Broadband internet is creating jobs, and changing lives in In Kentucky’s ‘Silicon Holler,’ Wisconsin’s Northwoods

JUNE 10, 2021

Matt Muncy, of McKee, Kentucky, went from being nearly homeless to supporting his family with a good-paying job working at home, providing tech support for Apple. –  Mark Hoffman / Milwaukee Journal Sentinel

McKEE, Ky. – Matt and Jennifer Muncy were dangerously close to becoming homeless.

They had lost their livelihood when a local factory sent work to Mexico. They barely subsisted on a string of low-paying jobs that followed.

Raising their four children in a part of Appalachia with a median annual household income barely above $32,000 — about half the national average — had become as lonely as McKee’s single traffic light.

“We were literally at a point where we were done,” Matt said, tears welling up in his eyes. “We had each other, and as God is my witness, that’s the one thing which kept me going.”

Then the couple heard about a program that helps land customer service work with companies like Apple, Cabela’s and Amazon. Matt was skeptical. He had looked into the promise of online jobs before and they seemed like a scam.

“They would never go into specifics and when you get to the end of everything, they’re wanting a credit card, they’re wanting money,” he said.

But desperation had set in.

McKee, Kentucky, a small Appalachian town with a single traffic light, is in one of the poorest areas of the country. But it has some of the fastest internet anywhere, and that’s created more than 3,000 jobs throughout a 23-county region. – Mark Hoffman / Milwaukee Journal Sentinel

“It was to a point where something either had to give or we sank,” Matt said.

The couple took the advice of a State of Kentucky employment center, which sent them to Teleworks USA, a nonprofit that says it has created more than 3,300 jobs in a 23-county region since the deployment of high-speed internet service about six years ago.

Shortly after he and Jennifer finished their training in 2018, they landed positions with a company that does tech support for Apple. Teleworks provided office space and a computer until they got back on their feet and could work from home.

Matt no longer had to tell his children they couldn’t have something at the store “because Daddy can’t find work.”

“If you’ve never lived poverty, you really don’t know,” he said. “You will never know what a wonderful feeling it is to be able to buy your kid a candy bar, to buy your wife a little something extra just because you can.”

At a time when a good portion of rural America lacks high-speed internet, also known as broadband, Matt and Jennifer Muncy’s experience stands as testament to its power to lift people out of a hand-to-mouth existence. In this thinly populated part of eastern Kentucky, nicknamed “Silicon Holler,” technology has trumped location.

A similar story is unfolding in Wisconsin’s Northwoods and in other rural places that have found ways to tap the potential of the internet — and in doing so, illustrate the missed opportunities when it’s not available.

Studies have shown that in addition to enhancing education and quality of life, broadband creates jobs, boosts entrepreneurship, raises property values and ultimately creates taxpayers who contribute to the common good.

“The internet is the most powerful platform in the history of the planet,” said Tom Wheeler, who was chairman of the Federal Communications Commission under President Barack Obama. “Unfortunately, it’s not yet pervasive.”

In 2016, Wheeler went to eastern Kentucky to see for himself how the region was being changed by the infusion of broadband into the countryside, where only a few years earlier, people could barely get online.

“I hope you folks realize what a big deal this really is,” he told a group of 90 folks who listened to his speech at the People’s Rural Telephone Cooperative conference center in McKee.

“This is a network that can create a level playing field for everybody.”

Wheeler recently said he still feels that way, maybe more so as the COVID-19 pandemic accentuated the depth of the rural broadband problem.

“The internet is no longer ‘nice’ to have. It’s critical,” he said.

One of the biggest obstacles in getting service to everyone is the high cost of installing fiber cable in places where there are few customers to defray the expense. It can cost $50,000 per mile in rugged terrain, an unattractive figure for a service provider seeking a return on its investment.

But it’s justifiable from a public-interest standpoint, according to Wheeler.

“The answer is to step up and pay the necessary capital costs, just like we pay for building highways,” he said.

Jackson County, where McKee is the county seat, doesn’t have a four-lane highway yet. That’s true for other parts of rural America as well. However, Wheeler said the telephone cooperative’s success with broadband could be replicated across the country.

“While I was at the FCC, we estimated it would cost about $80 billion for a one-time fix to deliver service to everyone,” he said.

President Joe Biden’s American Jobs Plan currently proposes around $65 billion, scaled back from $100 billion announced in April.

