Local power companies across seven states make up the Tennessee Valley Public Power Association — and many of them are expanding their services to offer broadband to their consumers. Doug Peters, president and CEO of TVPPA, joined us at Fiber Connect 2021 to discuss how local power companies are improving the quality of life in rural communities that lack a broadband connection, empowering them to access remote education, telehealth, work from home resources and more.
Transcripts have been lightly edited for clarity and readability.
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Andy Johns: And thanks for tuning in to the latest episode of Rural Broadband Today. I am not Stephen Smith. This is Andy John substituting as the podcast host for Stephen here at the FiberConnect 2021 Conference from the Fiber Broadband Association. Today, we’re taking a look at the people and issues shaping the rural broadband story. And I’m excited to have you join us. My guest today is Doug Peters, who is the President and CEO of TVPPA, the Tennessee Valley Public Power Association. Doug, thanks for joining me.
Doug Peters: Thank you for having me. I’m honored that you asked.
Andy Johns: Great. Well, we enjoy knowing the folks over at TVPPA, and they’ve got a couple of conferences coming up later this year that we will be joining them. Today, we are at the center of the rural broadband world here at the Fiber Broadband Association FiberConnect 2021 in Nashville, Tennessee. So you’ll probably notice, as we say on most of the episodes, what you’re hearing is not background noise, it’s ambiance. So we’re right here, a little extra energy here, at the trade show portion of it. But I wanted to talk to you, Doug, today about the shifting attitudes and energy around — I don’t know, if the attitudes are shifting so much as they are just so much more action right now with the TVPPA members and broadband. As we were talking before we hit the record button, it’s not a new thing necessarily for TVPPA members, but it’s certainly something now that’s getting a lot more attention and has a lot more energy than it did a few years ago.
Doug Peters: We have several members who’ve been in the telecom business for a very long time. And without going too far down this road, it started out way back in the day, probably even in the early 90s with some customer dissatisfaction with major carriers that folks can probably guess who I’m talking about. And so our members answered the challenge from some of their customers and said, “Why don’t you get in that business?” And so back in the day, it was really more cable. But as we all know, that kind of telecom sometime in the 90s, certainly late 90s, early 2000s, morphed into the internet and broadband and fiber and our members morphed with it. And so they may have started out in a very traditional, at least at the time, very traditional coaxial cable kind of system, doing the same thing that the major carriers were doing. They very quickly got into fiber and broadband. And it started with our municipal members first because that’s where the greatest dissatisfaction was. And we all know our municipal members typically are denser in terms of their customers per mile. And the co-ops were at a slight disadvantage because of that. But over time, you know, today in 2021, you just can’t have life if you don’t have broadband. And I’m not going to tell you anything that others aren’t saying as well. The pandemic simply accelerated or put even more emphasis on broadband, especially in rural areas, because education, health care, economic development, if you don’t have world class broadband, you’re at a significant disadvantage.
Doug Peters: My youngest daughter just finished her family practice residency. And I said, you know, “How’s this working during the pandemic?” And she said, “We’ve moved to telemedicine.” And she said, “You know, at first we were kind of skeptical. Can I really effectively treat a person over the Internet? We learned very quickly there are several day-to-day sniffle kind of stuff we can do. But we also recognized some early Covid patients and said, ‘No, no, no, no, you got to come in.'” And so it was an eye opening experience for her. And she was in Savannah, Georgia. So not necessarily a rural area. So even in medicine and certainly I’ve used this analogy because I’m from Chattanooga. EPB just made their internet available to every kid in Hamilton County. During the pandemic and even in a post pandemic world, if your child doesn’t have access to world class broadband, they’re at a significant disadvantage. So our members are very interested. The co-ops are now getting into it. It’s just one of those things that I think year after year after year, within a couple of years, we’re going to see the vast majority of our members providing this kind of service. And it’s just as a result of the technology that’s changed over the last 30 years.
Andy Johns: One of the reasons that I wanted to be sure to have you on, and I should have gone through some of this at the beginning to give some background, because TVPPA is a little bit different association than some of the statewide and some of the associations that are just cooperatives or that are just for municipals. You guys — just for a little background for the listeners — you guys have both municipal power providers and the co-ops. And you guys have members in seven states. So that gives you kind of a different perspective on not just the two different models there, but also how things are going in different states. Tennessee has been, I would say, a little bit of a leader in and support for broadband networks. Tell us a little bit about — and I guess we’ll keep a very high level because it would take a long time to dissect all seven states — but tell us a little bit about what you’re seeing in the different states where TVPPA has members in terms of support.
