Capitol Ideas

CSG Knowledge Center

Research Services

MLC Policy Resolutions

Stateline Midwest


Minnesota grant program helping expand broadband access to rural areas

by Carolyn Orr ~ February 2016 ~ Stateline Midwest »
Ask Minnesota Sen. Matt Schmit what his rural communities in Greater Minnesota need to prosper, and it doesn’t take long before the discussion turns to the importance of having high-speed Internet.
“A good share of our rural homes and busi­nesses still lack access to Minnesota’s very modest speed goals,” he says.
Schmit is not the only state lawmaker concerned about this lack of connectivity. Six years ago, the Legislature passed a bill calling for all Minnesotans to have access to those “modest speed goals” (10 megabits per second download and 5 Mbps upload) by 2015. As of last year, however, only 78 percent of households met that standard.
“Anchor institutions like schools, libraries, and hospitals are pretty well covered,” Schmit says. “But connecting schools isn’t enough, because they are constrained by the student with the slowest speed or least reliable coverage. “Our schools need at-home connectivity.”
Standing in the way is the higher cost of building those connections to homes and businesses in rural areas — about triple the cost of construction in urban ar­eas, according to the Minnesota High Tech Association. But while progress may not be as fast as lawmak­ers envisioned with the 2010 speed goal, it is being made. Between 2010 and 2015, the state’s high-speed con­nectivity rate jumped from 56 percent to 78 percent, in part because of increased investment by the state.
Under the Border-to-Border Broadband Development Grant Program, the state provides funds to underserved or unserved areas. To participate, local providers and communities must provide matching funds and build broadband infrastructure “scalable” to download and upload speeds of 100 Mbps.
Gov. Mark Dayton has proposed deepening the state’s investment in “border to border” broadband; he is seeking $100 million from the Legislature this year. To provide broadband access to every Minnesotan, the Governor’s Task Force on Broadband has estimated the cost to be between $900 million and $3 billion.
In 2016, Schmit is pushing to replenish the fund with a $100 state appropriation.  He also looks to codify the state Task Force’s new speed goal of at least 100/20 service for all homes and businesses by 2026, and to expand authority for local partnerships.
“The state can only do so much – and we need to promote local partnerships, energy and vision,” Schmit says.
The RS Fiber Cooperative is one example: With involvement by 10 cities and 17 townships in rural Sibley and Renville counties, its goal is to provide 6,200 homes and businesses with speeds of 1 gigabit per second (the equivalent of 1,000 Mbps).
These local governments agreed to sell abatement bonds totaling $13.7 million to provide a loan to RS Fiber Cooperative. The bond serves as the local match for the state broadband funding, and it is helping support the first phase of network construction. By the end of 2016, most of the area will have improved service. The second phase of the project, which will begin in 2018, includes wiring each rural farm, business and home.
The project is expected to cost a total of $45 million and be completed by 2021. And for rural business owners and farmers, such investments may be necessary for economic success.
“Technology is one of the four key factors limiting growth and prosperity in rural America,” Diane Smith, CEO of American Rural, told state lawmakers in January at the 2016 Legislative Ag Chairs Summit. (The Council of State Governments helps support this event.) “If you have access to technology, you have access to information and the global marketplace. People don’t have to find your front door [for you] to have a successful business.”
Wireless access is also becoming essential to farmers.
“Almost every piece of farm equipment that rolls off the assembly line today is set up for wireless con­nectivity,” Nick Tindell of the Association of Equipment Managers said at the Ag Chairs Summit. “Those cornfields are vital economic zones in the Midwest, and they need wireless signal coverage as well.”


Article written by Carolyn Orr, CSG Midwest staff liaison for the Midwestern Legislative Conference Agriculture & Natural Resources Committee.