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Battle over broadband: Minnesota slipping in efforts to get more high-speed Internet access

The 10-year broadband plan the Federal Communications Commission plans to issue today marks a new thrust into a future where we all can agree that ultra high-speed access to the Internet is ultra important.

Lofty visions are one thing, though.

Just look at Minnesota's struggle for better connections, and you see bumps and roadblocks in the way of racing together at virtual high speed.

One of many challenges facing the state is a question of leadership into a better connected future. A blue-ribbon task force told state officials that more leadership is crucial for the long term.

Right now, though, Minnesota stands at a critical juncture where it is competing for a share of billions of federal stimulus dollars in broadband loans and grants. Rather than spur the state to go for top awards, Gov. Tim Pawlenty has, controversially, kept secret the details of his role.

Another pressing issue is the question of whether communities should be empowered to take more control over their own connectivity. A bill before the Legislature would have made it easier for communities to start their own communication utilities. But telephone and cable companies objected, and the bill has been amended to the point where its original backers reject it.


The upshot of all the obstacles is that frustrated communities across the state are scratching and clawing for broadband resources at a time when the FCC and state officials are challenging them to step up their pace into a connected future.

From Gopher to mediocre
Minnesota was a proud leader in connecting computers during the 1990s when University of Minnesota professors began swapping documents on an innovative application called, appropriately, Gopher.

Because broadband adoption goes in tandem with affluence, relatively well-off Minnesota still should be a leading state. Sadly, it isn't. It ranks in about the middle of states in terms of broadband speeds and connectivity.

The stakes are much higher than tweeting and connecting with long-lost classmates. High-speed Internet access already plays a large role in determining where a business will locate and who gets a college degree or the first tip on a job prospect.

And we are fast approaching the day when the life of someone who falls ill in a small Minnesota town may well depend on a chance to "see" experts in a far-away medical center via computers.

So there is little debate that the state needs to be better connected and also to make better use of the connectivity it has.

Looking for leadership
A rare catch-up opportunity came last year when the federal government opened competition for $7.2 billion in stimulus funding for broadband.

But Minnesota has not been a big winner so far of the funds being awarded by the U.S. departments of commerce and agriculture.

Some who are close to the process say that Pawlenty's administration should have organized a push for the funding.

"The governor has shown no leadership on telecommunications and broadband," said Christopher Mitchell, who directs a telecommunications initiative at the Institute for Local Self-Reliance in Minneapolis.

Pawlenty did play a role in the first round of the federal awards. He and other governors were asked last fall to help evaluate applications from their respective states.

Tom Glocer, chief executive of Thomson Reuters, left, and Peter Warwick, right, chief executive of North American Legal, looked on as Gov. Pawlenty signed a Minnesota broadband bill into law at the Thomson Reuters campus in Eagan, April 18, 2008.
REUTERS/Eric Miller
Tom Glocer, chief executive of Thomson Reuters, left, and Peter Warwick, right, chief executive of North American Legal, looked on as Gov. Pawlenty signed a Minnesota broadband bill into law at the Thomson Reuters campus in Eagan in 2008.

It was highly sensitive work, given the stakes around the state.

And Pawlenty's responses have been kept secret. Officials in the state Department of Commerce say that Minnesota law requires that the information be held nonpublic until the evaluation period has ended.

But other governors opened their evaluation process for the public to see, said Sen. Yvonne Prettner-Solon, DFL-Duluth, and Rep. Sheldon Johnson, DFL-St.Paul. They had asked unsuccessfully to participate in Minnesota's evaluations as heads of legislative committees with jurisdiction over telecommunications.

"At least 14 other states which have made recommendations ... have all made their processes and final recommendations public," the legislators said in a letter to Minnesota's commerce commissioner. "As far as we can tell, Minnesota is the only state in the country refusing to make this information public."

Pawlenty's evaluations will be released eventually, a Commerce Department spokeswoman said last week.

"We are not trying to be evasive or anything," said Nicole Garrison-Sprenger. "Once the evaluation process is complete and awards are made, then that data will be made public.

Meanwhile, cities, counties and other applicants for the awards faced a deadline of March 15 to apply for a second round of funding. They could have benefitted from knowing where they stood in the competitive rankings and seeing evaluations of their initial applications.

"Getting the feedback from the governor's office would have been helpful," said Ann Treacy, a broadband consultant.

But it's unclear how much sway governors had in the final decisions made in Washington, she said.

Winners small and big
Some 77 applications involving Minnesota broadband projects were submitted for the first round of funding, and just three had been funded as of last week. They are:

• The University of Minnesota received a $2.9 million grant with matching funds of $741,000 to enhance broadband awareness and use for residents in four poverty zones in Minneapolis and St. Paul.

