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The same locally owned cooperatives that brought rural America up to date with 20th-century technologies of electricity and telephones could be the cornerstone of providing high speed, fiber-optic internet to underserved areas, a report says..

The study by the Institute for Local Self-Reliance, an update to an earlier report, analyzed the role cooperatives play in connecting rural communities to broadband internet and assessed their potential for further expansion. 

As of June 2019, up to 30% of the fiber services in rural America are provided by cooperatives. The number is based on the Federal Communications Commission’s (FCC) data, but doesn’t reflect all of the co-ops that are currently in the process of building out their fiber-optic networks. These should be reflected in the data in the next several years.

The report stresses the outsized role the co-ops play in providing basic services to rural households. Electric cooperatives maintain 42% of the electric distribution lines in the United States, serving 20 million entities, from homes to farms, “providing reliable power to 56% of the entire U.S. land area, accounting for 42 million people in 48 states.”

More than 30 states have at least one telephone cooperative, according to the report.

While big internet service providers like AT&T and CenturyLink have historically overlooked rural America, the report says, co-ops are well equipped to bring reliable and fast internet to those communities. Some have already laid their fiber optic cables before using it for other purposes. The technology is also considered “future-proof,” meaning it has a long technological lifespan.  

According to the data collected in the study, 26% of rural Americans lack these services, compared to 2% of their urban counterparts. The pandemic has called new attention to the gap in rural service as households and businesses have turned increasingly to digital tools for activities previously conducted face to face.

Jake Rieke, vice chairman of the RS Fiber Cooperative board out of Minnesota was quoted in the report saying “I was seriously considering having to move off the farm — a farm that was homesteaded by my family in 1862 — and moving to a town with better broadband access because I felt that there was a serious possibility that I was putting my kids at a disadvantage.” 

The report highlights success stories that support the cooperative model. Among those are North Dakota boasting 81.7% of its land area with access to fiber-optic services, followed by South Dakota with 53.4%, and Montana, Iowa, and Minnesota in the upper fifth nationally.

The report lists three ways public policy could expand cooperatives’ roles in providing broadband service:

  • Expansion of existing cooperatives (as opposed to starting new ones).
  • Supporting legislation that targets co-ops as potential funding recipients of federal and state subsidies.
  • And removing barriers to cooperatives serving as internet providers through state legislation.

Some states have already gone down that path. In North Carolina and Virginia coops have expanded service areas, while Georgia and Mississippi “removed legal uncertainty by explicitly authorizing electric cooperatives to offer internet access, and North Carolina has overturned a restriction that prevented electric cooperatives from accessing federal broadband funding.”

Others, like Indiana, Colorado, Maryland, or Texas help cooperatives through allowing the use of electric easements for broadband development, often spawning opposition from major providers.