Utilities Face a Culture Clash in Becoming Fiber Companies, UTC Summit Told
The fiber business is different from the power business and complications are sometimes hard to anticipate, electric co-op and public utility members of the Utilities Telecom Council were told at a virtual broadband summit Thursday. Speakers said their focus on customer service in providing power is an advantage in competing on broadband.
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Employees were resistant to change, said Stacy Evans, chief broadband and technology officer at BrightRidge, a public power company in Tennessee. “Getting them to buy into and understand … why this is important to the organization, that’s a challenge and it doesn’t happen overnight,” he said: “It happens by kind of teambuilding over time.” As the business grew, it helped employees see “this is a successful thing,” he said.
Getting started was tough, Evans said. He underestimated how long it would take to go through the request for proposal process, get board approvals, procure technology and work out contracts with vendors. Working out a contract with construction vendors slowed launch by four months, he said: “It’s something you really don’t anticipate. … Those things are easy to underestimate.”
The biggest challenge from broadband was “a bit of a culture change,” said Loyd Rice, manager-fiber services at Semo Electric Co-op in Missouri. “If you moved into our service territory you just had to deal with us.” That changed with broadband, he said. IT was a challenge, he said. “We were delivered a new Juniper router that literally took us two months and a lot of blood, sweat and tears to get online,” Rice said. “IT challenges, don’t underestimate them,” he said.
Wilson, North Carolina, ran into problems with ISPs already serving the area, said Don Richardson, city information technology manager. Wilson knew it needed to install fiber, he said. “There was a lot of fear [from other providers] they were going to have to compete by replacing the coax,” he said: “They dropped prices on us, they tried a lot of different tactics to stifle what we were doing, but our customer service prevailed.” Customers chose service over price in many cases, he said. Initially, Wilson overpaid for equipment, he said. “Some vendors, not all, will try to take advantage,” he said.
It’s a mistake to think “build it, and they’ll come sign up,” said Lee Ayers, vice president-engineering at Mid-Carolina Electric Cooperative in South Carolina. “You’re going to get some of that. But you’re also got to be prepared to sell it … make it known that you’re out there. You’ve also got to be prepared to compete.” The co-op doesn’t offer discounts, he said. “We do things, we like to say, the co-op way,” he said: “We set a fair price. We stick to it. We don’t raise it. We don’t offer an introductory rate or special.”
Ayers’ advice to other co-ops is “start asking questions and start having people ask you questions.” A lot of unanticipated problems will arise, he said. “You don’t know it all,” he said.
Electricity customers “don’t understand that you’re building this line, and they don’t understand why you can’t just hook them up,” said Steve Bandy, general manager at Arkansas-based OzarksGo. It took 83 years to build the power network, compared with less than five for fiber, he said. "You can work half days, it just doesn’t matter what 12 hours you work to get it done,” he said.
“Don’t underestimate the demand,” said Darren Farnan, chief development officer at Missouri’s United Electric Cooperative. “We were thinking too small.” Fiber “has really transformed our business,” since it launched in 2013, with a doubling of the customer base, he said. “Bring the right people in,” he said: “This is not a thing you can do part time. This needs people who are dedicated. … Take care of your telecom customers the same way you’ve taken care of the electric customers.”
Deploying fiber will also mean adding power customers, said Bill Hetherington, CEO of Bandera Electric Cooperative in Texas. The growth in Bandera’s electric business was an annual 1%-1.5%, which jumped to 3% when it started deploying fiber three years ago, he said. “It provides a significant value to the electric utility in selling your base product, which is electricity,” he said.