Last week at the Broadband conference we learned more about a community cooperative as a way to deployment community broadband from Mark Erickson and RS Fiber. RS Fiber (in Renville and Sibley Counties) is looking at the coop approach. Mark was good enough to share information he is also sharing in his community. It would be helpful to anyone else considering a coop approach…

What is a cooperative?

A cooperative is an autonomous association of persons who voluntarily cooperate for their mutual social, economic, and cultural benefit.

A cooperative is a legal entity owned and democratically controlled by its members. Members often have a close association with the enterprise as producers or consumers of its products or services.

Cooperatives are typically based on the cooperative values of “self-help, self-responsibility, democracy and equality, equity and solidarity” and the seven cooperative principles

1. Voluntary and open membership
2. Democratic member control
3. Economic participation by members
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperatives
7. Concern for community

Cooperatives are dedicated to the values of openness, social responsibility and caring for others. Economic benefits are distributed proportionally to each member’s level of participation in the cooperative, for instance, by a dividend on sales or purchases, rather than according to capital invested.

Utility cooperative
A utility cooperative is a type of consumers’ cooperative tasked with the delivery of a public utility such as electricity, water or telecommunications services to its members. Profits are either reinvested into infrastructure or distributed to members in the form of “patronage” or “capital credits”, which are essentially dividends paid on a member’s investment into the cooperative.

In the United States, many cooperatives were formed to provide rural electrical and telephone service as part of the New Deal.

RS Fiber Cooperative
The RS Fiber Cooperative was formed in late 2012 as a 308B Minnesota Cooperative. Most of the older cooperatives in existence today are 308A cooperatives. A 308B cooperative can raise outside capital more easily than a 308A cooperative.

There are patron and non patron members in a 308B cooperative. Patron members have a controlling voice in the economic interests over non patron members.

A 308B cooperative has a corporate shield comparable to a corporation as well as a board of directors made up of patron and non patron members that is elected by members at an annual meeting.