Interim Legislative Science, Technology and Telecommunications Committee meets in Silver City 082317, part 5
[Editor's Note: Because several sessions took place the first and second days of the meeting, this will be a multi-part series of articles.]
By Mary Alice Murphy
The second presentation on Wednesday afternoon, Aug. 23, 2017, had the title: Using Mixed Technologist to Build Reliable Connectivity in Rural Areas. Members of the Interim Legislative Science, Technology and Telecommunications Committee heard from Sacred Wind Communications Chief Executive Officer John Badal.
"I created Sacred Wind Communications to serve the Navajo Nation, which in 2006 had no broadband," Badal said. "My company does broadband deployment in rural New Mexico. We are at the beginning of a new age for New Mexico. We are the newest telephone company in New Mexico, the third newest in the U.S., and we may be the last."
He said the answer for broadband lies in local resources, with local telephone companies outside the larger areas of population.
"Sacred Wind has the highest bandwidths in the state in an area with a population density that is one of the lowest in the country," Badal said. "We began dedicated to serving the Navajo. The job needed to be done by somebody. I bought all the old copper network, and bought the last mile from Qwest, which is now CenturyLink. At the time there was no copper wire to 75 percent of the Navajo Nation. Trading posts had banks of pay phones. That was the extent of access to even telephones by the Navajo. Qwest had a different model. None of us has a wireless mobile play. In the Navajo Nation and in rural New Mexico, we don't fit the larger business models. The Federal Communications Commission created the rural telecom model 50 years ago. It is almost defunct."
He said since 2006, Sacred Wind has installed new services to 2,400 residents of the Navajo Nation. "We have laid 100 miles of new copper and 100 miles of optical fiber. We borrowed federal money and have gone outside the area to bring in revenue."
Badal said he was inspired to hear about the collaboration in the previous presentation and the possible use of general obligation revenue bonds.
"In 2009, Sacred Wind Communications was recognized as the most inspiring small business in America," he continued. "We cover 90 percent of telephone service to the Navajo, and now broadband to 100 percent of that 90 percent. We had the requirement to offer 250 Kbps (kilobits per second) speeds. We built it to 4 Mbps (megabits per second). Now everyone in a house will have 25 Mbps and can get up to 100 Mbps. That is the highest level we offer."
Badal said 81 percent of the residents qualify for the basic "lifeline" telephone service and 45 percent of them take that rate. "Anyone with a child is a natural customer for broadband. Milan is one of the most wired villages in the state. The village built, on its own dime, a computer-training program. Grants is the largest area we provide service to, and we offer 150 Mbps to every household. We are looking to expand."
"Our greatest achievement is going from six employees to 44 employees," Badal said. "We hire on attitude and work ethic, and we train them. Eighty-three percent had no telecom background. Seventy-one percent are Navajo or Hispanic. We offer education incentives for their children and have a stock option plan. Six years from now, employees will have majority ownership. In 10 to 12 years, they will be empowered. We are also providing solar for some homes with no electricity. Our entire network is fiber."
He invited the legislators to look at the company's initiatives, which include developing a web portal for Navajo arts and crafts people, eBay based. "On average they are getting three times what they got at the trading posts. We have had several talks with Navajo Technology University to develop skill sets. We have cultural reinforcement with the website Dinehnet.com, including sites written by customers on Navajo history and culture."
Badal said Grant County's WNMU Communications is more sophisticated than CenturyLink. "People don't know how to maximize broadband. They don't know how to get from the bond to cooperation. They hear warnings about anti-donation. I think it frustrates partnerships. Collaboration is foreign to many. Everyone wants broadband. Can we get together?"
Sacred Wind sells by usage. "Our minimum is now 5 Mbps. We recommend if you have a couple of kids that you have at least 10-15 Mbps. If you have 20 Mbps, you can throw in gaming. I don't think New Mexico should subsidize 1 Gb Mbps, unless someone needs access to a Craig computer. The highest need for a local residence is 100 Mbps. I see no need for 1 Gb for a residence."
