In this episode, we are at the NTCA Rural Broadband Association event 2020 RTIME. We start with a visit with Christine O’Connor, executive director of the Alaska Telecom Association talks about her mission to educate and advocate for rural broadband programs and providers in Alaska, she provides an update to on-going broadband efforts and funding challenges. More about Alaska Telecom Association here: www.alaskatel.org
We also talk with Fred Johnson, vice chairman of the NTCA and CEO of Farmers Telecommunications Cooperative in Rainsville, Alabama. He provides a view into NTCA’s work with the FCC and policy development. Fred updates us on progress in rural Alabama as well. More about Farmers Telecommunications Cooperative (FTC) here: farmerstel.com/
RTIME 2020 brings together more than 2,200 thought leaders in the industry ready to push the limits and continue this track to success. Hosted by NTCA – The Rural Broadband Association an association representing 850 independent, community-based telecommunications companies that are leading innovation in rural and small-town America. NTCA advocates on behalf of its members in the legislative and regulatory arenas, and it provides training and development; publications and industry events; and an array of employee benefit programs.
Learn more about NTCA and RTIME 2020 here:
Christine O’Connor: We were founded in 1949 even before statehood. The Alaska Telecom Association supports member companies as they provide telecommunications services across some of the most remote spectacular areas on earth. It impresses me a little that even at that point before statehood, they were realizing they needed to work together. It took us into the 80s to get landline service everywhere in Alaska. There’s a long arc to getting this infrastructure out and I feel like we’re in the middle of that arc for broadband. It’s moving much more quickly, and people wish it would move even faster.
I am completely Alaska-centric, born and raised in Alaska, came up through Alaska telecom and I’ve been learning over the last five years or so that it’s different down here. One of the big things that just jumps out is to us a big hurdle is just that middle mile, how do we get to the world? And it’s just a given that factors into everything and realizing that and the huge cost of that and the recurring, not just building but the Opex, and realizing that’s not the same factor in other parts of the US, in fact, maybe most.
Craig: Out of curiosity, what would be a rough comparison as far as the expense for that middle mile?
Christine O’Connor: I don’t know if there is one because we’ve got undersea cables going from Homer or different central areas to Seattle. I mean, that’s 1500 miles, so the cost of that which is borne by our member companies in the ILEC community, I don’t know if there’s a comparison down here.
Christine O’Connor: The most recent is ReConnect (Broadband ReConnect Program). I’ve got a member company, Cordova Telecom that put in an application and was awarded a grant to connect Yakutat, which is a neighboring… well, in our terms, neighboring community down the coast. Cordova is going to be building five microwave towers down the coast and then fiber to the home in Yakutat, which will be an absolute game changer for that community. It’s going to be something that changes the trajectory of their town. So that’s the most recent announcement. But even dating back to January 1st of 2016, our high cost funding through the Universal Service Fund (USF) was stabilized through the Alaska plan, ACAM (Alternative Connect America Cost Model). We have a couple ACAM companies and we have one price-cap company.
We have stable funding and designated build out obligations and there is just a flood of broadband deployment happening. We’ve got companies putting in microwave connections. We’ve got fiber to the home across the North slope, so in the most arctic place, Utqiagvik, used to be called Barrow. You’ve got fiber to the home there, so it’s exciting. My hometown Dillingham, Nushagak Cooperative is upgrading and building new microwave towers to dramatically expand their broadband capacity. And that’s all just due to a huge investment by members. We have about seven cooperatives and about seven private companies, seven, eight private companies. They are investing their own member capital, their own leveraging loans. CoBank is a big loan provider in Alaska and then of course the stable Universal Service Funding and we do have a state fund that helps boost to get all this happening. It’s just a really fun time.
Christine O’Connor: We have a lot of areas where the deployment obligation is 25/3, even some 50 Meg service going in and 100 Meg. We also have areas where the obligation is simply to maintain existing service. Fortunately, the Universal Service Fund recognizes there are some extremely high cost places where at this moment in time, unfortunately it’s not feasible to deploy broadband. You recognize that and continue to fund the operation of that network, so consumers still have the service. In those areas, my member companies have been upgrading their last mile network so that they will be ready at the point where they have access to middle mile. You’ve got fiber to the home in Aniak, which is a very remote community. They’re getting ready for when we can plug the two pieces together middle mile and last mile.
