Friday, May 25, 2018


Small telecoms wary of legislation
Larger view
Spring Grove Communications is housed in the newest building in town. It provides the latest in technology at an affordable rate to customers all around this tiny hamlet in far southeastern Minnesota. (MPR Photo/Erin Galbally)
There's a new federal telecommunication law in the works and it's expected to have major implications for rural telecom providers. Minnesota has the third largest number of small town telephone companies in the country. As a result, there's increasing concern that those mom and pop outfits will be overlooked when it comes time to finalize the new legislation.

Spring Grove, Minn. — Spring Grove Communications is housed in a sprawling new building on Main Street. Huge baskets of purple petunias greet visitors outside. But step inside, and it's not just telecom central.

General manager Craig Otterness is leading a tour of the facility for other telephone leaders from around the region. He says the building has slowly become a community hub.

"The library is a huge hit. The fitness center is a huge hit," says Otterness.

That's right, the telephone company's building is also home to some other important community assets, including a library and a fitness center.

"With the technologies that we're getting into that seem to be continually changing ... they're all taking care of their communities and making sure their customers get the best service. I'm no different then any of those guys," Otterness says.

Still, Otterness says Spring Grove Communications' primary mission remains keeping the area connected by phone and Internet to a quickly changing world.

But the cost of doing business could increase sharply depending on the outcome of a new piece of federal legislation, which for the first time in a decade targets regulation of the telecom industry.

Many people can now start companies and telecommunications in small rural towns where they want to raise their families, and still have a Twin Cities job.
- Randy Young, Minnesota Association for Rural Telecommunications

Small providers have reason to be nervous.

It's a fact that it's more expensive to provide services to smaller towns than big cities, because there are fewer customers. In the past, the federal government has compensated rural telecom companies for the difference in price. Last year alone, Minnesota received some $80 million.

Under the new legislation there's talk of eliminating what's known as the Universal Service Fund. That would mean big price hikes for the consumer and trouble for rural businesses.

U.S. Rep. Gil Gutknecht, who represents Minnesota's 1st Congressional District, has spent plenty of time on the issue. He says telecom is key to keeping rural economies afloat. Speaking in Spring Grove, Gutknecht says without access to technology, the future of small towns is in jeopardy.

"If you have a dirt road going to your town, your town cannot grow. If you don't have a good highway to that town, it won't grow," says Gutknecht. "This is the highway of the future. And I think, frankly, it's going to become more important to commerce and business and economic development than even the highways 50 years ago."

Gutknecht says part of the problem is that larger companies like AT&T and Verizon tend to have a more forceful voice in Washington, where representation comes increasingly from urban and suburban communities.

"The bigger companies -- and I'm not picking on them necessarily -- but they are eager to serve the big cities. And they are not as eager to serve rural America, so we just want to make sure we don't get left behind," says Gutknecht.

That's precisely what Randy Young, the head of the Minnesota Association for Rural Telecommunications, is trying to ensure. He says there's a lot at stake, like job creation and retention.

"We are now seeing dozens and dozens of examples because of the broadband we're providing, and well over 90 percent of our customers have access to it," explains Young. "Many people can now start companies and telecommunications in small rural towns where they want to raise their families, and still have a Twin Cities job. Without this network they couldn't do this."

A new federal telecommunications bill could be up for debate in the House this fall. The entire piece of legislation is expected to be completed by the end of current congressional term.

It's hard to say whether the elimination of rural subsidies is truly on the table, or whether it's a become a political pawn. But Minnesota's network of smaller telecom groups are hopeful they won't be overlooked.