Wednesday, March 28, 2012

Rural and Wireless. Problem Solved?

Earlier earlier this month, Verizon announced its HomeFusion product, offering rural wireless Internet access faster than many urban residents have today and riding on the company's expanding 4G network. Is wireless the solution for connecting rural areas in Minnesota?  The answer is complicated.  Read more...

Friday, March 9, 2012

High-Speed Broadband and Agribusiness

Access to high-speed broadband is a critical component of the rural economy.

In 1910 “rural” was defined as “open countryside and any place with fewer than 2,500 people.”  The 2010 Census defined “urbanized areas” as places consisting of 50,000 or more people, and “urban clusters” as areas populated by at least 2,500 and less than 50,000 people.  Anything under that threshold is “rural.”

Ask the average person what they think of when they hear the word “rural” and they will tell you that they think of farms and farming, not population.  The idea of farming is often romanticized – evoking images of amber waves of grain, cows contentedly munching grass, and a lazily turning windmill.

While amber waves of grain still ripen in the fields and cows still graze on grass, today’s farm is a fast-paced, high-stakes business, not to mention one of the riskiest business endeavors that can be undertaken. Farmers need to use every tool in their arsenal to ensure that their bottom line is where it needs to be.

These days, one of the most critical tools for a farmer is high-speed broadband.  Most farmers are using broadband on a regular basis for their day-to-day operations.  On a typical day, a farmer might email a spreadsheet detailing crop statistics to his crop consultant, check the grain markets, do some commodities trading, download an equipment parts manual from the internet, and participate in an online auction to purchase a piece of machinery on the other side of the country.

And it’s not only farmers who need and benefit from high-speed broadband.  When one considers all the agribusinesses that support farming (and that farming supports), the need for, and resulting benefit of, high-speed access is enormous.  Agribusinesses include equipment dealers, equipment manufacturers, elevators, seed companies, fertilizer companies, trucking companies, crop sprayers, crop consultants, welding shops, tool and hardware stores, fuel companies, and food processors.

Titan Machinery is a prime example of the importance of broadband in rural areas, with 91 equipment stores and revenue of $1.3 billion.  These stores are scattered throughout a two-state area – most of them in rural communities.  High-speed broadband not only gives Titan staff the ability to communicate from store to store, it also gives them the ability to communicate with producers out in the field – in what are often very remote areas.  Imagine the following scenario:  a farmer is harvesting a high-value crop, but his combine breaks down.   With a crop that is dead-ripe and variable weather conditions that have the potential to harm it, every hour lost is costly.  With a wireless broadband connection, the producer can use his cell phone to take a picture of the broken part, attach it to an email, and send it to Titan instead of driving all the way to the repair shop and back.  The time savings can make a dramatic difference.  

Consider Border State Bank, a $25 million business, with banks in seven locations and a $350 million portfolio.  The bank relies heavily on broadband for its day-to-day operations, doing everything its urban counterparts do.  But some things are unique to a rural bank and will never be part of an urban bank’s business plan – things like having a banker who processes loans out of his tractor and pick-up truck while actively farming. This is precisely what Erik Heggedal, Ag Loan Banker for Border State Bank, did for a three-year stint.   

Consider the Fosston Tri-Coop Elevator, located in Fosston, MN, population 1,594 – a small town elevator with annual sales of $28 million.  Four years ago, they launched a website that offered a broad spectrum of marketing services, enabling farmers to market grain and virtually any commodity, and access international markets in real time.  The first day they launched the service they had about 600 hits on the website, and they continue to see hundreds of hits each day.  With wireless web access, a farmer can literally sell grain from the seat of his tractor.  

The challenge is that not all areas have adequate broadband service.  Many areas have less than adequate speed, while some have no service at all. In fact, within the 12-county area of Minnesota (defined as Economic Development Regions I and II) over 3,600 households are without any connection.

Rural areas are high-cost in terms of building out broadband infrastructure, but the risk is low in terms of the reward; this truly is an “if you build it, they will come” scenario.  The region needs to expand its current technology capabilities to allow for producer expansion, attraction of new agribusinesses, and retention of our current businesses.  This needs to be the mission of all of Minnesota as well as those who serve rural areas.

A small group of individuals, members of the IMPACT 20/20 Taskforce for Broadband, have decided to get serious about promoting adequate broadband speeds in Northwest Minnesota and eastern North Dakota.  Taskforce members believe that high-speed broadband is one of the most important components of the rural economy, now and into the future. 

The taskforce has set two goals: (1) all communities in the region of 500 residents or more will have business-grade broadband access of speeds greater than 20/10 (20 Mb download and 10 Mb upload) within five years; and (2) all residents of the region will have access to broadband speeds of 10/5 (10Mb download and 5 Mb upload) within the same time period. 

One of the main strategies of the IMPACT 20/20 Taskforce for Broadband has been reform of the Universal Service Fund (USF).  The taskforce submitted a reply comment to the FCC’s Notice of Proposed Rulemaking late last spring, voicing their support for USF reform and emphasizing the importance of high-speed Internet access in rural areas.  On October 27, in the most significant policy step ever taken to connect all Americans to high-speed Internet, wherever they live, the FCC voted unanimously to comprehensively reform its Universal Service Fund and intercarrier compensation systems.  This is an important first step in expanding high-speed Internet access in high-cost rural areas.

For more information about IMPACT 20/20, visit
Submitted by Mike St. Onge, Regional Manager for Titan Machinery and Michelle Landsverk, agricultural producer and President of Landsverk and Associates.  Mike is a member of the IMPACT 20/20 Taskforce for Broadband and Michelle is project coordinator for the initiative.