Connect America Phase 2 Funding in Minnesota: a blessing and a curse

[Commentary] Connect America Funds (CAF) Phase 2 is going to be a game changer for the broadband landscape in rural America. The quick explanation is that larger providers were offered the opportunity to accept funding to help subsidize broadband expansion to rural areas. The stipulation was that the provider must provide service that is at least 10 Mbps down and 1 Mbps up to everyone in the service area. They have until the end of 2020 to complete deployment. (There are incremental requirements starting with 40 percent coverage by the end of 2017.)

Getting access at speeds of 10/1 is better than what the communities receiving CAF 2 funding have now. And any improvement is an improvement. BUT those speeds are slower than the Minnesota speed goals of 10/5 (The MN Broadband Task Force is looking to update those speeds.) and they seem even slower when you compare them to rural areas that have Gig access. So the news for these communities is mixed -- they will see improvements in the next five years. But knowing that incremental improvements will be made makes it difficult for a new provider to come into town to compete with the CAF-supported incumbent provider.