Rural areas get $82 million to get fully wired

Broadband service will come to every home in Lake and eastern St. Louis counties with electrical service, as well as much of of Cook County, with the approval Monday of a federal grant and loan geared to wiring rural areas.

Broadband service will come to every home in Lake and eastern St. Louis counties with electrical service, as well as much of of Cook County, with the approval Monday of a federal grant and loan geared to wiring rural areas.

The $82 million award will cover most of the cost of installing improved voice, data and video service via the Internet in the region, culminating longstanding efforts to see Lake County and other rural Minnesota areas fully wired.

"We're real excited; it's a huge investment in the county," said Gary Fields of National Public Broadband, the company teaming with Lake County on the plan. He said he expects construction to begin in the spring, with some homes connected by fall 2011 and the entire network completed within three years.

Lake County Commissioner Paul Bergman shared the enthusiasm.

"We got every penny we asked for," said Bergman, whose county will receive $66.3 million from the Department of Agriculture's Broadband Initiatives Program. Matching funds will bring it to a total of $70 million needed for Lake County's portion, Bergman said, with the award breaking down as a $56.4 million loan, a $10 million grant and about $3.5 million in bonds to be paid back out of operational revenues.


Another $16.1 million will go to getting Cook County connected.

In the past year, Lake County added areas around Aurora and Ely in St. Louis County to its target area in order to make the plan more attractive to the USDA, which is seeking to bring better Internet coverage to the nation's rural regions. The county broadband service area covers all populated areas of Lake County as well as Ely, Babbitt, Aurora, Hoyt Lakes and the townships of Duluth, Morris, Embarrass, White, Waasa and Bassett.

Three hubs will need to be built, with the main one in Two Harbors to house the operations staff. Bergman said the other hubs would be in Fall Lake and Silver Bay, bringing an estimated 510 jobs to Lake County and about 600 project-wide. Those range from short-term construction crews to long-term office and maintenance positions.

Bergman said the redundancy built into the network would eliminate the problems with service interruptions when lines are cut, as happened in January when a Qwest Communications fiber under a Duluth street knocked out cell phone, Internet and 911 service along the North Shore.

"It's a great thing for 911 service," Lake County Sheriff Carey Johnson said.

The fiber optics network is expected to be paid off by the operational revenue, with no long-term debt expected for taxpayers, backers said. They said it's too early to set any potential consumer costs for monthly service but that it will be competitive with current high-speed service offered by telephone and satellite companies. The county and other supporters contend that companies such as Qwest, Frontier and MediaCom aren't going into more sparsely populated areas fast enough, and the proposal is intended to ensure public good over profits.

"It's a myth that rural fiber networks cannot be built and operated on a fiscally sound basis," National Public Broadband CEO Tim Nulty said. "We look forward to demonstrating the viability of the Lake County network and helping a rural area compete in the global economy."

Agriculture Secretary Tom Vilsack also stressed the need for broadband in the area, specifying citing jobs, access to health care and educational opportunities.


"These projects will not only create jobs for the people who will build these networks, the completed systems will provide a platform for rural economic growth for years to come," Vilsack said in a statement.

Sens. Al Franken and Amy Klobuchar, both Minnesota DFLers, echoed that sentiment, with Klobuchar saying the service "lays the groundwork for long-term economic growth."

Last month, as a member of the Senate Commerce Committee that oversees telecommunications, Klobuchar hosted a "broadband summit" in Minneapolis focusing on wiring communities for economic development. One speaker was Gunflint Lodge co-owner Bruce Kerfoot, who testified: "We're in the backwaters in our communications world."

On Monday, he said his business was still in the backwoods but hopefully, no longer on the back burner.

"We certainly have hope that the grant will be inclusive of our entire community. Obviously, it costs more (to wire) the back country than it does along the main highway," he told the News Tribune."

But, he added, "We're pretty darned excited because it brings a whole new dynamic to our business. This whole thing is about as important to us as bringing power to our communities was back in the '50s."

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