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Economic Opportunity for Broadband with Rural Electric Co-ops

Co-ops have the chance to support education, healthcare and work-from-home coming out of the coronavirus pandemic.

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Drew Clark and Darren Farnan

March 2, 2022 – The chief operating officer of a rural electric coop that expanded into the broadband business by using its existing electric infrastructure said it has seen the new business outpace its existing one, which it said goes to show the importance of using existing poles to connect rural Americans.

Darren Farnan of the Missouri-based broadband provider and electric co-operative United Fiber, said his company has also seen a rapid uptake in higher-speed internet packages during the pandemic, with 60 percent of his company’s new customers now taking 500 megabits per second or one gigabit per second download service.

“It was such a game changer with Covid,” said Farnan on an Ask Me Anything-style interview with Broadband.Money on Friday, adding the company hopes to upgrade capacity and begin offering two, five and 10 gig service. “I mean, we thought we were busy and a lot of demand before and then that just blew the roof off.”

United Fiber has seen much more prosperity in its electric business from the success of its broadband provision, Farnan said, taking advantage of what it believes to be unique circumstances under which it is the only rural electric co-op in the which has more broadband subscribers than it does electric customers.

Farnan also said he feels that United Fiber has brought much needed internet service to areas of their electric footprint where rural telephone co-ops failed to provide service, including many smaller communities adjacent to the areas served electrically. He added that 92 percent of the persistent poverty counties in the U.S. are served by electric co-ops.

Entering the broadband business

This earlier lack of access for customers brought United Fiber into the broadband business almost accidentally during the days in which it was just an electric network, Farnan said.

Federal funding was essential to United Fiber’s foray into broadband, but many other co-ops have been able to make such expansions to their service using only their own funds as the co-op broadband model becomes more prevalent in other states, he said.

Earlier this year, Chris McLean, the acting Rural Utilities Service Administrator, said over the past two fiscal years, his agency funded more miles of fiber than power lines.

The company aims to take as active a role as possible in the communities it serves to ensure a profitable local economy – introducing initiatives such as rate discounts, particularly in December to help customers with their holiday spending, Farnan said.

Even with increasing broadband membership, United Fiber still views its electric service as essential due to increasing demand for things such as electric cars and does not anticipate phasing it out of distribution.

“Like I said, we’re unique, when you mention the tail wagging, the dog, it’s a little bit unique for us because we’re, like you said, three times the number of customers,” said Farnan.

“And we just try not to put labels on it, right? Our mission is to basically take care of our members and take care of the region, so we just look at it that way and it really benefits all.”

Watch the Ask Me Anything! interview with Broadband.Money on Friday, February 25, 2022, on Broadband.Money.

Reporter T.J. York received his degree in political science from the University of Southern California. He has experience working for elected officials and in campaign research. He is interested in the effects of politics in the tech sector.

Fiber

New Public Broadband Association Criticizes NTIA Rules, Boasts Strong Start for New Group

While praising some aspects of NTIA rules, the group said that “we can’t take a victory lap quite yet.”

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Photo of (left to right) Scott Menhart of Traverse City, Bob Knight, Kim McKinley and Angela Imming at Broadband Communities Summit by Drew Clark

KEYSTONE, Colorado, May 24, 2022 – The America Association of Public Broadband on Tuesday praised many aspects of the U.S. Commerce Department’s rules for spending the Infrastructure Investment and Jobs Act, but criticized some aspects of the regulations that will make it hard for cities to build broadband projects.

In a statement and press briefing at the Mountain Connect conference here, officials representing the association said that the $42.5 billion in spending under the Broadband Equity, Access and Deployment Program will “go a long way to address the high-speed broadband access and equity gaps plaguing American communities.”

The group is chaired by Angela Imming, who is responsible for a municipal broadband project in Highland, Illinois. The other four officers of the organization represent cities of Kitsap, Washington, Traverse City, Michigan, UTOPIA Fiber in Utah, and the town of Ridgefield, Connecticut.

The statement and press conference were conducted by Kim McKinley, UTOPIA Fiber’s chief marketing officer and secretary of AAPB, and Bob Knight, a commissioner of economic and community development in Ridgefield and a member of the AAPB board.

But AAPB, a new lobbying group that aims to represent the interest of municipalities seeking to build high-capacity broadband, also highlighted many problems.

“But we can’t take a victory lap quite yet,” said McKinley and Knight on behalf of the group. In particular, “these challenges include a cumbersome application process with a letter-of-credit requirement which serve as steep barriers to entry for local government, nonprofits, and small ISPs.”

“Additionally, the multi-year rollout of BEAD funds leaves many high-speed broadband projects out in the cold, limiting the options for those deploying prior to 2024.”

Referring to comments that Alan Davidson, administrator of the National Telecommunications and Information Administration, said earlier on Tuesday, the group said, “We were pleased to hear Assistant Secretary Davidson say at Mountain Connect today that more refinement will be necessary and that the NTIA team is on the case. We look forward to working with NTIA to ensure that the interests of local, regional, and state entities are heard and acted upon.”

