Broadband Communities

NOV-DEC 2014

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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26 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | NOVEMBER/DECEMBER 2014 FTTH DEPLOYMENT Bolt Lights a Spark in Oklahoma A rural electric cooperative in Northeast Oklahoma gets ready to launch gigabit services. By Masha Zager / Broadband Communities I n many rural areas where incumbent operators have not built broadband networks, electric cooperatives are rising to the challenge. Co-ops, which are member- owned and whose mission is to support their communities, view the need for broadband with some urgency: Local businesses can't thrive without broadband, and when businesses fail or relocate, the co-ops lose their biggest electric customers. Many co-ops began by building wireless networks – the simplest, lowest-cost alternative for a company without existing telecom plant – but in the last few years, more than a dozen have decided that fber broadband is needed to keep their service areas economically competitive. One of these is the Northeast Oklahoma Electric Cooperative, which serves 30,000 members in rural communities, tribal areas and a lake resort area. Te cooperative had some experience with fber broadband already. Two decades ago, it launched a technology subsidiary, RECtec, which has connected school buildings, libraries and enterprise customers. So when members, fed up with satellite and slow wireless Internet, began pressing the co-op to provide broadband to homes and small businesses – annual member surveys consistently show broadband as the top need – the cooperative was ready to listen. Finding a way to deliver broadband took some time, however. Te cooperative examined and rejected several possible solutions, among them WiMAX (unreliable because of the terrain and foliage) and fber to the home (too expensive because of the low population density). However, as prices for FTTH equipment fell and members' pleas for broadband grew more urgent, the cooperative decided to take another look at fber and try to develop a business case for it. Eventually, when it had a business case that made sense, it formed a new subsidiary, Bolt Fiber Optic Services, and applied for a Rural Utilities Service loan. Forming a subsidiary was critical to the business case, says Alex Mercado, Bolt Fiber Optics' operations supervisor. He explains, "Most boards want to make sure the co-op won't have to sufer on the electric side." Tough there are synergies between the electricity and telecom divisions, their fnances are kept separate to mitigate risk: Bolt attaches fber to the co-op's utility poles but pays pole attachment fees; the co-op will use Bolt's fber network (Bolt will put Internet points of presence at the substations) but will pay Bolt for transport. In addition, some cooperative employees are working on the network build, but Bolt reimburses the co-op for their time. A SHARED HEADEND Making the business case required several other strategic decisions. Perhaps most signifcant was the decision to build a video headend. "We went back and forth for about a year," says Sheila Allgood, Bolt's manager. "Over-the-top video is coming on the horizon, but we live in an area where people still like to have channels. … We felt that, [by ofering] video, we would increase the take rate enough to pay for it." A member survey clinched the deal; members indicated they were very interested in buying TV services from Bolt, and that convinced Bolt (and the

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