For electric cooperatives that decide to bring broadband service to their regions, the challenges can be daunting.
There are large upfront costs to determine a path forward for building communication networks in rugged terrain where subscribers are often miles apart.
Expensive technology and raw materials, including large spools of optical fiber, must be bought and warehoused.
New technicians and customer service staff must be hired and trained.
Applications for federal grants and loans are lengthy and complex. And state and federal regulations can add onerous compliance and reporting requirements.
Then there’s the competition.
Dozens of national internet service providers are well-positioned and resourced to snag billions of dollars in federal subsidies for rural broadband.
“It’s kind of like a David and Goliath story,” says Mike Partin, president and CEO of Sequachee Valley Electric Cooperative in South Pittsburg, Tennessee. SVEC started its broadband subsidiary in 2019. “Here we are, small co-ops up against the large telecom giants. We need … the tools, the information and a national voice to help us move forward as we become mature telecommunication businesses.”
With 200 electric co-ops in the broadband space and many others assessing it, NRECA has heeded a call from member co-ops to expand its services, expertise and resources deeper into the telecommunications space.
Launched in July, NRECA Broadband offers more robust federal advocacy for co-op broadband priorities, plus targeted resources for communications, new learning events and focused business and technology support.
“This new level of service will bring our voice as a national organization to new places in Washington, where telecommunication issues are discussed and where telecommunication business policies are made,” says NRECA Chief Operating Officer Jeffrey Connor. “This is about building partnerships NRECA can develop to be a more powerful voice for our members’ interests.”
'Broadband is a new world'
NRECA began studying a new service tier in 2021 after several co-op leaders asked the association to leverage its prominence among federal policymakers to advocate for co-ops on broadband issues.
“With the reputation NRECA has inside the Beltway, it’s something members have asked for,” says NRECA CEO Jim Matheson. He says NRECA’s Government Relations team is working to build “a new set of assets” to lobby Congress and the executive branch.
Partin says the respect NRECA commands nationally will help level the playing field for co-ops competing with large telecom companies for grant money and other programs.
“When you come to Washington, D.C., to talk about things that matter to rural America, NRECA has a voice like nobody else in this city,” he says. “The leverage that brings to us as electric cooperatives getting into the fiber business will help us counter the dollars the large providers can put at the table.”
Between 2019 and 2020 alone, 15 telecom corporations spent more than $234 million—or about $320,000 a day—in federal election contributions and lobbying for favorable rules, according to a study by Common Cause, a political watchdog group, and Communications Workers of America. Topping the list were Comcast, with annual expenditures totaling more than $43 million, and AT&T with $36 million.
In the coming months, co-ops will face battles with these internet behemoths over some $65 billion in grants and loans provided for rural broadband by the Infrastructure Investment and Jobs Act.
“Because they’re so big, they have a tendency to run over the little guy, which is what cooperatives are in this world. So, it’s going to be very important to have that voice in Washington, D.C.,” says Tim Smith, general manager and CEO of East Central Oklahoma Electric Cooperative in Okmulgee. The co-op opened ecoLINK fiber services for internet and telephone in 2018.
“Broadband is a new world for us,” Smith says. “It’s very competitive in nature, and there are a lot of outside forces that are coming after us.”
NRECA advocacy will also be crucial as the Federal Communications Commission updates its broadband maps to identify unserved rural areas that are eligible for funds.
“That’s where we rely on NRECA to help sort through those facts and those requirements,” Smith says. “We’re going to need some help with that. It’s complicated.”
Mel Coleman, CEO of North Arkansas Electric Cooperative in Salem, says deeper engagement from NRECA means broadband co-ops won't have to go it alone.
“If I walk in, they’re not going to listen to me. If we walk in as a group represented by our national association, that’s where we get the ears of the regulators and the lawmakers. We’ve seen that happen at the FCC. We’ve seen that happen with lawmakers,” says Coleman, whose co-op’s fiber subsidiary NEXT will reach all of its consumer-members by 2023. “We can’t do it individually. We have to have NRECA, and NRECA has stepped up to help.”
'A natural extension'
Participation in NRECA Broadband is voluntary and carries separate fees. Any NRECA voting electric co-op or statewide association can join for an additional $6,000 a year. Co-ops that are already active in broadband pay a higher annual fee of $12,000 plus $1 per broadband customer.
“The first two years of this effort are critical to determine what our membership commitment is to NRECA doing this work and how we’re going to build a program that effectively serves them,” he says.
Connor noted that the new services will not interfere with or duplicate the work of NRTC, NTCA or other co-op-focused organizations involved in broadband issues.
The first NRECA Broadband event will take place Nov. 17-18 in Washington, D.C. It will offer broadband education sessions, discussions with federal agency staff, peer-to-peer discussions about the telecommunications business, and feedback sessions.
Matheson says NRECA Broadband will augment NRECA’s original mission to help electric cooperatives succeed and thrive.
“Increasingly, our members are entering the competitive field of telecommunications. That brings with it new opportunities to serve their consumer-members, schools and local businesses, but also significant business and policy risks different from the electric sector,” Matheson says.
“NRECA’s mission is to be an advocate for quality of life in the rural and diverse communities our members serve and has been for 80 years. NRECA Broadband is a natural extension of our advocacy, and we are prepared to commit our efforts to serve electric cooperatives as they work to deliver broadband to their communities.”
For more information and to sign up, visit NRECA Broadband.