TUPELO • Electric power cooperatives are now allowed to offer broadband internet to their customers, but it could take years before individual houses are hooked onto the internet.
And some areas might never receive the service because of the high costs of creating the infrastructure needed to bring high-speed internet to rural areas.
“If there was easy money to be made, then the people who do that for a living would be doing it,” said Jon Turner, manager of marketing and public relations for Four-County Electric Power Association. “It’s a very skinny margin.”
For the Prentiss County Electric Power Association, it will cost around $25 million to provide broadband to its roughly 13,000 customers. Four-County EPA serves 47,000 customers in all or parts of nine counties. Their estimated price tag is as much as $150 million.
“People think there is a magic switch we can flip now that the law was passed,” Turner said. “I have actually had people call and ask me when they would be getting their internet.
“I had to burst their bubble and tell them that if we do proceed, it’s going to be a five- to 10-year rollout. It will be a long and measured process.”
The associations have to be slow and deliberate in the decision-making process. In addition to the high costs of creating the infrastructure, they cannot raise electric rates to fund the project. And running a fiber optic cable does not guarantee that everyone on the road will want to sign up for internet.
“This is a huge undertaking. It may be the most important decision in the last 80 years,” Turner said. “At the end of the day, we have a fiscal responsibility to our members. If something goes wrong, we would have to pass the losses on to our members.”
In order for it to be economically feasible, there has to be densely populated areas for the association to start creating the infrastructure. Since the Prentiss County EPA serves Booneville and Baldwyn, they could have a head start on the process.
“Even in town, there are some places where internet connections are spotty,” said PCEPA general manager Ronny Rowland. “It is definitely feasible for us. But there won’t be a quick recoup of the money.”
He estimated that it could take 20 or more years for the power company to earn enough from internet sales to pay for that infrastructure. If they do move forward, Rowland feels they could start connecting houses within a couple of years and have lines run across all of their service area in around six years.
While private companies might be turned off by the high costs on the front end and the long time it takes to get a return, it could be appealing to the cooperative. The power association board members live in rural areas and recognize the need for this service, even if it is not the association’s core business.
“This is not something we were pushing, but we will do everything we can to make sure our customers are served and have a certain quality of life,” Turner said.
Four-County has asked for a second feasibility study to get a second opinion and help make the decision-making process easier.
As Gov. Phil Bryant signed the law on Wednesday that gave electrical cooperates the authority to offer high-speed internet, officials said the first of the power providers could begin offering internet service by the end of this year or early next year. But because of the nature of the problem, the most rural residents will likely have to wait the longest.
“The people who need it the worst – those who live the farthest out – will be the last to get it,” Turner said. “It’s just like when we brought electricity in 1938. We started with a core area around Starkville and slowly worked our way out. The most remote areas were the last to get electricity.”
According to Michael Callahan, CEO of the Electric Cooperatives of Mississippi, there is around $600 million in loans and grants the U.S. Department of Agriculture will award this year to expand service.
The law allows cooperatives to invest money, loan money or guarantee loans to affiliates, but says they can’t use revenue from electric sales to subsidize broadband.