Broadband push just first part of new economy

Rep. Rick Nolan (D-MN8) shared this ad from the days of the Rural Electrification Administration, comparing the need for federal action on broadband now to the need then to connect rural places to electricity.

Rep. Rick Nolan (D-MN8) shared this ad from the days of the Rural Electrification Administration, comparing the need for federal action on broadband now to the need to connect rural places to electricity in the first half of the 20th Century.

Universal access to affordable broadband isn’t just about getting more people on the internet, it’s about giving more people in more places the opportunity to generate a sustainable balance of labor and wealth in their communities.

Over the past 10 years I’ve written many pieces about the importance of high speed internet infrastructure throughout Minnesota and the potential broadband would bring to our economy.

In an e-mail, U.S. Rep. Rick Nolan (D-MN8) told his Northern Minnesota constituents he had introduced H.R. 3152, the Rural Broadband Initiative.

The need could not be more clear. High-speed broadband isn’t a luxury. It’s a necessity required to help grow our small town rural economy and compete, start new businesses, create new jobs, attract new people and modernize the education and health care services so essential to quality of life.

Nolan describes his bill thusly:

Our plan is to centralize key rural broadband grant and loan programs under one Office of Rural Broadband Initiatives at the U.S. Department of Agriculture. With a new Under-Secretary appointed by the President, the office would administer roughly $724 million in rural broadband grant and loan programs. Regulations would be streamlined, and local and state governments would have a one-stop shop for help in connecting their areas. Just as importantly, the Federal Communications Commission (FCC) would have a central information clearinghouse to help them better utilize some $4.5 billion in federal resources specifically targeted to expand broadband to rural areas.

Gregg Aamot has a compelling read about the gaps in Minnesota’s broadband infrastructure over at MinnPost.

The situation has been likened to the lack of electricity in rural areas before the massive federal electrification movement of the 1930s that helped to modernize farms. Rather than a luxury afforded the largest and most urban, broadband is now recognized as a necessity of living and doing business in the 21st century.

“We are in a world economy,” said Richard Baker, Mille Lacs County’s community development coordinator. “We need that reliable access to the Internet.

In my recent conversation with Chuck Marohn on the Strong Towns podcast, I highlight e-commuting and remote location of creative production as potential anchors of the new economy of the Iron Range. Rural broadband is a key part of that kind of plan, but I’ll tell you a secret: Iron Range municipalities already have broadband. The speeds aren’t blazing, by international standards, but they are fast enough for electronic commerce.

So, Mr. Smarty Pants, why isn’t the Iron Range a bastion of 21st Century progress then? That’s a complicated question, but cutting to the chase the answer is that high speed internet is indeed a necessity, but only part of the strategy. We have to use the infrastructure wisely to attract the kinds of businesses and individuals who need it.

An example of this was featured on Minnesota Public Radio’s website today via Montana Public Radio’s Eric Whitney. Greg Gianforte, a Montana software executive, sent 18,000 brochures to the alumni of the state’s biggest universities asking them if they were “tired of the city,” imploring them to “come home,” where e-commuting is a viable option in many parts of the state.

Whether the pitch works or not has yet to be determined. (Gianforte is considering running for the GOP nomination for governor and there is a subtle promotional tint to his brochure). But it shows an entirely new way of thinking about economic development: more focused on the people who create economic activity than the smokestacks and corporate logos we’ve chased for 30 years.

Still, after infrastructure is installed the next phase is using it strategically. Attracting people to come from afar, or return home, is important. Fundamentally, Northeastern Minnesota won’t improve some of its most persistent problems until it puts the size of its population in line with the institutions it wants to keep.

As I wrote about in this Daily Yonder piece last year other cities have demonstrated that finding innovators in your midst is arguably ideal, if you’re able to develop or invest in a winner. Locally-owned economic activity has more staying power and keeps more wealth in the community.

So, maybe you like Nolan’s bill and maybe you don’t, but connecting more people who live in Northern Minnesota into the modern economic and social web will pay dividends over time. Further, if you don’t like waiting for federal action, cities could consider developing programs to attract e-communters and “tech centers” within their confines. In fact, every town on the Iron Range has real estate right on main street that could be remodeled for just such a purpose.

