Marc Dyman: We’re in some interesting, explosive times from a growth standpoint. You have to choose your partners carefully, and the ones that are nimble and can be that right size that also marry up. I think about your audience, you want to have a like-sized type company that you have access to people. I think the relationships are made in the long term when the chips are down and situations go bad.
Jeff Johnston: That was Marc Dyman, chief development officer for SQUAN, an engineering and construction firm, about the importance of having strong and reliable relationships when undertaking a network build.
Hi, I’m Jeff Johnston, and welcome to the All Day Digital podcast, where we talk to industry executives and thought leaders to get their perspective on a wide range of factors shaping the digital infrastructure market. This podcast is brought to you by CoBank’s Knowledge Exchange group.
The broadband industry almost in this “ready-fire-aim” state where operators are racing to plant their fiber flag in underserved and unserved areas, or they’re responding to new competitive threats. There is a sense of urgency when it comes to new network builds, but proper execution is critical for success. Marc has a unique perspective given his experience running broadband companies and providing third-party engineering and network services. When it comes to execution, Marc has seen it all.
So, without any further ado, pitter patter, let’s hear what Marc has to say.
Marc, welcome to the podcast. It’s great to have you back on. It’s been a while, but super excited to have you back on. How you been?
Dyman: Hey, great. Thanks for having me back on. Things have been going well. Just taking on a new endeavor here with SQUAN. Appreciate the invite back.
Johnston: Great. Given all your experience and your perspective through your career, Marc, maybe what we can start off with here is just give us a high-level overview of where the fiber design, construction industry or activity is currently right now with clearly a bent towards the rural markets. I don’t know if there’s specific challenges or opportunities you see at a high level. Maybe we can set the stage with that.
Dyman: That sounds like a great place to start. I think, look, the fiber design and construction industry, a lot of growth going on here. I think it’s driven in large part by just this increased demand for high-speed internet and data connectivity.
The last three years, I think you’re talking over 30 million homes passed. Some of the recent stuff I’ve seen here is projecting another 15 million in ‘25. That’s one that’s driving it. I think two is getting away from the legacy copper technology to get to more scalable fiber infrastructure. I think it’s two other things too, coming from where I just did is the cost of maintaining that legacy technology, but also it’s some of the pressure from end of life that you’re seeing from some of the manufacturers to support copper. A lot of people don’t think about. It’s like we’re buying equipment in the past life on the gray market to be able to support those things, and that’s a real problem. I think that shift is essential for meeting the growth of the data demands out there, driven by whether it’s cloud, or AI, or any of these data-intensive applications.
Then I think the third one, maybe to a lesser extent, and I think it's more of an expansive one that's going to play out a little bit is just what I’d call maybe strategic deployments, which is where I think about these middle mile routes that are either being built to help expand to more fiber to the home, or we’re seeing all these data centers getting built out in the middle of nowhere. It’s like, how do you bring those guys fiber? I think that’s just another approach that we’re seeing out.
I think from a challenge standpoint, the rural broadband operators, there’s several different things. The first one I think is the cost, deploying fiber in the rural areas, mainly because of the density of population. Unlike the urban areas where there’s a lot of density that helps you absorb some of those costs, you’ve got that challenge.
The one we’ve been running into here a lot recently is rugged terrain. Maybe that’s not just going around mountains or through forests, but it’s these subterranean areas where it’s heavy rock, and where you can’t find a way to get up aerial and be on a pole, or you can’t plow the ground. That becomes complicated in terms of the cost that’s driven.
The other one too here, is limited funding and resources. While there’s a lot of federal and state programs available to support broadband deployment, I think just accessing those resources can be challenging for rural operators from an administrative and regulatory hurdle standpoint. The last one I’d just say is probably technical expertise. Once these networks are up, it’s like, “Hey, I’ve got to maintain them. I’ve got to repair them in a rural area.” Some of that is getting to locations in a timely manner, based on the remote nature. Some of it is also the talent that’s available that has the know-how that you can hire on to support these things. I think those are probably the main challenges I think that would be facing rural broadband operators in this endeavor.
