2015 RTIME Round-Up – Cautious Optimism

A collage of photos from NTCA's 2015 RTIME.
Snapshots from NTCA’s 2015 RTIME.

“Economic development is at the heart of what we do,” said Dave Osborne of VTX, a rural broadband operator serving a large swath of south Texas. Osborne was part of a panel at NTCA’s 2015 RTIME that focused on how operators are using their broadband networks as a basis for new applications that are helping their communities compete.

This idea of putting community and customer first was a recurring theme throughout the many conference sessions. Keith Larson of CTC of Minnesota explained that their decision to work with the city of Little Falls fit into their mission. Similarly, Gary Johnson of PBC explained that their expansion to Gig services was fundamentally about helping their members and it is already helping their local economic development efforts. This “overnight success” was the result of a Fiber to the Premise plan that began in 2004.

The advanced fiber-based networks these operators are building will facilitate the Internet of Things, which will overshadow the use of the Internet of Humans in terms of end points, according to VTX’s Osborne. Mobile tech trucks are one way that VTX is helping their customers understand how they can use their network and the associated technology and applications the network enables.

With only 0.75 lines per mile and sometimes hundreds of miles of windshield time, these trucks play a key role in helping their members learn how to get the most from the VTX network. Diversification of revenue is clearly an important motivation for expanding the number of services offered, as well as expansion into new service territories beyond their existing exchanges.

Regarding revenue, there seemed to be a sense of optimism among the operators that the FCC’s recent actions will open the door for financial support of rural broadband, instead of today’s approach of basing rural build outs on Plain Old Telephone Service. Bob Debroux of TDS suggested that the FCC is considering two basic plans; a plan based on models and one a rate of return. He suggested that the FCC first must fix how the monies are distributed and then solve for the contribution side.

In the short-term at least, the FCC’s Title II rules seemed to be of minimal concern in that these operators have been complying all along with the “bright line rules”. Still, some expressed concern that a different FCC could change the rules in the future.

One of the biggest regulatory challenges, particularly when expanding outside an existing serving area, is working with local communities. Former Kansas City, Kansas Mayor, Joe Reardon, talked about some of the benefits his city has seen from the Google fiber deployment. One example of success is an area termed “start-up village” where they have seen small businesses and entrepreneurs move into this Gig-capable area from other cities.

Economic development and betterment of schools are two drivers that will motivate local elected officials to facilitate an operator’s roll out of broadband. Citing his Kansas City experience, he indicated that a city doesn’t need to subsidize a rollout, but streamlining permitting and other regulatory hurdles will go along ways to smoothing out the rollout of gig networks. He said that the Google experience spurred a review and refresh of regulations and that was a good thing beyond the fiber project.

Reardon warned against municipal builds, as it is difficult for municipal entities to keep up in a very competitive and dynamic business. There are some interesting examples of public-private partnerships, such as the aforementioned Little Falls, MN example, as well as TCT and the city of Powell, which TCT’s Don Jackson deemed a successful public/private partnership.

And local broadband networks are important to keep a community vibrant. Don Macke of the Center for Rural Entrepreneurship, suggested that 35 to 50% of young people who moved away from their communities would return, if they could (e.g. if there were jobs, etc.). This reinforces the point made by Gary Johnson of Paul Bunyan Communications when he stated the reason they built FTTH/Gig everywhere is that, “It’s the right thing to do [for their members].

Stay tuned for video interviews with Gary Johnson, Don Jackson and others who made NTCA’s 2015 RTIME an informative and thought-provoking event.

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