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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J A N U A R Y / F E B R U A R Y 2 0 1 8 | 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 | B R O A D B A N D C O M M U N I T I E S | 3 3 for self-determination and the broad acknowledgment that we needed to fix our own problems. Relying on others to deliver a critical infrastructure, satisfying cooperative quality and service levels, was not going to happen. JD: What are the demographics of the area that you serve? FH: We are an older, seasonally driven economy and demographic. Our service territory has an average age of 52, compared with a Washington state average age of 38. Additionally, 35 percent of the home ownership is part-time/seasonal residents. JD: Are you providing broadband outside the electric service territory? FH: Not currently. However, if a cooperative is facing similar challenges, they can call us. We have had some interest from other communities and may explore replicating our fiber/LTE model in other parts of the county. JD: What broadband/telecommunications offerings already existed in your marketplace? FH: e primary offering was DSL internet delivered over an aging copper infrastructure, mixed with minimal cable and satellite. DSL was either provided by the incumbent carrier or resold via local ISPs. JD: Was there a competitive response to your offering? FH: We acquired the largest local ISP in an effort to expand our existing customer base and get closer to our subscriber break-even targets right from the beginning. e incumbent carrier started to upgrade portions of our mutual service area using governmental grants. However, those efforts were short-lived; the cost to upgrade infrastructure in our county is very high, and our pricing and baseline service offering is beyond [the incumbent's] best capability. Based on substandard service for a number of years, there remains an overwhelming desire from folks to get away from the incumbent. JD: Did you complete a feasibility study and if so, did you prepare it internally or hire an outside firm? FH: Over the years, a number of studies were performed both internally and externally. e current plan was derived in mid-2014 after hiring a team to define a plan of action. JD: What technologies are you utilizing? FH: Our core network is an active Ethernet fiber to the home/premises supplemented with an LTE fixed wireless network. We entered into a long-term partnership with T-Mobile US, whereby we share investment and capability allowing us to offer a private wireless solution using multiple LTE spectrum bands (2, 4 and 12). We do deliver some services via public spectrum Wi-Fi as well as reselling DSL connectivity. JD: What services are you offering – triple play, broadband only? FH: We offer broadband and voice service. We do not offer traditional TV, taking the view that if you deliver a superior connection, people will adjust their consumption habits to streaming services. We also offer a full suite of IT services: hosting, email, technology classes, etc. JD: How are you marketing your services? FH: We market via the full range of media (print, online, social media, sponsorship, etc.). JD: Did you hire any new personnel for this project? FH: Yes, our broadband business has grown to 30 full-time employees since its inception in 2014. We have hired an extremely dedicated and talented group with a wide range of skills, including technology, finance, marketing and retail experience. Perfecting our team culture has been one of our largest challenges. Providing internet services is a competitive business and requires a slightly different attitude and sales mentality. We are fortunate to be able to attract talent from all over the United States. JD: What is your organizational structure? Who holds the broadband assets? FH: OPALCO is a 100 percent equity owner of Island Network LLC, doing business as Rock Island. OPALCO maintains ownership of our backbone infrastructure, while Rock Island owns all distribution assets installed. JD: Did you partner with anyone? FH: As mentioned previously we have a very unique partnership with T-Mobile. We each have access to each other's LTE spectrum. T-Mobile provides Rock Island with a managed virtual network operator (MVNO) arrangement through which we can deliver fixed wireless services. JD: How are you funding the project? FH: Operating revenue, loan/line of credit from CoBank and direct investment for construction from property owners. We have also benefitted indirectly from a multimillion-dollar investment in infrastructure by OPALCO and T-Mobile. The failure of an undersea fiber cable in 2013 brought home the need for self-determination and the broad acknowledgment that San Juan County needed to fix its own problems.

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