Rural Cooperatives have proven to be the ones to trust for rural broadband deployments.
Coverage maps for broadband and electric service prove that rural cooperatives have made investments to ensure the rural parts of Minnesota have what they need to compete. Unfortunately, there are many areas that need better broadband.
Electric and Broadband Coops have an opportunity to improve these areas leveraging the resources and knowledge they each have.
13. 2017 2016 2015 2014
Non-Member grant $18,107,890.00 $19,625,174.00 $2,369,677.00 $9,855,942.00
CNS Member Grant $8,367,666.00 $14,523,584.00 $8,957,129.00 $8,922,854.00
$8,367,666.00
$14,523,584.00
$8,957,129.00 $8,922,854.00
$18,107,890.00
$19,625,174.00
$2,369,677.00
$9,855,942.00
DEED GRANT IMPACT - CNS MEMBER VS. NON-
MEMBER
CNS Member Grant Non-Member grant
16. I hope that the CAF II auction will attract a wide variety of providers.
We need and want everyone to participate: rural telcos, electric co-
operatives, cable operators, price-cap carriers, satellite companies, and
fixed wireless providers.
Of course, the most cost-effective technology for a particular area will
vary. So regardless of how you deliver connectivity, please take a hard
look at the CAF II auction.
“
“ FCC Chairman, Pai
17. CAF II AUCTION LOCATIONS
IN ELEC. COOP AREAS
TOTAL HOUSEHOLDS IN ELEC. SERVINGAREAS
AUCTION BLOCK GROUPSWITHIN ELEC. SERVING
AREAS
1,072
27,076
TOTALAUCTION RESERVE SUPPORT DOLLARS
$3,065,826
19. HOW BROADBAND
NETWORKS WERE
FUNDED
• USAC High Cost Support (ETCs)
• USDA RUS loans
• Operational cash flows
• CoBank
• A-CAM (RoR carriers)
• CAF II (Price cap carriers)
• State BB grants
• ARRA grants
• Rural Broadband Experiments
20. “AS WE EXTEND FARTHER, AT LEAST A
50% FUNDING MATCHS IS REQUIRED”
• CAF IIAuction
• State BB grants
• New Federal Infrastructure investment
• RUS
• Cooperative lenders
• Federal grants/loans
• Local banks
• New MarketTax Credits (low income communities)
• Local governments (general fund and/or bonding)
• Local NGO (Federal grants)
• USDA REDLG, Facilities loan
• Local gov. or non-profit can borrow for other projects which frees up dollars for broadband?
• Local large businesses
• Residents donating to non-profit for tax deduction
• Follow the money for those who benefit the most
22. FOCUS ONTHE COMMUNITY
• Long-term focus
• ROI will be a challenge
• Economies of scale do exist
• No cookie-cutter approach for:
• Technologies
• Funding
• Partnerships
• Comfort zones will be stressed
25. NETWORK DESIGN CONSIDERATIONS
• Plant construction considerations
• Aerial attached, OPGW, underground,
wireless
• New construction vs Planned network upgrades
• Backhaul
• Network technology
• Phases, Future planning
• Upgrades/expansion after initial projects
• Telecom and Electric engineering
experience as well operational experience
26. Free/low
cost pole
attachments
Builds and owns
physical network,
leases to telco
Builds and owns physical
network, owns customer
Builds and owns physical
network, owns customer,
manages all technical aspects
Own and manage network and
customer experience
Manage customer
experience
Provides tech
support and
wholesale
services
Provides
wholesale
Services
only
WHO DOESWHAT?
ELECTRIC COOP TELCO COOP
27. UNIQUEVALUE(S)
• Customer base
• Community involvement
• Financial resources
• Man power
• Network facilities
• Smart grid, substations needs
• Network upgrade plans may allow
adding fiber with less cost
ELECTRIC COOP TELCO COOP
• Scalable equipment
• Scalable software
• Billing, Management,
Troubleshooting
• Experienced man power
• CSR,Tech, Network,
• Marketing, Regulatory
• Backhaul
• Expertise
• Technology
• Familiar with competition
28. • Increasing competition decrease feasibility
• A-CAM, CAF II, and CAF Auction funding
• BB grants
• Risk tolerance thresholds can vary
• CAF Auction funding – the clock is ticking
• Partnerships likely needed for success
CHALLENGES
30. CONTACT
Jason Dale, CEO –
Jason.dale@cooperative-
networks.com
Paul Solsrud, Product Manager –
Paul.Solsrud@cooperative-
networks.com
Al Haman, CEO –
Alhaman@star-energy.com
Jim Pederson, Sales Representative –
Jpederson@star-energy.com
32. CAF II ReverseAuction Overview
• Auction to commence July 24th
• $2B over 10 years (30k CBGs, 214K CB)
• Equates to $934 per Census Block
• ~14k Locations in MN
• 10 years of support
• 40% by end of year 3, 20% each year after, 100% by end of year 6
• Funding is for “Fixed Broadband”
• Technology neutral (DSL, Fiber, FixedWireless, Satellite, Cable) & Price Cap carriers
• Bidding at Census Block Group level, not blocks
• Reserve prices established by the Connect America Model
• No blocks will be awarded funding greater than the model says is required
• It’s not clear which speeds this support is for
• No benefit for bidding on multiple CBG
33. CAF II ReverseAuction Overview
• Voice and Broadband must be offered
• Engineered accommodate at least 70% take rates
• Joint Bidding Arrangements– FCC concerned about collusion (NDA,
separation of duties, etc.)
• Joint Bidding Arrangement limitation
• Partners for joint bidding cannot bid alone for any blocks – they must partner
for every block group they want to bid on – regardless of area
• Cannot changeTier and Latency after first bid is made
• Service prices that are reasonably comparable to urban areas
• Data from 2016 477 – some areas have been upgraded since then
35. CAF II ReverseAuction Process
• Bidding process
• Short-form applications Due March 30th
• Get approval to participate
• Criteria:
• 2 years providing voice, BB, Electric services
• One year financials OR 3 years financials, and bank letter of credit
• ETC status not required to bid
• Long-form (after winning)
• Prove financial qualifications, funding, ETC status
• Complete within 180 days after winning
• Build outs begin after complete
• Auction training and practice available before start
