We’ve spent billions to provide broadband to rural areas. What failed?

Adina Hamb

Table of Contents Inadequate mapping of the problemRepeating some of the same mistakes‘Such a waste of public dollars’‘It was hugely disappointing’Not much faith in the FCCAt the state level, claims of unfairness‘We are just asking for accountability’About this project Six years ago, Jeff Hallstrand’s home in Price County appeared close […]

Six years ago, Jeff Hallstrand’s home in Price County appeared close to finally receiving a much-needed boost in internet service.

The federal government had announced that more than 129,000 homes and small businesses across rural Wisconsin were eligible for an upgrade under a $330 million grant awarded to broadband provider CenturyLink.

Hallstrand, a county supervisor, had worked for 30 years for CenturyLink and another internet company before branching out to start his own engineering business. But at his home in the Town of Ogema, he had speeds not much better than a dial-up modem from the 1990s. 

The map of locations eligible for improved service showed that he might finally get on the right side of the digital divide.

Today, nothing has changed. The grant left it up to CenturyLink to pick which locations to upgrade, and Hallstrand got nothing. 

“The internet that’s at my place today was installed 20 years ago,” he said. 

Last fall, he had a daughter who was a junior in college and another daughter who was a sophomore in high school trying to do online classes from home because of the COVID-19 pandemic. 

“It just doesn’t work,” he said.

The Federal Communications Commission has said that nationwide around 14 million people lack access to broadband, also known as high-speed internet. However, the firm Broadband Now, which helps consumers find service, estimates it’s closer to 42 million. And although Microsoft Corp. doesn’t have the ability to measure everyone’s actual internet connection, the tech giant says approximately 120 million Americans aren’t using the internet at true broadband speeds of at least 25-megabit-per-second downloads and 3 Mbps uploads — a further indication of how many people have been left behind. 

In education, jobs, telemedicine and entertainment, large swaths of the countryside are stifled in basic tasks such as uploading a video or taking an online class. 

Today, many believe the nation is at a pivotal moment as President Joe Biden’s administration has proposed spending $65 billion for broadband expansion. 

Biden’s initiative, part of his $1.2 trillion American Jobs Plan, would prioritize the creation of future-proof networks, “so we finally reach 100 percent coverage,” the White House said in a recent statement. 

Hallstrand and others across rural America have heard this before. 

In 2004, President George W. Bush called for affordable, high-speed internet access for all Americans by 2007. It was, he said, essential to the nation’s economic growth.

In 2010, President Barack Obama promoted a National Broadband Plan as part of the American Recovery and Reinvestment Act. The 360-page plan outlined 208 recommendations. “It is a call to action,” the document said, “to replace talk with practical results.”

In 2019, President Donald Trump unveiled the $20 billion Rural Digital Opportunity Fund, saying that farmers “just haven’t been treated properly” when it comes to internet  access. Billions had already been spent on broadband. 

Federal Communications Commission Chairman Tom Wheeler makes a statement during the FCC vote on net neutrality in 2015.
Brian Cahn, TNS

None of the efforts under any of the administrations succeeded, and some of the reasons were fairly straightforward. The data on who has broadband  — and who doesn’t  — has been flawed. Some of the upgrades quickly became obsolete. There’s been limited accountability.

“We have given away $40 billion in the last 10 years … and haven’t solved the problem,” said Tom Wheeler, who was FCC chairman in Obama’s administration. “I always thought the definition of insanity was doing things the same way over and over and believing that, somehow, something will change.” 

And so the digital divide, which some say has become a chasm, remains. 

Inadequate mapping of the problem

The FCC can’t readily identify where high-speed internet is missing in rural areas because there are no accurate maps of address-by-address coverage.  

If even one home or business in a census block has access, the agency considers the entire block served. In rural areas, some of those blocks, not to be confused with the larger census tracts, cover hundreds of square miles. Many places are shown as having broadband when, in reality, they don’t.

“That means in the United States we lack an honest picture of the communities that are consigned to the wrong side of the digital divide, and the people and places most at risk of falling further behind,” FCC Commissioner Jessica Rosenworcel said last summer in a memo of dissent over the agency’s rush to spend billions on rural internet projects based on flawed maps. 

