June 1 , 2002
IT Roundtable: The Digitized Grid
to participate as retail distributors. About 250 members have signed up.
Fortnightly: Why would that be more successful for co-ops than other broadband service businesses?
Collier: Wild Blue is similar to DirecTV, in that it is a marketing and customer-premise installation and support play. They don't have to build any infrastructure. Someone else does the heavy lifting. But that's also true in co-ops' core business; co-ops generally aren't generating and transmitting power, just distributing it.
Also, one thing that is true about rural electric and telephone cooperatives is they have a very strong local community connection. A lot of telephone co-ops are getting into video over DSL. Where telcos offer this kind of service, they are getting better than 50 percent market penetration, and that's in competition with cable TV and satellite. They are getting this success rate because they are the trusted local provider, and people often hate their local cable providers and don't get the same kind of service they get from Joe at the co-op.
Finally, the main place that co-ops have been making money is satellite TV. If members offer both satellite and Internet on the same dish, take rates double. If they have a 4 percent take rate on satellite TV, then the offer with Wild Blue goes to 8 percent.
This is a market advantage if co-ops are willing to seize it.
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