Connect America Fund CAF Carriers Opt for Seventh Year of Support

Telecompetitor provides an update on the CAF federal funding…

The CAF program offered money to the larger carriers, known as price cap carriers, in 2015 in exchange for committing to deploy broadband to rural portions of their local service territory lacking broadband service. Funding was based on a cost model. Carriers had to accept or reject funding on a state-by-state basis and most of them accepted most of the money they were offered. Funding was for six years, and deployments were expected to be completed by the end of the sixth year, but carriers had the option of electing to receive a seventh year of support. The sixth year of support ends at the end of this year.

In the December 2014 Connect America Fund report and order, the FCC stated that the purpose of the seventh year of support was to provide “a gradual transition to the elimination of support.”

They report on the providers that they know opted for a seventh year…

Over the past week, AT&T, Frontier and CenturyLink sent letters to the FCC electing to accept the seventh year of CAF support. Three other price cap carriers — Cincinnati Bell, Consolidated Communications and Windstream – also were eligible to request the seventh year of support and may have done so at an earlier date.

AT&T and CenturyLink accepted all funding for all states for which they accepted CAF funding. For AT&T, seventh year CAF funding totals approximately $427 million for 18 states. For CenturyLink, the total seventh year funding totals approximately $503 million for 33 states.

Frontier elected seventh year CAF funding for 25 of the 29 states for which it accepted funding back in 2015. The company did not accept funding for Idaho, Montana, Oregon or Washington – the four states where Frontier sold its operations to WaveDivision Capital, which uses the name Ziply for those operations.

The seventh year CAF Funding that Frontier accepted totals approximately $313 million.

The funding has been a mixed blessing in Minnesota. Some areas have seen improvements but they don’t always meet MN standards, CAF speed requirements are as low as 10/1 Mbps; Minnesota speed goals are 25/3 by 2022 and 100/20 by 2026. A connection to 10/1, and really even a connection to 25/3 does not necessarily get a community closer to the 100/20 goal. There have been some projects where state funding has been used to leverage federal funding and push for higher speeds.

Also, we reported in January (2020) that both CenturyLink and Frontier reported that they “may not have met” required milestones in Minnesota. In May, CenturyLink asked for an extension of deadline due to COVID.

Charter expands broadband in Lake Carlos area (Douglas County)

Alexandria Echo Press reports…

Charter Communications, Inc. announced completion of a nearly $150,000 broadband construction project in the Lake Carlos area Monday, Sept. 28.

As a result of this project, around 40 more farms, homes and businesses in the Lake Carlos area now have access to the company’s full suite of services.

Charter also expanded its network in Alexandria in July, which included a $250,000 investment to reach more than 160 area homes. Charter covers more than 150 communities around Minnesota, many of which are rural.

Monticello’s municipal network FiberNet is 15 years old – catch up with them via ILSR

From the unique pronunciation of Monticello (think “sello” not “chello”), the town has never been afraid to stand out. Institute for Local Self Reliance’s Chris Mitchell talks to City Planner Jeff O’Neill about FiberNet, Monticello’s municipal network. It has been the subject of talk since it started 15 years ago. Spoiler alert, it’s going well, especially in the time of COVID. Here’s the description of the conversation from ILSR -and know that it’s a fun quick listen…

Christopher and Jeff delve into the history and development of the network over the last fifteen years. They discuss how business leaders began calling for the city to look for a solution to poor Internet speeds all the way back in 2005, why the city ultimately decided to build its own network, and how FiberNet persevered in the face of an early lawsuit so that incumbent provider TDS could slow competition as it began its own fiber buildout. Jeff and Chris then talk about the network subsequently weathering a vicious price war with Charter Spectrum which contributed to the fracturing of its relationship with early partner Hiawatha Broadband, but which also brought significant savings and better customer service from incumbent providers to everyone in town.

