Episode 188

Lessons Learned from a Fiber Build

February 23, 2021

Episode Summary

SEMO launched its fiber build a few years ahead of most electric cooperatives. CEO Sean Vanslyke talks about the lessons they’ve learned along the way.

Show Notes

Transcripts have been lightly edited for clarity and readability.

 

Andy Johns: What are some lessons that electric cooperatives getting into broadband can learn from somebody who’s been doing it a little while? That’s what we’ll be talking about on this episode of StoryConnect: The Podcast. My name is Andy Johns, your host with WordSouth. And I’m joined today by Sean Vanslyke, who is the CEO of SEMO Electric Cooperative and GoSEMO Fiber there in Missouri. So, Sean, thanks for joining me.

Sean Vanslyke: Well, thank you for having me. I appreciate the opportunity.

Andy Johns: I’m excited to get into a bunch of our topics here. Right before we do, just a little bit of housekeeping. I wanted to make sure that all of our listeners knew about “Rural Broadband Today,” which is WordSouth’s other podcast, produced by WordSouth’s founder Stephen Smith. He talks with a lot of the heavy hitters in the battle to bring broadband to rural America. Great topics. And that’s “Rural Broadband Today.” So I know if you’re interested in this podcast, you may be interested in listening to that one, too. So I wanted to be sure to bring it up.

Andy Johns: But the main reason we’re here is to talk to Sean about some of the things that they’ve been doing over SEMO and GoSEMO Fiber. And as we were talking, Sean, before we hit the record button, there are a lot of electric co-ops right now getting into broadband with RDOF or either considering it. But you guys have kind of been ahead of the curve. You guys got an earlier start than most folks. And I wanted to talk a little bit about the decision to get into it. So let’s rewind back to where you were when, compared to where some of the folks are right now, when you were considering it, seeing if it was the right decision. Talk us through a little bit of that: what your pitch was and why you decided that you guys were the ones to do it.

Sean Vanslyke: I think when you look back in time, we were kind of the early second wave, if you will. The first wave out there is you have Douglas Electric Co-op in Oregon. Then you had Co-Mo Electric in Missouri. You had Ralls County in Missouri. You had United in Missouri. You had some folks out there. Some co-ops that were earlier than most.

Sean Vanslyke: And we came in on the second wave, and we actually started looking at broadband, if you will, back in July of 2013. We actually did a questionnaire to our leadership team about bringing broadband to SEMO. And at that point, I’m not sure we even understood what broadband meant, what that was. But we just started digging around, and then we started looking, could our culture do this? Could we handle this? Were we prepared to get into another business? And we had some cultural things that we had to work through and build. But in 2013, we had a questionnaire. And then when you start looking at 2016, finally we started really getting serious about it. And then our directors got excited because we heard a presentation at our statewide group from Jonathan Chambers who was at the FCC, but now he’s at Conexon. He talked about the future of fiber to the home, and we started looking at it. And one of our board members said, “if we don’t do it, who’s going to do it for us?” I think in my mind, I thought that wireless technology would be much further along than it was, but it wasn’t. And so we started kicking the tires and really looking at it. We looked at it like a 40 million dollar ice storm.

Sean Vanslyke: And so we had the worst scenario that we could envision with our financials. So we looked at it and said, “OK, if we had an ice storm like we did in 2009, that was about 20 million dollars. If we had one double that, what would that do to our equity? What would it do to our rates?” So we looked at the worst scenarios, then we looked at the opposite end and said, “what can we do for our members?” And that’s one way we did it. We actually had Berry Electric’s CEO come to us in August of 2016 and give a presentation because Berry Electric was one of those first ones out there again. And their general manager came over and presented fiber to the home to our board and our leadership team. And then when you roll forward, we started doing our feasibility study right after that. We got our feasibility study back in January of 2017, and our board made the decision in March of 2017 to move forward. And now we’ve borrowed almost 50 million dollars. We have almost 8,000 services installed. And we’re just pushing forward now to do more.

Andy Johns: Excellent. It’s quite a story like the board member said, “if not you, then who?”

