Katherine McCardle Cole knows what it’s like to witness history—twice—from the front porch of her southern Mississippi farmhouse.

That’s where the 83-year-old was when Dixie Electric Power Association first strung power lines to her home when she was a child.

And that’s where she was again in January, as a truck from the co-op’s broadband subsidiary came up the hill. Katherine, who now relies on a wheelchair, asked her son Ricky to help her get there so she could watch the crew hang fiber-optic cable.

“She says, ‘Boy, I want to see that,’” said Ricky. “She sat there and studied them awhile. Naturally, she had a couple of ideas on how they could be more efficient with their time. Then she said, ‘I am just tickled to see that going up, because it is going to help all of us.’”

Ricky, who travels from Jackson to Ovett three days a week to work the family farm, says his mom is excited for the life improvements broadband will bring—online doctor visits, good video quality for her favorite shows and enough bandwidth for her grandchildren to do their schoolwork.

“She understands the full value and benefit of internet service, and she will be an excellent consumer of it,” he said. 

Katherine and her husband both have health challenges. Getting into and out of a vehicle for a doctor visit several miles away can be exhausting.

“As soon as we can subscribe for internet service through Dixie, she can sit in the living room and do an appointment with her doctor,” Ricky said. “Then my dad will have no excuse to miss his doctor appointments.”

Ricky said his mother is most excited about her grandchildren being able to stay for longer visits.

“Both have been virtual students since the pandemic began,” he said. “Now they only stay a day or two, then they have to get back to Jackson to do their schoolwork. She’s excited about the prospect of them being at the farm a lot more.”

Ricky said he’s looking forward to having access to precision agriculture applications and social media to boost sales of the farm’s produce.

“Broadband will add … quality of life and economic opportunity for our family,” he said. “I believe it will have a lasting positive impact on rural society and the rural economy and also the rural culture.”

He’s not alone. Randy Smith, general manager of Laurel, Mississippi-based Dixie Electric, says calls from members wanting broadband for education and telework started coming in long before the pandemic.

“Once COVID hit, it’s been nonstop,” he said.

With help from the federal CARES Act for COVID-19 pandemic relief, state grants and matching co-op funds, Smith said 600 households will soon have broadband service in this sparsely populated region dotted by blueberry growers, poultry operations and family farms. Another 1,800 have expressed interest in signing up.

Dixie Electric began exploring retail internet in earnest in 2019 after the state legislature clarified that electric co-ops could enter the broadband space. With board approval, two in-depth feasibility studies and strong member feedback, the co-op began building a fiber network and connected its first 112 customers in December 2020.

“The response has been overwhelmingly positive,” said Smith. “We had a couple of people tell us, ‘AT&T has been telling us in two to three years that they’re coming, and we’ve not seen them yet. In three months, you’re here.’”

Smith said being part of the history that Katherine Cole and so many other Dixie Electric members have seen is something he takes to heart.

“We’re excited about the opportunity and what it means for the members in our service area,” he said. “It’s been said a number of times, if co-ops don’t do it, then in lot of cases, it’s not going to get done. We’re excited about being part of the solution.”

Cathy Cash is a staff writer at NRECA.

The need to close America’s digital divide is as crucial as ever, and the Federal Communications Commission’s Rural Digital Opportunity Fund stands to have a huge impact, with billions in funding for deploying broadband to unserved communities.

NRECA’s Brian O’Hara and NRTC’s Greg Santoro break down how the RDOF auction works and outline concerns about winning bidders with unproven technologies, and Tri-County Rural Electric Cooperative’s Rachel Hauser gives the perspective from a co-op that’s looking to use RDOF funding to make major progress in its broadband efforts.

Listen to the episode below:

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Related Content:

NRECA Sends Concerns to FCC About $9.2 Billion Rural Broadband Auction
Members of Congress Urge FCC to Vet Provider Promises on Rural Broadband
Electric Co-ops Win $1.6 Billion in FCC Rural Broadband Auction

Find out more about NRECA’s podcast. Questions or suggestions? Email us at AlongThoseLines@nreca.coop.

New broadband grants worth $300 million should only go toward proven technologies, and some rural areas should remain eligible for this funding even if they’ve won awards in other specific federal efforts to bridge the digital divide.

Those are the messages NRECA sent to the National Telecommunications & Information Administration as the agency finalizes rules for its Broadband Infrastructure Deployment (BID) grant program.

The Feb. 17 letter incorporates concerns that regions covered by initial winners in the Federal Communication Commission’s recent Rural Digital Opportunity Fund auction and similar programs will be locked out of new broadband funding if an RDOF grantee proves unable to provide adequate service.

NRECA and a large group of lawmakers raised these concerns to the FCC about a sizable portion of the $9.2 billion allocated in RDOF Phase I going to bidders with unproven technologies, such as fixed wireless to provide gigabit speeds and new low-earth-orbit satellite.

“People and businesses in rural America are struggling in a changed world that depends more each day on remote health care, remote education and remote work,” said Brian O’Hara, NRECA’s senior director of regulatory issues for telecom and broadband.

“A rural area set to receive federal funds for internet at speeds below the current definition of broadband should not be precluded from support for a higher level of service that will meet the growing bandwidth needs of today.”

Because of the way RDOF funding is structured, rural communities where broadband projects fall short could be stuck for up to a decade with inadequate service and no access to additional federal funds, O’Hara said.

NRECA also recommended that NTIA consider the far-reaching impacts of the pandemic on supply chains and labor and, if necessary, allow grantees to spend funds beyond the program’s one-year deadline.

“The ongoing COVID-19 crisis has put the spotlight on the absolute and outright necessity for ubiquitous high-performing broadband,” O’Hara said. “Rules for funding rural broadband must be flexible and inclusive to meet this challenge.”

Cathy Cash is a staff writer at NRECA.

NRECA is urging the Biden administration to review the winners of $9.2 billion in federal funds for rural broadband to ensure they can truly meet their bid obligations.

“We stand up for the 42 million people we serve,” NRECA CEO Jim Matheson said. “When it comes to the unserved, it’s disproportionally rural communities. Broadband may be provided by electric cooperatives or someone else, but we must make sure the technology and the level of service are accurately reflected in the bids.”

Matheson on Feb. 1 sent a letter to the Federal Communications Commission accompanied by a white paper from NRECA and NRTC describing concerns about certain winning bids in the Rural Digital Opportunity Fund Phase I and offering remedies if an FCC review finds winners unable to meet their commitments.

“Our focus is on making sure that every unserved American has access to reliable and robust broadband that will meet not just their needs today but also into the future,” Matheson wrote. “NRECA and our member cooperatives stand ready to work with the FCC and other stakeholders to make sure RDOF Phase I is a success and to move forward with planning for phase II.”

The RDOF I, as the FCC’s largest broadband auction to date, is expected to connect 5.2 million unserved homes and businesses. The money will be distributed over 10 years as winning internet service providers achieve certain coverage milestones. Detailed technical and financial broadband deployment applications by the winning bidders were due Jan. 29.

To ensure the validity of all bids, NRECA recommends that the FCC first reject those the commission deems unable to meet their commitments. The FCC could roll money from any rejected bids into the future RDOF Phase II auction or hold a RDOF Phase 1.5 auction of these funds soon to ensure affected census blocks get served as quickly as possible.

Electric co-ops won bids totaling $1.6 billion to serve nearly 1 million locations in 31 states, largely to build fiber-optic cable networks. Fiber offers internet service with extremely low latency or interruptions and is easily scalable to speeds of one gigabit or more.

Some RDOF winners offered lower bids with unproven technologies. These include fixed wireless companies that promise gigabit service in heavily forested or mountainous areas and a low-Earth orbit satellite delivery project still largely in beta testing by Elon Musk’s SpaceX.

“There are a lot of winning bids we are concerned about,” Matheson said in remarks discussing the RDOF. “This money is not there to fund a science experiment. It’s to fund broadband for rural Americans.”

RDOF winners that fail “will put people in rural America in substandard service for a long time. Because when that federal money is spent, there is no other money for that census block for a decade,” he said.

On Jan. 19, 160 senators and House members from both parties sent a letter to the FCC asking that RDOF winners be vetted to ensure they can fulfill their bid requirements.

Cathy Cash is a staff writer at NRECA.

A bipartisan group of 160 senators and House members is calling on the Federal Communications Commission to verify that broadband providers can truly give rural Americans the high-quality service they promised to deliver.

NRECA and NTCA–The Rural Broadband Association are worried that some companies that made winning bids during the first phase of the recent Rural Digital Opportunity Fund auction do not have the ability to carry out their ambitious plans.

Lawmakers, in a letter sent Jan. 19 at the urging of NRECA, asked the commission to scrutinize the long-form applications that auction winners must now submit to the agency to validate that they have the technical, financial, managerial and operational skills and resources to perform as promised. Providers must submit the applications for approval to receive federal funds.

“We also strongly encourage the FCC to make as public as possible the status of its review and consider opportunities for public input on the applications,” the senators and House members wrote. “Such transparency and accountability will be essential to ensure the success of this program and to minimize any opportunities for fraud or abuse.”

One of NRECA’s concerns is that some companies won bids promising service they cannot deliver. For example, several companies said they could provide gigabit speeds using fixed wireless technology that is not widely available, said Kelly Wismer, NRECA’s lobbyist on broadband issues.

“Many of the winning applicants claim they will deliver levels of service with certain technologies that are only achievable in extremely limited conditions and terrain—or still not commercially available,” Wismer said.

Electric cooperatives also competed in the auction to provide high-speed internet service to rural communities, and the integrity of the auction and public trust in future auctions depends on companies providing realistic information about what they can provide, Wismer said. The congressional letter asked the FCC to vet all the long-form applications, so co-op applicants will also be scrutinized.

“At the end of the day, what’s important to NRECA is that the broadband provider, whoever it is, can deliver on the promises they made so unserved Americans get access to high-speed internet,” Wismer said.

Without proper vetting, lawmakers warned, “we fear that we will not know whether funds were improperly spent for years to come.” Wismer said rural residents will suffer the consequences if that happens because they “desperately need fast and reliable broadband service.”

That need has been underscored during the COVID-19 pandemic as rural students have struggled to do schoolwork at home.

The FCC announced winners of its RDOF action last month. Those winners are slated to be awarded a total of $9.2 billion to reach more than 5.2 million unserved communities throughout rural America. Electric co-ops were among the winning bidders and are expected to receive more than $1.6 billion to serve 900,000-plus locations in 31 states.

“We all hope this program will be a great success—and it is in that spirit that we write to encourage you to take every reasonable measure possible to ensure this turns out to be the case,” the lawmakers told the commission.

Erin Kelly is a staff writer at NRECA.

For decades, communications providers in Georgia have claimed that pole attachment fees charged by electric cooperatives are too high, attempting to have the legislature mandate lower fees to subsidize their for-profit businesses. More recently, cable and internet service providers falsely claimed that pole attachment fees are the primary roadblock to extending broadband into the state’s unserved rural areas.

Now, the co-ops in Georgia have offered an incentive to push broadband deployment in the state.

In a precedent-setting ruling from the state public service commission, Georgia co-ops volunteered to temporarily drop new annual attachment fees to $1 per pole for broadband providers. The rate kicks in on July 1 and covers areas identified by the state as lacking broadband.

“If the pole attachment fee is the barrier, we just took that barrier away,” said Dennis Chastain, president and CEO of Georgia Electric Membership Corp., the statewide association based in Tucker.

As part of the ruling, the commission set a cost-based annual co-op pole attachment rate of $27.71 for existing equipment in areas now served with broadband. Companies qualifying for the new $1 rate will revert to the cost-based fee after six years of delivering broadband service.

Chastain said he believes the PSC ruling “absolutely could spur rural broadband service if cable providers are serious about wanting to expand in rural areas.”

“Our co-ops just want their members to have access to broadband,” he said. “They will forgo six years of cost recovery on a pole if that means their members get broadband service.”

Georgia EMC, the statewide trade association for Georgia’s 41 electric distribution co-ops and generation and transmission companies, negotiated the so-called “One Buck Deal” to end years of complaints by internet service providers about co-op pole attachment rates after the state legislature tasked the commission with resolving the issue by Jan. 1, 2021.

Chastain’s team worked with industry experts and used NRECA resources to develop the solution, which could be replicated by other co-op statewide associations facing similar battles.

“This is a big win for electric cooperative members and unserved communities in Georgia,” said Brian O’Hara, NRECA senior regulatory director. “The Georgia PSC balanced the need for incentivizing broadband deployment and ensuring that cooperatives can fully recover the cost of communication attachments on their poles. This decision could serve as an example for other states when pole attachments are reviewed.”

As part of the deal, Georgia co-ops must report the total attachments to their poles and the total revenue from these attachments to the PSC every two years. Telecom companies were ordered to report their total broadband customers and investment in expanding broadband.

Danny Nichols, Colquitt EMC’s general manager, said the One Buck Deal “will help EMCs partner with broadband providers in unserved areas and ensure that our members’ investments in the co-op infrastructure will stay here in our own service territories and not leave the state for more profitable projects in urban areas.” 

Cathy Cash is a staff writer at NRECA.

Electric cooperatives made a strong showing in the Federal Communications Commission’s largest reverse auction to fund rural broadband, winning bids expected to top $1.6 billion to serve over 900,000 locations in 31 states.

The FCC announced the winners of its Rural Digital Opportunity Fund on Dec. 7 and released initial details about how the first $9.2 billion in Phase I funding will be distributed over the next 10 years among the nearly 400 winning bidders.

Nearly $7 billion in unobligated Phase I funds will be added to $4.4 billion for a Phase II auction the FCC is expected to schedule once it has implemented more granular broadband data collection and mapping.

RDOF bidders pledge to provide broadband access to residents of census blocks determined by the FCC to be fully unserved in Phase I and partially served in Phase II.

Of the electric co-ops that participated in the Phase I auction, 180 competed as part of five consortiums that garnered a total of about $1.5 billion. Five individual electric co-ops won a total of $59.4 million.

Co-op Connections Consortium with 13 electric co-ops won bids in eight states; NRTC Phase I RDOF Consortium with 51 electric co-ops won bids in 14 states; RDOF USA Consortium or FiberRise with 21 electric co-ops won bids in five states; Prospero Broadband Consortium with  about nine electric co-op won bids in three states; and Rural Electric Cooperative Consortium with 95 co-ops won bids in 22 states. These groups must divide the winning bids among the participating co-ops by Dec. 22.

The individual electric co-op winners were:

• Lutsen, Minnesota-based Arrowhead Electric Cooperative with $18 million to serve nearly 5,000 locations.
• Bandera, Texas-based Bandera Electric Cooperative with nearly $1.7 million to serve 534 locations.
• Cassville, Missouri-based Barry Electric Co-op with $14,500 to serve 26 locations.
• Grants, New Mexico-based Continental Divide Electric Cooperative with $38 million to serve nearly 8,500 locations.
• Roseau, Minnesota-based Roseau Electric Cooperative Inc. with nearly $1.3 million to serve 266 locations.

All winning bidders must file a detailed long-form application with the FCC between Jan. 14 and Jan. 29, 2021. Applications must include deployment plans specific to their RDOF awards and areas to be served. Over the 10-year disbursement of funds, the RDOF has set service milestones that include reaching every location assigned by the end of year six.

To enter the auction, bidders were required to select a speed tier established by the FCC. The allowable minimum speeds were 25 megabits per second for downloads and 3 Mbps for uploads.

The RDOF used a weighted tier system and other rules advocated by NRECA to ensure co-ops with superior service could compete against other types of internet providers with slower or spotty service in rural areas. Many electric co-ops deploying broadband use fiber-optic cable that provides the fastest, most reliable connection.

NRECA was also successful in recommending that the FCC auction small census blocks to ensure bid areas were near co-ops’ service territories and infrastructure to reduce build-out costs or delays.

The FCC lauded the auction as a way to deploy high-speed internet access to more than 5 million homes and businesses currently without service. In announcing the initial results, the commission said that “99.7% of these locations will be receiving broadband with speeds of at least 100/20 Mbps and more than 85% will get gigabit-speed service.” 

NRECA continues to analyze the results of this huge auction and its impact on rural co-op members lacking access to broadband.

“There is cause to be excited about parts of the RDOF Phase I auction results, but in order for the auction to be considered a success it needs to deliver on its promises,” said Kelly Wismer, legislative affairs director at NRECA.

“For every American to have access to robust, affordable broadband, it’s critical that the FCC continue to do in-depth due diligence of all RDOF winners in a transparent way to ensure they can technically and operationally do what they have promised. Over 5 million Americans in rural communities depend on the FCC getting this right.”

Cathy Cash is a staff writer at NRECA.

Last updated: Nov. 7, 11:30 a.m.

Joe Biden’s victory in the presidential race sets the stage for the former vice president to implement sweeping environmental policy changes. But his planned agenda will likely be muted by what now looks to be a divided Congress, with a Republican-led Senate and a diminished Democratic majority in the House.

In the near term, Biden is expected to push for a broad economic stimulus plan shortly after he takes office in January, presenting opportunities for NRECA to secure more pandemic relief for co-ops and their consumer-members.

“Vice President Biden has been clear that the two most important things facing our country are health care, especially related to the pandemic, and the economy. We agree,” said NRECA CEO Jim Matheson. “We are focused on supporting our members in the development of the next COVID relief package, including RUS loan refinancing, shortfalls caused by nonpayment of bills and protecting those consumer-members who are least able to pay their bills.”

Senate Majority Leader Mitch McConnell, R-Ky., said he wants to move another economic stimulus package before the end of the year.

Matheson said NRECA will work with bipartisan champions in Congress to pass the Flexible Financing for Rural America Act, which could save co-ops more than $10 billion by allowing them to reprice loans from the Rural Utilities Service at current low interest rates. The bill would waive any prepayment penalties normally associated with refinancing.

“Our priorities remain the same: to protect the interests of America’s electric cooperatives and to ensure government doesn’t get in the way of affordable, reliable power,” he said.

Over the longer term, electric co-ops will work to shape a $2 trillion plan Biden campaigned on that would eliminate carbon dioxide emissions from the electric power sector by 2035 and replace fossil fuels with zero-emission sources such as wind, solar, nuclear, hydropower and biomass. The divided Congress could affect how aggressively the incoming administration pursues these goals.

 “The vice president has put forward principles, but the details really matter,” said Louis Finkel, NRECA’s senior vice president for government affairs. “And as those details emerge, we will evaluate them based on the tenets of affordability, reliability and resiliency.”

Biden has also touted the need to pass a comprehensive infrastructure spending bill to rebuild the nation’s aging highways and bridges and invest in public transportation and electric vehicle charging stations. He is pushing for rural broadband deployment as part of that plan.

 “Our long-standing approach—to work in a bipartisan fashion with lawmakers—is going to continue to be important,” Matheson said. “Regardless of who is in control of the Congress, we feel good about the champions that we’ve worked with on both sides of the aisle. No piece of legislation we’ve ever championed has been partisan, and we will continue to work with Republicans and Democrats alike.”

Erin Kelly is a staff writer at NRECA.

“The future.”

That’s what a $14 million grant from the U.S. Department of Agriculture’s ReConnect rural broadband program means to Jo-Carroll Energy members, said President and CEO Mike Casper.

“The key takeaway is that our members in this beautiful slice of America will be more successful, healthy and educated,” he said Oct. 19, when USDA announced this year’s largest ReConnect award would go to the Elizabeth, Illinois-based cooperative. 

More than 7,600 people, 378 farms, 150 businesses, eight public schools, three fire stations, two post offices and two museums will gain access to high-speed internet thanks to the grant, which Jo-Carroll will use to expand the buildout of its fiber-to-the-premises network.

“America and economic development depend on a robust infrastructure, fiber being an essential component,” Casper said.

Jo-Carroll Electric is among about a dozen electric co-ops or related entities that received a total of nearly $64 million from the latest round of the ReConnect program, which is in its second year of giving grants, loans and 50/50 awards to rural broadband developers.

MiEnergy Cooperative, with headquarters in Rushford, Minnesota, and Cresco, Iowa, was another big winner with a $9.7 million ReConnect 50/50 grant and loan to broadband provider Harmony Telephone Co., which the co-op partially owns. The money will help provide high-speed internet access for 1,579 people, 96 farms and 31 businesses in northeastern Iowa.

“The pandemic has shown us that access to high-speed broadband in rural areas is just as critical and essential as access to electricity was in the 1930s,” said MiEnergy President and CEO Brian Krambeer. “This award will create life-changing opportunities for our rural members, allowing them to have the speeds necessary for working and learning from home.”

Central Alabama Electric Cooperative, based in Prattville, won an $8.6 million ReConnect grant to deploy broadband fiber to 13,853 people, 149 farms and 77 businesses across seven counties.

Decatur, Tennessee-based Volunteer Energy Cooperative will use a $3.7 million ReConnect grant to deploy a fiber-to-the-premises network to connect 2,687 people, 79 farms and nine businesses.

Ntera LLC, the broadband subsidiary formed by Cornell, Wisconsin-based Chippewa Valley Electric Cooperative and local internet provider Citizens Connected, will build a fiber network to serve 2,044 people, 33 farms and 33 businesses with a $3 million ReConnect grant.

Brownstown, Indiana-based Jackson County Rural Electric Membership Corp. will connect 4,881 people with a $1.9 million loan and a $1.9 million grant from the program.

Grants, New Mexico-based Continental Divide Electric Cooperative will use a $1.1 million grant to deliver broadband fiber to 85 people, four farms and a business, and Linden, Indiana-based Tipmont REMC’s  $1 million grant will go toward fiber-to-the-premises for 279 people, 10 businesses and 16 farms.

“The need for rural broadband has never been more apparent than it is now as our nation manages the coronavirus national emergency,” Agriculture Secretary Sonny Perdue said at an Oct. 21 award announcement.

“I am so proud of our rural communities, who have been working day in and day out, just like they always do, producing the food and fiber America depends on. We need them more than ever during these trying times and expanding access to this critical infrastructure will help ensure rural America prospers for years to come.”

USDA received 172 applications by its April deadline for ReConnect funds and has awarded more than $414 million so far this year.

Cathy Cash is a staff writer at NRECA.

About 190 electric cooperatives have qualified to compete for up to $16 billion in the Federal Communications Commission’s largest reverse auction to fund broadband internet for unserved areas across the country.

The FCC on Oct. 13 released its list of 386 qualifying bidders, primarily telephone co-ops and other types of internet service providers, for the first phase of the $20.4 billion Rural Digital Opportunity Fund. The majority of electric co-ops are bidding through a consortium.

Winning bidders will receive funds over a 10-year period to deploy broadband to unserved census blocks identified by the FCC.

Phase I bidding begins on Oct. 29 and is expected to ultimately connect up to 6 million rural homes and businesses.

The auction requires providers to deliver minimum speeds of 25 megabits per second for downloads and 3 Mbps for uploads. It will use a weighted tier system and rules advocated by NRECA to ensure electric co-ops with superior service are not sidelined by cheaper internet providers with slower or spotty service in rural areas.

