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Rural Broadband Today is a new podcast focused on one of the most important issues facing Rural America. It tells the stories of those working to bring broadband internet access within reach of every citizen. This interview-style show presents conversations with elected officials, industry experts and business leaders at the forefront of America’s efforts to solve the rural broadband challenge.
Intro:
Rural Broadband Today is a production of Pioneer Utility
Resources.
Broadband, we need it for work and for school, for our health and
our economy.
What's being done to bring broadband internet access within
reach of every American?
Let's talk about it now on Rural Broadband Today.
Andy Johns:
Thank you for listening to Rural Broadband Today, where we take a
look at the issues and the people shaping the rural broadband
story across America.
I'm your host, Andy Johns, and this program is produced by
Pioneer Utility Resources.
Please share this episode with your network and help us tell the
rural broadband story.
Today, we're going to be talking about the 2022 Rural Electric
Cooperative Broadband Benchmarking Report.
And I've got two great guests who are joining me.
I'd like to welcome Rudy Tober, who is CMO of NRTC Broadband
Solutions.
Rudy, thanks for joining me.
Rudy Tober:
Thank you for having me.
Andy Johns:
And we've got Paul M.
Breakman, who is the vice president of Cooperative Business
Solutions for NRECA.
Paul, thanks for joining.
Paul M. Breakman:
Hey, Andy. Thanks for having me.
Andy Johns:
Well, there's a lot to dig into here.
There's a lot of meat in this report.
I was glad to get in there.
I think it provides a very good insight about some of the good
work being done across the country from rural electric
cooperatives in building out rural broadband.
But Paul, let's start with you.
What is the purpose of a report like this, kind of what's the
goal, and how is NRECA
and NRTC involved in making it come about?
Paul M. Breakman:
Yeah. Thanks, Andy.
So NRTC first published a Rural Electric Co-op Broadband
Benchmarking Report back in
2020.
And over the pandemic the a number of co-ops who have deployed
has increased.
And NRECA, we now have about 210 members who have deployed
broadband on some
level. And so we thought when NRTC came to us and said they
wanted to do an update and would we be willing to collaborate, we
took the opportunity to get involved and partner with them on
this report.
And so this report, this time around, it has 88 members' data,
and the
goal was really to catalog the results to help co-ops that are
in the business, going into the business, sort of
evaluate what the different technologies are and the business
cases and the success of those deployments.
And so it was a great collaboration, and it was a real honor to
be part of that effort that NRTC led.
Andy Johns:
So we'll dive into some of the specifics, because you touched on
several of the things that I want to talk about there, but Rudy,
let's go to you. What are your top line takeaways?
What's kind of the headline?
What are the things, at least for me, that I would go to the
dinner table and be like, "Hey, this really interesting report
came out and these are the top headlines." And my family would
not be as interested in it as I would be.
But what are the big takeaways or top line things from you,
Rudy, from this report?
Rudy Tober:
You know, I would say, and I've been at this a long time working
with electric cooperatives and working on
broadband deployment.
And I would say the top takeaway for me is that these projects
are successful.
I mean, there was a time years ago when I would meet with
cooperatives and they would say, you know, this was before there
were 200 deployments, when there were only a handful of
deployments.
And folks would say, "Hey, how do we know this is going to work?
It's a big financial investment.
How do we know people will buy internet services from an
electric cooperative?
How do we know what the take rate is going to be?
How do we know that we'll be able to pay back all of the money
that we're borrowing?" And I think what this report does, and the
one that we started with as Paul mentioned back in 2020, really
verifies that these projects are successful.
Take rates above 50% after a couple of years.
Internal rates of return of 9% on average for the 88 cooperatives
that participated in this
project. So it's really heartwarming for me to see this because,
again, there was a time when cooperatives were very
skeptical and very nervous about doing this.
And I think this report and the fact that it covers the whole
country and it covers many, many participants just proves
that this has been a good thing to do, and it's been very
successful on a nationwide basis.