What if we didn’t just knock down blight in Iron Range towns, but in fact replaced blight with public and private investment in start-ups?

Just another idea. Feel free to develop and pursue your own. The exciting thing is that talking this way means we don’t have to wait for a decision by a distant mine owner or rely on one political party or another to save the day. We have the tools, and everything I’ve discussed here is possible.

That is, so long as we have the will.

Comments

  1. Ranger47 says:

    My God Aaron, you talk ad nauseam about this new fancy tool that’ll save the Range, the internet…and continually demand it be “free”. But never, never, do you offer any ideas or suggest what these new mythical businesses might be/should be/could be.

    The cities have had this fancy tool for years now, home owners use it, businesses use it, schools use it. Which of the businesses located in the cities do you believe should move to the Range? If it’s not a cities business that already exists, at least give us some ideas as to what new business you think should be created, and why they should be located up north?

    You sound as though you just want free internet!

    • Software. Engineering. Architecture. Bioengineering. Really, anything that involves design can and is being done with increasing mobility in this economy. We are entering an age of independent workers either freelancing or contracted by corporations. I’ve written about these things, but you only seem to remember your talking points. No one is advocating for “free” internet, despite your pathological fear of such a concept. But affordable, market-rate Internet for all is a worthy goal and good policy.

      • Gerald S says:

        Even manufacturing — at least high value added manufacturing — requires reliable high bandwidth internet, especially if located in relatively remote areas. Design specifications, programming of machine tools and printing devices, and communication with both vendors and customers all occur predominantly over the internet.

        Retailing is extremely internet dependent. Health care, legal services, banking and finance, transportation, utilities, and even food services are all wired in these days.

        In fact, as Aaron described in an earlier article about the Australian mining industry, even modern mining is dependent on fast, reliable internet.

        21st century business requires reliable, fast IT in all fields. Basically, only jobs that are done with shovels and brooms are still in the 19th century.

  2. Kevin Edberg says:

    Aaron- You may have addressed this aspect of the story elsewhere, but the key to rural electrification was the broadbased focus on consumer owned cooperatives as the mechanism for delivering the power and the lines. There any number of conversations one could have about the strengths and weaknesses of the cooperative model, but rural electrification investment into cooperative ownership, supported by technical assistance from USDA to co-op boards, coupled with preferential finance are all parts of the package that has demonstrated its success and sustainability for 80+ years. It is not simply enough to call for federal funding for the internet in rural communities. Such investment needs to be coupled to local accountability and governance. If the investor-owned providers won’t make the market-based investments on behalf of their shareholders, why should we make that investment for them, and then subject their customers to monopoly control?

    • That’s a really good point Kevin. A cooperative model would be best, but is not the preference of the cable companies, who pile lobbyists into fed and state capitals when decisions like this are made. What Nolan is doing is the art of the possible, not the best way to do this.

  3. R47, Internet service a “fancy tool”? lol. You are a bit behind the times. Internet service is as vital to businesses small and large and for personal use now as “fancy tools”, electricity and telephones quickly became when they were available across the country.

    I just read about Crystal Cabinet Works located in Princeton, MN in the Mpls Star Tribune which employs 430 people and ships cabinets across the US. They have to pay for a separate internet service with more bandwidth to be able to run their business. As their IT director said, if slow, unreliable internet service is not addressed, “it will become a serious business issue”. I think it already is a serious business and public issue in MN.

    Spotty internet access isn’t just a problem in rural areas of the state, it’s also a problem in suburbs. Unreliable internet affects agencies such as clinics that need to send immediate x-rays or health information, students taking online courses and licenses or other services issued electronically by gov’t agencies.

    Is it so difficult to believe that more people from private users to tiny, home-based businesses to larger businesses would relocate up here, work from home, if they could have fast, reliable internet service and create business websites that would work efficiently for them? Of course, they would. I have met a few people who moved here with small home-based businesses that were extremely frustrated with their slow internet service that made it very difficult to sell their products.

