New State Law to Help N.C. Electric Cooperatives Provide Expanded Rural Broadband Access

Gov. Roy Cooper today signed into law Senate Bill 310, entitled “Electric Co-op Rural Broadband Services,” which will make it easier for the state’s electric cooperatives to leverage their existing fiber network and form partnerships to provide broadband services in rural areas that currently lack access to high-speed internet.

The bill makes key statutory changes that remove hurdles to electric co-op participation in broadband deployment including:

  • Helping offset the up-front costs of providing broadband by modifying North Carolina statute to allow electric cooperatives to access federal funds, including U.S. Department of Agriculture Rural Broadband funding, and providing greater flexibility to electric cooperatives when structuring partnership/lease terms with broadband partners and subsidiaries;
  • Clarifying that it is permissible to use existing electric cooperative fiber deployed primarily for electrical purposes for the secondary purpose of providing broadband services; and
  • Limiting electric cooperatives’ exposure to liability when they make dual-use of their fiber to provide broadband services.

Careful analysis will be required when evaluating the cost feasibility of cooperative broadband services, and it is expected that interested co-ops will consider forming partnerships to enable deployment. In March, for example, North Carolina’s Electric Cooperatives announced a partnership with RiverStreet Networks to enable the expansion of high-speed internet access to unserved and underserved rural communities. The partnership, which was formed with the expectation that this bill would become law, will execute several pilot demonstration projects that could become models for providing broadband services using electric cooperative fiber networks.

Electric cooperatives aim to facilitate their members’ use of smart, connected home technologies that have become standard in urban and suburban communities. These technologies benefit cooperative members by allowing them to better manage their home energy use, and they will make cooperative distribution systems more dynamic, flexible and efficient. As a secondary benefit, the same fiber network that enables these co-op operations can also be used to deliver high-speed internet access.

“The passage of this bill will open the door for more of our co-ops to take a serious look at broadband and it marks an important step forward in our efforts to bridge the digital divide for rural North Carolina,” said Nelle Hotchkiss, senior vice president and chief operating officer for North Carolina’s Electric Cooperatives. “We now have more flexibility to utilize co-op broadband infrastructure to not only deliver innovative energy solutions, but also provide access to economic development, education and healthcare opportunities that are critical to rural prosperity and quality of life.”

Other states including Alabama, Georgia, Indiana, Missouri and Tennessee have passed similar legislation that facilitates the deployment of rural broadband by electric cooperatives.