- Associated Press - Sunday, February 15, 2015

DES MOINES, Iowa (AP) - Even as lawmakers work through Gov. Terry Branstad’s latest proposal to expand broadband Internet in Iowa, officials and service providers said the effort will last for years and cost far more than the $5 million now under discussion.

Supporters of Branstad’s grant program said it’s intended to bring attention and jumpstart work on a long-term broadband expansion the governor believes is vital to ensuring the state’s rural economy remains competitive as the nation relies more heavily on technology.

The example of Bloomfield, a southeast Iowa city of nearly 3,000 people, offers a good example of how expensive that expansion could be. Service provider Citizens Mutual spent more than $4 million to install a robust system of high-speed Internet in the community.

“We knew that it was a long-term investment,” said Citizens Mutual general manager Joe Snyder. “It takes time to do that and it takes a lot of money to do that.”

Figuring out that cost depends largely on an area’s population and the system that’s installed.



Increasingly, companies are opting for a fiber-optic network. The system of underground cables can meet not only current needs but increased future Internet speeds.

Bloomfield installed a fiber-optic network, and Branstad’s bill and a separate broadband bill in the Senate focus on expanding such systems.

Snyder said it can cost between $3,000 and $3,500 per household to establish a fiber-optic network in an urban area, and that figure can jump to $10,000 to $12,000 per household in less populated rural areas.

There are at least 20,000 households in Iowa that have no high-speed Internet, according to Connect Iowa, an organization that works with communities across the state to expand service.

Branstad’s bill includes a grant program aimed at helping service providers with the costs. If the Legislature approves it, Robert von Wolffradt, the state’s chief information officer, will oversee the program. Von Wolffradt said the $5 million included in the program never was intended to pay for all the state’s broadband needs.

“The $5 million isn’t a panacea and it isn’t going to solve everything for everyone,” he said. “But what it does do is allow us to start targeting places and communities and schools and farms … that are in need.”

Von Wolffradt said the effort wouldn’t be limited to fiber-optic networks, and he noted his office would examine how the first year worked and make changes if needed.

For years, service providers have been expanding broadband through a combination of their own money, private loans and federal funding, said Dave Duncan, CEO of Iowa Communications Alliance, a group that represents more than 130 community-based telecommunications providers that offer some type of broadband.

“Providers aren’t just relying on whatever the state may come up with in their program. They’re doing it on their own already. They have been for years,” he said. “It’s just that any program out there that the state or the federal government come up with would help expedite the plans to build out, and would also help target areas that wouldn’t otherwise be served.”

Von Wolffradt and industry experts said it’s unclear how long it would take to expand broadband throughout the state.

Branstad made broadband a priority last session, but his measure failed as some lawmakers cited concerns about language dealing with cell towers for wireless service and others complained the tax breaks for providers were too generous.

Many of those details are absent from the current bill, though Duncan wants lawmakers to return to language closer to last year’s measure when dealing with property tax exemptions. The failed bill gave providers a 10-year exemption from increased property taxes, while the current measure gives a three-year break.

Still, service providers seem focused on getting legislation passed this year.

Branstad’s bill is just one puzzle piece in bringing about high-speed Internet to Iowa, said Tom Conry, CEO of Farmers Mutual Cooperative Telephone Company in west central Iowa.

“It’s no different than anything else. If you don’t start it, you’ll never get there,” he said.

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Follow Barbara Rodriguez on Twitter at https://twitter.com/bcrodriguez

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