Transcript: Community Broadband Bits Episode 92

Thanks to Jeff Hoel for providing the transcript for episode 92 of the Community Broadband Bits podcast with Mike Foor on Georgia Communications Cooperative. Listen to this episode here.

 

00:10:

Mike Foor:  The goal is, if we can drive economic development, if we can improve the education in the area, you know, those things are our goals.  And then, Lord willing, we can break even at that, as well, and continue to grow.

00:23:

Lisa Gonzalez:  Hello.  You are listening to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance.  I'm Lisa Gonzalez.  Hey, Happy April Fools' Day.

Recently, Chris was in Raleigh, North Carolina.  He was at a conference held by the Southeast Association of Telecommunications Officers and Advisors, also known as SEATOA.  In addition to receiving the 2014 Community Broadband Advocacy Award, he visited with Michael Foor, President and CEO of the Georgia Communications Cooperative.  GCC is one of the partners involved in deploying the North Georgia Network.  The North Georgia Network was the first project to receive American Recovery and Reinvestment Act funds.  Now, GCC has its own network, called Trailwave.  That's a fiber network that provides last-mile connectivity to residents and businesses.  Cooperatives like GCC know the territory, they understand delivery challenges, and they have a special connection with customers.  So, in that regard, they play an important role in bringing together last-mile and middle-mile projects.  Cooperatives are also owned and operated by those they serve.  So business decisions are not always driven only by the desire to increase profits.  When exploring plans to build local networks, cooperatives like GCC can be reliable partners.  Here are Michael and Chris in Raleigh, talking about life as a cooperative.

01:44:

Chris Mitchell:  Welcome to another edition of the Community Broadband Bits Podcast.  I'm Chris Mitchell.  And today, I'm speaking with Michael Foor, President and CEO of the Georgia Communications Cooperative.  Welcome to the show.

01:55:

Mike Foor:  Thank you.  Glad to be hear, Chris.

01:57:

Chris:  So, we spoke with Paul Belk on a previous episode.  And he told us all about the North Georgia Network, and how it received some stimulus funding, in order to become -- begin delivering Internet access, and providing some of those economic development activities.  The Georgia Communications Cooperative is a part of the story we didn't get to.  So, can you tell me a little bit about what the GCC is?

02:20:

Mike:  Sure.  As part of the NGN story, we had two electric coops, that were heavily involved with starting and building the fiber that created the NGN rings that are now out there.  And Georgia Communications Cooperative was birthed out of that process as well.  it is a member-owned cooperative, that serves areas outside of those two electrical coop areas.

02:44:

Chris:  OK.  So we have these two coops that were involved with the NGN.  And then -- they take care of everything that's happening within their territories -- their electric territories -- and then you are able to connect the areas that are nearby and could be served, but aren't within those existing territories.

03:03:

Mike:  That's correct.  Outside of their territories, there were some schools, some core anchor institutions that we needed to get to.  Some small business hot pockets that have great opportunity for economic development.  And we're able to take care of those areas.

03:16:

Chris:  You're composed of both coops and then also these other institutions that are taking service from you -- some of the schools, and libraries, and that sort of thing.

03:25:

Mike:  That's correct.  There -- so, NGN is a coop itself.  And then it has three cooperatives that are members of NGN: Blueridge Mountain EMC, Habersham EMC, and Georgia Communications Cooperative.  Now, all of my customers get the opportunity to become a member as well.  And right now, we've got about 60 percent of our customers that have chosen to be a member of the Georgia Communications Cooperative.

03:50:

Chris:  One of the things that people often assume is that rural areas are really lagging behind in Internet access.  I mean, I hear that you are actually charging $100 for a gigabit.

04:00:

Mike:  Yeah, Habersham EMC just launched, last week, a gig to the home for $99.95.

04:06:

Chris:  That's a rip-off.  [Laughs]

04:09:

Mike:  Yeah.  Their other offering before that was 50 meg.  And these are symmetrical.  So, 50 meg for $49.95.

04:16:

Chris:  That's incredible.  We're -- just before we started recording, we were talking about the long legacy of coops, and delivering this necessary infrastructure in communities.  It's been 75 years, you said.  You just had your anniversary, for some of the coops in the region.

