Event Recap of Fiber Connect 2022 - ETI
X

Want to take a Self-Guided tour?




September 7, 2022

Event Recap of Fiber Connect 2022

The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch. The Broadband Bunch is sponsored by ETI Software.

Joe Coldebella:

Hello and welcome to another episode of The Broadband Bunch. I’m Joe Coldebella. We are at Fiber Connect 2022 in Nashville, Tennessee. This event is of course hosted by the Fiber Broadband Association. Joining me is one of the key architects of this event, the 2022 chairman of the board of the Fiber Broadband Association and chief marketing officer for Clearfield, Kevin Morgan. Kevin, welcome to The Broadband Bunch.

Kevin Morgan:

I really appreciate it, Joe. Appreciate the opportunity to be here. I really appreciate the opportunity for what The Broadband Bunch offers the industry in bringing great stories.

Joe Coldebella:

We can’t thank you guys enough as well. We did the previous show with JJ and Richard, which was phenomenal. And then, we did get some time with you and Gary in the past. It’s always great that you guys make yourselves available. Because ultimately, it’s about sharing stories and making sure that everyone in the industry knows what everyone else is doing. Because that’s how we learn and progress as an industry.

Kevin Morgan:

And it’s changing all the time.

Joe Coldebella:

It definitely is. That is one thing. This is not a static industry as well. Especially, in the last few years. With all this influx of money and the unfortunateness of the pandemic, a lot of things have been accelerated. We’re going to talk about the event, but before we dive into that I would love it if you could just give us a quick little snapshot in terms of your origin story. Before we dive in with that, I saw that you got your undergrad at Auburn. And then, your grad in Alabama. Do they allow that?

Kevin Morgan:

My family disowned me once I had my degree from Alabama, but a lot of my friends accept me now.

Joe Coldebella:

Okay.

Kevin Morgan:

But it’s hard to believe. 35 years ago, I got an electrical engineering degree from Auburn. And then, 10 years later, I got my MBA from Alabama. My initial job in the industry was working for South Central Bell Telephone Company as a network engineer. I worked for BellSouth. Well, it became BellSouth. Now, it’s part of AT&T. It’s actually AT&T now. For 10 years.

Kevin Morgan:

I spent five years in their science and technologies department. Evaluating, at the time, state-of-the-art asynchronous transfer modes, which are ATM, frame relay, and SMDS. I was a lab guy and wrote test plans for making sure all that stuff worked. But that was the first 10 years of my career. Then, I moved to the supplier side. I worked for 20 years for ADTRAN. Came in as a product manager. Ran product management for a few years. I went into international marketing for five years and did a lot of other types of marketing at ADTRAN.

Kevin Morgan:

And then, six years ago, I took a position with Clearfield as the chief marketing officer. It was a great opportunity to get with a company that was growing. It was an industry that I believe personally in very fervently. This is where society needs to go and where the world will end up going. It’s all-fiber network. And so, I couldn’t think of a better company to join than Clearfield. It’s been a great ride.

Joe Coldebella:

Wow. That’s great. And it’s amazing hearing your story, in terms of where you really are from … Just starting out at the beginning, and then transitioning over to marketing. It’s an incredible story. It must have been an exciting time.

Kevin Morgan:

There are two types of engineers. There are those that really love design and entrepreneurship. They want to build new products and things like that. Fortunately, for me, I’m not made that way. I’m more of a marketing type. I’m an extrovert. I love to tell stories. And so, when I was able to get the MBA, it really opened a new opportunity for me career-wise. To get to a different level and use that technology base and understanding of how the bits and bites work and the software protocols. But ultimately, a true engineer has a tough time telling the story. They need marketing to tell a story, so that’s what I do. I enjoy that.

Joe Coldebella:

It’s one of the great things … In terms of the marketing and the other side of the building, you always want the guy with the brown suit, but you also have to have the guy with the suit. Because it’s really hard to find someone who can do both. It’s awesome that you can. Because it’s one of those things where it’s a tough talent, but the fact that you know both sides must help Clearfield excel.

