can be streaming something on the television, all at the same time which is something we wouldn't have dreamed of before."

Smart public investments can connect everyone in this state, at a fraction of the price that it would cost to subsidize the big private companies to do it. They are too inefficient and require too large a margin of profit, in addition to a host of other problems.

WindomNet Turns on Southwest Minnesota Broadband Services

Exciting times in rural southwest Minnesota, as Southwest Minnesota Broadband Services has turned on its first customer. SMBS is a broadband stimulus-enabled partnership with eight rural communities and WindomNet, the muni FTTH network in Windom.

The Rev. Andrew Schensted and his wife, Lisa, were the first to be connected. The fiber-to-home connection provides “obnoxiously fast Internet,” Andrew Schensted said in a SMBS press release.

The SMBS Internet is “at least 10 times faster” than what they had when living in the metropolitan area, Andrew Schensted added. The couple has been able to streaming video in full HD from TV streaming websites.

So it begins... the Metro around Minneapolis and St Paul have to rely mostly on Comcast for connections to the Internet. CenturyLink's DSL is generally slower and in many places, utterly unreliable. Monticello has had a blazing fast connection (faster than we can get in the metro) at lower prices for more than a year. Communities served by HBC also have faster connections in SE Minnesota. In the coming year, the stimulus-funded networks on the North Shore will also have better connections than we can get. It will be curious to see how development patterns adjust in the coming years.

“The demand for higher-speed Internet in our rural area is daunting,” Olsen said. “People not only want faster speeds, they need it for their business operations. If the wireless trial is successful, it could provide a better option to those not on the fiber system. “

Southwest Minnesota Broadband Services (SMBS) is a consortium of eight communities including Bingham Lake, Brewster, Heron Lake, Jackson, Lakefield, Okabena, Round Lake and Wilder. The 125-mile, $12.8 million dollar fiber ring is expected to be completed in September 2012.

The fiber-optic communication network has the capacity to bring fast, competitively priced services for internet, phone and cable TV to residential subscribers as well as businesses and other community institutions. The government grant-supported project is intended to provide southwest Minnesota with the telecommunications connectivity required to remain competitive in the global marketplace.

The new network has bucked a strong trend among community fiber networks of offering symmetric connections to the Internet. Packages and pricing are available here. If I had to guess, the most commonly subscribed-to package will be the 10/2, which is pretty limiting in the upstream (though a tremendous improvement over the status quo).

Update: I have just verified that Windom is limited in what they can offer in the upstream presently due to the limited options they have for connecting to the Internet from rural Minnesota. Over time, we hope they will have more options that will lower those costs for them.

At a certain point, true symmetry becomes an academic point. I don' think many would quibble with a connection that is 21/19 or 33/35. The question is ultimately whether one is limited by the network. Nonetheless, we are strong proponents of networks upstream capacity that is closer to downstream capacity because being on the Internet is about participating, not consuming.

Longmont Considers Second Vote on Community Fiber Network

Colorado requires a referendum before a local government can build a broadband network as a result of a 2005 law pushed by Qwest to prevent communities from building next-generation networks. So when Longmont wanted to expand its fiber ring to offer residential and business services, they put it to a vote.

They lost with only 44% supporting the measure. But now, more people understand the issue and the community is considering voting again.

We saw the same dynamic in Windom, Minnesota. Almost ten years ago, Windom held a vote to build a muni FTTH network and it failed to gain the Minnesota-required 65% supermajority. After the vote, a number of people wanted to revote because they realized they had been conned by the incumbent phone provider (ahem… Qwest) and only truly understood the issue after the vote had occurred.

City officials wanted no part of another referendum but community champions eventually prevailed and they had a second vote that authorized the community to build the network.

