HAMILTON – Last year, Ravalli County’s state legislative delegation got an earful from people concerned about low-quality Internet services in the Bitterroot Valley.
Local businessmen and the county’s economic development coordinator told the politicians that a lack of Internet access and high costs were creating challenges for local entrepreneurs.
The delegation tasked Sen. Fred Thomas, R-Stevensville, and Rep. Ed Greef, R-Florence, to find out why.
“We’ve come a long way in learning about Internet in Ravalli County since then,” Thomas said. “We found out that we have phenomenal service right here with our own local providers.”
Last week, Thomas, representatives from two local Internet firms and others used the Internet and Skype to have a face-to-face talk with U.S. Sen. Steve Daines, R-Mont., about the challenges that rural internet providers face.
Those challenges include a general lack of support for the smaller local companies, while larger companies are provided subsidies for installing new fiber-optic lines.
“Charter and CenturyLink are the same as Walmart to other small businesses,” said Christian Palecek, a network engineer with Cyber Net. “We need community support to be able to continue to grow our company that is based here.”
The Bitterroot Valley has two major fiber-optic lines owned by CenturyLink and Charter Communications that run as far south as Hamilton. Charter has recently installed an additional fiber-optic line into the town of Stevensville.
While those companies provide service along the valley floor, Thomas told Daines that anyone outside that corridor has to look elsewhere.
“We have a long, skinny valley that’s not really conducive to fiber,” Thomas. “It is conducive to microwave technology.”
Outside that fiber-optic corridor, Bitterroot Valley residents mostly depend on that microwave technology to bring Internet into their homes, he said.
Thomas invited representatives from Hamilton-based Cyber Net and Rocky Mountain Internet of Stevensville to the meeting, as well as Jason Pond, the owner of West Yellowstone’s Grizzly Internet who also serves on the state’s Wireless Internet Service Providers Association.
The two local providers told Daines their businesses have grown dramatically during the last couple of years.
Palecek said major improvements in technology has improved service and internet speed, which has led to that Cyber Net’s increase in customers. The company serves 2,500 customers between Huson and Darby.
Terry Weisenburger of Rocky Mountain Internet said his company now has 1,700 billable clients, with the majority of those clients being home-based businesses.
Weisenburger recently had fiber-optic lines installed at his home business in Stevensville, which gives him the capacity serve more than 5,000 clients.
Without additional frequencies, Weisenburger said he may have to cap out his business at 2,000.
“It’s a wireless soup out there right now,” Weisenburger said.
Palecek said it takes a great deal of careful planning for independent companies to build capacity under the current restrictions caused by limited frequencies.
Another challenge for smaller companies is the increasing demands on Internet use.
The providers told Daines the industry predicts that users will increase their Internet usage between 300 to 400 percent over the next two years.
Currently, Palecek said about 60 percent of Internet usage is for streaming video.
That amount is expected to continue to grow as people become more reliant on Internet-based television.
“Smaller Internet providers are concerned about having the spectrum (frequency bands) to get the capacity that everyone is demanding right now,” Pond said. “Their number one need is access to that spectrum.”
Pond told Daines that smaller providers can’t afford to pay millions of dollars to obtain licenses or spend money chasing newly developed policies.
“That’s all money that they can’t spend to get their local communities online,” Pond said.
The smaller companies could also use some help in obtaining federal loans that could be used to expand their businesses, he said.
All three providers at Wednesday’s meeting said they had not received any federal money to build their business.
Palecek said it is frustrating to see the federal government provide money to the larger companies for expansion into markets, such as Stevensville, where they compete directly with smaller companies that get no government help. Those subsidies aren’t available to the smaller providers because they don’t offer a voice service, he said.
Julie Foster, director of the Ravalli County Economic Development Authority, said her office still fields daily phone calls from businesses concerned about internet issues with the larger companies.
In one case, Foster said her office found a new location for a company dependent on the Internet. The money the company saved by switching providers was enough for it to pay its mortgage on a larger building and allowed it to hire additional people, she said.
Daines said he knows the value of wireless providers because that’s how his home outside of Bozeman obtains Internet.
“You are a very important part of the solution for rural Montana,” Daines told the providers at Wednesday’s meeting. “You go where others won’t go.”
The advances happening in technology that allow for faster Internet service in rural communities will play an important role in building economies in rural Montana, Daines said.
Increasingly, people are looking for a way to both live in a place like the Bitterroot Valley that promises a good quality of life and make a good living at the same time.
“We have to make sure that small Internet providers can continue to deliver,” Daines said.