5 More Questions: On broadband access, ‘I want the state to be a facilitator’

MinnPost photo by Brian Lambert
Essentially, Sen. Matt Schmit’s plan is the 21st-century version of rural electrification, with the goal of eventually providing every community and farm access to genuine high speed broadband service.

Every session of every legislature produces its share of “no brainer” ideas. Some, literally so. Time and money-wasting notions are floated that are so bereft of imagination and polluted with ideology you wonder if brain power was involved at all. Others though, like the expansion of broadband across Greater Minnesota being pushed in the Senate by DFL Sen. Matt Schmit of Red Wing, seem so self-evidently necessary and valuable — in terms of tele-medicine, on-line education, essential business connections — it’s hard to make a coherent case for resistance.

Essentially, Schmit’s plan (mirrored by DFL Rep. Erik Simonson in the House) is the 21st-century version of rural electrification, with the goal of eventually — perhaps over a decade … of good-paying tech construction work  — providing every community and farm access to genuine high speed broadband service. [Here’s a breakdown of the blizzard of clauses and differences between the two bills.]

The demand is evident. Several dozen Minnesota communities have petitioned the FCC for federal assistance. But resistance, in the form of lobbying pressure from telecommunications giants like Comcast, has produced foot-dragging in the form of arguments that expansion of the sort Schmit and Simonson and others are talking about is best (and only) served by private enterprise. Which might be the case if tech companies could promise shareholders return on investment in the next couple quarters.

We met with Schmit in his Capitol office. A 35 year-old first termer with a Bible salesman’s zealotry for his product and a TV anchor set of teeth, Schmit sees broadband as an essential key to the rejuvenation of the outstate economy.

MinnPost: There have been three different-size packages for broadband expansion batted around this session. A $100 million version, a $50 million version and now the one that seems most likely to move, the $25 million version. Can you explain what we get for each?

Sen. Matt Schmit: Well look, what came up over and over in our informal broadband listening tour around out-state is that there isn’t enough return on investment in the short term for private capital, so there has to be an infusion of public money. That much is completely clear.

I also got the message that there isn’t a one-size-fits-all approach, meaning each different city or area, has to build out from its existing strengths.

There are different competitive markets, different geographical situations and different visions for how this should be done. So, in my mind, you want the state to facilitate this discussion, and provide a path forward for investment.

So I hope we leave here this year with a fund that is large enough that it gets people’s attention and they say, “Look, the state is serious about this, we need to get serious, too.”

But as for size, we’re really just talking down payment this time around. We’re not going to leave with a fund capable of doing everything that needs to be done. We’d be looking at $900 million to $3.2 billion to provide fairly basic broadband to everyone statewide.

The state can’t do all that. That’s why we’re looking at targeted public investment. I’m pleased the House has come around as it has on this and seen the value of this investment.

Ideally, with the $25 million package we’ll see quite a few communities, I think there are 50 around the state who have already contacted the FCC asking for assistance, putting in serious applications for projects that are very close to being “shovel ready” if you will.

The experience we have with those communities will give the legislature a lot more to work with next year and the years after that.

But what is already clear though is that this isn’t another solution in search of a problem. This is a solution that is far overdue for problems facing much of Minnesota. Also, I’m certain that however much we put into this fund, there’s going to be a great deal of interest in tapping it.

MP: Well, Speaker Thissen sounds optimistic, to the point that he was making comments the last month about coming back next year for additionally funding, based on the response you get to this year’s package. But I’m curious what you believe you can actually get done between now and next winter. Sure, a lot of people will raise their hands and say, ‘I want some.” But what can actually get done?

MS: Look, I think there have been three governor’s task forces on broadband. There has been a great deal of work done by philanthropic organizations, like the Blandin Foundation. They are well aware of what we heard on our turn. And that is that in 2014 when people consider moving to a community, or setting up a business in a community where they used to ask first about schools, today they ask about technology. [Here are some fascinating stats on broadband availability — or the lack thereof — from the Greater Minnesota Partnership.]

Ideally I’d like to see a series of partnerships with existing local providers, with a matching fund program from the state to expand out their system. I don’t want to be telling them what to do, what sorts of technologies to use. As I say, I want the state to be a facilitator for whatever communities decide is best for them.

We don’t to be overly proscriptive. We just want it built for the long-haul, scalable up to speeds … 

MP: You have to have some kind of basic technical standards … 

MS: Yes. And what we’re asking in the bill we’ve got now is that it be scalable up to 100 [mega bits per second … the average home Comcast broadband download speed in the Twin Cities today is about 28 mbps — but Google fiber is working toward 1 gigabit per second in its test cities.]. We are well aware of the speed of change in both technology and demand. But we are confident with fiber optic that once it’s in the ground it will be scalable and reliable for decades.