Johnston: I want to go back to one thing you said, just touch on it briefly, is what’s happening in the data center market. You mentioned that a lot of these data centers are getting deployed in rural America, presumably, where there’s access to some power, because that’s a huge challenge right now. I’d love to get your thoughts on that middle-mile opportunity because again, I think the data center industry has realized that it’s easier to move gigabytes of data than it is electrons.
That would suggest to me that given the growth in AI and the growth in data centers, it would seem that this middle-mile opportunity for rural operators to connect these data centers could be a pretty rich one.
Dyman: Yes, I couldn’t agree more with everything you just said. I just continue to see obviously that the thirst for power that’s needed.
I think the next problem comes, okay, great. Now, we’ve got a power path to deploy these things. The next thing is now how do you get fiber there? Traditionally, in an area where you may only have a couple of the incumbents, there’s likely not an overbuilder, maybe there’s one overbuilder. I think that it becomes challenging because some of the requirements for the hyperscale people, as you well know, require up to four diverse routes to come out of that data center to get back to the core. Just looking at what’s there today, it just doesn’t exist. The ability for somebody to come in and build a new middle mile or help, maybe there’s someone there, I think is something here.
Recently in the Carolinas where I saw, hey, there was a regional fiber provider. Now them having the opportunity to build those, they had two routes. Now they could build two more routes, that additional brand-new middle mile that allowed them to tick the requirement to be the fiber provider for those four routes, I think is a great example of exactly what you’re talking about.
I think it’s an awesome opportunity. Then you think in the future of long haul routes that may cut through there, and, hey, could you jump on a new path now and stitch together some new long haul routes to create different latency outcomes or different route paths of diversity. I definitely think there’s a couple of opportunities there.
Johnston: Yes, just the sheer amount of data going over these networks is one thing, but the fact that they have such significant redundancy requirements, I guess if you will just makes that opportunity so much more attractive.
Back to some of the resource challenges you talked about. I remember a couple of years ago, labor was a big challenge for a lot of operators looking to build networks. The thought back then was, well, look, wait till BEAD comes because when BEAD comes and all this money starts to flow, labor is going to be even tighter than it was a couple of years ago or so. How are you thinking about labor from a contractor perspective?
Dyman: Yes. I think generally, you’re right. There needs to be much like you have an electrician or an automotive degree that you have out there. You almost need the community colleges to adopt programs to attract and build people through that model. You can train them in the classroom, but then you’ve got to have some on-the-job training that I think everybody’s willing to do. I just feel like there’s a shortage of that coming into the space.
I think if you don’t start to do some more of that training and onboarding and teaching people greenfield on it, you’re going to run into a situation where it could potentially cause a rise in pricing because even without BEAD, there just seems to be this pent-up demand that is continuing to drive more into an area. I think the people that are there doing this work will gravitate to where can they make the most money in a capitalistic environment, that’s just, it’s going to occur.
Johnston: We’d love to get your thoughts on your experience, Marc, and what you’ve seen, and maybe some success stories that you’ve observed around how operators are really able to effectively get a network build to schedule, and then on top of that, be able to really quickly monetize that network. What are some of the processes or steps that you’ve seen or that you’ve implemented yourself that you know that really light up that asset and get it generating cash as quickly as possible?
Dyman: I think maybe you’re alluding a little bit about maybe what could a turnkey offer look like and how that might be beneficial. I think that’s something that I’m seeing more and more out there is how could this offering called turnkey services benefit these rural operators? I think there’s a couple concepts there. Certainly, by bringing construction and engineering together, you can streamline project management, and you can have one provider.
I think the rural operators could benefit from simplified coordination, communication, just the complexity of managing multiple vendors. That’s one that I think is important. I think from a cost efficiency standpoint as well, because there’s just going to be a general economy of scale by bringing both of those services together.
The obvious maybe of a turnkey solution is a faster deployment. You can accelerate project timelines. You eliminate a lot of delays.
Then, I think there’s a quality assurance piece too. A single provider being responsible for one project is going to ensure consistent quality standards all the way from design, all the way to construction. Again, I think that ultimately will translate into a more reliable and robust infrastructure. Then the last one I would say is just reduce risk with a single provider accountable to the project. I think there’s less risk of miscommunication or errors between different parties that ultimately lead to a smoother project execution and being able to get the fiber out there so that you could start selling it and monetizing it.
