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Invest Your $5M Wisely, Kristi: Rural SD Lacks Broadband

Along with approving the FY 2020 budget in the dark of night, our blizzard-spooked legislators pulled $6.6 million out of reserves to balance this year’s budget. Among the items onto which legislators poured some sugar was a new “rural broadband fund” under the Governor’s Office of Economic Development, for which Governor Kristi Noem asked and got $5 million.

Oh, look—another $5 million ceded to the Governor’s mostly unspuervised spending authority. What could go wrong?

The money comes a couple years after the Obama stimulus money that originally filled South Dakota’s broadband fund ran out and forced the state to axe the nice little website it was using to share information and help providers get grants to build the info-infrastructure that is necessary (but not sufficient!) to sustain rural economic development. This $5M also comes as the press picks up a January 2019 study by Old Dominion and the University of South Dakota on rural broadband discussing the urban-rural digital gap.

The researchers got hold of Internet users around the state, from the comfy confines of the Vermillion-Yankton corridor to farther-flung outposts on the high lonesome:

McNab, Earnest, et al., Improving Rural Broadband Access, Old Dominion/University of South Dakota, January 2019, p. 3.
McNab, Earnest, et al., Improving Rural Broadband Access, Old Dominion/University of South Dakota, January 2019, p. 3.

Broadband connections are spotty all over. An EMT said unreliable mobile signal hinders sending EKG information to hospitals. One respondent on the USD campus said our second-largest university doesn’t offer enough bandwidth for reliable video conferencing. Respondents said that signal becomes unreliable during big events like Dakota Days and county fairs (we Brown County Fairgoers can attest to that), during which our temporary population densities are still ridiculously small compared to big cities where people get reliable signal every day.

McNab, Earnest, et al., 2019, p. 7.
McNab, Earnest, et al., 2019, p. 7.

The report indicates the best way to spend Governor Noem’s $5 million (and whatever federal dollars and private donations she can conjure up to match it) to close the urban-rural digital gap won’t be on wires:

A recent estimate by the South Dakota Telecommunications Association (SDTA) highlights the challenge of fixed broadband investments in less populated areas of the state. The estimated average per-mile cost of installing backbone fiber was $16,000 for rural areas of South Dakota but was $60,000 per mile in the metropolitan Sioux Falls area. However, while the SDTA estimated the population density of the Sioux Falls metropolitan area was 2,490 residents per square mile, it estimated that the population density of its rural customers was only 4.5 residents per square mile. The low population density of rural areas meant that the average cost per resident of installing backbone fiber was $3,571 per resident, compared to $25.54 in the Sioux Falls metro area [McNab, Earnest, et al., Improving Rural Broadband Access, Old Dominion/University of South Dakota, January 2019, p. 11].

At those rates, Noem’s $5 million would run fiber to another 1,400 South Dakotans, or 0.16% of our state population.

The cost-effective solution, says the report, will be 5G wireless networks, which, according to some friends in Sioux Falls, is a scam, a power grab, and a way to fry our sweat ducts.

Whatever infrastructure we build, empirical evidence suggests that improving broadband access does all sorts of good:

The question of broadband access is not only one of improving the consumption of video and associated consumer and business services, it is directly and positively related to questions of employment and productivity. For the United States, the available empirical evidence suggests that broadband availability lowers the unemployment rate at the county level and these effects are concentrated in technology-concentrated and high-end service industries such as finance and insurance, education, and heath care (Bai, 2017; Crandall, Lehr, & Litan, 2007; Forman, Goldfarb, & Greenstein, 2012; Kolko, 2012). The empirical evidence also lends credence to the argument that increased mobile network capacity and speed reduces information asymmetries between rural and urban areas, improves the acquisition of human capital and agricultural productivity, and improves connections between governments and the citizens that they serve (Baumüller, 2018; Beratarrechea et al., 2014; Haftu, 2018; Mittal, Gandhi, & Tripathi, 2012). Improving access to mobile networks also appears to reduce the incentives for rural-to-urban migration by improving economic opportunities in rural communities [McNab, Earnest, et al., 2019, pp. 11–12].

