Ranking Broadband Stimulus Applications in Minnesota

Our focus on the broadband stimulus is almost entirely on last-mile infrastructure because it is the most challenging and expensive problem to solve before all Americans will have affordable access to the broadband networks they need in the modern era. As we are most familiar with Minnesota, we decided to take an in-depth look on who is proposing what projects in our state.

Total Infrastructure Grants Requested for Last Mile solely in MN: at least $240 million
Total Infrastructure Loans Requested for Last Mile solely in MN: at least $85 million

Groups seeking stimulus funds to deliver last-mile broadband access in Minnesota have asked for hundreds of millions of dollars. By my tally, some 17 applicants are seeking to serve Minnesota with last-mile access (I threw out applications pertaining to middle mile infrastructure, digital divide, and those last-mile projects that combine Wisconsin and North Dakota areas) have requested some $240 million in grants and $85 million in loans.

If one assumes that the total amount of money is divided evenly among the states, this is somewhere around 3x as much stimulus money that will be awarded to Minnesota applicants over the course of the multiple rounds of funding.

At some point, this list will have to be winnowed and prioritized, so let's delve into it. All applications still must survive the peer review process (ensuring they met NTIA/RUS requirements), the incumbent challenges (incumbents can veto applications by showing that targeted areas already have broadband advertised to them), and the prioritization of surviving projects by each state (no one seems sure of how this will happen in Minnesota, our Governor is too busy not running for President in 2012).

There are two applications that should be jettisoned immediately, Arvig Telephone Company and Mid-State Telephone Company, both of which are owned by TDS Telecom. [Update: I have now heard conflicting reports on whether Arvig is, in fact, a subsidiary of TDS]

When NTIA formulated the stimulus rules, it ignored Congressional intent by allowing any private company to apply despite the requirement that the company act in the public interest.

Though NTIA ignored the intent of Congress, states like Minnesota should absolutely use that criteria in deciding how to rank projects. You may recall that TDS Telecom filed a frivolous lawsuit against the city of Monticello, which was tossed out of court at the earliest opportunity, but TDS continued obstructing the community's plans until the company ran out of appeals (our coverage here. TDS Telecom abused the court system by using it to delay a network approved by 74% of voters for more than a year in an attempt to prevent competition in the community. Few companies have abused the public trust more egregiously; they should be prohibited from receiving public money.

Further, government grants should certainly not be given to such a profitable company in order to expand their slow DSL services rather than offering the higher speeds that are needed by communities in 2010 and beyond.

Minnesota should prioritize publicly owned networks when it comes to public dollars. Unlike networks run by absentee network owners, these networks are directly accountable to the citizens of the community. Thus, projects like Lake County, Cook County, and City of Windom should all be front-runners. These grants are expensive in the short term, but they are investing in a technology that will last decades, rather than already-obsolete DSL. Rural Minnesotans need broadband, but extending speeds that already lag behind needs is not a wise use of public money.

Other smart projects that will deserve a hard look are the cooperatives that have applied - they have been borrowing from the federal government for years to extend state-of-the-art fiber networks to rural communities. Unlike companies like TDS and Qwest, they find it economical to bring fast and affordable access to their subscribers because they put community needs before profits. This is a model that needs to be expanded in rural areas.

Finally, we also support the applications of Donny Smith in several areas - his Jaguar Communications company runs an open network, allowing competitors to serve the community (again, something that other private companies avoid in order to maximize profits). He is working in several Minnesota regions to build fiber-to-the-home networks.

Basic Information about some MN Broadband Grant Applications available here - apparently, this does not include all applications aimed at Minnesota, but just applicants based in Minnesota.

Photo by Jackanapes, used under creative commons license.