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Highland Telephone Cooperative Gains Gigabit Recognition

The NTCA-Rural Broadband Association this month awarded the Highland Telephone Cooperative (HTC) of Sunbright, Tennessee, its national certification as a “Gig-capable” provider, reports the Independent-Herald.

HTC serves Scott and Morgan counties in Tennessee and McCreary County in Kentucky and is now one of 85 Gig-certified company/cooperative providers in the nation. The certification recognizes rural communities that are at the cutting-edge of broadband technology, offering Internet service of up to at least 1 Gigabit per second (1,000 Megabits per second or Mbps). The association launched this national campaign in the fall of 2015. 

Years of Planning

HTC completed its $66 million fiber-optic network within the last year; 1 Gig capacity Internet service is available to all 16,5000 members reports the Independent-Herald.  The six-year project upgrades the cooperative’s old copper network. Highland Telephone CEO Mark Patterson: 

"This gigabit certification caps off years of careful planning, investing and building a brand-new fiber network in our area...All along, we knew our commitment was worth the effort so our friends and families in this area could keep their rural lifestyle without sacrificing world-class connectivity."

The upgrade included more than 2,700 miles of fiber by the cooperative's crews and contractors — enough to stretch from Highland's office in Sunbright to Vancouver in British Columbia, the Independent-Herald reported.

"Our area lacks interstates and many economic advantages that other communities enjoy, and we've suffered through some extremely high unemployment in recent years," Patterson said. "An asset like a gigabit-capable network can be our competitive edge when it comes to bringing in industry and growing existing businesses."

85 Gig Networks

To date, the NTCA-Rural Broadband Association has recognized 85 companies and cooperatives from 26 states as Gig-capable. The list includes 26 recipients in Iowa and six from Minnesota. Among the Minnesota honorees is Paul Bunyan Communications headquartered in Bemidji.  

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Across the nation, more and more telecom cooperatives are helping bring high-speed connectivity to rural America. They are filling the void created by large Internet Service Providers (ISPs) who generally consider it financially unattractive to make major broadband investments in sparsely populated areas.

The latest FCC annual broadband progress report estimates 34 million Americans, or about 10 percent of the nation’s populace, lacks access to 25 Mbps down/3 Mbps up service, the agency’s current definition of what constitutes basic broadband service. Those numbers likely understate the true situation, however, as they are based on form 477 data provided by ISPs and national providers often overstate their coverage based on census blocks. For more on Form 477 data, check out episode #224 of the Community Broadband Bits podcast. Christopher interviewed our Research Associate H.R. Trostle, who studied mountains of data for her report on connectivity in North Carolina.

Cooperatives Work!

In October, we noted that it was National Cooperative Month and highlighted a long list of cooperatives now providing next-century Internet connectivity. We expect that list to grow as rural communities recognize the value of cooperatives in bringing better connectivity to rural areas.

Transcript: Community Broadband Bits Episode 229

This is episode 229 of the Community Broadband Bits podcast. Former head of the FCC's Office of Strategic Planning and Policy Analysis Jon Chambers discusses how electric cooperatives can be the path to rural connectivity. Listen to this episode here.

Jon Chambers: There is no reason this country can't do today what our forefathers were able to do in the '30s which is delivered to rural areas the same kind of life that you can get in the rest of the country.

Lisa Gonzalez: This is episode 229 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. More and more world telephone and electric cooperatives are offering high quality internet access to their members. Why? Rural communities are tired of waiting for national providers to bring the kind of activity they need and because the business model works. Jonathan Chambers, a partner with Conexon and former head of the FCC Office of Strategic Planning and Policy Analysis joins Christopher this week. They talked about the role of electric cooperatives in bringing broadband to rural America. Jonathan points out how cooperative Fiber-to-the-Home of deployments works so well in rural America where so many people need and want them. Chris and Jonathan discussed political perceptions how events in DC have sculpted the current internet access situation in rural America, and how Washington could help local communities in the future. Now, here are Chris and Jonathan Chambers on rural electric cooperatives and ways federal policy can improve rural connectivity.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell and today I'm talking with Jonathan Chambers. He's a partner with Conexon and formerly the head of the FCC Office of Strategic Planning and Policy Analysis. Welcome to the show.

Jon Chambers: Thank you, Chris. It's a pleasure to be with you.

Christopher Mitchell: I think some of the people who listened to the show may have either seen you or seen videos with you in it in which you were talking about your ideas for rural America and how you recommend the people look into those if they're able to. I wanted to start with kind of a poke at what is common knowledge Which is that it is just too expensive to build Fiber-to-the-Home in rural America. How do you react?

Jon Chambers: There's some who come to believe it's too expensive to build fiber in lots of parts of the country. People know now Google Fiber which launched a very public and very inspiring fiber effort getting the whole country involved and gigabit service has pulled back its own plans to deploy fiber. What we're seeing, my partner and I who worked with rural electric cooperatives throughout the country is that co-ops can build and are building Fiber-to-the-Home in the most remote areas of the country are doing so without any government support, are doing so profitably and in delivering services, one gigabit service, hundred megabit service at affordable prices to their members. It add then common wisdom for many, many years at the FCC and all the smart people who analyzed this that building Fiber-to-the-Home was a step too far for rural America. As it turns out, it's not at all. We're building Fiber-to-the-Home throughout the country in rural population densities of three and four and five and commonly less than ten homes per mile. It is an exciting time to be in this particular part of the business. You had mentioned I was with the FCC. I was with the FCC for four years, but I'm now back doing what I really enjoyed doing which is working with companies that build networks.

Christopher Mitchell: You mentioned your partner I think is worth pointing out. He's actually a former customer podcast, Randy Clint doing a wonderful work with Ozarks and also with Conexon formerly with Como. Can you tell us a little bit about how co-ops are able to make this work when it's like I said it's a common knowledge that there's just the business model falls apart. Why are collapse so special?

Jon Chambers: Yes. You know that every good story has a good protagonist, and the story of electric co-ops building fiber at the home, the protagonist there is Randy Clint. Randy was working at a cooperative in Central Missouri called Como. Como had applied for a grant as part of the recovery act funding to build a fiber at home project in rural Missouri. The best thing that happened for rural Missouri, for rural America was that Randy in Como were turned down by the federal government when they applied for that grant. As a consequence of having been turned down, Randy is the type of person who and if you tell him you can't do something, he just tries harder and wants to prove people wrong. He and the membership of his co-op had gotten so enthused about building a fiber network that when they were turned down, they decided to proceed anyway. They took out a loan from CoBank. They built a fiber to the network which today provide service to every availability to every single one of their members. About half of their members take service. They offer a hundred megabit per second service for $49.95, gigabit service for $79.95. They were the first company anywhere to sell gigabit service in rural America. That network is the most complete and profitable network of its kind in the country and other co-ops in the country have started to adapt the same methods. These electric cooperatives have an existing infrastructure in place so they're leveraging an existing infrastructure. They have poles and docs and conduits and rights of way and bucket trucks and alignment. They used to responding to storms and emergencies in the middle of the night. They have equity in their current electric system. They have the capacity to borrow funds to continue to build. Above everything else, they are membership organization. Some people think that the benefit of say an electric cooperative or a telephone cooperative is that they're oftentimes not for profit. They're not all not for profit. The real benefit is that it's a membership organization. As a membership organization, the members decide how they want to invest their own money, their own equity. You have a built in base of interest when you start a project like this. You're only building because the membership wants it. That doesn't mean they translate to do a 100% if the member's buying the service. Part of the arrangement here is you're planning a 100% availability. You're serving everyone because that's the ethos of the cooperative movement that started in the 30's in these rural areas and today serves 80% plus of the geography of the country. What they do today, what the dozens of electric co-ops are doing today is similar to what their grandparents or great grandparents did in the '30s which is provide a service that no else is willing to provide. In the '30s it was the investor on utilities that were unwilling to build into rural areas. Today, it's the exact same story with fiber networks. What they will offer is unique but it's consistent with the way people have thought of telecommunications networks, consistent with the way people think of networks in general which is the network is stronger if you reach everybody. The network is stronger if everybody gets on the network. When we designed these networks, when we write business plans for these networks, when we execute on the business plan, we always talk about serving every single person and serving every single person with the same level of service. Everybody gets one gigabyte service or a hundred megabit per second service. You don't offer a better service to people who live closer to in the telephone world, to a central office and a slower speed when you live further out. You don't put data caps. You don't put tricky pricing in and try to encourage people to come in for a few months and then raise the pricing. The pricing of service level, all of it is all of a piece which is to say it's a cooperative community effort. It's in the tradition, sort of been the best of American and rural traditions in this country. It's still at the early stages, but like many things in life you can see something at an early stage and recognize its potential.

