Some parts of the telecom and infrastructure sectors get lots of attention and credit, and some labor behind the scenes enables everyone else. The engineering and implementation providers generally stay out of the spotlight, but it’s their trucks we pass on the side of the road more often than we realize. With us today is the CEO of another such low-profile company, Josh Broder of Tilson. Tilson offers network consulting, design, build, and operating services to projects nationwide, telecom network financing, development, and commercialization, as well as tech due diligence for telecom M&A and broadband consulting for public infrastructure investments.
TR: Tell us a bit about your background. What was your journey to the CEO role at Tilson?
JB: I’m an accidental technologist. I had gone to college for humanities with an ROTC scholarship, and when I was about to graduate, I was expecting a posting in Japan as a military intelligence officer. When the plane hit the Pentagon in 2001, the group that was meeting to divvy up our assignments was killed and our files were burned. I wound up being a communications officer in Germany on the eve of the second invasion of Iraq and with Afghanistan already going on. I spent five years overseas doing various missions, and my last big job was building and running a new IP network in Afghanistan, Pakistan, and Uzbekistan. Tilson was originally founded to be an IT consultancy by Mike Dow, and when I got out of the army and got back to Maine in late 2006 or early 2007, he hired me as an IT consultant, CIO for hire kind of gig. Then, when we were still small company of maybe 15 people, he went to go work for a defense contractor overseas, I wound up buying the company. We started to do more work in telecom instead of IT, and fast forward to today we’re about 550 people working out of 20 national offices on projects across 48 states.
TR: Where does Tilson fit into today’s infrastructure ecosystem?
JB: We have three lines of business. Our biggest is a network design and building, providing civil engineering, logical engineering, permitting and real-estate, telecom construction and implementation, maintenance, and active management services for customers such as cellular providers, wireline broadband providers, public utilities, and government agencies. We also have a pretty vibrant consulting business, which provides tech due diligence for telecom and IT M&A transactions. We also do quite a bit of public policy work on broadband policy and planning and grant program implementation for largely state but also federal and local governments. And our third line of business is an infrastructure development company which develop and commercializes smart city poles, fiber, and towers.
TR: What interesting projects do you have running currently?
JB: Our projects technically are quite varied, and the range of customer types and geographies are pretty broad. But the similarity between them is that they’re usually large monolithic projects covering either a smaller area with a lot of network density or a larger geography with lower density but higher total volume. One project we just started is a public private partnership with the Pennsylvania Turnpike Commission where we are commercializing and expanding the fiber on their intelligent transportation system network. We’ve also just won a similar contract in North Carolina. And we’ve recently deployed several thousand small cells in New Jersey for cellular carriers, in some cases on poles we’ve developed and in other cases on other people’s infrastructure. Deploying large masses of small cells and urban and suburban areas a pretty typical project for us, although we also do some rural work. For example, in Vermont we’re just finished a new fiber-to-the-home network of about 150 miles of plant that provides a 10G fiber service in the Northeast Kingdom there. Fiber to the home projects are our fastest growing sector, and we have been scaling our OSP engineering and field self-performance construction capability to keep up.
TR: What are you doing for the Pennsylvania Turnpike Commission?
JB: They are actually building a fiber network that connects intelligent transportation devices, such as configurable signboards that can change their messages, cameras for monitoring traffic flow or accidents, weather sensors to inform when they should put salt down, and things like that. They have a really dynamic set of IT infrastructure across that is knitted together with fiber. Once the network gets completed, those routes becomes available to all commercial and governmental actors on an open access basis. We are looking at pulling together use cases for that infrastructure and making it more useful for other telecom providers such that we can build additional capacity in the right of way and off the right-of-way from wherever the fiber is to wherever they need it. We can develop vertical structures in the right-of-way, like towers and poles for telecom providers to locate on. It is a mix of planning, engineering, and constructing followed by the process to lease those facilities out and build the operational life that the end customers need from an SLA and incident response perspective. We have a 25-year contract with the Pennsylvania Turnpike Commission that includes operational and maintenance duties. Ian Horwitz is a well know fiber solutions expert in Pennsylvania and is already taking orders from carriers and others on the network.
TR: How common are projects like this for you? What else like this do you have in the pipeline?
