You might've heard about Corey as one of the largest winners of the FCC's Rural Digital Opportunity Fund Phase 1, where LTD's applications netted a total $984 Million in broadband grant award money.
LTD's success in the RDOF auction process generated controversy within the industry, prompting questions like "How'd they manage to win so big?" and "How will they deliver?"
We have a different question: what might broadband grant applicants and state directors learn from Corey and LTD's approach?
Here is your chance to get to know Corey as a person, his vision for the future, how he thinks differently than many operators, and how he was able to win such sizable broadband grant support.
See the Broadband.Money profile of Corey Hauer
Corey lives in Las Vegas, NV. LTD serves thousands of customers in rural areas throughout the U.S.
Jase Wilson: Awesome. Corey, it's really a pleasure to have you. Thank you for making time. I know you're busy getting folks connected at LTD and doing all kinds of awesome stuff to get broadband out to lots of parts of the United States, so thank you for making time. And here we're with Ask Me Anything series at Broadband Money. We had a couple of amazing events along with Peggy Schaffer from Maine, along with Craig Settles, who's a telehealth pioneer. We have one upcoming, January 14th with Scott Woods, who's a director at the NTIA, absolute visionary and hard worker, getting folks connected in minority communities. So please make time for that. But I just wanna shout out, folks, welcome. Last check, there were over 130 folks that had RSVP'd, so we wanna say hello and thank you to all of you. I really appreciate it. Corey, let's go ahead and get started with it. I have a quick question for you though. You started LTD. When did you start?
Corey Hauer: So LTD is my second rodeo in rural internet service, but I started that in 2010 in Southern Minnesota, which is where I grew up.
Jase Wilson: Well, awesome. And I'm curious too, Corey, I know there's a lot about you and your winnings from the public limelight of, this sort of spotlight that's put on you when you won such a massive award in this recent auction, but I'd love for you, if you could tell the folks on the call, like why did you start LTD? What were you trying to do? Were you trying to win a bunch of grant money?
Corey Hauer: Yeah, it's an interesting question. And I really enjoy the WISPA industry events, meeting up with other operators and figuring out their origin stories too. And our origin story is a little different because I had some previous experience doing telecom in rural areas at another company. But a lot of the operators I run into at these events, I think their common theme is they live in rural nowhere, they can't get broadband, they're techie, and they know a way to fix it. And so I've run into hundreds of operators that have done that in rural areas throughout the US. I guess the difference with us is I started this company, I was able to recruit people from my last company, but also from other areas where I knew I'd be able to get talent, and we focused on areas that were unserved and underserved. I mean that was really the genesis of the company is going where we knew we were gonna win. Our very first community that we served was a small town called Rose Creek, Minnesota, and it's interesting, the incumbent phone company was CenturyLink, and they had a 24-port DSLAM, so they could serve 24 people with DSL service in that small town while there's a lot more than 24 homes, so there was a year's long waiting list hoping someone would cancel their DSL so someone else could get it.
Corey Hauer: And obviously, we knew that there would be built-in demand on day one, and we crushed it on day one, and signed up everybody that have been waiting, and then everybody else who didn't really know they needed broadband yet, discovered that they did need broadband. And so we grew geographically as quickly as we could get equipment and get things installed in rural areas surrounding there.
Jase Wilson: Nice, Corey. Thank you. And in our prep session, you mentioned that also you... When you guys started, you even drove around... One of the things I was really struck by is you drove around and knocked door-to door in the country roads...
Corey Hauer: Yeah, I've eaten a lot of gravel dust. [laughter] I've driven thousands of miles of rural area.
Jase Wilson: Okay.
Corey Hauer: And... It's interesting having conversations with farmers and people living in rural areas and really discovering that they need it, they know they need broadband, they don't know how to get it, they can be angry about them not getting it, and that's about the extent of it. You can call a politician and complain, "Hey, how come we can't get broadband in our township?" And we really took the approach that, "Hey, we can solve this, let's go solve this at scale." And so we went from one tower site in 2010 to over 2,500 tower sites today, just by having those conversations and driving down gravel roads and finding structures and building them out.
Jase Wilson: Okay, so you've been at it for a while, and you didn't start it with the intention to win a billion bucks of grant money. So we're gonna have some questions about how you were able to achieve that later and how you're gonna do all the wonderful things that you have to do in order to put that grant money to good use, but I wanna dive into the questions. And folks, if you have any more questions, pile them on top. I'm gonna start at the bottom and roughly go in the order of number of likes. There are some great questions, you probably have to hit the Load More Comments button in order to see them, but if you have any questions, I'll be refreshing the page and our friend Drew Clark from Broadband Breakfast is on the call, is on standby, and he's sort of coaching me to try to become a videocast MC and he's there as kind of training wheels in case the wheels start to fall from me doing this. So Drew, if you see any questions come in, let me know, okay? Great. I have an initial question here from Ahmed and he says, "How do you make fixed wireless stable? And then what's your approach to engineering for failure conditions?"
