Transcript: Community Broadband Bits Episode 472

This is the transcript for episode 472 of the Community Broadband Bits podcast. On this week's episode of the Community Broadband Bits Podcast, ILSR's Senior Reporter, Editor, and Researcher Sean Gonsalves, along with Senior Researcher and Multimedia Producer Maren Machles, chat with Paul Recanzone, the general manager of Beacon Broadband, about Beacon's plan to build out broadband where no one has before. Listen to the podcast here or read the transcript below.

Paul Recanzone: We cannot rely on the industries of the 20th century, which were our fishing and our timber. We have to find a way to thrive in the 21st century. And here at Beacon Broadband, we believe that the broadband is going to be the catalyst to be able to create a thriving economy on the south coast of Oregon.

Sean Gonsalves: Welcome to episode 472 of the Community Broadband Bits Podcast. I am Sean Gonsalves, Senior Reporter and Editor, sitting in for the vacationing Christopher Mitchell. He will be back this week and will return to the airways for the next episode. So there's still time for our listeners to send in a bunch of emails to tell him what a fabulous job we've done since he's been gone. Today, we are going to look at the work of a Cooperative in the beautiful state of Oregon. And so that is why are joined by Paul Recanzone, the general manager for Beacon Broadband, which is the broadband subsidiary of Coos-Curry Electric Cooperative. Welcome to the program, Paul.

Paul Recanzone: Thank you, Sean.

Sean Gonsalves: And we also are joined by my colleague here, Maren Machles, who wrote our story on muninetworks.org about CCEC that we published in May. We're pleased to have Maren with us as well. Welcome Maren.

Maren Machles: I'm pleased to be here, glad to be chatting with you folks.

Sean Gonsalves: So we're going to have Marin jump in throughout to help us out and to flesh out this discussion, but just to get us started, Paul, why don't you tell us a little bit about you and how you got to Beacon Broadband?

Paul Recanzone: Well, thank you. I've been working in broadband development for probably 15 or 16 years. The long story in an abbreviated version is when I graduated from college with an English degree from the engineering school, the University of Nevada Arena, I didn't know what to do. So I joined the army, spent about seven years in the army learning how to be a local network engineer. After doing local area network engineering for about 15 or 20 years, I bumped into the city of Payson Utah, where in Payson they were participating in the Utah Telecommunication Open Infrastructure Agency project, or UTOPIA.

2:20

Sean Gonsalves: UTOPIA.

Paul Recanzone: And I got so enamored with what UTOPIA was doing that I called them up. And I said, you guys need a project manager. And they said, yes, we do. So I spent a 7 to 10 years as project manager on the UTOPIA project. Then I spent another seven years as an independent consultant doing broadband development work for municipalities. That landed me here on the south coast of Oregon, in this beautiful rainforest that I live in now. And when I got here, I started reaching out to Coos-Curry Electric Cooperative and saying, I've been working with counties and states and cities to try to get them to develop broadband. And I haven't really done where the real root of this work comes from, which is going to be the electric cooperatives. The electric cooperatives across this country are the ones that are going to be driving a significant amount of broadband development over the next probably two decades.

Sean Gonsalves: UTOPIA fiber of course, is something that we're very familiar with. And Chris has had various folks from UTOPIA on here quite a bit. And I know in the early years it was a bit of a struggle for UTOPIA and now things are... Businesses are booming and you... They've are doing fabulous work. And also, you're talking about your background working with Counties and Municipalities and then Cooperatives. And I think you hit the nail right on the head, just in terms of how well positioned Cooperatives are to deliver broadband across their service territories. I mean that was one of the reasons why we were excited with the infrastructure bill and how initially the thought was that there was going to be prioritizing electric co-ops and municipalities. It looks like that has kind of taken a backseat, but still electric co-ops, I think are going to still play a pivotal role in bringing broadband to lot of folks.

Paul Recanzone: Cooperatives absolutely will be playing a pivotal role, regardless of whether the infrastructure bill puts us in the forefront or just allows us access to the funding. More and more electrical cooperatives across the nation are recognizing that broadband is the next essential service. And just like Coos-Curry Electric Cooperative determined that 85 years ago, a group of people could not get electricity into the sitcom valley of Oregon. Today, their descendants, in fact, the grandson of Coos-Curry's founder is one of our pre-registrants and he lives in his grandfather's house.

Sean Gonsalves: Wow.