Andy Johns:
Outstanding. And there's a lot of things in there that we'll
unpack as we're talking later.
Paul, what were the big headlines for you?
What was the takeaway when you look at this report?
Paul M. Breakman:
So just when I read some of the results and some of the data,
some things that stand out which were obvious, and we'll talk
about those as sort of the evolution of technology – where we
were two or three years ago and where we're headed now and over
the next 48 months.
But something that really stood out to me was – and I knew this
was going to be an issue.
And I don't want to downplay the fact that workforce
developments are a challenge right now
and in these models, right?
So staffing – members that go into the broadband business use all
kinds of mixed staffing models,
and there's no right way to do it.
But what we saw from the report is that, you know, outsourcing
is hugely important, and partnering is hugely important on the
resource side. When you talk about the business of broadband
versus the traditional electric supply business, which our
members have done for over 75 years, it's a game changer.
And the right folks to operate those networks are really
different than the traditional folks that have operated the
electricity systems.
And so there are some difficulties in terms of materials
procurement and hiring the right folks.
And the report highlighted that, good or bad.
It's important that we acknowledge that there are challenges in
this business, and they're different than the
business that we have been in.
Andy Johns:
I think so.
Paul M. Breakman:
Yeah.
Andy Johns:
When you say, let's define that term.
You said "mixed-staff models." You're talking about contractors
versus in-house, or partnering with other co-ops?
Or it could be a number of things.
Paul M. Breakman:
Right? The answer to that question, Andy, is yes.
So what we saw from the data from, and I know it from talking
with some of the members, but the report really
highlighted it is that staffing levels will vary depending on
how big your system is.
And some folks will outsource on the IT side, the help desk
functions,
and cybersecurity functions and partnering with different
vendors to help
find the right workforce that's going to support your network
buildout.
And there's no right one model.
And so it's what co-ops do.
You know what, we hear it a lot.
You've talked to one co-op, and you've talked to one co-op, right
?
And it's the same with these broadband buildouts.
You know, the difficult issues tend to be a, as I mentioned,
reporting and compliance and materials procurement and
then the hiring piece.
And in order to solve those challenges, we've seen all kinds of
different partnerships that are successful.
And some co-ops just increasing their staff and training their
existing staff.
Andy Johns:
I think so. Thanks for explaining that one, and kind of defining
what you've seen there.
You were saying something else, I think, before I cut you off.
Did you want to go back there?
Paul M. Breakman:
No, in one of the pieces that stood out a little bit is that –
and in Washington
NRECA spends a lot of time on the Hill and at the agencies
talking about broadband and rural broadband and the
initiative and how do we get funding from Washington and at the
state level to the members who are
deploying broadband. And so it was interesting to see the data
that 92% of our 88 respondents had received at least
one federal or state grant, and over 60% of those had received
two or more
grants. And so it's nice to see and nice to hear about money
flowing.
And there's different levels.
But, you know, we're highlighting the work, you know, from all
this funding that's going to be coming from the bipartisan
infrastructure bill.
And we've got $62 billion related to that funding effort and $42
billion that's going to flow
through the states.
And so, the data we saw from this report is aligned with,
hopefully, what's going to happen over the next 36
to 48 months coming out of Washington and through the states.
So it was successful deployments are tied to successful
financing and funding models.
Andy Johns:
It's going to be a very interesting next few months as that
starts to come out.
Paul, I'd like to come right back to you, because one of the
things – I don't know that it was a surprise, but I think it's
worth noting.
So the motivations to invest in broadband from the respondents
to the survey, and they were asked as a
"1" being least important and "5" being most important.
With an average of 4.7, the community service/economic
development was the number one motivation for
electric co-ops to get into broadband.
And then the second one was to strengthen the electric business.
Things like smart grid, that got an average of 4.0.
