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State approves license for Lake County fiber project

The Minnesota Public Utilities Commission has approved Lake Communications' application for the authority to provide broadband fiber-optic service in Lake and St. Louis counties. Lake Communications is the two-man team hired by the county to run ...

The Minnesota Public Utilities Commission has approved Lake

Communications' application for the authority to provide broadband fiber-optic service in Lake and St. Louis counties.

Lake Communications is the two-man team hired by the county to run an Internet, telephone and television service using $66 million from the U.S. Department of Agriculture's Rural Utilities Service. The county is adding $3.5 million in matching funds.

The fiber optic project, set to begin construction in January with the running of lines on poles in larger cities like Silver Bay, Two Harbors and Ely, would cover every home in the county now served by electrical service. It also would serve homes in eastern St. Louis County.

A protest from the Minnesota Cable Communications Association was withdrawn just before the vote, said Public Utilities Commission staffer Kevin O'Grady. The commission then approved the application 5-0.

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The cable association, which faces competition from the fiber project, had complained that the county, without a public vote, couldn't be the legal authority to provide telecommunications services under Minnesota law. The commission, responding to the complaint, said the authority would be granted to Lake Communications, which it deemed had a proper relationship with the county in providing the service.

The cable association rescinded its objections Tuesday. Mike Martin,

director of the cable association, said the withdrawal came after the county honored its data request for information on the project.

"That satisfied us as far as the information," Martin said. To press its license objection had "no point," he said.

Martin said the association still thinks the county should have asked for a public vote concerning the project and the money being put into it. Lake County originally had sought bonding for its required share of the project, $3.5 million. After looking at the interest rates for borrowing, it decided to save money by using funds it has on hand -- after promising that no public money would be used.

"We've never gotten an answer," Martin said of why the project didn't come up for a public vote. "We will continue to chip away at that."

The county plans to build the network and lease the lines to Lake Communications for revenue. In its original response to the cable association's complaint, the state commission said Lake Communications' application "complies with the requirements typically applied by the commission to applications" across the state. It also stated that Lake Communications' financial statements were "sufficient and consistent with the financial information filed by other applicants for authority."

The new system also will need to lease from Century Link (Qwest) and Citizens Telecom on the exchanges they own in the coverage area, which requires the state approval. The vote Thursday means Lake Communications will receive a conditional license to perform as a "competitive local exchange carrier."

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Lake County Commissioner Paul Bergman said the vote meant "a good day for Lake County residents," as it is the first step in providing high-speed broadband service to the region. The release of the federal money still is pending with the Rural Utilities Service, but that process will be speeded by the state license approval, Bergman said.

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