U.S. utility operators see a bright future in fiber broadband
Leaders from three rural utility providers discussed their expansions into deploying fiber and how their organizations are getting involved with delivering broadband on a webinar hosted last week by the Fiber Broadband Association, In Holland, Michigan, for example, the Holland Board of Public Works (HBPW) started building fiber 30 years ago for “enhanced connectivity for monitoring and control” to its systems, said Pete Hoffswell, superintendent of broadband services at HBPW, which operates a power plant, water treatment plant and water reclamation plant.
“Fiber is absolutely essential for very reliable, high-performance connectivity for all that equipment,” said Hoffswell. “If we lose contact with one of our substations and the power goes down, that’s a bad day in our town. And fiber helps us keep that up.”
Katie Espeseth, vice president of new products at EPB, a municipally owned electric power distributor in Chattanooga, Tennessee, that started delivering fiber in 2008 and today has roughly 11,000 miles of fiber deployed, shared Hoffswell’s sentiment and added a number to it. “We have about 11,000 miles of fiber in our footprint. We serve about 125,000 customers with our broadband services,” said EPB’s Espeseth.
“The cost of power outages in Chattanooga was nearly $100 million a year,” she said, referring to costs to the community (“the cash register or the point of sale terminals not working and that sort of thing,” she explained). Today, the fiber network has reduced power outages by 65% and outage minutes by 52%, which the utility estimates as a $50 million return to the community, she added.
“A lot of our local offices are relying on the local Internet. And so the systems that we have, from a corporate standpoint, some of our field engineers can’t even run those systems because the Internet connection in those local areas is so poor,” he said. “It’s significant to know that you do not have a limitation from a communication standpoint.”
EPB, Alabama Power and HBPW, which all began deploying fiber to support their power grids, have each expanded into delivering fiber broadband either directly or indirectly. EPB – which turned Chattanooga into “the first gigabit community in the world,” according to Gary Bolton, CEO of the Fiber Broadband Association – operates its own ISP called Fi-Speed. Today, Fi-Speed delivers residential service speeds of 300 Mbit/s, 1 Gbit/sec and 10 Gbit/sec.
In Michigan, Holland BPW delivers fiber to local businesses, municipalities and community institutions and works in partnership with six ISPs: 123.net, Everstream, Sirus, Merit Network, US Signal and The ISERV Group.
“When we started the fiber, we decided any excess capacity in our network would be made available to our community,” said HBPW’s Hoffswell. “We did that and have provided lit services and dark fiber services to our greater community for 30 years now.”
(Image Credit: Pixabay)
Similar to HBPW, Alabama Power started its fiber build 30 years ago but did not expand into fiber distribution until “three or four years ago,” said Stegall. Rather than looking to serve as an ISP (“that’s outside of our scope,” he said), Alabama Power is delivering middle mile fiber and currently has service provider partnerships in seven of the 14 markets where its fiber distribution networks are active.
“The other seven are in more rural areas and [it is] harder to find those partners,” Stegall said. “So, we’re very interested and excited to see what the infrastructure bill is going to do in terms of enabling business cases for some areas that did not have traditional telecom business cases.”
Service and infrastructure ‘decoupling’
Indeed, the multi-billion-dollar broadband grant programs in the Biden administration’s infrastructure law specifically reference electric utilities’ role in the future of fiber and broadband delivery.
The $1 billion middle mile program calls out “electric utilities that increasingly recognize their capability to transform the communications market.” And the $42.45 billion Broadband, Equity, Access and Deployment (BEAD) grant program names electric utilities among the “non-traditional providers” as eligible subgrantees and encourages funding open access networks.
That push toward funding open access networks, and recognizing electric utilities and cooperatives as well placed to close broadband infrastructure gaps in the rural US, is enabling new business and delivery models.
In Arkansas, for example, a group of 13 electric co-ops has recently banded together to form Diamond State Networks, a wholesale fiber network, to deliver broadband across the state.
Conexon, a consultancy that works with electric co-ops on fiber delivery, is another example; its newer ISP arm Conexon Connect operates broadband services for electric co-ops that don’t want to take on the role of service provider. (“We help people design and build networks, and we are interested – when an electric co-op is not – in operating the network,” Jonathan Chambers, partner at Conexon, told Broadband World News.)
Alabama Power’s Stegall expects the federal government’s focus on open access to push more utility providers that were previously hesitant to compete with service providers into delivering fiber infrastructure. “What I see in a sense is the decoupling of an infrastructure play and a services play. It’s the future,” he said.
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Good overview of the excellent conference last week. Last week, I spoke to several electric co-ops that are now serving more broadband customers than they have electrical customers. This is because communities outside their service territory asked those electric utilities for broadband service. The upside for the original electric co-op members is that, not only are they getting good broadband, the electric coops have been able to return profits to their members via either capital credits and/or lower/flat electrical rates.