Fast reliable Internet service is more essential today than it was just a few short years ago. But many Americans, in fact one in three do not enjoy high speed Internet service. Most of them are in rural areas. But that trend is starting to change, especially with more emphasis placed on home schooling and other education efforts. Loyd Rice, manager of fiber services at SEMO Electric Cooperative in Sikeston, MO shares their story of why the co-op invested in providing high-speed Internet to their communities.
Transcript – Power For Your Life – Season 1 | Episode 12
Original release date: August 1, 2020
My name is Rebecca and I'm part of the Boone Electric Cooperative and my favorite thing about being part of an electrical cooperative is being a member. I feel like I'm actually treated like a valued member and not just on paper, but that they provide opportunities and connections for me as a member that I don't have with a lot of other places.
Darryll (Host): Welcome to the Power For Your Life podcast, where we focus on energy efficiency, the value of electric cooperative membership and safety around electricity. I'm Darryll Lindsey, your host. Today's topic: High speed Internet. My guest is Loyd Rice. Loyd is the manager of fiber services at SEMO Electric Cooperative in Sikeston, Mo. The cooperative owns and operates a broadband subsidiary called goSEMO Fiber. Loyd, thanks for joining me by phone today. Fast reliable Internet service is more essential today than it was just a few short years ago. But many Americans, in fact one in three do not enjoy high speed Internet service. Most of them are in rural areas. But that trend is starting to change, especially with more emphasis placed on home schooling and other education efforts. Loyd, why did SEMO Electric Cooperative get into the business of providing high speed Internet?
Loyd (Guest): Thanks for having me-so glad to be here and it's always a really neat journey to be able to share with the cooperative family. So hello, cooperative family out there. SEMO got into this business, Darryll, our board and leadership team, had conversation somewhere, even starting back in 2013. But as you can attest as this thing has evolved from then until now, that few short years was filled with a lot of questions and hurdles, really, too big to overcome. SEMO just decided to get into the biz in a 2017 at a uh at a uh March board meeting, uh, when they effectively voted yes to go with a fiber business model. The fiber-to-the-home business model Darryll was put together by Conexon, presented at that board meeting and they agreed on it. To do the entire cooperative footprint, basically Darryll from a standpoint of it, if not
us, then who? Nobody was going to come to rural southeast Missouri and go home to home collectively throughout a rather poor demographic and put up high-speed Internet of any kind, much less a fiber optic network. So, our board, our leadership team, and kind of following on the footsteps of Co-Mo and some others, uh, just said guys, if we don't do this, nobody else is gonna do it for us. So, that's kind of our little background with it.
Darryll (Host): Kind of an interesting turn of events then that happened considering the demographics and how everything kind of pulled together isn’t it…
Loyd (Guest): Darryll, it was. And again, some of those hurdles and as attested by the numbers, there's a whole lot more that are not doing it, than are. It's not an easy thing to do and we’ll probably have that point proven out a little later in this conversation. But most things we do in cooperative territory are not easy, right? They are from a standpoint of much less a consumer density. We are-we're a six meter per mile cooperative Darryll in the worst part of our territory in the maybe the least densely populated I should say… a very ag-heavy, row crop area. We're about two meters per mile up to some of our towns that we serve boosts us up on to about a 14 meters per mile. So, we as a six meter per mile and as you know, in uh in Missouri we are, you know, United at two meters per mile…up to, you know, Cuivre River that has a whole lot of meters per mile. It's just a testament to there's a lot of stuff that goes into this, and it may not make the most business sense. But again, our board was willing to say, you know what, if we don't do it nobody else is. And that was literally our-our marching orders. We’re not only gonna do it for the areas that makes sense, Darryll, our board made the commitment to do it to 100% of the membership. If there's a meter out there, we're going to build to it.
Darryll (Host): That's an interesting philosophy and-and you know, it kind of alludes to a similar move that happened with electricity back in the 1930s. There wasn’t power to rural areas back then and high-speed Internet's really not for every electric cooperative either, right?
