We know access to reliable, high-speed Internet is important to our members, so we’ve taken a closer look at how we can support increased access to broadband in the most cost-effective ways. We wanted to share the current situation, what we’re doing and why, and what you can expect.
THE BIG PICTURE: BROADBAND IN RURAL COLORADO
According to the Federal Communications Commission (FCC), broadband is a type of high-speed Internet access that has download speeds of at least 25 mega-bits per second (mbps) and upload speeds of 3 mbps. It can be a driver of economic opportunity and development, and is a necessity for schools, hospitals, and businesses to operate and function effectively.
According to the Colorado Broadband Office, 77 percent of rural households in Colorado have access to broadband services and there’s a need for greater access to reliable, high-speed Internet in many areas. Some rural electric cooperatives and municipal utilities in Colorado are in good position to utilize new technologies and add a broadband service offering, while others have decided against pursuing broadband projects because of the costs and financial risks.
Fortunately, over 90 percent of households in PVREA’s service territory have high-speed Internet today – and over 50 percent already have broadband. Nevertheless, we want to help address this gap in high-speed Internet and broadband service – an identified need from some of our members and community leaders. PVREA has researched how we can be a part of the solution to provide that need.
BROADBAND & PVREA
We tapped an industry-leading consulting firm to conduct a feasibility study that incorporates member feedback and evaluation of our business models.
The research shows if PVREA provided a broadband service directly to our residential and commercial members it would require a $120 million capital investment in easements, labor, construction, equipment, legal, and other related costs.
Much of this cost is due to our service territory’s rugged terrain and the number of people we serve per mile of line. PVREA only serves 10 members per mile of electric distribution line. Meanwhile, municipal utilities serving more urban environments, like our neighbors in Fort Collins, average 48 customers per mile. Because of these factors, the research shows that on a year-to-year basis, there would always be more money going out than coming in.
This “last mile” model, where PVREA would be a broadband provider and having rates competitive with other service providers, simply never cash flows. Starting a PVREA broadband business could likely result in future electric rate increases and conflict with our mission to keep rates affordable. With these results, PVREA leadership and the Board of Directors has developed a plan to help enable broadband service in a cost-effective manner by looking to build the “middle mile”.
PVREA plans to build a portion of the broadband network called “the middle mile” - the backbone of the broadband network. This will enable us to attract and open the door for third-party broadband providers to come into our area and provide internet service.
We’re already constructing fiber optic cable to our substations to improve communication and better manage our electric grid. To help bring broadband to underserved areas, we plan to include accommodations in our fiber construction plan that builds the middle mile backbone - without significantly impacting our finances or rates.
Our plan is to lease the middle mile to third-parties that have the expertise and personnel we lack. Through this approach, PVREA can utilize our resources and infrastructure to help enable broadband service in our region in a cost-effective manner. It’s just one of the many ways we’re looking out for you, our member.
Do you have questions or want to learn more? Contact us at email@example.com or 1-800-432-1012.