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HELENA — Not many people live in Eastern Montana, but those who do — and those who travel through — want reliable cellphone service.

“As we move out into Eastern Montana, the population density becomes less than one person per square mile,” said Mike Kilgore, CEO and general manager of Nemont Telephone Cooperative, based in Scobey. “There are so many miles to cover and so few people to serve.”

Though population is sparse, people who live along the Hi-Line and east of Billings are starting to expect cellphone service just like their counterparts to the west. Visitors traveling through want their devices to be able to run off the area’s cell towers. Farmers and ranchers use wireless services to direct farm equipment through fields during planting season.

Nemont and other rural providers like Mid-Rivers Communications, based in Circle, and Triangle Communications, in Havre, are increasingly challenged by providing service to these rural areas — an endeavor that is growing more expensive and receiving less reliable funding.

“There are fewer people to pay for the constantly changing communication networks of the 21st century,” Kilgore told the Economic Affairs Interim Committee on Thursday. “These systems are expensive to build from a capital investment standpoint and expensive to maintain.”

“Without some form of support, it’s not economical to serve rural Montana,” he said.

Kilgore and Michael Candelaria, general manager of Mid-Rivers Telephone Cooperative, said some type of state support is necessary to provide and expand wireless service for the 25,000 square miles their companies serve. 

The men were invited by the committee to discuss rural cellphone service and broadband access, issues the group is considering examining. Interim committees can explore possible recommendations or create draft legislation for the upcoming legislative session.

The two companies have 20,000 cellphone customers along the Hi-Line, through southcentral and Eastern Montana and into parts of North Dakota. They also serve national customers of companies like Verizon or AT&T who travel through. Nemont also provides wireless service on the Fort Peck and Crow reservations. Not all providers go onto reservation land; some circle the borders.

The state, Kilgore and Candelaria said, needs to decide where rural wireless coverage and broadband service fit into the its priorities.

“Would the taxpayers of Montana be willing to support funding to enhance modern telecommunications service in rural Montana?” Kilgore asked. “Quite frankly, I believe it’s a tough one.”

Decreasing federal support is hurting his company, and the state could help fill the gaps, Kilgore said. He pointed to a 911 fund paid for with a $1 fee tacked on to all phone bills in the state, a pot he says has about $32 million but can’t be tapped by his company. 

The federal Universal Service Fund that helps pay for operations is frozen at 60 percent of what it used to be and Nemont hasn’t yet been paid for projects it completed based on commitments from the fund’s Mobility Phase 1.

Legislative research analyst Sonja Nowakowski said the Energy and Telecommunications Interim Committee is exploring draft legislation on how to spend some of the "stranded" money. 

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It’s unclear how much of the money must be spent and saved, she said. A proposal includes spending some of the $10 million set aside for wireless providers to update 15 older routers around the state, which would benefit 911 service but also capacity for wireless broadband data. That’s expected to cost $5 million and would be done through grants administered to local governments working with private telecommunications providers. The issue will be discussed at a meeting of a group of stakeholders next Thursday and the Energy and Telecommunications Interim Committee's next meeting in Kalispell on May 12-13.

The state Public Service Commission also has opened an investigation into providing a Montana Universal Service Fund to create greater broadband development.

“Without that support, there is no business case to build and operate rural wireless networks,” Kilgore said. It’s hard to put a dollar amount on how much it would cost to upgrade cell equipment in the region, he said, since technology is constantly changing.

Only half of Nemont’s third-generation, or 3G, sites have been updated to 4G service. VoLTE, one of the newer, faster technologies, is not universally deployed, and the industry is already talking about what’s next. The company, which began providing service in 1995, has 115 3G sites and 64 4G sites; 17 of which are on the Fort Peck Reservation along Highway 2.

The state could provide some relief by making it easier to access state lands for maintenance work. Companies like Nemont and Mid-Rivers spend hours negotiating access whenever they need to do work on their towers, Candelaria said.

Other assistance could come in the form of tax abatements, grant programs or a state version of the service fund.

Rural wireless networks not only serve the several thousand subscribers in rural Montana, but also 200-plus million subscribers nationwide who travel through the state. Roaming revenue is a big part of staying in business, Kilgore said.

“You look at all those maps those carriers boast that shows their coverage,” Kilgore said of providers like Verizon. “They can say that because of our network.”

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Reporter covering statewide issues for The Billings Gazette.