Coast Electric and the
Possibility of Broadband Service
Broadband and Your Co-op
In 2019, the Mississippi legislature passed a bill allowing electric cooperatives the ability to provide rural broadband service. Since then, Coast Electric personnel have been working to determine the best plan of action for our members.
What we believe:
Electric cooperatives were formed more than 80 years ago for the purpose of serving rural Americans. Today, we believe reliable, affordable internet service is a necessity for everyone, just as reliable, affordable electric service is a necessity.
As your local electric cooperative, we have a responsibility - especially as a company owned by members like you - to make sure this venture wouldn’t threaten the financial stability of Coast Electric.
We are working to see if we can find a balance that allows us to provide a necessary service and keep our company strong for the people we serve. If we decide to offer new services, it will be for the benefit of our members, like you and won’t negatively impact our core job – powering your homes and businesses.
News / Updates
- It requires that electric cooperatives do feasibility studies to determine if this can be done without putting the electric cooperative at significant risk.
- It allows the cooperative to provide the service through several options. Cooperatives may form subsidiaries, enter partnerships, or form other types of affiliates to provide broadband service.
- The law prohibits an electric cooperative from providing the service through the cooperative itself. It must be done through a separate company, maintaining separate accounting books. A cooperative cannot use electric revenue to provide broadband service, again limiting the risk to the electric cooperative and its members.
- The law requires the cooperative, if it decides to provide broadband service, to commit to making broadband available to all members at some point.
- It does not require a cooperative to offer broadband and it prevents a cooperative from requiring a member to take the service.
- One of the requirements of the bill obligates Coast Electric to conduct feasibility studies that will help determine if broadband is a good option for our community. To date, we have completed three feasibility studies.
- A team of management leadership has worked diligently since the Broadband Enabling Act was passed into law in February 2019 to learn as much as possible about broadband networks, terminology and types of broadband systems. This learning process is on-going.
- This team has met with various broadband companies to get proposals for installing a broadband network. Our mangers are working with our board members to determine next steps.
- We have conducted surveys of our members to better understand the needs of our community.
When determining whether or not to offer broadband service, there are several considerations. A few are:
- Cost. There is a reason telecommunications companies have not yet offered broadband service in certain areas. It is costly.
- Are there enough households and businesses in our service area that need broadband service?
- How many of those will it take to make this venture feasible?
- If there is the need and the interest, what type of business structure do we form? Do we create a subsidiary or form partnerships?
- Will we need to hire additional employees and how many?
- Are there people available to hire with the necessary technical skills?
While there are obstacles, we believe there is opportunity as well. Some of the benefits of offering broadband service in our area include:
- Co-ops like Coast Electric are already an essential part of the communities we serve. We are familiar with the needs of our members and our communities.
- According to some reports, Mississippi ranks No. 49 in the U.S. in broadband availability. If co-ops provide broadband service, Mississippi could begin to move up in the rankings.
- Education and remote health care are just a couple of the areas that could benefit as availability is potentially expanded into the rural areas of the state.
- The cooperative business model puts an emphasis on service to members, not profits.
We know many of you are eagerly waiting for results of these studies and for a decision regarding broadband service. Our focus these past weeks and in the weeks to come is on serving our members in the midst of the Covid-19 crisis. We also understand this crisis has brought to light the need for reliable internet service for those who are working from home and home schooling children.
We understand the challenges and appreciate your patience as we work to determine the path forward. We hope to make further decisions and announcements in the summer of 2020.