JB: It’s becoming an increasingly common structure. I think public instrumentalities are recognizing that the infrastructure that they need to digitize is quite expensive but also provides opportunities to help other carriers and commercial players do what they do to the benefit of their citizens. We’re seeing it in larger, more sophisticated states. In North Carolina, we’ve just received notice of our award. We would expect this to proliferate everywhere and there are lots of states that are now figuring it out. As we head into a period of heavy infrastructure stimulus, that hopefully will provide additional resources for some of those large infrastructure owners to figure out how they can digitize their facilities. Because these projects require long term operating facilities, we have developed a tool and product set for our customers to provide active monitoring of devices as a smart infrastructure NOC as a service.
TR: Are the smart cell projects in New Jersey a preparation for 5G or an upgrade to the 4G that is already there?
JB: The answer to that is yes – all of the above. A lot of these locations provide both 4G and 5G technology, although we occasionally will deploy a unit that’s just 4G or just 5G. The carriers have quite a lot of spectrum that is in some cases discontiguous: some high spectrum, some medium spectrum, and some low spectrum. On a given site, we deploy one to three bands of that spectrum using a variety of equipment and serving a variety of users, and we are increasingly deploying multicarrier poles. We have become expert at multi-carrier sites, including interference mitigation, more thoughtful power services, and municipally friendly solutions. Each carrier has a different answer to what 5G really means to them and what technologies they are leveraging for it, and so what you would actually see at that site are quite different for each. But overall, the story is that lots of these small cells will provide better data capacity for users. They’re generally not coverage solutions, but rather providing more data capacity in a place where there already might be coverage. Carriers are also increasingly interested in fixed broadband using mobile technology. If a small cell or a tower can provide service to a phone, it can also provide service to a hotspot within a home or some other kind of more durable device within the home. Verizon and T-Mobile have been quite public about their product set in this area, and in some cases they have already commercialized some kind of a wireless 5G home product for their customers.
TR: Do you foresee that type of product really catching on? What state is the technology at there?
JB: It’s past being experimental, and the technology is improving every day. In some cases, communities are using stimulus funds to deploy LTE or 5G to in home devices to connect students during the pandemic. Tilson built a project like this recently in Tucson, AZ. I think we’ll see continuous improvement on radio access networks and the devices that are being put in the home. I think it’s a cable competitor and also a tool the cable industry could use. Some of these 5G links deliver really high speeds that would be perhaps competitive with what some people see with fiber to the home. If they can have those kind of speeds, then video products could work really well over the top. It would be a good deal for the cellular operators because they get to leverage network they have to deploy anyway. And the reality of peak usage means that these networks are generally engineered to cover more traffic than is flowing on an average basis. There is lots of network capacity that’s available when they’re not peaking in that area, so having fixed customers on that mobile footprint helps carriers get more net new dollars to serve the same infrastructure that they have to deploy. One of the challenges that the carriers face is the CapEx intensity to continue to upgrade these networks and increase speeds and provide more data is bumping into the reality that most people are already customers. So the market cap isn’t growing that much. But if they can capture new dollars and increase their annual revenue per customer, then they start to find their way out of this problem and perhaps become quite threatening to some of the wireline providers.
TR: What is your sense of the status of the rollout of infrastructure for 5G? How much more work is there to do?
JB: Well, we have started, but it’s still early. We have done 5G deployments for every carrier somewhere, but there’s still a long way to go. Each carrier has a different meaning for 5G coverage and they have different spectrum. Some have a capacity strategy; others have a coverage strategy. But eventually, they’re all going to have capacity and coverage. The place where I see the next big growth spurt in is the recent C-band spectrum that was auctioned. This is Goldilocks spectrum, just right. It is high enough to encode some real data and provide some fast 5G service, and it is low enough to have some decent propagation. For many carriers, it will be their broad, pretty fast, pretty good coverage/capacity solution. With low band, they could get a little better coverage; with high band, they could get a little better capacity. Because the cost was so high it has cooled near-term CapEx deployment. So the carriers had to lay out a lot of new debt to purchase that spectrum and that is now impacting their capital plans, but they have time frames they have to adhere to get the spectrum deployed, and have also made a number of public moves to shore up their cash positions so they can ramp up their building. So we’re hearing discussions about getting rocking and rolling on C-Band deployments late this year and into next year. But you can imagine that we still have two or three years of really heavy deployment ahead of us to get to 5G that fulfills the promise of game-changing kind of capacity to more people.
TR: For your tech due diligence for M&A and broadband consulting arm, how has the pandemic affected consolidation in the industry?