We'll see if Longmont follows suit. An article discussing the re-vote notes that Comcast and Qwest have dumped unprecedented sums into preventing the community from having a new choice:

The first attempt at getting that approval didn't go so well in 2009. According to city records, opponents -- including the Colorado Cable Telecommunications Association -- spent $245,513 to defeat that ballot measure, the largest amount ever spent on a Longmont city election. By contrast, the city legally couldn't campaign on its own behalf, and the explanations that were out there didn't explain well, according to Longmont Power & Communications director Tom Roiniotis.

The cable and phone companies created an astroturf group called "No Blank Check" that then used standard fear, uncertainty, and doubt tactics to spread misinformation around the community. A quarter of a million dollars is a drop in the bucket to stop the only real threat of competition these companies face anymore -- locally owned community networks.

The situation in Longmont has attracted the interest of the Boulder Weekly, which focused on the opposition of Qwest and Comcast:

According to city records, opponents spent nearly $250,000 — the most ever spent on election ads in Longmont’s history — on the “No Blank Check” campaign, which painted the initiative as a tax guzzler that would reduce funding for local police officers and firefighters. According to reports, the primary campaign contributor was the Colorado Cable Telecommunications Association (CCTA), which counts Comcast among its members.

Public safety departments in Longmont should talk to their counterparts in Wilson, North Carolina, who recently testified about the many tremendous advantages they have from owning their own fiber network.

Longmont Power and Communications

Roiniotis says the “No Blank Check” claims were misleading, to say the least, because any city-owned telecommunication service would operate as a self-funded enterprise, relying solely on the fees it collects instead of tax dollars.

“We run it just like a business, but we’re nonprofit,” he says.

If anything, Roiniotis says, it would make money for Longmont’s emergency services, because it would send 8 percent of its revenue to city coffers in the form of a franchise fee.
“It was actually just the opposite of what No Blank Check was saying,” Roiniotis told Boulder Weekly. “They were saying we were going to have to lay off police and firefighters. Nothing could be further from the truth. That’s never been proposed. In fact, telecommunications would actually generate money for those departments. But they had models dressed up as firefighters, looking very sad."

The article goes on to quote Comcast and CenturyLink who say that communities never succeed at building a networks… failing to mention that their best networks cannot even come close to matching the impressive networks built by Chattanooga, Lafayette, Wilson, Salisbury, Monticello, North Kansas City, and a number of other communities. CenturyLink -- with its pathetic last-generation DSL service -- wanting to educate local governments on how to build a network is like Coyote offering tips on stride to the Road Runner.

Like others, Longmont has credited the Google gigabit initiative as a rallying and organizing cry to reorganize and build the network they need.

The proposed question this time around is:

Shall the citizens of the City of Longmont Colorado re-establish their City's authority to provide all services restricted since 2005 by Title 29, article 27 of the Colorado Revised Statutes, described as "advanced services", "telecommunications services" and "cable television services," including any new and improved high bandwidth services based on future technologies, utilizing community owned infrastructure including but not limited to the existing fiber optic network, either directly or indirectly with public or private sector partners, to potential residential and commercial subscribers within the City and the service area of the City's electric utility enterprise?

The challenge of any ballot initiative on broadband is to explain to voters what is at stake. These technologies are intimidating and confusing to most voters - particularly as those who don't vote on a measure are often counted as nays.

Upcoming Minnesota Events

As Minnesota's rural county-wide FTTH projects move forward, we have the opportunity to learn more about them in upcoming events.  Thanks to Blandin's broadband blog for covering these issues!

On February 10, Cook County is welcoming Dan Olsen from WindomNet to discuss their experiences with a community-owned fiber network. You can listen to a previous interview on the North Shore with Dan Olsen.  In the interview, Dan Olsen mentions that a number of residents use WindomNet to work remotely, commuting only once a week to their jobs in South Dakota.  

For the rest of us, mostly located in the metro area of Minneapolis and Saint Paul, we can learn about the projects in Cook, Lake, and Sibley Counties at a Telecommuniations and Information Society Policy Forum at the HHH School of Public Affairs at the University of Minnesota.

