Hiawatha Broadband CEO: How to Make Rural Gigabit Economics Work

A gigabit project from RS Fiber Cooperative and Hiawatha Broadband Communications set to kick off in Minnesota will focus on small towns and rural areas. Rural gigabit isn’t unusual. But while rural gigabit projects typically are undertaken by an incumbent service provider, this one is a complete overbuild. HBC has been overbuilding underserved communities in Minnesota since 1999 and will operate the new gigabit network. In an interview, HBC President and CEO Dan Pecarina explained how HBC and RS Fiber Cooperative plan to make the new gigabit project economically feasible.

RS Fiber Cooperative is an entity dedicated to the new gigabit project, which will bring service to 10 towns and 17 townships across four counties in south central Minnesota. The project will be funded through two general obligation tax abatement bonds; through other federal, state and private sources; and through revenues that Pecarina expects to generate beginning in 2015. The plan now initially calls for deploying broadband wireless to the most rural parts of the serving area. Installers will be mounting antennas on top of water towers to support radios providing speeds up to 25 Mbps with a range of several miles. The goal is to get paying customers onto the network quickly in order to generate revenues. “By using the history that HBC has had in acquiring customers on our network, it works,” explained Pecarina. By the end of 2015, HBC expects to roll out fiber-to-the-home to two of the 10 target towns. After all 10 towns are completed, the plan is to bring fiber to the more rural homes to replace the broadband wireless.