Grants help close TN’s digital divide


Seven years ago, the going internet speed in rural Scott County was 1.5 megabits per second — near the bottom rung for most large providers — and the slower speed applied to businesses, homes and medical clinics.

With residents spread out, about three homes per mile, upgrades were cost-prohibitive. But with an unemployment rate hovering above 18 percent and another 400 jobs lost in a span of months, the need was significant.

“We needed the infrastructure to make it attractive to potential industries to move in,” Highland Telephone Cooperative CEO and General Manager Mark Patterson said. “How do you tell a rural area that it’s not cost effective, so you are just left on the other side of the digital divide?”

Scott County, located 60 miles northwest of Knoxville, has a population of 22,000 and is classified by the state as economically distressed, yet its local cooperative offers among the fastest internet services in the state and nation. The recent upgrades that include 2,700 miles of fiber installation stem from a $67 million federal grant awarded to Highland Telephone Cooperative in 2010, part of the 2009 American Recovery and Reinvestment Act. As Tennessee officials grapple with how to improve broadband access in rural areas as a means for economic improvement, Highland and other companies in rural Tennessee are demonstrating how grant dollars can be leveraged to spur much-needed infrastructure investments. Highland’s broadband initiative grant brought fiber to each of its service areas, which include Scott and Morgan counties in Tennessee and McCreary County in Kentucky. Twenty-five percent of the grant was a loan that will cost the cooperative $17 million over 25 years “We would never have had the funding to do this without the grant,” Patterson said.

With the fiber access, ranging from 15 to 1,000 megabits-per-second, schools can offer distance learning, businesses can easily connect with customers and students can take courses online. The closest interstate is 20 miles away, making reliable connection that much more important to an area seeking to lure or develop business activity, Patterson said.

While cost and internet education remain hurdles for many residents, adoption rates have climbed to 60 percent from 50 percent since the fiber network was installed and nearly all businesses have signed up.

For Brandon Anderson, a radiology technician at a clinic in Scott County, the benefits of fiber internet are greatest when it comes to transferring health care data.

“With big packets of information, doing it from facility to facility was a lot harder, nowhere near as quick as it is today,” Anderson said. “If you were sending big packets of information there was no guarantee the information would make it there or if the information was going to be corrupt when it got there because there was such a long time.”

Demand for improved broadband access in rural parts of Tennessee has grown in recent years as internet connection has become increasingly important for business, health care and education. Both the Tennessee Economic and Community Development office and the Tennessee Advisory Council on Intergovernmental Relations issued studies last year highlighting the internet disparity between rural and urban areas, how that limits economic opportunity in rural areas and explored potential ways to improve connection, including grants, tax adjustments and municipal broadband expansions. According to the TACIR report, more than 423,000 Tennesseans live in census blocks where coverage does not exceed 10 megabits per second.

Gov. Bill Haslam has created a group within his administration to study the issue and legislative solutions could be proposed this year, although he has not disclosed specifics. Cooperative leaders say they are awaiting proposals.

While the focus has been on shortcomings in rural areas, Tennessee Telecommunications Association Executive Director Levoy Knowles said member cooperatives and companies, despite their small size, have been providing advanced solutions in recent years as they transform from telephone companies to internet providers.

“They are building out hundreds of thousands of miles a year,” Knowles said. “Our members are just going fast and furious trying to get fiber to the home as much as possible and to get the speeds in rural areas as high as possible, as quick as possible. ... They are putting every penny of money they’ve got into these networks.”

Knowles said TTA supports state tax credits to prompt further investments in underserved areas as well as funding for the state’s broadband fund. The fund has not received any state dollars, but it could help educate residents about tools the internet provides and subsidize monthly payments to improve adoption rates. Higher adoption rates mean the investment is more feasible for providers, he said.

“There should be an effort to educate the public on how they can utilize broadband, how it can enhance their lives,” Knowles said. “We have areas with 100 percent fiber to the home and you have a 60 percent take rate. Either you can’t afford it or you don’t understand how it can help your personal life.”

AT&T, Frontier Communications and CenturyLink have also accepted federal grants totaling $210 million for rural expansion through the federal Connect America Fund. AT&T has received the largest share, with $26 million annually for six years dedicated to connecting 81,000 homes in Tennessee. Speeds must be at least 10 megabits per second and 32,000 locations will be connected by year end, according to the company.

Source: Knoxville News Sentinel, by Jamie McGee USA Today Network

The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit

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