Entries in Fiber Deployment (4)

Wednesday
Jan042012

A New High Wire Act Along New Hampshire Roads

Sometimes when we discuss the need for broadband in remote or rural areas, it's easy to forget just how much work it takes and how many hours are necessary to complete a fiber build-out. As a case in point, consider New Hampshire, where this winter residents will see more than just snow along the road. There, crews are working demanding hours for Network New Hampshire Now (NNHN), hanging fiber from already-existing telephone poles. Last week, Seacoast Online reported that the BTOP-funded, 750-mile fiber network was “moving into the next phase,” thanks to diligent work and considerable man-hours. But the project is taking time, thanks to a complicated build-out process that involves “stringing cables from pole to pole to pole—over 750 miles in cities, suburban streets and back woods—a lot of hours spent in 'bucket trucks' doing the physical work, but just as many [crew members] figuring out how the cables can fit on the poles, which are owned either by the electric company or telephone company.”

As a public-private consortium, NNHN oversees the $65m project, with $44.5m in grants from the federal stimulus package and $21m in matching funding from other sources. It's an ambitious and far-reaching broadband initiative that, according to NNHN, will “ensure that residents of ten counties in New Hampshire will be able to plug into a powerful future with internet connectivity.”

There are three main components of the network: the middle-mile fiber backbone, last-mile fiber-to-the-premises (FTTP), and a closed middle-mile public safety microwave network.

The middle-mile network will stretch all across the Granite State—from the Seacoast, across the more populated southwest, up to the northwest, and all the way to the remote North Country and mountainous Lakes Region. NNHN says it will “place network access points in or near existing central telephone office locations along the path, allowing all commercial broadband providers to potentially leverage the fiber optic network build across the state regardless of protocol, service or technology.” This portion of the broadband network is being overseen by University of New Hampshire Information Technology—a leader in the initiative.

A variety of partners are coming together to provide last-mile connectivity through what NNHN is deeming an “innovative model called FastRoads,” which will provide fiber-optic connectivity in 35 communities in the southwest part of the state. According to NNHN, these 35 communities translate into 1,300 homes and businesses.

Finally, a closed middle-mile microwave network called NHSafeNet will be made available for public safety, public television, transportation and mobile broadband communications on mountaintops across New Hampshire covering 3,800 square miles.

As with any statewide broadband initiative, the list of partnerships for NNHN is quite long. Last April, Chelmsford, Massachusetts-based Waveguide announced that it would “provide engineering and construction services,” along with New Hampshire Optical Systems, based in Nashua. Additionally, Green Mountain Communications is constructing NHSafeNet, along with other state organizations and departments.

But, despite good planning and an impressive assembly of partners, the issue of actual, physical work remains. And it takes time.

Waveguide president Rob Carmichael described the process of preparing for and hanging fiber to Seacoast Online last week: "We have a right to the space, but the space has to be made available. First we do a survey, walk the pole line with both utilities. We look at the pole, take measurements, engineers in the field decide on this one, power can move up, phone can move down, cable TV can be rearranged, whatever is needed, then you'll have space," he said. "There are no unique issues, other than the timelines. Building 750 miles in this time period is fast.” Completion date for the network is slated for June 30, 2013.

Of course, in addition to deadlines and man-hours in the cold, the network has also faced criticism from existing providers in the area. FairPoint Communications has already built a similar fiber backbone in the area, which it uses to provide its DSL service. In more populated areas like Nashua, in the southern part of the state, FairPoint's FAST provides fiber-to-the-home for residents. But in many “overlooked” regions of the mountainous state, there is no fiber connectivity.

With an impressive scale, NNHN's 750 miles of fiber is just one of many New England fiber builds, as Vermont, Massachusetts, and Maine are all stringing fiber to underserved areas of their states. In Maine alone, 1,100 miles of fiber will crisscross the state, connecting businesses and residents who cannot currently get high-speed service.

But just like in New Hampshire, these networks, too, will be completed in difficult terrain, in a variety of weather—one measurement, one survey, and one cable line rearrangement at a time. No faster.

Wednesday
Dec282011

Digging Deep: Palmetto Rural Looks to Bury Its Competition

When Chuck Crabtree joined Palmetto Rural Telephone Cooperative as its Director of Marketing this year, he was attracted to the co-op's commitment to broadband and advanced services like IPTV. Right now he says PRTC is making great progress towards an extensive fiber build-out that will cover most of Colleton County, South Carolina. And PRTC has been able to fund this upgrade to FTTH “without any big grants. We're mostly doing it ourselves, utilizing business loans,” Crabtree said. With many ILECs and cooperatives counting on broadband, PRTC's story may not seem like a unique one—but the provider's embrace of services like IPTV and advanced video platforms, is. According to Crabtree, PRTC is fighting “formidable competitors” like Comcast and Frontier by offering richer, dependable services through fiber. In underserved areas of the county, PRTC is the first to lay fiber and, in doing so, hopes to better serve its entire territory.