Kevin Morgan:

It really has an appreciation for technology. And it allows me to identify the ways where we need to skate to where the puck’s going to be.

Joe Coldebella:

I love it. That’s a Wayne Gretzky kind of quote.

Kevin Morgan:

There you go. The Minnesota-based company, you’ve got to talk hockey somewhere along the way.

Joe Coldebella:

Absolutely. Before we talk a little bit about Clearfield, I would love to get your thoughts on Fiber Connect 2022. The first thing is that you and the organization as a whole, you guys must be over the moon in terms of what a home run this event has been so far.

Kevin Morgan:

Yes. This is the best event we’ve ever had. Without a doubt. The credit to a lot of people, including our board and our premier members has hung with us since we started in 2001. We’ve been growing a lot in the last couple of years, but our staff led by Gary Bolton, our president, and CEO, put together a great event. The good thing about having so much experience in the industry is you know when you’ve had lean years. I was the chairman of the board back in 2015. It wasn’t necessarily the best time to be the chairman.

Kevin Morgan:

I was the 2019 chairman, and this year 2022. I’m so appreciative of this moment. How different it is. It is such fulfillment of a vision that we’ve all had. That if people just got on board, this was going to take us where we need to go for fiber. Now, we have an energy that resonates with so many people. It’s a 50% increase in attendance this year over our last year. This is mapping what we’re seeing in revenue growth and up to the right metrics for a lot of people in our industry. It’s just fantastic.

Joe Coldebella:

I was talking with someone. We were kidding that this is like the Woodstock of fiber in the sense that everybody’s here. There’s an exciting buzz, which must be super gratifying.

Kevin Morgan:

It really is. It’s just so nice.

Joe Coldebella:

The venue has been fantastic. The speakers are great. You’re doing amazing things with the panels. But I think one of the things that I noticed that was really different than other events that I’ve met in the industry was the fact that you guys added entertainment. I would love to get a snapshot of what you guys were thinking.

Kevin Morgan:

We’re in music city. Nashville is home to country music. We really wanted to showcase some of the up-and-coming talents and give them an opportunity to really shine and have a broader reach into the story. We have four great artists that are coming in throughout the conference to play their songs. We give them an audience. It’s a great time.

Joe Coldebella:

I think that it just shows the extra effort that you guys are putting in to make sure that the experience that folks are getting is just top shelf. From the folks that I’ve spoken with at the event, really, that’s the takeaway we’re getting.

Kevin Morgan:

Good.

Joe Coldebella:

That’s awesome. Obviously, you, Gary, and JJ Jones opened the conference this morning. What were some of the key takeaways that you wanted the attendees to leave the conference with?

Kevin Morgan:

The benefit of having a trade association. I think we are the quintessential, prototype for what an industry trade association should be. Each of our companies that are part of our membership, they’re great on their own. They have their products and portfolio that they sell every day. But when we pull our resources together, we can do a lot of great things. One of the things we highlighted this morning was our Public Policy Committee. All the work that they’ve done in Washington to get the politicians, the congressmen, the regulatory officials leaning towards fiber as they make these large allotments of money to build out infrastructure. This is the culmination of a lot of people’s efforts. And so, we brought that out.

Kevin Morgan:

It really typifies what you can do with an industry trade association when you have people that are willing to volunteer their time to come and be part of something together. It’s almost like a competition because you’re working along with your competitors. But ultimately, all boats are rising as a result of these efforts. And so, it’s just a great time.

Joe Coldebella:

No. It most definitely is. I’d love to also put a spotlight on the pre-conference …

Kevin Morgan:

Workshops?

Joe Coldebella:

Workshops. I went to them yesterday. Ultimately, my only complaint was that I couldn’t clone myself, because I wanted to be in two places at once. If you would talk about … All the panelists, all the moderators were fantastic. What kind of feedback are you getting from attendees on that?