MP: I imagine a lot people hearing about this think a plan is afoot to connect everyone to fiber optic in the near future. But the reality, for the foreseeable future, is schools, hospitals/clinics and larger businesses across the state. Isn’t that right?

5 More QuestionsMS: Those are what we call “anchor institutions,” and we’ve made great strides in connecting them. But they’re not all covered.  But in my mind it’s not just the “anchor institutions,” it’s the end user experience. Schools often have good connections, but students at home don’t, which means they’re at a disadvantage when doing homework. So you get these scenes of kids in parked cars next to hot spots doing their homework in the depths of winter.

That has to change. Likewise, whether it’s tele-health or sufficient bandwith for home-based businesses. That’s where you start to see real improvements. And I’ll remind you the Blandin Foundation has a report showing a 10-to-1 return on investment on broadband. Next to early childhood, I don’t know where you’ll see better numbers than that.

MP: The usual resistance to something like this is the ideological position that government has no business here, never mind the history of road-building and rural electrification, and that it should be left to the private sector. But even if you dismiss that as dime-deep thinking there is the valid concern that technology is advancing so rapidly, with the next invention we could find a lot of public money lost in obsolescence. [Can you say, “Project Loon”?] What do you say to that?

MS: Well, I defer to the experts who tell me fiber is future-proof. Once you put it in the ground you can play with both ends to increase the bandwith, and remember, even wireless relies on fiber. You have to connect to the towers.

But again, I don’t want the state to be dictating the terms. If a community can find another way, a viable path, I want to facilitate. But you also don’t want fiber running down both sides of a highway. You want enough coordination to promote efficiencies and economies of scale.

I’m convinced we’re going to have a lot of interest, even with this $25 million down payment. And what it’ll really do, by showing communities that the state is serious, is create even more demand, more fully-conceived ideas for the next session, when we could be looking at a larger fund.

MP: I’m a little surprised I haven’t heard you guys banging the “jobs, jobs, jobs” drum on this. There’s a lot of long-term, higher tech work to be done here.

MS: Absolutely. We’re not building a stadium here. We’re looking at a long window to get from where we are today to where we need to be. This will put people to work for a long time. So yes, there is a very large jobs component here. But this isn’t just spending money to put people to work, it’s money spent to create competitive environments where new businesses can form. 

Comments (4)

  1. Submitted by Dennis Tester on 05/15/2014 - 12:46 pm.

    A “coherent case for resistance”

    It’s not the role of government (read taxpayers) to provide an exclusive infrastructure (unlike roads which could have national defense applications) so private corporations can make money. You mention “rural electrification” but a more accurate comparison would be phone lines. Did the government pay for or lay the phone lines?

    Let whichever private internet provider who stands to make money from broadband customers pay for and install the broadband cable.

    And with satellite-based products like ViaSat, DishNet, HughesNet, WildBlue and others, there’s no need for the government to interfere in the marketplace or for the taxpayer to pay for the installation of any broadband system, cable-based or otherwise.

    Let private enterprise offer their competing products, let the customers choose which product they prefer, and let them then pay for it with their own money.

    • Submitted by Ray Schoch on 05/15/2014 - 04:21 pm.

      Just out of curiosity

      Why are phone lines a “more accurate comparison” than rural electrification?

      Also, just out of curiosity, what if no private internet provider, whether fiber, DSL, satellite, or some other technology, feels it can make money on rural internet service?

    • Submitted by Matt Haas on 05/16/2014 - 12:34 am.

      Congratulations Dennis!

      You’ve come so close to an epiphany. Don’t you think if there is money to be made in providing broadband access to rural America that one of the major providers would have done so by now? What you have done so well, is to illustrate that this issue is EXACTLY one in which the government needs to step in, an obvious need by society, which the private sector is unable(or unwilling), to address.

  2. Submitted by Chris H on 05/15/2014 - 11:50 pm.

    Question, Answered

    “Did the government pay for or lay the phone lines?”

    Mostly, yes. http://en.wikipedia.org/wiki/Bell_System#Government_sanctioned_monopolization

    In exchange for monopoly, the government got something out of the phone companies. Due to cost, speed, and reliability, wireless and satellite are not viable options for business, healthcare, or education.

    If we’re not going to whack broadband providers with a stick (regulation), let’s encourage more competition and broader access — to ensure there’s an actual free market. We can do that by laying lines in the ground.

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