RS Fiber cooperative broadband approach noted for lack of federal funding

Yes Magazine recently featured RS Fiber as “a unique community-owned broadband cooperative will free dozens of tiny towns and farms from reliance on slower corporate providers.” We’ve been tracking their progress here over the years, it’s nice to see their hard work get well deserved attention…

Here’s a quick snippet…

Today, in this sparsely populated swath of Minnesota, a grassroots, member-owned cooperative spanning more than 700 square miles and four counties is poised to expand high-speed broadband access—without relying on federal funding. After seven years of development led by local leaders and volunteers, RS Fiber, now in its first phase of construction, is expected to deliver high-speed broadband internet to more than 6,000 rural households by 2021. And unlike companies like Mediacom, the co-op is owned by local customers who have a say in rates and how it’s operated.

And perspective on their approach…

Last summer, Politico reported on the failure of dozens of rural broadband projects that received grants under the American Reinvestment and Recovery Act, the stimulus package that Obama signed in 2009, because of alleged mishandling of funds by the federal Rural Utilities Service (RUS). Meanwhile, projects without government support face even rockier odds of survival because utility companies and banks often consider it too risky to build expensive broadband networks in sprawling rural counties, where small populations don’t support the same kind of market.

As a result, about half of rural residents still don’t have access to high-speed broadband Internet.

“Those projects generally haven’t done well,” Mitchell said. “They couldn’t crack the code for how to get them financed.”

However, the RS Fiber project in rural Minnesota could soon flip that script, Mitchell says, because unlike other rural broadband co-ops, RS Fiber relied primarily on county and city bonding authority—not federal loans or grants—to finance the $45 million project. These local government partners then agreed to be repaid last if financial projections don’t pan out, making it easier to recruit secondary investors, such as community banks.

“It’s an incredible [approach] because it doesn’t rely on states or the federal government,” said Mitchell, who co-authored a case study about RS Fiber. “It allows communities to tap into their existing financial resources and borrowing capacity.”

This entry was posted in Community Networks, FTTH, MN, Rural by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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