Remarks Made by Denny Law at FCC Rural Broadband Workshop

Washington, D.C. (March 19, 2014) –Thank you for the opportunity to participate in today’s rural broadband workshop. I have a strong interest in supporting rural broadband initiatives—besides my professional responsibility as the chief executive officer of Golden West Telecommunications, my family and I are residents of Wall, S.D., population 818. I believe it is important to ensure that advanced telecommunications services are provided to areas like Wall and other small communities scattered across South Dakota and all of rural America.  

Golden West is a rural incumbent local exchange carrier serving more than 24,500 square miles of rural South Dakota. Our serving area is bigger than Maryland, New Jersey, Connecticut and Delaware combined. Golden West provides telecommunications services across a diverse landscape, including small communities as well farm and ranch land. We also provide service to portions of five Native American reservations, as well as areas containing national parks, national grasslands and national forests. Each of these areas presents unique challenges in meeting the telecommunications needs of customers today and in the future.

Golden West provides customers with high-quality voice service, broadband access and video service. Our broadband technologies include DSL over twisted pair copper, fiber to the premise and cable modems.

This panel has been asked to address what incents providers to deploy broadband to “new” areas.  But it is very important to expand that question to look at what it takes to get broadband to and keep broadband in “all areas.” As a network investor and operator, I have to look at not just new areas that will receive broadband for the first time. I have to be thinking, too, about how to manage my budget to upgrade and sustain rural areas that have broadband already. These are the tradeoffs every service provider must make, and they’re necessary to make sure that today’s new broadband investments aren’t wasted and don’t become subpar in the future.

When Golden West is determining where and when to invest, whether we are upgrading an existing network or expanding broadband into an unserved area, there are several questions we ask ourselves:

  1. What can we afford to build to deliver the best service to consumers now and for the foreseeable technology horizon? 
  2. If I build that network, will I be able to maintain and sustain it over the life of that network? 
  3. Will my customers be able to afford the services provided on that network?

If you can’t affirmatively answer each of these questions—affordability, sustainability and reasonably priced service for consumers so they can adopt and use my network—providers like Golden West are unable to make long-term network investments.

A second question posed to this panel is what drives choices in technology. There are many factors, but I will focus on a few primary themes.

The first is network cost. This includes not only my initial construction and deployment cost, but the cost of upgrades and maintenance, and how quickly I might need to upgrade for the services customers will require tomorrow.  Will future upgrades require totally new construction, or electronics upgrades on existing facilities? Will I need to bear the opex of rolling a truck hundreds of miles every time something doesn’t work on my network?

The second theme is service definition. Can the network do what consumers and society really expect of it? As an eligible telecommunications carrier or ETC and carrier of last resort, I need to be able to provide voice and broadband services with quality of service and performance metrics. While we rightly focus on broadband, the capability to provide quality voice and reliable access to 911 must be viewed as important parts of the platform, too.

A third theme is sustainability. We can’t focus exclusively on the one-time act of deploying a network. The network I build has a decades-long life, and an investment is wasted if the network and services over it are not sustainable. If subscribers purchase service on my network, can I be reasonably confident that those services will generate enough revenues to sustain the network?  Can I provide it without making services unaffordable given the rural nature of the area I serve?  If consumers can’t afford the service I provide or can’t get access five years from now to services that are comparable to what folks in other areas are getting, that network isn’t sustainable.  

Universal service support has been a key component in promoting sustainability and affordability for rural Americans, and it’s important that this program take into account both the one-time act of deploying networks and the ongoing work of delivering reasonably comparable services to consumers—at reasonably comparable rates.  

Thank you again for allowing me to participate in this workshop, and I look forward to your questions later.