Christine O’Connor: There’s deep satisfaction, but I would say the strongest reaction is, what’s next? We know there is so much more to do. We’re not done. The gaps that we have in broadband service in Alaska are just crying out to us. So probably the consistent responses. Yep, we finished that one. Now we’re looking at this. The Alaska plan started January 1st, 2016 through 2026. We’ve got a mid-year look where we’re… we report every year, the member companies, what they’ve deployed, looking at how far are you going to meet your target goals. Many companies are exceeding those goals and will achieve a lot more. It’s very successful. It’s that stability and a huge nice chunk of funding to push broadband out.
The Alaska plan was somewhat unique because it has a wireless, it took the mobility funds that were coming to Alaska and locked them in with ILEC Funding or the Rural To Go Funding. Lock that in so you’ve got about over 10 years, 1.5 billion. This is the high cost stream that was already coming to Alaska. As the FCC worked on reforming and modernizing the high cost fund, it was having weird effects in Alaska because our networks are different, our companies are different. So, what the Alaska plan did was take those amounts, lock them in for 10 years in return for obligations that were achievable for the companies.
Christine O’Connor: There is a historic project that will be going live, I believe, in early May by Matanuska Telephone Association, MTA, a very large cooperative founded by its members in 1953, so also before statehood. They are completing the first terrestrial connection from Alaska to the lower 48. They have already run fiber from Fairbanks down in our meeting Northwestel at the Canadian border. So this is a really big deal. Until now, we’ve relied for middle mile on those undersea cables and satellite connections. Now we’ll have this geographically redundant, very large terrestrial pipe. That’s a big deal.
Craig: When you talk about how these projects are underway, it would seem, at least from a layman’s standpoint, that there is perhaps more variety in the methods of construction and delivery in Alaska than anywhere else in the US.
Christine O’Connor: That is what I have gathered. Sometimes I joke that I’ll get people saying, “Hey, how can we help you?” And say, “Well, we actually know how to do this. We are the experts in ultra-remote arctic technology. We use a combination, copper plant, fiber plant, microwave, radio, whatever works to get it there, we need resources to do it.” So it’s just a combination, whatever it takes to get to the remote community. We even have, out in Bristol Bay, there’s a commercial fishery out there every summer where I go, well, I have a big old second generation HughesNet on my cabin so I can get connectivity. We’re creative, very resourceful to get that connection.
Christine O’Connor: For the association, continuing to focus on the regulatory environment. Really the association does a lot of advocacy. I am always looking to see what’s next on the horizon for regulation, funding. Often there’s some little nuance that doesn’t quite fit for Alaska because of our circumstances, so continuing to do that. Looking ahead, what comes after the Alaska plan, we will always want to be building the networks. The operations costs will continue to be very high relatively. So yeah, five years we’ll be getting very close to 2026, that will be a big focus.
It’s quite a haul to get to D.C. from Alaska, two flights and really the four-hour time zone changes the worst. So you’ve got to come a couple days early so you can reset your time clock. But actually, partnership with NTCA is very helpful there. NTCA does a couple fly-ins a year. Many of my members come, so we just gather up together, go up to the Hill. We also often visit the FCC and just try to… it’s a continuous explaining our circumstances and listening to them. What are their priorities for our networks and our services?
I like that part of the job. Its facilitating being a little bit of tour guide. I love introducing people that haven’t been to D.C. before saying, “Here, we’re going to go to Union Station, check this out. That is gold on the ceiling people.” Because I’ve been in that position and someone did that for me. I enjoy it and it’s rewarding.
Christine O’Connor: We have our winter conference, which I think that was the largest meeting we’ve had in recent years. We’ve had a lot of changing of the guard within the association. People retiring, new GMs, new engineers, senior execs. So we get together, I try to put together an agenda that is… I have a regulatory background, so my agendas tend to be a little wonky. So just lots of brain food, lots of get together, talk everybody, let’s see what’s going on.
Craig: I know that one of the things that when people think about Alaska, Iditarod comes to mind and talking with some of the other members of the association that were here, talking about how they enjoy every year being there on the opening day of competition at the Iditarod. That has to be a lot of fun.
Christine O’Connor: Being downtown Anchorage when they start the races and the dogs are so excited. I mean, they love to do this, so the dogs are yelping and jumping and never fails. Once in a while the dog teams will take off and you’ve got someone dragging behind trying to catch up. It’s a huge party downtown and yeah, it’s not to be missed.
Christine O’Connor: To build consensus on big federal issues, which we’ve had a lot of consensus and that’s through the association. I try to create a forum for us to get together because we have incredible diversity within Alaska, much less, we’re different from the lower 48. Finding something that will support all the companies in their work. And once we find that, we go and we talk about it and we get a good reception, we get a very rigorous questioning and how would this work? And it’s been very positive. I love that. That’s my favorite thing.
