High speed internet access may soon be available in Derrynane and parts of Lexington, Lanesburgh and Montgomery townships, but it’s no guarantee just yet.
At an Aug. 27 board meeting, Le Sueur County Board of Commissioners passed a resolution to commit funds in 2021 to help Bevcomm expand its fiber-optic cable network to the area.
Le Sueur County has been pursuing partnerships with internet service providers (ISPs) for the past month to expand broadband internet to rural areas. The county recently found a partner in Bevcomm, who requested $300,000 from the county for the project, which covers much of Derrynane, northern parts of Lexington, parts of Lanesburgh southeast of Heidelberg and the northern edges of Montgomery Township.
Commissioner John King said the reason the county is involved is because internet service providers won’t serve rural areas without subsidies.
“In sparsely populated areas, i.e. the township areas of our county, it does not make business sense for internet providers to expand their broadband in areas where there isn’t enough population to support the business model and get a return on their investment,” King said. “So local governments and grants are looked to to help supplement that so it can be a viable option for the telecomm or internet provider to do so.”
Commissioner King voted in favor of the resolution and has pushed for the broadband expansion. He cited economic and educational benefits of internet access as the reason for his support.
“It has an impact on economic development, schoolchildren in the middle of their stuff and also the value of those properties,” said King. “If people are moving out and people are going to purchase those properties, the big thing is internet. If they don’t have internet they will often bypass the property because they need to have that so they can work from home, so that their kids can get their schoolwork in. It’s not just about shopping on Amazon and downloading Netflix, it’s more than that.”
Long road ahead
At this stage, the rural broadband project is far from certain. The resolution only requires the county to pay the $300,000 as long as there is financial backing from the state and the townships served by the fiber-optic network. The county’s expectations is that there will be an even three-way split in investment between local governments, the state and Bevcomm, with each paying approximately $300,000. Any additional costs would be paid by Bevcomm.
There are $40 million worth of state grants for broadband in 2019 and 2020, and the county is relying on receiving one of these grants for the project to go through. If the state doesn’t fund the project, the county will pay no money toward it. According to Commissioner King, there’s likely to be over $40 million worth of applications for funding in 2019 alone, meaning the grant will be highly competitive.
The county is also relying on the served townships to fund about half the county’s contribution to the project over the next 10 years.
“A likely scenario going forward is that the $300,000 the county would contribute, half of that money would have to come from the township,” said Commissioner King. “In other words, $150,000 would come from all the citizens in the townships, including those that have internet, and the other $150,000 would come from the county because lack of broadband, unserved or under-served, is a township problem. It doesn’t apply to populated areas. The county would front that money and pay the $300,000 in 2021, and the townships would pay over the next 10 years, between $100-200 per passing per year to get to the 50% for the $150,000.”
The more passings or potential customers in a township, the more the township will have to pay toward the county. Derryanne, the township with the most potential customers, passed a resolution on Monday, Aug. 26 supporting the plan after it was presented to them by Commissioner King. King said the board was enthusiastic about the proposition.
“They were all about it. They were all on board,” said King. “ They passed a motion, passed the resolution they agreed in principle to pay those funds starting in 2021. And there was, like, no push back. None. And Derrynane is a conservative township.”
With Derrynane involved, it’s possible for the county to continue the project without involvement from the other townships, but King explained it would be difficult for the county to go it alone.
“If the other townships don’t want to play, then we have the option of ‘it’s not going to happen and they can listen to their people squeal,’” said King. “Or the county could fund that portion, but then we somehow have to recover those fees, either by setting up a special support service district, which gets really expensive and really cumbersome. The best way to resolve this is for the townships to step up and do something for their citizens other than leveling gravel and plowing snow.”
Commissioner Rohlfing was hesitant about getting involved in broadband, pointing to difficulties Sibley County had with their broadband project.
“Sibley County had a little struggle with their fiber, why is this going to be different?” Commissioner Rohlfing asked. “If we don’t get all the chips locked in, I don’t want the county to be on the hook for a whole lot of money either.”
Bill Eckles, the CEO of Bevcomm, responded that his company had experience with broadband that Sibley County did not.
“If you look at some of the counties that tried to do this on their own, they find that the broadband business is a lot harder than they thought it was,” said Eckles. “It’s not just putting some wires in the ground and all of a sudden money just flows in. This is what we do and this is what my family has done for 125 years.”
He also noted that Bevcomm is taking on the risk.
“The risk to the county is $300,000. That’s it. If this goes over budget, it’s on Bevcomm. If we can’t get people to sign up, it’s on us,” Eckles said. “We have got around a dozen of these state grants between Minnesota and Wisconsin over the last five years; we know we’re going to get somewhere around 75-80% of the people signed up. We have the history, we have the technicians, we have all the fixed cost of infrastructure; it’s already there … If someone wants to start up in Sibley County, they have to buy all those pieces. So for us, this is just more of an expansion of an existing network than it is necessarily starting a whole new thing.”
Bevcomm currently serves southern portions of Derrynane, stretching from St. Thomas Lake in the west, to Clear Lake in the south, to areas just outside city of Montgomery limits in the east.