Rosenworcel, a Democrat, labeled the rollout of the Rural Digital Opportunity Fund, right before the presidential election last fall, a premature move that smacked of politics.  

“We are spending down our resources before even taking the time to get (the maps) right. This is not the way to do it. We need maps before money, and data before deployment.” 

The mapping system should have been fixed years ago, according to Rosenworcel, who in January was named the commission’s acting chairwoman by Biden. 

In March 2020, Rosenworcel testified in a congressional subcommittee hearing that it was a significant but solvable problem. “We could radically improve the state of our maps” in three to six months, she said.

Last December, Congress gave the FCC nearly $100 million largely for that purpose. The agency said it has started the process, although it hasn’t disclosed when the task will be completed or exactly how it will be done.

“We have a better map of the Milky Way” than of who doesn’t have broadband, said Christopher Ali, an associate professor in the Department of Media Studies at the University of Virginia. 

Kegan Hackbarth installs fiber-optic lines in the Shawano County village of Bowler. The Wittenberg Telephone Co. is installing hundreds of miles of fiber-optic cable in the area.

Kegan Hackbarth installs fiber-optic lines in the Shawano County village of Bowler. The Wittenberg Telephone Co. is installing hundreds of miles of fiber-optic cable in the area.
Mark Hoffman / Milwaukee Journal Sentinel

Repeating some of the same mistakes

The Rural Digital Opportunity Fund touted by Trump aims to reach 5 million U.S. locations through subsidies provided over 10 years. In Wisconsin, 14 companies were awarded nearly $374 million for 240,546 locations. Of those, the two biggest awards went to Charter Communications at $168 million for 143,269 locations and Ltd. Broadband, $189 million for 88,070 locations.

The FCC says nearly all the sites, nationwide, will get speeds of at least 100 megabit-per-second downloads and 20 Mbps uploads, a huge improvement for most rural areas. In fact, the FCC says about 85% will get gigabit speeds of 1,000 Mbps.

However, “a promise made is not the same as a promise kept,” cautioned Blair Levin, a former FCC chief of staff who directed the writing of the National Broadband Plan in 2009. 

Nationally, many of the Rural Digital Opportunity Fund locations aren’t even in rural areas, the consumer watchdog group Free Press found in an analysis of the program. What’s more, about $700 million was designated for questionable sites. 

For example, a California broadband company won a subsidy to serve Terranea, a Los Angeles County resort popular with tourists wanting to take pictures of the oceanside cliffs, even if they can’t afford upward of $650 a night for a hotel room. But the resort, which has hosted technology conferences, already has ample broadband, said Derek Turner, research director for Free Press. 

“I’ve visited the public restaurant at Terranea and paid $18 for a sandwich so I could enjoy the view,” he said.

A Milwaukee Journal Sentinel review of the Rural Digital Opportunity Fund found that Elon Musk’s SpaceX venture won subsidies for Chicago locations such as the Museum District’s Shedd Aquarium and Adler Planetarium, Grant Park and parts of the Lincoln Park Zoo, even the University of Illinois-Chicago’s medical campus.

SpaceX was awarded an annual subsidy to bring the internet to parking lots near the Mall of America, and to serve the Minneapolis-St. Paul International Airport, the Journal Sentinel found.

“While the FCC continues to ignore the plight of the urban poor, it’s giving Elon Musk nearly a billion in subsidies, a significant portion of it to serve urban airports, parking lots and dog parks,” Turner said. 

The grant process was doomed before it ever got started, said Doug Dawson, a nationally recognized internet consultant from North Carolina. “If the FCC doesn’t figure out a way to cancel the worst of the grant awards, when we look back on this, we’ll find that half or more of the money was wasted.”

The awards will undergo scrutiny before the checks are written, Rosenworcel told the Journal Sentinel in a recent interview. “It’s going to require us to carefully assess the preliminary commitments that were made,” she said.

Ajit Pai, who in January stepped down as chairman of the FCC under Trump, did not respond to a Journal Sentinel interview request. But in a public hearing last fall he defended his decision to go forward with the Rural Digital Opportunity Fund before the presidential election.