5:00

Paul Recanzone: And he cannot get broadband. He can get electricity now because of his grandfather's work, but he cannot get broadband services. So we're excited to be able to eventually bring fiber to his house and give him a synchronous gigabit ethernet.

Sean Gonsalves: That's terrific. Maren, come on and jump on in here.

Maren Machles: I was wondering Paul, can you just describe for our listeners what the region kind of looks like what Coos-Curry county look like. Cause you've described it as like a rainforest canopy, I think. And it's really interesting to learn more about that part of the country.

Paul Recanzone: It is so gorgeous here on the south coast of Oregon. If anybody listening to the podcast has not had the opportunity to come and visit us here on the South Coast, I would throw out there and say, you ought to come out here. We're not a tropical rainforest, of course. We don't have parrots and whatnot, but we are a rainforest that we have an evergreen forest that is absolutely gorgeous. We have ferns that grow taller than an adult, not taller than a child, but taller than an adult ferns, but grow. You can walk 15 feet off of the highway and you're in a completely different world. It is just absolutely gorgeous. We are quite isolated. We are two and a half hours from a regional airport. To get to Portland international airport, which is the nearest large airport or mid-sized airport from the Northern part of our service territory, it's a four hour drive from the Southern part. It's a six hour drive to get to a major airport.

Sean Gonsalves: Wow.

Paul Recanzone: We have no interstates through our service territory. We have a couple of state highways that run through our service territory, but we're really a very geographically isolated and environmentally gorgeous area. And so to bring broadband into that, to be able to take the light on the fiber and transform our environment the same way the light coming through the fog transforms our environment is going to be just a critical thing for the businesses and the residents, the school children, and every aspect of people's lives here on the south coast.

7:22

Sean Gonsalves: It is a beautiful area, and how many people live in those counties?

Paul Recanzone: So Curry county has 20,000 people and Coos county has just over 60,000. We do not serve the entirety of Coos counties. So we're going to be passing about 18,000 addresses.

Maren Machles: Okay.

Sean Gonsalves: And historically, so I'm interested if you'd tell us a little bit about the electric co-ops history actually.

Paul Recanzone: Yeah. So Ivan layered 85 years ago, couldn't get electricity to his farm in the sitcom valley. He went to the privately owned power company at the time and they refused. They simply refused to provide him service. And he recognized that he was not the only one. He went to his neighbors, they had town hall meetings and they gathered together and they created the Coos-Curry Electric Cooperative at that time. It was the Coos Electric Cooperative cause it was only in Coos county and then through a series of acquisitions and mergers and roles, we became Coos-Curry Electric Cooperative. We provide all of the electricity in Curry county. And any of the unincorporated areas on the Southern three quarters of Coos county is Coos-Curry Electric Cooperative. Total of 20,000 meters, 18,000, or I'm sorry, 14,000 individual subscribers. And one of the things that I really like about Coos-Curry Electric Cooperative is 87% is hydroelectric power. And about 10% is nuclear power. Coos-Curry Electric Cooperative only uses 3% carbon producing power to serve these two counties.

Sean Gonsalves: Wow. I mean especially in this world that we're living in now...

Paul Recanzone: It's an extraordinary thing, isn't it?

Sean Gonsalves: That's a big deal. Yeah, for sure. Now the industries there, I mean, historically had been lumber, is that right?

Paul Recanzone: Historically, lumber and fishing. Those were the two key industries on the South Coast of Oregon. Fishing is still a pretty prevalent industry, but because of the large... In the rural farms across America, there's been consolidation into corporate farming. A lot of the fishing is consolidated as well, and so we don't have the fish processing plants that we used to have. A lot of that processing is being done on a corporate ship instead of being brought back to the port and being processed on land. And then the timber industry has really taken one two punch in the... People get mad at me when I say the very good benefit of environmental activity to preserve some of the old growth forest that we have and other things of that nature, but just furthermore, from a employment status, it used to be 50 years ago. If you were going to be cutting a section of forest, you built a lumber camp and you brought in 400 men and you cut down the trees and then it worked, it was incredibly difficult work. And today five guys can do what 50 years ago it took 450 guys to do.

10:37

Paul Recanzone: And so the, just from a labor perspective, from just a manpower, it's still incredibly intense work. And I have huge amount of respect for those people who work in the timber industry, but from a manpower perspective, the manpower has reduced hugely, which has created a significant economic impact on the South Coast of Oregon. As we talk about the industries that are available here, we cannot rely on the industries of the 20th century, which were our fishing and our timber. We have to find a way to thrive in the 21st century. And here at Beacon Broadband, we believe that the broadband is going to be the catalyst to be able to create a thriving economy on the South Coast of Oregon.

