Municipal Networks

More and more rural electric cooperatives are learning that their existing distribution networks can lend themselves to highly efficient deployment of broadband for their member-owners. Based on the distances that define rural America, one of the surest ways to effectively build a broadband network is to use an existing electric co-op infrastructure. Many co-ops have found that building out a broadband network is a productive way to serve customers, and can actually be profitable as well. But the challenges they face are numerous, and every build-out brings a new set of circumstances. With that in mind, CoBank interviewed leaders from six co-ops that have launched successful broadband initiatives in order to find out what works – and what doesn’t.

As CenturyLink rolls out new ‘price for life’ services and invests in its network to improve internet speed to nearly 700,000 people in Colorado, it’s also trying a new approach to bringing broadband to areas that lack it — public-private partnerships with local communities. The company has been negotiating partnerships with some Western slope communities and at least one on the northern Front Range to expand its fiber-optic network into areas it previously considered uneconomical to do so.

The approach resembles one used in Centennial by Mississippi-based Ting Inc. in partnership with the south-metro area suburb's municipal government. The company has been polling Centennial neighborhoods to find where the strongest demand for services exists, with the aim of announcing this fall where it will build high-speed lines to homes. CenturyLink, the main local landline phone company in most of the state, receives Federal Communication Commission subsidies for providing internet service in qualified rural areas.

Here, a look at three rural counties, in three different states, demonstrates how country folk are leading their communities into the digital age the best way they know how: ingenuity, tenacity, and good old-fashioned hard work.
The 'Silicon Hollow', Letcher County (KY)
Internet on the TV, Garrett County (MD)
Ahead of the Curve, Coshocton County (OH)

Beginning in 2013, the city of Opelika (AL) became the state’s first “Gig City,” offering broadband Internet services to its 11,000 households over a $43 million fiber-optic network constructed and operated by the city’s electric utility, Opelika Power Services (“OPS”). How is Opelika’s system doing financially?

According to Mayor Gary Fuller, the city’s network, in its fourth year of operation in 2016, is “on pace with our five-year plan to be at break even.” As explained in this perspective, this rosy assessment is entirely at odds with the city’s own books. The city’s telecommunications service has experienced large and continuing financial losses through 2016, accumulating millions in financial losses during its four years of operation. Before “break even,” these millions in losses must be recovered and the $42 million in debt paid. In this persepective, I conduct an analysis of the OPS broadband network’s financial health using the city’s financial statements. By any meaningful financial metric, OPS’s broadband network is unlikely ever to be “profitable.”

With high-speed internet access in West Virginia’s rural areas seriously wanting, Sen Shelley Moore Capito (R-WV) is pushing policy proposals favored by players on the right and left. According to the Federal Communications Commission, the Mountain State ranks 48th in the nation for broadband coverage. That helps explain why Capito co-chairs the Senate’s Rural Broadband Caucus, and why she’s willing to try practically anything. Last week, Sen Capito joined Sen Kirsten Gillibrand, (D-NY), in introducing the Broadband Connections for Rural Opportunities Program Act, which would channel as much as $50 million in grants annually to build out broadband infrastructure through a Department of Agriculture entity, the Rural Utilities Service.

The legislation introduced by Sen Gillibrand would provide as much as 75 percent of the construction and select deployment costs of a high-need broadband project, and it mentions prioritizing applicants such as state, local and tribal government stakeholders and nonprofits. Typically, low-interest loans and grants made through the Rural Utilities Service have gone to local co-ops and utilities.

[Commentary] The Rural Electrification Administration (REA) built on the efforts of another New Deal project. The Tennessee Valley Authority was among the very first creations of President Franklin Roosevelt’s administration. The TVA had several purposes, including navigation improvements and flood control, but among its biggest was generating electricity for some of the poorest sections of the country. Everyone knows about the high-speed internet deficit, so why hasn’t anything like a TVA for the internet been created?

One answer is that Congress has been controlled by politicians who have vilified all government programs and who do not want to create new ones. The bigger problem is that the very people who would benefit from rural broadband keep voting for those same politicians and things are even worse at the state level. Dozens of rural communities have tried to set up internet co-ops, on the model of the REA, but in response nearly two dozen states have passed laws making it nearly impossible to do so. Most of these states are controlled by the same kind of anti-government legislators who run Congress and all of them have been lobbied heavily by the same telecommunication companies that have abandoned rural internet users. But as long as rural Americans keep sending those politicians to Washington, or to the statehouse, rural America is going to remain stuck in the dial-up age.