“What you’ve heard from some, including some of the FCC, is that we should do absolutely nothing … unless the maps are perfect,” Pai said at the hearing. “But to me, people who are on the wrong side of the digital divide, who we know are on the wrong side, have waited long enough.”

‘Such a waste of public dollars’

The program’s flaws are a sequel to earlier mistakes.

In 2015 under Obama, the Connect America Fund II program only required grant recipients to deliver service of 10 Mbps downloads and 1 Mbps uploads — not even half the FCC’s definition of broadband, and not nearly enough bandwidth for many families today. 

Those speeds were “such a waste of public dollars,” said Bernadine Joselyn, public policy director for the Blandin Foundation, a Grand Rapids, Minnesota, nonprofit focused on rural issues. “If you’re going to make an investment in broadband, you want it to be future proof, especially with public funds. I think it’s reasonable to expect it would benefit a community for decades.”

The effort initially granted 10 companies, combined, more than $1.5 billion annually to build broadband infrastructure over a six-year period through 2020.

Nationwide, 4 million homes and small businesses were supposed to be covered. In Wisconsin, CenturyLink, Frontier Communications and AT&T, combined, were awarded about $572 million over the program’s duration to upgrade internet service at 230,451 locations. 

CenturyLink, in a letter to the FCC in January, said it “may not have reached” its build-out requirements in 23 states including Wisconsin. 

Frontier told the agency in January it “may not yet have met” the full requirements in Wisconsin and 16 other states. The company, which filed for Chapter 11 bankruptcy in early 2020, blamed the pandemic. 

CAF II grant recipients could face fines for not meeting deadlines or the program’s requirements, according to the FCC, but industry experts said they weren’t aware of any enforcement actions. 

Moreover, the program granted the companies a seventh year of funding, for 2021, and additional time to complete projects delayed by the pandemic. 

The seventh year of money was “the most blatant handout of federal broadband funds I’ve ever seen,” Dawson said, “because these funds won’t improve broadband for any rural customer. This will just help AT&T make its dividend payments and help ease Frontier coming out of bankruptcy.”

Frontier declined to answer questions from the Journal Sentinel. AT&T said it met the CAF II deadlines, and under the program, delivered service to more than 24,500 homes and small businesses in rural Wisconsin. 

“I think it was a good first step,” AT&T Wisconsin President Scott VanderSanden said. “The places where there’s absolutely nothing available are getting to be fewer and fewer.” 

Kathleen Blomberg, top left, is the owner of the small High Point resort between two lakes in rural Price County near Ogema. Blomberg says of the internet, “It’s always slow. I’m used to it, but people from away are not.”
Kathleen Blomberg, top left, is the owner of the small High Point resort between two lakes in rural Price County near Ogema. Blomberg says of the internet, “It’s always slow. I’m used to it, but people from away are not.”
Kathleen Blomberg, left, is the owner of the small High Point resort between two lakes in rural Price County near Ogema. Blomberg says of the internet, “It’s always slow. I’m used to it, but people from away are not.”
Mark Hoffman / Milwaukee Journal Sentinel

‘It was hugely disappointing’

Hallstrand, in Price County, says he pays for 1.5 Mbps download speeds but only gets around 0.6 Mbps, barely usable for streaming a low-resolution video.  

Rocky Carlson has had a similar experience.

“It was hugely disappointing,” he said, that CenturyLink did not upgrade the service at his home in Price County. He suspects that most of the improvements in the area went to towns such as Park Falls, where there are more people per square mile.

A few miles away, in the Town of Hill, Jeff Ulrich gets less than 1 Mbps downloads even though he pays $90 a month for better 1.5 Mbps service from CenturyLink. His address is in a CAF II eligible area but didn’t get an upgrade. 

Jeff Ulrich is a regional program manager for UW Health who works from his home despite having slow internet on his 40-acre property.

Jeff Ulrich is a regional program manager for UW Health who works from his home despite having slow internet on his 40-acre property.
Mark Hoffman / Milwaukee Journal Sentinel

Ulrich is a UW Health regional program manager. He can work from home — barely — but video conferences aren’t possible. 

“It gets so pixelated, it just stops,” he said.

In Price County, UW Health faces a large elderly population that is scattered and has trouble getting to see doctors in person. Better broadband connections would mean easier remote visits.