The FCC also recently released the final eligible locations and funding levels by census block group bidding area. Successful bidders must meet service milestones set by the commission.

“The FCC has now provided RDOF bidders clarity on the number of locations available and the amount of funding available in a given census block group bidding area,” said Brian O’Hara, NRECA senior regulatory director for broadband and telecom.

“Information on the census blocks up for bid could have a major impact on the ability of a co-op to participate. Each co-op looking to participate in the auction will have to crunch the numbers and adjust their bidding strategy accordingly. A census block project allotted less-than-expected RDOF money may no longer pencil out.” 

The FCC is prohibiting RDOF money from going to areas receiving other government broadband grants, such as the U.S. Department of Agriculture’s Rural Utilities Service ReConnect awards.

Every home and business within the auctioned census block group must be served by the winning bidder, and no additional money will be awarded if more locations appear than were initially identified, according to the commission rules.

The Phase II auction for the remaining $4.4 billion, plus any unused Phase I funds, is expected to take place after the commission gathers detailed census data and mapping information to determine areas that remain without broadband.

Qualifying bidders for the first round of RDOF auction included at least 10 individual electric co-ops and four consortiums representing 180 electric co-ops.

The individual co-ops are Lutsen, Minnesota-based Arrowhead Electric Cooperative; Bandera, Texas-based Bandera Electric Cooperative; Cassville, Missouri-based Barry Electric Co-op; Young Harris, Georgia-based Blue Ridge Mountain EMC; Rio Grande, Ohio-based Buckeye Rural Electric Cooperative; Dafter, Michigan-based Cloverland Electric Cooperative; San Angelo, Texas-based Concho Valley Electric Cooperative;  Grants, New Mexico-based Continental Divide Electric Cooperative; Bullhead City, Arizona-based Mohave Electric Cooperative; and Roseau-Minnesota-based Roseau Electric Cooperative.

Cathy Cash is a staff writer at NRECA.

An electric cooperative in north-central Pennsylvania that has found a way to get older members online with help from tech-savvy teen volunteers is being recognized by the Federal Communications Commission for its contribution to bridging the digital divide.

The FCC will formally recognize Tri-Co Connections LLC, the broadband subsidiary of Mansfield-based Tri-County REC, as a Digital Opportunity Equity Recognition honoree in a virtual reception in October.

Tri-Co Connections is the only electric co-op among the FCC’s inaugural recipient class of 22 individuals, organizations and corporations.

FCC Commissioner Geoffrey Starks formed the DOER program, spurred in part by the COVID-19 pandemic, to “acknowledge the tireless efforts of Americans working to close the digital divide in communities without access to affordable, reliable broadband.”

“From rural areas to urban corridors, students to seniors, to say this year’s DOER honorees are a stellar group is an understatement,” Starks said in announcing the honorees Sept. 14.

Tri-Co Connections is being hailed for its Senior2Senior program, which delivers free eight-week computer literacy courses to older members, some of whom have never owned a computer. Local high schoolers, with staff from social agencies on hand, provide instruction at four area senior centers.

About 40 older members went through the program in late 2019 before it was interrupted by the pandemic earlier this year. One class recently resumed with social distancing.

“The FCC has made great strides in helping bridge the digital divide in rural areas, and to be recognized and receive this award from them is a real honor,” said Craig Eccher, president and CEO of Tri-Co and Tri-Co Connections.

“With our sprawling rural service territory, harsh winters, and long commutes to services and retail centers, high-speed internet can provide seniors a means of staying connected from the comfort of their homes 24/7.

“And with the nation in the grip of a pandemic, reliable online access has become even more critical to the elderly population in our rural areas.”

Bill Gerski, Tri-Co Connections senior vice president for business development and the lead creator of Seniors2Seniors, said the pandemic has amplified the need for older people to have internet access and learn computer skills for things like keeping in touch with family and friends, paying bills and accessing medical services.

“Seniors are the most vulnerable to COVID-19,” he said. “If they don’t have a computer to gain access to the outside world, it’s pretty lonely.”

Cathy Cash is a staff writer at NRECA.

As a new school year gets under way amid the ongoing COVID-19 pandemic, electric cooperatives across the country are implementing broadband internet solutions to keep students connected to virtual classrooms even in the most remote and impoverished communities.

Orcas Power & Light Cooperative serves about 12,000 members spread across dozens of small villages that dot 20 islands in Washington state’s San Juan County. Only four of those islands have public ferry access. When the coronavirus forced school closures last spring, OPALCO and its internet subsidiary, Rock Island Communications, learned from the superintendent that what students needed most was fast, reliable internet at home.

Rock Island staff managed to quickly deploy fixed wireless or hotspot solutions to deliver internet access specifically to students’ school-provided learning devices. Now, every schoolkid in OPALCO’s service territory, no matter their location or family income, can learn in a virtual classroom.

“Access Education was realized, designed and executed to 114 homes in just a little more than two weeks,” said Suzanne Olson, the co-op’s public relations administrator.

Rock Island provided free connections for “a seamless solution for kids and the schools” and plans to continue the Access Education program through the 2020-21 school year, she said. 

School officials hailed the co-op internet provider as “an invaluable educational partner.”

“Now all district students and staff are connected in virtual classrooms with online resources to continue their teaching and learning,” San Juan School District Superintendent Kari McVeigh wrote to Rock Island.

Kit Carson Electric Cooperative shares a similar goal of connecting every student in its high-poverty service areas to broadband internet. Since the start of the pandemic, the Taos, New Mexico-based co-op has provided free broadband connections to more than 250 students in low-income households and offered them discounted monthly rates.

Connecting the remaining 1,300 students who lack broadband internet will cost about $2.6 million, said CEO Luis Reyes.

The co-op set up 23 permanent public hotspots for free Wi-Fi across the rural communities and tribal lands it serves. But Reyes said distance learning for many students in the five school districts and two universities the co-op serves will require more.

“Rural students without a broadband connection will not have the same opportunities or benefits as broadband-connected students,” he said.

Reyes recently testified on this issue before the New Mexico legislature, citing National Center for Education Statistics numbers that show “the digital divide disproportionately impacts students of color, those who are economically disadvantaged, and students in more rural and/or remote areas.”

“The nationwide disruption of K-12 and higher education caused by the COVID-19 pandemic and ensuing school building closures has led to a deepening of the digital divide,” Reyes told state lawmakers.

Hamilton, Alabama-based Tombigbee EC’s freedomFIBER is installing broadband for up to 2,000 low-income member households that received vouchers from the Alabama Broadband Connectivity for Students program. Republican Gov. Kay Ivey marked $100 million in federal CARES Act funds for the public-private partnership to provide internet access for qualifying K-12 students this fall. The vouchers will cover broadband internet access costs through the end of December.

“We started our broadband project in 2017 to help our community, but we had to move fast to respond to new state and federal funding opportunities,” said Brenda Overton, CFO at the 9,000-member co-op. “We got all our bases covered. But this is what we live for—it is the cooperative spirit in action, because broadband has become an even more profound issue in the last six months with the pandemic.”

Like Kit Carson, many co-ops across the country installed free Wi-Fi hotspots in convenient locations for students and parents at the pandemic’s start and continue to run them as the new school year gets under way.

Tipmont REMC, headquartered in Linden, Indiana, has built a dozen hotspots across its service territory through its broadband subsidiary, Wintek. Burgaw, North Carolina-based Four County EMC set up access points at nine locations, including six schools. Young Harris, Georgia-based Blue Ridge Mountain EMC also offers connectivity in nine parking lots at churches, schools, a recreation center and store across its rugged territory.

Barry Electric Cooperative’s free Wi-Fi at three high school parking lots comes with parental control software “to restrict the use of the hotspot to keep kids safe,” said Laura Holycross, member services coordinator for the Cassville, Missouri-based co-op.

The co-op’s broadband subsidiary, goBEC Fiber Network, is also working with low-income referrals from a local community agency that received CARES Act funds for broadband. Holycross said the co-op will then provide internet service at a discounted rate to help make the funds go further.

Some co-ops are helping turn school buses idled by the pandemic into smart buses with mobile Wi-Fi hotspots. 

Southern Rivers Energy, based in Barnesville, Georgia, awarded four school systems $15,690 in Operation Round Up grants to equip up to 16 buses with Wi-Fi. Multiple internet providers can use the equipment to provide hotspots.

“As a parent working from home and home-schooling two children with poor internet service, I felt like this could be a huge benefit for our communities,” said Erin Cook, SRE’s director of marketing and member services.

Some co-ops have found other ways to fill their communities’ education needs amid the ongoing pandemic.

Flint Energies is bridging the digital divide by donating 200 Chromebooks, worth $90,000, to six rural school districts in its 17-county territory in Georgia. The Reynolds-based co-op and its charitable foundation held an emergency meeting in August and agreed this donation would be a quick, effective way to help rural families.  

“We saw our rural students’ great need for technology and did what we could in short order to improve their access to online learning,” said Marian McLemore, vice president of cooperative communications. “Our Chromebook donation would not be possible without those Flint members who participate in our Operation Round Up® program. The small change they donate each month made this gift and so much more possible.”

In the western mountains of Virginia, BARC Electric Cooperative gave $6,000 to each of the three public school systems it serves. The Millboro-based co-op applied matching funds from CoBank’s Sharing Success program to make the $18,000 donation possible.

“We are fortunate to have access to the CoBank program and even more fortunate to be in a financial position during this pandemic to be able to make these donations,” said Mike Keyser, CEO of BARC, whose broadband subsidiary BARC Connects also serves the schools.

“As a cooperative that both serves the community and is composed of people raised in the community, there is no more valuable investment this organization can make than in supporting our schools.”

Consolidated Cooperative, based in Mount Gilead, Ohio, was installing free Wi-Fi hotspots in the parking lots of the 10 school districts it serves with broadband internet when it got a different request: Could the co-op livestream a drive-up high school graduation?

The May ceremony for Centerburg High School’s class of 2020 would take place in its parking lot. Upholding state policy to control the spread of COVID-19, the graduates got out of their cars as their names were called and walked across a temporary stage to receive their diplomas before returning to their vehicles. Attendance was limited to one vehicle per graduate.

Pomp and circumstance were nowhere on Consolidated’s radar. Still, the co-op’s fiber installation crew flew into action when they got the call and ran temporary fiber out to the parking area, allowing friends and relatives to witness the ceremony safely from a distance.

“This event deeply touched all of us at Consolidated,” said Jarred Davis, network supervisor. “The ability to bring at least a little normalcy to our community meant so much to our team.” 

He said the pandemic has shown how co-ops can serve their communities in many ways, while also underscoring the need for broadband access throughout rural America.

Although Consolidated’s fiber team is ready to assist with future livestream graduations, Davis said he hopes things are different by the end of this school year. “We’re optimistic that the Class of 2021 will have a more traditional experience, but if that’s not possible, you can bet Consolidated will be running fiber through the parking lot again if our community needs us.”

Cathy Cash is a staff writer at NRECA.

Indiana is awarding $36 million in state broadband grants to eight electric cooperatives—including $16 million to Tipmont REMC—to connect unserved rural communities and businesses.

The Next Level Connections Broadband Grant Program awards also include $12.5 million to Osgood-based Southeastern Indiana REMC and SEI Communications, $2.75 million to Martinsville-based South Central Indiana REMC, and $2.19 million to Orleans-based Orange County REMC.

Danville-based Hendricks Power Cooperative and Endeavor Communications received $851,085; Brownstown-based Jackson County REMC got nearly $500,000; New Castle-based Henry County REMC and Central Indiana Communications received $361,711; and Franklin-based JCREMC got $68,193 for broadband projects.

Southeastern Indiana REMC, with SEI, will apply the grants to three major broadband projects to connect more than 3,600 households, businesses and institutions across six counties.

Linden-based Tipmont and its broadband division, Wintek, will use the grants for 20 projects to build high-speed internet service for over 2,200 homes, businesses and institutions in five counties. The co-op said that shared infrastructure from these projects will help serve thousands more in the future.

“The COVID-19 pandemic has underscored how important access to quality broadband is for modern life,” said John Gasstrom, CEO of Indiana Electric Cooperatives, based in Indianapolis. “We are so thankful to the state of Indiana for the support as our cooperatives continue to find ways to close the rural digital divide.”

Indiana Lt. Gov. Suzanne Crouch, chosen by Gov. Eric Holcomb to oversee the Next Level Connections program with the Indiana Office of Community and Rural Affairs, praised co-ops’ broadband endeavors.

“We are proud of our partnership with organizations like Indiana Electric Cooperatives and their members,” she said.

Internet service providers including electric co-ops could seek up to $5 million in grants for each broadband project if they provided a minimum of 20% in matching funds under the Next Level Connections program. In total, $51 million in grants for 50 broadband projects were awarded during this second round of the program. Southern Indiana Power, Tipmont and Jackson County REMC were the only three co-ops to win grants, totaling $8 million, during the program’s first round in 2019.

“Tipmont is committed to bringing fiber internet to our entire electric service area,” said Ron Holcomb, the co-op’s president and CEO. “These funds will help bring service where it is desperately needed.”

Cathy Cash is a staff writer at NRECA.

About $40 million in Tennessee COVID-19 emergency grants awarded to electric cooperatives will speed “life-changing” access to broadband internet for thousands in need this year.

Gov. Bill Lee tapped the Tennessee Electric Cooperative Association to help find a way to support prompt construction of high-speed internet service to those most in need using the state’s share of a federal coronavirus relief package passed by Congress in March.

The Tennessee Emergency Broadband Fund was created in early August, and on Aug. 21 it disbursed $61 million to connect unserved or underserved residents. These projects must be completed by Dec. 15 to receive 80% reimbursement on build-out costs.

Ranging from $264,000 for Tri-County Electric Membership Corp. in Lafayette to $7 million for Volunteer Energy Cooperative in Decatur, 13 electric co-ops won 70% of the grants and will finish nearly 30 shovel-ready projects, TECA said.

“When the state asked, ‘Who can build rural broadband quickly?’ they turned to electric co-ops,” said Mike Knotts, vice president of government affairs for the Nashville-based statewide association.

“Tennessee’s co-ops are demonstrating their ability to expand internet access quickly and leverage grant funds for maximum impact,” Knotts said. “These emergency grants will accelerate the expansion of broadband to rural and remote areas and will help 17,000 Tennesseans get broadband by the end of the year when they otherwise would have had to wait for months or years.”

Rogersville-based Holston Electric Cooperative serves financially struggling communities in northeast Tennessee and, like many co-ops, has witnessed “the absolute necessity of robust broadband” to address public health mandates and the closing of schools, offices and even medical facilities, said CEO Jimmy Sandlin.

Its broadband subsidiary, HolstonConnect, will use a $5.6 million emergency broadband grant to boost its buildout in three communities and connect about 2,350 residential and 50 commercial customers by the deadline, he said.

The high bandwidth—with upload and download speeds of 300 megabits per second and buffering delays of less than 5 milliseconds—essentially allows real-time interactions with teachers and classmates or medical personnel, said Sandlin.

“In a lot of cases, serving these rural communities, broadband is literally life-changing,” said Sandlin. “Now, in their home they will be able to access just about anything—education opportunities, job and career opportunities, and have the ability to visit a doctor remotely.

“I’ve often wondered what it was like for those people to get electricity for the first time in the 1920s and 1930s. As we hook up broadband today, we get a taste of that.”

Cathy Cash is a staff writer at NRECA.

A $16 million grant from the U.S. Department of Agriculture will boost efforts by a Mississippi electric cooperative to deliver fiber-optic broadband internet service to more than 2,000 homes, businesses and farms.

Batesville-based Tallahatchie Valley Electric Power Association is the first electric co-op to win funds from the ReConnect Program since the USDA received $100 million from the Coronavirus Aid, Relief and Economic Security Act passed by Congress in March.

TVIfiber, the co-op’s internet subsidiary, has built nearly 600 miles of its planned $60 million broadband network and has over 350 subscribers. The ReConnect grant will play a big role in getting this vital project completed in four years, co-op leaders said.

“This is a historic day for our cooperative and our member-owners, but it is also a great day for the state of Mississippi, and we are all very thankful for this opportunity,” said Brad Robison, CEO of TVEPA and TVIfiber.

“A TVEPA member at the end of a gravel road will soon have access to the same quality internet service of those in major metropolitan cities.”

Robison said the ReConnect grant will be combined with TVEPA’s $44 million investment to deploy fiber throughout the co-op’s 27,500-member service area. It will help connect 2,082 people, 331 farms, 32 businesses, a post office and six fire stations in six Northwest Mississippi counties, where the density averages six customers per mile.

“The grant will make a tremendous impact on installing accessible, reliable high-speed internet services to homes, farms and businesses in the unserved and underserved rural communities located in their service area,” said Michael Callahan, executive vice president and CEO of Electric Cooperatives of Mississippi in Ridgeland.

TVEPA also was among 15 co-ops to receive a grant from the Mississippi Electric Cooperatives Broadband COVID-19 Act last week. The state legislature created the $65 million program for co-ops earlier this year through funds from the CARES Act. Co-ops must match their awards and use the money to deliver high-speed internet access to unserved and underserved areas in Mississippi. TVEPA’s grant was $4 million. Other states are also looking at utilizing CARES Act funding to expand broadband access.

 “We have been truly blessed to receive such overwhelming support for this project, and I think that support underscores just how critical broadband is for the people in our part of Mississippi,” said Robison.

TVEPA launched its broadband buildout last year shortly after the state of Mississippi lifted legal hurdles for electric co-ops to provide retail internet access. Despite the “massive undertaking,” Robison said, “we are committed to providing our members with this life-changing, state-of-the-art technology.”

Robison and Callahan thanked Mississippi members of Congress, including Republican Sens. Roger Wicker and Cindy Hyde-Smith and Rep. Trent Kelly. “A project of this magnitude must have partners,” said Callahan.

Agriculture Secretary Sonny Perdue lauded the co-op’s effort to deliver internet access when and where it is most needed.

“The pandemic challenges have shown the need for connectivity even more as our children have been in remote learning,” Perdue said. “It all depends on the connectivity, but the fact is that 20 million Americans don’t have that privilege. … Thankfully, parts of Mississippi will have access to this thanks to the efforts of Tallahatchie Valley Electric Power Association and their fiber. We are excited that the ReConnect program is coming to Mississippi.”

The USDA created ReConnect in 2018 to build rural broadband with funds appropriated by Congress.

Cathy Cash is a staff writer at NRECA.

For Monet Winters, the COVID-19 pandemic created a lot of hurdles for her to complete eighth grade at Santa Fe Indian School.

With school buildings closed in March and no reliable internet service at her home on the Taos Pueblo in New Mexico, Monet waited for large paper packets of schoolwork from her teachers to arrive by mail.

The 13-year-old tried to log on with her mother’s phone or Wi-Fi at her grandmother’s house but was hampered by spotty service, distractions and data limits.

“It was pretty challenging,” said Monet. “I wasn’t able to do my schoolwork online. I was struggling.”

Enter Kit Carson Electric Cooperative.

Working with the five school districts in its service territory, the Taos-based co-op’s broadband division identified students in need and provided free internet connections to more than 150 homes, including 14 on tribal land.

Now, Monet says she enjoys “being able to reach my classes online and doing Zoom with my teachers. I’m able to reach sites faster and able to do my work without having to constantly look for places to do it. I can do it right here in my home.”

The families pay $24.95 a month for basic broadband service, but the connection and wireless router were free.

“For them, it was a shot in the arm, getting them connected, having their kids not left out,” said Luis Reyes Jr., Kit Carson’s CEO. “We treat all members the same. If a tribal student is low-income, we figured out a way to get them a drop.”

The co-op hired contractors to complete an aggressive schedule for connecting homes with rising seniors or multiple students. A CoBank line of credit helped finance deployment.

Reyes said reaching some tribal homes was particularly challenging. Running fiber on Native lands requires installing cable underground and working around rough terrain to reach remote locations. It also means working with tribal leaders and hiring contractors who know local customs.

“We had these positive relationships in place,” said Reyes. “These things can take months or years. We’re very proud of what we were able to accomplish.”

Lillian Torrez, superintendent of Taos Municipal Schools, lauded Kit Carson for taking on the challenge of connecting students in need.

“There were a few difficulties, but they didn’t give up,” Torrez said. “Some of the students live in areas where it was difficult to connect, and they had to dig trenches. Kit Carson just did whatever they needed to do.”

Of the families who received the free in-home connections, Reyes estimates about 75% will keep the service long after their children finish school.

“There is a risk in doing this, but I think it is worth taking,” said Reyes.

Kit Carson also announced it is making permanent 22 free public Wi-Fi hotspots it set up across its territory in response to the pandemic, including three on the Taos Pueblo and two on the Picuris Pueblo.

“We have them at city parks, community centers, low-income housing, basically everywhere. We did work with school districts, municipalities and tribes to determine where the best spots were,” said Reyes.

Reyes said Kit Carson has taken a hit in electricity sales since the pandemic shut down the ski slopes and schools. He sees broadband as a new opportunity to serve.

“This COVID is really going to change the way we do business and make broadband one of the elements of doing business,” he said. “It has made us think more about how resilient our rural communities are going to have to be.”

Cathy Cash is a staff writer at NRECA.

Bill Gerski teared up a little when he received the email greetings.

They’d been sent by local senior citizens, many of whom had just learned how to turn on a computer for the first time, thanks to an innovative program created by the broadband subsidiary of Tri-County Rural Electric Cooperative in Mansfield, Pennsylvania.

“I’ve never seen so many smiles,” said Gerski, the senior vice president of business development at Tri-Co Connections. “Now they are emailing their grandchildren. That’s what it’s all about.”

Dubbed Senior2Senior, the program was launched by Tri-Co last year to form classes where senior citizens are taught internet basics by tech-savvy high school seniors.

Tri-Co partnered with the Potter County Education Council, which coordinated the teenage volunteers, a local career and technical center and senior centers, where the classes take place. Local banks donated funds for computers and printers to get the classes going and to help seniors learn how to do their banking online.

With Tri-Co and Senior2Senior, “we have the technology, the broadband connection, and we have the opportunity to teach the skills necessary to everyone,” said Michele Moore, executive director of the Potter County Education Council.

About 40 people completed the eight-week course last fall, and another 20 were halfway through when the COVID-19 pandemic paused their progress.

Gerski says the ongoing health crisis, with its stay-at-home restrictions, has underscored how vital internet know-how is. Skilled seniors with online access can carry out necessary tasks like banking, shopping, telemedicine and visiting virtually with relatives, neighbors and friends. Some could even come out of retirement and work from home.

“There are seniors who would like to go to work and add income to their Social Security, but they have no computer skills,” said Gerski.

Tri-Co, which has received grants and loans to build broadband, connected its first fiber-to-the-home subscriber on April 7, becoming the only electric co-op subsidiary in the state to do so. Tri-Co has since hooked up 60 more homes. It plans to run fiber to all 22 of its substations and serve all its members in northcentral Pennsylvania over the next five to six years.

Tri-Co’s demographics are challenging and not unique among rural co-ops. The electric co-op serves 5.8 homes per mile, about half the national average. About 42% of its membership are seasonal. Another 40% are seniors—most of whom lack computer skills.