  4. Ranger47 says:

    “As their IT director said, if slow, unreliable internet service is not addressed, “it will become a serious business issue”.

    So kissa – What do you think they’ll do if the unreliable service is not addressed? If they’re good business folks, I’ll tell you what they’ll do. They’ll move to where there is reliable, business friendly service. Problem solved.

    • Gerald S says:

      R47, you just suggested that rather than working to get quality broadband on the Range, we should instead accept if not urge businesses to move elsewhere.

  5. Ranger, you don’t even read what people write, do you? You skim and if it doesn’t suit your view of how things should be, you just reinterpret it to your fit your comfort zone.

    As I wrote, Crystal Cabinet Works pays for a separate faster internet service for their business. By the way, they have separate fast internet service in all three of their locations in and around Princeton, city of 4,700. They need it for their drafters and sharing kitchen and bath designs with dealers. And what about their local customers? How many of them also have spotty internet? The IT director wasn’t just talking about this business.

    They employ 430 people in three locations. Do you really think it would be easy peasy or wise financially or ethically to pack up and move all three businesses, put 430 people out of work in their home town even if they wanted to? Crystal Cabinet Works has been in business for 70 years. I would imagine the owners have some deep roots there over 70 years.

    You could have easily looked up the article yourself but to make it easier for you, search Mpls Star Tribune, July 26 for “Rural firms feeling the pinch from spotty broadband”.

  6. Ranger47 says:

    Nope, for heavens sake Gerald, don’t urge them to move. It’s enough that our politicians do the urging. Businesses will move on their own accord as needed. My neighbor who’s a logger only bids on stumpage if there’re trees to cut. If no trees, he moves elsewhere. If you wish to plant trees for his future cutting, you go right ahead.

    • Gerald S says:

      That’s the point, Ranger: if you want trees to cut, you have to plant the seedlings. If you want 21st century industry, you need broadband. The choice is whether you want the Range to have an ever-weakening 19th century extraction economy, or to work toward an economy with potential for growth. If you choose B, high capacity and high reliability broadband is critical. As Kissa has pointed out, even a mill industry that would historically be considered a 19th century type operation today requires full access to broadband.

      No one is casting this as an either/or decision vis-a-vis mining and forest industries. It is an and/also move, facing the fact that with the exhaustion of ores, high cost of extraction and post-processing compared with foreign competition, and the slow growing season for trees compared with overseas sources and our own South and Northwest our extraction industries are always in a poor competitive position in world markets, and we must look to expansion in other industries or fall back, as one writer on a thread here suggested, on an economy that will support only a small number of people.

      When you accuse regulators and politicians of driving away industry, you are ignoring the fact that businesses that generate good jobs always report that their first priorities are an educated and industrious workforce and infrastructure that meets their needs. If we are willing to invest in education, we can provide some of the former, and we can use the beauty and recreational potential of our natural environment (as well as good schools for children) to attract more quality workers from elsewhere. In the 21st century, broadband is as much a part of necessary infrastructure as roads, water, sewer, and power. In fact, we can turn our apparent disadvantage into an advantage in IT, since our late start potentially means that we can install the fastest and best state of the art broadband in the nation and the world. We can potentially be closer to Tokyo, Shanghai, and London than Dallas, Atlanta, and LA are.

      To switch metaphors, if you want to catch fish, you need bait. Broadband is bait.

  7. Ranger47 says:

    I good with that Gerald, as long as you buy your own bait..

  8. Ranger47 says:

    Oh Gerald…I know of no one who doesn’t support spending some taxpayer dollars on education and “infrastructure”. And I’m sure the circles you run in, you don’t either. And as you know, we spend trillions each year on both. That’s not the question.

    The question is, how much spending is required? Since Obama & Dayton have been in office, we’ve spent TRILLIONS on infrastructure (including large chunks on IT, software, computer hardware and broadband stuff). Remember all those “shovel ready” projects around the state, all those blue signs around the state our politicians felt so proud of?

