When the local internet provider refused to cross a four-lane highway to hook up Ralls County Electric Cooperative to its system 17 years ago, the small Missouri co-op decided to build its own 180-foot-high tower to create a self-supporting wireless network.
Seven years later, as demand for higher-speed internet grew, the co-op became one of the first in the nation to jump into the fiber-to-the-home business, despite warnings that the financial risk was too great.
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Today, New London-based Ralls County EC has a thriving broadband business, bringing high-speed internet to any of its 4,758 members who want it and expanding to provide service to non-members in the region. Local realtors are so excited about co-op broadband, some pay out of their own pockets to connect listed homes so they’ll command higher prices and attract more buyers.
“We’re a great example of what a small co-op can do with broadband,” says CEO and General Manager Lynn Hodges. “We have an 80% participation rate after 10 years, which is pretty remarkable. And we’re still growing.”
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Hodges credits his onetime boss, former Ralls County EC CEO Daniel Strode, for forging ahead with broadband despite the naysayers. Strode died last year at age 71 after retiring in 2015.
“Dan was a real pioneer,” says Hodges, who was hired by Strode 17 years ago to help bring modern technology to the community and boost economic development. “We were told we were crazy, that we would go bankrupt. Dan challenged that. Broadband is his legacy.”
Strode convinced the co-op’s board that a short-term financial hit would be worth it in the long term as the broadband program brought in new revenue. That can be a tough sell for co-op directors who are trained to be risk-averse, Hodges says.
“We took a beating on our equity position for the first few years,” he says. “But now, broadband is paying real dividends. We projected 45% participation among our members. At 80%, we’re exceeding all expectations.”
Ralls County EC’s employees were not thrilled initially at the idea of the co-op becoming a broadband provider.
“When we first made the jump, our employees were not hugely in favor, I’m going to tell you straight up,” Hodges says. “They saw it as an additional responsibility to them. Within a few years, they’ve had a total change of heart. They saw firsthand how much members cared about broadband service. If we have a power outage, members don’t mind their home in the dark, but they want their devices to work.
“My line superintendent, who had been a real skeptic, finally said after listening to members: ‘I don’t know if we can survive without broadband.’ We’ve had a real culture change here.”
Co-op consumer-member Steve Lewton, an agent at American Family Insurance in New London, said broadband has made a huge difference in his ability to serve his customers.
“Before they brought in high-speed internet, we were on DSL or something, and it was constantly buffering, or the system was going down,” Lewton recalls. “Customers would be waiting and waiting. It was terribly frustrating. Now we can get what we need in real time. It’s been a game-changer for us.”
If the co-op hadn’t stepped up, “there was no one else in town who was going to do it,” Lewton says. “Without them, we’d be stuck in the past.”
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Ralls County EC’s experience shows that small co-ops can be successful at providing broadband service, but they can’t do it alone, Hodges says. In addition to support from members and directors, they need to find financial resources and partners with expertise.
The co-op tapped into federal programs designed to bridge the digital divide between urban and rural areas. They received $10 million in grants and another $10 million in loans from the U.S. Department of Agriculture about 10 years ago. More recently, they were among the winning bidders in the Federal Communications Commission’s Rural Digital Opportunity Fund auction.
Ralls County EC has had partners from the start, working with Pulse Broadband, which helps design, build and operate broadband networks. The co-op also partners with NRTC, which works with co-op members to find the technology that best serves their needs. Hodges now serves on the NRTC board.
“You don’t have to do this by yourself,” says Hodges, who often speaks to other co-ops about Ralls County EC’s broadband journey. “There are a lot of lessons that you don’t have to learn the hard way. You can learn from those of us who went first.”