A very thin single strand of fiber-optic cable can support ultra-fast uploads and downloads of 1,000 megabits per second. By comparison, the copper wires would only support a small fraction of those speeds. – Mark Hoffman / Milwaukee Journal Sentinel

‘The impact is real and immediate’

Nearly 800 miles away from McKee, in Vilas County, Wisconsin, Amelia Gagliano can relate to living in a place where good-paying jobs are scarce. The poverty is not as dire as parts of Kentucky, but she’s seen folks scrape by with seasonal work.

“If you can find a year-round job here that’s 40 hours a week, has benefits and pays well, that’s amazing,” said Gagliano, who grew up at a fishing resort on the Rainbow Flowage near Lake Tomahawk, where her parents always had second jobs to keep the bills paid.

“People don’t stick around when they can go to cities,” she said.

High-speed internet has made it easier for young folks like Gagliano, an avid dog-sled racer, to remain closer to home and family.

She manages the Land O’ Lakes office of Errand Solutions, a Chicago firm that has a virtual concierge service for the employees of large companies and hospitals.

In February, when Texas was slammed by an ice storm that knocked out power and left thousands of people with frozen, broken water pipes, Errand Solutions weighed in from the Northwoods. No stranger to cold-weather crises, the staff helped folks with things they’d never encountered before.

“We can’t solve all the world’s problems, but that was definitely one we could handle,” Gagliano said.

Amelia Gagliano manages the Errand Solutions customer service center in Land O’ Lakes. The Chicago-based firm was able to open an office in the small town in Vilas County, Wisconsin, because it has high-speed internet. Many business professionals now work remotely from towns in the Northwoods, provided they can get a decent internet connection. – Mark Hoffman / Milwaukee Journal Sentinel

It was company founder Marsha McVicker’s idea to open the client service center in the town of about 800 people. She splits her time between Chicago and Land O’ Lakes, 385 miles north, where she has a cabin.

McVicker grew up near Wausau. As a child, she tagged along with her father who was in the road construction business in northern Wisconsin and Michigan’s Upper Peninsula. She grew to love the Northwoods, and when it came time to expand her business a few years ago, the forest and lakes won out over other places in Florida and Texas.

“Land O’ Lakes is tiny. But when you create jobs in such a small community, the impact is real and immediate. The ripple effect has been beautiful to see,” McVicker said.

High-speed internet allowed her to make the move. The town on the Michigan border already had fiber-optic broadband and was looking for ways to tap its business potential.

“We asked Marsha what it would take to open an office up here,” recalled Dave Juday, a Vilas County Economic Development Corp. board member.

She told us she needed a building, $350,000 of local money, a workforce and high-speed internet, Juday said. “And we had three weeks to get it done.”

The building that McVicker sought was a former We Energies customer service center, and the money was raised by Juday’s business contacts in exchange for an equity stake in Errand Solutions.

“I told them to bring their checkbooks,” he said.

The workforce was a crew of Northwoods residents grateful for jobs that paid a decent wage and didn’t have seasonal layoffs. They embraced the new positions and showed the outside world a Wisconsin friendliness that transcended borders.

“When someone calls into the Errand Solutions center, it’s going to feel like they’re talking to their aunt or their neighbor. It has such an incredible vibe,” McVicker said.

The office only employed about a dozen people, before the pandemic, but the goal is to have 60 in the next couple of years. An airplane hangar behind the building could be converted into office space and the staff can work from home as well.

High-speed internet was essential in the decision to set up shop in Land O’ Lakes.

“If investments are going to be made in rural America, it’s got to start with broadband,” McVicker said.

Just as good as New York City

It took ambitious planning, millions of dollars in federal grants and a mule named Old Bub to bring the internet to every home in Jackson County, Kentucky.

Saddled with about a 30% poverty rate, the county has struggled for many years. McKee is a small mountain town with empty storefronts clustered around the courthouse square. Dollar General and Family Dollar stores are among the few places to shop. A restaurant by the courthouse closed, but Dairy Queen stays busy.

McKee mirrors thousands of small towns in rural America. Yet against this backdrop, its People’s Rural Telephone Cooperative has helped connect folks to an economy not hemmed in by the Appalachian Mountains, a beautiful but hardscrabble slice of the South.

