Background

A Pennsylvania Local Development District, Southern Alleghenies Planning & Development Commission (SAP&DC), formed Alleghenies Broadband Inc., a non-profit organization, to develop broadband infrastructure that ISPs can lease to provide last mile broadband service. Alleghenies Broadband Inc., led by SAP&DC Director of Community and Economic Development Brandon Carson, leverages state and federal funding awards to make capital investments in middle-mile infrastructure, removing a majority of the risk associated with expanding service to rural areas. Alleghenies Broadband Inc. serves as a model for Local Development Districts to help ISPs expand service by making investments in infrastructure that ISPs cannot justify with a profitable business model.

Project Description

• A SAP&DC-managed project to develop broadband infrastructure faced major delays due to Pennsylvania regulations that restrict Local Development Districts ownership of utilities.
• SAP&DC formed Alleghenies Broadband Inc. as a vehicle that can apply for state/federal awards, build and lease middle-mile infrastructure to private ISPs that offer last mile service, and build last mile infrastructure and even offer broadband service when necessary.
• Alleghenies Broadband Inc.’s partnerships with ISPs lease access and future rights to broadband infrastructure in exchange for revenue sharing agreements that reimburse ABI over the useful life-expectancy of the broadband infrastructure.

The 2018 Alleghenies Ahead strategic plan identified broadband development as a regional priority for the six-county Southern Alleghenies Planning & Development Commission (SAP&DC) region. The Regional Broadband Taskforce formed by SAP&DC included commissioners and relevant county officials, school and hospital administrators, and representatives of incumbent Internet Service Providers (ISP).

The Taskforce partnered with a Blacksburg, VA-based broadband consulting firm, Design 9, to develop a strategic plan that inventoried broadband assets and mapped data on broadband demand. The study found that FCC data painted an inaccurate picture of the region’s broadband access, with major disparities between rural and urban parts of counties. This study outlined the role of a regional organization that would partner with ISPs to provide service and was able to apply for government funds, develop and potentially own infrastructure.

SAP&DC utilized this model to obtain a $1.5 million EDA/ARC award to connect wired broadband to industrial parks in Somerset County. However, SAP&DC faced a major regulatory hurdle. Pennsylvania Public Utilities Code 2004 Act 183[1] mandates that government entities, including Local Development Districts, are required to provide incumbent ISPs with right of refusal in each service area before development. SAP&DC had to offer each ISP the opportunity to develop and offer 25/3 Mbps broadband service in each incumbent service area, delaying the project by months.

In response, SAP&DC formed Alleghenies Broadband Incorporated (ABI), a 501 c3 non-profit organization that can apply for state/federal awards, build and lease middle-mile infrastructure to private ISPs that offer last mile service, and build last mile infrastructure and even offer broadband service when necessary. By leveraging public funding sources to make capital investments that can be used to extend broadband service to rural areas, ABI enables ISPs to provide service in low-density areas with a profitable business model.

ABI enters into public-private partnerships (p3s) with ISPs, where ISPs gain exclusive rights to provide last mile broadband to a service area in exchange for revenue sharing to recover ABI’s investment over the equipment-life. In 2020, ABI received a $250,000 ARC grant to install several fixed wireless broadband towers. ABI is partnering with a private ISP to offer fixed wireless service at speeds of 100 Mbps download to 375 customers at a price of $55-$75 a month by October 2021. Although ABI does not plan on directly offering broadband service, it has registered a Competitive Access Application with the Pennsylvania Utilities Commission (CAPT). The CAPT allows ABI to directly provide utilities to consumers in the SAP&DC region and adjacent counties and could be scaled state-wide.

Best Practices

Engage ISPs early and often. SAP&DC formed a successful partnership with several local ISPs by including them in the initial formation of the task force. When communities plan without ISPs, ISPs view communities as a competitor and are more likely to undertake legal action. Clearly state your mission to ISPs and help them understand your goal is increased broadband development, not to compete with them as a service-provider. Let ISPs know your mission is to make capital investments that enable them to extend service to rural communities.

Understand how regulations impact each partner. SAP&DC faced a significant delay to a broadband development project because of Pennsylvania statutes governing public organizations. By forming a non-profit organization exempt from these regulations to deploy broadband, SAP&DC avoided these statutes and can leverage federal funds to develop broadband infrastructure leased by private ISPs, who are un-eligible to apply for some government funding opportunities. State regulations that limit one partner might provide an opportunity for another or new partner to contribute to any efforts.

[1] https://www.legis.state.pa.us/cfdocs/legis/li/uconsCheck.cfm?yr=2004&sessInd=0&act=183

Read the Full Case Study

Alleghenies Broadband Incorporated Case Study

Background

Buckeye Hills Regional Council, a council of governments located in southeastern Ohio, has been working to move its broadband initiative forward for more than two years. In 2019, Buckeye Hills partnered with Ohio University and the Athens County Economic Development Council to perform a broadband feasibility study across eight rural counties in southeastern Ohio. Their team found that 75% of their area had insufficient broadband access and 80% to 90% of rural areas had no access to broadband services at all, an indication that FCC 477 coverage data may overstate coverage in some areas by a magnitude of 13:1.[1]

A subsequent mapping study conducted in 2020-21 by Reid Consulting Group under contract with BHRC[2] determined that 83% of the populated land and 44% of households in the 8 county region are unable to obtain the FCC minimum of 25/3 Mbps, with the majority of unserved territory below 10/1 Mbps. Coverage ratings were based on statewide Ookla Speedtest Intelligence® data licensed by InnovateOhio for the months of February 2020 through May 2021. This data included over 9 million crowd-sourced internet speed tests from nearly half a million discrete locations. Where possible, areas with no Ookla data were assigned an extrapolated rating based on comparative analysis of population density, FCC Form 477 data, and RDOF Phase 1 auction award maps. Extrapolation is effective at low population densities but becomes less accurate as density increases.

Buckeye Hills’ experience evaluating the state of their region’s broadband connectivity can help inform other LLDs about the challenges they are likely to face when conducting their own feasibility studies and increase awareness about viable solutions to overcome those challenges.

Project Description

• Conducting a community asset inventory is a vital piece of a broadband feasibility study, but not all desired information will be readily available. Developing an accurate understanding may require multiple data sources.
• Combining local address data with market penetration from completed projects in similar areas may be utilized to project likely market penetration for the current project.
• Digital inclusion programming is important to promote equitable access, but may be counterproductive if approached too early.
• Cost and unpredictability make ‘make ready’ costs associated with broadband deployment a major obstacle.

Evaluate the Current State of Broadband Development

An integral part of performing a feasibility study is conducting an asset inventory to determine the community’s existing broadband capacity. This process entails collecting information on where broadband is and is not available in the community and identifying pre-existing assets that may be leveraged to facilitate future broadband deployment. In this document we often refer to this stage of the feasibility study as evaluating current state of the community’s broadband supply. In Buckeye Hills experience, information on vertical assets and government properties is often readily available. However, locating pre-existing privately-owned fiber optic cable is often not possible due to the data’s proprietary nature.

In addition to accurately mapping current broadband supply, feasibility studies should also attempt to gauge the community’s desire for enhanced broadband connectivity and their willingness to pay for the service; the current state of the community’s broadband demand. While many communities evaluate the future demand of broadband via community surveys, Buckeye Hills has found that likely market penetration can be accurately extrapolated by combining address and business data for the area in question with market penetration data from previous deployments done in areas with similar socioeconomic characteristics. Tom Reid, a broadband consultant working with Buckeye Hills, indicated that examining the data from deployments by electric cooperatives can be of particular use in these situations, “Cooperatives don’t consider such information proprietary. They publish it, and industry groups make it possible to look at national trends. Based on that data, we know what kind of market penetration to expect and what average revenue per user will be.” Reid goes on to note that rural electric cooperatives who have deployed fiber to the home see subscription take-rates similar to urban and suburban providers. Penetration often reaches 40% of eligible households during pre-sales, with one-third of those customers choosing the fastest available package, typically gigabit.

