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State grants $34 million to expand rural broadband in Minnesota

Minnesota Lt. Gov. Tina Smith (left) talks with Cheryal Lee Hills, Region Five Development Commission executive director at a 2015 broadband panel discussion in Brainerd, Minn. FORUM NEWS SERVICE FILE PHOTO

ST. PAUL — A new round of state grants could extend broadband to thousands of businesses and households throughout areas of rural Minnesota that now are without reliable internet access.

A total of $34 million has been dedicated to 42 broadband infrastructure projects throughout the state aiming to chip away at the number of people left offline in greater Minnesota.

The state's Border-to-Border Broadband Infrastructure plan adds state taxpayer dollars to funding from private and local sources and federal reimbursements from the Connect America Fund.

Cities and the private sector matched state grants with an additional $40 million in funding. Lt. Gov. Tina Smith said the funding would help "level the playing field" for the nearly 20 percent of Minnesota households lacking internet access.

The grants are expected to provide affordable high-speed internet access to more than 16,000 households and 2,200 businesses throughout the state.

"Private industry is beholden to shareholders, and their expansion has to provide return on investment acceptable to shareholders," Smith said. "We are coming up with ways to fill the gap where the private sector is just not able to expand to that last mile or even that middle mile because projects just don't make economic sense without some kind of partnership with the public."

For businesses, Minnesota Office of Broadband Development Executive Director Danna MacKenzie said, broadband access is no longer a "luxury" but "critical economic development to make sure Minnesota remains competitive."

"Broadband is one of the tools necessary to ensure these industries are able to compete not only locally and globally," she said.

Smith said the grant process uses a "technology-neutral" approach open fiber optic, wireless and other options that offer cost-effective methods of expanding service.

Of the 31 broadband infrastructure projects funded in 2014 and 2015, MacKenzie said, 18 are complete or 95 percent complete while a majority of remaining projects are 75 percent complete.

The program has so far invested a total of $66 million in broadband infrastructure throughout the state, matched by more than $81 million in private funding. In 2015, Gov. Mark Dayton's task force on broadband determined a total investment of $900 million is still needed to expand broadband access to all Minnesotans.

As Dayton prepares the state budget, Smith said that she and the governor will continue to support state grants to spread broadband access to less-served areas.

"We're urgently wanting to get these projects done, and we've done a good job," she said. "Every day that we wait is another day a business, student, doctor or family is not going to have that affordable high-speed internet access that they need to be a part of our state's economy."