Frontier Forces FUD on Cities in Sibley: Sibley Responds

The fiber-to-the-farm initiative in Sibley County, Minnesota, has completed the feasibility study and the towns involved are discussing a Joint Powers Agreement. One of the impacted incumbent providers -- Frontier Communications, a rural telco famous for slow DSL) -- has started to spread the usual FUD (fear, uncertainty, and doubt) that is common whenever a massive company is about to face competition.

Though I am tempted to comment directly on Frontier's letter, I'll let the community's response stand on its own. The way they misrepresent the record of Windom should be instructive - this same misinformation strategy is used around the country.  We believe publishing these scare tactics and responses to them is helpful to everyone -- so if your project has received one, please let us know.

Frontier's Letter:

Dear Commissioners:

As a provider of telephone, internet, and video services to our customers in the Green Isle, Arlington, and Henderson areas, Frontier Communications is obviously interested in the "fiber to the home" proposal that has been presented. As a nationwide provider, Frontier is aware of other efforts by municipalities of various types to build and operate their own telecommunications network. While these proposals are always painted in rosy tones, it is important for officials to carefully review the underlying assumptions and projections that consultants make when presenting these projects. Unfortunately, history tells us that the actual performance of most of these projects is significantly less positive than the promises. Often times, these projects end up costing municipalities huge amounts of money, and negatively impact their financial status and credit ratings.

A nearby example would be WindomNet, the city-owned network in Windom, Minnesota. That network, which provides telephone, internet, and video service, began in 2005. The financial results to date have been poor; operating losses of $662,000 in 2006, $1,257,000 in 2007, $326,000 in 2008, and $93,000 in 2009. Additional borrowing by the city was required to make up those losses.

Another example is the city-owned network in Burlington, Vermont. Burlington Telecom was begun with high hopes in 2003, to offer telephone, internet, and video services. By the fall of 2010, the network was in trouble. A Vermont Public Service Board investigation found that it had violated its license to serve. The network cannot pay its debt, which has resulted in a downgrading of the city of Burlington's credit rating. This essentially makes borrowing more expensive for the city for all its operations. Indeed, a blue ribbon panel charged with investigating the situation concluded that the network is not viable at this time.

Reviewing the presentations on the "fiber to the home" proposal available on the County's website raises several questions regarding the reliability of the cost study and projections. The Sibley Renville Fiber Project Executive Summary says that to make the project work, it "requires a 70% penetration rate of customers buying two services (or more)". The November 15, 2010 Consultant Report assumes monthly prices of $19 for telephone service, $42 per month for Expanded Basic video, and $42 per month for 20 Mbps internet service, A customer taking all three services (phone, video, and internet) would pay about $100 per month; a customer taking only two services would pay something less.

However, the November 15, 2010 Consultant Report seems to tell a different story as far as the assumed penetration rates.

In the Consultant Report, the cost study results for City-Rural plan show $9.6M in revenue in Year 5. A customer taking all three services would generate revenue of about $100 per month, or $1200 per year. Thus, the $9.6M of projected revenues equates to 8,000 customers taking all three services (phone, video, internet) or more than 8,000 customers taking two services. According to the County's webpage, the 2010 population of Sibley County is 16,000, Apparently, the cost study assumes that every other citizen of the County will subscribe to all three services, at $100 per month. Not every other household; every other citizen, Since the average household size is approximately 2, the cost study implies that every Sibley County household will subscribe to this network (at $100 per month) for the projections to be accurate.

The Consultant Report assumes a "Total Investment per Passing" of $5600. The projected investment for the City-Rural plan is $44.6M by Year 3. This equates to roughly 8000 units passed. According to the US Census, with a 2000 population of 15,356, there were there were fewer than 6000 households in the county. Since the 2010 population of Sibley County is 16,000, there may be a few more households now. Evidently, the cost study is assuming that every household in the county (and then some) will be passed by Year 3, and that every household will subscribe to the network.

Frontier offers these thoughts not as a full review of the proposal, but simply as an initial caution to the county, to carefully examine the particulars of this project before proceeding. Frontier looks forward to participating in future discussions on this proposal.

