Jonathan Chambers from Conexon works with rural electric cooperatives as they bring high-quality Internet access to rural America. When he spoke with Christopher for episode 229 of the Community Broadband Bits podcast last November, he had some choice words to say about how the FCC chose to continue to subsidize big telcos for little return.

They Propose "A Huge Mess"

In a recent post on the Conexon blog, Chambers analyzes “The New Trumpfone Program,” and reveals how proposed Connect America Fund (CAF) subsidies, when applied to real world data, creates outrageous financial waste. While providers can receive up to $17,500 per location in CAF funding, when applied to a per subscriber formula, the figure is $100,000:

There are no U.S. communities where satellite or fixed wireless provides broadband to 100% of the homes and small businesses. Not 80% either, which is the FCC assumption. Not 50% or 25% or 15% or 10% or even 5%. The FCC has data on this. Let’s say, for this arithmetic exercise, that a satellite or fixed wireless subscriber achieves a 15% market share of telephone and broadband service in a rural community.

A 15% market share while receiving $17,500 for every location in an area translates into over $100,000 per subscriber. Should there be insufficient competitive pressure in the auction, the $17,500 per location is a realistic outcome, as is the likelihood of $100,000 per subscriber by some technologies.

Reimburse Per Subscriber

Chambers offers a sensible solution to save CAF funds and direct public dollars in the right direction: reimburse providers for actual subscribers, rather than by location.

Electric cooperatives are increasingly creating local solutions to rural connectivity woes. Many have built networks that rival those in the best connected cities in the U.S. Rather than waiting for disinterested national providers, cooperatives and their members have found workable solutions.

In south-central Missouri, the Sho-Me Power Electric Cooperative is once again exercising the power of community network projects. The Houston Herald reports that Sho-Me Technologies, the communications subsidiary of the co-op, is deploying a fiber-backed, fixed wireless project to connect businesses in Houston, Missouri.

Houston, We’ve Got A Problem

Houston (population: 2,000) is the capital of Texas County, Missouri -- yes, Missouri. Home to about 25,000 people, the rural county has poor connectivity; about 90 percent of the county’s population doesn't have access to high-speed Internet service of 25 Mbps download and 3 Mbps upload. The Houston Herald reports that speeds of up to 10 Mbps download are the norm in Texas County. Upload speeds are even slower.

The situation has been rough for small businesses in Houston, where they could not perform routine updates without impeding service. For instance, the local dentist office, Family Dentistry, could not accept Microsoft updates for its network without disrupting daily operations at the practice.

Downtown Houston Finds The Local Co-op Solution

While Tennessee Governor Bill Haslam’s “Tennessee Broadband Accessibility Act” has been in the news, several other Legislators have introduced companion bills earlier this month that deserve attention.

A Few Gems

SB 1058 and HB 0970, from Senator Janice Bowling and Representative Dan Howell, would allow municipal electric utilities, such as Chattanooga’s EPB, Tullahoma Utilities Board, or Jackson Energy Authority to expand beyond their electric service area. SB 1045 and HB 1410 reclaims local authority for municipalities that want to offer telecommunications service either alone or with a partner.

HB 0970 has been assigned to the House Business and Utilities Committee; SB 1058 was referred to the Senate Commerce and Labor Committee.

Bowling has also introduced SB 1045, a bill that allows municipal electric utilities and electric cooperatives the ability to offer telecommunications services either on their own or with private sector partners. SB 1045 and it’s companion, HB 1410, sponsored by Terri Lynn Weaver in the House, specifies that there are to be no geographic limits to the service area. SB 1045 and HB 1410 are also in the same committees as SB 1058 and HB 0970.

Correcting Existing Problems

The EPB challenged restrictive state law in 2015; the FCC determined that the law was inconsistent with federal goals. The agency preempted both Tennessee and North Carolina's laws that inhibit municipal electric utilities from expanding. When Tennessee and North Carolina appealed the FCC decision, however, the appellate court determined that that states had the right to impose those laws on local communities and reversed the preemption.

