Fastwyre’s Must-Be-Present-to-Win strategy has brought the company success, said Jim Patterson, Fastwyre chief strategy officer, in an interview with Telecompetitor.
Fastwyre Broadband, a portfolio company of Chicago-based private equity firm Madison Dearborn Partners LLC and Catania ABC Partners, got its start with the purchase of Louisiana-based American Broadband in May 2021. With its subsequent acquisitions of TelAlaska, Cameron Communications and Moundville Communications, the company expanded its footprint to a total of six states (Alaska, Alabama, Louisiana, Missouri, Nebraska and Texas) and began building foundational fiber-to-the-home (FTTH) and DOCSIS 3.1 networks from which it is expanding its reach today, according to Patterson.
“With the purchase of American Broadband, we embarked on a program to not only fix the markets we were in, but to grow the markets that were nearby,” said Patterson. “Our focus is on bringing broadband Internet speeds [as well as voice and video services] to underserved and unserved areas, whether they are in our footprint, near our footprint or just outside of our footprint where we can build enough scale to get operating efficiency.”
Specifically, the company has been leveraging what had already been done in each of its markets at the time of its acquisition. When Fastwyre purchased American Broadband in 2021, more than 60 percent of American Broadband’s serving area was already equipped with FTTH or DOCSIS 3.1, explained Patterson. Fastwyre’s key to success is being able to edge outward into new markets and gain market share that provides the company with a sustainable cash flow.
Keep It Local
“When we go into a new area, we want to make sure we have enough homes passed and enough demand for the service to bring in local sales reps, local operational folks, local central office folks in that area so we don’t have to be dependent on, or draw from, other areas to make things work,” said Patterson.
Fastwyre’s Must-Be-Present-To-Win strategy gets local people involved in deployment and local operations, he explained. The company also is highly engaged with county commissions, city councils and local mayors. This in turn helps Fastwyre get its fiber appropriately deployed and in a manner that quickly benefits the local economy.
Most of the capital investments that Fastwyre has made to date have relied on private capital. Those investments have laid a foundation from which the company can sustainably move into nearby lower density areas. Fastwyre seeks out government grants and broadband programs when that type of funding will help the company expand as efficiently as possible, explained Patterson.
In the near term, Fastwyre will likely be looking at grants from the USDA and the FCC in Missouri, Louisiana, Nebraska Alabama and Texas, said Patterson.
“We are also covered under the A-CAM program, which helps high-cost carriers serve very, very rural properties,” said Patterson. “That is not our entire footprint, but it’s a good portion of our footprint.”
A-CAM covers some of the costs of deploying broadband to unserved areas based on a cost model.
Fastwyre’s most recent grants were for its Western Alaska build. The grants came from the USDA ReConnect program. The company will use the funds to significantly upgrade Internet access across western Alaska via a broadband fiber optic network.
Most of Fastwyre’s ReConnect grants to date have been based on the company contributing 25 percent of costs, but the latest grants will fund 100 percent of the project, said Patterson.
The company has obtained several 100 percent grants for other projects and some with 80/20 percent ratios.
“We like to have some skin in the game and we find that the USDA likes that as well,” said Patterson.
Spirit of Cooperation
He added that the company’s latest grant —$70 million for a fiber network in Alaska — will help fund a very large project in a very remote area of the state. Fastwyre was diligent in making sure its proposal specified the use of Bureau of Land Management practices and techniques to lay its fiber in an environmentally friendly manner.
“That’s good because it’s going to save us money and allow our grant to go further,” said Patterson. “But what we are really trying to do here is take an area that is very rugged and bring the benefits of the broadband economy to these very small towns.”
In its quest to keep things local, Fastwyre will hire labor out of Nome, Anchorage and other Alaska communities to build the network that it is already busy planning.
Because of the state’s vastness and the fact that all the carriers in Alaska are working to obtain alternatives to satellite communications, the short construction window is balanced by a spirit of cooperation in Alaska, Patterson added.
“Everybody works together. It’s a much more cooperative carrier environment because everybody is trying to solve the same problem, yet no one has all of the funds to do it,” said Patterson.