Speaker Ken Johnson, from panel called Big Enough to Succeed: small carriers at the leading edge — entrepreneurial (non-Municipal) carriers show a fourth way (after Telco, Cable and Muni) to the future of connectivity. Video of panel is here: http://youtu.be/YSeXinuwBgU Freedom to Connect 2012

1. Big Enough to Succeed – or
Big Enough to Survive?

2.  Founded in 1897
 Reorganized and incorporated in 1926 – same
stock still circulating today
 I am only 6th Chief Executive of the Company
 ~ $8 million in annual revenue

3. 39 Employees
About half Union
 Two administrators
 Five Primary departments
 Two professional managers (HR/Billing)
 Six (6) I.T. field techs
 In-house construction and tech support
 Everyone multi-functional and interdisciplinary
 Few contracted services

4.  Regulated Telephone/calling features/LD/Key Sys.
 Cable TV and related products
 Communications construction/structured cabling
 Outsourced I.T. Consulting/business/residential
 Broadband Internet access:
 In territory-service available today to every customer
 Out of territory by wholesale agreement (WS & CL)
 Service types: ADSL, Cable Modem, FTTH, and WI-FI
 Speeds: FTTH-Up to 30/30, Cable Modem-Up to
18/1, ADSL-Up to 24/1

5.  Telephone ~ 4,200 lines (75% ms)
 Internet ~ 3,200 accounts (ADSL, Cable
Modem, Fiber, T-1)
 Cable TV ~ 2,200 subs (48% ms)
 Over 40 I.T. customers with over 30 on
monthly retainer
 CLEC coming online later in ‘12 and FTTH to
expand territory started

6.  Since early 90’s company believed local competition
was coming and that ICC would erode
 Worked to diversify with investments in
Cellular, Internet, and CATV services
 Realize that we must diversify geographical market
in addition to diversifying services
 Lean work force and small administrative layer
 All employees working to create revenue
 Offer all related services customers want
 Make smallest investments possible to get into a
product line, then expand with demand
 Use Gray market where prudent

7.  $2M in fiber trunk outside area to increase
bandwidth and lower costs
 Doubled Cable Modem speeds by adding DS
 Rebuilt all ADSL footprint 3 years ago
 Launched first FTTH system to over build
ADSL footprint in coming years (1st regional
provider to launch FTTH)
 Keep pushing upper limits of bandwidth to
customers while watching capacity
 Strive to be the best Cost/Mb provider

8. Why?
 Wages are calibrated to area cost of living
 CEO pay ~ $125K for SLEC
 Windstream (Morning Star) $9.7M (77x)
 Verizon (Bloomberg) $23.1M (1,848x)
 Time Warner Cable (Fox Bus.) $16.4M (131x)
 Extrapolate that for CFO, COO, HR, etc.
 New products added to meet demand not as
speculative
 Multi-functional workforce
 Not slaves to Wall St.

9.  USF and ICC Changes – Can we replace
revenue as fast as change takes it away?
 Political ideologies against small telcos
 Anticompetitive practices of competitors
(Feel like the eldest child)

10. Another five years will tell the tale
Thank you