The tier 3 telecom market gained another consolidator yesterday with the news that St. Louis-based startup company CountryWide Broadband plans to acquire iTV-3, operator of an open access gigabit network serving several central Illinois communities, including Peoria, Champaign and Urbana. In an interview CountryWide Broadband President and CEO Grier Raclin said CountryWide has been pursuing several acquisitions of broadband network operators but this is the first deal that has been finalized.
“We’re looking for broadband [companies],” said Raclin. The company is looking primarily for companies that have deployed fiber-to-the-home or hybrid-fiber coax, he noted. But he added that “we will consider twisted pair if we have the opportunity to do a triple-play and a growth opportunity.”
Although iTV-3 is a competitive over-builder, CountryWide also would consider incumbent telecom and cable companies, Raclin said.
CountryWide Broadband Plans for iTV-3
iTV-3 emerged on the telecom scene back in 2014 when it won the contract to upgrade and operate an existing network owned by the cities of Urbana and Champaign and the University of Illinois. iTV-3 is owned by the same family that owns Family Video, the nation’s largest retail video and game rental business.
“We have an opportunity to add value . . . and grow,” said Raclin.
CountryWide sees three ways of growing a broadband business – including growing geographically, adding more subscribers and growing the number of services offered, Raclin noted. With the iTV-3 network, he said, “We have an opportunity to do all three.”
The network that iTV-3 expanded was originally built, in part, with funding from the broadband stimulus program administered by the National Telecommunications and Information Administration, which focused primarily on middle-mile projects. Entities receiving that funding are required to make their networks available to other network operators and Raclin said CountryWide will adhere to that requirement in operating the middle-mile network.
CountryWide has an IRU – a long-term lease—on the middle-mile network, and other network operators are co-tenants in the same fiber bundle but on different fibers, Raclin explained. He also noted that CountryWide is responsible for maintaining the entire middle mile network and that the company also expects to build out additional last-mile infrastructure, including expanding into some other communities where iTV-3 has or is close to obtaining franchises to provide pay TV service.
According to a CountryWide Broadband press release, the company’s executive team has almost 100 years in combined telecom experience and includes former senior executives from Charter Communications, Williams Communications and other companies. CountryWide is part owned by New York-based Seaport Capital.
RBC Capital Markets served as the exclusive merger and acquisition advisor to iTV-3 in connection with the CountryWide deal.
Other companies acting as consolidators in the tier 3 market include Vyve and Rise Broadband.