Loyd (Guest): Absolutely Darryll. Depending on where you lay in the landscape or-or what the outside influences are absolutely not. In our area, it was an easier decision in that the competition that that we face just from a business standpoint, was, uh, I guess it's one of those misnomers Darryll… Hey, it's easy to bang on the local cable company. You know nobody likes them. We are the co-op. We are very deservedly have a great reputation in our communities as a member owned cooperative. It's-it's kind of the basis of it, right? Our people do things at a little different pace. We care a little more. You're not just a number out there. You are a member owner. That also goes right through to the team that's putting this thing in. Just like electricity Darryll, this doesn't make a lot of business sense. The payoff on it is long and it's a little bit unsure what technologies and things are out there that are going to change this conversation we’re having in five years. We don't know that, um, but again, I'll keep banging that drum Darryll. We knew that we had to have it for our territory to sustain. Recent events tell that even louder, right? We weren't, we weren't planning on a pandemic, but um, this pandemic you talk about casting a big light on the deficiencies in broadband in Missouri. This thing is a glowing brightly right now, and I gotta be honest, we're glad to be 2 1/2 years into our build project right now.
Darryll (Host): I would imagine so because, you know, we know that our business climate has changed. Our education climate has changed. In fact, our home life has even changed all because of a pandemic.
Loyd (Guest): When I relate that back to the The Electric Movement and as a-as a veteran of the co-op world starting those roots back in 1989, I'd always wondered how the old timers you know those guys on the line crew and that 50s, 60s era lineman that I was fortunate enough to kind of learn from-this cooperative movement isn't that old and that I mean, what're we-we’re three, four generations into this and to kind of be able to lay some hands of-off relativity, on that…it's really neat. I mean, my mom and my grandmother, their home was literally one of those. They had to go around and get 10 interested families and it costs them the $5 and it was a really big deal. And I get an opportunity now in 2020 to go say, hey folks, you're not on our territory. We don't serve you electrically, but you know what? If you can gather up 30 interested you know people and and give us a compelling case. Let us kind of help make that path forward. It-it's just a real neat journey to be on in that regard Darryll, how you know 80 years later we're kind of rinsing and repeating that process.
Darryll (Host): Yeah, that's and that is so true. How things that we thought we were kind of completed and done. You know, now it's not. Kind of an interesting turn of events. Recently Missouri Governor Mike Parson signed legislation to help bridge the digital gap and bring the best possible broadband programs and services to every area in the state of Missouri. Missouri is not the only one that's taken this on. There been other states do this as well. But talk about the importance of this type of legislation.
Loyd (Guest): What it does it, it helps, I guess, kind of smooth out some of those road bumps, some of those barriers. Um, anytime and again, again, relating this right to, uh, a company that's very backbone is coal fired generation right? The more regulations and the more red tape and the more issues, and the more paperwork that we have to go through. It could create such barriers that at some point it's just-it's just a barrier that you don't have the time, energy or influence locally to get across. And the governor making this a big deal is a-is a blessing in that regard. Uhm, it makes the importance very public. We don't have to go and sell this process into anyone. Everybody's on board with it. It's-it's almost like that emergency declaration, right? It, it puts it right out there on Front Street where everybody's gotta look and stare into the teeth of it. And kind of admit, hey, there's a problem, and as the governor he's doing everything he can. Now it's probably a little bit on us to do our work. And so far, again blessed with a Sean, a great board that let us kind of run in those races a little bit. Sometimes it's a little bit of a stretch Darryll. Sometimes it's easy to get a little bit outside of where maybe we need to be a more what were intended to. But again, you go back to those seven cooperative principles, and we even layer on a little bit on top of that, if we can just keep making lives better in our area, we've had to expand that from just our service territory, but in our area it is just really good for SEMO Electric Co-op and its member ownership.
Darryll (Host): Very good indeed for all of those in your area to be a part of something like this. Let's take a short break and when we come back, Loyd will walk us through the steps of installing high-speed fiber Internet….when we return.
Darryll (Host): Energy saving tip number 83 - check to be sure return air grills are not blocked by
furniture or bookcases.
Darryll (Host): Back with more of the Power For Your Life podcast. Today's guest is Loyd Rice with goSEMO Fiber. Before the break we were talking about the new legislation that will help bridge the digital gap in this state and the importance of high-speed Internet service in rural areas. Let's shift our focus a little bit now and talk about how it works. What are the five steps that a member can expect if they're interested in this service?
