Blog

A Short Recap from the 2018 TECA Annual Meeting...

One of the hottest topics in the electric cooperative industry at this time is broadband access and connectivity. Historically, electric cooperatives were not able to provide broadband service to their members. That all change with the passing of the Tennessee Broadband Accessibility Act in 2017. Now, electric cooperatives can provide this service to their members if they choose to do so.

At the TECA annual meeting, a panel of three board members from different electric cooperatives spoke about their experience with providing broadband access to their members. They all explained the “why” portion of providing this service in the same context. However, it was the “how” portion that demonstrated there is not one absolute correct way to do it. At the beginning of the discussion the moderator explained there were five things a co-op could do when it comes to providing broadband services to their members: 1) build the fiber and provide the service yourself, 2) build the fiber and lease the assets, 3) purchase an existing internet provider, 4) merge with an existing internet provider, or 5) do nothing.

Each speaker first explained that their members were in need of and wanted broadband services from their utility. They all reach out to their members through different marketing campaigns trying to gauge the interest level. Once that was completed, they each had a firm run a feasibility study to see if making the investment in broadband made sense for them and their members. From there each co-op took a different approach to providing broadband services.

The first speaker was Jessie Wallace from Meriwether Lewis Electric Cooperative (MLEC). He explained that MLEC decided that building fiber to the home platform was the best thing for the co-op and their members. They created a non-profit, wholly-owned subsidiary of MLEC known as ML Connect. ML Connect will offer telephone and internet services to their 43,000 existing electric members. They are currently building out fiber and hope to have it all completed within a few years.

The next speaker was Dale Fain from Appalachian Electric Cooperative (AEC). Dale stated AEC ultimately decided to take on a partnership approach instead of a do-it-yourself approach. AEC would build the fiber and lease the assets to another company which would offer services for the delivery and retail sale of broadband services. They have decided to partner with an existing telephone co-op and negotiations are expected to continue over the coming months to finalize their partnership. AEC has started building out the fiber backbone and plans to have 150 miles installed by the end of 2018.

The final speaker was Steve Seger from Middle Tennessee Electric Membership Corporation
(MTEMC). In contrast to the other speakers, MTEMC identified an existing broadband company within their service territory. The company is known as United Communications and they already had 1,000 miles of fiber in place. MTEMC and United Communications perused a partnership and MTECM begin to leverage their existing fiber infrastructure. They have already begun offering broadband services to some of their members and plan to build out the rest of the infrastructure over a multi-year process.

All three speakers agreed that there is no “one size fits all” approach to providing broadband. It was stated that each co-op is different and different approaches could be taken. It may make sense for some not to provide the broadband service at all. An interesting comment was made at the very end of the session. It was stated that the co-op was established to serve its members, and they saw the same need of service for broadband as was needed for electricity 80 years ago.

Written by Seth Daniels- PCA Rates Consultant