While conducting the region’s feasibility study, the Buckeye Hills team found that ‘make-ready’ costs associated with installing fiber either underground or on utility poles can be a major barrier to deployment due to its costliness and unpredictability. Much of Appalachia’s soil is rocky, making it costly to bury fiber, while aerial cabling typically requires permission from utilities to attach to their poles. Utility pole owners may mandate that internet service providers (ISPs) make costly improvements to the poles or replace them entirely. These make ready costs can exceed the cost of the fiber itself. Alternative technologies like fixed wireless come with significantly lower make ready; however, the region’s mountainous topography and dense foliage limit the usefulness of such technologies. Fixed wireless also offers a much lower maximum speed than fiber, making it less attractive as a long-term infrastructure investment.

Promote Digital Inclusion and Skills Training

Many experts and communities stress the importance of community engagement from the outset of a broadband initiative, including disseminating surveys to collect data on broadband demand and organizing digital literacy classes to educate the public on the advantages of having a home broadband connection. Buckeye Hills notes that while community engagement is key, too much digital inclusion programming in areas where broadband is not already available may cause frustration among the community and be counterproductive. “Because the FCC maps are so bad, there are a lot of areas that look like they have broadband when in fact there is none. If a community can’t get service of any kind, you’re really going to irritate the residents if you come in and try to explain to them why they should use the internet. I would hold off on too much education until you’re certain there is broadband there,” Reid said.

Reid suggests that securing funding to offer a broadband subsidy directly to underserved consumers may be the single best way to promote broadband uptake in an equitable fashion. In Southeast Ohio, Buckeye Hills found that the average cost of an internet subscription is $90 a month, an infeasible expense for many households in the area.[3] Securing funding for direct consumer subsidies can increase the region’s overall take rate and market penetration and promote equitable adoption in the community.

Navigate Legislative and Regulatory Barriers

Resourceful communities can overcome many challenges to further their community’s broadband goals. In some cases, however, regulations and policies that create barriers for broadband deployment are mandated at the state and federal level. LDDs should consider engaging in advocacy to influence policymakers at those levels to make needed regulatory changes to facilitate, not impede, broadband deployment.

“I think LDD’s can play a key role,” Reid said when asked about broadband advocacy. “The FCC does listen. If you give them enough data, you can have influence on them.” Reid points out two instances where LDD advocacy had a positive effect on broadband policy. In the first, an incumbent provider challenged the eligibility of a number of census blocks for federal subsidy, claiming that service was already available. Buckeye Hills filed comments that demonstrated, through data analysis, that the provider was lying. The FCC ultimately rejected that provider’s challenge, citing BHRC’s comments in its decision. More recently, Buckeye Hills joined forces with OMEGA, OVRDC, and Eastgate to oppose a carrier-sponsored amendment to the state budget that would have banned municipal broadband networks. That amendment ultimately was removed from the final budget.

Best Practices

Explore Opportunities to Make ‘Make Ready’ More Predictable: To attract ISP partners, Reid Consulting Group recommends brokering agreements between utility pole owners and ISPs to set a cap on pole preparation costs for fiber deployment. Such a cap would make it easier for the ISP to plan, since make ready would be a known quantity. It also would lower the ISP’s overall deployment costs. In return, the ISP would agree to offer service to all households in the area.

Digital Inclusion Programming, When the Time is Right: While community engagement and digital inclusion programming are often cited as important ways to gain project support and increase market penetration, such programming is most effective in communities where broadband access is already available. For areas that lack internet service, the topic must be approached diplomatically to avoid alienating constituents.

Be an Active Advocate: Some barriers to local broadband deployment have their roots at the state or even federal level. Local communities should collaborate to use their united voices to advocate for community broadband-friendly policies and programs such as direct consumer subsidies and state regulations that facilitate deployment, not hinder it.

[1] “Solving the Last Mile Puzzle,” Buckeye Hills Regional Council, Pg 1-2, https://static1.squarespace.com/static/5bcf4ef5b2cf79f60ff09deb/t/5df8db9f800af8463b83701c/1576590319325/BHRC-StateofBroadband-SEOH-Dec2019.pdf

[2] “Appalachian Ohio Broadband Availability,” https://connectingappalachia.org/mapping/

[3] Tom Reid (Buckeye Hills Regional Council Broadband Consultant, Reid Consulting Group) interview with DDAA, February 2, 2021

Background

Connected Nation is a nonprofit that develops and provides tools, resources, and methods to help local communities, states, and federal agencies create and implement solutions to broadband and digital technology gaps. It partners with communities and ISPs to develop community planning solutions that address technology gaps, empower state and local leaders with granular mapping on broadband access, and creates jobs through digital skills training and education opportunities in partner communities.

Connected Nation has partnered with over 600 communities to catalyze broadband development through partnerships with local and state officials, and ISPs. Connected Nation acts as a third-party between state and local government, and ISPs to synthesize data on broadband access and demand to identify development opportunities. This results in sustainable investments that expand service to underserved areas. Connected Nation has partnered with regional ISPs since it helped develop the National Telecommunications and Information Administration National Broadband Map in 2009.

Project Description

• Broadband champions mobilize regional assets to identify opportunities to leverage broadband towards improved outcomes and creates partnerships around broadband development.
• Local Development Districts can help coordinate planning efforts by regional partnerships to map broadband access, demand, and assets, and leverage public funds to support investment.
• Connect community development outcomes and improved service delivery with broadband development opportunities to engage a wide array of stakeholders invested in broadband.

A broadband champion is an organization with the perspective and positioning to form a strategic leadership group and coordinate broadband development across multiple domains. These organizations are generally the most aware of the community’s broadband gap and have the capacity and knowledge to address issues surrounding broadband development, including infrastructure and any impediments to adoption. Partners that champions should target include any organization with a vested stake in improved internet service. Community stakeholders can include local ISPs, university educators, school administrators and education officials, community and economic development organizations, national associations, and state and local transportation, jobs and family services, and economic development officials. Its key for the broadband champion to bridge any language barrier between the community and ISPs. Inviting ISPs to the table early helps the private sector feel comfortable that the community wants to develop broadband infrastructure as partners, rather than replace the ISP with a public sector service-option. Small and local ISPs often appreciate the opportunity to be transparent and share barriers to expanding service, including access to capital, regulations, return-on-investment, or talent shortages. The broadband champion then works with its partner organizations to implement solutions that address barriers to service expansion and facilitate broadband development in underserved areas.

Local Development Districts have the relationships and tools to facilitate broadband development planning efforts and map broadband access and demand. LDDs can deploy surveys, partner with ISPs, and perform address-level verifications of service to map broadband access and demand at a more granular level than FCC data permits. LDDs also have relationships with local government and businesses that can inform any vertical or fiber-infrastructure asset map. Communities can leverage insights from GIS data to help ISPs identify sustainable opportunities to expand service to unserved areas. As an economic development planning organization, LDDs can help partners mobilize their respective sectors to identify opportunities to improve service delivery using broadband. LDDs have the relationships and facilitation experience to champion opportunities and develop learning programs that leverage broadband to support community-wide, cross-sector development issues. As an EDA and ARC designated Economic Development District, LDDs are eligible for a wide number of public and non-profit financing programs and can dedicate staff-members to proposal and grant writing. LDDs are often best positioned in any broadband development partnership to leverage public funds towards infrastructure development and other programs to increase the access to and affordability of broadband. As a regional planning organization, LDDs are a capable community leader to organize partners, plan development opportunities and obtain public financing that can address access to and the affordability of broadband.

Sustainable broadband development programs leverage investments in infrastructure to create community development opportunities. Communities can create demand for broadband services by offering programs that help citizens access improved services and opportunities via high-speed Internet.  Examples of programs that Connected Nation has supported include digital literacy and awareness classes or subsidies for low-income residents purchasing broadband-enabled devices. Programs can focus on helping community-members use the Internet to access resources including for business, healthcare, and educational purposes. Other programs help community anchor institutions and public services leverage broadband technologies to improve the delivery of public services. As part of its initial survey of residents, businesses, government, and community organizations, Connected Nation tries to understand how businesses have already adopted broadband technology, and opportunities to help businesses use broadband to meet critical needs. This can include using teleworking to meet workforce shortages, and broadband-enabled technology training programs. Creating a broadband development program that is attached to broad community development outcomes, and not just infrastructure development, primes a community to take advantage of improved service and helps ISPs or a community finance any expansion of service to new areas.

