For many rural electric distribution cooperatives, the question is no longer whether it is feasible for them to enter the broadband business. The real task is making the right choices to ensure a successful launch. NRTC CEO Tim Bryan and a panel of three cooperative managers with broadband service experience laid out the issues yesterday during NRECA’s CEO Close-up Conference in Palm Desert, CA.
The process, Bryan said, begins with an understanding of a local community’s broadband needs. Do local farmers need precision farming techniques and other applications dependent on high-speed data transmission? Do local schools and hospitals lack broadband connections? Is the electric utility ready to install smart grid functions? The cooperative’s broadband service will have to accommodate those needs.
The following feasibility study will then take many other factors into account: a community’s population density; the cost and availability of physical plant and middle-mile fiber networks; the level of existing internet competition. The numbers of homes the network will pass, the cost of labor, the amount local consumers are willing to pay for broadband, and ongoing operations costs after launch are just a few of the other feasibility factors.
Bryan did not have to look any farther than three members of the NRTC Board of Directors to find executives who could describe the feasibility process.
Bob Hance, CEO of Midwest Energy and Communications in Michigan, has an electric service area with many communities with adequate population density and broadband demand to support fiber-to-the-home service. Midwest Energy’s FTTH service has attracted significant national attention.
However, Tim Mergen, CEO of Meeker Electric Cooperative in Minnesota, serves somewhat more remote communities. After studying the market, fiber or any landline technology was not right to serve those households. Satellite technology made more sense. A new generation of satellite service is starting up within weeks as Viasat puts its new Viasat-2 satellite in to commercial operation. Unlike past satellite service, Viasat will be able to deliver FCC-definition broadband speeds (25 Mbps downstream/3 Mbps upstream) with unlimited monthly data plans.
Finally, Dale Short, CEO of Butler Rural Electric Cooperative in Kansas, is planning construction of a hybrid broadband service. After feasibility analysis, Butler found some areas that would certainly support FTTH today. Others however did not have population density to support fiber today, but still had steady demand for broadband. For those areas, the cooperative is going forward with a fixed wireless solution. Butler will be able to provide equivalent broadband quality throughout its service areas using two different last-mile technologies.
Butler REC was among the first to take advantage of the enhanced feasibility study developed by NRTC’s Pulse Broadband. Pulse has added steps and expertise to its studies to take consider all available technologies – fiber, fixed wireless and satellite – to determine the ideal solutions for each unique cooperative situation.
A growing realization within industry and government is that electric cooperatives will have a major role in closing the remaining gaps in rural broadband coverage.
“Both electricity and high-speed connectivity are what economists like myself would call ‘general purpose technologies.’ The defining characteristic of these technologies is that they enable new advances and innovations,” said Jay Schwarz, wireline advisor to FCC Chairman Ajit Pai, who also spoke at the CEO Close-up. “Electrification kicked the Industrial Revolution into overdrive and fundamentally transformed the way we lead our lives … Wired and wireless high-speed connectivity offer similar potential to dramatically improve our quality of life.”
Schwarz gave credit to the early electric co-op broadband providers to “shattering some myths,” such as that there are some parts of rural America where it is too expensive to provide broadband and that broadband service in rural areas must be “second-rate.”
“Perhaps your biggest asset is your membership and the trust you have built within the communities you serve. For decades, you have done the hard work because it’s good for your communities—not necessarily because it’s good for you,” Schwarz said.