In recent days you may have read several news articles about rural broadband. Both legislators and public service commissioners are becoming more and more supportive of electric cooperatives becoming broadband service providers. We are also aware of the increasing drumbeat throughout the country regarding the need to make quality broadband services available in areas that are currently unserved or underserved, especially in rural areas. We are also aware of increased discussions (nationally, regionally and locally) concerning the role electric cooperatives might be able to play in providing or facilitating the provision of such services.
We at East Mississippi Electric Power Association also believe greater broadband availability in our services areas would benefit our members substantially, including improvements in quality of life, economic development, education opportunities, health-care benefits and economic growth.
Currently, in Mississippi, electric cooperatives are limited purpose corporations and do not have the freedom to provide broadband. We were chartered to provide electric service to member-owners in areas not being served at the time. To ensure financial stability in those areas, certificated areas were defined through the public service commission. Investor-owned utilities were given specific areas to serve and cooperatives were given the remaining areas. In these defined service territories, the party responsible for their certificated area had the exclusive right to serve electricity in conjunction with the responsibility to serve all that request service.
We hear frequently from our members their need for broadband access throughout our service areas. Many request services from other utilities and are told it is not financially feasible to build the infrastructure required to gain access to broadband in their area. This is much like the arguments used in the 1930s when people requested electricity, and from the profit-oriented business perspective, it is a true statement given the return on investment required by these companies.
So where does that leave EMEPA and our members? We have engaged the assistance of various consultants, and 19 cooperatives throughout the state have conducted preliminary studies that examine the economic feasibility of installing a fiber network for electric (smart grid) purposes and for providing (or facilitating the provision of) broadband to their members. However, there remains substantial work to be done. It is without a doubt an expensive proposition. A backbone fiber solution on the EMEPA system could cost as much as $145 million dollars. Then the service drops and equipment for the homes would be an addition to this cost.
The legal and financial challenges associated with broadband are significant. Many questions must be answered before any decisions on a path forward can be made, including questions relating to statutory and corporate authorization, entity structure, tax implications and financial feasibility. We continue to study the broadband issues and have reached out to possible partners but are not yet in a position to determine what role, if any, EMEPA can play in the delivery of broadband service.
It is extremely critical that any broadband legislation affecting the cooperatives be done correctly. Such legislation must address and resolve multiple legal and economic issues in a careful, fully-informed and comprehensive way, and in a way that gets quality, reasonably-priced broadband to as many Mississippians as possible without negatively affecting the distribution system we have worked so hard to build over the past 80 years.
Our preferred choice would be for existing broadband providers to quickly and affordably provide the services in which they are so experienced to all areas of our state, but we will continue to explore all avenues for potential benefit to our members. As the needs of our members grow, we continue to look for opportunities to empower east Mississippi as we have for the past 80 years.