Gerski believes Senior2Senior can help solve the density conundrum required for affordable broadband by equipping retirees with the tools to take advantage of fast, reliable internet.

He said he welcomes calls from other electric co-ops that want to replicate Senior2Senior as they develop broadband in service territories where a large number of retirees reside.

“If we teach the senior members to use a computer, they will be broadband subscribers, and we will have happy members,” he said. “Everybody wins if our seniors know how to use a computer and have high-speed internet access.”

And that includes one 96-year-old student who described how people questioned why she was bothering to learn how to use a computer and get on the internet, said Moore.

Her answer?

“Well, I don’t want to be left behind. I want to be part of this.”

To learn more about Senior2Senior, please contact Bill Gerski at billgerski@tricoconnections.com

Cathy Cash is a staff writer at NRECA.

Eric Cunningham was worried about his students.

As superintendent of the Halifax County School District in North Carolina, he knew that his 2,300 kids already faced hunger and other challenges of living in a low-income rural community. By early April, schools were closed in response to the COVID-19 pandemic and, without widespread internet access in the county, children were bound to fall behind in their learning.

That’s when the trucks from Aulander-based Roanoke Electric Cooperative arrived, ready to install a free, public Wi-Fi hotspot in school parking lots.

“It was a blessing,” said Cunningham. “We’re 100% free lunch, which means a lot of our students don’t have access to the internet for home use. We have to look at other means to support them. What I’ve learned from this pandemic is that the internet is needed like electricity, especially when it comes to learning.”

The quick hotspot buildout by Roanoke Electric is part of a trend among co-op broadband providers eager to keep their communities connected during the pandemic. Hotspot locations have included churches, parks, restaurants and co-op offices across rural America. Users can connect to work, do schoolwork, watch movies or shop, all from the safety of their vehicles.

In Fayetteville, Arkansas, OzarksGo, a subsidiary of Ozarks Electric Cooperative, partnered with several local school districts to create free Wi-Fi hotspots, including on school buses. Initially, a school district equipped the buses with Wi-Fi technology for cellular internet connections, then parked them in areas convenient to families. When this proved too expensive and slow for multiple users, the co-op delivered a superior solution through its fiber broadband network.

The hotspots are now connected to OzarksGo’s fiber optic network, offering high-performance internet connections.

“The addition of OzarksGo-provided fiber optic lines has been very beneficial for our students during this unprecedented COVID-19 pandemic,” said Jeremy Mangrum, superintendent of the Elkins School District. “The increased speed and capacity that we can now provide at these locations has allowed our students to complete their work more quickly and efficiently.”

Steve Bandy, general manager of OzarksGo, said he found the district’s effort inspiring.

“We know how important broadband access is, especially now, and we were happy to help with this innovative solution,” he said.

Back in North Carolina, Cunningham said co-op hotspots are helping level the playing field for rural students during the pandemic by letting them work digitally rather than waiting for paper packets to arrive in the mail. Students without computers are using their cellphones to keep up with classwork and meet with their teachers.

“An entire new world is opening up for our children because of this,” Cunningham said.

Cathy Cash is a staff writer at NRECA.

Read More on the electric co-op response to the COVID-19 Pandemic

See NRECA’s COVID-19 hub on cooperative.com for key resources for co-ops, including guidance on business continuity planning and communication, as well as event schedule changes.

While many Americans are working remotely to curb the spread of coronavirus, cooperative line crews and broadband technicians are essential workers, keeping members connected to power and internet.

We talk to an expert at Great River Energy, a generation and transmission co-op in Minnesota, about how his co-op is maintaining the electric grid while keeping crews safe and cybersecurity tight. Then we hear from leaders at SEMO Electric Cooperative in Missouri and Jackson Electric Cooperative in Texas about safety measures for staff and meeting the challenge of growing demand for co-op broadband.

You can also listen and subscribe to Along Those Lines on your preferred podcast service:
Apple Podcasts | Google Podcasts | Stitcher | Spotify | YouTube

Related Content:

Read More on the electric co-op response to the COVID-19 Pandemic

Find out more about NRECA’s podcast. Questions or suggestions? Email us at AlongThoseLines@nreca.coop.

BARC Electric Cooperative set out to upgrade its substation and down-line communications tools to broadband fiber internet in order to improve the co-op’s electric service, but it also aimed to connect its residential and commercial consumer-members to all that high-speed internet has to offer.

Since launching BARC Connects a few years ago, the Millboro, Virginia-based co-op has connected residents, schools and local businesses to opportunities they’d never had access to before.

Students at Mountain View Elementary School can now study math, literature and social studies without waiting for long dial-up connections, a historic mill built in the 1750s can attract visitors and sell its products online, and a local family dentist can serve his patients with efficient and affordable care, while giving back to his community.

Watch the video above to learn more.

For more on rural broadband, check out NRECA’s podcast:

As a third-generation owner-operator of his family’s 1,200-acre farm in Indiana, Steve Vail knows a thing or two about crop and livestock production.

As a director of an electric cooperative with a broadband subsidiary, he knows the transformative impact modern high-speed communication technology can have on a community.

Bringing these two critical perspectives together is why Vail is excited about his recent appointment, along with three other co-op leaders, to three Federal Communications Commission working groups on precision agriculture.

“I strongly believe that the viability of many family farms across the country may very well lie with availability of and access to technology that can only be facilitated through broadband,” said Vail, vice chairman of the board of directors of NineStar Connect in Greenfield, Indiana.

Precision agriculture involves computerized, connected technologies that bring greater efficiency to farm tasks like seeding, fertilizing, applying herbicide and watering. It can result in higher production and less waste.

Vail is a member of the FCC’s Precision Agriculture Connectivity Task Force, which was created by the 2018 Farm Bill to address the need for broadband access across farms and ranches. He will also serve on the task force’s working group on Accelerating Broadband Deployment on Unserved Agriculture Lands.

“For precision agriculture to happen in rural areas, we have to have that broadband infrastructure,” Vail said. “The task force will help the FCC understand what policies and regulations they can put in place to facilitate that.”

Mark Suggs, executive vice president and general manager of Pitt & Greene EMC, said the combination of smart farming equipment and internet access will enable U.S. farms to “compete in today’s economically depressed world.”

“Without reliable internet, the U.S. agriculture sector will continue to lag in these markets,” he said.

Suggs, a farmer and manager of the Farmville, North Carolina-based co-op for 37 years, will represent NRECA on the FCC group’s Mapping and Analyzing Connectivity on Agricultural Lands Working Group. He says identifying and measuring gaps in the availability of reliable internet access is the first key step.

“We then have to recommend measures to accomplish the goal of making broadband service available to all rural communities in America,” he said. “We have an opportunity to further lead the world in the agriculture field as well as in beneficial electrification. We cannot lose this battle.”

The FCC, in consultation with the U.S. Department of Agriculture, also appointed Midwest Energy and Communications CEO Bob Hance to the Encouraging Adoption of Precision Agriculture and Availability of High-Quality Jobs on Connected Farms Working Group and Valerie Connelly of Choptank Electric Cooperative to the Examining Current and Future Connectivity Demand for Precision Agriculture Working Group.

Connelly said she looks forward to providing perspectives from a rural cooperative whose farmer members must meet state and federal Chesapeake Bay cleanup goals yet lack broadband access to adopt the best technologies. She is vice president of government affairs and public relations at the Denton, Maryland-based co-op.

Hance said he hopes their work for the commission “results in broader and widespread adoption of farm technologies that fundamentally improve the outcomes for rural farmers and ranchers and makes it possible to continue to increase yields, improve efficiencies and meet the ever-increasing demand for production.”

“In reality, all this can’t happen until real progress is made with extending true, robust and reliable internet to the rural parts of this country,” he said from his co-op based in Cassopolis, Michigan. 

FCC Chairman Ajit Pai said he is targeting $1 billion for precision agriculture from a proposed $9 billion 5G Fund to support “next generation wireless services.” “The FCC must play a constructive role in promoting these efforts and supporting investment in high-speed internet in ways that specifically help precision agriculture,” Pai said.

Cathy Cash is a staff writer at NRECA.

NRECA is asking Congress to provide federal aid to the nation’s 900-plus electric cooperatives, some of which may suffer from budget shortfalls as their consumer-members struggle to pay their electric bills during the COVID-19 pandemic.

Lawmakers are expected to consider another sweeping relief bill later this spring as a follow-up to the $2 trillion CARES Act they passed in March. That legislation contained several provisions sought by NRECA, including an additional $900 million for the Low-Income Home Energy Assistance Program, which helps some low-income and moderate-income consumers pay their utility bills. But not all struggling families qualify for that aid.

“Many states have mandated moratoriums on utility disconnections and some members of Congress have proposed a similar federal moratorium,” NRECA CEO Jim Matheson wrote in a letter to congressional leaders. “At the same time, electric bill nonpayment is increasing nationwide and electric load from commercial and industrial users has dramatically decreased.”

Matheson reminded lawmakers that co-ops are not-for-profit, have no shareholders and return excess revenue to their consumer-members. Co-ops returned $1.2 billion to their members in 2018 alone.

“Because of this structure and the desire to keep energy costs as low as possible, some electric co-ops have limited reserve margins to sustain high rates of nonpayment,” he wrote. “As a result of nonpayments and load falloff resulting from economic hardship, some not-for-profit electric cooperatives are facing significant operational shortfalls. Without federal assistance, co-ops may face severe financial distress.”

NRECA is also asking lawmakers to include federal loan, broadband and disaster relief provisions in the next bill, including measures to:

• Direct the U.S. Department of Agriculture’s Rural Utilities Service program to help co-ops save money immediately by taking advantage of historically low interest rates to reprice or refinance RUS debt without penalties for borrowers. Co-ops hold more than $40 billion in RUS electric program loans.
• Increase the amount of lending available under the RUS Guaranteed Underwriter Program. It provides guarantees for loans made to co-ops by private cooperative banks such as the National Rural Utilities Cooperative Finance Corp. (CFC) and CoBank.
• Provide vouchers for needy families and small businesses to pay their internet service providers. This would allow broadband providers, including co-ops, to keep customers connected and provide new connections. Service is especially crucial during the pandemic for online school assignments, teleworking and telemedicine.
• Invest more in existing programs such as the RUS ReConnect Broadband Loan and Grant Program to bring high-speed internet service to rural areas.
• Direct the Federal Emergency Management Agency to reimburse co-ops for past disasters. Some Florida co-ops, for example, still have not received FEMA reimbursements for rebuilding their systems after Hurricane Michael in 2018.

The letter was sent to Senate Majority Leader Mitch McConnell, R-Ky., Senate Minority Leader Chuck Schumer, D-N.Y., House Speaker Nancy Pelosi, D-Calif., and House Minority Leader Kevin McCarthy, R-Calif.

Erin Kelly is a staff writer at NRECA.

Read More on the electric co-op response to the COVID-19 Pandemic

See NRECA’s COVID-19 hub on cooperative.com for key resources for co-ops, including guidance on business continuity planning and communication, as well as event schedule changes.

Jo-Carroll Energy’s broadband division, Sand Prairie, is the first 2020 recipient of a Community Connect grant from the U.S. Department of Agriculture and plans to use the $2 million award to deliver high-speed internet access to 420 homes.

“Expansion of fiber broadband is a much-needed development in our region,” said Mike Casper, president and CEO of the Elizabeth, Illinois, co-op. “This grant will assist our efforts to provide high-speed, reliable internet service to our co-op members.”

Sand Prairie will use the grant to build about 25 miles of overhead and underground mainline fiber-to-the-premise and another 32 miles of fiber connection drops. JCE will match 22% of the grant, nearly $460,000, to complete the $2.5 million broadband project. Construction is expected to begin later this year and be completed within two years. 

Sand Prairie offers broadband service of up to 2 gigabits per second to meet the rural area’s growing needs.

“This project supports economic development in our rural service area by increasing property values, attracting new residents and providing more residents the ability to work remotely, all factors that, in the long term, support community growth, boost our community’s tax base, enhance medical practices and support our schools,” said Jesse Shekleton, JCE director of engineering and project manager for the grant application.

JCE and Sand Prairie are applying for additional grants to continue extending broadband throughout their service territory. Sand Prairie was created in 2008 to build a fiber communications network for the co-op and was the subject of a NRECA case study. 

Casper sees fiber as unmatched regarding bandwidth, speed, uptime, latency and overall scalability into the future and a way to help maintain the community’s vitality.

“Fiber is a key element to keeping and drawing younger people and transforming more of the visitors to our area into residents who can bring in new businesses that heighten the quality of life for our members and communities.”

Cathy Cash is a staff writer at NRECA.

The urgent request from the county’s only hospital came on a Thursday evening: Could the local electric cooperative provide broadband internet access to a new clinic to test patients for COVID-19 by 8 a.m. the following Monday?

On a good day, a crew can excavate and drill around 500 feet of conduit to lay fiber cable. NineStar Connect’s closest connection to the facility was 1,800 feet away.

George Plisinski II, manager of telecom operations for the Greenfield, Indiana-based co-op, described the situation with a baseball analogy: “We were down 9-0 in the bottom of the seventh.”

Curveballs included obtaining state and city permits to bore into a state road and local street; getting gas, water and communication utilities to mark underground lines over the weekend; a late-season wet snow; and broken drilling equipment.

But NineStar Connect was up for the challenge, Plisinski said, because “we live our co-op principles every day and concern for community was right there with us.”

The co-op, which delivers electricity, broadband and water, called on state Sen. Michael Crider, R-Greenfield and a co-op member, to expedite the necessary permits, a process that can take up to a month.

Crider, who chairs the Homeland Security and Transportation Committee, got the Indiana Department of Transportation to approve the permits within minutes.

“That our state senator would ask on our behalf to push a permit through on Friday night set the wheels in motion,” said Plisinski.

Local utilities agreed to waive the 48-hour call-before-you-dig period and worked through the night Friday to mark lines. At daybreak Saturday, six high-pressure gas lines—including one that fed the entire city of Greenfield—along with one 12-inch water pipe and phone lines were “all standing in our path to get where we needed to get,” Plisinski said.

Then came the snow. By nightfall, the co-op crew managed to dig halfway to its connection in heavy slush.

Early on Sunday, the pump on a vacuum excavation system failed, stopping their work. The co-op contacted the mayor, who dispatched two vacuum trucks to the scene, preventing a four-hour wait from another location.

The NineStar Connect crew was running two directional drills when one had mechanical issues, forcing them to use the smaller drill before abandoning that and digging the last 30 feet by hand.

“We’re using shovels and spades, digging it down 3 feet deep,” Plisinski said. “And it’s dark at this point.”

A little after 10:30 p.m. Sunday, March 15, the co-op provided the clinic with broadband internet.

“We stopped by there Monday at 7 a.m.; everything was good to go,” said Plisinski. “Two people were waiting to be seen while we were there before the clinic officially opened.”

NineStar Connect provided multiple-gigabit service through a private connection back to Hancock Regional Hospital. The clinic doctors and staff are using the same software and equipment as they did at the main hospital, which the co-op first connected nearly two decades ago.

“During a pandemic you still have accidents, heart attacks, babies being born. The hospital has to continue to provide those emergency services,” said David Spencer, Ninestar Connect director of marketing and public relations. “The fact that they’ve been able to steer some patients to this clinic is huge.”

The hospital agreed.

“Without the incredible work and dedication from our partners at NineStar Connect, we would not have been able to open and provide care to those that needed us most,” said Jenn Cox, business director for Hancock Health Gateway Services.

“From phones to internet, involving communication, patient flow and documentation was all contingent on having the technology and infrastructure they provided us.”

Cathy Cash is a staff writer at NRECA.

Read more on the electric co-op response to the COVID-19 Pandemic

See NRECA’s COVID-19 hub on cooperative.com for key resources for co-ops, including guidance on business continuity planning and communication, as well as event schedule changes.

Several electric cooperatives that provide broadband internet are taking steps to keep rural communities connected during the coronavirus pandemic, including measures that go far beyond a Federal Communications Commission call to sustain service for low-income customers.

Those steps include delivering higher connection speeds, even for members who subscribe to more modest plans.

“Aside from being an early supporter of the FCC’s pledge, we’ve also increased our bandwidth to all of our fiber-to-the-home member-customers to 1 gig at no additional cost during this public health crisis,” said Michael Burrow, CEO of NineStar, an electric and communications co-op headquartered in Greenfield, Indiana.

“Because our service area is just outside of Indianapolis, we are seeing a huge influx of our members who are now working from home and, with schools likely being closed for an extended period of time, students being placed in e-learning circumstances. We feel if we can support our members and customers being able to conduct some parts of their business and personal lives at home, we should be doing that.”

FCC’s 60-day “Keep Americans Connected Pledge” asks internet providers to sustain service to any residential or small-business customers despite lack of payment, waive late fees because of economic distress, and open Wi-Fi hotspots to those in need.

Co-Mo Connect, the broadband business of Co-Mo Electric Cooperative in Tipton, Missouri, made the pledge and is increasing its subscribers’ internet speeds to their next service tier without charge as the pandemic amplifies the need for broadband at home.

“We are local, and our mission is to enhance the quality of life for the region we serve,” said Co-Mo Connect CEO Aaron Bradshaw. “We strive to achieve that every day and, as this virus spreads through our area, we must all do what we can to help.”

Kit Carson Internet, a subsidiary of Kit Carson Electric Cooperative based in Taos, New Mexico, said it will uphold the FCC commitments until the governor ends the health emergency and the schools reopen. The co-op said it will also work to ensure students in its service area stay connected through 14 public internet hotspots. It will offer reduced rates and waive fees to all students and new customers with high school seniors or college students.

KCI is also waiving fees for state and federal employees who can work from home if they have broadband internet access. 

“KCI is adjusting to the needs of our community and customers. This pledge is only one step we have taken,” said Mark Poche, manager of Kit Carson Internet.

BARC Connects is setting up free wireless hotspots in four Rockbridge County school parking lots to help students in rural Southwest Virginia continue their education online at a safe social distance inside vehicles. 

The broadband subsidiary of the Millboro-based BARC Electric, which has also signed the FCC pledge, expects the hotspots to be fully operational by April 2.  

“As we all navigate these unprecedented times, BARC desires to provide as much internet access as possible to aid our students, teachers and educational institutions,” said Tish Blackwell, communications specialist at the co-op.

Cathy Cash is a staff writer at NRECA.

Read more on the electric co-op response to the COVID-19 Pandemic

See NRECA’s COVID-19 hub on cooperative.com for key resources for co-ops, including guidance on business continuity planning and communication, as well as event schedule changes.

Updated: March 27, 2020

The $2 trillion coronavirus relief bill passed by Congress will bring help to electric cooperatives and their consumer-members by offering millions in aid for families struggling to pay their utility bills and billions in grants for small businesses.

At the same time, the U.S. Department of Agriculture took action to provide greater flexibility and certainty for co-ops that rely on the Rural Utilities Service for loans and other financial assistance.

NRECA urged Congress and the Trump administration to include aid for co-ops as part of federal relief efforts aimed at boosting the struggling U.S. economy in the midst of the COVID-19 pandemic. CEO Jim Matheson wrote letters to congressional leaders and Agriculture Secretary Sonny Perdue asking for specific measures to help co-ops and their consumer-members.

The Senate passed the Coronavirus Aid, Relief and Economic Security (CARES) Act on Wednesday, and the House approved it Friday by voice vote. Congress is expected to pass more relief legislation in the weeks ahead.

Here are some of the key provisions for co-ops in the nearly 900-page bill:

• Adds $900 million for the Low-Income Home Energy Assistance Program, which helps low-income and moderate-income consumers pay their utility bills.
• Adds $100 million for grants through the USDA RUS ReConnect broadband program and $25 million for the RUS Distance Learning and Telemedicine grant program to expand investments in telemedicine and distance-learning services in rural areas.
• Adds $45 billion for the disaster relief fund administered by the Federal Emergency Management Agency. Co-ops often rely on these funds to restore power after storms and other emergencies.
• Creates a $349 billion Paycheck Protection Program that provides federal government loan forgiveness (under Small Business Administration Section 7(a) loans) for small businesses to pay up to eight weeks of basic expenses, including electric, telephone and internet bills.
• Creates a $10 billion SBA program to provide grants of up to $10,000 to small businesses to pay their workers and pay rent or mortgages, among other uses. Co-ops with fewer than 500 employees may be eligible for this grant program if they plan to apply for SBA Economic Injury Disaster Loans. Certain restrictions on those loans have now been waived.

The legislation does not include a federal moratorium on disconnecting consumers who fail to pay their utility bills. Some states have already imposed moratoriums, while others have asked utilities to voluntarily suspend disconnections during the coronavirus emergency. Many co-ops have already stopped disconnections and deferred bill payments for members who are experiencing financial hardships.

Earlier in March, President Trump signed legislation that would expand emergency family and medical leave and paid sick leave for co-ops and other small businesses with fewer than 500 employees. The CARES Act clarifies payment limitations for those programs. It also waives the 10% early distribution penalty for employees who withdraw up to $100,000 from their 401(k) retirement savings or from their Individual Retirement Accounts.

The USDA also announced this week that it is providing relief for borrowers through its RUS program. The department extended for 60 days the deadline for telecommunications and electric program borrowers and grantees to submit their annual audits, which normally are due by April 30. It also waived borrower covenant requirements for loan agreement financial ratios for the entire 2020 calendar year.

The agency is waiving all financial reporting requirements associated with existing RUS loan and grant covenants through June 30. USDA also will help electric program borrowers gain access to funds more quickly at current low interest rates by considering extensions of loan terms on a case-by-case basis.  

“For over 80 years, the U.S. Department of Agriculture and America’s electric cooperatives have partnered—not just to keep the lights on—but to promote the overall well-being of all rural America,” Matheson wrote to Perdue. “In this extraordinary and challenging time, when those communities are threatened, our partnership is more important than ever.”

Erin Kelly is a staff writer at NRECA.

Read more on the electric co-op response to the COVID-19 Pandemic

See NRECA’s COVID-19 hub on cooperative.com for key resources for co-ops, including guidance on business continuity planning and communication, as well as event schedule changes.

Congress has passed legislation to improve the accuracy of federal broadband maps, making it easier for electric cooperatives to secure funding to bring high-speed internet service to the rural communities that need it most.

The Senate voted Tuesday to approve the bipartisan Broadband Deployment and Technological Availability Act, known as the DATA Act.

Senators had passed a previous version of the legislation in December, but they had to vote on it again because the House made changes when it approved the bill earlier this month.

The bill requires the Federal Communications Commission to collect more detailed data from broadband providers. The legislation also makes it illegal for providers to knowingly provide false or incomplete information to the FCC and allows co-ops, consumers, local governments and others to challenge FCC maps with their own data.

The bill will require the FCC to update its existing broadband maps, said Sen. John Thune, R-S.D., who co-sponsored the DATA Act.

President Trump is expected to sign the bill into law.

