What You’ll Learn

Tombigbee Electric Cooperative was early to the game on fiber optics. What can other electrics learn from Tombigbee’s Freedom Fiber service?

Guest Speaker

Steve Foshee

Show Notes

Transcripts have been lightly edited for clarity and readability.


Andy Johns: What can electric cooperatives learn about getting into the broadband business from freedom FIBER? That’s what we’ll be talking about on this episode of StoryConnect: The Podcast. I’m your host, Andy Johns, and I’m joined today by Steve Foshee, who is the CEO of Tombigbee Electric and Tombigbee Communications here in West Alabama. Steve, thanks for joining me.

Steve Foshee: It’s great to be with you.

Andy Johns: So you guys were a little bit ahead of the game. We talked about that a little bit. And I’m hoping we can unpack some of the lessons that you guys have learned getting into the broadband business. But I guess just for folks not familiar with the story, can you talk us through a couple of minutes about how Tombigbee decided that broadband was something that you guys needed to do?

Steve Foshee: Well, actually, we go back several years when we first looked at it. We applied for some of the stimulus money in 2010, and we weren’t one of the grantees. So at that point, we kind of got frustrated with it. We put it up on the shelf and tried to take a position of “let somebody else do it.” The problem with that is years went by and nobody else was doing anything. And our community as a whole continued to diminish.

So in 2016, we made the decision to go back and take a look at that and to dust off what we’d learned and see if there had been a lot of changes, and if so, what were they? And take a hard look at the impact that it would have to our community. So throughout that year, we looked at that. We studied it. Our board studied it. There were lots and lots of long lengthy board meetings with lots of experts coming in to our facility here advising the board. And they were multi-hour meetings. They weren’t a little bit. So we started from “what is a fiber optic cable?” all the way up to legal accounting. The whole issue. After a complete educational process through 2016, our board decided to launch a project in January of 2017.

Andy Johns: And so from that decision to launch it in early 2017, what happens next? Because there’s a whole lot you had to figure out before you started lighting up folks’ homes with fiber.

Steve Foshee: Well, there was. And we looked at all that through 2016. We looked at the legal, what we needed to have done there. We looked at the budget, you know, our financial plan. There was a great deal of work on it. We hired a lot of good consultants who were straight shooters, who didn’t just tell us what we wanted to hear, but what the reality of things were. We knew it was going to be a heavy lift. We studied that out. And I think what at the end of the day that made our board feel comfortable — because we were looking at a 40 to 50 million dollar investment — is to break that up into phases. And so our first phase — I call it picking the lowest hanging fruit. If you can’t pick that and do well, then how can you make the rest of it work? So we divided it up into five phases, not equally. But our first phase was a capital investment of 8 million. And then we went about to work to implement our plan. And then every day we verified how we were doing according to that plan.

Andy Johns: So what does that mean every day to verify how you’re doing?

Steve Foshee: Well, one of the big challenges in life when you build anything, number one is, can you build it according to the cost that you projected? It’s kind of like building a house. Are you going to have a lot of cost overruns? Well, that’s going to significantly affect your financial outcome.

Secondly, though, how does the money being spent, as what is the receptiveness, or are you building a field of dreams, too? Are you going to pick up the customers that say they want it? You know, and we kind of had a pretty good idea about that. And so are we building it according to cost, are we staying on budget, and are we bringing in revenue to retire that capital investment, which in our case would be borrowed capital? So every day we track those numbers. We have a very extensive accounting system here. We had accounting consultants. They kind of overlooked our shoulders to make sure that that was the case. And so that’s how we went about it.

Andy Johns: And while you’re going about getting this started — since primarily a lot of what we do at WordSouth, and then on the StoryConnect podcast, is talking to communicators — when did you guys start talking about a broadband network and fiber publicly? And then how did you decide when to bring that up? And then what were some of the first messages that you guys started to send out to folks?

Steve Foshee: Well, we did it right off the bat. Now we needed to build enthusiasm. You know, if you’re going to go spend eight million dollars on the first phase, we needed customers to sign up. And so we had an electronic process. They could go ahead and sign up, even though it’s going take us a little while to get there. So we needed to know what that was going to be. So we publicized that through all the various media. We branded our product “freedom FIBER”. So we got it out there. We put it like running a campaign, a political campaign. We put signs out in people’s yards. We asked people who wanted to become advocates for us. So we had a large, decent-sized part of the community that was so enthusiastic that they were out there helping us market.