04:30:

Mike:  Yeah.  Both Blue Ridge and Habersham EMC celebrated their 75th anniversary last year.  So, it's hard to believe just 75 years ago, we were introducing power into these areas, and now we're pushing gigabit connectivity over fiber to them.

04:43:

Chris:  That's pretty incredible.  And to have it down at $100 for a gigabit suggests to me that your have some really good backhaul, which is something that coops, who have long been doing fiber-to-the-home, they haven't always been able to count on.  Is that because of the stimulus -- the NGN -- being such a large network?

05:00:

Mike:  Yeah.  The stimulus -- part of the stimulus was that the fiber had to be built on a network that was 10 years forward-thinking.  So when they built the network, they built it with terrific equipment.  And that gives us the ability to offer really unprecedented Internet services to the area.

05:18:

Chris:  And so, what are your plans here?  I understand you're not done.  You're working with other electric coops in the area that are interested in expanding, and perhaps getting involved in this sort of thing.

05:28:

Mike:  Yeah, that's true.  We've got -- you know, Habersham EMC is continuing to grow.  Blueridge is continuing to grow.  But Georgia Communications Cooperative was actually created to sit on top of a network and look for other electrical coops within the state of Georgia who are interested in deploying, or maybe using, their existing fiber networks to benefit their communities and drive economic development.  So, we can go in and work with those other coops and provide services throughout the area.

05:57:

Chris:  The state of Minnesota is considering establishing a fund that would be available to make loans to coops, and try and help them to expand, whether it's a telephone coop, or perhaps some of the electric coops.  We have one or two in Minnesota that have been doing fiber-to-the-home.  Would a program like help to expand the coops in Georgia to expand this high-quality Internet Access?

06:16:

Mike:  You know, that's a great point.  Because when you get into the electrical coops, they have RUS funding that they can use to grow.  Now when you get into Georgia Communications Cooperative, who is designed different than an electrical coop, I don't really have those funds to grow.  So it's a lot more....

06:34:

Chris:  You can't just go out and borrow money?

06:35:

Mike:  No.  It's a lot more challenging.  And when you're building fiber, having those funds available to assist in getting the build's return on investment to those points would really be beneficial.

06:47:

Chris:  So, you said, specifically, the RUS funds are not available to you.  Now, you could go out and borrow money from the private sector.  But, I'm guessing, the private sector -- a lot of the investors look at you just like any other entity.  Whereas a government program -- a state program, or even a federal program -- would say, this is a coop, we understand this.  This is an entity that is going to stand the test of time, and is going to provide the services that we need.  And so that's where, in this case, I think, some public funding would be helpful, as opposed to just letting the market sort it out.

07:18:

Mike:  Yeah, I think.  Because the interest rates that you can get that at are lower.  And when you're trying to provide at a coop mentality, for a lower price point, really.  Because your goal isn't to make as much -- We're a non-profit.  The goal is, if we can improve the education in the area, you know, those things are our goals.  And then we can, Lord willing, we can break even at that, as well, and continue to grow.  It makes it challenging to invest, you know, $25,000 a mile -- or whatever the number may be -- to continue to grow.

Georgia has a law that they passed that make it easy to do equity funding, like you can get private equity funding groups created.  And if creating those -- somehow getting those equity groups, or that bucket, available is really critical for a company like mine, to continue to reach everybody that can really get value from what you have.  We have so many small businesses.  And when we're charging, you know, between $50 and $175 per month, just depending on which package they're taking, it's hard to quickly pay back any investment that was made.  So you need a longer-term investment.

08:38:

Chris:  Right.

08:38:

Mike:  That's the biggest challenge.

08:41:

Chris:  One of the things that I hear from rural communities sometimes is that even they feel that maybe it's not feasible to do fiber-to-the-home in rural areas.  Maybe they should just stick with wireless.  Now, is that the case?  Or can we connect everyone with a network that would be affordable?  And then -- I'll let you just answer for Georgia.  Is it possible to connect everyone in Georgia, with the fiber network, without breaking the bank?

