Broadband service delivery has reached a turning point for rural America, and the opportunity to bridge the Digital Divide has arrived. The devastating effect of the COVID-19 pandemic on lives and the economy has firmly established high quality broadband as essential infrastructure. Virtual services supporting business, education and health care have entered the mainstream of America and are here to stay.

Thanks to the FCC and the Universal Service Fund, $20B has been made available for the construction of broadband networks in underserved and unserved areas of the U.S. through the Rural Digital Opportunity Fund (RDOF) reverse auction process currently underway. This level of funding makes possible the implementation of broadband across a large part of rural America.

Over the past few years, states have come to recognize the crucial role electric cooperatives play in the delivery of rural broadband by relaxing or eliminating restrictions that once prohibited them from offering telecommunication services. Combining the electric cooperative’s inherent assets with the motivation of the cooperative’s leadership to improve the quality of life of its members, many have already undertaken broadband projects, and many, many more are expected to begin in 2021.

The result of the increased need for high quality broadband will be a demand for materials and services that overwhelms a limited resource supply that is already pressured by a challenging global economic environment. Material and labor prices will rise in response to demand, lead times will increase, and projects will face delays that may significantly impact the business model and the viability of the opportunity altogether.

KGPCo is a leading material and logistics supplier with deep roots in fiber and telecommunications. “We have already seen a significant increase in the demand for fiber, networks and installation services over the past two years,” said Trevor Putrah, President, KGPCo. “We increased our forecasts to maintain reasonable lead times, but both manufacturing output and transportation have been adversely affected by the global pandemic, compounding the material shortage challenge.” Fortunately, KGPCo anticipated the demand for fiber and broadband materials a couple of years ago and established partnerships with strategic suppliers.  “Forecasting can be challenging, and the miles of fiber we were estimating were staggering. Our partnerships gave us the granularity and confidence to increase our pipeline while managing our risks.”

The amount of fiber required for 2021 is indeed staggering. Considering the electric cooperatives alone, a simple assumption of 200 electric cooperative broadband projects at a nominal construction rate of 500 miles per year results in a demand of more than 500 million feet of fiber. Factoring in the demand from traditional carriers such as AT&T and Verizon with preferred customer contracts with glass manufacturers, the pressure on the fiber supply will be tremendous. Fiber production in North America rests with four fiber manufacturers – AFL, Corning, OFS and Prysmian. AFL is the leading supplier of ADSS in the United States; ADSS has been particularly useful to electric utility companies because of its ability to be placed in the power or supply space of the utility pole, saving time and costs with make ready changes. The electric cooperatives, however, have no priority for fiber among these manufacturers, so alliances with distributors and engineering companies with supply allocations will be key for timely broadband project execution.

FiberRise is one of the fastest growing engineering companies in the electric utility broadband space today. Its founders were among the first to understand the unique advantages the electric utility brings to broadband deployment in the rural areas, and FiberRise developed an architecture specifically optimized for the power distribution infrastructure. CEO Tommy Harmon has been intimately involved with funding programs for broadband and understood the tremendous potential for broadband service delivered by the electric cooperative. “We saw success early on with cooperatives where we could develop a viable business model with only a little extra funding,” according to Tommy. “We were aware that funding programs were trending upward, the legislation was changing, and the opportunity for more cooperatives to offer broadband was increasing.” FiberRise struck alliances with suppliers to ensure fiber and material would be available for its customers should shortages occur. “The FiberRise value proposition is the complete solution – fund, build and operationalize the network. If we don’t have the material on hand to build the project, we can’t help our customers succeed. Having access to fiber for our customers was the obvious first step.”

The auction phase for RDOF begins at the end of October 2020 and will end sometime before the end of December. In Phase I of the program, $16B will be distributed among the auction winners – price cap carriers, MSOs, electric and telephone cooperatives, and independent operators. The FCC went to great lengths to ensure a fair auction process that results in high quality broadband throughout rural areas, having learned lessons from previous auctions with smaller grants. 2021 will be an exciting year for broadband providers and, hopefully, a long awaited fulfillment of the broadband promise for rural America.