On January 8, 2018, the president issued an executive order aimed at streamlining the process by which the General Services Administration allows communications equipment to be attached to federal buildings. The measure is intended to ramp up investments in broadband infrastructure for rural communities across the country. The action seems to be well-timed. Two weeks after the president issued this executive order, we hosted the Clearfield Connection Forum in Minneapolis, in which a group of Wireless Internet Service Providers cited easement and right-of-way issues as a serious problem — especially for federal grounds. Standardizing the process for broadband infrastructure deployment will go a long way toward accelerating the connected future for those in rural areas.
There are currently more than 2,000 WISPs delivering service to nearly 4 million customers in mostly rural and suburban markets. These WISPs represent a fantastic microcosm of what is happening in the rural broadband market. All of these entities have the goal of providing broadband service to what is largely an underserved market using the most cost-effective solutions across vast areas of the United States. Most WISPs indicate serving areal clusters of 100 to 1,500 locations per square mile. While the technology of choice for WISPs is most often representative of the industry name (wireless), many WISPs are choosing to evolve past wireless technologies and are deploying fiber deeper into their networks — all the way to the home in many cases. The reasons for this evolution get down to business-case economics.
The WISP industry is growing up. The fact that the WISPs have been in business for more than a decade with wireless technologies demonstrates that rural broadband deployment is not only sustainable, but also profitable. But deploying wireless technologies comes at a cost. Bringing broadband to underserved rural markets exclusively using wireless technologies has provided a baseline business from which to expand service offerings using fixed wireline technologies like fiber.
The biggest issue facing the WISP industry today is that some are missing out on the opportunity to build a business with a sustainable long-term advantage by jumping in the fiber game. A survey of WISPs conducted by Clearfield in January 2018 revealed 88 percent of WISPs say fiber is important or very important to expand WISP service offerings. While initial deployment costs are higher for fiber than for fixed wireless, FTTH can support exponentially higher data rates and has a much longer equipment lifespan.
Most WISPs operate on a cash basis and not an accrual basis. While the costs of building the wireless network are low, the costs of operating the network are high. However, building a network is not all about costs. It’s about running a business. When we talk to WISPs now, the mood has shifted. Now, enough WISPs have had their lunch eaten by competitors offering fiber and they are motivated to have a competitive response. Now, they just need to get in the fiber game. If they do, then they will quickly understand that running the business is not all about the Capex — the Opex on fiber is so much less than their wireless alternative.
Now we are seeing more people get into running the WISP as a business. They hire out the technicians. They are becoming much savvier as a business. They have now experienced some fiber success. They can look at fiber projects and once they’re turned up, they no longer have to babysit the services. Fiber networks are durable, dependable and reliable. The amount of problems experienced with this type of network are orders of magnitude less than their wireless network alternative.
What needs to change? There are lots of shoestring budgets trying to barely spend any money to get and keep customers. They can’t keep up with demand for new and maintain the old. Most think, “How can I build out new networks and keep things running?” Start small. Take a small 10-home subdivision or take on a fiber project going up the tower and expand that into a building. Lots of WISPs have these opportunities. But remember, the biggest benefit of operating a fiber network is you can expand and run a business that doesn’t depend on whether you are there or whether you are not there to keep going. Ask any experienced broadband provider that has rolled out fiber networks. Customer trouble report rates for fiber networks are less than one tenth of the trouble report rate for alternative technologies.
The game has changed. It’s time to get in the fiber game.
Kevin Morgan is chair-elect of the Fiber Broadband Association and chief marketing officer of Clearfield, Inc.
Filed Under: Infrastructure