Andy Johns: I guess full disclosure for everyone, WordSouth has not worked with SEMO before, so I’m not claiming credit for any of the good work they’ve done, just to be clear. But some of the folks that we have worked with, Cullman Electric in Alabama, we’ve got them in an ebook. “What To Expect When You’re Connecting” that either by the time you listen to this, it may be out or if not, that it’s coming out shortly. But SEMO’s also featured in there. But one of the things in that ebook, and you touched on it, Sean, in what you said just a moment ago. But at Cullman, they said that the move into broadband is going to affect everybody at the company in some shape, form or fashion and some obviously more than others. But so, like you said, there are cultural questions and staffing questions. One of the things that we always try to stress with folks is to equip their staff to be prepared for getting into broadband, to be able to answer those questions. I know there was probably quite a bit that took place between the time when, like you said, that questionnaire, you guys weren’t exactly sure what all broadband entailed to the point where the staff was ready to start selling it. So what were some of the things that you guys had to do with the staff to get ready for it?

Sean Vanslyke: Yeah, and I’ll back up just a little bit in the sense that you have to do your homework when you get into this business. And when I think back, I can think back in February 2007, we had Lynn Hodges, who at the time, who is the CEO at Ralles Co. He even came down. He drove a five hour trip, round trip, almost 10 hours. He spent that day to come down and see us and go back and talk about culture.

Sean Vanslyke: And then we visited probably 7-8 different cooperative’s that had fiber. And that was a stretch for us. We had 15, 16 hour days. In the truck, I drove with the team to go see what we were getting into. And what was interesting about that was during the drives, if you will, I made them all have a yellow notepad. So on the way home, they prepared their presentations for the board. But what we did is we picked 4-5 people out of our team that really wanted to get on board. A couple of our senior electric folks, our operations manager and our engineering manager, they said, “you know what, we don’t want to get into the fiber business, but you go do that, and we’ll take care of the electric side”. And so when we started looking at fiber, we really pushed forward. And then probably the first big thing we did to get our staff on board. And I think it was President’s Day of 2017. We pulled the entire on Presidents Day. We closed the offices. We brought everybody in, and we did fiber 101 for our staff. And we set up four different stations. We didn’t really know what we were teaching. We just know this was an optical network terminal. And this was a thing that goes on outside of the house. And here’s what fiber looks like. I remember setting up the monitors. We know that there’s nine different software packages that we had to use to get TV, phone and Internet connected. We just set this up just to give a vision to Team SEMO. That’s what we call our employees here, Team SEMO, what we were getting into. And it was difficult because we really didn’t know at the time what we were getting into, but we figured that out. And so early on we brought the entire team in and spent a day just showing them, envisioning what we’re getting into and sharing what we learned when we visited those other co-ops.

Andy Johns: That’s a great idea. It’s funny you say that. We’re doing a training session for somebody who’s doing something very similar in Texas on Presidents’ Day. So that must be the time to do it. So I guess the next thing then after you kind of get the staff ready, the next really important part — and we’ll get to the fun stuff about how you guys have celebrated the brand and everything shortly — but in terms of member expectations, and you want everybody to be excited that you’re doing this, your staff is excited, your board is excited. But then the work is hard, and it takes a long time. So what do you feel like you guys did right? Or what are some lessons learned there early on in terms of setting customer expectations and being excited, but letting everybody know it’s going to take a little bit of patience to get a monumental job like this done?

Sean Vanslyke: Our number one mistake that we did is when we published the schedule of where we’re going. So to put this in radio terms, because we don’t have any pictures here, but we have 16 substations, if you will. We had no fiber in the sense. We got two strands from our transmission provider, but we really didn’t have fiber out there. And what we should have done is said it’s going to take us one year to build the backbone to get started. And so we didn’t realize. So we approved this in March. We started ordering equipment. And we didn’t get our big router, if you will, until about December of that year, and it just took that long to get some of these parts and pieces. We didn’t know that when Christmas arrives that Verizon and AT&T and your big guys, ladies, they shut down for almost three weeks during Christmas. They don’t make any network changes. We didn’t know that. We didn’t know that going in. And so the vendor shut down, not completely, but they shut down, too. And so we’re trying to get all this equipment in.

