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Rural Minnesota rising: Failed by capitalism, residents seize control of their internet destiny

Brett Ryder

Brett Ryder

The Civil War was in full fury when Jacob Rieke’s ancestors took flight from Germany, eventually coming to rest outside Fairfax, Minnesota. Five generations later, his family still works this land, farming corn, soybeans, and hogs.

But it wasn’t long ago that Rieke considered fleeing. Wretched internet imperiled a way of life.

Farming is no longer a vocation of eager sweat and sturdy backs. It’s one of drones sending real-time reads on moisture and soil conditions. Combines broaching the sophistication of fighter jets. Satellite data that parses the varying characteristics of a field, allowing for precision seeding and fertilizing that can save tens of thousands of dollars a year.

Yet it all requires the kind of internet service city folks take for granted. In these lands two hours southwest of Minneapolis, private companies offered a patchwork of plans, often at towering prices for near-useless speeds.

When his young daughters watched a buffering version of Netflix, Rieke couldn’t work. “If someone else fired up something on their device, Netflix would go down,” he says. “It was always a competition to see who could use the internet.”

Meanwhile, teachers in the Gibbon-Fairfax-Winthrop district were forced to circumscribe lessons because the kids couldn’t do research. On winter nights, students idled in cars outside libraries, seeking access to Wi-Fi just to do their homework.

For Linda Kramer, the new co-op means allowing her family to be “good stewards of the land.”

For Linda Kramer, the new co-op means allowing her family to be “good stewards of the land.” courtesy of Linda Kramer

Rieke was left with the lingering sense he would fail his daughters, sentencing them to a lesser education.

“I knew that if nothing ever changed, we couldn’t live like this,” he says. “We were going to have to look at a different house somewhere.”

Outside nearby Gibbon, Linda Kramer endured a similar fix. Her family grows corn, soybeans, and wheat, while her husband also works as a crop consultant. He’d attempt to send field data to clients, only to watch it take days to upload. So he’d find himself driving 40 miles just to deliver thumb drives.

“We weren’t being able to accomplish what people in the cities or other rural areas were able to accomplish,” Kramer says.

Their problems weren’t unique. Across hulking swaths of Minnesota, gas stations struggle to run credit cards. Counties see scant hope of nursing new businesses. And everyone worries the evacuation of their young will only accelerate. Forgive college grads who can’t see futures in places where it takes hours to load an Instagram photo.

Under normal circumstances, American faith would dictate that where there is great need, free enterprise will arrive to fill the void. But the exact opposite occurred. Internet providers see a slim upside to investing in regions of sparse population and sheepish incomes. Especially when competition is thin to nonexistent, and you’re already charging top dollar for the weariest service money can buy.

This bind has not only left rural residents to trail far behind their urban brethren. They’re chasing much of the developing world.

“When Minnesota is behind Bulgaria, there’s a problem,” says former state Rep. Dan Dorman (R-Albert Lea).

Yet something quite beautiful has come from all this. Outstate Minnesota is resorting to an old-fashioned brand of socialism, using co-ops and community-owned ventures to surmount the neglect.

Says Kramer: “We just figured we were going to be left further and further behind. The companies in our area weren’t doing anything for us. So we needed to do it for ourselves.”

Life among the screwed

“We don’t care. We don’t have to. We’re the phone company.”

This was the punchline of a 1976 Saturday Night Live skit, when Ma Bell held monopoly sway over the U.S. phone system. In the years to follow, cable TV would launch new fiefdoms, birthing generations of executives known for abusing their customers, who had nowhere else to go.

Fast forward to today, and consumer hostility flares undiminished. Surveys have shown that among the nation’s 12 most reviled companies for customer service, the telecom industry holds eight spots.

In Minnesota, no company affirms this notoriety like Frontier Communications, which serves the southern and northeastern parts of the state. During a mere five-week period earlier this year, the Minnesota Public Utilities Commission received 439 complaints about the Connecticut firm.

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The grievances read like a cannonade of frustration. They speak of no-show repairmen. Endless waits on hold. Charges for services never rendered. Outages that last for days.