Andy Johns: That’s what you want. That’s fantastic.

Steve Foshee: Yes, it was fantastic. And they’re still advocates of what we’re doing. So we called them champions, champions of freedom FIBER. We sent kits out to them, so they know what to talk to the neighbor. They would put signs out. They would get the neighbors put signs out. So all of a sudden you saw freedom FIBER pretty much everywhere in our first phase.

Andy Johns: So talk to me a little bit about the name freedom FIBER, because folks are always, you know, getting into broadband business. Do you take the name of the cooperative? Do you do something totally new? Where did you guys come about with freedom FIBER? And how do you think it has worked to have that name for the product?

Steve Foshee: Oh. There was a lot of looking at that. Our original mission here at Tombigbee, which goes all the way back to the 30s and 40s, was to improve the quality of life of our people. Now, we have done that on the electric side, but we also needed to do that on the communications side. Because we felt like if we could greatly enhance communications, then we can improve the quality of life. So we attacked that in four different areas, which is quality of life, education, economic development and E-medicine. Now, we’re still working on those almost every day. But those are the things that we felt like to turn this area — and when I say community, I’m really meaning a thousand square mile area, that’s our community — to turn this community around. Because rural America, rural Alabama is diminishing, and that’s a fact. So we need to make a turnaround. We need to move in a different direction. We need to be the kind of people that could pick ourselves up by the bootstraps and get to work. Nobody’s coming in here on a white horse to save us. We’ve got to save ourselves. So we akin that to freedom. Freedom of not waiting on somebody else, where the state government or the national government is going to come in here and say, “we got a plan for you, and we know how to turn your community around.” We were going to be free of that. We’re going to do it ourselves. And we also call it kind of like a revolution. If we had to do things in a much different way, if we had an opportunity to give ourselves a chance — that’s how freedom FIBER came into being.

Andy Johns: That was pretty inspirational. I feel inspired right here, so that’s great. So we always talk at WordSouth about when you’re doing something like this, when you’re launching a new brand, your employees are really your first audience. And before you go out and get the people in the thousand square miles you talked about, you’ve got to get people in the footprint of this building on-board first. Did you guys do anything in particular to really get the employees up to speed or get them on-board with the idea? What did you guys do to kind of fill them in on what was a pretty new thing for them to be doing?

Steve Foshee: Well, absolutely. Tombigbee, has been for some time a very sound and conservative financial company. I would say that we are quite the opposite of the federal government. We were very strong financially. We take conservative approaches to that. Almost like most people would run their home budget, we run that budget here very tightly and with very high controls. So our employees would come in here to work, not worrying about our financial status. You know, we were sound.

When you talk about spending eight million dollars to start, another 40 to 50 over the life of this, that is a lot of money to a company our size. So immediately our employees saw a radical change in our approach and were very concerned about their history, their jobs, really. You know, are we going bankrupt? So the way we combated that is we — I in particular and along with our chief financial officer, Brenda Overton — we met with them in very small groups, two and three and four at a time. Now, that took me weeks to get that done, but we did it. And I spent at least two to three hours per meeting per group.

Andy Johns: Wow, that’s a big commitment.

Steve Foshee: Well, it was, because like you said, those individuals are a big part of who we are. They’re also a big part to tell the story on into our community. So if they feel positive about it, then their story is going to be positive, and people will help rally behind them. So in a sense, all of our employees are salespeople. Not technically what they do during the day, but whether they go to Walmart or some other location, they were going to be constantly asked. So we made sure that they knew what we were doing, how we were going to pay for it, how this was going to be managed, what the results were going to be, and why were we doing it, which is those four key points that I talked about. Well, they live in this community, too. They knew that there had to be some turnaround. Well, what was going to do it, if we didn’t do it? Now, as a result, we at least felt like we had moved them to neutral, if not positive. Which was a big step in the right direction.