Doug Peters: Well, certainly Tennessee, the last two administrations have been very interested in this. And there’s an ever increasing amount of grant money available from the state of Tennessee. And our members have been very successful and very aggressive in applying for that because they know the role that broadband plays now. Again, our appetite for it is insatiable, you know, whether it’s entertainment or any of the other things we’ve talked about. Mississippi has also gone at it in a very big way. Very recently in our, especially our co-op members down there, but some municipals as well that weren’t already in this business are taking advantage of that as well. We do have a few members in Georgia. Georgia is increasing the amount of their grant money, but it’s not really at the same level as Tennessee and Mississippi. I don’t think it’ll stay that way. I think Georgia will recognize the fact that a good portion of their state needs this kind of incentive, an infusion of grant money to really compete, especially on the economic development side. I’m not as familiar with Virginia. We only have one member in Virginia. I’m not as familiar with North Carolina because we have a very small presence in North Carolina. Kentucky and Alabama, though, are probably someplace in between Georgia and Mississippi/Tennessee. So the seven states are clearly recognizing that broadband has the same kind of impact on society in the 21st century that electricity had in the 20th century. It’s the fifth, you know, depending on how you count them, it’s the fifth utility. And it’s almost a necessity on several fronts.
Andy Johns: Now, you were recently up in Washington, D.C., and I imagine some of that is the message that you took with you when you were going up there. Tell us a little bit about that visit and what the conversations were like, or what the message from TVPPA and some of the other folks with you was.
Doug Peters: You know, Washington is Washington. We all understand it’s fairly partisan now. It may be very partisan right now. Let me start here. Infrastructure is the hot topic up there. And of course, there’s any number of definitions of what falls in infrastructure. So we were trying to make the point that if Washington is going to incent or provide money for infrastructure, don’t forget transmission, distribution and broadband. And of course, they were already very attuned on the broadband issue. But I do think we surprised a few folks. There are two facts that I typically use that are striking, I believe. Municipals and cooperatives in this country, total of 2,800-3,000 independent, locally owned power companies at the distribution level. They provide about 30% of the energy or deliver 30% of the energy, but they deliver it to over 70% of the land area. So there are vast portions of our country that would not have electricity today were it not for the municipals and cooperatives. And quite frankly, I think I can boldly say the same thing is going to be true with broadband. I just heard yesterday, and I found this really interesting and I won’t get into the state, but there is a state who just changed the law and said if you’re going to provide broadband into a underserved area, because the major carriers always say one of the big barriers is the pole attachment fee. And the pole attachment fees run probably $10-30 dollars a year per pole. And so the state just changed the law just six months ago and said if you serve an underserved area, we will mandate that your pole attachment fee is $1. And so far, no major carrier has taken them up on that.
Andy Johns: Interesting. They called their bluff.
Doug Peters: So when you hear the major carriers say pole attachments fees are a barrier, that’s not really true.
Andy Johns: Interesting. I had not heard that, but I’ll be researching that.
Doug Peters: I just heard it yesterday.
Andy Johns: Ok, interesting. When we’re talking about pole attachments or really anything in the valley, TVA is not usually that far from mind. And obviously I’m not going to ask you to speak for them. But is there anything that, as we’re looking at rural broadband in the Tennessee Valley, is there anything that either helps or maybe hinders this area in particular as to different areas of the country that maybe didn’t have an entity like TVA involved the way that it is.
Doug Peters: No, I think TVA is doing all that it can. TVA has had its own fiber network. I used to work for TVA way back in the day, and they’ve had their own fiber network for their own intranet purposes, if you will, for a very long time. And so just a few years ago, they announced a $300 million upgrade to their system. And of course, now when you do that, the incremental cost of adding capacity beyond what they need for their own purposes is nothing. And so they very carefully, very intentionally came out to our members and said, “As you do what you do locally, if you need a path across to a different node for a better price or for redundancy purposes, let us know. We’ll work with you so you can kind of piggyback onto their backbone.” Now, you know, if you look at the TVA transmission system, and you look at where members are doing this, there have been some avenues that were exploited because of that. But I don’t think it was as much as we hoped for. But that’s not TVA’s fault. It’s just a location issue. So TVA has done everything they can.
