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Aug 20, 2018

Rural Broadband Deployment in South Dakota Ahead of National Averages

Rural South Dakotans have greater access to wired broadband telecommunications services than many of their counterparts across the country, according to a new report released by the South Dakota Dashboard and the South Dakota Telecommunications Association. Better than 76 percent of customers who lived outside of the state’s major metropolitan areas were able to subscribe to broadband speeds of 25 MB download and 3 MB upload or higher as of December 31, 2017, compared to 61 percent nationwide.

The new report, entitled Connecting South Dakota’s Future, also shows that rural telecommunications providers in the state are installing fiber optic lines at an accelerating pace. Over 65 percent of South Dakota Telecommunications Association customers were served by fiber-to-the-premises. In contrast, a nationwide survey in 2016 found that just over 40 percent of rural telecommunications companies’ customers were being served by fiber-to-the-premises.

“This pace of broadband deployment bodes well for rural communities,” says South Dakota Dashboard Project Director and Regional Economist Dr. Jared McEntaffer, “because the internet is rapidly becoming a central marketplace for the exchange of goods and services.”

McEntaffer says capital investments by South Dakota rural telecommunications companies also play a significant role in economic development. Between 2013 and 2017, the state’s rural telecommunications companies invested nearly $392 million in fiber optic lines, switches, equipment, buildings, and other long-term assets and generated nearly $480 million in economic impact.

Just over half of all South Dakotans live in non-metropolitan areas served by the community-based companies that are members of the South Dakota Telecommunications Association. These companies include cooperative, small commercial, municipal, and tribal telecommunications entities who cover 60,159 square miles, or more than three quarters of the state’s geography. Serving remote communities can present serious challenges. While the report estimates that it costs an average of $25.54 per resident to install fiber optic lines in Sioux Falls, the average cost per resident rises to $3,571 in rural South Dakota.

SDTA Executive Director Rich Coit noted that federal loans and grants provided through the U.S. Department of Agriculture’s Rural Utilities Service (RUS) and the federal “Universal Service Fund” (USF) have played a significant part in addressing these cost differentials and in speeding rural broadband deployment in South Dakota. In 2016, telecommunications companies in South Dakota, including non-rural and rural local exchange carriers, received nearly $100 million in USF funds. In 2017, the RUS approved loans to rural telecommunications carriers in South Dakota that totaled $116.7 million, accounting for 17 percent of all dollars allocated nationally under the related RUS programs. “These dollars ensure that rural telecommunications companies are able to serve customers who live in remote or sparsely populated parts of our state,” says Rod Bowar, president of the South Dakota Telecommunications Association and manager and majority owner of the Kennebec Telephone Company.

Connecting South Dakota’s Future: A Report on the Deployment & Impact of Rural Broadband provides data on the state of rural broadband in South Dakota and compares the state to the nation as a whole. It focuses particularly on the services provided by the 18 companies who are members of the South Dakota Telecommunications Association and the broadband backbone provider the SDN Communications. For the full report, see attachment at the bottom of this webpage. 

ABOUT THE SOUTH DAKOTA TELECOMMUNICATIONS ASSOCIATION:The South Dakota Telecommunications Association supports the efforts of its member companies to effectively deliver state-of-the-art communications services to the communities they serve. SDTA also provides educational and training opportunities on the newest and best technologies available to the industry. (www.sdtaonline.com).

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