A bill making its way through the Colorado General Assembly is tackling one of the tools that big incumbent ISPs use to secure their positions as monopoly Internet access providers - the right of first refusal. If HB 1099 passes, and other states see the savvy behind this approach, community leaders and advocates for a competitive broadband market will be able to put a chink in the monopoly armor.

Update: HB 1099 passed the Legislature and the Governor signed the bill into law on April 2nd, 2018. Yay!

A Familiar Story

ISP entrepreneurs, cooperatives that want to offer high-quality Internet access, and entities planning publicly owned projects know the story. Grants are available, usually for an unserved or underserved area that the incumbent DSL provider has ignored. Said entity invests the time and money into developing a plan and applying for the grant, feeling good about the fact that they will likely be able to serve this community that no one else seems to want to serve. 

They apply for the grant, may even receive a preliminary approval, BUT then the incumbent ISP exercises its right of first refusal, which throws a very big wrench into the plans of the ISP entrepreneur, cooperative, or entity.

In June 2017, we interviewed Doug Seacat from Clearnetworx and Deeply Digital in Colorado who told us the story of how his company had applied for and won grant funding through the Colorado Broadband Fund to develop fiber Internet network infrastructure near Ridgway. CenturyLink exercised its right of first refusal, which meant that unless Seacat could change the mind of the board that considered the appeal, CenturyLink would get the funding rather than Clearnetworx.

Federal broadband grant programs start accepting applications in the spring. 2018 is an especially exciting year because the Connect America Fund (CAF) II Auction is finally open. This program has been years in the making, but it still has its flaws. Learn more about the federal grant opportunities and how we can improve federal broadband data below.

Due March 30th, 2018 -- CAF II Auction

At noon ET on March 19, 2018, the much anticipated CAF II Auction opened. Application are due by 6pm ET on March 30th, 2018.  

The Federal Communications Commission (FCC) will distribute $2 billion to Internet Service Providers (ISPs) to build new Internet infrastructure in rural areas. This auction is the latest program of the larger CAF program that started offering funds in 2012. In the past, most CAF funds have gone to the largest incumbent ISPs, such as Frontier or Verizon. This auction is a chance for small rural ISPs to win funding for their communities through innovative projects.

Watch the FCC’s Application Process Workshop Video and then explore the map of eligible grant areas.

Due May 14th, 2018 -- Community Connect Grants

The U.S. Department of Agriculture (USDA) also announced that the Community Connect Grant program is open. Webinar presentations on the process will be available on April 5th and April 10th. Applications are accepted through May 14th.

Community Connect Grants are each $100,000 to $3 million and focus on improving rural broadband infrastructure. Areas are eligible if they do not have access to speeds of 10 Mbps (download) and 1 Mbps (upload). Nonprofits, for-profits, federally-recognized tribes, state governments, and local governments can propose projects. Winners must match 15% of the grant and the program has a budget of about $30 million.

Sign up for a webinar on how to apply for the Community Connect Grants: 

In southern California, an electric cooperative provides high-speed Internet service and continues to expand, meeting the needs of its 4,000 rural members. With community support, Anza Electric has navigated paperwork, construction delays, and more challenges. In May 2018, the California Public Utilities Commission will decide whether or not to award a grant of $2.2 million for Anza Electric’s fiber network project, Connect Anza.

We spoke with Anza Electric’s General Manager Kevin Short to learn more about the grant proposal and the project timeline. In July 2017, we reported that Anza Electric had submitted the grant application for a rural area south of Mount Jacinto in Riverside County. Short provided us with an update and more information on why this area was not part of the co-op’s first Internet access project.

2018 Grant Application

This area in Riverside County follows scenic highway 74 and includes the communities of Pinyon Pines, Garner Valley, and Mountain Center. The project will provide Fiber-to-the-Home (FTTH) Internet service to the rural co-op members. The co-op will also provide free high-speed Internet access to local fire stations and the Ronald McDonald camp for children with cancer. 

As an increasing number of rural cooperatives make the decision to offer high-quality connectivity in their service areas, communities where local telephone and electric cooperatives already provide Fiber-to-the-Home (FTTH) are seeing benefits today. Paul Bunyan Communications, offering broadband in Minnesota’s northwest region, has lured a new employer who will bring at least 150 new jobs to the area.

Nonprofit Building In The North

On March 16th, the nonprofit Delta Dental announced that it has decided to invest in a new operations and technology center in Bemidji, located about four hours and 200 miles north of the Twin Cities. The seat of Beltrami County, Bemidji’s population is around 14,300 and the community is the largest place for commerce between Duluth and Grand Forks, North Dakota. The Bemidji area is also home to three Native American Reservations and rests on the shore of Lake Bemidji. Several national and state parks and forests, along with a recreation area, attract tourists looking to escape the Twin Cities for more natural surroundings.

