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RiverStreet Networks Reaching Across Rural North Carolina - Community Broadband Bits Podcast 342
While in North Carolina at the recent Let’s Connect! speaking tour, Christopher sat down with Greg Coltrain, Vice President of Business Development of RiverStreet Networks. Greg participated in panel discussions in all three communities where the community meetings occurred: Albemarle, Fuquay-Varina, and Jacksonville.
RiverStreet Networks is the product of evolution of what began as Wilkes Communications. They’ve acquired several local providers in different areas across the state and are set on bringing high-quality Internet access to rural North Carolinians. In this interview, Greg shares some of the cooperative’s history, including information on how they’ve funded their deployments.
Greg also discusses his experience on the practical side of cooperative life, such as comparative operating costs between fiber and copper, working with electric cooperatives, and the ins and outs of leasing assets from public entities. Christopher and Greg also talk about future plans that RiverStreet has to partner with North Carolina’s electric cooperatives across the state to bring connectivity to more people in rural areas.
Learn more about Wilkes Communications and RiverStreet Networks from our conversation with Eric Cramer from 2016 for episode 188 of the Community Broadband Bits Podcast.
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Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Greg Coltrain: We're co-ops at the core. RiverStreet Networks is doing business as a name — it's a brand — but our culture has been the co-op world.
Lisa Gonzalez: This is episode 342 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Last week, Christopher and our research associate Katie Kienbaum were in North Carolina on a speaking tour to meet with people in the communities of Albemarle, Fuquay-Varina, and Jacksonville. You can read about the community meetings and even watch video from the Jacksonville event at muninetworks.org. While they were there, Christopher had the chance to sit down and talk with Greg Coltrain from RiverStreet Networks. RiverStreet Networks began as an extension of Wilkes Communications. Over the past few years, the cooperative began acquiring smaller companies all over the state as they began to implement their vision of bringing high quality Internet access to rural communities across North Carolina. This past fall, the cooperative merged with TriCounty Telephone Membership, another cooperative, greatly expanding the reach of RiverStreet. Greg and Christopher talk about RiverStreet's plans to bring Fiber-to-the-Home connectivity to as much of rural North Carolina as possible. They also get into some of the practicalities, such as working with local electric cooperatives and with local governments to help expedite progress and lower costs. Learn more about the cooperative at myriverstreet.net. Now, here's Christopher with Greg Coltrain from RiverStreet Networks.
Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance, doing another live interview in North Carolina today from Jacksonville, North Carolina, on the coast by the Marine base with Greg Coltrain from RiverStreet Networks. I'm just slowly parsing through that to remind myself — you are the VP of business development?
Greg Coltrain: Yes, that's correct.
Christopher Mitchell: Yes, because you have a couple of different titles, or you have, and I know that you were very involved with a cooperative that has since joined RiverStreet networks. But let's start there with the past and talk a little bit about TriCounty Broadband.
Greg Coltrain: Yes, that's correct. Yeah, TriCounty Broadband was formed 67 years ago. We were formed out of Tideland EMC, which was actually called Woodstock Electric at the time. They used USDA funds to build a telephone company in an area that the incumbents didn't serve.
Christopher Mitchell: And just to jump in for a quick sec, EMC is . . . ?
Greg Coltrain: Electric membership cooperative.
Christopher Mitchell: Right. That's what they're called in the Carolinas, from what I can tell.
Greg Coltrain: That's right. Yeah. So that's kinda where we got started. From the beginning, we put in phone service. Over several years, we invested in some TV and video product to serve rural parts of Beaufort, Hyde, and Washington counties in eastern North Carolina. And then, you know, over the last few years, we've morphed into really a broadband company. So a few years ago, I was having some conversations with a friend in the industry who was running a phone company and a broadband company in the western part of North Carolina called Wilkes Communications, and that was Eric Cramer.
Christopher Mitchell: Right. A former guest of our show, and we'll link to that in the show page so people could go back if they haven't heard that. But it's an exciting interview. I really enjoyed talking with him about that.