Kevin Morgan:

We learned so much. Obviously, the conference piece of our conference and exhibit is meant to exchange ideas from experts. People that have been there, have done that. Yesterday, on Sunday afternoon, we always have a pre-conference workshop. It was based on our Fiber Broadband Starter Kit that we started years ago to give people that are new to the industry a way to come in. Get their feet wet before they get into all the technology and the exhibits.

Kevin Morgan:

If you’re a newbie to the industry, come to the pre-conference workshop. It took off to add a few more tracks. We had public-private partnership tracks. We had tracks for the cable MSOs to understand where they were going and what was driving their decisions to stick around on the DOCSIS path versus jumping to fiber. We had a number of different tracks for people to go to. As you say, there’s so much information to absorb. It’s hard to put it all in a linear fashion, so we have to line it up in parallel.

Joe Coldebella:

But it’s definitely great. And then, two other things I’d like to focus on are … The two keynote speakers that you had today I thought were awesome. The first one was Andy Burke, the former mayor of Chattanooga. My question would be, how excited is the industry and fiber in general that the NTIA brought on somebody who really knows their way around? Not only politics but also the fact that he really understands the importance of broadband moving forward as a nation.

Kevin Morgan:

It was a great find for the NTIA to have Andy come in. He has real-world experience. Not just theoretical or academic. Real-world experience of understanding what the impact of fiber deployment can be on a community. And so, when you take that idea and you can leverage it to the nation, this is good for everyone. But I thought he had a really good message in that the Department of Commerce NTIA could be looked at as pushing fiber, but they’re not.

Kevin Morgan:

What they’re taking are the monies that were allocated by Congress and looking at, “What is the best way we can invest infrastructure in communities that are going to change people’s lives forever?” It’s not necessarily about fiber. Fiber fits that bill because that’s what it can do. But the driving force behind their decisions and how they’re structuring their notice of funding opportunity and the rules behind it and all those things are really meant to protect the taxpayer’s dollars. They want the taxpayer to have a really good experience with the funding for that infrastructure.

Kevin Morgan:

He repeated President Joe Biden’s mantra that he wants to have broadband in every home. I think it’s really good that you’ve got someone with experience there, who understands fiber and is able to articulate it in a way and lead to get the most out of this. I’ve heard a number of people talk about, “This is a once-in-a-lifetime opportunity.” I read an article where Blair Levin the former architect of the National Broadband Plan For 2010 was quoted as saying, “It’s not a once in a lifetime. It’s not a once-in-a-generation. This is a once opportunity.” And it really is. This is not going to happen again, so we better get it right.

Joe Coldebella:

Absolutely. And in terms of the second speaker, which was Randy Brogle from Meta … I thought that was a really astute choice. It was very forward-thinking. I was just wondering what you guys were thinking in terms of why you decided to bring him on. Because I loved him. I thought he was great.

Kevin Morgan:

I’ll tell you. The idea is that all things end with the fiber optic connection. That’s just the beginning. And that’s what we wanted to bring out with Meta’s keynote … It’s not about just the connections and the speed and all the technical characteristics of fiber optics. It’s about what’s riding on that network. What can we do? What is going to happen? I was really encouraged to hear Mr. Brogle talk about the applications and the requirement for low latency.

Joe Coldebella:

Absolutely.

Kevin Morgan:

Exactly. We’re all talking about the latest Tom Cruise movie, Maverick, and how, “I feel the need for speed.” He used the phrase, “I feel the need for a low latency.” I loved it. I feel the need for low latency. It’s not the same as, “I feel the need for speed,” but the thought is there. Low latency is a characteristic that obviously fiber fulfills.

Kevin Morgan:

And so, I think when you get these forward-thinking companies like Meta that are really thinking about, “What can we do in the future? How is society going to benefit from having this great network?” These are the kinds of things that just come out.

Joe Coldebella:

One of the lines that I took away from his talk that I thought was really like, “Okay?” He was like, “We’re just at the dial-up phase in terms of where we are with where the metaverse is headed.” I know I’ve got a headset or whatever. Every time that I use it, I’m just blown away in terms of just the potential and how we’ve just scratched the surface.