Christopher Mitchell: What are the things that comes to mind as you're saying all these things? These are the sorts of things that I think a lot of people associate with more of a left wing philosophy. In fact, I think people on the left associate collapse with socialism and historically some people on the right did. Now, people on the right I think more often associate cooperatives with private organizations. You mentioned it's not about the profit or the non-profit. It's about being a membership org which I think is worth reiterating. I want to just know you're more conservative and I wanted to know, this is the time in which our country might be as divided as it's been and certainly living memory. You've pretty much are summing up incredibly important values in terms of getting everyone connected. What do you respond to those? I think it's more commonly a conservative critique that, "Hey. If you choose to live in a rural area, you get poor service." Am I wrong in thinking that's more of a conservative position?

Jon Chambers: I'm a life long Republican. I'm a conservative. People I work with in rural America tend to be Republicans. They live in the red states. They live in the red areas of the red states. I've never had a political conversation with anybody from a co-op. It doesn't come up. I mean, this isn't, and I live inside the Beltway in Washington and I have for most of my life but I travel every week. I travel several days a week in rural areas. I don't find people talk to me about politics.

Christopher Mitchell: They talk to you about solving problems.

Jon Chambers: Which is refreshing because the politics get tiring even for those of us who or maybe especially for those of us who live inside Washington. I'd say it's not a like a right, left thing but these are businesses. First and foremost, the co-ops are businesses. It's not like a do good organization or a community organization that set out to try. It's a business first and foremost. The business that was established to provide electricity service and provide other services to its members. The actual organization is as a membership organization just means that the businesses owned by its members, being owned by members, being own by shareholders, being own by a one single private entity. Those are just different business structures. In this case, the business structure is membership. I guess it's an American thing. Again this is, I guess that's the point I'd like to make sure if you understand. It's not a right, left, red, blue, conservative, liberal, rural, urban. This is an American tradition. I'll tell you one quick story about my time in government. I was at the FCC for four years. I was promoting better service for rural areas and changing the way the FCC would go about it. That is to say the FCC spends a lot of money every year $4.5 billion a year for service in rural areas. The level of service the FCC had been advocating at the time and I'm talking about, They're obligating four megabit per second service which is faulty and inadequate and sub standard. I became a very vocal critique of that level of service, of the expectation and that's all a government or a telephone companies or the internet service providers could provide in rural areas. I'm fond of a saying by Michael Gerson who worked for President Bush years ago. In a different context, he talked about the soft bigotry of low expectations. I think that's been the FCC's view of rural America for a long time. At a time when the FCC have said in a national broadband plan that the goal was a hundred megabits per second for a hundred million households. The FCC was saying explicitly was those hundred million households. Well, that's not rural America. The 116, 117 million households in the country and it wasn't just the people like round numbers of the FCC was saying. Well, a hundred megabits for hundred million household and those are nice round numbers. The FCC followed up without saying what should be expected in rural America and what they were expecting was four megabits per second at the same time. They're expecting a hundred megabits per second elsewhere. It's not just about speed because speed is what enables activity, business activity and social activity and education and learning and health care and other things that we all do on the internet today. The expectation was low and that's what I began to criticize. I was stopped in the hallway one day by somebody, a lobbyist for one of a large telephone companies who said to me, "What do you think you're doing? Don't you know we had a deal?" What this lobbyist meant was in the previous administration before I had been there.

Christopher Mitchell: When you say previous, was that under Genachowski before you were there or is that the previous admin like under the Bush administration.

Jon Chambers: I was hired by Julius Genachowski but it was the deal that was set in 2010, 2011 was the deal that this person was referring to.

Christopher Mitchell: Right. For people who weren't aware that was the Obama administration, that was the previous FCC chairman.

Jon Chambers: Yes. That's right. That's right. The deal this person I was referring to is a deal that in rural areas the large telephone companies would continue to get billions of dollars of years in public support and would have to offer only four megabits per second speed. That was the deal. I have been a critique of the FCC for a long time including when I was there. My criticism isn't that I am against the government. I've worked in government. It wouldn't be viewed as sort of a personal attack that I don't like certain people. The FCC has at times over the years been interested in deal making. They have been coming over the years who have enjoyed merger reviews because it's allowed them to cut a deal, regulatory policy, rule makings, merger review, other things in which the FCC has in a sense cut a deal for the American people but it's deal making. I've long been opposed to sort of a regulator as deal maker. I tell you something that I've learned from my rabbi which is the difference between a contract and a covenant. For a lawyer a contract is when both parties have given consideration that is both parties get something and got something in return. It's oftentimes a zero sum game. A covenant is never a zero sum game. A covenant is something which binds people together and rises and lifts all people of. What the co-ops I worked with understand is this notion of covenant. Again, it's not a right or left notion. It's an American notion. It's an historic notion. We have a covenant in this country. A covenant can be thought of in three words; we the people. The people I work with, they were in electric co-ops. They understand covenant. They understand that they are formed of their members, by their members, for their members to better the lives of their members. In the case of the internet service which is the economic issue of the day for rural America, they understand that if they don't stand up, their communities will be the worse off. All across America, rural electric co-ops are standing up. They're investing their own money. They're investing their member's money. They're borrowing money in order to build world class internet systems because they understand what it meant in the '30s and they understand that's what it will mean that the kids, their grandkids are the future of their communities.

Christopher Mitchell: A key question in my mind is, to what extent the federal government is helping these co-ops and to what extent it might be hindering the co-ops? Let's start with hindering because we're kind of on that team a little bit. Other things the federal government is doing is making life harder for the co-ops to get this done?

Jon Chambers: The federal government has just simply not helped. It has the potential to help. There are some states in which co-ops have not been permitted to offer internet services but thanks structurally, we're finding a way to offer service throughout the country. I wouldn't say the federal government I bet hasn't hindered other than out of benign neglect. The greatest hindrance that the FCC is the federal government. The greatest hindrance has been this low expectation, this notion that poor service is good enough for some parts of the country or some people in the country. There's notion that satellite service, a fixed wireless service, things that are not subscribed to in great numbers or by whole communities anywhere in the country but that somehow going to be a good enough level of service for rural America. Then along the way, again it isn't a hindrance so much as it's been a mistake that the FCC and again all the sort of smart people that's hired over the years to look at these issues have made a fundamental mistake and how they evaluated the cost of building networks in rural areas. The FCC has looked at and spend a lot of time and money and energy developing a cost model which attempted to define with great precision found to the penny and a tenth of the penny what it would cost to provide Fiber-to-the-Home service to every part of the country. That cost model is the basis upon which the FCC has spent and is committed tens of billions of dollars, over $30 billion in just the last year alone committed by the FCC. That cost model is simply inaccurate. It simply does not capture lots of aspects of building a network which already exists. That is if you have existing infrastructure in place, if you can leverage infrastructure, if your cost of building is less then the model will assume it to be. All of that has led to an over expenditure that is an allocation of resources. The places it need not go and not spending money in areas that it does need to go, and not spending money on the types of services that can and will be built. I mentioned before, the co-ops I worked with is building without any federal money. That's not to say that money doesn't help. Money can always help, but where money really helps is in the most remote areas of the country. In areas where there's two or three or five homes per mile. As odd as this will sound to anybody listening in, the FCC made a decision several years ago not to give any money to those areas. The FCC considered it too expensive. That's the very area that needs money. At the same time, the FCC has given tens of billions of dollars to areas where it needed to give any money. There's been this misallocation of resource. We can get Fiber-to-the-Home to every home today that has an electric line. That's not just a pipe dream. It's happening. If the FCC would do like two things. One, set the standards high and two, allocate resource where it's needed. It could get that job done. Leaving up the FCC does nothing, we'll still do it.

