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Broadband bonanza: How will the Legislature wire up Montana?

Workers lay broadband near Augusta. (KPAX image)

HELENA — A multimillion-dollar chance to bring high-speed Internet to the hundreds of thousands of Montanans without it is before the 2021 Legislature – a chance lawmakers and others see as a huge economic opportunity.

“We’re 50th in the nation, when it comes to broadband penetration,” says Geoff Feiss of the Montana Telecommunications Association. “It takes money, whether it’s wireless or fiber to reach those consumers. And we have an opportunity here to try our best to reach them.”

Yet determining where, and how, to spend this windfall of federal money is no easy task – and lawmakers have just a few weeks to do it.

The money is primarily from the American Rescue Plan Act, the sprawling federal Covid-19 relief bill signed last week by President Biden.

Montana gets $910 million of discretionary funds under the act, and Gov. Greg Gianforte’s administration this week proposed using $350 million of that money for broadband infrastructure.

Sen. Jason Ellsworth, R-Hamilton, the sponsor of a bill to create a state broadband task force that would distribute the money, told MTN News as much as $500 million might be available, depending on federal funds and the will of the Legislature.

“We’ve got to make a decision of where we need these dollars invested, where do they give us the best bang for our buck,” he said. “It’s a significant amount of money that can really bridge the gap. It is our future.”

Ellsworth’s Senate Bill 297, now before the House, will likely be amended to create the state task force that would accept applications from private companies to build broadband that can bring high-speed Internet to areas without it.

Minority Democrats at the Legislature also have been talking about broadband investment since the beginning of the session. Their proposals include creation of a state “broadband manager” and a revolving loan fund, instead of direct grants, to wire up parts of the state without high-speed Internet.

House Minority Leader Kim Abbott, D-Helena, said this week she hopes the two parties can collaborate on the best approach.

“It’s a game-changer for these programs,” she said of the money. “I’m very excited to have a conversation about what it means for rural areas and tribal communities.”

Geoff Feiss, Montana Telecommunications Association

There’s also a range of opinions within the broadband industry on how best to reach the most consumers and businesses – and create networks that have a long technological life.

“When you spend money, you do it in a way that’s scalable for the next 20 years, or 30 years – not just getting to a minimum standard and calling it good,” says David Gibson, head of Fairfield-based 3 Rivers Communications, one of the larger rural telephone/broadband co-ops in Montana. “And that’s the trick.”

Whatever the structure for disbursing the money, the arguments most likely will be over the speed standard, how and where it’s applied, and which companies or entities will do the work.

Ellsworth’s bill, as currently written, defines broadband as infrastructure that can achieve transmission download speeds of at least 100 megabits per second (mbps) and upload at 20 mbps. That’s more than adequate for most household Internet consumers.

Under the bill, private companies would apply for grants to install broadband that meets that standard, in locations where it doesn’t exist. They must have “demonstrated experience” in the field and provide 20 percent in matching funds.

To avoid overbuilding or encroaching on competitors that may already be in those areas, the bill also allows others to challenge any grant award, by saying the area is not truly “unserved.”

The infrastructure that offers almost unlimited speed is fiber-optic cable – but it’s expensive to install.

Companies that build wireless Internet systems say in some areas, they can offer speeds fast enough for most non-commercial consumers, at a much lower price.

Fred Weber of Montana Sky Networks in Kalispell says it could cost him about $200,000 to erect a tower that could offer wireless Internet for 50 to 100 people, in a remote area of homes.

That same amount of money would pay for perhaps three miles of fiber-optic cable, with five people per mile – 15 people.

“The whole thing about speed is more driven by the guys who can provide higher speeds,” adds Robert Bialecki, who owns a wireless Internet company in Great Falls. “They want to put the bar up so high. It should be based more on what’s possible.”

Bialecki also said the state should give Montana-based companies or entities a preference, over out-of-state corporations that have done a poor job of serving rural and suburban areas in the state.

Feiss, the general manager of MTA, said it would be “somewhat unfortunate” if corporations that have failed to provide Montana customers with good Internet service in the past now end up with a public grant to do the work.

Yet he said the process in Ellsworth’s bill is a “transparent, objective process,” and noted the provision allowing people to challenge the grant recipients.

In Montana, the interior area of larger cities, and some mid-sized and small towns, are well-served by high-speed Internet.

Many rural areas served by the larger telephone cooperatives, such as 3 Rivers and Havre-based Triangle, also are in the midst of a years-long upgrade to fiber-optic Internet, funded largely by federal grants and loans.

Some extreme rural areas in Montana are without adequate service. But the biggest hole in Internet service in Montana is often the suburbs, just outside of cities – areas not served by the co-ops, but ignored by the larger telecom carriers, which consider these sparser neighborhoods not profitable.

“I call it the donut, the areas outside the core of the larger towns,” Gibson says. “The donut holes are served. … So, that’s where you really need the financial incentives that don’t exist today.”

Business consumers also may require much faster speeds than the average consumer who uses broadband to watch streaming services or run his or her household Internet, creating another wrinkle in the decision on what to build, and where.

Osterman, the state Commerce director, told MTN News Thursday that the Gianforte administration wants to see an expansion that can serve both businesses and household consumers.

“We’ve got to do both,” he said. “That consumer out there – they’re paying Montana taxes and federal taxes. They have just as much requirement and need. It’s a necessary part of our life today.”

Ellsworth acknowledges this multi-faceted need, saying that’s why he hopes to create a task force of experts who can sort it all out, when deciding how to spend the money.

“One answer is not going to fit all,” he told MTN News. “It’s going to be a myriad of different answers. And then we can really utilize this money effectively.