Cooperative FTTH looks like a low cost option for a lucky few in California

by Steve Blum • , , , ,

Southwestern Riverside County just got in line for a fiber to the home (FTTH) upgrade. The Anza Electric Cooperative submitted an application for $2.8 million from the California Advanced Services Fund (CASF) to run fiber alongside its existing electric system…

Connect Anza will deploy a fiber optic cable on existing poles and rights of way and establish a network of sufficient capacity to establish high speed, quality internet service for Anza Electric Cooperatives existing service territory covering over 500 square miles, located wholly within western Riverside County. The area encompasses the communities of Anza, Aguanga, Mountain Center, Pinyon Pines, and Garner Valley.

Rural electric cooperatives are rare in California (there are three) but are common elsewhere in the U.S., particularly in the the midwest and south. It’s a business model developed during the Franklin Roosevelt administration and has extended to telecommunications cooperatives, which are often, but not always, built around electric co-ops.

That approach has a couple of advantages. First, rural cooperatives are the preferred business model for the federal Rural Utilities Service, the arm of the agriculture department that handles broadband grants and loans. That institutional bias is a major reason California has been shut out of federal broadband grants in recent years. But that’s not a problem for Anza, or for the other two – Plumas-Sierra (which is also applying for CASF money) and Surprise Valley in Modoc County.

Second, if you already own the poles, conduit and other outside plant that goes along with an electric utility, then your FTTH construction costs go way down, particularly in rural areas. Anza’s total project cost is pegged at $4.7 million. If you assume that it’ll reach all 3,900 premises currently served by the cooperative – it’s not entirely clear from the publicly released information that’s the case, but let’s assume so for the moment – then the total cost is about $1,200 per premise and the subsidised portion of that is about $700. That’s a tenth of the typical CASF subsidy request for FTTH projects, and a hundredth – a penny on the dollar – of the high end of the range.