Loyd (Guest): Yeah Darryll, our um, and we've tried to do several things that work alongside marketing, as well as just being really practical. 'Cause the one thing that we felt like going into this that we wanted to be different at was being real straight forward, right? This is us warts and all. This is how it works. This is what it's gonna cost. We're not doing special gimmicks or special promotional pricing. This is the electric cooperative way of doing business. So, in kind of staying with that theme, we came up with what we like to at least advertise is a five-step process. And the first of that step-step one is the call. And that call is either going to be a phone call to our 8-7-7 number, check us out online. We like to say that's actually been the most busy way of pre-registration or come by one of our local offices and see us. So those three kind of live with in step one of the call. In other words, that's the initial contact. Hey, I'm Darryll Lindsey. I want service. At that point, Darryll, we're going to get some really easy paper work. and that's been something again, we have been able to streamline because as a fiber subsidiary, we do not pay the-the traditional and I'm in air quotes here, capital credits back. So, we don't have to have quite the layer of paperwork and identification and all of those details. We can really do it just like the traditional Tel-cos do-just a name and address. And hey, where can we get you to pay your bill? So, we're going to set that time with you and that is an initial appointment for what becomes step three--our flag. And our flag visit--we felt like initially was a little bit unique. We want one of our people to come meet with you Darryll at your home and pick a location outside the home that is going to be conducive to the equipment. In a fiber-to-the-home project, Darryll it really is fiber to the home and all the way into the modem. We're gonna have the modem placed as strategically in the house that you, the homeowner, and that we can kind of collectively agree on it. So that third step, the flag is a process by where we meet with you before anything else happens. After that we schedule the drop crew to come in. They’re going to put your fiber drop into the side of the house. That, most of the time Darryll that's underground…an underground drop vibrate-plowed in…a real non-intrusive type excavation. Or we can follow the electric into the home via a little overhead drop. Nothing magical about that other than hey, do you have underground to the home or do you have overhead? It's really that simple. And then finally Step 5 is that drop gets put in, and we're going to schedule an install for you. And-and install is where our installation folks come and physically put the modem in the house. Make the fiber connections, check the light, and then really again going back to the Co-op way of doing business, making sure the remote works for you. You're happy with the channel lineup. We're testing Wi-Fi around your house, making sure the phone's gonna ring, and all the little things that um again, maybe through time at the Co-op on the electric side, we don't go in the home anymore. It's a real personal process. This step by Darryll and it took- it took some getting used to. There's-there's a lot of stories when you start going into people’s homes. It's just a real personal contact as you can imagine. And even more so now during this pandemic.
Darryll (Host): And you know, I bet that's one of those processes that the homeowner really appreciates. The fact that you are so diligent, you you've got a process that is strategic. It's a known quantity to them.
Loyd (Guest): It is Darryll and it's--to be honest-it's one of the difference makers. It's why we are different than the normal Tel-cos or satellite companies, or again, either local cable companies. We-we’re the electric Co-op. We are the community, we are your neighbors, and we're going to take a little extra time and probably even a step or two that's a little bit longer in this path. But we're gonna, we're gonna do it right and make it work for you. And, uh, so far again 2 1/2 years in, we wouldn't give up one step of this process. We like it all. It's working well. To us, it's working right.
Darryll (Host): And that's important because you do want to serve the communities properly that-that are around you. And speaking of serving that community, you know you're active in more than just Sikeston or Bloomfield. You’re active all across your service area in every single community that you have. And it's become quite the buzz on social media. So how are folks in your area reacting to all this service?
Loyd (Guest): Darryll, one of the real wins…so that's, uh, weird response…in that, um, we can't get enough of it. When you get to visit with these folks after the fact, or flip that around and hear the stories as to why they need it so bad, it just fuels you. There isn't any of us in the cooperative landscape that can walk away from it I promise you. It is something else to know that you truly are making lives better. We kind of coined that phrase and pull it over as our moniker. They're getting world class fiber broadband fiber Internet services in some of the most remote, some of the poorest areas of the state of Missouri. And that's almost intoxicating at a level that we can't get enough of. We love to share stories and-and again Darryll, you mix in with that we've had a few hiccups and bumps and bruises and had some trouble here and there. And you know what? We're going to roll our sleeves up. We're going to stay late and do as much as we possibly can to get it right. But man, the effort and the teamwork and the bonding this thing is, again throwing it back a little bit I can--I can completely understand why those lineman back in the 40s and 50s were so stinking bought into this cause is because they were screwing light bulbs and hooking up refrigerators, right? And we're getting to hook up gig Internet to a, you know, a mobile home in Mississippi County, Missouri. It is really-really a neat journey. We’ll stick ‘em on Facebook with us. We’ll share with ‘em at community events Darryll, we've opened up sub offices in each of our little districts that are split up by the towns we serve. Advance...we've got a little remote office. Benton, Missouri...we've got a little remote office. Down in Kewanee, Missouri…little spot on the map down in New Madrid County. New location here in Sikeston. We like to get out in the community. Open this thing up, let you look under the cover and take advantage of it. It's really been one of the better parts of it.
