Case Study: Ozark Electric Cooperative
Pioneering OzarksGo Builds Fiber-to-the-Home Network for All Its Members
OzarksGo is blazing a trail that extends across Northwest Arkansas and Northeast Oklahoma.
From helping provide a reliable connection for poultry farmers and supporting a tech repair business, to filling the high-speed service void when a community’s provider exited, Ozarks Electric Cooperative’s broadband subsidiary is fulfilling its mission of making lives and communities better. In fact, the co-op started making a difference even before the first customer was connected.
“Demand was such that as people in the rural areas found out we had Wi-Fi connectivity at our offices, they would show up in our parking lots to allow their kids to do homework before they went home,” recalled OzarksGo General Manager Steve Bandy. “So as we connected our offices for communications, we provided free Wi-Fi connectivity for the community at our offices, and when word traveled, that became huge.”
Currently in year four of its six-year, $180 million deployment, OzarksGo was one of the pioneers of broadband delivered by an electric co-op. The network was launched in 2016 under the leadership of Conexon Partner Randy Klindt, an early member of the OzarksGo team, with its first customers connected in 2017. Today, the co-op has comfortably passed the halfway point of its planned 7,000-mile deployment, added more than 7,500 new subscribers in 2019 alone, and is approaching 15,000 subscribers overall. And thanks to $23 million in federal funding secured as part of Conexon’s rural electric consortium, OzarksGo’s break-even came in year three versus the originally projected year five.
“As a co-op, we believe in exploring ways to ensure rural living remains a viable economic and lifestyle option,” said Mitchell Johnson, Ozarks Electric Cooperative president and CEO. “And just as electricity was in the ’30s and ’40s, broadband is now the critical community service rural Americans need and deserve to continue living where they want to live. We’re very gratified with the success we’ve experienced, and attribute it directly to our co-op commitment of making sure people have affordable access to all of the education, economic and lifestyle benefits world-class broadband brings.”
As a Co-op, we're committed to ensuring our members and communities have access to all of the societal, education and economic benefits that world-class broadband delivers, backed by our cooperative commitment to make lives better. Conexon expertise and support have made a tremendous difference in our ability to do that. Randy and Jonathan have been valuable partners and instrumental to our success.
- Mitchell Johnson, President and CEO Ozarks Electric Cooperative
Straight into the Fire
Like other cooperatives, Ozarks Electric Cooperative’s initial investment in fiber-optic infrastructure upgrades was largely due to the smart grid capabilities fiber delivers – AMR, better load balancing, more efficient electricity delivery and others. With the initial fiber backbone in place, the co-op boldly decided to deploy its first phase of fiber to the home in its densest, most competitive area.
“We knew that if something happened and it wasn’t successful, the area would be able to support itself,” explained Bandy. “But as it turned out, it was phenomenally successful.”
Residents more than welcomed OzarksGo’s entry into the market, with take rates in the first phase 15% higher than the co-op’s original projections. In its most competitive areas, the co-op consistently enjoys take rates of around 42%, a number that continues to grow as potential customers reach the end of contracts with competitors.
OzarksGo’s plan and commitment were to provide access to broadband services for 100% of its nearly 79,000 members – a plan made feasible by its early success. Along the way, however, the co-op was approached by the city of Stilwell, Oklahoma, a community outside its territory, with a unique partnership offer. The city’s cable provider had left, leaving city residents without reliable access to the internet. OzarksGo took over the cable plant and built out fiber around the city, providing high-speed services to the city’s businesses and residents, a move one business owner believes will help keep young people living and working in the area.
“Even though it was outside our territory and all our members hadn’t received service, we believed it was an important way we could potentially help save a community that was struggling,” Bandy said.
Learning on the go
As the co-op has built out its network, the OzarksGo team understands one of the most important keys to success is open communication with members – setting expectations, then meeting them. The co-op has done some advertising, but a simple explanation of what symmetrical gigabit speed offers, its affordable price and the co-op commitment are often enough to attract subscribers.
“The most frequent comment we get is ‘I wish you were here,’” Bandy said. “One of our biggest challenges has been managing member expectations. It’s tough to tell someone that we may not reach them until year five or six, so open communication with members has been critical as we have built out. They hold us to a higher standard, which they should.”
The Conexon factor
OzarksGo has long partnered with Conexon for critical parts of the broadband project. With 35 employees and years of experience under its belt, OzarksGo manages most of its own construction, but has leveraged Conexon’s geomapping and autodesign capabilities. These have led to more accuracy and faster deployment. Additionally, Johnson and Bandy frequently tap the expertise and experience of Klindt and Conexon Partner Jonathan Chambers on all aspects of deployment. In particular, Chambers’ background in regulatory and funding has provided tremendous benefit, and was instrumental to OzarksGo’s participation in the Connect America Fund (CAF) II auction, where they secured the $23 million. The co-op also plans to possibly participate in the 2020 Rural Digital Opportunity Fund (RDOF) auction.
“The regulatory support of Jonathan and the team in Washington has been invaluable,” Bandy said. “Having someone help you understand what funds and areas are available and making sure you don’t leave available money on the table is a huge benefit.”
With its financial boost and gaining efficiencies where possible, OzarksGo is accelerating its build, with a goal of completing in five rather than six years, and always with an eye toward community benefit.
“Building out a fiber network is a tremendous undertaking,” Bandy said. “But it’s very rewarding to see how we’re helping rural communities. We all understand how important it is for us to do this. If we don’t provide reliable broadband, no one will.”