Along the shores of Lake Huron and across three rural counties in Michigan’s Thumb region, an electric cooperative is putting its thumb on the scale in favor of bringing fiber-to-the-home Internet service to its members.
Nearly 85 years after first delivering electricity to the region, Thumb Electric Cooperative (TEC) General Manager Dallas Braun announced the co-op had “started to lay the groundwork for a similar mission.”
“The mission,” he wrote in a recent edition of Michigan Country Lines, “is to provide much-needed fiber Internet service to those same sparsely populated areas by building a projected $80 million fiber network infrastructure that will be the superhighway of the Internet for future generations.”
The mandate came from members who saw ubiquitous access to high-speed Internet connectivity as a necessity of modern life much like the region’s rural farmers in the 1930s pined for electricity as they saw city residents enjoy a higher standard of electrified living.
It led to the creation of TEC Fiber – a new subsidiary of the TEC which currently serves 12,300 residents and businesses in Huron, Sanilac, and Tuscola Counties.
Foray into Broadband with an Air Advantage
The planned project, which is expected to be completed over the next five years, will deploy 1,500 miles of aerial fiber attached to TEC’s existing electric poles. That will be connected to another 600 miles of underground fiber, which will allow the co-op to extend service beyond its current footprint thanks to its recent purchase of Air Advantage, a Thumb-area Internet Service Provider (ISP).
Not only does the purchase of Air Advantage allow TEC to integrate and expand the local ISPs existing fiber and wireless network, it also means the co-op will acquire all 30 of Air Advantage’s experienced workforce.
“This is an exciting time for TEC and the Thumb,” Braun told the Huron Daily Tribune after the Air Advantage purchase was announced in October of 2021.
“The stock acquisition is a great opportunity for TEC, Air Advantage, and the local communities. We are excited to have an experienced and professional Air Advantage workforce to be part of the TEC team as we work to close the digital divide with TEC Fiber for our members and surrounding community.”
Weaving Together the Financing
It was the right time to sell the company, Air Advantage CEO Scott Zimmer said after the sale. In a press statement after the deal was finalized, Zimmer went on to elaborate:
Air Advantage has worked hard for the past 19 years to bring better broadband to the Thumb, and we are proud of what we’ve accomplished. This transition will bring faster internet speeds, and the RDOF funds will aid to accelerate the build-out to many areas throughout the Thumb. We know that TEC has a passion for serving Thumb area residents and understands the unique challenges we face in a rural market. It was important to us to find a partner that understood those needs. We strongly believe that TEC is the right group to continue what we started.
For TEC, the acquisition of Air Advantage had a number of benefits: besides acquiring the company’s existing fiber and wireless network (which consists of over 140 towers that transmit fixed wireless broadband service across seven counties in the Thumb and surrounding region), the company also has 5,500 paying subscribers. Those revenues will help TEC Fiber’s cash flow and also reduce the original build-out timeline from eight years to five.
But to finance the bulk of the build-out, TEC will use a $51 million line of credit it received from the USDA's Rural Utility Service. And, thanks to being a part of a coalition of rural cooperatives known as the National Rural Telecommunications Cooperative, which secured more than $706 million from the FCC’s Rural Digital Opportunity Fund auction, TEC was awarded $22 million to help bring high-speed Internet service to a little over 11,000 premises.
With the financing in place, and having contracted with LeCom to build-out the network, network construction began in November of 2021 in the Tuscola County area.
As the network continues to expand, residential subscribers will be able to choose between two service plans: 250 Megabits per second (Mbps) symmetrical service for $85/month or a symmetrical gig connection for $125/month.
Header image of farmland in the Michigan Thumb region, near Bay City courtesy of Wikimedia Commons, Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)
Inline image of Michigan Thumb region map courtesy of Wikimedia Commons, Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)