Broadband Communities

JAN-FEB 2018

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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FTTH DEPLOYMENTS 3 6 | B R O A D B A N D C O M M U N I T I E S | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | J A N U A R Y / F E B R U A R Y 2 0 1 8 pretty accurate and about half the original projection. To date we have $24 million in the project with 4,000 installs. In the end, how many customers will we have? I'm hoping somewhere around 7,000 to 9,000. All that said, the feasibility study is very important, because you have to have something to present to your board. AD: What technologies are you utilizing? BP: We built a GPON network. More importantly, because the population density is so low in much of our service territory, we did distributed split. Distributed-split GPON is a term that's very important for rural electric co-ops. Without getting too technical, instead of there being a cabinet on the ground, for a distributed split you have splicing enclosures on the pole. You just don't have the population, the density, to just build active Ethernet. When you go into an area like we have called Paint Rock Valley, and you probably have 2.5 customers per mile, distributed split is the only way to financially reach those areas. I know that there is discussion about wireless for the more rural areas. I get wireless, and I'm sure you could line up 10 million people [who] disagree with me, but wireless is not hardwired, and it will never be. Wireless fluctuates for what appears to be millions of different reasons. When you're an electric co-op, people expect reliability and quality, especially reliability. e only way to accomplish that is a wire or fiber. We use the Cisco 9000 router, and all of our access equipment is ADTR AN. AD: What services are you offering – triple play, broadband only? BP: Triple play. AD: How are you marketing your services? BP: Basically, we are not. Alabama Living magazine is the only place that we have marketed anything, but there's a reason for that: we keep a wait list of seven weeks, and we really don't want any more people calling, requesting service, than we have now. ere will come a day when we begin marketing, but we've actually, for a while, hoped our requests for service would slow down and let us catch up. AD: Did you hire any new personnel for this project? BP: Yes, of course. At one time, we had approximately eight construction crews, and we had drop guys and install guys. Now, we have two local guys work with our engineering and design firm, then work with the construction contractors, then work on drops and installs, so that we ultimately have two local guys who went through the entire project and would immediately go to work for us at the completion. Additionally, we encouraged contractors to hire local people, and we contracted separately with others who will eventually be hired full time at the co-op. AD: What is your organizational structure? Who holds the broadband assets? BP: e assets are at the electric cooperative. Because of the federal grant money, the broadband cannot be a subsidiary. We call it, for internal purposes, North Alabama Fiber Co-op, but that's not a legal distinction. We do keep separate accounting for the fiber side. AD: Did you partner with anyone? BP: We did initially partner with a local telephone cooperative for the first three years. Earlier this year, we dissolved that partnership and took everything in-house. AD: How are you funding the project? BP: We were awarded a $19 million grant under the American Reinvestment and Recovery Act that covered the bulk of the build. Right now we owe approximately $4.5 million in borrowed funds. At this point, we're paying for everything out of our operating revenue, so we're not borrowing. We haven't borrowed money in a while. All of the heavy expense is behind us now. As far as funding the project, you're going to need the ability for immediate monies from time to time, because these projects have many different moving pieces. You've got the fiber construction. You've got the electronics. You're building your network operations center. Lead time on fiber is approximately 18 weeks, so you can't wait until you're almost out. You have to stay ahead of the lead times. You're probably going to need a local bank or other bank that will provide you the means to get money immediately. Waiting on the grant money to come was often months after we actually had invoices that had to be paid. at was difficult. You need a line of credit, you need short-term borrowing, and then at some point you'll turn it into long-term loans. AD: Did you collect contributions in aid to construction from your subscribers? BP: Zero. It's what we felt like we had to do as a co-op. AD: Is the project on time and on budget? BP: Yes. e project was on time, because we didn't have a choice. at $19 million grant turned into a loan if it was not on time. On budget, yes. I feel very good about us having a total of $24 million or so, and being completely built out and now serving 4,000 people. AD: Did you encounter any surprises or challenges along the way? BP: Answering that could literally take the rest of the day. e biggest issue that we had, period, was the bad contractors that came in and did work. at is very hard to overcome. In the beginning you don't know enough, and by the time you figure out they're doing bad work, there's already quite a bit of bad work completed. You're trying to keep your schedule, but you're having to back up and redo work. at happened multiple times, and it really caused us problems. I'd almost classify it as devastating at the time. e biggest mistake I made – and on a scale of one to 10, it is a 10 – I did video. I had many people telling me from day one that you had

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