Best Practices

Engage ISPs early in any community broadband development effort. ISPs can provide data on broadband access that supplements market research and can be a critical partner in expanding service to underserved areas. Partnerships that bring the private sector to the table early provide opportunities to create a shared dialogue and set of solutions that benefit the community and help ISPs make sustainable investments that result in further development. Early engagement allows communities and ISPs to hear each other out, and results in a solution that has the buy-in of the community and private ISPs with the resources, tools, and experience to deliver broadband service.

Leverage Local Development Districts’ strengths as a regional coordinator and facilitator. LDDs have the relationships with local government, community stakeholders, and businesses to engage regional ISPs, and the tools to lead planning efforts around broadband. LDDs can coordinate the collection of community data on broadband access and demand, including drive-by validation, and most LDDs have the GIS tools to map broadband access, demand, and regional assets to facilitate broadband planning. As a coordinator, LDDs can activate regional assets to address gaps in broadband infrastructure and access, affordability, and digital literacy.

Organize a group of broadband champions that can address gaps in infrastructure, affordability, and digital literacy. Broadband development stakeholders include any organization that can utilize broadband-enabled solutions to improve service delivery. Activating these assets to leverage broadband enabled technologies towards improved service delivery helps create demand for broadband that demonstrates to ISPs the sustainability of any investment. Champion organizations work within their sector to mobilize demand for broadband and realize sector-wide opportunities to leverage broadband towards improved social, economic, health, education, and other community-related outcomes.

Read the Full Case Study Here

Connected Nation Case Study

Background

In 2016, Ammon Township, Idaho unveiled a municipal broadband network where the city extended fiber-broadband service to every participating home, in exchange for a property tax levy. Ammon Township owns and operates a municipal broadband network that uses virtualization software that enables ISPs to offer broadband service over the network without any physical infrastructure or connection. Today, the Fiber Optics program is debt-free, cash-flow positive, and owns and operates 30+ miles of fiber that connects homes, businesses, utilities, schools, public safety, and wireless providers.

Ammon Township began its broadband development efforts in 2006, after a City Council Member approached Bruce Patterson, the one-man IT Department for Ammon Township, with a problem: slow internet speeds were harming his business. Slow internet speeds threatened the ability for Ammon to capture its share of the high-earning professionals and business-owners moving to Idaho. In 2008, Ammon Township began design of its municipal network, followed by a series of resolutions and ordinances that prioritized broadband as an essential service. By 2010, a fiber ring connected the government buildings downtown. In 2013, Ammon Fiber Optics connected the school district to the fiber ring with financial support from E-Rate, an FCC program to connect schools and libraries to fiber networks. By 2015, Ammon Fiber Optics began to expand fiber-to-the-premises of homes and businesses through a Local Improvement District that extended infrastructure to opted-in properties.

Project Description

• Leadership in Ammon organized around broadband as an opportunity to retain and attract workers from outside the region seeking teleworking opportunities in Idaho.
• The municipality relied on a stated commitment to broadband as an essential service to continue to identify opportunities for broadband development for over a decade.
• Ammon leveraged relationships with other small broadband networks and community-members to create a sustainable business model for broadband in Ammon and expand the network.

Leadership in Ammon view broadband development as an opportunity to attract workers and entrepreneurs after seeing the benefits of reliable broadband service to neighboring Idaho Falls’ growth. As the Township furthered its investment into broadband, attitudes by leadership evolved to view broadband as an essential service that the Township needed to provide to its residents. A Council Member feared that poor internet service in Ammon would prevent the Township from capturing its share of professionals relocating to Idaho for an improved quality-of-life. In 2000, the City of Idaho Falls started running fiber-optic cable alongside its municipal power lines to connect to sub-stations that grew into a middle mile network that broadband providers could connect to homes and businesses. Improved internet service helped retain talent from the local Idaho National Laboratory, resulting in a cluster of smart energy and transactive energy market research firms that sprang from INL efforts. Ammon’s City Council became invested in broadband development to increase the Township’s competitiveness in cultivating workforce talent, especially relative to nearby Idaho Falls.

In 2008, Ammon’s City Council declared an ordinance that outlined a strategic vision and priorities for the Township’s broadband development efforts. These stated priorities maintained focus on broadband development throughout over ten years of investment by the Township. The development and construction of broadband infrastructure occurs over a longer-period than election cycles, and its important to keep newly elected officials informed of the Township’s goals in that arena as turnover occurs. Ammon Fiber Optics continued to reference the objectives when faced with decisions around broadband development, and the Township refers the ordinance to private ISPs who are afraid that the Township is interested in replacing private ISPs, rather than just providing infrastructure for them. After Ammon was unable to obtain federal financing for infrastructure development, the Township embraced its mission and invested municipal funds in a downtown-government fiber ring that increased the Township’s capacity to construct and operate a fiber network. This guided Ammon’s continued development of this initial ring into a fiber-to-the-premises program connecting homes and businesses. Having a stated, statutory commitment to broadband development maintains continuity of efforts, keeps the community goal-oriented throughout setbacks, and helps keep ISPs and community-members aware of the purpose of any broadband development effort.

Ammon leveraged relationships with regional ISPs and community-members to develop and grow Ammon’s broadband network from a downtown fiber ring, to connecting schools and libraries, to connecting homes and businesses. In 2006, the City Council tasked the Ammon IT department with examining municipal broadband networks and identifying a model that Ammon could adopt. After a review of Idaho Falls, and other municipal networks including UTOPIA in Utah, Oregon Telephone, and Wyoming Silverstar Communications, the IT department informed the Council it was ill equipped to build and operate a municipal broadband network. This resulted in additional partners that provided construction assistance to Ammon officials and helped them develop new revenue streams that increased the sustainability of any future network. By the time Ammon obtained the financing necessary to create a municipal network, it had sourced the experience and knowledge from its partners to develop a sustainable network. Ammon leveraged community outreach and neighborhood champions that tested the service to help residents opt-into the network and choose to expand service to their neighborhoods. Both local support and national partners played a crucial role in helping Ammon develop a sustainable network that meets the community’s mission for universal broadband service.

Best Practices

Clearly articulate community goals and priorities. Ammon Fiber Optics never planned on using Local Improvement Districts to finance the Township’s capital investments in broadband infrastructure. Clearly articulated goals and priorities help keep community-leaders and members focused on the stated goals throughout various stages of development and options for service-delivery. The commitment to broadband as an essential service maintained support for the program throughout any initial setbacks. Stated goals also helped private telecommunications providers understand that Ammon was not attempting to replace ISPs with their network, and just provide a platform for broadband. The ordinance lays out the process for community engagement and shows that the Township received comments from residents and businesses. Elected officials and Ammon Fiber Optics officials continue to revisit the statute as turnover occurs across election cycles and as the Township faces new decisions.

Separate broadband infrastructure from broadband service. Public organizations can obtain and leverage low-cost capital financing to create broadband infrastructure that attract service providers. Separating service from infrastructure includes private ISPs in broadband development by creating a platform for ISPs to affordably offer service to new areas. Private ISPs lack the access to capital to extend service to rural areas, and by removing up-front capital costs for expansion, ISPs have little reason to enter new areas with only operational costs. The public sector and private ISPs can partner to create a favorable business case for the expansion of service to underserved areas.

Find partners and networks to model. Prior to constructing its network and establishing Ammon Fiber Optics, Ammon’s IT Department interviewed municipal and small-regional networks across the country to find partners, revenue-opportunities, and models to organize a municipal network. This resulted in partners that helped consult Ammon’s broadband development efforts, provide construction assistance, and help Ammon implement virtualization software solutions and obtain revenue from leased dark fiber. Efforts to engage with successful and sustainable models created new opportunities for Ammon that helped realize the community’s goal for a sustainable fiber broadband network.