“Bridging the digital divide is impossible without accurate service maps showing who has broadband access and who doesn’t,” said NRECA CEO Jim Matheson. “The Broadband DATA Act charts a course for a more connected rural America and is a welcome bipartisan solution under the leadership of the Senate Commerce Committee and the House Communications and Technology Subcommittee. It builds on the success of more than 100 electric co-op rural broadband projects and injects much-needed accountability into the broadband mapping process.”

Co-op leaders have long known that national broadband maps do not adequately reflect the lack of access throughout rural America, said Kelly Wismer, NRECA’s legislative affairs director on broadband and telecommunications issues. The legislation, which contains key provisions that NRECA supported, will make it easier to identify areas that need service and make those communities eligible for federal funds.

Dan Stelpflug, director of operations, engineering and technology at Allamakee Clayton Electric Cooperative in Postville, Iowa, testified before a House subcommittee last June that faulty FCC data was causing a financial hardship for the co-op and its roughly 10,000 consumer-members. The co-op ended up having to essentially pay back 23% of a $1.4 million broadband grant it received in 2014 because the grant was based on bad data that indicated the co-op could reach more potential customers than was actually possible.

“More accurate data and mapping showing broadband availability is a key part of reaching all rural Americans with high-speed broadband service,” he said recently. “This will enable us to clarify existing gaps in coverage, and harmonize the diverse solutions that will be required to help rural Americans keep pace with their urban counterparts.”

Faulty federal data can wrongly show that rural residents have widespread access to broadband when only a few people in a community are connected, Wismer said. It also can deprive co-ops of the chance to compete for broadband grants if the data inaccurately shows that communities are already served.

“Congressional action on broadband mapping will go a long way toward making sure millions of rural Americans are not locked out of the modern economy due to inaccurate maps,” Wismer said.

Broadband service is essential to allow communities served by co-ops to grow local businesses, expand online learning and access telemedicine, the bill’s supporters said.

“This bill would be an important step for collecting more precise data to improve the FCC’s flawed maps that waste resources and stifle economic development opportunities,” said Sen. Roger Wicker, R-Miss., the bill’s lead sponsor and chairman of the Senate Commerce, Science and Transportation Committee.

Sen. Amy Klobuchar, D-Minn., a co-sponsor, said it will help kids in rural America stay there when they grow up by increasing their opportunities.

“When rural Americans have access to the infrastructure needed to support improving access to broadband then we keep rural America competitive in the 21st century and beyond,” she said.

Erin Kelly is a staff writer at NRECA.

Arlington, Va. – National Rural Electric Cooperative Association CEO Jim Matheson today applauded congressional passage of S. 1822, the Broadband DATA Act.

“Bridging the digital divide is impossible without accurate service maps showing who has broadband access and who doesn’t,” Matheson said. “The Broadband DATA Act charts a course for a more connected rural America and is a welcome bipartisan solution under the leadership of the Senate Commerce Committee and the House Communications and Technology Subcommittee. It builds on success of more than 100 electric co-op rural broadband projects and injects much-needed accountability into the broadband mapping process.”

The Broadband DATA Act improves Federal Communications Commission broadband data collection by:
• Requiring providers to include more detailed coverage information in their self-reported data.
• Setting accountability standards for reporting.
• Establishing a process for third parties to challenge provider-reported broadband coverage data.

The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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The best approach to helping economically challenged communities is to have “a bias toward innovation.”

That was one of NRECA CEO Jim Matheson’s messages during a Feb. 12 panel discussion at the National Association of Regulatory Utility Commissioner’s Winter Policy Summit in Washington, D.C.

Electric cooperatives “serve a lot of underserved people,” he said. “We need innovation to do it. We need flexibility to do it right.”

Matheson spotlighted innovation adopted by several electric co-ops:

• Cherryland Electric Cooperative in Grawn, Michigan, joined state and local agencies to provide low-income members with bill credits toward the co-op’s community solar program.

• North Dakota Association of RECs partnered with state telecom co-ops to set up a rural development center that runs a food bank, provides access to loans and helped form a cooperative child care program.

• Roanoke Electric Cooperative in Aulander, North Carolina, with half its territory defined as “persistent poverty,” is offering modest charging subscriptions to electric vehicles owners plus no upfront costs to install in-home EV chargers.

• Western Farmers Electric Cooperative and its member distribution co-ops in Oklahoma are working with investor-owned utilities and others to build the nation’s most comprehensive public EV charging network.

Matheson’s message to state utility regulators on providing rural broadband access to underserved communities was simple: Talk to electric co-op leaders within their borders. More than 100 are deploying retail broadband to rural communities; many others are studying the feasibility.

Whether a state regulates them or not, “co-ops can be an important voice,” Matheson said.

“Co-ops can give insight at the state level in terms of current laws and regulations, and how they either assist or impede” rural broadband development.   

For example, easements can be a hurdle to rural broadband. Co-ops could be prohibited from stringing fiber-optic cable on their poles for retail internet access or face litigation after the fact. 

Matheson also underscored the importance of economic development for rural areas, but he noted those efforts may be for naught without broadband internet access.

“If you don’t have broadband, you aren’t going to get economic development,” he said. “It’s that fundamental.”

Listen to a recent podcast episode on Advancing Energy Access for All, a new NRECA initiative that focuses on co-op efforts to improve the economic health of local communities:

Cathy Cash is a staff writer at NRECA.

Rep. Tim Walberg, R-Mich., hosted Federal Communications Commission Chairman Ajit Pai on a recent trip to Walberg’s rural Michigan district, where Pai publicly heralded efforts by electric cooperatives to bridge the digital divide.

During his visit, Pai got a firsthand look at a co-op broadband initiative, watching crews from Cassopolis-based Midwest Energy & Communications hang fiber and install equipment.

“He was fully engaged and engrossed in the whole construction process,” said MEC CEO Bob Hance.

Pai’s trip preceded the much-anticipated Jan. 30 vote on the rules for the new Rural Digital Opportunity Fund, a $20.4 billion reverse auction aimed at bringing high-speed internet to the country’s unserved communities.

Pai and Walberg’s itinerary included a discussion about the challenges of rural broadband with Hance, Craig Borr, president/CEO of the Michigan Electric Cooperative Association, and Sally Talberg, who chairs the Michigan Public Service Commission. Walberg is an MEC member and serves on the House Energy and Commerce subcommittee with jurisdiction over the FCC.

Currently, only three electric co-ops deliver fiber-to-the-home in Michigan, but Hance said that number could more than double with help from the new FCC funding program.

“The RDOF is a great catalyst,” he said. If co-ops win bids in the RDOF, that will “provide relief to some of the boards about the capital commitment” for broadband.

MEC won a $5 million grant in 2018 from the Connect America Fund auction, a precursor to the RDOF. The co-op’s highly successful broadband deployment has a 70% take-rate in its most mature areas and nearly 12,000 residential and business subscribers in just five years, said Hance.

“We get calls every day from people outside our member network asking, ‘How come you can’t serve us?’” he said.

Phase I of the RDOF auction will allocate $16 billion to unserved census block areas identified by the FCC, and Phase II will auction the remaining $4.4 billion. An official schedule for the auction has yet to be announced.

Cathy Cash is a staff writer at NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association CEO Jim Matheson applauded today’s vote by the Federal Communication Commission (FCC) to approve rules for the Rural Development Opportunity Fund (RDOF) reverse auction for broadband projects.  

“America’s electric co-ops are optimistic that the auction rules will lead to meaningful expansion of broadband access in rural America,” Matheson said. “We appreciate the commissioners’ willingness to apply lessons learned from previous auctions and implement changes that will promote higher speeds by winning RDOF bidders. The need to bridge the digital divide has never been more urgent. 

“More than 100 electric cooperatives have stepped up to deploy broadband and connect their communities to the modern economy. But for many co-ops, broadband projects are simply not feasible without grant funds. We look forward to partnering with the FCC on projects that will boost the quality of life and economic outlook for hundreds of rural communities.”

Cooperatives welcome this important change from the last FCC broadband reverse auction because it will enhance FCC’s selection of projects with the highest speed and lowest latency, and therefore result in a far higher number of locations being served with future-proof technology.

Cooperatives have demonstrated their commitment to bringing high-quality broadband service to rural areas. More than a hundred co-ops are engaged in broadband projects. CAF II, the last FCC reverse broadband auction, was the first time electric co-ops were eligible for FCC rural broadband funding. Thirty-two electric co-ops won 35 bids in that 2018 auction.

The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Updated: Dec. 20, 2019

Congress on Thursday passed the RURAL Act, protecting more than 900 electric cooperatives throughout the nation from the risk of losing their tax-exempt status when they accept government grants for disaster relief, broadband service and other programs that benefit co-op members.

The Senate’s vote to approve the legislation came two days after the House approved it as part of a sweeping tax and spending package. President Trump has signed it into law.

The RURAL Act was NRECA’s top legislative priority for the year because of the profound threat to the business model of not-for-profit co-ops. Tens of thousands of co-op leaders, employees and members across the country rallied to advocate passage of the bill.

“This package preserves the fundamental nature of the electric cooperative business model and will save electric co-ops tens of millions of dollars each year,” said CEO Jim Matheson. “Moreover, it protects co-op members from unfair increases in their electric rates and provides certainty to co-ops that leverage federal and state grants for economic development, storm recovery and rural broadband deployment.”

Lawmakers passed the popular bipartisan legislation in the final hours of the 2019 session as part of a larger tax and spending bill that funds the government through September 2020.

More Spending Bill News: Congress Saves Co-ops Millions in Pension Costs, Repeals ‘Cadillac Tax’

The bill’s passage fixes a problem created in 2017 when Congress passed the Tax Cuts and Jobs Act, which redefined government grants to co-ops as income rather than capital. That change made it difficult for many co-ops to abide by the 15% limit on non-member income to keep their tax-exempt status. The RURAL Act once again exempts grants from being counted as income and is retroactive to the 2018 tax year.

Without the fix, some co-ops would have had to start paying taxes this spring after receiving grants in 2018 or 2019 to repair storm damage, bring high-speed internet to rural communities or invest in renewable energy and energy-efficiency programs. Many co-op leaders feared they would have to raise rates for members to pay the new taxes.

The legislation attracted more than 300 co-sponsors in the 435-member House and nearly two-thirds of the senators. The effort was led in the House by Reps. Terri Sewell, D-Ala., and Adrian Smith, R-Neb., and in the Senate by Rob Portman, R-Ohio, and Tina Smith, D-Minn.

NRECA lobbyist Paul Gutierrez credited the victory to a collaborative campaign strategy that included co-ops’ grassroots efforts to alert their senators and representatives to the issue.

“This was an amazing NRECA team and membership effort, including co-op members at the end of the line,” he said. “We had great legislative champions in the House and Senate, and they worked tirelessly to get this included in the final tax package.”

Previous coverage of the RURAL Act:

Co-op Voices, Part 1: How Losing Tax-Exempt Status Would Hurt Rural Residents

Co-op Voices, Part 2: CEOs Discuss Impacts of Tax Law Glitch for Members

As Majority of House Signs On to RURAL Act, Lead Sponsors Press for Vote

Q&A: Senate’s Lead RURAL Act Sponsors Discuss Their Strategy for Passage

Q&A: RURAL Act’s Lead House Sponsors Say Co-op Voices Are Key to Bill’s Success

Co-op CEO to Congress: Help Expand Rural Broadband by Passing RURAL Act

NRECA CEO Jim Matheson: ‘If We All Stand Up,’ Co-ops Can Save Tax-Exempt Status

Erin Kelly is a staff writer at NRECA.

A Virginia electric cooperative’s for-profit broadband subsidiary is acquiring a telephone cooperative that also delivers high-speed internet in a bid to expand the region’s educational and economic opportunities.

Mecklenburg Electric Cooperative CEO John C. Lee Jr., who also heads EMPOWER Broadband, said the acquisition of Buggs Island Telephone “is a big piece of that puzzle.”

“There is no doubt that joining forces puts us in a stronger position to deliver a third critical service to our members: world-class internet access,” he said.

Approvals by the Federal Communications Commission and the Virginia State Corporation Commission are expected by March 31, 2020.

EMPOWER Broadband, based in Chase City, and BIT, headquartered in nearby Bracey, announced Nov. 14 at the Lake Gaston Volunteer Fire Department that 76.5% of BIT’s members voted in favor of the acquisition. BIT bylaws required approval by two-thirds of its membership for any transfer of assets.

“The merger of our two systems’ resources and talents will quickly deliver educational and economic development opportunities across Southside Virginia,” said David Jones, chairman of the MEC and EMPOWER Broadband board of directors.

The support stems from MEC serving the telephone co-op members for decades, said Lee. “They knew who the acquiring party was,” he said. “We’ve had a good relationship with these members.”

Like EMPOWER, BIT delivers fiber-to-the-home. The two co-ops will assess their fiber-optic networks, review areas for subscriber density and optimize existing facilities to advance broadband deployment. Customer subscriptions will drive service in new areas, the co-ops said.

EMPOWER recently received a nearly $3.8 million loan from the U.S. Department of Agriculture’s ReConnect program to deploy fiber internet service to 1,254 households, four educational facilities and two “critical community” facilities. EMPOWER has also bid successfully in the FCC Connect America Fund II reverse auction and won several state grants to build broadband.

MEC first studied entering the broadband space in 2017, and EMPOWER began fiber-to-the-home for members this quarter.

“We did a lot of homework on this. We really, really thought it through,” said Lee. “In the end, to me, it came down to putting our youth on a level playing field with youth of urban areas with internet access. That pushed us over the line—recognizing the importance that internet access has on education.”

Listen to an NRECA podcast episode on rural broadband:

Cathy Cash is a staff writer at NRECA.

After years of dealing with roller-coaster diesel prices, Inside Passage Electric Cooperative in southeast Alaska is investing in hydropower to lower rates for its 1,300 members and bring cleaner energy to the rural communities it serves.

The co-op’s latest project will turn an unused dam on the remote island village of Kake into a source of power for about 600 people, many of them Alaska Natives. It’s the second hydropower project undertaken by IPEC, which plans another two as it moves toward 70% renewable energy.

But the nearly $7 million in state and federal grants that are helping the Juneau-based co-op reach its goals could also strip the not-for-profit business of its tax-exempt status and thwart its effort to reduce rates.

That’s because a 2017 tax bill passed by Congress redefined government grants to co-ops as non-member income, making it difficult for co-ops to avoid going over the 15% limit on outside revenue to keep their tax-exempt status. If they must start paying taxes, many co-ops will be forced to raise electric rates—often in high-poverty communities that can least afford higher energy costs.

“We’re trying to reduce fossil fuel consumption and reduce rates to our members,” said IPEC CEO Jodi Mitchell. “Now this tax issue is going to undo all the good we’ve tried to do. It’s very unfair that we’re being punished for trying to do the right thing. Congress has just got to fix it.”

Mitchell and leaders at the nation’s electric co-ops are urging lawmakers to vote before year’s end to pass the RURAL Act, a bipartisan bill that would allow co-ops to accept grants without risking their tax-exempt status. The legislation had 280 House co-sponsors and 45 in the Senate as of Nov. 12.

Co-op leaders hope that IPEC’s situation, and the stories that follow, will shed light on the harmful impact of the tax law on rural residents:

Hurricane Recovery in Texas

When Hurricane Harvey slammed into Texas with 130 mph winds and more than 20 inches of rainfall, it knocked out power to all 22,467 meters served by Victoria Electric Cooperative. With help from 300 employees of neighboring co-ops and contractors, the co-op restored electricity to 95% of its service area within 10 days. More than 630 poles and nearly 260 transformers had to be replaced.

The co-op’s recovery efforts after the 2017 storm were aided by the Federal Emergency Management Agency, which provided more than $8 million in disaster relief this year. To qualify for those funds, the co-op had to spend about $890,000 of its own money and take out loans for about $420,000 more, costing members a total of about $1.3 million.

By accepting the FEMA grants to restore its system, Victoria EC is facing the loss of its tax-exempt status and a tax liability that could be as much as $850,000.

At its recent annual meeting, about 150 co-op members signed up to support the RURAL Act, said CEO Blaine Warzecha. But so far, Texas Republican Sens. John Cornyn and Ted Cruz have not signed on as co-sponsors of the bill.

“Without the FEMA grants, we’d still have had to repair the system,” Warzecha said. “We would already have had to have a rate increase, no doubt about it … Now we may have to have one anyway to pay for our taxes. Our members are going to end up footing the bill unless we get help from Congress.”

Broadband Service in Tennessee

Forked Deer Electric Cooperative in Halls, Tennessee, was thrilled to learn in October that it was the first recipient in the nation of a rural broadband grant from the U.S. Department of Agriculture’s new ReConnect program.

But the co-op’s joy faded when leaders realized that the $2.8 million grant might cost them their tax-exempt status.

“We’re all excited, and then a week later I get a call from one of my colleagues asking me what we’re going to do about the tax issue,” said CEO Jeff Newman. “I said, ‘What are you talking about?’ When he told me, it was a real punch in the gut.”

Newman said the co-op wants to use the federal grant to bring high-speed internet service to the part of its service area that is the most sparsely populated and the least connected. Now he is trying to figure out a way to draw down the grant money more slowly, so that it won’t push the co-op over the 15% limit for non-member revenue in any one year.

“All of our members have these high hopes for broadband, and we don’t want to let them down,” he said. “A middle-aged woman came into our office the other day and cried because she can now do online schooling and change her lot in life. We’re realizing broadband has life-changing impacts for our members … We don’t need obstacles from the federal government.”

Building a Stronger System in Oklahoma

After a brutal ice storm in 2017, it took 30 days for Northwestern Electric Cooperative in Woodward, Oklahoma, to restore power, with 400 lineworkers from throughout the region working around the clock. More than 6,000 poles and 100 miles of wire had gone down in the storm.

The FEMA aid that the co-op received to help restore power came before the tax law change, so it didn’t affect the co-op’s tax-exempt status. But the co-op is now at risk because this year it began receiving nearly $54 million in FEMA grants for a $72 million, three-year project to strengthen its system so that it will be better able to withstand future storms. CEO Tyson Littau said the grants will put the co-op over the 15% non-member limit.

“Do we rebuild and try to strengthen our distribution system and pay the taxes, or do we delay the mitigation project that would improve 1,200 miles of line throughout our territory?” he said. “I think we have a responsibility to the membership to improve the system for the future.”

Snowstorm Recovery in Oregon

When a record-breaking snowstorm hit Oregon in late February, Lane Electric Cooperative in Eugene sustained $5.6 million in damage to a system that serves 10,000 members.

With the help of FEMA grants, the co-op will rebuild its system and make it more resilient against future threats, said CEO Debi Wilson. But the co-op could also lose its tax-exempt status in the process, she said. Lane is currently working with tax advisers to see what tax liability it might face and whether a rate hike will be needed, Wilson said.

“We need things to go back to the way they were before the 2017 tax law,” she said. “Right now, FEMA funds aren’t functioning the way they were intended. They are supposed to take the burden off of our members, not add to their burden.”

Read more coverage of the RURAL Act:

Co-op Voices, Part 1: How Losing Tax-Exempt Status Would Hurt Rural Residents

RURAL Act: Why Popular, Bipartisan Legislation Can Face Hurdles in Congress

Q&A: Senate’s Lead RURAL Act Sponsors Discuss Their Strategy for Passage

As Majority of House Signs On to RURAL Act, Lead Sponsors Press for Vote

Q&A: RURAL Act’s Lead House Sponsors Say Co-op Voices Are Key to Bill’s Success

Co-op CEO to Congress: Help Expand Rural Broadband by Passing RURAL Act

NRECA CEO Jim Matheson: ‘If We All Stand Up,’ Co-ops Can Save Tax-Exempt Status

Co-op Advocacy Needed to Move Vital Tax Fix in Congress

Bipartisan Bill Would Protect Co-ops From Losing Tax-Exempt Status

Listen to a recent podcast on the RURAL Act:

Erin Kelly is a staff writer at NRECA.

More than a third of senators have now signed on to support the RURAL Act, a bipartisan bill by Sens. Rob Portman, R-Ohio, and Tina Smith, D-Minn., to protect electric cooperatives’ tax-exempt status.

As of Monday, 38 senators were co-sponsoring the bill, which would allow not-for-profit co-ops to accept government grants for disaster relief, broadband service and other priorities without losing their tax-exempt status.

In the House, 269 members have signed on to the bill, led by Reps. Terri Sewell, D-Ala., and Adrian Smith, R-Neb.

The RURAL Act would fix a problem created by the 2017 Tax Cuts and Jobs Act, which began counting grants as non-member income for co-ops. Under federal law, co-ops must receive at least 85% of their income from consumer-members to remain tax-exempt. Before the law took effect in 2018, grants were considered capital and did not affect co-ops’ tax status.

Unless Congress passes the RURAL Act, co-ops may be forced to pay the new tax by raising rates for their consumer-members, many of whom live in high-poverty areas.

The Joint Committee on Taxation estimated last week that the bill would cost the U.S. Treasury $3.4 million a year in lost taxes for 10 years—a tiny amount for a federal budget that is nearly $5 trillion.

Portman and Smith talked about their strategy for passing the bill and explained why it’s important to rural Americans.

What are the biggest challenges/obstacles to getting the bill passed in the Senate this year?

Portman: To be honest, the biggest challenge we face is whether the Senate will be able to work with the House to pass any significant tax legislation this year. This is especially true for any legislation building upon the monumental tax reform of 2017. While the RURAL Act actually goes beyond their pre-tax reform treatment by simplifying the treatment of governmental grants and assistance received by co-ops, this bipartisan legislation is still getting caught up in the partisan politics of tax reform. Ultimately, I am optimistic that the strong bipartisan nature of this legislation will help clear the path through the partisan discussions around tax policy in Congress today.

Smith: Passing legislation in today’s polarized political climate is never easy. There are several bills to correct problems with the 2017 Republican tax bill that have been caught up in negotiations over other tax measures. However, I’m hopeful that we can now make meaningful progress toward an agreement that addresses the problems with the 2017 tax bill and some of the corrections and other middle-class tax relief provisions that should have been included in that bill.    

The House now has more than a majority of its members signed on as co-sponsors of the bill. If the House can pass the RURAL Act with a strong bipartisan majority, would that help you convince a majority of senators to take up and pass the bill?

Portman: We also have significant support in the Senate…more than a third of the Senate. But yes, a strong bipartisan majority, and hopefully an even stronger bipartisan vote in the House, would provide a clear signal to my colleagues that the RURAL Act is a common-sense fix to the tax code.

Smith: We have a strong bipartisan coalition in the Senate and with stakeholders across the nation. We’re pushing to get this across the finish line as soon as we can, but to do so, senators will need to continue to hear from their constituents about this bill.   

What do you see as the best strategy to pass it?

Portman: As much as I think that the widespread bipartisan support in both the House and Senate make a strong argument for passing the RURAL Act on a standalone basis, Congress very rarely passes standalone tax bills. It’s most likely that this bill becomes part of a broader tax package that rides along with a must-pass piece of legislation, hopefully in the coming months.

