Rural Electric Cooperatives as FTTx Catalysts

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OzarksGo and Consolidated Cooperative Invest in End-to-End Gigabit Services — 

Electric cooperatives are critical to the deployment of gigabit Internet in underserved areas, where many traditional telecom providers don’t dare go. Many electric cooperatives have the distinct advantage of low entry barriers because they have access to infrastructure, such as pole attachment points and hub facilities. They also can leverage synergies in preexisting field staff, billing, customer support, and administrative personnel, that helps eliminate a vast amount of capital and operational expenses.

Over the past decade, eco-friendly home appliances and lower-power TVs have reduced consumer demand for electricity. New core competencies in fiber-based communication services have given a leg-up to the electric cooperatives by creating new recurring revenue streams, bringing in stable cash flows, and most importantly, serving their loyal customer base, who have largely been left out of the digital era. 

Two such electric coops are OzarksGo and Consolidated Cooperative. Because of the commitment to their communities, these 2 coops have developed new core competencies in fiber-based communication services.

That said, Rural Electric Cooperatives (RECs) face many of the same challenges as traditional telecom providers when building reliable networks at low cost. It is important to note that electric cooperatives and other alternative regional or municipal service providers are also likely to drive further rural fiber broadband investment, much like Google Fiber did years ago in major metro areas. 

RDOF and Fiber: The Difference Makers

From a Fiber-to-the-Home (FTTH) perspective, the Rural Development Opportunity Fund (RDOF) auction was all about RECs getting into the fiber business. In fact, 199 cooperatives (almost 25% of the total RECs) qualified to bid in the auction, most through 5 bidding consortiums! Over half of them (125) were successful when combined, winning almost 1 million locations. 

Now consider that these same 125 RECs have a total of about 4 million electric customers. We can then ascertain that most of these RECs are likely to serve the majority of their electrical service areas, so the number of homes connected is likely to be 3 to 4 times the number of RDOF locations awarded. 

In addition, many RDOF auction areas are situated in very close proximity to RDOF ineligible areas that already had access to 25Mbps+ speeds from DSL services delivered by the incumbent telephone company. These more densely populated areas have pent-up demand for gigabit-capable fiber broadband services. 

This creates an opportunity for these RECs to offer higher-speed services in these areas as they expanded from their RDOF-enabled “beachhead”. Much like Google Fiber, these alternative service providers could then serve as a catalyst to drive additional fiber network investment from the incumbent service provider(s) in that area. This could result in millions of additional homes connected over the next decade — bridging The Digital Divide even further. 

However, the key to ensuring the gigabit experience to these customers is about delivering higher speeds all the way from the home to the device. And that is the key to winning the battle for mindshare and customer loyalty. 

PON to the Rescue

Fiber optic access networks have been the obvious choice as they offer low latency and symmetric gigabit connectivity that promise a better work-from-home experience, faster and higher-quality video streaming and gaming experiences, and better support for the ever-increasing number of devices in homes and businesses. 

Fiber optic access technologies like Passive Optical Networks (PONs) are also in demand to modernize power grid communication systems as they enable network operators to serve a large base of Internet subscribers or grid infrastructure endpoints with the least number of active connections and lowest energy utilization. And because PON technology is deployed using a point-to-multipoint architecture, it aligns with the existing power grid infrastructure deployment model. It simplifies the ability to deploy fiber across a power grid network and accelerates the grid communication system modernization needed to support various smart grid applications. 

Innovations in PON technology, such as Combo PON, have made it possible for electric cooperatives and municipal utilities to simultaneously support 2 secure and separate communications networks over the same optical distribution network, and launched from the same platform. 

Combo PON uses transceiver technology that integrates the coexistence of GPON and XGS-PON into a single pluggable entity. The GPON portion of the transceiver plugs in to a GPON Media Access Control (MAC) chip, while the XGS-PON portion of the transceiver plugs in to the XGS-PON MAC chip. With Combo PON, you can serve GPON customers today, and later add XGS-PON customers without having to insert any new equipment. Since most of the cost differential between GPON and XGS-PON deployment is on the ONU side, Combo PON OLT makes for a perfect recipe for low-cost upfront investment in GPON and least disruptive and most economical migration to XGS-PON.

Of course, a fiber access network alone does not guarantee subscribers will receive a high-quality broadband experience. WiFi has become front and center in a lot of operators’ minds. The quality of a subscriber’s WiFi defines how good a service really is and, in essence, determines customer satisfaction. Providers must be able to own the connection all the way to the device to ensure the quality of experience. 

Successful service providers also give subscribers control over their experience, empowering them to personalize their services and to provide exciting and secure experiences for their families. This more modern cloud-managed service model provides additional monthly revenue streams such as premium self-healing whole-home WiFi, parental controls, home security, and the very lucrative assisted living market. 

In addition, the expectation of network reliability is also much higher than before. Subscribers expect little to no outages and don’t want to be involved in service maintenance, making it essential for providers to proactively resolve subscriber issues. Providers must be able to remotely determine who is likely to call with an issue or who is at risk of churning. For instance, a service provider must be able to discern if one of the optical network units (ONUs) that reside on the side of or within each home is a rogue ONU disrupting the entire neighborhood, or if there is merely error data coming from a dirty fiber connection or a micro-bend at a single home. Or that the historical trending on the power level from this subscriber has dropped, indicating that the ONU needs to be replaced. It is critical to recognize the issue before it becomes a problem, and to determine its proper course of action. This type of network assurance is accomplished via cloud-managed SaaS applications that run AI-driven algorithms to recognize patterns and perform network analysis that results in the delivery of actionable intelligence.

In summary, electric cooperatives are playing a very important role in bridging The Digital Divide. They are driving fiber broadband investment further and transforming consumers’ Internet experience with unfettered high-speed broadband connectivity. The key for these electric cooperatives will be to focus on delivering the end-to-end experience — from the fiber access network all the way to the end device. 

By investing in best-in-breed fiber access solutions supported by cloud-based business optimization tools, electric cooperatives can deliver amazing broadband experiences that elevates their brand equity as they revitalize their communities.

Resources and Notes
https://www.adtran.com/index.php/ozarksgo-creates-bumper-crop-of-connectivity-with-adtran-fiber-access-and-whole-home-wi-fi-solutions

https://www.adtran.com/index.php/consolidated-cooperative-trusts-adtran-and-nisc-to-close-ohio-s-digital-divide

https://www.adtran.com/index.php/fiber-access

https://www.adtran.com/index.php/blog/939-939-what-is-combo-pon

https://www.adtran.com/index.php/residential-gateways

https://www.adtran.com/index.php/mosaic-one

For more information, please email kt.mishra@adtran.com or visit adtran.com/utilities. You can also follow Mishra on Twitter @kt_mishra, and follow the company on Twitter @ADTRAN.

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About KT Mishra

KT Mishra is a Market Manager with ADTRAN. He has more than 10 years of experience in the telecom industry. For more information, please email kt.mishra@adtran.com or visit adtran.com/utilities. You can also follow Mishra on Twitter @kt_mishra, and follow the company on Twitter @ADTRAN.