Notice that the research above shows benefits to agriculture and several other important South Dakota industries. The study authors emphasize the decreasing importance of agriculture and the increasing importance of those other information-dependent service industries:

While a significant proportion of economic activity and employment may continue in the agricultural sector, its relative importance to other sectors of the South Dakota economy has declined over the last two decades.

In 2017, a slight majority of the South Dakotan population resided outside the two Metropolitan Statistical Areas (MSAs) of Rapid City and Sioux Falls. It is highly likely, however, given current trends that sometime in the next two decades, more than 50 percent of the population will reside in these metropolitan areas of South Dakota. People follow jobs, and jobs have continued to migrate from rural to urban communities as South Dakota evolves from an agriculture-based economy to a more diversified economy based on financial services, health care, education, and tourism. The growth in these sectors is, in part, dependent upon the availability of access to the Internet, access which appears to be constrained in rural areas of the state.

… fully one quarter of the value of South Dakota’s economic activity is generated by finance, insurance, real estate, rental, and leasing, dwarfing

that sector’s approximate 10.7 percent share of the state’s employment.

…The state’s traditional economic base, agriculture, accounted for 5.3 percent of total employment and 6.6 percent of economic output [McNab, Earnest, et al., 2019, p. 12, 14].

Expanding broadband to Tyndall, Highmore, and Zeona isn’t just about helping farmers and ranchers keep up with the markets; it’s about providing rural folks with other skills a chance to participate meaningfully and optimally in the other 93% of the South Dakota economy without having to move to Sioux Falls or Rapid City. And even that network-enabled opportunity, Dr. Bottum will remind us, may not be enough to reverse some areas of rural decline, because most people don’t want to live their whole lives online.

Governor Noem has $5 million to spend right now on rural broadband, and a new study telling her how to spend it reasonably. Let’s keep an eye on the $5 million to see if the Governor follows through on her promise to connect the rest of South Dakota to the 21st century.

24 Comments

  1. jerry 2019-03-17

    5G would make broadband obsolete and be a cheaper way to go.

    “The report from Ovum, and commissioned by, er, soon-to-be 5G network provider Three, talks up benefits that the next-gen tech will bring to Blighty when it arrives in 2019.

    The analyst firm predicts that customers will be able to save an estimated £240 per year by ditching their fixed-line connection. It expects 5G Fixed Wireless Access (FWA) connections to eliminate the need for engineer visits thanks to its plug-and-play setup, saving Brits an estimated £240 per year.

    Ovum estimates that 5G wireless services could replace traditional connections for 85 per cent of the UK’s 26 million fixed line customers with “equal or better speeds”. https://www.theinquirer.net/inquirer/news/3066693/5g-will-replace-brits-broadband-with-speeds-of-80-to-100mbps

    We are still way behind the rest of the world in 5G, but we could catch up…if we had the will to do so. Instead, we blame Huawei for being so efficient with their 5G.

  2. Nick Nemec 2019-03-17

    What speeds are considered good? I just Googled “how fast is my internet?” and ran the test available and got 15.0 Mpbs download and 22.6 Mpbs upload speeds here in rural Holabird.

  3. cibvet 2019-03-17

    As a rural resident, I’m thankful to the Feds for electricity in my lifetime. Maybe, if I live long enough, I’ll see reliable broadband. I have doubts SD will have anything to do with it.

  4. Roger Cornelius 2019-03-17

    How long has John Thune and other republicans that control been talking about rural broadband?
    Doesn’t Thune sit on some pretty powerful senate committees that are responsible for bringing rural broadband to South Dakota?
    Thune post numerous press releases on DWC telling us how hard he is working to bring rural broadband.

  5. jerry 2019-03-17

    Roger, the only and I mean only fellow who worked diligently on bringing broadband to rural areas was President Obama. Thune, natta, GNOem, forgetaboutit. Shorty, only thinks it pertains to an all woman band. Obama even laid out the money to get’r done. So the Democrats put in healthcare with the ACA, and put in Broadband with the money for the white guys that hate him. What have Republicans given us and are still giving us?, RUSSIA. Republican idea of infrastructure is corruption.

