Almost 54,000 electric cooperative residents will see the benefits of a statewide law change in Maryland after a summer filled with changes. After a state vote to allow deregulation, Choptank Electric, which serves member owners across nine counties in Maryland’s Eastern Shore, voted in August to become member-regulated so that the cooperative can pursue broadband projects in a part of the state that has long suffered from poor or no connectivity options.
A State Law and a Membership Vote
The process unfolded earlier this year, when representatives for the co-op spoke with the legislature in Annapolis about offering broadband to its members. State law at the time meant that electric utilities were regulated by the Public Service Commission, which prevented them from entering the broadband space.
The Eastern Shore sits across Chesapeake Bay, with 450,000 people living across its nine counties. Driven by a lack of connectivity options and a desire for economic development, area legislators submitted HB 999, which drew support from dozens of businesses, 1,200 current Choptank customers, and a number of local governments. The “Rural Broadband for the Eastern Shore Act of 2020” [pdf] passed the state legislature on May 8th, 2020, and freed the co-op from regulation by the Public Service Commission. Talbot County resident Pamela Keeton testified to the Senate Finance Committee:
The bottom line is, no one wants to pay taxes and no one wants to spend money, so we’re left with no Internet service.
The move allowed Choptank to become member-regulated after two regular meetings and a membership vote, which took place from May to August both in person and electronically. Ultimately, it needed 7,000 members to vote yes. All told, 33% of its membership participated, and of those 98% were in favor of member regulation. As a result, the co-op will be able to form a broadband subsidiary to embark on construction and offer service.
A History of Local Investment
As it stands, Choptank already has 650 miles of backbone fiber in place for metering it can use. According to CEO Mike Malandro, efforts will begin next spring, and the co-op expects to start off by connecting between 50 and 100 member owners every week for the first year. It will look to double that in subsequent years, though the whole rollout will take some time. Construction will be funded by debt from the co-op, though no word yet on exactly what form financing will take.
Choptank Electric formed on September 21, 1938, as part of the nation’s rural electrification efforts. Currently, it serves member owners across the Eastern Shore in Caroline, Cecil, Dorchester, Kent, Queen Anne's, Somerset, Talbot, Wicomico, and Worcester counties. It owns more than 6,200 miles of distribution lines across 10k square miles, with about 40,000-100,000 easements it can use. Mike Malandro, CEO, said of the bill:
“This whole process is what we did with electricity 80 years ago. We want to do the exact same thing with broadband, and we feel confident can do it.”
Broadband on the Eastern Shore
Hundreds of thousands of Maryland residents [pdf] currently lack fixed broadband connections, with one in five in the state’s rural areas. It’s a problem that local governments have been trying to fix for years; Talbot County (pictured to the right), in Choptank's service area, issued an RFI in 2017 [pdf] to no avail. Carroll County has been expanding connectivity recently through its middle mile network, and Garrett County has been doing the same through an economic development initiative.
The move allows Choptank to participate in federal grant programs like the Federal Communication Commission’s (FCC) upcoming Rural Digital Opportunity Fund (RDOF). Maryland’s Office of Rural Broadband also has a grant program offering local governments grants of up to $200,000 to spend on extending service to unserved households.
It’s heartening to see legislation like this, which has been gaining steam around the country over the last few years and allowing electric cooperatives expand fast, affordable, high-quality Internet access.
Header image of Crisfield, MD waterfront by Wikimedia Commons user baldeaglebluff CC BY-SA 2.0