Bresnan Backroom Deal Threatens Jobs, Investment in Rural Montana

While New York-based Bresnan Communications http://www.bresnan.com/ has been busy dumping assets in Montana, they’ve been plotting behind the scenes with Gov. Schweitzer to build a completely unnecessary, taxpayer-funded communications network that threatens jobs and investment in rural Montana.

Governor Schweitzer http://governor.mt.gov/ recently sent a letter to the federal government supporting an application by Bresnan for $70 million of federal broadband stimulus funding. Bresnan’s application is the only application in Montana that received the Governor’s support for “full funding” and his “highest priority.” The Governor’s letter says, unbeknownst to anyone else that he has been working with Bresnan since 2005—shortly after taking office—to develop a plan to link Montana’s Tribal Reservations with a fiber optic network.

Trouble is, there already is a fiber optic network linking Montana’s Reservations, and points between. In fact, there are several fiber networks serving rural communities throughout the state. So why would taxpayers want to waste their hard-earned dollars on building a completely unnecessary network?

Montana’s rural telecommunications providers employ 1,000 Montanans and invest $70 million every year in building and expanding broadband networks to serve their business and residential consumers, as well as schools, health care providers, emergency responders, Tribal institutions and other key entities. Tribal members are employees of these companies and several Tribal members serve on the Boards of Directors of Montana’s rural telephone cooperatives. And of course, cooperatives’ customers, including Tribal members, are member-owners of the co-ops. In addition to the rural telecom providers, companies like Vision Net, Sprint, 360networks, AT&T and others have deployed “middle-mile” networks that provide broadband backbone connectivity linking communities and end users.

In an October 28 letter sent to the U.S. Secretaries of Agriculture and Commerce, Montana’s rural telecom providers unanimously objected to the Governor’s secret deal with Bresnan. They reported that the Governor’s exclusive endorsement of Bresnan’s application, “includes factual errors and mischaracterizes the state of broadband telecommunications investment and deployment in Montana—particularly on Tribal lands. It reaches ‘conclusions’ which are the result of a lack of due process and a disregard for transparency and accountability. The letter raises conflicts of interest and legal questions regarding Bresnan’s willingness to comply with the terms of the stimulus program…If granted, Bresnan’s proposal will not stimulate Montana’s economy. By duplicating existing networks, the Bresnan application, if allowed, will result in less investment, fewer jobs and economic decline in rural Montana.”

A letter sent to the Secretaries of Agriculture and Commerce by the Montana Public Service Commission reaches similar conclusions. The Commission noted that the Governor’s recommendation violates “a cardinal rule in competitive grant-making, ‘the proposer should never be the evaluator of competing proposals.’”

In justifying his recommendation, the Governor referenced a “White Paper” that had been developed together with (by?) Bresnan. Regarding such “justification,” the rural Montana telecom providers noted that they’d never been consulted about the development of the White Paper. There was never any data collection regarding actual broadband deployment in Montana. That process is just beginning now. There was no public participation in developing the Governor’s White Paper; i.e., no transparency, accountability or due process.

The Public Service Commission similarly concluded that while the Bresnan/Schweitzer White Paper “eloquently and correctly describes the very real, gripping, and onerous economic circumstances and challenges facing residents of Indian Country, there is nothing in the Bresnan proposal…that inspires any confidence that those problems will be materially addressed by this $70 million overbuild of ‘middle mile’ assets.”

In short, Bresnan proposes to waste $70 million of federal stimulus funds on overbuilding a network that already exists. They offer nothing new. Any jobs or investment gained will come at the expense of the jobs and investment of rural companies already serving the same areas. Why would we want to ask the U.S. taxpayer to pay for building something that already exists?

Under the federal stimulus rules, Bresnan’s application will be judged according to “the level of need for a middle mile network in the area…whether there are middle mile providers already present in all or part of the area [and] what proportion of the network’s users are located in unserved or underserved areas.” The rules further state that middle mile projects “should offer substantial benefits to unserved and underserved areas relative to the costs of providing service.” Not one of these criteria is satisfied by Bresnan’s application.

The broadband stimulus program provides a unique opportunity to bring the benefits of enhanced broadband connectivity to unserved and underserved consumers in Montana, and to stimulate job growth and economic development in areas most in need. Bresnan’s application fails to achieve any of these benefits.

Instead of exploring partnership opportunities with existing broadband providers who have demonstrated their longstanding commitment to Montana by continuously investing in jobs and advanced telecommunications capabilities in our state, the Governor regrettably has opted for a sole-source funding scheme that smells like a backroom deal and fails to meet the greatest broadband needs or provide the greatest possible benefits to the consumers of Montana.

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Contact:

Geoff Feiss, General Manager

Montana Telecommunications Association

Helena, Montana

406.442.4316.

[email protected]

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Fact Sheet: Rural Telco Investment Examples in Montana

Montana’s rural telecom providers deploy middle mile and last mile broadband connectivity throughout Montana. Following are examples of their broadband investment in Montana, including in and between Montana’s Reservations.

