How Fiber, Electricity and Telecommunications Companies can Work Together to Bridge the Digital Divide (Part 2)

As we shared in our previous blog post, our country is currently facing a digital divide. In rural communities, 35 percent of Americans lack access to high-speed broadband internet.

In this series of blog posts, we are exploring a solution to Indiana’s digital divide which involves fiber networks, rural electric co-ops and telephone companies working together. For this installment, we’ll introduce the key players.

Incumbent Local Exchange Carriers (ILECs)

An ILEC is a local telephone company that held the regional monopoly on landline service before the market was opened to competitive local exchange carriers (CLECs).

If you’re familiar with the term ILEC, then one may already provide you with internet. These legacy telephone companies are made up of IFN’s member/owners and allow their customers to connect directly to the internet via phone lines – and some high speed fiber.

Though not necessarily through a statute or decree, ILECs have traditionally not experienced a lot of competition because they have chosen to build in sparsely populated areas. Urban areas tend to have multiple service providers, while rural areas often do not.

Examples of Indiana ILECs (that are also IFN member/owners) include Citizens Telephone, New Lisbon Telephone and Washington County Rural Telephone Cooperative. Some Indiana ILECs are commercial, for-profit businesses, and some are member-owned cooperatives, which means they are non-profit.

Rural Electric Membership Corporations (REMCs)

REMCs, also known as rural electric membership cooperatives, provide electricity to rural communities and homesteads throughout the country. REMCs were created in the 1930s as part of the Rural Electrification Act and exist today under the umbrella of electric generation and transmission (G&T) cooperatives.

By statute, REMCs were created to act as monopolies because of policy decisions to ensure there were not multiple power lines running down the same street and connecting to multiple different power plants. Therefore, there is no competition among REMCs today because electric company service territories are assigned geographically. Electricity customers use the energy company in their area. For instance, if you were to move from Indianapolis to Carmel, your service provider would switch from Indianapolis Power & Light to Duke Energy.

Wabash Valley Power Association and Hoosier Energy Rural Electric Cooperative are G&T electric cooperatives providing wholesale power and services to member distribution cooperatives throughout Indiana. Under their umbrellas, they service localized electric distribution cooperatives. Together, they serve the majority of the rural electric distribution cooperatives currently providing all rural Hoosiers with electricity.

Now that we’ve introduced a couple of the key players, we’ll explore a solution to Indiana’s digital divide which involves IFN working together with rural electric wholesale G&Ts, REMCs and ILECs to create a win-win-win solution for all of our customers across Indiana.

Stay tuned for Part 3 when we will discuss our solution for advancing fiber connectivity across the state.