But then the revenue expansion and diversification got a 3.5 out
of 5, which is still a high score, but it's not as high as I
would have thought. And I'm not surprised that just knowing
electric co-ops that the motivation to serve members and serve
their communities was the number one, but I am a little
surprised at how different it is, because you hear a lot of folks
talk about needing to diversify revenue, that sort of thing.
So did any of that surprise you, or particularly the revenue
diversification was a lower motivating factor?
Paul M. Breakman:
So I've said this in other places.
Co-ops first went into the electricity business 75 years ago,
not because they were in love with the commodity of
electricity. It's because the challenges associated with getting
those investor-owned utilities to serve rural America.
And so here we are again, right?
The commodity here is broadband, and it's a way to serve our
communities, and
the need is addressing what's needed in those local communities.
And that's the economic push and the
business of broadband are very closely related.
And so what we've seen – and this report really highlighted
that – is that the revenue
diversification, while important, certainly because you want to
leverage and hedge your investments,
really the things we do for our communities is based on helping
our communities.
Not because we love the business of broadband, although it's
exciting, but it could be anything in terms of serving.
And co-ops serve their communities in many ways, not just
broadband, but economic.
There's all kinds of economic pieces associated with how we are
serving, whether it's
building out the deployment on the broadband side or partnering
with your local community
to help your schools.
It can be all kinds of things.
And so I wasn't surprised at all, Andy.
You know, it gives me comfort knowing that we are doing the right
thing.
We're mission driven organizations, and that held true with the
data.
I mean, Rudy, I think you would probably agree here.
Rudy Tober:
Yeah, I think, Paul, that was a great answer.
And, you know, I spent a lot of time, as I think I mentioned
earlier, with cooperatives directly working on their
feasibility studies, know, working with them to try to figure
out is this going to work, meeting with their boards, etc.
And the motivation was always kind of coming up from the bottom.
In other words, their board members were saying, "Hey, we have a
problem in rural areas.
We just can't get good broadband service." And 80 years ago,
cooperatives came together, and they solved this problem
related to electricity.
And now the question is, can we find a way to solve this
problem?
You know, when it comes to broadband service, smart grid and all
of the other things that are coming along.
And for me, it was just a pleasure to see cooperatives come
together and say, "You know what?
We're going to venture into these things.
We're not going into these businesses necessarily because we
think we're going to make money at it.
But we are going into these businesses, or we're going to
deliver broadband, because we believe it's going to help our
community. It's going to allow people to stay in our area.
It's going to attract businesses, jobs, etc." And so, you know,
just kind of agreeing with everything that you're saying that
that the motivation for cooperatives isn't really a financial
one.
It's one of helping their communities.
Paul M. Breakman:
Yeah. And to your point, Rudy, I think the emergence of what we
call the smart grid and other IT related services, it certainly
provides a great opportunity for the industries to collaborate
and to partner for new services
and, in the co-ops' cases, even in new revenue.
But that's certainly not always the driver for our members.
It goes back to the mission – to help our communities.
Andy Johns:
I think that's tied to the next point that I had seen looking
through it.
If I'm reading this right, Rudy, 80% of the areas surveyed were
growing in jobs and population.
And that kind of goes against what you hear a lot of time – a
lot of doom and gloom about rural America and population and jobs
and all that. So, you know, can you tell from there, number one,
am I reading that right?
And then number two, were a lot of these areas are growing
already?
[Do] we have kind of a causation correlation thing there?
Or does the data suggest that broadband is the driving factor
with that?
That was an exciting number for me to have 80% of these areas
growing, so unpack that for us a little
bit.
Rudy Tober:
Yeah, and I think the question, the specific answer there, the
80% was – so the question was, did the
cooperatives in building these projects see an increase in
population, businesses or jobs?
Any of the three.
And I think when you look at this data, if you go out to the five
year window, and there are now a number of broadband projects
that have been in business for five years, fully 80% of those
cooperative saw at least one of the three.
And in most cases many saw more than one of the three.
So fundamentally, to answer your question, the answer is yes,
this is having a positive impact on these
communities, just like they were hoping would happen.
