UTC Telecom 2014: The Rise of the Utelco?

UTC Telecom 2014: The Rise of the Utelco?


PHOENIX, Ariz. -- While many utilities are primarily focused on modernizing their internal communications networks, some of them also want to sell broadband services. To that end, some exhibitors at the Utilities Telecom Council Inc. 's Telecom 2014 event here are focused on equipping utilities to push high-speed connectivity to underserved regions. (See UTC Telecom 2014: More Power to You.)

"There's certainly potential for utilities to leverage these networks for multiple purposes," says Jens Erler, director of industry specific solutions for Ericsson AB (Nasdaq: ERIC).

Several US utilities are deploying fiber-to-the-home (FTTH) networks to provide broadband services. Kit Carson Electric Cooperative (KCEC), for example, recently tapped Fujitsu Network Communications Inc. to help it implement a network that will cover nearly 3000 miles in northern New Mexico, including Taos.

"We needed fiber for our electrical operations, and high-speed connectivity is lacking in our area," says Luis Reyes, CEO and general manager of KCEC. The utility secured $64 million in funding from the US Rural Utilities Service (RUS) , he says, to build a network that will pass 29,000 homes and businesses.

Municipally- and member-owned utilities are far more likely to become "utelcos" in underserved areas, both because of the government funds available to them and because they are less regulated than investor-owned utilities, said Mark Madden, regional vice president for North American utilities at Alcatel-Lucent (NYSE: ALU). Alcatel-Lucent supplied the infrastructure for the FTTH network that Chattanooga, Tenn. municipal utility EPB Fiber Optics launched in 2010.

"Any profit we make goes back to members in the form of lower electrical rates," says Reyes of KCEC.

In addition to connecting broadband users, Reyes says he hopes the deployment will stimulate the local economy by helping businesses be more competitive, particularly in tourist areas like Taos.

"Being able to provide high-speed bandwidth is an economic development enabler," says John Chowdhury, utility practice director for Fujitsu Network Communications.

"The only way of discovering the limits of the possible is to venture a little way past them into the impossible."