CoBank recently published a helpful (and inspiring!) report on Making the Move to Broadband: Rural Electric Co-ops Detail Their Experience. The whole report is worth a read if you’re looking at tackling rural broadband and even you’re not an electric cooperative. One of the communities they highlight is Cook County and old ARRA project deployed by Arrowhead Electric Cooperative.
A little bit of background on the project. IN 2009, Cook County was listed as least served counties in Minnesota; last I looked they had 94 percent coverage for speeds of 25/3 and 100/20. ARRA Funding is the impetus for the jump. (Although they were also part of Blandin’s MIRC program, which certainly helped boost use of the network.)
The case study is in the form of an interview – Jenny Kartes from Arrowhead talking to Mark Doyle from CoBank. I am just going to pull out the section (pg 43-44) that I think will have the most value for the greatest number of reader – so folks with and without a relationship to a cooperative – although I have to say the ethos for the cooperative certainly seems like a good fit for getting rural broadband done…
MD: Did you partner with anyone?
JK: We did. At the beginning of our project, we had a number of options as to how we were going to do this. Were we going to be the retail provider or the wholesale provider? We found quickly that there is a large learning curve especially related to phone and the assets you need for providing phone service. We wanted a partner with our same values and good industry knowledge. We found Consolidated Telecommunications Company (CTC) out of Brainerd, Minnesota, which as a cooperative really had our same values and has been doing this for a very long time. They were a good fit for us, and they were very excited to work with us as well. It was a good partnership as a small entity. There was a lot more on the front end than we had originally realized. We did indeed need that partnership and rely heavily on it.
MD: How are you funding the project?
JK: We funded this project through the American Recovery and Reinvestment Act, the broadband initiative program. It was funded through a $16.1 million federal grant and loan: $11.3 million in grant and $4.8 million in federal loan. After our application, we realized that due to our terrain and the seasonality of our customers, it was going to cost a bit more than that. We then went to our county, and they
provided $4 million more in grant funds to us. It was a $20 million project in total, roughly 75 percent grant funded.
MD: Did you collect contributions in aid to construction from your subscribers?
JK: On the initial rollout of our project we did not. We had a window of a few years, as we were rolling out our construction, when we allowed people to essentially sign up for free construction to the home. It did not require them to take service. Once that window closed, and if you did not sign up within that window, then we do require 100 percent aid to construction from the subscriber. Since our subscribers are not necessarily members of our cooperative, we do require them to fund that construction.
MD: Was the project on time and on budget?
JK: Based on our original projections, it was not. As I mentioned earlier, our original budget was significantly short and we required an additional $4 million to complete the project. We then reworked our budget a few times, and we did stay very close to our second budget that included the additional $4 million.
However, that did create a timing issue as far as securing the additional funds to complete the project. The project was initially to be done at the end of 2013, and we finalized the project in 2015. Construction delays were mainly due to the terrain. We have a lot of rock, and construction is slow going in our service area. Additionally, the very short construction season in northern Minnesota
slowed us down.
MD: Did you encounter any surprises or challenges along the way?
JK: Yes. I could talk for quite a while on that. Having detailed maps and accurate plant records would have saved us a lot of frustration and a lot of time as the project began. We also did not realize the importance of on-site engineering, on-site contractor management and constant quality assurance throughout the project, at every point. We ended the project with those elements in place. We also ended up changing some of our contractors/vendors mid-project. Many of our contract crews were a bit surprised by our service territory and the time it took to complete work, never doing work up here before.
MD: What is your long-term measurement for the success of this project?
JK: The long-term measurement for success, being that our goal was to just get our community connected, is that the broadband project and division can be financially self-sustaining. We do not want the project to have any risk for our electric members. We’re not looking to make large profits off of it. If it can stand on its own financially, and provide good customer service and good broadband service to our community, we will call it a success.