Cooperatives around the country have built on their long legacy of delivering essential infrastructure by starting to deliver next-generation Internet services. Here, we cover the basics of cooperatives in rural areas and then discuss the details of electric and telephone cooperatives that have already branched out into Internet service. Finally, we highlight the first Internet fiber optic cooperative and discuss how other communities have better Internet service through building their own networks.

Why Rural Cooperatives?

Cooperatives are part of the fabric of rural America. The member owners control the cooperative: each person receiving service is a member of the cooperative and can directly vote in elections for the Board of Directors or even become a member of the Board.  

Starting in the 1930s, the U.S. Department of Agriculture supported communities as they created more than 900 electric cooperatives across the country.  In the 1950s, the federal government again supported communities building telephone networks, crisscrossing the country with telephone cooperatives to connect rural communities.

Each technology brought new markets, revitalized economies, and revolutionized industries. Cooperatives have a long history of building and maintaining essential infrastructure and providing excellent service in rural communities. Now they have the chance to do that again by building next-generation networks for Internet service.

Rural Public Policies

Rural areas face a number of challenges that urban and suburban communities do not.  Low population density coupled with rough terrain can make building infrastructure challenging. Added to these factors, rural communities may not have access to the same financial resources as larger towns and cities do. 

Cooperatives, however, have made infrastructure projects work in rural communities for nearly a century.  They have access to funding from their membership base, local banks, and often the federal government. Some state governments have expanded their broadband grant and loan programs to include electric cooperatives. Other states have clarified laws and policies to recognize that electric cooperatives can build fiber networks for Internet service using their current infrastructure. A few states, however, have hurdles that stymy investments by electric cooperatives. Technically, the 1996 Telecommunications Act, Section 253, prohibits states from stopping any co-op from offering Internet service, but co-ops in many states are loathe to challenge state law in court.

Electric Cooperatives

More than 900 rural electric cooperatives provide electricity to about 12 percent of the U.S. population. Their service area, however, covers more than half of the total land, nearly 2 million square miles. About 50 rural electric co-ops have embarked on fiber optic projects to increase Internet access for their members. 

Several of these electric cooperatives started by building fiber optic lines to substations and large demand centers to increase the reliability of the electric system through better monitoring. This could then form the backbone of a network for Internet service to businesses and residents. 

Articles and Interviews

We have written many articles and collected several reports detailing how electric cooperatives have tried to increase Internet access in their communities. These stories show the many different ways electric cooperatives have structured partnerships and programs for their members.

Several electric cooperatives provide Internet service themselves. Some started pilot projects, while others built out to their entire service area. The Fiber-to-the-Home project by Valley Electric Association boosted the local economy in Pahrump, Nevada. The co-op has already added 31 new jobs because of the fiber service. 

Others partner with an existing telephone cooperative or telephone company. Ouachita Electric in Arkansas is one of the many cooperatives to have done this. By combining their resources and expertise, this partnership is able to extend electric and Internet service throughout much of southern Arkansas.

Many electric cooperatives work together, such as Sho-Me Power in Missouri and LS Networks in Oregon. These cooperatives have provided connectivity for local ISPs and businesses, and now are looking to connect residents.  

In episode 229 of the Community Broadband Bits podcast, Jon Chambers, the former head of the FCC Office of Strategic Planning and Policy Analysis, describes how electric cooperatives have the potential to bring Internet access to unserved rural America. 

Mel Coleman, president of NRECA and CEO of North Arkansas Electric Cooperative, joined the podcast in episode 243 to discuss how the electric co-op had improved Internet access for its members and what other cooperatives are doing.

Find more in our archives.

List of Fiber Projects

This is a list of the rural electric cooperatives that have programs and projects to increase connectivity in their service areas. They do not all provide Fiber-to-the-Home. Some only offer fiber connections to businesses while others focus on dark fiber and fiber transport services for other Internet Service Providers. (Last updated: 07/2017)

Telephone Cooperatives

There are about 260 telephone cooperatives in the United States. They provide Internet service as a natural extension of their existing infrastructure. Many started out by providing dial-up and DSL services, but only recently have begun to transition to Fiber-to-the-Home. Some have already transitioned to an all-fiber network, having upgraded everyone in their territory to fiber.

The Rural Broadband Association (NTCA) has a gigabit certification program in order to draw attention to how many small telephone companies cooperatives have built these next-generation networks. 

Articles & Interviews

We have featured a number of these cooperatives on our website. Some cooperatives choose to work with local governments or electric cooperatives while others focus on providing service alone. Below is just a small selection of the many cooperatives that have built Fiber-to-the-Home networks. 

In Michigan, a rural telephone cooperative got its start in the early 2000s. The community went from sparse telephone service to state-of-the-art Internet service. Read more about Allband Communications Cooperatives unique story here.

Paul Bunyan Communications Cooperative in Minnesota has expanded their GigaZone throughout the northern half of the state, including Red Lake Nation.

In Missouri, Callaway Electric Cooperative and Kingdom Telephone Company (the local telephone co-op) teamed up to form a new company together called Callabyte Technology to deliver Fiber-to-the-Home service.

Episode 188 of the Community Broadband Bits Podcast features Eric Cramer, the President and CEO of Wilkes Communications/RiverStreet Networks. He explained how the telephone cooperative has built a Fiber-to-the-Home network throughout several counties in northern North Carolina.

Read more in our archives.

The First Internet Cooperative

Cooperatives are not just telephone and electric. There is now a workable model for Internet cooperatives created from scratch. RS Fiber in Minnesota is the first cooperative formed for the express purpose of providing reliable, high-speed Internet service. 

We have extensive coverage of how RS Fiber started and the rural communities they have connected. Read more in our report RS Fiber Fertile Fields: New Rural Internet Cooperative.

More Resources

List of Gigabit Cooperatives

These cooperatives offer a gigabit to residents within their service areas. This list includes only those gigabit cooperatives found with FCC Form 477 data through June 2016. (Last updated: 07/2017)

Community Broadband Bits Podcast Episodes

Listen to our collection of Community Broadband Bits Podcasts to learn firsthand about how electric cooperatives have made the decision to provide Internet service.

Image Credits:

Rural Barn Flag, woodleywonderworks, Creative Commons license

Minnesota House Chamber, Chris Gaukel, Creative Commons license

Wooden Pole, dimitrisvetsikas1969, Public Domain