Joe Coldebella:

I thought that was really great of you guys. It’s almost like bringing him on to say, “Listen, 10 miles down the road, there are some amazing things happening. We’ve got to prepare for it because it’s going to be crazy times. Amazing times.”

Kevin Morgan:

It’ll be fun.

Joe Coldebella:

Absolutely. And then, I would love it if we could dive into … One of the things that I thought was really interesting was at the pre-conference workshops. Peggy Schaffer from Maine Connect said something I thought was really spot on. When I talk with people, everyone talks about speed in terms of the minimum speeds or ceilings or whatever.

Joe Coldebella:

I thought was it really illuminating. She’s like, “I would love it if the standard was for those who are connected would be fiber. Those who are underserved would be the cable. And then, those who are unserved would be DSL and below.” I thought that was an awesome illustration in terms of where we really need to go. It’s not about speed. It’s about delivery service.

Kevin Morgan:

We’ve struggled with that messaging in the past. Years ago, we talked about a Fiber Broadband Association advocating for a 100-megabit nation. That was 10 years ago. We quickly, I’d say in the last 10 years, have really pivoted from the message about speed. It’s not about speed. It really isn’t. It’s about technology. It’s about what is being rolled out in terms of technology that enables … This is labeled an infrastructure bill. This is not labeled a national broadband plan.

Kevin Morgan:

This is an infrastructure bill. When we talk about infrastructure … When you’re served, you get a fiber connection. I love that analogy. The fiber is served, coax is underserved, and DSL and below are unserved. However, there’s inertia that’s been built up in the industry through definitions of terms.

Kevin Morgan:

Broadband as defined by the regulatory body of the FCC is 25 megabit down, three megabit up, which has moved from 4/1 to 10/1 to 25/3 now. Who knows what it’ll be? It’s just one of those things that’s unfortunate. How the government has had to work really to get to this point. If we get to 100 meg symmetric … That’s written into some of the monies as well. You’re only going to go with fiber. Ultimately, it’ll get there.

Joe Coldebella:

I’d like to touch on two other things. And then, I would love to chat about Clearfield. The first is work workforce and workforce issues. I know that the FBA is sort of doing stuff. I know Deb Kish is doing stuff as well.

Kevin Morgan:

Doing a great job.

Joe Coldebella:

Is it one of those things where there’s a tidal wave coming in and hopefully we’re going to be prepared for it? What’s your take on workforce issues in general?

Kevin Morgan:

That’s a great question. I’m very keen to try to understand this. One of the things that I see as an issue is the labor shortage for rolling out all these fiber networks. I’ve asked around, “What are the job titles that you’re missing? Is it the technician?” It’s not. What’s really missing today is the ditch diggers, the laborers, the people that are coming in. The early entry-level jobs. There’s just not enough.

Kevin Morgan:

US Department of Labor statistics shows that about 10 years ago, there were about 800,000 workers in the telecom space. That’s come down to 650,000 in the last 10 to 12 years. That’s a model. It’s been a pretty steady decline. We expect that there’s going to be a need for a huge uptick in the number of telecom jobs in the next few years, so it’s an issue. The creative things that I’ve seen to try to solve that are creating retention bonuses. So if I get a laborer on and get a 60 to the 90-day window and a 180-day window, you get an extra bonus if you stay on. Because a lot of times what we’re seeing are the younger generation … They don’t have the same experience that I did growing up on the farm and understanding the value of hard work.

Kevin Morgan:

Many of these folks come on board and they’re out in the 100-degree temperatures. They want to go back home to mom. They don’t want to stick it out. Even though it’s pretty good pay. But I believe over time, the pay will have to catch up enough to incentivize the workers to come out. That job right there is a $20 or $30 an hour job. You can make a decent living, but you have to be willing to put in the work. That’s the problem.

Joe Coldebella:

Well, I also think that it’s an opportunity to start a career as opposed to getting a job.