Christopher Mitchell: One of the things that I think people don't always realize is how much money is already being spent. You noted that already and to some extent just redirecting it toward loans rather than giving money away to co-ops. Loans that might be unfavorable terms or might gently subsidize the interest rate in certain areas. I think we're talking about bribe them. That's what we're talking about spending new money, if they would spend it wisely. One of the things that you recently wrote I think suggest that you know, I go back in my head whether or not this is an issue of ignorance or malice. Not really malice, but sort of neglect. You know, there's a perception among Democrats that Republicans like corporate welfare and they're going to give money to the telephone companies to keep Republicans on the hill happy. Then, a separate quote in this book posted that you said we're democrats and rural Americans are not our people. Give me a sense that let me just tell one more thing is that I feel like in a lot of issues, these groups that organize around us think. If we just had someone high up at the FCC, we could break through and we could get things done. You're that person and I think you left the FCC in a lot of frustration after trying to break through and not being able to really dent the mentality of the FCC folks.

Jon Chambers: Let me remark on one thing which is capital for building rural areas is not a problem. We borrow money, private banks, CoBank loans money, publicly the rural utility service lends money. We haven't found any problem getting capital. It would be helpful to get some of the money that's spent, a fraction of the money that's spent by the federal government every year to support telephone companies to have that spent in a competitive way where the best service could get access to the money and prevail. You made some that nice remark about me, I want it to be as clear as I can. I was in the government for a few years but I never thought any of this was about me or what I thought. I spent most of my time while I was in the government trying to reach out to people and hear their stories. It was very great compliment paid to me over the years that I got invited to speak in a lot of places and I still go speak a lot of places. I used to use a line at the end of it. I never go someplace to just speak and so I get invited to talk but I always come to listen. I always spent at least the day wherever I went to ask people to come to me and just tell me about their lives and their stories. Great people at the FCC, there's a not so great people at the FCC, it's not so much a personality thing. It's natural in federal government that people sit in these offices and they get visited by lobbyist. They get praised for what they do and they complimented for their views. It's a very insular world. I used to say that people just get out of Washington. Go out and spend as much time as you can in areas where your talking to people where your policies are affecting those people. When I talk to co-op boards and others, I would say, "Look. I've got a one rule of thumb which is you put the member's interest first. You put the member's interest first and everything else follows." As corny as that sounds and as sanctimonious maybe as it sounds, I view that as my role of the FCC that is when I've been in government, it was a privilege. I viewed as my job, my boss, the people of the country, people of the United States of America, that's who I worked for. I didn't work for any particular chairman. I didn't work for an institution. I didn't work for bureaucracy. I worked for the people. I still do. The people I work for now are members of rural electric co-ops. I get a charge out of working with people where you have a chance to affect their lives. You know, people have joked with me about how I think broadband like broadband is the answer to everything, I ain't going to eh I don't really think that but that's what I do for a living.

Christopher Mitchell: I've been there.

Jon Chambers: I walked into a colleague's office one day at the FCC and I said something like, "Half a million of our fellow Americans, kids, families, veterans are going to sleep on the streets tonight and it's cold out there." A guy looked at me and he said, "So what? Chambers here. Your answer is broadband." I said, "Well, no. You know, I --" I said, "But I don't work for the Department of Housing and Urban Development. I don't work in Housing field. I don't really know a solution to homelessness." I said, "But I do know is when I come to work in the morning and I drive in a certain direction, I pass by the Martin Luther King Junior Library downtown in Washington. I say, "And I don't see sometimes a line out front waiting for the library to open. And that line is for people waiting to get in so that they can use the free computers and internet access in that library." I said, "When I leave at night sometimes if I take that same route home and I pass by that same library,' I said, "I see those people are because they're homeless shelter, buses parked out in front of the library waiting to take people back to the shelters." It's not answer to everything. Sometimes, it's just enough to give people an escape. My view of broadband is it's a lot of things. It's good things, it's bad things. It's part of all our lives now. Some of the best part of it is just it's a way to reach out to people. It's a way to feel socially involved. Sometimes it's just a way to get out your own life and escape into a next one.

Christopher Mitchell: I think that maybe we'll end on this last question which is, if you have any advice for people who are served by an electric co-op and their electric co-op doesn't have an interest. Maybe management or the board is too worried about the risk of this or they just don't see the value, what advise do you give them?

Jon Chambers: It always takes in every case I know, every co-op that my partner and I worked with and we're working now with several dozen co-ops around the country which is the facts and there's over 800 electric co-ops in the country. This is still early days. It always takes somebody to take a leadership role within the co-op. It could be the CEO or general manager. It could be a member of the board. It could be the board president for us to be led and we give advise. We write business plans. We have materials relationship. We can help people get funding. We can do fiber design. We can manage a construction process. All of that is just the implementation piece. What I know to be true is every cooperative in the country can build a Fiber-to-the-Home network. The business case gets harder, the more remote you are. In those cases, we encourage co-ops to work together because if you can get some more scale, it helps the business case. I know because I've been approached sometimes by members of the co-op in the past and I talked to their CEOs. Their CEO is not interested, which is fine but this is still viewed as a risk to folks. Even though I think the risk runs the other way, I think the risk runs to not doing anything. The risk runs to not building. I know that it scares some people. I think we'll reach the point inside of a year or 18 months where we'll go from the early pioneers in this to where it becomes common. We'll reach that tipping point. I don't know if it's 100 co-ops we're building or a 150 co-ops but I think we'll reach that tipping point inside of 18 months and that it will become common place. Nobody will even wonder within a few years about it and it will be like the expectation that you can get electricity. You can get fiber and people shouldn't settle for something less than the same kind of service you get. Same kind of service I have in my home, just fiber into my home to look at by the horizon and it's great. There is no reason that this country can't do today what our forefathers were able to do in the '30s which is deliver to rural areas the same kind of economic opportunity, same kind of education opportunity, same kind of life that you can get in the rest of the country.

Christopher Mitchell: I just want to point out that based on your timeline which I fully believe we're seeing. Just incredible activity from not only electrics but also telephone cooperatives. You're not going to have kind of activity that's as good in rural areas and as cities. Frankly, the kind of activity in rural areas will far exceed in what many of us have because we're mostly beyond cable. In the last generation technology that probably won't significantly upgrade to offer the same capacity and another benefits one has from the next generation network. That something to really cheer I think.

Jon Chambers: Yeah. My partner Andy has a variety shows when he makes presentations about in rural Missouri in Co Mo, Central Missouri where he was from. The internet speed done by some speed test showing the fastest speeds available in the country. There in rural Missouri was his system and it was showing the third fastest internet speed available anywhere in the country. It wouldn't be a great thing if people had a reason to move after rural areas. One thing that folks in rural areas know is that population is declining. For the first time in this country between the 2000 and 2010 census, population decline in a part of the country. Population decline in rural America. I'm not saying this turns it all around but you're right. You have a better level of service where these networks are being built. Wouldn't it be great part of the reason to move out into the wide open spaces and still have access to everything, to all of the information and attainment and social connection that anybody has anywhere. It's not a pipe dream. It's happening today. All you have to do is look at Co Mo in Missouri, in mid west in Michigan or part in Virginia or Ozarks in Arkansas.

Christopher Mitchell: North Georgia Network. Yeah. You get --

Jon Chambers: North Georgia Network, Habersham Electric. All across the country, people are proving this out.

Christopher Mitchell: -- Thank you so much for taking the time to talk to us about this. It's something we're going to keep covering certainly. I like to check it back in with you as you move forward with more companies you're working with, more the co-ops.

Jon Chambers: Thank you. It's been great talking to you as always, Chris.

Lisa Gonzalez: That was Chris talking with Jonathan Chambers, partner at Conexon and former head of the Office of Strategic Planning and Policy Analysis at the FCC. As electric cooperatives makes strides across rural America, we will continue to share their stories on MuniNetworks.org. Remember, we have transcripts for this and other Community Broadband Bits Podcast available at MuniNetworks.org/broadbandbits. Email us at podcast@muninetwork.org with your ideas for the show. Follow Chris on Twitter, his handle is @CommunityNets. Follow MuniNetworks.org stories on Twitter also where the handle is @MuniNetworks. Subscribe to this podcast and all the podcast in the ILSR podcast family on iTunes, Stitcher or wherever else you get your podcast. You can also subscribe to our monthly newsletter at ILSR.org. We want to thank the group mojo monkeys for their song "Bodacious" licensed through Creative Commons. Thank you for listening to episode 229 of the Community Broadband Bits Podcast.