They end by discussing the multitude of community benefits realized today by having three competing providers in Monticello — two offering Fiber-to-the-Home (FTTH) in the city of 14,000 — and what it means for community savings and economic development for the city moving forward. Jeff ends by sharing some of the work he’s most proud of being involved in and what he sees as important for FiberNet in the years ahead.

Crow Wing Power on broadband updates in Crow Wing, Morrison, Cass and Aitkin Counties

In their most recent newsletter, Crow Wing Power spoke with local providers about broadband upgrades and expansion in the area, often spurred by great need in COVID.

From CTC…

  • Kristi [Westbrock, CTC CEO] explained that in mid-March, the company scrambled to extend finer to where it was needed and where they could reasonably expand, so students could have access to Internet for distance learning. It’s estimated that their efforts in the Brainerd ISD 101 school district provided broadband access to approximately 200 families in the region and set up 50 hot spots where kid cluster could go to study.
  • In 2019, CTC received an $830,587 MN Border to Border grant from the MN Department of Employment and Economic Development (DEED) to expand services to build to Ft. Ripley, and other areas in Crow Wing and Morrison Counties. This allowed CTC to build to 399 homes in portions of St. Mathias and Fort Ripley Townships, as well.
  • “Most recently, CTC received CARES Act funding from both Crow Wing and Cass County to build broadband to unserved areas of Welton Road, County Rd 10, Border Lake, Little Pine Road and unserved areas in Lake Edward Township. The funds must be used by December 1 so these locations will have access to fiber Internet.

From Emily Cooperative Telephone Company…

  • Five hot spots were also installed throughout the communities, which are still available. Josh [ECTC CEO] said they are updating 100 homes in the Crosslake area to finer services and reviewing other areas for 2021. ECTC also received a MN DEED grant of $376,000 to build fiber services to the Esquagamah and Round Lake area in Aitkin County.

Mille Lacs County looks at CARES funding for wireless broadband

Mille Lacs Messenger reports…

Talks of potential broadband expansion in the southern portion of Mille Lacs County have taken place over the last month among county board members and county administration. The county is pursuing CARES (Coronavirus Aid, Relief, and Economic Security) Act funding for this expansion.

During a special meeting in late August, the County outlined a proposal to implement broadband infrastructure using the CARES Act funding available to counties and local government.

The proposal stated that Advantenon, a broadband wireless internet provider servicing Minnesota and South Dakota, will complete the building of towers that provide broadband internet service, beginning with the southern border of Mille Lac County and working northward. Coverage in the unserved and underserved areas would extend to an east/west line three miles north of Page to the southern border of the County.

Advantenon’s responsibilities would include confirming suitable tower locations for internet backbone connectivity and for hub and spoke antenna host sites, creating construction plans for all sites, installing and configuring network infrastructure to support Internet connectivity and inter-tower connectivity, installing end users (a residential, business, institutional, or government entity that uses services for its own purposes and does not resell such services to other entities) as time permits until Dec. 31, 2020, and installing end users as requested after Dec. 31, 2020.

The County’s responsibilities were outlined as assisting Advantenon in identifying antenna host sites in smaller towns, particularly when water towers are good candidate locations, identifying antenna hosting at suitable county-owned premises and assisting in permitting process for county permits.

Advantenon will utilize the feasibility study and a past State of Minnesota grant proposal, which has been denied twice for Mille Lacs County, to confirm tower locations within the southern portion of Mille Lacs County. Once tower locations have been confirmed, the towers will be utilized to install and configure end use connectivity.

The estimated project cost, which would include six completed towers and direct internet access, is $1 million. Individual Internet plans through Advantenon would range from $39 to $109 per month or a discounted year-in-advance rate.

Paul Bunyan Communications and CTC Receive FCC Honor

Two Minnesota providers have received honors from the Digital Opportunity Equity Recognition (DOER) Program. It’s a big deal and each cooperative has earned their honor.

