Opportunity Abounds With Fiber Internet Expansion

Published by Bob Hance on Monday, March 4, 2019 in Internet

Fiber construction

You've probably heard the phrase, “You don't know what you don't know.” As I think back over our five years in the fiber internet business, I realize there was a lot we didn't know when we jumped in. Much of it was technical and operational stuff that we learned on the fly, but the biggest “aha moments” came from the response to our new offering.

Our charge from the board of directors late in 2014 was to implement a five-year plan to deploy fiber internet across our southwest Michigan electric service territory. We knew there would be a huge learning curve and some growing pains. What we didn't know was that we were on to something so much bigger than what we ever imagined.

We successfully launched a broadband offering that remains unparalleled in terms of the overall service experience, and as expected our electric customers signed up in droves. Some were part of the first year of construction, and some now eagerly await their install as we make our way through year five. We knew this would be well received, but never expected the overwhelming response we got from outside of our service territory. Word spread quickly, and we started seeing organized, grassroots efforts spring forth from townships, communities, neighborhood associations and even individuals – all begging us to bring this service to their area.

Didn't see that one coming!

The story just keeps getting better and better. We are well ahead of our scheduled build out in southwest Michigan, and plan to begin construction in southeast Michigan next year. Our sign-ups are significantly higher than projected in our business plan (we expect to install our 10,000th customer next month!), and many are enjoying their experience so much that they're upgrading to the higher-speed options at rates exceeding our expectations.

It's a perfect storm to take advantage of the growing interest brewing outside of our service territory.

We've already dipped our toes in the water of this kind of opportunity and extended service into a few areas that we don't serve electrically. These were well organized efforts where prospective customers came with enough interest and cash in hand to cover a substantial portion of the construction costs. These “one-offs” gave us a unique opportunity to develop an expansion business model that will offer positive economic benefits for you and your cooperative. Given our perfect storm scenario, we're ready to act.

We're currently mining data to evaluate interest from a number of areas adjacent to our electric service territory, and will extend construction offers into areas that seem ripe for the opportunity. None of this impacts our ongoing construction plan. Each offer will be unique based on our financial strategy, and will require a minimum take-rate and financial buy-in to help fund capital costs. It's a very different model than our planned deployment across our electric service territory.

We still don't know what we don't know, but are making calculated and strategic decisions that will ultimately offer great value to our cooperative and electric customers.

About The Author

Bob Hance

Bob Hance is the President/CEO of Midwest Energy & Communications.