With the firm link established between quality broadband availability and community economic vitality xxvi, community leaders want to ensure that their residents, businesses and institutions are not left behind, whether located downtown in the county seat or miles from town on a farm or on a lake. It is a shrinking demographic that does not want access to broadband at adequate levels. Next generation people and technologies will demand an even higher standard of broadband quality. xxvii

Key Findings

  • 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.

This case study documents the real-world footprint of CAF II-funded networks in two rural Minnesota exchanges. CAF II funding increases Internet speed to some customers, but for many the increase is not enough to meet the state’s broadband goals for either 2022 or 2026. In sum, CAF II investments in Minnesota are being spent to build networks that don’t meet today’s federal definition of broadband and won’t meet state goals for the future. Moreover, lack of transparency in proposed CAF II network plans and timelines is making it difficult for impacted communities to plan accordingly to ensure their broadband needs are being adequately met.

Despite these challenges, Minnesota can boast examples of communities and CAF II recipients working together to finance networks that offer better service than CAF II-funded networks alone.

Projects in Martin County and in Chisago County’s Sunrise xxviii and Fish Lake Townships xxix have combined state and CAF II funding to build networks that meet state goals. To qualify for state grants, providers were required to commit to high-speed networks (25 Mbps/3 Mbps with scalability to 100 Mbps), far higher levels of service than the CAF II-funded projects in the Lindstrom and Braham exchanges:

  • Frontier has committed to delivering ubiquitous 25 Mbps/3 Mbps service with more densely deployed fiber and DSLAMs in Nobles County.
  • CenturyLink, using bond funds from the township residents in addition to CAF II and DEED funds, is deploying a fiber to the home network capable of Gigabit speeds in Fish Lake and Sunrise Townships in Chisago County.

These projects demonstrate the potential of Minnesota’s nationally renowned Border to Border Broadband grant program as an effective tool for leveraging state funds to impose state requirements – geared toward state goals – to ensure maximum public benefit from public investments.

In addition, greater transparency on the part of CAF II recipients would benefit communities and providers alike. While recognizing that plans sometimes change, maps showing planned CAF II deployments over the next three years (through the end of the program) would help communities partner with their providers for better networks, as in the examples above. The same holds true of the FCC’s Alternative Connect America Cost Model (A-CAM) xxx subsidies to medium size rate-of-return carriers.

With greater transparency from CAF II recipients, state elected officials and the Office of Broadband Development could build effective strategies for maximizing the value of the CAF II and A-CAM dollars for the benefit of Minnesotans, including designing programs that require a fair mix of public resources – federal, state and local – to spur even more and better rural deployment in a predictable way.

Maximizing the public benefit from public investments is good for everyone.

Better broadband through transparency and collaboration is possible.

Impact of CAF II-funded Networks