The U.S. Department of Agriculture (USDA) recently awarded a $2.85 million grant to Forked Deer Electric Cooperative headquartered in Halls, Tennessee, and $9.75 million to Orangeburg County, South Carolina to develop broadband infrastructure. The awardees will use the ReConnect grants to construct or expand existing Fiber-to-the-Home (FTTH) Internet access to thousands of households, critical community facilities, and educational facilities.

A Reconnect Primer

In 2019, Congress allocated $600 million for the ReConnect Program to help expand high-quality Internet access to rural America. Applicants can apply for a 100 percent grant, 100 percent loan, or a grant-loan combination. The ReConnect Program provides funding to allow for-profit companies, rural cooperatives, local governments, and tribes to deploy broadband infrastructure under specific guidelines. The service area for qualified applicants must be rural communities with 90 - 100 percent of the population considered "underserved," defined as Internet access speeds of 10 Megabits per second (Mbps) download and 1 Mbps upload or lower.

As we reported in September, more than half of the applications submitted came from cooperatives and local governments.

Orangeburg County

Under the American Recovery and Reinvestment Act (ARRA), Orangeburg County was awarded federal stimulus funds in 2010 and added around $4 million of their own money for rural broadband projects. Shortly following the stimulus package award, the state legislature enacted a law discouraging simlar local investment. The law requires local governments to charge rates for broadband Internet services similar rates to those of private companies, even if service could be provided at a lower cost. This law effectively limits local broadband authority and discourages communities from developing publicly owned networks.

The National Association of Counties (NACo) gave us permission to reprint an article they recently wrote in their County News publication. NACo advocates for county governments on federal policy that impacts local decsion and local control. NACo is based in Washington, D.C.

In the article, author Charles Taylor discusses the perils of Oconee and Orangeburg Counties in South Carolina, both involved in broadband projects supported by stimulus funds. Because of a new law passed this past summer, those projects are in danger and the possibility of future projects is all but extinguished.

Rural counties' broadband projects face uncertainty

The success of two South Carolina counties’ plans to provide broadband access to rural areas could be in jeopardy because of a new state law that severely restricts public broadband projects. It also essentially bans new ones.

Oconee and Orangeburg counties received more than $27 million in federal stimulus funds in 2010 for rural broadband projects.

A South Carolina law, enacted in July, requires local governments that offer broadband Internet services to charge rates similar to those of private companies, even if the government could provide the service at a lower cost and the area is not served by commercial providers.

“It effectively prohibits municipalities from operating their own broadband systems through a series of regulatory and reporting requirements,” said Catharine Rice, president of the SouthEast Association of Telecommunications Officers and Advisors (SEATOA). “These practically guarantee municipalities could never find financing because the requirements would render even a private sector broadband company inoperable.”

Orangeburg County, South Carolina, received $18.65 million in broadband stimulus funds for high-speed broadband (which we previously noted). Unfortunately, AT&T and its friends at ALEC have since pushed through a state law to limit local authority in building networks.

According to the Broadband Adoption Map from the Investigative Reporting Workshop of the American University School of Communication, Orangeburg County has a broadband adoption rate of 20-40% as compared to the national rate of 60%.

Not only has AT&T refused to invest in modern networks in much of South Carolina, it is not even bothering to accept a federal subsidy that would underwrite some of that cost. Which is actually good for the rest of us, because subsidizing any AT&T activities is a very poor use of taxpayer dollars.

But Orangeburg is moving forward on its own. The Orangeburg County Council approved a $2.4 million contract with Edwards Telecommunications to complete the third phase of their project. This phase alone will use 171 miles of fiber and add 902 households to the network. Two more phases are scheduled before the entire project is complete.

According to a Gene Zaleski Times and Democrat article:

Seventy-five percent of the project will be paid for with a U.S. Department of Agriculture Rural Utilities Service grant and the remaining 25 percent will be paid for with proceeds from the Orangeburg County capital project sales tax.

In 2010, after receiving the award, the County expressed their optimism in a Phil Sarta article in the Times Democrat:

In an effort to improve the area’s economic prospects, county officials have worked in recent years to secure funding to refurbish roadways and sewer systems—but they also know that, in a globalized marketplace, old-school infrastructure is not nearly enough. That’s why, in 2009, Orangeburg County applied for, and received, $18.65 million in stimulus money to finally give the area access to high-speed broadband internet. County Administrator Bill Clark and his colleagues envisioned a municipal, or muni, network that could reach roughly a quarter of Orangeburg’s rural population, including just over three thousand households and one hundred businesses. ... But the titans of telecom aren’t operating on quite the same wavelength. Since last January, AT&T, CenturyLink, and Time Warner have contributed just over $146,000 to politicians in South Carolina who back legislation that would cripple networks like Orangeburg’s. It’s only one example of a broader campaign by telecom companies to protect their cartel at all costs—even at the expense of keeping the country’s poorest on the wrong side of the digital divide for many years to come.