State to award $25 million in stimulus funds for broadband in rural areas
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State to award $25 million in stimulus funds for broadband in rural areas

Date: September 28, 2009
By: Jeremy Essig
State Capitol Bureau
Links: Missouri broadband map

JEFFERSON CITY - State Rep. Belinda Harris, D-Hillsboro, is the type of person the broadband initiative of the governor and federal government was designed to help.

Sparse population and geographic barriers provide little financial incentive for private companies to run broadband lines into Harris' home. With few alternatives, Hillsboro residents such as Harris have turned to high-cost satellite providers for Internet access.

For the most basic service, Harris pays close to $50 a month for satellite-provided Internet. A constituent who works in medical records pays $160 for the high-speed connection required for her job, Harris said.

Hillsboro seems an ideal place to use federal stimulus funds set aside to bring broadband into hard to reach rural areas of Missouri. However, the first application the governor's office is pursuing  would target an area of northwest Missouri, already somewhat covered by private broadband providers.

Sho-Me Technologies has applied for $25 million in state matching funds to lay 2,500 miles of new fiber-optic cable. Sho-Me Technologies is a subsidiary of Sho-Me Power, a company based out of Marshfield that provides power to nine rural electric cooperatives.

A portion of the proposed lines would overlap with existing fiber, causing concern within the telecommunications industry of a state funded competitor.

"We do perceive that as a competitive overlay," said Max Huffman, chief operating officer for Missouri Network Alliance, a telecommunications company that serves a portion of the area where the proposed cable would be laid. The Missouri Network Alliance has provided service for the area for ten years, Huffman said, describing it as "nicely covered."

Sho-Me Technologies managers argue the new cable as an opportunity rather than competition.

Current fibers may not be able to handle future consumer needs, said Sho-Me administration manager Jerry Hartman. The proposed fibers would only enhance what is currently available, Hartman said adding that the new fiber would be available for use to the telecommunication companies.

In testimony before a joint House-Senate sub-committee on September 16, Paul Wilson, one of the governor's top advisors, said Democrat Gov. Jay Nixon's overall goal is to make broadband Internet accessible to 95 percent of Missourians within five years. The new fiber will facilitate this goal, Hartman said, providing a backbone for companies that may want to run cable from the proposed lines into people's homes.

Ric Telthorst, president of Missouri Telecommunications Industry Association, wonders why Sho-Me decided to go into an area that already has a "pretty robust network." To reach a goal of 95 percent, money needs to be spent on expanding the network into areas where laying cable presents logistical and financial problems. The association is urging the governor to seek funding for a detailed map of all current lines before approving Sho-Me's application, Telthorst said.

One-third of the capacity from the new lines would be available to companies that want to offer broadband to the local community. Another third will be made available to the state at no cost. Sho-Me will keep the final third for their private use.

A portion of the state's third would be made available to schools and libraries, a program currently overseen by MoreNET, which operates within the UM System. The new cable would lower costs to MoreNET members, said MoreNET executive director Bill Mitchell.

Logistical and financial broadband problems are not unique to rural areas of Missouri.

Jonathan Sessions, managing partner for Columbia's Tech Two computer consulting, said an area of Broadway between Ninth and Tenth streets where new apartments are being built is unable to receive broadband connections from MediaCom because it costs too much to run cable into new area.

It makes no financial sense for Internet providers to run new cable, Sessions said.

Rather than additional cable, Sessions describes a future of wireless signals, citing a technology called Wimax. Functioning as a larger version of a wi-fi connection, Wimax could be attached to existing towers and produce a wireless signal that could be distributed across a sparse area.

This type of connection would be more cost effective than running miles of cable, Sessions said.

Chuck Banks, executive for Jefferson County - the county in which Hillsboro is located - sees the future in a similar manner.

"I used to think whoever got fiber to every home would win," Banks said. Now, however, Banks sees the "winner" as the company that can provide rural areas access wirelessly. 

Ironically, broadband-limited Jefferson County is the home county of Missouri's governor.