“It could save lives,” Ulrich said.

During the pandemic, there were times when the parking lot at the local library was nearly filled with people sitting in their cars trying to catch a Wi-Fi signal from inside the closed building.

“Sometimes the fixes put in place are like placing a Band-Aid on an arterial bleed,” Ulrich said.

The Town of Hill is home to High Point Village, a resort with five chalet-style cottages and the Hill of Beans restaurant and coffee shop. The resort is next to Timm’s Hill, the highest point in Wisconsin and a popular destination for hikers.

But for all the beauty of being secluded in the woods, it’s not the place to stay for guests that need much of an internet connection.

Owner Kathleen Blomberg has managed to get at least some service to two of the five cottages closest to the main lodge. But not the other three, and it’s cost her some reservations when people learned there was barely any internet.

“It’s just always been slow,” she said. “I’m used to it, but young people, and people in general, are used to things happening right now.”

CenturyLink, in July, said it was on track to upgrade service at 130,000 rural Wisconsin locations by the end of the year. In Price County, the company said, it will have brought faster speeds to nearly 3,000 homes and businesses — short of the 3,810 locations eligible for an upgrade. 

Under the Connect America Fund requirements, grant recipients had a great deal of latitude in where they deployed upgrades. They were allowed, for example, to bypass thinly populated sections of rural counties and make up the difference in other CAF II-eligible areas that had more customers. 

It’s really hurt places like Price County, according to Hallstrand, who says the government subsidies should be used to cover the areas most in need of better service before the money’s spent in other places. 

“That’s how rural America gets broadband,” he said.

In one rural Wisconsin county after another, Connect America Fund II has left a trail of skepticism and frustration. Many communities have initiated their own broadband expansion projects, seeking state grants and local partnerships, because they haven’t seen much help from the federal government and big-name service providers. 

“Marathon County has decided we aren’t going to wait for some mythical program to increase broadband access,” said Melinda Osterberg, a member of the county’s internet task force. “We will just continue trying to solve the problem on our own.” 

Randy Scholz, former Lincoln County administrative coordinator, spent months trying to learn what Frontier was doing with the CAF II subsidies in his county.

“There were places in the middle of nowhere that got service … but it didn’t seem to follow any logical pattern,” Scholz said.

He felt as if he was tracking a moving target.

“I went out and told everybody that service was coming, and when it didn’t show up, it made me look pretty bad,” he said. 

Karen Thayer, a Jackson County supervisor, said she didn’t know where CenturyLink was using the federal money it could have received for 4,212 locations in her county. 

“It’s pretty bad out here,” Thayer said last fall, adding that there were times when she didn’t even use her computer because it took so long to get online. 

Her cellphone service wasn’t much better. 

It was a similar story in parts of Sauk County where state Sen. Howard Marklein, R-Spring Green, is from. He’s on Gov. Tony Evers’ broadband task force.

Federal government projects, he said, “often went for the low-hanging fruit,” where there were higher population densities and a better return on the service provider’s investment. 

“I think if you look at it statewide, there was an impact,” Marklein said. “But in my district, years later, we still have areas where there’s no cellphone service, no internet, nothing.” 

Not much faith in the FCC

It’s much the same story nationwide. There’s an interactive map of where service from federal programs like the Connect America Fund was deployed. But independent testing has shown that even mediocre speed requirements weren’t always met, according to Dawson, from North Carolina.

“If the FCC really wants to do the right thing, it will ask for local feedback,” he said. “There are local officials across rural America who would love to verify if these upgrades brought anything close” to the minimum speeds. 

Some states have confronted broadband providers on their own for not delivering the required service under federal projects. Last fall, Mississippi issued an investigative subpoena for AT&T to produce records about its use of nearly $284 million in Connect America Fund grants in the state.

The subpoena sought detailed information on the company’s claim to have brought wireless internet access to 133,000 homes and businesses after a state investigation found discrepancies in what was promised and what was actually available to consumers. 

“AT&T has pocketed $283,780,632 of public money with a promise to expand internet service, yet they refuse to answer the most basic questions of a regulator surrounding the use of these dollars and the actual success of their plans,” Mississippi Public Service Commissioner Brandon Presley said in a news release

In some instances, AT&T acknowledged, it may not have the build-out requirements.  But the company said it never deceived regulators or consumers.

