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About the Report

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Minnesota remains a state of broadband haves and have-nots, with 52.88 percent i of rural communities having access at the level of the state’s minimum standard, compared to 70.04 percent of statewide households meeting the state’s broadband goals. ii Because Blandin Foundation cares deeply about the vitality of rural communities, we care about these gaps.

Recognizing that both local leaders and policymakers need sound information so that communities, border to border, are positioned for healthy, vibrant broadband-enabled futures, Blandin Foundation, in collaboration with lead researcher Bill Coleman of Community Technology Advisors, offers this case study. It focuses on two rural Minnesota exchanges where major federal investment has been made through the Connect America Fund (CAF II). The intent is that these two examples better illuminate how resources are—and sometimes are not—being woven together in support of rural communities. The report also suggests ways that the tapestry of broadband resources available to rural communities may be improved.

For more than 75 years, Blandin Foundation has worked to strengthen rural Minnesota communities through its grantmaking, community leadership training and community engagement. In 2003, the Foundation formalized its belief that robust access to, and use of, high-speed Internet was key to community strength through the Blandin Broadband Initiative. Since then, Blandin Foundation staff and partners have stood with more than 70 communities as they design and claim their broadband-enabled futures.

Lead researcher Bill Coleman, president of Minnesota-based Community Technology Advisors, has assisted clients in developing and implementing programs of broadband infrastructure investment and technology promotion and training for nearly two decades. He helps communities make the connection between telecommunications and economic development.

Executive Summary

Through the Connect America Fund (CAF II), the Federal Communications Commission (FCC) is providing more than $85 million dollars to qualifying telecommunications providers in Minnesota to stimulate further broadband deployment to unserved rural customers. CAF II is intended to subsidize network deployments that can deliver service of at least 10 megabits per second upload/1 megabit per second download (10 Mbps/1 Mbps). Note, the current FCC definition of “broadband” is service at the speed of at least 25 Mbps/3 Mbps.

Minnesota’s near-term (by 2022) speed goal is in sync with the FCC’s current broadband definition of 25 Mbps/3 Mbps. Minnesota also has chosen to aim higher by establishing a speed goal of 100 Mbps/20 Mbps by 2026. Projects receiving “Border to Border” grants from state legislature through Minnesota Office of Broadband must be scalable to meet the 2026 state broadband goal.

Minnesota residents and policymakers are asking, what difference are these CAF II investments making in Minnesota? Because the FCC does not require CAF II recipients to submit network plans or maps, the answer is: it’s hard to tell. And based on the research conducted for this paper, the lack of transparency and accountability in the CAF II program has been challenging and frustrating for residents in CAF II-eligible areas who want a role in determining their broadband future. Similarly, policymakers are at a loss to understand how to leverage the federal government’s CAF II investments when the state’s aspirations are so much greater, as well as how to account for federal investments when determining an appropriate level of state investment in redressing Minnesota’s broadband gaps.

This study’s purpose is to help local and state leaders better understand the kind of networks being built using CAF II funds. The need for this work was confirmed through interaction with GPS 45:93, East Central Minnesota’s regional economic development coalition, as they considered broadband improvement strategies and were unsure of the real impact of CAF II investment. The region’s lack of broadband is documented on state broadband maps. These two exchanges were selected for study based on GPS 45:93 team members’ knowledge of recent CAF II improvements and provided an opportunity to compare the CAF II deployment strategies of the two dominant incumbent telephone companies within the region.

To this end, Right of Way (ROW) permit information was sought for all fiber and electronics installations within the two exchanges and researchers took to the streets and fields to visually identify and document fiber and electronics improvements in these exchanges. We mapped the newly installed network equipment in the exchanges and drew a representation of the network’s coverage based on the location of equipment. To help ensure accuracy, advice was sought on the study’s design, equipment identification and findings from industry experts. In addition, the two telecom providers that deployed these CAF II-funded networks, CenturyLink and Frontier, both were asked to review and offer corrections to the report prior to publication although neither chose to offer substantive comment.


  • CAF II dollars are being used to deploy Fiber-to-the-Node technology to support distance-sensitive Digital Subscriber Line (DSL) services in and around the cities of Lindstrom and Braham.
  • Even after CAF II investment, the vast majority of land within these two exchanges lies more than 3,000 feet from a fiber-fed DSL node, thus limiting the bandwidth available to those customers to something less than Minnesota’s 2022 state broadband goal of 25 Mbps/3 Mbps.
  • It is unlikely that any customers in these exchanges will be able to receive broadband services that meet the 2026 Minnesota broadband goal of 100 Mbps/20 Mbps without additional provider investment.
  • Greater transparency from CAF II recipients would enable more effective collaboration with state elected officials, the Office of Broadband Development, and communities to maximize the value of both CAF II and ACAM (Alternative Connect America Fund) program dollars towards meeting Minnesota’s broadband goals. ACAM is another FCC program that supports rural broadband deployment by mid-size telephone companies.
  • So far, the networks in this study being built in Minnesota with CAF II funds don’t meet state goals of better broadband speeds for everyone. The improvements are inadequate to support broadband-based economic and community development, while discouraging investments by competitive providers. Although some residents indeed welcome CAF II-funded upgrades that improve their service from ‘bad’ to ‘somewhat better,’ in the long run, the program’s second-class status for rural will cut ever deeper as networks in more densely populated, more profitable-to-serve areas continue to advance. CAF II funding has not been enough to incent participating providers to invest in the kind of world-class networks rural areas need to survive and thrive in an increasingly interconnected world. Absent additional incentives, future upgrades seem unlikely in communities already served by CAF II investment.
  • Minnesota can boast of examples where communities, the state’s Border to Border Broadband grant program and CAF II recipients have worked together to finance and build networks that offer better service than CAF II-funded networks alone.
  • Maximizing the public benefit from public investments is good for everyone.
  • Better broadband through better transparency and collaboration is possible.
Impact of CAF II-funded Networks
Back to Report Home  ·  Authored by Community Technology Advisors. Published July 2018.
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