The Daily Yonder recently ran an article from Craig Settles on the power of cooperative to serve broadband to very rural markets. He points out that there are currently 27 coops in the US with fiber networks. Yet there are 900 coops nationwide. That’s a lot of coop potential!

He uses a quote from Minnesota’s own Mark Erickson to explain the unique advantages of a coop model…

Telephone and electricity co-ops are well suited to enter the broadband business. “Co-ops are private entities that have to break even and put aside money to fund expansion, but they exist to maximize benefits, not maximize profits,” states Mark Erickson, Winthrop, MN EDA Director and a key champion to a project headed by RS Fiber Cooperative in Minnesota. The co-op was specifically created to meet communications needs. “There’s direct accountability to the community because members can have a say in how the network is managed and used, as well as a share in the profits.”

And coops have a political advantage over municipal networks – especially in states that have legal restrictions that make it more difficult for a community to provide broadband. Minnesota does have restrictions – Minn. Stat. § 237.19 requires a supermajority voter approval for the provision of local phone service by a local unit of government, and clarifying county and state bonding authority. Cooperatives do not have such restrictions – again RS Fiber is used as an example…

A unique partnership between RS Fiber and 10 cities is proving successful in Minnesota, which also has restrictions on public networks. The cities sold a General Obligation bond that they used to underwrite a loan to RS Fiber. The co-op leveraged the loan to raise more investment money.

RS Fiber retained Hiawatha Broadband Communications, a local ISP, to oversee all network buildout, operations and marketing. A fiber backbone will connect the 10 towns. During the three years it will take to complete the buildout, the co-op will provide 25-megabit symmetrical wireless and telephone services to the cities. In 2018 RS Fiber will ask the cities to pass another bond to finance the remaining buildout to take in surrounding farmlands. In total the entire network will cover over 600 miles and 2500 farm sites.