After receiving guarantees that certain information would be kept confidential, AT&T agreed to comply with Mississippi’s records request. However the dispute remains unsettled, Presley told the Journal Sentinel in June. 

Equipment at the heart of rural broadband service is shown in a technology hub in Wausaukee, top, and Iron Mountain, Mich. It is from Astrea, a service provider in northern Michigan and Wisconsin.
Equipment at the heart of rural broadband service is shown in a technology hub in Wausaukee, top, and Iron Mountain, Mich. It is from Astrea, a service provider in northern Michigan and Wisconsin.
Equipment at the heart of rural broadband service is shown in a technology hub in Wausaukee, left, and Iron Mountain, Mich. It is from Astrea, a service provider in northern Michigan and Wisconsin.
Mark Hoffman / Milwaukee Journal Sentinel

At the state level, claims of unfairness

Wisconsin’s Public Service Commission has awarded 268 broadband expansion grants totaling more than $72 million since 2014. The latest round, in March, covered 44 counties and leveraged $49 million in private and local government matching money, according to the agency. 

Often, the distribution of the money comes down to whether a broadband provider is even interested in a community. But some local officials, and at least one state legislator, have complained that decisions have been based on political and industry connections. 

For 2018, one-third of the state broadband grant funding was aimed at a couple of projects in Madison-area communities in Dane County. None of the eight applicants from state Sen. Janet Bewley’s district, in the northwest part of the state, got a dime. 

“Not sure about you, but I think we’re a lot more underserved than people who live in Dane County,” said Bewley, a Democrat from Ashland. 

A screening panel that made recommendations to the public service commissioners rated two projects from her district in the top 10 list of applicants, according to the senator. 

“Unfortunately, the politically appointed commissioners rejected those recommendations,” she said.

Moreover, she complained that commissioners appointed by then-Gov. Scott Walker, a Republican, favored three major broadband companies.

“Those companies just happen to employ 10 lobbyists here in Wisconsin,” Bewley said.

Nevertheless, there are many examples of very rural areas winning state grants. 

One of them was Cloverland, about 25 miles east of Superior along state Highway 13 and the Brule River State Forest.

With only a handful of people per square mile, it would have seemed that Cloverland hardly stood a chance of convincing an internet company to spend hundreds of thousands to bring service to the area. Yet with dogged persistence, a handful of folks helped win a $443,000 state grant in the spring of 2020.

“I was astonished,” said Michael Spencer, a former stockbroker who spearheaded the campaign urging the Public Service Commission to subsidize the cost of delivering broadband, over fiber-optic cable, to 55 homes and six small businesses.

Spencer went door-to-door with a petition seeking support. Only two people refused to sign: one man who lived in the woods without electricity and another who had no interest in going online for anything.

Michael Spencer tends to his garden at his home in the Town of Cloverland in Douglas County. He spearheaded the campaign to subsidize the cost of bringing fiber-optic cable to the area.

Michael Spencer tends to his garden at his home in the Town of Cloverland in Douglas County. He spearheaded the campaign to subsidize the cost of bringing fiber-optic cable to the area.
Mark Hoffman / Milwaukee Journal Sentinel

The grant went to Norvado Inc., based in Cable, which said it was putting $190,000 of its money into the $633,000 project scheduled to be finished this year. 

“I can tell you that a couple of folks here were pretty shocked,” said Norvado CEO Chad Young, a member of Evers’ broadband task force.

Bewley cited the grant for Cloverland, which is in her district, as an example of what’s needed for places where market forces alone won’t bridge the gaps. “It may cause people to gasp, but it’s a one-time investment and you’re done,” the senator said.

PSC Chairwoman Rebecca Cameron Valcq said there’s sometimes no other way to get service to small communities.

“I get a little excited when someone says that doesn’t seem like a very good use of grant dollars,” she said. “Tell that to the people who had to put their kids in the car and drive them 12 miles to the nearest public Wi-Fi spot so they could do their schoolwork.”

