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Rural Phone Co-Op Shows Successful Economic Growth Through Broadband

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Tuesday, December 31, 2019   

AUGUSTA, Maine -- A telephone cooperative in two depressed Kentucky counties may have found a good path to economic development in poor rural areas -- through super-fast broadband.

The Peoples Rural Telephone Cooperative serves 18,000 people in Jackson and Owsley counties in Kentucky - one of the poorest areas in the country due to the collapse of coal mining. PRTC CEO Keith Gabbard said during the Great Recession, they moved to connect every home and business to the internet with gigabit-capable fiber.

He said it was very expensive, but it made possible a boom in tech support work with companies such as U-Haul and Apple.

"We've seen over 1,000 jobs created; work-from-home jobs," Gabbard said. "They have benefits. Some of these people are working for Apple, they're doing tech support for Apple. And all of them are paying more than a lot of the minimum-wage things that are available around here."

Gabbard said it cost $50 million, an average of $5,000 a mile, because it's especially expensive to wire the last mile to buildings. But he called it the best investment they've ever made. Along with the general improvement in the economy, broadband helped cut the unemployment rate by two-thirds -- from 16% at its peak to 5% now.

Like much of rural Maine, eastern Kentucky has suffered in recent years. Not only has it been hit by changes in the energy markets, it's also faced problems such as the opioid crisis.

Gabbard said areas with broadband tend to have better school test scores. And he said through telemedicine, they've been able to help local veterans skip the three-hour round trip to the nearest Veteran's Administration clinic in Lexington.

"We worked out a partnership with our local public library and we equipped a room," he said. "And now the veterans can actually have doctor appointments and go on there and talk to them via the computer."

About one-third of the money came from grants, 60% from loans and 10% from capital the co-op had saved, Gabbard said. He added that, with some help from their successful business as the local cell-service provider, the broadband venture has been able to meet its debt payments.


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