Then we had to perform. So as we worked and our performance numbers came in, we shared that with them. We’ve been an open book about it, so they got to see that we were making progress. When we got that first big grant — we didn’t count on any grants, none in our financial planning did we count on a grant. If we got one that was just simply going to help our job be easier. If not, going back to freedom FIBER, we were going to get it done ourselves. Well, when we got that first big grant, it was like a pressure being relieved. And our employees were so excited, and they saw that we could make this thing work.

Andy Johns: That had to be an exciting day, a good feeling around the office, for sure. So I would imagine, correct me if I’m wrong, but after the employees were on board, I imagine either at the same time or thereabouts, you’ve got some decision makers or leaders, some key people around the community, whether it’s in local government or wherever, that you’re probably reaching out to and talking to. What did you do to engage some of those folks around the area when you got this process rolling?

Steve Foshee: Well, thankfully, with our board’s concurrence, we invited a lot of the key leaders into the planning sessions. So many of those, when we said planning sessions, we have a nine person board here. Often in those meetings we’d have 40, 50 individuals sitting there. And they were hearing the same thing that the board was hearing. Well, that’s a big buy-in of the community leaders as well, because they become educated. They understand why, how it’s going to be done, how it’s going to be funded, and they become some of our leading advocates for this. So we brought them in very early in the process.

Andy Johns: Definitely, I think that was a smart move. So then once you’ve got the employees on board, once you’ve got some of those leaders in the community, then you start rolling out. You start talking to people about it. What were some of the big questions that you heard from your members when the news first kind of came out that you guys were going to do this?

Steve Foshee: The largest and the biggest question we got was “when can you be to my home? How long is it going take you to serve us?” We had also surveyed our members through an informal survey, and we had a pretty good idea, you know, what they felt about this issue. Is high speed broadband for everyone? My answer is no. But we did know, we felt like pretty strongly, that at least some interest, if not all together interest, it was going be eight out of 10. And we thought the other two out of ten would come along once they learned how was it impacting our neighbors lives. And we’re highly engaged in that. But we felt like there was a very strong interest. And when I would go out into communities within this community and speak, the enthusiasm was great. And so, you know, when you see a room full of people and they’re asking good questions and they’re excited, when you see people volunteer to become an advocate or a champion for you — and they were actually calling us to volunteer, we weren’t calling them — you knew that you were really touching something.

And then when we got that very first large grant, the three million dollar basically grant, and of course, the governor was here and secretary of agriculture, but that was not nearly the story. We had anywhere — estimated we didn’t count them — between six and eight hundred people here that they heard about it over a two and a half day period. And they showed up here at our place. And it was almost like a political rally. Every time somebody was given a speech and they were making a point, they were standing and giving them ovations for their comments. We got comments from all the political leaders. It was one of the largest gatherings and the most enthusiastic gatherings both on the state and federal level that they had ever attended of any type. So, you know, this is touching a nerve. It’s a touching thing. And we think it parallels. I didn’t live in that time period, but it sure looks like to me when I read the history, it sure looks like to me where we’re kind of going back in time, and we’re going back to the 1930s when people didn’t have electricity. It seems like it’s touching that same sort of nerve all over again.

Andy Johns: I think there are a lot of parallels that, you could draw between that, because it’s certainly that kind of really life changing technology. So you mentioned there a moment ago the most common question, and that’s everybody I’ve ever talked to, that’s the most common question that people have “is when do you get to my house”. What especially for those people — I think you said there are five phases — what was your answer for people that were in some of those those later phases who might not like, you know, how long is it going be? It’s going be a while. They may not like that answer. How did you go about talking to those people to ask for for their patience?

Steve Foshee: Well, you have to just be honest and straightforward. In some cases, we didn’t know. We told them what our goals and objectives are. We told him why the five phases existed. We told them why the first phase was what it was. After all, it was two towns here, two of the more populous towns. If we couldn’t meet our numbers in those more highly dense areas, we for sure weren’t going to meet our numbers in the low dense area. And now, make it clear, when we launched this project, it was clearly with the idea that we were not going to leave a family or business behind, no matter how rural they were. There was no cherry picking on our part. If we’re going to do this, we’re going to get it to every home and business in that thousand square miles that wanted it. Now, that’s a heavy load when you get down to really, really rural Alabama, and there’s two customers per mile a line, and you’re spending thousands of dollars, so we tried to explain that. We tried to be careful about that, and I think they understood that. And we simply laid it out. Here is our time frame. This is how overall the project will go. We’re going to start with the first phase, and we’ll report back to you how that went. And we did.

