1. Blue Ridge Mountain EMC
Before you begin…
Lessons Learned on the Road to Broadband
Blue Ridge Mountain EMC
NOTE: THE FOLLOWING INFORMATION SHOULD BE CONSIDERED PROPRIETARY AND MAY NOT BE SHARED OR RELEASED TO THE PUBLIC WITHOUT EXPRESS WRITTEN CONSENT FROM BLUE RIDGE MOUNTAIN EMC

2. Blue Ridge Mountain EMC – Serving GA & NC
Electric Cooperative serving three North Georgia and two Western North Carolina counties since 1938
Tennessee Valley Authority (TVA) All-Requirements Distributor
53,400+ meters (42,500+ members) / 200 employees
6,100 miles of electric distribution line
40 miles of transmission & sub-transmission line
10 substations (+1 shared TVA-owned station)
Entered broadband business in 2002
Today:
1,100 + miles of fiber
Around 8,000 fiber customers and 24,000 homes passed
Adding average of 92.8 customers/month
Challenges: Rural and Mountainous footprint, Multi-state jurisdictions, Limited industry base, Low customer density (8.3 per mile), Among lowest sales per residential customer in the nation (around 850 kwh), and initial broadband take rates (<25%).
Advantages: Regional partnerships, Proximity to major metros, In- house expertise, & Strong community support.
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

3. BRMEMC Broadband Successes & Partner Achievements
BRMEMC Successes
Connected nearly all critical or data-dependent customers in the region
Commercial; industrial; governmental; healthcare; education
Awarded nearly $4 MM for various broadband infrastructure projects…so far!
Co-location facilities to large, regional fiber partners, educational and healthcare institutions, other Co-ops, and others
Deployed & manage nearly $33 MM in overall fiber plant
Partnership Successes
Awarded $35.8 MM for broadband infrastructure projects ($33 MM in ARRA – BTOP funds) Created North Georgia Network Cooperative along with Habersham EMC and five (5) local governments (Dawson, Forsyth, Lumpkin, Union & White Counties) - NGN constructed dual, geographically diverse transport network to Atlanta (Infinera DWDM and Brocade MPLS)
Ellijay Telephone (ETC) provides voice (phone) services to BRMEMC customers over BRMEMC fiber
BalsamWest Fiber NET, LLC-providing them with co-location and fiber over-build for BRMEMC
TVA for regional fiber connectivity (fiber swaps) allowing them to access critical hydro and transmission facilities
Several local government partnerships addressing specific governmental and industrial needs (economic development)
Financial Successes
Recipient of over $1 MM of smaller broadband expansion grants for specific projects (industrial, non-profit, etc.)
Awarded $3 MM USDA Community Connect Grant in late 2018
Paid back initial TVA-required “loan from the electric department to broadband” in late 2017
Operating “in the black” for over eight (8) years
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
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4. BRMEMC Broadband Footprint
Regional NGNC Backhaul Network
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5. BRMEMC Broadband - Unique Issues & Structure
Georgia has unique cable TV prohibition for electric cooperatives
Express authorization in Georgia’s EMC enabling legislation allowing for broadband was signed by the Governor the last full week of April 2019
New law will require BRMEMC to spin off an “affiliate” to operate broadband going forward
NC has unique prohibition on use of certain federal funds for broadband – working on a legislative “fix” now
TVA requires LPC’s to avoid using electric revenues for non-electric purposes
Required to fully allocate broadband costs to broadband department
Fiber asset/utilization allocation between EMC -vs- Broadband was conducted
Overall fiber plant value at the time was $15-20 MM
Loan between Broadband Department and the Electric Department (both EMC operations) was executed for the allocated fiber utilization cost (around $3.5 MM)
Principle and Interest was paid monthly to the Cooperative – loan was paid off in late 2017
BRMEMC maintains ownership of all fiber infrastructure, and Broadband Department simply “leases” (similar to an IRU) fiber for its use. Monthly payments for lease/allocated costs are paid from Broadband to Electric
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

6. BRMEMC Broadband – Current Status
Continuing aggressive back-filling of EMC and NGN-owned last mile
Focusing more on areas where OH construction is possible
Revenues are sufficient to completely cover costs (IRU, O&M, Modest Cap-Ex expansion, etc.)
Original loan to EMC is paid out entirely - all future revenues (minus those covering lease from EMC) will be used to support and expand fiber network
BRMEMC maintains three (3) sales and six (6) fiber construction employees – all other employees were transferred to NGN and their services are paid for under contract with NGN
BRMEMC electric construction crews also continue to do fiber installation
Drop costs range from $1,500 - $2,500
OH construction averaging $15,000/mile, but UG construction is 2x or more (if direction drilling)
Two-year contracts with early termination fee (e.g. - $42.95 x 24 = $1031)
Customers can opt for no-contract for a monthly premium (around $10 additional/month)
BRMEMC avoids highest-cost builds unless subsidized by the property owner or grant dollars
BRMEMC chose not to do much marketing (word of mouth), but this is changing rapidly!
EMC has allocated around $750,000 for continued fiber construction in this year’s budget (ending in June)
Recently implemented a community competition approach for build priority
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