To improve rural Internet access, the Georgia Joint House and Senate Study Committee on High Speed Broadband Communications Access for All Georgians recommends that Georgia enable municipal networks and empower rural electric cooperatives.

The committee recently released their report on potential solutions for the lack of rural connectivity. They held six public meetings over the course of four months in 2016, consulting with stakeholders and concerned citizens.

Support of Local Government Networks 

Specifically, the report recommended that the Georgia legislature:

“Reaffirm the state’s approval of competitive telecommunication markets by continuing to permit locally-owned and operated government broadband services”

In the economic development section of the report, they detailed the positive role of community networks and the challenges in finding financing.

The report pointed to the success of two community networks, Community Network Services (CNS) and ElbertonNet. ElbertonNet is the fifteen-year-old community network of Elberton, Georgia. The report praised the community network’s “tremendous public feedback” and “exceptional customer service.”

For more than a century, electric cooperatives have ensured rural communities’ electricity needs are met. Now, many electric co-ops have made strides to ensure their communities have access to today’s newest necessity, Internet service.

In northeastern Missouri, Ralls County Electric Cooperative is bringing high-speed Internet service to the small city of New London. Nearby, the city of Perry hopes the electric cooperative will extend the project to its residents and they've let the co-op know that they will welcome the service with open arms.

Ralls County Electric Cooperative

Ralls County Electric Cooperative is working on a pilot project in New London that will bring incredibly fast and reliable Fiber-to-the-Home (FTTH) to the community's 1,000 residents. The project will offer triple-play services of Internet access, phone service, and high-definition TV.

The New London project won't be the first FTTH project for Ralls County Electric Cooperative. Between 2010 and 2015, the cooperative built a $19 million fiber network in the area. Funding came from the American Recovery and Reinvestment Act (ARRA) in the form of half as a loan and half as a grant. The electric cooperative formed a subsidiary, known as Ralls Technologies, for its telecommunications projects.

Perry Petitions

The Herald-Whig of Quincy, Illinois (about 45 minutes from the Missouri towns), recently reported that officials in Perry are encouraging Ralls County Electric Cooperative to come to their town. They have started a petition to show support for bringing the project to their community. 

Ralls County Electric Cooperative has not committed to extending the project to Perry, but the city’s Mayor Dustin Wasson has signed a letter of support on behalf of the City Council to the electric cooperative. Explaining the need, Mayor Wasson told the Herald-Whig:

This is episode 225 of the Community Broadband Bits. Representatives of Midwest Energy Cooperative discuss their project to bring high-speed connectivity to rural southwest Michigan. Listen to this episode here.

Dave Allen: I really see this as a re-lighting of rural America.

Lisa Gonzalez: This is episode 225 of the Community Broadband Bits podcast, from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. There's a project taking shape in rural southwest Michigan and the nearby regions of Indiana and Ohio. It's headed up by the Midwest Energy Cooperative. At the recent Broadband Communities Economic Development Conference in Minneapolis, Chris ran into Bob Hance, President and CEO of the cooperative, and Dave Allen, the cooperative's Vice President of Regulatory Compliance. Naturally, we wanted to hear more about their project and share the details with you. They provide some history and how access to high quality connectivity has positively impacted a number of their rural members. Chris, Bob, and Dave also have some interesting thoughts on federal funding programs, project standards, and the different rules for cooperatives and big corporate providers. Learn more about the project at teamfiber.com, where you can also discover more about the cooperative. Now you may notice some background noise. We apologize in advance. While we advocate for local choice and access to technology, sometimes technology is just not on our side. We had a little trouble with the mic that day. Also, Chris is suffering from allergies, and until winter sets in, he may sound a little like the late Howard Cosell, but never fear, it is our Christopher. Now, here with Chris are Bob Hance, President and CEO, and Dave Allen, Vice President of Regulatory Compliance for Midwest Energy Cooperative.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell. Today, I'm speaking with two folks from Michigan. Bob Hance, the President and CEO of Midwest Energy Cooperative. Welcome to the show.

Bob Hance: Thank you.

Christopher Mitchell: And Dave Allen, the Vice President of Regulatory Compliance for the Cooperative. Welcome to the show.