    Since Dayton has been in office, spending on education has gone from what – $16 billion to $21 billion, a 31% increase. And just today we find out we’ve shown no improvement in Reading, Math and Science, only 57% proficient in Reading, 48% proficient in Math and 54% proficient in Science. Absolutely abysmal! Obviously more money isn’t the answer.

    So Gerald, at what point do we stop increasing spending for education, for infrastructure…for bait?

    • Gerald S says:

      As you probably know, we now spend less money on schools and higher ed in MN than we did in 2003, and our state infrastructure budget has been stuck on hold since the big deficits that followed the early 2000’s tax cut — the collapsed I-35 bridge was just one of many projects where maintenance was “deferred” to balance budgets. And inn fact, if you subtract the costs of the special ed mandates that Reagan defunded back in 1982, we actually spend less real dollars on K-12 than we did in 1968.

      So much for increased spending — in reality we’re still playing catch up. Dayton just restored the huge cuts from the Pawlenty era without bringing us back on track in real dollars.

  9. Ranger47 says:

    I’ll try again – “So Gerald, at what point do we stop increasing spending for education, for infrastructure…for bait”?

  10. Ranger47 says:

    What??? Spend less on education today than in 2003?? We spent $12 billion in 2003 and $21 billion this year. Gerald, my God. You obviously have trouble with numbers. Pull out your calculator.

    P.S. Back when I went to a Range school math scores were much, much higher than today and we, the taxpayers, spent a heck of a lot less per student. Those evil mining companies provided most of the support.

  11. Gerald S says:

    Actually, we spent almost $49 billion on education in FY2015, counting all levels and all programs. In both years you are missing many items of the ed budget.

    However, allowing for inflation, in constant dollars the amount spent is actually less than in 2003. It is significantly higher than in 2013 and in all years from 2008 to then.

    Again, in addition to inflation, the major escalator of K-12 ed costs since when you and I were in school is special education, which accounts for up to 60% of classroom ed budgets in some school districts. This spending exists because of a federal mandate from the early 80’s, and when passed was accompanied by federal provision of 100% of funding. Unfortunately for state and local ed budgets, Reagan and the GOP controlled Senate chose to cancel that funding, leaving school districts with a major budget problem and reducing available funding for mainstream education by large amount.

  12. Ranger47 says:

    Gerald – Your refusal to answer a simply question makes me think you’re in or running for office. But I’ll try one more time – “at what point do we stop increasing spending for education, for infrastructure…for bait”?

  13. Ranger, depending on what your interpretation of “bait” is which is likely to be quite creative, your question is nonsensical and motivated by using misdirection as usual.

  14. Ranger47 says:

    kissa…I didn’t bring up “bait”, Gerald did. Let’s hear what he has to say. His silence is deafening..

  15. Ranger47 says:

    Say kissa…I KNOW you’re not a politician or running for office, but are of similar DNA to Gerald. Why don’t you take a shot at the question. . “At what point do we stop increasing spending for education, for infrastructure”? Do you have an opinion? Do you have an upper limit has to how much spending is enough?

    • Gerald S says:

      Sorry I didn’t answer the question right away R47, but it was because I didn’t think you meant it seriously.

      That question is exactly like a homeowner asking “at what point can I stop spending my money on maintenance, painting, upgrades, and repairs?”

      The answer is obviously never, unless you want the house to fall down.

      Even under the best of circumstances, costs for education and infrastructure are going to constantly increase due to inflation. Costs will also increase due to new areas of innovation — like computer education in K-12, for example, or university labs built or rebuilt to bring training up to current standards, and new infrastructure needs like the broadband this thread is about.

      But in MN we are not in the best of circumstances at all. The combination of the ill-advised tax cuts under the Ventura administration, the Bush recession, and the Pawlenty government’s and GOP legislature’s refusal to consider taking steps to right those problems resulted in massive cuts to K-12, even more massive cuts to higher ed and research, and to deliberate neglect of infrastructure through “deferred” maintenance and a freeze on new projects.

