NCSC Issues First Telecom Loan to Virginia Member

With the consolidation of the Rural Telephone Finance Cooperative (RTFC) into the National Cooperative Services Corporation (NCSC) now complete, NCSC has begun issuing financing to its new broadband/telecommunications utility members. The first telecom member to receive a loan from NCSC was Scott County Telephone Cooperative (SCTC), which provides telephone, broadband and video services to over 19,000 members across more than 500 square miles in southwest Virginia and northwest Tennessee.

NCSC, an affiliate organization of CFC, closed on the acquisition of the loan portfolio of RTFC, another affiliate organization of CFC, on December 1, 2023, and welcomed roughly 200 new telecommunications members to the NCSC ranks, creating a combined $1.5 billion organization to continue meeting the financial needs of the rural telecommunications industry.

The new NCSC loan, along with lines of credit, will allow SCTC to match state and federal grants it received to build fiber broadband infrastructure that will connect underserved areas of northwest Tennessee and southwest Virginia with high-quality broadband service. “NCSC gives us the ability to build the network and meet our financial obligations,” SCTC CEO William Franklin said. “Our NCSC lines of credit will provide interim and match funding for the grants we received to perform the Tennessee and Virginia buildouts, which will enable substantial growth over the next five years.”

SCTC has enjoyed robust success in obtaining grant funding to deliver broadband to rural areas. In 2023, SCTC was awarded a National Telecommunications and Information Administration middle mile grant of $20 million and a $25 million Rural Utilities Service ReConnect grant, both of which will allow SCTC to bring fiber broadband to underserved areas of Virginia and Tennessee.  

Further Growth Is Coming

In addition to these projects, SCTC has additional substantial expansion planned across three states in the years ahead. The cooperative is partnering with its local economic planning district and a major wireless carrier to grow its network in areas no one else wants to serve in five counties in southwestern Virginia. 

SCTC has also partnered with its sister electric cooperative, Powell Valley Electric Cooperative, to serve five counties in east Tennessee and is working on a partnership with another major electrical provider to build out five counties in West Virginia.

“I envision SCTC growing by at least 200 customers a month for the next eight to 10 years,” Franklin said. “We have taken our small 3,400-member cooperative to a total member count of 19,000 customers today. I feel like we are in a position to see substantial growth, and NCSC will play a major role helping us meet our cash-flow needs to build into these unserved/under-served areas.”

Continuing To Choose NCSC

SCTC first began its relationship with RTFC in 2017 when a loan helped the cooperative prefund its employee defined benefit program to reduce the cost to remain in the program and keep SCTC as one of the premier employers in the region.

Since then, SCTC has continued the strong relationship—first with RTFC and now with NCSC. The core reason for that strength is simple. According to Franklin, it’s all down to the deep knowledge NCSC staff have of the rural telecom industry. 

“We have been blessed beyond our imagination with many grant awards for fiber buildouts into unserved areas. But if not for NCSC, it would have been impossible to manage our cash-flow needs because of the millions in interim and match-funding requirements and our small size,” Franklin concluded.