United Fiber’s path to bringing broadband to northwest Missouri’s rural communities

United Fiber, a subsidiary of United Electric Cooperative, has deployed broadband to more than 50 communities across northwest Missouri, including some of the state’s most rural areas.

And that is only the beginning, United Fiber’s general manager Darren Farnan said.

The electric co-op, among the most rural in the state, has since 2010 connected more than 50 communities across the region including a current project where it is expected to provide broadband service to the entire city of St. Joseph, Missouri which has a population of roughly 80,000 people.

“While it might seem like an overnight success, it isn’t,” Farnan said.  “It happened by taking risks, showing our success and continuing to grow at each opportunity.”

Since the early 2000s, the Maryville, Missouri-based electric co-op provided satellite internet service but was aware that customers would inevitably outgrow the service. This led to applying and being awarded $21 million in funding from the American Recovery and Reinvestment Act of 2009 for all 14 of its substations, or 5000 passes in 2010.

“Almost 90% did not have access, according to our survey at that time, to [4 Mbps download by 1 Mbps upload] which was the definition of broadband at that time,” Farnan said.

During the building process, United Fiber began generating interest from nearby communities, such as Cameron and King City. King City’s population was around 5,000 while nearby Cameron boasted 10,000 residents and owned their own poles making the process even cheaper.

Meanwhile, Mosaic Life Care, a major healthcare provider in nearby St. Joseph, Missouri, reached out requesting that United Fiber provide broadband service to 13 of its buildings. United Fiber, while connecting Mosaic, eventually connected 100 additional businesses on the same build.

“We probably weren’t ready for all of that, in hindsight, but you have to strike while the iron is hot,” Farnan said. “We started building many of these communities by just building through Main Street in order to connect critical businesses like banks and community anchor institutions, such as schools and health centers, since we didn’t have enough financial backing at the time.”

Starting early has paid dividends for United Fiber which was awarded $61 million from federal and state funding to deploy broadband to some of Missouri’s most rural communities.

An early start and commitment to building smaller communities first not only impressed grantors, but the co-op’s lenders who were initially hesitant to fund their efforts.

“Our loans initially would start off at between $3-5 million dollars per build, which isn’t as much as it sounds when you’re factoring building two and a half meters per mile, but we’d start building slowly and show results over a period of roughly three years.”

Similar to other co-ops considering expanding into broadband, United Fiber’s earlier risks were deciding to provide broadband service to non-member areas and navigating reporting and compliance.

“There’s plenty of new challenges for co-ops to navigate, but on the bright side, there’s also more than 200 co-ops who have successfully done this providing plenty of models to look after,” Farnan said. “Davis-Bacon compliance and managing your asset base are some of the big risks and it’s important to remember that we’re in a business known to avoid risk. There’s also, on the other hand, so many resources out there, including Broadband USA and Ready, to overcome this.”

United Fiber, meanwhile, decided to provide broadband service outside of its member area by comparing its strengths to competitors and tackling smaller projects with plans to grow over time.

“It takes some creativity to say that we can provide a service that’s much better than what’s out there and build some areas outside our member footprint that can actually benefit our members,” Farnan said. “It’s not too different from the electric utility business other than it being a bit more competitive but it also brings more flexibility as there’s areas that we couldn’t serve electrically but are now able to provide broadband service to.”

The risks seem to have paid off, as well. More than 80% of United Fiber’s broadband customers are not electric customers with the company anticipating more than 30,000 subscribers in St. Joseph, Missouri upon completion of the build.