Seventeen percent of properties in Pipestone County are struggling to meet today’s demand for internet service. That’s according to a report presented by Marlena Pfeiffer with Hometown Fiber during the Jan. 24 Pipestone County Commissioner meeting.
The commissioners approved paying Hometown Fiber up to $99,950 back in October to see what it would take to build a fiber optic internet network that would provide access to quality internet throughout the county.
Out of 5,316 addresses in the county, the company rated broadband service to 2,700 addresses as able to meet internet demand for three to five years, 1,700 as able to meet demand for at least 10 to 15 years, 884 as struggling to meet today’s demand and 32 as able to meet demand for 20 or more years. Pfeiffer said the ratings were based on internet speed only, not reliability or affordability. She said the areas expected to meet demand for 10 years or longer have fiber internet service, of which most is passive optical network (PON) or shared fiber.
Pfeiffer said what she found interesting about the findings was that the city of Pipestone, which has the largest population, has a coaxial cable internet network. She said that’s almost outdated technology and will not meet demand for long.
“When it doesn’t it will need immediate attention and updating because these are your areas with high resident and business count,” Pfeiffer said.
Pfeiffer contended that internet access is a necessity and that, as such, government plays a role in making sure local residents and businesses have it.
“We can’t rely on a for-profit business model to effectively supply infrastructure to our citizens,” Pfeiffer said. “Infrastructure falls under the government’s umbrella and to keep up with the needs of our economy and our citizens we have to look at internet access as infrastructure, not a luxury.”
Community Fiber developed two options to provide fiber to the parts of the county that do not have it now. One would provide direct fiber to all parts of the county that don’t have fiber now and is estimated to cost $15,779,433, with an average cost per property of $3,165. The other option would include only the rural areas considered to be already struggling to meet demand and would cost $10,683,991, with an average of cost $12,086 per property.
In either case, Hometown Fiber anticipates that the county could receive $8,012,993 in state and federal grants. It recommends that the county sell 15-year revenue bonds to pay for the rest of the cost.
The total cost of both options includes connecting residents and businesses to the network, so there would be no cost for property owners to connect their property to the network if they do it at the time the network is built. Property owners could decline the connection if they wanted, but if they connected at a later time they would have to pay for it.
According to the recommendation, the revenue bonds would be repaid by network operations. The county could also get bond insurance to protect itself in case payments cannot be made with network operations. Pfeiffer said there would be no tax levy dollars used to pay off the bonds.
“You pull the bonds and the network operations pay these bonds back,” she said. “It doesn’t touch your people and it doesn’t touch your taxes. It’s a revenue bond and it’s insured.”
Once the bonds are paid off, the county could continue to receive income from the network operations through a broadband franchise agreement.
The county could own the fiber and lease it to Hometown Fiber for a nominal fee and Hometown Fiber would be responsible for operations and maintenance.
“That becomes contractual, so for five years we’re going to do this and then we revisit it and if at any point you guys want to kick us out of here that clause is built in there for you too,” Pfeiffer said.
Pfeiffer said Hometown Fiber would bring in multiple internet service providers (ISPs) to offer internet service through the network. Participating ISPs would pay a network lease fee, according to information from Hometown Fiber.
Anticipated costs to customers for internet service over the network range from $29 a month for 100 megabits per second speed to $199 a month for 5 gigabits per second speed. Phone and video services would also be possible over the network.
If the county proceeded with one of the options Pfeiffer presented, construction of the network could be completed within three years.
Pipestone County Information Technology Director Bill Folger said the plans looked good to him.
“I like how it’s structured where other commercial providers can participate in something that’s already there in the ground,” Folger said. “It’s going to save them money. While their bean counters might not think so, I think it’s going to be better for them in the long run. This is probably the way everything will end up going. It’s how we do roads.”
The commissioners said they would like further clarification about the financing of the project and how the bonds will be paid back. County Administrator Steve Ewing said he’d set up another meeting to discuss more of those details.
In other business, the commissioners:
•Approved a low bid of $3,149,558.80 from Central Specialties, Inc. out of Alexandria for overlays on sections of County State Aid Highways 5, 7, 13 and 15 northwest of Pipestone, 30 in Pipestone, 10 southwest of Ruthton, 2 between Ihlen and U.S. Highway 75, 20 in Ihlen and 18 northeast of Edgerton.
•Scheduled the annual road and bridge hearing for Monday, March 20 at 9 a.m. at the Pipestone County Emergency Services building.