  6. grudznick 2019-03-17

    If people stopped whining about waiting 3 seconds after they click a little picture their lives would be far less stressful. Why, back in the day we would sit around and read at night. Read paper things, like books and catalogs and magazines with meaningful content like the National Geographic and Time and Charley Jones’ Laugh Book Magazine.

    Why Governor Noem wants to spend millions to save a few yahoos out in the sticks 3 seconds is beyond me. They should drive to the nearest town with a library.

  7. Cory Allen Heidelberger Post author | 2019-03-17

    Grudz, the problem isn’t just impatience with click-wait time. The problem is that the same low bandwidth that makes our meager clicks take three seconds makes it impossible for rural users to participate in online video conference calls with remote bosses, clients, customers, teachers, and students. It makes it practically impossible for teachers to upload videos for their online students. It makes it practically impossible for online nursing students in Eureka or Edgemont to access online medical simulations necessary to their training. And as the example from the OD/USD study pointed out, low bandwidth makes it impossible for EMTs to transmit live medical data from the field.

    Transmitting my text-heavy blog and activating a link to another Grudz’s zingers are trivial concerns to the real economic development, educational, and social needs motivating the push for fatter, faster Intertubes.

    Besides, pretty soon we’re going to have holographic comment sections. We’re gonna need 10G for that… but Dakota Free Press will not be left behind! :-)

  8. Cory Allen Heidelberger Post author | 2019-03-17

    South Dakota may not be ready for hemp, but even Korea isn’t ready for 5G: their planned launch has been delayed at least a month, in part because Korean regulators said 70,000 won ($62 US) a month is too high a price for customers.

  9. Cory Allen Heidelberger Post author | 2019-03-17

    Nick, are you sure about that upload speed? I did the same Google test and got 25.6 Mbps download and 0.64 Mbps upload on my Midco service. Google tells me, “Your Internet speed is fast. Your Internet connection should be able to handle multiple devices streaming HD videos at the same time”… which is true! We can run Netflix on the TV, live radio on Alexa, another video on another computer, and post blog comments on my Mac simultaneously with no dips in service. Are you able to watch online videos without buffering in Holabird?

    I find that uploading videos to YouTube takes too darn long… and there is another problem for economic development. If some rural entrepreneurs want to make their livings producing video (TV ads, web marketing videos, YouTube awesomeness, live-blogging from the rodeo…), they need fat pipes to upload fast and smoothly. With a few more donors, I could launch my own live nightly newscast, but if I can’t stream in smooth reliable hi-def, who’s going to watch?

  10. Cory Allen Heidelberger Post author | 2019-03-17

    Say, CIBVet reminds me: correct me if I’m wrong, but 83 years ago, when we had a huge rural-urban gap in electricity, we didn’t hold out some flimsy incentive payments to private power companies and hope they’d wire up the Nemec homestead and Charlie Hoffman’s grandpa’s place and all those other outposts, did we? FDR signed the Rural Electrification Act, rural folks formed co-ops, the feds loaned money, and we built our own power networks, right?

    Why doesn’t Kristi Noem propose a Rural Internetification Act? Take her big pot of money, loan it to co-ops (existing or newly formed) to bring broadband to all customers, and make it so?

  11. jerry 2019-03-17

    Net Neutrality has corrupted the broadband by slowing it down. Verizon, one of the worst in that regard, just announced 5G for Minneapolis.

    “5G is coming, and with it a massive boost in bandwidth that will feed artificial intelligence applications, enable the long-fabled internet of things, and deliver more streaming video. Lots of streaming video. But all that extra bandwidth won’t be much use if the average consumer can’t afford a 5G connection, or if those connections are hobbled by restrictive bandwidth caps.”