The association was first announced on May 4 at the Broadband Communities Summit, and the group provided updates on its progress on Tuesday.

In the three weeks since the association’s announcement, the organization said that $200,000 had been raised from the equipment vendor and non-profit community.

The group now has an advocacy and policy group that is working with federal and state leaders to advance the interests of municipal broadband, an education group, and a membership group.

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Open Access

UTOPIA’s Projects Proceeding in California and Montana, CEO Says

Both the GSCA and Yellowstone Fiber are using UTOPIA’s techniques to provide open access broadband over fiber.

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Barbara Hayes (left) and Roger Timmerman (right) speaking at Broadband Communities Summit 2022 on May 4

HOUSTON, May 4, 2022 — UTOPIA Fiber’s open access model has found success in California, Montana, and Idaho as it continues to deploy across Utah, the company’s CEO said Wednesday.

“Right now, we are working with [Golden State Connect Authority] to identify various pilot areas for the project and have started preliminary engineering work to determine the initial project area,” Roger Timmerman said at the Broadband Communities Summit 2022.

During the press conference, Timmerman also pointed to UTOPIA’s expansion into Santa Clara, Utah, and its completion of its original 11 Utah cities by the end of 2022.

Timmerman was joined by partners Barbara Hayes of the Golden State Authority and Yellowstone Fiber CEO Greg Metzger as they delivered remarks on their joint ventures. The partnership will create the largest publicly owned fiber network in the US, and as it stands now, would span 38 of California’s 58 counties.

“California may be the world’s fifth-largest economy, but our state’s connectivity is decades behind,” Hayes said. “Investing in open access fiber will be transformative for California.”

Both Metzger and Hayes emphasized that their decision to partner with UTOPIA was largely informed by the company’s track record.

“We needed to have a partner who was successful and had done it before,” Metzger said. “For Montana, this is going to be a breath of fresh air.”

Yellowstone Fiber, formerly known as Bozeman Fiber, is a not-for-profit that will replicate UTOPIA’s open access model to provide broadband to the greater Bozeman region; it will own and operate the fiber but will rely on UTOPIA for assistance on the backend.

UTOPIA’s model of open access has long been a point of interest in the telecom industry. While some claim it will be a solution to the digital divide, other assert that it has merely created a “race to the bottom” where internet service providers are constantly pushed to undercut their completion. Timmerman and others have pushed back against the “race to the bottom” assertion, claiming that providers can find ways other than price to distinguish themselves from their competition, such as superior customer service. Additionally, they point to their recent track record as evidence that critics’ concerns that they can maintain a positive cash flow are unfounded.

Though UTOPIA, a sponsor of Broadband Breakfast, now has positive revenue and has served as a model for open access projects around the country, critics still point toward its more than $300 million in outstanding debt it accrued in its early days, before Timmerman was at the helm.

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Fiber

Municipalities Generally Prefer Not to Own Broadband Builds, Conference Hears

Broadband leaders note cities prefer to partner than to own networks.

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Kenrick Gordon speaking remotely, with Deb Socia, Joshua Williams and Christopher Mitchell in person at Broadband Communities Summit

HOUSTON, May 3, 2022 – During a panel discussion Monday, broadband implementation leaders said local governments are often much more willing to help a partner organization establish a broadband network than they are to oversee construction themselves.

Speaking at Broadband Communities Magazine’s 2022 summit in Houston, Kenrick Gordon, director of the Maryland Office of Statewide Broadband, said “most local governments don’t really want to own a broadband network” and prefer to partner up and support the build.

Gordon spoke alongside Deb Socia, the CEO of the Enterprise Center, a non-profit infrastructure partner based in Chattanooga, Tennessee, which is known as the “gig city” for its city-owned gigabit fiber network.

When asked about what makes a bad partner organization for local governments in infrastructure projects, Socia, who formerly led internet-expansion organization Next Century Cities, said those who are not trusted by members of the community will not make effective broadband providers.

Many organizations have the potential to overpromise to community members, for example giving earlier timelines for broadband builds than is required, Socia said. Gordon added it is common that the expectation among some community members is that broadband projects can be built faster than other infrastructure.

Screenshot of Kenrick Gordon, Catharine Rice, Will Aycock, Deb Socia, Joshua Williams and Christopher Mitchell

Socia said trust can be garnered from the public by using a consistent script between all involved organizations, such as utilities and city government offices, so that questions can be answered in the same manner with accurate information.

She also outlined how Chattanooga was able to promote its broadband network on trusted and popular local radio stations, increasing familiarity with it in the community through on-air discussions.

Both Socia and Gordon, as well Catharine Rice, project director for the Coalition for Local Internet Choice, stated the importance of maintaining relationships and partnerships, with Rice emphasizing the need to frequently speak to state broadband offices as they generally are quite interested in working to be helpful and improve how they do their job.

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