Those are probably some of the main ones associated with a turnkey offering that rural providers could benefit from.
Johnston: Good. Just so I got you, I’m tracking with you here on truly what is a turnkey. I guess I’ll use an analogy, and you tell me if I’m right or not. If I think of a turnkey solution, is that similar to working with a general contractor when you’re building a house, so you’ve got one throat to choke, if you will, that’s managing a lot of the design, the permitting, the labor, the construction, the integration? Is that what a turnkey looks like in this context?
Dyman: Yes. That’s a great analogy to use. I think on the fiber side, I would think about it all the way from those initial high-level designs all the way through the actual physical construction and the handing over of an as-build at the end of here’s your design, we’re going to put that in your GIS system, you’re going to have an accurate record. All the way through that from that inception process to your point. The plans all the way to the execution and handing over of the final plans, like, “Hey, here’s what we built for you.” It’s one turnkey approach to all of that.
Johnston: Got you. Let me ask you this, Marc, do you typically see – Is this type of a solution something that a smaller operator would typically look to partner with that presumably maybe doesn’t have all of the resources, or there’s opportunity costs associated with doing it turnkey versus internally? Is that the sort of typical operator that would adopt this strategy? Or is it that and larger ones for whatever specific reasons they might be?
Dyman: Yes, I think where I’ve seen it more recently here is what you described. I don’t want to say somebody doesn’t have any resources, it’s limited resources, and it’s limited maybe expertise.
I have also seen it on the larger side as some of the larger providers attempt to cut cost or contain cost and shrink in some of the capabilities that they have.
Johnston: Have you noticed a greater sense of urgency out there on the part of operators to get stuff done quicker? Whether it be competitive-related concerns or financing concerns, or is it at a pace that you’ve seen in this industry for many years?
Dyman: No, I think there’s a heightened approach. I think it’s having to do with there being a lot of money out there. I turn around every day and it seems like somebody’s got $50 million, $100 million, $200 million. They want to put that to work as quickly as possible, especially in a PE-type cycle where you’ve got a five-year period and you want to put that money to work and get it out there and then begin to figure out how to monetize it. I think there’s a heightened approach.
We’ve even seen certain providers looking at similar markets in some cases. I think they know what their competitors are doing. I guess the first one to strike is driving some of that urgency because they know when they go in there, because of the increased penetration rates that you’ve seen when you deploy fiber to the home, that there’s something that can be mined there pretty significantly.
Johnston: Yes. You mentioned competition. From my perspective, it just seems like competition’s always been a concern unless you’re in a very remote rural market where you’re the only provider and probably will be that way for a while. It just feels like competition is coming up more and more as an area of concern and whether it’s satellite technology, fixed wireless convergence, et cetera. How are you seeing things play out, and what are your thoughts on the competitive market out there in general?
Dyman: Yes. I think there’s a lot of competitive offers, as you mentioned. I think that it’s a situation that somewhat sometimes, I think is blurred in the eye of the consumer. What are all these offers that are coming at me? What does that look like? What does it mean to me? When I think about how do you drive a successful marketing or sales strategy there, I think there’s a few things there to unpack when you’re coming to a new area
you want to be able to spell out a phased approach of where’s that construction coming? If there’s a way, and I think it’s a bit of magic to be able to say, “Hey, when you’re building that new fiber network and you’re passing houses, could you at the same time have a sales and marketing motion that coordinates with the two of those so that as I’m building that core network, I’m now going, “Oh, I’m going to drop this house and this house and this house and this community.”
I think back to the competitive side of things, I think it comes down to a little bit of controlling your own destiny. I think you got to attach yourself as you try to differentiate competitors, especially some of the ones you’ve met that would be coming into an incumbent’s territory. It’s that hyper-local marketing. Being part of the community, getting tied to community-specific campaigns, local events, sponsorships, tying that all together to really show them that you, as the role operator, are part of that community.
