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Will federal money help Montana bridge the ‘digital divide’?

First $266M in funding up for bids; more to come
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Posted at 2:33 PM, Feb 22, 2022

This is the first of a two-part series on the launching of an historic, multimillion-dollar investment in Montana’s high-speed Internet infrastructure.

This month, Montana began the process for awarding $266 million in federal funds to install high-speed Internet access into the state’s rural and suburban unserved areas. But this huge investment is just the beginning of an even bigger broadband bonanza.

“We could be, at the end of the line here, be talking about close to a billion dollars,” says Geoff Feiss, general manager for the Montana Telecommunications Association. “And that’s what it would take to bring fiber to almost every location in Montana. We ought to be shooting for that, and nothing less.”

Yet while this mountain of money marks a historic investment, Feiss and others still worry the state could blow it, by choosing to fund projects that won’t offer the widest swath of consumers the best, most affordable technology well into the future.

Geoff Feiss, general manager, Montana Telecommunications Association.

“We have an opportunity to build a network for the future and not to enshrine or condemn consumers to what’s good enough today,” Feiss told MTN News in a recent interview. “I’m not convinced we’re going to grab that opportunity. We have a risk here of clutching defeat from the jaws of victory.”

While decisions on which projects to fund are just beginning, the Gianforte administration’s point man on high-speed Internet says the idea is to finance networks that will stand the test of time and reach as many unserved people as possible.

“To me, success is ensuring that we get the most people we can the opportunity to succeed and engage in the current economy, by being connected (to high-speed Internet),” says Chad Rupe, the state’s broadband program manager. “It’s a moving target, but it’s something that if we continue to deploy these assets in a sustainable way, I will consider that a success.”

Chad Rupe, broadband program manager for the state of Montana.

The money is coming from two bills enacted last year by Congress — the American Rescue Plan Act (ARPA) — passed solely by Democrats, and an infrastructure bill, that had some Republican support.

ARPA contained the $266 million that’s out for bids now and could have another $120 million. Matching funds from the project bidders will add at least $50 million, and perhaps more.

The infrastructure bill has a minimum of $100 million for Montana, and likely a lot more as well, once federal officials complete rules that “weight” the distribution of additional broadband funding for rural, unserved areas.

Montana is usually considered the least-served state, when it comes to high-speed Internet, with at least one-third of the state’s population without it, depending on what broadband speeds are the standard.

Some say half the state is without access to high-speed Internet.

State Sen. Janet Ellis, a Helena Democrat who is on a commission advising the Gianforte administration’s decisions to spend the money, says the target must be the thousands of Montanans without this access.

“You can talk about ‘unserved’ and ‘underserved’ and all sorts of things, but in the end, we just need to get it in the ground to get people basic Internet service,” she says. “The most important thing to do is get Montanans who need reliable, affordable high-speed Internet the most, to give them that service.”

State Sen. Janet Ellis, D-Helena.

Montana state lawmakers, anticipating the burst of federal broadband money last spring, set up a framework in state law for deciding how and where to spend it.

The Gianforte administration opened the bidding on Feb. 7 for grants to spend the $266 million in ARPA funds, soliciting proposals from private companies, which may partner with local governments or others. The bidders must provide at least 20% in matching funds.

The administration created a point system to rank the bids, which are due April 8 and will be awarded by the end of June.

Telecom providers who spoke to MTN News said they’re generally impressed with the Gianforte administration’s process so far.

But they’re still concerned that too many projects could be funded that will provide speeds that are adequate now but can’t be ramped up in the future.

Rob Johnstone, CEO, Range Telephone Co-op in Forsyth.

“We don’t want to have the conversation in 10 years that maybe we picked a solution or technology today that was limiting, to only get us by for a few more years,” says Rob Johnstone, CEO of Range Telephone Co-op in Forsyth.

For Johnstone and other local telecom providers, avoiding that trap means installing fiber-optic cable networks wherever possible.

“If you put fiber in the ground, the limitations (for speed) get washed away,” says Jason Moothart, general manager of InterBel Telephone Cooperative in Eureka. “I think the important thing is to drive a long-term solution with this kind of once-in-a-lifetime kind of money.”

With fiber-optic cable, auxiliary equipment and electronics can super-charge the download or upload speeds on an Internet network, depending on how much customers want to pay.

Jason Moothart, general manager, InterBel Telephone Co-op, Eureka.

The current standard for high-speed Internet is 100 megabits-per-second (Mbps) for downloading content and 20 Mbps for uploading content — although more and more, customers are demanding upload speeds that equal download, called “symmetrical” speeds.

Most residential urban Internet customers in Montana enjoy speeds near those levels, which can provide video streaming services and most other home uses.

Moothart notes that just a few years ago, the benchmark was 25 Mbps for download and 3 Mbps for upload — speeds now considered obsolete. With a fiber-optic network, speeds of one or two gigabytes per second – 1,000 or 2,000 Mbps – are possible, he says.

Yet installing fiber-optic networks is expensive and time-consuming, having to dig trenches, get rights-of-way and lay cable in the ground to reach thousands of homes and businesses.

Sen. Jason Ellsworth, R-Hamilton, the sponsor of the bill that set up the framework to spend the broadband money, says it’s inevitable that some areas will be served by less-expensive technologies that may provide speeds considered high now, but that may be limited in their capacity to increase in the future.

State Sen. Jason Ellsworth, R-Hamilton.

Wireless Internet, which uses a tower to transmit data for that “last mile” to certain locales, will be an option, he says.

“I do understand people having a concern about being ‘future-proof,’ but you don’t want to be future-proof to the point of not having a service,” Ellsworth says. “To run fiber to the top of the mountain, if you’re paying $30,000 a mile and you’ve got 20 miles to get there, fiber is not going to be a choice.”

Rupe also believes a combination of technologies can get the job done.

“We would love to have fiber to the home everywhere,” he told MTN News this week. “But sometimes it’s not practical to be able to offer that level of service and have a sustainable business model. What we really hope to be able to do with this money is make sure that people have sustainable broadband service five to 10 years from now.”

Local, smaller telecom providers also hope the state will look first to them, to install the networks to reach unserved Montanans – instead of the national giants that haven’t always delivered well on serving many parts of the state.

“You have to show some level of guarantee that you can build and maintain the network,” says Johnstone of Range, which serves parts of rural southeastern Montana. “To me, right out of the gate, that means Montana-owned providers. Most of us are co-ops and have been here for 50 to 100 years. That’s a great, proven track record.”

Moothart, at InterBel in northwestern Montana, says investing the money in Montana-based companies probably also means more local jobs and property taxes, that directly impact local communities.

“Some of the largest companies in the state are not focused (on Montana needs),” he says. “They’re focused on really urban areas, like the Seattles and Salt Lakes, so there is a void being left by some of the bigs that are already being filled by the co-ops.”

Next: A closer look at the process for picking projects, when construction will happen, and whether the service will be affordable.