Building broadband internet service to remote rural areas is a costly and complex project. Wherever possible, NRTC always has encouraged its members from the rural electric and telephone worlds to work together. Telcos have the knowledge and experience to build communications networks; electric co-ops have the resources and service areas to expand broadband offerings over wider regions.
NRTC board member Shirley Bloomfield also has been thinking about partnerships. In a recent blog post, she listed what she sees as the main advantages to partnering:
- overlapping consumers
- both have existing investments in fiber facilities
- together they can achieve efficiencies of scope and scale
- they can work jointly to develop additional revenue sources
Bloomfield mentioned that the NRECA board has invited her in recent years to discuss the issues around broadband and the advantages of partnerships. NRECA invited her again this year.
“The gratifying part of the discussion this year was that I spent less time my giving my formal presentation and more time on actively engaging with the electric leaders on how we might work together, what models are working in the field, what do fiber swaps and managed agreements look like and if there’s a way for USDA to incentivize partnerships in any available funding,” she said. “It was a fun and robust discussion and I was delighted with the engagement.”
Electric cooperatives’ growing interest in building fiber for their own smart grid needs as well as for the community is naturally leading to more opportunities where it makes sense for them to work with telcos. Stories about telcos and electric partnerships in the upper Midwest last month during a “listening event” sponsored by both NTCA and NRECA, provided compelling evidence.
But Bloomfield lamented that along with the stories of successful partnerships, there are also stories about electric cooperatives choosing to overbuild rural telcos. The history of communications network overbuilds, dating back to small-town cable TV overbuilds before commercial internet service was available, has often been dismal. In communities that can barely support one ISP, two companies drive each other out of business and the community is left with nothing.
“It’s even more of an issue when limited federal support is at stake and we are pitting federal dollars against federal dollars for the same consumer in a low-density market. Not the best use of limited federal resources for sure,” Bloomfield said.
Partnerships often make the best business sense, and when they are successful, they are a reason for rural communities to celebrate.