Almost six years ago, we told readers about Ottawa, Kansas, where the community of around 13,000 people had invested in publicly owned fiber optic connectivity for local businesses. We recently touched base with IT Director Paul Sommer, who updated us on the progress of their broadband utility and how it has impacted the community.

Steady as it Grows

When we first met Ottawa, they had worked with the local school district and Franklin County to capitalize on existing fiber infrastructure and expand to more locations. Local leaders had learned from Ottawa businesses that the best options available from incumbent AT&T were T1 lines for approximately $600. Higher capacity connections were scarce and financially out of reach for local establishments, and AT&T could not be convinced to upgrade their infrastructure. As Bigham put it, AT&T was "milking the cow."

Once the city, school district, and Franklin County established a partnership, Ottawa began to expand fiber to other municipal facilities and businesses as requested. Sommers, who has taken over as IT Director, says that now all 10 city buildings are on the network. In addition to an industrial park on the original infrastructure on the north end of town, the network now reaches an industrial park to the south.

The electric utility has trained their own staff rather than hiring external fiber deployment personnel. In addition to enriching skills, their employees are able to respond quickly if there are downed cables or other maintenance issues. Sommers recalls an instance when a car, which had caught fire, sent shrapnel flying into the air. By a twist of fate, one piece severed the fiber optic cable hanging some distance away. His team was able to rehang and splice the cable that same day and get the subscriber back online.

By using electric utility staff, Ottawa has reduced the cost of their incremental build over the years. They typically budget around $100,000 each year for expansion of the network, have never gone over, and often don’t spend the entire allotment. Sommers says that, since they own the utility poles in town, have necessary personnel on hand, and equipment at the ready, unnecessary bureaucracy doesn’t slow down maintenance, repairs, or expansion efforts.

Bursting at the Streams

In  November 2017 we reported that Mount Washington, a town of roughly 200 people in southwestern Massachusetts, had deployed its own infrastructure for broadband service. More than two years after the initial setup, a recent article in Government Technology on municipal broadband in Massachusetts takes us back to the tiny town. We learn how fast affordable, reliable publicly owned Internet infrastructure has brought positive transformation to the citizens of Mount Washington, located in the Taconic Mountains.

You Could Barely Use It

The article covers several layers of how high-speed Internet access has provided a jumpstart for the local economy. The small town with its remote landscape and inherent challenges had only two options before broadband: dial-up or a long-distance Wi-Fi service, which provided download speeds of less than 1 Mbps. 

“You could barely use Wi-Fi calling, and it was impossible to stream anything,” said Brian Tobin, Mount Washington select board member. “You could send emails, and you could do Internet searches that just took a long time.”

In spite of the fact that they're the third smallest town in the state, the Mount Washington Broadband Network now offers fiber optic infrastructure and contracts with an Internet access provider to offer speeds which surpasses those in some of the state's much larger communities. Funding for the network is part of a larger state plan to bring broadband to rural towns in need of Internet service. The Government Technology article notes that: 

“Mount Washington benefited from the Last Mile Program, which provided more than $35 million in grants for rural broadband. The program is run by the Massachusetts Broadband Institute (MBI), which is part of the state agency Massachusetts Technology Collaborative (MassTech).”

As the USDA continues to award federal ReConnect funds for rural connectivity, we're glad to see that communities in West Virginia are not being ignored. Most recently, the Harrison Rural Electrification Association (HREA) announced that they will dedicate ReConnect grant funding of approximately $18.75 million to deploy Fiber-to-the-Home (FTTH) in rural sections of their service area.

Combining Funding and Collaboration

The project will bring more than 6,300 households high-quality connectivity along with five educational facilities and another community facility. The deployment will cover approximately 354 square miles within Harrison, Lewis, Upshur, Barbour, and Doddridge counties. Once completed, the project will provide better connectivity to around 16,000 residents.

