Fiber to farm: Should farmers pay more?
Posted at 7:30 AM on November 18, 2010
by Dave Peters
(13 Comments)
Filed under: Broadband
The residents of Sibley County in rural central Minnesota have launched themselves into a conversation, not just about whether to build a fiber optic network that would give them world-class Internet access but about how to share the cost burden between town and farm.
MPR News reporter Mark Steil mentioned this on Morning Edition on Wednesday, noting how unusual this project would be.
Here are the questions: Should the county of 15,000 (18,000 if you add the neighboring town of Fairfax) create a project to serve eight small towns with Internet speed far greater than what is available now through phone and cable companies? Assume it would borrow about $34 million and have an expected breakeven in five years. Or should it build a project offering the same service to the same towns plus all the farms in the county, borrowing $61 million, finding another $2 million in equity and breaking even in seven years?
And -- here's the really interesting part for residents to tussle with -- if they lay fiber to all the farms, should farmers pay more?
From one perspective, it seems simple. Adding fiber to the low-density countryside is expensive, so those people (farmers) who get that service should pay more to get it, right? (Winthrop city administrator Mark Erickson, who is spearheading the project, tossed out the suggestion that one possible way to pay for the service would be for farmers to pay $1,000 each to get service, maybe spread over several years.)
But Peggy Soeffker, who farms a few miles outside Arlington, was among about 35 people at a public gathering in the town's community center Monday, and she asked a simple question. Why?
Farmers are business people who need access to markets, who communicate with colleagues around the country, who need Internet service as much as anyone. So why should they pay more for the same service their friends in town get?
The project is ambitious. It would provide 20-megabit service (more if you want to pay more) to everybody in Winthrop, Arlington, Gaylord, Green Isle, New Auburn, Henderson, Gibbon and Fairfax (in Renville County). By comparison, today a typical phone or cable service in one of those towns delivers 6 megabits in download speed and less than one for uploads.
It would be one of the few in the country to then wire all farms in a county with the same fiber. The county would own the operation; it would likely, if 65 percent of residents approved, establish a separate utility to run it.
It would need an estimated 70 percent of the homes in the county to agree to use it. So it would undoubtedly face competition from the phone and cable companies who offer service to towns now and who could be expected to cut rates and maybe improve service in order to compete. Those same companies have not shown much interest in extending coverage to rural areas that now have dial-up.
So over the next few months it will require Sibley County residents to ask two questions of themselves. Do we, in hopes of being as foresighted as the generations that brought telephone and electrical service to all homes, want to be so ambitious? And, if we do, do we think of ourselves 1) as divided into town and farm or 2) as a single community that shares burdens equally?
The first alternative sounds unfriendly, but it puts the pain where the costs are. The second alternative sounds brotherly but there's a cost to the folks in town.
Officials are holding a series of public meetings to lay the questions out for residents and then plan a joint session in January of county and city elected officials to move ahead or not.
A lot of variables, including the possibility of an outside investor and changing interest rates, could affect the financial equation. But it looks like Sibley County has made itself one of the more interesting places on the Minnesota broadband landscape.
Comments (13)
It is an excellent article. It is the most important question before us as a country. Do we exist as independent actors, each only responsible for our self-preservation, or is self-preservation itself a denial of the illusion that we exist as independent actors? To believe that economics solves this question is to fail to understand both the question or economics itself.
The spacial quality required by the farms to produce food results in the distance issues that give rise to extended connectivity and attendant costs. Yet that same quality provides for the very existence of both the towns, at least in origin, and certain qualities of life that the people of Sibley County desire. The spacial quality is required by, and benefits, all of us.
The simplicity of "business case" financials fails to reflect this. Indeed, "business case" financials fail in countless cases and manners when attempting to answer questions of our relationship, our interdependence, to each other. There simply is none. Interestingly, it is this exact failure of "business case economics" that gave rise to what Sibley County is pursuing. Without this failure on the part of existing providers, this study would not have been performed -- even for the towns themselves. The failure includes both towns and farms the same.
We need to answer this question: how do we exist -- alone or interdependently? When answered, the question of achieving a five versus seven year break even on a twenty-to-thirty year investment becomes more clear.
Eric Lampland
Make no mistake, this is a key decision and other counties will be wrestling with it shortly. There is no business case for the private sector to build this kind of network so the question is also whether Sibley's farmers will have access to modern communications, or will they be stuck on 21st century dirt roads (as the FCC's National Broadband plan is content to leave them).
I understand that nearby communities want to learn more and may want to join the project, I hope they find a way to connect everyone with the network they ALL deserve rather than a network designed to charge as much as it can for as little as it can deliver for out-of-state shareholders.