Sean Gonsalves: Indeed, yes. And now, so I'm wondering because... And a lot of our coverage with other cooperatives, we've come to see that many of the cooperatives initially got into fiber to... For their status systems and to really monitor their utility systems and provide for better efficiencies. I'm wondering, is that a similar story there?

Paul Recanzone: I'm going to be honest with you and tell you that for our cooperative, that's an also ran. They need that. They believe in it. They look forward to having the fiber to improve their management of the system. But we're a little bit different than a lot of cooperatives because regardless of whether we have better controls through our SCADA system, we're still going to have the same staffing. It's not going to save us any staffing. And so we do want to improve the controls, but when we were meeting with the board of directors to try doing the analysis of, should we get into the broadband business? We did not include that as a high value. We did an analysis as to what it could potentially save the cooperative, but in the end, the thing that convinced the board of directors after we were able to show them that we could at least not lose money, not necessarily make money, but at least not lose money.

12:39

Paul Recanzone: The thing that convinced the board of directors, there were two elements. The first element was is that we were committed to bringing relatively similar service to all of the Coos-Curry members. So we weren't going to cut some people off with the fiber to wireless solution. We were going to bring fiber to everybody. And that was a critical element for our board of directors. The second thing was the promise that this can be a transforming technology for the South Coast of Oregon. The board was very, and it still is very enamored with the idea that broadband can bring the same types of changes, the same change in the economic vitality, and the education vitality, and the cultural vitality, the reduction of isolation. They're very engaged that fiber can provide those benefits to their members. Those are the things that really drove our board of directors to approve the project.

Sean Gonsalves: I mean, it is really interesting. And especially what you said about, that commitment to serving, every member of the cooperative versus sort of having different technological solutions, et cetera. That's one of the things too with Cooperatives that I think distinguishes Cooperative's approach and their... Then when you have, sort of a just a private broadband provider, who's sort of looking to maximize dollars and which oftentimes leaves out sectors of communities that, where it's not economical to build.

Paul Recanzone: Sean, I have to concede that in some cases that makes perfect sense. Some cases you, that's what you should do. That's what you have to do. We have... We went and visited a number of cooperatives as we were building our feasibility case. And some of the cooperatives we visited do have a hybrid fiber to the premises slash wireless network. And some of them that we visited have elected to expand beyond their borders before they completed building to all of their members and have some of them have even conceded that it's unlikely they will ever build to all of their members.

Paul Recanzone: Each cooperative is going to have a different business case and a different driving reason for why they're doing it. I'm general manager for Beacon Broadband, so of course I'm going to say our reasons are the best, but I don't want anybody listening to the podcast or any other cooperative that's out there going, oh man, we simply can't bring fiber to everyone, so we're not going to do it. That's not the message. The message that I want to present is our board of directors said that these were the things that we're driving for them.

15:19

Sean Gonsalves: Great points, well said. I promise I'm going to let Maren jump back in here, but I just wanted to back up just a tiny bit in terms of the, sort of the broad sort of timeline. So when you first started considering offering broadband services, around what year are we talking? And then, and then how long did it take you to get to the point where you were ready to start building?

Paul Recanzone: Right. So Coos-Curry started the very first feasibility study in 2018. 2019, we came to a decision that this was something that we were going to do. We created Beacon Broadband in June 2020, and then got full approval from the board to move forward. When we participated in the RDOF auction and became... We were selected for some RDOF funding in November of 2020, and then the board approved us.

Sean Gonsalves: And then finally, and then Maren's going to jump in here, give us a sense of what kind of Internet service provider options were there prior to?

Paul Recanzone: Right, so in about 80% of our service territory, we have service from charter spectrum, which is a reasonably good service. They have a 400 megabit over something service. They don't advertise what their upload speeds are. They have a 400 over something service that they offer, which is reasonably good. The other one, when we first started, was frontier sold their Northwest assets to a company called Ziply. Ziply is actually installing fiber. And some of the communities here on the south coast of Oregon now, and they offer a reasonably good service as well, about 80% of our member base can get reasonably good Internet service from either charter or Ziply. 20% have nothing. They can get the satellite. And many of them can't get satellite because we're in an incredibly rugged terrain, a heavily forested, incredibly rugged terrain. So I regularly have people calling me up and saying, we can't even get used net because we can't see the satellite.

Sean Gonsalves: Right.

