Telecom industry eyes federal dollars to expand broadband
By JILL SCHRAMM, Staff Writer jschramm@minotdailynews.comArea telecommunications cooperatives are seeking federal help to make broadband more accessible in rural, northwestern North Dakota.
As part of an economic stimulus package, Congress allocated $7.2 billion for broadband last spring. The money is being distributed through a massive, complicated program administered by the National Telecommunications and Information Administration in the Department of Commerce and Department of Agriculture's Rural Utilities Service.
Area telecommunications cooperatives have submitted applications in the first of two grant rounds, but it is unknown just when any awards will be made. About 2,200 were received. A comment period on applications closes Oct. 28.
Federal grant officials will decide whether or how much of each request is funded, and once that decision is made, successful applicants have a small window of time to begin projects.
Steve Lysne, general manager with SRT Communications, said if money is awarded, SRT would be ready to go immediately with engineering and right-of-way acquisition. Construction could start as soon as weather permits in 2010.
"We would do as much as we could with what they award us," Lysne said.
SRT submitted applications to bring fiber connection to about 7,000 rural subscribers and to build out its wireless broadband in rural areas. Each application seeks about $10 million.
Lysne said the projects would benefit areas where it is costly to provide broadband because subscribers are remote or widely scattered. No stimulus money is sought for any work in Minot, although SRT plans to spend other dollars to deploy wireless broadband in Minot, Lysne said.
SRT already is installing fiber in its service area as copper cables age and need replacement. SRT currently has about 500 subscribers connected using fiber, Lysne said. Fiber projects have been done or are ongoing in South Prairie and rural areas around Lansford, Velva and Minot.
Northwest Communications Cooperative in Ray has submitted a $10.5 million application to bring fiber to homes in five of its rural exchanges that aren't well served by other broadband offerings.
This year the cooperative spent $2.5 million on a project to bring fiber to about 250 subscribers in Epping, rural Epping and a couple of nearby developments. Previously, the cooperative completed a pilot project to bring fiber to about 20 customers in the Wildrose area.
Fiber is the only way to move forward with broadband service in rural areas, said Dwight Schmitt, manager of Northwest Communications Cooperative. By installing fiber, which can handle any amount of bandwidth, it will "future-proof" the areas going forward, he said.
Reservation Telephone Cooperative in Parshall is seeking federal dollars to bring fiber to homes within its service area.
Royce Aslakson, manager of Reservation Telephone, said the final decision by the federal agencies will come down to determining where needs are greatest, he said.
"We have many areas where we think there's a great need," Aslakson said.
Midcontinent Communications, which serves Minot and other area communities, didn't apply for stimulus dollars because of concern about the rules, said W. Tom Simmons, senior vice president of public policy with the company, Sioux Falls, S.D. The program requires that the government hold a lien on any assets acquired with the funds.
"We are a private company and can't be in a position where there's a lien on any of our assets. That puts us in a negative position with the bankers that we rely on to provide financing for all the other things we do," Simmons said.
A second round of funding is expected in about six months. Midcontinent is working through trade associations to persuade the government to alter the rules relating to liens. If the change happens, Midcontinent would consider applying, Simmons said.
Midstate Telephone in Stanley also has not applied for assistance. The company serves much of Mountrail County, including Stanley, along with the Beach and Medora areas and Portal.
Jim Wilhelmi, president, said Midstate Telephone is building out with fiber without federal assistance and expects to be 100 percent complete in two years. The paperwork to apply for federal help is so complicated that it isn't worth it, he said.
David Crothers, president of the North Dakota Association of Telecommunication Cooperatives, Mandan, said North Dakota's telecommunications industry already has been doing a good job of installing high-speed broadband. North Dakota's telecommunications industry invested $106 million in 2008 on infrastructure and will spent $107 million in 2009, he said.
The industry has brought broadband to 290 communities, including towns as small as 57 people, he said.
"The problem that we have in North Dakota is that it's phenomenally expensive to take broadband out to the farthest reaches," Crothers said.
One company calculated the cost of providing broadband to 77 percent of its subscribers at $25 million, he said. Providing broadband to the other 23 percent would cost $66 million.