      That left us in a situation where all levels of education and maintenance and growth of infrastructure fell far behind. Local school boards entered a constant state of crisis, and local governments were unable to do their work and were forced to raise property taxes just to function. Higher ed costs for students sky-rocketed, closing availability of post secondary ed to working class kids and causing cuts to programs. Our research institutions, the basis of our major corporations from taconite to health technology, were allowed to deteriorate from the world class level that generations of leaders of both parties had created to weakened status. Our neglected infrastructure is crumbling and outdated, so much so that a bipartisan commission said that we need to spend $20 billion more in the next ten years just to provide needed repairs and needed updates and expansion.

      Minnesota does not thrive because of its balmy climate, its oceanside communities, or its proximity to major markets and cultural centers. To succeed, we have to convince people that it is worth having to buy a heavy coat and snow tires to work here and open businesses here. Historically, we have done that with a bipartisan commitment to excellence, and economically have led the Midwest and been in the top rank nationally because of well educated workers who can add value for corporations, sound infrastructure that provides for business needs and holds expenses down, and research that is second to none. If we want to continue to succeed and to even expand on that success, we certainly need to keep up our level of investment in all those things to compensate for inflation and fix past neglect, and if we want to compete with more favored climes we need to expand that investment.

      So the answer to your question is “never, and especially not now when our recent history has dug us into a deep hole that we have to climb out of before we can begin to climb upward again.”

  16. Ranger47 says:

    You’re bloviating Gerald,again. The question was, and still is – “at what point do we stop INCREASING spending for education, for infrastructure..” Not when do we stop spending. Even my hard working, most conservative neighbors know we need some level of spending for education and infrastructure.

    Only fools or politicians think the spending can keep increasing…and “never” stop increasing. Which are you? It’s no wonder the latest reading and math skills test results of our Rangers kids are at the level they’re at.

  17. “That question is exactly like a homeowner asking “at what point can I stop spending my money on maintenance, painting, upgrades, and repairs?” – Gerald

    Gerald – Pull out your home maintenance spending receipts for the past 10 years, make a simple graph showing spending by year. (You know, an XY chart with the X axis being each of the 10 years and Y axis being spending for a given year. Call Lorri Shalley 218- 263-3675 if you need help. She teaches algebra at HHS). Then post it.

    Then let’s make a few observations.
    One – did you ever not spend on maintenance in a given year?
    Two – did spending increase every year over the previous year?
    Three – what was your average spending?
    Four – Is there a level of spending per year that makes sense to you to maintain your home?

    You can use a calculator if needed.

    Once we work through that, then we’ll come back to education and infrastructure spending.

  18. Oh Gerald, make your chart in current dollars (you know, actual dollars spent in each year). We can adjust for constant dollars later, if necessary. Keeps things simpler. Thanks..

  19. You guys got sidetracked from the broadband issue. Ranger would make a good politician who sidetracks discussions.

    Re broadband: My rural northern MN home had terribly slow ‘net while I waited and waited for the phone company to actually make their advertised services available. Never happened. And I’m not all that rural, as I can easily walk to several dozen businesses, a clinic and hospital. So I went with a slightly expensive alternative, probably increasing the speed times a few thousand kbs or something. So I was thrilled, though there’s lots i CAN’T do with that speed. I took an extended trip to visit family in a western state. They live in a densely populated relatively poor area. But the ‘net there is amazing. I got between 15-50 Mbs download, usually around 30. Upload ranges from 5-30 Mbs. Complex websites still are not blazingly fast at those speeds, which I think is something website designers need to consider. I’m guessing complex technical transmissions would need at least those speeds. The family I stayed with needed that type of internet because the man works for a solar company and he needs to transmit his daily reports regarding inspections. He and his colleagues, sales people, installers, inspectors, repair people all rely on the fast internet uploads for the designers to work from. They have to have this in their homes to be normal, regular workers in their company.

  20. Gerald…How’s your home maintenance spending analysis chart coming? I’m anxious to get back to discussing the issue at hand – education & infrastructure spending.

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