Tag: "minnesota"

Posted May 3, 2019 by Katie Kienbaum

Last November, we reported on a change to the tax code that is deterring rural telephone and electric cooperatives from leveraging government funding to expand broadband access. We were alerted to the issue by the office of Senator Tina Smith (D-MN), who sent a letter to Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig requesting that they remedy the issue and announcing her intention to introduce corrective legislation.

Federal elected officials have introduced such a measure, called the Revitalizing Underdeveloped Rural Areas and Lands (RURAL) Act. Senator Smith together with Senator Rob Portman (R-OH) introduced the Senate version of the bill, S. 1032, in early April, followed by Representatives Terri Sewell (D-AL) and Adrian Smith (R-NE), who introduced a companion bill, H.R. 2147, in the House a few days later. The RURAL Act would ensure that co-ops, which are many rural communities’ only hope for better connectivity, could take full advantage of federal and state funding for broadband networks.

Addressing Legal Ambiguity

As we explained last year, a tax policy change included in the 2017 Tax Cuts and Jobs Act carelessly put rural co-ops at risk of losing their tax-exempt status if they accepted government funding for broadband projects or disaster relief, among other things. Traditionally, these government grants were excluded from the requirement that electric and telephone cooperatives obtain at least 85 percent of their income from members (often referred to as the member income test) to maintain their tax exemption. The 2017 law threatened this precedent by changing the tax code so that “any contribution by any governmental entity or civic group” is now included in a corporation’s gross income. This has made some co-ops hesitant to apply for programs like the U.S. Department of Agriculture’s ReConnect Pilot Program for fear of jeopardizing their...

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Posted March 5, 2019 by lgonzalez

Brent Christensen, Chief Operating Officer of Christensen Communications, came into our Minneapolis office to sit down and have a chat with Christopher this week for podcast 346. Their interview comes a short time after Christopher and several other Institute for Local Self-Reliance staff took a tour of the Christensen Communications facilities.

Brent has an additional role as President and CEO of the Minnesota Telecom Alliance (MTA) a group that advances...

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Posted February 13, 2019 by lgonzalez

 

Maine’s Department of Economic and Community Development is currently seeking a Director of their Broadband Office. The closing date to apply for the position is February 22, 2019.

Learn more about the position at the State of Maine’s online posting

According to the announcement on the search, the position will: 

[P]rovide leadership and guidance for Statewide broadband deployment in Maine. This position provides direction to the ConnectME Authority Board, manages staff, provides oversight and coordination of grant funding programs, interacts with public and private sector leaders and management, engineers, attorneys, accountants, construction and financial experts, and the public relating to the mission and implementation of ConnectME initiatives.

Some of the Director’s tasks will be:

  • Monitor emerging technologies on national and industry initiatives and trends in broadband; prepare recommendations and position papers; conduct research and analysis to identify best practices toward broadband adoption and improvements.
  • Research new and existing technologies to ensure that all areas of the State have access to optimum service.
  • Through dedicated website and social media channels, explore all opportunities to engage service providers and existing and potential subscribers on the benefits of broadband.
  • Provide guidance and direction to the Office of Broadband Staff and ConnectME Authority Board.

Read more about the role of the Director of Broadband Office and the qualifications for the position on the state posting.

Work in Minnesota

The Dakota Broadband Board is also seeking to fill a leadership role as they look for an Executive Director. The Board asks that interested individuals submit their application materials by 4 p.m. CST on February 28th.

Read the job announcement.

As part of their position:

Duties include Board administration, budgeting & financial administration, marketing of commercial dark fiber, legal & compliance oversight, contracting and contractor management. The position reports...

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Posted January 4, 2019 by lgonzalez

Ever since the term “5G” came on the scene, the big ISPs have dedicated themselves to expanding hype about what the technology will accomplish, especially in rural areas. In a recent NBC News Signal segment, Dasha Burns took a look at rural and urban connectivity, the digital divide, and considered the demands and limitations of 5G.

She provides a simple explanation for why 5G can only have a limited impact in rural areas. She also touches on some of the issues that create parallels between the situation for people in urban areas who might not have access to 5G when it finally arrives. To address the urban component of digital equity, Burns went to Newark, New Jersey, and met with students who, due to economic limitations, rely on public access to the Internet.

Burns visits rural Minnesota to check out RS Fiber and talks with one of the many local people in the agriculture industry, a crop consultant, that needs high-quality connectivity from the broadband co-op. We get a peek inside the RS Fiber headquarters. For more on the rural Minnesota cooperative, download our 2016 report, RS Fiber: Fertile Fields for New Rural Internet Cooperative.