JB: It’s an interesting question. When the pandemic started and the markets crashed, what we saw was that debt markets seized up for a moment and there wasn’t a lot of inexpensive cash available for transactions. It wasn’t that the cash was too expensive – interest rates bottomed out – but just that the appetite for risk really wasn’t there in that moment of uncertainty. What we see now is that the markets have recovered, the debt markets have returned, M&A transactions are flowing, and business is brisk for our due diligence team. It’s in fact the busiest we’ve ever seen it. With stimulus starting to hit the streets, we are also very busy with state and local government doing broadband planning and running grant programs.
TR: How has the pandemic affected you operationally?
JB: One of the big takeaways from the pandemic is that the supply chains are vulnerable. We have seen systemic delays in getting equipment. Some of that is a big-P problem, and even in areas where there isn’t a huge problem we have beenfacing death by a thousand cuts in supply chain delays. Stuff doesn’t get delivered on time because the shippers are overwhelmed with problems with containers. Factories have a COVID outbreak and lose a couple of shifts. It’s just a grinding supply-side problem that was unexpected coming into the pandemic. It won’t change the number of deployments, but it’s pushing them out a little bit. At Tilson, we’ve been working really hard to keep people safe. We’ve closed all our offices, and our safety team is highly engaged in trying to protect people. But the reality of America in 2020 and 2021 is if you have 550 employees, you’re going to have some COVID cases. We consider ourselves very lucky that we haven’t had any employee deaths. We’ve had a couple of hospitalizations that ended happily, and we have had an employee who lost a spouse as well as dozens who have lost other loved ones. So it has been emotionally very difficult from a workforce standpoint. With much of our workforce vaccinated, we are starting to open our offices back up. Our field teams kept rolling through the pandemic. We’re feeling very lucky to be in telecom where there’s just a tremendous need for broadband. That gave us economic security during that period of disruption. But it also, and maybe more importantly, gives us a really strong sense of purpose about what we’re doing. Our mission is building America’s information infrastructure. In this moment, it’s the thing that is allowing people to do remote work, to send their kids to school for distance education, to access telehealth. I think there’s never been a better public awareness about the positive impact that connectivity brings from a resiliency standpoint.
TR: Do you think that the new administration’s infrastructure plan will be a boon for infrastructure investment?
JB: We think it’ll be the third boon. The first boon was the CARES Act, which offered a high level of flexibility for states to spend money and led to many broadband projects, a number of which we participated in. The second is the American Recovery Act, which has been passed already but is still working its way through the various rulemaking and advisories to get the money out the door. There’s something like $17B in telecom stimulus baked into that coming through a number of channels. We think that’ll be really positive, particularly for fiber and private LTE networks. Now, one proposed plan that the administration has floated has some $100M in telecom supports while competing legislation coming out of the Senate has mentioned something like $40B. Numbers anywhere in that range would be really significant to the industry. There’s lots of arm wrestling that will happen about how that money gets spent, but from our perspective as a design/builder, it’s all good. Wherever it lands, we’re going to participate. From our perspective as a consultant, we have opinions about how best to do it, but we recognize that for this next bill to pass, there’s probably going to need to be some compromise and consensus. So we certainly think that our elected representatives have their work cut out for them to find their way through that. But we’re really hopeful that they do, and stand ready to support them in any way we can during the process.
TR: What message do you want to get out there to the industry today?
JB: We’re hiring. If people are reading this, then I would really like people to think about taking a look at our job site and thinking about their careers. One of the things that I think is challenging in the telecom industry, is that if you look at somebody that’s been in it for 10 years, they might have 10 companies they have worked. We’re looking for people who want to come and stay and go project to project with us, not one project and go. We’re hiring at all levels from that from the C-suite through the power technicians, drill operators, tower climbers, and fiber splicers. We are really trying to make sure that we have access to the best possible talent and we’re doing that nationwide.
TR: Are you finding the labor market to be a bit tight at the moment?
JB: Yes. Despite the fact that unemployment is high, historically, in this moment, telecom is still pretty busy and I think it’s going to get a lot tighter as things happen here. The way we are thinking about that is that we’ve turned ourselves into a workforce development machine. We have a number of registered apprenticeship programs in the trades in order to add net new workers to the workforce as opposed to just poaching from each other. We are prepared to recruit, onboard, train, and professionally develop about 35 people a month going forward. I hear a lot of bellyaching in the industry about not finding good people. I don’t have time for that – we are investing in giving people the skills they need to build America’s information infrastructure. Our goal there will be to win more than our fair share on the best hires and retain more than our fair share. Rather than bang our heads against a problem without doing something to change the conditions, we’re changing the conditions and adding new workers to the workforce.
TR: Thank you for talking with Telecom Ramblings!
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