    As Cory points out from his urban location, some have higher speeds than others have, it is all in what your provider wants to pass onto you. As a rural consumer, my high speed with phone service, costs about $100.00 per month. This puts broadband out of reach for many many rural households. It will also put 5G out of reach for many rural households as well.

  12. Debbo 2019-03-17

    “One respondent on the USD campus said our second-largest university doesn’t offer enough bandwidth for reliable video conferencing.”

    Earlier today I read that campuses are beginning to outlaw streaming in class buildings and that seems to be solving the problem. Professors can evidently turn it on or off in the classroom they’re using. Interesting.

    I’m for the citizen REA style co-ops for broadband and really wireless makes so much more sense.

  13. leslie 2019-03-18

    Its like it’s happening all over again, like nov 2016. Elected another republican idiot.

  14. Cory Allen Heidelberger Post author | 2019-03-18

    Video streaming eats up a lot of bandwidth. Live video interaction is great for educational purposes like bringing in remote speakers. But when students are sitting in class watching YouTube videos instead of participating in what’s happening, we lose valuable bandwidth.

    Part of the solution is technological. Part of the solution is social, teaching young people the responsible use of resources. Students wouldn’t go to their chemistry lab and take a hot bath in the lab sink; they should have the sense not to class and plug up the bandwidth distracting themselves with NCAA highlights.

  15. grudznick 2019-03-18

    This 5G, they say, will fry our brains even if we don’t use it. It will be buzzing all around downtown Rapid City, by the skating rink and probably beaming down from the top of the Alex flooding the Tally’s breakfasts with moonbeams and putting a premature skin over our gravy bowls and such. There needs to be more studying on this 5G.

  16. jerry 2019-03-18

    Kinda correct grudz, right now there are a whole lot of waves beaming at us from all directions without the 5G, with more and more being added. The studying has been done, with or without the 5G, we are being battered.

  17. Nick Nemec 2019-03-19

    Cory, that is what the speed test I took told me. I don’t do a lot of uploading other than photos and a few short videos to Facebook. When I do that it happens nearly instantly. My internet connection is through Venture Communications my local rural telephone cooperative. Over the years they have installed fiber optic line into much of their rural service area. Fast upload speeds are of great interest to me and my bride. She is a nurse practitioner, is nearing retirement age and has contemplated continuing practice as a telemedicine nurse practitioner out of a spare bedroom disquised as a medical office. Jobs are available but fast internet connections are required for this to be successful retirement gig.

  18. Cory Allen Heidelberger Post author | 2019-03-19

    Good example, Nick! Jobs depend not just on consuming data but on producing and beaming data out. Whatever the tech is—5G, 10G, direct telepathy—folks wanting to diversify their job prospects in Greater Holabird and similar rural areas need to be able to beam their services out to the world.

  19. Greg Dean 2019-03-19

    The $5 million allocated by Governor Noem will help companies bring quality broadband services to some places in South Dakota where it is severely lacking. In areas served by cooperative, municipal, tribal and small commercial companies, roughly two-thirds of all customers are connected by fiber, and projections are that number will increase to more than 90% by the end of 2021. In addition, baseline speeds by 2021 for most of these customers will be 25 Mbps (some will see base speeds of up to 100 Mbps) and some customers will enjoy top end speeds of 1 Gbps.

    More information about the current state of broadband in rural South Dakota can be found here:

    https://sdncommunications.com/media/files/Docs/SD-Broadband-Report-2018.pdf

  20. Cory Allen Heidelberger Post author | 2019-03-19

    Thank you for the link, Greg! Can we quantify how many people will get service from $5M in state money, and when?

  21. bearcreekbat 2019-03-20

    How does someone qualify for this assistance? I have a place with no internet at all due to its rural location. What would I need to do to obtain this assistance in obtaining broadband service?

  22. mike from iowa 2021-12-21

    I discovered what super troll JD has been up to on hiatus….. https://juanitajean.com/yall-this-is-just-mean/

    Helping design bracelets to ward off the no effects of 5G while giving wearers radioactivity. Who could have known the solution to no evil is more evil. Anyway, Juanita jean nails this one.

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