He does believe that it is sound policy to get access to services to every resident in New Mexico. "I draw the line at entertainment. But broadband can be an economic stimulant to business parks, for job skills, county development, and building an app for art show teasers."
Badal had a list of cities in the state, including Silver City and Ruidoso, that had no access to a rural telecom. "They are all on CenturyLink. The ones that have rural telecoms have more broadband access than those with CenturyLink. We're working on a throughway, with redundancy pathways."
He listed policy issues that need to be addressed at the state level. They include establishing minimum speeds for rural and urban areas; incentivizing infrastructure investment with tax incentives and a state broadband fund match; promote cooperation between electric companies and telecom companies; revamp rights of way laws and rules; take on pole attachment authority; and state collaboration in the middle mile.
"You've seen many of us in the telecom industry," Badal said. "All we hear from you is that we are on the right side. We need to work together in partnerships using local talent. When we started leasing the capacity from Qwest, it was $20 per megabit. Now it's 60 cents a megabit. We won three major e-rate bids for McKinley, Zuni and Ramah. The third we will have done by the end of the year. There are 21 schools in CenturyLink territory. We have a different model. We can assure the customers, the schools, better usage."
He showed a map of major areas in the state that the FCC will auction off that have customers not served by the three major carriers, CenturyLink, Windstream and Frontier.
"Mid-year next year is an opportunity for rural telecoms to use federal funds to partner with local partners," Badal said. "The Public Regulations Commission has a broadband fund."
Sen. Mary Kay Papen, who also serves as Senate President Pro Tempore, asked if the PRC turned down a broadband proposal.
Badal replied: "No. They are amending the universal service rules to make funding available. To my knowledge, the PRC is solidly behind the broadband fund."
Papen asked how much the pole fee is to attach fiber.
"It's an annual set amount paid per pole at $20 per pole per year," Badal replied. "There are usually 20-22 poles per mile. One company is charging $29 per pole per year. There is no limit. The FCC has exempted the rural electric companies from capping the amount. It costs $9 per pole in Albuquerque. Also because many of the poles are 50 to 70 years old and have been carrying the weight of electric lines, if you want to add another line, the electric company wants to get you to replace the poles. We have to pay 10 percent of the cost of the new poles."
Rep. James Smith said he wished every presenter ended their presentation with a list of recommended policy changes. "Why is your service area in the northwest part of the state?"
Badal said the PRC and the federal government have to approve any regulatory transfer. "In this case, CenturyLink had to give up the requirement to serve, and I had to take over all of it. The FCC froze boundaries. It was arduous, expensive and unsuccessful to change the boundaries. The rural telco model that works doesn't fit the larger company model."
Smith asked if state could come up with a one-stop shop, if it would help. "You go in and you want to go, say, from Albuquerque to Moriarty, and you can get all the permits there."
"Yes," Badal said. "I am not averse to the state owning the conduit. Leave it for the one who wants to use it later. There is always the issue of money and anti-donation. What I've found are innovative ways to get around them. 'No' is much easier for the state to say than 'yes.'"
He said a pole attachment authority bill had been passed. "PNM is required to allow someone to put fiber on a pole. You're talking about rural electric co-ops."
Smith said the PRC cannot regular pole attachment. Badal said the federal regulation allows the state to get authority and then the state can impose state regulations.
Rep. Linda Trujillo said the policy was new to her to establish minimum speeds for urban and rural. "I think 100 Mbps is a good start."
Badal said he sees no need for any more than 100 Mbps. "The FCC could require 10 Mbps in rural areas, and 25 in urban areas. The policy should state that these are minimum expectations."
Trujillo said that from 5 p.m. to 10 p.m., streaming speed stalls. And she complained about sometimes receiving only 55 Mbps at her home in Santa Fe.
Badal said all rural telecoms receive FCC funding and "we made the decision that minimums are for the information service business model. Entertainment should be beyond that level."
The next article will cover Developing Remote/Solo Work Centers: challenges, Benefits and Case Examples.