Check out the 5:25 minute video:

Posted December 20, 2018 by Katie Kienbaum

Even if a local government isn’t ready or able to build its own broadband network, there are still ways they can help bring the benefits of better connectivity to their community. Over the past few years, several counties in Minnesota have partnered with local electric and telephone cooperatives to expand high-quality Internet access as an economic development strategy. In many instances, county governments have offered financial support to the local co-ops, in the form of grants and loans, to connect their rural residents with high-quality fiber networks, often supplementing federal subsidies or statewide Minnesota Border-to-Border Broadband Development grants.

Projects Across the State

Minnesota counties have taken a variety of approaches when it comes to helping cooperatives finance broadband deployment projects.

Some, such as Cook County in the far northeastern corner of the state, provided grants to local co-ops. Cook County began its partnership with Arrowhead Electric Cooperative back in 2008 when both entities contributed to a broadband feasibility study. At the time, the county suffered from the worst connectivity in the state, and many people still relied on dial-up. In 2010, Arrowhead was awarded a $16.1 million combined grant and loan from the stimulus-funded Broadband Initiatives Program (BIP) to build a fiber network in Cook County. The county government offered Arrowhead a $4 million grant for the project, funded by the voters’ reauthorization of a 1 percent sales tax that was due to expire. In return, Arrowhead agreed to provide services such as Internet access to county buildings at no cost.

Yet more local governments have opted to loan money to co-ops to expand broadband access in their county. Both Big Stone County and Swift County chose this route after Federated Telephone Cooperative received a $3.92 million...

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Posted November 9, 2018 by Katie Kienbaum

For many rural Americans, the local electric or telephone cooperative is their best hope for finally obtaining modern-day connectivity. With the support of government funding, rural cooperatives have brought electricity, telephone service, and more recently broadband access to some of the most rugged and sparsely populated places in the country.

However, recent tax code changes might prevent co-ops from connecting more rural communities. Cooperatives could potentially lose their tax exempt status if they accept government grants for broadband expansion and disaster recovery — an unintended yet foreseeable consequence of the Republican “Tax Cuts and Jobs Act” passed late last year. In a press release, Senator Tina Smith called attention to the oversight, noting, “This uncertainty has caused cooperatives significant concern and frozen some of their grant applications.”

Who’s Ready for Some Tax Policy?

As nonprofit membership corporations, rural electric and telephone cooperatives are exempted from paying taxes under section 501(c)(12) of the Internal Revenue Code (IRC). To maintain this tax exempt status, cooperatives must derive at least 85 percent of their income from members (e.g., from selling electricity). This is sometimes referred to as the the member income test or the income source test.

Not all sources of non-member income are included when calculating this percentage. Revenue from utility pole rentals, for instance, is exempted. In the past, rural cooperatives also excluded federal and state grants from the member income test, based on assorted rulings from the Internal Revenue Service (one example is Rev. Rul. 93-16, 1993–1 C.B. 26, which held that a federal grant given to an airport should not be considered income for tax purposes). As long as co-ops treated the government funding as a source of capital, not income, they could accept as much grant money as they wanted without the...

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Posted October 4, 2018 by Katie Kienbaum

A few weeks ago, we wrote about one of the community meetings held by the Minnesota Public Utilities Commission (PUC) to address mounting frustrations over poor service from Frontier Communications. Subscribers at the meeting in Wyoming, Minnesota, complained of download speeds as slow as 0.05 Megabits per second (Mbps), outages that lasted for weeks, and unhelpful customer service representatives.

According to Minnesota Public Radio (MPR), the small town of Ceylon, Minnesota, has had to deal with even more insulting mistreatment at the hands of the company. Residents of Ceylon say that Frontier never actually finished installing its lines in the town. Instead, Frontier has left them lying in people’s yards and dangling from trees — for as long as three years, by one account.

Frontier’s “Corporate Indifference”

Internet access and telephone providers like Frontier usually bury cables underground or suspend them on utility poles to keep the infrastructure safe. In Ceylon, it appears that Frontier has taken a more lackadaisical approach, resulting in lines snaking through the grass, tied to trees, and even crossing over a propane tank. MPR notes that some people in the town have taken it upon themselves to move Frontier’s cables out of the way of harm, attaching them to posts and fences for fear of accidentally severing the connection.

Ceylon officials had previously requested that Frontier fix the problem, to no effect. At the PUC hearing in Slayton, Minnesota, City Councilmember John Gibeau said that the incomplete network installation represented Frontier’s “corporate indifference” to serving rural subscribers, MPR reports.

A representative from Frontier said the company would visit Ceylon to verify that the lines belong to them and to remedy the situation. But for now, Gibeau has a warning for Frontier: "You don't do that to my town and think you're going to get away with it."

Whatever the reason for the slipshod work, Frontier can’t blame it on lack of funding. As Bill Coleman and his team from the Blandin Foundation...