Rural Tennessee Economy: Digital Divide, Connectivity Chasm

Rural folks without fast, affordable, reliable Internet access face challenges with common tasks such as doing homework, completing college courses, or running a small business. Although Tennessee has an entrepreneurial spirit, a large swath of the state's rural residents and businesses don't have the connectivity they need to participate in the digital economy. A September article in the Tennessean looks deeper at the state's digital divide between urban and rural areas.

National Internet Service Providers (ISPs) have failed to make good on promises made over recent decades to bring high-quality Internet access to the entire country, both urban and rural. Several telephone cooperatives and the U.S. Department of Agriculture (USDA) are already actively investing in better Internet access to improve rural Tennessee’s economy.

The Tennessean Perspective

The newspaper the Tennessean laid out much of the connectivity problem in the "Volunteer State." Tennessee may have excellent Internet access statewide, but the urban and rural divide remains. According to a Tennessee Department of Economic & Community Development's report, only 2 percent of all urban residents do not have access to broadband. The FCC defines it as 25 Megabits per second (Mbps) download speed and 3 Mbps upload speed. That number climbs in rural areas, where one out of three residents does not have broadband access. 

Speed Is Not The Only Problem

Some folks simply have no Internet connection. For example, Deborah Bahr drove 30 minutes for Wi-Fi at Bojangles (Chicken and Biscuit) or visited a friend’s house a few miles away. Bahr used to run a coffee shop, leaving the Wi-Fi on continuously so local community college students could work on homework overnight in the parking lot. Bahr’s town borders Cocke County, an economically distressed area where almost 30 percent of residents are below the poverty level. 

A state law that prevents cities from expanding telecommunications services to neighboring rural areas hampers local communities’ efforts to bridge the rural-urban divide. The Tennessean article noted that the city of Clarksville has access to a Gigabit (1,000 Mbps), but in nearby Houston County, 99 percent of residents do not have broadband access. Clarksville has high-speed connectivity because the community has CDE Lightband, a municipal Fiber-to-the-Home (FTTH) network that offers a range of affordable Internet access speeds, including a Gigabit package.

logo-clarkesville-cde-tn.jpg

Tennessee Governor Bill Haslam, in speaking with the Tennessean, aptly summarized the dilemma that many face:

“Do we want private enterprise to compete with the government? I don’t think that’s government’s role. Our goal is to provide services people can’t get on their own. But that’s the sticky part. This is a service that people in some places in the state can’t get on their own.”

USDA #RuralMade, More Than Ag

Those rural areas with high-speed connectivity in Tennessee often have their local telephone cooperative to thank. Formed by farmers years ago with support from the federal government, these cooperatives brought the first telephone lines out to rural Tennessee. Although fiber networks in rural areas have a high-cost, many of Tennessee’s rural telephone cooperatives have built them. 

A few, such as Highland Telephone Cooperative and Twin Lakes Telephone Cooperative, relied on support from the USDA to build high-speed FTTH networks. In Tennessee alone the USDA has already invested $236 million for telecommunication projects. For more information on USDA’s multi-million dollar investments in Tennessee, check out the USDA #RuralMade Tennessee Fact Sheet.

These projects are recognized as supporting all aspects of the rural economy from manufacturing to healthcare. According to the Tennessee Department of Economic & Community Development's report, 24 percent of Tennessee’s households run a business from home with 14 percent operating a business exclusively from their home. That same study found that 43 percent of all new jobs are enabled by broadband.

The rural economy needs high-speed connectivity to move forward. In the Tennessean article, Bahr perfectly encapsulated this:

"I want people around here ... to see themselves as entrepreneurs and real stakeholders," she said. "It could help them start their own businesses."

Gigabit Speed in Red Lake Nation in Minnesota

Native American communities throughout the United States have rather bleak figures when it comes to Internet access. That’s about to change.

In Minnesota, Red Lake Nation now has access to some of the fastest Internet service in the entire country. The telephone cooperative Paul Bunyan Communications has extended its GigaZone, offering a Gigabit (1,000 Megabits) per second Internet service, to the tribal nation. 

Future Focused

In Red Lake Nation News, Tribal Chairman Darrell Seki, Sr., described the benefits of this new high-speed Internet access: 

“Having access to fiber Internet services is vital to our rural economy and impacts so many aspects of life. To start a new business, find a good job, or get a high quality education you need a quality high-speed Internet connection. The GigaZone is on the cutting edge of technology and enhances the Red Lake Nation's unique assets, including a large workforce and the Red Lake Nation College, for economic development and business expansion. We're excited about the positive impact this will have on our Tribe now and well into the future."

The Gigabit service will be available in the communities of Red Lake, Redby, Little Rock and Ponemah. The Red Lake Nation is home to about 13,000 Ojibwe members, and is the only “closed reservation” (meaning that the land is held in common) in Minnesota. The nation is a model of self-reliance: they just announced the launch of an all-solar electricity project.

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The high-speed Internet service is provided by Paul Bunyan Communications based out of Bemidji, Minnesota, which is about 45 minutes south of Red Lake. The telephone cooperative has built out one of the largest Fiber-to-the-Home (FTTH) networks in the United States. Read more of our coverage of Paul Bunyan Communications; we expect to see even more from this community focused rural cooperative.

An Expanding Movement

The Red Lake Nation is the latest community to work with a rural cooperative to get Internet access for the 21st century. Cooperatives are quickly becoming a prime source of high-quality Internet access for rural residents and businesses. When national providers won't invest in less populated areas, cooperatives are taking up the challenge. We've compiled a list of approximately 200 rural telephone, electric, and broadband cooperatives that are now offering Gigabit connectivity, mostly in rural areas. That list is expanding as rural America refuses to be left on the sidelines and cooperatives help their communities to stay competitive.

Research on Rural Connectivity Power from Electric Co-ops at BBC Mag Conference

In October in Minneapolis, Broadband Communities Magazine hosted the “Fiber for the New Economy” conference. The first day featured a set of four panels on the role of rural electric cooperatives in providing much-needed connectivity to far-flung communities.

We want to provide the highlights and give further context to some of the most fascinating stories. In this post, we’ll cover some of the latest research coming out of Ball State University’s Center for Information and Communication Sciences.

Indiana’s Electric Cooperatives 

Researcher Emma Green from Ball State University kicked off the track. Her presentation, “Rural Broadband: Technical and Economic Feasibility,” outlined the potential role of rural electric cooperatives in facilitating last mile (connectivity to homes and business) and middle mile (regional connectivity) deployment. 

Green's research centered on Indiana, where 14 percent of the population does not have broadband access (speeds of at least 25 Megabits (Mbps) download and 3 Mbps upload). In rural areas of the state, however, more than half of the population does not have access to those speeds. Green's research underscored how rural electric cooperatives can use their assets (such as Smart Grids, Right-of-Way access, and pole ownership) to facilitate middle mile connectivity. 

We previously noted some of this research from Ball State University in our post BBC Mag Spotlights Rural Electric Co-ops. Focusing on the middle mile is not always a pathway to long-term last mile solutions, and our Christopher Mitchell has often pointed out those pitfalls. Unless a provider is willing to invest in the critical last mile connections, middle mile networks have only a minimal impact.

Green, however, did not stop at the middle mile. She brought her presentation back to bear on last mile connectivity. Electric cooperatives are in a great position to partner with other entities to provide services. They could also simply move forward with last mile fiber projects themselves. Green’s research provides a model for how cooperatives could potentially serve a large portion of a state’s rural population.

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Conclusions on Co-ops

Electric cooperatives can indeed work together to solve the connectivity problem in rural communities. This is much like what we proposed in our report, North Carolina Connectivity: The Good, The Bad, and The Ugly. Chris and I discuss our methodology and findings included in the report in this short interview on PRX.

We've seen similar activity in Michigan. Christopher recently interviewed two leaders at Midwest Energy Cooperative (based out of Cassopolis, Michigan) for episode #225 of the Community Broadband Bits podcast. Midwest Energy Cooperative is working with nine other electric cooperatives on a concerted effort to bring next-generation high-speed Internet service to rural homes throughout the state. 