Montana’s Rural Telecom Providers Investing in Montana

Montana’s rural local exchange carriers (RLECs) invest over $70 million annually in Montana’s telecom infrastructure. They have over $500 million of total plant in place. They offer outstanding salaries and benefits to over 1,000 hard working Montanans dedicated to their jobs and the communities in which they live and work. They have deployed over 9,000 miles of fiber optics in the state, and are deploying more every year—without stimulus funds. They have pushed broadband capabilities to the edges of their networks, often reaching nearly 100 percent of their business and residential consumers. This broadband deployment substantially exceeds national average deployment.

These substantial investments in advanced telecommunications infrastructure are being made by companies whose average customer density is less than three access lines per mile. These RLECs, in other words, do not have the luxury of picking and choosing low-cost, high-density populations to serve. As eligible telecommunications carriers, they provide lifeline and link up support for low income consumers and extend service to all consumers in their areas.

Montana’s RLECs offer state-of-the-art distance learning, telemedicine, and other videoconference capabilities to government, commercial, educational and health care providers. Vision Net, owned by a consortium of rural telecom providers, provides middle-mile backbone capacity throughout the state, as well as Internet access, network management, videoconference and other advanced services for telecommunications service providers in Montana and around the country. Other middle-mile providers include Qwest, 360networks, Sprint, AT&T—among others—deploying hundreds of miles of broadband facilities. In cooperation with CenturyLink, Montana’s RLECs operate one of the most advanced emergency 911 networks in the nation. Nearly every one of these companies is, or has been, a Rural Utilities Service (RUS) borrower in good standing.

(See map of Montana’s rural telecommunications infrastructure which depicts the extent to which Montana’s RLECs have invested in Montana.)

Montana RLECs Investing in Broadband Access in Indian Country

Montana’s RLECs are active investors in both human resources and physical infrastructure in Montana Indian Country. They aggressively market low income availability and support E-Rate funding on Reservations. They employ dozens of Montana Tribal members, and include Tribal members in their governance structures, such as Boards of Directors and senior management teams.

Examples of specific RLEC investment on Montana’s Tribal Reservations:

Crow Reservation (Project service area)

• Miles of fiber: 82

• Communities with access to 10-20 Mbps broadband capacity: Crow Agency, Lodge Grass, Willow Creek, Wyola, Ft. Smith

• Anchor institutions with access to 9-20 Mbps (among others): Indian Health Service; Little Big Horn Community College; Lodge Grass High School; Lodge Grass Middle School; Crow Agency Middle School; Ft. Smith Middle School; Crow Administration Building; Tribal Court; Water Treatment Plant; Boys & Girls Club; Head Start; Diabetes Clinic; New Day Care; BIA Law Enforcement; Senior Citizens; Roads Dept.; Tourism Building

• ITV/Distance Learning Sites: Lodge Grass

Ft. Peck Reservation (Nemont service area)

• Miles of fiber: 524. Fiber to the Premise (FTTP) in Reserve, Larslan.

• Communities with access up to 20 Mbps: Frazer, Oswego, Larslan, North Nashua, Poplar, Reserve, Brockton, Poplar North, Wolf Point, North Wolf Point

• Anchor institutions with access to 20 Mbps (among others): Ft. Peck Community College, Poplar; Ft. Peck Community College, Wolf Point Branch; Lustre School and dorm; Frazer Schools; Nashua Schools; Poplar Schools; Brockton Schools; Wolf Point Schools; Frontier School, Wolf Point; Indian Health Service; Poplar Community Hospital; Wolf Point Trinity Hospital; Ft. Peck Administration; BIA offices, Faith Lutheran Home.

• ITV and/or Distance Learning Sites: Ft. Peck Community College, Poplar; Ft. Peck Community College , Wolf Point; Lustre Academy; Frazer; Poplar; Brockton; Wolf Point

Flathead Reservation-Confederated Salish & Kootenai (CenturyLink area)

• Miles of fiber: 125+. Redundant fiber rings; fiber to the premise or curb available to every business on the reservation; multiple fiber to the home (FTTP) projects on the Reservation

• Communities with access to 10 Mbps and up: Polson, Elmo, Dayton, Lake Mary, Ronan, Yellow Bay

• Anchor institutions with access to 20 Mbps and up (FTTP): Polson Hospital; Ronan Hospital; S & K Community College; City and County Government Buildings, Tribal Government and Administration buildings

• 98.4% broadband access penetration; over 70% with access to 10 Mbps+

Flathead Reservation-Confederated Salish & Kootenai (Ronan/Hot Springs service areas)

• Miles of fiber: 100 (12 more miles under construction). Fiber-based wide area network connects major sites with 10 Mbps backbone, scalable to 100 Mbps without equipment upgrade. Fiber backbone currently operates at 1 Gbps, upgradeable to 10 Gbps.

• Communities with access to 10 Mbps and up: Charlo, Ronan, Pablo, Polson, Hot Springs.

