Then there are areas where the state government has worked hard to provide grants and a flexible network of private and local not-for-profit organizations to build out coverage slowly. An excellent example of this would be Minnesota where 117 providers have come together to build infrastructure in the name of economic development.
Then there is the vibrant area of broadband build out that is headed by rural electric cooperatives. Congress passed the Rural Electrification Act of 1936 to bring electricity to rural areas when privately owned companies were not building out to farms and ranches. The act allowed electricity to rural areas through cooperatives, many of which still exist today. These member-owned co-ops purchased power on a wholesale basis and electricity was distributed on a network of their building. Many government experts see this model as a potential saving grace for Internet in rural areas.
According to a 2017 Federal Communications Commission Broadband Deployment Report, 92 percent of the total U.S. population has access to both fixed terrestrial services at 25 Mbps/3 Mbps and mobile LTE at speeds of 5 Mbps/1 Mbps. But for those living in rural areas, only 68.6 percent of Americans have access to both services, compared to 97.9 percent of urban dwellers.
But there are still areas that have nothing to tether them to the modern world at all. These areas are not just rural, but geographically challenging to traverse and connect. Oregon is one of these states. Geographically the eastern part of the state is cut off from the coast by the Cascade Mountains.
It is under these conditions that Chief Information Officer Alex Pettit went to bat to improve rural access in his state. In 2012, he found that the state was paying $11 million a year for access to the Internet, so he collaborated with four state universities to buy nearly 2,300 miles of fiber-optic cable, hoping to create a faster, cheaper public network running to areas across the state.
He had also expected to offer that network to rural schools, public libraries and tribal reservations to create public-private partnerships to increase connectivity.
"Without access to broadband, we cannot drive new investments into Oregon," Pettit explained.
To solidify his case and get state law behind him, he offered amendments to House Bill 4023, relating to rural connectivity and the use of the state and university system's network to connect rural Oregon municipalities, where 43 school districts still lack a fiber-optic connection.
“On one-third or half the landmass of the state, people can't access the Internet," Pettit said. "The state is full of data centers, from Apple to Google, but there are 10 counties with 49 school districts without connectivity."
Despite the best intentions of the state, the private provider industry feared the state would become direct competition. Middle-milers worried that the state would take their business and the last-mile providers also objected. So considerable was the opposition that 20 amendments were offered almost daily in a 35-day legislative session to limit what the CIO could accomplish.
"Ninety percent of our middle mile is controlled by a duopoly," Pettit said. "They complained that the state was overbuilding by creating our network." In fact, the state had only acquired its fiber because a middle mile provider had been unable to monetize it and sold cheaply as excess.
"We also proposed an amendment to allow public-private partnerships with the telecoms in underserved areas," he said. "We never envisioned or proposed to do something in the last mile. We were content to let the local ISP provide that."
What he got in the end was the ability to connect government and university offices to the fiber network, with the limited ability to connect underserved municipalities, schools and reservations — as long as the state was not in direct competition with a telecommunications provider.
While the Oregon CIO counts this as a win, his state still lacks coverage necessary to keep rural communities connected. He now says, though, that he thinks the rural parts of his state won't be connected unless something like the Rural Electrification Act is passed in Washington, D.C.
In some ways, Christopher Mitchell, the director of the Community Broadband Networks Initiative for the Minneapolis-based Institute for Local Self-Reliance, agrees with Pettit.
"These are big challenges that call for another rural electrification administration approach. That is the scale of the problem," he said. "The reason we had initial rural electrification was because the Franklin Delano Roosevelt Administration, particularly a guy named Harold Ickes, who realized that the private sector would not bring good infrastructure to rural America, so they created all these co-ops."
Ironically those rural electric cooperatives are building fiber networks in rural areas frequently without government help today. "If we wanted to improve rural access quickly we would focus on the electric and telephone co-ops in rural areas," he said. "Instead, the federal government is giving billions of dollars to AT&T and CenturyLink."
Minnesota is making a success of pushing broadband out to its rural areas by collaborating with rural cooperatives, private providers, and a wireless pilot programs as well, said Danna MacKenzie, executive director of the Minnesota Office of Broadband Development.
The state collaborates with multiplicity of providers to help it meet its goal of border-to-border coverage of 25 Mbps/3 Mbps by the year 2022. By 2026 the state hopes to supply all businesses and homes with access to at least one broadband provider of with download speeds of at least 100 Mbps/20 Mbps.
The Office of Broadband Development also awards grants to providers for its border-to-border program. In 2017 the state legislature allocated $20 million for this program. The grants provide up to 50 percent of project development costs with a maximum grant of $5 million. These grants require the grantee to match the state's dollars. In the past four years, the state has laid out $85 million for broadband coverage.
One of the strengths of the program, she says, is that it is a framework rather than a rigid plan. These providers “all have different investments, different interests and different specialties,” MacKenzie said. “We have a system and a framework in place that welcomes all these different providers.”
Still, with all this activity surrounding broadband in the state, the issue of rural access is still a problem. Minnesota is ahead of the national average for connectivity, but 39 percent of rural residents have no access to high-speed Internet. Currently 202,000 households in rural areas, or 22 percent, lack access to fixed, nonmobile broadband service at the FCC standard, according to the Minneapolis Star.
"We are generally confident that if the state funded the state [grant] program at $35 million a year, we will hit our 2022 goal," she said.
When the state began to talk about what she calls the federated model of broadband deployment, they had bi-partisan leadership from former Minnesota Gov. Timothy Pawlenty, a Republican, and Democrat Mark Dayton.
And like Oregon, the private providers in Minnesota were worried that the state was fixing to take their business away. “Industry was really concerned about this whole effort,” MacKenzie said. “They were concerned about additional layers of government oversight or regulatory burden. They resisted this for a long time.”
It wasn’t until the decision was made to place the agency in the Minnesota Department of Employment and Economic Development and separate from any regulatory agency that the private providers came on board.
“This meant we could play an advocacy role and an investment role separate from the regulatory agency. Once that happened, we tried to create a win for everyone,” she said. "Right now, we have all our major industry groups on board as well with local government, the establishment of our state speed goals gave us our North Star, and it allowed everyone to buy in and have something to work towards.”
While MacKenzie believes that the state can hit the 2022 goal that has been outlined, she struggles with the thought of meeting the sweeping 2026 target with download speeds of at least 100 Mbps/20 Mbps. She is also intrigued by the idea of what small independent cooperatives could bring to the table to help achieve the state’s goals.
“Minnesota is looking at where there might be partnerships between our phone and electric cooperatives, allowing them the opportunity for each to bring their expertise to the table and getting things up and running much faster,” she said.
Some successes have already been seen with a partnership between an electricity and telephone provider in this space, she said.
