Peoples Telephone Cooperative Works to Build 600-Mile Fiber Network to Unserved Areas

Last week, while President Obama lamented “an incomplete high-speed broadband network” in rural areas and his Republican dissenters placed blame on the FCC for over-regulation, one thing was missing from the discussion: rural telecom providers. The truth is, the cries for “more broadband!” are only half of the story, when rural and independent telecommunications providers have made tremendous progress building out broadband networks in unserved and underserved areas. These are the companies and cooperatives we like to highlight here—to follow up on federal stimulus dollars and see how new broadband roll-outs have been received in rural communities.

Peoples Telephone Cooperative, based in Quitman, Texas, is one such example. The cooperative, which first opened its doors in the early 1950s, received a sizable stimulus grant in March of 2010 to lay over 600 miles of fiber optic cable throughout East Texas. The $36m project is being funded in part by $28m of federal BTOP grant and has encountered some delays. But according to PTC Marketing Director Lisa Webber, about 30% of the project is completed and the company has “already begun service contracts with several businesses along our new broadband network. We are also negotiating with the schools and hospitals along the route since providing connection to the anchor institutes is a primary focus of this project."

The broadband network will be an extensive one, connecting medical, educational and governmental institutions in 13 East Texas counties—some of which have few, if any, options for high-speed. While primarily a middle-mile network, PTC will also provide end-use infrastructure to residential customers. So far, Webber says, “The response from residential consumers has been encouraging as well. These potential customers currently have little or no broadband options and are very excited to see Peoples laying fiber in their area.”

In areas where competitors do provide high-speed service, it's usually “satellite providers such as HughesNet and Texas Cellnet” that attract customers, Webber said.

To some rural Texans (and, likely, to many politicians) the progress in rural broadband may seem slow, but laying fiber is, in reality, a sizable infrastructure project that takes time. And for PTC, there were some delays that no one could have predicted. For instance, Webber explained, “Much of the initial progress was delayed due to the fiber shortage caused by last year’s tsunami in Japan that damaged a major fiber supplier located in that area. We found ourselves in a line with our larger nationwide competitors, all vying for the first available fiber supplies.”

Assistant General Manager Steven Steele said, “When ATT, CenturyTel and Verizon go to a supplier that I’m using, I very seldom get a phone call back, so you can imagine what it has done to my fiber supply. We have been slowed almost to a complete stop several times as far.” To keep progressing, Steele said crews worked ahead to install conduit, making it easier to insert the fiber when shipments came in, and since last November shipments of optical fiber have picked up, allowing them to resume installation.

Talk about the repercussions of a global economy.

To date, PTC is finished with Phase I, and has moved into Phases II and III of the build out. Once complete, PTC's broadband network will connect with the Texas Lone Star Network, a group of 39 rural telecommunications carriers that also is connected to many of the state’s educational institutions and medical facilities.

According to Webber, Peoples currently serves 13 exchanges in landline telephone service—a little more than 11k subscribers—in rural East Texas. The company also offers high-speed internet through DSL and a wireless broadband option, for residents outside the co-op's telephone exchanges. Webber said, “Over 95% of our service area has DSL service available. Over 51% of our total landline subscribers also subscribe to our DSL service. Through our wireless broadband service, we have been able to offer service to residents living in surrounding underserved areas. We currently have 334 wireless broadband subscribers on our 3.65 and 700 spectrum services. A recent upgrade to utilize our 700 [MHz] spectrum is allowing a greater customer growth potential and enhanced speeds and quality of wireless broadband service through our partnership with NetAmerica.”

Webber echoed the sentiments of many other rural providers, stating that, “Broadband has had a huge impact on our local schools, hospitals and businesses as in any other rural area... [These] connections have allowed our local schools to connect to area colleges and form partnerships to offer higher education courses to the high school students.”

For Webber, the education benefit of broadband is personal: “I’ve seen this benefit first-hand, as a parent of a high school senior. This May, my daughter will graduate with 30 college semester hours which will qualify her as a college sophomore. Her 'dual-credit' courses allowed her to complete the hours needed to fulfill her high school requirements while, at the same time, earn credit for college classes…all while attending her current high school. A partnership between her high school and an area college provided the framework for the course structures.” For example, Webber said that “video classes, online testing and online assignment submissions allowed the students to meet course requirements without ever leaving the city limits or the farm.” Such connections saved time and money, and has been an experience Webber deemed “priceless.”

For rural residents like Webber, broadband in East Texas will also likely bring medical advancements and world-class medicine to small communities. “Quality medical care is a major factor when determining the quality of one’s life in a rural setting,” Webber said. “Broadband technology allows rural residents to overcome geographic challenges in accessing medical care by placing their local physicians and health care facilities only a computer screen away from a network of specialists, larger medical staffs, medical files and other telemedicine benefits.” Again, the effects can be personal. “When put into perspective, this benefit is one of great importance since the medical care administered—and the life saved—could be one of ours or that of our family members,” Webber said.

Whether for education, medical services or connectivity to a global market, Webber acknowledged that the benefits of broadband still hinge, in part, on funding availability that will get broadband projects off the ground. Like so many other independent telephone companies, PTC has seen its wireline subscriber base dramatically decrease and, simultaneously, seen shifting criteria for how newer services are funded. “Among the many challenges in our industry is the nationwide trend of consumers 'cutting the cord' and going mobile only,” Webber said. “This trend has obviously made us expand the original focus of our company to encompass more broadband and cellular services. As with any other rural provider, one of the biggest challenges is building-out our services in areas that simply do not have the population base to offer much return on the investment. This challenge is one reason the recent changes in USF funding has our industry so concerned.”

As for the here-and-now, PTC has 3 years to complete its fiber network, or will risk losing the $28m in federal funds. Additionally, Steele said the network “has to be economically self-sustaining, so we have to hook up enough businesses and institutions to make this thing pay for itself.”