Kevin Morgan:

You get your foot in the door, and then you can become a skilled laborer. You can get more training. You can get all these things. This is what the Fiber Broadband Association is focused on with the Optic Course. Our Optic Course is being adopted by a number of states and local community colleges, vocational schools, and trade schools to try to create a curriculum to certify that … Once students go through this 144 hours of training, with some hands-on training there, they would graduate and be well equipped to be able to be great technicians.

Kevin Morgan:

We have many of our service provider customers that are part of the Fiber Broadband Association lining up for the graduates from these programs. This is the beginning of a wave. But ultimately, this is a very difficult issue.

Joe Coldebella:

Definitely. The dovetail to that is also the supply chain. It’s one of those things where … It’s funny. I hear different things and I read different things. Do you think the supply chain is going to be as big of an issue as it’s going to be? Or is it because the money is going to come in at certain ways? The planning is going to come out that … Hopefully, what’ll happen is that we’ll be able to tackle it a little bit better than the scary forecast that some people are saying.

Kevin Morgan:

I think we’re in a fortunate position now. We’ve had, the last two years, around five or six billion dollars for 2020 in terms of funding. About eight billion dollars hit the market in 2021. Something like that. We’re still at the beginning of all the big dollars.

Kevin Morgan:

I’ve looked at it and there are over $100 billion dollars announced. This funding for broadband, favorable to fiber, will be coming out in the next five to seven years. The big tidal wave has not hit us yet. And so, I believe it’s giving us in the industry time to catch up with these supply chain issues.

Joe Coldebella:

That’s a great point. Hopefully, as an industry, there’s a laser-like focus on this issue. Because it’s one of those things …

Kevin Morgan:

No pun intended. Laser-like. I love that.

Joe Coldebella:

Let’s just quickly move over. It’s one of those things where you’re doing all these amazing things for the Fiber Broadband Association. When do you have time to work on Clearfield? It’s one of those things where you must have a busy schedule.

Kevin Morgan:

It’s great. The Fiber Broadband Association, it’s all a volunteer thing. I learn so much. Also, I’m able to get insight into the industry. What’s happening? What’s really out there? Where are we going? To inform our management team and our executive board on how to prepare. And that’s exactly what I’ve done to really bring the messages back to anticipate what’s really happening in the industry.

Joe Coldebella:

Speaking to messages, I love Clearfield’s tagline. And it’s the “Fiber to anywhere company.” Could you elaborate in terms of what you were thinking when you guys rolled that out?

Kevin Morgan:

We built our company over the years. We were founded in 2008, so 14 years ago. We built the company on fiber at the home. That was the technology that we were enabling. In the last five or six years, it’s become much more common to have not only fiber in the home but the fiber in the building, and fiber in the cell site.

Kevin Morgan:

Fiber to anywhere. And that’s where that tagline came from. We are the “Fiber to anywhere company.” Because ultimately, it really doesn’t matter the location. It’s anywhere. We’ll take the fiber up the tower to the top of the antennas on the top. It doesn’t matter.

Joe Coldebella:

And so, what’s your USP in terms of your separation? The fact that you guys will go anywhere. And I love the three pillars that you built it on, which were your innovative design, speed of fiber deployment, and then the last one, which is labor-light.

Kevin Morgan:

That’s an important value prop for all of our service provider customers. Again, it goes back to the labor shortage issue. The thing about the product set that we give in the industry, we are a fiber connectivity supplier. That’s our core competency. For the types of products that need fiber connectivity, there are a number of ways in which you can connect to fiber in the network. You can splice it. You can do a pre-connect plug-and-play style, which we lean toward that.

Joe Coldebella:

Sure.

Kevin Morgan:

But the idea is that you’ve got these different methods of fiber connectivity in the industry. There’s also a way in which you can design a product to make it simple. We, fortunately, have a lot of people on our staff … Application engineers, field engineers that have been there, done that. We like to say that we don’t lab engineer our products, we field engineer our products.