Corey Hauer: That's a great question, I love it. And it's an engineering question, so you really can dial in the performance of your equipment to handle snow, rain, sleet in terms of weather, you can engineer in power redundancy which is probably the largest issue in WISP networks, and this is something that's fresh in my mind in Minnesota, Iowa and Nebraska. In the last two days, we've been recovering from a massive December wind storm, including several tornadoes, literally the first tornadoes to occur in December in Minnesota history. And so our crews are filling generators where battery backups have been exhausted and that, in operating a large fixed wireless network like we operate, we cover roughly 50,000 square miles, I can tell you that power is the biggest issue we face, just the stability of the electrical grid itself is probably the biggest thing. And that's one of the good things, is you can solve that with money. You can throw bigger batteries at it and standby generators. And so you can engineer with a well-capitalized wireless network, engineering additional stability and additional redundancy. The other thing too is people talk about fixed wireless, it's never just fixed wireless, it's hybrid network.
Corey Hauer: So we utilize fiber, and we're pushing fiber deep into our networks to give us additional capacity. And obviously with our RDOF awards, we're planning on doing tons and tons of fiber. I mean that's to the extent in places where we still will utilize fixed wireless. The depth of fiber into our network will offer additional stability. Think of a wireless link where you can have a tower hit by a tornado, which happened to us, we had a tower hit by a tornado, we're engineering and building a new site today to replace the damaged site. But fiber can get it...
Jase Wilson: Well this just happened.
Corey Hauer: This just happened. Yeah, this is happening right now.
Jase Wilson: Oh geez.
Corey Hauer: Yeah right now we have crews on a site in rural Iowa that are... I got the pictures of the site flattened like a pancake. So imagine a 100-foot crane just folded over in someone's farm place. Yeah. I mean, thankfully, no loss of life. We don't know of anybody that was killed in the storm. So that's... We can fix networks, we can fix wireless infrastructure, and we're doing that, but...
Jase Wilson: Yeah spot-on. Yeah, I grew up in the Midwest. I remember tornados vividly. I don't know which is scarier is more, how dependent we become on broadband and how many people still need access to broadband right now, or December tornadoes. That in itself is kinda strange but... So switching gears a bit, you've talked a little bit about, like Ahmed's question is about wireless, and people hear wireless and... Me personally, I'm a huge fan of fiber, but I'm also a huger fan of get the job done now. So in our conversation preparing for this, you mentioned several times about this hybrid concept. Drew has questions about fiber, there's a bunch of really good questions coming in about fiber, and you started as not fiber, but you've always incorporated fiber into your networks, and you're talking about this hybrid thing, can you say a bit more about it? And we'll go to Drew's question next. What percentage roughly are you thinking about your RDOF winnings are gonna go towards fiber versus how much of it is gonna go to wireless in its various forms?
Corey Hauer: Yeah. So our plans for RDOF are fiber. We're gonna continue to invest in wireless infrastructure... Excuse me, in non-RDOF areas, but in the RDOF areas, our plans are for fiber. And one of the... It's interesting, and I talk to a lot of politicians and stakeholders at various levels of government, and there's a perception that wireless is unreliable. And I think a lot of that is driven by our cell phones, that we are accustomed to driving through areas where our calls drop or maybe with one bar of signal. And circling back to Ahmed's question, a well-engineered network shouldn't be giving somebody one bar of signal at the end.
Corey Hauer: You build additional towers. You should be living in five bars of signal land. And so engineering a stable wireless network, quite honestly, the answer is engineer it for five bars of signal, and that's a non-technical term for the actual signal strength numbers that we use to engineer networks, but the bottomline is you can invest in enough towers and enough equipment to get five bars into the nooks and crannies. The other thing, and this circles back to your fiber question, so wireless internet companies in general, we have a problem where people call us up and they say they want service, but they can't get it, and the reasons they can't get it are the same. They either live in a deep valley where you can't get wireless signal down to them, or they live in the middle of a forest where you can't get wireless signal to them. So those are the two killers of being able to deliver broadband via fixed wireless, easily solved by fiber.
Corey Hauer: We can go down into the valley and follow 16 poles, lay 16 poles of fiber to get to everyone in that valley, and in fact, that's what we do every day in the areas where we're building fiber today. And there are some... We are building fiber and some hoots and hollers in Tennessee that...
Jase Wilson: Hoots?
Corey Hauer: Hoots and hollers. I had to learn what a holler was. But...
Jase Wilson: I knew what a holler was.
Corey Hauer: Yeah, they talk...
Jase Wilson: What the hell is a hoot?
Corey Hauer: Yeah that's a good question. Maybe somebody can answer that in the AMA chat. I don't know. But I know what a holler is.
Jase Wilson: If any listeners... Yeah. Well, okay. But you're getting both hoots and hollers connected in.
Corey Hauer: Yeah, I mean that's a... But fiber is like the tool for that. And if you look at our RDOF award areas, it's the places that didn't get served. I mean by definition, the RDOF locations are quite rural and low density and hard to get to with other technologies like fixed wireless. So the maps that show unavailability of 25 x 3, there's a lot of discussion about mapping and how maybe the maps aren't accurate and...
Jase Wilson: Yeah.