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City of Ammon Fiber Optics Case Study

Background

North Dakota’s superb rural broadband connectivity illustrates how small, community-minded businesses and cooperatives can collaborate to deliver the highest quality connectivity to rural consumers. Over 75% of the state’s rural residents have access to fiber optic broadband offered by one of 14 independent telephone companies and cooperatives.[1] According to an analysis of Federal Communications Commission (FCC) data conducted by the Institute for Local Self-Reliance, North Dakota’s rural residents are more likely to have access to gigabit fiber broadband than their urban counterparts.[2] North Dakota’s success is due in no small part to all 14 companies’ joint investment in the Dakota Carrier Network (DCN), a ‘middle mile’ network that connects each of the 14 independent providers’ ‘last mile’ networks together and facilitates last mile expansion.

Project Description

• North Dakota is renowned for its high-speed and widely available fiber broadband, available throughout much of the state’s rural expanse.
• Over 85% of the state’s service territories are served by locally-owned and operated internet service providers, most of them cooperatives.[3]
• Dakota Carrier Network is a middle mile network that is owned equally amongst the 14 local internet service providers.

Models to Deploy Broadband Infrastructure

The story of North Dakota’s rural broadband success hinges on community, cooperation, and trust. In 1996, telephone company U.S. West (now Qwest) expressed an interest in selling their telephone exchanges and leaving the rural North Dakota market due to lack of profitability. The local telephone companies in the state became interested in purchasing these exchanges to expand their own service areas and ultimately organized amongst themselves to bid jointly on all of U.S. West’s exchanges.

Looking for additional opportunities to expand their businesses, the cooperatives and companies jointly created the Dakota Carrier Network (DCN), a statewide, middle-mile fiber optic network that connects each of the 14 independent providers’ networks together. To ensure return on their infrastructure investment, the owner companies knew that DCN would need an anchor tenant. In 1999 DCN won the state contract to provide broadband service to every government building and schools in the state.

A notable feature of DCN is all but two of the 14 owner companies have equal voting rights at board meetings, no matter their size or level of investment in the network. Those at DCN stress that this arrangement fosters the trust and transparency necessary for such a large-scale collaboration between competitors. “I think collaboration is a huge component and in order to collaborate you have to have a lot of trust and transparency and so that’s what really has been important,” said DCN CEO Seth Arndorfer.[4]

While DCN serves North Dakota government establishments, schools, and large businesses directly, each independent provider offers broadband access to households and small businesses within their service areas. The providers leveraged the FCC’s Universal Service Fund subsidies to aggressively expand the fiber infrastructure in their local communities and offer wireline broadband access to even the most rural community members. Collectively, the owner companies have invested over $100 million a year for the last five years, and 90% of last mile connections are fiber-to-the-home.[5] [6]

This type of infrastructure investment reveals a key to North Dakota’s success: The independent providers are local entities that inextricably connected to their communities and share the goal of increased connectivity in their areas. Between them, the 14 companies employ over 1,000 North Dakotans.[7] “There can be a perception that ‘why don’t you just get rid of all these small co-ops and have DCN be the single POC for the state?’ But that goes against why we’ve been so successful. It’s because all these small co-ops, they live in these small towns, over 1,000 employees across the state… We want to leverage their employees in the area and ensure long term viability for employership and giving back to their communities. They are really vested in their communities and their logo means something there and we want to maintain that,” said Seth Arndorfer.[8]

Best Practices

An Internet Service Provider Partner Should Share A Community’s Values: A key to rural North Dakota’s broadband success is that each independent provider is locally owned, operated, and in many cases directly owned by its customers. Because each company is inextricably tied to the community, the connectivity goals of the provider and the community are often aligned.

Trust is Key: Large-scale broadband initiatives with many partners may open doors to new connectivity opportunities by pooling resources, but trust between partners is a key component of success.

Be Ready When the Moment Strikes: North Dakota’s independent providers paved the way for their expansion throughout the state when they organized to buy U.S. West’s telephone exchanges. This decision facilitated the creation of the Dakota Carrier Network, which guaranteed its financial wellbeing because its partners were prepared to bid on the state’s RFP to provide internet service to the state government. Communities that have ‘done their homework’ and invested time into strategic planning will be more likely to capitalize on unexpected opportunities that may be leveraged to facilitate broadband access, when they present themselves.

[1] Kienbaum, Katie, et al, Local Providers Built the Nation’s Best Internet Access in Rural North Dakota, Institute for Local-Self Reliance, May 2020, Pg 6-7, https://cdn.ilsr.org/wp-content/uploads/2020/05/2020-05-North-Dakota-Internet-Access-Case-Study.pdf

[2] Ibid.

[3] “Owner Companies,” Dakota Carrier Network, Accessed March 24, 2021, https://dakotacarrier.com/about-us/owner-companies/

[4] Seth Arndorfer (Chief Executive Officer, Dakota Carrier Network) interview with DDAA, February 10, 2021

[5] Seth Arndorfer (Chief Executive Officer, Dakota Carrier Network) interview with DDAA, February 10, 2021

[6] “History,” Dakota Carrier Network, Accessed March 22, 2021, https://dakotacarrier.com/about-us/history/

[7] Idib.

[8] Seth Arndorfer (Chief Executive Officer, Dakota Carrier Network) interview with DDAA, February 10, 2021

Background

The Institute of Local Self-Reliance (ILSR) is a national research and advocacy organization that works to empower local communities with innovative strategies and timely information in order to build an economy driven by local priorities. ILSR’s Community Broadband Networks (CBN) initiative partners with local communities, allies, and other stakeholders to advance policies that improve local internet access across the country. In addition to its advocacy work, CBN also researches and documents community broadband initiatives across the country and publicizes innovative approaches that have been used to expand broadband access. Ultimately, CBN works to ensure universal access to fast, affordable, and reliable internet service for all Americans.

CBN’s work is especially relevant to rural Appalachia communities because it focuses on what local communities can do to solve their own internet access problems. CBN asserts that universal rural internet access can be best achieved through internet networks that are owned and operated by locally-rooted and democratically-accountable stakeholders. To this end, CBN has publicized news and resources from over 550 community-led broadband networks. Through its MuniNetworks site, CBN shares resources in the form of case studies, fact sheets, and videos that are designed to help local leaders make decisions about their broadband initiatives, while recognizing that each community is unique.

Christopher Mitchell is the Director of the Institute for Local Self-Reliance’s Community Broadband Networks initiative. Mitchell has conducted research on and worked with hundreds of public broadband projects across the United States. He has been recognized for his work by organizations such as the Coalition for Local Internet Choice and the Blandin Foundation, and his research has been cited in publications from the National Economic Council. He considered a leading expert on community networks and broadband access.

DDAA sat down with Christopher Mitchell to discuss community broadband initiatives and get his perspective on how Local Development Districts may best support their regions as they look to bring high-quality, affordable internet access to their community members.

Project Description

• Communities shouldn’t wait for full project funding to begin their broadband initiatives. Establishing a broadband project manager and committee and collecting data on the community’s connectivity are inexpensive activities that can position broadband projects for success when funding does become available.
• Establishing the right leadership will help ensure committee broadband initiatives get the most value from hired consulting services by allowing local committee members to gather more technical knowledge and empowering them to the project forward.
• The impact of digital inclusion programming, such as public awareness campaigns, digital literacy classes, and consumer subsidy programs, depends on how much the community at large engages with the programming. Leveraging well-trusted community institutions to publicize and coordinate digital inclusion programming is an important step to ensuring that digital inclusion investments reach their full impact.

Establishing Strategic Leadership

Chris told the DDAA team that establishing strategic leadership through the assembly of an effective broadband committee can sometimes go overlooked. Communities can become overly fixated on seeking, or a lack of, full project funding and do not spend the requisite time needed to make sure that all strategic stakeholders in the community have been engaged. Even if a community’s broadband project lacks sufficient funding to move forward at the moment, keeping stakeholders engaged and focused via project meetings, focus groups, and community data collection can pay dividends when funding does become available. For instance, Le Sueur County, MN continued to assemble its broadband task force for three years without the necessary funding to deploy infrastructure. But, when the COVID-19 pandemic began and federal emergency funding became available, the county was able to quickly kick its broadband team into action by building off of prior planning, leveraging CARES Act funds to initiate its project in earnest. Broadband initiatives should make sure their leadership and plans are in place in order to capitalize on serendipitous opportunities that may appear in the future.