Smith: I believe that the most important thing to getting this bill passed is to make sure that senators and members of Congress hear from their constituents about why this issue is so important. When you make your voices heard, you have an incredible ability to effect the kinds of changes you seek.    

What do you think are the most effective arguments you have when you’re asking other senators to co-sponsor the bill or when you’re asking leadership to bring it to the floor?

Portman: There are few issues that unite my colleagues more than expanding access to rural broadband. No matter what part of the country you’re from, there’s a good chance that parts of your state wouldn’t have access to high-speed, reliable internet without the services provided by tax-exempt rural co-ops. Any legislation that ensures co-ops will continue expanding these broadband services should be an easy bill for my Senate colleagues to support.

Smith: Most of my colleagues I speak with understand just how vital rural electric cooperatives are to rural communities…For many decades, this tax-exempt business model has ensured that hundreds of Minnesota rural communities—and thousands across the country—have affordable, reliable power and the significant economic benefits that come with it. It wasn’t the intent of the 2017 tax law change to jeopardize rural electric cooperatives’ tax-exempt status.

How will your rural constituents be hurt if their co-ops lose their tax-exempt status?

Portman: The Ohio electric co-ops provide electricity and broadband services to more than 380,000 of my constituents, covering 77 of Ohio’s 88 counties and some of the most rural areas of the state. If just one of these co-ops were to lose their tax-exempt status, the Ohioans they serve would almost immediately feel the squeeze as the co-op would be forced to raise their rates in order to afford the new tax payments. For a lot of families and individuals in the rural areas of my state, even a small increase in the cost of necessities such as electricity and broadband could make a world of difference in their financial security. We can’t let that happen, which is why Congress should pass the RURAL Act as soon as possible.

Smith: Many cooperatives in Minnesota and across the country are in danger of being forced to choose between keeping their tax exemptions and accepting an important grant to clean up a disaster or to expand broadband services. The resulting costs to cooperatives could force up electricity rates for customers and make cooperatives think twice about accepting grants that could help their communities.

How can co-op leaders and members in your state and throughout the nation best help you pass the legislation?

Portman: As far as Ohio goes, I’m very pleased with the grassroots effort by the Ohio co-ops to encourage the delegation to support the bill. Last I checked, there’s only one more House member out of 16 that hasn’t co-sponsored, and I’m hopeful [Sen. Sherrod] Brown will support the bill as well. Even outside of Ohio, I have to say I’m very impressed by the grassroots effort across the board…

But you shouldn’t take that as a sign to let up, either. Whether it’s in Ohio or any other state, it is crucial that everyone continue to reach out to their representative or senator to talk about the importance of the bill and the potential consequences of a co-op losing its tax-exempt status. With your help, I’m confident that we can continue growing support for the bill and have a chance at passing it this year.

Smith: You should make your voices heard by your representatives in Washington. Senators and members of Congress care deeply about what’s important to their constituents, and I’m hopeful that you will be able to play a key role in getting them to accept a tax package that addresses this problem and the other key tax priorities that Congress needs to address.  As we come to the end of the tax year, I plan to make it clear to my colleagues that we can’t continue to allow our tax laws to hinder our nation’s electric cooperatives from doing the important work of powering our rural communities and supporting jobs and economic development. I’ll be pressing [Senate Majority Leader Mitch] McConnell to reach a fair agreement that allows this bill and other important tax priorities to be addressed. 

Read more coverage of the RURAL Act:

RURAL Act: Why Popular, Bipartisan Legislation Can Face Hurdles in Congress

As Majority of House Signs On to RURAL Act, Lead Sponsors Press for Vote

Co-op Voices, Part 1: How Losing Tax-Exempt Status Would Hurt Rural Residents

Co-op Voices, Part 2: CEOs Discuss Impacts of Tax Law Glitch for Members

Q&A: RURAL Act’s Lead House Sponsors Say Co-op Voices Are Key to Bill’s Success

Co-op CEO to Congress: Help Expand Rural Broadband by Passing RURAL Act

NRECA CEO Jim Matheson: ‘If We All Stand Up,’ Co-ops Can Save Tax-Exempt Status

Co-op Advocacy Needed to Move Vital Tax Fix in Congress

Bipartisan Bill Would Protect Co-ops From Losing Tax-Exempt Status

Listen to a recent podcast on the RURAL Act:

Erin Kelly is a staff writer at NRECA.

U.S. Secretary of Agriculture Sonny Perdue personally delivered a $2.8 million grant—the first from his department’s ReConnect program for rural broadband—to Forked Deer Electric Cooperative, which says it’s building high-speed internet to provide access to “forgotten America.”

During his visit to the Halls, Tennessee-based co-op, Perdue praised the work of electric co-ops nationwide in their efforts to connect rural communities. He spent several hours touring communities in western Tennessee that will benefit from the co-op’s fiber deployment.  

“There are a lot of advantages that electric co-ops have when it comes to broadband,” Perdue said during the Oct. 18 ceremony at the co-op’s headquarters. He noted that co-ops know their customers and already have lines in place and that broadband deployment “fits right into your business model.”

The ReConnect program began in 2018 with $600 million from Congress to be disbursed for rural broadband in 2019. ReConnect offers 100% loans, 100% grants, and 50/50 loan-grant awards. It received 146 applications this year between May 31 and July 12. Congress added another $550 million this year.

David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association, noted that spotlighting an electric co-op with the first ReConnect award is a nod to the value co-ops bring to such public investments.

“Tennessee co-ops have demonstrated the ability to maximize state and federal funds. For every dollar of grant money received, Tennessee co-ops are investing $15 of their own money,” he said. “This multiplier means that Tennessee electric co-ops are stretching grant funds further to have the greatest impact.”

Forked Deer built a 120-mile fiber backbone for system communications in 2017 and expanded into retail broadband this year with a wholly owned, not-for-profit subsidiary, Forked Deer Connect LLC.

The co-op plans to deploy broadband with minimum speeds of 200 megabits per second to download data and 200 Mbps to upload across its entire service territory, which averages only seven customers per mile. The ReConnect grant targets 347 of Forked Deer’s most rural members, whose homes dot 435 square miles along the Mississippi River bottomland.

“Down the bluff, toward the river, that’s forgotten America when it comes to connectivity,” said Forked Deer CEO Jeff Newman. “Now those people will have the same advantages as the people living in big cities because of broadband connectivity.”

Perdue, Newman and TECA officials talked with residents and businesses in the grant area about the co-op’s plans to deliver broadband. They visited a grain elevator for loading barges on the Mississippi River, a cotton farm, a cooperatively owned cotton gin and a seed company.

“The secretary toured where there will be actual benefits from the ReConnect grant,” said Mike Knotts, TECA vice president of government affairs.

Parents want broadband so their children can do schoolwork at home, and farmers need it to reap the full potential of their irrigation and agriculture equipment, said Newman.

Now, with the ReConnect help, “they were astonished that they would be able to get that connectivity to where they are,” he said.

Listen to an NRECA podcast episode on rural broadband:

Cathy Cash is a staff writer at NRECA.

Seven electric cooperatives that serve communities in Appalachia won nearly $10 million in federal grants to build fiber-optic networks and bring broadband internet access to residents and businesses hurt by the decline of the region’s coal industry.

The Appalachian Regional Commission expects the $9.6 million awarded to the co-ops in October to go a long way toward diversifying and strengthening rural economies hit hard by job losses in mining, power plant operations and coal-related supply chain businesses.

BARC Electric Cooperative in Lexington, Virginia, received $1 million; Buckeye Rural Electric Cooperative in Rio Grande, Ohio, $2.5 million; French Broad EMC in Marshall, North Carolina, $1.9 million; Holston Electric Cooperative in Rogersville, Tennessee, $862,017; Tombigbee Electric Cooperative in Hamilton, Alabama, $774,912; and Washington Electric Cooperative in Marietta, Ohio, $24,500.

Tri-County Rural Electric Cooperative in Wellsboro, Pennsylvania, will work with Tioga County, which is getting a $2.5 million ARC grant to build a 175-mile fiber-optic network across three counties. Tri-County is providing $3.2 million toward the project. 

Buckeye REC will use its grant to build a 168-mile fiber backbone for two-way communications between its corporate office and its substations in six counties. The co-op said it will add $1.1 million, or 30% of the project’s cost, in cash and services.

“We are excited to be part of the first step toward the expansion of broadband into areas of southeastern Ohio, where it would not otherwise be possible,” said Tonda Meadows, Buckeye REC executive vice president and general manager.

Fiber will improve system reliability and security and allow for future retail broadband by regional internet service providers, the co-op said.

“The advent of rural broadband development is imperative to the sustainability and advancement of Ohio’s pastoral communities,” said BREC Board President Paul Berridge. “High-speed internet access does more than link us to the global village—it connects us to health care, educational opportunities, and commercial growth. Buckeye Rural Electric Cooperative is pleased to be the gateway toward the expansion of rural broadband access.”

The grants are part of ARC’s POWER initiative—Partnerships for Opportunity and Workforce and Economic Revitalization—which gave a total of $44.4 million to 54 projects ranging from broadband to job training to substance abuse recovery services. ARC expects these targeted funds to help retain or create more than 5,700 jobs, sustain 3,000 businesses, train thousands of workers, and leverage more than $39 million in private investment.

Listen to an NRECA podcast episode on rural broadband:

Cathy Cash is a staff writer at NRECA.

High-speed internet service “is vital to the survival and growth” of rural America, but a recent tax law change makes it harder for electric cooperatives to bring broadband to their communities, a co-op CEO told a key congressional committee Friday.

“We desperately need help fixing our federal tax code before the end of 2019,” said Tim Johnson, CEO of Otsego Electric Cooperative in Hartwick, New York. Johnson testified before the House Small Business Committee at a field hearing on rural broadband in Hudson, New York.

Unless Congress acts this year, Otsego and other not-for-profit co-ops throughout the nation could lose their tax-exempt status when they take federal, state or local grants to bring broadband service to rural residents. It also affects co-ops that accept grants to restore power after a natural disaster, invest in local economic development, or create energy efficiency or renewable energy programs.

Congress created the dilemma in 2017, when it passed the Tax Cuts and Jobs Act. The sweeping new law redefined government grants to electric and telephone co-ops as “non-member” income. Under federal tax law, no more than 15% of a co-op’s income may come from sources other than its consumer-members. Co-ops that exceed that amount can lose their tax-exempt status and be forced to pay federal and state income taxes. Before the change, government grants were considered capital and were not counted as part of a co-op’s income mix.

“For OEC, the train had already left the station when the tax bill arrived,” Johnson told the committee in written testimony. “Prior to the enactment of the new law and the discovery of its unintended consequences on our tax-exempt status, our cooperative was awarded $10 million from New York’s state broadband program plus nearly $4.3 million in federal funds over the next decade to extend broadband to well over 2,000 rural homes and businesses.”

After learning what Congress had done, Otsego EC’s board decided to “forge ahead” with its plans to bring broadband to all its members, Johnson said.

“We view access to reliable broadband as an essential basis for quality of life and economic development in our entire cooperative community,” he said.

Rep. Antonio Delgado, D-N.Y., who led the field hearing, said “small businesses, families, schools and health care providers in rural communities across upstate suffer daily from a lack of access to broadband due to lack of investment in broadband infrastructure.”

“We must take swift action to close the digital divide between our urban and rural communities,” Delgado said. “I hope that today’s discussion will shed light on ways to improve broadband in rural areas.”

Johnson said Otsego EC will lose its tax-exempt status if Congress does not pass a tax-fix bill by the end of this year.

“What’s more, as much as 30% of the grant money received could be lost to taxes,” he said. “The combined penalties of paying income tax on grant funds and the loss of tax-exempt status will significantly reduce our ability to build broadband to as many locations as we originally projected, depriving many households of the intended and direct benefits of public grant funding for the broadband project. This is clearly not good public policy and the inadvertent mistake that has caused this situation must be fixed.”

Johnson urged lawmakers to pass the RURAL Act, a bipartisan bill that would allow co-ops to once again accept government grants without risking their tax status.

“OEC, along with the entire rural electric cooperative family and various rural-focused organizations such as Farm Bureau and the National Cooperative Business Association, are urging Congress to pass this legislation,” he said.

Johnson told the committee about other impediments to providing broadband, including the lack of detailed, accurate federal data about which communities do and don’t have service.

“More granular and accurate maps showing broadband availability are a key part of reaching all rural Americans with high-speed broadband service,” he said. “This will enable us to clarify existing gaps in coverage and harmonize the diverse solutions that will be required to help rural Americans keep pace with their urban counterparts.”

Since co-ops are nonprofit businesses that operate at cost, they will continue to need public investment—including government grants—to bring broadband to rural areas, Johnson said.

“Rural electric cooperatives are uniquely suited to partner with the government for these projects because of the existing infrastructure we have in place throughout our service areas,” he said. “As member-owned, locally operated and democratically controlled entities, we feel we can best determine the needs of our local service areas because our consumer-members have a direct say in the services we provide. We will continue serving these areas we call home long after other companies have reduced the quality of their service or ceased investment altogether.”

Read more coverage of the RURAL Act:

As Majority of House Signs On to RURAL Act, Lead Sponsors Press for Vote

RURAL Act: Why Popular, Bipartisan Legislation Can Face Hurdles in Congress

Co-op Voices, Part 1: How Losing Tax-Exempt Status Would Hurt Rural Residents

Co-op Voices, Part 2: CEOs Discuss Impacts of Tax Law Glitch for Members

Q&A: RURAL Act’s Lead House Sponsors Say Co-op Voices Are Key to Bill’s Success

Q&A: Senate’s Lead RURAL Act Sponsors Discuss Their Strategy for Passage

NRECA CEO Jim Matheson: ‘If We All Stand Up,’ Co-ops Can Save Tax-Exempt Status

Co-op Advocacy Needed to Move Vital Tax Fix in Congress

Bipartisan Bill Would Protect Co-ops From Losing Tax-Exempt Status

Listen to a recent podcast on the RURAL Act:

As Congress considers legislation to improve federal broadband data, NRECA is urging a key House committee to include crucial provisions to ensure the accuracy of maps showing which rural communities have access to high-speed internet service.

“More granular and accurate maps showing broadband availability are a key part of reaching all rural Americans with high-speed broadband service,” NRECA CEO Jim Matheson wrote in a letter to the House Energy and Commerce Subcommittee on Communications and Technology.

“This will enable us to clarify existing gaps in coverage and harmonize the diverse solutions that will be required to help rural Americans keep pace with their urban counterparts.”

Matheson signed the letter along with Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association. They sent the letter in advance of a Sept. 11 subcommittee hearing on how to improve the nation’s broadband mapping.

The issue is crucial because inaccurate maps can wrongly show that rural residents have widespread access to broadband when only a few people in the community are connected. Faulty data also can deprive electric cooperatives of the chance to compete for government grants to bring broadband to rural communities that need the service to boost their economy, educational opportunities and telemedicine services.

The subcommittee is considering at least three bills aimed at improving broadband data and mapping. Matheson and Bloomfield asked lawmakers to address these four key issues in any legislation:

• More granular data is needed for maps to reflect actual broadband coverage areas. Currently, entire census blocks are often classified as served, even though many residents within those large geographic areas don’t have access.
• The quality of broadband service—including any limits on monthly usage—also needs to be reflected in any federal data that is gathered.
• Data should be standardized to ensure that all broadband service providers follow specific guidelines when they report what areas they are able to serve.
• There should be an easy way for rural communities to challenge the accuracy of broadband maps.

While Congress is considering legislation, the Federal Communications Commission has begun taking action on some of these issues to try to make its broadband data more accurate.

“Improving broadband maps is an incremental process that will not happen overnight,” Matheson and Bloomfield wrote in their letter to lawmakers. “Utilizing the proposals we have suggested, we are encouraged to see federal agencies and Congress moving forward simultaneously with mapping improvement and deployment activities to judiciously reach rural consumers with connectivity required to fully participate in our 21st Century economy and society.”

Erin Kelly is a staff writer at NRECA.

Mississippi ranks near the bottom when it comes to available broadband internet access. Electric cooperatives are on a mission to help change that.

Four co-op boards have approved plans to enter the retail broadband space just months after the bipartisan Mississippi Broadband Enabling Act took effect.

The new law authorizes—but does not mandate—electric co-ops to pursue retail broadband through an affiliate separate from their service as energy providers. The state legislature passed the bill in January and it was quickly signed into law by Gov. Phil Bryant.

The board of Tallahatchie Valley EPA in Batesville voted in the spring for delivering high-speed internet access to members, soon followed by the board of Prentiss County EPA in Booneville.

The boards of Tombigbee Electric Power Association in Tupelo and Alcorn County EPA in Corinth this summer voted in favor of building broadband services.

The co-ops commissioned multiple feasibility studies to inform their boards’ decisions on forming a fiber-to-the-home service.

“Bringing readily accessible, reliable high-speed internet to rural areas is the 21st century equivalent to rural electrification,” TVEPA Board Chairman Will Hays said. “The overwhelming response from our members also confirmed our studies, and we began to move forward.”

In creating Tallahatchie Valley Internet Services (TVI-Fiber), the board also changed TVEPA’s Articles of Incorporation to conform to the new state law, a move that members quickly approved, the co-op said.

TVI-Fiber will begin the $60 million, three-phase, 48-month buildout in mid-September. The co-op has applied for a grant from ReConnect, one of the U.S. Department of Agriculture’s rural broadband programs, and plans to pursue others.

“We are excited for the opportunity to be able to provide the services that our members so greatly desire,” said Brad Robison, TVEPA general manager and CEO. “We are a very rural system serving parts of the Mississippi Delta and grant monies would be a tremendous help to the project.”

Prentiss Connect plans to break ground in October on its 1,050-mile smart grid project and broadband for nearly 14,000 members. With 13 meters per mile of powerline, the fiber buildout is expected to be completed within two years at a cost of $23.5 million, said Ronny Rowland, co-op general manager.

“I have been involved in trying to get broadband service in North Mississippi for almost 20 years,” said Rowland. “Co-ops could not provide broadband services until our state law was changed this January. This is certainly an exciting opportunity to move our state forward and to provide what most consider a necessity of life today.”

Tombigbee EPA said its estimated $95 million broadband project across its 43,350-member service territory will proceed in four phases, each subject to board approval.

“High-speed data capabilities are no longer a luxury but a necessity for the economic growth and continued viability of rural living,” said Bill Long, TEPA’s general manager. “With the recent changes in Mississippi legislation allowing co-ops to provide broadband, we view it as our role and responsibility to serve this need.”

Listen to a recent NRECA podcast episode on rural broadband:

Read more:
Co-op Broadband Case Studies
Guide: Due Diligence of High-Speed Broadband Investment and Business Creation by an Electric Cooperative

Cathy Cash is a staff writer at NRECA.

When Congress returns next month from its August recess, there are only about 40 legislative days left this year in the House and about 50 in the Senate. That leaves a small window of opportunity for progress on the most pressing issues for electric cooperatives.

John Cassady, NRECA’s vice president of legislative affairs, gives an update on how co-op priorities have fared so far in 2019 and what’s next. The greatest urgency in this session of Congress is to try to push through two key bills: the SECURE Act, which would save co-ops more than $30 million a year in pension insurance premiums paid to the federal government, and the RURAL Act, which would protect co-ops from losing their tax-exempt status if they accept government funds, such as disaster relief or rural broadband grants.

What would you say is the most important progress that NRECA lobbyists have made so far in this session of Congress?

“We’ve made progress on key priorities, including progress on our top two legislative initiatives. The first is ensuring that the Senate follows the work of the House and finishes the job on the SECURE Act, which contains the language that provides relief from the high premiums the Pension Benefit Guaranty Corp. is charging our co-op pension plan. Our premium relief is tied up in a broader retirement package that has been approved by the House on an overwhelmingly bipartisan vote.

“Currently, the larger package is being held up by a few senators, not based on anything related to the substance of the issue that we care about. Nevertheless, it’s slowed the momentum from quick Senate action. Now, there is going to be a process on the Senate floor for the SECURE Act to move forward, and the hope is that the process will eventually lead to the Senate passing the bill and then getting it to the president’s desk this fall.

“There are a lot of trapdoors throughout the process, and that’s why these things never come easy … but this issue has been a long time coming.”

What about the other top legislative priority, the RURAL Act?

“On the issue of the RURAL Act, we’ve made a great deal of progress but are not quite as far along as the SECURE Act. This time last year, we were still doing a lot of the behind-the-scenes work on this issue: explaining to key members of Congress and their staff the impact of the issue, why it needed to be addressed, and lining up champions for our legislation. A lot of the blocking and tackling work had to be done.

“Fast forward to now, where we sit favorably if you look at the fact that the RURAL Act now boasts over 90 bipartisan co-sponsors in the House and 18 bipartisan co-sponsors in the Senate. There’s a high degree of awareness of the issue, and there’s a recognition that our challenge was an unintended consequence of the 2017 tax law. There’s an appetite to get it done.

“But we also face some obstacles. There are still some negative optics among some on the Hill who associate anything tax-related with the Tax Cuts and Jobs Act of 2017, which was handled in a very partisan manner that created a lot of bad partisan feelings. There are still some rough edges out there on Capitol Hill when tax policy is brought up. The challenge we have had, and what we’ve tried to maneuver around, is to avoid having the perception on the Hill that our issue is a purely partisan priority. We want to create a bipartisan recognition that our issue needs to be addressed on behalf of co-ops throughout the country and the rural communities they serve.”

Co-ops are worried about losing their tax-exempt status if they take federal, state or local broadband grants or disaster relief grants from the Federal Emergency Management Agency. Is this one of the issues you hear most about from co-ops?

“Yes, we’re hearing concerns in certain sections of the co-op world. I know Florida co-ops are very engaged from a FEMA standpoint, as an example. Many co-ops are leading with the concern that if their co-ops are hit with a major storm and there’s a presidential disaster declaration and FEMA grants are dispersed, that having those resources that help us restore power would then negatively impact our tax-exempt status and generate a tax liability for our member co-ops. That is an issue that helps put a point on our advocacy.

“The other issue is that some co-ops are working to help bridge the digital divide and leaning on grant dollars to put forward the initial capital investment. For example, there are a number of co-ops in Indiana looking to take advantage of the broadband grant program that the state has instituted. In doing so, they could potentially upset their tax-exempt status, which really runs counter to the goal of bringing broadband to rural areas. It’s a perverse outcome of public policy that our members would be in this position. They’re just trying to do the right thing, to bring solutions to their communities for broadband, and this unintended consequence has real impact on their ability to do so.”

Do you think there will be a big infrastructure bill in this Congress that could include more broadband funds and grid modernization?

“If you were to go through the halls of Congress, every member would say ‘infrastructure is a great idea. Democrats and Republicans should come together on infrastructure.’ But if you don’t have the right environment, it makes it challenging. There’s a high degree of tension between congressional Democrats and the Trump administration … and it doesn’t show any signs of letting up. So that doesn’t create a conducive atmosphere for bipartisan cooperation.

 “If I had to handicap the likelihood of a broad infrastructure package making its way through Congress, I would say it’s a low-probability proposition at this point.”

Have you played more offense or more defense on co-op issues so far with this Congress?

