When the Mississippi Legislature took up a bill that would allow the state’s electric cooperatives to provide broadband service to its customers, the term “high speed” was the operative word — in more ways than one.
It took just 10 days from the time the Mississippi Broadband Enabling Act was sent to committee for its to pass both chambers and be sent to Gov. Phil Bryant for his signature Thursday. Bryant is expected to sign the bill into law early this week.
The uncommon speed of the bill’s passage and its enthusiastic support (it passed the House by a 115-3 vote and the Senate by a 52-0 vote) may create the assumption that co-ops will soon be providing internet service to their customers.
“We’re asking our customers to be patient,” said Michael Callahan, CEO of the Electric Cooperative Association that lobbied hard for the bill on behalf of its 25 member co-ops in the state, which represent 1.8 million members. “We don’t want to dive head-first into a two-foot pool. We need to do this right and that means we have to take our time to really understand what we are getting into.”
Until the new bill was passed, electric cooperatives were bound by a law passed in 1932 that prohibited them from providing anything but electricity to members. Now, the co-ops can provide broadband service — but are not required to do so.
The bill has been championed by North District Public Service Commissioner Brandon Presley and enthusiastically supported by the Electric Cooperative Association but closer to home, a spokesman for 4-County Electric Power Association said officials are taking a cautious approach.
“We have to be responsible,” said 4-County spokesperson Jon Turner. “We’ve seen (this legislation) coming for a while and had already commissioned a feasibility study. As a matter of fact, we are studying some of the preliminary reports right now.”
4-County serves more than 38,000 members in rural areas of the Golden Triangle, as well as Noxubee, Monroe, Chickasaw, Choctaw, Winston and Webster counties. However, Turner said it is not clear those members will want to pay for internet service from 4-County if they feel they have other options.
“We did a survey of members in the most affected areas — western Clay County, Choctaw County and Noxubee County as well as smaller areas in Lowndes and Oktibbeha counties, focusing on the areas that most qualify as rural areas,” he said. “We wanted to find out what their appetite for this was, to get a feel for what they might want.
“They don’t like what they have necessarily, but what we are seeing is that whether they have (broadband access) or not, they don’t want to pay what it’s going to cost to get it to them,” he added. “That’s the big factor.”
Both Callahan and Presley said that once customers realize the full implications of what co-op provided internet service could mean, customers will find it appealing.
“The biggest thing is making sure the customers understand the potential,” Callahan said. “It’s not just about the internet. In a lot of places, those customers are paying for satellite TV, which is expensive. But with broadband, you can subscribe to things like Hulu and Netflix as a cheaper alternative to satellite TV. Once you consider everything that broadband can do, you begin to understand that it’s a much better deal than what they have now.”
Presley said that even in those areas that do have access, co-ops have another advantage.
“For the co-ops, broadband isn’t a profit-center. They’ll tell you they don’t want to be in the broadband business. For them, it’s a service to their customers,” he said. “That means they can provide faster service at a lower price. You’re going to tell me people won’t like that?”
Chicken or the egg?
In order to provide broadband service to its customers, co-ops have to lay fiber-optic cable required to deliver the service.
Callahan said six of the state’s 25 co-ops are already in the process of running fiber optic cables, either their own or by leasing access to fiber-optics from other companies.
It’s an expensive proposition — Turner said 4-County’s preliminary report estimates it would cost $120 million to provide fiber-optics to its customers. Even so, Callahan said, fiber-optics will someday be standard equipment for the nation’s 900 electric co-ops.
“All the studies say that between 2040 and 2050, every co-op will operate on some kind of fiber,” Callahan said. “It’s the gold standard. It’s the future.”
While acknowledging the move toward fiber-optics, Turner said 4-County leadership is trying to take a long view of how the services will operate in the future.
“The flip side is what will happen if there is emerging technology that will supersede fiber optics,” Turner said. “Who’s to say that somebody out there someday has a Tesla moment and suddenly you don’t need wires? If we have made a $120 million commitment and that happens, where will we be?”
Presley argued co-ops have the ability to borrow money long-term at low interest.
“They’ve done it before and have been very successful,” he said.
A matter of density
While Callahan is an enthusiastic supporter for co-op provided broadband, he recognizes co-ops are not immune to the market pressures that apply to commercial internet service providers. In fact, the primary reason why the 23 million Americans living in rural areas who don’t have any broadband access is that it’s been judged cost-prohibitive by commercial providers.
“What our consultants have told us is that you need nine to 12 customers per mile who are taking the service to make it work,” Callahan said. “Altogether, we have only 8.8 meters per mile, and that includes meters at catfish ponds, shops, places that you don’t have a demand for broadband.
“Now, from co-op to co-op those numbers go up or down,” he added. “So for some areas with a higher density, we can help. For others, probably not.”
Turner said density issues are a major consideration as 4-County considers broadband.
“The problem is that it’s the low-density areas that are the ones that have the worst access,” Turner said. “In a lot of our service area, Lowndes County and Oktibbeha County in particular, those customers have good access to broadband already. But in the western part of Clay County and in Choctaw and Noxubee County, you’re talking about a density of three to four customers per mile. At that point, you really have to ask some serious questions about whether it’s really feasible.”
Presley: The time is now
Presley remains undeterred, pointing out there are $600 million in federal grant funding set aside for companies to assist in providing broadband service to rural areas.
Although that’s a drop-in-the-bucket compared to what it would cost to provide service to thousands of unserved or under-served rural communities across the country, what Presley believes to be the inevitability of a national conversion to fiber optics should be incentive for co-ops to commit to the program while federal funds are available.
“What I will say is this: The ball is in the court of the boards of directors of these co-ops to respond to the needs of the people who own the co-ops,” he said. “I feel like every board will be hearing from their members. If the boards aren’t going to pursue this on behalf of their members, they should be prepared to give an answer as to why they aren’t.”
Turner said 4-County officials understand that, but they also understand their primary mission.
“At the end of the day, we’re not an internet company,” Turner said. “We have a job to do and that job is to provide reliable, affordable power to our customers. As much as people may want broadband, we can’t lose sight of that. That’s always going to be our most important priority.”
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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