ELY – When it comes to access to high-speed Internet, Ely is truly at the end of the road. The completion deadline for the final phase of a three-year project to bring broadband to northeast Minnesota, and as far as Ely and the surrounding area, came and went last fall.

The fiber network literally ends at Ely’s doorstep and completion of the project for Ely residents and entrepreneurs looks bleak unless more funding, and even more cooperation between service providers, takes a positive turn.

Jeff Roiland, the general manager of Lake Connections, the fiber-optic broadband company owned by Lake County, was in Ely last week and talked with the City’s Telecommunications Advisory Board to provide some solutions on how to move toward project completion.

In June 2012, Lake Connections, the fiber-optic broadband company owned by Lake County, began constructing a network to offer rural residents of Lake and eastern St. Louis counties the same high-speed Internet, digital television and voice service those big-city residents and businesses enjoy.

Funding for the project came mainly from a federal grant and a low-interest loan through the American Recovery and Reinvestment Act.

Construction progress on the first two phases of the network continued on a steady pace, even with unforeseen issues affecting the timeline, according to Roiland. High-speed Internet service is available in the cities of Two Harbors and Silver Bay, along with many other routes. All remaining routes were slated to have live service in the summer and fall of 2015.

The eastern St. Louis County portion, or the third phase of the project, included the communities of Ely, Aurora, Babbitt, Hoyt Lakes, and the townships of Basset, Colvin, Crystal Bay, Embarrass, Fall Lake, Morse Township, Stony River, Waasa White, and several unorganized townships, and consisted of more than 750 miles of fiber completing the fiber ring.

“The St. Louis County ring was at risk last year of not being completed hardly at all,” Roiland said, “because we ran out of money.”

The broadband project was federally funded through the Rural Utility Services (RUS) part of the United States Department of Agriculture and their broadband initiatives programs of the American Recovery and Reinvestment Act, commonly called the Stimulus Act.

“There was a timeline for this project to be built,” Roiland said. “We started in 2012 in Two Harbors, and on the first day, at our first construction meeting, we ran into our number-one obstacle, using the city’s utility poles. Frontier Communications showed up and said we don’t have access to their poles.”

Roiland said his company spent the next year trying to determine ownership of the poles and the hierarchy of where various cable services would be located on those poles. “We were thinking we could be the bottom position (on the pole) which was the least intrusive, but Frontier wanted to maintain the bottom position which meant that we would have to touch every pole in the town to move the various cables and utilities with the cost being put on Lake County.”

Lake Connections sought a remedy through the Federal Communication Commission. “More or less, this was a delaying tactic for us to build this project and they were successful at it,” he said. “We are still dealing with those same poles and the hierarchy issue in Two Harbors after four years and it may be the end of 2017 before it gets resolved.”

In August 2014, Lake County expressed concerns about the project deadline and funding to the Rural Utility Service, the federal agency providing funding for the broadband project. Weather, terrain, and especially the utility pole attachment issues caused significant delay and unanticipated costs throughout the life of the project, Roiland said.

Rather than provide assistance to solve the construction challenges and the utility pole attachment issues, RUS unexpectedly stopped all loan funding and also demanded an alternate plan that demonstrated the project would be completed on time and on budget in accordance with the original application for the loan, according to Roiland.

By the end of 2014, RUS agreed to start processing all documents, along with funding, allowing all project operations to continue. In addition, the Lake County Board of Commissioners approved a financial resolution, ensuring the continuation of the fiber broadband project to meet the September 2015 completion date.

Lake Connections was also awarded $3.5 million from the Connect America Fund through the Federal Communications Commission (FCC) for the broadband project.

“About a year ago, we were at a critical point in the project in the timing of the project,” Roiland said. “Minnesota Power’s utility poles were going to be used in the Aurora, Hoyt Lakes, and Babbitt areas with Frontier Communications as joint owner and we had the same (hierarchy) issues. To complete our (service) ring up to Ely, we basically had to redesign that route from aerial fiber lines to buried lines.”

He said those St. Louis County communities were completed in 2015. “It wasn’t easy, and it was probably the same cost as going on poles but it was a time constraint,” Roiland said.

So close, yet so far

“As of September 30 of last year this program has ended,” he said. The Fall Lake and Ely areas were not completed by the deadline. Lake Connections did some aerial work near Moose Lake, Garden Lake, and into the city of Winton and up the Fernberg Trail. “We still have about $1.5 million worth of work to finish that area,” he said. “Of the $55 million grant and about $10 million loan, we exhausted pretty much all of it.”

The fiber literally stops at the substation at the Ely city line, according to Roiland.

“We are now just doing (service) drops to individuals and hope to have about 2,000 connected in the those nearby areas by the end of this summer,” he said. “We pass roughly 14,000 homes on the network, and that does not include any homes in Ely.”

The goal for Lake Connections is to reach a 50-percent service connection rate in the next three years.

“We want to work with Ely to help you get this done,” he said. “We just ran into a time crunch. This is the fourth-largest project like this in the nation and we are 98-percent compete, but it came with a lot of resistance and challenges.”

Roiland said the construction bid for providing fiber service to Ely came in “well over the engineers’ estimate for the design” in the beginning stages of the Lake Connections project. “That didn’t include anything with the poles,” he noted. “That was just the cost of materials and installation.”

At the start of the project, Ely Clerk-Treasurer Harold Langowski said he began to look at the pole ownership issue within the Ely city limits after learning about the issue in Two Harbors.

“When we asked Frontier (Communications) about the pole ownership, we received back some deeds from 1902 showing the telegraph lines and the railroad’s ownership,” Langowski said. “This is more than pole ownership, it is the position-on-the-pole ownership. Even though we replaced many poles and own them, it is the position on the poles that they claim they own. You can see why, because they can dictate what gets installed on their poles.”

Roiland added, “(Frontier) was up front with us that they didn’t want us on their poles.”

Langowski said the city of Ely is still waiting for Frontier to move their wire off the old poles replaced by the commercial feeder project from a couple of years ago. “They are less than reactive to requests,” Langowski said. “That must just be the culture that they have. They don’t want anybody else in here and they delay and stall as long as possible.”

Roiland said Lake Connections had pursued alternatives for Ely, such as burying the fiber optic lines.

Langowski said when the Northeast Service Cooperative Border-to-Border Broadband project provided high-speed Internet service to local government, schools and medical facilities, the underground access trenching resulted in “broken sidewalks, sunken alleys, messed-up streets and street lighting.”

City officials continue to talk to county, state and federal legislators to move the broadband service project in Ely to completion. “We need about $4 million to complete this project, and that’s not including the pole issues,” he said.

He estimated a cost of about $1,500 to replace one pole. “Our utility commission doesn’t have the appetite to replace all the poles in the city,” he said. “We have to replace sub-stations. We have $8.8 million worth of projects we need to do over the next 15 years.”

Langowski said city bonding for the fiber project is out of the question. “We would have to raise our utility rates too high,” he said. “At the federal level, we have to push them to make some changes to the RUS program to allow for non-traditional communication companies to do these projects.”

He also pondered project completion funding at the state level, such as a loan guarantee through the Iron Range Rehabilitation and Resources Board, or through help from St. Louis County. “Our county is so huge,” he said.

“I think everyone wants to see good, reliable broadband out there,” Roiland said. “You need to find a mechanism that works.”