HomeNewsletterLatest NewsletterIrby Utilities partners with co-ops to bridge divide

Irby Utilities partners with co-ops to bridge divide

Irby Utilities got its start in the 1920s, distributing supplies to some of the nation’s first electric utilities. Later Irby supported rural cooperatives after FDR’s Rural Electrification Act set in motion the investments that would close the power gap between U.S. cities and farms. Today, Irby is part of the world’s largest privately held electric distributor, Sonepar Group, and is working hard to close a different gap.

“The digital divide is both wide and deep,” said Patrick Reams, vice president of technology and communications at Irby Utilities. “In rural America, the digital divide is wide. How do you get the service there? In more urban centers, the divide is deep in that it’s very narrow pockets which lack access, and both challenges have to be addressed.”

Reams was part of a panel titled, “The Role of Utilities in Bridging the Digital Divide” at The Wireless Infrastructure Association’s Connect (X) show in New Orleans. He said locally accountable organizations are one of the keys to bridging the digital divide, and explained how Irby is helping regional co-ops connect their communities to fiber broadband.

“We’re covering about 360,000 locations and 40,000 miles of fiber that’s either constructed or currently under construction,” he said. “All told, that’s about $600 million of investment in the local economies going on through these utilities who have found a need in their areas and are responding to that.”

One such utility is Craighead Electric, a co-op that serves about 21,000 square miles of rural Arkansas with 5,000 miles of power lines, and more recently with 3,500 route miles of fiber. Craighead initially explored fiber as a way to communicate with critical electrical devices on its grid and realized during its due diligence process that almost half its members lacked reliable broadband. The utility’s management team recognized that its 35,000-meter count could easily start to shrink if members move to urban areas in search of better connectivity. As such, it decided that it needed to offer broadband to fulfill its mission of serving the community.

Craighead partnered with Irby after a series of feasibility studies and started stringing fiber in early 2018. By 2021, the backbone of the fiber network was complete, $14 million under budget and 18 months ahead of schedule.

Now Craighead’s fiber subsidiary serves 14,000 subscribers with broadband internet and VoIP. Customers are getting at least a 200 megabits per second (symmetrical) internet, usually faster.

Like many of the utilities that Irby partners with, Craighead Electric formed a broadband subsidiary to operate its fiber network. Craighead leverages existing assets, including poles, trucks and labor, but it has to carefully account for all of that.

“In most states, even though they have those trucks, if the utility uses its truck for the broadband subsidiary it has to bill the broadband subsidiary,” explained Reams.

“You can’t cross-subsidize ratepayer money with the build of the fiber projects.”

Reams said fiber construction costs were averaging about $33,000 a mile above ground and about $60,000 to $70,000 a mile underground during the spring of 2023. Keeping those costs in line with projections is key to the long-term viability of utility-owned fiber networks, he said.

“It’s easier to maintain that affordable component when you haven’t gone over budget,” Reams explained. “It’s really hard to stay affordable if you’re trying to deal with being in arrears. And that’s what I think is the single key advantage that we bring: Proper planning leads to proper execution and deployment. And Irby has been able to do that by delivering all of these projects at or under budget.”

Craighead’s internet service, called Empower, has replaced DSL and satellite with fiber for thousands of Arkansas residents. It’s also replaced big corporations with a local provider, which seems to make a big difference to customers. Almost every testimonial on Empower’s website calls out the company’s personalized customer service.

This is not a surprise to the team at Irby, which has made working with local providers a part of its mission. “Electric cooperatives and municipalities are best equipped to provide local support and internet services to their communities,” said Reams. “You’ve got to make a business model that works so that you can deploy it effectively. And I think that’s what Empower was able to do.”

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