Tag: "rural electric coop"

Posted December 20, 2018 by Katie Kienbaum

Even if a local government isn’t ready or able to build its own broadband network, there are still ways they can help bring the benefits of better connectivity to their community. Over the past few years, several counties in Minnesota have partnered with local electric and telephone cooperatives to expand high-quality Internet access as an economic development strategy. In many instances, county governments have offered financial support to the local co-ops, in the form of grants and loans, to connect their rural residents with high-quality fiber networks, often supplementing federal subsidies or statewide Minnesota Border-to-Border Broadband Development grants.

Projects Across the State

Minnesota counties have taken a variety of approaches when it comes to helping cooperatives finance broadband deployment projects.

Some, such as Cook County in the far northeastern corner of the state, provided grants to local co-ops. Cook County began its partnership with Arrowhead Electric Cooperative back in 2008 when both entities contributed to a broadband feasibility study. At the time, the county suffered from the worst connectivity in the state, and many people still relied on dial-up. In 2010, Arrowhead was awarded a $16.1 million combined grant and loan from the stimulus-funded Broadband Initiatives Program (BIP) to build a fiber network in Cook County. The county government offered Arrowhead a $4 million grant for the project, funded by the voters’ reauthorization of a 1 percent sales tax that was due to expire. In return, Arrowhead agreed to provide services such as Internet access to county buildings at no cost.

Yet more local governments have opted to loan money to co-ops to expand broadband access in their county. Both Big Stone County and Swift County chose this route after Federated Telephone Cooperative received a $3.92 million...

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Posted December 17, 2018 by Katie Kienbaum

More and more electric cooperatives have been building broadband networks to bring better Internet access to their rural members. According to the cleverly titled podcast “Along Those Lines” from the National Rural Electric Cooperative Association (NRECA), that trend isn’t stopping any time soon.

In the second episode of the podcast, host Scot Hoffman, editor of RE Magazine, speaks with guests Mike Keyser, CEO of BARC Electric Cooperative, and Brian O’Hara, regulatory issues director for NRECA. They discuss the growing interest in broadband among electric cooperatives, some of the hurdles co-ops must overcome when deploying networks, and the impact that better connectivity has on Rural America.

Highlights From Their Conversation

A few years ago, the field of cooperative broadband was populated only by the early adopters. Now, Keyser tells the podcast host, “It seems like we’re reaching this tide where everybody’s now talking about [broadband] at every conference we go to.” One of the reasons for this groundswell of enthusiasm, O’Hara explains, is the increasingly vital role of communications infrastructure in managing the electric grid. Cooperatives’ commitment to local economic development and their “strategic advantages” in deploying networks also plays a role, he says.

BARC Electric Cooperative is one of the dozens of co-ops that have built fiber networks to connect their members. In the podcast, Keyser relates how the co-op ultimately decided to move forward with BARC Connects despite challenges:

“We finally got to the point as a co-op where the board said, look, this is going to revitalize our community, this is our mission, this is what we did 80 years ago . . . We need to just go. This is too important to the community and to the co-op.”

Local residents are clearly excited about the new network. “The single biggest question I get asked everyday is ‘When is it coming to my house?’” shares Keyser. He even believes that revenue from the broadband network will one day outstrip the co-op's income from selling electricity, a testament to the community’s need for better connectivity.

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Posted December 6, 2018 by Katie Kienbaum

When privately owned utilities refused to electrify rural areas, communities established electric cooperatives to light up their homes and farms. A recently released report, Unlocking the Value of Broadband for Electric Cooperative Consumer-Members, describes how electric co-ops now have an opportunity revisit that role as they bring Internet access to their rural members nationwide.

The report, published in September by the National Rural Electric Cooperative Association (NRECA), finds that millions of people in electric cooperative service territories lack access to broadband. As the report explains, rural electric cooperatives are uniquely poised to meet their members’ needs for better connectivity. However, public investment may still be necessary to connect many rural communities.

Download the report.

Co-ops Could Meet Rural Broadband Needs

Like many rural Americans, members of electric cooperatives often find themselves unserved or underserved by the existing Internet service providers. The report’s authors estimate that more than 6 million electric co-op households — a total of 13.4 million people — don’t have access to broadband, defined by the Federal Communications Commission (FCC) as 25 Megabits per second (Mbps) download and 3 Mbps upload. Even more co-op members are likely struggling with poor connectivity because of how the FCC data overstates broadband availability and access.

There are several reasons why rural electric cooperatives are in a good position to bring modern-day connectivity to their unserved members, the report notes. Perhaps the most important advantage is that many co-ops are already investing in broadband networks to support smart grid technologies, such as advanced metering infrastructure (“smart meters”). The report points out that a broadband backbone ”not only enables the co-op’s smart grid operations, it also enables connectivity to the broader Internet backbone.” By expanding off their existing...

