Planning Leads the Way to Broadband Success
The main takeaway of the most recent “Rural Electric Cooperative Broadband Benchmarking Report” is that planning and research are the best way to overcome pitfalls that could impede a broadband project. At the same time, the report should give rural electric cooperatives confidence that there is high demand for broadband and that it has been a successful investment for many rural electrics.
“My advice would be methodical. Do a very thorough feasibility study, ask all of the questions, make sure you have a very dynamic financial model,” said Rudy Tober, NRTC’s chief marketing officer, Broadband Solutions, during a podcast posted today by Pioneer Utility Resources. “I think our report has proven that these projects are successful. There is a real track record.”
NRTC and NRECA jointly produced the report and released it in late 2022. It is an update of a report NRTC released in 2020, which reviews cooperatives’ experience with broadband network construction and broadband service operations. It outlines the steps they often took to complete successful projects. A total of 88 cooperatives participated in compiling the 2022 report.
Tober and co-panelist Paul Breakman, VP and attorney for NRECA, repeatedly returned to the need for thorough planning during the 45-minute podcast. For example, the rising cost of construction materials and the frequent shortage of available workforce are ongoing concerns that affect costs for rural cooperatives.
“From the data in the report, we saw that remains true,” Breakman said. “And the deployment costs are increasing year over year. Those are real numbers … When NRTC does a feasibility report for the membership, those kind of estimates are built into those studies and the revenue estimates.” When you have a grasp for direction of costs, it is easier to know when to order supplies and avoid project delays.
“I think, that you do a very thorough feasibility study, and then you update that model on a regular basis because prices do change,” Tober added.
Planning also helps cooperatives develop a business model. Some rural electrics are in a good position to build and operate a broadband service on their own. Others will find creative ways to get outside help.
“Members that go into the broadband business use all kinds of mixed staffing models, and there’s no right way to do it,” Breakman said. “We saw from the report that outsourcing and partnering are hugely important. When you talk about the business of broadband versus the traditional electric supply business, which our members have done for over 75 years, it’s a game changer.”
The NRTC/NRECA report continues to gain industry attention as a useful tool for cooperatives planning broadband investments. They will have another opportunity to hear about the report on March 6 when NRTC’s Keith Sinclair leads a TechAdvantage conference session, “Real World Broadband Results: Findings From a Comprehensive Electric Cooperative Broadband Benchmarking Study.” The session begins at 11 a.m. Central Time at the Music City Center in Nashville.