Darryll (Host): Pretty exciting indeed, and it's exciting for me to see some of the things that you guys post on social media and just the smile that it brings to the face of that customer. It's just really incredible.
Loyd (Guest): Whether it's a work from home or a school from home, Tele-health, Darryll was a whole thing two years ago that we were like, yeah, I don't really get it whatever. Darryll, it's become so real that it's an in-in three months’ time it's really become all the talk that, um. A person that has whatever--uh diabetes--I mean, you could name it, uh, a dermatology appointment. Things that normally you go to Saint Louis, Memphis, or Springfield for in our world that are literally, you're doing it online. And that's a subtle life changing event, right, that's? You--you can't necessarily quantify that other than, say you know what, it's just really a whole lot better to be able to do that from right here in the comfort of home. It doesn't work without a high-speed upload ability, and that's why fiber to the home is different. We don't pull that upload speed back. It's I mean, you and I are on a webinar. These things have become so big a deal this spring and um…The--it's the people, the stories that people share, whether it's work, whether it's school, no matter the situation, it has just really changed lives. This spring is just making it stick out…really stand out.
Darryll (Host): So, I'm going to throw one word out here and it's called expectations. We really shouldn't have them, but we do. And it doesn't matter what were involved in. What is your expected goal in terms of the number of subscribers that goSEMO Fiber anticipates by the end of the year.
Loyd (Guest): Darryll, our end of the year goal….we’ll complete our construction mainline construction… I'll hang this on my construction manager Chris’s neck here publicly by saying by the end of the year, so by December will have 100% of our 2,000 miles of electric line built to. So, we will have affectively passed and they in the biz, they call that passings. We’ll have somewhere around um I'm gonna say 10,000 passings. Our goal by the end of the year is to have 5,400-a little bit of an odd number there. Our business model at the very beginning of this Darryll said that we needed 6,000 subscribers to make this thing viable in this amount of time over this many years. Well our board took that five-year plan and said that is not moving fast enough. Let's condense that down to three. So last year we affectively doubled our build and we're going to build this thing in a three-year build process. So, that will end in 2020--December 2020. We hope to have 5,400 connected subscribers online, which is way outpacing our needs on that business model Darryll. And in doing that that, that creates some pressure. You really ramp up your build. You're going to--you're going to take this $40,000,000 project, and you're going to start adding crews, manpower, labor, all of the materials involved. That ran cost up. We’re, we’re running a little bit over that initial cost estimate due to it. But to hit those expected goals Darryll of 6,000 by the end of 2022 if I'm doing my math right…we knew that we wanted to also run at this pace. So, that expectation Darryll that we needed 6,000. We're outpacing that right now as if you can kind of follow the math. I know it's a little bit tough to stay up with me. But um, we really want to be that 50% take rate, and that's kind of the path we're on right now. We're sitting at right around a 40% take rate. Our business model said we needed around a 30% take rate to make it work. So, it depends which goal you're looking at, right? The-the minimum one of 30% take rate or the team goal of plus 40. And I'll even say we're going to land at 50 Darryll 'cause we're doing it right. We're doing it for the right reasons. It's insanely expensive. It costs about $25,000 per mile in SEMO’s territory to build fiber-to-the-home. We're doing a mainly overhead construction with the mainline fiber, which is the most expensive part of it. Tim, and the crew down at Pemiscot- Dunklin to our South are doing mainly an underground one. Just because their area is a little more conducive to cheaper underground builds. But I wanted to lump that cost into this expectations conversation, because without this subscriber count Darryll, you're not going to bankroll this thing. And co-op business is unique in that we can take that as a not for profit entity. We can take that and spread that out a little farther like we have done for so many years. And the customers that come later, the customers in the past, all of us absorb this and we don't have to have it paid for in three years. Thank goodness. Some of those funding mechanisms that you’ve heard of…the governor's initiative… the Missouri broadband grant and a big one on the way that's called R-D-O-F---the rural digital opportunity fund. That's going to be a difference maker for some of the co-ops that haven't gotten in yet or just now in the process of having these conversations. Darryll momentum is on the side and I would like to lump some of our friends and neighbors in the co-op world into that conversation. It really ought to be all of our expectations to truly make lives better. And if there is that need in co-op land and there is that support for it, I hope that these funding mechanisms that are really tailored to the electric co-op space, come to pass Missouri-wide to get some of that Moxie back.