The National Broadband Plan and the Minnesota Ultra High-Speed Broadband Recommendations each promote public-private partnerships. I think a ubiquitous solution rests in such a partnership – especially a partnership at the most local level, where a local providre may be more interested in pursuing an investment in the community as well as in the business.
Sibley County is headed in the right direction with the community meetings.
I hope the farmers who think they should pay the same rate as towns people because we are all in this together, did not vote for the politically conservative candidate who advocated adopting an expanded fee-for-service model for public services.
As with better public education, better public roads, cleaner water, and more public parks, everyone will benefit from the improved internet access that everyone will get. Some will benefit more and some less, but everyone's life is improved.
Just wondering: isn't the trend to go wireless? I've heard of miles and miles of dark fiber- unused fiber optics- installed but not serving anyone.
Nancy, there is a trend for wireless to solve the mobility issue. But wireless as a solution for people who want to be productive for home is much less satisfactory. For one thing, very few wireless solutions allow one to stream video, which is how many of us use broadband.
Wireless is also much less reliable and offers far less capacity.
While there is dark fiber, I think you are confusing multiple issues. Many of the problems in rural MN result from too little fiber. Much of the dark fiber lies in corridors that already have a lot of existing fiber.
Do you really think that this will work? You need to ask yourselves a very simple question. Do you think the government can do a better job at providing this service then a business that has been working on this for years? What what will happen if a fiber drop is cut? Who will repair it and how long will it take to get someone out once you call?
This is a lot of money to be asking for in a time when money is tight. Technology is changing at a very fast rate. What you might think is "cutting edge" right now will be obsolete in a few years. What kind of back bone will are you talking about? Where will it be placed and who will maintain the plant? How much will the service cost per month?
I see a lot of pie in the sky talk going on here and no real answers to anything. Most of the people that live in town can get 6 meg service right now. Why will they want 20 meg service? The computers that a lot of people have right now will need to be updated to see any kind of change. That alone would cause people to go and spend more of their money.
Check out the link and then ask yourselves if it is worth having to pay all this money to get 20 meg service with equipment that will be obsolete before it is even paid for. I for one would like to know how much it would cost me every month to have 20 meg service that I would never need. This looks to me like some people want it and want others to pay for it. Keep your money people.
http://www.technologyreview.com/communications/25158/page1/?a=f
Responding...
"Do you think the government can do a better job at providing this service then a business that has been working on this for years?"
In fact, yes. For a variety of philosophical reasons, but we also have empirical evidence http://minnesota.publicradio.org/collections/special/columns/ground-level/archive/2010/11/are-community-broadband-networks-faster-than-the-metro-area.shtml as well a simply look at the economics shows that private companies have no reason to build next gen broadband in rural areas.
Additionally, Sibley has been fairly clear that they plan to work with an existing company to provide the services - this is what Monticello did as well.
"Technology is changing at a very fast rate."
Yes, it has been for a long time. Of course, some technologies change more slowly... the internal combustion engine and copper phone lines have lasted at least 100 years. Fiber-optic technology is one that lasts a long time. No experts dispute this and no private company would lay new copper when they could do fiber - the opex is too high on copper and it is much more limited.
"I see a lot of pie in the sky talk going on here and no real answers to anything."
Having attended a few meetings, I saw very little pie in the sky talk and very much real discussions about the costs and risks involved.
"Most of the people that live in town can get 6 meg service right now. Why will they want 20 meg service? The computers that a lot of people have right now will need to be updated to see any kind of change."
I don't like to be insulting, but that is absurd and demonstrates crazy ignorance. Apple has had gigabit ports standard for almost 10 years now. 100 Mbps ports have been a minimum for longer.
The reality is that different people need different speeds based on their usage. But it is clear that more is needed over time (30% year growth according to various sources) and the networks serving Sibley already fail to meet the needs of many.
I think it is a disservice to the planning and studying to suggest that no one is asking hard questions.
I don't like to be insulting, but that is absurd and demonstrates crazy ignorance. Apple has had gigabit ports standard for almost 10 years now. 100 Mbps ports have been a minimum for longer.
I agree, however, are you really trying to convince me that computers from 10 years ago work as well as computers today? That my friend is absurd and misleading. It does not matter how big or what the speed limit is on the freeway, if your bus can only go 70 mph. What you are asking for boils down to this. You want everyone to subsidize your INTERNET. Can the average person tell if they are getting 6 meg compared to 5 meg? What about 10 meg? The difference is so small that the AVERAGE user can not tell the difference. That is a fact.
Having attended a few meetings, I saw very little pie in the sky talk and very much real discussions about the costs and risks involved.
Please let me know what they are. I have asked this question before. It has not been answered. You seem willing to try and insult me for posting questions and concerns, yet, you do not answer my question about the cost for maintaining, repairing or just the cost of the service for the average person.
