Earlier, this year, the Minnesota Legislature established a "Border to Border" Broadband fund to expand Internet access to the least connected in the state. Senator Matt Schmit and Representative Erik Simonson led the effort to establish the fund that is now administered by Danna Mackenzie. All three of them join us this week to discuss the program.
We discuss the state of Internet access in Greater Minnesota and why these elected officials fought to create a fund to improve the situation. Then we move on to discuss the details of the fund with the Executive Director of the Minnesota Broadband Office, along with some lessons for other states that may be considering taking action.
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 23 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.
With a meeting on July 17th of city officials, local residents, institutional stakeholders, and technology consultants, Bozeman officially began its process of creating a master plan for its Broadband Initiative. The process will be lead by Design Nine, a consulting firm based in Virginia, and will include a survey of existing assets and needs, feasibility studies, and public outreach, among other elements. The entire process is expected to take about 6 months, with the end goal being a road map for improving access and affordability for businesses and public institutions in the Bozeman area.
The Montana city of almost 40,000 was initially inspired to examine the issue of municipal broadband by former Montana State University Chief Information Officer (CIO) Dewitt Latimer, who had previously worked on the Metronet Zing open access network in South Bend, Indiana, an innovative public-private partnership involving the University of Notre Dame that we have covered before. Unfortunately, Lattimer passed away in early 2013. But the seed of an idea had been planted.
In March of 2014, the City of Bozeman issued an RFP for a design firm willing to develop a plan for how the city could expand internet access going forward. After receiving a surprisingly competitive group of 12 responses, City officials eventually chose Design Nine to undertake the comprehensive study and make recommendations.
The City was able to secure $55,000 in grants from state and federal sources to fund the planning process, and solicited a further $80,000 from supportive local institutions including Deaconess Hospital, the local school district, and several local Tax Increment Financing (TIF) districts.
The business community has been a driving force for the initiative as well, with the Bozeman Area Chamber of Commerce committing $5,000 to the planning fund and expressing its enthusiastic support in a letter to the Mayor in April:
Affordable broadband access is essential to the health of our community. Technology firms, banks, businesses, and startups require fast, reliable, and secure connections to their clients. Broadband connectivity is presently only available at high prices or at disparate locations. We believe that increasing the availability of affordable broadband is essential to [the] well-being of this community and we are invested in making this critical infrastructure widely available.
The City’s own press release about the July 17th meeting highlights the competitive atmosphere among Montana cities as they strive to upgrade their communications infrastructure and foster economic development:
Several Montana cities are evaluating their broadband options. The Montana Economic Revitalization and Development Institute (MERDI) built a fiber optic ring in Butte utilizing a public-private partnership with Fatbeam. MERDI’s fiber ring lured a Bozeman-based internet security firm, Hoplite Industries, to uptown Butte. Missoula is about to release the results of their community broadband feasibility study. Livingston is also considering developing a broadband master plan.
According to David Fine, an official with the City’s Economic Development Department (which is overseeing Design Nine’s planning process), the city would be open to public ownership of fiber infrastructure if that ends up being a recommendation of the nascent master plan. The city has no interest in operating the network itself, however, and does not have a municipal electric utility that might fit easily into that role. From the City’s press release:
The City envisions a public-private partnership model in which broadband providers, anchor businesses, School District 7, the City of Bozeman, and Bozeman Deaconess Hospital collaborate to support a new community fiber optic network. The master plan will investigate options for public-private partnerships, viable business and financing models, and potential build plans. It will also explore regulatory options that can speed the deployment of broadband by the private sector.
Fine also emphasized the potential for direct public savings from a new fiber network. The city and county governments pay $70,000 and $50,000 per year, respectively, for their data connections from a private provider. The school district is charged $105,000 per year for internal ethernet connections, and another $50,000 per year for a shared gigabit connection to the broader internet. With recurring costs that high, it is not hard to imagine a capital investment in fiber infrastructure paying off in the long run through significantly lower monthly bills.
