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Six Arkansas Electric Co-Ops Stringing Broadband

5 min read

Six electric cooperatives in Arkansas are bringing high-speed broadband internet access to thousands of their members and plan to offer it to all of their members within the next four to six years.

Broadband projects are underway in areas served by Arkansas Valley Electric Cooperative of Ozark, Craighead Electric Cooperative of Jonesboro, North Arkansas Electric Cooperative of Salem, Ozarks Electric Cooperative of Fayetteville, Ouachita Electric Cooperative of Camden and South Central Arkansas Electric Cooperative of Arkadelphia.

“There is a trend, and it’s far beyond Arkansas,” said Robert McClanahan, vice president of information technology and chief technology officer for Arkansas Electric Cooperative Corp. and Arkansas Electric Cooperatives Inc. “There are other states in which cooperatives are well ahead of us. It stems from the fact that cooperatives were the ones in the 1930s and early ’40s who brought electricity to rural areas when nobody else would. There’s a lot of thinking in the co-op world that this is the 21st century version of that, that there really is no money to be made by building that much fiber, or that much cable, to serve a very few number of customers.

“Well, co-ops are accustomed to that because that’s what we did back then,” McClanahan said. “The for-profit economics aren’t there.”

For electric cooperatives, this “Herculean effort” is not profit-driven, he said; electric cooperatives are not-forprofit. It’s mission-driven by the goal of improving the quality of life of members.

Still, for-profit internet providers like AT&T, Comcast and Windstream are also investing in infrastructure improvements and expansions, and they say that benefits all of their customers, in urban, suburban and rural areas.

AT&T invested $550 million from 2015-17 in its Arkansas infrastructure, according to Ronnie Dedman, president of AT&T Arkansas. The company is also working on AirGig, a first-of-its-kind system that would deliver high-speed internet via a device attached to utility poles. The signal would travel through existing power lines.

Brad Hedrick, vice president of operations in Arkansas for Windstream Holdings Inc., said it has invested more than $46 million since 2016 to improve its network in the state.

Comcast invested about $110 million in its network in Arkansas between 2011 and 2017, according to spokeswoman Alex Horwitz.

In addition, these providers and the co-ops are using money awarded by the Federal Communications Commission’s Connect America Fund II to provide internet access in areas that need it most. Companies bid to do the work the FCC is subsidizing, and successful bidders in Arkansas include:

• OzarksGo, the subsidiary of Ozarks Electric that offers internet service to northwest Arkansas and northeast Oklahoma ($23.6 million over 10 years);

• Next, a subsidiary of North Arkansas Electric ($22.6 million over 10 years);

• South Central Arkansas Electric Cooperative (it received some of the $4 billion awarded to the Rural Electric Cooperative Consortium for work in Arkansas, but the co-op declined to disclose how much of that $4 billion it got);

• Arkansas Valley Electric Cooperative (nearly $4 million over 10 years for work in Arkansas);

AT&T ($427 million per year for six years, or $21 million a year for work in Arkansas);

Windstream ($175 million per year for six years, or $13 million a year for work in Arkansas).

Loans are the main source of funding for the co-op projects.

RELATED: Arkansas Cooperatives Apply Rural Electrification Model to Internet Access

‘New Opportunities’
OzarksGo has nearly completed Phase II of its $180 million, six-year, six-phase plan to offer internet to all Ozarks Electric members. The co-op serves Washington County and parts of Madison and Benton counties.

Several thousand locations already have access and another 150 to 200 are being connected every week, according to OzarksGo General Manager Randy Klindt. He also said the take rate — the percentage of people who decide to pay for internet service when it’s offered — is above the company’s projection, but he declined to reveal that rate.

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ARIS, formed by Ouachita Electric and South Arkansas Telephone Co., is serving about 600 broadband customers now, said Mark Cayce, the co-op’s general manager. Another $20 million will be invested in the deployment over the next two years, and $4 million has been spent so far, he said.

Its take rate has been about 60 percent, which is above their projection of 50 percent, Cayce said.

“It’s bringing new opportunities and possibilities to south Arkansas that didn’t exist before, and I’m still looking forward to it myself,” he said. “Unfortunately, where I live, I’m still probably 12 months out.”

Next, the North Arkansas Electric subsidiary, has brought internet to 770 members so far. The take rate has been 35 percent, exceeding a 30 percent projection, said Mel Coleman, CEO of the co-op and its subsidiary.

The plan is to bring internet to all of North Electric’s 29,000 members in Baxter, Fulton, Izard, Sharp, Marion, Lawrence and Stone counties over the next five years, Coleman said.

“Everything today seems to be tied to the internet,” he said. “When people move into an area, that’s the first thing asked about … . More and more today we find that people are choosing to live in beautiful, rural north Arkansas, and they want the same high-speed internet as someone who lives in any city in Arkansas or any other state has. And that’s what we’re determined to do, to bring that to them.”

Increased Efficiency
For Craighead Electric, South Central Arkansas Electric and Arkansas Valley Electric, delivering internet service to rural homes and businesses is secondary to their main internet goal of connecting substations to each other, to other facilities and to smart meters, increasing efficiency and reliability by enabling better monitoring of outages. That could also mean lower electric bills for their members.

“The real motivation for Craighead was on the electric side, Fiber Assets Manager Jeremiah Sloan said. “We have a big service territory, 30,000-plus meters, and we wanted to be able to position ourselves to adapt to technology changes and to deploy new technologies that are currently in development.”

Craighead Electric serves eight counties in northeast Arkansas; construction of its new network began in July. The co-op expects to spend $100 million on the deployment, which has a deadline of 2024, Sloan said.

South Central Connect, the subsidiary of South Central Arkansas Electric, has provided access to several hundred members. Its plan is to reach all 10,000-plus members and about 5,000 who aren’t members within four years, according to Drew Schaeffer, the subsidiary’s sales and marketing coordinator.

Arkansas Valley Electric also has a subsidiary, called Wave Rural Broadband LLC. The co-op announced the launch of its project in August and said it anticipates offering internet service in Crawford and Sebastian counties next summer.

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