And folks are seeing people move back in.
I mean, again, I go back down memory lane.
I remember being in meetings where people would say, you know,
"Our cooperative is actually dying." I mean, one of the first
projects we built in Missouri, which was probably now eight or
ten years ago, they said, "You know what?
People are moving out of our area because they can't get good
broadband service.
Businesses won't move into the community because they say, 'You
know what?
Without a good internet infrastructure, we're just not going to
move that plant or that office or that business into the
community.'" And then people were literally saying, "Hey, you
know, I'm starting to work from home.
I need an internet connection.
I'm communicating with my office on a regular basis.
And I can't just live in a community where my internet service
is faulty or doesn't work." So that
one project that I'm thinking of, in fact, I mean, that began to
reverse after a few years.
And the nearest community, the nearest city, that folks lived
in, the cooperative when we started there, they
originally said, you know, the average person lives on about 80
acres in our cooperative.
So this is a very rural area.
And people were moving out.
And then after the broadband network was built, and they were
delivering, you know, super fast symmetrical high speeds and
everything that people were looking for, they literally said
people were moving out of the nearby city when they realized,
"Hey, I can live on 10 or 20 acres, and I can get a symmetrical
gigabit internet connection at my
home. And so now I can have the best of both worlds.
I can live in a rural area, but I can have all of the modern
conveniences of an advanced broadband network." So,
yeah, to answer your question, we are seeing that across the
country.
Andy Johns:
So – go ahead, Paul.
Paul M. Breakman:
That's a great point.
And so, Andy, when we looked at the data, two things about it,
right?
So the economic impact, the data indicates it's significant.
You're talking about an increase in electric meters, increase in
population, new businesses, increase in home building and plant
communities and an increase in jobs.
What we saw over the, and I actually wrote a piece for NRECA
early on in the pandemic that was called – I forgot – it was
sort of broadband as an essential utility and how the pandemic
working from home and the need for speed
and all these things, really highlighted that.
And the data from this report really highlights that.
And not only it's sort of, it also
solidifies some work the NRECA did a few years ago in terms of
broadband.
It was the loss of economic value to these communities that
don't have broadband.
And so we're seeing the flip side of that.
And it really solidified what we thought we knew, that connected
communities
are generally healthy communities.
Andy Johns:
Now we let off the call talking about the top line takeaway being
that a lot of these buildouts are successful.
I know, Rudy, you've been involved in a lot of feasibility
studies.
NRTC does a ton of those.
Most of that needed take rates that I've seen from working with
our clients, from those feasibility studies, it's like 40 or 45%
is kind of the way that those seem to be built.
What this survey indicates is that for those who have been doing
it at least two years,
it's a 50%, or a little more than 50%, take rate for people
signing up for service.
And a 9% rate of return, like you mentioned earlier.
That's better than most folks expected from what I've talked to
and from what I've heard.
And I know that that varies with a lot of the folks that we work
with.
They may get a really high take rate in an area without any
competition, and then an area with a lot of competition, it's
going to be lower. Do you think that take rate and that rate of
return, do you think that holds up as buildouts
continue?
Rudy Tober:
Yeah, and I think, you made the point where it does vary by
area, right?
But I think the great news is that you pointed out that take
rates are very strong right?
On average, again, this is 88 cooperatives around the country.
After two years, a 52% take rate, which is very strong and very
solid.
And like I said, I go back to a time when people would sit in
meetings and say, "How can we – we see your feasibility study,
and you're saying, you know, we're going to put a 40% take rate
in here.
How can we know that people will really buy broadband from us?
And what if our take rate is 10% or 20%?" So I think the good
news in this survey is that in 88
cooperatives, we see take rates much higher, right, than those
initial projections.
And I would also throw in that we, NRTC, when we do a
feasibility study, we want to be a little bit on the conservative
side, right? Because nobody's unhappy when their take rate comes
in higher than we projected.
