Quick Fact: Rock Island Communications
Rock Island is OPALCO’s wholly-owned subsidiary. Together they have built a hybrid fiber and LTE wireless network to meet the needs of our rural, remote territory. This robust communication system solves multiple critical needs including improving public safety, controlling OPALCO’s electrical system maintenance and outage costs, and providing a connection to resources and the greater world.
Where We Started
About a decade ago, internet and cellular service across San Juan County were unreliable at best.
Many areas had little to no service at all. In 2013, a major outage took down phone lines, internet, and even 911 connectivity across the county. It was a wake-up call.
The Economic Development Council said: “San Juan County will soon become a digital desert.” They reached out to OPALCO and asked if the co-op could help, by opening our fiber backbone to the community.
At that point, OPALCO explored every option. Large telecom companies were contacted—but none were willing to invest. The geography was too difficult, the population too small, and the economics didn’t work for a for-profit provider.
So the co-op stepped up. Working with the community, OPALCO engineered a locally owned hybrid fiber and wireless communications network—not to get into the telecom business, but to solve a real problem for its members.
Building the Network
Starting in 2015, Rock Island Communications was launched as OPALCO’s broadband subsidiary. Debt financing was used to build the infrastructure and support startup operations, allowing the system to get up and running quickly.
This wasn’t a simple build. Infrastructure had to be installed:
- Across multiple islands
- Through bedrock
- Underwater to connect islands
- In remote areas that are difficult to access and maintain
- And scaled up based on member need and rapidly growing demand
At the same time, partnerships—like the one with T-Mobile—helped expand cellular coverage and create a path to deliver broadband service where none existed.
Community Broadband Benefits
Today, Rock Island is a strong and growing system:
- Secured $31.5 Million in Grants for Broadband Expansion
- Nearly 7,000 subscribers
- More than half of San Juan County households and businesses connected
- Major improvement to first responder communications reliability and reach
- Revenue growth from $1.8 million in 2015 to over $12 million in 2025
- Positive net income in 2023 and 2024
- Enables 95% cellular coverage across San Juan County
The system is fast, reliable, and financially sustainable.
But the work is not finished. Thousands of homes and businesses are still unconnected. The network continues to expand, supported by ongoing investment and recent funding, including a $16.5 million Benefit of the Bargain grant. This will help connect nearly 4,000 additional locations in the coming years.
Rock Island is Financially Sustainable
Rock Island has been net-income positive for the past two years, which shows the model is working. Revenue is reinvested back into the system, not extracted as profit.
Ongoing subscriber revenue supports three things:
- Expanding the reach to more co-op members
- Maintaining the system going forward
- Paying down the debt used to build the network
As with the electric grid, the system continues to grow and evolve to meet community needs.
Reliable Broadband Matters
Reliable broadband is essential to community and economic wellbeing. It supports:
- Emergency services
- Work and local businesses
- Education
- Healthcare and telehealth
- Everyday communication
During the COVID-19 pandemic, Rock Island’s locally owned network allowed the community to stay connected when it mattered most. This is infrastructure—and it’s owned by the people who use it.
The Bottom Line
Rock Island Communications exists because this community chose to invest in itself. It’s not owned by outside investors. It’s not driven by shareholder profit. It’s owned by you. And after more than a decade of work, it stands as proof that a small, rural community can build and sustain the infrastructure it needs—when it decides to do it together.
Some bulleted facts:
- OPALCO gave Rock Island an initial start up loan for $5M and was paid back in 2016.
- OPALCO members contributed $1M to support Rock Island’s initial debt service on the loan through a monthly charge on power bills of ~$3/member over 24 months (2015-2016) for a total of $72 per member. This was a time-limited member investment and the only impact to member bills.
- OPALCO is a 100 percent equity owner of Island Network LLC, doing business as Rock Island Communications. OPALCO maintains ownership of our backbone infrastructure, while Rock Island owns all distribution assets they have installed. Rock Island pays OPALCO for use of the backbone infrastructure at market rates.
- Rock Island has over 6500 subscribers, having achieved cashflow positive and on track to make net profitability in year end 2022. Beginning in 2024, Rock Island is forecast to generate over $9 million annually. Our goal is get as many members as possible connected and to continue to reinvest into Rock Island Communications.
- The expansion of fiber and 38 LTE sites throughout our remote island territory has increased the safety and communication for our crews in the field. It enables greater automation of our electrical system through installation of more devices in the field that can be monitored and controlled remotely.
- Rock Island has received multiple national awards for best internet speed and customer service and the model is so successful that T-Mobile is replicating it across the nation to bring access to broadband in other rural communities.
- Rock Island provides ~40 local living wage jobs in the community – plus local contractors.
- Rock Island’s rapid deployment has given us a leap of progress in preparing our grid for the foreseeable future of balancing more member devices on the system, more local distributed power and positioning OPALCO to serve as a balancing authority as we move toward a more transactive energy world when members will take control of their energy usage, local generation and storage.
- High-speed, two-way communications is the solution to the biggest challenge facing utilities today as they embrace more and more renewables and local distributed power. This project provides us with the perfect platform to meet our current and future needs.
- Another benefit that Rock Island provides OPALCO members is to build OPALCO’s equity to improve our financial position for future capital projects.
- Board Strategic Directive #11: Manage OPALCO’s wholly-owned subsidiary to provide our membership high quality, reliable internet, voice and communications services. Prioritize communications to emergency responders and fiber to the home deployment while continually improving wireless services and maintaining key partnerships.
- Rock Island Governance: Policy 1 states, “The Board shall also oversee any subsidiaries of the Cooperative. Such oversight shall include regular updates from the General Manager, financial performance review, business plan and strategy review, review and approve debt increases, and consistency with overall Strategic Directives.”
Myth Busting
Myth: Rock Island is just another internet provider charging too much.
Fact: Rock Island was created because private companies wouldn’t invest here. It is a member-owned system built to serve the community, not maximize profit.
Myth: Internet should cost $30/month like it does on the mainland.
Fact: Mainland pricing reflects dense populations and existing infrastructure. San Juan County required building a network from scratch for a much smaller number of customers, spread across 20 islands, through a complex network of submarine, buried and aerial fiber and wireless infrastructure.
Myth: The system is already built, so rates should go down now.
Fact: The network is still expanding. Thousands of homes remain unconnected, and ongoing investment is required to maintain and upgrade the system.
Myth: Members paid for the system and are now paying again.
Fact: Members paid $75 to kickstart the system. Everyone benefits from improved broadband and wireless services in the county. Since then, the costs are covered by subscribers and grants.
Myth: Rock Island blocks competition.
Fact: In fact, Rock Island’s competitors use its fiber backbone to deliver their own services — a sign of strength, not exclusion. Partnerships and local investment created connectivity and gigabit capcity where none existed.
Myth: Rock Island is making excessive profits.
Fact: Rock Island pays OPALCO for use of the backbone infrastructure at market rates, which benefits OPALCO members. Rock Island has recently become financially sustainable. Revenue is reinvested into paying debt, expanding service, and maintaining the system. Rock Island benefits the co-op by providing equity to improve our financial position for future capital projects.
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