“I really appreciate the vision of the people at DMEA who used a rural electrification model and applied it to bringing world-class broadband to our community…”
— from an article by reporter Joe Vacarelli, “An electric co-op’s bright ideas” in The Daily Sentinel, November 3, 2018.
Like the rural residents of southwest Colorado who created the La Plata Electric Association (LPEA) in 1939, the farmers and coal miners living near Delta, Colorado in 1938 also benefitted from the federal Rural Electrification Act, and began stringing electric power lines across their rural landscape. Their co-op eventually became the Delta-Montrose Electric Association, DMEA — a company owned by the member users, rather than by a group of private investors. As with other rural electric co-ops, profits are returned to the members, or used to expand services to the members.
80 years later, the DMEA continues to expand its services to its 27,000 member-customers, beyond simply providing reasonably priced electricity. A few years ago, DMEA began installing fiber optic cable to its substations, and shortly thereafter, members began asking the co-op to provide high-speed broadband services.
The subsidiary, Elevate Fiber, was launched in 2016, and DMEA now has about 5,000 broadband customers, with another 11,000 pre-registered to receive the service when it reaches their neighborhoods. Internet speeds are reportedly 10 to 100 faster than we typically have available in Archuleta County, and Elevate customers report they are paying less, for better service. Elevate is now offering internet-based telephone service to its customer-owners, and more recently, internet-based TV.
Could the same broadband model work in Archuleta County? Those of us with electricity — which is almost everyone — typically belong to our local electric co-op, LPEA. We typically have LPEA power lines running to our homes. Couldn’t we also have broadband fiber?
I made a call yesterday to LPEA’s CEO, Mike Dreyspring, to find out if our electric co-op has plans to get into the broadband business.
Apparently not. Or rather, not exactly the way DMEA has done it.
Mike Dreyspring:
“I have looked intently at what DMEA is doing. LPEA cannot do that, and here’s why. We formed a telecom entity back in the late 1990s; it was originally called REAnet. REAnet filed for bankruptcy [in 2001] as did a lot of electric-cooperative-owned telecom affiliates.
“Anytime you start a utility infrastructure, you end up putting hundreds of millions of dollars in the ground, or in the air, and you recover it in very small increments… So it’s not uncommon for a company to go into a crisis financially, and actually become insolvent. Because they over-capitalize, initially. And I’ll tell you, that is where DMEA was initially headed.”
REAnet was a joint venture between LPEA and Cortez-based Empire Electric Association, initiated because the main telecom provider in the area — US West, later purchased by CenturyLink — refused to lay fiber optic cable in southwest Colorado. Shortly before REAnet became insolvent, the company was making plans to lay fiber all across Western Colorado.
LPEA reportedly wrote off about $7.5 million in losses during the bankruptcy. The co-op members were presumably not happy about that.
Mike Dreyspring explained that DMEA and Montrose-based Region 10 League for Economic Assistance and Planning came to an agreement to share jointly fiber access, which — Mr. Dreyspring said — saved DMEA from certain financial difficulties.
Here in southwest Colorado, LPEA and Empire spun off their REAnet assets following the bankruptcy, to form a new company: FastTrack Communications. According to their website, FastTrack currently provides 200 Mbps broadband to customers in their service area for $149 a month.
By comparison, Elevate Fiber in Delta-Montrose provides 1,000 Mbps for $79 a month.
Mike Dreyspring:
“LPEA owns 75 percent of FastTrack, and Empire Electric owns the other 25 percent. Our members approved a change to the bylaws [following the REAnet bankruptcy] saying that LPEA cannot go into any other affiliates without a vote of approval by the membership.
“So I’m restricted by our bylaws from getting into any kind of enterprise like what DMEA is doing.
“That doesn’t mean I can’t do fiber infrastructure. In fact, I have an agreement with FastTrack that says — LPEA needs fiber to interconnect substations and other automated facilities, and so I have this agreement with FastTrack that says, if LPEA needs fiber in, say, a substation in Pagosa Springs, and FastTrack is interested in operating broadband in the same area, FastTrack has the right to pay for the fiber and installation cost — and let’s say it’s a 48 fiber bundle — LPEA might get four strands of fiber and FastTrack gets everything else. And then FastTrack can use the rest of the fiber for commercial service. That’s kind of how the agreement works.”
LPEA can provide FastTrack with power pole access for overhead fiber installations, which can greatly reduce the cost of installation, compared to buried fiber.
Overhead fiber is, however, more vulnerable to weather damage. Or so I understand.
According to the service area map on the FastTrack website, the company has a high-speed fiber optic cable network that extends from Albuquerque, NM up to Grand Junction, CO. The towns served include Durango, Bayfield, Ignacio, Cortez, Mancos, Dolores, Aztec, Bloomfield, Farmington, and Montrose.
Pagosa Springs is not included in the service area.