Co-ops: a strong solution for rural broadband build out?
October 28, 2015 by Blandin Foundation
More than 20 percent of people living in Minnesota still do not have reliable access to broadband. A large portion of these people are in rural. This is not just an inconvenience, but a barrier for economic growth, educational opportunities, quality modern healthcare, and so much more. Rural leaders have been seeking solutions for years, some successful, others challenging. One solution that is rising in notability is the potential role of cooperatives.
There are about 900 co-ops nationwide. If they flex their collective muscles, they can put a huge dent in the unconnected population.
A unique partnership between RS Fiber and 10 cities is proving successful in Minnesota, which also has restrictions on public networks. The cities sold a General Obligation bond that they used to underwrite a loan to RS Fiber. The co-op leveraged the loan to raise more investment money.
RS Fiber retained Hiawatha Broadband Communications, a local ISP, to oversee all network buildout, operations and marketing. A fiber backbone will connect the 10 towns. During the three years it will take to complete the buildout, the co-op will provide 25-megabit symmetrical wireless and telephone services to the cities. In 2018 RS Fiber will ask the cities to pass another bond to finance the remaining buildout to take in surrounding farmlands. In total the entire network will cover over 600 miles and 2500 farm sites.
At Blandin Foundation, we are all about supporting local leaders as they determine the best path towards vibrancy for their community. We’ve listened and watched as more communities look at co-ops as a potential model to help rural broadband reach the un- and underserved. This year, we put out a call to existing co-ops to learn more about their current thinking on broadband, and brainstorm together what might some possibilities be in the future.
- public/private partnership models between co-operatives and government at all levels
- market demand is strong – people want broadband
- champions are required and are willing – both providers and communities
- positive impacts of broadband are evident
Barriers were also discussed, such as:
- financing rules and tools need to be clarified
- leadership must be developed
- industry dynamics – technology, regulatory, workforce
This conversation will be carried forward at the upcoming Border-to-Border Broadband Conference on November 18-20. If your community is at all interested in exploring whether a cooperative model might work, consider attending the session. Here’s a description and panelists.
Many of Minnesota’s best rural broadband services are provided by cooperatives. Find out whether a cooperative model might work for your community and how existing cooperatives might be your best bet for a public-private partnership.
You can register for the Border to Border Broadband: Better Together Conference here and follow the Blandin on Broadband blog for more highlights.
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