Sean Vanslyke: So we lost three weeks right away in December that we didn’t realize that we would lose. And we eventually got to do one of our first test sites, if you will, in January. And then I think in February of 2018, we actually hooked up our first member. But there’s a lot of things that we’ve learned that we could talk about for days. But that’s the biggest thing to say, “OK, members. We’re going to do this, but we need about nine months in order to lay the track down,” if you will. And I explained it like a high school track. People can envision walking around that track. But each lap that I make, if you can imagine, I’ve got to make 16 laps around that track to hook up each substation. But what we didn’t do is put a 17th lap in there, and we should have had a 17th lap at the very beginning to say “it’s going to take us this long to do this.” And even today, even as we’ve gotten 8,000 thousand services, we had a call. I just got an email this morning from somebody that’s probably three miles outside of our service territory, just begging for fiber. And we get those every day. We get lots and lots of those every day. And it’s frustrating because we can’t serve everybody at this point.

Andy Johns: Right, right, well, that’s a good way to put it. I like the analogy there, and there’s some people I need to talk about vendors shutting down for three weeks at Christmas. That sounds like that’d be nice.

Andy Johns: But in terms of the fun stuff, you know, as you guys are doing that backboned work, getting the network built. And when you start connecting folks, you guys have done a good job. I remember seeing the pictures of the 5,000th person connected. You guys have done a pretty good job of of marking those milestones and keeping people excited as the build has continued. And I didn’t know if there is any of that that you wanted to share with us. 

Sean Vanslyke: And I would share I’ll give you an internal and external standpoint. We’ve celebrated every thousandth member that’s connected to us. So 1,000, 2,000, three, four or five. We go out, and we present something to them. Blow a confetti gun, whatever.

Sean Vanslyke: Even during Covid-19, when we did the 4,000th, I think in May of 2020, and then we did the 5,000th in November of 2020. And we showed up with masks and social distancing. It’s not quite as intimate, intimate as one, two and three were because we delivered a cake and a TV, but those people are just as excited to get that. And we don’t stage it for the most part. We just go with whoever that number 5,000 cuts member is, that subscriber. And they have a lot of fun with it. On the internal standpoint, we think that everybody is part of the sales team, and so our 60 some staff members, if you will we celebrate. So when we hit 1,000, our board of directors actually came in and gave everybody $100 bill. And we celebrated that the board members shook every one of our our staff member, employees’ hands, if you will. And then when we doubled that 1,000 to 2,000, the board came in, shook everybody’s hand, and gave them $200. And then when we doubled that when we hit 4,000 during Covid, which was again back in May of 2020. We had to mail the checks because of Covid because we couldn’t come together. Now the teams are focused on getting to 8,000 subscribers. So we have 8,000 services. We have about 5,4000 subscribers at this point. We’re trying to change the language throughout the industry, if you will, by talking about services instead of subscribers. Because when we look at electric meters, we may have 16,000 electric meters, but we actually have 12,000 members, if you will. On the fiber side, we have 5,400 subscribers, but we actually have over 8,000 services. And so we’re trying to put them in comparison with electric meters and fiber because when people call-in they may have questions about three different services, no different than a member might call-in and have questions about six different electric meters. And so the time it takes to help them and manage and navigate through all that, I think it’s real important that we, as an industry, think about how many services we’re providing, whether it’s electric or whether it’s broadband.

Andy Johns: That’s interesting, so let’s stay right there for a minute, because, I mean, it says that right in the name of our company, WordSouth, words matter. So when you’re talking about services, you’re talking about if somebody has not just broadband, but some of the other services that you guys offer. So you count those, not just the one person with a broadband subscription, but that one person may be counted a couple of different times because they have other services that you guys provide.

Sean Vanslyke: Right. So let’s just look at your house, for example. Let’s say that you had a house. Let’s say you had a farm, and you had a grain bin, and you had a barn. And let’s just say you had three meters there, right? Well, at any given time, you could call us about any three of those services. We would have to deal individually with those because they’re three separate services. Even though you’re getting a group bill, you might get a bill that has all three meters on it. Well, in the fiber industry, what we’ve learned is you may call-in because you have TV, you have Internet, and you have phone. So when you call in, you could be dealing with three different services.

