Marketplace - Breaking Ground: Bringing high-speed internet to every home in Kentucky

Episode Date: August 27, 2024

Roughly 200,000 Kentucky households lack internet access or are “underserved,” according to Meghan Sandfoss, executive director of the state’s Office of Broadband Development. It’s her job to open digital doors for all those residents, rural and otherwise — a tricky task that involves coordinating federal, state and local offices as well as internet service providers, nonprofits and engineers. In this episode, we’ll upack the process of hooking up homes to a fiber-optic network, including getting local buy-in, developing detailed maps and navigating environmental challenges.

A billion here, a billion there. Pretty soon you're talking broadband for all. Our series Breaking Ground on the program today from American Public Media. This is Market Plans. In Los Angeles, I'm Kyle Rizdall. It is Tuesday today, August the 27th. Good as always to have you along, everybody. We're going to continue today with our series, Breaking Ground.

We were in Catawba County, North Carolina yesterday at a manufacturing plant run by a company called Prismian. It's one of only three companies that meet federal standards for domestically manufactured optical fiber, and it is gearing up to get way busier. Because one of the explicit goals of the bipartisan infrastructure law is to connect every home in America to high-speed internet. We anticipate, yes, being busier. And we're big on broadband, and we say only fiber's future proofs.

These cables that I've showed you that we've made today, we're making those to be able to survive outside for decades. Once we understood the high-speed internet supply chain, we flew the 281 miles from Charlotte, North Carolina to Lexington, Kentucky and headed to the capital, Frankfort, to see how the money's going gonna roll out. How are you gonna measure success? Is success literally every home in Kentucky, every business, every company has broadband?

Yeah, the measure of success is people stop calling us saying they don't have internet. Meagan Sanfus is the executive director of the Kentucky Office of Broadband Development, and she's the one who's in charge of making that broadband development happen for Kentucky. Kentucky's a really interesting test case, actually, for broadband rollout. It's got a big rural population, double the national average, and super challenging topography.

Hills and mountains and valleys that make installing those cables we saw yesterday more difficult than in most other places. You're going to see a lot of construction upstairs. The Kentucky Broadband Office actually is so new, they are still moving in. The federal program that's at work here, that's called BEED, Broadband Equity Access and Deployment, is a little different than other federal broadband programs. With BEED, states are in charge of figuring out how to spend their piece of the pie and getting the money out the door.

Kentucky's going to get more than a billion of the 42 billion total federal dollars in BEED funding. And that's part of this story, but the other arguably bigger part is the work that has to get done when state and federal governments meet in the middle. So we headed up to the still under construction third floor. Not that one. Oh, that one. Elevator.

There are signs on printer paper taped on the wall pointing us along our way. Office of Broadband Development. There we go. There is a lot of construction around here. Holy cow. Hi Megan Kye, Rezdal, nice to see you. How are you?

I sound like just like you do on the radio. I appreciate that. Thank you very much and thank you for listening. You and my mom, that makes two people. Megan showed me into her somewhat bare office. We should start a fund to get you something on the walls here. You got a billion dollars. And we had a chat. One point one billion dollars basically flowing through this, no offense, nondescript office

in Frankfort, Kentucky. Yeah, it's exciting. You're smiling, but I can't tell if it's a terrified smile or an excited smile. in Frankfort, Kentucky. You're smiling, but I can't tell if it's a terrified smile or an excited smile. It's an excited smile. This is going to change the lives of Kentuckians. So we get calls every day from people that are unconnected and are looking for a solution to not having high speed internet. And the best conversations that we have are the ones where we can tell them it's coming and soon.

But the hope is that by the end of the B.E.E.D. program, and if we don't accomplish it, we've failed, is that we're going to connect everyone. By everyone, she really means the 200,000 homes in Kentucky that are either unserved or underserved by broadband. And the definitions here are kind of weedy but important, so bear with me. According to the Federal Communications Commission, broadband, or high-speed internet, take your pick, is a fixed internet connection with a minimum download speed of 100 megabits per second and a minimum upload speed of 20 megabits per second.

Pretty fast. According to the Commerce Department's guidelines, unserved locations are places where the internet only reaches speeds of 25 megabits up, three down, or where there's no Internet access where there could be. Think houses that aren't hooked up at all. Underserved places are where the connection is too slow to count as high-speed Internet.