• The Southwest Minnesota Broadband Group was awarded a $6.4 million grant and a loan worth nearly as much to extend fiber optic cable to the Jackson, Lakefield, Windom, Round Lake, Bingham Lake, Brewster, Wilder, Heron Lake, and Okabena communities. This funding builds on a system in place in Windom.

• Halstad Telephone Company was awarded a $3.3 million grant and a loan for the same amount to provide broadband in five towns and surrounding rural areas in Norman and Polk counties. About 5 percent of the network will serve an area in North Dakota.

The award process is far from complete. But meanwhile, some states clearly were big winners — especially those that submitted projects involving large regions or swaths of broadband infrastructure.

For example,

• $80 million went to Louisiana to fund a collaboration among six state agencies which plan to deploy more than 900 miles of fiber-optic network.

• In Washington state, 12 nonprofit public utility districts collaborated on a project that got $84 million to bring high-speed Internet access to more than 100 community anchor institutions.

Texas got two loans totaling $63 million and $61 million in grants to develop broadband across the South Texas plains.

No one took responsibility to coordinate projects on that scale in Minnesota, said people close to the process.

"The strategy was local ... There isn't anything at the state level," said Ann Higgins at the League of Minnesota Cities. "The League would have loved to have played that role, but we just don't have the resources."

Leadership, vigilance, collaboration
Further, the work was outside the mandate of the Ultra High-Speed Broadband Task Force the Legislature created in 2008.

In its final report [PDF], the task force called for every home and business in Minnesota to have access to ultra-high-speed Internet by 2015. At a minimum, all residents should have download speeds of 10-20 Megabits per second and upload speeds of 5-10 Mbps, it said.

Most Minnesota counties outside the Twin Cities area fall far short of those speeds right now. And chunks of several counties have no broadband at all.

In order to achieve the ambitious goals, the task force said, the state needs "a long-term commitment of leadership talent to an ongoing program of vigilance and collaborative problem solving."

In particular, it called for creating a broadband advisory council in which state agencies would play an active role alongside other leaders with a stake in the issues.

That and other task force recommendations are working their way through the Legislature this session. But given the severe budget problems, it may be impossible for the Legislature to create any new body no matter how urgent the need.

All of this is not to say that Minnesota lacks initiative on the broadband front. Local leaders at several levels have assembled creative collaborations in which cities, hospitals, colleges and other key users are pooling resources to propel themselves toward ever better connections.

"Local people who make this a priority don't have to wait for federal stimulus dollars," said Bernadine Joselyn of the Blandin Foundation in Grand Rapids, which has launched programs to help local leaders learn about broadband and bring it to use in their communities.

"There is a lot that local leaders can do on their own," Joselyn said.

Incumbents and upstarts
There is a basic tension, though, between communities striving for better access and the private telephone and cable companies that have delivered most of the high-speed connections — for better or worse — around the state.

Another bill before the Legislature illustrates the debate. It would change a long-standing state law that allows a community to create and operate its own telephone exchange if it can pass a referendum winning approval from a 65-percent supermajority.

Several Minnesota communities have tried using that power to create their own broadband-telephone-television utilities, often with vigorous resistance from the companies.

Most recently, Cook County in the state's Arrowhead region staged a referendum last fall. Many county businesses and residents, including resorts along the Gunflint Trail, have no broadband access. But the referendum fell short with 56 percent of the vote.

That set up the impetus for the bill. It would allow a community to create its own public network if its referendum passed by a simple majority.

Now, though, the bill's original backers say its Senate version has been amended to the point that it would do the opposite of what was intended and actually build more barriers to public networks.

Mike Martin, director of the Minnesota Cable Communications Association, acknowledged that his organization helped shape and push the amendment.

Private companies have made substantial investments in the existing networks, he said, and demands of the marketplace hold them to increasing investments only where they make good business sense. More "ground rules" are needed for competition that could be government subsidized, he said.

"Right now there are virtually no conditions [imposed on] municipalities that enter the very competitive world of telecommunications," Martin said. "The cities consistently ignore our investments ... and they are prepared to pledge millions of dollars in general obligation bonds to compete with private companies."

Communities that do get into the business learn how expensive and challenging it can be to keep up to date with new innovations and the ever increasing demand for higher speeds.

"There is this idea that it's going to be better when we the city does it," he said. "But communities around the country have discovered it's very competitive, not as simple as turning on a water plant."

But the bill's original proponents see the amendment as a stealth move to sabotage competition that urgently is needed if Minnesota's rural regions are to expand their broadband access.

The amendment effectively would shut down new municipal broadband projects, said Higgins at the League of Cities.

"It requires things that are unworkable and prescribes steps that are not realistic in the public sector," she said.

Rather than exploiting their powers to get a leg up on private industry, communities typically venture into the broadband business as a last resort, said Jodie Miller of the Minnesota Association of Community Telecommunications Administrators.

