Bigness doesn’t always trump in broadband

There was an interesting exchange this morning between Margaret Anderson Kelliher, former House speaker and chair of a state broadband task force, and Duane Ring, Midwest Region President for CenturyLink and a member of the task force.

The two were on a panel for a Minnesota High Tech Association-sponsored discussion in Minneapolis of the task force’s recent report. The report pointed out that the state needs to pick up its game if it wants to become a leader in the availability of high-speed Internet access.

By the official definition of broadband, 62 percent of the state’s households have it available. If you map that availability you can see that residents who get phone and Internet service from small companies like Paul Bunyan in the Bemidji area and Farmers Mutual Telephone in western Minnesota get some of the fastest speeds. If you look at the rural service areas of big providers like CenturyLink and Frontier, speeds are slower.

Why is that? Anderson Kelliher asked Ring.

“Wow,” Ring said, taking a deep breath. It wasn’t, I don’t think, that the question was a surprise. It was that the performance of big phone providers in rural Minnesota has been a constant issue at the center of this rural debate.

Ring’s answer wasn’t really a surprise either, but it was a tacit acknowledgment that bigness may not always provide the solution to challenges like this.

Noting that CenturyLink wants every customer it can find, Ring pointed out that the company nonetheless needs a return on investment that satisfies shareholders and meets the demands of larger commitments and fiduciary responsibilities.

The small phone companies that have laid high-speed fiber networks, some of whom are cooperatives whose customers are the owners “can make decisions that maybe the economic return is 25 years,” Ring said. “They can do that.”

Public-private partnerships can help, Ring said, although companies like his will object when a public entity proposes a network in direct competition with a private one that CenturyLink or Comcast might be providing.

CenturyLink is spending $11 million of federal Connect America Fund broadband money to reach underserved areas in its territories in Minnesota.

In Lac qui Parle County in western Minnesota, local officials have thrown in with Farmers Mutual Telephone to build a fiber network. That’s just one example of public-private partnerships involving small telecommunications companies.

It would be interesting to see one of those involving a company the size of CenturyLink.