Rural Electric Cooperatives Deliver Broadband

Benton Institute for Broadband & Society

Monday, December 9, 2019

Digital Beat

Rural Electric Cooperatives Deliver Broadband

Jon Sallet

Home broadband subscription rates continue to lag in rural areas, holding back local economies and access to telemedicine. The deployment of broadband networks to rural areas echoes the challenges earlier generations had ensuring that electrical networks and telephone service reached everyone. The solutions those earlier generations employed provide us lessons for today’s broadband challenges.

Through the 1930s, many power companies ignored rural areas of the nation even when the federal government offered loans to serve these sparsely populated areas. As late as the mid-’30s, 90 percent of rural homes were without electric service. Working with the Rural Electrification Administration, farmer-based, consumer-owned electric cooperatives, commonly known as electric co-ops, started to bring electricity to rural farms and homes. Cooperatives are member-owned businesses. Democratically controlled and operated on a nonprofit basis, a cooperative opens membership to those who use its services.

In the years after World War II, the number of rural electric systems in operation doubled, the number of consumers connected more than tripled, and the miles of energized line grew more than fivefold. By 1953, more than 90 percent of U.S. farms had electricity.

Most of the electric co-ops still exist today, providing power to 56 percent of the U.S. landmass—and their importance is becoming clearer every day.

Nearly 100 of the 900 or so rural electric co-ops across the United States offer some form of broadband. Another 200 or so co-ops are studying whether to move in the same direction.

Electric co-ops and publicly owned municipal electric utilities have a number of natural advantages that allow them to deploy and provide fiber-based broadband service. After all, within their service areas, electric utilities basically reach everyone. They often already have access to essential infrastructure, including pole attachment points and hub facilities. They can use their pre-existing field staff and the billing, customer support, and administrative personnel. With all of these elements in place, they have lower risks and fewer entry costs.

The Tri-County Rural Electric Cooperative—based in Mansfield in north-central Pennsylvania—is starting to string a fiber-based broadband network after surveying its members to see if they wanted the co-op in the broadband business. The response was a resounding “yes.”

But financing the project was “ugly,” said CEO Craig Eccher, and was only possible when Tri-County received pledges of more than $32.3 million in support from the Federal Communications Commission, after Verizon declined FCC support to serve the same area. Pennsylvania is supporting the Tri-Co broadband deployment with funding provided through the Governor’s Office of Broadband Initiatives and a grant from the Pennsylvania Redevelopment Assistance Capital Program.

The 16,000 customers who are to get lightning-quick internet are jubilant, but they comprise just a fraction of the 520,000 rural Pennsylvanians who lack high-speed internet.

Although rural electric co-ops are critical to the deployment of broadband to places without any service at all, they can also provide competitive choice where service now exists. For example, Midwest Energy & Communications (MEC) in Michigan began deploying fiber in 2014 to its rural co-op members who were widely underserved with communication technologies far inferior to MEC’s fiber broadband offering.

Seventy-five years ago, electric cooperatives electrified rural America. Today, coops continue to energize rural economies by closing the digital divide.

For more on Broadband for America's Future: A Vision for the 2020s, please sign up for updates.

Download a special Benton Report by Jonathan Sallet

Jonathan Sallet is a Benton Senior Fellow. He works to promote broadband access and deployment, to advance competition, including through antitrust, and to preserve and protect internet openness. He is the former-Federal Communications Commission General Counsel (2013-2016), and Deputy Assistant Attorney General for Litigation, Antitrust Division, US Department of Justice (2016-2017). ​

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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Broadband Delivers Opportunities and Strengthens Communities

By Jonathan Sallet.