Making sure that broadband committee membership is stable and that roles are well defined will also help a broadband initiative get the most value possible from any external consulting services that the committee engages. “It’s not just a matter of hiring a consultant but hopefully that consultant is working directly with the local committee,” Mitchell said, “Because a common failing of feasibility studies is they hire a consultant to do a report and they get it but no one has learned anything.”[1] All committee members should walk away from consultant engagements better educated about broadband in general. But it is the most helpful if one leader, often the broadband project manager, can gather the technical information to drive the project forward with confidence after the consulting team has completed their engagement. Encouraging as much knowledge transfer between external consultants and local committee members as possible equips project leaders with valuable expertise as well as lends credibility to their project vision. In this way, engaged and dedicated leadership amplifies the benefits of other aspects of the broadband initiative.

Establishing project leadership through the engagement of stakeholders that are representative of the community will have positive downstream effects when the initiative moves to build political support among elected officials. In some cases, local officials may not be aware that broadband is as high a priority for community members as it is. Elected leaders are more likely to take a broadband project seriously if they can be assured that the initiative is well supported by key groups within the community like teachers, local government officials, and prominent residents. Getting key community stakeholders at the grassroots level engaged in leadership positions may be the difference between tepid and robust political support.

Local Development District Leaders should also not be afraid to involve themselves in project leadership. Chris told the DDAA team that committed leadership from local economic development professionals is often a critical component to most successful community broadband projects. Individuals who understand that increased broadband access represents an opportunity to unlock enormous numerous development benefits will have the motivation and willpower to continue to advance their broadband projects, even in the face of uncertainty. In multiple cases, local economic development association directors have served as project managers on successful broadband projects.

Regardless whether a community’s broadband project manager comes from an economic development background or not, they shouldn’t be intimidated by a lack of technical knowledge at the outset of the project. Between a broadband project manager skilled at relationship-building versus one who has a profound understanding of telecommunications technology, the former is likely to be more successful. Any relevant technical knowledge will make a broadband project manager more effective, but the position’s core responsibilities are administrative and relationship-oriented in nature. “One of the lessons I take away is you want someone who is empathetic. Someone who is good at listening and understanding people’s needs because that’s what’s most important,” said Chris. “You might have someone that really knows the technology well, but if they’re not good at talking to people then they are not the right person to run these engagements.”[2]

Promote Digital Inclusion and Skills Training

Building community trust is a defining feature of a successful digital inclusion program. Community members, especially those that are most disadvantaged or isolated, may be suspicious of public awareness campaigns and informational material that comes solely from the broadband initiative or from a government entity with which they rarely interact. To illustrate this point, Mitchell pointed to Alabama’s plan to allocate CARES Act funding dollars to consumer broadband subsidies for students from low-income households. Many residents who received written material about the plan were skeptical of its authenticity and disregarded the program. General and project-specific broadband information is more likely to be heeded if it comes from community institutions that are well-known and enjoy broad public trust. Officials from local school districts and libraries frequently offer the best avenues for disseminating broadband initiative-related materials and coordinating digital inclusion programming. This idea also extends not only to digital inclusion and education initiatives, but to other community engagement aspects of a broadband project such as connectivity surveys.

Navigate Legislative and Regulatory Barriers

Reforming local legislative barriers is an important step to moving a community forward towards increased broadband access but it is not a golden ticket to unlock private investment. Mitchell indicated that reevaluating inefficient regulations, especially around public rights-of-way and permitting, does lower barriers to broadband deployment. Implementing model ordinances that can be adopted by entire regions, especially if they are pursuing connectivity together, does have value. However, project leaders should not view regulatory reform as a surefire solution to attracting private ISP investment. While streamlined regulations lower one barrier to deployment, it may not be the only, or even the principle, barrier standing in the way between a community and private sector broadband investment. A low population density or challenging terrain may still discourage private sector ISPs from entering the market. Overall, regulatory reform does remove barriers to expanded broadband access and success in this area will certainly make infrastructure deployment easier but has its limitations. Broadband committee leadership would do well to view regulatory reform as one of many important steps a community musts take to promote expanded broadband access.

Best Practices

Don’t wait for full project funding to begin your broadband initiative. Some community broadband projects become mired inaction because they cannot identify enough funding sources to fully fund their projects at the outset. However, even broadband projects with limited funding can take important steps to advance their communities’ initiatives forward. If communities focus on establishing an effective leadership team and make a prospective plan to evaluate the state of broadband in their community, they will strategically position themselves to act quickly when funding becomes available.

Leaders shouldn’t be intimidated if they don’t know everything about broadband technology. Local broadband initiatives often struggle to identify a broadband project leader. Finding someone in the local community who possesses all of the technical, business, and social skills required may seem like a Sisyphean task. However, an individual does not need to be intimately familiar with all of the technological aspects of the project to be an effective broadband project manager. Instead, communities should focus on finding an individual who understands the community’s needs and how expanding broadband access addresses those needs. Empathy, relationship-building, and negotiation skills are of the utmost importance in a broadband manager. Background technical and business knowledge are helpful, but can be acquired as the progress advances with the help of state, non-profit, and contracted experts and consultants.

Tap well-known and widely trusted community institutions to advance digital inclusion initiatives. Digital inclusion initiatives, such as public awareness campaigns, digital literacy classes, and consumer subsidy programs are vital to encouraging internet adoption and making sure that the community will take full advantage of the technology once it becomes available. However, they are only effective if community members recognize the value in digital inclusion programming and participate. Digital inclusion activities that are promoted by community organizations that are well-known and widely trusted will signal to residents that digital inclusion programming is a legitimate endeavor and worth the time and effort needed to participate.

[1] Christopher Mitchell (Director, Community Broadband Networks initiative) interview with DDAA, February 5, 2021

[2] Christopher Mitchell (Director, Community Broadband Networks initiative) interview with DDAA, February 5, 2021

Background

The North Carolina Department of Information Technology’s Broadband Infrastructure Office (NCBIO) was established by North Carolina’s chief information officer in 2015 to serve as a statewide resource for broadband access, first responder communications and classroom connectivity initiatives that the state leads. The office provides policy recommendations and guidance to government leaders and key stakeholders to foster broadband infrastructure expansion, adoption and use. Through the use of on-the-ground technical advisors, the office provides assistance to local government leaders working to facilitate broadband expansion in their communities.1 

NCBIO’s work has contributed to North Carolina’s emergence as a state leader in providing local governments with tailored resources that help them expand internet access in their areas. Unlike many other states, North Carolina has maintained an office dedicated to expanding broadband connectivity within its state government for the last twenty years.2 The North Carolina Broadband Infrastructure Office is the latest iteration of the state’s continued effort to facilitate expanded broadband access through direct collaboration with local communities. Building off the work of its predecessors, NCBIO created a comprehensive connectivity plan for the state while continuing to support North Carolina communities via new types of support in the technical assistance and digital inclusion spaces. 

NCBIO separates itself from the pack in the areas of technical assistance and digital inclusion. The office’s Technical Assistance team works with local broadband committees to evaluate their area’s current state of broadband, including mapping underserved parts of the community and conducting a broadband infrastructure asset inventory. NCBIO even assists in building partnerships between communities and private sector internet service providers. On the digital inclusion side, NCBIO has garnered attention through its innovative Building a New Digital Economy in North Carolina (BAND-NC) grant that provides mini-grants to communities looking to implement digital inclusion plans and initiatives. 

DDAA sat down with the North Carolina Broadband Infrastructure team to find out more about the initiatives they spearhead and discuss what types of strategies they have seen communities employ in their state to overcome seemingly intractable broadband challenges at the local level. 