Stay tuned for more on the role of rural electric cooperatives and the Broadband Community Magazine’s conference.

Rural Electric Co-ops Power Up a Gig in Pacific Northwest

Rural electric cooperatives are providing next-generation connectivity. In Oregon a consortium of electric cooperatives called LS Networks built a middle mile network a few years ago and now are taking the next step with last mile connectivity.

LS Networks’ Connected Communities program hopes to bring last mile fiber connectivity to 25 communities in rural Oregon and Washington. Internet access will officially be available in early 2017 in some communities. Depending on the needs of each community, the solution could be Fiber-to-the-Home (FTTH), or fixed wireless using the fiber-optic network for backhaul.

Connected Communities

The project started in July, but LS Networks only now made the official announcement. The Connected Communities program asks folks to nominate their community to be connected by filling out a short form. LS Networks will offer two types of monthly plans [pdf]: 100 Megabits per second (Mbps) for $40 and a Gigabit (1,000 Megabits) for $70. Customers will also be able to purchase voice service for an additional $15 per line and 50 cents per phone number.

Currently, the small, northern Oregon town of Maupin is the only official Connected Community. LS Networks is already at work building out a fiber connection to nearly all of the 400+ homes and businesses in the community. On November 9th, Maupin residents can take part in a town hall meeting at the South Wasco County High School to learn more about LS Networks’ plans and the Connected Communities program.

Consortium of Cooperatives

LS Networks should be well prepared to handle such a large-scale fiber network project. The consortium of electric cooperatives and the Coquille Tribe came together around 2005 to provide middle mile connectivity. At first, the consortium focused on their region of northern Oregon, but LS Networks’ footprint quickly grew to 7,500 route miles of fiber. The network spread throughout the Pacific Northwest, covering rural regions of Washington, some areas of northern California, and even parts of Idaho. 

If all goes as planned, rural homes and businesses in Oregon and Washington will soon have access to affordable next-generation technology. In the press release, Director of Sales and Marketing Bryan Adams highlighted how LS Networks continued to stay true to its cooperative roots

“Our priority has always been to provide service before profit and to use telecommunications as a tool to bridge the communities that make the Pacific Northwest great — on both sides of the Cascades.”

To learn more about the Connected Communities program, check out the LS Networks Connected Communites information website.

Paul Bunyan Communications Keeps Expanding Gigabit Territory

Paul Bunyan Communications in Minnesota reports it has expanded its “GigaZone” Internet service territory to Turtle River, Puposky, and Tenstrike and to additional areas of Bemidji.

More than 2,800 additional locations now have access to, among other services, Internet speeds of up to 1 Gigabit per second (Gbps) following the recent upgrades to its fiber-optic communications network, the Bemidji-based co-op notes.  

"Over the next several months we'll be activating the GigaZone in many more areas,” Gary Johnson, CEO of Paul Bunyan Communications, said in a company statement. "We will continue to do as much as we can to bring the GigaZone to all our members and the communities we serve as fast as we can." 

GigaZone Locations Top 20,000 

The co-op said its GigaZone service is now available to more than over 21,600 locations. Previous areas served include rural Park Rapids, Lake George, Trout Lake Township east of Grand Rapids, most of Grand Rapids, Cohasset, and LaPrairie.

The co-op has an online map showing the active areas of the GigaZone as well as future areas that are set for construction. The co-op said that members who subscribe to GigaZone Broadband can also add PBTV Fusion and/or low cost unlimited long distance phone service.

Co-op Wins Award In 2015

About a year ago, we reported that Paul Bunyan Communications won the 2015 Leading Lights National Award for Most Innovative Gigabit Broadband Service. The northern Minnesota cooperative beat out both local innovative local firms like C Spire and national companies like Google. 

We first reported on Paul Bunyan Telephone Communications in 2009. The co-op began expanding its existing fiber network in 2007, but Gigabit connectivity did not become available to members until earlier in 2015. Upgrades began in Bemidji and will continue to include the cooperative's entire 5,000 square mile service area. As new lines are installed, older lines will also be upgraded to fiber in a makeover of the entire network. 

The cooperative first offered Internet access in 1996 as Paul Bunyan Telephone. In 1999, Paul Bunyan began infrastructure upgrades that enabled it to offer phone, high-speed Internet access, and digital TV. The network expanded incrementally and continued to implement technological improvements. In 2005, the cooperative expanded with fiber technology for the first time. In 2010, Paul Bunyan Telephone changed its name to Paul Bunyan Communications.

Transcript: Community Broadband Bits Episode 225

This is episode 225 of the Community Broadband Bits. Representatives of Midwest Energy Cooperative discuss their project to bring high-speed connectivity to rural southwest Michigan. Listen to this episode here.

Dave Allen: I really see this as a re-lighting of rural America.

Lisa Gonzalez: This is episode 225 of the Community Broadband Bits podcast, from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. There's a project taking shape in rural southwest Michigan and the nearby regions of Indiana and Ohio. It's headed up by the Midwest Energy Cooperative. At the recent Broadband Communities Economic Development Conference in Minneapolis, Chris ran into Bob Hance, President and CEO of the cooperative, and Dave Allen, the cooperative's Vice President of Regulatory Compliance. Naturally, we wanted to hear more about their project and share the details with you. They provide some history and how access to high quality connectivity has positively impacted a number of their rural members. Chris, Bob, and Dave also have some interesting thoughts on federal funding programs, project standards, and the different rules for cooperatives and big corporate providers. Learn more about the project at teamfiber.com, where you can also discover more about the cooperative. Now you may notice some background noise. We apologize in advance. While we advocate for local choice and access to technology, sometimes technology is just not on our side. We had a little trouble with the mic that day. Also, Chris is suffering from allergies, and until winter sets in, he may sound a little like the late Howard Cosell, but never fear, it is our Christopher. Now, here with Chris are Bob Hance, President and CEO, and Dave Allen, Vice President of Regulatory Compliance for Midwest Energy Cooperative.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell. Today, I'm speaking with two folks from Michigan. Bob Hance, the President and CEO of Midwest Energy Cooperative. Welcome to the show.

Bob Hance: Thank you.

Christopher Mitchell: And Dave Allen, the Vice President of Regulatory Compliance for the Cooperative. Welcome to the show.

Dave Allen: Thanks, Chris. Good to see you out in Minneapolis.

Christopher Mitchell: Yes, Dave, it was terrific to run into you and to learn more about your approach.

Bob Hance: Not many people say that, Chris.

Christopher Mitchell: Well, I'm happy to be the one. Now your cooperative is really leading Michigan, in terms of delivering high quality Internet access. Can you tell us about your regions that you serve?

Dave Allen: I can touch on the areas that we serve and set that up. Bob does a great job of talking about our history in the communication space. Midwest Energy serves twelve counties. Eight of those in Michigan, three in Indiana, and another two in Ohio. We have two distinct service areas. One in southeast Michigan, and one in southwest Michigan. The area we’re really focusing on, in terms of our initial phase of this project, is the southwest Michigan district. That scenario's characterized by Notre Dame, down in Indiana and South Bend, and you can go in a northeasterly direction toward Kalamazoo and southwest Michigan. We're those counties that fall in between that space. The area is really kind of identified by Whirlpool's world headquarters. Kellogg world headquarters is nearby in Battle Creek. We've got Pfizer up in Kalamazoo. A lot of industry that is in the area but not in our direct service footprint. The areas we serve are more rural areas, more characterized by seed corn industry, and perhaps to the south, the RV industry. My point being is that we are extremely rural. We probably serve about eight members per mile, but we do have large industry that's in the area that lives in our service footprint and really have a need for access to high speed broadband.

Christopher Mitchell: I have to point out that after talking with some of the telephone cooperatives here in Minnesota, eight people a mile is a positive luxury in some cases.

Dave Allen: In terms of municipals are 60-some-odd customers per mile. Investor on utilities run on the 30 members or customers per mile range. So at eight customers per mile, that's still pretty rural.

Christopher Mitchell: I think that a rule of thumb has been that you make money when you have eleven people per linear mile or more with a private sector business plan, but not if you have less than eleven people per mile. But let's talk about your history of offering communications services.