But the reverse might be true if it came in lower.
So again, great news, really solid take rates.
But then to your point, I think the service area itself, the
electric footprint where the cooperative
is building the broadband network makes a difference.
It makes a difference, right?
More competition would lead to a more challenging environment.
And that's really why we would recommend doing a feasibility
study, because you've got to look at all of those factors.
So we said it here earlier.
If you've seen one cooperative, you've seen one cooperative.
It's very important for any cooperative to look at the makeup of
their service area, and if they have a portion of the service
area where there's already two or three entrenched competitors,
maybe that take rate in that
area is going to be a little bit lower, or maybe they don't want
to build that area, whatever.
They need to make those decisions, but a good feasibility study
will help them.
And I think the proof is out there that the cooperative model
where you're providing a superior
product with fiber to the home, you're providing excellent
service, and you're pricing it in a fair manner, that
formula is a great success formula and has worked well for
cooperatives.
Andy Johns:
That superior – go ahead.
I was taking us towards technology, which is a dangerous spot.
Go ahead, Paul.
Paul M. Breakman:
No, I just wanted to add some perhaps some color commentary.
When I looked at the data and saw these these take rates, I was
happy, right?
Because that just indicates that co-ops remain trusted partners
of the communities.
And, you know, this is a competitive business.
And I talk about that a lot when we talk about co-ops deploying
broadband.
And doing things like developing revenue estimates can be
tricky, and that's especially when you're talking about a
competitive market where co-ops generally lack experience in
selling services, right?
We've never had to sell our service.
And revenue estimates are built up from pricing and take rates.
And so when I see a 50% and higher take rate, it's indicative of
the work that co-ops have done on the front end to make
sure they're getting these estimates and numbers right.
And something I was happy to see, because a lot of times you
build into these feasibility models, what we call a customer
churn rate, right, which is turnover due to competition.
And it happens frequently.
And you'd like to see about, you can expect about a 2% month
churn rate, right?
And the data we're seeing is that, as I mentioned, we are the
trusted partners in those communities,
and we are the first providers that the members are looking to.
But that takes work, right?
And so beyond deployment, you have to think about – and the data
really confirms this – you have to really think about the
marketing considerations and the ongoing operational
considerations and things like legal risks and tax risks and all
these things.
And so to Rudy's point and to, Andy, your point, that 50%
seems pretty healthy.
I would agree. But it's really a testament to the work the
co-ops do on the front end and remaining the trusted partners in
those communities.
Andy Johns:
Seeing what I do all day, every day, I do appreciate you bringing
up those marketing considerations.
So that's part of – we always say before they connect to your
service, you've got to make a connection with them.
So, you know, however that may be.
Communicating, building up some of that demand, so they're ready
to go.
And we've got – none of us on here are engineers.
But Rudy had mentioned the technology.
One of the things that stood out to me from this report, it
talks about the majority of the investment is in
fiber, and there's more uses of XGS-PON – the networks for the
multi-gig service.
How is that different than maybe what – Rudy, we'll start with
you – but how is that different than maybe what you
expected, or what previous surveys had said?
And why do you think multi-gig ready buildouts are becoming more
and more common?
Rudy Tober:
You know, I think my answer there would be – and remember, I'm a
marketing guy, not an engineer.
So I'm giving the kind of the marketing answer.
But fundamentally, broadband is a continuously evolving
business.
And the one thing that's been true, and I've been in broadband
for a very, very long time since I got out of college.
So, you know, I worked for the cable companies in the past, the
big broadband providers, and then switched into the
cooperative broadband.
And it's always been a speed race, right?
So we're always increasing speeds.
And one of the surprises that came out for me in the
benchmarking report was that we actually have a
number of cooperatives that are offering multi-gig standard
packages.
So a two gigabit symmetrical internet package as standard
service, and
that surprised even me.
And I think it's because the demand is out there, right?
Businesses are moving into cooperative areas.
People are saying, "Hey, I want the fastest possible speeds.
