Case Study: East Central Electric Cooperative
East Central Electric continues the trend to build a fiber-to-the-home network to serve 100% of its members leveraging Conexon as its partner
East Central Oklahoma Electric’s broadband exploration began in mid-2017 and picked up momentum later in the year when the co-op was approached by one of its largest customers, the Creek Nation, about broadband possibilities. With an infrastructure and electric footprint within Creek Nation boundaries, the co-op seemed the natural choice to provide high-speed data to give the Nation’s residents access to critical communications like telemedicine, distance learning and more, and offer broadband advantages to all other co-op members. A short time later ECOEC commissioned the feasibility study, an exercise Smith advocates for any co-op considering broadband market entry.
“If you’re getting questions about broadband from members or your board, get a study,” he advises other cooperative leaders. “Broadband isn’t for every company, but you can’t answer the question of ‘why or why not’ without that feasibility study.”
When time is short, stakes are high and you’re about to launch an entirely new business, true partnership boils down to the basics.
“You have to get real comfortable, real fast,” East Central Oklahoma Electric Cooperative (ECOEC) general manager Tim Smith says simply. By all measures, Smith’s early comfort level with broadband consultant Conexon is still well-placed as ECOEC embarks on a six-year buildout of a fiber-to-the-home network for its 33,440 members.
Within just a few months of an introductory meeting, Conexon had produced a study proving out the economic feasibility of a broadband business and engineered federal funding of roughly $22 million dollars for the build-out – funding that will have ECOEC broadband subsidiary ecoLINK producing cash flow in year one, effectively eliminating the need for financial subsidizing by the electric co-op. Today, less than a year-and-a-half later, the network is designed, infrastructure make-ready is in process, fiber is being strung, and thousands of customers are lining up for service.
At a Glance:
Total miles of fiber6000
Percent of Members Reached100
Conexon partners Randy Klindt and Jonathan Chambers presented ECOEC’s board with a feasibility study in March 2018 that detailed the financial impact on the cooperative and how that would play out over time. The board’s quick buy-in allowed ECOEC to join the Conexon-led consortium of electric cooperatives to collectively bid for federal broadband funds through the Connect America Fund (CAF) II auction. The $22.5 million awarded to ECOEC created a whole new financial picture.
“That before and after review demonstrated what the auction meant to our co-op,” Smith says. “The results of the CAF II award mean we will not be subsidizing the build-out from the electric side, which is important for us. We had no idea of the magnitude of the auction, but Conexon did and that’s part of the value they bring to a partnership.”
Broadband plans quickly turned into action and implementation, with Conexon as an integral partner.
“Since we didn’t have (broadband) expertise we needed someone we were comfortable with that we didn’t have to teach the co-op business model to,” Smith says. “Conexon is made up of co-op people, so they understand how we need to do things.” In keeping with cooperative philosophy, ECOEC is committed to providing fiber build-out benefits to all its members, upgrading its electric delivery and reliability as the network is being built out.
“All of our members will receive benefit from the enhanced electric, regardless of whether they choose to subscribe to broadband services,” Smith stresses. “That’s the most important aspect to us, and this way, we can also provide broadband services to those who want them in an affordable way, without those services being subsidized.”
Working hand-in-hand with ECOEC’s team, Conexon designed the network and quickly moved into the role of construction management partner – providing daily supervision, preparing RFPs, coordinating contractor and vendor selection, verifying and validating work completion and overseeing the many other moving parts of the mammoth project.
Smith compares launching the broadband initiative to the important and pioneering work of the electric cooperatives in the 30s, bringing electricity to an underserved part of the country.
“We categorize this as another frontier, closely aligned with electricity to rural America in late 30s and early 40s,” he says. “No one would build out because the farm was too far away. Now, 80 years later, we’re bring something to rural Americans – something they need – that they couldn’t get another way. “This drives us every day.”