For the Press

Rural Electric Cooperative Consortium awarded $186M in FCC’s Connect America Fund Phase II auction

WASHINGTON, D.C. – Aug. 28, 2018 -- Conexon, a company committed to working with electric membership cooperatives to bring fiber to the home in rural communities, today announced that the Rural Electric Cooperative Consortium (RECC) is the single largest Gigabit winning bidder in the Federal Communications Commission’s (FCC) recent Connect America Fund (CAF) Phase II auction. The consortium of member-owned co-ops will be awarded $186 million over a 10-year period to build fiber-to-the-home networks to more than 66,000 locations across rural America from Virginia to Oregon.

“Co-op members and the communities they serve have waited far too long for services that are available in towns and urban areas across the country,” said Randy Klindt, partner at Conexon, which formed and represents the RECC.  “Through our participation in this auction, we’re demonstrating our willingness to invest in our communities. The nation’s electric cooperatives have served their communities with essential services for 80 years and are now stepping up to offer broadband services as well.”

Funding levels for the CAF II auction were calculated using the FCC’s Connect America Cost Model (CACM). The CACM was first used in 2015 providing $10 billion in funding to the nation’s largest telephone companies in exchange for those companies providing 10 Mbps download speeds and 1 Mbps upload speeds.

By comparison, the CAF phase II auction awarded the RECC and the other winning bidders less than one-third the support per home provided to telephone companies. In exchange for the support, the RECC members will build fiber networks delivering symmetrical gigabit speeds to residences and small businesses in their service territories – 1,000 times the speed for a fraction of the support.  Bidding within a field of more than 200 approved entrants including telecom, cable, satellite, and fixed wireless companies and others, the RECC’s involvement signals an important change in the goal of providing broadband across the country.

“The true winners in this are the members of these electric cooperatives and the communities they serve,” said Jonathan Chambers, partner at Conexon. “Instead of satellite or fixed wireless at home, the communities will have world-class communications available to every home. Instead of 10 Mbps, the members of these cooperatives will now have gigabit speeds.

“Policymakers have long struggled with the question of how to get real broadband to rural America. The CAF II auction is validation that electric co-ops are the answer.”

“Electric cooperatives have traditionally pulled together to share experiences, knowledge and talent as they worked to overcome the challenges of building, operating and maintaining electric lines in rugged and sparsely populated rural areas across the United States,” added Gary Wood, CEO at Central Virginia Electric Cooperative.  “The forming of the consortium led by Conexon is an extension of that same cooperative spirit among a group of electric cooperatives who have committed to overcoming the lack of true high-speed internet access in their communities.

“The success we had as a group in the CAF II auction will propel the expansion of fiber-optic networks across the country and improve the quality of life for those we serve.”