Natchez Trace Electric Power Association’s board of directors will decide if it will offer broadband service based upon customer survey results, according to General Manager Shawn Edmondson.
NTEPA mailed out the broadband surveys to its nearly 12,000 power customers two weeks ago.
“We’ll bring the survey results to the board and they’ll have to decide whether or not to go forward,” Edmondson told the Eupora Rotary Club on Feb. 18. “We’d love to offer this as a service to our membership.”
“We want to hear what you have to say,” he said of the surveys, which must be mailed in to the Houston headquarters by March 6. The results will be announced at the membership’s annual meeting at 7 p.m. April 27 at Calhoun City High School.
“If we proceed further, we would proceed with a market analysis and make a determination of where we’d start with the service,” Edmondson said.
The Mississippi Broadband Enabling Act, enacted in January 2019, allows the state’s electric power associations to also provide broadband internet service. The board and management of NTEPA have actively been looking at investing in the infrastructure to deliver high-speed internet and reliable telephone service to all of the association’s members since the fall of 2018, according to information on the survey form.
FCC subsidies
The investment would require the association to borrow about $34 million to build a fiber communication system from scratch, Edmondson said. The survey states the association plans to apply for grants next year in hopes of offsetting this number, “but there is no guarantee that we will receive any financial aid.”
The Federal Communications Commission has created a $20 billion program to subsidize the construction of broadband networks in unserved parts of the United States over the next decade. Electric cooperatives, phone companies, satellite operators and other telecom providers will compete for the funding. The subsidies will be allocated from the agency’s Universal Service Fund, which is collected from fees on consumers’ monthly phone bills.
Edmondson said the amount to be allocated would be based upon census blocks. NTEPA, on its Facebook page, stated, “A few of the FCC’s census blocks within our (seven-county) service territory will qualify for this money. Unfortunately, the maps that the FCC will use are very inaccurate. Many of the members that need this service sit in areas where the FCC believes adequate service already exists.”
The most basic internet package NTEPA would deliver to its membership would be at a speed of about 200 megabytes per second, according to the survey. NTEPA said a large percentage of its membership basis only has access to five-15 mbps, “which falls well short of meeting the (FCC’s) definition of broadband.”
The FCC’S two-phase reverse auction process for the funds starts in October. Edmondson said any eligible company can bid for these auction blocks “and bid you down.”
NTEPA contracted with outside companies to conduct two feasibility studies, both of which were comparable, according to Edmondson. Based upon the studies, he said the association’s broadband subsidiary, if formed, would have to have at least 6,000 internet subscribers to be economically feasible, with a recommended charge of $60 a month for residential service. NTEPA wants the subsidiary to stand on its own and not affect electric rates, he told Rotarians.
Risk of debt
The survey states if NTEPA gets enough internet subscribers, then its broadband subsidiary will be able to cover the cost of the debt that the association takes on to provide the service.
“If the subsidiary does not get enough internet subscribers, then raising electric rates will be our only option for covering the cost of this debt,” NTEPA asserted. “If electric rates are increased, they will increase for everyone and not just the ones who voted for NTEPA to offer internet service.”
The final yes-or-no question on the survey asks, “Would you be comfortable with a potential rate adjustment on your electric bill to cover any difference between what the broadband entity has generated in revenue and what the association must have to cover the cost of this loan?”
Commenting on that question in a Facebook post, Northern District Public Service Commissioner Brandon Presley wrote, “This question is very misleading. While it is true that any broadband system that failed would have to be paid for, every cooperative is doing these projects in phases to guard against this risk.”
“NTEPA cannot raise your electric rate to pay for the broadband service. If the project fails, then their debt would have to be repaid but it cannot affect what you pay for electricity. The cooperative could string out the debt as a line item but this assumes that the whole project fails, no one buys it and they don’t sign up enough customers near what they need.”
As of Feb. 21, according to Presley, nine electric cooperatives in the Northern District have chosen to provide broadband. NTEPA is among the seven still awaiting a decision.
NTEPA board members representing Webster and Clay counties are Terry Wills of Eupora (president), Joe Hays of Walthall (secretary) and Robbie Harrington of Mantee.
Edmondson was accompanied at the Rotary meeting by Craig McCluskey, Eupora district manager. The Eupora office is working on an alternate electric power line route to the water wells west of Eupora, Edmondson noted. USDA Rural Development announced last June that NTEPA had received a loan of $8.56 million to be used to upgrade distribution and headquarters facilities.