Sean Vanslyke: And our calls, typically, our call volume for broadband is much, much longer than it is for electric services. So when people call in, they have questions. The other day we had an elderly lady came into our office, actually. She was there for 45 minutes. She was upset because her GoSEMO fiber telephone service was not working. And our team sat and listened to her and talked to her. And by about 20 or 30 minutes in the conversation, she said, you know what, my cell phone’s not working either. And eventually we get to the point that her hearing aid was out, and that took about 45 minutes to get there, because you’re always trying to say, “OK, what have we done to not let her phone work? What did we do? Did we not update something? Did we not port something?”

Sean Vanslyke: And it just takes time like that. And we just run into this and what you find out, I often explain it. Imagine if our electric crews went out, and they hooked that meter up, which is on the outside of the house, but then they had to go inside the house and show the owner how to use the microwave, and then call back to the office, say, “OK, I want to provision the microwave now.” Now, I’ve got to show them how to program it. And then I go over to the stove, and I do that. Then I go over to another electric appliance. Can you imagine maybe 40 years ago or 50 when we sold refrigerators, we probably did that. But our industry has changed over the last 20 or 30, 40 years to get away from that. And now with fiber, we’re going back into people’s homes, and it’s just not a simple process. I can remember early on that we had a 95 year old man call. He was upset. It was Friday night. His kids were coming in. They wanted to watch the St. Louis Cardinals or the Kansas City Royals or both that night because we have both of them on our station, the Major League Baseball teams. He could not get his remote to work. And so it was a 45 minute drive. I get over there. He had his batteries upside down in the remote. Those are the things that you deal with that people. When we went on our journey before we started this, nobody warned us about those type of things that we were going to run into.

Andy Johns: Well, and that’s exactly the point that I have made. I’m glad that you brought that up. Exactly the point that I have made that nobody calls the electric co-op when the toaster doesn’t work. But they’re absolutely going to call the broadband provider when the smart TV doesn’t stream, right or something like that. So, yeah, it’s a very different mindset, very different customer expectations. 

Sean Vanslyke: Think about the Internet of Things as we move forward. Think about how the broadband and the electric energy world are going to start coming together. So when I take my electric vehicle home and my electric doesn’t work or my broadband doesn’t work to connect those two together to the Internet of Things or my refrigerators not communicating, while I’mm at work, is it my power? Is it my broadband? Is it my Wi-Fi? What is not working? And so think about the service industry that we’re going to be into in five, seven, eight, nine, ten years. Think about how dependent people are going to become on us that are doing both services.

Andy Johns: You’re right. And it may not even be that long. It seems like things are accelerating pretty quickly. I know I’m a self-confessed smart home nerd with all kinds of smart devices around the house. So we could we definitely spend some time talking about that. But I wanted to move on. Just two last questions for you.

Andy Johns: One being, the Friday Feature is something that you have started putting out during the Covid times. I know it’s not necessarily totally related to broadband or to the electric side of things, but it is a good spot for motivation. So I wanted to just give a couple of minutes if you want to share just a little bit about that, because people can find that on your LinkedIn page and on the SEMO blog. But do you want to talk about just briefly about the Friday feature you’ve been doing?

Sean Vanslyke: Yeah, I’m humbled that you asked. It’s just something that I started right after Covid. I’ve always wanted to do something like that to give a weekly message, if you will. A video message that is positive that encourages people just to keep pushing forward. I have a saying and some may agree or disagree, but “whether we want to go to heaven or hell, we’re always interviewing.” We’re always doing something people are always talking. And I think at the end of the day, people when I say “always interviewing,” think “you mean for a job?” No, I just mean the fact that as we live life, we’re always being judged. People are always looking at us. And I have my bad days, too. But how can we help other people? How can we just sometimes just keep pushing forward? Because I have bad days. My team has bad days, our family members have bad days. But for the most part, we have a lot of good days, and we have to focus on that and Covid gave us a great opportunity to try to make lemonade. And I’ve enjoyed Covid from the standpoint that I didn’t have to travel here.