“I have never dealt with a more incompetent company than Frontier,” writes one customer on Google Reviews. “I have no other choice for internet or phone service in my area.... It took me over three months just for Frontier to get to my house to even connect my service.... They also canceled multiple times for installation without calling. They just didn’t show up.”

These maladies aren’t exclusive to the outbacks. They also extend to Watertown Township, in the exurbs of Carver County.

“Frontier Communications is my only option for internet,” Kathleen McCann wrote state regulators. “My internet service is worse than dial-up.... As a dentist, I am not able to email dental X-rays. It took me 47 minutes to upload one small photo to Facebook recently.”

As Frontier Vice President Javier Mendoza sees it, his company is at a disadvantage, serving more rural areas than its rivals. While it’s one thing to connect a compact city, it’s quite another build a network across the unsparing tundra.

“The economic reality is that upgrading broadband infrastructure in the more rural parts of the state is not economically viable,” he says.

Which leaves customers forgoing YouTube, Pandora, and using more than one device in the same home. Launching a business with anything but remedial tech needs is out of the question.

Yet while Frontier faces the heaviest fire, its peers aren’t held in much higher esteem.

Lake Connections proved a godsend for Lindsey Deitz... and a bloodbath for Lake County.

Lake Connections proved a godsend for Lindsey Deitz... and a bloodbath for Lake County.

Across Minnesota, people tell of speeds delivered at a fraction of what they pay for. Peak evening hours where loading a web page becomes a Sisyphean task. Packages in monopoly areas that sell for $50 more than in neighboring towns with competition.

In Brainerd, it translates to volunteers who can’t do online training to be approved as hockey coaches.

In Kandiyohi County, it means the hunting trap company battles to send catalogs to clients.

“Where internet is the worst, it’s often the most expensive,” says Bill Coleman of Community Technology Advisors. “The market has failed when it comes to rural Minnesota.”

Mediacom is among the few outfits investing in top-flight rural fiber. It now claims minimum speeds of 60 megabits per second. (The FCC’s basic broadband standard is 25, though much of outstate Minnesota operates in the low single digits.)

Mediacom VP Tom Larsen understands the complaints: “You have a product that you can’t live without, and I think the angst drives up when there’s an issue.” Yet he makes no bones about the difficulty of serving sparse populations amid the siren call for profit.

“We take a lot of criticism as an industry for not doing more,” Larsen says. “The reality is we’re doing this with private money, and it has to make sense. You need a return.”

Jacob Rieke was left with the lingering sense he would fail his daughters, sentencing them to a lesser education.

Jacob Rieke was left with the lingering sense he would fail his daughters, sentencing them to a lesser education.

Herein lies the rub. When companies do invest, they’re not prone to pushing improvements beyond regional centers, leaving inhabitants of the woods and fields to fend for themselves. Their presiding motive, after all, is to puff stock prices and executive pay. The lives of farmers and lake dwellers run a very distant second.

“If the CEO of CenturyLink said he was going to spend $100 million in rural Minnesota,” says Coleman, “they’d probably get a new CEO.”

All of which leaves the information superhighway running more like the rail lines of yesteryear, Dorman says. Towns with respectable depots have a chance to thrive. Towns without are fated to wither and die.

“Those people are screwed,” says Christopher Mitchell of the Institute of Local Self-Reliance, a Minneapolis nonprofit. “People who make business or real estate decisions are not going to move to that area.”

The Renville-Sibley Insurrection

Winthrop, Minnesota wished not to be among the screwed. Mark Erickson, the city’s economic development director, was charged with finding a way to the modern world.

He spent 18 months trying to convince local companies of the virtues of a community partnership. They balked.

In the heart of Trumpland, Mark Erickson turned to an old-school socialism practiced a century ago.

In the heart of Trumpland, Mark Erickson turned to an old-school socialism practiced a century ago.

Winthrop—population 1,399—was too small to build a high-speed fiber system on its own. So it resorted to a spirit of socialism practiced a century ago, the kind that brought electricity, phone lines, and farm cooperatives to the Minnesota backcountry.