Corey Hauer: That's not an AMA question, but I do think that perfect is the enemy of good in terms of mapping, and I think the FCC did the best job they could with mapping using the data they had. But I think that if you look at the map areas, not just of LTDs, RDOF award areas, but RDOF in general, there's a lot of terrain out there that isn't gonna be served well with fixed wireless. And not discounting my colleagues, I mean there's other companies that propose to building fixed wireless at the gigabit profile. I know Nextlink, Resound, Etheric, GeoLinks. I'm not here to naysay those guys. If they can do it, I think they can do it. I think the technology exists. But I think we're inclined to build fiber for our RDOF areas.
Jase Wilson: Awesome. Yeah, so what I'm hearing is you started off with wireless and you're going in this hybrid, and you're not against fiber, and you actually enjoy fiber, too. Let's... Let me get into a couple of more questions about that specifically and scaling, knowing that there are things like supply chain constraints going on and a shortage of folks. So you have 15 states that you're gonna go and pull fiber in and run fiber in over the next few years. So I'd love to hear from you about some serious questions. First is, how are you gonna find that man... She called it a manpower. I think we're supposed to say people power now. The first in power to build the networks. How are you gonna find those persons?
Corey Hauer: Well I don't wanna give too many of the secret sauce answers, but we have some good pipelines of people that are gonna be able to do the types of pole attachment work that we are gonna need to do in some of the underground work. But I think there's pretty wide understanding. There's gonna be a lot of broadband projects constructed over the next 10 years. And I think that this isn't gonna be a, we go recruit these guys away from X, Y, Z Construction Corp or ABC Construction Corp. I think this is gonna be creating new jobs, maybe from other trades. This is... We view this as a large construction project and...
Jase Wilson: Reskilling.
Corey Hauer: Yeah, I mean that's... Nothing wrong with being a carpenter, it's a great trade, but arguably, if you're a carpenter, you have a lot of the skills that could be applied to installing broadband infrastructure and probably at a better wage. I have friends that are union carpenters and they make a good wage, but if they were building fiber networks, they would make a better wage. So I think that's part of our inclination is to create and train professionals to install fiber networks. I think that's...
Corey Hauer: And I think it's interesting, the Windstream CEO sort of probably doesn't see eye-to-eye with me in a lot of ways, but we do agree in this way, that he's hiring a 1,000 self-perform fiber installation folks, and we think that's a path. I think that the reality is at the scale that we're gonna be building, we're gonna need many hundreds of people constructing fiber spread across some pretty wide geographies, and so we'll have a lot of regional construction zones where we will be hiring and training people to complete our fiber infrastructure.
Jase Wilson: Nice. And so you're kind of, if I'm understanding correctly, saying something along the lines of the right tool for the right job, and you've studied the problem in a variety of different contexts and... There's a great question from TJ York. "Can you talk a bit about the differences between your approaches in the rural and urban context when it comes... " And he says specifically fiber to the premises, but I would open that up to all the different techniques and approaches that you're gonna be using knowing, now that we... I think we all agree that fiber to the premises wherever possible is the ultimate goal, and then meanwhile, with the need to get folks online really quickly, like things that we can do to Sort of for on that. So I'd love for you to answer that one next.
Corey Hauer: Yeah, and I love that question. RDOF really doesn't include much in terms of urban areas. Sort of by definition, urban areas are largely served. It doesn't mean we don't care about urban 'cause urban people count too, and even suburban. I'll say that we have a focus on maybe touching some suburban areas that are near our RDOF, and they are radically different. And so where I live, I live in an urban area where the utilities are underground and installing utilities adjacent to those existing utilities cost a lot of money. You have to locate the gas line, the water line, the sewer line, potentially the cable TV provider and the phone provider, that all costs a lot of money. And I think part of the, I won't call it a misunderstanding, but there's a lot of chatter around how expensive it is to put in fiber, and I'll say that it is in certain areas, it's very expensive. For instance, where I live, it would be costly to add another set of infrastructure underground. These rural areas are not that. I sort of talked about the thousands of miles of gravel roads that I've driven over the last 12 years. There's no water lines. There's no sewer lines. There's no, in most cases, no buried electrical lines.
Jase Wilson: Interesting.
Corey Hauer: People are... For the lion share of our RDOF areas, if they have gas in their house, it's an LP tank sitting in their backyard that they pay someone to come fill a couple of times a year. There's no... Their gas line is 20 feet long from the LP tank to their house. And so it's a different cost structure when you're working in an urban area or a suburban area. It's also a different cadence of construction too. So if you think of what's involved in having to miss and find all those utilities and inevitably you're gonna hit a gas line and cause a ruckus and have to recover from that, that cadence is radically different in the rural areas. So cost, definitely a different timing, definitely a difference... And also competitive markets. So the economics of coming into an urban area with another fiber line competing with the incumbent broadband utilities is probably challenging. And I'm not saying people don't do it. MetroNet, Ziply, those kind of companies are definitely doing builds in urban areas with some success, but they have density, so they have a lot more homes per mile than what we're looking at.
