Currently in the U.S., there are nearly 83 million people living without access to internet—a majority of whom live in rural areas. As COVID-19 has pushed many to work and learn from home, it’s exposed the need for fast, reliable internet.
At the Fiber Broadband Association’s latest live video series Fiber for Breakfast, Scott Jackson, national market manager of broadband for Graybar, and Charles L. Phillips, vice president of technical services of Gibson EMC and vice president of operations for Gibson Connect, talked about how building rural fiber networks is going to be key for economic development and connectivity in the future.
“COVID-19 really amplified the need for broadband,” said Jackson.
In many rural communities, municipal entities have stepped up to become internet providers for their residents. In west Tennessee, the Gibson EMC—or Gibson Electrical Membership Corporation—became that entity. Serving nearly 39,000 people over 3,500 miles, the customers of the co-op include some of the poorest and most rural parts of the country.
Phillips said as the co-op was looking to modernize its electrical grid as a means to improve its service, they saw an opportunity to build out fiber networks for their customers.
“We’re about serving our members,” he said. “We talk to them every day—we’re part of the communities we serve. There’s an economic development and a digital divide that is very real in rural areas.”
When formulating the idea to build out a fiber network, they first began by talking to customers to see what their needs were. Where were areas that were completely unserved? Where were areas that were underserved?
They found that nearly 40% of their customers had no internet options.
“That service was not there until we were in the market,” Phillips said.
But it’s not as easy as just building a network and turning on a switch. Jackson said any entity—whether private or public—needs to first do a feasibility study. In the case of Gibson EMC, modernization was already happening to install fiber in the grid. That coupled with the need and desire for fiber among existing customers made creating Gibson Connect—the co-ops fiber arm—a no brainer. But for others, the strong business case might not be so cut and dry.
Providers need to ask themselves: What is the business case in our community? Where are we going to get our funding? What is our potential take rate, and does that cover the initial costs of implementing and running a fiber network?
For those looking to receive federal funds and grants, they also need to ask themselves what is a realistic timeline to complete these projects.
“There’s a lot that goes into it other than just laying fiber,” Jackson said. “These projects have to be on time and on budget, and that is a critical component.”
In his experience, most utilities who adopted fiber had take rates of up to 50% and were cash flow positive in three years. But a key component was getting the community to buy into a utility-owned fiber provider, both literally and figuratively.
“It works when you have the community behind you, and you have the brand that goes with it,” he said.
This has been true at Gibson EMC and Gibson Connect. Phillips said so far they’ve laid 1,300 miles of fiber and are adding 80 new customers a week. The key to their success is providing fast, reliable internet at a fair price.
“It’s not just about having access to broadband, it’s having access affordably,” he said. “And that’s where an electric co-op can really help us fill that gap in rural areas.”