A group of 13 electric cooperatives in Arkansas formed a new wholesale fiber provider called Diamond State Networks, aiming to expand broadband access across the state and create a model for bridging the digital divide that can be replicated elsewhere.
Doug Maglothin, project leader for Diamond State Networks, told Fierce the company is focused on supplying ISPs and wireless operators with access to quality middle mile fiber transport routes. Specifically, he said its transport rings will be all-fiber and use top of the line 800G technology. These routes will act as a sort of interstate, with on and off ramps for distribution rings that use technologies like XGS-PON and Ethernet to provide a last mile connection to customer locations.
All told, Diamond State’s 13 co-op members have or are planning to invest $1.66 billion in fiber infrastructure which will cover more than 64% of the state’s land mass and reach nearly 600,000 customer locations. Maglothin said Diamond State is hoping additional co-ops join to boost those figures. It is also working to secure middle mile funding from Infrastructure Investment and Jobs Act to extend the reach of members’ fiber even further.
Mitchell Johnson, president and CEO of Ozarks Electric and co-managing member of Diamond State, told Fierce providing broadband connectivity isn’t a stretch for members given all already have some kind of operational fiber. That’s in part because fiber is key for future-proofing their electric networks and a majority are providing fiber-to-the-home, either themselves or through a subsidiary, to monetize that asset.
“We knew if we could get connectivity through a middle mile network, then we just thought we could control our costs better, we thought we could gain additional opportunities that we didn’t have before,” he explained. “When you have a regional or national organization that wants to deal with one entity instead of 13 entities, it makes sense for us to be able to aggregate that business through Diamond State.”
And there are already plenty of folks looking to deal with Diamond State, with Maglothin stating it has been “blown away” by the level of interest it has seen. He noted several “very large companies” sought out Diamond State before it had established a social media presence because they had heard rumors about its plan. Already, Diamond State has executed deals with several local ISPs and is in talks with “major Tier-1 providers,” he added. It is also looking to do business with wireless operators to help them connect more cell towers across the state.
“We think Diamond State is going to hit a mature clip toward the end of this year, where we’re really starting to provision and deliver services with the efficiency we want to get to. So, for 2023 we feel like the sky’s the limit and demand is not going to be our problem.”
The biggest issues Diamond State faces right now are supply chain issues and scaling its internal workforce to accommodate the rapid growth it anticipates, Maglothin said.
Given electric co-ops are the fastest growing group of ISPs, with hundreds deploying or offering fiber service, Johnson said it makes a lot of sense that states looking to close the digital divide would turn to them for a solution. Indeed, National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson told Fierce in February around 200 of its 900 members had or were in the process of rolling out retail broadband. Matheson said co-ops are unique positioned to serve parts of the country other operators either can’t or don’t want to reach.
Though Diamond State Networks is the first coalition of its kind, Maglothin hinted it likely won’t be the last. He noted “half a dozen or more states” are working with it to perfect their own plans for similar alliances, adding there’s “a national appetite for this among cooperatives” as well.