Rural communities across the United States are already building the Internet infrastructure of the future. Using a 20th century model, rural America is finding a way to tap into high-speed Internet service: electric and telephone cooperatives are bringing next-generation, Fiber-to-the-Home (FTTH) networks to their service territories. This policy brief provides an overview of the work that cooperatives have already done, including a map of the cooperatives' fiber service territories. We also offer recommendations on ways to help cooperatives continue their important strides.

Download the policy brief, Cooperatives Fiberize Rural America: A Trusted Model For The Internet Era here.

Key Facts & Figures

Farmers first created utility cooperatives because large private companies did not recognize the importance of connecting rural America to electricity or telephone service. Now, these cooperatives are building fiber infrastructure.

Almost all of the 260 telephone cooperatives and 60 electric cooperatives are involved in fiber network projects. As of June 2016, 87 cooperatives offer residential gigabit service (1,000 Mbps) to their members.

Rural cooperatives rely on more than 100 years of experience. The cooperative approach does not stop with rolling out rural infrastructure, but ensures that their services remain viable and affordable. 

The majority of Montana and North Dakota already have FTTH Internet access, thanks to rural cooperatives. Even one of the poorest counties in the country (Jackson County, Kentucky) has FTTH through a telephone cooperative.

AT&T receives about $427 million each year in rural subsidies to bring Internet service to rural America, but AT&T does not invest in rural fiber networks. 

Moving Forward

Our policy recommendations offer an outline of how to build off of this work and further support rural cooperatives:

1. Design funding programs with cooperatives in mind. Recognize what requirements make sense for large organizations and what is unnecessary for...

Approximately 30 miles separate Morristown and Newport, but the two are joining forces to better connect local businesses and residents as entrepreneurs take up residence in the region's newest high-tech work space.

An Incubator for Innovation in Morristown

SkyMart Venture Place is a new cooperative workspace stirring innovation in the quaint downtown district of Morristown.

Morristown was on the forefront of implementing city-wide Fiber-to-the-Home (FTTH) back in 2006. Today their gigabit network MUS FiberNET is fostering innovation in this thriving co-working space and helping neighboring communities bridge their connectivity gaps. Lynn Wolfe explains that the new space has helped support her in the early stages of her business. “[SkyMVP] gives me a place—with super-fast internet—to come and do my internet marketing, and it has been very beneficial for that and being able to upload my training videos,” Wolfe said.

SkyMVP’s doors opened in August of last year and it’s become a hub for local entrepreneurs. The space allows members to hold workshops, rent office space, and network with other professionals.

Similar incubator projects are underway in Virginia’s Roanoke Valley and Indianola, Iowa. SkyMVP is yet another example of how gigabit connectivity can spur positive transformations for local communities. Morristown’s decision to invest in FTTH infrastructure is emboldening their local economy and potential for small business growth in the area is promising. Sky MVP has even begun offering a course for budding entrepreneurs and a handful of free workshops.

Expanding the 'Net in Newport

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Mount Washington, Massachusetts, is set to light up its new Fiber-to-the-Home (FTTH) network this month. By “building our own Fiber-to-the-Home broadband network, we are taking an important step in securing our community’s long-term vitality and sustainability,” says Selectboard Member Gail Garrett. 

Mount Washington Recap

Mount Washington is nestled within the forested Taconic Mountains area located in the southwest corner of the state. The roughly 150 full-time residents have been frustrated with the lack of connectivity. "Everybody's had it with their current connections” said Garret and believes the town “deserves the same opportunity to connect to the internet as those in larger communities.” 

The final estimates for the network came in at $603,000 but the town planned for any unanticipated make ready or dig costs and prepared for a high estimate of $650,000. To fund construction, Mount Washington authorized the use of $250,000 from their stabilization fund in 2015, received $230,000 in federal and state funds from the Massachussetts Broadband Institute (MBI) earlier this year, and established a plan to borrow the remaining $400,000 through a state loan program. This spring, received an additional $222,000 grant from the Executive Office of Housing and Economic Development, which will allow them to pay down the debt sooner and have the network paid off within five years.

The FTTH network is set to provide residents who opted in, over 60 percent of the town, with up to 1 gigabit of upload and download speeds. To opt in, residents deposited $300 per household and committed themselves to three years of data and telephone service on the FTTH network.

According to Mount Washington’s Broadband Business Plan, the town will be charging $75.00...

Another rural electric cooperative is set to bring high-quality connectivity via fiber optic infrastructure. Volunteer Electric Cooperative (VEC) in Tennessee will be investing in a pilot program in Bradley County by year’s end.

A Learning Process - The Pilot

When it comes to fast, affordable, reliable connectivity via publicly owned Internet infrastructure, Chattanooga is typically the first location on everyone’s lips. Unfortunately, neighboring Bradley County has struggled with chronically poor connectivity. Even though Chattanooga would very much like to expand their reach to serve Bradley County residents and businesses, restrictive state law prevents the city from helping their neighbors.

Last summer, VEC saw an opening when the state legislature changed existing barriers that prevented electric cooperatives from offering broadband access or from applying for state grants to deploy the infrastructure. VEC is currently in the process of preparing grant applications through the state’s economic development commission. 

The purpose of the pilot, according to VEC President Rody Blevins, is to determine the level of interest in Fiber-to-the-Home (FTTH) connectivity in Bradley County. Areas VEC chose for the pilot include homes where there is no service and premises were there are more than one option.

"We are doing that to discover how many would choose our services who have no options as well as those who do have a source for broadband service already available," Blevins said. "That helps us looking at the bigger financial model."

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"If we have real low response, that's going to hurt us," he added. "We are not for- profit, so this thing has to pay for itself overtime. If I show my board it will never pay for itself, we can't do it. But, I don't think that's going to be the case."

Blevins told the Cleveland Banner that the cooperative estimates the cost to cover 75 percent of Bradley County would be approximately $40 million. He went on to say that if 50 percent of households in the pilot areas chose to sign up, “we would be in pretty good shape.” 

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