Why federal grants may set rural broadband in some areas of Minnesota back for years

Minnesota officials announced the winners of $20.6 million in grants to develop high-speed internet across Minnesota, the latest infusion of money approved by lawmakers to fully connect the state. Many celebrated the cash, which Steve Grove, commissioner of the Department of Employment and Economic Development, called a “vital” push to correct disparities in internet service that were highlighted during the pandemic. Yet the grants also drew frustration from some broadband developers. That’s because Gov. Tim Walz’s administration won’t award state money for projects where telecom companies won more than $408 million in awards from the Federal Communications Commission's Rural Digital Opportunity Fund to provide new internet service across swaths of northeast, central and southern Minnesota. The biggest federal grant winner was the controversial LTD Broadband, a company the governor’s own broadband task force is skeptical can meet its promises for a huge range of projects. State officials say it could be a waste of taxpayer money to subsidize internet where another company plans to build infrastructure with other grant funding. And LTD Broadband maintains it can deliver a huge surge in broadband service in Minnesota. But some local developers say LTD’s failure, or even success, could delay broadband internet for areas they could quickly serve.