How can you make a claim that a private company will not invest in the rural areas for dsl? I really don't know of any areas in Henderson, Arlington or Green Isle that can not get dsl. If there are any areas that can not get dsl, how about saving your money and just ask the phone company? I do know that the cable company will not go into the rural area, however, the phone company will.
Oh... I tried the link that you posted. It will not show up. Could you please repost it so everyone can see what it is about?
"The reality is that different people need different speeds based on their usage. But it is clear that more is needed over time (30% year growth according to various sources)"
I agree with you on this. I know that INTERNET usage is climbing and that there is a need for more bandwidth. I just think that there is a better way of doing this then what is being talked about in this article.
Thanks
The point about computers 10 years ago is that any computer manufactured in the last 15 years can take advantage of 20Mbps - after you suggested computers need an update to go from 6Mbps to 20Mbps.
The larger point is that you have little technical knowledge. That is not to say you opinion is not important but to say that readers should not listen to you regarding what computers can and cannot do.
I have not suggested I want anyone to subsidize Internet for anyone. And the plan Sibley is considering has network paid for by its users, not the tax base (though the tax base will benefit from economic development).
I claim that private companies will not bring the kind of network Sibley County is considering (and the link above works fine for me so I will not repost it. Apologies if others cannot get it to work). Slow DSL available to those close to town is nothing comparable and strands farmers.
Your questions about the network may be answered by reading the feasibility study or contacting the people involved. http://www.scfiber.com/Sibley_County_Fiber/Home.html I am not involved in the project and I do not have time to continue answering questions about it.
There is no better way for rural folks to get proper broadband than for them to build it themselves via local governments, nonprofits, and coops. The same was true of electrification, for many of the same reasons: low density means small or no profits for the private sector so they are not interested.
It's not a matter of whether the government can do a BETTER job. They just need to do the same job as the private providers . . . . except they will do that job with fiber to the home/farm/business.
If Frontier, Qwest, CenturyLink, Mediacom or the local independent phone company want to come to Sibley County and deploy a county-wide fiber network we will welcome them with open arms and help them develop a business case. If the private sector is unwilling (actually they are unable) to upgrade their rural exchanges and communities with fiber and the people who live in those communities and exchanges recognize they need the advantages of fiber connectivity in order to compete in today's world then how will their needs ever be met if the citizens don't do it themselves.
Cities and Counties don't WANT to build these network but the private sector doesn't want to either. We live here, they don't.
Saying that 20 megs is too much is like saying the upgrade from two lane highways to the Interstate system was unnecessary 50 years ago. Why upgrade to a tractor when a team of horses can do the same thing.
Cities, counties and country's throughout the United State and the world are building or planning to build fiber to the home networks. But apparently the folks in rural Minnesota aren't entitled to have the same tools. I've been having the same tired debate with people for ten years about whether cities and counties should get into the telecommunications business.
The same arguments were made by the private electric companies 80 years ago and their are moer than 100 municipal and cooperative electric operations in Minnesota today. As a matter of priorities, local government should not be competing with the private sector but the law is clear in Minnesota and the need is compelling. If the private sector won't do it then local government has every right ,and I would even argue a duty, to do give their constituents the tools they need.
What Sibley County is clearly engaged in ......
I looked at the comments between Garret and Christopher. I do think Christopher handled it as well as could be done -- given the implied values that Garret was putting forward (i.e. government is not capable, anything that government does includes a subsidy to those who don't deserve it, the market always addresses consumer needs, etc). Those types of opinion do little to advance a real conversation, but are typical of this space. Unfortunately, they are most often -- I have rarely seen otherwise -- based on very poor information, which I believe Christopher was trying to tactfully address.
It is to be expected that some people will use this issue as a barb that brings forth political values and viewpoints. What Sibley County is clearly engaged in is trying to address a failure of the market economy. A failure that has long-term consequences for people and business. A failure that it has been addressed numerous times since the 1970's -- without clear success. What has been learned over these past 40+ years is that certain critical infrastructure issues are rarely achieved by incentives, regulation or legal rulings when constrained by practices from the same industry in which those market failures are occurring. The list of these attempts are long but include the 1984 AT&T Divestiture (legal); Carterfone decision in 1968 (regulatory); numerous incentives for FTTH contained in the 1996 Telecommunications Act and subsequent FCC rulings.
There have been successes. Minnesota is home to some excellent telephone cooperatives that have proceeded with Fiber-to-the-Home (FTTH). Verizon is serving millions of their customers with FTTH. Those semi-private and private market efforts are to be applauded -- they have shown courage and foresight. But it is not happening in Sibley County -- and many other locations elsewhere in the State.