In total, the project will cost an estimated $25 million and HREA will use a $6.2 million loan from CoBank to cover the difference. They plan to complete the project within 3 1/2 years and cooperative leadership intend to have the project ready for bids by the end of February.

Rather than offering Internet access directly to members, the cooperative will work with Prodigi Fiber, a private sector ISP that works exclusively in West Virginia and only with FTTH connectivity. The co-op will lease the infrastructure to Prodigi and dedicate the proceeds from the lease toward the CoBank loan payments.

Early Excitement

On the HREA Facebook page, locals have expressed their excitement at the prospect of better connectivity. Some note the need for better reliability while others are looking for better speeds or alternatives to current options. 

Lenny W.: Was excited to get the email. This is great for the rural areas of this county. Are there any maps or projections on what areas are going to start and when? I’ll sign up for whatever is $75-$100 per month.

Ken C.: Whoooohoooo

This month, both Frontier Communications and CenturyLink put the FCC on notice that neither company expected to meet deployment milestones related to Connect America Fund Phase II (CAF II). In total, rural households in 23 states will have to wait for connectivity that the two large companies were tasked with developing using federal subsidies.

Not-So-Great Expectations

When Frontier and CenturyLink accepted the funding in 2015, they agreed to provide deployment of Internet access speed of at least 10 Megabits per second (Mbps) download and 1 Mbps upload. By the end of 2018, they agreed to have at least 60 percent of the premises within each state connected and 80 percent of the premises connected by the end of 2019.

In their letter to the FCC, Frontier claims that of the contracted 774,000+ locations in 29 states waiting for connectivity through the CAF II program, they have deployed to around 596,000 in CAF II census blocks. They calculate that these deployments come to at least 70 percent in each state where they've accepted funding. The company also says that in 13 states they "may not have met" the 80 percent milestone.

The failure was a continuation of last year, when they reported that they had met the 60 percent milestone in 27 states, but had failed to make the grade in New Mexico and Nebraska.

Frontier accepted more than $283 million in CAF II funding soon after the FCC redefined broadband to 25 Mbps / 3 Mbps. The CAF II program had also increased minimum connections from 4 Mbps / 1 Mbps to 10 Mbps / 1 Mbps, which seemed outdated almost from the beginning. 

Iowa has multiple rural communities where large national Internet access companies have not invested in high-quality Internet infrastructure. Iowans have adopted a self-reliant approach, however, and one look at the community networks map shows that publicly owned networks pepper the state. Osage, in the north-central part of Iowa, has offered Internet access to the community since 2001. In a recent announcement from the U.S.D.A, we learned that Osage Municipal Utilities (OMU) will receive almost $400,000 to continue their efforts to connect more premises in rural Mitchell County and connect people with fiber Internet access.

According to the announcement:

Osage Municipal Utilities (OMU) in northern Iowa will use a $397,749 ReConnect Program grant to provide broadband service to underserved households, farms and businesses in Mitchell County. This will be accomplished by directly accessing a fiber trunk line that runs through the heart of Mitchell, Iowa, and up to the border of Minnesota, allowing OMU to increase its service area bandwidth. The funded service area includes 151 households spread over 20 square miles.

We wrote about Osage's broadband and solar projects and interviewed OSU General Manager Josh Byrnes back in 2016. Listen to the interview here:

Over the last few months, the U.S. Department of Agriculture (USDA) has released a steady stream of awardee announcements for the first round of its ReConnect broadband program. Among the recently announced recipients is Valley Telecommunications Cooperative Association in Flandreau, South Dakota. The telephone co-op will receive a grant of about $9.5 million to connect nearly two thousand underserved households, businesses, and farms to it’s existing fiber network.

The first round of ReConnect funding made $600 million available in grants and loans to Internet service providers to expand broadband access across the country. Many of the round one awards have gone to locally-run, community-owned providers, like Valley Telecommunications, to build fiber networks. This includes grants to Forked Deer Electric Cooperative; Orangeburg County, South Carolina; and Star Telephone Membership Corporation, as well as awards to two economic development agencies in Tyler and Wetzel Counties, West Virginia.