I want the best possible service." And so to your question, I
think folks are always upgrading the
technology that they're deploying.
So we see it in new projects where they're saying, hey, I'm
getting ready for multi-gig internet service.
And then we also see as people are rebuilding maybe an older
project or extending into new areas, they're deploying the
most current technology.
And I think it will always be that way.
There will be a race for more speed, a race for better
technology.
And I think cooperatives, to their credit, are at the forefront
of providing the absolute best service that they
can come up with. So I think you're seeing new technologies
being adopted.
I'll also throw in that a good feasibility study, like the ones
that we do, you're always anticipating a
life span for the equipment that you will be replacing, right?
Maybe it's three years, five years, seven years.
And so as people replace that equipment in accordance with their
financial plan, they're buying the
latest version. So I think all those things play a factor.
Paul M. Breakman:
Rudy, as you're on the marketing side and Andy, too, I can say
that as a telecom and energy
lawyer, I'm a very poorly trained and uncertified engineer as
well.
And so in terms of XGS-PON technology, we've really seen it
become
the de facto standard for meeting those multi-gigabit bandwidth
needs for the residential business customers.
And just [inaudible] a little bit, Andy, for your listeners
XGS-PON, it stands for
the ten gigabyte symmetrical passive optical network, right?
So it's the updated standard for passive optical networks, and
it's the technology that supports the
ten gigabyte per second symmetrical data transfers, the
downstream and upstream.
And when we move into the next evolution of deployments, this has
become what co-ops are
investing in.
And that probably over the next 36 months or more, we could even
move into things like 25 G-PON
and 50 G-pon and 100 G-PON.
If you were to ask me, do we need this kind of speed five years
ago?
I would have said, for what?
Are you crazy? Our systems and the technology we're using can't
even support it.
But this is really aligned with co-ops making long term
investments.
Invest in a robust build out, and it's consistent with the
decisions we make on the resource side, on the electricity side,
investing in long term generation investments and distribution
investments and transmission
investments. We really spare no expense, and the same is true on
the broadband side.
Rudy Tober:
Yeah. And I would add if I can Andy, you know, as we move into
kind of the smart grid era, right, with everything that's
going on with electric vehicles and smart data monitoring and
upgrades on the electric side,
having all of that capacity, having a fiber backbone that has a
robust capacity to
connect all of those smart grid devices to it.
It's really becoming kind of the name of the game.
So it's really moving these cooperatives to the next level as
they deploy more and more devices, more and more speed, more and
more things connected to their fiber backbone.
Andy Johns:
Sure. And for anybody who's listening, who is interested in
hearing more about the multi-gig kind of the case for multi gig
broadband, we did an episode on the StoryConnect podcast feed
back in November with Matt Daniel from Mountain Telephone in East
Kentucky, where he laid it out very, very smartly, I think,
about kind of what folks are looking at and why
multi-gig broadband is so important for rural communities.
That one's worth looking up.
Going back to the the report and Paul, let's start with you on
this one.
When we're looking at pressures or challenges, obstacles ahead,
the pressure for labor and material
was one that was brought by a lot of the folks.
That's no surprise.
Obviously, when there's the kind of funding coming in that there
has been, and so many folks getting in all of a sudden, some of
the materials and folks to work with it can be kind of scarce.
You mentioned workforce development there at the beginning.
But how do you think those pressures for labor and material will
shape deployment of fiber on a macro scale?
And then what is NRECA and other partners doing to shape that?
Paul M. Breakman:
Yeah, so to your point, costs are rising, right?
There's price pressure on materials and increased labor costs.
And the data from the report, we saw that remain true.
And the deployment costs are increasing year over year, and those
are real numbers.
And so all of those numbers, though, you know, when, for
instance, when our NRTC does a feasibility report for the
membership, those kind of estimates are built into those studies
and the revenue estimates.
But the pressure we're seeing – and it's not just in broadband.