Doug Peters: Our sister organization — let me just get a quick plug in for them. Our sister organization, Seven States Power Corporation, I think is trying to do what I believe will be very beneficial to our members in terms of broadband. If you think about the 153 members and roughly I’m guessing about half of our members are now into this, they’re doing that on a local level. If you are one of the major carriers or even SunTrust Bank and you want an intranet for all of your banks or all of your offices in the Tennessee Valley, you don’t want to go cut a deal with 50 or 60 different providers. You would like a single mid-mile network administrator that you can cut a deal over. Seven States is trying to do that. I think that’s going to multiply the return on investment because they’re making the decisions locally in terms of that ROI. But now, if you can throw some value on top of that, because you’re interconnected with your peers across the state, that’s just another revenue stream. And Seven States is very early in that process, but I think they’re going to be successful before it’s all said and done.
Andy Johns: That’s a very interesting niche for them to step into.
Doug Peters: Yes. And quite frankly, it was our member Chattanooga Power Board, Electric Power Board of Chattanooga, who kind of clued us in to that. They were trying to bid on an AT&T request for a pathway across the valley. And they helped us understand that AT&T made it very clear they didn’t want to deal with but one entity to cut that deal. So I don’t know what happened because I don’t think there was a single entity that could make it happen. But it certainly was a lesson learned and an objective that Seven States added to what they’re trying to do.
Andy Johns: Now, and we’ve mentioned them a couple of times already, you can’t really talk about broadband in Tennessee without bringing up EPB in Chattanooga. I know Knoxville right now, there’s a lot of headlines with the Knoxville KUB building out a municipal network. The big city stories are certainly there. But what are some success stories that you’ve heard both the municipal side and the co-op side? Because there’s a lot of broadband being built outside of the big cities in Tennessee as well.
Doug Peters: I’ll give another little plug for just TVPPA. Starting in the late 2000s, TVA put us on notice that they were going to change the wholesale rate structure and technology like automated metering infrastructure could be very important. Now, we were specifically working with TVA to change the wholesale rate structure in a way where we didn’t have to force members to an AMI system. So even in like 2008-2009, our members got together and said in order to get ready for the future, instead of worrying about AMI right now, build out a fiber backbone such that you can interconnect to TVA and you can interconnect onto all of your substations. So several of our members took that very seriously. And what they found kind of organically is they built out their systems individually. They were getting very, very close to each other, and they began to interconnect. And that has already opened up some new revenue streams for them. It’s very rare for a member to install dark fiber and not find someone who wants to come over that dark fiber within just a few months. So our members, like in Trenton, TN; Gibson EMC; Jackson, TN has been in it for a very long time. Tullahoma has been in it. Bristol, TN has been in it. Several of our members, not the least of which Glasgow, KY. So it’s not just the major metropolitan areas. Oh, for Forked Deer, a very small co-op in Halls, TN got a grant from the Department of Agriculture because it came through that avenue. And then Secretary Perdue, former governor of Georgia, came out and brought the big check and handed it to him. And so Halls, TN in very rural northwest Tennessee is building out a broadband network very successfully. Holston Electric in east Tennessee…
Andy Johns: The other side of the state.
Doug Peters: Yeah, if I had thought about it, I’d have brought a laundry list, because now I’m worried that some of my members will hear this and they’ll go, “Doug, why didn’t you mention us?”
Andy Johns: It’s a dangerous question. You can blame it on me for sure. And I think the analogy that you used earlier or the metaphor. We’ve seen this before where they’re pockets being built.
Doug Peters: The metaphor or analogy that I always like to use, and I’m old enough to barely remember it. I remember when I-75 was not complete from Chattanooga to Atlanta, and you had to get off kind of in Cartersville and go around.
Andy Johns: It was one of the last sections of the interstate system to be finished.
Doug Peters: So today, what you have in terms of broadband in this country, it looks like the interstate map did in the 60s. You know, when they were building it out, there were portions or areas where you could go really, really fast. And then 10 miles later, you’re back to a two-lane road. And so what we’re trying to do in the Tennessee Valley is make that a much more comprehensive and universal map such that it looks like the interstate map today. You know, it’s hard to imagine not getting on I-65 or I-75 or I-24 or I-40, name them, and go where almost wherever you want to at an accelerated speed. And it’s not the 60s. It’s probably the 80s now or maybe the 70s, but we’re getting there. But I think that’s an apt analogy.
Andy Johns: I like it. I like it a lot. But the last question I had for you is, if you don’t mind getting out your crystal ball, let’s look and see what’s coming next. As we’re looking forward to the future in the Tennessee Valley and I guess with rural broadband as a whole, if you want to speak to that. But what comes next? I guess there’s so much attention in political circles right now about rural broadband, I hope that attention stays like you were talking about Washington earlier. Sometimes the attention span isn’t there. Because this is a problem that you can’t just throw a couple of grants at it, and it’ll be done. It’s going to take a while to get there.
