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Minnesota Busts the
‘Broadband Is Too
Expensive’ Myth
2017 CASE STUDIES OF 5 RURAL MINNESOTA
COMMUNITIES
ANN TREACY & BERNADINE JOSELYN
Lay of the Land
Blandin Foundation for community
capacity building and engagement
Office of Broadband Development
for coordination of public
investments
State broadband goals and task
force – in Legislation
Cooperatives growing interest in
broadband
Research questions
1. What does a connected rural community look like?
2. What are the providers and communities doing
right?
3. What is the community ROI on public
investments?
Methodology
• Collect and analyze existing data from 5 communities
• Look at ROI formulas
• Hold community meetings/interviews with key
interlocutors
Beltrami/Bemidji –
Hip and Happening
Provider – Paul Bunyan
Fiber (Gig)
DSL (50/40)
Community Partners
Bemidji Leads and
Greater Bemidji
Crow Wing/Brainerd –
Work Hard, Play Hard
Provider – CTC
Fiber (Gig)
DSL (50/1.5)
Community Partners
Brainerd Lakes Chamber
of Commerce, Brainerd
Lakes Area EDC (BLAEDC),
Schools
Goodhue/Red Wing –
Hotbed of Entrepreneurs
Provider – HBC
Fiber (Gig)
Fixed Wireless (40/40)
Community Partners
Red Wing Ignite
Lake – Remote but Global
Provider – Lake
Connections
Fiber (Gig)
Community Partners
County Commissioners,
Lake County
Sibley – Stable & Determined
Provider – RS Fiber
(HBC)
Fiber (Gig)
Fixed Wireless (50/25)
Community Partners
RS Fiber
“I get two questions: do you have the people we
need to succeed here; the second do we have the
broadband.” - Economic Developer
“Business involvement is key in any successful
economic development program.” – Economic
Developer
“…that [new location in same town] coupled with
online marketing, we’ve grown 400% over my
dad’s record year.” – Business owner
“As we work with commercial real estate agents,
they tell us that’s a leading question – is fiber
available at that location?” – Broadband provider
“Having good internet makes everything move
more smoothly… bill pay…accounting … camera
feeds in our hog sites…” - Farmer
“We use drones to do investigating … into the
jungle [Puerto Rico] instead of sending
employees.” – Xcel Energy
“Broadband helps efficiency by allowing us to do
things at such a rapid pace. Before …you’d sit and
wait for things.” – Winthrop News
“Patients can easily be 200 miles from the
nearest health facility… the patient portal … is
tremendously convenient.” – Healthcare
What do the numbers show?
Broadband Access Over Time
Beltrami – Census Stats
2016 Population is up 3.7 percent from
2010
◦ The statewide average was 4.1
◦ Town/Rural counties as a group have
seen a decline
2015 Median Income is $44,757
◦ Compared $40,700 for similar counties
Beltrami’s Digital Divide Index Score is
the second best out of the counties we
are tracking
ROI Formulas
0
50000000
100000000
150000000
200000000
250000000
Beltrami Crow Wing Goodhue Lake Sibley
Public Investment vs Community Benefits
Public Investment Annual Economic Benefit Community Real Estate Increase
ROI Details
County Public Investment Annual
Econ Benefit*
Real Estate
Increase*
Beltrami $1,432,000 $38,631700 $102,593,266
Crow Wing $15,123,450 $67,412,150 $214,662,149
Goodhue $542,262 $32,774,600 $104,825,572
Lake $83,418,170 $13,695,550 $38,547,421
Sibley $9,850,011 $8,604,350 $20,162,085
• Annual economic benefit - $1850/household x HH served
• Community real estate increase – 3% increase of market
(median value x HH served)
Just to compare
Public costs?
Minnesota Super Bowl Host
Committee (nonprofit) $60M
Stadium (taxpayer) $500M
Tax savings, free parking, closed
public transport…
ROI?
Rockport Analytics estimated
$338M
Sports economist Victor Matheson
suspects $30M to $130M
Conclusions
• Two keys to economic benefit – access and
adoption
• The community benefits from broadband quickly;
the provider’s ROI may not be as “timely”
• Public funding shortens ROI for the provider
• Adoption efforts increases ROI for community
Thank you!
