Minn.-based company tackling Pierce's internet needs
Monday, November 05, 2018
NorthfieldWiFi, a Northfield, Minn.-based internet provider, is expanding throughout the county — with its eye on a November buildout in the town of Clifton — in hopes to capitalize on and fulfill a glaring need for high-speed internet. And while fiber-based internet is faster, Pierce County's harsh terrain and low resident density create high capital costs with low returns, disincentivizing large companies from expanding to the area and creating an opportunity for Northfield's wireless service.
"Nobody is willing to invest millions of dollars to put the cable down," said Sherry Keller, a county resident.
Pierce County has faced expensive and slow internet speeds causing some struggles, according to area residents. Parents have taken their kids to other areas for weekly homework, and when residents do get modest speeds, they have to be careful with going over data caps.
Keller leads the Clifton High Speed Internet Coalition, a group of Clifton-area residents that worked since March 2017 to bring a high-speed internet company to the area. The group could not persuade fiber companies like Baldwin LightStream, Centurylink and others to start doing business in the county, but eventually the group met with representatives from NorthfieldWiFi who were eager.
"From a business standpoint it makes a lot of sense to target areas that don't have anything, and might not have anything for a very long time," said Tabitha Lyon, co-owner of NorthfieldWiFi with her husband Nate.
Fiber financials and Northfield's business
NorthfieldWiFi's expansion plans throughout the rural counties are somewhat puzzling and buck common internet business plans that involve outside incentives. The company is expanding quickly — it built or added on about 12 towers a year ago throughout Minnesota, and has built 10 more this year in its home state and Wisconsin.
States with underserved rural populations have had to incentivize companies through grants or subsidies to build out in rural areas, said Stephen Kelley, a senior fellow at the University of Minnesota's Humphrey School of Public Affairs.
"One of the reasons that rural areas are underserved is that for both telecommunications and electricity, distance has a cost," he said. With fewer customers, and higher costs, it's a tough sell for companies.
The coalition's most promising interest from a fiber company fizzled after the group and town were unable to secure a state grant, Keller said.
Kelley compared it to when telephone lines were first expanding, and subsidy programs helped drive expansion.
"This gets back to what is sort of an axiom, the [building] costs in rural areas are so high that ... hardly anyone in a rural area could afford the costs of delivering it," Kelley said.
Yet, NorthfieldWiFi isn't interested in subsidies or grants.
"We like to hit the ground and run, there's a lot of red tape involved with that stuff," said Nate Lyon, co-owner. "At the end of the day it's quicker, people need the internet yesterday."
Using wireless technology is much cheaper than building out a fiber wire network, he said. The company typically spends anywhere from $10,000 to $15,000 setting up its systems on existing towers, which are usually tall structures like radio towers or farming structures like a grain leg.
The company already has existing services in Prescott. It has hopes to get approval to expand into Clifton next month; discussions are ongoing with River Falls and hopes abound for Ellsworth.
"Wherever the need is ... we look into those areas," Tabitha Lyon said.
Even before the coalition, some Clifton residents tried to convince internet companies to come to the area.
Survey data from 2014 shows that Pierce County residents had some dissatisfaction with their internet service, said David Trechter, a professor of Ag Economics and head of the Survey Research Center at the University of Wisconsin - River Falls.
That figure mirrors other counties he's surveyed, he said.
"This is high in regards to other goods or services that you'd see out there," Trechter said, and noted that a survey on dissatisfaction on food cooperatives didn't break more than 5 to 10 percent.
Cynthia Jahnke, one of the coalition members, said she and a group of St. Croix Riviera, a Clifton-area neighborhood, residents tried about three years earlier to convince what was then known as Baldwin Telecom to come, but the company wanted a survey showing 75 to 80 percent resident interest. They never came close.
"It was up to us to get the support, and it was hard," Jahnke said. "Then I heard about the coalition."
Jahnke said the coalition was more organized, and effective at getting residents' and town officials' attention.
And while NorthfieldWiFI has potentially fulfilled the coalition's goal, Keller, the group's leader, admitted that it wasn't what they set out to do.
"We're excited that we have something to offer the residents," she said. "We do feel success in the fact that we were able to bring something, but it isn't what we initially started."
The company is hoping to build on town property, and is currently negotiating lease terms with Clifton officials. Once approved, it would be the final step for the company to move forward and begin building next month, Lyon said.
He said that Clifton has more "aggressive" terrain than other areas they've expanded to. Their technology requires a line of sight to function, so trees and other blocking elements can get in the way.
"We're probably going to have more money invested in Clifton than the past couple communities we've done," Lyon said. "But there's a high need."
Town board members have been impressed with the way Northfield has handled the process to set up in the area, said Joe Rohl, a town board and coalition member. The board and the company have been hung-up on language surrounding automatic renewal of the roughly $2,000 lease and cancellation terms, he said.
"We're pleased they're interested," Rohl said. "We think for Clifton township, and other townships, the only way they're going to be developed is through this technology."
Rohl said he can't speak for other board members but is optimistic about the meeting.
"We worked through a lot of concerns, and I think we're down to a finished product," he said.
Original story here.