Corey Hauer: The beauty of the rural areas is our lower cost structure sort of makes up for the lack of density. So I'm excited about the rural areas that we're gonna be building out just because obviously we're gonna be seeing a subsidy, but also the demand vector is gonna be highly different than maybe being $10 cheaper than the competitor in an urban market. Now, one thing I'll expand about a little bit because we've done some of this, I think I've said I'm really bullish on wireless outside of our RDOF areas, and we've done some of that, we actually built one of the first Terragraph networks in New Hampton, Iowa where we're offering gigabit over wireless. That's something a lot of people think can't be done, and it works. It's a technology with a specific use case. You're not gonna do it for miles out in the country, but in a dense area... And I study urban WISP with some granularity to what they're doing and it's fascinating. I found out another urban west WISP in Southern California, I know of a couple in Northern California. WISP technology works in urban areas, and I think it really hasn't... You'll see reports in cable companies' SEC filings talking about the threats of wireless as a competitor to them.
Corey Hauer: I think that's real. I think they know that there is a competitive threat in urban areas from wireless technology. Even our handsets, our mobile handsets are getting pretty good with 5G technology. So it's... Urban isn't our laser focus, but we're definitely gonna play in that space.
Jase Wilson: I wish someday they would tell us here in San Francisco that that stuff's getting pretty good.
Corey Hauer: Well...
Jase Wilson: Super glad. Yeah, cool.
Corey Hauer: Some areas, yeah.
Jase Wilson: That's really good, Corey, thank you. So let's switch gears a little bit. I have a random question for you. You live in Las Vegas, right?
Corey Hauer: Correct.
Jase Wilson: Okay. This is really important. Are you a Raiders fan?
Corey Hauer: I am not.
Jase Wilson: Okay.
Corey Hauer: My wife is a Southern California girl and is not a Raiders fan, and so I am not... I'm not really a football fan. We're hockey people.
Jase Wilson: Okay, I understand, I understand. Yeah and... Corey, we've got a ton of good questions here in the list. I'm gonna keep going up the list. Drew asks, "You're awarded more in RDOF funds than Elon Musk of SpaceX," he asks, "Do you plan to engage in a tweet storm with Elon?" which is, I wouldn't recommend it 'cause he's the Dank meme overlord and really good at Twitter. But I have another question that's related to this, because when we first met and we started having conversations, Corey, you're kinda... You really struck me in the fact that you... You drilled really deep and really specific into cost structure in a way that kinda reminds me of Elon Musk and the way he breaks down problems from first principles and thinks about, Well, if we did it the way we always do it it's gonna be roughly the same cost, but if we recast the incumbent structure and think about it from first principles, and what are the raw ingredients and then how much would those cost and you talked about the months that you spent and going line up skill access things, you Kinda use like the rain man of broadband, but instead of phone numbers and a phone book, it was like line items in a Bomb.
Jase Wilson: So can you talk a little bit about your obsession with cost structure, and does that in any way like influence... And I don't wanna be the one to break this to you Corey, but you have some critics. I don't know if you know that or not, but they didn't hear from me if not, but you have some critics and they tend to dwell on the idea that your award is impossible it can can't be done. But hearing you say what you say about rural reserve and everything, kind of I think it makes me think something like a lot of people are applying incumbent cost structures and in particular, predominantly urban models, and maybe even legacy telco cost models onto a problem that you're saying is it's actually... It's a different... It's a different and needs to be approached differently. So can you talk about that? Is that gonna be part of your success in getting these folks connected...
Corey Hauer: For sure, yeah. All respect to other broadband providers in the industry. They've done some great things and continue to do it, but you're right, we definitely have a different thesis on cost structure and what it takes to build these networks, and there's just difference in engineering approaches. We have a competitor in one of our fiber footprints that has a single node for their GPON architecture, so every single fiber line comes from one spot, and that's a fine construction method, but you end up needing 572 count fiber as you're leaving the central office or maybe even more than one of those, where we have an approach that's a distributed network architecture with field cabinets and smaller count fiber. It's a different approach, it's a different thought process, you're still delivering Giga, 10 gig or 100 gig out to the areas that you need it, but it's just a different network design and there's pluses and minuses, you can have the engineering discussions. The Cybertruck is a great example. So I look at that truck and I realize that Elon didn't design it to look pretty, he designed it to make it cheap and consequently tough, but to build a Cybertruck, to take those flat sheets of 30X steel and build a truck, it's gonna be crazy fast for them to do it.
Corey Hauer: And it's gonna be a crazy truck. It's gonna be probably the strongest truck ever made for a consumer truck, but the design decisions were optimizing for rapidity of building and also cost, and it's gonna haul freight down the road, or lumber, or kids. It's gonna do the job that pick up stew for people, not as pretty maybe or as conventional as what people would expect.
Jase Wilson: Some people would say it's pretty.
Corey Hauer: A lot of haters.
Corey Hauer: I talked to a lot of people that hate that truck, but in the same way, obviously, we know we have some critics and some folks that say it can't be done, but...
Jase Wilson: I didn't wanna be the one that broke it to you.
