Electric Cooperatives are the best choice to provide Rural Broadband
Here is an interesting post from Bloomberg with regards to rural broadband access. Politics aside, I’ve always wondered why Rural Electrics did not see this as an opportunity to service their customers. Even without Broadband over Power Lines (BPL) implementing this technology would not be difficult for an REC. Electric Cooperatives own rights of way, service rural customers and have equipment to support an outside cable plant.
Now, I know that in some states, electric cooperatives can not provide telephone services. However, data services are typically not regulated the same as telephone. Additionally, data services do not have the overhead of 911 services and can be easily managed remotely as part of a services agreement.
Backhaul infrastructure does not even have to be far and wide through the service area. There is no reason that you could not build a ring type of arrangement utilizing high speed microwave backhaul to provide the connectivity to a primary and secondary point of main service. This backhaul network can also be used as part of the Public Safety Broadband Network (FirstNet)
Distribution can also be done wireless. The advantage here is that utilities are exempt from Planning and Zoning, and again, you have access almost everywhere. This is an excellent application for TV White Space technology, and could even replace and existing SCADA or meter reading network.
Small municipalities, remote subdivisions and even, when designed properly truly rural subscribers could have moderate service.
In larger metropolitan areas, the opportunities are to provide Metro Ethernet services where the local RBOC or telephone company may not be capable (or interested) in providing service.
The final opportunity is to become a “carriers carrier” either providing dark fiber (not advisable) or bandwidth into areas where access may be limited back to other larger long haul providers (Sprint, AT&T, Verizon). These organizations are always looking for alternate routes, particularly into under served regions.
So, who would be your competition? Obviously, the local telephone company, but there are a few others that may surprise you. There have been a number of small local ISP’s try to provide wireless, but they typically fail due to poor engineering and lack of capital to sustain themselves long enough to show profit. The other surprising competitors are first and foremost the cable TV companies. They have access to broadband within a subset of the region, and many of them have gone to a model of having a limited set of head end equipment and then distributing out over fiber to their service areas. But their service areas do not always include some of the smaller communities and larger rural subdivisions, so there is an under served market already established.
Longer term, competition will most likely be from the wireless cellular companies. The advent of analog cellular service being discontinued, and the spread of 3G and 4G services will provide adequate bandwidth, but rural areas are typically last in receiving these services. Cooperatives would have an established market in these areas before cellular companies came to market. As we all know, it’s easier to keep a customer than to acquire a new one.
Lastly, there is satellite. Having worked in two separate VSAT networks, I can personally attest to some of the limitations that they have. First and foremost is bandwidth. Let’s face it, you just can’t go up to the satellite and upgrade it to allow for higher bandwidth or new features on a network level like you can on a terrestrial network. Secondly, the initial cost of equipment is high, and finally, latency can become an issue, particularly when dealing with delay sensitive applications such as streaming audio, video such as You Tube and IP phone services such as Vonage, Skype and MagicJack.
In summary, I think this is an opportunity for Rural Electric Cooperatives to provide a needed service to their customers. A business model could be built to determine how viable this is. Technology is the easy part, in the end, it’s all up to the Cooperatives to decide if they are willing to expand into non-traditional areas of service.