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Posted November 30, 2018 by lgonzalez

When it comes to high-quality Internet access, the big corporate ISPs have failed rural Mississippi. Other states with similar digital divide issues are starting to see rural electric cooperatives make efforts to connect members. In some places, legislatures have adjusted state laws that complicated co-ops' ability to deploy fiber optic infrastructure. Now, the Public Service Commission (PSC) in Mississippi has formally requested that state lawmakers update an antiquated statute to allow rural electric cooperatives to expand high-quality Internet access.

Waiting for Action

When Magnolia's State Legislators convene in January, they’ll have a unanimous resolution waiting for them from the state’s PSC. The resolution requests that lawmakers take action to adjust Miss. Code 77-5-205 to allow electric cooperatives the authority to offer Internet access. 

James Richardson, Policy Director and Counsel from the Office of Commissioner Brandon Presley, explained that the law currently only allows electric cooperatives the authority to form “…for the purpose of promoting and encouraging the fullest possible use of electric energy…” — electric cooperative are precluded from operating for any other purpose. The law was passed in the 1930s when cooperatives formed across the state to bring electricity to the many farmers in rural Mississippi. The matter has been tested and confirmed at the state Supreme Court

The PSC asks that the State Legislature create an exception in statute in order to allow rural electric cooperatives the the ability to also offer Internet access. Earlier this month, the three Commissioners on the PSC approved the resolution requesting the law change.

logo-ms-psc.jpg Presley has been...

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Posted November 9, 2018 by Katie Kienbaum

For many rural Americans, the local electric or telephone cooperative is their best hope for finally obtaining modern-day connectivity. With the support of government funding, rural cooperatives have brought electricity, telephone service, and more recently broadband access to some of the most rugged and sparsely populated places in the country.

However, recent tax code changes might prevent co-ops from connecting more rural communities. Cooperatives could potentially lose their tax exempt status if they accept government grants for broadband expansion and disaster recovery — an unintended yet foreseeable consequence of the Republican “Tax Cuts and Jobs Act” passed late last year. In a press release, Senator Tina Smith called attention to the oversight, noting, “This uncertainty has caused cooperatives significant concern and frozen some of their grant applications.”

Who’s Ready for Some Tax Policy?

As nonprofit membership corporations, rural electric and telephone cooperatives are exempted from paying taxes under section 501(c)(12) of the Internal Revenue Code (IRC). To maintain this tax exempt status, cooperatives must derive at least 85 percent of their income from members (e.g., from selling electricity). This is sometimes referred to as the the member income test or the income source test.

Not all sources of non-member income are included when calculating this percentage. Revenue from utility pole rentals, for instance, is exempted. In the past, rural cooperatives also excluded federal and state grants from the member income test, based on assorted rulings from the Internal Revenue Service (one example is Rev. Rul. 93-16, 1993–1 C.B. 26, which held that a federal grant given to an airport should not be considered income for tax purposes). As long as co-ops treated the government funding as a source of capital, not income, they could accept as much grant money as they wanted without the...

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Posted September 25, 2018 by lgonzalez

Great Lakes Energy (GLE) in Michigan decided in late 2017 to approve a plan to incrementally deploy Fiber-to-the-Home (FTTH) to cooperative members, beginning with a pilot project in Petoskey. This week, Vice President of Communications, Marketing and Energy Optimization Shari Culver from GLE joins Christopher to talk about what could possibly become the largest FTTH project in the state.

GLE anticipates offering its symmetrical Truestream Internet access to members in the pilot area as early as the end of October. The planning process, however, has involved several feasibility studies and at least two years of planning in addition to several more years of contemplation. Shari explains how the region GLE serves covers many different types of geographies, subscriber income levels, and different levels of Internet access competition. Some folks have only dial-up, while others have the option of cable Internet access. One of the challenges GLE faces is educating potential subscribers about the differences between what they have now and the potential with Truestream.

She explains that the cooperative has decided to approach deployment with a flexible incremental approach, carefully examining demand as they deploy to determine where they go next across their service area. There’s a significant portion of seasonal homes in this northern section of the lower peninsula, and GLE sees that high-quality Internet access can help boost local economic development if those seasonal visitors have the ability to stay longer by working from the cabin.

For more on the project, check out our...

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Posted September 19, 2018 by Katie Kienbaum

South Dakota has more cows than people — and if you live in a rural community outside of the state, it’s possible that all those bovines may have better Internet access than you do.

South Dakota Dashboard recently released a report on rural Internet access in the state. It was commissioned by the South Dakota Telecommunications Association (SDTA), whose members include cooperative, municipal, and tribal providers. The report, Connecting South Dakota’s Future: A Report on the Deployment & Impact of Rural Broadband, found that rural connectivity in the state significantly exceeds national averages, proving that high-quality Internet access is possible even in the most rural areas.

Download the report for more details.

Summary of Findings

According to the report, more than three quarters of rural South Dakotans who subscribe to Internet access from SDTA members have access to speeds of 25 Megabits per second (Mbps) download and 3 Mbps upload, which are the federal minimums for broadband. Across the country, approximately 61 percent of rural residents have access to those speeds.

Furthermore, 65 percent of people who subscribe to Internet access from SDTA members receive service through Fiber-to-the-Premises (FTTP). In contrast, only around 40 percent of rural telecommunications company subscribers nationwide are connected via fast and reliable fiber optic lines.

