Electric co-ops eager to expand broadband connections to rural areas

Electric co-ops eager to expand broadband connections to rural areas

October 12th, 2017 by Dave Flessner in Business Around the Region

Jim Matheson, CEO of the National Rural Electric Cooperative Association, and David Callis, president of the Tennessee Electric Coop Association, speak about broadband access in rural areas at the Chattanooga Convention Center Wednesday, Oct. 11, 2017, in Chattanooga, Tenn.

Photo by Erin O. Smith

Gallery: New source of power

+3
more photos

Many of the power cooperatives that helped electrify rural Tennessee in the 1930s and 1940s are gearing up for a similar effort to bring high-speed broadband to rural areas not connected to today's information superhighway.

But similar to electrification of the South in the early 20th century, the telecommunications upgrades for rural broadband are likely to be costly and take years or even decades to fully implement.

"We know that in rural America there is a lack of broadband and that is holding back many communities and residents from fully engaging in today's economy," Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA), said during a regional gathering Wednesday in Chattanooga of hundreds of co-op leaders from across the South. "It's just like electricity in the 1930s. The economics make more sense in the densely populated areas and it's far more challenging to serve sparsely populated areas with capital-intensive services."

But Matheson and Tennessee power co-op leaders insist membership-owned cooperatives are well suited for the challenge, even if they are likely to need government help and subsidies to bring broadband everywhere.

The Federal Communications Commission estimates 34 million Americans in rural communities lack access to broadband connections, including 34 percent of Tennessee's rural residents.

Matheson said the trade group he heads is eager for President Donald Trump to include more federal funding in any infrastructure package he may propose to help expand broadband service into underserved rural areas to better education, health care and economic development.

"We are going to need help from the government and it's going to take a subsidy to serve many of the most rural areas," Matheson said.

The American Recovery Act, the stimulus bill adopted in 2009, provided some money for broadband investments and the FCC's Connect America Fund and the USDA's Rural Utility Service provides both grants and loans for telecom investments in underserved areas. But NRECA is urging Congress and the Trump administration to do more.

In Tennessee, the General Assembly earlier this year sought to broaden high-speed broadband, in rural areas by lifting the ban on electric co-ops providing most telecom services such as internet, telephone and cable TV, and by creating a $30 million fund to support rural broadband initiatives with grants to aid broadband providers over the next three years.

David Callis, CEO of the Tennessee Electric Cooperative Association, called the Tennessee Broadband Accessibility Act "a frantastic measure" that should help expand broadband coverage in many communities that would not otherwise be served. Among the 23 power cooperatives in Tennessee, Callis said he expects all but three or so are likely to apply for part of the $10 million a year of grants the state is offering. Three rural electric co-ops — Gibson Electric Membership in Trenton, Tri-County Electric Co-Op in Celina, and Volunteer Energy Co-Op in Decatur — expect to begin testing out broadband service in parts of their service territories before the end of the year.

"At nearly every co-op in the state, members are asking about and wanting broadband service, and we think the electric co-ops are positioned in many instances to help meet that need — sometimes in partnership with others," Callus said.

Volunteer Energy Corp., the state's second biggest electric co-op which added natural gas and propane service to its utility platform seven years ago, will add its first telecommunications service to customers by December when it launches a test of broadband service to a limited area just south of Hopewell, Tenn., in Bradley County.

Based upon the success of the pilot program, Volunteer Energy spokeswoman Julie Jones said the co-op hopes to expand its broadband service, working with Twin Lakes Telephone Cooperative in Baxter, Tenn.

Jones herself lacks any broadband connections at her own home in Meigs county — one of 17 counties served by Volunteer Energy.

"I get calls every day from people wanting to know when they could get broadband service from us and we are keeping track of those requests to help plan how we might best expand our broadband service as we move forward," she said.

Volunteer is among the power co-ops in Tennessee making grant requests for state assistance by the Nov. 17 deadline.

Scott Harrison, public information officer for the Tennessee Department of Economic and Community Development which is administering the state grants, said "interest has been strong," although final applications for the assistance have yet to be submitted.

"Addressing broadband infrastructure gaps is a top priority for the department," he said. "It's critically important for our residents and small businesses to be able to compete in an increasingly digital economy."

Matheson said telephone companies and cable TV companies also provide broadband services, but many of those for-profit companies do so only in areas where there are enough customers to justify the investment and make money. Electric co-ops, which are nonprofit, membership owned businesses designed to serve their consumer owners, don't have to make as much profit and can benefit by laying fiber optic lines to help their electric operations have access to a smarter grid and remote reading and controls for power meters.

"Electric co-ops have always taken on the role of advocating and supporting economic development in the area they serve and clearly broadband is a foundational component if you are going to have any economic opportunity going forward," Matheson said.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.


Loading...