When will we get fiber?

This is a frequent question and the response is not an easy one.
As discussed during the Annual Meeting, in previous newsletter articles, and with many of you individually, we have developed a 5 Year Plan that serves as a schedule for our fiber deployment. This plan is updated annually (i.e., we add a new schedule each year and drop the year we just completed). The plan is actually filed at the Federal Communications Commission (“FCC”) annually.

The 5 Year Plan is a tool to provide a methodical guideline to our Team for the installation of fiber throughout our rural service area. Our service area covers nearly 3,000 square miles, with a population of less than 1 person per square mile. Once deployed, the fiber will cover an estimated 1700 linear miles. This is a long term project. If we were to complete this project in 5 years: 1700 / 5 = 340 miles per year and approximately 30 miles per month. That’s challenging any way one looks at it. Another component is the cost, which we estimate will be $20 – $30 million. Bottom line: This is a project that will take longer than 5 years unless we take on substantial long term debt and use external resources.

This past winter and first half of 2015 has brought unprecedented precipitation to our area. The precipitation has been great for the agricultural community and it kicked the drought right out of here. Unfortunately, it has delayed our progress.

To assist our Construction Team in keeping on track, we have added team members and have promoted Manual Cantu and Harvey Bravo as Team Leaders and Billy Seiver as the Supervisor over Construction and Installation and Repair. Their charge is to keep the fiber deployment moving forward as consistently, efficiently and effectively as possible, while following the 5 Year Plan. They must also maintain the existing network, any cable cuts or other issues that arise.

In conjunction with our 5 Year Plan to deploy fiber, we developed a 5 Year Expense Plan which was designed to replace the aged fleet of equipment and vehicles in a methodical manner, while still maintaining our financial resources. In the 41 months that I have been with the Cooperative, we have added a Fiber Injector and Compressor, purchased boring machines and trenching equipment (replacing several machines that were no longer working properly and were frequently out of commission), replaced an aged fleet of vehicles, added a Vactron machine and a large truck to haul equipment. All of these purchases were made to assist our Construction Team in operating more efficiently and effectively.

Currently, we are funding the 5 Year Plan from our general funds, while still preserving our financial resources. We have not sought large loans to support the project because the small rural telephone cooperatives and companies like West Texas Rural Telephone Cooperative are continuing to face challenges brought about by our legislators and regulators. In its 2011 Order, the FCC decreased revenue streams that the small rural companies rely on for providing communications services in the high cost areas where we provide service. This action created instability in the industry and caused many small companies to delay or cease plans to upgrade networks.

Our industry is working at the state and federal levels through our associations, NTCA – the Rural Broadband Association, Texas Statewide Telephone Cooperative Inc., and the Texas Telephone Association to work with our legislators and regulators to migrate the Universal Service Fund to a stand-a-lone broadband fund. Without the support of the USF, these companies will not be able to meet the FCC’s mandated of 25 mg down/5 mg up (formerly 4 mg down/1 mg up).

We are also faced with predominantly urban legislators and regulators, not understanding the needs of rural America. Without voice and broadband communications, the rural economy would suffer greatly. Our industry is also carrying this message to our regulators and legislators.

We were successful in getting Congress to send letters to the FCC supporting a stand-a-lone broadband fund. We now have indication that the FCC may move forward with this fund by the end of the year.

We will be reviewing our financials at least annually to determine whether it makes sense to pursue a large amount of long term debt to speed the deployment of fiber or to proceed as we are today.

Fiber is the best, most reliable technology to meet the demands for bandwidth for the long term. Wireless technology does not have the bandwidth capability that is required and is not a replacement for wireline. To give a few examples:

  • In the aftermath of Hurricane Sandy (2012) on the East Coast, Verizon wanted to replace the communications infrastructure of Fire Island with wireless technology. The authorities said no and Verizon was forced to replace the infrastructure with fiber.
  • ATT was previously touting that wireless was the technology of the future until Google started installing fiber in selected neighborhoods in large cities. Now, ATT is following Google’s model across the nation.

Those large commercial companies that would have you believe that wireless technology will work for rural America, advertise they have the least dropped calls (translated to: our service sucks the least). Wireless is a complement to wireline, not a replacement.

Our 5 Year Plan is designed to take fiber deeper into our network and increase bandwidth to our members. Our goal is to be able to meet or exceed the FCC’s target of 25 mg down/5 up. We are investigating ways to increase bandwidth using microwave, alternative electronics, and fixed wireless until we get the fiber project completed. We will have to weigh the benefit vs. cost of the alternatives vs. continuing on with our deployment of fiber.

We want you to know that we are making every effort to speed the deployment of fiber. And, we ask for your patience as we do this. The network that was built in the 1950s took time to build. This one will take some time as well.