GoNetspeed CEO says accelerated build will bring 140K passings this year

GoNetspeed is on a fiber deployment spree.

The fiber provider accelerated builds in the second half of 2023, with the expectation that this calendar year it will pass more than 140,000 locations across Maine, New York, Connecticut, Massachusetts and Alabama.

In the last month alone, GoNetspeed announced new service availability in Portland and Rockland in Maine; Attalla, Alabama; Amherst, Massachusetts and Plymouth, Connecticut. This month the company also began construction in Thomaston, Connecticut and announced expansions in Connecticut’s Fairfield, Glastonbury, Rockville, Vernon and Watertown.

“We're building at the highest pace we've ever built. And we've only been in existence for just over 30 months,” GoNetspeed President and CEO Richard Clark told Fierce Telecom.

Of the company’s fiber construction, 98% is greenfield. GoNetspeed was formed in 2021 from the merging of OTELCO, OTTC, Upstate Fiber Networks, Lantek, and Icon with the previous iteration of the company — creating its existing footprint.

For the next 12 months, Clark said GoNetspeed will stick to those five states. “But we're looking at all states available to us for future expansion,” he added. “It takes a year or two to plan where we're going to build, so we're always looking well beyond the next 12 months.”

As for how it chooses those greenfield markets, at least some of the decision is driven by how many homes per mile are available in each town, and the “competitive landscape.”

In most markets, GoNetspeed’s competition is typically a cable operator or local incumbent telephone companies, some of which have upgraded to fiber. Although, Clark noted “the majority” hasn't.

“We, in many cases, are the only fiber providers in our territories,” he said.

The fiber provider offers 1-gig to its residential subscribers today and will be offering 2-gig in the first quarter of 2024, according to Clark. Price tiers vary in each GoNetspeed market “to respond to the competitive landscape in which [it’s] operating,” he said.

Take rates are meeting expectations, which Clark attributed to GoNetspeed’s attention to customer service and the capabilities of fiber.

“Fiber provides that symmetrical capability unlike any other offering that is out there. So we think we have an advantage,” he added. “And I think our service level really attracts subscribers. We bring that level of local presence because we have people in every state, which people appreciate.”

All of the company’s builds are privately funded by Oak Hill Capital, following a partnership with the private equity company that was formed in January 2021 (and which allowed GoNetspeed to consolidate). While Clark wouldn’t share how much capital has gone toward GoNetspeed’s fiber builds this year, he did say “it's very large.”

“One of the things that differentiates us is that we are funding this with private capital,” he noted, “rather than using a lot of government programs and government grants. Our focus has been speed, and speed comes with having your own private capital.”

Private capital also allows GoNetspeed to focus on the higher density territories, as government funding like the Broadband Equity, Access and Deployment program is centered on unserved or underserved rural locations.

In rural regions, “homes per mile may only be six homes per mile,” Clark said. “We're not building a lot of that currently. We're focusing on the higher density territories because with the same mile I can serve 100 homes versus six.”

Heading into 2024, GoNetspeed expects to build at a similar pace as this year, with around 140,000 to 150,000 passings in the same states in which it already operates.

Utility pole access poses challenge

If there is one thing that will allow GoNetspeed to build faster, it’s changing the current process to access utility poles, Clark told Fierce.

“There's a key challenge that many fiber builders in this country are facing, which is access to the poles, the ability to get on the telephone poles,” he said.

In one town in Massachusetts for example, GoNetspeed submitted applications to the poll owner in 2021 and still hasn't received approval.

The fiber provider has been a loud proponent for Massachusetts to adopt legislation that would simplify the process for deploying new broadband infrastructure.

Known as One Touch Make Ready (OTMR), that bill would enable providers to better access utility poles and other infrastructure through a streamlined permitting process. Clark said the existence of OTMR in Maine, New York, Connecticut means GoNetspeed is building faster in those states.

But it's not just Massachusetts where providers are contending with the pole attachment issue. Last month, in a letter to the Federal Communications Commission (FCC) West Virginia Senator Shelley Moore Capito asked the Commission to take action on a long-standing proceeding which could change the way broadband providers access utility poles.

Capito said she continues to hear “problems and delays” associated with broadband providers getting access to utility poles in West Virginia and other states.

The FCC in 2022 sought comments regarding pole attachment rules, and as of July this year received 4,180 comments from telcos and utility companies about how the cost of pole replacements should be allocated between the pole owner and the attachers.

But the Commission has yet to issue new rules on pole attachments.

“Poll access is probably the single largest challenge that this industry is going to face over time to allow people like us to build as fast as possible,” Clark said.