Crabtree characterized PRTC's service area as a combination of Low Country rural lands and small- to mid-sized towns. “Currently we've completed roughly 15% of our fiber build-out, but the overall fiber-to-the-home plan will take longer,” he said. “It's a lot of work. They don't call us the Low Country for nothing— we have a lot of wetlands and it can be very swampy, but we're absolutely committed to getting fiber to every home, even the most remote areas.”

Of course, fiber builds can be tricky for smaller companies and co-ops, with cost often exceeding return on investment. But Crabtree says that PRTC has taken great measures not to just provide broadband services, but to do so with media platforms that rival those from large competitors. Earlier this year, PRTC announced it was transitioning its IPTV-based video services to Alcatel-Lucent's starter pack end-to-end solution, which included the Microsoft Mediaroom 2.0 software platform. Mediaroom, created specifically for Tier 1 service providers, “helped get rid of some traditional IPTV problems, but also opens up new opportunities,” Crabtree said. “Some telcos deploy IPTV and then really aren't thrilled with what they're able to provide. But for us, Mediaroom was really a great choice for the consumer. It really is a very slick, great interface,” he said, noting that the platform makes it possible to introduce VOD, whole-home DVR, caller ID over the TV, and even remote DVR services. Right now, the co-op's IPTV services are about 10% penetrated, but Crabtree says that Mediaroom should dramatically increase marketability and will allow PRTC to “ratchet up marketing for this particular service. We're already seeing great responses, and we believe it's going to be successful.”

But for PRTC, the fiber build-out is about much more than just IPTV services alone. It's about “future-proofing,” as Crabtree put it. “The more fiber you have, the more you can do with it. Fiber-to-the-home provides almost limitless bandwidth capacity, allowing our customers to share multi-media content, watch videos on any device, and so on.” In other words, PRTC is looking to provide the bells-and-whistles that the Big Guys provide, but they plan to bring it to even the most remote areas where subscribers live and do business.

In some areas, DirecTV and Dish Network provide stiff competition, Crabtree acknowledged, but when it comes to providing the whole package of services, PRTC still maintains an edge. In Colleton County, Comcast provides TV and Internet services, but no voice service, and Frontier offers voice and broadband in small pockets of coverage. “We keep hearing rumors of improvements coming down from the Charleston area [in regard to Comcast], but right now they have a pretty standard offering. Our TV service is much richer, according to what we offer, and of course we have a whole package of services we provide.”

Crabtree noted the importance of broadband in small communities and rural areas—something that he says is threatened by recent changes to USF funding. When asked about how the Connect America fund will impact cooperatives like PRTC, Crabtree said, “We stand with everyone at NTCA and the other ILECs who have voiced their opposition to these changes. We're working fast and furious to run fiber and offer as high a service level as possible, and the cutting of USF funds hurts our efforts to do that in the fashion we'd like. We're not happy about the changes in the way they're distributing funds.”

Despite these federal battles, like most cooperatives, PRTC is committed to improving its community, Crabtree said. “We are very involved in the area, and are especially excited about the advanced services that the Colleton County Medical Center is able to offer through our broadband connection.” He explained that, in the past, the facility had to rely on its sister hospital in Charleston for difficult diagnoses, advanced technologies, and specialist services. This often included transporting patients via helicopter or a one-and-a-half hour drive. But now, in seconds, doctors at CCMC can send data to physicians in Charleston and get a detailed diagnosis right away. Doctors at CCMC are also making use of iPads to collect patient information; hospital management will soon rely on “hot boards” to streamline providers and get physicians to the hospital when demand increases, and the hospital website will offer online updates on emergency room wait times. Crabtree said, “These are super patient-friendly services and, while they've had our [PRTC's] broadband for years, they're now really expanding the utilization of its functionality.”

In addition to medical services, Crabtree said that PRTC's broadband has been “a real game-changer” for Colleton County High School and Colleton Preparatory Academy. “We offer broadband connections to each school in a way that fits their needs very well... and we partner with the local schools all the time—to sponsor athletic departments and support recreational teams. We really try to have a local presence in a variety of ways,” Crabtree said, explaining that PRTC also provides telecommunications services to the police and fire departments and sponsors fundraisers for March of Dimes. “That personal connection is really important,” he said.

