Friday, August 12, 2016

RS Fiber Cooperative Bringing Fiber to the Farm

Cooperatives long have been a way rural communities organize themselves to supply electricity or communications to their members. Now more communities might look at cooperatives to build Internet access infrastructure.
With the caveat that for every good public purpose there are corresponding private interests, and with the further caveat that many are skeptical of situations where government entities compete directly with private entities, there are arguably fewer such sharp economic or political objections if the enterprise takes the form of a cooperative.
To be sure, such a capital-intensive endeavor often requires seed funding from local governments able to issue bonds that covered half of the approximately $16 million required for the project’s first phase. So even cooperatives are not free of the criticism that they represent a form of government-subsidized competition.
Still, in principle, non-governmental free associations of citizens should have the right to create cooperatives for electricity or communications. It is not easy, and many similar efforts have failed.
Even if one generally agrees that governments should not provide services that private entities can supply, if customers are not happy, and want to form cooperatives, it is hard to argue they should not have the right to do so. It is quite difficult, and perhaps rarely can happen in a “pure” sense, with no financial support of any sort from any local unit of government.
But it also is hard to argue that allowing multiple forms of competition is a “bad thing,” where it comes to providing high-quality Internet access in hard-to-serve areas where there actually is not a traditional business case.
In fact, that is the whole rationale behind subsidies for providers of telecom service in rural areas, for example. RS Fiber provides an example of a cooperative that is an association of rural cities and towns, not an independent cooperative that might be more palatable to some.

More competition in a competitive industry is rarely welcomed by incumbents. But one way or another, more competition is coming. We haven’t yet seen the full extent of what might be possible.  

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