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As Colorado nears 100% broadband access, funds for rural support shrink

86% of Colorado's rural communities now have fast internet, but only because of public subsidies. Now the flow of money toward grants is slowing.

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San Antonio is a very small, rural community in the San Luis Valley. It’s about 5 miles south of Antonito, near the New Mexico border. It’s also in a low valley with trees that block reception from wireless broadband service offered in other parts of Conejos County. 

But as early as next March, the community of 90 households and three businesses will be able to order gigabit internet service. This isn’t wireless. Alamosa-based Jade Communications plans to run fiber-optic gigabit internet lines to every customer’s home. 

Getting the remaining fringes of rural Colorado up to modern-day speed — at least 25 mbps down, 3 up, according to federal minimums — has been an expensive chore ignored by existing telecoms for years.

There are still about 85,000 rural households, or 14% of Colorado households, with slow or no broadband. But armed with state grants, smaller internet providers are jumping at the chance to get every nook of Colorado up to speed, as the state itself aims for 100% rural coverage even as funding sources shrink.

“Rural carriers want to do this, but they look at their pocketbook and realize that if I got every customer in the area, even after 50 years I’m not going to come out ahead,” said Josh Wehe, Jade’s director of operations. “I could not afford to do these projects without the (grant). It’s been a wonderful thing.”

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Ironically, funding previously used to subsidize rural telephone service now supports broadband grants. Incumbent telecom providers are being criticized for not offering acceptable internet speeds much sooner. In Jade’s application for San Antonio, it called CenturyLink’s broadband “antiquated DSL technology” that residents in the canyon reported is “less than 1 Mbps, sometimes even at 256 Kbps.”

Jade received a $507,094 grant from the state, and the company will kick in $169,031 of its own money. That ends up being $7,270 to get each household on faster broadband. The company, which also was awarded two other state grants, plans to charge $125 a month for gigabit service, with a slower 25 mbps plan priced at $50. After meeting with area residents and officials, Jade said it expects 65% of the potential customers to subscribe. 

Officials from CenturyLink, which received funding from the Federal Communications Commission’s Connect America Fund, said the telecom is working on expanding fast internet service to 50,000 homes and businesses in rural Colorado by 2021. But it’s only been able to get to 60% of the targeted population. Even with the federal funds, CenturyLink “will not reach every rural Colorado consumer,” said Mark Soltes, CenturyLink’s director of public affairs.

“The Colorado state broadband fund was originally designed to fill the rural service gaps that (Connect America Fund) can’t fill, but it isn’t working,” Soltes said in an email. “We support reforms in the broadband program that focus on serving consumers, rather than providers, and funds sustainable investment in broadband infrastructure for rural Coloradans.”

A ribbon of two-lane road winds through the prairie in rural Larimer County. (Ed Kosmicki, Special to The Colorado Sun)

Funding rural broadband

Since 2016, state grants from the state Department of Regulatory Agencies have subsidized broadband access for 17,479 households in rural areas.

DORA requires quarterly updates from all grant recipients and expects their projects to be completed within two years. It has awarded $19.6 million to nonprofit or private companies, like Jade, which must match 25% of the project’s total costs. 

A different program run out of the state’s Department of Local Affairs has awarded $20 million to more than 40 projects in the past five years. These grants match the amount invested by local governments 50-50 and are used to build infrastructure, or “middle-mile” pipes, that internet service providers later tap to connect consumers. That program is funded from royalties paid by oil and gas or mining companies doing work on federal land.  


The DOLA program helped the town of Red Cliff put a tower on top of Ski Cooper by running fiber up and over the chairlifts and add an antenna that shoots a wireless internet signal back to town. (The tower also provides internet for Ski Cooper guests.)

It’s also a contributor to Project THOR, an effort by the Northwest Colorado Council of Governments to unite several mountain communities to share costs of building a backup internet link and expand broadband access in the mountain region made up of Jackson, Grant, Eagle, Summit and Pitkin counties.

“This project is touching 20% of the landmass and 4% of the population. That’s the problem,” said Jon Stavney, NWCCOG executive director. “The rural market is distant and dispersed.”

The state’s renewed focus on rural broadband included the creation of the Colorado Broadband Office and hiring of former Intel executive Tony Neal-Graves as its executive director. Broadband now reaches 86% of rural households, up from 77% when Neal-Graves started the job two years ago. 

Anthony “Tony” Neal-Graves, executive director of the Colorado Broadband Office. (Tamara Chuang, The Colorado Sun)

He said Colorado is on track to reach 92% by June — and that’s just in rural communities. Statewide, 96% of Colorado’s roughly 2 million households have broadband access while urban areas like Denver are in the 99.94% range, according to the broadband office. The goal, of course, is 100% statewide.

“Our philosophy is everyone in the state should have access to high speed broadband,” Neal-Graves said.

Impossible task? Getting to 100%

But it will be harder to reach the state goal than initially planned.

The financial source for DOLA’s rural grants is running 28% lower than expected this year. DORA’s Broadband Deployment Board, which approves grants, had anticipated $18.7 million, thanks to the 2018 law administered through the Public Utilities Commission. 

“They (the PUC) have now projected that they’re going to give us $13.5 million,” said Jordan Beezley, DORA’s Broadband Deployment Director. “It’s more money than we had to work with in the past, but even if we got all the money provided in (the new law), it’s likely insufficient to match the needs out there.”

Some history: DORA’s broadband grants got a boost this year after the new law diverted money originally set aside for landline telephone service. The landline program, called the High Cost Support Mechanism, subsidizes rural phone service by charging all Colorado telephone customers a 2.6% fee on their phone bill. But by 2012, the PUC decided it no longer needed to subsidize landline phone service because of increased competition. The 2018 law switched the funds to subsidizing broadband access instead.