Valley Reaches a Peak

Members of Valley Telecommunications Co-op can already subscribe to gigabit speed fiber connectivity. From 2008 to 2016, the co-op replaced all of its old copper lines with a modern fiber optic network. “One hundred percent of our members in north central South Dakota can receive gigabit broadband services via that fiber network,” shared CEO and General Manager Jeff Symens at a press conference announcing the ReConnect grant.

Soon after completing the fiber buildout, the co-op decided to expand into nearby communities such as Volga and De Smet, operating under the name Valley FiberCom. However, this still left some homes and businesses outside of the towns unconnected. Symens explained:

Farmers depend on Internet connectivity like any other businesses for daily office tasks such as record keeping, reporting, banking, and marketing. This dependency stretches further as daily farming productivity depend on GPS-based applications that enable real-time data collection giving accurate information on soil fertility, field mapping, and other farm-related tasks. An October 2019 report from the United Soybean Board (USB) describes how poor connectivity is striking at the heart of America’s agricultural industry.

Profitability and Sustainability: Threatened 

The report, titled Rural Broadband and the American Farmer [PDF]  reveals that 60 percent of U.S. farmers and ranchers do not have adequate Internet connectivity to run their business and 78 percent do not have a choice in Internet Service Providers (ISPs). The USB study touches on how poor Internet connectivity in rural parts of the country has negatively impacted profitability and sustainability in farming.

Among 2,000 farmers surveyed by the USB, 59 percent of  farmers plan to incorporate more data onto their system and 28 percent are considering more data usage. Most also want to use high-tech and data transfer applications but the impact of poor connectivity and unreliable Internet service does not allow them to do so. Michael H., a soybean farmer in south-central Louisiana said that, “Without the right support network, we can’t even consider taking advantage of getting real-time information from one piece of equipment to another.” Up to 33 percent of farmers said poor connectivity has affected their equipment purchases.

The U.S. Department of Agriculture Economic Research Service reports that farming productivity contributes nearly $133 billion to the U.S. gross domestic product (GDP) but lack of connectivity has heavily impacted farmers to contribute only $80 billion. 

Arkansas soybean, cotton, and corn farmer Vonda K. explained:

The federal government is about to spend more than $120 million on subsidies that, rather than improving rural connectivity, will make tens of thousands of families worse off.

These funds are part of a 2018 federal program intended to expand rural broadband access called the Connect America Fund phase II (CAF II) reverse auction. The program, in which Internet access providers competed for subsidies, will distribute nearly $1.5 billion over the next 10 years to connect unserved rural residents. But in some communities, the auction may do more to widen the digital divide than diminish it.

While some winning bidders committed to building out high-speed fiber optic networks, satellite company Viasat will rake in more than $120 million in subsidies to continue providing inadequate geostationary satellite connectivity to rural households that are clamoring for something better. Not only does satellite Internet access offer slower speeds, greater latency, and less reliability for a higher cost compared to other technologies, but Viasat’s subsidies are making those areas ineligible for future broadband funds, deterring other providers from building truly high-quality networks. Instead of bridging the digital divide, the process will relegate certain communities to satellite Internet access while others receive ultra-fast fiber and do nothing more than deepen the fissure.

Mo’ Money . . .

The Connect America Fund (CAF) is a multi-phase subsidy program that supports improved connectivity in rural, high-cost areas as part of the Federal Communications Commission's (FCC’s) Universal Service Fund. The most recent phase of the program, the CAF phase II reverse auction, auctioned off regions to providers using a complicated formula that prioritized bids for low subsidy amounts and high-quality service.

Previous rounds of CAF mainly subsidized the large incumbents, such as AT&T and CenturyLink, but for the reverse auction, the FCC opened participation to other entities, including non-traditional providers like electric cooperatives. Eligible areas included rural locations where the incumbents had previously refused subsidies (and the accompanying commitment to expand Internet access).