Stephanie Gooden is past the point of wondering if rural broadband is a necessity.
“It’s far past time and we need to get going,” the northern district commissioner of Saline County said.
The primary hurdle that keeps rural areas from attaining access to reliable internet, however, isn’t recognition of the need. There are 780,000 people without access to internet speeds of 25 megabits for second, the federal minimum, in their home.
The primary hurdle is money.
“We need the funding,” Gooden said.
Gooden represents a portion of the state hardest hit by the COVID-19 pandemic.
But before the coronavirus shuttered industries and forced schools to close their doors, before Gooden had to figure out how to keep county staff online as they adjusted to working from home, she knew her county needed faster internet.
“It just seems like a hurdle that we shouldn’t have to tackle in this century,” she said. “We’re too far advanced for this. We have the technology. We just need the communities to be funded so we can get it out to everyone.”
There are several financing options for private firms and co-ops interested in providing internet in rural areas.
A cooperative can poll members and see if they are willing to take on the costs like Co-Mo Connect Electric Co-op did in 2011 when it built out in Moniteau County.
The United States Department of Agriculture has funds. Gooden and Marshall Municipal Utilities did just that and won a partial grant, partial loan in late January.
There are also state programs like the Missouri Broadband Grant Program, which awarded $3.05 million to rural providers on April 17.
Gascosage Electric Cooperative in Phelps County received $405,332 to help fund a $1.09 million project in Phelps County.
But there’s a catch – and it can frustrate projects that would otherwise move ahead. Poviders can’t use a state grant in addition to a federal grant in the same project area. So some providers are passing on some opportunities in favor of other, potentially more lucrative, options down the road.
Semo Electric Cooperative in Sikeston won a state grant in the most recent round of funding. But General Manager Sean Vanslyke turned it down because accepting it would disqualify him from applying for possibly more money from the Federal Communications Commission in October to bring internet to the same area.
“It would be outstanding if we could stack or match the grants so that we could leverage the state and federal dollars together in order not to double dip, but to better serve the citizens in our areas,” Vanslyke said.
Vanslyke wonders if there is a better way – if the process could become more efficient if the state offered matching dollars or made it possible to use a state grant in addition to a federal grant.
The Missouri Broadband Grant Program was created in 2018 and allocated $5 million in 2019. The money was to be distributed for projects serving un- or under-served areas, which are defined as those that don’t have access to internet speeds of at least 25 megabits per second (mbps). But the funds shouldn’t overlap with other projects happening in the same area.
“The purpose for that is to ensure other broadband programs, which are obviously expanding and doing great things … are not coupled together,” Broadband Development Director Tim Arbeiter said. “In essence, with the state grant, it’s intended to go farther.”
Missouri’s program is intended to work like a puzzle, fitting into an existing grant project until all of Missouri has access to at least one form of internet service. The metric for success is area covered.
That’s how it’s working for Gascosage Cooperative General Manager Carmen Hartwell. Her cooperative just started pursuing broadband projects.
“It’s not just to get somewhat better internet speeds. The idea is to get it to people who have nothing,” Hartwell said. “That’s what our approach has been right now.”
Gascosage’s upcoming project in Phelps County involves laying 21 miles of fiber internet that will serve 83 homes. That comes out to between $48,000 and $50,000 per fiber mile.
“It’s not a profitable thing,” Hartwell said. “Which is exactly how rural electric cooperatives were built, because no one wanted to build out rural electric infrastructure because the density was so low.”
Electric co-ops are in the perfect position to build out internet. Cooperatives are member-owned, not-for-profit organizations, meaning they aren’t trying to make money on rural broadband projects. But small margins mean little money for big investments like rural fiber.
“I hate to say that it’s a responsibility of the government, but I think it’s past that,” Gooden said. “It just needs to be done. We need the funding.”
Gooden and Marshall Municipal Utilities just won a grant through the USDA Reconnect One program. They’ve already applied for the second round of funding, Reconnect Two. During the application process for one of the grants, Gooden said they had to carve out a portion of the project because a satellite internet provider had already applied for a grant for the same area.
“They are using fixed wireless,” Gooden said. “I know fixed wireless has a need … but it’s not always consistent. Fiber is a direct connection. So why is a direct connect company competing with a fixed wireless company?”
Vanslyke is running into similar issues while trying to build out a six-county area of the Bootheel. He said that the ability to stack grants either to cover more costs of a single project or to offer more than one service to a particular area could help rural co-ops as they try to sort through the web of funding opportunities.
DOLLAR FOR DOLLAR
In some ways Pennsylvania’s rural broadband program is behind Missouri’s. It’s still an initiative underneath the Office of Economic and Community Development, meaning it doesn’t receive direct appropriations from the state’s budget.
In other ways, however, it’s exactly what Vanslyke would like to see in Missouri.
Many federal grant programs require a local match either with the provider’s own funds or through a local government or organization.
“But a lot of these smaller providers can’t necessarily come up with a match on their own,” Sheri Collins said.
Collins is leading the governor’s broadband initiative, Restore Pennsylvania, from within the state’s Department for Economic and Community Development.
She spent much of the last year traveling around the state meeting with rural providers and communities still waiting to receive broadband capabilities.
“Any time you can leverage state, local and federal funds together, you have an opportunity of really being able to make a larger impact,” Collins said.
Because Pennsylvania’s program has yet to be codified into legislation, many of its funding opportunities are one-off matching funds.
Although Missouri’s program is more consistent, providers like Vanslyke say the ability to match or stack grants and loans would not only cut some of the complicated bureaucracy out of applying for funds, but also help keep their projects viable.
“The more dollars that we have from those funding sources the more people that we can help,” Vanslyke said.
There is no talk of changing the way the Missouri Broadband Grant Program operates among state leaders. Because it was created in the legislature, any change would need to originate in the state’s house of representatives.
Although rural providers do wish the program was more flexible, they don’t want to sound ungrateful for the funds. Rural broadband is expensive, especially fiber projects like Hartwell’s, Vanslyke’s and Gooden’s. It basically requires utility companies to take miles of hair-thin glass and either bury it underground or string it from utility poles.
Yet, the past two months have made clear that without consistent and competitive broadband offerings, rural communities will get left behind amid a rapidly transitioning economy.
What providers and local leaders are grappling with is how to do it and, sometimes, betting on the opportunity that will get them the most dollars for their efforts.
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