Neal-Graves said he had expected a decline since more people have canceled their landlines. But there’s another reason, he added. Mobile phone services have also shifted their billing to focus on data — not voice, which is the only service that HCSM can charge a 2.6% fee.

More: Centennial just became Colorado’s largest city to launch an alternative broadband service. What about the other 100+ that voted to control their internet destiny?

“There are fewer and fewer households with a phone connected to the wall,” he said. “Almost all of us use cell phones. Mobile carriers, the Verizons of the world, are shifting more of their billing to data services as opposed to voice. I think we’re going to be seeing something bigger than that (28% decline).”

In May, he hired Teresa Ferguson to look into federal grant programs like the Connect America Fund from the Federal Communications Commission, which has committed hundreds of millions to rural broadband deployment. 

“The FCC has continued to put money into this. The U.S. Department of Agriculture is another big player,” he said. “I’ve said we can help local communities and even the private sector in Colorado become more successful in winning grants or loan money to help with the issue. I feel the best source of money is the federal government.”

Hidden gem: Rural electric co-ops

Another “hidden gem,” Neal-Graves said, are the rural electricity co-ops.

Five of the 22 rural electric co-ops serving Colorado have already gotten into the broadband business or are getting into it, including Delta-Montrose Electric Association, with Elevate; Empire Electric Association & La Plata Electric Association, with the jointly-owned Fast Track Communications; San Luis Valley Rural Electric Cooperative  with Ciello; Southeast Colorado Power Association, with SECOM; and Yampa Valley Electric Association, with Luminate Broadband. 

The Yampa Valley co-op unveiled its broadband service last spring, though company officials did not respond to requests for additional details. The member-owned Yampa Valley Electric Association is starting with Craig, Steamboat Springs and Hayden because of the denser population, according to documents filed with the state’s Broadband Deployment Board.

Steamboat Springs Resort in late September 2018. (Jesse Paul, The Colorado Sun)

But the co-op only decided to pursue broadband after learning of the momentum of the Moffat County Broadband Initiative, comprised of civic and local business leaders so intent on getting broadband, they were willing to figure out how to build it themselves. After the co-op committed to building it, the community organization abandoned plans and withdrew its application for state funding last fall, said Nate Walowitz, Regional Broadband Program Director of NWCCOG, which worked with both groups. 

The community group “helped YVEA recognize the market opportunity and benefits to their cooperative shareowners of becoming a broadband provider and building out fiber and wireless to the premise in their rural service territory,” Walowitz said. 

The Yampa co-op still can apply for state funding and it just did for two DORA grants, which had a deadline last week. In its proposal to serve North Routt County, the co-op asked for about $1.8 million from the state and said it will kick in $591,784 of its own money. 

The result would provide 474 homes (approximately 1,199 people) and 48 businesses in and around Clark and Hahns Peak Village at a cost of $54.95 per month for 100 mbps to $100 for one gig. A school, the fire station and the Steamboat Lake Visitor’s Center would also benefit. The current internet option? Satellite internet. A second application for Willow Creek Pass would provide broadband to 123 households and cost $1.4 million. 

The obvious goal here is to help rural communities access reliable, fast internet service to improve modern life for families and businesses. In its application, Yampa cited a story in the Steamboat Pilot that bemoaned the area’s slow internet, which caused the North Routt Community Charter school to discontinue its online homework system “because families do not have internet connections fast enough to use it.” 

Neal-Graves, who was hired to help get rural broadband coverage to 100%, knows not everyone wants broadband at their home. But he believes Colorado will get close.

“Whether we get to 100%, what it (the goal) will do is drive investment in infrastructure that will solve other issues with broadband, like reliability,” he said. “When I travel around the state, everyone knows how important this is but at a county level or town level, they have very little real estate taxes to draw on. They need help. Working with communities, I can confidently say that if we didn’t have this focus at the state level, we wouldn’t be there (at 86%).”


Approved 2019 DORA grants

The Broadband Fund Grant Awards are awarded twice a year. The deadline to apply for the latest round was July 15. Application details are posted HERE. Here are the winners from the Winter 2019 round:

  • Ouray — Brainstorm Internet awarded $783,942 to provide fiber-to-the-home broadband for up to 700 households and 93 businesses. Monthly prices range from $50 for 50 mbps to $70 for gigabit speeds. Completion date: End of 2019.
  • Town of Norwood — Brainstorm Internet to provide fiber-to-the home broadband for up to 244 households and 35 businesses. Monthly prices range from $50 for 50 mbps to $70 for gigabit speeds. Completion date: December 2019
  • City of Cripple Creek — Forethought.net awarded $827,946 to provide broadband to 809 addresses. Monthly prices range from $50 for 100 mbps to $70 for one gigabit speeds. Completion date: October 2019.
  • Chalk Creek Canyon — Colorado Central Telecom awarded $1,215,721 to provide fixed-wireless broadband and fiber-to-the-home service to 271 households in Chaffee County. Fiber plans start at $75 per month for 50 mbps to $125 for 100 mbps. Fixed wireless plans start at $45 for 5 mbps and $110 for 25 mbps. Upload speeds on all plans are slower. Completion date: March 2021
  • Sun Hills, El Paso County — StratusIQ awarded $518,127 to provide broadband to 100 households that sit on 5- to 10-acre lots. Monthly plans start at $50 for 60 mbps to $100 for gigabit service. Completion date: Nov. 15, 2019
  • Big Elk Meadows, Larimer County — xBar7 Communications awarded $64,627 to provide wireless internet to 170 households. Monthly pricing starts at $59 for 2 mbps to $158 for 25 mbps. Completion date: October 2019

Source: Colorado Broadband Deployment Board awards


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