Think DSL or satellite. The BEAD program is supposed to address both of those groups, but unserved is the priority. Is a billion dollars enough to get this done? We think so. There has been a significant amount of investment through other federal programs. We've made progress. The most recent FCC reporting, the gap was closed by another 40,000 locations. So the progress is incremental, but that's a pretty big jump.

The Commerce Department's goal is to get everybody hooked up by 2030. So that's Megan's job. Get the money out the door and get it out fast. So let me ask the question. Yeah. It's a chance for you to make a difference. Absolutely. I wake up every day excited to come in. That's the question.

progress and we're just kind of surviving on hope and iced coffee and other days where we're like, this was great, like we've made progress and you know, I just, this is the best job. I think shortly after I started, there was an article in like an industry publication that said the hottest government job is state broadband director. And I was like, I don't think I've ever heard any kind of government job or public sector job be described that way. But they said, you know, like, oh, you need a unicorn, someone who can, you know, manage the technical aspects of it, along with the administrative aspects. And I guess I'm a unicorn. There you go.

You broadband expert, do you? Is this where you come from? and I guess I'm a unicorn. You broadband expert, do you? Is this where you come from? So that's basically what this is, right? It's community development just in a high-tech nature. Okay. Before that high-tech community development can happen, Megan's got to make a good old-fashioned map, and the federal government has to approve it before she can distribute the money. This is the middle. The federal government meeting state government

and working together to figure out the tiny details of a massive federal broadband project. Kentucky's map shows every single home, every business, every school and hospital, any place that needs internet and the status of its actual access to broadband. But when you're making a map like that with so many real-time details, you're going to get some things wrong and people are going to call you up and let you know. In BeedSpeak, this is the challenge process. We got, I think, over 400,000 challenges.

Not the most that any state has seen, but it's still a lot. Once the map is perfect, Megan and her team will still need to figure out exactly how to spend that billion dollars. Internet service providers, ISPs, will bid on the to-do list created by that map. ISPs that range from big national brands to tiny local companies you will find only in Kentucky. They're all going to be competing with each other in the hopes that Megan will pick them to get bead funding. Is any of the bead money actually out the door from you yet? Not yet.

How long? Not yet. That's not nothing, right? about permitting struggles, poll attachments, environmental reviews. So there's a lot of work that goes on behind the scenes before you see the fiber on the utility pole. So I think that's one of the big questions we get from people all the time is like, well, you spent a billion dollars, where's my internet?

And there's a lot of things that have to happen before the truck rolls down the street. So of course I got in the truck. If you block that, pull around over here. Perfect. Thanks, Chip. Big truck. Dodd-Ram. After the break we're going for a drive. the the the the Hi, this is Emily from Paxton, Nebraska. I live in a rural area where the written local news has been outsourced to a bigger city,

and the local newscast is not very good. I enjoy listening to marketplace programs because they are informative and thought provoking. I learn about things, places, and people that I would not have found anywhere else. I am so grateful for Marketplace's dedication to bringing the news to the people. Join me in supporting Marketplace with a gift today. Go to marketplace.org slash donate. And thank you. This is Marketplace, I'm Kai Rizdal. We're in Kentucky today, the capital, Frankfurt, to follow the money.

Kentucky's share of $42 billion federal dollars from the BEDE program, Broadband Equity Access and Deployment. How it shows up at the state level, that money, and what it's gonna take to get broadband internet to every home and business here. There's a gentleman that works for the state government here who has coined a phrase that

I love and he's talking about the program. He says, internet for all means every hood and every holler. Chip Spann is with the National Telecommunications and Information Administration. He's the federal program officer for Kentucky and West Virginia, Megan Sanfus's counterpart, helping state and federal governments meet in the middle. Music Tell me what we're going to see today. What are you going to show us? Well, today we're driving to an area about 8 to 10 miles east of Frankfurt to demonstrate

the fact that even in population centers like this, just on the periphery, there are a number of homes that are unserved and underserved. We're in the capital of Kentucky. Yes we are, but we're about to be out in the farmland of Kentucky. Chip's been in the telecommunications industry for 40 years and part of his job here is putting that expertise to use, helping Megan put together that map of unserved and underserved homes. He has a keen eye for spotting houses that are using something like satellite or a wireless connection rather than a connection fast enough to hit that 100 megabit upload 20 download number to actually count as broadband.

So let's talk technical here for a minute. Fiber is the method of choice for the Commerce Department, the source of the bead money. Do you think that's realistic? I do. Fiber is the one technology that's probably more future-proof than anything else. It has the ability to upgrade some of the electronic components without having to retrofit the entire network. Actual physical infrastructure is no small part of this.