Corey Hauer: Yeah, I mean I've had a couple of team members say, hold my beer as a response to that, and that obviously we're joking, we wouldn't really think that, but we're building fiber networks today. We know experientially what it's costing us to build fiber networks in quite rural areas, so we're not making numbers up, we're not pulling up out of the air, this is experientially what we're building fiber for, and it is different, but I think to your point, it's the difference between urban and rural. There's a lot of difference between going down a rural county road than a dense urban area where they just... There's a lot of obstacles and a lot of delays and delays cost money, so it is markedly different.
Jase Wilson: Yeah, delays. That reminds me... We'll get into some more questions related to performance and the accountability and stuff that it's coming up for you to do the work that the grant money will allow you to do, but... Jessica's, the new FCC chair woman. She has this brilliant... I think it's brilliant, like re-mix of a bushism where she says something like, No Child Left offline. Right, and I think that's very powerful because we work with a lot of folks that do philanthropic work in education, it's really frustrating to hear that there was already a gap between broadband haves and have-nots in the country, but COVID accelerated it and forced it... Some describe it as a digital canyon between the haves and have-nots. And just if you're listening, this is interesting because my understanding Corey is that you haven't received the award money yet, so you haven't actually been able to connect people, but meanwhile you could be out there connecting people, right, and you said that you've done some of these deployments for a fraction of the cost and what they result in is like good broadband, maybe not perfect broadband, but at least for now, it's good broadband and it's now, right, and then there's this other issue that it's sort of a wet blanket for a lot of folks, me included.
Jase Wilson: But We quintupled the money supply in the United States of America in 2020. And if history rhymes, and we can look at nations that have done that in the past, that means that we have at least rampant inflation, if not hyper-inflation coming up, and that also... Correlate it to that is of course, that there is an exponential decay to the Purchase Power of the broadband grant money that we have set aside to solve this problem. So, I have a question for you, Corey, I don't know what LTD stands for, but can we rename your company to LFG?
Corey Hauer: Okay, I'll buy it. Oh, yeah. I like it. I'll have to make some board minutes to that effect 'cause I like it. Yeah, you bring up several great points, one is sort of the cost of building this, and if anything, it's gonna make it more important to build cost effectively and build quickly and get this...
Corey Hauer: There's a syntax of this where you get the money and you build it. You have the time in between, but the demand vector is here. It is the hockey stick. So with COVID, what we call our legacy company our wireless companies, saw tremendous immediate uptick and I think we did some research to see where people were coming from, were they switching from DSL competitors, were they switching from hotspots? What were they coming from, when they came to our broadband? It was interesting, they were coming from their phones, they were households that only had phones internet, the cell phone is all they had. And I think if COVID did anything, it took maybe the estimate of 17% of rural households that didn't have broadband and took them into the they need broadband... And I think that's maybe the one sort of ray of light of COVID is households have realized that for education reasons, for entertainment reasons, for being able to work for reasons, they need real hard wired... And I'll include fixed wireless in there, that is a hard land wire coming into the house, but that type of broadband, I think is a standard as much as clean water and electricity in 2021 and probably has been since the start of COVID.
Jase Wilson: Yeah, well said, well said. Everybody that's listening, thank you all for what you're doing to get folks connected, and that's really important work that you're doing. I know, Corey, that's what you're trying to do too. Well, let's keep rolling. And I mentioned that you have some critics, I would love to get into some questions, Corey, that deal with "Corey, how are you going to do all the stuff that you need to do in order to get these people access to the Internet?" What's the next step for you?
Corey Hauer: Well, we're building some fiber pre-RDOF, running the training programs that we're gonna be using to staff up our teams, and that obviously we'll do that at larger scale once the RDOF funds start flowing to us and just yesterday the FCC announced some additional... What do they call their notice? Their public notice, their PN came out saying they're ready to authorize another group, so I don't think the FCC has authorized anyone large yet, I think the largest so far has been Windstream with a $250 million reward award, but the FCC has is a hard lift. They're working through 417 provisional winners. My guess is they'll get to some of the larger awardees next year, but that's tea leaf reading on my part, but they did award over a billion dollars in this latest round, so they're getting there.
Jase Wilson: Wonderful. Drew has a question about, how are you gonna deliver the performance required to meet your award criteria without spending multiples of grant winnings?
Corey Hauer: Well, I think that fiber's gonna meet the criteria, we're gonna be able to deliver the gig down 500 up with low latency that's required for RDOF. But in terms of how we're gonna do it, we're gonna build it quickly and we're gonna build economic CAPEX rates, we're gonna use some new thinking to deploying rural fiber. And I say new, it's probably new to the industry, it's not new to us. We've been doing it for a bit now, but that is how we're gonna do it.
Corey Hauer: And it's how do you eat an elephant? Well, carve it up into individual bites. And our particular elephant is a number of regions, so that's also... Are gonna be our approach. We're not gonna build the whole thing from one location, we're gonna have regional offices and we're gonna bite off multiple elephants over the six-year build out window.
Jase Wilson: So, you're not daunted, it sounds... This work is definitely cut out for you.
