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Electrical Cooperatives Are the Unsung Heroes of Rural Broadband, Say Broadband Breakfast Panelists

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February 18, 2021— Electrical cooperatives that own their own fiber are filling in the broadband gaps that telecoms have left, said panelists at a Broadband Breakfast Live Online event on Wednesday.

The locally-owned businesses that have traditionally only provided electricity are now owning their own fiber and using their existing electrical infrastructure to drive home broadband to their local communities.

“A lot of [electric cooperatives] are starting to deploy some fiber to support their electric operations,” said Brian O’Hara, senior director for regulatory issues with the National Rural Electrical Cooperative Association.

He stated that this is a win for both the providers and the consumers as their coverage continues to expand.

Traditionally, telecoms must rent space on the electrical poles on which they sling their fiber cables; those deals often require negotiations. With cooperatives now owning both the broadband means and the method to deliver them, it can cut down the time to deliver much-needed internet services.

Screenshot of NRECA Senior Director of Regulatory Affairs Brian O’Hara from Broadband Breakfast Live Online

O’Hara also noted that while these local providers cover 56 percent of the landmass of the U.S., they only serve around 12 percent of the population. O’Hara explained that this low population density contributes to a higher cost of infrastructure, as the cost to build is proportionally greater than the return from the few people who use the services.

Mark DeFalco, telecommunications initiative manager at the Appalachian Regional Commission, said the federal government is beginning to take the expansion of rural broadband more seriously, and is using programs like the Rural Digital Opportunity Fund, the Rural Utility Service’s Reconnect Program through the U.S. Department of Agriculture, and a $300 million grant to expand broadband coverage to underserved communities.

Electrical cooperatives a ‘game changer’

He also pointed to smaller groups that are also pitching in, such as the Appalachian Regional Commission, the Northern Borders Regional Commission, and Delta Regional Authority. As a program manager for the ARC, DeFalco said that he is excited to work with rural electrical cooperatives.

“It’s a game changer for rural America,” he said.

Christopher Ali, professor of media studies at the University of Virginia, emphasized the role of local electrical cooperatives in ensuring that rural Americans are provided with broadband, going so far as to refer to them as “the unsung heroes of rural broadband.”

“They’re emerging as a distinct kind of local ethos,” he said, adding that because they often live in or around the communities they serve, they are often more committed to fulfilling their obligations. This kind of accountability is not something that larger, corporate providers can offer.

Ali continued by adding that the fixed wireless providers should consider RDOF a huge victory and that is ultimately a win for rural consumers.

Problems with the Rural Digital Opportunity Fund

However, Ali criticized components of RDOF . He said he was critical of a provision of the fund that stated that providers that received state funding would be ineligible for RDOF.

“It should not be one or the other,” he stated, “We need to adopt an all-hands-on deck approach to solving the digital divide and accessibility in rural America.”

O’Hara said that the current standard for download and upload speeds are not sufficient. “We need to be aiming higher,” he said. “Truthfully, we believe that fiber is the way to go” he added, noting that despite the increased cost, fiber would be the best way to meet the current and projected demand.

DeFalco ended on a positive note, and said that the U.S. has come far in its quest to expand coverage, “When I started traveling Appalachia, I had to plug into the telephone and do dial up,” He concluded, “Now, no matter where I go—no matter what hotel I go to—there’s wireless broadband.”

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Reporter Ben Kahn is a graduate of University of Baltimore and the National Journalism Center. His work has appeared in Broadband Breakfast, Washington Jewish Week, and The Center Square, among other publications. He primarily covers Big Tech and spectrum policy.

Rural

Local Governments Provide Valuable Information for Rural Infrastructure Builds

Rural communities vary in broadband needs, making community engagement essential for breaching the digital divide.

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Photo of Scott Woods, Josh Seidemann, Jerry Kuthy and Bob Knight (left to right) by Teralyn Whippe

WASHINGTON, May 11, 2022 – A critical first step to delivering on the Infrastructure Investment and Jobs Act for rural communities at a local level is community engagement and understanding, panelists said at a Tuesday event of the Local Initiative Support Corporation.

As a local leader in a rural community “the first thing to do is a community survey,” said Josh Seidemann, vice president of policy at NTCA – The Rural Broadband Association.

Seidemann and other panelists provided advice on what local communities need to do to be successful in applications under the IIJA. The process is expected to kick off upon release of rules from the Commerce Department’s National Telecommunications and Information Administration. The agency must release rules under the IIJA by May 16.

A community survey will help “determine and evaluate where your community needs broadband the most,” said Seidemann. Such a survey is “going to inform and illuminate the type of network that will best meet your needs.”