Mark Erickson, the Winthrop City Administrator who has spear-headed this project, responded with the following letter (which is not in a blockquote style due to its length).

A response to Frontier Communications letter to Sibley County Commissioners on Dec. 14, 2010 regarding the proposed county-wide fiber network

Sibley logoAs residents, businessmen and elected officials study and learn more about the possibilities of constructing a county-wide fiber to the home/farm/business network in Sibley County, Fairfax and the rural exchange around Fairfax, it is important that everyone is presented with facts.

On December 14th of last year Frontier Communications presented a letter to the Sibley County Board of Commissioners expressing their concerns and opposition to the proposed network.

The letter is an example of how the telecommunications industry has typically responded to the threat of competition; confuse everyone with half truths and lies, point to a bleak future and remind everyone their taxes are going to increase if the project goes forward.

Nothing could be further from the truth.

In their letter, Frontier says that “these proposals (for community fiber networks) are always painted in rosy tones.” That is not true in our case. Our consultant, Doug Dawson, and the city staff involved in the project have gone out of their way to remind elected officials and the several hundred people who attended the two rounds of presentations regarding the project there are inherent risks in the project and a significant amount of hard work required to make the project successful.

Frontier goes on to say that “history tells us that the actual performance of most of these projects is significantly less positive than promises.” That also is not true. There are approximately 75 municipally based fiber projects currently operating in the country. A case can be made that perhaps three or four of those projects have under performed. Four out of 75 projects is a far cry from “most of these projects.”

The letter further goes on to point to WindomNet in Windom, Minnesota as an example of a municipally based program that is not doing well. Again, the accusation is absolutely false. WindomNet was built by the city of Windom about five years ago and stumbled out of the block because of overwhelming support for the project. Their original business plan estimated that 20% of the residents would subscribe to digital television service which requires a set top box that back then cost about $400 each. Instead, 80% of residents signed up for digital service and Windom was required to borrow more money to meet the demand. Since then Windom has been a model of success. They have met their financial projections and continue to add customers. In a conversation with their general manager a few weeks ago he admitted they could do better financially if they charged more money. Instead they choose to provide outstanding service to their customers as a price that allows them to pay their bills and put a little in the bank.

This past year the WindomNet Board voted to work with eight area communities (Jackson, Lakefield, Round Lake, Brewster, Heron Lake, Okabena, Wilder and Bingham Lake) to build fiber to the home networks in each of those communities. Does that sound like an operation that is not doing well?

Minnesota phone companies, under the direction of the Minnesota Telecommunications Alliance, have been telling “The Windom Lie” for the past five years. In a way it is good that Frontier’s letter mentioned Windom as an example of a municipal venture that is failing, because it gives us the opportunity to tell the truth. WindomNet is doing just fine. A municipal venture measures success by generating more cash than is needed to pay for expenses, pay for assets and pay for debt. Windomnet is cash positive and the City considers the project a total success.

The letter also mentioned the community of Burlington, Vermont as an example of a municipal network that is not doing well. Frontier is accurate in that description. Burlington made several big mistakes. Burlington stands as an example of what not to do for municipal networks and the lessons learned from Burlington have been heard in many city halls and county courthouses across the country.

The Frontier letter then goes on to raise “several questions regarding the reliability of the cost study and projections” of the feasibility study authored by CCG Consulting. I must admit that reading their concerns certainly seems to point to problems. Fortunately, they have taken simple financial assumptions and twisted them in a way that points to failure instead of success. The numbers presented in the feasibility study are sound. CCG Consulting has authored hundreds of similar studies for cities, counties and phone companies and has never had a failure. In fact, CCG is recognized as one of the top fiber-to-the-home consulting firms in the nation. We are ready to defend the projections in the study with anyone at any time.