Bob Hance: Technically, we've been an active ISP since the mid-90's. That was all brought upon by a relationship we had with Trans World Network. We provided third party long distance, as well as ISP services through dial-up. As the Internet progressed, and people became more and more in tune with all things related to the electronic world and personal computers and the mobile devices that we have today, obviously dial-up service was just not going to be the thing of the future. So over time, we've had many, many folks who have left that to go to other options, including satellite, which we've entered in to providing terrestrial broadband, thinking that that was going to be a possible solution to the rural space that we were in, and a good replacement for dial-up. Unfortunately, we ran into problems such as limited band availability in the service territories that we were trying to serve. We had numbers of people who had signed up for that service but were let down because the capacity of the satellite just was not going to reach the demand. And even though they launched the second satellite, we ran into the same problem with that and eventually moved on to phase number three, if you will, with trying to provide rural America with some semblance of broadband. And that was broadband over power line. We were one of nine co-ops that were involved with a company called IBEC that was a single source provider of equipment and a process that would provide a signal across the power line. So an injection on our current equipment that sounded very promising as well. Unfortunately, we were two years into it and finally started to get past some of the technical issues that came with broadband over power lines when IBEC announced that they were bankrupt. That was back in December 2011. So here we have a few hundred people who had been hooked up with satellite and broadband over power line, and instead of abandoning them entirely, we just went back to the drawing board and said, "What's next?" Interestingly enough, at the same time, separate from communications, our utility folks, which includes me, were kicking around what we were going to do with respect to our needs in communications for the electric space. We have an active SCADA system. We know what's going to happen with the further smartening of the grid. So clearly utilities have been using various forms of communications between substations and their corporate offices at headquarters to get data back from the field. Eventually the light comes on and we say, "If we put in this fiber system, we take care of our utility needs, and at the same time, we can leverage that with the opportunity to replace what we've been trying to do by providing a true broadband to our membership, which married quite well together I can say."

Christopher Mitchell: Well, it's interesting because I think almost all electric utilities are involved in communications for internal needs, but there is a split between those who see themselves purely as an electricity co-op and not interested in doing anything externally, and then those that see themselves as more technology driven and bringing the technology of the day to their members. Is that your experience?

Bob Hance: I think you're spot on. I think those are the conversations that have been had across the country. I like to see it as we're doing what is required to continue to serve our membership in a relevant way. I'll just exercise that a little bit by saying that if not for the insistence of them for the last several years that we look at ways to provide them this service, I don't know that we would have. I think our principle responsibility and our duty is to our membership, and if the membership is asking us to consider other products and services that make being part of the rural landscape more enjoyable, more affordable, more reasonable for them, that's what we ought to do.

Christopher Mitchell: Dave, do you have anything to add on that?

Dave Allen: Yeah, just to add to that, we don't have an annual meeting per say, but we have district meetings where Bob goes out and engages our membership. And over the course of probably the last three or four years, the questions trended away from anything having to deal with electricity and more toward can you provide a broadband solution. We have a lot of folks out here that are on air cards. I think there are still some people on dial-up and folks utilizing satellite ... frustrations with usage allowances, with costs, with reliability, all these things that enter into the equation. They are just tired and fed up with that, so increasingly they have asked us to enter that communication space, where in all honesty, we were comfortable remaining an electric co-op. So we're a little bit of a reluctant participant. But there are a lot of things going on with respect to energy too, and Bob touched on some of the smart grid things we're doing. We have to do a better of helping people manage their energy use better, so this is one component of that.

Christopher Mitchell: I understand that you are not alone. There are other cooperatives in Michigan that are interested in working together to improve Internet access?

Bob Hance: We are working in conjunction with the other electric co-ops in Michigan. There are nine of us, specifically. A number of them are going through this process of evaluating from a conceptual standpoint. Maybe moving forward they are doing their due diligence. There are some surveys that have been presented to the memberships. At least three of them are fairly active in this process, but of course it takes a little bit of time for them to walk through that. I think it's promising. I think they understand that we're here to help in any way. We're the example that is on their way with already building a project, so we're a ready resource, and a valuable resource in their process. We'll see where it goes.

Christopher Mitchell: Thanks, Bob. I'm also curious if there is a difference in your members across different states in terms of appetites for delivering broadband or if the interest is pretty similar.

Bob Hance: Chris, I think there is interest from all kinds of areas. Even those co-ops that are serving closer to the suburban areas. What everyone understands, and you get this firsthand, is when Google showed up with this whole idea of Google-fying a city, or Google-fibering a city, and that whole contest that went on for the better part of two years, raised the specter of what does this mean, fiber, and what can this provide versus what we already have. This notion of this being like the technology that passes every other technology easily and to the extent that you can say it is future-proof, it just seems like there isn't any end to the desire of folks, even beyond our memberships, that would really like to get connected to fiber. If you look at who is signing up on our website, it is probably three to one right now. So for every three members that we have signing up to take service from us, we have a person signing up that is not an electric member of ours but is close enough to see what we're doing and hoping that they can get connected as well.

Christopher Mitchell: Interesting. You're getting pressure to expand even to people who are not members of the co-op at this point then.

Bob Hance: Yes, very much so. It's probably one of the hardest things for us to manage toward is this demand that is outside or external to our current footprint. And the strong desire for all these other people to get connected too.

Christopher Mitchell: I think that there are two key questions that come up. And Dave, I'd like to direct this to you first. In terms of a project like this, how do you finance it? There is a context here that rural areas have too little demand, and if you wanted to deliver high quality Internet access to them, it would be too costly. So how do you make it work?

Dave Allen: Well, in terms of your first question, our financing the project through member equity. We reached out to USDA, RUS, the Rural Utility Service, because as Bob mentioned earlier, we were looking at our need for better communications utilizing fiber. So we talked with the RUS about improving communications, utilizing fiber through our substations, through our facilities, and ultimately to the member home, and they agreed that that was a good purpose for us to pursue. You're looking at the clean power plan in the very near future in terms of what the ramifications might be to the users of electricity. Also in the state of Michigan, looking at a new energy bill, and our need really to help people manage their energy use better going forward. So that did resonate with the RUS, and ultimately, we're financing this project through an RUS work plan loan through the electric side. That provides us with the equity to pursue this project, which is going to be deployed over five years, running about 400 miles of fiber a year. As we're connecting homes, looking at those folks that would enjoy a voice or a data drop. So it's kind of an integrated project. Again, smart grid communications first and foremost for utility purposes, and then voice and data drops beyond that.

Bob Hance: You know our financial modeling bears the fact that we'll be cash positive after three years of building on our project, so we're very confident that despite the fact that we're in rural areas, there is an ability to realize a profit for the entity, so that beyond the five years, we can begin looking at those areas that are not an immediate part of our service footprint. It's been a very good and very positive project for us, and certainly resonates with members and non-members alike.

Christopher Mitchell: Let's clarify though Rural Utility Service financing. This is loan financing, right?

Dave Allen: Yeah, correct. We did receive a small, rural broadband experiment through the FCC. Bob has been very engaged in the past, advancing the notion that non-traditional providers of broadband services should be considered in the Connect America Fund, and as part of that, we applied for that rural broadband experiment, received a little more than $200,000. Probably the better part of that was just becoming eligible for the CAF phase 2 options, which will hopefully happen some time in 2017. But for the most part, yes, we are doing this through member equity, but there is an opportunity to engage CAF phase 2 and receive some funding that will really help us build out a little bit faster and perhaps consider some of the folks in those census blocks that we build out to that are not part of Midwest Energy.

Christopher Mitchell: Bob, I really want to make this very clear for everyone, that even though it took a tremendous amount of investment to take electricity to everyone, I don't think it really cost the American tax payers very much.

Bob Hance: I'm not trying to mix things together too much here. We have roughly $120,000,000 of plant that took us 80 years to build. What's interesting about this project is that although we are telling people that we're going to build 2,000 miles of fiber from scratch, and we're going to do it in five years, it doesn't seem to be fast enough. And the fact that it's nearly a $60,000,000 investment. So it can be done with the help of RUS, with respect to seeing the need and the opportunity, as Dave was projecting, the notion of smart grid and getting connections all the way to the home so that we can deal with in-home devices at some time in the future is invaluable.

