Presentation to Globecomm
Techforum 2010 Conference
October 5, 2010
Mickey L. Sims
General Manager
Buggs Island Telephone Cooperative
BIT Wireless Broadband
Opportunities
Wireless Opportunities
Act now; The challenges of attempting to ―catch up‖ after missing a
step in deploying technology; Think ―Long Term‖
The inescapable trends to wireless—strong and growing The foreseeable end to the ―telephone business‖ and ―long
distance‖; Questionable future for the concept of ―universal service‖
Trend to ubiquitous Broadband, IP-based (Internet Protocol)
technology and Ethernet connections and transport
Customers want quality communication services and products that
Buggs Island Telephone Cooperative
Established in 1951 as a part of Mecklenburg Electric Cooperative; Spun-off in 1962 at behest
of Rural Electrification Administration (REA)
REA is the most successful federal government program ever and clearly the best economic
development success story on the federal level
Telephone (voice) local exchange service, Long distance service, Internet (data) service,
Broadband, Computer sales and repair services, Security, & Wireless Services
Still regulated for Interstate services—such as DSL (Digital Subscriber Line) Broadband
Services
Not Regulated by the State Corporation Commission in Virginia
Member of National Exchange Carrier Association (NECA)—as required by law at the
break-up of AT&T in 1984. Rate of return as a regulated utility was the maximum and the minimum that could/would be earned
Telecom Act of 1996 opened local exchange telephone service business to competition but
never anticipated the effects of the Internet and the trend to delivery of services via the Internet
Nine Member Board of Directors elected by the members of the Cooperative—each serves
staggered three-year terms
Based in Bracey, Virginia in the heart of south central Virginia near the North Carolina border
and serving around beautiful Lake Gaston
700 Megahertz Auction in 2008
Last ticket to the dance?
―Beachfront‖ property of the spectrum available in the United
States
2007-08 Federal Communications Commission Auction
BIT’s purchase of three (3) Cellular Market Areas--$849,000
net—$1,250,000 Gross Price (15 counties)
297,375 pops, 111,462 households, 14,497 businesses, 1,600
community anchor institutions
The Big Guys—AT&T and Verizon & Their Market Power &
Strategies—Watch out for the big guys!
The capabilities of the spectrum to deliver latest generation
BIT Wireless Broadband
Start-up Company—with Buggs Island Telephone Cooperative contributing their FCC
Wireless Licenses and other ―in-kind‖ contributions and services as the Cooperative’s equity to the new start-up
U.S. Department of Commerce’s NTIA Grant to BIT of $18.9 million dollars in
conjunction with the American Recovery and Reinvestment Act (ARRA)
Virginia Tobacco Indemnification and Community Revitalization Commission grant to
BIT of $3.9 million dollars –for the additional 20% of the infrastructure costs
Buggs Island Telephone as the Operating General Partner—and our ability to earn when
the partnership earns a profit; Potential profits returned to Members of the Cooperative
BIT Wireless Broadband, LLC is a wholly-owned for-profit limited liability company
and subsidiary of Buggs Island Telephone Cooperative
Subscribers of BIT Wireless Broadband will not be members of the Buggs Island
Telephone Cooperative
Challenges of Building a Broadband Network and then adding a ―Cellular‖ type system
with mobile capabilities where significant demand exists
Challenge of accessing Human Resources & Access to Capital
62 new jobs being created with average salary of $40,000 plus benefits, including but not
BIT Wireless Broadband’s Focus
Voice & Broadband in Underserved & Unserved Rural Markets Fixed (1st Quarter 2011) and Mobile (3rd Quarter 2011)
Building a highly-reliable broadband and mobile voice network with excellent
coverage and a minimum of dropped calls
Future Services—Video and Video on Demand if more spectrum becomes available Meeting the demand today and positioning for the next generation of users with 4G
(Fourth Generation) Wireless Services
Build out requirement is ―substantially complete‖ by March 31, 2012—24 months
after having accepted the NTIA grant in April, 2010
Offer is non-discriminatory, with open access availability and BIT’s network adheres
to principles of net neutrality and is fully compliant with all federal, state and local laws and regulations
South Hill and the Buggs Island Telephone Cooperative traditional local access
serving area are being built with BIT money and not grant money—thus are not subject to the open access requirement but Mecklenburg and Brunswick County Residents will be afforded the same pricing and services as other residents and businesses in the 15 county area (except that the wireless service is not offered in the Buggs Island Telephone Cooperative traditional service area as DSL is available to all subscribers already)
BIT Wireless Broadband
LTE Technology—the same as Verizon Wireless & AT&T Wireless
as well as T-Mobile and Sprint
Still Awaiting NTIA Approval for Re-purposing the grant to LTE 97 ―cell sites‖—85 of which are existing towers/sites
100% of the geographic area of all 15 counties Vendor Selection
Environmental Assessment commencing again—missed the due
date October 1, 2010
Partnerships & Creating New Jobs
Citizen’s Community Bank (CCB) as Primary Financial Institution Partnering with Mid-Atlantic Broadband Cooperative for towersand fiber optic transport facilities
Southside Planning District as BIT’s grant administrator
Having partnered with the Southside Virginia Community College
and the telecommunications certificate program
NeoNova for back office support and technical support Local Contractors and Suppliers
Resellers and wholesale opportunities
62 new jobs being created—most of those located in Mecklenburg
County—technical, network operations, retail, sales, support
Retail stores in South Hill, South Boston, Farmville, Blackstone,
Service Offering
$32.95-$36.95 with Minimum of 1.5 mbps and 3.0 available
for a nominal additional monthly charge of $10.00
ARPU of $42.00
Business service prices slightly higher
Customized service offerings
Offering up to 10.0 mbps for businesses and larger users
Unlimited Long Distance and Voice Calls
Calling features, etc.
BIT Backhaul, LLP (managed by Buggs Island Telephone
Cooperative but not owned by BIT) supplying most of the
―backhaul communications facilities‖ from the cell sites to the
BIT wireless and broadband ―switch‖ near Bracey, Virginia
Trends
Commoditization of telecommunication and
communication services—voice, broadband, video,
wireless
In capitalism—consumers move to less costly, more
efficient technologies and means of delivery every time
Technology drives our business, but in reality technology
drives every business