Subscribers to the member-owned cooperative’s broadband can get gigabit speeds, plenty of bandwidth for any business. It’s much faster than in most of rural America.

Every home and business in Jackson County and adjacent Owsley County has access to broadband delivered through fiber-optic cable, a major accomplishment given much of the area is swallowed up in the hills and crags of the Daniel Boone National Forest.

The prices are low, starting at $10 a month for families eligible for a federal subsidy and around $40 without the government assistance. Moreover, there are free Wi-Fi hot spots all over the area — at libraries, churches, the courthouse and the cooperative’s offices.

Keith Gabbard, CEO of People’s Rural Telephone Cooperative, was largely responsible for bringing high-speed internet service to Jackson County, Kentucky. It’s supported work-from-home jobs for Apple and other Fortune-500 companies. – Mark Hoffman / Milwaukee Journal Sentinel

Keith Gabbard, the CEO of People’s Rural Telephone Cooperative, is largely credited with having the foresight and chutzpah to make it happen.

In 2009, when President Barack Obama’s administration announced that federal stimulus money was available for rural broadband projects, Gabbard seized the opportunity.

The McKee native, who returned to his hometown in 1976 after receiving a bachelor’s degree in business from Eastern Kentucky University, saw the internet as a way to create sustainable jobs in an economy hurting from the loss of manufacturing and, years earlier, coal mining.

All told, it cost $50 million to bring ultra-fast service to the area. Largely financed by federal grants and low-interest loans, the project took six years to complete. But even the construction fueled an economic boom as workers came from other places to string cable through the mountains.

That’s when Old Bub earned his place in local history. The mule spent several years trudging up and down the steep hillsides hauling spools of fiber cable in places where it would have been difficult to maneuver a machine. There was even a song written about the sure-footed beast that brought eastern Kentucky into the 21st century.

“People still ask about him,” Gabbard said.

A lack of high-paying jobs remains a problem in the area. But the influx of call-center work, paying between $12 and $20 an hour plus benefits, has lowered the jobless rate in small towns like McKee, Booneville and Annville by around 5%.

Broadband also has brought educational opportunities, and with telemedicine, folks no longer have to travel long distances to see a doctor. There’s even a virtual “living room” at the public library in McKee, where veterans can connect with a Veterans Administration hospital several hours away in Lexington.

“Much of my life I heard people complain about everything you couldn’t do here,” Gabbard said. “We only had one stoplight. We didn’t have a Walmart or a college or a hospital. But now we have just as good of broadband as New York City.”

A Jackson County, Kentucky, inmate uses the internet to take his GED test at the public library in McKee. The space, called the “virtual living room,” is mostly used by veterans for telemedicine appointments at a Veterans Administration hospital. – Mark Hoffman / Milwaukee Journal Sentinel

‘It’s changing the economy’

In Wisconsin, Vilas County has been one of the leaders in the number of state Public Service Commission broadband grants — 14 in seven years. This spring, service providers CenturyLink and ChoiceTel won nearly $3 million, altogether, for projects in the county.

The aggressive deployment of broadband has largely been the result of a long-term effort by local officials, some of them retired executives, to secure state and federal funding.

“Without it, most of us would have been stuck with dial-up speeds,” said Bill Niemuth from Boulder Junction, a small town known as the “Musky Capital of the World” that in March helped CenturyLink win a $2.2 million state grant.

He was director of global security and corporate air transportation for Kimberly-Clark Corp., a job that took him to dozens of countries. Now, from his home, he runs a corporate security business with clients around the world.

The presence of business professionals from outside the area isn’t immediately noticeable in Boulder Junction, where the population swells in the summer with tourism. However, their spending in the off-season has made a difference at restaurants, grocery stores and other businesses and has boosted home sales.

“It’s changing the economy,” Niemuth said.

Wealthy seasonal homeowners have poured money into the community.

For example, Uline Corp. executives Richard and Elizabeth Uihlein donated several million dollars for a lakefront pavilion in Manitowish Waters and a 17-mile paved bike trail to Boulder Junction.

The Uihleins have owned a hotel, a condominium complex, a coffee shop, restaurant, spa and two gift shops in a town where the business district runs a third of a mile before it retreats into the surrounding forest.

Another notable is Dick Leinenkugel, brewing scion and former Wisconsin secretary of commerce.

