Electric Co-ops Get a Big Boost for Rural Broadband Efforts in FCC Auction

Electric co-ops pursuing broadband service for their consumer-members got a big boost from winning bids in an FCC auction. (Photo By: Preston Keres/USDA)
Electric co-ops pursuing broadband service for their consumer-members got a big boost from winning bids in an FCC auction. (Photo By: Preston Keres/USDA)

Electric cooperatives’ mission to deliver high-speed internet access to rural America got a $225 million boost from the Federal Communication Commission’s auction of funds earmarked for the country’s underserved or unserved communities.

The FCC opened its Connect America Fund (CAF) II auction to broadband providers outside traditional telecom companies for the first time. About 45 electric co-ops placed bids to serve census blocks identified by the commission.

Thirteen individual electric co-ops won bids worth more than $39 million in 11 states. Separately, the Rural Electric Cooperative Consortium, which is made up of 22 co-ops, won bids totaling $186 million in eight states. The FCC will distribute the funds to the winners over 10 years.

The Rural Electric Cooperative Consortium placed the single largest bid for gigabit service—the fastest speed available through fiber to the home. The consortium was formed by Conexon, a consulting and analytics firm dedicated to electric co-op fiber-to-the-home projects.

“The success we had as a group in the CAF II auction will propel the expansion of fiber-optic networks across the country and improve the quality of life for those we serve,” said Gary Wood, CEO at Central Virginia Electric Cooperative in Colleen, a consortium member. CVEC is embarking on a $110 million, five-year fiber-to-the-home build to serve its 36,000 members.

Overall, 73 percent of the nearly 1 million locations up for auction won bids. These areas are expected to receive better internet service or service for the first time with the help of these funds.

In 2019, the FCC is planning to auction about $100 million from the CAF for more remote areas. The next phase of the CAF auction is expected to take place in 2021.

“We thank the FCC for allowing electric co-ops to participate in this auction, and look forward to building on this success moving forward,” said NRECA CEO Jim Matheson.

“We are committed to continuing the rural broadband conversation and working with policymakers at the federal, state and local level on technology and funding solutions that will enrich the lives of rural American families and businesses.”

The CAF II auction pot of $2 billion was derived from past offers by the FCC to large telecom providers that declined to provide internet service in rural parts of the country. Bidders could offer service with download/upload speeds as low as 10/1 megabits per second. The FCC holds a broadband benchmark of 25 Mbps download/3 Mbps upload, according to the commission’s 2018 Broadband Deployment Report.

Cathy Cash is a staff writer at NRECA.