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Why even the most ambitious broadband bill at the Legislature still won’t bring speedy internet to all Minnesotans

fiber optic cable
A group of DFL and Republican lawmakers are pushing to narrow the broadband gap by injecting $70 million over the next two years into a grant program for internet projects.

While cities and towns in Koochiching County might have fast and reliable internet service, large parts of the northern Minnesota region currently have no good options. Paul Nevanen, director of the county’s Economic Development Authority, says that translates to headaches for the area’s economy.

Just miles from International Falls, where broadband access has attracted a significant data storage business, Nevanen said resorts and recreation outfits that rely on tourism to Rainy Lake and Voyageurs National Park have struggled to cope with poor internet connections.

“We’ve got resorts that have their systems connected to the internet and can’t process credit cards at certain times because they don’t have the capacity,” Nevanen said.

There is no shortage of stories across Minnesota like the ones in Koochiching County, where uneven access to high-speed internet, sometimes called broadband, persists despite a decade of study and more than $85 million in state spending (plus more in local, federal and private money) since 2014.

Now a group of DFL and Republican lawmakers are pushing to narrow that broadband gap by injecting $70 million over the next two years into a grant program for internet projects. But while the new money would keep Minnesota on track to meet one of its broadband access goals by 2022, the state has a long and expensive road ahead to reach a more ambitious pledge — to bring much faster universal internet to the state by 2026, said Danna MacKenzie, executive director of the state’s Office of Broadband Development.

“We absolutely will be celebrating that we’ve done something that I don’t think too many other states have done,” MacKenzie said about the prospect of reaching the state’s 2022 goal. “But at the same time, no, we aren’t necessarily done yet.”

Progress made

The biggest obstacle to high-speed internet outside of large cities has always been money. In remote areas, it’s expensive to build infrastructure, and there are fewer potential customers to offset the costs.

Justin Forde, the senior director of government relations for Midco, a Midwestern telecom company, said there can be a “tremendous” price tag for running wireline internet services, such as fiber-based broadband or digital subscriber lines (DSL), to rural houses and businesses.

“It’s tough to do that with only private capital because the return isn’t there for some of these last-reach spots,” he said.

To prompt internet companies to expand, governments have stepped in. The 2009 economic stimulus package championed by former president Barack Obama had $7.2 billion for broadband grants and loans across the country, while Minnesota has had a task force on broadband since 2008 along with its grant program spending.

There’s no doubt Minnesota has come a long way in providing high-speed internet since the late 2000s. More than 90 percent of Minnesotans and 79 percent of residents in rural areas now have access to internet with download speeds of at least 25 megabits per second (Mbps) and upload speeds of 3 Mbps. (Netflix recommends download speeds of just 5 Mbps for high-definition streaming.) In February of 2015, just 86 percent of residents statewide and 68 percent of people outside of urban areas could access 25/3.

Estimates of Minnesota broadband availability over time
Date25/3 Mbps100/20 Mbps
StatewideRuralStatewideRural
February, 201585.8368.0839.1440.68
July, 201687.7272.2468.4548.93
October, 201687.5372.0368.5349.33
April, 201787.9473.0769.8652.46
October, 201788.1173.4570.0752.88
April, 201890.7779.2673.6658.99

Jim Boyd, executive director of the Cook County Chamber of Commerce, said his county is a success story. Arrowhead Electric Cooperative offers blazing speeds to much of the area after developing a fiber network with the help of $16 million in stimulus money. Roughly 95 percent of the county now has access to internet with speeds of at least 100 Mbps/20 Mbps.

That internet speed is Minnesota’s goal for all residents by 2026. So far, 74 percent of the state — and 59 percent of rural areas — have access to that speed, though that’s up from the 39 percent of residents (41 percent in rural areas) that had it in 2015.

Percent of households served by 100mbps down/20mbps up broadband, 2018
Source: Minnesota DEED

A long way to go

While those numbers represent improvement, they also show far the state has to go, especially since those last pockets of the state without high-speed internet are typically the most difficult to bring broadband to, said Judy Erickson, a spokeswoman for the Minnesota Rural Broadband Coalition.

Her organization, which includes counties, electric cooperatives, banks, nonprofits and more, is supporting House File 7, the $70 million bill introduced by Rep. Rob Ecklund, DFL-International Falls.

