Area Internet could get stimulus boost

By Matthew Stolle

WINONA — Hiawatha Broadband Communications CEO Gary Evans held a meeting with his staff Thursday morning, half of which was devoted to discussing a single subject: The $7.2 billion in federal stimulus money designated for broadband projects.

"It is a huge deal. I suspect that this is going to make the California gold rush look like a stroll in the park," said Evans, whose Winona-based company provides Internet access to 11,000 customers in southeastern Minnesota.

Hiawatha Broadband is one of dozens of entities across the state — cities, counties, educational institutions — that have made clear their interest in tapping a portion of the $7.2 billion in broadband funds, part of the $787 billion federal stimulus package.


If the money works as it is intended, it could significantly expand or improve access to high-speed Internet connections in communities that are currently underserved or have no broadband access. In addition to HBC, there are at least two other entities in southeastern Minnesota that hope to get a piece of the pie: Goodhue County and the Southeast Minnesota Network, a consortium of nine area school districts.

School district help

Wendy Shannon, superintendent of Byron Public Schools and SEMNET chair, said a key issue with many school districts is the lack of affordable and adequate bandwidth that meets the needs of teachers and students.

"What’s happening is that people want it available anytime, anywhere," Shannon said.

The money is being channeled through two federal agencies. The U.S. Department of Commerce’s National Telecommunications and Information Administration is responsible for disbursing $4.7 billion in broadband funds, and the U.S. Department of Agriculture’s Rural Utilities Service division will hand out $2.5 billion.

So far, there are no criteria or guidelines for determining who will get the money. A public comment period is set to end on Tuesday, and rules governing the applications could be issued in the next couple of months.

Awards to come

Evans said there probably will be at least two rounds of awards, one in fall and another in 2010. At the moment, it is unclear whether the funds will come in the form of grants or loans. Evans said the common belief is that it will be grants — that the government will fund 80 percent of a proposed project and the recipient will pay the rest.


"So think about this: You can build a project in which you will have 100 percent equity for 20 percent of the investment," Evans said. "This is going to make Santa Claus look like the Grinch."

Evans predicts there will be a "tremendous battle" waged around the question of what is broadband. Incumbent Internet providers, hoping to protect their turf, are likely to push for a loose definition, arguing that whatever it is they are providing is sufficient.

Evans noted that the rules currently in place at the Rural Utilities Service division define broadband at 256k, a broadband connection that he said was far from adequate.

"I would suggest that in this world that broadband would probably start no further down than 10 megabytes up and down stream. And probably in very short order, if we really want to be competitive with the rest of the world, we’re going to have to get on networks that deliver gigabyte speeds," Evans said.

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