Paul Bunyan Communications started in Bemidji as the Paul Bunyan Telephone Cooperative when a group of local citizens organized as a cooperative after purchasing a small private telephone system and another municipal telephone system in a nearby town. After expanding over the years and taking the initiative to offer Internet access, cellular service, video, and several other services, the entity has shifted to become Paul Bunyan Communications in 2010.

The cooperative has been expanding the FTTH network ever since as The GigaZone. It’s received grants from the Minnesota Border-to-Border Broadband Program to help fund the expansions. As of December 2017, GigaZone connections reached more than 29,400 premises and covered more than 5,000 square miles in Beltrami County, also entering five additional counties.

For the past seven months, SEMO Electric Cooperative has been working on phase one of construction of a new fiber optic network in southeast Missouri. They recently announced that subscribers are hooked up and taking advantage of Fiber-to-the-Home in rural Scott County and in the towns of Miner, Advance, and Bloomfield.

A Necessity In Society

This is the first of five phases of a $40 million project that the cooperative decided to pursue in 2017. The co-op board saw that providing high-quality Internet access to was filling a demand that incumbents are not meeting, locals want, and assists the community. Homeowners, schools, and local businesses need broadband. Loyd Rice, the administrator of engineering services for SEMO Electric:

“Now we get to build out something that has become a necessity in society. The ability to have a broadband service that is effective now changes the whole quality of life for those folks. It’s definitely a necessity at schools. You can work from home.”

Like other electric cooperatives that have found value in offering broadband service, SEMO has certain advantages in both deployment and operations. Rice noted that they're finding that cost to construct are lower than expected because they’re able to build along existing infrastructure. “And so six seven months into now, we’re probably half to three-fourths the way through our first phase of the actual build,” he told CBS 12 KFVS.

Keeping Locals Updated

As they deploy GoSEMO Fiber, the cooperative provides video updates on its YouTube Channel, the GoSEMO website, and on FaceBook and Twitter. In addition to messages that provide updates on the progress of deployment, staff provides information on equipment. The videos are short and to the point. Here’s the latest, posted on March 11th, 2018:

On May 8th, voters in Sharon Township, Michigan, will decide whether or not they want to pursue an initiative to invest in a publicly owned fiber optic network. People in the community of less than 2,000 people don’t expect the national ISPs to bring them the connectivity they need, so they will decide if they should take another approach to connect every one with high-quality Internet access.

Like Nearby Lyndon

Sharon Township residents and businesses find themselves in the same type of situation Lyndon Township faced before they decided to take action to develop a network. There is limited wired Internet access in the community, but it’s almost always slow DSL from Frontier or AT&T. Many people must rely on expensive and unreliable satellite for service. Comcast also claims to have a small presence in Sharon Township.

When township supervisor Peter Psarouthakis tried to connect with representatives from incumbents to talk about improving services, he couldn’t reach anyone who could make decisions. Next, community leaders asked smaller companies to serve their areas, but "They told us they have no plans to operate in our township because we don't have enough people, and the return on investment isn't going to be there for them.”

Pressing On

When residents and business owners completed a survey in 2013 as the community considered what route to take, 70 percent of respondents said that their current ISP did not meet their needs; 95 percent expressed an interest in alternative choices for Internet access. Since then, community leaders have hired a consultant to develop a feasibility study and Sharon Broadband Yes, a grassroots group advocating for a fiber network, has formed to educate the public.

Senator Janice Bowling has long been a champion for rural broadband in Tennessee. On March 6th, her bill SB 1045 came before the Tennessee Senate Commerce and Labor Committee and the members chose not to advance the bill. Once again, big telephone and cable company interests win out over the needs of rural Tennesseans.

Download SB 1045 here.

Information Session 

Sen. Bowling presented information about the bill at a February 27th meeting of the committee. She introduced SB 1045 last year and it was added and removed from committee hearing schedules several times; HB 1410, the companion House bill from Rep. Weaver, encountered similar treatment. SB 1045 would allow municipal networks and cooperatives to provide broadband service beyond their service areas. Communities that don’t have municipal networks, will regain local authority to invest in Internet infrastructure.

Explaining The Need

In her February 27th presentation, Sen. Bowling described how rural areas in the state are crippled in various ways by the lack of high-quality connectivity. She provided a map that visualizes the disparities between rural areas, communities with fiber optic networks, and urban areas.

She described the need for fiber for economic development:

In rural Tennessee, if we have what is called an industrial park, and we have electricity…you have running water, you have some paved roads, but if you do not have access to fiber at this point, what you have is an electrified cow pasture with running water and walking trails. It is not an industrial park.