Minnesota’s BEAD Funding Trimmed from $652 Million to $392 Milllion

Minnesota’s broadband story is more than a tale of cables and connections—it’s about how digital infrastructure underpins the state’s economy, from family-run farms to global enterprises.

Take Redhead Creamery in central Minnesota. The small but inventive cheesemaker recently added spirits to its product line, distilling vodka and bourbon from whey. But behind the artisanal branding is a modern farm that relies on robotics and stable internet. For years, the family managed with unreliable satellite service. Now, a fiber buildout from Runestone Telecom is finally delivering the speed and consistency they need.

For Redhead and thousands of others, broadband isn’t a luxury—it’s a critical utility.

Statewide Progress

Minnesota has been a national leader in broadband policy. Since 2013, the state’s Office of Broadband Development has awarded more than $400 million in grants, funding 10 rounds of projects that extended fiber to nearly 120,000 homes and businesses.

The grants typically cover up to half of construction costs, with higher percentages for the most rural and expensive projects. Recent line-extension initiatives even targeted households sitting just beyond existing routes—though demand quickly exhausted the budget.

Federal Funding Uncertain

The next phase depends heavily on the BEAD program (Broadband Equity, Access, and Deployment). In 2023, Minnesota secured $652 million, but shifting federal guidance temporarily trimmed its usable allocation to $392 million.

Even so, officials expect BEAD dollars to fund connections for more than 75,000 unserved or underserved locations, with projects launching as early as 2026. That’s critical progress in a state where 300,000 residents still lack 100/20 Mbps access.

Changing Expectations

The pandemic reset what “good enough” means for internet service. “For years, 25/3 speeds were tolerable,” says broadband analyst Ann Treacy. “But remote work, virtual classrooms, and streaming all at once showed the cracks.”

Today the average Minnesota household has 36 connected devices, and video traffic makes up the majority of usage. Communities without fiber now struggle to compete in education, health care, and economic development.

Rural Providers Take the Lead

Electric co-ops and independent providers are filling the gaps. East Central Energy, serving 4,500 square miles, began broadband deployments in 2021. Backed by $38 million in state and federal funding, it plans to invest $300 million overall to connect up to 30,000 members.

Perham-based Arvig has also expanded aggressively, building fiber in Walker, Melrose, and other rural hubs. Both companies illustrate how local providers, once focused on power or regional phone service, are now central to broadband’s future.

Metro Market Competition

The Twin Cities metro isn’t standing still either. Comcast has invested more than $525 million in Minnesota in just three years, while new entrants like Gateway Fiber and Metronet are racing to roll out competitive networks. Unlike rural projects, metro expansion rarely depends on grants, but the activity underscores how broadband is viewed as a modern utility.

Why It Matters

Broadband is a bipartisan issue. “It’s important for our ag community, for education, for access to government benefits,” says Bree Maki, executive director of Minnesota’s broadband office.

For farms like Redhead Creamery, better broadband means operational stability and growth. For the state, it’s a foundation for competitiveness in agriculture, health care, manufacturing, and beyond.

Minnesota’s case shows the stakes: broadband is no longer optional infrastructure—it’s essential for every sector of the economy.