However, measuring the success of state broadband expansion grants through publicly available documents can be difficult. A Journal Sentinel review of the records found that some were thin on information or it was redacted from public view. 

The Public Service Commission doesn’t routinely test to verify the speeds and quality of service of grant-funded projects but says it follows up in other ways. 

“We can call customers and businesses and ask if they’re satisfied,” said state Broadband Director Jaron McCallum. 

‘We are just asking for accountability’

State officials ought to demand more accountability, according to Marklein and other state lawmakers including state Sen. Jeff Smith, D-Eau Claire, and state Rep. Rob Summerfield, R-Bloomer. 

Smith proposed legislation that would allow consumers to seek a refund if their internet provider didn’t live up to advertised speeds.

“We are just asking for accountability, truth in advertising,” he said.

He also authored a bill that would task the Legislative Audit Bureau with biennial performance audits of the state broadband expansion grants. 

Summerfield has proposed giving funding preference to projects pledging speeds of 900 Mbps or higher, a move that would help level the playing field between rural areas and cities for years to come. 

“If we’re going to be spending the public’s money, we should make sure it’s for high-quality service,” he said. 

Yet some changes wouldn’t come easily. In 2011, the telecommunications industry in Wisconsin was largely deregulated under the Walker administration. Supporters said it freed companies from a maze of arcane regulations based on an era of landline telephones, and that they needed breathing room to keep pace with changing technologies and markets. 

But now, it’s hard to tell how bad the rural internet situation is because there’s no reliable data and little accountability of government programs, said Barry Orton, professor emeritus in the telecommunications program at the University of Wisconsin-Madison. 

“There’s no oversight left,” he said.  

The Journal Sentinel is examining the lack of high-speed internet, also called broadband, in rural areas.

Here’s some of what’s coming:

  • The deployment of broadband has created more than 3,300 jobs in what’s known as “Silicon Holler” in Eastern Kentucky. In Wisconsin’s Northwoods it’s attracted new businesses and executives working from their home on the lake.
  • For all the billions of dollars poured into expanding service in rural America, there’s been an inability to identify coverage gaps, a lack of accountability in spending, and a short-sighted view for what consumers actually need.
  • New technologies, such as Elon Musk’s SpaceX and Starlink venture, could help bridge the digital divide, although some doubt their effectiveness. Moreover, millions of people in both rural and urban areas can’t afford the options available to them

Rick Barrett is a business reporter who covers agriculture, large manufacturers such as Harley-Davidson, the telecom and defense industries, and other topics. Barrett’s coverage of Wisconsin’s struggling dairy industry received a 2019 National Headliner Award — his second. His work also has earned a Gerald Loeb Award for outstanding business reporting, a Barlett & Steele Award for investigative reporting, and has been recognized by the Society of Professional Journalists, the Society of Environmental Journalists, and the Association of Health Care Journalists. Barrett lives on a hobby farm near Appleton where he takes care of donkeys. He joined the Journal Sentinel in 2000.

Email him at [email protected] and follow him on Twitter: @rbarrettJS.

Mark Hoffman has been a visual journalist for the Milwaukee Journal Sentinel since 1992. He has traveled around the world covering the Olympics and other major sporting events, the plight of refugees in Jordan and Europe, the threat of zoonotic diseases, the civil war in El Salvador, the ongoing struggle of poverty and corruption in Haiti, the environmental effects of oil sands mining in Alberta, and the aftermath of the 9/11 attacks in New York City. Before coming to Milwaukee, he was a photo editor at the New York headquarters of The Associated Press, a photojournalist at the Bridgeport Post & Telegram (now the Connecticut Post) and a photographer at the La Crosse Tribune.

Email him at [email protected]; follow him on Twitter: @MJSPhotog.

About this project

Reporter Rick Barrett spent the 2020-21 academic year as an O’Brien Fellow in Public Service Journalism at Marquette University examining the challenges facing rural Wisconsin. He was assisted by student researchers Christopher Miller and Kelli Arseneau.

All work on the project was done under the guidance of Milwaukee Journal Sentinel editors. Marquette University and administrators of the program played no role in the reporting, editing or presentation of this project.

To support the Journal Sentinel’s in-depth local reporting, please subscribe at jsonline.com/deal.

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