Funding proposal for Missouri Internet coverage raises questions

Tuesday, September 29, 2009 | 3:08 p.m. CDT; updated 3:57 p.m. CDT, Tuesday, September 29, 2009
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JEFFERSON CITY — Missouri Rep. Belinda Harris, D-Hillsboro, is the type of person the governor's broadband initiative was designed to help.

Sparse population and geographic barriers provide little financial incentive for private companies to run broadband lines into Harris's home. With few alternatives, Hillsboro residents such as Harris have turned to high-cost satellite providers for Internet access.

For the most basic service, Harris pays close to $50 a month for satellite-provided Internet. A constituent who works in medical records pays $160 for the high-speed connection required for her job, Harris said.

Hillsboro — about 40 miles southwest of St. Louis — seems an ideal place to use stimulus funds set aside to bring broadband into hard-to-reach rural areas of Missouri. The first application the governor's office is focusing on, however, would target an area of northwest Missouri, already somewhat covered by private broadband providers.

Sho-Me Technologies has applied for $25 million in state matching funds to lay 2,500 miles of new fiber-optic cable. Sho-Me Technologies is a subsidiary of Sho-Me Power, a Marshfield-based company that provides power to nine rural electric cooperatives. A total of $225 million in federal stimulus funds has been set aside for broadband projects in Missouri, and while many companies have applied, Sho-Me Technologies is the first project specifically mentioned by the governor's office.

In testimony before a joint House-Senate subcommittee on Sept. 16, Paul Wilson, a budget adviser in the governor's office, said 10 specific applications have been singled out for matching funds. Announcements concerning other applications are likely to begin in November, and there will likely be two to three contracts awarded after Thanksgiving, Wilson said in his testimony. The majority, however, will not be awarded until Jan. 1, 2010. Nixon's office declined further comment on this story.

A portion of the proposed lines would overlap with existing fiber, causing concern within the telecommunications industry of a state-funded competitor.

"We do perceive that as a competitive overlay," said Max Huffman, chief operating officer for Missouri Network Alliance, a telecommunications company that serves a portion of the area where the proposed cable would be laid. The Missouri Network Alliance has provided service for the area for 10 years, Huffman said, describing it as "nicely covered."

Sho-Me Technologies managers said the new cable would provide opportunity rather than competition.

Current fibers may not be able to handle future consumer needs, said Sho-Me administration manager Jerry Hartman. The proposed fibers would only enhance what is currently available, he said, adding that the new fiber would be available for use by telecommunication companies.

One-third of the capacity from the new lines would be available to companies that want to offer broadband to the local community. Another third would be made available to the state at no cost. Sho-Me would keep the final third for its private use.

A portion of the state's third would be made available to schools and libraries, a program currently overseen by MOREnet, which operates within the University of Missouri System. The new cable would lower costs to MOREnet members, said MOREnet Executive Director Bill Mitchell.

In his Sept. 16 testimony, Wilson also said Gov. Jay Nixon's overall goal is to make broadband Internet accessible to 95 percent of Missourians within five years. Hartman said the new fiber will facilitate this goal by providing a backbone for companies that may want to run cable from the proposed lines into people's homes.

Ric Telthorst, president of Missouri Telecommunications Industry Association, questioned why Sho-Me would decide to go into an area that already has a "pretty robust network." To reach a goal of 95 percent, money needs to be spent on expanding the network into areas where laying cable presents logistical and financial problems. The association is urging the governor to seek funding for a detailed map of all current lines before approving Sho-Me's application, Telthorst said.

Logistical and financial broadband problems such as those in Hillsboro are not unique to rural areas of Missouri.

Jonathan Sessions, managing partner for Columbia's Tech Two computer consulting, said the south side of Broadway between Ninth and Tenth streets is unable to receive a Mediacom broadband connection because it costs too much to run cable into a new area.

It makes no financial sense for Internet providers to run new cable, Sessions said.

Rather than additional cable, Sessions sees the future as wireless signals, citing a product called Wimax. Functioning as a larger version of a Wi-Fi connection, Wimax could be attached to existing towers and produce a wireless signal that could be distributed across a sparse area.

This type of connection would be more cost-effective than running miles of cable, Sessions said.

Jefferson County Council Executive Chuck Banks sees the future in a similar manner.

"I used to think whoever got fiber to every home would win," Banks said.

Now, Banks sees the "winner" as the company that can provide rural areas access wirelessly. However, no company has currently come up with a comprehensive plan to do so.

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Melissa Walker February 6, 2011 | 11:50 p.m.

As a person that lives in the rural area of Elkton, MO.. I can only hope that they really use this grant to cover the rest of "Rural" Missouri, not the major cities which all ready have least four or more providers that can give them internet..
I solely only have two options and was told by local phone company (centurylink) that is could be another 5 to 6 years if EVER that I will see DSL in my area.. Dial-up lets face it, is not an option anymore in this high tech economy we are in. It takes a week or more just to download a update for my computer using dial-up. The other option is Satellite and just to get a basic plan that is basically one step above dial-up I could be spending 80.00 dollars or more.
With more and more going viral and wanting our kids to be better connected digitally we are severally lacking in the ability to keep them connected even for school work if we can't even get internet to begin with.. Also my local WISP provider is not even trying to get service out to us because they say the funds are just not there..
I seriously hope that the officials in charge at least try and connect the people that have no or little internet choices.. it's just a shame that this part of Missouri is so forgotten.

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