This is all despite the fact that, with fewer than five residents per square mile, deploying fiber costs on average $3,571 per resident in the rural regions served by SDTA members versus about $26 per resident in the more densely populated Sioux Falls.

Fast Internet Speeds Nothing New for South Dakota

In June of this year, we reported on PCMag’s annual ranking of the fastest Internet service providers (ISPs) in the country, which chose South Dakota as the state with the second...

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Posted September 10, 2018 by Katie Kienbaum

If you’re looking to move to a community with a relaxing, rural lifestyle and quality Internet access, then Lyndon Township in Michigan may have just jumped to the top of your list. Now that the community has chosen an ISP to serve the community via its publicly owned infrastructure and established the cost of service, they're eager to start deployment.

Lyndon Township Board recently approved rates for their forthcoming fiber network, setting the price of symmetrical 1 Gigabit per second (Gbps) Internet speeds at a reasonable $69.95 per month. This is a nice reward for the township’s residents, who last year approved a tax increase to fund the construction of the network. The affordable residential gig brings Lyndon Township into the same price range as communities such as Lafayette, Louisiana; Westfield, Massachusetts; and Longmont, Colorado.

Local Support Founds, and Funds, the Network

Though only a 20-minute drive from the University of Michigan, a world class research institution, Lyndon Township residents are mostly stuck with expensive, slow, and unreliable satellite Internet service. Around 80 percent of the community doesn’t currently have access to broadband, which the FCC defines as a minimum of 25 Megabits per second (Mbps) download speed and 3 Mbps upload speed.

When attempts to get existing Internet service providers to expand into the community failed, the township decided to build its own Fiber-to-the-Home (FTTH) network. To fund the approximately $7 million network, residents approved a millage increase in 2017, with 66 percent of voters in support. The millage amounts to a property tax increase of $2.91 per $1,000 of taxable property.

Fast Speeds, Low Rates...

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Posted September 4, 2018 by lgonzalez

A year ago, we last had Jonathan Chambers of Conexon on the podcast to discuss the pros and cons of the Connect America Fund. Since then, the FCC has held an auction to expand connectivity in rural areas as part of the Connect America Fund Phase II (Auction 903) and recently released news of the winning bidders. In episode 321 of the podcast, he’s back for another conversation on the process and the results.

In addition to a brief history on the Connect America Fund, Jonathan and Christopher spend some time discussing the arguments for and against federal funding dedicated to rural deployment. Do ISPs really want to serve residents and businesses in rural areas? Based on the results of the auction, the answer is yes.

As Jonathan notes, this year’s bidding process has been more transparent in years past, but in order for the program to be a true success, there also needs to be accountability. Christopher and Jonathan also discuss the results from this auction and the strong showing that rural electric cooperatives made in the auction. They talk about some of the technological challenges that may arise for some of the bidding firms that promised results that may be beyond their capabilities. Christopher and Jonathan also discuss some of the areas of the country where firms receiving Connect America Funds will deploy.

You can view lists of bid winners and the news release about the auction at the FCC website. There are also maps available at the FCC, to offer visual representations of areas to receive infrastructure, along with eligible areas, and related documents.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 51 minutes long and can be played on this page or via iTunes or the tool of your choice using this feed.

You can download this mp3 file directly from here....

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Posted August 28, 2018 by Katie Kienbaum

There may be one famous Orange County already — the one in California is home to Laguna Beach, Disneyland, and The Real Housewives — but Orange County, Indiana, will soon be making a name for itself with world-class connectivity thanks to the local electric cooperative.

After a few years of planning, Orange County REMC is moving ahead with the construction of a Fiber-to-the-Home (FTTH) network that will bring premium Internet and telephone services to its members and other nearby residents. Construction on the main fiber ring begins this fall with services starting as early as next year.

The Seventh Cooperative Principle

In Orange County, the co-op’s main service territory, about half of the county’s 9,000 residents do not have access to 25 Megabit per second (Mbps) wired Internet access.

To address this, Orange County REMC began exploring ways to provide fast, reliable connectivity to its members in 2015. Two surveys and a feasibility study confirmed that a fiber project would be financially possible for the co-op and that it would garner sufficient interest from residents, while also improving management of the electric grid. “Based on the second survey, 85 percent of Orange County REMC members stated they would take our service if it were offered,” Matt Deaton, the co-op’s General Manager and CEO, told Hoosier Energy.

Because of the strong community support and the benefits for local businesses and residents, the Orange County REMC Board of Directors approved the FTTH project, Orange County Fiber, in May 2018.

In a recent edition of the Electric Consumer, published by Indiana electric co-ops, Deaton explained:

“All of these factors are found under the seventh cooperative principle ­— concern for community...This was a major decision to expand the services we provide to prepare us to meet the current and future needs of our members.”

Orange County Fiber

The finished fiber network will serve 14,000 people, primarily in Orange County, but also in parts of Crawford, Davies, Lawrence, and...

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