The local Deaconess Hospital stands to benefit from a new public network as well, as they strive to meet electronic records requirements. Their need for fast and secure connections has grown quickly in recent years, as they have expanded their footprint to various clinics around town and look to make telehealth and remote medicine a viable option for patients in a large, mostly rural state.
The problem is not that fiber is nonexistent in Bozeman. There are several firms in the area focused on cloud computing, including the tech giant Oracle. Large, well-capitalized firms that can afford to run their own fiber lines or exert serious leverage in negotiating prices can often meet their fiber needs. The problem is bringing affordable and adequate connectivity to small and mid-sized businesses, startups, schools, hospitals, and ordinary citizens.
For local news coverage of the plan, highlighting its importance for local businesses, watch the video below:
Located in rural southwest Colorado, Cortez is just 20 miles from the famous four corners of the US southwest. When incumbents were either unwilling or unable to provide modern services in the region, Cortez stepped up with a plan. This week, Cortez General Services Director Rick Smith joins us to share how they incrementally built an open access fiber network.
Cortez is one of the growing number of local governments with no electric utility that has built its own fiber network - and they didn't just stop with one. They have built both a local loop for a business district and a larger regional loop to connect anchor institutions.
The network was financed in large part with grants from the state that were matched locally. Cortez has plans to continue growing both networks to ensure area businesses and residents have access to the services they need in the modern economy.
In a revealing video about the Internet access problem in rural Minnesota, Annandale City Administrator Kelly Hinnenkamp below describes her town's struggle with connectivity. The video is the latest in a series on the Minnesota Senate DFL YouTube page intended to shed light on the critical situation in the state.
Hinnenkamp describes broadband in the areas outside of Annadale as "horrific." She goes on to discuss how the community's poor connectivity negatively impacts its economic health. She shares a story about entrepreneurs from an artisan spice business once located in Annandale. The company started with online sales but the owners anticipated opening a storefront in the downtown area of the lake community. After contending with eight outages in three weeks, the new business pulled up stakes and moved to Buffalo.
Buffalo, located only 15 minutes away from Annandale, offers fast, reliable, affordable fiber service to local businesses.
“Broadband is probably the single most important issue in our community right now,” she said. “Our big issue is not that we don’t have service but that we have one provider that has shown little interest in improving it. Broadband is our future."
In a Star Tribune article, Pete Kormanik, the owner of a local McDonald's, expressed his concern as a business owner:
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.”
Watch the brief interview with Hinnenkamp below or visit the series website to see more interviews. In the words of Dan Dorman, Executive Director of the Greater Minnesota Partnership:
"It's time to stop talkin' and do something."
Broadband has been discussed for the past several years in Minnesota. Several task forces and reports have all concluded that lack of broadband in Minnesota, especially in the rural areas, will have detrimental effects on the future. Senator Matt Schmit, a DFLer from Red Wing, introduced SF 2056 [PDF] this session to inspire momentum for local broadband projects. Representative Erik Simonson, DFL Duluth, has been pushing the measure in the House.
The bill establishes a grant and loan program focused on local middle- and last-mile projects in areas like Annandale. Dubbed the Border to Border Infrastructure Program, it would bring $100,000,000 from the state's general fund to be applied to broadband projects. The bill has bipartisan support but has not been prioritized by either the Governor or Senate leadership within the Legislature. Meanwhile, Comcast and other incumbent lobbyists have been trying to minimize the fund and any impact it could have.
While it may not become a reality this legislative session, the bill has brought serious reflection on the critical need for Minnesota's rural areas. One of the attractive features of the bill is that funds can be used to supplement funding for local projects. This approach allows local communities to determine the best path for their own needs.
Residents in the Iron Triangle neighborhood of Richmond are now receiving free Wi-Fi as part of a new pilot program. The pilot, sponsored by Building Blocks for Kids (BBK), hopes to make Internet access widely available to the many local families who cannot afford it. New towers have been placed on local homes to extend access to approximately 400 houses.