It's not just getting the cable to somebody's house or fiber to somebody's house. It's actually the infrastructure from wherever the network center is out to that phone pole. That's correct. Yeah. Hmm. Now, I want to drive you through a couple of areas here that appear on the Federal Communications Commission National Broadband Map as a broadband serviceable location or BSL.

Broadband serviceable. So it could be in there, but maybe it's not yet. That's correct. Okay. Now there could be infrastructure in place already but it could be that that infrastructure is BSL or it's some other service that's less than the 100 over 20. One of the locations I'm going to drive you through is an RV park. Hmm. Now when you're looking at that from a satellite image, all you're seeing is the rooftop of a structure. Right. There's lots of RVs here.

That RV park just 10 minutes outside of Frankfort's downtown has more than 100 lots for mobile homes along with playground space and laundry areas, a hint of the local agriculture scene with a barn on our way in, and antennas for Wi-Fi connections as far as the eye could see. And we're here because this is the work that needs to be done to draw that map. It's literally people getting out and driving around and counting houses and RVs.

That's a lot of it. It's difficult to do an engineering design from a desk a hundred miles away. Sure. Right? A lot of the broadband serviceable locations that appear on the FCC map might be tobacco barns like this. Oh wow. They might be listed as a business.

Now one of the interesting things about this roadway we'll be taking here in just a moment. You can see the infrastructure to our left on the utility poles. I can see that there's cable television there. Do you just look at these poles and you know exactly what it is? Yes, absolutely. Because for the rest of it it's all power lines and cable and whatever. Yep. In the middle, the top person on the pole happens to be the cable television company. Below that there looks like there's a fiber optic cable, and below that's the telephone company. Now, we're eight miles outside of Frankfurt, and you're starting to see we're turning into farm country already. Oh, sure. Yeah. It's nice out here, I'll tell you that.

We headed out of that RV park onto a super narrow two-lane road. Trees on one side, a steep ditch on the other. We did pass a couple of houses set way back from the road. So this is one of the areas where a company might consider trenching along the roadway, but you see the difficulty of trying to trench here. It's tight, right? It's super tight. Trees are right up against the road. There's a big hill on one side, so it's not going to be dug there. Now, what typically happens in situations like this is they'll get off the roadway a little bit,

perhaps go try and negotiate an easement or a right of way with the farmer. So when you're an internet service provider, one of the things that you're trying to account for is for every mile of infrastructure that I have, I'm hoping that I at least pass a minimum 10 households or more. I was just going to say it because this is,

I mean, it's lovely out here, but this is a whole lot of nothing. It's a whole lot of nothing. And so you're going to have mile over mile of infrastructure investment in many cases before you get to your first potential customer. That's not nothing. I mean, that's the economics of this thing, right?

It is. And uniquely in the area of Kentucky where I live, you may pass seven, eight, nine homes before you get to that one household that could be your customer base. Wow. That's the reason that in rural areas like we're in right now,

the business model has just not panned out to date. Yep. So this does not happen without the federal government. That's correct. All right, for the record we're passing some farms and stuff so there is habitation out here. Some of the houses out here are set a good half mile or more back from the road, which is a lot of work and a lot of money to get one single home like that connected. There's a capital investment that comes with this that the ISPs have to make, right? Is it a sizable capital investment? So for fiber to the home in a rural area like this, it may not be uncommon for that investment

to be $50,000 a mile. That sounds like a lot. It sounds like a lot. For comparison, in suburban areas, that number might be closer to $27,000. But look, doesn't there come a time where economically, no matter how good the engineers are, it's simply not cost effective? Absolutely. So then what do you do?

Well, then you start looking at the other technologies kind of in diminishing order of return or diminishing order of speed. If not fiber to the home, I think the next most robust opportunity is to work with cable providers who are offering hybrid fiber coaxial. But as we heard when we toured the Prismian plant where they're making the fiber, the Biden administration wants fiber to be the priority. And not only is that just not possible in some areas, but there is a labor market and

workforce slice of this That's going to be challenging, too Do you have a sense of how many jobs how many new jobs is going to take to get all this done in Kentucky? Yeah hundreds if not thousands of new jobs and That's going to be anything from the guy Climbing the utility pole to make the splice all the way to the back end.

