Over the past eighteen months, southeastern-Mississippi based Dixie Electric Power Association (Dixie EPA) has gone from presenting its initial buildout plans for a fiber-to-the-home (FTTH) network, all the way to connecting its 5,000th subscriber. Because of electric cooperatives like Dixie that are getting organized and prioritizing connectivity for their members, Mississippi is likely to become one of the states with the best rural connectivity within the next five years.

Founded in 1938 in Laurel, Mississippi, Dixie EPA’s present-day coverage area stretches across southeastern Mississippi in parts of Covington, Jasper, Jones, Clarke, Wayne, Perry, and Forrest counties. The cooperative provides electric service to 30,000 premises. 

In September 2020, about six months into the COVID-19 pandemic, Dixie began pre-registering subscribers for Internet service under the cooperative’s newly-created subsidiary, DE Fastlink. Dixie was part of a collective of electric cooperatives that had just received a recent state appropriation of $65 million in CARES Act funding for rural broadband deployment. The funding was administered under the Mississippi Electric Coop Broadband Covid Grant Program by Mississippi Public Utilities. Dixie planned to match in full its own $3.3 million award, which, according to the terms of the grant, had to be spent by the end of that year. 

The cooperative was one of fifteen in Mississippi to receive funding for a buildout. The state was a new leader in supporting cooperatively-run rural broadband; only a select few states decided to spend CARES funding on rural broadband, and Mississippi spent among the most. Of the $75 million in CARES funding it had designated for expanding connectivity, $65 million was awarded to electric cooperatives, while only $10 million was set aside for other types of providers. Of this $10 million, only $1.5 was actually used, because the state received very few grant applications...

By Karl Bode and Ry Marcattilio-McCracken

 The FCC’s Rural Digital Opportunity Fund (RDOF) Reverse Auction was completed a little more than a year ago to much fanfare and spilled ink, and though we’ve seen irregular updates over the last twelve months, we thought it worth the time to round up what we know so far in an effort to see where we’re at and determine what is likely to come.

The RDOF was built to award up to $20.4 billion in grants over 10 years using competitive reverse auctions generally won by the lowest bidder. The money comes from the Universal Service Fund fees affixed to consumers’ monthly telecom bills. The previous FCC announced $9.2 billion in auction winners in December of 2020. 

To date the FCC has announced five rounds of Authorized funding released, six rounds of applicants whose bids they have decided are Ready-to-Authorize, and three rounds of Default bids. 

It’s clear that the final picture is still taking shape, but looking at things a year later leaves us feeling a little better than we were immediately after the auction closed. To date, it appears the FCC is closely scrutinizing many of the bidders that most worried industry veterans and broadband advocates, while releasing funds for projects that will bring future-proof connectivity to hundreds of thousands of homes over the next ten years.

Moving Slowly on Problematic Awards

The biggest news so far is that of the top ten winners, seven look to have received no funds at all (see table below or high-resolution version here). That’s $4.1 billion worth of bids for almost 1.9 million locations, and includes LTD Broadband, SpaceX’s Starlink, AMG Technologies (NextLink), Frontier, Resound Networks, Starry (Connect Everyone), and CenturyLink. This is a big deal.

Among the top 10 bidders who have received funds or will shortly, Windstream has received about two-...

Electric cooperatives illustrate the power that community-owned enterprises have to bring Internet access at scale to unconnected rural communities. Because of their work, states like Missouri (where 15 percent of all households only have access to broadband speeds slower than 100/20 Megabits per second, and only 38 percent have access to speeds of 100/100 Megabits per second or faster), will go from being among the least-connected states to one of those with the greatest connectivity in rural areas in coming years. 

An infusion of federal funding shows how publicly owned infrastructure can go farther and move faster. Ralls County Electric Cooperative (RCEC) serves as example in Missouri, building on its existing broadband infrastructure to further increase connectivity in one of the most connected counties in the state.

Closing the Gap

Ralls County, located in the northeastern part of the state, is one of three statewide to provide fiber or wireless Internet access to over 90 percent of residents in its service territory. With $1.3 million in funding from the Rural Digital Opportunity Fund (RDOF) now in hand, RCEC is extending broadband access outside of its electric service area.  

RCEC’s initial fiber buildout began in 2010. By 2014, it was the first electric distribution cooperative in Missouri to have built fiber out to all 6,300 of its members. 70 percent of RCEC’s members currently subscribe to its fiber services. Through its wholly owned subsidiary, the cooperative offers five speed tiers. Speeds range from 50/10 Megabits per second for $50/month to 1 Gbps/15 Mbps for $100/month in select locations. 

Reaching Beyond its Electric Membership Footprint

The RDOF funding has allowed RCEC to extend its service area to “100 percent of the addresses in areas along U.S. 24, north of Mark Twain Lake, and areas on Highway 54 south of the Mark Twain Lake.” RCEC Manager and CEO Lynn Hodges expects to reach half of these areas...

When the FCC announced the winners of the Rural Digital Opportunity Fund (RDOF) last December, many industry veterans were surprised by the appearance of LTD Broadband as the largest recipient of funds. The company managed to snag more than $1.3 billion to serve 528,000 locations across 15 states, but its capability to do so immediately drew skepticism from many (including us).

Now, a little less than a year later, the company's chickens are coming home to roost. In a recent ruling denying the company the expanded Eligible Telecommunications Carrier (ETC) status it needs to offer service in RDOF-awarded areas, the Iowa Utilities Board took LTD to task for a history of noncompliance and late payments:

Specifically, LTD had not complied with the Board’s February 22, 2019 order, as LTD had not yet filed a registration as a telecommunications service provider, was past due on its DPRS assessment, and had not yet filed an annual report with the Board for reporting years 2019 and 2020. 

[B]eyond the procedural flaws in LTD’s Application, the company’s responses to Board . . . illustrate that LTD has routinely submitted regulatory filings with obvious errors, if filings were submitted at all . . . It is for this reason that the Board takes seriously LTD’s history of inconsistent compliance with this provision, as the regulatory burden is minimal and the consequence of failing to uphold the obligation ETCs pledge to carry out impacts the rest of the industry, the Board, and most importantly, the Iowans served by the program.

But the regulatory board took its comments a step further, basing its ruling also on the fact that the company's behavior in the state betrays what looks like a lack of ability to meet its bidding commitments during the auction:

The record in this docket does not merit the expansion of a credential that signals to the public that LTD has evidenced the technical and financial capabilities required to carry out the public interest obligations of those entrusted with federal funds. LTD’s responses and actions lack the candor that the Board would expect from a carrier seeking to evidence the expertise to take on this degree of expansion.

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