Report: Cooperatives Provide 31% of Fiber Broadband in Rural Areas

Cooperatives are playing a key role in bringing fiber broadband to rural America, according to a new report from the Institute for Local Self-Reliance (ILSR). Nearly one third (31%) of the fiber broadband in the rural U.S. was deployed by a cooperative, according to ILSR. These cooperatives are comprised primarily of companies that traditionally provided telecom or electric service, although a few were established with the specific goal of deploying fiber broadband.

Cooperatives and Fiber Broadband
According to ILSR, there are approximately 260 telecom cooperatives and 900 electric cooperatives in the U.S. and they serve much of rural America. While telecom cooperative fiber deployments are quite common, such deployments are becoming increasingly common among electric cooperatives as well.

Currently, about 10% of electric cooperatives have a fiber internet access project and many more are considering such projects, according to ILSR. More than 110 rural electric cooperatives in the U.S. have embarked on fiber projects, according to the researchers.

The ILSR report reiterates an idea that ILSR has suggested before: that state laws are becoming more friendly toward electric cooperatives that want to offer fiber broadband service. The report notes, for example, that Georgia and Mississippi have explicitly authorized electric cooperatives to offer internet access, and North Carolina overturned a restriction that prevented electric cooperatives from accessing federal broadband funding.

Offering fiber broadband internet service may be a natural fit for electric cooperatives that may already have fiber in place for other purposes. ILSR notes that some electric cooperatives started by deploying fiber optics to substations and large demand centers to increase the reliability of the electric service through better monitoring.

“This forms the backbone of the network for internet access to businesses and residents,” the authors wrote.

Several states have a particularly high percentage of land mass where fiber broadband is available from a cooperative. North Dakota tops the list, with 70.8% of the land mass covered, followed by South Dakota (47.7%), Montana (23.4%), Iowa (22.2%) and Minnesota (21.6%), according to ILSR.

While many telecom and electric cooperatives have been around for decades, the researchers point to two examples of cooperatives that were established more recently, including Allband Communications Cooperative in Michigan and RS Fiber in Minnesota. The latter is particularly unique in that it was created specifically as a rural broadband cooperative.

Telecom and electric cooperatives, as well as RS Fiber, have plans to expand fiber availability in the future, as the following map included in the ILSR report reveals.

In some cases, the cooperatives are expanding beyond their traditional service territory to bring fiber internet to neighboring communities.

Recommendations
ILSR makes several recommendations in its report titled “Cooperatives Fiberize Rural America” for spurring further cooperative broadband deployments, including:

• Designing funding programs with cooperatives in mind by, for example, making applications as simple as possible
• Encouraging cooperatives by removing barriers and encouraging partnerships
• Getting citizens involved by talking to people in the community
• Making it clear that rural connectivity is about more than entertainment by emphasizing its important role for farming, programmers and entrepreneurs

Updated in response to an email from ILSR stating that there was a mistake in the report. Initially the percentage of rural areas with fiber available from a cooperative was reported to be higher. ILSR added, however, that the 31% figure likely understates cooperative investment comparatively. The research was based on FCC Form 477 data from June 2018 and ILSR said its research suggests cooperatives are more likely to offer fiber service to an entire region rather than parts of census blocks.  Form 477 data are known to over-represent services from those who only serve some premises in an area, as it considers an entire census block to be served if one household can take service, ILSR noted. ILSR said it deeply apologizes for the mistake.