Maybe a young man or young lady fresh out of college that wants to become a customer service representative or specialized billing agent. As these companies grow and their subscriber base grows, so grows the need for employees internally. When was the last time you climbed a utility pole? About two years ago. Oh, is that right? Yeah.

What were you doing? Well, I was assisting a friend in a rural area who had gotten access to a pole to put up a wireless transmitter. That's pretty fun. At age 60. I was just going to say. I try not to do that anymore. I don't like that.

You still got those little spikes that you put on your shoes. Oh, yes, sir. Oh, yeah. Wow. I imagine you're a lot busier now that the B program is in effect and you've got this new gig, I guess. It's not like the eyes of the world are upon you, but certainly the governor knows your name. And I certainly have no intentions of letting the governor down.

I'm in the boat with Megan and we're both pulling the oars together. I think we realized early on that this is a game of collaboration. Divide and conquer. Do whatever, you know, whatever is necessary. Megan and Chip are both in the middle of all this. In the middle of state regulations and federal requirements, in the middle of the process of making this happen, and in the middle of aspirations versus reality. And yet there are variables in all of this that they have no control over. It's slightly denser here, right?

There's more people, more infrastructure, more wires on all these poles. That's right. And I just want to point out, I went to reset the GPS to get us back to Frankfurt and I noticed my phone says that there's no internet connection here. So one of the things that we've learned or that I've learned is that the areas that lack high-speed broadband probably also lack access to cellular service. In the 90 minutes, give or take, that we spent driving around with Chip, we saw homes and neighborhoods, barns, rolling pastures, plenty of horses, and lots of examples of places

that don't have broadband internet. Now, do you guys want me to drive you back to the Capitol building or back to your hotel? I think just that parking lot is great. We never got more than 12 miles from the Capitol that day. Chip Spann, on the other hand, has done more than 10,000 miles around both Kentucky and West Virginia working on those maps.

Since our visit back in June, all $1 billion of bead funding has been authorized for Megan's team to use, but there is still a whole lot to do before the money is out the door. More work, more challenges, and more planning for a program with a ticking clock in an election year when the timeline might matter a lot. Coming up tomorrow, a one-stoplight town in eastern Kentucky that figured out high-speed

internet a decade ago. We always complained about, okay, we don't have a four-lane highway, we don't have a hospital, we don't have a college, we don't have a Walmart, we don't have so many things. But now we have something that not a lot have, and it's high-quality broadband in the middle of nowhere. High-speed internet for everyone and the challenges that come with it

on the next episode of Breaking Ground. This final note on the way out today, we were hearing from Chip Spann a minute ago that he's got no intention of letting the governor down when it comes to making Internet for All happen in Kentucky. Well, funnily enough, we had a chat with that governor while we were in town. Governor Andy Beshear and I sat down for a quick conversation about what broadband expansion means for his state and for the people in it. You took a six weekish, 14 stop listening tour about broadband in the state. Tell me some of the stories.

Well, broadband intersects every political, regional, urban, rural barrier that you can imagine. It's something that everybody wants and it needs to be both there and affordable. And if you can reach those two things, what it can open up in all parts of Kentucky, the hardest to reach or those with the most people is game changing. It opens up to our small and medium sized businesses, everything. Since you brought up the politics, I have to ask you, you're a Democratic governor in a largely red state. What's the reception you get when you go out and say,

the federal government is here to help you with a billion dollars to get broadband? What do they say? Well, I don't necessarily lead with the federal government, but I will say that the idea that we have the funding that's coming down from the federal government to potentially hook up every home and every business across Kentucky receives an amazing standing ovation you pick, excitement, optimism from every part, from every room, regardless of the demographic,

regardless of how red or how blue. This is something everybody agrees that we need and everyone is excited about. When I see a group selling cupcakes around the United States from an area in far eastern Kentucky where they create their brand and they're able to create a revenue stream from it because they have high speed internet access, that's pretty impressive. We are going out that way tomorrow, Mckee, Kentucky, to see what broadband can really do on the ground. Our digital and on-demand team includes Kerry Barber, Jordan Mangy, Dylan Mientinen, Janet Nguyen, Olga Oxman, Ellen Rolfus, Virginia K. Smith,

and Tony Wagner. Francesca Levy is the executive director of digital and on-demand. Director of Digital and On-Demand. I'm Kyle Rizdahl, we will see you tomorrow everybody. This is APM. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Espinal, and on Financially Inclined, I'll guide you through simple money lessons that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO and what you can do to make smarter money

decisions. Listen to Financially Inclined wherever you get your podcasts.