Bernadine Joselyn
Blandin Foundation
brjoselyn@blandinfoundation.org
http://blandinfoundation.org
Ann Treacy
Treacy Information Services
atreacy@treacyinfo.com
http://treacyinfo.com

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Minnesota Busts the ‘Broadband Is Too Expensive’ Myth

  • 1. Minnesota Busts the ‘Broadband Is Too Expensive’ Myth 2017 CASE STUDIES OF 5 RURAL MINNESOTA COMMUNITIES ANN TREACY & BERNADINE JOSELYN
  • 2. Lay of the Land Blandin Foundation for community capacity building and engagement Office of Broadband Development for coordination of public investments State broadband goals and task force – in Legislation Cooperatives growing interest in broadband
  • 3. Research questions 1. What does a connected rural community look like? 2. What are the providers and communities doing right? 3. What is the community ROI on public investments?
  • 4. Methodology • Collect and analyze existing data from 5 communities • Look at ROI formulas • Hold community meetings/interviews with key interlocutors
  • 5. Beltrami/Bemidji – Hip and Happening Provider – Paul Bunyan Fiber (Gig) DSL (50/40) Community Partners Bemidji Leads and Greater Bemidji
  • 6. Crow Wing/Brainerd – Work Hard, Play Hard Provider – CTC Fiber (Gig) DSL (50/1.5) Community Partners Brainerd Lakes Chamber of Commerce, Brainerd Lakes Area EDC (BLAEDC), Schools
  • 7. Goodhue/Red Wing – Hotbed of Entrepreneurs Provider – HBC Fiber (Gig) Fixed Wireless (40/40) Community Partners Red Wing Ignite
  • 8. Lake – Remote but Global Provider – Lake Connections Fiber (Gig) Community Partners County Commissioners, Lake County
  • 9. Sibley – Stable & Determined Provider – RS Fiber (HBC) Fiber (Gig) Fixed Wireless (50/25) Community Partners RS Fiber
  • 10. “I get two questions: do you have the people we need to succeed here; the second do we have the broadband.” - Economic Developer
  • 11. “Business involvement is key in any successful economic development program.” – Economic Developer
  • 12. “…that [new location in same town] coupled with online marketing, we’ve grown 400% over my dad’s record year.” – Business owner
  • 13. “As we work with commercial real estate agents, they tell us that’s a leading question – is fiber available at that location?” – Broadband provider
  • 14. “Having good internet makes everything move more smoothly… bill pay…accounting … camera feeds in our hog sites…” - Farmer
  • 15. “We use drones to do investigating … into the jungle [Puerto Rico] instead of sending employees.” – Xcel Energy
  • 16. “Broadband helps efficiency by allowing us to do things at such a rapid pace. Before …you’d sit and wait for things.” – Winthrop News
  • 17. “Patients can easily be 200 miles from the nearest health facility… the patient portal … is tremendously convenient.” – Healthcare
  • 18. What do the numbers show?
