Central Virginia Electric Cooperative (CVEC), has been working on their plan to deploy Fiber-to-the Home (FTTH) to members and surrounding premises since 2017. The rural cooperative received a financial boost when they recently received a grant and loan award from the USDA's ReConnect Program.

Welcome Funding for Fiber 

With $28 million - part loan and part grant - CVEC plans to fund the first three years of their project. The USDA funding will allow CVEC to connect more than 17,000 households, six health care centers, 15 educational facilities, and 15 other community facilities. When the entire five-year plan is complete, approximately 37,000 premises will have access to FTTH. 

In Buckingham County, CVEC officials announced the award to about 200 people, including local resident Virginia Jackson. She and her family rely on their mobile phones' hotspots for Internet access, which is unreliable and can be expensive. She and her husband were interested in the project and how it would improve connectivity for them and left "excited to see what the project brings to our community."

Early in the planning process, CVEC sought funding from local governments where they plan to deploy infrastructure. They did obtain support, but still sought grants and loans elsewhere to help pay for construction of the project, which they estimated to cost between $110 and $120 million. CVEC has received grants from the Virginia Telecommunications Initiative (VATI), FCC Connect American Fund, Tobacco Region Revitalization Commission (TRRC), and a loan from the Rural Utility Service (RUS) for smart grid upgrades. 

The project will include deploying approximately 4,000 miles of fiber optic infrastructure and will touch 14 counties. The co-op will deploy in a range of competitive environments. In some areas, locals have only dial-up, whereas in other communities CenturyLink and Comcast already serve subscribers. Even in places where residents already have one or two options, the ability to connect with fiber...

At the end of 2019, Congress passed the Revitalizing Underdeveloped Rural Areas and Lands (RURAL) Act, fixing a tax law change that threatened to raise rates and delay the expansion of broadband for rural cooperative members across the country.

Passage of the RURAL Act ensures that cooperatives can accept federal funds for broadband deployment, disaster relief, and other efforts without risking their nonprofit tax exempt status. A change in the 2017 tax law would have labeled these funds as revenue for the first time, potentially causing co-ops to exceed the allowable percentage of non-member income they must maintain to remain tax exempt.

After Senators Tina Smith (D-Minn.) and Rob Portman(R-Ohio) and Representatives Adrian Smith (R-) and Terri Sewell (D-Ala.) introduced the bipartisan bill in April, it attracted 55 additional cosponsors in the Senate and more than 300 in the House. It was eventually incorporated into the consolidated appropriations act and signed into law in December.

“Obstacles From the Federal Government”

We described the possible impact of the 2017 tax law change on rural cooperatives over a year ago, when Senator Smith first brought the issue to our attention.

Failure to remedy it would have forced some co-ops to choose between continuing with desperately needed broadband and disaster recovery projects and increasing their members’ rates. Northwestern Electric Cooperative CEO Tyson Littau described the difficulty of that decision to the National Rural Electric Cooperative Association (NRECA):

Do we rebuild and try to strengthen our distribution system and pay the taxes, or do we delay the mitigation project that would improve 1,200 miles of line throughout our territory? I think we have a responsibility to the membership to improve the system for the future.

Gulf Coast Electric Cooperative was another co-op faced with the prospect of raising electric rates to...

As the USDA continues to award federal ReConnect funds for rural connectivity, we're glad to see that communities in West Virginia are not being ignored. Most recently, the Harrison Rural Electrification Association (HREA) announced that they will dedicate ReConnect grant funding of approximately $18.75 million to deploy Fiber-to-the-Home (FTTH) in rural sections of their service area.

Combining Funding and Collaboration

The project will bring more than 6,300 households high-quality connectivity along with five educational facilities and another community facility. The deployment will cover approximately 354 square miles within Harrison, Lewis, Upshur, Barbour, and Doddridge counties. Once completed, the project will provide better connectivity to around 16,000 residents.

In total, the project will cost an estimated $25 million and HREA will use a $6.2 million loan from CoBank to cover the difference. They plan to complete the project within 3 1/2 years and cooperative leadership intend to have the project ready for bids by the end of February.

Rather than offering Internet access directly to members, the cooperative will work with Prodigi Fiber, a private sector ISP that works exclusively in West Virginia and only with FTTH connectivity. The co-op will lease the infrastructure to Prodigi and dedicate the proceeds from the lease toward the CoBank loan payments.

Early Excitement

On the HREA Facebook page, locals have expressed their excitement at the prospect of better connectivity. Some note the need for better reliability while others are looking for better speeds or alternatives to current options. 

Lenny W.: Was excited to get the email. This is great for the rural areas of this county. Are there any maps or projections on what areas are going to start and when? I’ll sign up for whatever is $75-$100 per month.

Ken C.: Whoooohoooo

Sharon L.: Please,...

Farmers depend on Internet connectivity like any other businesses for daily office tasks such as record keeping, reporting, banking, and marketing. This dependency stretches further as daily farming productivity depend on GPS-based applications that enable real-time data collection giving accurate information on soil fertility, field mapping, and other farm-related tasks. An October 2019 report from the United Soybean Board (USB) describes how poor connectivity is striking at the heart of America’s agricultural industry.

Profitability and Sustainability: Threatened 

The report, titled Rural Broadband and the American Farmer [PDF]  reveals that 60 percent of U.S. farmers and ranchers do not have adequate Internet connectivity to run their business and 78 percent do not have a choice in Internet Service Providers (ISPs). The USB study touches on how poor Internet connectivity in rural parts of the country has negatively impacted profitability and sustainability in farming.

Among 2,000 farmers surveyed by the USB, 59 percent of  farmers plan to incorporate more data onto their system and 28 percent are considering more data usage. Most also want to use high-tech and data transfer applications but the impact of poor connectivity and unreliable Internet service does not allow them to do so. Michael H., a soybean farmer in south-central Louisiana said that, “Without the right support network, we can’t even consider taking advantage of getting real-time information from one piece of equipment to another.” Up to 33 percent of farmers said poor connectivity has affected their equipment purchases.

The U.S. Department of Agriculture Economic Research Service reports that farming productivity contributes nearly $133 billion to the U.S. gross domestic product (GDP) but lack of connectivity has heavily impacted farmers to contribute only $80 billion. 

Arkansas soybean, cotton, and corn farmer Vonda K. explained:

We need both financial sustainability and sustainability of the land. I would like to have more moisture sensors, to know exactly what’s going on. We have a couple of wells that we can shut off remotely, but I would love to...