Greg Coltrain: He's really good at telling stories
Christopher Mitchell: He is, and we look forward to having him on again too.
Greg Coltrain: For sure. But we just started having some candid conversations about the industry, where things were going. We always navigated to each other when we would go to meetings. e tended to have some of the same visions, and that just naturally took us to discussing partnerships, which later turned into a full blown merger. So in August of this past year, we merged TriCounty Broadband into Wilkes Communications.
Christopher Mitchell: And before the merger, TriCounty Broadband, about how many — you know, what was your service territory like in terms of square miles, number of customers, that sort of thing?
Greg Coltrain: Well, I mean, to give you some perspective, when we started over building the entire network with fiber, that was about 355 miles of fiber that we laid in the ground. We served roughly 2,900 to close to 3,000 customers at the time, and we've passed all of these customers now, so they all have Fiber-to-the-Home.
Christopher Mitchell: And how were you able to do that? I mean, how did the financing work?
Greg Coltrain: Well, we've traditionally always borrowed money through the United States Department of Agriculture. They have a group called the Rural Utility Service division of the Agriculture Department. And most of the TMCs across the country when they looked at getting started in the beginning, borrowed and the interest rates were great, so we just continued to do so. But when the American Recovery and Reinvestment Act was coming around, there was monies placed in there for broadband infrastructure growth across the country. And we decided to bid in that grant loan process and we were awarded a 75/25 grant loan combination. So we had to pay back 25 percent of it, but it was really helpful for our membership and for our community. Something of this nature wouldn't have ever happened without that.
Christopher Mitchell: And so, when you were getting the straight loans before the stimulus dollars were around, were you having to go into the more dense areas then? Is that how you had to structure it?
Greg Coltrain: Prior to the broadband line, you know, we were trying to get closer to customers with electronics because we were working on old copper networks, and the only way that you could get faster broadband to them was to get closer to them. And so we would build a five year plan, do a five year proforma, and we would forecast that into really an engineering model. And we would sit down and decide what we were going to do for the next five years, and in turn we would borrow the money from RUS and we would draw down funds as needed to pay for the project. And then of course, we paid that back at a low interest rate over many years.
Christopher Mitchell: Now, are your operating costs much lower in areas where you're operating on the fiber now as opposed to when you were operating on the copper?
Greg Coltrain: Yes, actually they are. Some statistics show that fiber uses 60 percent less electricity to manage the customers. We also have a whole lot less repeat trouble calls for Fiber-to-the-Home customers. It's really just a resilient service. It's remarkable; it's almost a magical how it works.
Christopher Mitchell: Well that's one of the things I feel like people don't always appreciate when they're talking about how fiber costs so much, we can't get it to all the rural areas, is that by not using fiber, we may be fooling ourselves because the higher operating costs that may be involved even as we're delivering an inferior product.
Greg Coltrain: That's true. The problem is, is that you've got this capital outlay that you put out here in this network, and even though it makes sense to take it and trade it in for something new, the cost associated with putting that fiber in is still real cost. And so, you upgrade customers to a superior network that's by far superior to what they've had which is really kind of laying the ground floor for years to come, but you're not increasing any revenue stream. And so, it's a bit of a juggernaut, if you will, because you go and you spend anywhere from $30,000 to $50,000 a mile — depending on the municipalities that you're having to work around or whether you're going through rough terrain like mountains or rock, stuff like that — to serve only a few customers, six or seven customers per mile. So it makes it really complicated, and then you're not making any additional revenue when you switch them over to this product.
Christopher Mitchell: Right. When you're working in areas where the electric membership corporation, where they have the electricity, are you going on the poles? Are you burying? Is there a combination?
Greg Coltrain: Well, in certain parts of our network where the earth is just not very penetrable, we will utilize poles and hang on the poles. For the most part, we like to put it in the ground because it's a little safer there. We just have to worry about backhoes and stuff like that.