When we look about what’s going on with the NTCA, obviously there’s so much great work and of course the association serving rural customers in 45 States across the country, 37% of the nation’s land mass, but what’s so important I think is the work that’s being done to expand that footprint in rural America. What are some exciting things going on now with the NTCA?
We’ve had some extremely successful advocacy and the FCC has been very responsive to a number of our needs over the past few years, which has ushered in a new, at least decade of reasonable stability for most of our members. That’s allowing and providing for the ability for our members to make some significant investment decisions that have long been put on hold. So we’re seeing a significant amount of modernization primarily in the direction of optical fiber to the premise deployment that’s really bringing a new wave of investment and a new era in communications technology in broadband in rural America.
When we look at the funding that’s required for that fiber to the home, if I were the premise approach, there are many programs in existence that assist providers along those routes, but there’re also hurdles that for many start with just whether or not they can qualify for those programs. Talk a little bit about that.
As with anything administered by the federal government, there are going to be necessary rules and regulations and sometimes those are daunting. But I will say this, the current FCC has probably been as reasonable, and I say that as a tax payer as well as a communication CEO, as any FCC has in recent modern history about making those doable. Sure, you’ve got to do a lot of work. It’s not easy and you’ve got to understand the nature of the market, the nature of the business, and the nature of the regulatory landscape to participate, but if you’re willing to do that, then there are great opportunities out there, both with respect to the traditional support mechanisms as well as the reconnect and infrastructure funding that Congress has given the Agriculture Department to help in that area as well.
I know that the advocacy in Washington D.C. is a big part of what goes on. I know that in a couple of months you’ve got the legislative policy conference there. Give us a preview.
As I said, we’ve been very successful in getting what we believe to be some very reasonable policies and rules and regulations in place, but that is a never ending proposition. Our industry and anyone connected to it that genuinely has the best interest of rural America at heart and the deployment of broadband as a goal has got to continue to educate our policy makers and legislators on the importance of staying focused on that task.
I know that when we talk about providing broadband in rural America, agriculture is an industry that obviously has benefited greatly. I know in years past you’ve had Sonny Perdue, the Secretary of Agriculture and of course for those of us from Georgia, former governor, but I know that that is an industry that has really made huge strides with regard to the benefits from broadband.
Absolutely. And I challenge all members of our communities to remember how things are evolving in that platform. For example, we just started an initiative that will carry on for years to come about surveying our local farmers, especially those of the larger commercial farmers to know what they’re going to be requiring to make sure our network reaches them before they need it.
When we look at your other responsibilities as CEO at Farmers, what is going on there?
Well, the one thing that I just told you is that we’re expanding the range of our optical fiber network. We never really knew whether it would be affordable or feasible for us to extend optical fiber to 100% of our membership. We are in fact going to reach that goal. We’re already at 95%, we will be at 98% availability by the end of the year, and 100% next year. And in our particular case, we will not only have it available, but for all practical purposes, everyone will be connected to it. So that’s a milestone for us and it has had a remarkable impact upon solidifying the base of economic incentives for our industrial developers and economic developers.
When you’ve got that kind of network in place, you’re not losing any jobs because of the communications network. And that’s been very important to us.
Northeast Alabama is such a growing part of the region. And you mentioned the economic growth and how broadband is very much part and parcel of not just survival, but that is the essence of the future growth for areas.
We have some of the largest distribution facilities in the US located in our service territory and they absolutely require not just basic broadband connectivity, but robust broadband connectivity that is both geographically and virtually redundant.
With what you have seen in your time of service with the NTCA and also with Farmers, what do you expect the next five, 10 years to bring for the industry?
Well, as we started this podcast, I made mention of the fact that we have an era of stability. Now, let me be a little bit more specific about that. We probably have somewhere between eight, nine, possibly 10, but we’ll say between eight and nine years of relative certainty with regard to specific government rules on specific support mechanisms. There are two challenges. First is to be sure that we address what is next and influence that as much as possible through advocacy and policymaking to be sure we do everything we can to help define the landscape. The second thing though is we’ve got to be ready to deal with what happens in eight to nine years, regardless of how much we’re able to affect the outcome.
So we’ve got a good period of time to do some good stuff, but we have to be ready when that’s over.
Strike while the iron is hot.
Vice chairman Johnson, we appreciate your time. Thank you so much for what you do for the world of broadband and the NTCA. We appreciate you being part of The Broadband Bunch.
Thank you very much. Good to be with you.