The Frontier letter went on to talk about the “Total investment per passing of $5,660” in Sibley County, using the 2000 census figure. We worked directly with all of the cities and the two counties to estimate the total number of passings (homes, farms and businesses). Frontier’s assumptions are incorrect because they don’t include the passings in Fairfax and Renville County. They admit there “may be a few more households now” in Sibley County but conveniently left out the folks in Renville County. Again, we feel very confident of our numbers in the study.

According to a December 16th, 2010 article in the Arlington Enterprise about Frontier’s presentation of their letter to the Sibley County Commissioners, Frontier Regional Manager Todd Van Epps made the following statement” “What we can do is provide the same speed of service as fiber can provide.” We are fairly confident that people recognize the absurdity of that statement. If the Sibley/Renville fiber optic network is eventually constructed it will provide at least 20 megabits of symmetrical Internet service (same download and upload speed) to every home, farm and business for less than $50 a month. It will be capable of providing up to a 100 megabit of symmetrical Internet connection to everyone using standard hardware and can be upgraded relatively easily to provide one gigabit of bandwidth if a customer needs that much.

Frontier’s copper network simply cannot match those speeds. If they could, large companies would still be building copper networks, which none of them are doing. The superior bandwidth of fiber optics not only allows for ultra high speed Internet connections, it also means that video over fiber is absolutely crystal clear and high definition television (HDTV) is far superior in quality that some cable networks and all satellite networks.

The bottom line is that Frontier Communications does not want this network to be built because they don’t want the competition. We understand that. That’s why we have said from the beginning of this project that if the phone or cable companies want to build this network we will stand back and welcome them with open arms.

Sibley County MapWe have even gone as far to say that if the phone or cable companies are interested in building a fiber to the home network in Sibley and Renville Counties we will help them find a way to finance the project, allowing them to operate the network and eventually own the network for little or nothing when the bonds are paid off. Unfortunately the phone and cable companies we have talked to are not interested in such a partnership.

Almost everyone in Sibley and Renville counties we have talked about this project in the last eight months recognize the benefits that a fiber optics network would bring to their lives, businesses, schools and communities. A lot of people have offered their support to try to figure out a way to make this happen. The construction of a fiber to the home/farm/business network in Sibley and Renville Counties would bring us into the 21st Century and put us far ahead of our big city cousins with respect to access to technology.

Again, we understand why the phone and cable companies take such a dim view of this project. But instead of spreading lies and half truths wouldn’t it be more constructive if they sat down with us and tried to figure out a way to make this happen that benefits them as well of the residents of Sibley and Renville counties.

On January 13th, representatives from the eight communities and two counties involved in the planning stages for this fiber network got together to learn more about the project and possibly agree on a way forward. Cities and counties will have until the end of February to decide whether to form the joint powers board and move ahead or end the project now.

If enough communities decide to form a joint powers board to manage the project to a point where we have all of the questions asked and answered to everyone’s satisfaction, the process could easily include discussions with not only Frontier Communications but any phone or cable company willing to sit down and talk logically and constructively about how we can bring benefit to everyone in Sibley and Renville County for generations to come instead of settling for copper and coaxial technology that has already become outdated.

As we have said many times in presentations and meetings regarding this project, this is not an anti-phone or cable company project. This is a pro Sibley and Renville County project.

In the “Telegraph and Telephone” section of the Gaylord History book, the following information appears: “Before the telephone was introduced in Gaylord in 1897, there were some who thought it was just a fad and would prove impractical. They thought the telegraph, which originated at the same time as the railroad, had served the community adequately for many years.”

It is an ironic twist of fate today that phone companies like Frontier who oppose these kinds of project represent the naysayers of 100 years ago who didn’t think it was necessary to upgrade telegraphs to the new telephone.

This fiber project represents those folks 100 years ago would knew that Sibley County would be better served by investing in technology.

If the folks in Sibley and Renville counties can find a way to build a fiber to the home/farm/business network it will become an invaluable and necessary tool future generations can use to meet the challenges that will most certainly confront them.

Respectfully submitted,
Mark Erickson
Winthrop City Administrator
EDA Director