“We’re playing offense on the SECURE Act and the RURAL ACT. We played defense on a number of issues as well. A good example is the administration’s budget proposal to, once again, propose that the transmission assets of the Power Marketing Administrations be privatized. We had to play defense there and engage with policymakers on the Hill to ensure that that idea didn’t gain any footing.”

Erin Kelly is a staff writer at NRECA.

An Indiana multiservice cooperative is leveraging its fiber network to provide a rural community easier access to state-of-the-art health care services with a project that also will lay the groundwork for future economic growth.  

NineStar Connect, located outside Indianapolis, will pass through $2.3 million in federal loans and grants to help a regional hospital system build an urgent care and diagnostic center in an underserved part of Hancock County. The Greenfield-based co-op received the funds from the Rural Economic Development Loan and Grant Program sponsored by the U.S. Department of Agriculture.

Hancock Health will use the REDLG funds to buy MRI machines, CAT scanners and other medical equipment for the facility, which will connect to NineStar’s broadband fiber network.

When the Hancock Gateway facility opens in September, residents in the growing Mt. Comfort Corridor community will have quicker access to high-quality care, said Steve Long, president and CEO of Hancock Health and Hancock Regional Hospital. The facility also is expected to provide 27 high-paying medical positions.

As families and individuals shoulder more out-of-pocket expenses due to high-deductible health plans, “they often decide to forgo needed care, or they search for lower-cost options [at] imaging facilities located in strip malls utilizing older, lower-resolution imaging equipment,” said Long. “Our new facility combines hospital-quality imaging and lab equipment in a much lower-cost environment, which will allow us to price our services on par with lower-quality providers.”

The $12 million health facility is the first phase of a broader economic development strategy outlined in a 2019 Urban Land Institute report for sustained, controlled growth in the Mt. Comfort Corridor, a 13-mile stretch in Hancock County. Since 2000, NineStar Connect, which also provides water and sewer services, has been a partner, along with Hancock Health, the Greenfield Banking Company and town and county officials.

The plan’s second phase calls for a campus with mixed-use development, including commercial, retail and affordable housing.

“A lot of our strategic focus has been on what can we do to create a better quality of life for the people that we serve,” said Mike Burrow, the co-op’s president and CEO. “NineStar’s role in that is the fact that we have a very extensive fiber network.”

Burrow said the co-op’s fiber-optic investments have kept pace with the hospital’s growth in a booming Hancock County. 

“I give the hospital very high marks because they’ve truly embraced our fiber network and have continued to look at very creative ways they can embrace technology, leveraging our fiber network,” said Burrow. “A lot of county hospitals across the United States, and even in Indiana, are closing” because of lack of technology.

Earlier this year in Greenfield, NineStar Connect created Idea Co-op, a coworking office and technology campus to help entrepreneurs launch new ventures. Its fiber-optic network is a big selling point for people who want to work and live outside Indianapolis.

“The impact of NineStar Connect on the quality of life of residents of Hancock County, especially those in rural areas, cannot be overstated,” said Long. “The entire county has the ability to connect to fiber-optic-based broadband services, allowing every individual to be fully connected to the internet with speeds in the home exceeding the speeds businesses in other communities only dream of. It is hard to think of a stronger partner.”

Victoria A. Rocha is a staff writer at NRECA.

PALMYRA, Va.—Virginia Gov. Ralph Northam grew up on electric cooperative lines and lauds their record of “reliable and efficient energy service.” But at a historic church surrounded by woods in the state’s rural center, he recognized co-ops’ latest role: broadband provider to the underserved.

Co-ops “absolutely” have a role in his administration’s goal of connecting every Virginia resident to highspeed internet access, he said.

“To have the cooperation of the co-ops—we are all in this together—that’s the way we will move forward,” Northam said in an interview in rural Fluvanna County, where he traveled to announce a state broadband grant for Central Virginia Electric Cooperative.

“We want universal broadband, but every region has its own challenges,” he said. “A role co-ops have taken, by stepping up and using their [infrastructure], has really helped and has been part of the process to move forward. I commend the co-ops throughout Virginia.”

The grant to CVEC of $641,967 “will help connect 570 premises, including Lyles Baptist Church where we are today,” he told state, county and co-op officials and members gathered outside the redbrick edifice built in 1774.

Northam underscored the need for rural broadband to lift the state’s economy.

“If we’re going to have a business coming into Virginia, especially rural Virginia, if we’re going to help a business grow, there is no way we can do it without access to the internet,” he said. “Businesses are not going to come to regions of Virginia or this country when they don’t have access to broadband in the year 2019. It’s just that simple.”

CVEC’s board of directors, who attended the July 11 event, last year approved a $110 million investment to connect all 37,000 co-op members in parts of 14 counties by 2023.

“Rural people in Virginia are very patient,” said Gary Wood, CVEC CEO and president. “They’ve been waiting here to stream some congregation moments, and they’re going to have access to that pretty soon.”

The state grant will cover 25% of CVEC’s cost to build broadband in Fluvanna County and “open doors” to extend gigabit fiber —the fastest available connection—to neighboring counties, Wood said.

“Rural communities need broadband, and CVEC has made that commitment to us,” said Eric Dahl, administrator of Fluvanna County.

The grant is one of several won by co-ops across the state.

“We don’t have a better partner than our electric cooperatives,” said Evan Feinman, the governor’s chief broadband adviser. He updated the gathering on how 70,000 homes and businesses have been connected, including “hundreds” by electric co-ops, since Northam took office in 2018.

For many in the crowd, the excitement of broadband arriving will be akin to the first time a switch flipped electricity into their childhood homes.

Longtime CVEC member Joseph Stanley, 79, traveled 30 miles to hear the latest on the co-op’s broadband development. He said he hopes it soon comes to his Buckingham County home so he can stay connected to his sons who live near Richmond.

Stanley recalled how, as a child, his family home in Russell County initially lacked electricity and indoor bathrooms: “It was like a party every time we got a little more electricity turned on at our house.”

What will he do when he gets broadband? “Most of my partygoers have passed on,” Stanley said. “I’m going to have to invite a younger crowd.”

Cathy Cash is a staff writer at NRECA.

A Texas-based distribution cooperative is tripling up to meet demand for renewable energy and high-speed internet in its service territory by selling site-installed solar panels, energy storage technology and broadband services connected to its fiber network.

“We listened to our members who said they wanted more renewable energy options, specifically solar energy,” said Bill Hetherington, CEO of Bandera Electric Cooperative, adding that members also want fast, reliable internet service. 

“As a co-op, we are uniquely positioned to partner with members who want to invest in solar energy. We can now provide design expertise, installation and ongoing monitoring built on the long-term commitment of the cooperative.”

Since launching BEC Solar in 2016, the co-op found that over 40 percent of members who buy solar arrays also add battery storage to their systems.

The co-op-provided storage systems are scalable, so up to 10 can be installed on a single system, said Todd Horsman, manager of technologies for BEC Solar. “That makes them a good fit for customizing solar installations to meet the needs of individual members’ homes or commercial account needs.”

During the design phase, the co-op reviews several years of a member’s electricity use and makes system-sizing recommendations, said Horsman. “That sets us apart from a lot of solar dealers, who will look at the available space and try to sell as many panels as possible. We don’t want members buying more of a system than they can reasonably use.”

The co-op is also providing maintenance and upkeep on the solar systems it installs. In the three years since its first systems went in, the co-op has made several reliability improvements.

“We now deploy solar panels equipped with individual inverters, reducing disruptions that can occur as a result of lightning strikes or severe hail or storm damage,” said Horsman. “With micro-inverters, you can lose one panel, and the rest of the array continues to operate.”

Both the co-op’s broadband and solar arms were launched as a direct result of responses to customer satisfaction surveys.

“We’re offering these products and services to bring more value to our members and the communities we serve,” Hetherington said.

BEC Solar has installed more than 150 solar energy systems, including its first commercial system, saving the co-op’s members more than $200,000 a year in power costs.  BEC Fiber has connected more than 3,200 members to high-speed internet and helped fuel growth in BEC’s overall member base, said Hetherington.

“Since 2017, we have seen more than 10 percent member growth annually,” Hetherington said. “The deployment of fiber has not only provided added revenue, it has also improved the electric system’s reliability.”

The co-op has also added several new skillsets to its workforce, leading to significant employment growth. Since their respective launches, BEC Solar has added six team members, and BEC Fiber has added 12 team members.

Overall, BEC has grown across the organization from 83 employees in January 2016 to 116 employees now, said Hetherington, adding that the co-op also operates a community solar farm that’s 93 percent subscribed.  “Our primary focus remains providing reliable electric service, and offering solar solutions enables us to keep rates low for all members.”

Inaccurate federal broadband data is creating big problems for electric cooperatives striving to bring high-speed internet service to rural America, a co-op leader told a House committee Tuesday.

Dan Stelpflug, director of operations, engineering and technology for Allamakee Clayton Electric Cooperative in Postville, Iowa, said faulty data from the Federal Communications Commission may force the co-op to pay back 23% of a $1.4 million broadband grant it received in 2014, causing a financial hardship for the co-op and its roughly 10,000 consumer-members.

The FCC grant was awarded based on agency data that said the co-op could reach 665 potential customers in 209 census blocks with broadband service, Stelpflug said. But the co-op later conducted its own count and found 510 potential customers, 23% fewer than the FCC data showed.

Co-op leaders discovered the discrepancy while preparing progress reports required by the FCC. Allamakee Clayton asked the agency last fall to waive some of its rules to allow the co-op to meet the requirements of the grant program based on the actual number of potential customers, but the agency has not responded, Stelpflug told members of the House Small Business Subcommittee on Contracting and Infrastructure. He said the co-op is hesitant to buy or update equipment because it may have to pay back nearly a quarter of the grant to the FCC.

“The bidding process required us to ask for a subsidy per subscriber per month,” he said. “Our bid was based on the subscriber count provided by the FCC, and at the time, the cooperative had no process or procedure in place to verify that the FCC data was correct. Had we known that the subscriber count was inaccurate, our bid per subscriber would have been incrementally higher.”

The co-op asked the FCC to verify how their count was done, but the agency refused to do so, Stelpflug said.

 “In a perfect world, we would have been able to identify this discrepancy earlier,” he testified. “But the realities of a small business, the timeline, and our initial trust in the accuracy of the FCC data didn’t allow for that to happen.”

There was no process to resolve the issue, even if the co-op had discovered the discrepancy earlier, Stelpflug said.

Allamakee Clayton’s frustration with bad federal broadband data is not unique. Many co-ops have struggled with trying to ensure that broadband grants go to areas that need it most. NRECA and its member co-ops have been lobbying Congress and federal agencies to improve the accuracy of broadband data, especially of maps that purport to show which areas have high-speed internet service.

Several bills to address the problem have been introduced recently. Stelpflug praised the bipartisan Broadband Data Improvement Act of 2019, which would require more granular data to be reported and create a way for the public to give feedback.

NRECA supports the bill, which is sponsored in the House by Reps. Tom O’Halleran, D-Ariz., Cathy McMorris Rodgers, R-Wash., G.K. Butterfield, D-N.C., Annie Kuster, D-N.H., and David McKinley, R-W.Va. An identical Senate bill is being sponsored by Sens. Shelley Moore Capito, R-W.Va., Brian Schatz, D-Hawaii, Jerry Moran, R-Kan., and Jon Tester, D-Mont.

Another cause of misleading data is broadband carriers, who can report advertised maximum internet speeds for entire census blocks even if they only provide high-speed service to one customer, Stelpflug said.

“Grant money is not available in these areas because the FCC assumes the census block is adequately covered with high-speed service,” he said.

The lack of high-speed internet is hurting farmers in the co-op’s territory because they cannot engage in “precision agriculture,” Stelpflug said in response to a lawmaker’s question. That practice allows farmers to use information technology, including GPS guidance, sensors, robotics and drones, to help manage their crops and livestock more efficiently. The tools require high-speed internet access to work.

“These farmers are really dependent on this stuff, and they’re kind of falling behind,” he said. “To be competitive with everybody, they need access.”

Reaching all rural Americans with high-speed internet service has become this century’s most complex challenge for co-ops, just as bringing electricity to remote areas was last century’s biggest struggle, Stelpflug said.

“More accurate maps showing broadband availability are a key part of reaching that goal, enabling us to clarify existing gaps in coverage and harmonize the diverse solutions that will be required to help rural Americans keep pace with their urban counterparts,” he said.

Read Stelpflug’s statement (PDF) to the House Small Business Subcommittee on Contracting and Infrastructure.

Listen to a recent NRECA podcast episode on rural broadband:

Read more on rural broadband:

Case Studies on Co-op Broadband Initiatives
New State Laws Clear Hurdles for Co-ops That Choose to Pursue Broadband
NRECA Urges FCC to Advance $20B Auction to Deliver Broadband to Rural America

The path to broadband internet access for more than a million rural Americans just got a little clearer.

On May 30, the governors of Alabama and North Carolina signed new laws that lift major hurdles for electric cooperatives to provide high-speed connectivity to unserved and underserved communities in their states.

Both laws authorize—but do not mandate—electric co-ops to deploy retail broadband and pursue any federal funds available for the task. The laws also allow co-ops to use their existing easements and infrastructure to deploy fiber to the home and ban class action suits against doing so.

Georgia, Indiana, Missouri, Tennessee and Texas have recently passed laws that facilitate rural broadband.

“These new broadband laws with provisions tailored to each state recognize the important role electric co-ops play in upholding the economic health, education and well-being of their consumer-members,” said Brian O’Hara, NRECA regulatory issues director for telecom and broadband.

Under Alabama’s new Broadband Using Electric Easements Accessibility Act, legal challenges to electric co-ops and utilities over easement use have a three-year statute of limitations and plaintiffs only may sue for actual damages, not punitive or consequential.

The Alabama Rural Electric Association of Cooperatives and its member co-ops helped shape the law to deliver broadband to what it estimates as 1 million residents without service.

“The law sets a bright line as to what co-ops can and cannot do,” said Sean Strickler, vice president of public affairs at the Alabama statewide. “We didn’t want to spend $1 million in a court case to prove we can do what we know we can do. This law removes those questions or concerns.”

Alabama co-ops and utilities that elect to provide broadband must provide a minimum speed of 25 megabits per second for download and upload under the new law. This prevents rural communities from having to settle for lower speeds based on obsolete technology, Strickler said.

The Federal Communications Commission defines broadband as 25 Mbps/3 Mbps and estimates at least 21.3 million Americans lack that level of internet access.

“We wanted to set ourselves to a higher standard,” said Strickler.

Two Alabama co-ops, Tombigbee Electric Cooperative and North Alabama Electric, already offer broadband. The new law plus the legislature’s approval of $20 million in state grants for rural broadband has several other co-ops exploring the broadband space, he said.

North Carolina’s new Electric Co-op Rural Broadband Services law allows co-ops to form broadband partnerships and subsidiaries and lifts a 20-year state ban on using U.S. Department of Agriculture funds for telecom initiatives.

“We now have more flexibility to utilize co-op broadband infrastructure to not only deliver innovative energy solutions, but also provide access to economic development, education and health care opportunities that are critical to rural prosperity and quality of life,” said Nelle Hotchkiss, North Carolina’s Electric Cooperatives’ senior vice president and chief operating officer.

North Carolina’s Electric Cooperatives recently established a partnership with RiverStreet Networks, a subsidiary of Wilkes Telephone Membership Corp., to assist the state’s electric co-ops in the deployment of broadband by facilitating the use of the existing cooperative fiber network.

“The models developed by this partnership may help sketch a broadband solution unique to a co-op’s situation and its pockets of areas that are unserved or underserved,” said Hotchkiss.

The North Carolina government has not yet released an official estimate on the number of residents without broadband, but high-speed internet advocate Broadband Now puts the figure at 468,000.

Listen to a recent NRECA podcast episode on rural broadband:

Read more on rural broadband:

Co-op Wins $51 Million for Broadband Networks Before Groundbreaking

Takeaways From NRECA’s Broadband Case Studies (PDF)

Cathy Cash is a staff writer at NRECA.

An electric cooperative in Tennessee is going back to its roots to bring high-speed internet service to its members. And co-op officials believe what worked more than 80 years ago could be even more effective today.

“In the 1930s, co-op leaders went door-to-door getting their neighbors to commit to joining Gibson Electric Membership Corp.,” said Dan Rodamaker, the Trenton-based distribution co-op’s president and CEO.  “We’re using a similar approach to build Gibson Connect, and we believe every member who wants high-speed internet will have access to the service within five years.”

The electric co-op’s membership fee has always been $5, and Gibson Connect, its wholly owned subsidiary, is being built with the same co-op model, with a one-time registration fee of $20.

“We want our members to drive this process, so by paying the minimal $20 registration fee it shows they support the project and are committed to taking the service,” said Charles Phillips, Gibson EMC vice president of technical services. He said about half of Gibson EMC’s members had access to internet service from other providers but often expressed dissatisfaction with their service.

Passage of broadband accessibility legislation by Tennessee legislators in 2017 cleared the way for electric co-ops to offer the service in areas not served by telephone cooperatives.  A projected market of 36,000 potential subscribers was identified among Gibson EMC’s eligible membership.

“We divided our service territory into 27 zones created with a community focus,” said Phillips, who also serves as vice president of operations for Gibson Connect. He said each district was designed around landmarks or characteristics familiar to area residents.

“Building more than 600 miles of fiber-to-the-home per phase is a large and time-intensive process,” Phillips adds.  “The good news is that those members who have been connected say they love the service.”

So far, at least 30 percent of the members in 11 of the Gibson Connect zones are signed up, with some areas doubling the required advanced participation commitment. Work to extend broadband service from the co-op’s fiber-optic network to homes and businesses began in six zones as part of a phase one rollout. Five additional zones will be tackled in the recently announced phase two construction.

“The broadband project has been promoted at grocery stores, parades and other events held throughout the co-op’s service territory,” said Rita Alexander, Gibson EMC’s vice president of human resources and member services. “We want our members to be a part of it so that the communities where they live and work will be able to get service sooner rather than later.”

Co-op officials expect to have their broadband backbone completed before 2025. 

“To help move the project along and hold down costs, we are vigorously pursuing grants for those areas that qualify,” said Rodamaker. Grants totaling more than $3 million have already been obtained from state and federal sources, and Gibson Connect will also seek additional low-interest loans and grants from USDA’s Rural Utilities Service as they become available.

Read more on rural broadband:

Co-op Wins $51 Million for Broadband Networks Before Groundbreaking

NRECA Urges FCC to Advance $20 Billion Auction to Deliver Broadband to Rural America

Takeaways From NRECA’s Broadband Case Studies

Listen to a recent NRECA podcast episode on rural broadband:

A broadband buildout to more than 16,500 members of a Pennsylvania electric cooperative is nearly paid for before the first fiber cable is spliced.

Through a convergence of federal, state and local funds and partnering, Tri-County Rural Electric Cooperative’s broadband subsidiary has acquired $51 million in grants to deliver high-speed internet access to its seven-county territory within three to six years.

Groundbreaking for the 3,250-mile fiber network is slated for August.

“We want to build broadband to deliver a better quality of life for our members,” said Craig Eccher, president and CEO of the co-op based in Mansfield, Pennsylvania. Eccher participated in an urban-rural digital divide discussion at the National League of Cities in Washington, D.C., on May 15.

“We have the funding in place to build the system. We have infrastructure to make it happen.”

Tri-Co Connections won a $32.5 million bid in the Federal Communications Commission’s Connect America Fund II auction to serve rural census blocks rejected by the large national broadband providers.

That led to the “first marriage” between a co-op and the Pennsylvania Department of Transportation and a $17.5 million grant for broadband infrastructure, Eccher said. Then came a $1.5 million grant from the Pennsylvania Redevelopment Assistance Capital Project program.

“If we didn’t win CAF II money, we didn’t win state money,” he said.

In April, the Pennsylvania Public Utility Commission determined that Tri-Co Connections met its criteria to serve as an “eligible telecommunications carrier.” It was the state’s first such designation to an electric co-op broadband subsidiary, which potentially carries additional regulatory obligations.

Three years ago, Tri-County REC sent out grassroots teams to discover the connectivity needs for health care, education and economic development in north-central Pennsylvania.

Almost half the school-age children receive subsidized breakfasts, and more than half will not seek secondary education. Instead, they will enter the military or the workforce, securing jobs created by the natural gas industry and others, he said. Broadband could spur economic development and teleworking to meet their needs.

“The infrastructure is in the school, [but] when they go home there is no connectivity. How do they get their schoolwork done?” said Eccher.

“It is important that we get this connectivity. We are concerned about these kids when these gas jobs dry up. We need to be smart about this and do better for that generation.”

Read more on rural broadband:

NRECA Urges FCC to Advance $20 Billion Auction to Deliver Broadband to Rural America

Takeaways From NRECA’s Broadband Case Studies

Listen to a recent NRECA podcast episode on rural broadband:

ARLINGTON, Va. – Federal Communications Commission Chairman Ajit Pai has appointed National Rural Electric Cooperative Association CEO Jim Matheson to serve on a Broadband Deployment Advisory Committee. The committee will identify new ways to encourage the expansion of broadband to rural and urban low-income communities, as well as disaster response and recovery capabilities in the communications sector.

“Expanded broadband access is a key ingredient for a healthy 21^st century rural economy,” Matheson said.  “Electric co-ops are committed to improving the quality of life in America’s rural communities. I look forward to bringing that community focus to the FCC and fostering a conversation around policy changes to bridge the digital divide.” 

Matheson will serve on the committee with 35 other leaders from various sectors. The committee will meet for the first time on June 13.

About 24 million Americans lack broadband access, most of them in rural communities. More than 100 electric cooperatives are working to solve this problem by leveraging partnerships and investments in communications infrastructure to connect communities.

The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Georgia electric cooperatives now have legal clarity to pursue retail broadband for their consumer-members and federal funding to make it happen. 

A new state law gives the go-ahead to co-ops that want to deliver broadband services or improve internet access in their service territories.

“This will open the door for more of our co-ops to take a serious look at broadband where they might have been reluctant before,” said Dennis Chastain, president and CEO of the Georgia Electric Membership Corp.

“Access to broadband services can give rural Georgians a fair chance in our state’s evolving economy.”  

The law also removes the uncertainty that has kept co-ops in Georgia from accessing federal funds for rural broadband, said Jason Bragg, Georgia EMC’s vice president of government affairs.

The Department of Agriculture’s ReConnect loan and grant program for rural broadband awards additional points to applicants from states that have granted utilities specific legal authority to provide broadband.

“Now, large urban co-ops and small rural co-ops can look at what works best for them in their market,” Bragg said.

The law further clears up the “gray area” for co-ops that want to lease dark fiber—excess fiber optic connections from their internal communications network—to internet providers, he said.

Chastain said he expects most co-ops may consider partnerships rather than take on the operational and budgetary challenges involved in entering the broadband space.

For Habersham EMC in Clarkesville, Georgia, and Blue Ridge Mountain Electric Membership Corp., which are already in the broadband business, the new law “gives them the legal certainty they did not have before,” he said.

