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.

Economic Opportunity for Broadband with Rural Electric Co-ops
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.

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