Doug Peters: Well, if you think about to me, broadband is the same kind of technology as electricity was in the 20th century. And so, we started building out the what we now know today is the grid in the early 1900s. And quite frankly, we and APPA and several municipal members, just a summer or two ago sent some resources, both material and manpower, to a small reservation, I think to New Mexico, to get them electricity. They were on generators and had been forever. And so you don’t think about it. But there are still in this country some small number of places where you can’t get electricity. So we’ve been trying to electrify this country for 100 years. And quite frankly, I believe the industry has done amazingly well with that and built what I consider to be the most complex, reliable machine in the history of man, and that’s the electric grid in this country.
Andy Johns: Pretty amazing when you think about it.
Doug Peters: So it’s going to take some time in order to get broadband. The challenge will be because… I’ve got three daughters, and they just can’t imagine life without it and neither can anybody else. You know, my daughter’s are in their late 20s and early 30s, so customers aren’t going to wait 100 years for this. It’s going to be a huge, huge challenge to build it out and make it ubiquitous. And I think what’s going to happen is especially — and I’ll just keep this in the electric utility sector, if you will, because, again, broadband has applications in medicine and education and economic development and commerce. You know, who doesn’t buy something off of Amazon? You know, I placed an order probably 30 minutes ago.
Andy Johns: I did one this morning.
Doug Peters: But just in the electric utility sector, what’s going to happen is you’re going to see water heaters, thermostats, EVs, EV batteries, backup generation. If you can put an IP address on it, it’s a device that can be controlled. And now if you think about that daily load curve, that daily load curve was just something that the industry had to respond to. You know, because customers do what they do. They get home, and they turn on the air. They turn on the water or make coffee in the morning and take a shower. So you just had to respond to it. But now with the ability to talk to these devices and control these devices and because of the diversity, you can manage that load curve and make that a much flatter curve to serve. And in doing so, you’ll reduce cost. You’ll reduce greenhouse gas emissions. So I think what you’re going to see over the next 20 years is a lot of effort to aggregate or harness the load as the complement to the generation with transmission and distribution in the middle. And you’re going to manage that. Now, that is a very difficult equation to solve. Because just to use TVA as example, roughly, they have a few hundred assets that they can meet their load curve with every day. Their own generation units and the utilities that they’re interconnected with. So a few hundred assets to manage.
Doug Peters: On the load side, you’re talking millions. And so you’re going to see AI come into this, and it’s going to be software and managing all of that. Now, there’s going to be human operators. I’m not saying, you know this isn’t Skynet. Terminator is not coming. But it’s going to be a huge challenge to handle all of this disaggregation. And you’re going to have to do it if you’re going to keep affordability, reliability and predictability. Because planning, a lot of folks don’t fully appreciate this. And I know I’m way off track here, so I’ll get back on track in a minute. But if you think about what the electric utility has done over the first 100 years, it planned long term. It knew how many assets it had to build transmission and generation and distribution to serve the curve. And in doing so, it kept it affordable, reliable and predictable. With all this disaggregation on the load side, that’s a huge challenge, and it’s going to take a whole other level of long term planning to manage that and keep affordability, reliability and predictability where we’ve all grown accustomed to it.
Doug Peters: I don’t want to live in a world without electricity. And I can guarantee you every time that when my daughters were growing up, every time the power went out, “Daddy, I’m bored,” and I’m going, “It’s only been five minutes.” So, yes, the future coming at us very rapidly. And if you think about the role that electricity and now broadband play, our members in the whole electric utility industry have got a real challenge, but a real opportunity to keep us where we want to be as a country, as an economy. And then throw on cybersecurity and all those other attributes, I bet we find something to do almost every day.
Andy Johns: I think you’re right about that. And I’m certainly glad of that, too. Well, Doug, thank you for joining me.
Doug Peters: Oh, again, thank you. I hope this was helpful. These are my humble opinions, so they’re worth what you paid for them.
Andy Johns: Got it. He is Doug Peters. He’s the President and CEO of the TVPPA, the Tennessee Valley Public Power Association. And we’ve got a few more guys lined up later today, so we’ll be coming up with those next. And thank you for listening to Rural Broadband Today, where we take a look at the people and the issues shaping the rural broadband story across America. I’m your host, Andy Johns, filling in for Stephen Smith. And this program is produced by WordSouth — A Content Marketing Company, an affiliation with Pioneer Utility Resources. Please share this episode with your network and help us tell the rural broadband story. Thank you for listening.