First the spoiler – here are the hometown heroes…

  • Consolidated Telecommunications Co. (CTC) partnered with the Brainerd School District in Minnesota to coordinate in response to the COVID-19 pandemic. Within two days, using data provided by the school district on all students that did not have access to a reliable connection, CTC plotted hundreds of students into its GIS mapping system and partnered with the District to contact all families within their service area. The information led to them connecting 100 students within a week without regard to their families’ credit rating, history with CTC, or ability to pay. By the end of April, CTC connected over 300 additional homes.
  • Paul Bunyan Communications and its cooperative members have responded to the COVID-19 pandemic including the transition to working from home, increased telehealth services, and distance learning. Paul Bunyan Communications worked directly with the school districts it serves to quickly develop creative solutions to ensure broadband access for students by installing multiple Wi-Fi hot spots so students and their families in unserved areas around the cooperative would not be left behind. The cooperative has now built one of the largest all-fiber optic rural broadband networks in the United States that is delivering broadband speeds, both upload and download, up to 1 gigabit per second to over 23,000 rural locations in northern Minnesota.

And here’s what the FCC had to say…

Today, Commissioner Starks announces the honorees of the inaugural Digital Opportunity Equity Recognition (DOER) Program, which was created to acknowledge the tireless efforts of Americans working to close the digital divide in communities without access to affordable, reliable broadband. The program honorees will be recognized at a virtual reception on October 1 at 12pm ET. Commissioner Starks issued the following statement about this year’s DOER honorees:
“It is clear that our long-standing digital divide has morphed into a monstrous new COVID-19 divide. From the start of the COVID-19 pandemic through now, I have heard stories about the innovative and rapid ways individuals, non-profit organizations, and companies are responding
to the connectivity needs of people across this country who are seeking access to medical professionals via telehealth services, education, and safe ways to communicate with family and friends. In response to these efforts, I put out an open call to hear about heroic DOERs who have stepped up in their communities to ensure that no one gets left behind because they lack broadband connectivity. The DOER Program received an overwhelming response to that call
with more than 60 submitted applications, each one impressive and laudable, and demonstrating a true commitment to serving communities through acts of substance and consequence, big and small, generosity and selflessness both during the pandemic and prior to the recent events that have changed our nation.
Because of all of the strong nominations I received, alongside my advisory board, narrowing down the honorees was very challenging. I believe every applicant is worthy of recognition but there were several that rose to the top because of the scope of their accomplishments and the impact they made. From rural areas to urban corridors, students to seniors, to say this year’s DOER honorees are a stellar group is an understatement. ,
Organization, and Corporation. Congratulations to all, and please keep up the hard work.”

CenturyLink is changing its name(s)

Telecompetitor reports on CenturyLink’s changes in name and focus…

CenturyLink unveiled a new branding strategy today, effectively breaking itself into two brands. The company introduced Lumen Technologies, or just Lumen, as its new brand for its largest business segment, enterprise and wholesale.

The CenturyLink brand will remain and will represent the company’s legacy residential and small business segments. Although, CenturyLink is also introducing a new brand for that unit, Quantum Fiber, for its growing FTTH network. Confused yet?

I think most readers will be most interested in what’s happening with residential services…

CenturyLink and Quantum Fiber will now be the face for residential subscribers. There has been some speculation that CenturyLink is looking to sell its residential and small business unit. This move might add some fuel to that speculation.

CenturyLink’s FTTH footprint is rather small, when compared to its entire residential footprint. It’s not entirely clear what the Quantum Fiber strategy will be. On a FAQ section on the company’s website, an explanation of Quantum Fiber is outlined as the following:

“Quantum Fiber will be coming soon to markets where we offer superior fiber-based internet services. Specific, market-level roll out plans are still in development. Eligible customers will be notified when services become available in their area.”

The website goes on to say Quantum Fiber will eventually be available in all markets where CenturyLink offers fiber-based internet services, but specific market roll out plans are under development.

Does that mean Quantum Fiber is simply the new name for CenturyLink’s FTTH service, or does it mean the company intends to expand Quantum Fiber into new markets? Or both? Hard to tell. I guess we’ll find out, assuming Lumen doesn’t spin off CenturyLink and Quantum Fiber.