  • 20. Beltrami – Census Stats 2016 Population is up 3.7 percent from 2010 ◦ The statewide average was 4.1 ◦ Town/Rural counties as a group have seen a decline 2015 Median Income is $44,757 ◦ Compared $40,700 for similar counties Beltrami’s Digital Divide Index Score is the second best out of the counties we are tracking
  • 21. ROI Formulas 0 50000000 100000000 150000000 200000000 250000000 Beltrami Crow Wing Goodhue Lake Sibley Public Investment vs Community Benefits Public Investment Annual Economic Benefit Community Real Estate Increase
  • 22. ROI Details County Public Investment Annual Econ Benefit* Real Estate Increase* Beltrami $1,432,000 $38,631700 $102,593,266 Crow Wing $15,123,450 $67,412,150 $214,662,149 Goodhue $542,262 $32,774,600 $104,825,572 Lake $83,418,170 $13,695,550 $38,547,421 Sibley $9,850,011 $8,604,350 $20,162,085 • Annual economic benefit - $1850/household x HH served • Community real estate increase – 3% increase of market (median value x HH served)
  • 23. Just to compare Public costs? Minnesota Super Bowl Host Committee (nonprofit) $60M Stadium (taxpayer) $500M Tax savings, free parking, closed public transport… ROI? Rockport Analytics estimated $338M Sports economist Victor Matheson suspects $30M to $130M
  • 24. Conclusions • Two keys to economic benefit – access and adoption • The community benefits from broadband quickly; the provider’s ROI may not be as “timely” • Public funding shortens ROI for the provider • Adoption efforts increases ROI for community
  • 25. Thank you! Bernadine Joselyn Blandin Foundation brjoselyn@blandinfoundation.org http://blandinfoundation.org Ann Treacy Treacy Information Services atreacy@treacyinfo.com http://treacyinfo.com

Editor's Notes

  1. Area of extremes Provider - Paul Bunyan Communication (Cooperative) Voted Bemidji their Best City by Minnesota Monthly Recently wooed Delta Dental (150 jobs!) Beltrami Stats Youngest population of the cohort Highest level of education Highest population of Indigenous Smallest population of White (73%) Greatest percentage in poverty Greatest growth percentage since 2012 Highest number of housing building permits, despite being third largest county What’s happening Bemidji State University Gaming Championship GigaZone Minnesota Innovation Institute Launchpad Growing Art Scene County partner role - Been meeting for 15 years to plan from the Future. Broadband was key. They still meet regularly.
  2. Lots of tourism, but big enough to need other industries Crow Wing Stats Largest population Greatest population density Second highest median home value Tourism location but big enough to have other industries What’s happening? Concerted focus on shifting to tech industry after closure of Potlatch Community Tech Recruiter position created Schools offering tech training Seasonal homes are becoming year-round residents Attracting people who can work anywhere Hackfest to convene techies County partner role - Held a conference of leaders in 1999. In 2001, the school took the lead to getting broadband. Joined BBC.
  3. Goodhue Stats Highest median income Highest median home value Closest to Twin Cities What’s happening? Red Wing Ignite Bringing “cool” events to Red Wing such as hackfest and the MN Ignite Cup Promoting innovation and entrepreneurs in schools Programs to support existing entrepreneurs County partner role - Founded in 2013 through local foundations and the City to support better broadband use. Joined BBC.
  4. Lake Stats Lowest population (and pop density) Largest percentage of population over 65 Smallest percentage of population under 18 Second largest land area Most remote, although proximity to Duluth What’s happening? Attracting people who can work anywhere Extending vacations Making area away from the lake attractive Creating intergenerational interaction Dealing with haves/have-nots in the school County partner role - Stimulated with ARRA funds in 2010. Founded to bring better broadband. Joined BBC to spur adoption.
  5. Sibley Stats Second highest median income Second lowest population Highest population of foreign born (4.6%) Lowest percentage of college degrees Smallest number of building permits What’s happening? Broadband is still new – but receiving a lot of attention for the approach Saved the newspaper and found a way to reach millennials Attracted a medical school (to open in 2018) County partner role - Started in 2015 – after 10 years of striving for broadband. Joined BBC to spur adoption.
  6. Our challenge was to try to quantify some of the success that we’re seeing. Like website stats – we have to balance quantitative and qualitative. AND unlike website site we need to recognize that the stat lag behind reality.
  7. First – it’s helpful to look at progress over time to help determine where these counties are in the process. One problem with broadband mapping is changing definitions Another problem with broadband mapping is reliability The problem with census data is that it lags behind broadband updates
  8. 2016 Population (46,101) is up 3.7 percent from 2010.  The statewide average was 4.1 Town/Rural counties as a group have seen a decline 2015 Median Income is $44,757 Compares favorably to similar communities where median is $40,700. Beltrami’s Digital Divide Index Score is the second best out of the counties we are tracking
  9. Rockport & Matheson - https://www.mprnews.org/story/2018/01/31/super-super-bowl-economic-impact--depends-who-you-ask http://m.startribune.com/toodle-oo-super-bowl-lii-how-d-minnesota-do-as-a-host/472858103/