"Cities and counties ... are not interested in getting into the broadband business or competing against the private sector for the fun of it," she said. "It is always driven by community need and demand that's not being met."

Too often, she said, the companies won't invest in upgrades until a community poses the threat of competition.

"It is easy for the industry to use these arguments and to say government should not involve the public's tax money in a risky business that would compete with the private sector," she said. "But these cases come up because these communities are desperately in need of service. Their economic development is at stake. Companies are considering leaving the community."

Sharon Schmickle writes about national and foreign affairs and science. She can be reached at sschmickle [at] minnpost [dot] com.

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Comments (6)

"Private companies have made substantial investments in the existing networks, he said, and demands of the marketplace hold them to increasing investments only where they make good business sense. "

This is a prescription for disaster. Qwest and the other companies have limited resources to invest. Small towns and rural areas are going to be last in line for those investments. It may never "make business sense" for companies to invest in competition to their legacy infrastucture.

Copper wire is a 19th century technology. Letting the companies who own that legacy infrastructure protect their "investment" is like letting the horse breeders control whether autos get built.

Perhaps the "private companies" should be reminded that no phone service in rural areas would "make good business sense". Without subsidies from the universal service charge on phone bills there would be no phone service. Yet those companies are also opposing allowing that charge to be used for purely digital internet connections. The result is that people have to buy land-line phone service from them in order to get high speed internet service. Whether they want it or not.

What is really going on here is the protection of a government created monopoly by its political cronies in both parties. Pawlenty is mostly irrelevant, he has one foot out the door anyway. its the Democrats in the legislature who are blocking progress on this one. And all you need to do is look at their campaign contributions to understand why.

It would be wonderful if we all had internet access with "download speeds of 10-20 Megabits per second and upload speeds of 5-10 Mbps."

What kind of computer tasks requires such phenomenal speeds, other than downloading music and movies?

Some companies, one supposes, might spend 2% of their computer time on downloading huge files (defense department requests for bids, etc.), but I doubt if there is one in each of our 87 counties.

Most people spend most of their time writing messages like this comment, or 140 character Tweets.

There was a fiber optic line, coming from Chicago, laid alongside of I-94 ten or more years ago? Has that ever been used?

Predictions of computer service needs continue to be over promised but for some reason, the private sector doesn't buy them. It's always expected that government should pay the freight.

Good article Sharon. It would have been interesting to get comments from legislators who oppose municipal telecommunications investments and from the governor.

I take issue with both comments above. To Ross' point about rural areas, it a fact that some rural areas have modern fiber networks that reach to every home and business in an area. These networks have been built with government loans and operational subsidies. This is not a criticism, but an endorsement of the federal investment in rural areas to help them compete in the global marketplace. Most if not all members of the MN Telecommunications Alliance, the industry trade association, take advantage of RUS loans, Universal Service Funds (a charge on everyone's land line) and access charges to invest and operate profitably.

To Ray's point, people need more bandwidth. My Comcast modem slows significantly depending on time of day. Videos that I download, whether entertainment, product information, healthcare information or whatever bogs down while the network struggles to keep up. More and more people use the Internet for daily work activities, online education and health care. Dismissing people's downloading of music and movies is similar to dismissing telephone use as "only talking with friends and family".

The US is falling far behind other countries in the percentage of people who have access to fiber optics and high bandwidth. State leadership is critical; it is unfortunate that here in Minnesota, communities are forced to figure this out at the local level rather than being able to leverage statewide efforts.

"Most if not all members of the MN Telecommunications Alliance, the industry trade association, take advantage of RUS loans, Universal Service Funds (a charge on everyone's land line) and access charges to invest and operate profitably."

Just to clarify. I have fiber-optic cable to my house provided by Paul Bunyan Telephone, a private telephone cooperative. To use it, I am required to purchase land-line phone service from Paul Bunyan because that is the only way they can access Universal Service Funds for my service. There is little, if any reason, for this requirement. Between VOIP and cell technology, old fashioned land lines are obsolete.

It is the effort to protect the investment in that obsolete technology that is the reason we are falling behind the rest of the world in internet service. Many legislators are far more interested in protecting their campaign contributors legacy investments than bringing us into the 21st century. And the problem is not only with only whacked-out libertarian free market Republicans blocking progress. The effort is bi-partisan.

@Ray,

Not everyone needs the faster speeds, but many do - most notably small business and those who work from home. Modern networks do not allow people to access the office network as fast enough speeds to maintain high productivity (depending on the job). People who want to take online classes are somewhat limited by slow speeds - just as many learning centers have not looked into how they might improve their services in ways that would require higher bandwidth because they know many students do not have access to these networks. This is a chicken and egg problem in some respects - just as with other infrastructure, we cannot predict exactly how higher capacity networks will be used, only that they will be used.

At a minimum you can tell your doctor you're getting more fiber each day...