Arrowhead Cooperative Interim Manager Jenny Kartes demonstrates the on-line television option that is available via the cooperative’s True North broadband.
Just as it did over 60 years ago to bring electric service to Cook County, Arrowhead Cooperative has been working with local and federal government agencies to bring broadband Internet to homes in the remotest of areas of the county. In keeping with the co-op’s mission, they have been working to “connect the Tip of the Arrowhead.”
Sitting in the board of directors’ room at the cooperative headquarters in Lutsen recently, Arrowhead Interim Manager Jenny Kartes was happy to give an update on the True North project that kicked off with loan and grant applications in 2009. Construction started in the fall of 2010.
Kartes acknowledged that the fiber to the home (FTTH) project has taken longer than expected. She said the installers were not from this area and did not anticipate the short construction season. And, she added with a smile, “All the rock.”
But, Kartes said, “I go back to how long it took to get electricity to all of Cook County. To do this fiber project in a few years is pretty phenomenal.”
Customers who now have True North broadband service agree. The FTTH is in place through Schroeder, Tofte, Lutsen, and Cascade and into Grand Marais. She said Arrowhead has finished construction and is now “verifying” parts of the Gunflint Trail. Once that part of the project is done, the work moves on to Hovland and Grand Portage.
The majority of the fiber is in place but before going “live,” workers must confirm that the lines are connected and working properly. That’s the “verifying,” Kartes said.
Arrowhead staffers are out in the field to assess every fiber to make sure all of the potential customers are connected. They do so by taking readings to ensure that the line has the “optimal light reading” and is ready to be put into service.
The radios between the cooperative headquarters in Lutsen and the fiber line workers are busy, with light reading levels being called in and confirmed by the office. It’s a painstaking process.
“If one house is missed, it would mean that the others would have to be shut down while that was fixed,” said Kartes. “We don’t want that to happen.”
It has been going well up the Gunflint, said Kartes who said, “There are a lot of happy people up there.”
In fact, she said when the Arrowhead Board of Directors representative for the Gunflint area, Les Edinger, came to the last board meeting, he said it was the first time he didn’t have a complaint from a member asking when the broadband service would reach them. Customer service available at Arrowhead
Who do customers reach if they have questions about their Internet or telephone service? Kartes said many questions could be answered by the staff at Arrowhead. “We’re the first line tech support,” she said.
If questions are beyond Arrowhead’s expertise, customers are referred to tech support at Consolidated Telephone Co-op of Brainerd. “They are also a co-op, so they have the same mindset as we do,” said Kartes. “We know the people there—in fact, that is where Joe Buttweiler [a former Arrowhead Electric co-manager] is working now. Their CEO has been here. Our relationship is unique and it’s become a national partnership model.”
Television service with True North looks a bit different than originally envisioned. At the beginning, Arrowhead thought it would also be a television provider, like a cable company, but Kartes said just in the five years that the project has been under development, the TV industry and the public’s viewing habits went through rapid changes. She said there is a huge increase in streaming (watching) TV on-line.
“We would like to provide a solution, but we can’t take a huge risk,” said Kartes, explaining that what the co-op decided to do was to create a process to help people stream TV programs through the Internet.
“We offer Roku,” she explained, “which is a box that you hook to your TV and it enables you to easily stream Netflix or Hulu or a service like that. Roku also offers its own programming.”
There is a large screen TV in the lobby of the cooperative that Arrowhead employees can use to walk customers through the steps of using Roku. The finances of fiber
In September 2015, Kartes came before the Cook County commissioners, requesting that the county release the 1 percent sales and infrastructure tax funds that were earmarked for the broadband project. In 2011, the county agreed to provide Arrowhead Electric $4 million from the 1 percent funds.
Kartes requested, and was granted, $3,586,707.55 toward completion of the project.
At the Arrowhead office, Kartes explained that the county had asked Arrowhead to exhaust all of its other funding sources before using the 1 percent funding. She said Arrowhead had done just that.
The build-out was funded by the United States Department of Agriculture (USDA) Rural Utilities Service (RUS) under the Broadband Initiatives Program through the American Recovery and Reinvestment Act.
Kartes said Arrowhead Cooperative received $16.1 million in grants and low-interest loans. She said 70 percent of the money from USDA was a grant.
To date the total cost of the project is $20,569,544.00.
And how will Arrowhead recoup its investment? Kartes said the cooperative is still in the start-up phase, but eventually, there will be profits that will be used to pay off the low-interest loans.
There may eventually be profits, which are considering “non-operating revenue,” because they are outside the electrical operations, which can be spent at the board of director’s discretion.
What will likely happen is that proceeds will be reinvested in the fiber plant. “There is a lot of turnover in data equipment. It’s not a cheap system to maintain,” said Kartes.
Asked if the original customer estimates are correct, Kartes said yes, but added it was hard to anticipate how many people would ultimately want True North services. As expected the “take rate,” the number of users in Grand Marais is lower than areas where no other Internet service is available. In some areas Arrowhead is seeing a greater-than-anticipated sign-up rate, such as in the Clearwater Lake area.
There are now 1,650 properties connected and receiving some sort of service from Arrowhead. Kartes said some people have Internet service; some telephone service and many people have both. There are also some unique clients such as companies operating cell phone towers.
Kartes said the goal during the planning process was to have 1,648 Internet lines and 1,000 phone lines. “So we are well on our way,” she said.
Well on the way to “connecting the Tip of the Arrowhead” indeed.
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