17:20

Paul Recanzone: So we have a significant population that has absolutely no option for broadband service. And again, that's one of the reasons why we're doing this. If we were only talking, in fact, we had several conversations leading in the feasibility about why would we do this when 80% of our members already have reasonably good access to broadband? Does it make sense for the cooperatives to spend 60 million dollars on a project to get to 20% of its numbers? And the answer was, well it does. And not just to get to that 20% of members, but to extend the high speed broadband, the high speed fiber experience where no one else will go. So yeah, Ziply's going to bring fiber into downtown Brookings and Beacon Broadband's going to bring fiber into down Brookings, but as we extend fiber into downtown Brookings, we want to extend the experience into our customers lives.

Sean Gonsalves: Maren, I know you've got a couple of questions. Why don't you jump on in here?

Maren Machles: Well, something that really stuck out with me in the several times that we've talked about what you all are doing is just, something that you actually just mentioned, like community investment, caring about the community being accountable to the community. Can you just talk a little bit about some of the things that you're doing to try and help with this project specifically?

Paul Recanzone: So thank you Maren, I sure appreciate that. So again, one, because we are trying to transform the economy, we did... We have a local hire requirement for all of our construction vendors. At least it's not a huge requirement, but at least 15% have to be from this local area on their crews. And so that's part of what we did. We were just talking about splicing in fact today, and we were talking about rather than bringing in a splicing company from outside, should we build the splicing capability here on the South Coast of Oregon? And that's a risk that we're probably going to end up making. To be able to build that skillset here. And then to go beyond the construction and the management of broadband fiber network, we're working with Southwest Oregon Community College. And we got the Community College hooked up with Utah State University and Utah State University has an exceptional online workforce certification program.

19:49

Paul Recanzone: And so now Southwest Oregon Community College is going to be an affiliate program of that University of Utah of the Utah state university program. And we're going to be able to offer remote working certification right here on the south coast of Oregon. In addition to that, we're working with, again, the south, the Community College, and we're working with the South Coast development center and the small business development center. We have a 10,000 square foot building that we lease here in Harbor. And there's 17 of us. I mean, we rattle around here in like beans in a Morocco. And so we're going to take some of that excess space that we have, and we're going to create a cowork facility and an entrepreneurial incubator, focusing incubation on broadband based types of businesses.

Paul Recanzone: We have another facility up in Coquille, but we're going to do the same thing. So we're going to extend, we're going to take this broadband service that we offer and extend it beyond just offering the broadband service and say, this is how it changes our lives. This is how it, it revitalizes our economy. This is how it brings the world to us and extends us into the world.

Maren Machles: That's great. So the last time that we spoke, you know, you all had broken ground in April and you were just kind of, I think starting the build out process. Where are you at now with everything?

Paul Recanzone: I think that if you ask all of us across the nation, that question right now, we're all going to say materials delays are wiping us out. And we're in the same boat, materials delays are wiping us out. We have about two miles built now. We have 1400 miles that we're going to build. In fact, someone asked me for... To update. We have this graphic that shows our progress, right. And some... My marketing person asked me, can we update the graphic? And I said, can you show 0.02% completion on that? And that's where we are. We're just getting started. We will, we got delayed on our launch of our pilot test area because of a variety of materials delays. We will have our first live customers up and running next month in our pilot test area. We're going to continue to build aggressively beyond the pilot test area and hopefully get paying customers up before the pilot test free service time is done. So we are so far behind in order to give you the short answer Maren.

22:25

Sean Gonsalves: It seems that these supply chain issues are affecting a lot of communities in terms of their, the timetable in the build out. But how long do you expect the build out to take though? You know, kind of once you get things really rolling.

Paul Recanzone: Our original schedule was to go in two and a half years to get the 1400 miles of fiber done. That's an incredibly aggressive schedule with the supply chain problems that we're looking at, we have a number of processes that we're putting in place that will diminish the supply chain problems. We're just buying a boatload of material as the process. We're probably going to try to do just in time delivery anymore. So we're going to go ahead and exacerbate the supply issues by buying a whole bunch of stuff that we don't need right now, just so everybody else out there knows you should probably be doing the same thing to make my life more difficult since I'm going to be making yours more difficult, but anyway...

Maren Machles: Right. Become the most hated man in broadband.

Paul Recanzone: All of us are doing the same thing. We're all buying everything that we need right now, because we can't rely on a timeline any longer. There's a real shortage because we have to overcome that real shortage. We're all buying a bunch of stuff. That's exacerbating the shortage.