BBK is a collaborative of 30 government agencies, nonprofit groups and community leaders. The pilot project is funded by a $500,000 grant from the California Emerging Technology Fund to address digital literacy in areas of Richmond where affordable Internet access is not readily available.
A recent Contra Cost Times article covered the story. According to the article, an Internet connection tower is mounted on local resident, Yolanda Lopez's roof:
The Internet tower installed on Lopez's house receives signals from Internet Archive, a nonprofit organization that has a 40-foot tower at 2512 Florida Ave. Lopez's transmitter sends free Internet signals for a radius of a few hundred yards, providing the web to dozens of neighbors, said Internet Archive engineer Ralf Muehlen.
The ongoing costs to provide the signal, now that the hardware is in place, is "negligible," Muehlen said.
By summer, BBK partners hope to outfit 20 houses in the Iron Triangle with signal towers, providing free high-speed Internet signals to more than 400 homes, said BBK Executive Director Jennifer Lyle. A second tower has already been installed at a home in Atchison Village, Lyle said.
The BBK press release notes that several public and private entities worked together to enhance the Wi-fi service:
Because of the technical skills of collaborative member ReliaTech and the IT infrastructure expertise of City of Richmond’s Department of Information Technology, low-income Richmond residents will have access to wi-fi at an impressive 12-16 megabits per second.
The neighborhood of just under 20,000 has had problems with high rates of crime for many years. A 2013 survey reflects that residents of the neighborhood are not embracing connectivity because it is too expensive for them. The results of the survey are part of a larger study from BBK examining home Internet access and usage in the Iron Triangle neighborhood. The study indicates that one-third of local residents do not have access at home and 40% do not own a working computer.
The grant has also allowed BBK to distribute 1,000 free refurbished computers and provide training to over 900 families.
Lopez told the Times:
"All my neighbors are coming up and thanking me for the free Internet," Lopez said in Spanish. "A lot of people can't pay $50 per month."
On January 30, the FCC announced it will begin a process that makes Connect America funds available for pilot projects aimed at expanding broadband in rural areas. Details about the process are still forthcoming, but the FCC asks interested parties to submit "expressions of interest" by March 7th. In order to assist possible applicants, the National Rural Assembly's Broadband Working Group will hold a webinar today, February 13th, at 1:30 EST.
From the webinar announcement:
The National Rural Assembly's Rural Broadband and Policy Group invites all rural stakeholders, to participate in a national webinar in cooperation with the Federal Communications Commission that will explain how to participate in the FCC's new experiment, the Rural Broadband Trials - a program that will fund projects to bring broadband to rural areas.
Participation in this first phase is not mandatory but encouraged. The results from the expressions of interest process will help the FCC determine how much funding will be needed.
We reported last month on a decision from the FCC to make Connect America funds available to expand broadband. At the time we did not have much detail on the measure, but on January 30th, the FCC released its official statement. The agency reached a unanimous decision to open up Connect America Fund dollars for experimental projects.
The FCC restructured the Universal Services Fund (USF) in 2010 to create the Connect America Fund. Until now, those funds were only available to large incumbents. Because some incumbents did not want to be bound terms associated with the funds, they did not take the money and so a portion of it has not been distributed.
In the January 30th announcement, the FCC stated that it will open up funding to entities other than large incumbents in experimental processes, including nonprofits, cooperatives, municipal and tribal governments, and private businesses. The FTTH Council reported:
Specifically, the Commission’s order outlines a call for multiple pilot projects to examine how best to make the technology transition while preserving consumer welfare and promoting the widespread deployment and use of broadband networks. As part of those projects, the Commission, informed by recommendations of the FTTH Council, will be using “test beds” to experiment with different models of bringing next-generation high-speed broadband to rural areas.