Are AT&T and other providers changing their tune about mapping or changing their spin?

AT&T is getting a lot of heat after CEO John Stankey published a column in Politico. As Ars Technica reports…

AT&T—which has spent the past decade fighting US-government attempts to improve the country’s horrible broadband maps—is now claiming to be very concerned about the mapping problem that has helped thwart efforts to wire up millions of American homes without adequate broadband access.

AT&T CEO John Stankey this week published an opinion piece in Politico with the apparent goals of improving AT&T’s reputation, reducing government regulation, and getting more federal funding. The piece is titled, “A Game Plan to—Finally—Connect Every American to Broadband,” and the first item on AT&T’s game plan is “to identify where broadband is unavailable with geographic precision.”

Most of the heat stems from the fact that AT&T (and other broadband providers) have a history of not supporting mapping. So folks are questioning the change. Medium offers a high level framework upon which they build a case…

AT&T’s Stankey game plan has 4 goal posts.

  • POINT 1:“First, we need to identify where broadband is unavailable with geographic precision.”
  • POINT 2:“Second, the Federal Communication Commission’s program that supports connectivity for low-income households needs to be modernized.”
  • POINT 3:“Third, as Congress debates earmarking up to $80 billion for rural broadband as part of the next round of pandemic relief, we should give equal weight to wired and wireless options.”
  • POINT 4:“Lastly, Washington should enact a policy framework that incorporates sustainable funding mechanisms for the long run.”

Our take is different: America needs:

  • RESPONSE, POINT 1:A complete accounting of AT&T’s copper and fiber lines in service, “lit” or not lit, (known as “dark”, which are installed but not in use) needs to be done immediately in each state utility.

  • RESPONSE, POINT 2:An investigation to explain why America’s prices are 3–14 times more expensive that other countries, worldwide — with the goal: lower rates 50% or more.

  • RESPONSE, POINT 3:Go after the $95 billion in overcharging over the last 5 years from AT&T, Verizon and CenturyLink — and use the money to solve the Digital Divide, once and for all.

  • RESPONSE, POINT 4:New federal and state government oversight andenforcement with penalties and fines must happen now.

The situation calls for a high ranking ombudsman who looks out for the short and long terms needs of consumers and citizens. Or maybe, as is happening, it calls for broadband proponents to respond to Stankey’s position and start a conversation that moves us farther afield.

 

Midco brings fiber to Scandia (Washington County) with MN broadband grant

The Country Messenger reports…

Midco is furthering its mission to bring broadband services to areas of Minnesota that are unserved or underserved. A ribbon cutting is scheduled for Sept. 16 in which the City and Midco will celebrate the communications company’s expansion of its Internet services.

“I’m impressed with the expediency in which Midco has implemented its Internet expansion in Scandia.  From the award of the grant at the end of January, Midco is on schedule to complete this project by the end of October,” said Scandia City Council Member Patti Ray. “I’m also grateful to Midco adding even more homes to the project. This shows what a good corporate partner Midco is to Scandia. The City looks forward to working with Midco on future expansions because it takes a strong government/corporate partnership to cover the costly installation of high-speed Internet in rural Scandia.”

Some details from the project…

In January, Midco was awarded a grant through the Border-to-Border Broadband Development Grant Program, allowing the communications company to expand services in five different parts of Scandia.

The broadband network project will improve access to critical e-learning applications and health care resources enable telecommuting options for residents and make businesses and city institutions more efficient. Midco’s high-speed broadband connection will exceed Minnesota’s 2026 speed goal.

Was your internet down or spotty last Sunday (Aug 30)?

I had several friends asking me about their Internet access Sunday morning. I was able to find the initial Tweet from CenturyLink at the time. I was hoping there’d be more details available later. [Added 5pm – someone sent me a great description and I’ve added it in the comments below. Thanks David Farmer!] It looks like we have confirmation but not much in terms of how it happened or could be prevented. Gizmodo reports…

Widespread internet outages knocked down Cloudflare, the PlayStation Network, Xbox Live, Amazon, Hulu, and a slew of other sites on Sunday morning, and it’s apparently all because of a single internet service provider: CenturyLink.

