Coast Electric and the

Possibility of Broadband Service

Broadband Vote Results and Next Steps

Broadband and Your Co-op

Members vote in support of broadband service 

Coast Electric members recently voted in favor of ratifying changes to the cooperative's Certificate of Consolidation that will allow the possibility of high-speed internet service in our three-county service territory. The vote was an impressive show of support for broadband in our area, with 97 percent voting for the service.

In the coming weeks, we will monitor the pilot project in Pearl River County and continue research the possibilities of expanding service to more areas. We plan to make announcements later in 2020, probably in November.

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

Broadband provides consumers with a link to the internet, including voice, data, video and email services. The connection Coast Electric is considering would be through a fiber optic connection, which many believe provides the fastest and most reliable broadband service to consumers. Coast Electric would need to extend fiber across areas of its system, mostly on its own poles, to provide that fiber access to consumers. 

  • 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.

Read the bill, as signed by the governor

  • 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 managers 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.
  • In July and August of 2020, members voted in support of Coast Electric offering broadband service in its service area. The cooperative will monitor its pilot project in Pearl River County this fall and make announcements regarding the future of service in November of 2020. 
  • Coast Electric will conduct further research to determine if the service will be in the best interest of Coast Electric members. 

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 are opportunities 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. 

Yes. Coast Electric uses many communications systems linking offices, substations and other equipment to remotely gather information that enables us to effectively manage the electric system. Adding more fiber to our system would improve communications, leading to a smarter grid improving efficiency and outage response times in areas where fiber is deployed. 

The state law that allows electric cooperatives to enter the broadband business states that there can be no cross subsidization between the electric co-op and broadband subsidiary. No costs for this project will be borne by the electric co-op or its members. Ultimately, the cost will be borne by the customers of the broadband company. Since we are a not-for-profit electric utility, we have access to low-cost financing and can take a longer approach to payback. We can’t speak to funding sources at this time for competitive reasons and other prohibited communication rules. We do know that our proposed pricing will be the best in the marketplace for the best service, with symmetrical speeds and no data caps.

In August of 2020, Coast Electric approved the ratification of an amendment to Coast Electric’s Certificate of Consolidation, allowing the cooperative to offer broadband service. Before the board considers authorizing this project to proceed, the full plan will have to be developed. 

Announcements about the future of broadband service are expected in November 2020. Installing fiber for broadband is a lengthy process, and it would be years before all members would have access to some form of broadband. 

Coast Electric members recently voted in favor of ratifying changes to the cooperative's Certificate of Consolidation that will allow the possibility of high-speed internet service in our three-county service territory. The vote was an impressive show of support for broadband in our area, with 97 percent voting for the service. 

In the coming weeks, we will monitor the pilot project in Pearl River County and continue researching the possibilities of expanding service to more areas. We plan to make announcements later in 2020, probably in November. 

Questions / Comments

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