Some electric cooperatives in Mississippi have decided to push ahead with developing broadband Internet service for their customers, but Magnolia Electric Power isn’t likely to join that movement for the foreseeable future.
Magnolia Electric faces significant obstacles that General Manager Darrell Smith wrote about earlier this year for the Electric Cooperatives of Mississippi magazine, Today in Mississippi. MEP spokeswoman Lucy Shell said those conditions have not changed significantly during the course of the year.
“We are below the threshold of being able to make a broadband financial model that would work and pay for itself,” Smith wrote.
One problem is MEP’s service area, which has a customer density of just 6.6 per square mile. On top of that, the cooperative’s survey of its membership revealed a low demand for the service.
Those together, combined with an estimated $100 million price tag for the infrastructure to offer broadband, are keeping MEP from pursuing that business extension.
The cost is especially problematic because, though the electric distribution and broadband services have to be separate, the bill authorizing cooperatives to offer broadband service “does allow the electric distribution company to loan money to the broadband subsidiary.
“If the broadband subsidiary should fail to generate enough revenue to pay its note, the electric distributive membership would be responsible for paying off the loan for the broadband program,” Smith wrote.
While Magnolia Electric is not pursuing broadband now, Smith said the cooperative is continuing to study the prospect and open to seeking grants to defray expenses, or to partnering with outside companies to bring broadband service to all or parts of MEP’s service area.
“Any future decisions on Magnolia Electric Power going into the broadband business will be after much careful study, deliberate fact finding and the formulation of a business plan that would be financially successful and garner the support of the full membership,” Smith said.
Magnolia Electric is not alone in moving slowly, if at all, on broadband.
Media reports from around the state show caution about moving forward by the Southwest, Southern Pine and 4-County electric cooperatives.
All of those, like Magnolia, have concerns about the cost of infrastructure for sparse populations.
All of the cooperatives that have voted to move forward with broadband initiatives are in North Mississippi, where Northern District Public Service Commissioner Brandon Presley has championed broadband expansion.
Six cooperatives have decided to establish broadband service, including:
• Alcorn County, based in Corinth.
• North East Mississippi, Oxford.
• Prentiss County, Booneville.
• Tallahatchie Valley, Batesville.
• Tippah, Ripley.
• Tombigbee, Tupelo.