By STEVE ALEXANDER, Star Tribune
Last update: April 11, 2010 - 3:29 PM
Apr 11, 2010
Hoping to hit the jackpot, Minnesota counties, schools and telephone companies are dreaming big as they seek some of the billions the federal government will give out for high-speed Internet projects by September.
In Little Falls, Minn., public schools and two telephone companies want to build a fiber-optic network costing more than $50 million linking schools, hospitals, cities, counties and consumers over 1,600 square miles of north central Minnesota. The request exceeds the largest Minnesota broadband award in the first round of grants this spring, $43.5 million to expand service in the northeast part of the state. All other state awards were under $7 million each.
Ramsey County also is aiming high, proposing a $32.9 million fiber-optic network with government and public Internet cables buried in the ground side by side. While its scope is less than what some St. Paul leaders hoped -- a city committee recommended superfast fiber-to-the-home connections that are not part of the bid -- the project is nonetheless unusual. It would create two unconnected networks to prevent tampering with the government's system.
The money for these and other broadband projects around the nation would come from $7.2 billion in federal stimulus funds to promote broadband Internet service. About a third of that money remains available for the second round of proposals being submitted now.
Bigger seems to be better
Applicants like Little Falls and Ramsey County are asking for big grants in the second round of stimulus awards in the belief that federal rules are now in their favor. Absent this time are requirements that federal money be spent in areas with little or no high-speed service.
Instead, analysts and applicants say the government is giving priority to public-private partnerships that combine a government-run fiber "backbone" network with private Internet service for local businesses and consumers. The chief requirement is that the networks be open to all potential users.
"The government is looking for substantial projects that make a difference to the community as a whole," said James Farstad, president of the consulting firm Farstad.US.
Farstad, whose Minneapolis firm worked on the Little Falls and Ramsey County projects, said public-private partnerships offer "the biggest bang for the buck, both for the public and the taxpayers." As a result of the new rules, there are fewer broadband applicants in round two, but they are asking for more money per project, he said.
For the Little Falls group, it's all about persistence. Its project was turned down in the first round of broadband awards, and so its plan has been scaled back from $63 million. Kay Campbell, executive director of Mid-State Education District 6979 in Little Falls, said the project still would double the reach of the school district's network to 300 linear miles, enabling it to serve 140 institutions in five counties.
For consumers, the Little Falls plan promises Internet connections five to 20 times faster than are available now, at a cost of $30 to $60 a month, said Tony Gebhard, CEO of Sytek Communications of Upsala, Minn., which has teamed with Nextera Communications of Baxter, Minn., on the project. The schools and the companies are separately seeking stimulus money, totaling more than $50 million.
Ramsey County's side-by-side buried cables would add security at little extra cost, said Mary Mahoney, Ramsey County chief information officer. The total project cost is $32.9 million, with the county's private partner, Minnesota Fiber Exchange of Stillwater, contributing $9.9 million. Network speeds would vary from 1 to 10 gigabits per second.
St. Paul consumers would have to wait for the benefits, because initially Minnesota Fiber Exchange plans to offer high-speed Internet services only to businesses, said John Schultz, the president. Other Internet service providers are expected to buy service on the network later, and probably will offer residential customers wireless service instead of fast fiber-to-the-home, he said.
But Mahoney says St. Paul's fiber-to-the-home advocates shouldn't be disappointed.
"This is not as elaborate on the community side as the St. Paul city committee recommended," Mahoney said. "But I say this is a step toward getting that broader fiber network."
Other projects seek funds
Other unusual projects also are seeking federal broadband funds.
The Minneapolis public schools are seeking $14.4 million to provide 13,000 seventh- to 12th-grade students with school-owned, Wi-Fi-equipped laptops so they can get Internet access at home. The plan relies on a free website and discounted Internet access subscriptions from US Internet of Minnetonka, which operates the Minneapolis Wi-Fi network. The USI website has become a storehouse of student assignments, reference materials and student progress reports, and the laptops are designed to help students take advantage of it.
"Laptops for students initiatives always face funding issues," said Coleen Kosloski, executive director of technology for the Minneapolis Public Schools. "The broadband stimulus is a unique opportunity for us to go beyond supplying laptops to just one or two schools. And because we have a city Wi-Fi network, we can try to do broadband on a large scale."
Even Denver-based telephone company Qwest Communications, which serves 14 states including Minnesota, is seeking broadband stimulus funds. It applied for $350 million in stimulus funds for a $467 million project it says would bring broadband speeds of 12 million to 40 million bits per second to rural communities. About $54.5 million of that money would be spent in Minnesota, Qwest says.
While many organizations are seeking the federal stimulus funds, others are going it alone. Velocity Telephone of Golden Valley raised private funds to build a $750,000 fiber-optic network to serve a 1-square-mile industrial park in Eagan. If the return on investment is sufficient, Velocity plans to raise private funds to build a $20 million high-speed fiber-optic network in Eagan to serve businesses and consumers, said Jim Hickle, the president.
"I don't think we could have gotten any broadband stimulus money," Hickle said. "Why waste time on something that's never going to happen?"
Steve Alexander • 612-673-4553
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