Christopher Mitchell: Yeah, this is an area of the country where hurricanes, when they hit, they hit you pretty much head on. They don't slow down a whole lot.
Greg Coltrain: Correct. On the eastern part of the state, we've taken a beating over the years with that. But we've had a lot of collaboration with EMCs. For many years, if they were going out to do locates or stuff like that before we had the state 811 locating program, we would really help each other by locating things to prevent from hitting each other's stuff. And sometimes when they would open a trench, they would let us lay in there with them. We've just always had a real amicable relationship with them.
Christopher Mitchell: Well, I'm glad to hear that. The reason I was asking that is — and we're going to pivot to RiverStreet networks in a second, which is very exciting, the latest news, but one of the things we sometimes hear from electric cooperatives around the nation is, well, we'd like to do broadband, but our poles just can't support it. They're worried about ice load and things like that. Is that something that you've run into? Is that why you prefer to be underground? Or is that — I have to tell you sometimes I think it's just an excuse because they really don't want to go into it and they're looking for a reason not to.
Greg Coltrain: Well, I mean obviously if you have ice on lines, that's going to tear them down and it's going to be a lot more trouble if somebody else's facilities are in your way, and you know, that could be kind of thrown the other way towards us. We could be trying to repair stuff and they could be in our way, but we've not really noticed that. Most of the co-ops that we've had to deal with where we've had pole attachments have been fairly easy to work with, and so I can't say that we've had any huge complaints there.
Christopher Mitchell: Okay. That's good to hear because every region has its own peculiarities.
Greg Coltrain: It is. And if you go out there and get on the Internet and start reading, you'll notice that not all co-ops play well together. They've got different politics going on. But we've been really blessed; we've been thankful to have the relationships in North Carolina and they seem to be getting even better.
Christopher Mitchell: Well, in Virginia too, which leads us to our next announcement, which is that you combining in August was part of a much larger kind of unveiling in connection with the Connect America Fund auction — which again, I would say if people are interested in that, I did a podcast on that back in September with Jon Chambers. it's just a very exciting auction. You were a tremendous winner of it. If you want to outline the plan of what's going on with RiverStreet networks first and then we'll dig into some of the specifics.
Greg Coltrain: Sure. You know, the merger between Wilkes Communications and TriCounty was kind of a strategic plan that fell hand in hand with some of the other acquisitions that we've made across the state. And so we were able to combine the two co-ops, but we also purchased Ellerbe Telephone Company in Ellerbe, North Carolina. We purchased three TDS properties in 2014: Barnardsville Telephone, Saluda Mountain Telephone, and Fair Bluff — or Service Telephone in the Fair Bluff area.
Christopher Mitchell: And these are telephone companies that did not have fiber?
Greg Coltrain: These are telephone companies that were really kind of left out there to not have any opportunity for fiber. We acquired them with the hope and the desire to receive some grant funds or utilize CAF funding and a lot of our own capital to go in there and rebuild those networks. And so, some of those things have already started, are underway. We've ran into some hiccups in a few areas. You know, it can be a slow go, and we find that the more that we can get local groups to have some skin in the game, if we can have partners that come to the table that actually help facilitate the process — even if it's something as simple as working with DOT to make sure that we don't have a lot of hurdles to jump through and cost —
Christopher Mitchell: Right. Department of Transportation.
Greg Coltrain: Yes. Those things are helpful. And so, we acquired these companies. We also reached out to a telephone company in Virginia in Pittsylvania County, Peoples Mutual Telephone Company, and we were able to acquire that through Consolidated, which was the owning company for that. And so we've added that to the family of RiverStreet Networks. There's a company in Danville, in Pittsylvania County as well.
Christopher Mitchell: We've actually talked with Jason Gray many times over the years [and] followed Danville, an early open access pioneer, and Gamewood, the company that had operated on their network really doing tremendous service for local businesses. They're now RiverStreet networks, right?
