HAMILTON, ALA. • As Mississippi electric cooperatives study the idea of providing rural internet, most eyes turn east just across the state line.
Two years into a five-year, $48-million project to run high-speed fiber optic to customers, the Tombigbee Electric Cooperative in Hamilton, Alabama, is under budget and ahead of schedule. The pilot program has become the poster child for Mississippi.
In fact, when Mississippi lawmakers voted in January to change state law and allow its electric cooperatives to also offer internet services, the success of Tombigbee Electric Cooperative was the example that propelled them. So as Mississippi’s cooperatives begin to study the possibilities created by that legislation, the Daily Journal took a deeper look at what lessons could be learned just across the state line.
That project has blossomed rather quickly. Just three years ago, the idea of bringing high-speed internet to rural Alabama was still a pipe dream for Steve Foshee and Tombigbee EC. (Note: Tombigbee EC is not connected to Tombigbee Electric Power Association in Mississippi.) Now, the cooperative is well on its way to providing blazing speeds at low prices to more than half the households in the area.
After a first look at providing rural internet in 2007 failed to gain traction, Foshee and the TEC board took a second look in 2016. A pair of economic feasibility studies led to a five-phase $48-million plan. The basics of the plan were hammered out on napkins during a four-hour meeting with an industry colleague at a Huntsville Red Lobster.
“It’s based on four tenets – jobs, education, e-medicine and quality of life,” Foshee said. “In January 2017, we adopted a plan with an initial budget of $48 million. It was a lot to consider, so we broke it into five phases. The first phase was $8 million. We thought $8 million might sting, but it won’t bankrupt us.
“We had to gather the low-hanging fruit first. We’re not the most prosperous area of the state, so we were challenged.”
To make the project work, the newly-formed TEC subsidiary, Freedom Fiber, began running fiber optic lines in densely populated areas. That provided working capital to run future lines to the more sparse rural areas.
Construction started in April 2017. By October of the same year, Freedom Fiber connected its first customers, two police departments and the school entrepreneur center – a coffee shop and internet cafe where students could do homework on the porch after school and on weekends.
“We used it as a test center to make sure things worked,” Foshee said. “In December 2017, we started adding customers. After 16 months, we just passed 4,000 customers.
“Sign-up was so heavy in the early months that halfway through the first phase, the board voted to move on to Phase 2. We were on budget and meeting and exceeding goals. The customer demand was enormous.”
Freedom Fiber started by running fiber optic cables in the cities of Hamilton and Winfield, with a total population of around 12,000 residents.
“In the business model, we had to get 30 percent of the households,” Foshee said. “We are now around 48 percent and creeping up a half percent or so each month.”
That number is not 48 percent of the houses that have internet. That is 48 percent of all the houses in the area.
“When all is said and done, based on the locations, we should be around 60 percent,” Foshee said.
One of the reasons for their success is they are offering internet at faster speeds and at a cheaper price than their for-profit competitors.
According to the FCC, the minimum standards for “high-speed” internet is a download speed of 10 MB per second and an upload speed of 1 MB per second. Because of the limitations of copper lines, the fastest speeds most for-profit internet suppliers can offer is 25 MB download and 3 MB uploads.
“In a rural application, the absolute minimum is 25-25,” Foshee said. “You need a fast upload.
“Our minimum is 100-100. We also offer 1GB service to homes. Businesses can get speeds up to 10 GB per second, both down and up.”
Around 80 percent of customers sign up for the 100-100 for $50 a month. That is download speeds up to 10 times faster and for less money than most were paying. Rumors spread that it was just introductory offers – prices would go up and speeds would drop.
“The price is going to stay right there,” Foshee said. “We priced it where we needed it. And there are no other costs. We offer free modems and free installation.”
In an attempt to be a good neighbor, Tombigbee EC tried to partner with existing internet providers but it didn’t work out.
Businesses jumped at the chance for faster speeds. In turn, employees at many of the businesses switched their home accounts as soon as they could.
“Technology is a huge part of the mortgage business,” said Jeremy Webb of CIS Financial in downtown Hamilton. “Having high speed internet is extremely important to us. We have 75 people in one operation, so it doesn’t take long to pull down the bandwidth.
“We are not experiencing those problems anymore. We are seeing less interruptions, whether it is speed or capacity.”
Webb also switched to Freedom Fiber at home and saw his download speed skyrocket from 4.4 MB per second all the way to 102 MB per second.
Before switching over to Freedom Fiber, the No. 1 complaint of the guests at the Hampton Inn in Winfield was slow internet speeds. It was so slow, the hotel was in jeopardy of losing its affiliation with Hilton.
“We were below the brand standard and were about to get into trouble,” said hotel manager Chad Clark. “The brand requirement is 50 MB, and we were getting around 8-9 MB.
“In the last 6 months (since switching) the connectivity score on guest surveys went up 12.1 percent. For us, that is huge.”
Not only is the speed 10 times faster, it costs less. Clark estimates the hotel is saving $900 a month on internet alone. He also switched at home and is personally saving $125 a month.
“Most people don’t realize what a big deal this is,” Clark said. “There is no telling how many industries we lost (or failed to recruit) because of slow internet.
“We now market this hotel, promoting the fact we have 100MB speeds.”
While the initial success and community response has been positive, officials know they still have a long way to go before the project is complete. That includes reaching the most far-flung customers.
“We believe we are going to get it to the family at the end of the line,” Foshee said. “We are not going to cherry pick where we serve. We are determined to make it available in every home and business in our area. That is our objective.”
Tombigbee officials know that just supplying fast internet connections is not going to change the economy or the way of life of the community. It will take more.
“Building the pipe is not enough,” Foshee said. “You have to go much deeper. What are you going to do with it to transform the community with growth?
“Washington can help. Jackson and Montgomery can help. But at the end of the day, it’s up to us to come together and change our community.
“We are seeing results and are more comfortable. We know without a doubt that we can make the four tenets work. It has a chance to be transformational to the community. It’s a big job, but fiber alone will not change the community.”
To that end, officials are looking more into e-medicine (visiting with a doctor online in a real-time video chat) and telecommuting (technology-based jobs that allow the person to work from home anywhere in the world). Both require enough speed and bandwidth to quickly move large files (video and high-resolution pictures). While they are still working on e-medicine, officials are already seeing results on the other front.
Families have already been touring the area and were quick to point out that the high-speed internet was a big reason why they chose to live there. One telecommuting couple who had lived in Los Angeles and San Antonio, Texas, is now eying northwest Alabama in order to live closer to family.
In addition to recruiting new citizens, officials want to make sure they retain the existing population, especially the younger ones.
“We asked high school seniors if they would stay in the area if they had a gigabyte connection at their house,” Foshee said. “All said they would stay or come back after college.
“Why spend so much on education for them to take it to another state. We’re not getting a return on our investment.”