BRMEMC, based in Young Harris, this winter delivered broadband to Blood Mountain and a well-known hikers’ shelter on the Appalachian Trail.

Georgia joins Mississippi, Indiana, Tennessee and others in recently lifting legal hurdles for electric co-ops to explore ways to deliver high-speed internet access. 

Chastain praised Georgia Gov. Brian Kemp, state Sen. Steve Gooch and state Rep. Jay Powell for their recent action to get the broadband bill enacted.

“The passage of Senate Bill 2 encourages continued dialogue among a variety of stakeholders to identify the best and most efficient way to expand broadband service,” he said. “Georgia’s EMCs have a reputation for the careful planning of reliable, safe and affordable delivery of electricity. The same due diligence will be essential when evaluating broadband services.”

Cathy Cash is a staff writer for NRECA.

About $20 billion in federal funds may be available as early as next year for electric cooperatives pursuing broadband service in rural America.

A new auction, dubbed the Rural Digital Opportunities Fund (RDOF), is expected to offer up to $20.4 billion to build broadband in unserved or underserved census blocks identified by the Federal Communications Commission.

RDOF will be a huge encore to the FCC’s $2 billion Connect America Fund II auction in 2018. CAF II marked the first time that electric co-ops were allowed to bid in such an auction, and about 35 co-ops won over $225 million, which will be distributed over 10 years.

NRECA is urging the commission to expedite rules for the RDOF so the auction can be held in 2020 and not pushed back to a later date. 

“The RDOF presents an unparalleled opportunity for electric cooperatives interested in deploying broadband to their communities,” said Brian O’Hara, NRECA regulatory issues director for telecom and broadband.

“Electric cooperatives accounted for about 30 percent of all winning CAF II bids. A majority of these co-ops are deploying gigabit networks, which is about 1,000 times faster than FCC-defined broadband,” he said. “We will be working to build on that success with the FCC to ensure our members can compete and succeed in the next auction.”

NRECA, along with America’s Communications Association and NTCA–The Rural Broadband Association, asked the FCC in a May 9 letter to fast-track its efforts for the new auction.

The trade groups also recommended that the FCC use the most current information to determine where high-speed internet access remains unavailable. “[B]y using the latest [semiannual] Form 477 data in conjunction with a robust challenge process, the commission can more accurately identify unserved census blocks and target support to where it is needed,” the groups told the FCC.

“NRECA looks forward to the FCC opening a proceeding to establish the rules for the RDOF auction and will be actively involved at the agency in helping shape the rules,” O’Hara said.

The FCC holds a broadband benchmark of 25 megabits per second download/3 Mbps upload, according to its 2018 Broadband Deployment Report.

Listen to a recent NRECA podcast episode on rural broadband:

Read more on rural broadband:
Takeaways From NRECA’s Broadband Case Studies

Guadalupe Valley Electric Cooperative knows a thing or two about providing internet access to rural America on a co-op’s budget. It’s been doing so for 20 years.

“We entered the business when the internet was just gaining traction,” said GVEC General Manager Darren Schauer.

Today, more than 12,500 GVEC members in south-central Texas are receiving broadband services over its wireless and fiber-to-the home networks.

“We are seeing strong demand for our service,” he said. “We are realizing customer take rates in the range of 60 to 80 percent within the first 18 months of having the service available.”

GVEC, based in Gonzales, and a handful of Texas co-ops looking into FTTH are hopeful new state legislation will alleviate a major delay and cost for co-op broadband: easement renegotiations.

Texas law requires co-ops to sign new right-of-way agreements with landowners to add fiber to utility infrastructure. A bill moving through the legislature would make it clear that electric co-ops could use existing easements to provide broadband.

Distances across properties are huge in Texas, and absentee landowners are common. Hiring contractors to obtain easement permission from thousands of landowners can cost the co-op up to $500,000 per year, said Schauer, who recently testified before a state Senate committee considering the bill.

“We can install fiber on the pole but we can’t deliver broadband without receiving a new easement,” he said. “If we can get legislation passed, we can take those resources and apply them to building additional fiber.”

Low population density in rural communities also carries higher service costs, but Schauer said, “We want to be sure we are doing something in each of the counties that we serve.”

GVEC, which serves electricity in five counties and parts of 13 others, is building broadband into each of the five primary counties. The meters in these areas range from nine to four per mile.

GVEC first offered dial-up connection to the World Wide Web to its members in 1998 when no other provider would. Next, the co-op offered multi-point wireless access with speeds up to 25 megabits per second—what the Federal Communications Commission today calls broadband.

The co-op began exploring FTTH in 2013, targeting a small, densely populated area and developing a team to test itself on planning and design.

GVEC has since reached more than 9,000 homes and businesses with broadband fiber starting at 100 mbps and plans to build access to another 4,000 to 5,000 this year, Schauer said.

“From our perspective, broadband fiber-to-the-home has to pay for itself,” said Schauer. “We saw what type of take rates we could get. The investment and return we made was in line with our projections.”

Schauer believes broadband delivered by electric co-ops is here to stay.

“Broadband is really lagging across rural areas,” he said. “It is only going to grow in the future as more and more people become dependent on high-speed internet.”

Cathy Cash is a staff writer at NRECA.

Millions of rural Americans without broadband internet access today are losing out on billions of dollars in quality-of-life benefits ranging from better employment and education to commerce and health care.

That’s the word from NRECA Chief Economist Russell Tucker in his presentation at the USDA’s 95th Annual Agricultural Outlook Forum in late February.

“Access to broadband is essential for the economic health of rural communities,” said Tucker, lead author of the recent NRECA report “Unlocking the Value of Broadband for Electric Cooperative Consumer-Members.”

Co-ops deliver electricity to at least 6.3 million households that NRECA estimates to be without broadband access. This lack of access limits economic value for consumer-members on several fronts to the tune of $68 billion over 20 years, Tucker said.

“Many electric co-ops are concerned about the economic health and long-term viability of their communities if broadband access is not attained,” he said. “If broadband is not available in rural America, will parts of the rural population decide to move to where it is available? This is critical because the labor force is drawn from the population.”

The bright spot? Electric co-ops are already working hard to bridge the digital divide.

“Today, more than 100 co-ops are at varying stages of delivering retail broadband solutions. Many more are assessing the feasibility of providing retail service,” Tucker said.

“To the extent that broadband access provides an opportunity to maintain or grow the rural workforce combined with productivity-enhancing applications—such as precision agriculture—then this bodes well for local economic growth.”

Co-ops are finding ways to deliver high-speed internet as a byproduct of broadband backbone communications systems they are building to enable the application of smart grid technologies. These high-capacity, low-latency communications networks offer a cost-efficient opportunity to deliver retail broadband to communities served by the co-ops, Tucker said.

“In this way, electric co-ops are part of the solution to the digital divide,” he said.

By connecting critical infrastructure and delivering high volumes of data quickly, a broadband backbone alone improves grid reliability and saves money even for smaller co-ops.

A 10,000-member electric co-op could avoid grid operation costs of about $2 million to $3 million a year from smart grid applications enabled by operating a broadband backbone, NRECA research found.

Read More:

5 Takeaways From NRECA’s Study on the Value of Broadband for Consumer-Members

Q&A: The Benefits and Challenges of Building a Broadband Backbone

The Value of a Broadband Backbone for America’s Electric Cooperatives: A Benefit Assessment Study

A new law in Mississippi is unleashing electric cooperatives to explore broadband internet access for their members. But significant financial and density barriers for rural connectivity remain.

“We got permission from the legislature, now we need patience from everybody,” said Michael Callahan, CEO of Electric Cooperatives of Mississippi.

Gov. Phil Bryant signed the bipartisan Mississippi Broadband Enabling Act on Jan. 30 after it cleared the state Senate unanimously and the House 115-3.

The new law does not mandate that electric co-ops pursue broadband but expands their authority to do so through an affiliate that is separate from their electric service. Co-ops can hang broadband fiber on their existing power poles and lease it to the affiliate. Or, the affiliate can partner with an internet provider to get the job done.

With internet access below standard or nonexistent across Mississippi, alliances of businesses, civic groups and colleges last year requested legal clarity for electric co-ops to enter the broadband space.

“There was a large push from citizens in Mississippi who live in rural areas,” said Jason Siegfried, president and CEO of Southern Pine Electric, headquartered in Taylorsville.

When it comes to internet access in his co-op’s service territory, “a large portion has none at all,” he said.

That means a high percentage of children cannot do online homework assignments, houses are harder to sell, and farmers lack the advantage of smart equipment to run their poultry houses, he said.

Upon learning of Southern Pine’s internal fiber network, one elderly member made a personal plea to the co-op. “His doctors told him that if he had a good enough internet connection, he wouldn’t have to drive 30 miles one-way for them to get data from his pacemaker,” Siegfried said.

Southern Pine Electric is one of many co-ops undertaking feasibility studies on how to bring their members affordable high-speed internet.

“Once we have a fully vetted business plan that our board is confident in, and our members are absolutely supportive of us doing this, we can move forward,” Siegfried said.

Biggest Boardroom Decision

The rural nature of Mississippi makes broadband delivery an expensive proposition.

“Projects of this magnitude could be the biggest decision made in the boardroom in some time,” said Siegfried.

A study commissioned by a majority of Mississippi’s 25 co-ops estimates costs at $1.5 billion to deliver broadband fiber-to-the-home to 75 percent of their members.

“Our biggest problem is our density,” said Callahan. “Each co-op will have to look at its own demographics and density and whether it makes sense for them to do this.”

Co-ops in some parts of the state have as few as four customers per mile of powerline, he said. The national average for co-ops is about eight customers per mile.

With the new law, two co-ops have said they may build a broadband business and initiate connections as early as next year, and already internet providers “are upgrading their speeds and bringing their prices down,” said Callahan. One general manager told him the local cable company now plans to expand service and deploy fiber.

“Several independent telephone companies have also reached out to co-ops to work together. They are exploring those possibilities,” he said.

“The new law provides our electric co-ops various opportunities to provide or assist in delivering broadband services in Mississippi. And that was the goal of the bill.”

Cathy Cash is a staff writer at NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson issued the following statement in response to President Trump’s State of the Union address:

“Rural America is counting on policymakers to find common ground and work together to address the needs of rural communities — needs that transcend politics and demand compromise and collaboration,” said Matheson. “Improving our nation’s aging infrastructure is a great place to start.

“In the 21^st century economy, updated roads and bridges have diminished value if they lead to rural communities that lack modern infrastructure like broadband access. It’s important for policymakers to work together and explore new infrastructure initiatives to help maintain and modernize the electric grid and bridge the digital divide.

“Electric cooperatives work arm in arm with more than 42 million Americans and serve as engines of economic development throughout their communities. We stand ready to work with every policymaker who shares our goal of a brighter future for rural America.”

According to the FCC, an estimated 24 million rural Americans lack broadband internet access. More than 100 electric cooperatives are working to bridge the digital divide by bringing broadband to their communities. Hundreds more are conducting broadband deployment feasibility studies.

The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Lamar Paris is no stranger to winter’s treachery on the roads that wind through the mountains of North Georgia.

He’s been elected sole commissioner of Union County for the past 18 years, and among his unofficial duties have been frequent hazardous drives up nearby Blood Mountain to report, via his Facebook page, on road conditions through the highly traveled Neels Gap.

“This is our main transportation artery out of Union County for 80% of all critical medical needs,” said Paris. “Anytime there was a bad snow or ice storm, I’d physically drive up the mountain to check the road conditions. I’ve done it for several years, often in the middle of the night. It’s dangerous for me [but] I felt it was something I always needed to do. I couldn’t ask anybody else to do it, so I’d do it myself.”

Now, thanks to broadband internet access installed by Blue Ridge Mountain EMC and the time-saving work of an intrepid drone, the need for Paris’s pre-dawn ascents has disappeared.

“It’s almost like a dream for me,” he said.

The Georgia Department of Transportation installed a weather station with cameras on the mountaintop with internet connection through a distant cell tower. But when winter storms blew in—the most critical time to obtain weather data—the signal would frequently drop.

“It was a nice amount of equipment, but we didn’t have a way to access it on a regular basis,” said Paris. “That’s why I went to see Jeremy Nelms.”

Nelms is the CEO of Blue Ridge Mountain EMC, which has offered fiber-to-the-home broadband to its members for more than 10 years. After hearing Paris’s weather-station concerns, Nelms offered to help connect the system to the co-op’s fiber network.

“This link is necessary so the local government has connectivity to a weather station and cameras atop the mountain,” said Nelms. “Understanding winter weather conditions is critically important, because this passage is a main thoroughfare for citizens of Union County and its surrounding counties who travel south to get to work and to health care facilities in the Gainesville and north Atlanta areas.

“The benefits of the project will show themselves during the first good snow, when people know they can or cannot go over that mountain. It could save lives.”

The co-op in late 2018 planned to extend 7,000 feet of fiber cable up the mountain. But the path to the top included a deep gorge and 100-foot-tall pine trees.

Keeping the project on track and getting it finished before winter required an unconventional solution: drones.

“Drone technology is starting to become a game-changer in the utility industry,” Nelms said. “From supporting line construction efforts to system inspection and storm restoration assistance, drones are just another arrow in the quiver of the utility worker of the future.”

The co-op based in Young Harris, Georgia, partnered with Southern Company Services to fly a drone from ridge top to ridge top carrying a pull line that would later be attached to fiber cable. Co-op crews climbed steep embankments to follow the drone, which used a mechanical release to drop the pull line and sometimes even flew low enough for the crew to grab it.

“Without the drone, we would have been looking at weeks and not hours to complete this effort,” Nelms said.

Improving Public Safety

The co-op connected the weather station on Dec. 13, 2018, after getting a permit from the Georgia DOT and approval from the U.S. Forest Service.

With fiber service to the weather station, data and pictures will soon be able to be livestreamed during extreme weather conditions. Eventually, the goal is for any would-be mountain driver with an internet connection to be able to access the information as well.

It could even help some of the 2,000 hikers that transit the area every year. The weather station is adjacent to the popular Walasi-Yi Interpretive Center, the only man-made structure that the 2,175-mile Appalachian Trail passes through.

“This fiber line will be incredible for the safety of this area,” said Paris. “Sometimes hikers don’t realize how tough it can be, or they can get caught in a snowstorm.”

A reliable connection will be invaluable for mountain rescues, when timely communication by voice or data is critical, Paris added.

“Having this quality signal will help emergency personnel get data to doctors before they even leave the scene.”

‘A Historical Project’

Blue Ridge Mountain EMC first offered internet access in its remote mountain territory way back in 2002. It began its fiber rollout in 2006.

“Members were asking for it,” said Daniel Frizzell, the co-op’s director of engineering. “In our area, there is no opportunity for rail or air or interstate—it doesn’t exist up here. We had to find a way to jump-start growth, meet the [broadband] demands for education, medical and industry.”

Now the co-op has 1,100 miles of fiber across its system bringing broadband to more than 7,800 members in the counties of Fannin, Union and Towns in Georgia and Cherokee and Clay in North Carolina.

“When you are in a rural area like we are here, it is of critical importance to minimize any barrier to companies being successful,” said Erik Brinke, the co-op’s director of administrative service and external relations. “It makes a difference if we are able to mitigate one biggie—internet connectivity.”

For Paris, the co-op’s commitment means he can rest a little easier knowing his constituents have timely information about icy mountain road conditions.

“I can’t tell you how much we appreciate the EMC taking interest in the project,” he said. “It is not mundane. It’s a historical project for this area.”

Cathy Cash is a staff writer at NRECA.

NRECA advocates on many public policy issues on behalf of electric cooperatives. As the new Congress kicks off, here’s a look at several electric co-op policy priorities for 2019.

Energy Policy/Infrastructure

The potential for energy and infrastructure legislation presents a significant opportunity as electric cooperatives work to meet the growing needs of their communities. NRECA will work to ensure that any infrastructure package focuses on more than roads and bridges, including opportunities to modernize the electric grid and expand rural broadband access.

Environment

NRECA will promote and encourage bipartisan support for energy research and development programs—including on renewables and programs that focus on finding a viable use for carbon capture, utilization and storage.

Broadband

Expanded rural broadband access remains a priority for NRECA. As electric co-ops engage the new Congress, we will work to ensure that all rural broadband discussions include the electric co-op perspective.

Employee Benefits

NRECA provides benefits to 56,000 electric cooperative employees nationwide. We will continue working to protect electric cooperative employee retirement benefits by supporting legislation to substantially reduce the insurance premiums that co-ops pay to the Pension Benefit Guaranty Corporation.

Tax Policy

The 2017 tax reform law included a provision that treated federal grants as income, threatening the tax-exempt status of some electric cooperatives. NRECA will seek to fix this unintended consequence of the tax law.

Grid Resilience

Protecting our nation’s vast power grid is a national priority and focus for electric cooperatives. Ensuring appropriate information sharing and preserving existing partnerships and structures are essential to these efforts.  We will advocate for resources and technologies that meet the unique cybersecurity and recovery needs of small and medium-sized utilities to help protect our systems.

Listen to our podcast episode on how NRECA works with Congress to advocate for co-op priorities: 

From community development to broadband and renewable energy, electric cooperatives stand to benefit from the Farm Bill overwhelmingly passed by Congress this week and now headed to President Trump, who’s expected to sign it.

The House voted 369-47 in favor of the bill on Wednesday, a day after the Senate approved it, 87-13.

“The bill advances the interests of rural America,” said NRECA CEO Jim Matheson. “Its strong rural development provisions will enable co-ops to invest in modernizing the electric grid and continue key economic development activities in the communities they serve.”

Lawmakers agreed to keep or expand several programs important to electric co-ops.

The bill preserves the Rural Economic Development Loan and Grant Program beyond 2021, when funding was scheduled to expire. Electric co-ops use this program to finance economic development projects in their communities.

Funding also is maintained for the Rural Energy for America Program, which offers loans and grants for renewable energy initiatives.

The bill also extends the Rural Energy Savings Program to provide loans for home energy retrofits. Electric co-ops created the program as part of the 2014 Farm Bill. The new language increases the allowance for administrative expenses from 3 percent to 5 percent of the loan.

Big Win for Rural Broadband

Several provisions in the bill will help electric co-ops bridge the digital divide:

• Authorization for $350 million a year in grants and loans for deploying rural broadband. (Funding for this new program is in addition to the Department of Agriculture’s $600 million broadband loan/grant pilot program included in the budget passed by Congress in March.)
• Areas with low population density will be eligible for the highest proportion of federal grants. Broadband projects in areas with fewer than seven people per square mile may be eligible for grants covering up to 75 percent of the total project.
• Grants will be available for areas where 90 percent of the homes lack internet service at the minimum level of 25 megabits per second to download data and 3 Mbps to upload. In areas where half the homes are without 25/3 Mbps service, applicants will be eligible for loans.
• Loan or grant applicants must now commit to build broadband service at speeds that will meet the areas’ future needs.
• The bill does not prevent the use of Rural Utilities Service funding for broadband projects in areas that have received Federal Communications Commission funding.

Mixed Results on ‘Cushion of Credit’ Program

The RUS cushion of credit program has provided escrow-like accounts for borrowers to deposit excess money and earn a steady return. The Farm Bill modifies the program to allow for withdrawals from the cushion of credit account for purposes of paying down RUS debt without penalty. The bill will eventually lower the interest rate paid on cushion of credit balances.

The bill includes these changes to the cushion of credit program:

• No new cushion of credit deposits will be allowed after the bill is enacted.
• Co-ops in the program may transfer their cushion of credit money to prepay RUS loans without penalty through Sept. 30, 2020.
• Remaining cushion of credit funds after 30, 2020, may be applied only to regular RUS debt service payments.
• Existing cushion of credit balances will earn 5 percent interest until Oct. 1, 2020, when that rate will drop to 4 percent. Beginning Oct. 1, 2021, interest on remaining balances will be paid at a floating 1-year Treasury rate.

Cathy Cash is a staff writer at NRECA.

ARLINGTON, Va. – NRECA CEO Jim Matheson today welcomed an announcement by the U.S. Department of Agriculture (USDA) on the launch of its e-Connectivity pilot program established by Congress.

“Today is a good day for rural America and the families and businesses that call it home,” Matheson said. “Secretary Perdue’s announcement lays the groundwork for an improved approach to making broadband a reality across rural America. This pilot program, and the strong broadband provisions included in the 2018 Farm Bill, highlight a much-needed shift in federal policy to make rural broadband a possibility for the estimated 23 million Americans who lack it.

“Electric cooperatives are driven by a deep connection to their communities. That community-focus has led more than 100 electric co-ops to launch broadband deployment projects to help modernize rural economies. Broadband access at the right speed is absolutely essential for the growth of communities that today are suffering because of the digital divide. We look forward to working with federal policymakers and other stakeholders as we build on these positive developments and make new strides to close that divide.”

America’s electric cooperatives played a key role in the development of this new pilot program. We are very pleased that the pilot program adopts a 25/3 sufficiency standard and will prioritize applications that would deliver speeds in excess of the 25/3 minimum standard.

NRECA supports five success factors for making rural broadband available to every American. They include:

• Providing additional financing support through a combination of grants and loans.
• Encouraging better broadband coverage data collection to spotlight service gaps.
• Allowing all capable providers to have equal access to federal funding, regardless of technology.
• Prioritizing grants to projects in areas with the lowest population density, given that is a prime cost driver of the lack of broadband deployment.
• Ensuring that broadband systems funded with federal money meet the growing speed and data consumption needs of today and the future.

The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landmass. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

Arlington, VA – NRECA CEO Jim Matheson today released the following statement regarding the FCC’s Broadband Deployment Advisory Committee (BDAC) vote to approve a model code for states.

“Existing federal programs have failed to close the digital divide and the BDAC missed an opportunity to offer meaningful solutions to expand broadband access in rural America,” said Matheson. “Just two of the ten articles in the state model code specifically address rural issues. Instead of focusing on solutions for unserved and underserved rural communities, many of the recommendations focus on issues specific to urban areas where broadband is already available.

“Ignoring the precedent of federal law and laws in 20 states, the state model code would treat co-op poles like those belonging to large investor-owned utilities. The state model code would also cap pole attachment rates in state statute, effectively making those rates permanent. This code, in effect, increases regulatory burdens while giving co-ops less time and less money to comply with those regulations. There is no evidence that such a proposal will lead to better broadband access in rural areas, and I encourage state legislatures to find a better way.”

NRECA believes a genuine effort to bridge the digital divide will:

• Provide financing support with a combination of grants and loans.
• Improve the data to enhance our understanding of broadband coverage gaps.
• Allow all capable providers equal access to federal funding, regardless of technology.
• Prioritize grants funding for areas with the low population density.
• Future proof investments by making project funding contingent on providing speeds greater than 25/3.

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The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landmass. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

NRECA CEO Jim Matheson, speaking before a Washington audience of business strategists, outlined how federal policymakers can help close the digital divide and what innovative electric cooperatives are doing to meet rural America’s broadband needs in the meantime.