CenturyLink Tweeted about the problem…

CenturyLink confirmed on Twitter that its technicians were working to fix an IP outage, which was resolved shortly before noon.

“We are able to confirm that all services impacted by today’s IP outage have been restored. We understand how important these services are to our customers, and we sincerely apologize for the impact this outage caused,” the company tweeted.

How is it looking for the new StarLink satellite? Let’s ask Doug Dawson!

I’m always happen when Doug Dawson (POTs and PANs) takes a deeper dive into something I’ve been wondering. He’s more technical than I am and I’m happy to defer to his assessment, which is what I’m about to do today and I’m trying to focus on the how and why of the latest satellite project.

Doug has recently taken a look at Starlink Satellite. (That’s Elon Musk’s latest plan to launch 30,000 satellites for broadband deployment. It was been billed as the next great thing for rural broadband especially.) Turns out the marketing may be better than the real thing…

Most folks that work in the industry have probably seen the early speed test results for the StarLink satellites that come from the Ookla speed test site. There are only a few results posted and they show a range of download speeds between 35 Mbps and 60 Mbps, upload speeds between 5 Mbps and 18 Mbps, and latency between 31 and 94 ms.

I call these results disappointing because the speeds are so much slower than Elon Musk’s hype about providing gigabit data speeds from the satellites for the average customer. Unfortunately, a lot of rural Americans let themselves get sucked into that hype and they’ve been talking about satellite broadband as the solution that would solve rural broadband issues forever. There are communities putting broadband plans on hold since they think that the satellites will solve all of the local broadband problems.

Here are factors that will contribute to services…

  • But to offset any improvement in the technology will be the fact that speeds will naturally slow down when the satellites fill with subscribers. When everybody in a rural area is heavily using the Internet in the evenings the speeds from the satellites will slow down, just like they do with other shared bandwidth technologies. We also still don’t know how the satellites will handle rain and snow and how badly broadband might bog down during weather events.
  • We know that this technology is only going to work for homes with a decent view of the sky. Homes in ravines, in valleys surrounded by steep hills, or located on hillsides will likely get slower speeds or might not be able to maintain a connection to satellites. It seems likely that homes located in heavy woods will have similar problems.

Is Starlink better than what many people in rural areas have now? Yes. But like some technology that seems old the minute we take it off the self, Starlink is far from future-proof, it’s second tier out of the shoot…

What’s most disappointing is that these speeds don’t close the broadband gap. These speeds would be a great band-aid and will bring broadband to many homes that desperately need it. But these kinds of speeds are still second-class broadband on day one compared to urban broadband, and the gap between satellite and urban broadband will grow rapidly over time.

We’re seeing an explosion of data usage in urban areas. OpenVault recently reported that at the end of the second quarter of 2020 that 61% of all homes in the country subscribe to broadband speeds greater than 100 Mbps. That includes 37.8% subscribe to plans between 100 Mbps and 200 Mbps, 13.5% subscribe with plans between 200 Mbps and 400 Mbps, 5% with speeds between 400 Mbps and 900 Mbps, and 4.9% subscribing to gigabit speeds. What’s not shown in the OpenVault numbers is the trend where homes are upgrading to faster broadband. The number of homes subscribing to gigabit broadband grew by over 130% in the last year. Home data usage continues to grow at a blistering pace and homes are upgrading speeds in search of broadband that meets their needs.

2020 version of ILSR’s Profiles of Monopoly: Big Cable and Telecom

The Institute for Local Self Reliance first published their Profiles of Monopoly: Big Cable and Telecom in 2018. They have updated it annually since then and have recently posted the 2020 edition. They took a look at the big national providers: Comcast, Charter, AT&T, Verizon, CenturyLink, Frontier and  Windstream.