One of PRTC's smaller business divisions is its wireless service, which Crabtree said is branded PRTC Wireless but also accesses one of the largest networks in the country. PRTC has offered wireless for the last 2-3 years and hopes to more aggressively promote “a quad play in the future,” Crabtree said. “It's not an easy business to grow in, but we're doing it, slowly but surely.”

As for the regional area surrounding PRTC's base in Walterboro, South Carolina—the county seat of Colleton County—there is plenty of growth to go around. PRTC's service area sits outside the main competitive markets of the Charleston area, but the county enjoys growth from nearby economic expansion. Early this month a new aerospace company, Colleton Aerospace LLC, announced it would construct a $15m plant in the county, bringing 300 jobs to the area and hopefully spurring development in the Low Country. PRTC is already scheduled to be the telecommunications supplier to Colleton Aerospace, and Crabtree noted that this was just one of the ways that the area is continuing to see growth in jobs, residential expansion, and population increases. Recently Boeing opened a new facility in North Charleston and tire manufacturers Bridgestone, Continental, and Michelin have all made significant investments in the surrounding area. Likely this growth will spill into PRTC's service area, and Crabtree says the company has already been active in Charleston media markets. “We can't help but think our region's growth will help us, and we hope to enjoy some of its success.”

Wednesday
Jun082011

USF Reform - Their Two Cents: FTTH Council 

Fiber-to-the-Home Council Recommends 25 Mbps for Rural Broadband

On May 23, 2011, The Fiber-to-the-Home Council (“FTTH Council”) filed reply comments in the Universal Service Fund Reform proceeding, where they expressed concern about the FCC’s proposal for a broadband speed target of 4 Mbps download, 1 Mbps upload (“4/1”) in rural and unserved areas. Although the FTTH Council agrees that a relatively low speed target may be sufficient in the immediate near term, it would ultimately “deprive rural residents and businesses of broadband performance comparable to that found in urban areas.” The FTTH Council recommends 25 Mbps (in both directions) by 2015, and argues that FTTH is the most efficient and financially prudent broadband technology for high-cost areas—therefore, the revamped High Cost Fund should ensure support for rural FTTH deployment.

The FTTH Council points to the rapidly growing demand for Internet content and applications, such as distance learning, enhanced video conferencing, and HD telemedicine, as evidence that high-performance broadband networks need to be supported by USF.  I believe that in rural and remote areas, high-bandwidth applications can literally mean the difference between life and death, business or no business, and education or no education. The FTTH Council clearly understands the importance of high speed broadband to rural residents, businesses and communities as broadband users increasingly require “Next-Generation Access” (NGA) broadband service.  The FTTH Council cites a report by consulting firm CSMG on consumer adoption of NGA broadband applications, which supports “the conclusion that consumer demand for symmetrical bandwidth is likely to exceed 25 Mbps by 2015.”

In addition to thinking about future demands for high-performance broadband, I believe it is also important to look to the past for examples of why broadband speeds must be forward-looking and well beyond the minimum requirement. Advocates of the 4/1 Mbps target claim that most broadband consumers do not actually need higher speeds because they primarily use broadband to check e-mail and browse the Web. However, this assumption does not consider the adoption and use of future broadband-enabled applications, and according to the FTTH Council, “it is highly likely that innovative applications development will lead to as-yet undefined applications with significant public benefit.” Now-common applications like YouTube, Netflix streaming video, Google maps, Skype and Apple iTunes skyrocketed in popularity as a result of increased broadband speeds over the last 10 years, but continued investment in high performance broadband is necessary so that consumers can continue to benefit from new applications. The FTTH Council provides an interesting infographic on page 14 of the reply comments to illustrate the relationship over time between broadband speeds and “killer apps.” Clearly, as the FCC moves towards reforming the Universal Service Fund to support broadband, the power of innovation must not be underestimated.

In the USF Reform docket, there is prevailing criticism that FTTH is not a financially viable solution for broadband deployment in rural and unserved areas, but the FTTH Council argues that rural FTTH is well worth the private and federal investment in the long term. The FTTH Council urges the FCC to “encourage the rapid deployment of FTTH because it will enable rural telephone companies to more expeditiously meet consumer needs and thereby receive higher revenues and lower operating costs, which then translates into an eventual reduction in universal service support.”  Not only does fiber enable “virtually unlimited throughput capabilities,” FTTH networks also offer “lifetime operating expenditure savings” of $100-$250, which makes the actual cost of FTTH on par with other technologies, savings included. 

The FTTH Council calculates the cost of deploying FTTH to the “last 5%” of rural households as $44b, nearly half of the total $94b cost to deploy FTTH to the last 20%. However, the cost to deploy fiber in the eightieth to ninetieth percentile is roughly $29b, and the FTTH Council urges rural telephone companies serving the that percentile of unserved households to upgrade to FTTH.

