The National Rural Electric Cooperative Association (NRECA) is urging Congress to increase minimum uplink standards for broadband networks funded by the federal Broadband Equity, Access and Deployment (BEAD) program. The agency says a minimum requirement of 100 Mbps symmetrical would benefit electric co-ops as they compete with larger ISPs for BEAD grants, since regional co-ops are more likely than nationwide providers to invest in high-speed broadband for rural residents.
“Typical offerings we see are 100 Mbps to 2 Gbps, and some offer up to 10 Gbps," said Joe Trammell, senior director, rural broadband development at Netceed, a major distributor serving the telecom industry. "We are about to see throughput speeds jump to as high as 25 Gbps and to 50 Gbps," he said. "Recognizing software and bandwidth require more and more throughput at higher speeds, why would we relegate users to speeds from 5 years ago? That sounds like a recommendation from service providers that have old copper wire or coax networks.”
Trammell recommends that his electric co-op customers offer broadband “at a minimum 100/100 with optional services up to 10 Gbps.” He said most electric co-ops he works with on broadband are offering service at speeds “far higher” than 100 Mbps symmetrical.
Electric co-ops are governed by boards typically comprised of their members, the same people who rely on the co-ops to power their homes and businesses. As more boards ask co-ops to build broadband networks, they are often asking for fast fiber. Co-op boards and their partners will project the cost of deploying and maintaining these networks, as well as the number of rural residents who will purchase the service.
Money from electricity customers can’t be used to subsidize broadband builds, but electric co-ops can create telecom subsidiaries, which can hire the people who work for the co-op to deploy fiber. Another advantage for electric co-ops is that they typically own the power poles, so they don’t have to pay lease fees in order to hang fiber there.
But for some rural residents, getting faster, more reliable internet service may be more important than waiting for superfast broadband.
Plumas-Sierras Telecom
In northern Nevada and California, Plumas-Sierras Telecom charges $79/month for broadband service with speeds of 100 Mbps on the downlink and 20 Mbps on the uplink. The telco is a subsidiary of Plumas-Sierras Rural Electric Co-op (PSREC), which owns utility poles and used a $15 million federal and state grant to deploy middle mile fiber on the poles. Initially, the goal was to expand supervisory control and data acquisition (SCADA) for the electric grid. PSREC planned to wholesale the excess fiber to major telcos and to local businesses. The co-op also leased fiber to its own telco subsidiary, which had previously tried to provide wireless service to the rural population.
“You might as well put up 144 strands if you’re going to put up anything,” said PSREC general manager Bob Marshall. “SCADA only needs 2 strands. We rented the excess to Plumas Sierra Telecom. They went to neighborhoods and started experimenting with take rates, and they were better than expected. We see 65%-75% take rates.”
Many of the people who didn’t initially have the chance to buy broadband from PSREC became very vocal. “At the board meetings all we ever heard was ‘When are you getting to my house?’,” remembers Marshall. “The board president got up and said ‘Don’t worry, we are getting to all of you.’ That was not in the script I had written for him.”
Marshall and his team agreed to extend the fiber network to local businesses. That decision prompted a flood of requests from one subdivision in which several residents said they had suddenly decided to start home-based businesses. “We got 80% take rates in that subdivision,” Marshall said.
The network has since expanded to more neighborhoods, with residents hiring their own contractors to dig trenches. One neighbor rented a ditch witch to dig his own trench, Marshall remembers. Marshall himself dug the last part of the trench to his own home with a trowel, carefully avoiding his wife’s garden.
The telco has worked hard to economically serve as many residents as possible, Marshall said. “Where we had coax, we rehabbed the coax … If we had a magic pot of money, we’d have taken down the coax and put fiber.” He said the team was able to use some legacy Ericsson equipment in the network, but now the primary vendors are Nokia (core router), Ciena (core switching and some access switching) and Calix (residential access/customer equipment.)
At least 200 of the 900 electric co-ops in the U.S. are offering some form of broadband service to members, according to NRECA. Netceed’s Joe Trammell thinks the number may be significantly higher than that. The Fiber Broadband Association calls rural electric co-ops the fastest growing set of broadband providers, but Trammell said municipally owned utilities (MOUs) are coming on strong.
“I would say municipals may be growing a bit faster than electric co-ops in 2024,” Trammell said. “And privately funded ISPs are still very active.” Trammell expects to see a large number of BEAD applications from MOUs, and he noted that these entities may be other public services providers as well as power providers. He estimated that there are over 2,000 of these entities nationwide.
Both electric co-ops and MOUs face a steep learning curve as they enter the broadband business, Trammell said. “When it comes to deployments, most electric co-ops don’t go it alone, they consult with project management, engineering, and construction teams,” Trammell said.