The FTTH space is one of the most dynamic in the infrastructure world right now, with providers of all types investing resources in residential connectivity around the country. Last year we talked to Consolidated Communications here for an Industry Spotlight about their Fidium buildout plans. Now, one year later where are they? With us today to talk about the company’s buildout status and where they are putting their efforts going forward is Gabe Waggoner, Executive Vice President of Operations at Consolidated Communications.
TR: What was your journey to your present role at Consolidated Communications? How did you get involved with today’s FTTH rollout?
GW: I joined Consolidated back in 1996, and I’ve served in a number of different roles, including engineering, operations, customer service, construction management and various leadership roles. It’s been an amazing journey. When I joined the company, we were operating predominantly in one state — Illinois. Today, after a series of acquisitions and expansions, we’re operating in more than 20 different states. I’ve been fortunate enough to have led a lot of those integration activities as well. When we acquired TXU Communications and merged the Illinois and Texas properties and markets, that was my first foray into integration. I have also been able to live and work in a number of these communities, including Illinois, Texas, and California, and through this gained a real appreciation for the markets and customers we serve.
TR: When I last talked to Consolidated, you were just starting to roll out your Fidium fiber-to-the-home initiative. How did the first year go?
GW: It has been super exciting for our employees to be back in growth mode. Since last year, we have expanded Fidium to more than 200 markets. While we started initially in New England, we’ve expanded it to eight regions across the U.S. We also upgraded to a two-gigabit symmetrical offering and will continue to bolster our fiber product. We’ve got a great service with enhanced capabilities. We’ve expanded it to more markets, and everybody is really excited about it.
TR: Where are you focusing your buildout efforts right now?
GW: We continue to expand the build. The areas with the most fiber build activity right now are Maine and Vermont. We’re working closely with the state of Maine, and with Vermont CUDs. But we’re building in a number of additional markets as well, in Illinois, Minnesota, Texas, and Pennsylvania. We built an additional 400,000 passings in 2022, surpassing 1 million fiber locations. Our Fidium offering is now available in more than 200 communities.
TR: That’s a lot of passings, how has your market penetration been so far?
GW: Customer response is really positive. We’re seeing good penetration numbers where our sales machine is ramped up, and the experience has been great. Looking at NPS numbers, we are getting really fantastic 50-plus scores. We have also put great effort into the customer experience. It’s not just about homes passed and gross ads. It’s also about happy customers and transforming the relationship with our customers and communities. We’re just in continuous improvement mode, trying to listen to our customers and constantly improve. We use a number of analytics tools to take feedback from our customers and see how we can continue to deliver on the offering. We’re really proud of the platform that we’ve got out there for our customers.
TR: What has made New England such fertile ground for your buildout so far?
GW: It’s the densest part of our footprint, but it’s also an aerial offering which gives us some build cost advantages. In other parts of the country, we do buried fiber: plow, directional bore — the standard methods. We have great contractor relationships and great crews, and so for underground we see favorable passing costs there as well. But the aerial really gives us a cost advantage in New England. And because we actually have the incumbent advantage in New England, we have access to the poles which eliminates a burden for us.
TR: Are you also considering rolling out Fidium in areas where you don’t have incumbent territories?
GW: We are looking at overbuild opportunities as well. But that is predominantly about the future.
TR: What target are you aiming at for your ongoing buildout?
GW: At the end of the year 2022, we will have almost 1 million passings in our fiber Fidium footprint. Cumulatively, in our overall build plan we want to add 1.6 million passings, which will put us at 70% fiber capability across our footprint.
TR: Does it get harder to grow passings as you move on? When does it become a long tail?
GW: We do have some more rural, less dense areas to build. But I think not only will we get to the 1.6 million, I think we’re going to look at further expansion opportunities if they present themselves. We’re going to continue to work with federal, state, and local governments — we’ve had a lot of success with public private partnerships. We may find ourselves in a place to go even beyond 70%.
TR: What kinds of grants and programs are you finding the most attractive to help with the buildout?
GW: We look at the whole scheme of opportunities there with state and federal. We have had some state opportunities with Maine and with the CUDs in Vermont. We’re evaluating a number of other different opportunities in different states.
TR: Have you also found the need to build out more middle mile infrastructure to support the FTTH rollout?
GW: We already had a great fiber foundation. But in addition to last mile built, we are also upgrading our core network to 100G and we’ll eventually upgrade to a 400 gig capability. While Fidium is at the forefront of our strategy, we also have commercial and carrier customer growth plans. So when we’re building out our fiber network, we’re thinking about all three of those customer groups. So we’re being opportunistic with these fiber builds with the core upgrades to make sure that we can serve all of the different opportunities.
TR: How do you think the industry as a whole is really meeting the promise of closing the digital divide? Are we succeeding?
GW: There are a lot of focus points out there on this. We think fiber is the gold standard and the absolute best solution. This is the biggest infrastructure upgrade that we’ve done in our 128-year history. With all the funding opportunities that are out there and the customer demand for reliable broadband services, it’s not about us pushing a solution, it’s about providing solutions that meet our consumer, commercial and carrier needs.
TR: What about the remaining 30% or whatever else is out there, how do we reach it?
GW: I think those extremely rural areas, they’re going to be more challenging. Fixed wireless is one solution, but it doesn’t work everywhere. We find it’s not a great solution in our northern New England territories, for instance. It’s just harder to get line of sight where you need it due to the physical geography. So we’re going to have to continue to seek out partnership opportunities to try and close that gap.
TR: As you mentioned, Consolidated’s growth story includes plenty of inorganic activity. Do you still see any M&A opportunities out there?
GW: Our focus is going to be on our fiber growth initiatives. If there’s rationalization of assets, we’ll continue to look at that. But we are predominantly focused on our fiber growth plan and building to 1.6M locations.
TR: There seem to be so many independent fiber-to-the-home players backed by private equity cropping up. Do you often run up against such competitors in the markets you are building out into?
GW: We’ll find small outliers here and there, but primarily it’s the cable providers that are our competitors in these markets. There are a few of those in some of our markets, but I think we’re pretty aggressive with our strategy. We are confident our fiber coverage, our competitive product offerings, and service delivery gives us a superior offering.
TR: How has the shift to FTTH changed the company itself internally?
GW: When we started this plan in the beginning of 2021, we weren’t doing a large amount of construction. To have scaled up to where we’re at now, with 10,000 miles of new fiber and a million passings, I think it’s remarkable what this team has done to scale up. We’ve built a really cost-competitive structure and now provide services to many communities that otherwise wouldn’t have had them.
TR: Is it in-house or do you bring in outside contractors to maintain the pace?
GW: We use both internal and third-party resources. We’ve got some great third-party relationships with contract vendors, including some primary providers that we’ve had long-standing relationships with. The magnitude of work that we’re doing with them today is a bit unprecedented though.
TR: How have economy-wide issues such as supply chain problems and inflation impacted your buildout progress?
GW: Supply chain and inflation are both squarely on our radar screen. We anticipated very early that starting an initiative of this size could be daunting with some of the supply chain issues. So we sought great relationships with some key vendors and suppliers and we made pretty extensive future forecasts and commitments to lock up a lot of those supply chain commitments. We definitely expanded some of our supply chain operations, just considering the sheer magnitude of materials that we were putting through the system. We are in a great position to execute on the full fiber expansion plan that we’ve committed to.
TR: Thank you for talking with Telecom Ramblings!
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: FTTH · ILECs, PTTs