• Anchor institutions with fiber access: Charlo Schools; Ronan Schools, Polson Schools, Ronan community hospital; Confederated S&K Tribe administrative buildings at 6 locations.

• DSL 2+ (3 – 20 Mbps) available to 95% of all customers in service area.

Rocky Boy’s Reservation (Triangle Communications service area)

• Miles of fiber: 16. Fiber to the Premise (FTTP) in South Havre in 2011

• Anchor institutions with access to 3 Mbps (among others): Rocky Boy School District; Boys and Girls Club of the Bear Paws; Rocky Boy Health Board; Chippewa Cree Housing; Chippewa Cree Tribe; Chippewa Cree Development; Chippewa Cree Social Services; Chippewa Cree TANF; Stone Child College; Rocky Boy Senior Center; Rocky Boy Tourism

• ITV/Distance Learning Sites: Rocky Boy Schools, Rocky Boy Head Start
Fort Belknap Reservation (Triangle Communications service area)

• Miles of fiber: 30. Fiber to the Premise (FTTP) Harlem in 2012.

• Anchor institutions with access to 3 Mbps (among others): Fort Belknap College; Fort Belknap Housing Authority; Fort Belknap TANF; Fort Belknap Agency; Fort Belknap Small Business; Fort Belknap Library; Fort Belknap Indian Health Service; Fort Belknap Tribal Court; Fort Belknap Employment and Training Program; Lodgepole Senior Center; Hays Recreation Center; Fort Belknap Police Department

• ITV/Distance Learning Sites: Fort Belknap College
Northern Cheyenne Reservation (Range Telephone Co-op Service area)

• Miles of fiber: 72

• Lame Deer Community has access to 45 Mbps and the Busby Community has access to 9 Mbps

• Anchor institutions with access up to 7 Mbps (among others): Northern Cheyenne Tribal Schools, Northern Cheyenne Tribe, Boys and Girls Club, Utilities Commission, Healing Hearts Family Violence, NC Housing Authority, Native Action, Career Development, OMBO Work Program, Public Health Services, Bureau of Indian Affairs, Courtesy Cash Store, Home Care Services, NC Employment, Elderly Program, NC Chamber of Commerce, Lame Deer Trading

• The Lame Deer School has a 100 Mbps for school purposes and the Hardware Hank has a 2 Mbps SDSL service

Blackfeet Reservation (3 Rivers service area)

• Miles of fiber: 81. Fiber to the node and FTTP in Browning South, connecting current fiber network in Browning. Last mile, FTTH to the Heart Butte area, 2010.

• Communities with access to 10 Mps and up: Browning, Heart Butte

• Anchor Institutions with access to 10 Mbps and up: Browning Schools, Heart Butte School, Heart Butte Hospital, Blackfeet Community Hospital, BIA Law Enforcement, Blackfoot Tribal EMS and Tribal Health Programs

Letters to Governor Schweitzer

A number of RLECs and their representative associations sent letters and emails to the Governor and his staff prior to his October 14, 2009 letter to NTIA. For example,

Blackfoot Telecommunications Group (Missoula, MT) noted that it has
deployed the most robust IP-based advanced network in our area including extensive use of fiber rings. [Blackfoot also provides] broadband services to over 96% of our customer base.

InterBel Telephone Cooperative (Eureka, MT)
We are in the middle of a 5-year modernization plan utilizing a new RUS loan…We have been offering broadband to all of our customers since 2001 and in the last 2 years we began offering fiber to the home…

Mid-Rivers Telephone Cooperative (Circle, MT)
provides broadband services at speeds meeting – and in many cases exceeding – the BIP/BTOP definition to residents, businesses, schools, libraries, healthcare providers, emergency services and many others.

Nemont Telephone Cooperative (Scobey, MT)
Bresnan…incorrectly identifies the Fort Peck Reservation as wholly unserved or underserved. Not only are communities such as Larslan and Reserve served, they are served by Fiber to the Premise facilities

Range Telephone Cooperative (Forsyth, MT)—like other Eastern Montana RLECs serving one of the least densely populated areas in the nation–stated,
We provide broadband services to over 85% of our customers with the majority of them getting speeds well above the unserved definition. We do serve the entire Northern Cheyenne Reservation and a small part of the Crow Reservation. These customers have access to broadband speeds in excess of the 768K in most places.

Triangle Communications (Havre, MT) and 3 Rivers Communications (Fairfield, MT), among others, for years have been upgrading copper plant with fiber to the premise (FTTP).

Contacts:

Geoff Feiss, General Manager Bonnie Lorang, General Manager
MT Telecommunications Assn. MT Independent Telecommunications Systems
406-442-4316 406-443-1940
[email protected] [email protected]

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Montana Telecommunications Assets http://www.matr.net/files/MTA-MTRLECFiberMap-Oct09.pdf

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Critics say Schweitzer-endorsed Internet plan won’t extend services in Montana http://matr.net/article-36595.html

Rural Broadband: Let’s Talk About Cost http://matr.net/article-36611.html