Sean Vanslyke: And I’ve got to really have the opportunity to really focus on some things here at our office and with my family. And the best word I’ve heard on Covid-19 is “revealing.” I thought revealing is the best word to describe what happened because a lot of things were revealed: how people handle situations, how we handled it as an organization, and what we did to to help our members and help our subscribers. And I’m proud of Team SEMO because we never slowed down. In fact, we probably pushed a little bit harder and faster, and it just exciting to see them do that.

Andy Johns: Very cool. I think we could all use a little bit more encouragement and motivation during this year. It’s been pretty tough for a lot of folks. I certainly appreciate that. And I’m taking that and stealing that “always interviewing” phrase. I like that quite a bit.

Andy Johns: So the last thing I had for you, we’ve talked a lot about lessons that you have learned over the process of the fiber build. But I wanted to ask if there was any other advice or any other lessons that you had learned along the way. We talked about customer expectations. We talked about getting the staff ready and all of that. But are there any other pieces of wisdom or things that you had learned through the build out that you would like to share with some of the folks who, whether through RDOF or something else they are are getting into fiber right now that you feel like you can pass along?

Sean Vanslyke: Just a couple of things. I think, one, internally, you have to focus on your own house more than you have to focus on your out house, especially at the beginning. But even as you move forward, it’s like bringing a new baby home or a new dog home to an older dog or a kitten or whatever. Whatever it is that you’re into, this new child or this new project, this broadband, you can’t forget about the electric side of the business because all the balloons and all the confetti is all spread out about the broadband. But you can’t forget what brought you to the dance. And that’s your electric business, especially for cooperatives. I think two when we look at it, everybody now has a phone in their pocket. We believe here at Team SEMO that everybody is part of our public relations team. Everybody at Team SEMO is part of it. We get pictures from a lot of different staff members from the linemen to MSRs to whoever.

Sean Vanslyke: It’s not uncommon for me to whip out my phone, and we do an impromptu interview sometimes just to practice being prepared to work on iPhones. And as you look at our blog and our Facebook page, you’ll see a lot of different faces on iMovie. We just practice it all the time. We all have this tool in our hand that can help promote everything. And then third, I’d say don’t be surprised by the things that you run into, because this is difficult business in the sense that you’re going to experience things at the home level going into people’s homes that you’ve never experienced before, whether it’s people with less than ideal clothing on. It might be somebody might have a lot of cats in there, and they might have a certain odor in there. You just have to remember that this is their lives, and and we’re getting the opportunity to go into their house, and we have to kind of block things out. And my background, I had a natural gas and electric background as well. And so when you go in, and light pilot lights to help people, you would see some of that. But you learn to block that out and you learn not to talk about what you see.

Sean Vanslyke: You’re there to provide a service. And I’ve seen that struggle a little bit by some other folks. We’ve been very blessed to have about 30 different cooperatives visit us, maybe 35. Now, we just did a Zoom call with a co-op in Canada. We just did one in Virginia. Before we were done fiber fly-ins, and at one point, we had nine different cooperatives here. I think back in February of 2020, we had them here. But after Covid started, we started doing all these fiber fly-ins on Zoom now. So we’re very blessed and we’re humbled that we’ve been able to help a lot of different co-ops in the sense that we’re paying it forward like some folks helped us in the beginning. But we’re very blunt about what to expect. And it is hard work. It is a 24/7 storm, if you will, that people are used to in electric business. The fiber, the phone calls just never stop because people want it so bad, and they’re desperate for it in the rural areas. Especially where you don’t serve, they’re just begging you to extend that. But at $23,000 a mile, it’s hard to extend it everywhere.

Andy Johns: Absolutely. I think that’s great. Those are some great pieces of wisdom there and some things that a lot of folks had not thought about. So hopefully this has been an insightful podcast to share with folks. And I appreciate you, Sean, for taking the time to talk with me.

Sean Vanslyke: Thank you for the opportunity and best of luck to you and everybody else. And I’m always available if people want to call. I don’t have an office. My cell phone’s out there, and you can always call or text me anytime you need to.

Andy Johns: Wonderful. He is Sean Vanslyke, like the CEO of SEMO Electric. And GoSemo Fiber. I am Andy Johns with WordSouth. And until we talk again, keep telling your story.

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