Rural SW Arkansas Telecom Receives $25 million USDA Loan For Broadband

The U.S. Department of Agriculture has awarded a $25 million loan to a Texarkana telecom to upgrade a fiber network in Southwest Arkansas as part of President Obama’s initiative to improve broadband service in rural areas across the country.

Agriculture Secretary Tom Vilsack announced Monday that Texarkana-based Southwest Arkansas Telephone Cooperative will receive the $25 million loan to upgrade portions of a fiber network and convert the remaining portions of a copper system to fiber to improve service to its subscribers.

“These telecommunications providers will deliver enhanced broadband services to help attract and grow businesses, as well as to improve educational and health care services,” Vilsack said in a news release. “Time and again, studies show that affordable broadband offers increased economic opportunities in rural areas, which is why Rural Development is committed to delivering high-speed internet service to these communities.”

Officials at Southwest Arkansas Telephone, or SWAT, were not immediately available for comment for this story. According to the company’s last annual report filed with the Arkansas Public Service Commission in March 2014, SWAT had annual revenues of nearly $4.7 million in 2013.

Ode Smith of Texarkana is listed as chairman and president of the rural telecom cooperative that provides service to nearly 4,200 access lines, PSC documents show. The Southwest Arkansas communities served by SWAT include Doddridge, Emerson, Fouke, Fulton, Garland City, Trigg and Washington in Arkansas and Bloomburg in Texas.

The company’s website says SWAT has served rural communities in Arkansas and Texas since 1951, currently offering bundled IP, or Internet Protocol service that includes phone, high speed Internet and TV.

In October, the USDA awarded a similar $24 million loan to Danville-based ArkWest Communications to build a “fiber-to-home” network to provide voice, broadband and Internet TV service to nearly 4,700 rural customers in the Yell County area.

At the time, ArkWest was one of 25 projects to receive a portion of $190.5 million in grants and loans to provide rural telecom and broadband infrastructure improvements in rural areas across the U.S.

Founded in 1939, ArkWest bills itself as “community-minded rural telecom provider” that offers everything from basic local and long distance telephone service to high speed Internet and digital television service. In 2006, ArkWest garnered quite a bit of attention when it announced that it would be the first telecommunications provider in Arkansas to offer IPTV, or Internet Protocol TV, in most of Yell County and parts of Perry and Scott counties.

IPTV is the process of taking traditional cable and satellite TV content and streaming it over a data network to any device with an Internet connection. Telecom giants AT&T and Centurylink currently offer IP-based TV options through their respective U-verse and Prism TV services. Verizon FiOS also recently rolled out a limited IPTV service.

USDA LOANS PART OF OBAMA RURAL BROADBAND INITIATIVE
According to the USDA, Monday’s announcement included a total of $35 million in broadband infrastructure loans that will fund three rural telecommunications infrastructure projects in rural Arkansas, Iowa and New Mexico. In 2014, the Rural Utilities Service awarded $228 million to improve telecommunications service for 83,000 rural customers, the USDA said.

Besides the $25 million loan to SWAT, Mescalero Apache Telecom will receive a $5.4 million loan to upgrade portions of its system and provide fiber service to approximately 50% of its New Mexico territory. This is the first loan that USDA’s Rural Utilities Service (RUS) has made under the Substantially Underserved Trust Area provisions of the 2008 Farm Bill. RUS has held a series of outreach workshops around the country in the past year to help tribal communities access RUS broadband programs, officials said.

Iowa’s Minburn Communications received a $4.7 million loan to upgrade its copper network to fiber, and to provide subscribers with voice, broadband and video service.

The USDA announcement coincides with the news that President Obama signed a new presidential memorandum to create the Broadband Opportunity Council, co-chaired by Secretary Vilsack and Commerce Secretary Penny Pritzker.

The Council includes over 25 different government agencies and components, all united around clear policy objectives to:

· Engage with industry and other stakeholders to understand ways the government can better support the needs of communities seeking broadband investment;
· Identify regulatory barriers unduly impeding broadband deployment or competition;
· Survey and report back on existing programs that currently support or could be modified to support broadband competition, deployment or adoption; and
· Take all necessary actions to remove these barriers and re-align existing programs to increase broadband competition, deployment, and adoption.

The Council will report back to the President, within 150 days, with the steps each agency will take to advance these goals, including specific regulatory actions or budget proposals.