Decades after bringing electricity and telephone services to America’s rural households, cooperatives are tackling a new challenge: the rural digital divide. New updates to our report Cooperatives Fiberize Rural America: A Trusted Model for the Internet Era, originally published in 2017, illustrate the remarkable progress co-ops have made in deploying fiber optic Internet access across the country. 

Download the updated report [PDF] here.

All versions of the report can be accessed from the Reports Archive for this report.

The report features new maps showing overall growth in areas served by co-ops, as well as expanded information about state legislation that supports co-op investment in broadband networks. A few important takeaways:

More than 140 co-ops across the country now offer residential gigabit Internet access to their members, reaching more than 300 communities. 

Co-ops connect 70.8 percent of North Dakota and 47.7 percent of South Dakota landmass to fiber, and residents enjoy some of the fastest Internet access speeds in the nation.

Georgia and Mississippi have overturned state laws banning co-ops from offering Internet access, and other states, including Colorado, Maryland, North Carolina, and Texas, have implemented legislation that will further ease the way. 

Co-ops have proven that this is a model that works. With increased support from federal and state governments, they will continue to connect rural Americans to economic and educational opportunities otherwise denied to them. 

Read Cooperatives Fiberize Rural America: A Trusted Model For The Internet Era [PDF] here.

Beresford, South Dakota (pop. 2,000), has a long history of providing for itself. Located in the southeast corner of the state, Beresford operates its own electric utility as well as a municipal liquor store and golf course. For nearly 90 years, the city has also provided communications services to the community with the Beresford Municipal Telephone Company (BMTC), which currently offers DSL connectivity to residents and businesses.

In response to subscriber requests for faster speeds, BMTC recently decided to replace its old copper lines with a fully fiber optic network. The Fiber-to-the-Home (FTTH) upgrade will improve the network’s capacity and reliability, and city officials are optimistic about the potential benefits of better connectivity. “This is really a game changer for us,” said Beresford Mayor Nathan Anderson in a press release announcing the project.

Project Details

Over the next year, BMTC will deploy 70 miles of fiber to replace its current network. The new FTTH network will be capable of gigabit speeds, which over ten times faster than what BMTC can offer now.

“Our copper infrastructure has supported our many services over the years,” explained BMTC General Manager Todd Hansen, “but fiber optic cable improves speed, provides stability and will increase bandwidth.”

City officials believe the new fiber network will help the community grow. “Fiber is really going to help us to recruit and retain people to come, live, work, play and spend in Beresford,” Mayor Anderson said. “It’s potentially going to open new opportunities not just for residents but also for businesses.”

Beresford plans to spend approximately $5 million building the new network. At a March city council meeting, council members decided to commit $2.5 million to the project. The city expects to finance the remaining costs by issuing bonds.

BMTC will start construction on the FTTH upgrade in the fall.

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The fifth anniversary of the announcement of the KentuckyWired project is approaching later this year. As voters start to assess their candidates’ job performance, the unfinished and over budget middle mile public-private partnership (P3) has become an albatross that incumbents aren’t able to easily cast off. When we last discussed the project in 2017, we shared our observations and misgivings. Not much has changed, except some of our concerns have played out and the project has become troubled by new problems.

In Case You’re Just Arriving to the Party… 

The statewide, massive middle mile project officially began when Kentucky announced in late 2014 that they would build a fiber optic network in order to bring better connectivity to rural areas. They planned to find a private sector partner and sought bids. In the fall of 2015, Australian firm Macquarie won the contract for what soon became an even larger endeavor — a fiber optic network that would enter every county in the state at a minimum of one location. The network would consist of approximately 3,200 miles of fiber and connect about 1,000 public facilities. At the time the project was developed, the state estimated that deployment would cost approximately $300 million.

With early bipartisan support, the state allocated $30 million from their budget, which they expected to combine with $23.5 million in federal grants. When the Kentucky Economic Development Finance Authority issued $232 million in tax-exempt revenue bonds and $58 million in taxable revenue bonds to complete financing, Bond Buyer named the issue the “Deal of the Year” for 2015. Macquarie’s timeline estimated an optimistic one-year completion for the entire statewide project.

Macquarie Capital, as the entity managing the project, included in the agreement with the state a requirement that they and their partners, including Black & Veatch from Kansas and Ledcor of Canada, would build, operate, and maintain the network for 30 years. During the course of those three decades, the state would pay them approximately $1.2 billion and when the term was over, Kentucky would own the infrastructure free and clear. During the contract period, Kentucky would make “...

Cooperatives are building the next-generation networks that will support rural areas long into the future. We’ve covered this extensively at ILSR as we have gathered materials on community networks from across the country into one place. We want to share this fact sheet from National Rural Electric Cooperatives Association (NRECA) on how electric cooperatives are well-situated to bring high-speed Internet service to another 6.3 million households.

6.3 Million Households Have a Co-op, But No Broadband

The fact sheet features an insightful map of the areas within electric cooperative service territories that do and do not have broadband. (Note: The FCC defines broadband as a speed of at least 25 Mbps download and 3 Mbps upload.) Many telephone and electric cooperatives can take the credit for bringing needed connectivity to their communities. For example, more than 90 electric cooperatives across the U.S. have built Fiber-to-the-Home (FTTH) networks, which offer some of the fastest Internet service in the country.

The NRECA fact sheet, however, reveals the 6.3 million households in rural electric cooperative service areas that still need high-speed Internet access. These areas are primarily in the Midwest and the South. Creating pathways for electric cooperatives to extend Internet service is increasingly a priority in a number of these states, and state legislatures are now passing laws to empower both electric and telephone cooperatives. NRECA offers more policy recommendations to continue the momentum.

You can learn more about the ways rural cooperatives are bringing better connectivity to rural areas by reading our 2017 report, Cooperatives Fiberize Rural America: A Trusted Model For The Internet Era.

Check out the NRECA fact sheet, and drop us a line if you know of more resources to add to the ILSR’s Community Networks Initiative archives.