Expanding the Impact with Cooperation
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Expanding the Impact with Cooperation
- 1. Building Bridges: Expanding the Impact with Cooperation Laura Withers Director of Communications NTCA-The Rural Broadband Association lwithers@ntca.org
- 5. #RuralIsCool
- 7. A Tale of Two Rural Americas • Blue - Over 1,000 small businesses (RLECs) in most rural areas – <5% of U.S. population and 40% of U.S. landmass – Approx. 7 locations/sq. mi. • White - Mix of urban/suburban/exurban/rural in “Price Cap” areas – 95% of U.S. population – 60% of U.S. landmass – 50% of rural America (most of unserved America)
- 8. • Deploying broadband is: – Expensive – can someone share the cost? – Competitive – is that in your DNA? – Technical – do you have expertise in-house? – All-consuming – could it distract you? Why Partner?
- 9. Why Partner? • Regulation! – FCC/State Voice & ETC obligations – Form 477 broadband reports – CPNI (voice and broadband for now) – CALEA law enforcement obligations – Net neutrality?
- 10. Both….want to serve their local communities Need much better access to data, own and maintain critical infrastructure + = Need new areas of growth, have telecommunications assets and skills Electrics/ Municipalities Telcos Both
- 11. Need help marketing new services after operating in a relatively stable market or no market at all + = Need new areas of growth, have the marketing assets and skills operating in a competitive environment Electrics/ Municipalities Telcos Both Both….want to find new sources of revenue and improve services
- 12. Both….want to create a better future for rural America Need to find new lines of business but don’t want to manage + = Need to find new lines of business and new customers and have capacity to grow Electrics/ Municipalities Telcos Both
- 13. Partnership Can Take Various Forms Marketing/ Operating Partnership • Someone owns it, someone else runs or sells it Joint Venture • More skin in the game for both • Leverage your strengths, assets Merger • Not likely • How do you merge culture, boards? Vendor Relationship • Come and go • Each arrangement is based on the business plans and needs of the partners • There is no right or wrong way – and no template • Get to know each other and count on support from the national cooperatives to help guide your efforts
- 15. Know Before You GO 1. Rural telcos are doing a great job but their job is not done, and sometimes they need help. 2. Don’t be inefficient and overbuild existing networks. 3. Partnerships are ONE tool in the toolkit. 4. If you don’t do it, someone else might.
Editor's Notes
- -- NTCA serves nearly 850 independent telecom companies --Began as a committee of NRECA when electric coops wanted to bring telephone to rural America -- Mission: Working on behalf of small broadband providers who are working on behalf of rural America. --Members receive $2 billion per year from federal Universal Service Fund -- Inverse of Verizon map – lots of members in the Midwest --32 members in MN --Tour of MN in 2013 – from Blue Earth to Sebeka
- --Members 46 states covering about 40% of U.S. landmass --100% of NTCA members offer broadband to some portion of their serving territory – under FCC definition of 25 Mbps down --Most recent member survey: two-thirds of respondents’ customers can receive greater than 25 Mbps and 20% can receive between 10 Mbps and 25 Mbps. --More than three quarters provide video services, mostly IP-based, but some traditional cable. TRIPLE PLAY. About 60% provide wireless communications. --NTCA members deploy broadband to almost all of the schools and libraries in their service territories, displaying their commitment to community. --We recognize that schools and libraries are somethings the only option for students who don’t have access at home because of cost or availability.
- --Rural broadband is the new cool kids lunch table --NTCA participated in 7 Congressional hearings so far in 2017 --Nearly 60 meetings with FCC on universal service reforms in 2017 --Media interest has reached new heights – RFD-TV. --INFRASTRUCTURE FOCUS --August: FCC Rural Broadband Month --Blessing and challenge: The cool kids table is now more crowded. Where do NTCA members fit in?
- --If rural telecom companies have done such a good job, WHY are we still talking about this? Why do 19 million Americans still lack access to broadband, according to FCC? --Tale of Two Rural Americas: RLEC and Price Cap --Most unserved parts of U.S. are in “Price Cap” areas – served by larger carriers like Windstream, CenturyLink, national carriers Verizon, ATT --This is not an excuse! --Costs are the challenge. NTCA survey: 90% said cost is the No. 1 barrier to greater deployment.
- --Focus on partnerships to help bridge the cost divide. --Other factors: 1. Competitive spirit. Rural is no longer monopolies. Most NTCA members face some form of competition. 2. Technical expertise. Does a potential partner need help there? Electric coops need smart grid, but do they have techs to support? 3. Broadband is a full-time job. Competitive strategies, marketing planning, customer service/troubleshooting and keeping the Wifi on.
- --Used to work in auto industry and think it was highly regulated. Nothing compared to telecom!
- --Why partner? There are many reasons. --When the recipe works, it’s sweet.
- --Don’t underestimate marketing effort
- --Management needs to align and have clear division of responsibilities
- --There are many flavors of partnerships. Each is based on unique needs of partners. --Mergers are hard. Blending cultures and boards can be a challenge at best and a kiss of death at worst. --Don’t go it alone. Talk to others who have tried and use resources provided by national cooperative associations – NTCA, NRECA – and vendor partners.
- -- Case studies --RS Fiber: New broadband cooperative that serves most of Sibley County and some of Renville County. Bonds were approved to fund 25% of a broadband project and those bonds are backed by the counties, some small cities and also by townships that are getting the fiber. --Swift County: Federated Telephone Cooperative, an existing telephone company, was awarded $4.95 million to build fiber to rural homes in the county. The county approved general obligation bonds of $7.8 million to complete the project, or 60% of the funding.
- --Match.com for broadband projects. We promise you don’t need a fancy profile pic! --Nearly 50 inquiries since launch in June --Roughly ¼ have been electrics looking for partners; about ½ have been WISPs or munis looking for partners. The remainder have been vendors looking to connect with rural service providers. --In almost 2/3 of the inquiries from potential service providers (electrics/munis/WISPs), we’ve been able to find nearby interested telco partners for discussions. --We aren’t privy to how those may be going because we don’t want to gum things up by inserting ourselves into the process, but the good news is in a month of work we’ve got probably 10-12 different groups talking to each other who wouldn’t have been otherwise.