Fiber Could Be A Co-op Service, Like Electricity
Electric cooperatives around the U.S. are looking at ways to serve their member-owners with high-speed internet, just as they brought electricity to rural areas in the 1930s. Tom Manting, Chief Information Officer for HomeWorks, explains the situation here.
Eighty years ago, a group of mid-Michigan farmers united as Tri-County Electric Cooperative to do something no one else was willing to do: provide safe, affordable, convenient central station electricity to rural Michigan.
It didn’t take long for Tri-County Electric’s board of directors and management to realize that building and maintaining the electric distribution plant (all the poles, wires, meters, and transformers that deliver your electric power) is a uniquely local endeavor.
However, the “central” part of central station power - generating the electricity and transmitting it to substations - is best performed by a larger organization, since a larger generator can produce more electrons at a lower cost.
So Wolverine Power Supply Cooperative (a cooperative of cooperatives, also known as a Generation and Transmission (G&T) cooperative) was formed to help a number of Michigan’s electric cooperatives to gain economies of scale in procuring the electrons for its members. Today Wolverine, through its five member-distribution cooperatives, serves over 268,000 electric co-op members in 41 counties.
This brings us to high-speed internet: HomeWorks is looking into the possibility of providing Fiber to the Home (FTTH). A key decision would be how to structure such a business. Our options include using a for-profit subsidiary or making it a division of the cooperative.
One key factor is the extent to which we could partner with other Michigan cooperatives. If three or more co-ops work together to provide FTTH, all involved will benefit. We could negotiate better programming contracts, buy bandwidth at better prices, and leverage each other’s experiences to provide greater reliability and better service.
One model we’re considering would have HomeWorks building and maintaining the fiber, just like we build and maintain the electric lines. A separate operating company would provide the Internet, telephone, and possibly TV services that travel over the fiber, just like Wolverine provides the electrons that travel over our lines.
Our preliminary analysis suggests HomeWorks can provide this much-needed service with or without the other co-ops, but we think creating a “fiber G&T” could benefit all the cooperative’s members.
We’re still studying the feasibility of each option, and will report back here when we’re ready to make a decision. We welcome your thoughts.