Think about internet access in a community like a plate of crumbly cookies: Even if an internet service provider (ISP) takes a big bite out of each of the treats by servicing most addresses, the plate will still have broken pieces left behind.
Such is the logic for statewide line extension programs around the U.S. The purpose of these programs is connecting homes and businesses just out of reach of existing last-mile infrastructure. However, delivering service to even the closest outlier isn’t so straightforward.
From 2020 to 2022, the state of Vermont initiated a pandemic-era Line Extension Customer Assistance Program (LECAP) using an initial round of funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, with an additional boost from the American Rescue Plan Act (ARPA).
A go-to image to describe the need for line extensions in Vermont is a dirt road with a dead end. The entire road may have five houses on it, but only four have internet access. The house at the dead end may be left with DSL, dial-up, laggy satellite or no internet access at all. Even fixed wireless solutions have trouble reaching them because of the density of trees and mountains.
“The average town here is below 5,000 people…In many areas there is less than eight people per road mile,” said Rob Fish, director of the Vermont Community Broadband Board. “Pre-COVID, no one was coming to save you, so people had to organize themselves and find a provider with a fiber connection.”
Due to that fact, small towns across the state were historically left to fend for themselves, which led to the creation of Vermont’s Communications Union Districts (CUD). Each CUD contains bands of towns that work together as a municipality to negotiate with ISPs and find community-driven broadband solutions.
During LECAP’s lifetime, CUDs were the entities responsible for identifying necessary line extensions across communities based on feedback from individual residents. In total, about 500 households received a $3,000 subsidy to work with an ISP to deliver a minimum 100 Mbps service, which usually meant running fiber.
“We did not reach everyone… There were significant hurdles, like provider participation or having a line to extend. People wanted an extension, but there wasn’t anything online to extend,” Aaron Brassard, telecom project manager for Vermont’s Department of Public Service, explained.
As for whether Broadband Equity, Access, and Deployment (BEAD) Program projects will go after the remaining line extensions necessary across the state, Fish doesn’t believe that the previous program’s framework lends itself to BEAD very well.
“BEAD has incredibly strict rules and requirements on scoring, so there is little flexibility to do any program that is similar to line extensions,” he said. “It will fund extensions of existing networks as new builds, but it's not in the same way where it's driven by the individual household owner. It will be a different structure.”
Vermont scores proposals from ISPs based on a variety of values like accountability, oversight and public ownership. While some states are lining up incumbents to expand broadband access with their BEAD funding, Vermont is busy setting up a marketplace where local telcos and ISPs will bid on batches of addresses.
Making it work in Minnesota
The same logic applies to Minnesota, which is just starting to make its foray into centralized line extension programs. With $15 million in Capital Projects Fund (CPF) dollars available, the Office of Broadband Development has been receiving applications from residents and businesses requesting line extensions over the past six months. So far, the office has received over 2,000 inquiries.
Like in Vermont, line extensions in Minnesota are fiber-only because they require speeds of at least 100 Mbps. No other types of technologies are considered. After a six-month collection period, addresses will be grouped by region and sent to ISPs that already service the areas. ISPs will then have 10 days to confirm whether they can extend service out.
If addresses cannot be serviced and are not slated to go under construction through BEAD, a reverse 60-day auction will ensue during which other ISPs can bid on building out service to a batch of addresses. The state is prepared to pay up to $25,000 per line extension based on proposals and bids. The first six-month collection period is slated to end in the coming weeks. Since Minnesota’s line extension program was initiated via the state legislature, there is a chance that its efforts will continue, if necessary, long after federal funding runs out.
Bree Maki, executive director of Minnesota’s Office of Broadband Development, estimates that once a resident inputs a request for a line extension, their address may see a service facelift within one year’s time.
“There should be no cost [for a line extension] to the landowner,” Maki said. “It is also up to the provider to be thoughtful in their bidding process because they could be outbid with a lower cost number.”
However, a non-negotiable consideration for any construction timeline in Minnesota is the climate. Extensions can only realistically occur between May and November when the ground isn’t frozen over from the wintertime.
In 2022, a governor’s task force on broadband in Minnesota released an annual report which listed 291,000 addresses as unserved across the state, meaning they were without access to speeds of 100/20 Mbps. While the 2,000-plus current applications for line extensions will help close some of the gaps, Maki is also aware of the fact that the process of getting every household and business universally online is going to outlast statewide grant programs and BEAD.
For example, once a potential line extension address reaches the stage of the reverse bidding process, there is a possibility that local ISPs will decline to build out services to the location because it still doesn’t fiscally make sense for them. That, in turn, will inform future grant projects in Maki’s office to subsidize and reach households that fall outside of the line extension framework and BEAD.
“Minnesota isn’t waiting for funding to come. We don’t want to keep residents waiting any longer. We have funding and a mechanism to get them the service that they need,” Maki concluded. “I think if history says anything, we have a really forward-thinking state who cares deeply about this sense of structure.”