With just over five million residents, Alabama ranks as the nation’s 24th most populous state. But only six states will get more money than Alabama from the federal BEAD program. Texas, California, North Carolina, Michigan, Missouri, and Virginia are the only states allocated more than Alabama, where almost 43 percent of the population lives in rural areas and 55 of the state’s 67 counties are considered rural, according to Alabama Public Health.
Alabama, which will receive $1.4 billion in BEAD funding, is home to Cullman Electric, a member-owned cooperative which launched Sprout Fiber Internet in June 2020. Mark Freeman, Cullman’s manager of network operations, spoke to Inside Towers recently, less than 24 hours after a storm had temporarily knocked out most of the utility’s substations.
Better connectivity between those substations was Sprout’s first goal, Freeman explained. With $6 million in state funding, the co-op used Ciena’s 5171 platform to create a 100 Gbps fiber ring to connect Cullman’s 11 substations as well as two of its offices.
Now the fiber backbone is starting to pay for itself, as Sprout lights up residences along the ring. Freeman said a feasibility study showed Sprout Fiber Internet would need a 30 percent take rate to break even, and the current rate is already at 39 percent (6,700 of the 17,000 homes passed so far have signed up). In addition, roughly 400 businesses have become Sprout Fiber customers.
Freeman said a number of Sprout’s customers use the federal Affordable Connectivity Program, which gives them a $30 per month subsidy to help pay for broadband internet. Sprout charges $60 per month for its 300 Mbps symmetrical service, $80 per month for 1 Gbps symmetrical and $119 for 2 Gbps symmetrical.
“We are deploying next-generation utility broadband internet with state-of-the-art technology,” said Freeman. “When that subscriber loses power the internet is still up and running … as long as they have a generator they can still surf. I chose the hardware vendors that I knew could maintain that level of uptime: Ciena, Calix and Adtran.”
But so far, the next-generation network serves just a fraction of the co-op’s member base. Thousands more are located off the fiber ring, and even on the ring some homes have not been passed.
“A lot of the places left are very rural areas,” said Freeman. Sprout will be more likely to address those areas once the state of Alabama has a plan to put its $1.4 billion in BEAD funding to work. “If we built there [now] we can’t apply for government funding,” Freeman explained. “As soon as you start construction you can’t apply for funding because you are serving that area.” The BEAD program is designed to fund broadband in unserved and underserved areas only.
Cullman Electric and Alabama’s other electric co-ops are already making plans to extend fiber to more Alabama homes, and Freeman said BEAD is not the only funding source available to them. He said six electric co-ops in the state have joined together to create a Request for Proposals for middle-mile infrastructure. The co-ops plan to share the middle mile and build their own last mile networks to member homes and businesses.
“The middle-mile technology is pretty new to a lot of us co-ops because we have always been about the last mile,” said Freeman. He said he learned a lot by visiting Ciena’s Ottawa R&D facility recently. “Being there and meeting the engineers was helpful to us,” he said. “I am a small co-op – I am one network guy trying to run a whole internet company.”
This article represents the opinions of veteran telecom industry editor and journalist Martha DeGrasse, an Inside Towers Contributing Analyst with features appearing monthly. DeGrasse owns Network Builder Reports and contributes regularly to several publications. She was formerly a writer and editor with RCR Wireless and a TV business news producer.
By Martha DeGrasse, Inside Towers Contributing Analyst
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