Corey Hauer: Yeah, it's big. Right? I could minimize it. It's a big undertaking, but it's certainly something... We've spent 11 years growing our fixed wireless footprint, peddle to the metal, the entire time building 30 new tower sites a month for years, and that sort of cadence, we're gonna keep doing... We're gonna keep building at a rapid rate, but we're gonna be doing it in multiple areas at a time. So, not just our Midwest footprint where we've been focused, we'll have teams in Colorado, we'll have teams in Texas, we'll have teams in Illinois.
Jase Wilson: You have a plan and you're ready to rock, once the funding rolls.
Corey Hauer: We are, yeah.
Jase Wilson: And the outcome is that you're able to get people connected in hard to connect areas.
Corey Hauer: People come to work for LTD for... Obviously, it's a good paycheck and it's a good job, but there is a satisfaction when you go home at night and you've changed people's lives in a palpable way. And talking to my installers and my field techs and tower techs, like even the work they're doing right now, repairing storm damage. It's pretty satisfying, in knowing you're doing that sort of good. I'm sure the guys in the '30s, guys and girls in the '30s that were building rural electrical infrastructure that didn't exist before had the same feelings. They... My ancestors grew up are from Northeast Iowa. Those areas when they got power, it changed lives, you could farm past sundown because you had lights in the barn.
Corey Hauer: And you could go do things and work on equipments. And it changed the way that people lived in rural areas. I think in the same manner this type of broadband that we're gonna install with RDOF will be a game changer, because if you work for X Y Z multinational, you're gonna be able to potentially live in rural Southeast Missouri where you probably couldn't pre-covid, but those rules have changed now. The companies are finding out that their workforces could be productive working remotely. So I talked to county commissioners all over the country and different stakeholders, and they all get this, they have the people that are scooping up farm studs in their rural counties, and they're working for these large multinationals. And it's changing the demographic of these rural areas, and I think in a positive way because I think there's a bit of a chasm in our country between rural and urban, and maybe urban people don't understand rural people or vice versa. We're gonna be more of a melting top potentially. I think that the broadband's gonna enable some of that, some of those types of discussions to happen, that probably haven't happened before.
Jase Wilson: That's a cool vision for the future Corey so we'll keep rolling that. Adam Bender asked an interesting question. Can you comment on what the California PUC denying your ETC application yesterday means for LTD and if you will appeal as you did in Iowa. And a follow-up is how much of a setback for LTD are the CPUC and Iowa Utilities board decisions and how concerned are you about other states like South Dakota.
Corey Hauer: Yeah, that's a great question. So we're obviously super disappointed with the California Public Utilities Commission. And I've hesitated to say things publicly, but they've fired their shots. Every single decision that CPUC made yesterday was done unanimously. Which tends to lead me to believe they didn't read a lot of the things that they voted on. It's my guess, 'cause I think if they had read what they voted on, they would have saw that it was pretty poor without getting into the specifics. It's a public document, you can read it, but it appears to me that for whatever reason, California is trying to prevent broadband from happening in their state. And not just referring to LTD broadband, but all of the other RDOF winners that didn't already hold what's called the CPNC in California, that's sort of like a CLAC authority in other states, but they call it a CPNC in California. Every single winner, including LTD broadband, has been a subject of an intentional 18-month delay in certifying ETC Eligibility in California. And that's unique, they're the only state in the country that, in my view, isn't running a serious attempt to get RDOF funding going in their state, so there's no...
Corey Hauer: If you didn't already hold the CPNC in California, you're not building RDOF and you're not gonna build it this year or next year because of the inbuilt delay. And in fact, one of the earlier decisions made by the California Public Utilities Commission was in regard to some of their programs that they're running for grants in California that overlap RDOF areas and in general RDOF areas have sort of been carved out from other federal grant funding, so as not to subsidize an area with two different competitors and breaking the economics of those subsidy areas. California dismissed all of the companies that challenge those awards and said, "You don't have your ETCs", which is ironic, 'cause the reason they don't have their ETCs is 'cause the California Public Utilities Commission hasn't done it. And so, it's astounding to me.
Jase Wilson: That's very interesting.
Corey Hauer: And I love California as a state. We visit there often. I think that their CPUC is clearly dysfunctional and we're absolutely gonna appeal. The areas in California that we won are very rural. And I wonder how much politics is involved in that. There may be some blue-red fights going on that we don't know about, but the reality is that there's a lot of need for broadband in the rural areas of California that were part of RDOF.
Corey Hauer: Not just LTD's award areas, and for CPUC to by intent delay, all of this funding, I just I and I know they're trying to do state funding alongside that, Gavin Newsom has talked about a couple of billion dollars for broadband, both last mile and state-run broadband in California. But it's a subject I care about, I care about the rural Californians that are affected by this, and it's not just an LTD issue, I think it's... I don't know why the National Press, particularly the telecom press hasn't picked up on this. I hope that they do. I think that this is an unknown issue to a lot of people, and it's and to me, it's quite sad.
Jase Wilson: Why? But why are they... Why? Aren't they supposed to be helping folks get the utilities that they need? But...