Andy Johns: As you’ve gone through a couple of years into this now, what has been easier than you expected it to be, and what has been tougher than you expected it to be throughout this process, whether it was on the design and engineering side or whether it was on the member relations and communication side?

Steve Foshee: Let me start out with the negative, end it with the positive. The tougher part of it is we’re essentially building a utility from scratch. We’re not just building a communication company. We’re building a utility, not non-similar to what the electric is, where we have very high reliability. We’re going to serve everyone, and we’re going to do in a high quality way. That has had daily decisions. I’ve been surprised at how many different types of decisions that I didn’t anticipate. But I guess if you built a house, you know, and you are going to have a million decisions that you didn’t really anticipate either. Well anybody that’s ever done that knows exactly what I’m talking about. Just multiply it by a thousand times, and that’s kind of where you’re at. And so daily decisions that matter. And they matter to your bottom line, they matter to how you’re going to operate, so you have to be focused on that almost every day.

The other challenge to me is, what’s a game plan to take those four points that I talked about earlier and get them implemented in the community? I’ve been surprised at how little help we’ve gotten on that. And I’ve reached out to a number of governmental entities. I think they’re all for it, but how do you do it? And I’ve looked nationwide. And so I’m looking for a game plan. I’d love to just to copy it, but I can’t find it. But we know it will work, and so we’re having to go now and try to develop that kind of plan. And how do we implement this within our community to change the community? So that’s the heavy loads.

On the positive side of it, the enthusiasm of our members, our customers, our employees to a person here…they couldn’t be more enthusiastic. Our customers couldn’t be more enthusiastic. Our leaders of our community couldn’t be more enthusiastic. And most importantly, to me, our board couldn’t be more enthusiastic. I tell people when they look at phase one, and they met alone. Not without all these other people, but privately in a board room, they debated this. We finished up our last educational thing. They came into the board room to decide. All right, are we moving forward or not? And they debated that amongst themselves for well over two hours. And I heard speeches that reminded me of the speeches of our founding fathers, and they were great speeches. And they were tremendous men and women with heartfelt thoughts about our future, about what’s going to happen and what needs to happen. That well went over two hours. They voted for it, and they voted to launch phase one. Some months later, I brought to them, all right, it’s time to decide on phase two. You’ve got all the numbers. You’re seeing our performance. They debated phase two a minute and a half. And then, it got to be phase three. Phase three, they debated it 30 seconds. So that was really good.

Andy Johns: I would say so, that’s a pretty good sign that you’re on the right track. The last question that I had for you, like we said, you guys are a couple of years maybe ahead of where some folks are — that there are other electric cooperatives who are kind of looking at this or thinking about it, or maybe they’re just beginning. What are some lessons learned over this time or some advice that you might pass on to them if they’re where you were a couple of years ago?

Steve Foshee: Well, my advice would be, be totally committed. The board needs to be totally committed. Ours is and ours was when they voted. There was not a dissenting person in the room. They were very united. And then the management needs to be united. And then the employees need to be united. It’s a heavy lift, but it’s a lift worth doing, if your community is suffering like ours is currently. Most people are not going to be able to put a brand new interstate right through their system. But even if you can, you may not be growing with jobs and all these other things that you would like to be. So what else can you do to help your community? And if you look around and you’re willing to do that, you’re willing to keep your eye on the ball. Don’t take it off. Strive to benefit your community. Know it’s a heavy lift. Get everybody behind you. Then, it’s worth doing.

Andy Johns: Well, sounds like you all are living proof of that, and it sounds like a good example for other folks to learn from. So I appreciate you taking the time, letting us stop by your office and talk this through with you.

Steve Foshee: Thank you.

Andy Johns: He is Steve Foshee. He is the CEO, Tombigbee Electric and Tombigbee Communications. They offer freedom FIBER to folks here in west Alabama. I’m your host, Andy Johns with WordSouth, and until we talk again. Keep telling your story.