09:06:

Mike:  Connecting everyone is a real stretch.  I think that there's probably a mix -- a hybrid solution -- that's going to make it feasible -- more feasible -- to connect everyone.  Because when you're dealing with 8-9 homes a mile, in some areas -- and in some areas even less -- just the cost of construction, without some kind of subsidy to make that happen, makes that practically unfeasible to do it.  But we are looking at some hybrid solutions up there, and using hybrid solutions.  So, just depending on the foliage and the other terrain issues.  In other areas, where it's a lot flatter than it is in North Georgia, wireless can be a great accent to a fiber network.  In our region, it's extremely challenging, because we have a lot of wooded and a lot of mountainous areas.

09:55:

Chris:  Now, when you say wireless, do you mean the wireless from Verizon -- 4G, LTE type of thing?  Or are you talking about a more robust connection?

10:04:

Mike:  Yeah, I'm talking more of a robust connection.  We are working with a company that was -- they're called Appalachian Broadband.  The parent company is Pathfinder Digital.  They do Department of Defense wireless.  So it's a high-grade wireless solution.  They come to a meet-me point with our fiber.  And they deploy -- basically, it's like a wireless patch cord from our fiber to the home.  So we can still provide high-bandwidth solutions right to the home.  Minimum service we're providing through them is 15 megabits symmetrical connections to the home.

10:38:

Chris:  That's really quite a lot for a wireless connection in rural America.  A lot of WISPs -- wireless service providers -- are actually doing more around 1 or 2 megabits a second.  So this is quite impressive then.

10:49:

Mike:  Yeah.  Yes.  We've had a great response to it.

10:53:

Chris:  What is the difficulty of connecting Georgia with fiber everywhere?  Is it the ongoing cost, or is it the capital cost of getting out there?

11:03:

Mike:  The initial cost is really the biggest challenge.  The NGN model, where we've worked with the electrical coops, I feel, is a great model.  The coops have great relationships.  They're used to investing in their communities.  They, in my experience, use the money wisely.  So, I think that's a great model.  And we see, through that model that, really, just a one-time investment, it can make terrific things happen.  Versus ongoing investments, where you have to keep the company alive by continuing to pour revenue into it year after year.

11:41:

Chris:  The Universal Service Fund model has been one of -- every year, you need to put more money into it, and more money into it.  And, quite honestly, when you look at some of these big private companies, they don't provide the same level of service to rural communities as the coops do.  We see them, often, taking that money and giving it to shareholders and things like that, whereas, ...  Well, in some ways, the coops are doing the same thing.  You're just doing it by delivering great services.

12:05:

Mike:  That's right.  Our members are our shareholders.  So the goal is to not charge them any more than we need to, and give them the best products and services that we can.

12:15:

Chris:  What's the most interesting thing about serving this area of Georgia with this approach?

12:20:

Mike:  Well, I think one of the most significant things we've been able to do is -- we're providing gig to the schools, which they didn't have before.  We've seen the competitive pricing just change dramatically since we've entered the market.  And the quality of service has had to improve.  So, we're also offering a 10 gig private exchange to the schools, which is allowing them to share resources unlike they've ever been able to do before.  So, we're challenging the schools to tear down the barriers that they've lived in for so long, by having slow Internet -- or no Internet, really -- and look at how they can share resources, in order to benefit the children, in order to benefit the budgets, and really offer education like they've never been able to do it before.

13:08:

Chris:  Excellent.  In some ways, I think, we all look forward to the time, 75 years from now, when most people have no sense of how hard it was to get it started...

13:16:

Mike:  Right.

13:16:

Chris:  ... and they just reap the benefits.

13:18:

Mike:  Yes.

13:18:

Chris:  Thank you for coming on the show.

13:19:

Mike:  Well, thank you for having me.

13:21:

Lisa:  You can learn more about the Georgia Communications Cooperative at gcc.coop.  We've also written about the North Georgia Network on muninetworks.org, so be sure to check out what we've written.

Let us know about topics that would interest you, or if there are guests you feel we should interview.  Write to us at podcast@muninetworks.org.  You can follow us on Twitter.  Our handle is @communitynets.  This show was released on April 1st, 2014.  Thank you to the group Valley Lodge for their song, "Sweet Elizabeth," licensed using Creative Commons.  Have a great day.

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