Corey Hauer: I don't know. I wish I knew. To be honest, the Administrative Law Judge that was assigned our ETC application, I guess I don't wanna get too much into this specific to the judge but I'm okay.
Jase Wilson: Yeah that's fine.
Corey Hauer: Yeah, I'm a little bit astounded. My wife's an attorney. I know that you fight battles and you do the things you're gonna do, but it very much feels like this ALJ and perhaps the CPUC is trying to railroad LTD out of California. And...
Jase Wilson: Interesting.
Corey Hauer: Yeah, it's astounding to me and my other counsel that is working on our California legal work is astounded. It's not a great look for the CPUC and for this judge to be honest.
Jase Wilson: Well, that gets into some interesting other questions, I had one from Erin, and then Joan Ingebretsen, I am sorry Joan if I mangled that. Asked some really great questions. We are gonna go into those real fast and my question Corey to you is can you give us a sense of your thinking on the FCC hasn't awarded these places, and we now have... We're staring at a tsunami of new broadband grants coming in that in areas there's a lot of fear, uncertainty and doubt among RDOF winners. There's a lot of confusion about, is it going to be something that they're gonna displace the RDOF subsidy. And the opposite is a concern too, that are they going to say, "Well, that place, that area won RDOF and so therefore, it doesn't qualify for RJA, money in the B program or any of the other programs. Do you have any knowledge of that? Or do you have any thoughts on what's going on there? Is that a concern or is that... Or is that completely crazy? 'Cause it seems like $42.5 billion bucks for bids is, you could go in and it's all we'll triple down on those areas, right? I guess there's just... I'd love to hear your thinking on that.
Corey Hauer: So it's interesting 'cause there's a lot of discussion about broadband, and I think the first discussion is about availability. And we've probably all agreed that universal broadband availability is a huge priority. Some political folks have come right behind that and said, "Well, not just availability, but affordability." Well now that's a different conversation.
Jase Wilson: Yes.
Corey Hauer: Because if you're going to solve for both, you need probably 10X the money because you're gonna have to have a competitor to deflate the market to a point where it's "affordable". I think that there's certainly programs like the EBB program, and that's evolving to a new permanent program that are subsidizing broadband costs for low-income households. We participated in that program and we'll participate in the Future program, but I think it's a great idea. 'Cause I think that broadband affordability is an issue. But I think that subsidizing competition can be problematic, but I think it's 10x problematic if you're subsidizing multiple competitors in an area. And so my understanding is that the intent of the federal subsidies is to subsidize one area once. At least as things are written today, there's definitely politicians that want to change that and subsidize every area twice. That is what it is.
Corey Hauer: You just be careful what you ask for. Right. I think that would be my caution to those folks, I think, in my view, solve the access issue first, and if there's things you can do like the EBB program to solve affordability, if that becomes the next problem. But I think the access issue is pretty clearly right in front of us and solvable with, I think your point, Jay, so there's a ton of money that's been allocated. If we can't solve it with 9 billion in RDOF and $65 billion in bid funds, I would say the problem probably can't be solved. And I would also caution maybe the idea of over-funding because now you talked about inflation, you can inflate up the cost of these projects to where they actually don't ever get done. And this is sort of... I say this a lot, that I don't think broadband is or should be a political issue, I think it's a quality of life standard issue, and as a group of rate payers, in the case of RDOF funds, taxpayers in the case of bid funds, we ought to be able to solve it. And then in my view, it probably shouldn't take 65 billion and 9 billion, I think it should be solvable for less...
Corey Hauer: I'm not here to fight that battle, I'm just here to solve it in our small way, we're gonna solve it for the RDOF areas that we were awarded. And I think the other RDOF awardees are too, I think this is... The FCCs run three reverse auctions now. And I'd say that they've ran 'em well. The work that they've done to build a cost-effective solution for getting these areas served with broadband, reverse auction. I think there are people that will probably disagree with it, but I think it's been proven to be a successful mechanism for getting accountability, performance and economic feasibility to deploying broadband.
Jase Wilson: That's a good attitude Corey Great. That brings us to Jones's question then, do you have the contingency plan if the FCC doesn't approve your long-form application?
Corey Hauer: Well, I don't think that is a thing that's on the radar. The FCC has been very collaborative with us, and I think with other RDOF awardees that I've spoken to. I don't think the FCC's goal or job is to try to blow up RDOF. I don't hear that. There may be some upset competitors that hope that will happen. I don't see that in the cards. I think that the FCC wants RDOF like have to like the rural broadband experiments to be successful and to check the boxes in these geographies where RDOF was awarded. I just don't see that as a goal for the FCC. They want the companies that are participating in it to succeed and complete their obligation.
Jase Wilson: Nice. So we have a few more minutes Corey I wanna close it out with a quick note, broadband money, the place we are right now, the services, it's all about helping local providers, local networks, Mom and Pop, ISPs, RUCs, utilities community networks, every flavor of approach to solving this problem that Corey you're talking about stating it's to help those local folks get their share of grant money and the subsidies. So it's really... It's been an honour to get to hang out with you here. Corey I'd like to wrap up with a couple of more questions. One is, what's one thing that you would like the industry to know? And that could it be straight to the haters, that could be to the folks that are listening in from the various states where you won. And or even folks from the FCC that are sitting in on the call or whoever you wanna talk to. Just like what's one thing you want them to know?
