Rural Internet, the modern REA
This increases the chances that a temporary spending resolution will be needed to maintain government funding when fiscal 2022 begins on October 1.
Washington Insider: Rural Internet, Modern REA
This week, the House agriculture committee will mark out the Broadband Internet Connections for Rural America Act (HR 4374), a measure to bring the Internet to rural areas of the country.
âRural broadband is essential for the growth and development of our rural communities, and it is essential that we act to finally bridge the digital divide that has kept so many of our rural communities from reaching their full potential, which is why the House of Commons Agriculture Committee is leading the charge in this effort, âsaid Chairman David Scott, D-Ga. “This bill will allocate $ 50 billion for critical infrastructure for rural broadband and also includes resources to ensure that this funding is used in a timely manner and accessible to rural communities with limited resources.”
Indeed, rural internet systems have clearly been tested during the pandemic with students taking their classes from home and many working remotely from their homes, using internet connections to achieve this.
But many have also discovered the limits of broadband Internet access in rural America.
While the effort is likely to easily wipe out the House agriculture committee and potentially the entire House, it would appear that the hasty effort to pass the measure – the markup was only announced Monday afternoon for Wednesday’s session – could be the one that lawmakers are interested in. the bipartite infrastructure package as a potential vehicle for setting the measure in motion.
What some suggest is that a Rural Electrification Administration (REA) effort is what needs to take place. And the concept of REA was born from the rise of electricity in urban areas. It was estimated that in 1935, when the REA was formed, 90% of farms still relied on kerosene lanterns and candles for lighting and wood stoves for heating their homes. And they had no electricity to provide them with running water.
While there were several systems that used wind power to collect and store electricity in large glass batteries in what many referred to as âDelco Systems,â these were the exception rather than the norm and were. found in the farms of those who were doing better.
In the late 1920s and before stepping down in 1933, President Herbert Hoover agreed that electrification of rural America was important, but he wanted to leave it to the private sector to make it happen. Then came the Great Depression, and many private efforts withdrew when the economy collapsed.
Enter the REA which was established in 1935. The cost of delivering electricity to rural areas was still not cheap when the REA was launched, estimated in 1935 at around $ 2,000 per mile. By the time we reached 1939, the cost had fallen to around $ 600 per mile. Put in today’s dollars, the cost has dropped from $ 38,740 per mile to $ 11,622 per mile.
And the concept of REA was developed by Morris Llewellyn Cooke, a mechanical engineer who had proposed the plan to distribute electricity to New York and Pennsylvania. When REA was launched, President Franklin Roosevelt chose Cooke as his first director. By 1937, some 1.5 million farms were electrified by 350 rural cooperatives in 45 of the 48 states. Almost half of all farms had electricity in 1942, and almost all farms were electrified by 1950.
However, there were still a handful of those who did not trust the power supply going through a wire in their home and they did not choose to install it. These farms were rare, but they were always a factor in the situation.
Congress started the effort with $ 410 million, the equivalent of $ 7.9 billion in today’s dollars. The REA was essentially a government financing project that subsidized loans to private companies, government agencies or cooperatives for the construction of electricity supply infrastructure. The repayment terms were over 25 years and the interest rate was eventually set at 2% after 1944.
Money loaned by REA has also been largely repaid, with a default rate of less than 1%. Telephone service was added to their effort. REA and its successor, the Rural Utilities Service (RUS), arranged nearly $ 57 billion in low-interest, federally guaranteed loans for the development of electric and telephone co-ops.
And now the focus is on the Internet. Indeed, agriculture has already seen what a government-subsidized system can do to provide what is an essential service to rural America.
It is no coincidence that RUS is again sought after for its efforts to bring rural America on par with the country’s urban areas.
So we’ll see. The pandemic has revealed what many already know, few have been willing to push broadband internet into rural areas and efforts like those under consideration could have great potential provided the end result does not produce a system that really brings that service to areas that need it, so the situation needs to be watched closely as it gets closer to reality, Washington Insider believes.
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