Greg Coltrain: Yeah. That open access network in Danville is really a cool thing, and our, our property Gamewood Technologies has been selling broadband service on that to customers for quite a while now. We also have the means to do security and home surveillance. We do hosted voice telephone systems, and that's basically phone systems that work over the Internet. And it's a lot easier than the old school way of doing hosted phone systems in business offices.
Christopher Mitchell: Sure. Many more features.
Greg Coltrain: Many more features and flexibility. But, we've been doing that for some time and we also have a relationship with King and Queen County, which is in kind of the northern part of Virginia as you're heading towards DC. Very unique model there. So they basically have an open wireless network there that they're selling, that the county is selling. We're managing it for them. We helped them construct and build the towers and facilitate the APs, the access points, on the towers, and we do the maintenance and manage and bill for that. And it's just a great partnership. It works well with them. But all of these were strategic acquisitions to give us expertise and experience and a lot of different things, so that we can basically funnel that back through our machine and our processes and come up with a good conceptual idea of how we can reach these rural areas that nobody else wants to go to. And so if you've got all these ideas and you've got all these people that are doing these things, it makes it a lot easier to bring everybody to the table and say, hey look. We've got a real complicated area. It's very rural. We've got the following vertical assets. We've got the following fiber assets. Now let's figure out how we can get connected to them and then we can serve those areas. Which takes us to our next step of our exciting process, which is a partnership with the North Carolina Electric Membership Cooperatives.
Christopher Mitchell: Right, and so there's about 26 of them and they cover the majority of territory of North Carolina. So, there's a lot of reach there.
Greg Coltrain: They do and they're rural and they also are co-ops. And we're co-ops at the core. RiverStreet Networks is doing business as a name, as a brand, but our culture has been the co-op world. And if I could explain that to your listeners a little bit better. If you're a co-op, you're owned by your membership. So if you make money at the end of the year, you pay it back in dividends to your members or you spend it in capital expenditures to grow the network even more.
Christopher Mitchell: Sure.
Greg Coltrain: And so, you know, one of the things that we've tried to do is to take the efforts that we've had and spread them out and share that in a way to reach more people that are underserved. And it's worked well for us. That's the same thing that the EMCs done from a power standpoint, and so we had kind of a symbiotic relationship with them. So as we started talking further with them, it made too much sense for us not to talk further about how we could share assets, share resources, share knowledge. We have a lot of experience. We have about 140 employees, and so we can bring resources to the table to have a network operations center, to have technical support, to have full blown engineering. We have a production studio; we have the ability to tell the story.
Christopher Mitchell: Yeah. In fact, you brought your production studio to us in a limited extent in Albemarle two nights ago, as we're recording this.
Greg Coltrain: Absolutely.
Christopher Mitchell: That video is going to be up thanks to you.
Greg Coltrain: And Adam.
Christopher Mitchell: Adam, right. And Adam says that he travels all over the place, you know, doing productions like that.
Greg Coltrain: Yeah, they're excellent. The team at at Wilkes and RiverStreet is by far the best. I've never had such enjoyment as getting to know these people and seeing the passion that runs throughout the company. It's great.
Christopher Mitchell: So let's talk a little bit about North Carolina then. So one of the things that I know that you've talked about is that the cities and counties are a bit limited in how they can work with you. And so, you know, I wonder if you can tell me a little bit about what you'd like to see in terms of the cities and counties having authority to partner.
Greg Coltrain: Yeah. There's a bit of a scare tactic out there that munis and counties are wanting to get into the broadband business. And, you know, I guess that's rightfully so. Some have been more progressive than others. In our conversations with most of the municipalities and counties in North Carolina, we have found they just want to be a facilitator in trying to help make it happen. So there's room for some change in the law. There's room for us to reexamine what's available. And if there are assets that can be utilized for a company to come in and lease those assets so that they can reach further out into the community, it really kind of helps cut down on the substantial cost. I mean, it's a heavy lift to come into these communities and replow and reconstruct fiber throughout very small rural areas, and so if you can use the assets that are already in place to connect to, to get closer to those customers, it really cuts the cost down substantially.
