Some states are letting rural electric co-ops function as broadband providers in an effort to bridge the digital gap

In an effort to plug gaps and inadequacies in rural broadband service, some states are allowing rural electric cooperatives and other electric utilities to function as broadband providers, Susan Miller reports for Route Fifty.

"In Arkansas, more than a dozen electric cooperatives have partnered to form a new wholesale broadband provider that will leverage their fiber-optic networks to accelerate statewide broadband deployments," Miller reports. "Together, the electric co-ops will invest more than $1.66 billion in middle-mile fiber-optic networks that will serve nearly 600,000 potential customer locations."

In New York, a $1 billion initiative funded with public and private investments aims to bring affordable broadband to the whole state. As part of that initiative, the New York Power Authority will work with some rural electric cooperatives to use or install fiber-optic networks to reach more remote areas, Miller reports.

In Florida, Tri-County Electric Cooperative and local broadband provider Conexon Connect are teaming up on a $65 million project to build out a 2,400-mile fiber-optic network to homes within the next few years, Miller reports. Conexon partner Jonathan Chambers said co-ops own about half of the more than 5 million miles of electric distribution lines in the U.S. "To truly close the digital divide and not just wave at it, you’ve gotta get to the places no one else will build. Without co-ops I don’t think it would ever happen. With co-ops it’s got a fighting chance," Chambers said.

Rural electric cooperatives are one of the most promising possibilities for bridging the digital gap, according to reports from the Federal Reserve Bank of Richmond and the Institute for Local Self-Reliance. Some states have barred rural electric co-ops and municipal utilities from providing broadband, at the behest of telecommunications companies, but now some states are letting rural electrics get into broadband while still blocking municipal utilities. Legal issues can make it tricky for co-ops to operate outside their service areas, and there have been concerns that low-income minorities may not be able to afford the broadband provided by co-ops.

The federal infrastructure bill signed in November has $45 billion to close the digital gap. $42.5 billion goes to a program to distribute grants and loans to states, $1 billion goes to a program funding the construction of so-called "middle mile" internet infrastructure (co-ops are eligible to apply), and $1.5 billion goes to a program that distributes grants for boosting broadband connection among underserved populations, including rural.

However, rural electric co-operatives may be at a disadvantage in applying for other federal broadband grants. In February the National Rural Electric Cooperative Association called on the federal government to establish more rural-friendly rules for broadband grants.