Project Description

Establish Strategic Leadership

From NCBIO’s perspective as a state broadband office, LDDs (known as Councils of Government in North Carolina) serve as a vital line of communication to the communities in their districts when they are promoting a prospective statewide broadband initiative. NCBIO indicated that when the state’s General Assembly considers new broadband legislation, they reach out to local development districts to make them aware of what is being considered and enlist them to contact prominent members of the communities in their districts to voice their support to the state’s elected officials. This practice demonstrates how important local development districts can be when a broadband initiative, state or local, is working to identify key leadership to engage for the project. 

NCBIO has also leveraged the state’s LDDs to educate local policymakers across North Carolina about broadband generally. The NCBIO team explained that they held ‘Broadband 101’ sessions for all sixteen LDDs in order to train their staff about the technology and business aspects of the broadband industry.  The NCBIO team tailored the session’s content to each LDD’s level of broadband knowledge, focusing in on topics particularly relevant to each audience such as infrastructure deployment, digital inclusion, and broadband adoption strategies. Although this strategy may be difficult for an LDD to replicate across an entire state, it may be useful for LDDs to think about how they can adapt this strategy to their local context. For instance, an LDD with knowledge of how broadband works could conduct similar broadband 101 sessions for the local governments within its region. This strategy may create an opportunity to educate local officials about broadband connectivity while also serving as a recruitment tool to find and engage local government officials who are interested in being a part of the initiative going forward. 

Evaluate the Current State of Broadband Development

The NCBIO team suggested that a principal benefit of evaluating the current state of a community’s broadband infrastructure, usually through a feasibility study, is it serves as an exceptional educational tool for local stakeholders. In many cases, local leaders already have a good idea of where broadband is and is not available in their areas and a feasibility study may just confirm those assumptions. Additionally, while conducting a broadband asset inventory is important to understand what existing infrastructure in the community may be leveraged to facilitate additional broadband deployment, it is unlikely that such an inventory will uncover sufficient assets to prompt new private sector investment into the region on its own. Still, even if local stakeholders are familiar with the state of their connectivity problem locally, they may have gaps in their knowledge related to broadband technology, regulations, or organizational structures. Conducting a feasibility study or needs assessment, especially with the help of outside expertise, will provide local stakeholders with the opportunity to gain an in-depth understanding about how broadband works from a technological and business perspective at the outset of the project. From this perspective, evaluating the current state of broadband infrastructure not only provides additional information about the state of the community’s connectivity, but also equips project stakeholders with knowledge they can leverage to make informed decisions and feel more confident in later stages of the project. 

Promote Digital Inclusion and Skills Training

The NCBIO team considers broadband access and broadband adoption to be inseparable goals that must be pursued together. If a local broadband project is successful in expanding access through new infrastructure deployment but achieves only a modest increase in total internet adoption, the community is unlikely to see the socioeconomic and human development outcomes that broadband project managers envision. To substantiate this claim, the NCBIO team pointed to recent academic research that suggests broadband adoption is more heavily correlated with economic development outcomes, such as higher median household incomes and lower unemployment rates, than broadband access itself.3 Promoting broadband adoption via digital inclusion strategies also makes business sense. Private sector broadband providers are likely to view digital inclusion activities as having an uplifting effect on the area’s take rate, creating more subscribers and contributing to long-term financial viability of the project.  

LDDs in North Carolina have served as effective regional organizers, especially for digital inclusion initiatives. NCBIO indicated that multiple LDDs, including Land of Sky Council of Governments, are spearheading the creation of broadband digital inclusion plans for their regions. Due to their regional reach, LDDs may have a more complete picture of a region’s broadband assets and challenges than any individual local government that finds itself within the region. 

Explore Funding Opportunities

When asked about what roles they have seen local development districts play that have been the most valuable to local broadband initiatives, the NCBIO team pointed to LDDs that have provided guidance on grant applications to broadband initiative stakeholders seeking for grant funding. Due to LDDs’ experience managing grants and communicating with all levels of government, LDDs are well-equipped to guide those who are applying for broadband-related grants to understand the process and eligibility requirements associated with the grant. In North Carolina, local LDDs such as the Southwestern Commission and the Land of Sky Council of Governments have excelled in this role, helping private broadband providers understand eligibility requirements when filing applications for the state’s Growing Rural Economies with Access to Technology (GREAT) grant program that provides public dollars to private broadband providers to expand access in certain underserved rural areas in North Carolina. 

LDDs in North Carolina have also taken a more active role in project fund management by serving as fiscal agents for broadband initiative grant money. In some cases, broadband grant programs require a non-profit organization be the applying entity for an initiative’s grant. Broadband programs may have identified a non-profit organization that is willing to apply for the grant on behalf of the larger broadband project, but may not have the capacity to manage the funds themselves or meet stipulations set by the grantor. In these cases, a local development district may be able to step in and act as the grant’s fiscal agent, serving as the manager and oversight entity for the grant funds. Given LDDs’ experience managing grants for water lines, sewer systems, and other infrastructure, they often already have the expertise to fill this role exceptionally well. 

Best Practices

LDDs are well-suited to play vital roles as facilitators and fiscal agents on many local broadband initiatives. The North Carolina Broadband Infrastructure Office has collaborated with a variety of local broadband projects, including those where local development districts have played a key role. While LDDs are well-suited to fill numerous roles on a broadband project, the NCBIO team has seen their state’s LDDs be most effective acting as facilitators and fiscal agents. LDDs can leverage their contacts with public and private stakeholders throughout their region to facilitate dialogue amongst all sectors of the community.  

Leverage a broadband feasibility study as an educational tool.Assessing a community’s current state of broadband connectivity has multiple objectives, not the least of which is serving as an educational tool for local project leaders. Stakeholder education should be viewed as a primary goal of any feasibility study or needs assessment, in addition to the more visible objectives of collecting vital data about the community’s connectivity, spreading awareness about the project among the community. 

Broadband access and broadband adoption are inseparable. The NCBIO team views broadband access and broadband adoption as inseparable. Projects singularly focused on expanding broadband connectivity may make significant investments in infrastructure without realizing the socioeconomic and human development outcomes anticipated at the project’s outset. Thinking about a local broadband project through this lens underscores the importance of investing in digital inclusion activities that are impactful and tailored to residents’ needs. Making internet adoption efforts a central part of your local broadband initiative gives your project a better chance of meeting project outcomes and increases the area’s attractiveness for private sector investment. 

Background

NTCA – the Rural Broadband Association represents 850 independent, community-based telecommunications companies that provide internet service to 5% of Americans, but cover 37% of the landmass. NTCA advocates on behalf of its members in the legislative and regulatory arenas and provides training and development; publications and industry events; and an array of employee benefit programs that promote operational efficiencies.

As a representative of rural cooperative and family-owned ISPs, NTCA has a unique perspective into the factors that contribute to a sustainable broadband development effort and how policy-issues impact small, rural ISPs. NTCA also manages the network of Smart Rural Community providers. Smart Rural Communities are where ISPS and government collaborate on broadband-enabled projects tied to digital training programs and other economic opportunities. These Communities leverage broadband-enabled applications to support broadband-enabled agriculture, education, health care, transportation and other industries.

Project Description

• Activate demand for broadband and attract ISPs as partners by helping the community identify how broadband can serve as a tool to improve community outcomes.
• The Kentucky People’s Rural Telephone Cooperative leveraged a successful broadband network built with ARRA funds and subsidized by Universal Service fund programs to partner with a Teleworks USA training program that has had a $70 million impact and created 3100 jobs.
• Policy and regulatory decisions made at the federal, state, and local levels can impact the ability of rural Internet Service Providers to extend service to low-population density areas due to increased capital and operational expenses. Its important funding addresses both issues.

NTCA staff-members see that the most successful broadband development projects gather strategic leadership around a potential use for broadband that will create subscribers and benefit the community. Local Development Districts can play a key role in gathering partners and facilitating conversations that identify how broadband can unlock new service-delivery options. Activating the demand by these partners for broadband in turn demonstrates to rural, small ISPs the feasibility of sustainably expanding their network into an underserved area. Development District staff can pull together ISPs and stakeholders together to facilitate the conversations that drive investment decisions and create a collaborative relationship between ISPs and the community.

