Friday, January 4, 2019

Country Saviors or Crony Capitalists?

Will rural Mississippi finally get better internet access? There are many pleasures to be gained from enjoying the pastoral life.  Unfortunately, a bane of such living is the lack of broadband internet access in much of Mississippi.  Living in the sticks too often means just that - living in the sticks away from copper and fiber.  Mississippi electric coops will try to get permission from the legislature this year to provide internet service to "underserved" areas in Mississippi.  Journeyman reporter Bobby Harrison reported in Mississippi Today recently:

Northern District Public Service Commissioner Brandon Presley believes access to high speed internet in rural areas is as important now as was providing electricity in the early 20th century.

“It is the No. 1 request that comes to the PSC,” Presley said. “It is what I get asked about everywhere I go.

“I stop into a country store to get a Coca Cola, and the first thing I am asked is when are we going to get internet.”

Presley, a Nettleton Democrat, believes Mississippi’s 25 rural electric power cooperatives can play a vital role in providing high speed internet to underserved areas. As chair of the PSC, which provides oversight and regulations to Mississippi utilities, he said internet access is a major issue for him.

During the 2019 session, Presley will advocate for legislation to authorize the rural power cooperatives, which are owned by their customers and provide electricity to many, particularly rural areas of the state, to offer high speed internet services.

“This is about being a door opener for high speed internet to the rural areas,” Presley said. “Ask any politician in the state should people in rural areas have access to the same internet services as people in Jackson?”

He said it is an economic development, as well as quality of life issue. Presley cites the lack of high speed internet access in some parts of the state as one of the reasons for “brain drain” — where educated millennials are leaving the state.

“Our proposal will not ask for one copper penny of taxpayer money. And it will not propose any new regulations,” said Presley. “It will just give the EPAs the option to offer the services.”

The rural electric cooperatives, used to be known as electric power associations, trace their genesis to the 1930s when they were created through federal legislation to help bring electricity to rural areas.

Presley and others maintain the lack of accessible high speed internet is placing rural communities at a disadvantage just as the lack of electricity did at an earlier time.

For instance, state Sen. Neil Whaley, R-Potts Camp, said he has a family member living in rural Marshall County in north Mississippi, working for a tech company, who had the opportunity to work from home for the company, but could not because of the lack of high speed internet.

“I am definitely interested in this issue,” he said.

But as often is the case in the legislative process, passing the law might not be simple as it seems.

State Rep. Jody Steverson, R-Ripley, who is vice chair of the House Public Utilities Committee, said there are some issues with allowing the cooperatives to offer internet services. Steverson, who admittedly has a background of being employed in the cable television and internet provider industry, said he is concerned with cooperatives, which are public utilities, competing against private companies in more populated areas. And, he said, he is concerned about the cooperatives incurring debt by trying to offer the service in more rural areas where it is not cost effective.

“Another question about this possible legislation is how will getting into the broadband business impact (utility) pole attachment rate terms and conditions between EPAs and other telecoms once they are in competition?” Steverson asked. It is not uncommon for cable companies to rent space on utility poles from electricity providers.

Still, Steverson said he will be open-minded on any proposed legislation.

According to various studies, Mississippi is near the bottom in terms of access to high speed internet or broadband. The Federal Communications Commission ranks Mississippi last in terms of broadband access with 72 percent of the population having access to download speeds of at least 25 mbps and upload speeds of 3 mbps. Presley said that speed is in reality not fast enough for some activities, such as conducting telemedicine.

When asked about the rural cooperatives, Lisa Shoemaker, executive director of the Mississippi Cable Telecommunications Association, said, “Mississippi cable operators support efforts to expand broadband to unserved areas. We welcome discussion with other telecomm providers as well as legislative leadership and Gov. Bryant on ways we can work together to close the digital divide in Mississippi.”

She said that members of her association had invested $381 million and are now investing $48.5 million annually “to expand both the capacity and reach of our broadband networks. Those networks span 24,000 miles making our services available to approximately 850,000 homes and businesses, including many rural customers in Mississippi.”

But Presley maintains that if the traditional companies are not going to fill the broadband void, the cooperatives should have that option.