Interested parties must first file an expression of interest, describing how they would invest the funds. In keeping with the original goal of the Connect America fund, the FCC hopes to hear from organizations with rural broadband project plans. According to a Daily Yonder article on the process:
[Jonathan Chambers, the chief of the FCC’s Office of Strategic Planning and Policy Analysis] said the initial “expression of interest” isn’t a complex document. The FCC wants to hear who is interested in applying for support, what homes or institutions they want to serve and an estimate of the cost to get the job done.
Once they have that information, the commissioners will consider the next steps in creating the funding stream, Chambers said. A background report on the funding experiment asks rhetorically whether the FCC should fund the program at $50 million or $100 million and whether the funding should be spent in one year or over several.
March 7, 2014 is the deadline to submit expressions of interest. The FTTH Council is holding a webinar on February 6, at noon Eastern to share tips on filing an expression of interest. If you are unable to sign up for the webinar, it should soon be archived and able to view.
Information is also available on the January 30, 2014 FCC meeting report. Flip to page 31, paragraph 86 for more specifics on the report and order. Page 38, paragraph 105 provides detailed information on the expression of interest.
Nine years ago, Aurora officials decided it was time to reduce telecommunications costs and upgrade to a faster, more reliable network. The local government built a fiber network to service municipal government, but developed long-term ideas for the network to benefit the entire community.
Nonprofit OnLight Aurora now uses the City's fiber optic network to provide high-speed connectivity to educational institutions, businesses, healthcare facilities, social service entities, and major non-profits. The organization leases fibers from the City's fiber optic network and provides Internet access at affordable rates.
Aurora is the second most populous city in Illinois. The municipal government spans 52 buildings over 46 square miles. Before the city's fiber network, connections were a patchwork of varying speeds and capabilities. Employees in a building with a slow connection would need to travel to City Hall to access a high-speed connections to use the city's bandwidth intensive applications. The network was old, unreliable, and expensive. The Director of Onlight Aurora recently spoke with Drew Clark from Broadband Breakfast:
"In 2005-2006, we came to the conclusion that we were paying $500,000 a year [to telecommunications providers] for leased line expenses,” said Peter Lynch, Director and President of Onlight Aurora.
The 60-mile network, constructed from 2008 - 2011, cost approximately $7 million to deploy. At the beginning of the process, payback was estimated at 10 years. While the short-term goal was to cut municipal connectivity costs, community leaders intended to expand its use in other ways. The City now saves approximately $485,000 each year from having eliminated leased lines. From a Cisco case study on Aurora [PDF]:
“With local governments increasingly facing limited resources, you have to be able to find efficiencies in operations.” Although the cost savings are gratifying, [Ted] Beck,[Chief Technology Officer] notes that that was just the beginning: “The priority for the fiber optic network was initially cost savings; however we’re realizing that the benefits don’t end there. We’ve had some super wins with this technology, and we’re going to keep leveraging the infrastructure.” Mayor Weisner confirms these successes: “Pretty quickly, we saw a return on investment, both financially and otherwise. We have a much greater capability and fewer problems.”
In 2011, Aurora received a Congestion Mitigation and Air Quality (CMAQ) grant from the Federal Highway Administration (FHWA) administered through the Illinois Department of Transportation. When the FHWA sought communities for the pilot program and accompanying grant, Aurora's existing fiber network was a plus. During construction of the city network, Aurora had installed extra fiber strands in its conduit. City traffic engineers used several strands to synchronize intersections to improve traffic flow. The grant, of approximately $12 million, upgraded 60 traffic signals. It also allowed Aurora to eliminate all remaining debt on the network.
From the Broadband Breakfast article:
“We have been able to see better movement of traffic, which alleviates congestion and air quality,” said Eric Gallt, the city’s Traffic Engineer. The fiber loop enables city traffic officials “to see what is going on remotely, and it decreased the cost of the project by 50 percent or more.”
That same year, Mayor Tom Weisner formed a broadband task force to field specific ideas for best utilizing the fiber optic network. In 2012 the group created non-profit OnLight Aurora. The organization received a $25,000 grant and a three-year $150,000 loan from the City. OnLight and Aurora entered into a 20-year agreement for OnLight to lease network fiber strands from the City. OnLight would then lease access to the fiber backbone to other entities at affordable rates.