The People’s Rural Telephone Cooperative (PRTC) in McKee, Kentucky provides an example of how small ISPs can leverage digital training efforts to create new funding streams and sustain rural networks. PRTC is a classic example of the three-legged stool model of revenue for small, rural ISPs – public ARRA funds offset initial costs to deploy infrastructure, FCC Universal Service Funds help sustain rural networks, and PRTC collects revenue as a service provider. As a result of the network’s success, Teleworks USA partnered with PRTC and McKee to create a training program for telework customer service positions at Facebook, Google, and other Fortune 500 companies. So far the training center has created 300 – 400 broadband-dependent jobs in Mckee, and 3100 jobs across 23 counties and $70 million in economic activity, that were only made possible by PRTC’s investment in the community.

NTCA focuses on regulatory issues in Washington that impact the sustainability of small, rural ISPs. The Telecommunications Act of 1996 seriously decreased rural telephone providers revenue by re-appropriating fees collected on long-distance calls from the provider to the Universal Service Fund. The USF now supports several programs – including the High-Cost program – that serve as a competitive pool of funding for rural ISPs to leverage to expand networks. However, the fund faces issues regarding sustainability. While infrastructure packages support the creation of broadband fiber and fixed wireless solutions, the High-Cost program provides a subsidy to rural ISPs that accounts for the difference in operational costs faced by providing service in rural areas, relative to urban markets. Its important for broadband advocacy efforts to understand the need to address both capital and operational cost challenges faced by broadband development efforts in low population density areas.

Best Practices

Utilize the three-legged stool revenue model for rural broadband development. Tap into public funds to support broadband infrastructure, take advantage of FCC subsidies to provide service in rural areas, and collect revenue from subscriber fees. Multiple revenue streams can help cover capital and operational expenditures and enable expansion into new areas.

Align broadband development with community development goals. Leveraging broadband as a tool to improve service-delivery or access new opportunities, rather than a goal, brings more partners to the table and creates demand for the network. This can unlock new funding opportunities for expansion, and increase the take-rate and sustainability of the network.

Advocate on relevant policy-issues. Telecommunications policy seriously impacted the revenue of rural cooperatives in the past. Policies can either inhibit broadband development efforts in rural communities or unlock new opportunities for providers. By advocating to national, state, and local policy-makers, local development districts can ensure that relevant policies reflect their priorities.

Read the Full Case Study

NTCA – the Rural Broadband Association Case Study

Background

The Oglethorpe Development Authority transformed broadband development from an undefined problem into a county priority by taking the initiative to measure broadband demand, identify key assets, and demonstrate a willingness to invest in broadband that attracted attention from major ISPs. The Oglethorpe Development Authority is county economic development organization that recently deployed a fixed wireless network serving rural parts of the county and was the first county to be designated as a Georgia Broadband Ready Community under the leadership of then Director of Planning and Development, Amy Stone. After failing to connect with ISPs, these efforts catalyzed interest by the incumbent provider to invest in the community. The Oglethorpe Development Authority leveraged scarce resources to demonstrate the business case for expanding access in the county’s unserved areas, demonstrated feasibility through deploying broadband themselves, and ultimately developed partnership with ISPS that were initially unwilling to come to the table. 

Project Description

• The Oglethorpe Development Authority transformed broadband development from an undefined issue into a solvable problem by identifying a measurable goal, forming a strategic action plan, and identifying the state of the problem and potential solutions.  

• The Development Authority tried to use outreach to ISPs, market research, and broadband asset mapping to demonstrate the business case for ISPs to invest in Oglethorpe to no avail. 
• Ultimately, Oglethorpe had to deploy broadband infrastructure itself, and demonstrate that doing so was feasible, to attract interest from ISPs to develop broadband infrastructure. 

Broadband access was a major talking point for local business and community leaders. However, the County didn’t have any sense as to whether the people discontent with broadband were a vocal minority, or representative of a more widespread issue across Oglethorpe. 

In February 2018, the Oglethorpe Development Authority formed a Broadband Committee to identify the state of, and begin to address, the lack of investment by private ISPs in the county. The Committee adopted the goal that 90% of Oglethorpe County would have access to broadband at speeds of 25/3 Mbps, which became a rallying point for Oglethorpe County’s broadband development efforts. The Committee decided to be a “squeaky wheel,” hoping to encourage private ISPs operating in Oglethorpe County to address unserved parts of the county by raising the issue to business-leaders and legislators. 

Despite their best efforts, ISPs rebuked the Committee-members, with their key concern being the profitability of any investment into the most-rural portions of Oglethorpe County. The Committee realized they needed more data on unserved areas, broadband assets, and data on the market for broadband services. The Development Authority administered a broadband quality and affordability survey to Oglethorpe residents online, and via newspaper, outreach at carpool lines, and leaving copies at every community center. The survey found residents were willing to pay $50-$75 or more for reliable 25/3 broadband service. Data from the survey and input from stakeholders resulted in a strategic broadband plan for Oglethorpe that outlined vertical assets and mapped market insights from the survey-results. Again, this failed to bring incumbent ISPs to the table. 

The Development Authority developed an RFQ that solicited providers to deploy a fixed wireless network that serves 1,000 homes, 1/6 of Oglethorpe, for $350,000. The RFQ only received one response, from a start-up, to deploy broadband. The Development Authority formed a public-private partnership with the provider to provide broadband service and maintain the network for fifteen years, upon which the provider could purchase the network. While current roll out of the service has been slow, primarily due to the challenges facing a new company, review of the service has been favorable.  

The VP of Windstream contacted the Oglethorpe Development Authority less than a week after it awarded its broadband RFQ to identify opportunities to partner with the county to invest in broadband infrastructure, resulting in several federally-funded broadband development projects. The Oglethorpe Development Authority team had proven it understood the business model for ISPs, and that they were easy to work with and a reliable, supporting partner in broadband development.  

In 2019, the County attracted publicity by being designated the first Georgia Broadband Ready Community through streamlining regulations. In combination with this Designation, Oglethorpe hopes its investments in infrastructure will encourage private ISPs to further invest in Oglethorpe County. 

Best Practices

Project leaders need to identify the various regulations that impact a chosen connectivity option. The Oglethorpe Development Authority deployed a fixed wireless network, and had to receive rights from a neighboring county to use a portion of the spectrum to transmit broadband. Additionally, the County plans to review its Telecommunications Tower Ordinance, which applies burdensome regulations to tower-construction projects, regardless of the height of the tower. The right-of-way regulations specified in the Georgia Broadband Ready Community guidelines were easy to adapt for Oglethorpe, but are more complex issues for larger municipalities, such as Athens. 

Partnering with ISPs requires time and effort. Broadband development requires cooperation from incumbent and robust providers to expand broadband infrastructure. The incumbent ISP was undergoing bankruptcy and faced a change in leadership. After sorting its internal issues and proving itself a great parner, the Development Authority hears from Windstream every week about developments or opportunities to apply for federal broadband funds. The leadership-change at Windstream opened up company-executives to partnering with Oglethorpe in broadband-development, and Oglethorpe’s “squeaky wheel” made enough noise to attract their attention. 

Politics impacts Policy. After rolling out its pilot fixed wireless network, Oglethorpe had major changes in County leadership that are less interested in broadband development. This represents a potential unknown for any future county-led broadband development engagements. As such, the Development Authority has leveraged this opportunity to identify funding sources not under the control of the County Chair that open up new possibilities for broadband investment. 

Read the Full Case Study

Oglethorpe Development Authority Case Study

Background

Central Minnesota’s RS Fiber Cooperative provides a vivid case study of how centralized project leadership can leverage relationships with stakeholders and engage the community at large to bring together a complex array of partners to provide thousands of rural residents with affordable, reliable internet service. RS Fiber Cooperative is a community-driven/cooperative-owned fiber network that provides up-to-a-gigabit internet service to 10 small cities and 17 rural townships in central Minnesota. RS Fiber has garnered national attention because the cooperative was founded specifically to provide affordable broadband service, in contrast to the majority of such entities which have grown out of pre-existing telephone or electric cooperatives.

