Fiber Broadband Infrastructure Company Working Hard To End the Digital Divide - ETI
X

Want to take a Self-Guided tour?




February 12, 2021

Fiber Broadband Infrastructure Company Working Hard To End the Digital Divide

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.

This podcast is a discussion with Kevin Morgan, the Chief Marketing Officer at Clearfield and a board member of the Fiber Broadband Association. This episode covers a variety of topics including infrastructure deployment, closing the digital divide, and Kevin’s duties as an officer at the Fiber Broadband Association. Some of the other topics discussed:

  • Fiber Broadband Infrastructure
  • Fiber Broadband Association
  • Fiber Broadband Services
  • Fiber Optics Business Case
  • Fiber Broadband Funding
  • Fiber Optics Making the Connections
  • Fiber Broadband High-Speed Service
  • Fiber Internet of Things
  • Fiber to the Home

Craig Corbin:

Welcome to the Broadband Bunch. A podcast about broadband and how it impacts all of us. The Broadband Bunch, as always, is sponsored by ETI software.

Craig Corbin:

Hello everyone and welcome to another edition of the Broadband Bunch. Along with my colleague Brad Hien, I’m Craig Corbin. Thanks so much for joining us today. Fiber optic networks have long been the foundation of infrastructure for broadband and telecommunications providers worldwide. Demand today continues to grow exponentially, especially in light of connectivity requirements made more essential, thanks to a global pandemic. With a history going back for decades, Clearfield has long been an industry leader with innovative designs for optical connectivity and the most scalable fiber management platform anywhere. Our guest today joined Clearfield in 2016 and serves as the company’s chief marketing officer, bringing with him more than three decades of experience in advanced communications technology. Very effectively covered both sides of the iron bowl by receiving a BS in electrical engineering from Auburn University, along with an MBA from the University of Alabama. It is a pleasure to introduce the chief marketing officer for Clearfield Incorporated, Mr. Kevin Morgan. Kevin, welcome to the Broadband Bunch.

Craig Corbin:

We made mention obviously of your involvement with Clearfield. In addition, you have for quite some time been very involved with the Fiber Broadband Association. Just wanted to make mention of that too, as well, having served as chair of the board on a couple of occasions, I think currently, again, serving as treasurer now. Before we get started, just a brief comment from you on that relationship.

Fiber Broadband Association

Kevin Morgan:

The Fiber Broadband Association is an industry trade association, basically, that pulls together 250 or 300 companies over half of which are service providers that share a common mission. And that mission would be to further the deployment of fiber optic networks, access networks across the country and North America, as well as Canada. These companies basically come together and on that shared mission are able to effectively go to lobby the FCC and Congress to establish programs and funding that are fair representations for what the fiber industry needs, especially as it comes to bridging the digital divide and getting deployments out to rural America.

Craig Corbin:

Excited today to be able to dig in a little bit to what’s going on at Clearfield. It would be an understatement to say that you guys are burning the candle at both ends in light of the need for broadband connectivity around the world. Give us a 30,000-foot overview of Clearfield and what you have going on now.

Kevin Morgan:

Clearfield, we’ve been providing a lot of really innovative products in the area of fiber management and fiber delivery, and fiber protection. That’s our main business and areas of our product portfolio. What that means traditionally, just for the consumer in the home, anytime a fiber optic line is rolled out using high-speed internet service, typically you’re going to have to have some way to connect those fiber-optic lines from a central point, central office, all the way out to the residents or the business. We don’t make the manufacture of the fiber optic cables, but we make everything that is needed to connect those fiber optic cables from the central office and the network, all the way out to the homes.

Brad Hine:

Clearly, in the last year or so, we’ve seen such a change in our environment with COVID-19 and the need for obviously broadband at the home, broadband for certain services like school, people being connected to schools, being connected to work, healthcare, all kinds of that. What are some of the things you’ve experienced in the last year that have gotten you guys a little more of a tighter organization? And have your processes changed much in this last year?

