Federated plans large broadband project
JACKSON- Federated Rural Electrical Association (REA) has applied for a grant from the United States Department of Agriculture (USDA) to further develop rural broadband in Martin County. If approved the grant would pave the way for a $35 million expansion which would completely eliminate a lack of broadband access within the county.
The proposed project would provide up to gigabit upload and download speeds for every home and business within the county that currently has download speeds of less than 120 megabits per second and upload speeds of less than 20 megabits per second. Geographically this would cover nearly all of Martin County west of Granada, excluding Fairmont, Sherburn, Trimont, Truman, Welcome and Ceylon.
“It would fully serve the rest of the county that’s not currently served,” said Federated REA General Manager Scott Reimer.
The project signifies another step forward for the cooperative in becoming a major internet service provider in south central Minnesota. In 2022 Federated REA purchased Jackson-based Back 40 Wireless and began offering fixed point wireless service. Later that year the co-op began a project to provide fiber optic connections in Ceylon which is already serving a handful of customers in the city. Outside of Martin County Federated REA is planning a similar project to connect most unserved or underserved areas of Jackson County using funding from the state’s Border to Border grant program.
The costs of the project would be split between Federated REA, the USDA and a smaller grant from the Martin County Economic Development Authority’s (EDA) Broadband Partnership, which itself uses federal funds. Overall Federated would cover 46 percent of the project, the USDA would cover 50 percent and the EDA would cover the remaining four percent.
If approved the project is expected to directly connect to 2,352 households and 106 businesses. Most of these connections would be via underground cables but Reimer estimated roughly one third of these would utilize Federated’s existing overhead power lines. Federated’s existing fixed point wireless systems would not be part of this new project.
The project garnered letters of support from Minnesota Senators Amy Klobuchar and Tina Smith, state senator Rich Draheim and representative Bjorn Olson.
Reimer credits government funding and Federated REA’s status as a member owned cooperative as key factors for going forward with the project. Over half of the project’s funds will be subsidized by federal spending aimed at reducing disparities in internet speeds. Without this funding the high costs of connecting rural customers to broadband would cause projects to be delayed or not be completed whatsoever.
“You can’t find any of the big companies that want to serve rural America. They all want to serve in the densely populated areas because you can serve 15 to 20 customers per mile of infrastructure,” said Reimer.
Federated REA expects this project to serve less than five customers per mile of infrastructure.
Federated REA is also owned and controlled by its members which means it’s less motivated by investment returns compared to other providers.
Reimer compared Federated REA’s broadband ambitions to when the cooperative connected farms and rural communities to electricity nearly 100 years ago.
“We’re following the co-op model started back in the 1930s. We’re doing it for internet today. If someone wanted to serve them they would’ve served them by now,” said Reimer.
The $16 million the cooperative would invest into the project would still be a substantial investment, but Reimer argued the project will make rural areas more economically competitive and sustainable; broadband would allow businesses to continue to use the latest technology while also making different kinds of businesses more feasible.
“(It’s about) making rural areas more desirable for people to move back in. Our population in rural areas has been depleting because there’s not infrastructure out there that’s needed to keep people here,” said Reimer.
Reimer also stated if the project is completed the cooperative expects to recoup its initial investment while broadband will cover its own operating expenses.
“It shouldn’t cost the electric consumers anything. Broadband should be made to stand on its own two feet financially,” said Reimer.
Until funding is secured, the project remains in the planning phase. If the grant is approved Federated REA will begin the process of selecting a contractor to begin infrastructure installation. While some local organizations have the resources to construct broadband infrastructure the contract would be more likely to go to a larger Midwestern firm. Reimer expects groundbreaking would most likely occur in the spring of 2024 and hopes the project will be completed by the summer of 2027.
Once the project is completed Reimer predicts rates to be similar to what the cooperative currently offers for fiber connections which range from $70 a month for download speeds of up to 100 MB per second to $100 a month for download speeds of up to 1 gig.