ILSR focuses on local community autonomy or at least control so they have a perspective. They do a good job collecting and analyzing data. Here are their conclusions…

The broadband market is broken. Comcast and Charter maintain an absolute monopoly over at least 47 million people and millions more only have slower and less reliable DSL as a “competitive” choice. Some 52 million households (about 132 million people) subscribe to these cable companies, whereas the five largest telecom companies combined have far fewer subscribers — only around 30 million households (about 75 million people). The big telecom companies have largely abandoned rural America — their DSL networks overwhelmingly do not support broadband speeds — despite many billions spent over years of federal subsidies and many state grant programs.

These are our key findings with potential for more research:

Real Competition Drives Investment

The telecom companies have invested in Fiber-to-the-Home in areas where they face competition, which are generally more urban areas. The advent of Google Fiber in 2011 further increased the competition in urban markets.55 Efforts to increase investment from the largest firms in more rural areas have largely failed. Though states have varied regulations, the same trend results in every state — investment by the large ISPs is correlated to competition rather than the regulatory environment. This reality does not suggest that competition between a cable monopoly and a telephone monopoly is sufficient for high-quality Internet access, but it clearly helps to ensure connections at the minimum definition of broadband.

Big Cable Companies Dominate

Cable networks are capable of delivering high-speed broadband to everyone within their service area, a legacy of the local franchising requirements that often required universal service or at least service to all areas with a specified density of housing.56 More than half of the states have since removed local authority to negotiate such provisions but they bear some responsibility for the far-reaching cable networks. In the years since we published the first edition of this report in 2018, the large cable companies have continued to gain broadband subscribers while the major telephone companies lose market share. By the end of 2019, the cable industry as a whole had 67 percent of the broadband market.57 The FCC statistics suggest Charter and Comcast face more competition than they did in our last report, but we suspect competition has only touched some homes in many of the new census blocks that appear to have a choice in providers now.

Big Cable and Telecom Focus on Urban Markets

The big cable and telecom companies fight over urban customers, not rural customers. More than 98 percent of the urban population (about 259 million people) have access to broadband, according to the FCC’s 2020 Broadband Deployment Report, which analyzed data from December 2018.58 About 4 million urban residents, however, remain without broadband access. In rural areas, less than 78 percent of the population (50 million people) have broadband access, leaving more than 14 million rural residents without highspeed Internet access per the FCC but as many as 42 million according to another analysis.59

Bevcomm gets $5,000 grant, $15,000 loan to improve broadband in Faribault County

Faribault County Register reports…

Last Tuesday morning, during their County Board meeting, the Faribault County Commissioners decided to give the Faribault County Economic Development Authority (EDA) $600,000 from the county’s Coronavirus Aid, Relief and Economic Security (CARES) Act funds.

Part of that funding went to Becomm…

Bevcomm president Bill Eckles was present virtually at the EDA Zoom meeting to present his request for both a loan and grant for Bevcomm’s broadband Internet expansion project.

Eckles showed a map of the county to show where Bevcomm has put Internet broadband access into rural areas of the county, and where the newest expansions will now go.

“Last year the EDA agreed to loaning Bevcomm $30,000 when we applied for a State of Minnesota Broadband Grant,” Eckles said. “We agreed that loan will be paid back when the first customer is hooked up to the new broadband Internet area.”

Eckles says it is important for their application to the state to show community support.

The EDA agreed to follow the recommendation of the County Board to give a $5,000 grant to Bevcomm to go towards this project and show support for it.

They also agreed to a $15,000 loan at zero percent interest which will be paid back in full when the first customer hooks up.

The project will serve 429 homes and have a total cost of $3.9 million, with 40 percent of the cost covered by the state broadband grant.

Eckles said they hope to start construction in the spring of 2021, and the following year start signing up customers.

Providers not thrilled with changes to FCC maps that could more accurately portray coverage

Ars Technica reports…

AT&T and T-Mobile are fighting a Federal Communications Commission plan to require drive tests that would verify whether the mobile carriers’ coverage claims are accurate.