The financial aspects of FTTH are definitely attractive from an RLEC perspective, but will the FCC agree that FTTH is the best broadband technology for rural areas? Comments in the USF proceeding show that RLECs are extremely concerned about access to private capital right now, as regulatory uncertainty over USF hovers over lenders like a dark cloud. Private lenders have reservations about lending to companies that may not be able to repay loans if USF support is reduced or eliminated completely in some cases. The FTTH Council argues that the current High-Cost Support program significantly reduces the risks associated with private lending for broadband deployment in rural areas. If the FCC’s USF Reform proposals are adopted, the risk of investing in RLECs will increase, and “investors will demand a higher premium or higher interest rate on debt or loan,” and some investors may refuse capital to RLECs altogether. As a result, the “hurdle rate” for determining if an investment is viable will increase significantly, and some planned FTTH projects may not “get over the hurdle.”  The FTTH Council compares the stability of the current High-Cost USF system to a low-risk structured settlement, but the future CAF support model makes investing in RLEC FTTH projects more akin to a risky startup venture. 

Private lending and USF support go hand-in-hand for RLECs, and are clearly representing a double-edged sword as the USF Reform rulemaking nears decision time. Without continued USF support, private lenders may shy away from RLECs. Without private lending for broadband and FTTH deployment, rural communities will either continue to fall behind in broadband development, or they will lose their broadband provider altogether. The FTTH Council recommends that the FCC combine the current High-Cost Fund with the proposed Connect America Fund to achieve ubiquitous broadband. According to the FTTH Council, the FCC should “preserve and build upon the success of the High-Cost fund and meld the aim of this fund with CAF’s new objective to reach unserved areas.”

The FTTH Council’s reply comments are available to read here.

Wednesday
Apr062011

Fighting the Good Fight: Red River Telephone

Deploying Fiber to Unserved Broadband Markets

Between intense competitive pressures, hyper-rapid technology evolution and pending regulatory reform, ILECs all over the country are facing what is surely the most difficult period in the history of the industry.  The resolve of many to fight on in the face of these pressures is commendable.  For some companies, that fight will be lost to wireless or other competitors despite their best efforts, but others may just succeed in their drive to reinvent themselves.  In this series, entitled “Fighting the Good Fight,” I will profile various ILECs and RLECs and summarize how they are tackling these challenges.

Red River Telephone, based in Abercrombie, ND, was awarded a $9m combination of grant and loan funds under the Broadband Stimulus program, and $1m in private investment funds. While the BB Stimulus program has not turned out to be quite the panacea that was hoped a year ago, Red River GM Jeffrey Olson believes that receipt of the funding will make a difference for the company. I spoke with Olson earlier this week about the company’s plans and strategies.

Red River intends to use the funding to run 700 miles of fiber out to its most rural exchanges.  Specifically, Red River owns four exchanges that it acquired in two transactions in 1996 and 2003—Fairmount, Hankinson, Lidgerwood and Wyndmere—where there is presently little or no broadband service. 

Even with the funding, Olson said that the deployment will take two to three years, pointing out that its territory, which includes markets in North Dakota, South Dakota and Minnesota, has a very short construction period.  Presently the company is still waiting for its stimulus funds to be released and Olson added that a short delay could translate to a year lost in its buildout timeline.  Red River announced late last month that it has contracted with Calix (NYSE:CALX) for the deployment.

The fiber deployment will pass more than 1,200 homes and businesses, and when complete Red River’s exchanges will be 75% served by fiber.  The cost will run into “the thousands” of dollars per home passed.

Red River sees two reasons for making the investment.  First, in many of its exchanges there is no cable competition.  Satellite service is the only video option in these areas presently, but Olson says the plan is to offer video service in a bundle with broadband and voice service as soon as possible.  Right now the company is just waiting to get its funding and it will evaluate its ability to incorporate video services into the bundle at the end of the year. 

Olson also noted that the company is very dependent upon NECA settlement and said, “We think we could be better off if it’s based on broadband” following completion of the pending regulatory reform.  That said, Olson emphasized that it’s a very uncertain situation.  “It remains to be seen if we get enough…the change could be very scary.”

Red River serves 4,100 access lines and Olson said that it has just under 2,000 broadband customers.  The nearly 50% penetration level is thanks to the lack of cable competition in several markets, and also the company’s progressive offerings.  Olson said that Red River is part of an Internet coop that includes five companies and offers data center and other services.  Red River has also launched a fixed wireless broadband service which serves about 500 customers.

Olson conceded that there are some concerns with the reporting requirements and other Stimulus program obligations, but at the end of the day, “Without the broadband funds it would take us ten years to do fiber; it will only be three years with the funds.”