On Tuesday, March 10, 2010 Cook County Information Systems Director Danna MacKenzie updated the Cook County Board of Commissioners on new developments in efforts to bring fiber optic infrastructure to almost every doorstep in the county.
The Cook County Fiber Optic Commission was notified at the end of February that the county’s stimulus grant application had been denied, MacKenzie said, because the grant reviewers “did not understand” the county’s financial model.
The commission has looked into the possibility of qualifying for a second round of stimulus funding. County Commissioner Bob Fenwick said the terms of round 2 would not be as financially “favorable” as those of the first round of grants, however.
In the meantime, other possibilities have arisen on other fronts. MacKenzie reported that the Northeast Service Cooperative, a public nonprofit corporation established by the Minnesota legislature, has applied for a stimulus grant that would bring fiber optic infrastructure along the Highway 61 corridor to the Canadian border. Thiswould solve “two-thirds” of the county’s need for a redundant fiber optic line through the county, MacKenzie said, in order to avoid communication outages like the one that isolated Cook and Lake counties when a fiber optic line was severed January 26.
According to its website, “The Northeast Middle Mile Fiber Project will make broadband services viable for a vast geographic region, creating an initial backbone that will serve approximately 221 sites along 831.4 miles of fiber within eight counties including St. Louis, Lake, Cook, Koochiching, Carlton, Pine, Itasca, and Aitkin. … The Northeast Service Cooperative has successfully operated a regional wide area network since 2000. We are experienced in designing, building and operating telecommunications networks.”
In an email to the Cook County News-
Herald,
Northeast Service Cooperative Executive Director Paul Brinkman wrote, “The Northeast Middle Mile Project is a landmark opportunity for all of us in Northeast Minnesota.”
Arrowhead Electric partnership
Another new development is that Arrowhead Electric Cooperative (AEC) is working with a company called Pulse Broadband on applying for a grant to install fiber optic infrastructure throughout the county with a second round of stimulus funding. Paul Harvey, a member of the Cook County Fiber Optic Commission, said that private companies are now starting to get interested in serving this area.
Under the proposed model, Arrowhead Electric would own and maintain the infrastructure and Pulse would be a vendor of services that would provide 250 TV channels, unlimited local and long-distance phone service, and high speed Internet for an initial cost of $125 a month for residences.
Arrowhead Electric Executive Director Don Stead said Pulse would use less costly components than those proposed in Cook County’s application, resulting in a total outlay he estimates at $20 million. Pulse, which says it has successfully set up systems in over 30 locations over the last three years, estimated the cost at $16 million, but Stead believes it may not be aware of the challenges in rocky terrain like Cook County’s. Even $20 million would be much less than the over $50 million estimated in Cook County’s grant application.
Pulse Broadband is working with electric cooperatives across the country to apply for stimulus grants. Its partnerships include 750,000 subscribers, enabling it to negotiate lower prices from service providers.
Arrowhead Electric and Pulse are applying for $10 million that AEC would need to match with a $10 million loan, a financial risk that the USDA Rural Utility Service would consider acceptable as long as Arrowhead Electric procured a loan guarantee from an entity like the county.
The grant application is due March 29, but Stead does not expect to find out if they will get it until after June.
Commissioner Bruce Martinson suggested that since the county is unlikely to need its upcoming 1% sales and use tax for a fiber optic system, it could offer the funding to Arrowhead Electric. Before last November’s referendum that authorized the tax, the tax committee, comprised of elected officials from around the county, had discussed devoting at least half of the $20 million it expects to collect from the tax to installation of fiber optic infrastructure.
Commissioner Bob Fenwick said the county is committed to limiting the amount of 1% tax money it will spend on fiber optics.
Martinson wondered if the 1% could help lower subscriber costs from $125 a month to $90, for example. County Auditor-Treasurer Braidy Powers said that the 1% could only be used on infrastructure.
About the partnership, Stead said, “It provides a service to the county that I think we want and deserve.”
Commission member Terry Meath said the service would get the county “connected to the world.”
The county board passed a motion to send a letter of support for the Arrowhead Electric/Pulse Broadband grant application.
County-owned phone service
Commissioner Fenwick tried to clarify the county board’s involvement in legislation that would lower the percentage of votes needed to allow a county to operate a telephone system. A 1915 Minnesota law requires counties to obtain an approval margin of 65% in order to operate a phone system, but proposed legislation would lower that threshold to a simple majority of just over 50%.
No one in Cook County asked for this legislation to be written, Fenwick said. He learned of the proposal on February 4 in a conversation with Senator Tom Bakk.
On February 17, Fenwick met with Qwest/Minnesota Executive Director John Stanoch, who said Qwest would not be lobbying to keep other entities from installing fiber optic lines in Cook County or to oppose the proposal to lower the voting threshold that could authorize the county to operate a phone system.
Commissioner Fenwick agreed to testify before the legislature February 18 on how lowering the voting threshold could help counties throughout Minnesota obtain fiber optic infrastructure, but he found out during the session that someone had changed the bill to include only Cook County. It was then changed back to include all municipalities.
On March 3, Fenwick said, telecommunication companies testified on the same issue, and the bill was changed again to include only Cook County. Commissioner Fenwick has urged both Senator Bakk and Representative David Dill to try to keep the bill from including only Cook County, he said.
“The political process has now taken on a life of its own,” Fenwick concluded.
While that issue is being debated, the Cook County Fiber Optic Commission continues to meet. Danna MacKenzie said they want to find the best combination of services for the county. “New ideas are still being brought forward,” she said. “The situation is still changing.”
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