Corey Hauer: Well, I say this a lot when I speak at different venues. I've spoken before on a number of task force that are related to broadband. And I think the biggest misunderstanding about broadband is an odd one, and you probably wouldn't think of it, it's where the weakest link is. And we're a pretty large operator, we support tens of thousands of customers, and what I mean by the weakest link is typically the in-home network. Even in Las Vegas where we have relatively good internet, people perceive their internet to be bad because they don't have the right in-home networking equipment to deliver their good broadband to the nooks and crannies of their house where they might be doing a Zoom call or doing something that's needing better broadband. And as a company, we focus like a laser on that. We're including that equipment and those solutions as part of our offering, because we realize that we're gonna get blamed if the broadband experience is bad, it's us. So we're owning that, and I think that... I'm on calls all the time with people that have problems with Zoom. And I have the conversation I'm having with you right now talking about the importance of getting robust Wi-Fi to all the devices.
Corey Hauer: I think that rightly or wrongly, the cable industry has done a great job of selling people on the idea that they need gig service to do a three mega zoom call. It's not that you need 1000 megs to do 3 megs of video streaming, it's that you need a robust path from your... Whatever your broadband is to get to your device so your 3 Meg Zoom call is reliable. That would be something that if I could teach everybody that one thing, I think it's probably an aside to the real broadband issues that we're talking about in this call, but once you solve it, you have to solve it all the way to the device.
Jase Wilson: All of that as the provider, you're saying that you put on your own shoulders, not just getting to the house or the business, or the farm or the barn or whatever people are getting their broadband these days inside of the premises, right? It's your responsibility as a provider, you're shouldering that, as like the experience of the connected family or business, right. Is that am I hearing you correctly?
Corey Hauer: Yeah and...
Jase Wilson: You're saying that that's part of your duty as the provider, is to help them understand, it's like grandma was like, I can't get the WiFi, I can't watch my programs. Wheel of fortune is not coming in, and it's like well grandma, you know the routers in a brick closet. [chuckle] You're stuck... There's a Faraday cage under that stuff like you need to move it. That's something that most providers probably don't tackle, but you're saying that's part of your job?
Corey Hauer: There's folks in the industry that will say, well, that's a revenue opportunity, you can upsell and you charge for the mesh router system or however do it, and I think the skepticism of the consumer is real, right, that they think they're getting screwed and trying to make an extra $20 a month off them to provide the solution that should already be part of it. And I'm not saying the providers that wanna charge money for that are wrong, I'm just saying it's whether you charge money for it or if you include it, to me, making sure the customer has the solution is as important as getting the broadband there. 'Cause it doesn't do any good, right, because if your weakest link is the very next link between you and your iPad and your PC, you may as well have bad broadband because you do. That's, if your home network solution is bad, you have bad broadband, regardless of how good your broadband is, it's bad for you.
Jase Wilson: That's awesome. Okay, we got one more minute. So one last question it's from Drew your critics worry that you'll squander the winnings, however, historically, incumbents who received grant funding did not spend much of it on broadband. They spend it on other Bs with bonuses, the buy-backs and the BS. So Drew's question is what will you do differently?
Corey Hauer: Well, I think that the biggest thing is we'll actually go to the residences, and I won't name the company, but I've driven around California and I've seen all sorts of fiber along rural pole lines, and I go and I look at the name and I see who it is. And I recognize it, and I realize that that fiber stops at not one house on that road, it literally goes to the cell tower and it goes to the school. And that's because that's where they bid and they won the big contract for the commercial service. And that's one of the companies that gets the money that you talked about, that they've been getting rate payer money for years to subsidize their networks in rural areas, but they don't stop at any of the houses on that road. So the reason that those areas are part of the RDOF rural ward area is because of that. They just chose not to do it, and I think our focus has largely been residential, first. We focus as a company on unserved residential locations, we certainly have commercial customers, and we value our commercial customers, but we've been a residential first focus. I think that the larger usual suspects, and particularly the legacy telcos, if they could find a private equity firm to buy their rural residential customers, they would sell them all tomorrow, and a lot of them have.
Corey Hauer: You've seen some of the companies divest a lot of their residential-facing infrastructure, I would say residences matter. They do... 'Cause residences are businesses too. You're working from your home, is that a residence or is that a business? You have a small business in your home. Is that a residence or a business? I would say that it's as important to have residences have great broadband as it is to have great electricity.
Jase Wilson: It's also where people live in many cases. In the end it's about connecting people. So your point's taken. Corey, we're out of time, folks that have joined, again, thank you for making time to connect. Thank you for what you're doing to help people get better access, and Corey, thank you so much for making time here to share with us and to help folks understand. So I really appreciate you.
Corey Hauer: Yeah, Jay, thanks for having me. Thanks to you, Drew.
Jase Wilson: We'll see all.