Kevin Morgan:

When the pandemic hit and things shifted in March, of course, everyone reacted. To the credit of Clearfield, we were in a really good position because number one, we never missed, that I know of, any really critical deadline for delivering our products. We kept our production facilities clean and intact. We established all of the recommended procedures for keeping our employees safe. The non-production employees were basically sent home to work from home, using all the remote technologies like email and Zoom, and phone. It’s been a great experience, honestly. In this past year, if you look at the performance of the company, it really is a reflection of the demand in the industry. In our last quarters announcement though, it’s actually our fiscal year 21, but it’s the fourth quarter calendar year through December, we grew 40%.

Fiber Broadband Services

Kevin Morgan:

It’s an indicator of the demand for fiber broadband services has continued to accelerate and grow. I saw a chart this week on the bandwidth consumption and when you look at the bandwidth consumption of 2020 versus 2019 plotted over a number of months, it’s at least one and a half times, if not sometimes twice the amount of bandwidth being consumed by the networks. Those networks are extremely taxed. And so, having a technology like fiber optics is the thing that is able to help these network service providers, communication service providers, navigate through all of the demand and still maintain a really good service for their customers.

Brad Hine:

Obviously, we’ve all experienced this. Knowing that your business is trying to get the ball rolling at the front end of all these projects and knowing that your goal is to make the fiber rollout easier and that the largest fiber cost is labor. How have you been accomplishing that over the last year, then? I’ll make one observation, it seems that that’s always the key, is to try to speed up that process and make it more efficient. How exactly have you guys started to use a lot of those practices that you’ve had in the past?

Fiber Optics Business Case

Kevin Morgan:

I’ve been amazed since I came onto the company to understand better the impact of good product design on low labor costs. And if you look at the business case for rolling out fiber optics, it’s generally considered a split of 70% for labor construction costs versus 30% of the capital equipment costs to roll out fiber. As a supplier of the connectivity piece, the fiber management piece, this is wherein the network, everything is connected. You need to have a way in which you can connect fibers in a reliable fashion and do it in a way that’s the most cost-effective. Years ago, when fiber was first being rolled out, there were a number of techniques for connecting fiber. Actually, there weren’t a number of techniques, there was really one limited technique, which was to fiber splice every fiber in the network, whether they were in the backbone of the network, or if you’re connecting an individual user at a home.

Kevin Morgan:

When you look at the problem statement on the business case, large labor component, 70%, we look at that and say, what can we do to reduce the labor component through smart design? That’s where you see our company has embraced technology or technique called plug and play. The plug-and-play method of connecting fiber optics basically reduces and sometimes eliminates the need to perform a fiber splice. If you have a large count fiber, as it goes out through the network from the feeder fiber towards the distribution toward the job, it gets from a large count and success of lower counts as it gets down to an individual user with a single fiber. Well, all along the way, there’s a natural point in which you would perform splicing. Let’s say if you’ve got 144 counts or a higher cable, but then as it gets below 144 count fiber, you can really take advantage of plug and play techniques to reduce the cost of the labor that’s required to pick up service.

Kevin Morgan:

Not only the cost at the time. I mean, the time it takes to plug in a product versus taking a fiber, cutting it, cleaning it, prepping it, splicing it. You’re talking about an order of magnitude difference in the amount of time. Our products are a lot of plug-and-play technologies. We utilize a lot of plug-and-play technologies, a variety of connector types, but we also employ the best and most stringent, low insertion loss characteristics per connector in the industry. We use a technique called fiber deep and using these connectors with plug and play. Anytime you build a fiber network you’re going to incur an optical loss. You have an optical loss budget. You try to engineer your lasers to go as far as you can, to serve as many customers as you can. If you have a break in that cable where it’s a connector, or whether you have a splice, then you’re introducing a little bit of loss. So with our connectors, we have cut the amount of loss in half when compared to other industries’ connectors.