Project Description

• Ten cities and 17 townships in Central Minnesota formed a new broadband cooperative to provide urban and rural residents with high-speed internet of at least 50/mbps.
• Project leader Mark Erickson served as a central point of contact for the project, helping achieve buy-in from reluctant city councils and facilitating the project’s relationship with its private sector network operator.
• The project’s supporters utilized phone surveys, pledge drives and presentations to inform the public and gather support for the project, despite significant opposition.
• Financing obstacles required the local governments involved to raise taxes, but ultimately resulted in the availability of high-quality broadband at a lower cost to community members.

Establishing Strategic Leadership

RS Fiber’s story begins in 2008, when the city council of Winthrop, fed up with the city’s inadequate internet service, directed city administrator Mark Erickson to explore the possibility of constructing a fiber network for the city of approximately 1,400. [1] Erickson first approached the area’s incumbent providers, including a locally-owned telephone company, to propose the idea of partnering with the city to construct a fiber network. However, every incumbent determined that the city’s low population density made fiber construction financially infeasible and refused to partner. Without a partner and aware that a city of Winthrop’s size could not support its own municipally-owned network, Erickson assembled a group of nearby cities and townships to join forces and tackle inadequate broadband connectivity at a regional level.

In order to facilitate decision-making among so many project stakeholders, the participating governments created the Joint Powers Board (JPB), an entity that would act on behalf of the city and township governments to manage, oversee, and finance the project. By the end of 2011, despite the withdrawal of a few key members, JPB solidified its membership of 10 cities and 17 townships involved in the project.[2] JPB leveraged Erickson’s connections with his former employer, internet service provider Hiawatha Broadband Communications (HBC), to design, build, and operate the envisioned network. In many ways, HBC was an ideal candidate: the firm had experience in wireline fiber deployment and had partnered with other municipalities in the past. At around the same time, the local United Farmers’ Cooperative (UFC) agreed to provide seed money to form the RS Fiber cooperative, a 308B cooperative that would own the future network.[3]

After exploring multiple financing strategies, JPB and RS Fiber decided on an innovative financing mechanism: JPB would issue general obligation bonds and loan them directly to RS Fiber, making those loans subordinate to all additional financing that RS Fiber would receive from other sources. JPB’s financing would serve as a down payment on the project’s cost while also decreasing the risk for subsequent lenders. In 2015, the governments of JPB raised a total of $8.7 million which the cooperative used to begin construction and the cooperative began laying fiber that same year.[4] Because the cities offered a larger subscriber base at decreased construction cost, RS Fiber decided to first complete its network in urban areas and use the revenue from to finance its expansion into the rural townships.

Evaluate the Current State of Broadband Development

The RS Fiber team began engaging the public early in the process to inform the community about the project and the benefits that a fiber network would bring to urban and rural residents. To gauge public opinion, the local governments conducted a phone survey and found that 70 percent of respondents indicated support for a government partnership with a commercial entity to provide internet service.[5] Taking the engagement one step further, the RS Fiber team conducted a pledge drive, asking residents who were interested in subscribing to the new service to fill out cards showing their support. “Initially it was thought of as a way to show investors that this company could work. In the end, I don’t know if it made a whole lot of difference but it was very effective in getting the word out to the community,” said Jake Rieke, Chairman of the RS Fiber Board, when asked about the pledge drive.[6]

However, maintaining public support for the RS Fiber project, and the large public investment it entailed, was arduous. Vocal groups began to speak in opposition to the project at public meetings. In addition to opposition from incumbent providers, a group of citizens, concerned that the project may raise their taxes, also voiced dissent. These concerns ultimately prompted Sibley County and the cities of Arlington and Henderson to withdraw from the JPB.

To garner public support on the idea of issuing subordinate bonds to finance the first phase of the project, the RS Fiber team decided to be as transparent and communicative as possible. “We had as many meetings as possible. We gave powerpoints about what we were trying to do,” said Jake Rieke.[7] In 2015, each of the participating localities held public meetings and their city councils voted to approve the issuance and RS Fiber broke ground later that year.

RS Fiber Today

Despite RS Fiber’s success in laying fiber and amassing subscribers to its new internet service, the cooperative ultimately defaulted on its debt repayment to the governments of Joint Powers Board in 2018. Unable to secure additional long-term, low-interest financing, the additional loans used to pay for the network construction cost ended up being short-term, high-yield speculative loans. Originally, RS Fiber planned to leverage a major cooperative lender to convert those short-term notes into long-term debt, but were unable to do so. The cities and townships ultimately had to raise levies to pay for debt service from the general obligation bonds.

Today, RS Fiber offers fiber-to-the-home broadband service of up to gigabit speeds in all ten cities and fixed wireless connectivity of up to 50mbps to the rural townships. It currently offers internet access to over 6,200 potential consumers.[8] As its subscriber base continues to grow, the cooperative anticipates that it will be cashflow positive within the next two years and will even be able to retake loan repayments from the JPB governments within the next seven to eight years. RS Fiber’s continues to work towards its long-term goal of providing every consumer in the area with access to fiber optic wireline internet. However, the cooperative’s success in providing broadband to its members proves that, with the right leadership, expertise, and community engagement a diverse group of communities can band together and overcome obstacles to broadband connectivity.

Best Practices

Successful project leaders serve as the central point of contact for their community’s broadband initiative. Project leaders must be able to speak knowledgeably about the technical and financial aspects of a project, but above all they must maintain relationships between the project’s various stakeholders. Winthrop City Administrator Mark Erickson played an important role in persuading the surrounding communities to join the project and form the Joint Powers Board. Additionally, Erickson’s previous work experience in the telecommunications industry, and his relationships with Hiawatha Broadband Communications facilitated RS Fiber’s partnership with their future network operator. By cultivating relationships with these stakeholders, Erickson and his team were able to amass the resources and expertise needed complete the project and maintain the initiative’s momentum when roadblocks or disagreements arose.

Early community engagement provides opportunities to inform and collect data. Engaging the community through informational sessions, awareness campaigns, and surveys, not only allows for opportunities to publicize the project but to also collect data on potential subscribers. Gathering interested community members’ addresses, their current level of internet service, and their willingness to pay for enhanced service can provide insight into the project’s future market penetration.

The ‘low-density problem’ can be tackled by community expansion. The idea of RS Fiber was hatched when City of Winthrop administrators realized that it was not feasible to install their own fiber network due to a lack of potential subscribers. Winthrop overcame this challenge by approaching nine other cities in the area about the prospect of constructing a shared fiber network. By pooling their resources and combining their potential subscriber bases, the involved governments were able to embark on a project that would not have been financially feasible for any of them acting independently.

A partner with telecommunications expertise is crucial. Those that were a part of RS Fiber have expressed that the technical expertise provided by Hiawatha Broadband Communications to build and operate the network infrastructure was a vital component of the project’s success. “Experience is huge, having those relationships with fiber builders and engineering companies. Had RS Fiber tried to start that from scratch and do it themselves, it would have been a disaster,” said Jake Rieke, Chair of the RS Fiber Cooperative Board.

[1] ACS Demographics and Housing Estimates, American Community Survey, Table DP05, Census Bureau, https://data.census.gov/cedsci/table?g=1600000US2771122&tid=ACSDP5Y2019.DP05&hidePreview=false

[2] Carlson, Scott, Mitchell, Christopher, RS Fiber: Fertile Fields for New Rural Internet Cooperative. Institute for Local Self-Relance, Next Century Cities, April 2016, Pg 10, https://cdn.ilsr.org/wp-content/uploads/downloads/2016/05/RS-Fiber-Report-2016.pdf

[3] RS Fiber: Fertile Fields for New Rural Internet Cooperative, Pg 23

[4] RS Fiber: Fertile Fields for New Rural Internet Cooperative, Pg 26

[5] RS Fiber: Fertile Fields for New Rural internet Cooperative, Pg 21

[6] Jacob Rieke (Chairman of RS Fiber Cooperative Board) interview with DDAA, February 23, 2021

[7] Jacob Rieke (Chairman of RS Fiber Cooperative Board) interview with DDAA, February 23, 2021

[8] RS Fiber Cooperative, “What is RS Fiber”, Accessed March 18, 2021, https://www.rsfiber.coop/about-us/what-is-rs-fiber/