Katherine Desch works at a loan processing center on the Lac du Flambeau Reservation in Vilas County. The center’s work is supported by high-speed internet service, creating jobs, yet some parts of the reservation and surrounding area still struggle with not having a high-speed connection. – Mark Hoffman / Milwaukee Journal Sentinel

In Lac du Flambeau, a Native American community in Vilas County, high-speed internet supports a loan processing center run by the Band of Lake Superior Chippewa Indians.

The center, which employs about 40 people, handles payday loans from all over the country. It generates significant revenue for the tribe, the largest employer in the area.

The starting wage is around $11.50 an hour, better than some other jobs on the reservation, where there’s a paucity of options.

“People can move up fairly quickly. It’s an important part of our organization,” said Dean Zaumseil, CEO of the Lac du Flambeau Business Development Corporation.

Daniel Two Crow has worked at the loan center for seven years. He supervises about 15 people and says it would be difficult to find another job with comparable pay and benefits.

At 48 years old, he’s lived in Minnesota, Colorado, Illinois, Washington, South Dakota, North Dakota and New Mexico, before settling down in Lac du Flambeau. He’s married with five children.

“My wife and I are in the process of buying our first home. This job’s been a blessing for me and my family,” he said.

The benefits of broadband certainly haven’t been felt everywhere. Some areas of the reservation, and other parts of Vilas County, struggle to get online.

Brad and Rubie Gauthier are shown with their 10-month-old daughter in Minocqua. They are the owners of Sitecast, a national website design firm. They lived in Portland, but anxious about coronavirus and social unrest, left the city and moved to the Northwoods. – Mark Hoffman / Milwaukee Journal Sentinel

“We’ve still got a lot of work to do,” said Dion Reynolds, information technology manager for the Business Development Corporation.

But the deployment in Minocqua, a tourist town in Oneida County, allowed Brad Gauthier to return home from Portland, Oregon.

Gauthier grew up on the Lac du Flambeau reservation, and while in his 20s, traveled extensively across the U.S. His laptop was his office and he spent five years working from internet cafes.

His wife, Rubie, was raised in the Philippines. As an executive with Hewlett Packard Corp., she traveled globally before she met Brad and they settled down in Portland to run a software development business.

For a while, the young couple ran the business from laptops while touring the U.S. National Park System. Their customers never knew the difference and many now probably don’t realize they’re based in the Northwoods.

In Portland, they paid $32 a square foot for office space. In downtown Minocqua, the rent is about a dollar a square foot.

“Huge office buildings might be just a snapshot in time,” Gauthier said. “When you look at where the trends are headed, it’s all about remote work. You can attract the best talent without disrupting someone’s life.”

Jobs that offer promotions, good pay

In Annville, about 15 minutes from McKee, one of nine Teleworks facilities sits on a hill overlooking a vacant lot that was once the site of Jackson County’s largest employer, Mid-South Electronics.

On Jan. 15, 2005, much of the plant was destroyed in a fire.

While no one was injured, it took more than a half-dozen fire departments to extinguish the flames in a 100,000-square-foot building where plastic-molded parts were made for appliances.

Shana Green, of Jackson County, Kentucky, lost her job when the area’s largest manufacturer was destroyed in a fire. Now she works from home, assisting veterans with medical issues. – Mark Hoffman / Milwaukee Journal Sentinel

Shana Green, who along with her mother and boyfriend worked at Mid-South, recalled that night the factory was set ablaze by a disgruntled employee.

“It was about 3 o’clock on a Saturday morning when my phone rang,” Green said. “It was my mother. She said she’d heard the plant was on fire.”

Green rushed to take a look but couldn’t get within miles because of the thick smoke and road barricades. Nearby homes were evacuated due to fear of chemical explosions.

Damages to the plant were estimated at $50 million, including lost revenue, and efforts to restart the operations in Annville eventually fizzled.

An empty lot marks the site of what was a Mid-South Electronics plant in Annville, Kentucky. The plant was destroyed in a 2005 fire which left about 700 people out of work. What was a child care center in the industrial park is now a Teleworks USA hub that provides training for customer service jobs for national retail chains and other companies. – Mark Hoffman / Milwaukee Journal Sentinel

“It was a big blow to the community,” Green said.

Now, she does telephone customer support for a national health insurance company.

“I really enjoy the job because I know I’m helping veterans,” she said.