MacKenzie, the state’s broadband office director, said that $70 million is based on a recommendation from the broadband task force aimed at keeping the state on track to meet its 2022 goal of 25/3 speeds.

Percent of households served by 25mbps down/3mbps up broadband, 2018
Source: Minnesota DEED

MacKenzie said there isn’t an estimate for how much it will cost to reach the 2026 goal for now, partially because it’s difficult to forecast what will happen with federal and private dollars in the future. But she stressed that the state will not be finished working on broadband once it reaches the lower speeds of the 2022 goal.

“I want to be a little bit careful about not establishing the expectation that 2022 is a hard stop and we’re done,” MacKenzie said. “And I know that a lot of people are anxious to find that ‘when do we get to say we’re done’ and, and to be frank, we live in a world that’s constantly changing and it’s not clear when we’re going to be done. But we are making what I think is significant progress.”

Erickson said one reason her organization is not pushing for more money now is to preempt the notion that lawmakers can approve one big chunk of cash and call the job done. The broadband bill would also build that same $70 million into future budgets, which Erickson said is critically important to consistently build broadband infrastructure. The money for the grant program has generally been approved in one-time allotments.

Political chances

Despite the price tag of the broadband bill, Erickson said she believes there is political will to pass it. DFLers in control of the House introduced the measure as one of their first 10 bills of the year, signaling its place as a top priority. At least some Republicans in the House and Senate have supported it, too. Plus, both parties have largely backed spending on rural broadband in the past.

Telecom companies don’t appear to be a big hurdle either early in the legislative session. Forde said Midco generally supports the state’s broadband grant program. Representatives for Frontier and CenturyLink, two companies that provide internet service in Greater Minnesota, did not respond to requests for comment.

But the state’s approach to broadband hasn’t been without controversy. Some in the GOP have complained about the state’s preference for fiber-optic cable, which is reliable but pricey. Rep. Pat Garofalo, R-Farmington, has argued for more reliance on cheaper options, such as internet by satellite or what’s known as fixed wireless, where homes get service from a signal placed high on a nearby building, like a water tower.

Telecom businesses have also bristled at some new broadband projects in areas where private companies already offer some form of internet, saying focus should be on unserved communities. The Freedom Foundation of Minnesota, a conservative think tank, has argued against government-owned broadband in any form, saying it reduces competition and innovation and is a risk to taxpayers. The foundation cites, among other stories, the financial collapse of Lake County-owned broadband service known as Lake Connections.

For now, Ecklund said the fight at the Legislature will likely be about how much money to give the broadband program. But he said the slow internet service hits close to home, affecting his neighbors, local businesses and even his own house: Rob and his wife, Joan, cannot each have a laptop on the internet at the same time “because neither one of us will get service. In a nutshell, that’s why I’m pushing it.”

Comments (17)

  1. Submitted by richard owens on 01/16/2019 - 10:11 am.

    China has been leading in the fine art of infrastructure investment.

    When a complex, subdivision or urban project begins, gas mains, storm sewers, water, electric and fiber-optic mains are installed.

    We should begin to adopt better development techniques around the state and nation. The issue is economic. Modern industry, schools, hospitals and students need access to high=-speed internet.

    The ISPs need to have some requirements placed on their desire to cherry pick high-density areas at the expense of small towns where companies like Frontier cannot deliver decent telephone, let lone stable functional DSL speeds.

    Verizon makes a killing wherever they are the only game in town. Comcast, AT&T and local telephone companies all need to be incentivized, as a function of their licensing or in the case of small telephone companies, subsidies.

    To be productive in the 21st century, every household and business needs access to high-speed internet, even if Republicans don’t care.

  2. Submitted by Tom Clark on 01/16/2019 - 10:46 am.

    Isn’t cellular service improving enough to cover rural areas at a far lower cost than wired broadband? I live in a exhurban town where a DSL line from Frontier on a good day gets 5 megabit, but my T-Mobile line can do up to 50 megabit. Is the state looking at cellular provided internet as a possible alternative in hard to reach rural areas?

    • Submitted by James Hamilton on 01/16/2019 - 12:49 pm.