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Posted September 14, 2018 by lgonzalez

People in Wyoming, Minnesota, gathered together on September 12th to bend the ear of officials from the state’s Public Utilities Commission (PUC). Ann Treacy from the Blandin Foundation attended the meeting and recorded most of the conversation from the 100 or so frustrated and fed-up folks. The meeting was one of five organized by the PUC after a record number of complaints by incumbent telephone and Internet access provider Frontier.

A Shared Reality

It’s safe to say that “frustration” was the star of the night, as everyone who spoke mentioned how it had consumed their experience with Internet access from Frontier. People who spoke at the meeting included those who worked from home, business owners, parents with families whose kids needed Internet access for homework, and retired folks who just wanted to enjoy a quiet evening streaming a movie.

Most of the people who spoke at the meeting said that they needed to run mobile hotspots or had given up on Frontier’s DSL service and now rely solely on hot spots to avoid the frustration of dealing with terrible service. Several people at the meeting don’t have the option of mobile hotspots because there’s no cell coverage where they live.

In addition to horribly unreliable connectivity, where the only consistency is dropped service, people expressed anger about overpaying for Internet access that was down far too often — even for weeks at a time. When they were able to get online, many people who spoke at the meeting reports horrifically slow speeds and feel they are being “ripped off” because they never reach the “up to” speed that they pay for each month. Once woman has documented her line’s performance and the fastest download speed she has reached is .96 Megabits per second (Mbps); the slowest is .05 Mbps. This same person has had limited success in cajoling Frontier to temporarily lower her bill since 2012.

...

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Posted August 22, 2018 by lgonzalez

In this policy brief, we highlight the gulf between FCC broadband data for Rochester and what’s actually available to residents by examining local competition. Download the policy brief Broadband Competition in the Rochester Region: Reality vs Federal Statistics here.

Rochester Competition: Not All it Appears to Be

The city, home to the world-famous Mayo Clinic, had previously considered building a municipal network, but the idea was dropped, in part because of the incorrect perception that enough competition already exists between Internet service providers. Our analysis and the corresponding maps reveal that broadband competition in the region is more limited than many realize.

The policy brief concludes:

“Overall, Charter and CenturyLink compete for the urban center of Rochester, while the rural areas rely almost exclusively on fixed wireless for broadband service. Even where residents have a choice in broadband, anyone looking for speeds in excess of 40 Mbps will almost certainly have to subscribe to Charter Spectrum. This is why more cities, especially those with municipal electric services, are considering how smart local investments can ensure more consumer choices and a working market for these essential services.”

Shortcomings of FCC Data

As we’ve covered before, the FCC collects data by census block, which incorrectly inflates broadband access and competition data. Internet service providers self-report and describe an entire block as “served” even if they can only connect one address in that census block.

We describe the problems with self-reporting in the policy brief:

“Large, de facto monopoly providers have incentives to overstate their coverage and territory to hide the unreliable and slow nature of their service in many communities. Small providers often have trouble completing the FCC Form 477. . . Larger providers have plenty of staff to handle the form and seem to benefit the most from its flaws, as this data is often used to determine whether government programs should invest additional funds into an area, often by a competitive grant program....

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Posted August 22, 2018 by Katie Kienbaum

It’s no secret that the Federal Communications Commission’s (FCC’s) broadband data is unreliable. Many people, including U.S. Senators, have pointed out how federal data collection methods overstate connectivity across the country. Rochester, Minnesota, is no exception. In this policy brief, we highlight the gulf between FCC broadband data for Rochester and what’s actually available to residents by examining local competition.

Download the policy brief Broadband Competition in the Rochester Region: Reality vs Federal Statistics here.

What’s Going On in Rochester

The city, home to the world-famous Mayo Clinic, had previously considered building a municipal network, but the idea was dropped, in part because of the incorrect perception that enough competition already exists between Internet service providers. Our analysis and the corresponding maps reveal that broadband competition in the region is more limited than many realize.

Shortcomings of FCC Data

As we’ve covered before, the FCC collects data by census block, which incorrectly inflates broadband access and competition data. Internet service providers self-report and describe an entire block as “served” even if they can only connect one address in that census block.

We describe the problems with self-reporting in the policy brief:

“Large, de facto monopoly providers have incentives to overstate their coverage and territory to hide the unreliable and slow nature of their service in many communities. Small providers often have trouble completing the FCC Form 477. . . Larger providers have plenty of staff to handle the form and seem to benefit the most from its flaws, as this data is often used to determine whether government programs should invest additional funds into an area, often by a competitive grant program. Areas that appear to be well covered will not result in more investment, leaving the incumbent providers without fear of competition.”

In our analysis, we discovered evidence that at least one provider in Rochester had...

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