Christopher Mitchell: That's right. The point that I really want to hit on is that when the federal government is giving out loans, the budgetary impact is quite small compared to other programs. The electric co-ops receive billions of dollars of loans, followed by billions of dollars in repayments over many years and over decades, so the interest rate may have been subsidized, but overall, this type of program seems like a very reasonable investment.

Bob Hance: When you think about bang for the buck, I can't imagine that there is another federal program that you could point to that has been as successful, or as deeply successful as the REA RUS program, bar none.

Christopher Mitchell: That's what I want to hear.

Bob Hance: You think about this over time and what was accomplished with loan dollars as you pointed out may be subsidized a little bit with respect to the interest rates, but when you see what we've accomplished and what we continue to accomplish with those loan dollars, and now carrying on the position as we did with the electric systems now with another product that is becoming more and increasingly important in the mix with respect to services to folks, we're just repeating what we did back in the 30's.

Christopher Mitchell: You mentioned the CAF 2 dollars. That's one of the ways that the federal communications division is giving out these grants, but as we move into the final question of this show, I want to talk about the response from your members to this service. But first, let's just finish the CAF 2 discussion by noting that the FCC has just given, without any hope of repayment, these are just grants, billions of dollars to the biggest private telephone companies so that they can build out to the obsolete 10 Megabit down, 1 Megabit up standard. You all got $200,000 to deliver much faster connections. Do your members appreciate the difference between what you're doing, versus what that 10 Megabit by 1 Megabit minimum is?

Bob Hance: Chris, I think unfortunately most folks don't get it. Most folks don't really understand what's really happening with Universal Service Fund and now CAF. I think there would be a country-wide outcry! I think you would have pitch forks and other things arriving in our nation's capital if they knew what we know. Dave and I, having gone to the FCC for the last almost four years now and seeing firsthand how quickly it is to throw $30 billion through the fan without ever giving a second thought to what we are getting for the $30 billion other than second class citizenry for our folks getting 10/1 when the rest of the country is moving toward these other standards. It's close to being criminal. I fashion it to be like you just shoved one of those metal objects into the sore part of my mouth. It's just crazy. Even with CAF 2 and the struggles we've had to help them get rules in place so that you have this stupid auction in the first place. And all the restrictions on $2 billion that they never put on the $30 billion. It's just crazy. It's ludicrous.

Christopher Mitchell: Dave, let me jump in quickly before you respond. I just want to make sure the people understand that making loan guarantees to co-ops requires a 10% budget hit. That is to say that doing $30 billion in loan guarantees requires budgeting only $3 billion. The $30 billion that is being misused from the CAF, from the Connect America Fund, that could have wired the entire country if it was spent in co-op loan guarantees. So now, Dave, can you please pile on?

Dave Allen: My only point in talking about the $30 billion, which has gone out the last 15 months to the price cap carries and rate of return carriers, is to point back to a conversation I had with Danna MacKenzie, who is the chief of Minnesota's broadband office, and they've set an appropriate benchmark of 25 download and 3 up, state-wide in terms of what they are promoting in the state of Minnesota, which is a national broadband standard. But of course that $30 billion went out with the only expectation that they build out to a 10/1 standard. So I had that chat with her, "Are you frustrated, are you disappointed?" And she said, "Immensely so." If the FCC from a policy standpoint had the intestinal fortitude to set that standard at 25/3, they essentially would have realized their goal well ahead of the date they had set, which I think was 2020 to hit that standard. Our frustration in going in and chatting with the FCC is, let's not set it at 10/1, let's at least set it at the broadband standard of 25/3 so that we can incent people to build out better networks like fiber going forward.

Christopher Mitchell: It's worth noting that the Minnesota requirement is not only 25 Megabits by 3, but that you also have to be using a technology that can scale all the way up to a 100 Megabits. I think that's a really good approach.

Bob Hance: Chris, I think that's consistent with the New York standard now too.

Christopher Mitchell: I think it's important to make sure that we're wisely investing so that we don't have to spend more in three more years for a new round of upgrades on networks that we've just subsidized. But I want to end on a more positive note. Dave, can you give us a testimonial from your members explaining why this is so important?

Dave Allen: I mentioned that when we were out in Minneapolis. We've actually taken over 100 pages of testimonials in to the FCC and left them with commissioner offices because they do resonate. They hear from us, but to hear from our members, our customers, folks in the rural space, really resonates with those folks. And even now, when we go back out there, they ask if we've updated that because we get these testimonials daily. My favorite, and I'll let Bob chime in with a couple of his, but this person from Metridgeberg said, "We're so pleased with Midwest, as we thought this service would never come down our dirt lane off of a dirt road." I think that really explains what we're doing. We're not going out to the urban areas, areas of high density. We came down a dirt lane off of a dirt road to provide this person with gigabit-capable fiber.

Christopher Mitchell: And Bob, do you also have one that you would like to share?

Bob Hance: The one that's striking to me is this one. Another customer that's hooked up now says, "When you live out in the country, you learn that not all things are easy. Not all things are accessible at a moment's notice. The country teaches you patience and understanding. Today, with the blink of an eye, something that I was told would never happen to the rural people, we have Internet. Not by tether of a phone or an air card with an astronomical price tag on it. Thank you Midwest Connections for being the stand up people that you said you were. I cannot tell you thank you enough."

Dave Allen: I'd just add too, it's interesting how life-changing this is for people in our area. They have been used to poor service, dial-up service, and to have fiber optic available to them has been just amazing for them. It's taken me by surprise in all honesty.

Bob Hance: There is a certain class of people though who live in cities and might be thinking, "What do I get out of it if they have better Internet access out there in the country?" My answer is a thought experiment. What if we did not electrify the country with the REA, the Rural Electrification Administration, and we thereby save a few billions of dollars in federal budgeting over many decades, maybe, we don't even know that we would save that much. But if we did, we would also end up with smaller markets. We wouldn't have people being as productive in the rural areas, and they would not be buying things that other people are producing. And my point is that this is not charity. It's in my self interest, as someone living in St. Paul, to make bigger markets everywhere because we're going to have a better economy.

Dave Allen: We're seeing for the first time in our nation's history the fact that rural areas are losing population. As they continue, births aren't keeping up with the rural out-flight. As people move back to cities and urban centers to avail themselves of services like broadband, that's going to tax those urban centers from an infrastructure standpoint. That should be a concern to urban areas in terms of how to maintain roads, sewer systems, and things like that as people move back to cities.

Bob Hance: I'd like to remind folks, but for rural electrification and now this new valuable service with respect to particularly how farms operate today, we have the food out here. We're the producers!

Christopher Mitchell: Yeah, the food doesn't just magically appear in Kansas then, I guess! That's a good reminder. I'm excited about your project, and I really want to thank you for joining us on the call. Thank you very much.

Dave Allen: Chris, we have reminders of our past scattered throughout our office of when this co-op was constructing the lines back in the 30's. And one that's really striking to me is a lady who is reaching up to turn on that light bulb for the first time. And that's exactly what this feels like to all of us, and it's really helpful to get the kind of affirmations that we're getting from members. I really see this as a re-lighting of rural America.

Christopher Mitchell: Yes, I'm with you. I think sometimes people say that this isn't as big as electricity, but when electricity was first rolling out, people didn't know where that was going to go either. So I think you're doing the right thing. What we have to do is make wise investments, and then let time do its thing.

Dave Allen: I like to think that we spend once. Build once, spend once.

Christopher Mitchell: Thank you so much.

Dave Allen: Thank you, Chris!

Bob Hance: Thanks, Chris!

Lisa Gonzalez: That was Chris talking with Bob Hance, President and CEO from Midwest Energy Cooperative, and Dave Allen, Vice President of Regulatory Compliance from the cooperative. Remember, we have transcripts for this and other Community Broadband Bits podcasts available at MuniNetworks.org/broadbandbits Email us at podcast@muninetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @CommunityNets. Follow MuniNetworks.org stories on Twitter. The handle is @MuniNetworks. Subscribe to this podcast and all of the podcasts in the ILSR podcast family. You can do it on iTunes, Stitcher, or wherever else you get your podcasts. Never miss out on our original research. You can also subscribe to our monthly newsletter at ILSR.org. Thank you to the group Mojo Monkeys for their song "Bodacious," licensed through Creative Commons. Thanks for listening to episode 225 of the Community Broadband Bits podcast.

