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Minnesota set for $652 million broadband windfall from federal infrastructure bill

The cash is a staggering sum of money compared to prior state and federal spending on broadband internet access in Minnesota. It should help move the state closer to goals in state law for universal access.

fiber optic cable

Ever since Congress passed a $1.2 trillion infrastructure package in 2021, Minnesota officials have expected a windfall of cash to help subsidize the construction of high-speed internet infrastructure in rural areas.

On Monday, the White House announced exactly how much Minnesota will get: $651,839,368.20.

That matches an estimate given to the state last year, first reported by MinnPost in August. But it’s nevertheless a staggering sum of money compared to prior state and federal spending on broadband internet access in Minnesota, and should help Minnesota move closer to a goal in state law for universal access to high-speed services.

“Any time we get a significant amount of money like that for the state it’s very exciting,” said Michelle Marotzke, who works on broadband expansion for the Mid-Minnesota Development Commission, based in Willmar. 

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Specifically, the state has a goal of universal access to internet with download speeds of at least 100 Megabits per second and upload speeds of 20 Megabits per second by 2026. Roughly 88% of the state had access to that level of wired broadband in October, according to an estimate released by the Governor’s Task Force on Broadband. That’s about 291,000 households and businesses that lacked the infrastructure for speedy enough service.

In rural areas, only about 62% had access to what the state deems to be adequate wired broadband.

The federal infrastructure money was doled out according to need for reaching areas without good internet. But every state was guaranteed at least $100 million. Most got much more.

Minnesota’s money — $652 million — ranks No. 29 in the country, which is proportionally less compared to its population. The 10 states getting the most total cash are Texas, California, Missouri, Michigan, North Carolina, Virginia, Alabama, Louisiana, Georgia and Washington.


U.S. Sens. Amy Klobuchar and Tina Smith praised the federal spending on broadband approved by Congress. The money will help Minnesota “reach each and every household across our state,” said Gov. Tim Walz.

Broadband developers say the gap in coverage is because of money. Some areas have so few people that companies say the cost doesn’t justify building infrastructure, like digging routes to deploy fiber-optic cable. Other areas have difficult terrain that would make it too expensive. That’s why the state and federal government subsidize the industry, to the tune of hundreds of millions of dollars in Minnesota in the last several years alone.

Minnesota’s “Border-to-Border” grant program has distributed nearly $296 million since it began in 2014, helping connect more than 103,000 businesses, according to state officials.

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Marotzke said low-density places like West Central Minnesota face challenges because of the cost of, say, laying fiber for the many farm families — some with driveways nearly a mile long. 

Earlier this year, state lawmakers approved another $100 million for Minnesota’s broadband grant program, a historically large amount. That’s part of a trend of higher spending on broadband over the last half-decade.

“Post-pandemic there has been a greater realization and a more concerted effort to ensure that the entire population is connected digitally,” said Soumya Sen, a professor at the University of Minnesota researching how to make internet more affordable and accessible. That helps as the world becomes more and more digital, relying on remote connections for things like school, medicine, and workforce training.

But even as government officials approve round after round of funding, universal access remains elusive. That’s partially because what state officials consider to be fast enough broadband has changed over time. Minnesota’s speed goals have increased; the state had a 2022 target for universal access to 25/3 Mbps internet that it missed.

Still, it’s also simply expensive, officials say, to reach the last parts of the state without blazing fast service.

So, how much are we talking about to reach the goal? It’s hard to know exactly. But one estimate from state officials earlier this year pegged the cost at roughly $2.76 billion. Not all of that would be borne by the state. Some would get covered by broadband developers themselves, like telecom companies, electric cooperatives, cities, counties and more.

RELATED: How far will Minnesota lawmakers’ $100 million broadband spending plan go?

That broadband task force estimated Minnesota is in line for nearly $1 billion from the feds, most of it that $652 million from the infrastructure bill. What’s left over — after the $100 million approved by state lawmakers this year — is about $326 million.

Still, the cost could be higher if the state needs to kick in a higher proportion of project costs for developers to build in the hardest-to-reach areas.

Sen said it’s important on a national level for there to be public data about how the money is used to ensure it’s being spent wisely, and good oversight to avoid any misuse of such a large amount of cash. He also urged officials to consider the value of public investment, like helping a school upgrade slower internet rather than connecting someone’s lake cabin for the first time.

RELATED: ‘Starlink,’ SpaceX’s internet service, is growing in Minnesota. What that could mean for the future of rural broadband. | MinnPost

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Some have debated whether the government should be spending this type of money as satellite services like Starlink and other technology develop.

Marotzke it’s too soon to plan for any one project with the federal money. But she said the cash will help the area build on recent progress in connecting people. Kandiyohi County has had a broadband committee for more than 20 years, but the last year “is where we’ve really seen the most success for our rural areas,” Marotzke said.

“It’s an exciting time in broadband,” she said.