Throughout the October Broadband Communities Magazine conference, folks kept repeating this sentiment: some partnerships are smooth and others have rough patches. At the conference, we heard from several electric cooperatives who had partnered with other cooperatives to provide next-generation connectivity to their communities.

We specifically want to highlight the work of two North Carolina electric cooperatives: Lumbee River EMC and Blue Ridge Mountain EMC. They were both included in our report North Carolina Connectivity: The Good, The Bad, and The Ugly. Each co-op took the bold step of building a Fiber-to-the-Home (FTTH) network throughout sparsely populated regions. At the conference, we were able to learn first-hand about their experiences.

Despite the Distance: Lumbee River EMC & HTC

HTC Chief Executive of Marketing Brent Groome described how the two cooperatives collaborated despite being nearly an hour away from each other. Their work together has involved a commitment to similar values and dedication to improving rural communities. (Lumbee River EMC’s representative was unable to attend the conference as much of the service territory had suffered flooding from the recent hurricane.)

Lumbee River EMC’s entry into Internet service brought fiber connectivity to southeastern North Carolina. The co-op provides electricity to more than 50,000 members. In 2010, the USDA provided Lumbee River EMC with nearly $20 million in funding to install fiber. A state law, however, imposes certain restrictions on electric co-ops and USDA funding. The electric co-op had to find another company with the drive and expertise to provide Internet service.

In October in Minneapolis, Broadband Communities Magazine hosted the “Fiber for the New Economy” conference. The first day featured a set of four panels on the role of rural electric cooperatives in providing much-needed connectivity to far-flung communities.

We want to provide the highlights and give further context to some of the most fascinating stories. In this post, we’ll cover some of the latest research coming out of Ball State University’s Center for Information and Communication Sciences.

Indiana’s Electric Cooperatives 

Researcher Emma Green from Ball State University kicked off the track. Her presentation, “Rural Broadband: Technical and Economic Feasibility,” outlined the potential role of rural electric cooperatives in facilitating last mile (connectivity to homes and business) and middle mile (regional connectivity) deployment. 

Green's research centered on Indiana, where 14 percent of the population does not have broadband access (speeds of at least 25 Megabits (Mbps) download and 3 Mbps upload). In rural areas of the state, however, more than half of the population does not have access to those speeds. Green's research underscored how rural electric cooperatives can use their assets (such as Smart Grids, Right-of-Way access, and pole ownership) to facilitate middle mile connectivity. 

We previously noted some of this research from Ball State University in our post BBC Mag Spotlights Rural Electric Co-ops. Focusing on the middle mile is not always a pathway to long-term last mile solutions, and our Christopher Mitchell has often pointed out those pitfalls. Unless a provider is willing to invest in the critical last mile connections, middle mile networks have only a minimal impact.

Rural electric cooperatives are providing next-generation connectivity. In Oregon a consortium of electric cooperatives called LS Networks built a middle mile network a few years ago and now are taking the next step with last mile connectivity.

LS Networks’ Connected Communities program hopes to bring last mile fiber connectivity to 25 communities in rural Oregon and Washington. Internet access will officially be available in early 2017 in some communities. Depending on the needs of each community, the solution could be Fiber-to-the-Home (FTTH), or fixed wireless using the fiber-optic network for backhaul.

Connected Communities

The project started in July, but LS Networks only now made the official announcement. The Connected Communities program asks folks to nominate their community to be connected by filling out a short form. LS Networks will offer two types of monthly plans [pdf]: 100 Megabits per second (Mbps) for $40 and a Gigabit (1,000 Megabits) for $70. Customers will also be able to purchase voice service for an additional $15 per line and 50 cents per phone number.

Currently, the small, northern Oregon town of Maupin is the only official Connected Community. LS Networks is already at work building out a fiber connection to nearly all of the 400+ homes and businesses in the community. On November 9th, Maupin residents can take part in a town hall meeting at the South Wasco County High School to learn more about LS Networks’ plans and the Connected Communities program.

Consortium of Cooperatives