Sean Gonsalves: And I was expecting that that was going to be a problem for cooperatives and, and other municipal network builders. But I even think I've read recently that AT&T was having a hard time. They usually at like... Companies like that are at the front of the line. And even, I think it's messed up some of their timelines. And so it's a massive issue.

Paul Recanzone: It has. So yeah, supply chain issues are biting us. So we're going to probably do instead of two and a half, three years, we're probably looking about a four year bill to get our 1400 miles in. We have such desperate demand in our community that we still want to just pull the bandage off as fast as we possibly can. And as soon as we can get all of our processes cycling and our engine running on all cylinders, we're going to build this at 20 miles per week or faster.

Maren Machles: And so you also have secured it's 14 million through RDOF funds?

Paul Recanzone: About 14 million of RDOF money that we'll be getting the total project costs is about 60 million dollars. We still have a number of unserved or underserved areas that are unfunded because they're the partial census blocks that the federal government has never been able to figure out how to fund just yet. So we do have some significant opportunity for additional federal and state funding based on the fact that we still have a significant number of unfunded, unserved and underserved areas. So we anticipate rapid passage and rapid rule making of the infrastructure bill to get that 65 million allocated for broadband out to us, out to projects like ours that are ready to spend that money to bring real change into people's lives.

25:25

Sean Gonsalves: Now, and have you settled on a service tier and pricing and so forth?

Paul Recanzone: We have proposed pricing that our board has not finalized yet. We will be offering right now our service tiers are at one gig, 400 megabits and 100 megabits per second. We are using an XGS pond solution. So we're not limited to be, to offering that one gig. We can go up higher than that. We do have like any builder, we have excess fiber in our network. So if somebody really wants to have an 80 gig circuit, we'll put the DWDM in and give them an 80 gig circuit, they will pay us dearly for it. But we'll...

Sean Gonsalves: Now, are you... Is it will be Internet only, are you offering triple play services?

Paul Recanzone: We're offering a triple play service. We do have our Internet, our Internet is ready to go. We partnered with a voice, a Voip provider, and we're ready to roll with them. It's public knowledge that we've partnered with Alianz to do our Voip services. We're still casting about to find the right solution for video for our age demographic here on the South Coast of Oregon, runs about 20, 15 to 20 years older than the age demographic across the United States as a whole. And if you thought about deploying a broadband network 15 years ago, you would not imagine doing it without video.

Sean Gonsalves: Right.

Paul Recanzone: And that's the marketplace we're in right now. We believe that we're going to have to provide traditional broadcast video type of model for about 10 to 15 years before our marketplace transitions to a streaming model.

27:11

Sean Gonsalves: Well, just as you know, 80, 85 years ago, or so the Cooperatives were the heroes and bringing electricity to parts of America that didn't have refrigerators yet. And in those kind of things, and the Cooperatives I think are really at the forefront of, in the broadband modification of the country right now. And it's a pleasure to have you on, we thank you for your work. And obviously we'd like to be checking back in with you from time to time as you light up your first customers and as the build out continues, but thank you for joining us. And we hope to talk to you soon sometime soon.

Paul Recanzone: Thank you. And I'm going to say, thank you for being here. I have had a long standing relationship with Christopher and the work that I've been trying to do with broadband development over the decades. And I have been incredibly grateful for the resources that I have found here at this site and in these podcasts. This has always been an incredibly valuable resource for me. So I'm grateful for the opportunity to be able to contribute some back.

Sean Gonsalves: And you're so right about Chris. We do miss him. He will be back and we thank you for your courage to be actually our first guest, where we actually talked network stuff and network builds without Chris here. So...

Paul Recanzone: Y'all did fantastic work without him. He's going to have to start watching his back.

Sean Gonsalves: That's right.

Maren Machles: That's what we want to hear.

Sean Gonsalves: Thank you.

28:50

Ry Marcattilio-McCracken: We have transcripts for this and other podcasts available@muninetworks.org slash broadband bits. Email us at podcasts@muninetworks.org, with your ideas for the show. Follow Chris on Twitter, his handle is @communitynets. Follow muninetworks.org store is on Twitter. The handle is @muninetworks, subscribe to this another and other podcasts from ILSR, including building local power, local energy rules, and the composting for community podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives. If you subscribe to our monthly newsletter at ILSR.org, while you're there, please take a moment to donate your support in any amount. Keeps us going. Thank you to Arne Huseby for the song, warm duck, shuffle licensed through creative comments. Thanks for listening.

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