With more fiber-to-the-home (FTTH) to be deployed in the next five years than in the entire history of the broadband industry, electric utilities are uniquely positioned to close the digital divide, delivering service to the unserved and underserved.
“There's a large portion of the country that is not served [by broadband] right now,” said Scott Pell, Vice President of Quality at FiberRise. “I feel very confident that electric power utilities are going to be key in making that happen. A lot of the unserved at this point are very difficult to get to. When we start talking about electric cooperatives, we’re lucky to get 20 homes within a mile. As you get further out, you’re lucky to get three or four homes per every 10 miles.”
Everyone in the United States that wants electric power is served with electric power, and the characteristics that lead to the creation of electric cooperatives around the country lend themselves well to those organizations taking up the task of delivering fiber broadband to their existing customers. Electric co-ops are used to making significant generational investments.
“They understand the importance of investment in a long-term asset, and also pay attention to resilience and restoration when tracking those assets,” Pell said. “When a utility spends money, it has to be on a 20-to-50-year trajectory because they have to stay ahead of the curve. As communities grow, and as power becomes more expensive, or the utilization gets higher, they’ve got to be able to match that. And as people move out, they have to be able to figure how they keep paying for assets and delivering services.”
Other attributes that favor electric cooperatives are their core mission and length of service, founded as a way to deliver power to the unserved in rural America a century ago. “They’ve been around for over 100 years and they’ve figured out how to make do,” said Pell. “Over the years, they’ve become a lot savvier in investment planning. As the broadband revolution to rural America took place, power cooperatives were very attuned to come with the capital to make it happen.”
However, while cooperatives are getting broadband take rates of up to 70% in some areas, incumbent management may be reluctant to start a new capital project in those who haven’t. “I think it depends on where their leadership is in their career,” Pell said. “If you're on the sunset of your career, do you make a generational investment? Is this a good legacy or bad legacy? Generally, I think the early adopters have come through and the next 30% are going to work together with others. The last third may want to have some new blood in.”
Click here to listen to the full conversation with Scott Pell on the Fiber for Breakfast Podcast.