Midwest Energy Cooperative Connects Rural Michigan - Community Broadband Bits Podcast 225

Telephone and electric cooperatives are making strides in bringing high-quality connectivity to rural areas while national providers stay in the city. This week we speak with two gentlemen from rural southwest Michigan’s Midwest Energy Cooperative: President and CEO Bob Hance and Vice President of Regulatory Compliance Dave Allen.

The electric cooperative has embarked on a project to bring fiber-optic connectivity to its members within its electric distribution grid. The multi-year project will bring better functionality to electric services and high-speed Internet access to areas of the state struggling with yesterday’s technologies. Bob and Dave describe the cooperative’s commitment to it’s members and discuss the deep roots of the cooperative in the region. They also touch on how the project is already improving lives in the areas that are being served.

Bob, Dave, and Chris, also spend some time discussing the difficulties that face rural cooperatives, especially regarding federal funding and its distribution. Serving sparsely populated areas is a challenge. Federal funding is often distributed more favorably to big corporate providers that promise to deliver much slower speeds than cooperatives like Midwest Energy. Co-ops are delivering better services, and building better networks with less federal funding; they also face higher hurdles to obtain that funding.

Why do they do it? Because they are invested in the future of their communities.

Read more about the project at the Midwest Connections Team Fiber website.

Read the transcript of the show here.

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

This show is 28 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to mojo monkeys for the music, licensed using Creative Commons. The song is "Bodacious."

National Cooperative Month: Celebrate Gigabit Cooperatives

Time to celebrate the work of rural cooperatives that bring high-quality Internet access to residents and businesses forgotten by national corporate providers. October is National Cooperative Month! Let’s celebrate some of the accomplishments of those cooperatives providing next-generation connectivity. 

We pulled together a list of cooperatives who were actively advertising residential access to a Gigabit (1,000 Mbps) at the end of 2015. These cooperatives rang in 2016 with Gigabit speeds, inspiring others to improve rural connectivity throughout the U.S.

To assemble the list, we used Federal Communications Commission (FCC) Form 477 data from December 2015 to find all the providers advertising a residential Gigabit download speed. This generated a list of about 200 providers. Those providers were then manually sorted into “cooperative” or “not cooperative” based on publicly available information. If you would like to make a correction or suggestion concerning this list, please email htrostle@ilsr.org

2015’s Gigabit Cooperatives

  • Ace Telephone Association, also known as Ace Communications or AcenTek, in Minnesota
  • Adams Telephone Cooperative in Illinois
  • Albany Mutual Telephone Association in Minnesota
  • Atlantic Telephone Membership Corporation (ATMC) in North Carolina
  • Ben Lomand in Tennessee
  • Breda Telephone, also known as Western Iowa Networks, in Iowa
  • Canby Telephone Association in Oregon
  • Chequamegon Communications Cooperative, also known as Norvado, in Wisconsin
  • Clay County Rural Telephone Cooperative, also known as Endeavor, in Indiana
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  • Co-Mo Electric Cooperative in Missouri
  • Cochrane Cooperative Telephone Company in Wisconsin
  • Danville Mutual Telephone Company in Iowa
  • Dickey Rural Telephone Cooperative in North Dakota
  • Eastern Oregon Telecom in Oregon
  • Emery Telcom in Utah
  • ENMR Telephone Cooperative, also known as Plateau, in New Mexico
  • Gervais Telephone Company, also known as DataVision Cooperative, in Oregon
  • Farmers Cooperative Telephone Company in Iowa
  • Farmers Mutual Telephone Company in Iowa
  • Farmers Telecommunications Cooperative in Alabama
  • Farmers Telephone Cooperative in South Carolina
  • Garden Valley Telephone in Minnesota
  • Gardonville Cooperative Telephone Association in Minnesota
  • logo-gvt-coop.jpg

  • Guadalupe Valley Telephone Cooperative in Texas
  • Halstad Telephone Company in North Dakota
  • NineStar Connect in Indiana
  • Hill Country Telephone Cooperative in Texas
  • Kingdom Telephone Company in Missouri
  • LaValle Telephone Cooperative in Wisconsin
  • Lavaca Telephone Company, also known as Pinnacle, in Arkansas
  • Matanuska Telephone Association in Alaska
  • McDonough Telephone Cooperative in Illinois
  • Midwest Energy Cooperative, also known as Midwest Connections, in Michigan
  • Molalla Communications Company in Oregon
  • Nemont Telephone Cooperative in North Dakota
  • North Central Telephone Cooperative in Kentucky
  • North Dakota Telephone Company in North Dakota
  • North Georgia Network in Georgia
  • Northwest Communications Cooperative in North Dakota
  • Paul Bunyan Rural Telephone Cooperative in Minnesota
  • Peoples Rural Telephone Cooperative Corporation in Kentucky
  • Peoples Telecommunications in Kansas
  • Phillips County Telephone Company in Colorado
  • Pineland Telephone Cooperative in Georgia
  • Polar Communication Mutual Aid Corporation in North Dakota
  • Red River Rural Telephone Association in North Dakota
  • Reservation Telephone Cooperative in North Dakota
  • Richland-Grant Telephone Cooperative in Wisconsin
  • Roosevelt County Rural Telephone Cooperative, also known as Yucca Telecom, in New Mexico
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  • RS Fiber Cooperative in Minnesota
  • Rural Telephone Service, also known as Nex-Tech, in Kansas
  • Santel Communications Cooperative, also known as Mitchell Telecom, in South Dakota
  • Sho-Me Power Electric Cooperative, also known as Sho-Me Technologies, in Missouri
  • Skyline Telephone Membership Corporation in North Carolina
  • South Central Rural Telephone Cooperative Corporation in Kentucky
  • South Central Utah Telephone Association in Utah
  • Springville Cooperative Telephone Association in Iowa
  • Twin Lakes Telephone Cooperative Corporation in Tennessee
  • UBTA-UBET Communications, also known as Strata Networks, in Utah, Colorado, and Wyoming
  • United Electric Cooperative, also known as United Services, in Missouri
  • UTMA, also known as United Communications and Turtle Mountain Communications, in North Dakota
  • Valley Telephone Cooperative in Texas
  • Venture Communications Cooperative in South Dakota
  • Western Telephone Company in South Dakota
  • West Carolina Rural Telephone Cooperative in South Carolina
  • West Central Telephone in Minnesota
  • West Kentucky Rural Telephone Cooperative in Kentucky
  • West Wisconsin Telcom Cooperative in Wisconsin
  • Wilkes Telecommunications in North Carolina

Smart Rural Communities

The National Telecommunications Cooperative Association (NTCA -  the Rural Broadband Association) has also created the Smart Rural Communities Program to recognize the achievements of cooperatives taking on high-speed connectivity projects. The program includes a Gig-certification process. Even if a cooperative does not advertise a Gigabit (which means they won’t appear on our list), the cooperative still has the ability to provide Gigabit connectivity. Check out the NTCA map of those cooperatives at SmartRuralCommunity.com

logo-CTCcoop.jpg

2016’s Growing Gigabit Cooperatives

A number of other cooperatives have recently moved forward with Gigabit community projects. Consolidated Telephone Company (CTC), the telephone cooperative out of Brainerd, Minnesota, launched its Gigabit speed tier this year. This summer, the Custer Telephone Cooperative in rural Idaho announced a new fiber project. The cooperative’s current goal is to offers speeds of 100 Mbps, and eventually a Gigabit Internet access speeds. Other cooperatives are in the early stages of their fiber projects, such as Duck River Electric in Tennessee. The number of cooperatives taking on these projects continues to grow.

An increasing number of cooperatives are recognizing that high-speed Internet access is necessary to keep the rural U.S. competitive. Cooperatives are a community-owned, local solution to connectivity problems. You can learn about how telephone and electric cooperatives are leading the charge to bring high-quality Internet access to rural regions in North Carolina in our most recent report. Download a copy of North Carolina Connectivity: The Good, The Bad, and The Ugly.

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Photo credit: woodleywonderworks, Creative Commons license