I have been involved in this industry for almost forty years. There are fine people and a few good companies who try their best to bring new and important technology to market. It is extremely difficult. The core demands of short-term profitability and investment return cycles -- absolutely required by the private markets -- are almost impossible with long-term strategies required for deployment of rural communications infrastructure. This has been known for years -- by every knowledgeable person in this business. It was even foreseen in the 1934 Communications Act. The questions are not: is fiber the best technology for the next 50 years; are the requirements for capacity increasing exponentially; or will new devices and applications come forward -- it is, they are and they're already here.
This dilemma is not Sibley Counties alone. Over 50 countries on every continent from Australia to Finland to Chile have active national plans addressing fiber deployment. Everyone knows this is important. Finland with a population equal to Minnesota, but with three times the land mass, requires by law, that it's citizens have right to connectivity that must be 100 million bits per second by 2015. Australia is doing the whole continent with fiber. The list is huge and growing. Fiber is not the question. Speed is not the question. Applications and use are not the questions.
The questions are: how do we do this and who is included?
Eric Lampland
FTTH supports very fast speeds but look at the Monticello WEB site to see the prices, very expensive. Can you afford??
If you convert phone internet and TV to fiber(FTTH) you will have a battery in your house to support telephone usage for when your power fails. If your power fails and your battery is dead your phone will not work for 911 or any other use.
While at the Monticello WEB site take a look at their council meeting notes. Notice they are pumping money into promoting their fiber company, fishing contest photos with Santa. A hidden cost of government providing fiber network.
IF all you need is 20 Mbit service DSL works just fine without incumbering yourself with MILLIONS of taxation. 20 MEG DSL is $20 a month in the metro.
North Saint Paul attempted to install fiber using Hiawatha Broadband and the informed residents voted it down 2 - 1. The $34,000,000 pricetag was also placed on the North Saint Paul network.
The future for Internet access is wireless!! Only 20% of telephone users are now on a wire, copper or fiber. The cellphone is the future of telephone.
Current wireless offerings for internet access is the tip of the proverbial iceberg. Any product hooked to a cable of any kind will be obsolete for residential use very soon. The large communications companies are creating faster and faster mobile rates all the time.
The Sibley county project pimps FTTH which again can support very quick transfer rates, Google FTTH and read about it. However the vast majority of Sibley county users will never use anything more than 20 Mbps. Based on the cost of the faster service. IF you want to pay for FTTH service at a fast rate like 100 Mbps you will need a special interface card and a newer computer.
Questions to ask:
WHY is Sibley County promoting this project?
Are the residents demanding it?
Do the taxpayers want to borrow a BUNCH OF CASH to lay fiber with promises of payback based on a survey of potential users?
Have YOU been asked if you want FTTH?
Has an unbiased expert been asked about the project?
How about a second opinion?
Sibley County residents WILL be committed to pay MILLIONS for this project, who are the winners and losers?
What transfer rate do you need and what will that cost?
Do you really need FTTH?
Will you use FTTH, based on the high cost?
How many years will you FOR SURE use the high priced service?
What do you use the internet for now and is it fast enough?
Have you checked on faster services from existing providers?
Remember this project will only pay for itself IF a lot of users pay for it for a long time..
| November 2010 | ||||||
|---|---|---|---|---|---|---|
| S | M | T | W | T | F | S |
| 1 | 2 | 3 | 4 | 5 | 6 | |
| 7 | 8 | 9 | 10 | 11 | 12 | 13 |
| 14 | 15 | 16 | 17 | 18 | 19 | 20 |
| 21 | 22 | 23 | 24 | 25 | 26 | 27 |
| 28 | 29 | 30 | ||||
Master Archive
Recent Entries
- Bemidji phone company puts fiber on hold
- For volunteer fire departments, recruits can be hard to find
- What's the impact of a health care system like Essentia?
- 'Brain Gain' study: People in 30s, 40s still moving to rural Minnesota
- Behind the "brain gain:" Ups and downs of going rural
- Why move to rural Minnesota?
- Central Minnesotans kick the tires of regional plan
- Outstate Minnesota's great divides
- Getting There: A conversation
- How do you get where you need to go?
Categories
- Aging
- Arrowhead Region
- Baldwin Township
- Brainerd
- Broadband
- Community Development
- Crosby
- Economic Development
- Green energy
- Health care
- Hunger
- Immigration
- Local Food
- Local government finance
- Northern Minnesota
- Public safety
- Rural
- Social entrepreneurs
- Todd County
- Transportation
- Water quality
- Young people
Services
In The Spotlight
-
Sound Learning
Looking for ways to ensure your students are doing quality research from credible sources? Sound Learning is a launching point to Minnesota Public Radio's content on the Web. -
The Current Music Blog
Your daily note for good music, news and pop culture. With attempted jokes.
- Become a Member
- Member Connect Accounts
- Leadership Circle
- Sustaining Members
- Member Discounts
- Become a Sponsor
- Tax Information
- Planned Giving
- Vehicle Donation
- Donate Stock