In 2012, OnLight Aurora received a $1 million Illinois Gigabit Communities Challenge award. The Illinois Department of Commerce and Economic Opportunity awarded the grant as seed money. OnLight Aurora also received another $1 million in matching public and private funds. The organization used the funds to offset costs of connecting customers and to expand to better reach developing business parks and healthcare facilities. Schools, medical centers, social services agencies, arts & entertainment entities, and businesses now connect to the network at speeds of up to 10 Gbps.
In August 2013, Indian Prairie School District 204 announced its plans to expand its technology program. The connection allows the District to connect two of its data centers. District 204 obtains a 10 Gbps connection from OnLight Aurora for $39,600 per year. OnLight provides ample bandwidth for the district's bring-your-own-device initiative. A portion of the $1 million Illinois Gigabit Communities Challenge grant paid for the cost of connecting the fiber.
OnLight also offers wireless connections as an economical way to serve small- and medium-sized businesses. OnLight uses city-owned towers and buildings that are already connected to the fiber for wireless point-to-point connections. The wireless complement will connect schools, businesses, and other entities when a lengthy fiber connection is too costly.
Businesses in Aurora are connecting to the fiber. An August Beacon-News article on the wireless plan also tells the story of security company Alarm Detection Systems (ADS). The company went from T1 connections at 1.5 Mbps to 20 Mbps connections from OnLight for approximately $500 per month. From the aricle:
While cases vary based on a number of factors, the upfront installation cost for Alarm Detection Systems offices to connect directly to the fiber network are about $19,000, according to [company IT Manager Mark] Schramm. But the reliable and fast connection will save the company money in the long run.
“We’re saving money and believe we’re getting a better product,” he said.
According the a recent Beacon-News article, OnLight Aurora is now reaching out to local businesses through seminars. An article about the January 29th seminar quoted a city official:
“Attendees will receive the necessary tools to better understand and employ the OnLight Aurora network resource for their businesses and organizations,” said Clayton Muhammad, Aurora Director of Communications.
OnLight Aurora's three year plan includes doubling it's current length to 100 miles. The network is completely underground and any carrier has access to the infrastructure.
The Civic Cloud Collaborative is a group of eight organizations using Burlington's gigabit network to create civic and public spaces. The group describes the Civic Cloud project on their website:
The Civic Cloud will be available for the community to use as a platform for public, non-commercial Internet applications and digital creative works. Several applications will be deployed during an initial prototyping phase of the Civic Cloud. High-definition live streaming will be provided for community media outlets to webcast live public meetings and cultural events. WordPress websites will be hosted for several Vermont non-profits including rescue squads, food shelves, job banks and historical societies. A collection of volunteer-developed applications and a state-of-the-art website deployed to the Civic Cloud will help Big Heavy World preserve and promote Vermont-made music. Lakecraft, an educational, multi-user game aimed at youth and adults that gamifies the Lake Champlain Basin, will also be one of the first applications to run on the Civic Cloud.
“We’re interested in it being a non-commercial space on the Internet,” said Bradley Holt, a Burlington-based developer who heads CodeForBTV, the local chapter of Code For America, an organization for public service software developers.
The cloud service, Holt said, will provide hosting capacity for local community organizations seeking to use the Internet to advance the public interest.
For more, check out the press release from Code for BTV, one of the collaborative members.
This is where the profit motive fails society -- there's no real financial incentive to provide coverage for someplace like Gilboa, New York, so therefore it isn't covered. But there is an incentive to prevent anyone else -- including the small town itself or, heaven forbid, the entire county -- from providing services to Gilboa because a David may grow up with the potential of killing Goliath.
Government does have an interest in seeing Gilboa, New York get access to broadband Internet coverage, because that would mean more employment opportunities, better educational facilities, and even more self-employment. In other words, like roads, sewage and utilities, broadband infrastructure is necessary to economic development.