From Appalachian Stereotypes to Broadband Connectivity
Thursday, November 17, 2011 at 12:00PM
Cara Snider in Broadband Developments, Broadband Penetration, FCC, Horizon Telcom, Industry Trends, NTIA, USDA

Transforming a Region: Horizon Telcom Partners to Connect Appalachia

In nearly every study conducted on broadband penetration rates, one region of the U.S. is consistently listed as behind the times—Appalachia. Still, despite its debilitating stereotypes and rambling topography, some areas of the region are quietly growing with industry, education, scientific research, and health care. But none of these sectors can thrive without broadband availability, a fact that inspired Ohio Congressman Zach Space to advocate for widespread connectivity in the region. Space collaborated with other smaller broadband advocacy groups in the area and, after several years, Connecting Appalachia finally found public and private sector support to make it a reality. Construction of the middle-mile project began this spring, thanks to combined funding from the NTIA and Chillicothe, Ohio-based Horizon Telcom. Many other organizations, businesses, academic institutions, and healthcare providers joined the effort, and as Brooke Eiselstein, public relations specialist for Horizon, describes it, Connecting Appalachia is “a testimony to partnership.”

The project is also a testimony to perseverance. Originally, Eiselstein said, Horizon Telcom worked with Congressman Space and a group of consultants to obtain an NTIA Broadband Technology Opportunity Program grant that would be a last-mile network. “We wanted every person in Southeast Ohio to receive broadband,” Eiselstein said. “Our grant was denied. They didn't find it practical to fund a broadband network that would carry aerial fiber several miles out to the middle of nowhere when only three houses could get it, and who's to say they [these residences] would even sign with us?”

Eiselstein said they re-grouped and “wrote the grant a second time, although this time we were asking for money to build the network to only the middle mile consortium. This entailed hanging fiber on existing utility poles all down major highways to hit large businesses, K-12s, colleges, hospitals, health care entities, government agencies, MARCS [multi-agency radio communication system] towers, and industrial parks.” The NTIA then agreed to fund 70% of the $100m middle-mile project, and Horizon stepped in to pick up the remaining 30%. The group was formally awarded the grant on August 18, 2010, and they will have exactly three years to have the 10MB synchronous connection network up and running.

But the process of securing funding was just one aspect of Connecting Appalachia's evolution. In many ways, the project is a mosaic of smaller, local efforts, starting with three hospitals that came together and decided they needed a broadband network for health care in southeastern Ohio. “Adena, O’bleness, and Holzer [the hospitals] joined together to form the Southern Ohio Health Care Network, and received a grant for $18 million from the FCC,” Eiselstein said. “Later, Horizon was awarded the contract to construct the network.” News of their efforts spread, and soon, Eiselstein said, local districts came together with Congressman Space to “develop a vision for what would become Connecting Appalachia.”

Eiselstein said that the project enjoyed a lot of press in local, regional, and even national press, and as a result their list of partners is quite extensive: the three lead healthcare providers; educational partners across the state; several state government agencies and the Appalachian Regional Commission; federal groups including the FCC, USDA, NTIA, and BTOP; local development districts; and Connecting Appalachia's consultants, Reid Consulting Group.

Such a wide variety of early partnerships paved the way for a larger broadband backbone, while also ensuring a customer base. Eiselstein said, “While we were writing the grant we had to identify 592 Community Anchor Institutions (CAIs). However, many of those customers needed services 'now' (then) and have already signed with other providers. Some have signed monthly contracts so they can switch providers after the network is built.” 

Before the BTOP grant was awarded, Eiselstein said, “We were awarded the Southern Ohio Healthcare Network grant. This allowed us to connect all rural hospitals in 13 counties. Most of these have already been connected. Now, the BTOP grant allows us to connect another 21 counties, totaling 34.”

When asked about cost and Horizon's concerns for return-on-investment, Eiselstein said “absolutely” the group will bring in new customers, adding, “We have to keep in mind that the grant was awarded because Appalachian Ohio has been left behind in regards to technology. This area has suffered because of the lack of broadband, and this was a great opportunity for Horizon to continue its 116-year tradition of providing good service to its neighbors. Horizon cares about putting Appalachian Ohio on equal footing with other areas of the state.” In order to elevate the area's residents and provide more advanced opportunities, Eiselstein said, “It truly is essential that a fiber optic network be built that would provide world-class, high speed Internet. Customers will finally be able to be on the same playing field as colleagues in more urban areas. New customers will be able to purchase internet connections, point-to-point connections, PRIs, and VOIP lines. We are also offering a business video package in many of the counties.”

As an investment opportunity for Horizon, Eiselstein underscored that the network “has the potential to reach 11m customers with up to 10GB synchronous connection. Of course we will not be reaching this many customers, but that is the potential it has.” She added that it was actually a strength for Horizon to be a small company, making it more “nimble and flexible when it comes to creating a solution-based service specific to our customers’ needs.”

Eiselstein has been an ambassador for Connecting Appalachia, tasked with “going to all the counties, joining the chambers, meeting the business owners, elected officials, mayors, commissioners, chamber executives, and so on. We go to trade shows, luncheons, and banquets. We usually have a table where we can distribute our annual reports, brochures, and giveaways that explain the project and who we are. Our response has been very positive. Everyone agrees there is not nearly enough broadband in the region.”

While the project itself will only affect the Appalachian regions of Ohio, Eiselstein notes that the broadband gap expands to other areas of Appalachia as well. “People in this region have been starving for Internet for years,” Eiselstein said. “When people see our trucks on the side of the roads hanging fiber, they immediately call into the office, or even stop to talk to the technicians about availability. The people of Appalachia are extremely excited and relieved to finally have access to Internet speeds and bandwidths that allow them to run their businesses and their lives more efficiently.”

As for the project's current phase, Eiselstein said the group has begun to construct the network's backbone, and are primarily hanging fiber on existing pole routes. A very small portion will be buried. Connecting Appalachia will be providing some last-mile connectivity to businesses. “These last mile costs are typically built into the quote for the business either in an up-front cost or amortized over the life of the contract,” according to Eiselstein. “We are also providing the last mile connection to the community anchor institutions who sign contracts for services. We are also partnering with WISPs to reach residential customers” since the BTOP grant did not fund the last-mile piece of the project.

Article originally appeared on JSI Capital Advisors (http://jsicapitaladvisors.com/).
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