States Considering Range of Options to Bring Broadband to Rural America

State policymakers have increasingly sought new solutions to improve the availability of broadband, including allowing electric cooperatives to offer service, the formation of regional utility districts to provide broadband, and the use of investor-owned utilities to improve the availability of critical infrastructure. The advantages and potential challenges of these models will be explored in a series of three articles, the first looking at the potential role of electric cooperatives. Electrical cooperatives are private, nonprofit organizations that provide electricity to customers in their service areas. They are customer-owned and operate on a cost-of-service basis, returning extra profits as dividends to members or to be invested in infrastructure.  Many electric cooperatives are well-positioned to bring broadband to rural areas because they already provide many of these communities with electric service. They also have many of the resources, equipment, and personnel needed through their electric operations. The cooperatives have built out infrastructure such as utility poles that can be upgraded to incorporate fiber as part of smart-grid modernization projects. And they can leverage existing resources—such as trucks, administrative personnel, customer support, and billing systems—to serve broadband customers. A key challenge for electric cooperatives seeking to provide broadband services is securing funding or financing for deployment. Because they do not have as much capital as traditional internet service providers, cooperatives often turn to state and federal programs for additional funding for these projects.

[Anna Read is senior officer and Lily Gong is an associate at the Pew Charitable Trusts' Broadband Access Initiative.]