Stimulus winner Rural Telephone targets 100 Mb/s to the home

While some rural telcos protest proposed modifications to the Universal Service fund that would support only 4 Mb/s service to the home, one rural telco is moving ahead with plans to deploy a fiber to the home network supporting speeds up to 100 Mb/s service to sparsely populated areas of western Kansas. The deployment is made possible by $101 million in funding through the Broadband Stimulus Program, which was awarded on a 50/50 grant/loan basis to Rural Telephone, a rural ILEC that also has CLEC operations.

“We’ll be building approximately 4600 square miles, which is huge,” Rural Telephone CEO Larry Sevier told Connected Planet. “We will touch 23,000 households and businesses and 335 anchor institutions in 21 towns and 26 rural areas.”

Like some other carriers that won broadband stimulus funding, Rural Telephone has opted to use equipment with which it is already familiar. The company plans to deploy the same fiber to the home equipment from Occam Networks that underlies the company’s existing FTTH infrastructure.

The cost of the access equipment represents about 15% of the cost of an FTTH deployment, Occam Networks’ vice president of marketing Russ Sharer told Connected Planet. A large portion of the money will go toward labor—and as Sevier explained, a significant amount of construction dollars will be spent in western Kansas.

Rural Telephone plans to do some of the installation itself and was also able to identify two local construction companies that were qualified to do this type of work. In addition the company has selected three companies from outside the area to work on the project.

“This will be huge for western Kansas,” Sevier said, because the construction firms expect to employ a total of 400 people for work on the stimulus project--and many of these people will be “filling up hotels and restaurants and spending a lot of money in this area.” Even the local crews may need to work outside their hometowns and may need foot and lodging, Sevier noted.

Rural Telephone expects to hire a total of 17 new internal employees as a result of the stimulus project and Sevier expects those jobs to remain after the project is completed. The new positions are in the central office, engineering, accounting and information technology, he said.

Rural Telephone has a long history of obtaining funding through the Rural Utilities Service loan program, going back as far as the 1950s, and Sevier believes that experience helped the company win the stimulus award. Like some other companies that won broadband stimulus funding, Rural Telephone is not yet able to draw on the funds it was awarded. The company is waiting to receive its final paperwork from the RUS. But as Sevier explained, “We’ve jumped the gun—we’re using internally generated funds on an interim basis.”

The Occam Networks FTTH equipment that Rural Telephone chose is based on active Ethernet technology. Rural Telephone Director of Operations Ron Ellis said the company chose active Ethernet rather than the passive optical network technology that larger carriers such as Verizon are using because, “if you need higher bandwidth, you run out too quickly with GPON,” Ellis said. In the future, Ellis said, Rural Telephone’s network could be easily upgraded to support 1 Gb/s.

Carriers in metro areas tend to select GPON because they often lack sufficient infrastructure to dedicate an entire fiber to each home as active Ethernet requires, Ellis said. With GPON, a single fiber from the central office to a neighborhood node is shared by multiple homes, reducing the amount of bandwidth available to each individual customer.