Grain Management Study: Local ISPs Have Fiber Deployment Edge Over Large Operators

Nov 17, 2023

By Ted Hearn, Editor of Policyband

Washington, D.C., Nov. 17, 2023 – In a new report, private equity firm Grain Management suggests small broadband providers can benefit from fiber deployment delays and challenges reported last year by such large operators as AT&T, Frontier and Altice.

Grain gives the edge to small market ISPs for being “agile” in developing deployment plans in cooperation with local residents and capitalizing on their close ties to local regulators that grant construction permits and expedite other approvals.

“Agile operators have been successful by targeting ideal secondary markets, leveraging partnerships with local municipalities to accelerate permitting and improve route-design. Active communication with residents pre-empts construction issues and streamlines build-planning processes for quick go-to-market,” the Grain report said.

The Grain study, released on Nov. 10, notes “large scale fiber operators” planned to deploy to nearly 7.7 million homes in 2022 but fell short by 1 million homes.

The shortfall was attributed to “permitting issues, general construction challenges, and supply chain delays – coupled with operational issues, such as multi-departmental coordination and protracted build-planning processes,” the Grain study said.

The study, citing the experiences of Charter and Alitice, says receiveing permission to access utility poles and rights of way can range from 20 days to six months. The study included results of a third-party survey on fiber deployment approval schedules in which “60% of responders stated a decision typically takes over a month, while 25% saw lead times of up to one year for planning approvals.”

Grain, which has investments in rural broadband Internet providers, says small market ISPs have a new opportunity to add customers because “delays in fiber deployment have led large scale fiber operators to re-focus their resources towards builds within major metros and other densely populated territories,” providing an opportunity for smaller, agile providers to serve households in de-prioritized markets – Tier II cities, suburbs, and rural locales.”

Grain Management, based in Washington, D.C., owns Great Plains Communications in Nebraska, a majority interest in Ritter Communications in Arkansas and other regional broadband providers. Grain portfolio companies have received about $120 million in broadband deployment grants since 2020. Grain has about $8 billion in assets under management.

“Amidst the challenges faced, Grain Management portfolio companies have proven successful building within this niche, with plans to perpetuate further growth,” the Grain study said.

Grain Managing Director Raghav Nayar and Vice President Tanner Goode were listed as contributing authors of the study.