High-speed internet service “is important to us as electric cooperatives because we are owned by the communities we serve, communities that won’t have much of a future without broadband,” Matheson said at the Next.2018 conference held Nov. 13-15 by Bloomberg BNA, a news and analysis company.

Matheson underscored how electric co-ops are leaders in smart technology, yet Federal Communications Commission policies fail to make the most of co-op investments for broadband development.

“The FCC has spent $114 billion, and there are still 23 million people without access to broadband,” he said. This gap in service is due in part to the commission’s reliance on self-reported and unverified data about internet service from incumbent providers.

In addition to better data collection, Matheson said there needs to be greater government financing of rural broadband through grant-loan combinations. The most sparsely populated areas should receive more grant money to offset the higher costs of building rural broadband, he said.

Federally funded broadband providers also should provide the highest speeds available to meet growing communities’ education, health care and business needs, he added.

Matheson described how a Missouri co-op with fewer than 7,000 meters deployed broadband to its membership with the help of a $10 million federal grant and a $10 million loan. Ralls County Electric Cooperative in New London has had a 70 percent take rate across its service territory.

“When it comes to delivering broadband, government aid should not favor any type of technology or business provider,” said Matheson. “When electric cooperatives come to the table, we just want the consumer to have real broadband.”

On the legislative front, Matheson sees the potential for an infrastructure package in the new Congress that should include provisions to advance rural broadband.

He noted that a bill to improve the nation’s connectivity and other infrastructure has been advocated by the Trump administration and is an area where lawmakers of both parties could reach an accord.

“Co-ops want infrastructure [legislation] in ways that expand the smart grid and broadband,” said Matheson. “That’s one area where Congress can work constructively in a bipartisan way.”

Cathy Cash is a staff writer at NRECA.

Watch: “Connecting Rural Communities” at the Bloomberg Next.2018 conference.

Read More:

On the Front Lines of the Digital Divide: Co-ops Push for Better Broadband

NRECA Coverage and Resources on Rural Broadband

Listen to our Along Those Lines podcast episode on co-ops and rural broadband:

In rural America, today’s efforts to deploy high-speed internet have been equated with the push for rural electrification 80 years ago. Billions of federal dollars have been allocated to help bring broadband to the heartland, and some say it could ultimately determine whether some small towns survive into the future.

For electric co-ops, the possibility of bridging the digital divide is a huge opportunity to not only leverage the infrastructure they already have in place and to draw on their expertise in serving their members, but also to continue their long history of improving the quality of life in their communities.

But is that the right move for co-ops? On the second episode of Along Those Lines, our host, RE Magazine Editor Scot Hoffman asks a couple of broadband experts about that and other key issues that co-ops face when determining whether to pursue a broadband project. You’ll hear from Mike Keyser, CEO of BARC Electric Cooperative in Millboro, Virginia, which launched its broadband subsidiary last year, and Brian O’Hara, regulatory issues director for NRECA’s government relations team, whose portfolio includes broadband.

Listen to the episode below:

You can also listen and subscribe to Along Those Lines on your preferred podcast service:
Apple Podcasts | Google Podcasts | Stitcher | Spotify | YouTube

Related Content:

‘The Beauty of Fiber’: Lessons From a Small Co-op’s Big Broadband Project
NRECA Coverage and Resources on Rural Broadband
Electric Co-ops Get a Big Boost for Rural Broadband Efforts in FCC Auction
On the Front Lines of the Digital Divide: Co-ops Push for Better Broadband
Arkansas Co-ops Point to Power Success to Promote Broadband Technology

Find out more about NRECA’s podcast. Questions or suggestions? Email us at AlongThoseLines@nreca.coop.

Those who remember when electric cooperatives in Arkansas extended lines to serve their homes and farms are sharing memories to explain how those same co-ops can harness rural broadband to forge better futures for their members.

“My parents lived in hard times, and [electricity] has made me a better person,” said Marylyn Cox, a member of Corning, Arkansas-based Clay County Electric Cooperative. “At first there was just one light hanging from the ceiling, but it was just so wonderful to have a light.”

Cox was one of several members of Arkansas’ cooperative family featured in a video titled Empowering Rural Arkansas.

“For rural Arkansans in the early-to-mid 20th century, electrification changed their lives and transformed their communities,” said Duane Highley, president and CEO of the Electric Cooperatives of Arkansas. “Our heritage of service is a testament to our pledge to continue our mission.”

Graduate students from the University of Arkansas’ Clinton School of Public Service combined historic film footage with contemporary interviews to show the potential electric co-ops can have in bridging the internet divide.

“We work diligently to improve the quality of life for the present and future generations of electric cooperative consumers, just like the electric cooperative pioneers,” said Highley.

A team of graduate researchers conducted about 50 interviews across the state as research for the project. The materials are now part of an educational resource focused on technology development and public-private partnerships, including electric co-ops that help strengthen the state’s economy.

“This fits quite well with ongoing cooperative efforts to connect the state’s co-ops to high-speed broadband,” said Rob Roedel, director of corporate communications for the Electric Cooperatives of Arkansas. “By showing audiences how we worked together to bring power and lights to rural communities, the possibilities become easier to see.”

Interviews featured in the 17-minute video are interspersed with clips from Power and the Land, an informational film produced in 1940 for the Rural Electrification Administration to help promote electric cooperative organizing.

“The results of this project will educate generations to come about the importance of cooperatives and electrification,” said Lori L. Burrows, the statewide association’s vice president and general counsel, who led the project. “Capturing this oral history in a video format ensures that this important part of our state’s history is preserved in a meaningful and accessible manner.”

“Co-ops have always meant power to the members,” said Roedel. “This is another way of using our past to tell the story of what we can do in the future to help make their lives better and build a stronger future for our state.”

Watch the Empowering Rural Arkansas video:

Facing challenges that mirror those seen bringing power to rural America decades ago, electric cooperatives today are entering the broadband market knowing that in some cases, it may be the only way to save their communities.

That was a key message of a panel of co-op leaders at the recent Co-op IMPACT Conference in Arlington, Virginia.

“We are really talking about the ability of communities in parts of the American countryside to survive,” Jeffrey Connor, chief operating officer of NRECA, told the audience. “We have to compete.”

Public policies have failed to ensure adequate internet service in rural communities for commerce, education and medicine among other necessities, leaving more than 23 million Americans unserved or underserved, he said.

“That number will remain static unless we do something about it,” said Connor, who moderated the broadband panel. “We are already community-focused. We just want to be able to participate.”

Today, about 100 electric co-ops have taken on the task of closing the digital divide. Their reasons, Connor said, are not unlike those behind the electric cooperative movement of the 1930s and ’40s: an urgent need in the community for better economic and educational opportunities and the likelihood that no other entity will deliver.

Mike Keyser, CEO of BARC Electric Cooperative in Millboro, Virginia, said that the resources required to launch and manage a fiber-to-the-home (FTTH) build has him convinced that “electric cooperatives are the only ones capable of undertaking projects of this magnitude.”

“Nobody else is going to make the kind of investment, in both time and money that we’ve made in our community,” said Keyser. BARC, which serves members along the Blue Ridge Mountains, began building its fiber network for retail broadband a year ago.

Ralls County Electric Cooperative in New London, Missouri, was a pioneer when it deployed broadband internet to its members in 2004.

“We were losing quality people. They were moving out because of the lack of opportunities,” said Lynn Hodges, RCEC’s CEO and general manager. “We are actually growing now. It’s reverse brain drain.”

In Chariton Valley Electric Cooperative’s thinly populated territory, the lack of broadband access remains painfully evident.

Big employers struggle without reliable high-speed internet in the Albia, Iowa-based co-op’s seven-county territory, which comprises some of the lowest-income areas in the state. Critical internet-based services like telemedicine are out of the question, said Bryon Stilley, CVEC’s general manager and CEO.

“Students can’t even do their homework from home,” he said.

An NRECA study on the value of broadband shows that at the minimum 6.3 million co-op-served households are without broadband as defined by the Federal Communications Commission: 25 megabits per second download; 3 mbps upload.

Electric co-op consumer-members without broadband access will lose at least $68 billion in economic value over a 20-year period, said Russell Tucker, NRECA’s chief economist and lead author of the report.

“We know this number is underestimated. We don’t know by how much,” said Tucker, noting that the lost value is substantially higher than the estimated cost to deploy broadband to co-op homes nationwide.

The panel of co-op leaders underscored the importance of federal loans and grants to help get their multimillion-dollar networks built. “Combination loan/grant programs are absolutely critical to reduce the high capital costs, especially in low-density areas,” said Keyser.

Stilley told the audience about how a recent change in FCC’s funding process whittled an $8 million broadband grant for his co-op down to $56,000 through the Connect America Fund II Auction. The cut was based on inaccurate self-reported information, or “477 data,” collected by the FCC about available internet service as advertised by for-profit providers, he said.

He said CVEC will continue to search for funding for the project, which could cost around $36 million. The co-op serves 6,100 members and has a density of 2.8 members per mile in the rural areas it serves. When the city of Albia is taken into account, the density grows to 4.8 members per mile.

“We do what we can for members,” said Stilley. “We want to provide the same reliability of broadband that we do with electricity.”

Cathy Cash is a staff writer at NRECA.

Read more:

5 Takeaways From NRECA’s Study on the Value of Broadband for Consumer-Members

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

NRECA Coverage and Resources on Rural Broadband

A new NRECA study finds that approximately $70 billion in consumer value will be lost over 20 years if broadband internet access remains elusive for millions of electric cooperative members in rural America.

“High-speed broadband is essential infrastructure for modern life. Unfortunately, broadband access and adoption are not ubiquitous,” said Russell Tucker, NRECA chief economist and lead author of Unlocking the Value of Broadband for Co-op Consumer Members.

“The digital divide is real, and many Americans remain without adequate broadband service,” said Tucker.

For purposes of the study released Sept. 11, broadband or high-speed internet access is defined by the Federal Communications Commission as 25 megabits per second download and 3 megabits per second upload.

Here are some key takeaways from the study:

1. Millions of Co-op Members Lack Broadband

About 34 million Americans are without access to 25 Mbps/3 Mbps internet service, according to the FCC. Of that number, at least 13.4 million people in 6.3 million electric co-op households across the country lack broadband access.

Within every state served by electric co-ops, there are areas without high-speed internet service. This underscores how deficient broadband access is a multistate issue.

2. Private Carriers Fear Rural Costs

When it comes to connecting rural Americans to the internet, there is a huge gap between the benefits to consumers and what a private service provider will earn by deploying broadband in areas with low population density. Many of these areas are electric co-op territories.

Private carriers often find their returns fail to justify their per-customer investment cost even when the lost value for these rural consumers could exceed deployment costs by 70 percent.

3. Billions of Dollars Left on the Table

The FCC estimates that nearly all of the areas in the U.S. without broadband could be connected with an initial capital expenditure of $40 billion. In comparison, NRECA estimates that the lost consumer value of not connecting electric co-op members with broadband is $68 billion over a 20-year period.

A recent study by the Purdue Center for Regional Development calculated that the state of Indiana would receive about $12 billion in net benefits if the broadband investment were made in co-op territories statewide.

4. Broadband Backbone Eases Co-op Entry

A modern electric co-op requires up-to-the-minute smart communications technology, and that requires a broadband backbone. Such a system would allow the co-op to communicate with its substations, better oversee powerlines to restore or even prevent outages in a timely fashion, and provide smart meters and other advances that consumers demand.

A broadband backbone also affords co-ops the opportunity to provide retail high-speed internet, when possible, as it passes fiber-optic cable by members’ homes and businesses. Thus, co-ops that build a broadband backbone for their electric power system can more economically connect rural areas.

5. A Good Partner Can Help

Many hands lighten the load, and that rings true for rural broadband. While electric co-ops may have infrastructure in place and brand recognition among consumers in rural areas they serve, the cost to deliver high-speed internet can give many pause.

Government loans and loan guarantees and grants for rural broadband can help close the digital divide and narrow the gap between investments and lost consumer value. Partnerships between co-ops and private carriers are an economical way to deliver internet service to members at the end of the line.

NRECA, NRTC and Ericsson partnered on “The Value of a Broadband Backbone for America’s Electric Cooperatives: A Benefit Assessment Study,” available on cooperative.com. Also check out several co-op broadband case studies.

Cathy Cash is a staff writer at NRECA.

Arlington, VA – The lack of broadband access for 6.3 million electric co-op households results in more than $68 billion in lost economic value, according to new research by the National Rural Electric Cooperative Association (NRECA). The new report investigates the cost of the digital divide and the growing economic advantages to America’s rural communities.

The study analyzed the value that households place on broadband access. It noted that households in parts of America with broadband access receive, on average, a benefit of $1,950 annually. Applying this value to 6.3 million electric co-op households without broadband, the study finds a total lost value of $68.2 billion to cooperative members nationwide.

Importantly, the deployment of broadband would be expected to enable additional economic benefits such as expanded jobs, education and economic growth. None of these factors were examined in the NRECA study.

“Closing the digital divide is imperative for rural communities and will help improve the economic outlook for the entire country,” said NRECA CEO Jim Matheson. “Millions of Americans are locked out of the new digital economy simply by virtue of their zip code. Electric co-ops recognize the importance of expanded broadband access and are working to be part of the solution.”

High costs and low population density are two barriers to rural broadband deployment. Nonetheless, roughly 100 electric cooperatives are bridging the digital divide and bringing broadband to their communities.

Electric cooperatives are playing a central role in improving access to high-speed internet in and around their service territories.  For this reason, NRECA has been encouraged by two recent policy changes. Thirty-five electric co-ops will receive funding from the Federal Communications Commission Connect America Fund II reverse auction, which for the first time allowed cooperatives to participate as broadband service providers.

In comments on the Department of Agriculture’s Rural Utilities Service e-Connectivity Pilot Program, NRECA urged the RUS to 1) make 25/3 the minimum standard for an area to be considered served; 2) set 25/3 as the minimum “build-to” standard, but give priority to applications that would exceed the minimum speed and provide symmetrical broadband; 3) make population density a key factor in determining areas eligible for grants; and 4) allow flexible approaches to ensure affordable service.

– ### –

The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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.

Updated: Sept. 4, 2018

The state of Indiana will invest $100 million to develop high-speed internet access in its sparsely populated counties. The announcement comes on the heels of new research showing the state could gain $12 billion in economic benefits from rural broadband service.

“Today we’re sending a big message to the world that Indiana is making a huge investment in our quality of life and for those who aspire to join us,” Gov. Eric Holcomb said at a Sept. 4 gathering of elected officials and community leaders at South Central Indiana REMC in Martinsville. “We are linking Hoosiers to each other and to the world.”

The funds will be used for a new grant program “to bring high-speed, affordable broadband access to unserved and underserved areas of the state,” Holcomb said. Online education and better crop management are just a few of the benefits Indiana residents will reap from rural broadband, he said.

Tom VanParis, CEO of Indiana Electric Cooperatives, said the announcement demonstrates the governor’s “commitment to eliminating the ‘haves and have-nots’ and to reshaping how this vital service is made available to all Hoosiers, regardless of location.”

The study released last week by the Purdue Center for Regional Development examined the costs, benefits and investments of broadband deployment in seven Indiana co-op territories. A $4 return to the local economy was estimated for every dollar spent on the infrastructure.

“Extrapolating the net benefits for these seven REMCs to the state, the total for the state of Indiana would be $11,976,222,899. In other words, the state of Indiana would receive about $12 billion in net benefits if the broadband investment were made statewide,” according to the study.

“Across rural communities in this country, the need for access to reliable internet is undeniable,” said Bill LaDuca, sector vice president for electric distribution at CoBank. “This groundbreaking study has immediate implications for rural Indiana’s healthcare, education, economy and way of life. It also has implications nation-wide as to the economic return of this vital infrastructure investment.”

Indiana Electric Cooperatives and Tipmont REMC commissioned the study, and CoBank funded it.

“The areas of the state that lack affordable and reliable high-speed internet are largely the same as those served by electric cooperatives,” said VanParis. “The study clearly shows the return on the investment to the state is significant and justifies a meaningful state investment to supporting broadband deployment in Indiana.”

“It is fundamentally important to us to improve the overall economic health, vitality and quality of life in the communities we serve,” he said. “These findings validate the feedback from our consumers that reliable internet service is as vital to modern economic development, education and health care as electricity is.”

Tipmont REMC, Henry County REMC, Jackson County REMC, Marshall County REMC, Noble REMC, Orange County REMC and Whitewater Valley REMC were examined for the report.

Indiana’s 38 co-ops distribute electricity in 89 of the state’s 92 counties, or about 80 percent of the landmass. About 10 electric co-ops in Indiana are building out a broadband network themselves or through a partnership.

In 2017, Indiana Electric Cooperatives successfully urged state lawmakers to allow co-ops to use existing easements for the purpose of delivering broadband without having to renegotiate. The new law eliminates a major obstacle to delivering this service to members.

Cathy Cash is a staff writer at NRECA.

ARLINGTON, Va. – Thirty-two electric cooperatives were announced today as winners of the Federal Communications Commission Connect American Fund II (CAF II) reverse auction. Those winning electric cooperatives will collectively receive more than $250 million over ten years to help defray the costs of deploying broadband in unserved areas.

The CAF II auction marks the first time that the FCC allowed electric cooperatives to bid for funding as broadband service providers. Click here for a full list of winning bidders.

“Today’s auction results highlight the power of cooperative partnerships and collaboration as electric co-ops work to bring broadband to unserved communities in rural America,” said NRECA CEO Jim Matheson. “We thank the FCC for allowing electric co-ops to participate in this auction, and look forward to building on this success moving forward. 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 National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

• 3E8 Broadband Solutions, LLC (AR)
• Barry Electric Cooperative (MO)
• HolstonConnect, LLC (TN)
• Illinois Electric Cooperative (IL)
• Lake Region Technology & Communications, LLC (OK)
• Maquoketa Valley Rural Electric Cooperative (IA)
• Meriwether Lewis Connect LLC (TN)
• Mid-States Services, LLC (MO)
• Orange County REMC (IN)
• Roseau Electric Cooperative, Inc. (MN)
• Tombigbee Communications, LLC (AL)
• Tri-County Electric Cooperative (MI)
• Tri-County Rural Electric Cooperative, Inc. (PA)

Rural Electric Cooperative Consortium includes the following cooperatives:

• Arkansas Valley Electric Cooperative Corporation (AR)
• B-A-R-C Electric Cooperative (VA)
• Callabyte Technology, LLC (MO)
• Central Virginia Electric Cooperative (VA)
• Co-Mo Comm, Inc. (MO)
• Consolidated Electric Cooperative (MO)
• Douglas Services, Inc. (OR)
• Great Lakes Energy Cooperative  (MI)
• Midwest Energy Cooperative (MI)
• NEXT, Powered by NAEC, LLC (AR)
• OzarksGo, LLC (AR)
• Prince George Electric Cooperative (VA)
• GoSEMO, LLC (MO)
• South Central Arkansas Electric Cooperative, Inc. (AR)
• Sullivan County Rural Electric Cooperative, Inc. (PA)
• Gibson Connect, LLC (TN)
• Mecklenburg Electric Cooperative (VA)
• Oklahoma Electric Cooperative (OK)
• East Central Oklahoma Cooperative, Inc. (OK)
• United Services, Inc. (MO)
• Electric Cooperatives of Mississippi (A.A.L.) (MS)
• Conexon, LLC (AR)

A Federal Communications Commission panel will call for the regulation of power poles owned by electric cooperatives as one way for states to accelerate broadband deployment, drawing serious concern from NRECA.

The FCC Broadband Deployment Advisory Committee (BDAC) included a dozen other provisions that the association said threaten co-op operations as part of a model code for states to employ as laws and regulations for delivering high-speed internet.

BDAC is expected to give final approval to the state model code by late August or early September. NRECA has had a seat on the committee that is dominated by telecom representatives since its launch in 2017.

“When the BDAC approves the model code, state legislatures will be encouraged to take it up as how the FCC believes broadband should be deployed,” warned Brian O’Hara, NRECA regulatory issues director.

State model code provisions opposed by NRECA involve rights of access to existing network support infrastructure and rights of access to poles in the communications space. One of the most troublesome articles would classify electric co-ops as infrastructure “owners” and subject them to regulations under the code.

“The state model code, as drafted, ignores current exemptions from pole attachment regulation allowed by Congress for electric co-ops. It also ignores that all 20 states that have enacted laws streamlining attachments for small cell/5G networks allow that same exemption for co-ops,” said O’Hara.

The committee on July 27 failed to reach final agreement on the state model code and is revising the draft. The final state model code, however, is unlikely to allay concerns by NRECA, said O’Hara.

“We do expect it to eventually pass. We do not anticipate the provisions with which NRECA has concerns to be improved,” he said. “Once adopted by the BDAC, we fully expect the telecom industry to push hard for adoption of the model code in state capitals across the country.”

NRECA supported the only three articles it felt would assist rural broadband. One that established a broadband assistance fund remained in the document. NRECA managed to get co-ops and other non-incumbent telecom providers included as eligible participants.

Another provision that would create a state broadband infrastructure manager and Broadband Infrastructure Advisory Council was struck from the code. The third, to allow co-ops and municipalities to partner to deliver broadband, was set aside for possible reconsideration.

Cathy Cash is a staff writer at NRECA.

As Congress enters the August recess, NRECA is urging conferees to reach a compromise on the Farm Bill that achieves electric co-ops’ priorities for the legislation.

“We are encouraging Congress to pass a final Farm Bill that supports several key policy issues for electric co-ops and their member-consumers in rural America,” said NRECA CEO Jim Matheson.

The House and Senate each passed versions of the Farm Bill in June and are seeking to reach a compromise in the fall.

House leaders have named Republican and Democratic members to serve on the Farm Bill conference committee, and Senate conferees are expected to be named in the coming days.

Electric cooperatives have three priorities for the final version of the bill:

Remove Senate changes to Rural Electrification Act loan program

The House Farm Bill retains existing escrow accounts for co-op loan repayments and treatment of deposits into those accounts. The Senate-passed version eliminates the escrow or “cushion of credit” program that allows greater financial flexibility to co-ops and benefits the government by having funds pre-deposited toward loan payments.

“Cooperatives depend on the USDA’s electric loan program and its escrow treatment to serve the most rural, hardest-to-serve areas of the country,” said Matheson.

Promote true high-speed broadband for rural areas

The House version provides for significant financial investment in broadband development by electric co-ops and other providers in rural areas that have either no internet service or substandard service.

The Senate Farm Bill increases funds for rural broadband but provides only limited support for projects in areas with existing but inadequate service.

“Deployment of rural broadband is essential to keeping rural communities competitive,” said Matheson. “NRECA is working to ensure co-op member-consumers get high-speed internet service on par with the rest of the country.”

Include funds for rural economic development and innovation

Co-ops use the Rural Economic Development Loan and Grant Program (REDLG) to finance economic development projects, such as refurbishing a library or buying emergency response vehicles. Both bills reauthorize and improve the program through 2021. NRECA supports the Senate provision, which also provides $5 million for the program each year.

Cathy Cash is a staff writer at NRECA.