Growing your community means growing your business

Rural Telecommunications, July-August, 2008 by Masha Zager

From the earliest days of telecommunications, rural telephone companies have actively promoted the economic well-being of the communities they serve. Their reasons are the same today as they were in the 1890s: Most rural telcos were founded and operated by local residents precisely for the purpose of bringing economic opportunity to their communities.

Because they continue to provide essential services needed by all households and businesses, rural telcos are intimately involved in business location decisions within their service areas and are aware of what's most needed in their communities. Their own health and viability is closely linked to the health and viability of the communities they serve. Out-migration means fewer customers and, usually, higher per-subscriber costs, while economic development translates into greater demand for services.

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Staffing Needs

In spite of their shared commitment to development, telcos vary greatly in their approach. This isn't surprising. After all, different communities have different needs, and the companies themselves have widely divergent resources and philosophies. There's no "one-size-fits-all" recipe for economic development.

Some larger telcos are able to maintain economic development offices with dedicated staff. For example, Mid-Rivers Communications (Circle, Mont.), a company with 25,000 access lines and 175 employees, operates a four-person rural development office consisting of a director, a grant writer and two video production coordinators. The office not only subscribes to grant databases that local groups can use, but also maintains an informational Web site, lobbies for legislative support for community projects and produces videos of community events.

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More typical is the experience of Winnebago Cooperative Telecom Association (WCTA) (Lake Mills, Iowa), which is also deeply committed to community development but does not devote fulltime staff to this task. General Manager Terry Wegener explained, "We are a cooperative, so we are a community service provider. It's important to work with our communities to help them grow, and it has an impact on our operations as well." Wegener said that economic development is "just part of what the managers do," and that the company hires additional resources, such as grant writers, on a temporary basis when needed for a particular project.

Outside Help

Whether or not they maintain dedicated full-time staff, telcos involved in local development generally collaborate with other organizations, finding that they are more effective when they leverage other groups' efforts. For example, Wegener said, "Two of our communities have their own economic development person and so do two of the counties, so if they have a project that they need our help with, they call us, and we're there with personnel, help letters and grant applications. They take the lead role, and we're there as a partner ... helping them find solutions when a project comes up." WCTA is a member of local economic development councils in its service area, and several of its employees serve on their boards.

Jim Dahmen, general manager of Columbus Telephone Co. in Columbus, Kan., is a former economic development administrator active in his town's economic development corporation. He chairs a community improvement group and recently joined the local Workforce Investment Board.

A new approach to collaboration is being demonstrated by Iowa Network Services (INS) (West Des Moines, Iowa), a fiber-optic backbone owner and service provider owned by 147 independent Iowa telephone companies. INS recently launched an ambitious initiative called "Ripple Effect," piggybacking on a program run by the Iowa Area Development Group (IADG), which handles economic development for Iowa's rural electric companies. Sue Cosner, vice president for community initiatives at IADG and also responsible for Ripple Effect, explained, "Rather than reinvent the wheel, because there were so many synergies, IADG could do the work for telephone companies in much the same manner."

Ripple Effect offers both financial and technical assistance to INS members to help them develop the communities they serve. INS has put $1 million on the table as seed money for economic development loans and grants. (Individual telcos are expected to match INS monies with their own funds and then use both to leverage public or private investment). And Cosner's staff, which includes specialists in marketing, financing, grant writing and the complex requirements and priorities of the various assistance programs, gives small telcos ready access to expertise without having to hire dedicated employees.

The member telcos, in turn, take the lead in identifying the projects that are most needed--and most likely to succeed--in their communities. "We don't know all of the communities," Cosner said. "We have to defer to the knowledge that the community partners bring. ...We're there to assist them."

Ripple Effect has just approved its first two projects--matching grants for contributions made by Grand River Mutual Telephone (Princeton, Mo., and serving southwest Iowa) to the Decatur County Development Corp. to support its job attraction program and by Farmers Mutual Telephone (Harlan, Iowa) to the Stanton Area Industrial Foundation to conduct a feasibility study for a multipurpose community center. The community center, which also leveraged other local funds, would be a "drawing card or asset for business and industry wanting to locate there," Cosner said. Both projects will be required to submit evidence of progress to the Ripple Effect committee.