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Brian Bakst, Published December 01 2013

Minn., others push broadband Internet to rural areas

BOYD, Minn. – From a farm country studio 3½ miles down a gravel road, Jean Menden ships handmade silver jewelry as far away as Norway to customers who discovered the pendants, rings and bracelets through her website.

What the retired teacher turned silversmith lacked until recently was a robust, reliable Internet connection critical to her budding business. Before newly installed fiber-optic cable delivered ultrafast broadband to her home, it was a challenge for Menden to maintain her electronic storefront and tap into Web-based tutorials that help hone her craft.

“If you had two hours, you could watch a 10-minute video,” Menden said as she described the fitful connection that used to be the best available around Boyd, a town of 172 people not far from the Minnesota-South Dakota border.

The high-speed capability that’s an afterthought in big cities and regional centers is spreading ever deeper into the nation’s countryside, nudged along by billions in federal stimulus dollars and state efforts to expand a key amenity for both quality of life and business competitiveness.

A Commerce Department report to Congress this fall highlighted efforts in Nebraska to hook up 100 key community institutions and 25 public schools with Internet dependable enough to support distance learning and library access in remote areas. It showcased a collaborative in Oregon where broadband has been credited with aiding 50 startup businesses and creating hundreds of jobs. And it emphasized strides in rural Illinois, where one district now supplies all of its students with a mobile device.

Still, the Federal Communications Commission reports that as of last year 19 million Americans still lived in an area without a fixed broadband connection, most of them in rural towns and on tribal reservations.

Every state has a commission or special project to measure broadband progress, but some are doing more. California established an industry-fed $60 million technology fund to advance broadband. Massachusetts lawmakers authorized investment of up to $40 million from state bonds in network infrastructure projects. Iowa Gov. Terry Branstad directed officials to report back by December on how to deliver on a “Connect Every Iowan” pledge.

Minnesota’s goal is universal access to quality broadband by 2015, a target set in law.

“It’s just as important as rural electrification was a century ago,” said state Sen. Matt Schmit, a Minnesota Democrat studying law changes designed to spread broadband’s reach.

Even among advocates, though, there are doubts Minnesota can reach its marker. Federal aid has largely run out with some hard-to-serve areas still unreached. Regulatory uncertainty is causing some providers to delay. And efforts to subsidize far-flung buildouts have drawn criticism from those who question whether it’s worth the steep expense.

The first director of a new Minnesota Office of Broadband Development was just named ahead of a statewide summit to be held Wednesday. Meanwhile, a task force is working up recommendations to state lawmakers for tax changes that could make broadband equipment more affordable, and for a potential fund that could make it more feasible to reach into remote areas.

“Without that sort of intervention we are going to have a very difficult time getting to 100 percent,” said task force Chairwoman Margaret Anderson Kelliher, president of the Minnesota High Tech Association. “There needs to be some sort of gap-closer.”

In recent years, local phone companies and community cooperatives could get federal aid to run fiber through forests and fields to subscribers in sparsely populated areas. Minnesota providers, many working with local government partners, drew more than $238 million in stimulus loans and grants from a national pool of $4 billion, according to state and federal data. All that money helped build out 105,000 miles of new or updated network connections across the country.

It’s not just about having a broadband connection – more than 96 percent of Minnesota households have access to one – but about how fast it is. The state is striving to achieve download speeds of at least 10 megabits per second and upload speeds of at least 5 megabits per second.

Those rates are considered vital to unlocking the most technological opportunities: seamless streaming of distance-learning courses in schools, telemedicine projects that allow for virtual doctor checkups and letting grandparents dote over their grandchildren via Skype or FaceTime without frustrating freeze-ups.

New figures published this month by Connect Minnesota, a nonprofit that maps access using industry data, show that nearly three-fourths of households now qualify for fixed or mobile service that’s at least as fast as the state goal. That’s up from 56 percent in April 2011, the earliest for which comparative figures were available.

Minnesota Telecom Alliance president Brent Christensen said a recent repeal of a state sales tax exemption on certain equipment works against the expansion effort. He added that rules governing service fees and mandatory connection offerings are in flux at the Federal Communications Commission, causing some companies to throttle back for now or focus on building around known customer bases where return on investment is more certain.

A conservative think tank, the Freedom Foundation of Minnesota, calls the push to expand access laudable but argues that the market should dictate what happens. Jonathan Blake, the group’s vice president, said many of the publicly subsidized projects have occurred in places where high-speed options already existed.

“We don’t think it’s appropriate or serves taxpayers to have government serve as yet just another competitor in the marketplace,” Blake said.

In far western Minnesota, Farmers Mutual, a century-old phone company, laid down 600 miles of fiber cable beginning in 2011 with the help of $9.6 million in stimulus grants and loans. The 20 megabit per second service it debuted earlier this year made it the fastest in the market, but also touched off heated competition with much bigger providers keen to keep their customers.

At Dawson Oil Co., mechanic Morrie Schacherer said the auto shop he runs with his father gets regular solicitations from companies now trying to win their Internet business, including one provider he says wasn’t offering much before.

“The minute after we signed up with Farmers they were in here with two different guys wanting to sign us up,” said Schacherer, who has been able to reduce the shop’s tire inventory now that getting different styles and sizes is only a click away.

That competition means Farmers has a ways to go to meet its ideal penetration rate in Lac Qui Parle County, general manager Kevin Beyer said, as potential customers fear they’ll face steep cancellation fees from existing providers if they switch over.

Back in Boyd, Menden was quick to subscribe. Her newest challenge is not getting swept up in technology when she could be in her art studio or riding horses around her pastoral tract.

“Unfortunately, I probably spend more time on the Internet than I would like to because when you’d be frustrated before it was easy to shut down and be done with it for the day,” she said. “Now, there’s no reason to shut down.”