      My T-Mobile connection here in St.Paul tested at 39 megabits download and about 6 megabits upload just now. While its coverage in Minnesota has greatly improved in recent years, there are still gaps in LTE coverage in Minnesota, as you can see here.

      https://www.t-mobile.com/coverage/coverage-map

      Verizon has very similar gaps.

      https://www.verizonwireless.com/featured/better-matters/?map=4glte#maps

      The coming 5G standard may render many internet services obsolete in urban areas but the technology requires thousands of antennae rather than the towers currently in use. Rural areas may continue to lack the fastest cellular technology in coming years.

      One way or another, substantial investments will be required, whether those be public or private.

    • Submitted by B Carlson on 01/16/2019 - 02:56 pm.

      I know exactly what you mean about Frontier’s DSL internet service. I only wish I could get service from them as well as you do. My monthly bill from Frontier for DSL (not including phone service) is currently $47 plus taxes. For that they promise me download speeds of up to 1.5MB. That “UP TO” is the real joke of their whole plan, they can get away with giving people .0000000001MB, or even 0MB, I suppose. Using the various speed test calculator sites on line, I find that I actually regularly receive download speeds from about .05 MB to about .65 MB and usually closer to the smaller number, no where even close to the 1.5MB they call their plan. Numerous call after call after call to customer service goes nowhere, their customer service people do not even seem to know what is going on. Asking to talk with a supervisor or someone higher up goes nowhere either, they have no provision to do a transfer like that. Imagine, a phone company who is unable to transfer a call within their company!! I would love to talk to a person in authority at Frontier, if only I could reach someone! Living in far northern MN, in Koochiching County, I guess I am just out of luck.

      • Submitted by richard owens on 01/18/2019 - 12:02 pm.

        I suggest AG Keith Ellison’s office take a look at Frontier problems in MN and pressure them to correct either the service or the billings ASAP.

        Frontier needs their customers to get serious about legal action by our Attorney General’s office. They can’t be allowed to continue to do business here if they can’t get it together.

  3. Submitted by N. Coleman on 01/16/2019 - 11:17 am.

    The costs really are prohibitive. China was mentioned in an earlier comment but there are millions of people in rural areas of China. In Koochining county there’s only 12K people, at a density of 5 people per square mile. Fiber optic costs $10-15K per mile, just for the cable and installation. Wiring up just International Falls with fiber, equipment, and personnel would cost 10 million dollars, for around 6500 people. There are simply no economies of scale in outstate Minnesota.

    MN is sort of stuck between two extremes. The state either has to commit to spending huge amounts to subsidize a few people, or spend little and leave them stuck with bad internet. In 20 years, i’ve not seen any solution in between the extremes that has had any long term viability.

    Unfortunately, broadband is just the tip of the iceberg for challenges rural MN will be facing in the near future. Other more essential services such as water and electric grid need upgrading. The costs for upgrading this infrastructure are even higher, and rural towns simply don’t have anywhere near the tax revenue to pay for them.

    • Submitted by Claire Ackerman on 01/16/2019 - 06:45 pm.

      Wasn’t that the argument on electricity, etc.? Internet is a utility now. It needs to be a priority so that rural areas and rural students have the same advantages and opportunities that more populated areas of the state have.

      • Submitted by Rory Kramer on 01/17/2019 - 03:23 pm.

        As someone who lives in Rural Minnesota and has the internet through 2 different souces, there are already options for near-broadband speeds available to those that need the internet in their daily lives and the State doesn’t need to spend money burying cable to serve those in rural areas. Once difference between rural electrification of the 30s and 40s and the :internetrification: of today is that the farms were electrified using money that was loaned by the State to power companies and rural electrical cooperatives, unlike the grants given out to companies to wire farms for the internet

        For the last 10 years I’ve utilized satellite internet with what I would term to be near-broadband speeds, given the latency of the signal transmission from the host to the satellite and back down to my receiver. I also receive near-broadband speed mobile data on my smartphone through Verizon as they have towers spread throughout the area, with the closest one being 2 miles from my house. There’s another option where companies pay farmers with a tall grain-leg or similar structure to mount a transmitter to service clients in the area. Also, the local rural electric cooperative is developing their own fixed wireless broadband network using money from the USDA’s ReConnect Rural Broadband Program.