It would seem a despairing quest. Sibley County is in the heart of Trumpland. “Out here, we’re quite conservative,” says Erickson. “When the Republican Party says something, people listen.”

Yet the resulting campaign would exhibit a savvy and insistence few lefty activists could match. It involved 10 cities and 17 townships across Renville and Sibley counties. Over 100 educational meetings spanning two years. Seventy volunteers to carry the load.

The final outcome: RS Fiber, a co-op that delivers better internet than most Twin Citians receive.

“It was really an exercise in people taking control of the future of their communities,” says Erickson.

For Jacob Rieke, it means no longer fearing for his daughters’ schooling. He can now employ all the weaponry of precision farming, saving between $5,000 and $20,000 annually on seed costs alone.

For Linda Kramer, it means getting 10 times the speed of her old service for the same price, allowing her family to be “good stewards of the land.” An ability to read the subtleties of a field prevents over-fertilizing, which has left most southwest Minnesota waterways too toxic for swimming. “The technology is really allowing people to do good things.”

RS is also fostering commerce. A new 3D printer business in Gibbon can send data-heavy files to clients. An industrial electrician in Winthrop does work all over the world.

In nearby Gaylord, a New York company plans to turn an old elementary school into a medical college. The hope is that it will eventually house 300 students, training them to work in small towns with severe doctor shortages.

What makes co-ops different is a kinder sense of purpose, one that puts residents ahead of quarterly earnings and Wall Street ultimatums.

Says Brian Zelenak, head of the Mille Lacs Energy Cooperative: “It’s about enhancing the quality of lives.”

The countryside goes pro

Asked if he’d still be in business without high-speed internet, Kent Kelly offers a blunt reply: “No.”

He’s the general manager of Fortune Transportation, a testament to how even old-line industries like trucking are reliant on connectivity.

From headquarters outside Windom, Kelly runs 250 refrigerated trailers, hauling for the likes of Kraft, Anheuser-Busch, and Schwan’s. He can monitor the location, speed, and deliveries of his 150 tractors in real-time. And he can keep 200 well-paying jobs in small-town Minnesota.

Fortune’s success comes courtesy of Windomnet, among the nation’s first city-owned internet concerns. The company’s databases handle orders 24/7, a task impossible in much of outstate, since time-outs and dropped connections corrupt files, turning orders into horrors.

Windomnet allows the city to play on a footing equal to anywhere in the world. “Pricewise, people here don’t pay more than you do in a metro area,” says Kelly. “But the speeds are five to 10 times faster.”

The same thing could be said of Bemidji, home to Paul Bunyan Communications. It began as a telephone co-op in the 1950s, eventually moving on to TV and internet across multiple counties. “They’re really transforming that entire region,” says Coleman. “It’s becoming a high-technology center.”

One company has created a database of millions of aircraft, building custom parts for the restoration of World War II-era planes. Delta Dental is also opening a new facility, drawn by high-speed fiber that allows employees to telecommute.

Further east, Lindsey Deitz typifies another bonus for northern Minnesota: the work-from-home professional.

There’s no shortage of Twin Citians who daydream of living among the splendors of Minnesota’s Arrowhead. Want of jobs has always made it prohibitive. Yet it’s now one of the most connected parts of the state.

Four years ago, Deitz was living with her family in Amarillo, Texas, when her husband got a job in Silver Bay. The family had always wanted to put down rural roots. They found their perfect acreage outside Finland.

At first, Deitz had no internet—a rather imposing snag, since she runs All the Nourishing Things, a holistic food and lifestyle website. “It wasn’t going very well at all. I would just have to go find places that had Wi-Fi, so I didn’t get very much work done.”

Lake County rode to the rescue. It created Lake Connections, with the unforgiving task of bringing broadband to 11,000 residents scattered across 2,100 square miles, an enterprise no private company would attempt.

Deitz no longer has to slouch about town to earn a living. “I’m really thankful for the internet so that I can provide for my family,” says the mother of two. “You can make an income from home. A lot of people leave the area because they can’t find a job.”

