$100 million broadband bill at least will make waves

Sen. Matt Schmit, DFL-Red Wing, grabbed the attention of the high-speed Internet world in Minnesota this week with his proposal to finally put state money into broadband infrastructure. The bill he introduced Thursday would make $100 million available to match money for local projects in areas that don't have good access.

The first big question, of course, is whether the Legislature will see fit, even with a $1.23 billion surplus, to include broadband among its competing priorities. But after that, the bill, which is sponsored in the House by Rep. Erik Simonson, DFL-Duluth, could provide an interesting look at what communities around the state are facing as they try to get better Internet access for themselves.

The Legislature four years ago decreed that every household in Minnesota should have broadband available to it sometime in 2015. So far, about three-quarters of the state has achieved that, but nobody thinks the goal will be achieved. Schmit calls it a $3 billion problem; that's roughly what it would take to provide high-speed access to the whole state.  To fend off those who wonder why tax money should be spent to help cabin owners watch Netflix movies, he's pitching his proposal as an economic development tool in those areas where the marketplace has not provided the service people need to participate fully in the realms of education, health care, the workplace.

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"That didn't stop us with other utilities like electricity and transportation," he told a small gathering of the Telecommunications and Information Society Policy Forum late Thursday afternoon at St. Paul College.

The state's new broadband development office, under director Danna MacKenzie, is already tracking a variety of local efforts. In Sibley County, for example, a cooperative has been formed to try to create a fiber network. In other parts of the state, small telephone companies have been working with local officials to expand service.  Large rural Internet service providers like Frontier, CenturyLink and Windstream have invested millions, but it's a common complaint that those investments have not been sufficient.

Enter the state to, in the sponsors' words, deal with a basic economics problem of limited private capital. "If you don't have good broadband, it's really hard to market yourself," Simonson said.

So, how will the measure be structured to determine where exactly the money would go and what kind of proposals would have the advantage?

The first principle is geographic. Unserved or underserved areas are the target, so think rural. Improving service in the Twin Cities is not the goal.

Another criterion will be how much local organizations -- partnerships, businesses, local governments, Indian tribes, non-profit organizations and cooperatives -- would have to invest to get state money. Schmit talks about leveraging the state money to the tune of five to one or more, but he also said he worries about pricing some communities out of the game.

He also said he wants to account for the great variety of ways local communities are attacking this problem, trying not to create a one-size-fits-all solution. But so far, the bill envisions a variety of characteristics that would give a project priority -- upgrading service to health care, public safety, library and other institutions, facilitating use of electronic medical records or providing technical support for businesses, for example.

One interesting question would be whether large telecommunications companies that have been reluctant to form local partnerships to extend broadband would be interested in pursuing money under a program like this. Would the criteria try to entice them?

If nothing else, hearings would air these questions out in a way they haven't been before in Minnesota and probably give a forum to those communities that think they are underserved.

Earlier this month, for example, Kelly Hinnenkamp, the city administrator in Annandale, an ex-urban town of 3,300 people northwest of Minneapolis, was forceful at a Blandin Foundation public forum on the topic. "Broadband is probably the single most important issue in our community right now," she said. "Our big issue is not that we don't have service but that we have one provider that has shown little interest in improving it. Broadband is our future."

It's interesting to note that if you stand on building in Annandale you can almost see Monticello 20 miles away. That's a similar-sized town that  enjoys some of the fastest speeds in the state after a city-created fiber network was built, inviting lawsuits and tough competition from private providers. Monticello embroiled itself in a lot of criticism and financial angst, but at least some people are envious of the result.

"It's clear the state cannot throw $3 billion at this problem," Schmit said. "But I'm convinced this is the session to have that discussion."

Rep. Sheldon Johnson, DFL- St. Paul, long active on the broadband front told the forum Thursday that, given competing pressures for money, that people interested in improving their service, "really gotta make some noise. It really needs to come from communities."

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