Darryll (Host): Well, and you know, as we talked in the first segment, it's really an individual, cooperative choice. As you indicated here just a minute ago, the neighbors to your south Pemiscot-Dunklin more conducive to underground because they've got, as we so well know here in the Southwest part of the state, we've got rocks. You’ve got rocks. It makes it really difficult to do underground work when you have rocks.
Loyd (Guest): I think it's some of those hills and-and some of that terrain those guys set that first pole line on over there. And yes, it's a-it's a different animal. But Darryll, general conversation. We may effectively really have the only pathway to ‘em all. So yeah, I mean it-it just is--it even though, even as difficult and-and-and tough as it as it may sound, the electric cooperative space may be the only place that we get in front of everybody's door, right? And we may pass enough of 'em that-that we're the guys that is supposed to carry this flag this generation. Chalk it up to our board being that progressive about it. And a CEO that was that a passionate about the area, but. This may be right in our laps. Darryll, this may be the next rural electrification movement, and we're just kind of at the start of it here.
Darryll (Host): Well, Lloyd, I'd be remiss if I didn't mention something about safety. Give us a safety message as it relates to fiber broadband.
Loyd (Guest): Yeah Darryll, a couple. And of course, you have the construction. Inherently there-there aren't the dangers with fiber in the electric space. Uhm, so on our--the legislation that the Missouri uh, legislation passed several years ago, made it where electric co-ops can use their own pole lines, their own right-of-way, and territory to also put in broadband. That was a big important move, and it happened at just the right time for us. Working in that electric space, Darryll and uh, so you have to have the folks be properly trained. 'Cause it's, uh, if you're gonna be outside of that traditional communication space that next 40 inches there is really important that not only our people be trained and work really safe on, but all of the contractors and people that are also working on your system. So, it's a big-big deal to have contractors, and employees certified completely in the electric space. And again, along with that goes a cost, right? That person, that employee costs more. The other part is don't shoot our fiber lines. When you do that, it's a really expensive. It's a really a time expensive. When you shut down a main line fiber it is really hard to splice. It's really hard to find those issues. That's probably been our biggest obstacle, Darryll or biggest problem child, the last two opening season or opening dove season opening day have been some of our bigger outages...people literally shooting birds on a fiber line. And it will do a lot of damage to a lot of customers downline. And that's a maybe that can be my safety message is don't shoot at our fiber optic lines.
Darryll (Host): We don't shoot at the electric lines and the insulators 'cause it can be pretty devastating for people.
Loyd (Guest): That's right. We--in saying that you know, yes, did it knock you off Netflix? Well, yeah! But was-was Mrs. Lindsey on Tele-Health briefing…were some kids at school? Um was somebody on a 9-1-1 call? There's a lot of important data flowing up and down those lines. Maybe getting that message out is-is--- that's become one of our bigger marketing needs is to do as good as we've done on the electric side, right? Promoting that. And selling it into the area. We've got to make people understand that this isn't just a nuisance, it's a really big deal.
Darryll (Host): All good information to know. Loyd Rice with goSEMO Fiber. I appreciate you taking time today to join me in this discussion.
Loyd (Guest): Thanks, Darryll. We love to share the journey. It's been--It's been really good for the electric co-op all 62 of us are really proud, proud to wear that logo on our shirts and get out and about in the community. And we love sharing it with the cooperative family. Thanks for thinking of us.