Then I think at the top of that, it’s like you got to have this value proposition that communicates the advantage of fiber. Typically, it’s been done with high speed, reliability, latency. I think when you look at the technology, what are those two or three things that you can communicate in a consumer more layman terms that says, “Hey, this is where you’re going to see an advantage of this.”
Not that you’re going to break fully away from the price and the speeds and all that stuff, but I just think speeds and feeds just don’t sell like use-case applications. Then I think the last piece, I think to differentiate it from some of the competitors, is just how do you support that install, that initial experience, that coordination. I’ve seen some successful programs in some of my past, where even gone to a self-install program because the customers loves that. “Hey, drop me the gear and let me plug it in and follow this process.”
While it all comes up and works like that, that to me, so many people want that self-service type environment. I think that’s as critical as that marketing to differentiate in that competitive environment.
Johnston: Yes, you make a really good point, I think, on the self-serve nature of things. I’d like to go back to something else you said, too, because I think you made another really good point around just making the value proposition relevant or something that they can associate with. You talked about speeds and fiber. We understand fiber over coax and how much better that is, or HSC, but most people don’t care.
I think making it relatable, like you said, is critical. Can you expand on that a little bit?
Dyman: Again, trying to stay away from this technical, but you almost have to go there. The example I’d give is, or a couple of examples perhaps are on upstream bandwidth. In fiber being symmetrical, you’ve got a strong upstream, but everybody’s always talking downstream. You have to flip that on its head and say, okay, what are the applications that really drive that?
I think about video conferencing and just being in an asymmetrical environment where I am sometimes, it can become challenging sometimes for a video call, even with some good bandwidth. I think being able to point that out.
When you pull a 4K camera, that’s like an upstream type application. Again, that’s connecting to that. I think having a clever marketing message around those type of things. There’s probably more of them out there. There’s obviously a lot more downstream kind of applications that exist. I think more and more we’re seeing some more of these upstream things, and I think it’s relevant to point those things out.
Then you package that with a good offer that’s a bundle or whatever that gives them what they need. I think you get somewhere different on your value proposition. Just a little bit of edge and a little bit more sophistication. A little bit more time, and just the same old tired, “Hey. Well, we have a gig, and it’s X dollars per month, sign up here.”
Johnston: Well, hey, Marc, we’ve covered a lot here. I always like to give my guests an opportunity to share any closing thoughts or comments. The stage is yours. Any final thoughts?
Dyman: Maybe just re-summarize a little bit. I think we’re in some interesting, explosive times from a growth standpoint. This business, having been around it for a while, I’ve seen the ebbs and flows and waves of these things. We’re seeing something similar on the wireless side as well as the fiber side of the business. I think you have to choose your partners carefully, and the ones that are nimble and can be that right size that also marry up. I think about your audience, you want to have a like-sized type company that you have access to people. I think in this business, it’s everybody can be excited when contracts get signed and everybody figures out the scope of work. You go down the tracks.
I think the relationships are made in the long term when the chips are down and situations go bad. There’s a relationship where you can make the phone call, and you can figure out what plan B is and not let the bad news age. Get it on the table and go, “Hey, look, we know this went wrong. This is a complicated business.” I like to think that SQUAN and the group of people that I’ve joined here is we have that mindset. I think that’s important to long-term relationships. These aren’t short-term things. These are complicated long-term relationships, and being able to be there and steer over the challenges, I think, is critically important.
Johnston: Great. Well said. A great summary of the key points here. Hey, Marc, thanks so much for being on the podcast today. I really appreciate your time.
Dyman: Yes, great exchange, Jeff. I always enjoy being on. Thanks again for the opportunity.
Johnston: A special thanks goes out to Marc for being on the podcast today.
It may not be the most sexy thing to talk about, but executing against a network build plan and following that up with a strategic marketing plan is critically important. I think Marc’s idea about communicating a value proposition that consumers can relate to is a great idea. Cost and speed are fine, but I think it’s hard for the average consumer to put that into perspective for what it means for their overall broadband experience.
Hey thanks for joining me today, and a special thanks to my fellow CoBank associates Christina Pope and Tyler Herron because without them there wouldn’t be an All Day Digital podcast. Watch out for our next episode.
