Minnesota’s Broadband Grants See Numerous Applicants

Businesses, political subdivisions, Indian tribes and Minnesota nonprofits all applied as unserved entities for more than $10 million in grant funds.

by Heather J. Carlson, Post-Bulletin / September 24, 2015
(TNS) -- In a sharp turnaround from last year, several Southeast Minnesota entities have applied for a state grant aimed at improving high-speed Internet access.

Of the more than 40 applications received for the state's Border to Border Broadband Development grants, seven were for projects in Southeast Minnesota. Compare that to last year, when no Southeast Minnesota entities applied for $20 million in grants.

Those local projects will face some stiff competition. The state has just more than $10 million in grant funds available and has received more than $29 million in requests, according to Department of Employment and Economic Development (DEED) spokeswoman Madeline Koch.

Red Wing DFL Sen. Matt Schmit argues the need for grant support to upgrade Internet access in rural areas likely far exceeds the number of applications submitted to the state. Schmit sponsored a bill this year seeking $100 million in broadband grants. Lawmakers instead agreed to fund one-tenth of that proposal.

"There were a lot of applicants that sat on the sidelines because they didn't necessarily think they could have a competitive application with only $10 million and change available," Schmit said.

Underserved areas

Minnesota has not kept pace with a state goal ensuring that all residents and businesses have access to high-speed broadband of at least 10 megabits per second download and 5 megabits per second upload. About 20 percent of Minnesota households still do not have access to high-speed broadband.

To be eligible for the grant program, a project must be in an unserved or underserved area of Minnesota. Applicants are eligible for up to $5 million of funding and must provide at least a 50 percent funding match.

The next step in the application review is the challenge process. It enables existing Internet providers to challenge proposals and is aimed at making sure the applications are in unserved or underserved areas. The deadline for challenges is Oct. 9. Koch said the state hopes to award the grants by the end of the year.

Houston-based AcenTek is among the businesses vying for broadband grant funding. The company wants to expand access to high-speed broadband in the rural areas surrounding Lanesboro. The project would also include the small cities of Whalan and Highland in Fillmore County. AcenTek CFO Darren Moser said they are seeking $4 million from the state for the $8 million project.

The challenge for providers in expanding high-speed broadband to rural areas is the high cost. Moser said providers are working with a network originally built for telephone service. To get the higher speeds, the existing network must be rebuilt using fiberoptic cable.

"Everybody is looking to get that infrastructure out there for small communities," he said. "It's a way to stay viable, it's a way to attract residents and consumers to the area," Moser said.

No wires

Not everyone applying for state dollars is interested in installing fiber. LTD Broadband LLC has submitted a proposal to expand its wireless high-speed Internet access across southern Minnesota. The company's founder, Corey Hauer, said the project would serve more than 33,000 locations across southern Minnesota, including Dodge, Fillmore, Freeborn, Goodhue, Mower, Olmsted, Wabasha and Winona counties.

Hauer said his Albert Lea-based company already provides service to customers in more than 20,000-square-miles of southern Minnesota and northern Iowa. If the project moves ahead, he said customers would have access to 25 megabits per second download speeds that would be upgradable to 100 megabits per second. He said the major benefit of his company's approach is it is far less costly to install than fiber. As such, Hauer said it's hard to understand why the state and federal government is investing so much into fiber.

"Our solution is the best solution by far. Fiber costs literally 100 times as much to deploy as what we're doing," Hauer said. "I could sit on the sidelines and complain that the state is subsidizing fiber projects, or I could do something about it, which is apply."

Hauer declined to say how much he was requesting from the grant fund. DEED did not respond to a request for the dollar amount before the Post-Bulletin's deadline.

Broadband advocates are already looking ahead to the 2016 legislative session with plans to push for more grant funding. Schmit said he plans to introduce a bill that would seek at least $100 million in grant dollars. The Coalition of Greater Minnesota Cities has also lobbied hard at the Capitol for additional funding. The group's lobbyist, Tim Flaherty, said given that state lawmakers are expected to have a $1 billion budget surplus, it makes sense a significant investment is made in broadband infrastructure.

"When it's this important, you would think that the Republicans, the Democrats, the governor, the Legislature would understand that it's a win-win for everybody," Flaherty said. "It's going to produce a stronger overall economy in greater Minnesota, which is going to help business growth and state revenues."

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