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.

For several years now, Tacoma, Washington, has pondered the fate of its Click! municipal open access network. In the spring of 2018, the community issued an RFI/Q searching for interested private sector partners that would lease the network from the Tacoma Power Utility (TPU). After reviewing responses, consulting experts, and comparing potential arrangements, Tacoma has narrowed the field of possible partners. The goal is to put the network on a sustainable and competitive footing both financially and technologically. Tacoma is following a path that will retain public ownership of the Click! network as the network continues to expand.

Click! has offered considerable benefits during its lifetime, but the network retains considerable debt even as it will soon require more upgrades to continue competing with Comcast. The cable television system is rigged against small operators and while the open access Internet side creates many benefits, Click!’s ISPs just don’t have enough subscribers to make the network financially viable into the future.   The discussion around Click’s finances are complicated because the broadband network is used for both external customers and internal utility uses -- the rate modeling around how to allocate costs is a process that requires subjective analysis (e.g. should the costs be allocated based on bandwidth or evenly split among each service). Some have credibly accused past TPU officials with cooking the books to make Click!’s financial status worse than it actually was. Nevertheless, Click! still doesn’t appear to be financially sustainable when costs are allocated more reasonably. Given the upgrades needed by the cable system, we fear that preserving the status quo will do more harm than good to the community over the medium and long terms; Tacoma needs to make a change to avoid being stuck solely with the broadband monopolies that plague the rest of us.

Opponents have labeled the current proposal to lease the network as “privatization.” ILSR strongly disagrees. The options being considered by Tacoma will ensure public ownership - the lease to a partner is no more privatization than allowing independent service providers to...

In Missouri, rural electric cooperatives are bringing high-quality connectivity to an increasing number of small towns where large corporate Internet access companies don't consider population density high enough to justify investment. A few years ago, we reported that Ralls County Electric Cooperative (RCEC) was connecting New London, their hometown. Now, RCEC is expanding their network into nearby Perry.

It Took A While, But It's Coming

In the small town of Perry (pop. 700) in northeastern Missouri, many businesses currently lack the Internet speeds they need to operate successfully. With the current speeds available, as Senior Vice President of HNB Bank Jeff Albus explained, customers at the bank often have to wait while the employees stare “at a spinning wheel on [their] screen.” In order to secure Internet speeds necessary for a future in the digital age, HNB Bank decided to take initiative and work with the town to approach RCEC about expanding their fiber network into Perry.

Efforts began in 2016. At the time, RCEC was deployng their $19 million project aimed at serving rural areas around the town of Perry but not in the city limits. HNB and community leaders floated a petition and the Mayor had signed a letter of support on behalf of the City Council. With only CenturyLink DSL and satellite coverage to choose from, businesses and residents needed more options.

The community is considered the Southern Gateway to the Mark Twain Lake, where more than 2 million tourists come to enjoy summer recreation. As we've learned from places such as Cook County, Minnesota, and Colorado ski communities, such as Estes Park, high-quality Internet access is an expectation that an increasing number of tourists expect no matter where they go to relax.

From Electricity to Fiber...

After finishing its first phase of broadband build out covering businesses and industrial parks, Rock Falls, Illinois, will begin focusing on residential customers in early 2019. While residents living close to business areas will have early access to the gigabit fiber network, the city of 9,000 will use the fiberhood approach to reach its remaining residential areas.

Growing a Gigabit City

The plan to invest in citywide Fiber-to-the-Home (FTTH) began taking shape when Rock Falls residents became increasingly frustrated with the incumbent cable provider Comcast. Mayor Bill Wescott called for support for the project during his 2017 State of the City address, saying “The time is now to advance Internet in Rock Falls.” Later in April, the City Council approved the use of a $5.3 million general obligation bond issuance to fund the first phase of the build out, and an overall cap of $13 million for the duration of the project. The estimated cost of the project ended up being significantly reduced because the Rock Falls Electric Department (RFED) had already installed extra fiber-optic cable to connect substations as early as 2004.

By using GO bonds to finance their infrastructure deployment, Rock Falls departs from the typical funding approach. Most municipalities issue revenue bonds or employ interdepartmental loans and money they've saved from avoided costs when ending expensive leased lines to telecommunications companies. In recent years, other methods of funding fiber optic build outs have become increasingly popular as broadband infrastructure has obtained utility status in local communities.

Nine local businesses are already using FiberNet, which offers gigabit connectivity, a huge upgrade from the 10 - 20 Megabits per second (Mbps) download previously...