PROJECT SUMMARY
Many areas of Greater Minnesota receive communications services via traditional copper wire or limited lower-capacity fiber-optic cabling. The current infrastructure does not meet the requirements for applying new and emerging technologies for transferring information between businesses, public agencies, educators, and citizens. Because the private sector is market driven, statewide communications services have become fragmented and highly uneven. Communications networks in Minnesota's urbanized areas are lucrative, highly sought after and well served. Conversely, rural towns and counties are underdeveloped and considered unprofitable by service providers. Most private sector companies will not consider investing beyond a minimum amount of infrastructure.

These unequal levels of service, along with Mn/DOT's goals for deploying Intelligent Transportation Systems, prompted Mn/DOT and the State Department of Administration to form an inter-agency partnership to develop a statewide telecommunications infrastructure in exchange for limited access to freeway rights-of-way. The result was a landmark agreement between ICS/UCN, a private sector developer, and Mn/DOT and the Department of Administration. In exchange for one-time access to Interstate highway rights-of-way, ICS/UCN is financing, building and maintaining a $125 million fiber-optic backbone along some 2,000 miles of freeway and state highway, connecting rural and remote Minnesota to more urbanized areas of the state. In addition to meeting Mn/DOT's capacity needs, the partnership provides state and local governments access to 20 percent of network capacity for telecommunications use. The remaining 80 percent capacity will be available for lease to telephone companies, long-distance carriers, Internet service providers and other service providers.

Connecting Minnesota has set national precedence for procurement of telecommunications resources and capacity at no cost through leverage of access to public right-of-way assets. Not only are state and local units of government needs being met, but in doing so, 80 percent of Minnesota's population will be within 10 miles of the fiber-optic backbone. A potential eight out of ten citizens (3.6 million) could realize better telecommunications services at lower costs.

In an unregulated environment, and without the incentive offered by the state through Connecting Minnesota, private sector long-distance communications companies generally would not consider investing beyond a minimum amount of infrastructure, and would then only do so on the most financially lucrative routes. By offering one-time access to Minnesota's Interstate system to a private communications system developer, the state was able to leverage highly desirable routes in exchange for development of fiber-optic on less desirable routes, but routes that nevertheless are important to government and communities located near them. The value of the program is estimated at over $125 million in private sector investment that meets both public and private sector needs, with an annual benefit to the state of at least $5 million savings in current telecommunications costs-though immeasurable, life-cycle savings for the public sector and economic development benefits for rural Minnesota are clearly evident.