Community needs can vary due to topography and existing infrastructure available for use. “Make sure your network meets your community needs,” added Bob Knight, CEO of public relations agency Harrison Edwards and a local government official in Connecticut. He is co-chair of Fiber Broadband Association’s public officials group. “The best projects have an element of community engagement.”

Jerry Kuthy, Program Officer at Cameron Foundation, urged local leaders to create a mapping system of their individual geographical broadband needs.

The Virginia Department of Housing and Community Development launched an interactive broadband coverage map in April of 2022. Kuthy said the map will help local leaders in Virginia roll out funding for rural broadband infrastructure.

Mapping areas of focus for broadband projects has long been the focus for state and regional leaders, in part because so many people have expressed disappointment at previous FCC broadband mapping efforts.

LISC is an intermediary non-profit that connects public and private resources with underinvested places. The role of Community Development Financial Institutions was also discussed at the event.

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Rural

Community Development Financial Institutions Funds Prepare for Broadband Infrastructure Funding

CDFI funds are responsible for rural Wyoming broadband and may offer a solution to rural areas across the nation.

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Photo of Brian Vo

WASHINGTON, May 11, 2022 – A Treasury Department program that is bringing capital to disadvantaged communities is helping drive key money into broadband infrastructure builds in rural America, some of those recipient institutions said at an event Tuesday.

The department provides grants to and certifies institutions such as banks, credit unions, loan funds, microloan funds, or venture capital providers as Community Development Financial Institutions that provide financial services in low-income communities and to people who don’t have access to financing, according to the government website.

The program is also helping build much-needed broadband connectivity, as seen in rural Wyoming, where the Midwest Minnesota Community Development Corporation has already utilized CDFI funds to finance a project to run fiber optics networks to rural Wyoming.

“We believe that there’s capital available for rural broadband,” Gary Franke, managing director of the communications group at CoBank, said at the Local Initiative Support Corporation event on Tuesday.

LISC is an intermediary non-profit that connects public and private resources with underinvested places. CoBank, however, is not a CDFI.

Such deals “typically will involve partnerships with state, local, or federal programs in addition to private equity,” he said.

Suzanne Anarde, CEO at Rural Community Assistance Corporation, a CDFI, said Tuesday that CDFIs must “find out what our individual niche is and how we can build capacity that makes us viable.”

Brian Vo, chief investment officer at Connect Humanity said that his organization could work with CDFIs in the future to fund their holistic approach to digital equity.

Photo of Brian Vo (right) by Teralyn Whipple

LISC alleges that the large national financial institutions are not interested in making investments to improve rural broadband expansion across the country. The organization states on its web site that “rural broadband is lacking in many areas because the large national providers are not interested in making the investment.”

“We see a lot of opportunity out there. With the right capital and the right funding programs, there’s a lot more to come,” Franke said.

There are currently more than 1,200 CDFI funds operating across the nation, many of which are now focusing on crossing the digital divide by providing funds for rural broadband infrastructure.

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Universal Service Fund in Need of Reform, Said Panelist at Broadband Community Summit Event

The Universal Service Fund’s base is shrinking.

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Photo of Carol Mattey speaking.

HOUSTON, May 3, 2022 – As funding for the Universal Service Fund continues to fall year over year, the Federal Communications Commission is evaluating options to reform it.

During Broadband Communities Summit 2022, Principal Consultant for Mattey Consulting LLC, Carol Mattey anticipated what kind of changes to the Universal Service Fund that stakeholders could expect in the coming years.

The Universal Service Fund is responsible for funding several high-profile financial benefits including the Rural Digital Opportunity Fund, the Connect America Fund, E-Rate, the Lifeline Program, and the Rural Healthcare Program.

The USF is funded through compulsory service provider contributions. Though those contributions have historically been based on providers’ interstate and international telecommunications service revenues, critics of the program argue that providers are increasingly able to dodge these contributions by reclassifying their sources of revenue.

A common misconception for dwindling contributions is cord cutting, Mattey said. As more people drop landlines, there is simply less voice revenue – but that is only part of the issue.

Mattey said that while information revenues have increased through consumer use of the internet, voice revenues have fallen. This disparity has caused the telecommunication contribution to skyrocket and could be nearly 30 percent in 2022.

Mattey explained that most companies simply bill their consumers to offset that amount, and as a result, the contribution has been disproportionately burdened by the elderly who are more likely to use landlines.

When addressing potential reforms, Mattey pointed to three most likely possibilities being considered: broadband internet access revenue, a flat fee per voice and broadband connection, and a flat fee per phone number.

“Any reform needs to be simple and must be able to be audited,” she said. “The current system is not equitable.”

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