Michael Callahan, chief executive of the Electric Cooperatives of Mississippi, said that the rural electric power cooperatives believe better broadband access is crucial “for the growth and future of the state.”

He said, “At this time, 19 of our 25 electric distribution cooperatives are involved in feasibility studies regarding offering rural broadband services. They will be reviewing all aspects and, at the appropriate time, each will make a decision whether to enter the business. If the studies are positive and legislation is passed to allow us to offer broadband, we believe some will offer the services.”

Presley said $600 million in federal funds exist to provide grants to rural electric power cooperatives to help them with development of broadband. Mississippi cannot access those funds because state law does not allow rural electric power cooperatives to provide internet services.

“It is a horse and buggy law,” Presley said.

He is pattering possible Mississippi electric cooperatives’ involvement in broadband services with what is occurring next door in Alabama with the Tombigbee Rural Electric Cooperative that is based in Hamilton – near the border with northeast Mississippi.

Tombigbee received a $3 million federal grant and has a goal of providing high speed internet to more than 70,000 residents over 1,300 miles in northwest Alabama. The service will provide speed of at least 100 mbps to customers.

Presley held an event in June in Hamilton attended by 45 Mississippi legislators and other officials to tour the Alabama effort. Article
Kingfish note: Everyone wants to improve broadband internet access for rural Mississippi.  The question is cost.  It is highly doubtful that the AT&T's and Comcasts want to leave money on the table if there are profits to be made so one can assume it costs too much for them to expand in rural areas.  The first question that should be asked is how much will improving internet access for rural Mississippi cost?   The second question is whether the co-ops can afford to operate said service without losing their shirts.  The third question is how will they fund the expansion?  Loans? Grants? Subsidies? Taxes?  Suppose the federal fairy godmother pays for the "development of broadband."  Can the coop's operate the service at a profit or will that require more government gifts?   If they operate at a loss, will the legislature bail them out? Inquiring minds want to know. 

Don't forget about that little matter called competition.  Some of the coops operate in urban areas.  Will they thus compete against the telcoms at an unfair advantage?  One operates in Tupelo while another operates in Hattiesburg - hardly rural areas.  Does Commissioner Presley want to provide them with special help to build hi-speed internet networks?  C-Spire and AT&T would have loved such help when building and pricing their networks.  However, this is Mississippi where we loooove our crony capitalism.

More questions should be asked before the legislature goes down this turnpike.

One final ignorant, but honest question.  Will the eventual deployment of 5G technology render some of this discussion moot?

17 comments:

bill said...

You have to read pretty deep into the article before you come across the real reason the coops want to get into the broadband business - federal grant money. Kingfish has asked the right questions, but the most important one is the last one - how long before traditional broadband is taken over by other technology?

Anonymous said...

2 points:

1. AT&T and others got plenty of fees, subsidies and tax breaks to run fiber, but just pocketed the money... Same goes for E911 fees on your phone bill too, the 911 centers only get 68 cents on the dollar.

https://www.huffingtonpost.com/bruce-kushnick/you-have-been-charged-tho_b_6306360.html

2. My little volunteer fire department is REQUIRED by the state to do run reports on the most complicated web based software ever created, yet we can't get internet service to the fire stations. It's real cute when you're turning nearly 200 calls a year. 15 years ago we were using 1 page forms that could be scanned into the computer.

coop customer said...

Ticos is going to be doing a ton of business. Lobbyists are going to be pressing the flesh and "treating" some pols to some sho nuff fine eating and drinking experiences. Plus buying sponsorships to their fund-raising folf tournaments. A warning: better buy them limo rides after they have consumed. Damn -- let the electric coops service their customers.

Anonymous said...

At 10:42, you hit the nail! It's all about those grants (tax dollars), has nothing to do with helping rural MS.

Anonymous said...

Cant you receive it by dish to the rural areas now? Imagine if you had to run fiber 3/4 of a mile between houses and charge the people $70 a month for service? Our deer camp has it available for $50 per month but we would never use it. I would stick with upgrading the cell service, some areas don't even get a bar.

Anonymous said...