The carriers’ objections came in response to the FCC seeking comment on a plan to improve the nation’s inadequate broadband maps. Besides submitting more accurate coverage maps, the FCC plan would require carriers to do a statistically significant amount of drive testing.

Providers had different reasons:

  • AT&T objected to the proposed drive-testing requirement in a filing to the FCC on Tuesday this week, saying that annual “drive testing is not the proper solution for verifying nationwide coverage maps” and that there is “potential difficulty in determining how to formulate a statistically valid sample for areas given the terrain variability nationwide.”
  • T-Mobile said, “A blanket requirement to perform regular on-the-ground testing will force providers to spend millions of dollars each year on tests, resources that would be better spent investing in our network and deployment in rural America.”
  • Verizon had objected to the possibility of a nationwide drive-test requirement in a September 2019 filing, saying that “Verizon conducts drive tests in a more targeted manner to calibrate its propagation model and to confirm the accuracy of the model.”

Senators Tina Smith, Amy Klobuchar push bipartisan effort to improve financial stability of Electric Coops, Small Rural Broadband Providers in Next COVID Relief Package

From Senator Smith’s office…

U.S. Sens. Tina Smith (D-Minn.) and John Hoeven (R-N.D.) are pushing Senate leaders to add their bipartisan plan to help stabilize the finances of the nation’s rural electric cooperatives and rural broadband providers in the next coronavirus relief package.

In a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Chuck Schumer (D-N.Y.), the Senators pressed their Flexible Financing for Rural America Act, which would make it possible for rural electric cooperatives and telecommunications providers to refinance their Rural Utilities Service (RUS) debt at lower interest rates. By taking advantage of current lower interest rates, these rural cooperatives and businesses would be able to better manage cash-flow, invest in rural communities, and pass savings on to customers. The letter was signed by a bipartisan group of Senators who back the measure.

Sens. Smith and Hoeven say that this bill would also spur stronger recovery from the economic challenges of the COVID-19 pandemic. Rural cooperatives and businesses have struggled due to a decline in electrical consumption from industrial sources and an increase in unpaid bills from customers who have faced financial hardship.

“The impact of the COVID-19 pandemic has reached every corner of our country, creating financial hardship for communities and businesses in almost every sector of our economy,” wrote the Senators. “Rural areas have not been spared, and the crisis has highlighted existing disparities in things like broadband that have made recovery an even larger challenge. At the same time, many member-owned cooperatives and broadband providers have struggled financially as a result of the economic downturn related to the COVID-19 pandemic.

“Allowing borrowers to refinance their RUS loans at the current lower interest rates would enable a stronger recovery by providing rural cooperatives and businesses flexibility in managing their cash flow. Some estimates have predicted that this move could save businesses millions per year in debt payments, allowing these companies to invest in electric infrastructure or rural broadband networks in their communities, and pass savings on directly to customers. These investments would be especially vital as rural communities work to recover from the COVID-19 crisis.”

In addition to Sens. Smith and Hoeven, the letter was signed by Sens. Tammy Baldwin (D-Wis.), Kevin Cramer (R-N.D.), Kyrsten Sinema (D-Ariz.), John Boozman (R-Ark.), Amy Klobuchar (D-Minn.), Steve Daines (R-Mont.), Doug Jones (D-Ala.) and John Cornyn (R-Texas).

Sen. Smith has been working to get relief to rural electric coops during the COVID-19 pandemic. In May, Sens. Smith and Hoeven led a bipartisan group of Senators in urging the U.S. Department of the Treasury and the Small Business Administration (SBA) to support rural electric cooperatives and ensure their access to the Paycheck Protection Program (PPP).  When Sen. Smith heard that Minnesota cooperatives were at risk of losing their tax-exempt status if they received grants to expand broadband or recover from a disaster, she wanted to reverse that. The key government spending package that was signed into law last year included her bipartisan bill with Senator Rob Portman (R-Ohio) to ensure co-ops can retain their tax exemptions when they receive government grants.

You can read a copy of the letter here.