Trailblazers
At LREC, customer satisfaction surveys made it clear that members desperately wanted better internet service. More importantly, they trust- ed their co-op’s ability to provide it. With approval via member vote at their annual meeting, LREC’s board and management devised a plan, backed by engineering and fi- nancial studies and underscored by their long-standing commitment to improve rural life in northeast Oklahoma. In 2014, they created Lake Region Technology and Communications, a subsidiary corporation responsible for extending fiber-to-the-home capable of two-way data transmission speeds beyond their membership’s wildest dreams—100 Mbps. With fiber’s ability to carry multiple streams of information with no loss in speed, LREC can offer the revered “triple play.” For members, this means virtually unlimited TV channels; tele- phone service with free long distance; and turbo-speed internet—think endless streaming—all at a savings of roughly $40 to $100 per month. At the Earplug Superstore east of Fort Gibson, owner Tom Bergman couldn’t believe the news.
“I heard something about a five-year plan to run fiber through this area, and I thought, ‘Yeah, right. Better put another zero on that,’” he recalls, laughing. “Boy, was I wrong.” Fiber reached Bergman’s business in 2013 as part of LREC’s initial fiber build-out. Among other aims, the two-year pilot project would test the accuracy of their financial projections. Working alongside experi- enced fiber contractors, co-op employees deployed 260 miles of fiber cable, stringing it pole to pole beneath the overhead neutral wire. “Running the fiber overhead allows us to reduce our make-ready costs significantly,” explains Hamid Vahdatipour, LREC general manager. “If we’d chosen to bury fiber in the ground, this project would not be pos- sible. It’s simply too cost prohibitive.” As Vahdatipour recalls, those inaugural miles supplied the critical learning curve. LREC linemen made the not-so-distant leap from string- ing electric lines to raising fiber, strengthening the system with extra anchors and guy wires along the way. To handle fiber repairs and splic- ing, LREC hired four skilled technicians. Thanks to an earlier experience with ice-laden cable, they knew firsthand that fiber held up better than power lines. Above all, LREC’s financial projections worked. “We saw more revenue and fewer expenses than we thought,”
Vahdatipour recalls. Confident in their numbers and abilities, LREC began expanding fi- ber service in October 2016, bringing the total number of members served to over 900. Eventually, the co-op aims to run fiber to all 22,400 accounts at an estimated completion cost of $65 million. It’s not exactly chicken feed, Vahdatipour concedes, but LREC is ac- customed to dealing with longer returns on its investment. Easing the financial burden is a $20 million loan from Cobank, which will finance the first phase of fiber deployment. A $500,000 grant from FCC’s Connect America Fund (CAF) should pay $50,000 annually over the next 10 years. The co-op has yet to receive the CAF money, but Vahdatipour remains “cautiously optimistic.” One thing is certain: LREC’s fiber deployment will continue with or without government support. After all, the added financial, administra- tive and physical challenge of bringing fiber to Oklahoma’s isolated hills and dells is innately familiar. “We can’t let the fear of what might or might not happen, guide our business decisions,” says Vahdatipour. “If we let risk curtail us, our mem- bers would still be living in the dark.”
FIBER 85%
THE RISE OF
LREC expanded service in Oct. 2016, bringing the total number of members served to
with the goal of running fiber to all
of LREC members lack access to advanced broadband technology
> > 900 22,400
@
LREC can offer the revered "triple play." For members, this means virtually unlimited TV channels; telephone
service with free long distance; and turbo-speed internet—think endless streaming—all at a savings of roughly $40 to $100 per month.
FEBRUARY 2017 7
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