Sibley County opts out of fiber project, may give rise to farmer cooperative

The Sibley County Board of Commissioners voted last week to withdraw from a $70 million fiber broadband project that aims to bring high-speed internet to homes in at least 11 southern Minnesota communities.

The action makes unlikely one of its original goals -- getting high-speed fiber to every farm in the county -- but some farmers are already organizing to take another tack.

Across the state, cities and counties are trying a variety of approaches to increase broadband access for residents. The RS Fiber project is especially interesting because, if built, it would be publicly owned and serve farmers. But now that Sibley has stepped out of the picture, the project would reach fewer farms than originally planned. Renville County, the other community that includes some farms, recently voted unanimously to stay in.

At the Sibley County board meeting last week, Kevin Lauwagie, of the Winthrop-based United Farmers Cooperative, testified that fiber is necessary for the use of modern farming technology, such as maps that allow farmers to plant seeds more efficiently. He said his organization doesn't usually get involved in governmental affairs but, "We decided we needed to take a stand to support this project. Look into your crystal ball...and say, 'What is it going to be like when we try to move into the 21st Century and so on?' This project is just so huge in how it is going to propel us for years to come."

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(Jeff Nielsen, United Farmers Cooperative. MPR photo/Conrad Wilson)

Just after the Sibley County vote, a group of a half dozen farmers approached Jeff Nielsen, also of United Farmers, to inquire about starting a cooperative so they might raise money to become RS Fiber customers on their own.

"They said, 'We have to do something,'" recalled Nielsen. "I said, 'Let's go back to our roots and try to form a co-op.' Twenty-four hours later, we had an organizational meeting. We had about 30 people show up. This is really a credit to the grass roots people who have been working their heads off for the last two years to get this done. We were shocked the commissioners voted no."

"Clearly it's much more efficient to go into a city (with fiber)," Nielsen said. "But let's remember who paid the taxes in the county--the farmers and ag producers. Why are we leaving them out of the technology?"

The cooperative, which hasn't officially formed yet, is receiving organizational support from United Farmers, but it's expected to be an independent entity. Interested parties will meet tonight in Winthrop to discuss a structure and how much startup capital might be needed. Beyond that, the details--such as the cost per farmer to connect someday to the RS Fiber network--still have to be ironed out.

"The idea is to form a telecommunications co-op to secure the funding to bring fiber to rural residents," said Nielsen, who noted that financing could come through conventional or U.S. Department of Agriculture loans or other sources. "The idea then would be to have the co-op engage with the fiber project so we are all working together, so there are not two companies doing the billing and so on. We would work with the RS fiber project, but we would provide the capital and membership from rural residents."

During the Sibley County board meeting last week, commissioners voiced concerns with the RS Fiber business plan and the upcoming bond sale that would pay for the project. Specifically, they had trouble finding a law firm willing to render the legal opinions necessary to the bond sale.

"My computer runs too slow," said Commissioner Jim Nytes, who voted to withdraw from the project. "I wish we could get this thing working. But in the end, (we) five have to stand up and be responsible. When I was campaigning I said, 'I will not raise the taxes on grandma; she can't afford any more.' Many people in my district are on fixed incomes." He said the county struggles just to build and maintain roads. "We have plenty of budget problems."

"This thing has blown completely out of control," he said. "We can spend more money on it, but it probably won't work. We are a small county, losing population."

Mark Erickson, Winthrop city administrator and fiber project champion, thinks losing Sibley County might actually help the project's finances, since running fiber to far-flung farms is an expensive undertaking. "The (cost) of the project should decrease dramatically," Erickson wrote via email. "It should be a much better plan without the high cost rural areas."

He also said the project would benefit from having the newly-formed farmer cooperative as a customer because it would bring in additional revenue.

Overall, though, Erickson is disappointed by the loss of Sibley County. "Rural folks need the same access to technology as their city cousins have," he said. "Building out the entire county would have truly made this a very special project."

Now, all the RS Fiber communities will have to approve a new business plan that excludes Sibley County. Those include the cities of Brownton, Buffalo Lake, Fairfax, Gaylord, Gibbon, Green Isle, Lafayette, New Auburn, Stewart and Winthrop, along with Renville County. The city of Henderson hasn't voted yet on whether to move forward.

The communities also will have to sign off on working with Minneapolis-based law firm, McGrann Shea, which Erickson said has agreed to render the legal opinions required for the bond sale. He thinks other law firms have been unnerved by publicly-owned fiber projects that haven't done well, such as the one in Monticello.

Community approval will happen over the next two or three weeks, said Erickson. "The bonding process is moving forward and we expect all of the cities to approve the new documents."

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