Dan Shirley is seeing a similar quality-of-life boost in neighboring Cook County, where the Arrowhead Electric Cooperative brought fiber to Minnesota’s remote northeastern point.

Shirley’s family has run Sawbill Canoe Outfitters outside Tofte since 1957. It operates almost entirely off the grid, using wood for heat and solar for electricity. An automated website means “we don’t have to sit in front of the computer processing a reservation,” he says. “We can spend more time with customers.”

In the surrounding area, visitors are becoming permanent residents; they can now connect to the outside world.

Coleman believes this to be essential to the countryside’s survival. “Seventy percent of people won’t buy a house unless it has good internet service. Realtors all over the state have told me that. They see a nice house and find out there’s no internet and they drive away.”

This is as important to Twin Citians as it is to rural residents. Of Minnesota’s 87 counties, just four—Hennepin, Ramsey, Dakota, and Washington—produce more than half of the state’s tax receipts. Unless the metro wants to continually float an ever needier welfare state elsewhere in Minnesota, the country must flourish.

Surmounting the lobbyists

Public internet is by no means perfect. Take Lake Connections, which has proven a godsend for residents... and a bloodbath for the county.

To build it, Lake County officials borrowed mightily from the feds. The two soon began a dance of squabbling and ineptitude. When the county finally realized it was unsuited for the telecom business, Lake Connections was put to auction. The highest bid came in at $3.5 million—pocket change compared to debts close to $50 million.

RS Fiber is also looking at a $1 million deficit next year, leaving private sector partisans to cluck with satisfaction.

Erickson is unfazed. He says the plan called all along for the possibility of cash injections, like any start-up. At most, residents will see tax hikes of $9 a month. RS is already saving them $40-$50 a month.

Still, these red numbers bring kindling to those who believe citizens shouldn’t challenge free enterprise. The telecom industry has never been shy about attacking locales that infringe on its turf. Illinois providers once tried to subvert public competition with a phone survey that asked such leading questions as, “Should tax money be allowed to provide pornographic movies for residents?”

A more subtle resistance runs through the Minnesota Legislature, where telecom employs some 50 lobbyists. The state offers matching grants to improve broadband. But most have gone to private companies’ expansions into unserved areas, says Mitchell, rather than to co-ops contesting bad service. “The lobbyists want to make sure the state doesn’t serve any competition.”

The program is also chronically underfunded, despite hefty state surpluses. Democrats from metro districts don’t hear the drumbeat of grievances. And while Republicans may represent Minnesota’s hungriest regions, they’ve never been partial to public cures for private markets, preferring the one-size-fits-all remedy of tax cuts for all that ails.

Says Dorman, now executive director of Greater Minnesota Partnership, which promotes outstate development: “I do smile about some of the conservatives who complain about Google. They should be worried about Comcast.”

These obstacles have left 250,000 homes without basic broadband, according to former state Sen. Matt Schmit (DFL-Red Wing). It’s especially hard on the elderly. Telemedicine could allow them to stay in their homes, seeing specialists via the internet, rather than driving a half-day to a hospital.

“This isn’t stuff that’s far out,” says Schmit, now a senior research fellow at the University of Minnesota. “This is happening every day today.”

In the meantime, co-ops like Mille Lacs Energy are showing up with reinforcements. Out in Lake Country, using a credit card or a cash machine can be a test of wills. Residents know to avoid the web both morning and night, lest they be stuck in standstill traffic.

So Mille Lacs is running fiber to its 15,000 members. CEO Brian Zelenak believes it will give kids a better shot at getting into college, allow mom-and-pop resorts to email brochures, and keep the elderly from prematurely moving to get health care.

Even if it only allows people to work from their cabins, spending an extra day or two on gas and groceries, it will be a “significant boon,” he says. “I think you will see more cabins become permanent homes.”

Minnesota now has 30 co-ops diving into the internet, though Dorman worries for areas without one. Massive cord-cutting has left cable TV to hemorrhage. Without that extra revenue stream, “my fear is you’re going see cable companies start to walk away.”

If that happens, much of the state will be without a lifeline that’s “as important as electricity or water or telephone lines,” says Kramer.