[Steven Conn is the W. E. Smith Professor of History at Miami University in Oxford, Ohio]

[Commentary] Many business models have been disrupted by the internet. The next incumbent industry being challenged includes the old-style cable and telecom companies. They do everything they can to throw mud on the open-access fiber-optic infrastructure — including UTOPIA — that some of us enjoy along the Wasatch Front. Don’t fall for it. The future is brighter than the negativism of these companies and their allies in the Utah Taxpayers Association. That negativism leads to flawed studies like that from the University of Pennsylvania, which are easily rebutted by Next Century Cities and the Coalition for Local Internet Choice. But one has to take a moment to understand why Utahns, and everyone in the country, want the opportunity for gigabit broadband at better prices.

West Virginia’s largest cable companies have filed a lawsuit against Gov Jim Justice (D-WV) and Attorney General Patrick Morrisey, alleging that a new state law could ultimately cause internet service outages at customers’ homes and businesses. The state Cable Telecommunications Association is challenging new rules designed to make it easier for startup internet firms to secure access to utility poles. The cable companies don’t want competitors meddling with their equipment housed atop the poles. About 400,000 West Virginians have telephone and internet service through cable providers. “There could be significant damage to equipment and to customer relationships and outages and things of that sort when you have circumstances where there are no limitations at all on competitors moving other competitors’ equipment around,” said Mark Polen, spokesman for the cable group.

The companies say the new law allows the smaller internet companies to hire private contractors and rearrange existing equipment atop utility poles without permission. Federal rules already dictate how telecommunication companies share and access equipment on utility poles, according to the lawsuit. The new state law conflicts with longstanding federal law, the cable group alleges. The lawsuit characterizes the state law as “invalid” and “unconstitutional.”

Pinetops' (NC) fight to get municipal broadband demonstrates how far Big Telecom will go to keep its monopoly. The town was finally getting hooked up to high-speed fiber internet that would deliver 1 gigabit per second speeds to homes and businesses across the rural community. But a series of convoluted laws and court decisions created a scenario in which residents of tiny Pinetops (population: 1,300) received some of the fastest internet in the United States for six months—absolutely free.

For Pinetops, that was municipal broadband, where the local government runs its own ISP and delivers it to paying customers, similar to how electricity utilities work. Their provider: the nearby town of Wilson. Wilson is about 20 miles from Pinetops, just across the county line. The small city (population 50,000) has long supplied nearby towns with utilities like water and electricity, so when Wilson launched its municipally-run fiber optic broadband network called Greenlight in 2008, Pinetops was eager to get hooked up. But just as Wilson was preparing to expand the program in 2011, North Carolina passed House Bill 129: the "Level Playing Field" act, which was supported by Big Telecom lobbyists. This put tight restrictions on any town hoping to start its own municipal broadband, and reined in existing systems under the thinking that it was unfair for the government to compete in the open market with private businesses. After the law was passed, Wilson was not allowed to bring high-speed internet to Pinetops.

[Commentary] Although the fight for an open internet tends to have Silicon Valley tech bros at the forefront, it’s a racial justice issue; arbitrary powers for corporations tend not to help marginalized populations. It’s a rural justice issue, too.

The big service providers pushing the deregulation spree are the same companies that have so far refused to bring broadband to less-dense areas. They are holding under-served communities hostage by proposing a deal: roll back rights to private, open media, and we’ll give you cheaper internet. Trump’s Republican party is taking the bait. Up in the mountains west of me, a decade and a half ago, the commercial internet service providers weren’t bringing high-speed connectivity to residents, so a group of neighbors banded together and created their own internet cooperative. Big providers love making their jobs sound so complicated that nobody else could do it, but these people set up their own wireless network, and they still maintain it. Of course, their service remains pretty rudimentary; the same can’t be said of Longmont (CO), city 20 minutes from where I live in the opposite direction. There, the city-owned NextLight fiber network provides some of the fastest connectivity in the country for a reasonable price. In Longmont, all the surveillance and anti-neutrality stuff simply isn’t relevant.

Whatever happens in Washington, we can start building an internet that respects our rights on the local level. What would be the best route for creating community broadband in your community?

[Nathan Schneider teaches media studies at the University of Colorado Boulder]