Kevin Morgan:

These products have experience. From the guys that have been there, done that, they tell us, “Hey. You might want to consider doing this.” Through clever product design, you can take out a lot of the cost of the labor component. For any fiber project, most people will tell you that 70% of the cost is labor and construction, and 30% is the electronics and equipment. If you can create a product design that can ultimately reduce the larger portion of that business proposal from 70% to 65%, you’re going to make a lot of money.

Joe Coldebella:

Well, it seems to be working. Because didn’t you guys just expand in terms of your footprint?

Kevin Morgan:

We did. Going back to that forecast idea. A year ago next month, we announced a huge expansion of our Mexico production facility. We’re to triple the footprint down there. We moved into that building and started operations first quarter of the calendar year, this year. And so, that was all in anticipation of where this was going. Two or three months ago, I believe, we announced that we were doubling our US footprint. Square footage. Another warehouse-type facility in our headquarters area, in Minneapolis. And that’s all about getting the products in the pipeline so that we can get them out to our customers quicker.

Joe Coldebella:

You guys are basically cooking with gasoline right now.

Kevin Morgan:

We’re shipping as much as we possibly can and it’s great. Our revenues have been phenomenal. When I joined the company six years ago, it was in the $70 million range for revenues. Last year, we were in the $140 million range. In our last earnings call in April 28th, I believe, we talked about modifying our expected range for this year. We had thought we would be in the $180 range. Now, we’re going to be from $204 to $218 million this year. It’s just a great run. We’re an 80% growth company right now.

Joe Coldebella:

Wow. That is amazing. You guys must be doing backflips. It’s one of those things where.

Kevin Morgan:

It’s a really nice time to be at Clearfield. Unless you’re operations because they’re behind. They’re challenged. It’s a great thing to have. But we’re, again, positioned like no other company to be in a position to be able to capture. It’s one thing to have the opportunity to grow 80%. It’s another thing to actually do it. We’re doing it. And so, it’s just a credit to all the operations folks.

Joe Coldebella:

And that’s a perfect segue to my question. Where do we see Clearfield on the horizon? It’s going to be an incredible time. There’s all this money coming into the industry. There’s all this innovation. What’s your crystal ball prognostication?

Kevin Morgan:

I think about this a lot. The fortunate thing is that Clearfield’s model, the go-to-market model, is built around a high-touch model with customers. We have over 800 service provider-type customers we serve. It started off with independent telecoms, but it’s a number of people. When you look at the money that’s flowing into the funding from the federal government and other places, even state governments, it’s going to service providers that may or may not be experienced.

Kevin Morgan:

It may be utilities. It may be rural electric co-ops. It may be municipalities. Our products are built for that. Reduce the labor. Make it simple. Make it something that they can deploy easily. And so, we have a lot of newcomers coming into the industry that is accessing this money. I believe, over the next several years, you’ll see that continues to grow. At the same time, we have a core set of customers that we will take care of. Without a doubt. That’s who got us to the table. So I think a lot of growth in the industry. Specifically, for Clearfield in the next several years. Or 24 to 48 months.

Joe Coldebella:

Awesome. If folks want to find out more about Clearfield, where can they go?

Kevin Morgan:

Certainly. You’re welcome to go to the Clearfield homepage at www.seeclearfield.com. All of our products and messaging are represented there. We also have an investor page, if you’re interested. We are traded on the NASDAQ publicly, where $CLFD is our symbol.

Joe Coldebella:

Right. I’ll be looking that up.

Kevin Morgan:

Come on. We would welcome you to investigate us.

Joe Coldebella:

Well, Kevin, this has been an awesome visit. As always, we at The Broadband Bunch really appreciate you and everyone at the FBA for always finding the time to share the stories that are really important. I can’t thank you enough.

Kevin Morgan:

It’s always my pleasure. I really enjoyed talking to you.

Joe Coldebella:

All right. That’s going to do it for this episode of The Broadband Bunch. Until next time. We’ll see you later.