Electric Co-ops Considering Broadband Should Reach Out to Telcos

December 15, 2016

In a fall column for her blog, NTCA-The Broadband Association CEO Shirley Bloomfield wrote of her concern that electric cooperatives across the country are eyeing broadband as a possible business enterprise to help unserved and underserved rural areas.

Shirley Bloomfield

“On one hand, I admire the desire to serve,” she wrote. “On the other hand, I am concerned with some overzealous efforts by some rural utilities to get into the broadband industry, particularly where they express an interest in either not working with the existing rural broadband provider or where they have even gone so far as to look to overbuild the networks that rural carriers have built—in markets where even having one provider is difficult to support.”

Bloomfield went on to express her respect for the model that RTFC’s affiliate, CFC, is promoting among its electric cooperative members. CFC led broadband discussions at two member meetings in 2016, one of which featured Bloomfield as a speaker. CFC has urged its members to recognize the key differences in providing electric service versus telecommunications service to rural consumers and is encouraging systems to explore partnerships with local telcos.

“I greatly admired CFC/RTFC and the thought piece that [these] critical rural utility lenders released,” Bloomfield commented about a recent CFC broadband brochure. “[That publication] noted that while electric cooperatives might be looking into getting into the broadband business, they should also explore opportunities to partner with local, rural telecommunications providers as a way to better leverage resources, expertise and efficiencies.”

The CFC broadband brochure endorses a measured approach for electric cooperatives considering entry into the broadband market, including recognizing the differences in service models between energy and telecommunications, evaluating the risks associated with a competitive product offering and seeking partnerships with local rural telcos.

“Just like their telecommunications brethren, electric cooperatives have led the way in bringing much-needed services to rural areas, serving as catalysts for economic development in the communities they serve,” remarked Sheldon Petersen, CEO of both CFC and RTFC. “As electric co-ops consider offering broadband, they need to understand that the retail broadband market is very different, and there may be good opportunities to work with a local telco partner.”

Bloomfield encouraged NTCA members to connect with their local electric cooperative on the subject of broadband and find a win-win for both utilities and the communities they serve.