Is Rural Electrification the Model for Rural Broadband?

As a nation, we can and should build fiber to every rural home, farm and business. A New Covenant.

It has become fashionable of late to reference the rural electrification movement of the 1930s and 1940s as a template for closing the digital divide in rural America. That is a great testament to the hardworking men and women who built electric networks to two-thirds of the country and sustained rural communities for over eighty years. Yet, most references to rural electrification miss the fundamental principles that guided electric co-ops since their founding – the principles of local ownership and control, of economic sustainability, and of equal access to services at the same prices.

The digital divide in the country is not a consequence of rural network economics; it has been the consequence of specific decisions by Congress, and by state and federal government agencies. Congress codified the digital divide in 1996, the FCC quantified the divide in 2010, and subsequent Administrations spent nearly $100 billion to solidify the divide. If you think spending another $100 billion will close the divide, without changes in government policy, you haven’t been paying attention.

To flip the rural electrification analogy on its head, had the nation taken the telecommunications industry’s approach to rural electrification, electric service in rural America would have been stepped down from 120 volts to 12 volts, powered by generators in some places and simply unavailable in other places. And, it would have been deemed “better than nothing” electric service. What is the real difference between the nation’s commitment to rural America in the 1930s and that of today? Leadership, vision, grit, or perhaps we have simply resigned ourselves to being two nations.

If Congress, the Administration and state government bodies wish to emulate the success of rural electrification, I suggest the following three changes to federal policy:

Amend Section 254 of the Communications Act by striking the lawyerly, weaselly word “reasonably.” Section 254 states that low-income consumers and consumers in rural, high-cost areas should have access to services “that are reasonably comparable to those services provided in urban areas” at reasonably comparable rates. In my experience with state and federal agencies, the words “reasonably comparable” have been interpreted as not comparable. Is 4 Mbps service in a rural area reasonably comparable to Gigabit service in an urban area? Over the past decade, every FCC Chairman has voted to spend public money for 4 Mbps rural broadband. The Wheeler FCC squandered over $25 billion for sub-par copper networks in rural areas. Amend the statute and direct federal and state agencies to spend the public’s money only on services that are comparable and affordable.

Require that public spending be restricted to long-term, proven assets with a life of at least 30 years. Stop investing public money in short-term solutions that are out of date before the money is spent. Rural electric co-op networks have lasted for over eighty years because the vast majority of federal loans were devoted to long-term infrastructure. The Biden Administration has articulated this concept correctly by proposing investment in “future proof” broadband infrastructure. The easiest way to realize the “future proof” concept is to invest in assets with a proven life of at least 30 years. Let the private sector invest its own money on novel, speculative technology. Public money should be restricted to the only transmission medium that meets the “future proof” criteria: fiber optic networks.

Direct 25% of broadband infrastructure funding to the electric division of the Rural Utilities Service (RUS). The Rural Electrification Act created the Rural Electrification Administration, whose successor agency is the RUS. While the Biden Administration recognizes the import of electric grid modernization, it is missing two-thirds of the country in its electric proposals, the geography covered by rural electric cooperatives. We won’t achieve grid modernization without building fiber in electric distribution networks for distributed energy generation and other smartgrid applications. The Rural Utilities Service already has an excellent smartgrid loan program. By supplementing the loan program with a grant program, electric cooperatives will address both the Administration’s climate and rural broadband objectives. If such a program were implemented, the nation could build fiber to every rural home and business served by an electric cooperative for less than $25 billion.

One final political point: Cooperatives were built on a covenant, an echo of the original American covenant of “We, the People.” Covenants bind people together and lift them all up. There has been a tendency in past funding decisions to pit rural against urban, to pit rural interests against those of the urban poor. I believe the 1996 Telecommunications Act meant for those interests to be aligned. Combining the FCC High Cost program for rural areas and Lifeline program for low-income Americans would align rural and urban interests. To truly follow the rural electrification model will require a new covenant.

Jonathan Chambers was Republican Staff Director for the Senate Commerce Committee from 1992-1995 and Chief of the FCC’s Office of Strategic Planning from 2012-2016. Between 1995 and 2012, he worked for companies in the U.S. and Europe building broadband and wireless networks. He currently works with rural electric co-ops building fiber networks.