North Country broadband is a patchwork quilt
Only 102 years ago, on Jan. 25, 1915, the first transcontinental telephone call took place between Alexander Graham Bell and Thomas Watson. In 2017, connecting everyone to the latest communication technology is going to be a bit different.
The days of Ma Bell are over. No megalithic company is coming to connect all rural households to high-speed internet, throwing up miles of poles and wires. For one thing, the poles are already there. For another, instead of a few huge telephone companies competing for customers, a range of companies from giant multinationals to local startups is getting in on the game.
The state government is willing to invest in public-private partnerships to get high-speed internet service to rural households and businesses, but telecom giant Verizon declined to even bid on the North Country. Verizon did recently install more high-speed fiber-optic internet cable in downtown Saranac Lake, the Adirondack Park’s most populous community, but big companies have limited interest in much of northern New York, where customers are few and far between.
“The business model in rural areas is not conducive to providers clamoring to get in,” said Franklin County Legislator Barbara Rice, D-Saranac Lake.
That leaves an opening for smaller companies such as North Country Broadband Inc., a subsidiary of the St. Regis Mohawk Tribe’s broadband company Mohawk Networks LLC. NCBB has just activated a fiber network for residential properties in Massena and plans to expand to downtown Massena businesses in 2018.
The Development Authority of the North Country has constructed a large fiber network to assist internet providers with infrastructure. Small providers can hook up to these networks in exchange for a percentage of the revenue they’ll gain from customers.
In Saranac Lake, the village is adding high-speed internet via fiber optic cable thanks to a public-private partnership with Slic Network Solutions, a company based in Nicholville in nearby St. Lawrence County. Saranac Lake put up $125,000 to seed the project, and in return will receive 10 years of internet service pre-paid.
“We’ve worked very hard on this, and it’s extraordinarily important,” said Rice. She was on the Saranac Lake village board when it negotiated the deal with Slic. “It wasn’t funded by the state; it was funded by the village.
“We fronted the money over a 10-year period, where we would be paid back through free service to Saranac Lake’s library and youth center. We negotiated free Wi-Fi hotspots at Riverside [Park], Berkeley Green, Mount Pisgah and other places. Certainly it was a huge benefit for the farmers market vendors this summer [at Riverside Park].”
As of this writing, Slic has installed more than 3 miles of fiber in the downtown area of Saranac Lake. The new fiber network runs along Broadway from McClelland Street south to River Street and along Church Street, passing more than 100 businesses and 350 residential locations. This week the company will install fiber at the police station, fire station and village offices, hooking them up to the trunk lines. Business installations will begin in December.
Asked whether the public-private partnership model used by Slic and the village could work elsewhere, Slic Chief Operating Officer Kevin Lynch responded by email: “Slic has worked with a number of communities and agencies in public-private partnerships to extend broadband to unserved areas. In some cases, such as Tupper Lake, we partnered with the Franklin County [Industrial Development Agency], the Development Authority of the North Country, and Tupper Lake Hardwoods to extend high-speed broadband to Tupper Lake Hardwoods and the IDA’s industrial park. In Newton Falls we worked with the St. Lawrence County IDA, DANC, and others to extend broadband into the community and provide a key resource to a local employer.
“Each situation is unique, but because of our size and our local roots, Slic can be very flexible to create an innovative solution for each community.”
Lynch sees the two biggest challenges to extending internet access in the Adirondacks as the upfront capital costs, and the fixed operational costs of serving rural areas.
“When it comes to construction, the single largest fee is the ‘Make Ready’ costs we pay to the pole owners, (typically the electric and phone companies.) These fees can account for 30-35% of the total cost of construction, and occur before a single foot of fiber is strung. ‘Make Ready’ is the process of ensuring it is safe for us to attach our fiber to existing utility poles, and can involve rearranging the existing lines, replacing poles, or addressing code issues on the poles. Most of these costs are passed down to the company that seeks to attach to the pole. This process is also very slow and can take more than six months from the time we apply to the time we can actually start to build.
“We are grateful for the support we have seen in the form of grants from the NYS Broadband Office and the USDA, and partnerships such as with the Village of Saranac Lake. The programs help us build out rural areas and address some of these high costs, but we would like to see more of these funds used for actually building networks and connecting customers, and less on addressing aging infrastructure.”
Once the networks are built, writes Lynch, “Another challenge is that most of our fiber optic cables are taxed as real property based on the cost of construction. Since our infrastructure is new, we pay much higher taxes than our competitors. Construction costs are relatively constant per mile, so we pay the same amount of taxes in a dense area (like downtown Saranac Lake) as we do in more rural areas where there might only be two or three houses per mile. We also pay a pole-attachment fee for every pole that carries our cables. In rural areas, these taxes and pole fees are supported by fewer customers than more densely-populated areas, sometimes to the effect that it is not sustainable to maintain service in these areas. Addressing these fixed operational costs will go a long way to provide sustainable broadband in the rural areas of Franklin and Essex counties.”
North Country Congresswoman Elise Stefanik, R-Willsboro, recently introduced a bill to support rural broadband access. The bill, dubbed the the B-CROP Act, proposes a mix of grants and loan supports, especially geared to farmers. The grants proposed in the act would cover up to 50 percent of the construction costs for a broadband deployment project and up to 75 percent in remote, high-need areas. Rural areas losing residents, with a high proportion of low-income residents would given priority.
According to a spokesperson for Stefanik, “The B-CROP Act increases funding to $50M for the Rural Utilities Service for rural broadband deployment in underserved areas, like many communities in New York Congressional District 21. Congresswoman Stefanik has also re-introduced the Precision Farming Act which encourages the construction of rural broadband connections to farms by allowing providers to receive reimbursements for the costs related to construction.”