Minnesota could be waiting for an unprecedented financial windfall to help bring high-speed internet to rural areas.
Each state has been promised a minimum of $100 million for broadband development under the federal Infrastructure Investment and Jobs Act passed by Congress late last year. . But some states could get more, depending on need.
Now, Minnesota officials have an estimate of that extra money: $550 million. That would bring Minnesota up to $650 million for broadband from the infrastructure bill, a sum that would far eclipse any government spending in the state to develop high-speed Internet in recent memory.
“It’s a remarkable amount of money,” said Nathan Zacharias, technology policy analyst for the Association of Minnesota Counties. “The good it will do – especially for rural communities – is almost indescribable.”
The Minnesota Department of Jobs and Economic Development cautioned that the projection is only a rough estimate and subject to change. Nor would it be enough for universal broadband access at blazing speeds.
But if the end result is closer to $650 million, Minnesota’s high-speed internet goals will be much closer to reality.
What was in the federal infrastructure bill
The $1.2 trillion infrastructure bill — passed with some bipartisan support under President Joe Biden — contained $65 billion for broadband across the country. Of this amount, $42.5 billion was intended for distribution by the states. But so far, each state has only knew that they would receive a minimum of $100 million.
Diane Wells, deputy director of DEED’s Office of Broadband Development, said the federal government recently gave Minnesota an estimate of how much money it could receive so the state can start planning. The money is distributed based on need, so Kevin McKinnon, DEED’s deputy commissioner, said relatively rural Minnesota expected to receive more money than more urban, internet-connected states.
The final amount Minnesota will get will not be known until later, and it depends on the maps of areas without broadband access that federal authorities must update. Minnesota must also submit a plan for using the money over a five-year period.
McKinnon said it could take about a year before Minnesota gets money to spend under the infrastructure bill program, known as Broadband Equity, Access and Employment, or BEAD.
The federal government has already outlined several potential purposes for the money, including allowing states to install Wi-Fi in multi-unit residential buildings. But Wells said Minnesota’s money should be spent entirely on “rolling out” the internet, mostly subsidizing the development of infrastructure – traditionally, fiber optic cable – in places where it would be too expensive for people. Internet providers to justify themselves otherwise.
Universal broadband access is a goal of both political parties, especially since the COVID-19 pandemic has exposed inequities in internet access. But exactly how to use US bailout money on internet projects was a point of contention.
This year, lawmakers ordered the state to use $110m US bailout stimulus package passed under Biden for broadband infrastructure. In 2021, the legislature approved $70 million of the broadband development plan. This was already a significant sum compared to historic spending on broadband.
Minnesota was also in line for an additional $408 million from a grant program run by the Federal Communications Commission. But $311 million of that money went to a company, LTD Broadband, which was recently rejected by the FCC. Starlink, which originally received $8.4 million in Minnesota, was also rejected. The money is expected to be redistributed for broadband by the FCC, though it’s unclear how much will be spent on Minnesota.
How far would the infrastructure money go?
Minnesota currently has two straight goals for statewide broadband access. One is for every household to have internet access with download speeds of at least 25 megabits per second (Mbps) and upload speeds of 3 Mbps “by 2022.”
But the state also has a faster speed goal of 100/20 Mbps by 2026, which has been the primary goal of Minnesota broadband officials. (Netflix recommends at least 5 Mbps download speed for high definition streamingalthough faster speeds are likely needed for the more complex tasks involved in, say, running a business.)
As of October, the state estimated that approximately 88.5% of Minnesotans had access to wired internet such as DSL, cable and fiber at 100/20 Mbps speeds. And in March, before the Legislature approved $110 million for broadband, DEED officials said they would conservatively estimate the cost of meeting the 2026 target for adequate broadband at $1.3 billion.
Daniel Lightfoot, a lobbyist with the League of Minnesota Cities, said the federal estimate was “exciting to hear” and higher than expected. But he said that does not completely solve the problem of lack of broadband access.
“If it was $650 million in total, that’s about half of what we’d need to reach that goal,” Lightfoot said. “So that’s a big number, but the need is also huge.”