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Rural Broadband in Tennessee

Rural and suburban Tennesseans face missed opportunities because of limited broadband access. Electric co-ops are uniquely positioned to help solve the problem, but complex regulatory restrictions prevent co-ops from working to provide broadband access to their rural and suburban communities. It is time for Tennessee to change the law and create new opportunities for rural Tennessee.

Limited broadband access hurts rural Tennessee. Modern education, healthcare and commerce all depend on access to the Internet. When broadband is unavailable, too slow or too expensive, the impacts can be profound, with jobs and capital investment locating elsewhere, students falling behind their urban peers, and existing businesses missing out on opportunities to sell their goods and services.

Electric co-ops are uniquely positioned to provide real solutions. Co-ops serve the rural and economically disadvantaged regions of the state where broadband expansion is needed most. The cooperative business model means we can be successful in areas where for-profit businesses cannot, and co-ops can deploy broadband quicker and more economically because of their existing infrastructure. To support the growing technology and communication needs of modern power grids, many co-ops already operate internal fiber optic networks that reach deep into rural Tennessee. Co-ops have a legacy of expanding critical infrastructure beyond the city limits. A generation ago, the issue was electricity. Today, it is broadband.

Regulatory barriers in Tennessee that prevent co-ops from providing retail broadband service must be changed. Changing the law will provide co-ops with the option to develop a broadband service for their consumers or form effective partnerships with existing providers, which will create new opportunities for rural and suburban Tennessee.

Tennessee's electric cooperatives are working hard this year to change the law and create new opportunities for rural and suburban Tennessee. Contact your legislator and make your voice heard.


 
Learn More:

Media

Reports

The Tennessee Advisory Commission on Intergovernmental Relations (TACIR) Report: Released 11/2016

The Tennessee Department of Economic and Community Development (ECD) Report: Released 7/2016

TECA Broadband Memo: Presented to TACIR 10/2015

Resources




Questions and Answers
 

Q: Why is broadband so important to rural and suburban Tennessee?

A: Modern education, healthcare and commerce all depend on access to the internet. Lack of broadband access means that students are more likely to fall behind their more connected urban peers and leave them unable to develop the skills they will need to compete in the modern economy. Healthcare also depends heavily on connectivity. Studies show that broadband improves patient care, lowers costs and increases the availability of modern medicine in rural communities. Broadband is also a critical part of the modern economy. Without reliable, high-speed broadband, new business may choose to take jobs and investments elsewhere, and existing businesses miss opportunities to sell their goods and services.

Q: Does broadband access impact job creation?

A: Yes. Businesses surveyed by the state of Tennessee report that broadband enables 43 percent of all new jobs and 66 percent of new revenues. More than 34 percent of businesses stated that broadband is essential when selecting a new location, and 56 percent said that for them to remain in their current locations, broadband access is “essential.”

Q: How widespread is the problem?

A: A recent study conducted by the state of Tennessee found that 34 percent of rural Tennesseans – one in three – lack access to broadband. Only 2 percent of urban residents lack access.

Q: What is an electric cooperative?

A: Electric cooperatives are consumer-owned, not-for-profit energy companies. There are 23 electric co-ops in Tennessee that provide energy to more than 2.5 million Tennesseans across 71 percent of that state’s landmass.

Q: What can electric co-ops do to expand broadband?

A: Co-ops serve the rural and economically disadvantaged regions of the state where broadband expansion is needed most, and co-ops can deploy broadband quickly and economically because of our existing infrastructure.

Q: What do electric cooperatives know about broadband?

A: Quite a lot. Modern power grids require remote monitoring and control systems. In the last 15 years, many co-ops have constructed extensive fiber-optic networks extending deep into rural Tennessee to accommodate their own communication needs.

Q: Existing providers claim that low density and high cost create barriers that prevent them from serving rural Tennessee. What makes co-ops different?

A: There are two subtle but important differences that will allow co-ops to be successful where existing providers cannot be. The first is the co-op business model. Most existing providers are for-profit businesses. This means they have to cover their expenses and return a profit to their shareholders. Electric cooperatives are not-for-profit, consumer-owned businesses. Co-ops must also cover their costs, but they are not required to return a profit to shareholders. The second difference concerns the payback period of investments. Co-ops routinely make investments in infrastructure that have payback periods in excess of 20 years. For-profit businesses typically require infrastructure investments to pay for themselves in much shorter time frames, as little as 18 months in some cases.

Q: I have issues with government competing with private businesses. Should co-ops really get involved in this business?

A: It is important to remember that, unlike other utilities, electric cooperatives are private businesses. Co-ops are owned by their consumers, not the government. 

Q: What are co-ops waiting for?

A: Tennessee state law does not currently allow electric cooperatives to provide retail broadband service.

Q: What needs to be done to allow co-ops to provide retail broadband service?

A: The Tennessee General Assembly must change state law to allow co-ops to provide retail broadband service. Governor Bill Haslam is expected to introduce a bill this year that will provide co-ops with authorization, but that bill must first pass in both chambers of the legislature.

Q: How can I get involved?

A: Visit takeactionTN.com to join our campaign. This will allow us to keep you informed about broadband and other issues that impact rural and suburban Tennessee. After the bill is introduced, we will let you know about opportunities to contact your legislators to encourage them to support the bill. You can also encourage your friends and family to get involved.

Q: If the bill is passed, when can we expect broadband?

A: Unfortunately, changing the law is simply a first step. Individual co-ops would then decide what is in the best interest of their consumer-owners. If a local co-op does decide to provide broadband, financing, engineering and construction of any potential broadband network would take months or years to complete.


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