We're seeing it on the electric side, too, the increase in
materials and increase in labor.
And then the supply chain shortages, those have to be built into
your
deployment estimates and your planning.
And planning, planning, planning is so important.
NRECA has a number of resources, and we work hard in Washington
to address some of those
specific issues.
We recently rolled out the broadband tier to address the members
that have specifically gone into the
broadband business.
As our broadband tier of services, we have about 91 members now.
And so we are beefing up what we are doing, and we're working
with our partners, like NRTC on the technology
side and to partner with them to provide resources.
And everything from tax memos and working with our general
counsel's office on
legal implications and our government relations on funding
opportunities.
You know, there's a lot of things available to help the
membership.
I'd like to start on the cooperative.com broadband page and sort
of dig in.
And then folks that have any questions can always reach out to
me directly.
And, of course, I'm going to send them straight to Rudy and
NRTC.
But the partnerships we have really, Andy, with our friends in
the broadband space and the work we're doing here in
Washington, are intended to help the members be successful and
to recognize that there's challenges associated
with building broadband.
And it's not going to be for every member.
You know, I mentioned it earlier.
Legal implications, tax implications, operational
considerations, further to the point workforce
considerations. It's deep.
So members should not go about this quickly and working with
NRTC
and folks to understand the need to have the right technology
plan in place and the right business
case in place is really important.
Andy Johns:
Rudy get out your crystal ball for us.
How do you see labor and material pressures shaping things going
forward, and are they here to stay for a little while?
Rudy Tober:
Yeah. So I think Paul gave a great answer, right?
It's just kind of the way of the world, right?
Prices go up over time, and I think the way you deal with that is
we talked about feasibility studies, and we
talked about financial models.
And it's very important, you know, I think, that you do a very
thorough feasibility study, and then you update that
model on a very, very regular basis because prices do change.
Sometimes they go up, and sometimes they even go down, and
technologies change.
And if you're doing a very thorough feasibility study and then
you're updating that on a six month basis, a
quarterly basis, you'll have a much better chance of not getting
caught short.
And to Paul's point, I would also recommend work with somebody.
Work with NRECA.
Work with someone like NRTC.
Someone who does this on a day to day, week to week, month to
month basis.
Someone who sees prices rising.
Someone who can help you with materials procurement, because
sometimes there are supply chain issues, that can affect the
price. Sometimes there are contractual issues, that can affect
the price.
Some folks get their materials, some folks don't get their
materials because they don't have the right agreements and the
right leverage in place.
We obviously try to help folks with that with a full range of
services to help people plan and design and build and
operate their broadband networks.
But to what Paul just said a minute ago, planning, planning,
planning.
And then I would add to that update, update that information
with people that you can trust that have your best interest at
heart and can give you the most current information that you can
make decisions from.
Andy Johns:
Well said. Let's wrap it up with this question, and Rudy, we'll
go right back to you.
You mentioned feasibility studies, but aside from that, what
advice would you have for somebody
who, or what what advice can you draw from this report for
electric co-ops or utilities, more broadly speaking, who
are either just starting broadband or considering it?
What advice would you have for them?
Rudy Tober:
Yes, so my advice would be, in a sense, I may have just answered
that question, at least in my mind, which is, you know,
these are big projects.
And my advice would be, and again, I've been involved in a lot
of them, like from inception
to now seeing them many years later.
And my advice would be methodical, right?
Do a very thorough feasibility study, ask all of the questions,
make sure you have a very dynamic financial model.
The other thing I would recommend is now the good news is, and I
think our report is proven, is these projects are successful.
And there is a real track record, and there's a real record of
data that goes with it.
How much does it cost to build an aerial mile, an underground
mile?
What kind of technologies are folks using to deploy this?
So literally within every state in the country – and I don't
think there are any exceptions to that – there's probably a
cooperative in your state that has embarked on a broadband
project.
And I would suggest talk to those folks, go visit those folks,
ask them what was hard?
What was easy?