Only a handful of companies remain in the industrial park where Mid-South had been a regional employer. What was a child care center is now the Teleworks office.

The nonprofit teaches customer service skills for online and telephone support positions in all kinds of fields, such as retail, health care and consumer electronics.

The Teleworks jobs often pay better than local businesses. One company, Kelly Connect, offered a $500 sign-on bonus and a dollar-per-hour raise after three months.

“All of our companies promote from within, and you can quickly move up the ranks to become a trainer, a supervisor or a mentor,” said Betty Hays, operations director at the Annville office.

“It’s made a huge difference in peoples’ lives around here,” she said.

Hays has tapped the power of broadband for a second job, teaching English to kids in China. She’s had the same students for several years and has gotten to know them well.

One of them sent her Beebop headphones for Christmas. A mother of one of her students, worried about the COVID outbreak in the U.S., sent her a thousand face masks.

“She wanted to know if there was anything she could do to help,” Hays said.

Outside the back door of her home are lush green hills dotted with cows. Hays sometimes uses the camera in her laptop to give her students a glimpse of rural Appalachia. They’re living in high-rise apartments in Beijing and Shanghai.

“Three of them say they’re determined to come visit me,” she said.

Finding new paths in life

In Owsley County, the second-least populous county in Kentucky, Teleworks has brought about 400 jobs, according to County Judge Cale Turner. Other jobs have come from folks using broadband to tap a remote workplace on their own.

“It’s probably the best thing that’s happened to this community in my lifetime,” Turner said. “We were right near the bottom of counties for median household income, and we’re no longer in the bottom ten.”

Kate Roberson is one of those folks who landed a Teleworks job.

Originally from California, she raises sheep and flowers on a 150-acre farm not far from the Red River Gorge, an intricate landscape of canyons, sandstone cliffs, waterfalls and natural bridges in the Daniel Boone National Forest.

She and her husband, Lee, aren’t connected to the electric grid. But most days Kate drives into Booneville where she rents an office for $75 a month that includes high-speed internet and a shared receptionist. There, she does customer support for retail catalog companies.

Roberson moved to Owsley County in 2016, sight unseen, after a ranch she rented in Colorado was sold to an owner who wanted all the sheep gone. At the time, she had dozens of pregnant ewes. Spring lambing was only a couple of months away.

“I got on the internet, started looking around and saw pictures of this area. It was just gorgeous and the land was so inexpensive,” she said.

But the move came with big challenges, including how to earn a living while getting the farm going.

“I had no idea what I was in for, economically,” she said.

After putting in a morning of chores on the farm, Roberson heads into Booneville and settles in behind the computer for her customer support job.

She says the transition from farm to office suits her well.

“I can take my muddy boots off at the door, put on my slippers and be at work, no extra effort involved.”

From nearly homeless to comfortable

This spring, Matt and Jennifer Muncy purchased their first house — just three years removed from being nearly homeless. They are comfortable, even if they’re not getting rich.

“That’s what high-speed internet has brought to our family,” Matt said.

He’s been promoted to a senior support specialist who handles some of the most difficult customer service calls, where people are sometimes frustrated and angry over something like losing a job as well as a technology issue.

“Those are the customers I absolutely will not give up on,” Muncy said.

“It humbles me, knowing that I’ve been there.”

Here’s some of what’s coming:

• The deployment of broadband has created more than 3,300 jobs in what’s known as “Silicon Holler” in Eastern Kentucky. In Wisconsin’s Northwoods it’s attracted new businesses and executives working from their home on the lake.
• For all the billions of dollars poured into expanding service in rural America, there’s been an inability to identify coverage gaps, a lack of accountability in spending, and a short-sighted view for what consumers actually need.
• New technologies, such as Elon Musk’s SpaceX and Starlink venture, could help bridge the digital divide, although some doubt their effectiveness. Moreover, millions of people in both rural and urban areas can’t afford the options available to them

About this project

Reporter Rick Barrett spent the 2020-21 academic year as an O’Brien Fellow in Public Service Journalism at Marquette University examining the challenges facing rural Wisconsin. He was assisted by student researchers Christopher Miller and Kelli Arseneau.

All work on the project was done under the guidance of Milwaukee Journal Sentinel editors. Marquette University and administrators of the program played no role in the reporting, editing or presentation of this project.