Featured in Rural Telephone Finance Cooperative’s newsletter Capital Connections, below is the article about how a partnership between Peoples and RTFC will impact Peoples cooperative membership.
Peoples Telephone Cooperative (PTC) began in 1952 as a dream to link one neighbor to another. Today, the Quitman, Texas-based provider has evolved to connect rural citizens of East Texas to the global communications network—and RTFC is financing the company’s latest technology upgrade.
RTFC provided PTC with a $12 million term loan and $1 million line of credit— just the latest in a long history of transactions with the cooperative. “As a cooperative with a longstanding relationship with RTFC, we feel we have a true partner with our financing institution,” explained PTC General Manager and CEO Steven Steele. “Just like all rural companies in our industry, RTFC has a genuine concern for the success of Peoples and the well-being of our communities.”
The loan will be used to improve the quality of life in some of the small towns served by PTC’s independent local exchange carrier (ILEC), upgrading subscribers’ homes and businesses from a copper-based digital subscriber line network to fiber-to-the-home service in phase one of a multi-part endeavor.
“The improved broadband speeds will allow our members to continue remote working and distance learning as well as transitioning more of their entertainment to a streaming platform,” Steele said, adding that the enhanced quality of a fiber network will reduce reliability issues and service calls. “As for the impact on our overall territory, I believe fiber deployment is as necessary as roads, sewer and electricity for economic development and continued community growth.”
PTC’s footprint spans 19 counties, providing telephone, internet, home security and more through its ILEC and competitive local exchange carrier territories. The company has close to 3,500 miles of network that employs diverse technology offerings, including fiber, copper and fixed wireless.
Its service area is well known for a series of lakes that dot the area and attract “weekenders,” which creates a blend of rural and urban customers. “In 2010, we were awarded a Broadband Technology Opportunities Program grant requiring 300 miles of fiber cable to be built that loops around Northeast Texas connecting both commercial entities and anchor institutions. This laid the foundation for the current Tier 2 network Peoples operates today,” said PTC Chief Financial Officer Scott Thompson, who will assume the CEO post at PTC when Steele retires at the end of this year.
Like many rural providers, PTC has to overcome the challenge of serving a subscriber base that is spread far and wide. Thompson explained that PTC’s fiber deployment strategy has focused on overbuilds that would impact as many subscribers as possible. “In addition to density, we reviewed the percentage of members subscribing at their maximum attainable speeds,” he said.
The last 18 months have created other hurdles as well. “With more members working and learning remotely, we rolled up our sleeves and condensed our original five-year fiber deployment plan by half,” Thompson explained. “Many small, rural schools in our footprint had students, just like their urban counterparts, who needed connections for remote learning—and they needed it quickly.”
The expedited timeline for the fiber deployment resulted in a strain on the resource allocation of labor and supplies. Like the rest of the world, PTC has also had to contend with supply chain shortages, which have affected deployment schedules. PTC’s fiber upgrades will continue through 2024. The goal is to enhance fiber connectivity throughout the ILEC territory as soon as possible. “The hard truth is rural communities without fiber often lack the broadband connections to attract new businesses and residential growth, which typically drives the fiber network deployment in their area. This results in a vicious cycle—communities need growth and yet growth demands broadband,” Thompson said.
For the full Capital Connections Newsletter, click here.