What are the challenges you're facing?
What would you do differently?
So, you know, it's just being thorough in the research and
looking at all of the aspects of this.
How will it affect your unique cooperative situation?
And the other thing is – and I think, again, our report proves
this is – be confident now from all of the proof that's out
there that this can be done.
Now, really just answer the question, what would it look like in
my specific situation, and how can I do
everything in my power to make sure it's a success?
Andy Johns:
And I think that's been one of the really cool things to see, is
folks reaching out, you know, being willing to share that
information and talk to other folks as well.
Paul, what advice do you take from this, or what advice would
you have for co-ops and – I guess many of the co-ops – who are
looking, either just starting broadband or getting into it?
Paul M. Breakman:
So, I'll just reiterate what we've said over the course of the
last 30 minutes or so, Andy.
Tread carefully and do your homework.
Pick the right partners.
Don't be afraid to fail because there will be failures and
challenges and recognize that once you
start looking into the business of broadband, there's many ways
to be successful.
There's many technology options.
There's partnership models that work.
You may decide that deployment is not right for the co-op.
However, we're going to partner in our community and find out a
way to bring broadband into our territory.
And it may be through a partnership and maybe owning owning the
middle mile.
It may be, you know, owning and leasing the middle mile, rather.
And so there's just various ways to be successful and plan,
plan, plan.
Again, I can't overstate that.
And then plan again, right?
And I'll leave you with this, Andy, that when we think
about the business of broadband, you need to recognize that this
is different from our traditional electricity
service. We now go from the meter into the home.
And when you go into that doorway, this is a different way of
serving.
We're now into our consumer/members' households, and you're part
of that family.
And that is a different business model.
It is a different culture.
It is an entirely different way of thinking about running the
business.
And so there's a higher expectation.
Really you're closer to your consumer than we've ever been, and
so it's important to take
those considerations as part of your analysis of whether or not
you want to do this.
And then make sure you're leaning into the partners.
Cooperation among cooperatives – it's one of our principles.
It's never been more important than in the broadband space, to
Rudy's point.
Talk to the folks that have done it.
Talk to the folks that have succeeded.
We even have some members that have went into the broadband
business, and they've sold it.
There's just a handful of them, but find out why.
Find out what was the the reasons for not going forward.
But again, we've got a lot of very successful models, and so
it's important to do your homework.
Andy Johns:
Last thing. We didn't talk about this beforehand, but the full
report is about 45 or 50 pages.
I know when I got through it, it was behind the login at
cooperative.com.
Is that the spot that folks need to get it?
Or can they reach out and request it from one of y'all?
Or what's the best way if folks want to dive in?
Obviously, we couldn't get to all 45 pages of data here on this
episode, but what's the
best way, or what options do folks have to be able to see the
full report?
Rudy Tober:
So you, this is Rudy.
You can go to NRTC.coop, and you can find it there.
You can download it, or as you said, feel free to reach out,
yes.
Paul M. Breakman:
Yeah, it's available on NRTC.coop.
We also have it available on cooperative.com.
You can also Google "NRTC NRECA benchmarking report," and it
pops up top of the search.
Andy Johns:
Perfect. If it's available without being on the login, then we'll
go ahead and include a link to the report in the show notes on
this episode too, so that folks can find it there, so.
Perfect. I appreciate it very much, the two of you being on here,
sharing the insights.
Rudy, thanks for joining me.
Rudy Tober:
You're welcome. Thank you for having me.
Andy Johns:
Paul, thanks for being on.
Paul M. Breakman:
Hey, Andy, thanks a lot. Great to be here.
Andy Johns:
They are Rudy Tober, who is the CMO of NRTC Broadband Solutions,
and Paul Breakman, who is the Vice President of
Cooperative Business Solutions for NRECA.
I'm your host, Andy Johns, and I have enjoyed speaking with
these gentlemen, and we appreciate you listening.
And we look forward to talking to you on the next episode.
Outro:
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