7. BRMEMC Broadband – Current Status
New Broadband Customers Added:
2017 = 1,132
2018 = 904
*December not included
Average of 91 new customers per month since January 2014
*(thru Feb ‘19)
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

8. BRMEMC Broadband – Current Financial Status
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9. The Road to Broadband – Critical Decision Points
Decision Point #1: Pre-Planning
Does Sufficient Broadband Demand Exist
Competition in the Market to be Served
Is Service Currently Available
& At What Speed
Is Reliability Sufficient
Consider Implications of Dark Fiber, Lit Services, Internet Only, Value-Added (OTT) Services
What are your Member-Customers Demanding
Mission, Vision & Goals
Field Work – Learn from Others
Will a new broadband business improve things
Decision Point #2: Project Planning & Development (Include Sensitivity Analysis)
Network Utilization
(Electric System, SCADA, Communications, etc.)
Financial Strategy & Budgeting
(Consider Grants, Loans, Taxable and Tax-Free Bonds, TIF’s, NMTC, Private Equity, etc.)
Strategic Marketing & Branding
Technology Assessment & Selection
(fiber, wireless, hybrid, other)
Target Customer Identification
(Residential, C&I, Carriers, etc.)
Business Structure/Legal/Regulatory Analysis
(including licensing, certifications, etc.)
Transport/Backhaul Availability,
Capacity & Pricing
Decision On Service Offering
(Dark, Lit, Internet Only, OTT, etc.)
Densities, Homes Passed & Expected Take-Rates
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Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.
Decision Point #3: Technology & Construction
Active or PON (if fiber)
Electric or Telecommunications Space
Transport/Backhaul Availability,
Capacity & Pricing
Pole Attachments and Make Ready Assessment
ADSS or Strand-and-Lash (if fiber)
Selection of Appropriate Partners/Contractors
Materials & Equipment Sourcing
Personnel/Skill Sets Required (Staffing Plan)
Construction Methodologies (Splice Locations, slack, etc.)
Decision Point #4: Financial Management
Development of Cost-Allocation Methodology
Establishing Financial Record-Keeping Processes & Chart of Accounts
Ensuring Compliance with any Local/State/Federal Funding (Grant, Loan, Combinations)

10. Relevant Questions Must Be Answered Before Jumping Into Broadband…
Is there a need in the community that is not being met as regards broadband?
Is there a solution that might be within your company’s skill sets/sphere of influence to address that need?
What do your customers want you to do and what am I legally allowed to do in the broadband space as an electric utility?
What competition to solving the community’s need exists from other companies in the community/region?
Are there any logical partners in the area/region that might work well with you in this effort?
How and why have other electric utilities succeeded in the broadband space?
Can you leverage existing infrastructure, or possibly benefit from excess capacity utilization?
Who would be your primary/key customers if it is decided to offer broadband?
Are there specific legal or regulatory hurdles that you must address in order to allow you to enter broadband?
What is the optimal business structure for a broadband company and how will it work with/within my utility?
What specific technologies would be employed in order to deliver broadband (i.e.-fiber, wireless, small cell, etc.)
How would you fund broadband deployment and how quickly can the network be constructed?
Should you deliver direct retail services, stick to dark fiber leasing, serve only CAI’s or some combination?
Do you have the in-house expertise or contractors available to construct, maintain and deliver these broadband services?
How will you handle income from the broadband endeavor? (85/15 test applicability, PILOT requirements, etc.)
Will a broadband deployment strategy survive any possible changes in Board Governance? Is the plan controversial?
Is your utility prepared to manage two separate sets of financial records, develop cost allocations and prevent comingling of funds?
What strategies can I employ to maximize my initial take-rate from customers?
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

11. Key Lessons Learned…
Realization that ROI does not occur overnight (must be able to withstand several years without profitability)
Building a reliable cost model that recognizes required re-investment is extremely important to payback schedules
Storm restoration, electronics replacement/upgrade, required road moves/line-moves, underground utility “disasters” can be very expensive
Strategic Marketing Plan must be developed early – must maximize the “ripples on the pond” via increased take rates
Strongest growth among medium to lower-income households (lower investment cost / better take-rates)
Funder recognition of longer amortizations is necessary to mitigate delay in rural broadband adoption
-Initial take-rates will be in the mid-20% range without significant & innovative marketing, but rising to 45%+ over two years
-Often need 8-10 years to fully cover costs in lower-density areas
States/Feds must consider more grant/loan combo’s that help with rural broadband take-rate mitigation, low-volume users, etc.
-Most funders require connectivity to CAI’s (Community Anchor Institutions) to score well, but these are non-existent in extremely rural communities.
Providers should be incentivized to pursue funding for projects demonstrating regional and multi-organizational partnerships, and even projects led by competitors working jointly for broad community benefits (“Coopetition”)
Promote philosophy that one size does not fit all, and that we must all be part of the solution (Muni, Co-op, Incumbents, etc)!
-Must refrain from “incumbent squashing”…rather be committed to the business of delivering critical infrastructure services to all citizens (just like Co-op’s did in the 1930’s) whether folks choose to live in the city or in the most rural communities in the USA!
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

12. Thank you…
Erik C. Brinke, Director of Administrative Services & External Relations
Cell: (706)
Blue Ridge Mountain EMC
P.O. Box 9
Young Harris, GA
Phone: (706)
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.