        Broadband is available through the local phone company but until they upgrade their network of cables to handle broadband internet for all real broadband speeds are only available with a limited distance of 5 miles of the company’s exchange located in a town roughly 7 miles away. Many of the phone companies landline customers already receive their internet through one of the services already mentioned so they aren’t in any rush to spend more money to deliver service to people already being served. So, as someone who realizes there are options available for internet, I don’t think the State needs to invest anymore than what is necessary to bring internet to those that might not already have options for the internet given the logistics of where they’re located-living in a valley or on the north side of a hill or cliff which wouldn’t allow for satellite or fixed transmitter internet reception.

  4. Submitted by Bob Barnes on 01/16/2019 - 11:19 am.

    More wasted money. Make those who live in remote areas pay for it. Putting cable in the ground is wasted money in many of these areas. The returns aren’t there anyway. Wireless would be a cheaper way to go. I must say it’s funny to see people clamoring about how rural people should move closer to the cities for jobs/roads but now want to spend taxpayer funds to bury cable out to these same areas.

  5. Submitted by Mike Schumann on 01/16/2019 - 11:27 am.

    I’m totally for making sure that every library and school in the state has access to high speed internet, and that people who live in towns near those facilities can tap into that service at a reasonable cost. However, should the taxpayers cover the cost of providing fiber optic service to someone who decides to live in the middle of nowhere so they can stream videos on their 4K TVs?

    If you decide you want to live in the sticks, I don’t think it’s unreasonable for you to have to figure out your own connectivity options. Cellular service is certainly an option. So is getting together with your neighbors and building a WiFi based mesh network. Using off the shelf WiFi routers and directional antennas, it is possible to provide decent speed internet connections over distances of up to 20 miles if you have line of sight between the antennas at a total cost of ~$200.

    The answer to every problem doesn’t always require a truck full of government money.

    • Submitted by Frank Phelan on 01/17/2019 - 09:43 am.

      Yes, there are trade offs wherever you choose to live. Momma said I can’t have my cake and eat it too.

      Don’t buy lakefront property and complain about a wet basement.

    • Submitted by richard owens on 01/17/2019 - 04:02 pm.

      The idea of getting fast internet to every remote corner of Minnesota is not viable. Killing the idea with extreme examples is not a fair statement of the problem.

      The remote hermit ISP is not the issue.

      I think every school should have it no matter where the school is.

      I think every hospital and library should have it.

      I know that even within a few miles of a city the size of St. Peter, the availability of fast connections goes to ZERO just across a highway into the next county.

      Businesses running networks over Verizon towers can expect huge data costs.

      Why is this so difficult? Why are people so dense when it comes to getting up-to-date? America used to be the pioneer. REA cost a lot but it was decided every farm needed electricity even if some farms cost a lot just to reach.

      We did it anyway for the betterment of ALL.

      Cheapskates abound, and they aren’t the poor people who are so jealously guarding their 5 dollars of extra taxes, they are those who don’t care about anything unless it affects them personally.

  6. Submitted by cory johnson on 01/16/2019 - 11:54 am.

    So is broadband in even the most remote area of the state a right? I agree with the above comment that cell networks would be a much more practical option. We shouldn’t be in the business of forcing companies to put in the broadband networks at a loss any more than we should force taxpayers to pay for the networks.

    • Submitted by Dan Landherr on 01/24/2019 - 10:13 am.

      Even most wireless networks need a wired back end for the data. Cook County didn’t get good LTE coverage until it got fiber. 5G cellular is coming and it will be essential for businesses.

  7. Submitted by Paul Terrill on 01/20/2019 - 09:14 am.

    In Cook County, we didn’t sit around waiting for the state to help us out. We passed a 1% sales tax that had a portion dedicated to our broad-band project. And, we worked with our local electric cooperative to run the new utility. Lake County has tried a similar process and gone down in flames, in part due to opposition from the existing ISP that refused to invest, but opposed competition. I consider us to be extremely fortunate to have benefitted for good leadership and a great business partner.

  8. Submitted by Paul Udstrand on 01/23/2019 - 08:08 pm.

    The best model for this was always the public utility model. This goal won’t be accomplished without it. Moving deck chairs around with a subsidy here and there won’t get us there.

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