Christopher Mitchell: So let's talk about that briefly. If you could, you know — I was just thinking of the ants with the fungus that takes over their brains. Like, if you could take over the county and the county had full authority to do whatever it wanted, would you prefer dark fiber leases or would you prefer just conduit where you can do whatever you wanted with it.
Greg Coltrain: Obviously if the fiber's there, a dark fiber lease would be better because you wouldn't have that additional cost to put the fiber in. You could set up an agreement where you lease per mile of fiber through that town or through that county. That would be the best, but I mean, if there's conduit there, that's also huge savings.
Christopher Mitchell: Well, the reason I ask is because sometimes I've heard that ISPs think, "Oh, I'd like to lease dark fiber, but if there's 10 strands available," or something. I mean, what kind of strands — do you need a lot of strands available for the way you build them, or do you just adapt to whatever you have available?
Greg Coltrain: I mean, we try to be very nimble and adapt to whatever's available. However, we can do pretty much what we need to do with two strands of fiber, especially if there's some kind of a ring architecture. That's not always a real world scheduled approach because there's not always rings out there so that you've got redundant protection in a ring. You know, we make the best with whatever's available.
Christopher Mitchell: Sure.
Greg Coltrain: It just takes a bunch of people to kind of look outside the box and say, hey, I like the way you think. We've got these assets here. We've got a quadrant of our community over here that's completely unreached and unserved and we've got these assets here. It seems wrong to say, from a political standpoint, no, they can't be allowed to use that when it would offer relief in a hurry.
Christopher Mitchell: So you've been — these companies that RiverStreet has bought, they're spread all over the state. I feel like you've had a sense of all the different areas in North Carolina. Are we going to be able to get fiber out to everyone eventually?
Greg Coltrain: I think with the smart folks in North Carolina, we can do that. I mean, but it takes our politicians making some changes. It takes people thinking outside the box. It takes everybody coming together in the room. One of the talking points I used in one of our sessions was creating broadband subcommittees within counties. You're getting that grassroots approach, having the county commissioners establish a lead person and saying, "Hey, go out in the community, find some anchor people, and let's get the conversation rolling, and y'all start having meetings and start making recommendations to the commissioners and we'll listen." That's a great first step, and we've had the opportunity to work with some counties where we come in and they have a broadband subcommittee. Warren County in North Carolina had a great broadband subcommittee. Really, really cool people, great people thinking outside of the box. We were able to engage with them as a provider and find out what the desire of the community was, and then put together a plan and bring it before the county commissioners. And so, that's what we're finding seems to be a very good avenue to work through the counties.
Christopher Mitchell: Yeah. I love that you've brought that up at each of our meetings because that's one of the things I wanted to happen and I didn't fit it into my remarks, but it felt like you were just cleaning up for me.
Greg Coltrain: No problem at all. No problem.
Christopher Mitchell: Well, thank you Greg for coming on the show. And I've been wanting to get you on here since I met you in Durham last year, and it's a pleasure to spend three nights with you.
Greg Coltrain: Absolutely.
Lisa Gonzalez: That was Christopher and Greg Coltrain from RiverStreet Networks talking at the recent Let's Connect meetings in North Carolina. We have transcripts for this and other podcasts available at muninetworks.org/broadbandbits. Email us at firstname.lastname@example.org with your ideas for the show. Follow Chris on Twitter. His handle is @communitynets. Follow muninetworks.org stories on Twitter. The handle is @muninetworks. Subscribe to this podcast and the other podcasts from ILSR, Building Local Power and the Local Energy Rules podcast. You can access them anywhere you get your podcasts. Don't miss out on our original research from all our initiatives. Subscribe to our monthly newsletter at ILSR.org, and while you're there, please take a moment to donate. Thank you to Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons, and thank you for listening to episode 342 of the Community Broadband Bits podcast.