@ 12:45
I may be wrong but I was under the impression that they did not have to run new cable because the internet would travel in the existing power lines to the house but on a different signal hertz or something like that. Not sure.

Anonymous said...

"Pastoral Life"?

Anonymous said...

Is this another PERS thread?

Anonymous said...

3:25, yes. You may be wrong! But thanks for playing.

Anonymous said...

Who the hell else do you expect to do it? Comcast??? I live in the middle of the city and they don't give a shit about me.

It is a utility. Get it to rural areas any way you can.

Anonymous said...

Living in the country, you have to make trade offs. Internet access is clearly something you can't expect when you are living on a 50 acre plot. Deal with it and quit crying. If you don't like it, move to a city or pay to run a fiber line yourself. I swear farmers are the biggest complainers we have got always asking for more handouts.

Anonymous said...

I hope this passes. The people of rural Mississippi deserve to have their pornhub without much buffering.

Anonymous said...

The decision by internet providers may have nothing to do with " leaving money on the table" but rather whether or not that money could be more profitably spent elsewhere.

The profit margin may simply be too small.

We should remember that if profit was the only determinant for bringing electricity to rural areas, we would be an underdeveloped country . The countries where the wealth was in the hands of a few should be our examples.

It doesn't matter what nouns are used to describe the forms of governments where the wealth follows power and the future of the country and the society is not considered. The outcomes are the same. Be it the King or the CEO or President or Comrade, the greed as the primary determinant of decisions doesn't have good long term results for a country.

Anonymous said...

The Electric Co-ops in Arkansas are already breaking ground running broadband. Since by law these organizations are prohibited from earning excess profits they would need access to financing, which Trump and congressional republicans happily provided. This is a Godsend for people in rural areas, which often lack good cellular service and s well.

Michael said...

To Answer Kingfish's questions:
1. between $1.5 to $2 BILLION to run Fiber to the home.
2. Not all coops. This will be done with NO help from the State or Federal Government. Therefor, not every coop will be able to do this. There are 900 electric coops across the nation. Our lenders estimate that only 1/3 of those coops can provide broadband & break even. Currently, there are 109 electric coops providing broadband to their members.
3. The Fiber projects will be funded by loans. The coops would have to guaranty those loans (only negative to the coop). No monthly electric revenue will be used for broadband. 6 coops currently have fiber deployed on their system for electric grid communications. Expanding that fiber to the members is a 6 to 8 year project, with fiber being made available to members, 100mbps for $49.99 a month. IN some cases the coop might lease their fiber to an ISP. This would allow the ISP to provide the broadband & the coop would receive monthly payments. I would think many of our coops would look at this because it keeps the coop from goin full bore into the internet business & allows for the fastest deployment of broadband.

We need nothing from the State other than PERMISSION. After that we need PATIENCE from our members as coops determine the feasibility of providing this service.

Coops are doing this to help Mississippi. As Mississippi prospers, so do we, and we are seeing rural Mississippi begin to shrink. Coops provide electricity to 80% of Mississippi, 52% of all the meters & 1.8 million Mississippians. We have offered this to the Mississippi Legislature as a way of helping solve the problem. Most states have set up funds, but we know Mississippi doesn't have the money to do that, so we offered an option that doesn't need money from the state. Electric Coops are owned by the members. If those members want their coop to provide broadband services to help their communities grow, & the Coop board can make a business case for it, then why shouldn't the coop provide broadband.

Michael Callahan, Ex. VP Electric Cooperatives of Mississippi

Kingfish said...

So what happens if you are more than halfway into building a network and then 5G become prevalent?

MIchael said...

Our Lenders just gave us a report last month regarding 5G. The rollout appears to be having problems, even in populated areas, & estimates are 15 years before true 5G can make it to rural America. 5G requires 10 times more towers than 4G, and those towers need fiber. 5G is also hampered by trees, metal roofs & even UV coating on your windows. In a report last month, Microsoft, which is trying to use TV white space to deliver highspeed broadband to rural America, stated that the gold standard, if you can afford it, is & always will be fiber!!!!

Again, this is VERY EXPENSIVE & not all coops can do this. Maybe 5 out of 25 in our state.

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If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

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