Kevin Morgan:

We’re leading that charge to employ plug-and-play techniques and plug-and-play technology for a number of reasons. The biggest advantage for the service provider is they can reduce their labor force. They don’t have to buy the splicing equipment and have the pieces and splicers and train their technicians to be certified fiber optic splicing technicians. All they need are folks that can understand and are good with their hands to be able to do a simple, clean, and inspection of the fiber, plug it in, and there you go. It’s been a game-changer for our customers, and we have over 700 service providers throughout North America that are using these techniques every day and doing it in a way that’s very reliable and cost-effective. They’ve seen the light, no pun intended, of having a good way to roll out fiber optics.

Brad Hine:

Really important that you’re innovating with technology as well as processes overall and knowledge transferring that to the market and all your customers, man, that’s going to be a fabulous saving. Now, on the other side, we’ve seen how the government has gotten very involved in the last three or four years with the Connect America Fund and most recently the RDOF Fund. How have you seen this impact to your customers, and have you seen any specific focus geographically on where these monies are going?

Fiber Broadband Funding

Kevin Morgan:

I mentioned early in the conversation about the digital divide and it’s really a truism that’s a tough problem to deal with anywhere, but especially in the US. We have population densities that vary greatly from the urban area suburbs out to the rural areas. Traditionally what’s happened over time is that the larger population centers get a lot of choice in terms of their internet connections and high-speed broadband connections. Most of the fiber optic deployments have centered on those higher population densities. This has created a digital divide because in the rural areas and small towns throughout North America, they typically are underserved and sometimes unserved with broadband technology. We saw that play out this year, 2020, when the pandemic hit, the requirement to work from home, work from anywhere, to be able to employ distance learning for the kids at home, the ability to have telehealth applications work so that you don’t have to travel and risk your health to get into a potential COVID situation.

Kevin Morgan:

Those applications are only possible through high-speed internet. And so one of the things that have as you mentioned, the funding from the government, the FCC was charged to administer two things, the Connect America Fund, which was a plan that is a holdover. History on that, back in 2010 the national broadband plan was introduced that was designed to switch over the funding that every person pays on their phone bill for universal service funds to go and create funding instead of voice networks, to fund broadband networks. Over a period of 10 years, that’s what happened through the national broadband plan, the Connect America Fund that was rolled out in two phases. It funded more broadband deployments to the unserved and underserved communities. Recently the Rural Digital Opportunity Fund picks up on that theme and does one more by funding and heavily weighting gigabit services, which is where things need to go out to unserved and underserved communities.

Kevin Morgan:

Those programs don’t happen automatically. The lawmakers and regulators, they don’t just wake up one day and say, “Hey, let’s put $20 million aside for this.” This was a long time coming and the Fiber Broadband Association was a key part of lobbying and pulling together the data that the lawmakers could make decisions on and the policymakers of FCC could say, “Okay, what are the benefits, what are the pros and cons for rolling out various technologies?”

Kevin Morgan:

Ultimately as a citizen in the US, I really just think we need to solve the digital divide. In many cases, fiber is the best and of course the best technology, but fiber may not always be the right technology. We recognize that. So you need a full toolkit. Where we see fiber being compared with any other technology, it always wins. The challenge then to the equipment industry is to figure out ways we can make that rollout less capital intensive, less labor-intensive, so that it is without a doubt, hands down the best technology. Now, some places are so remote that you don’t want to serve them and there are other techniques to reach those very remote places, microwave or satellite, or fixed wireless access.

Craig Corbin:

You’re listening to the Broadband Bunch. We’re visiting with Kevin Morgan, the chief marketing officer for Clearfield Incorporated. Kevin, I know in earlier conversations, you have referred to yourself as a fiber evangelist. It’s obvious that you bring a lot of passion to what you do. I’m curious, share with us if you would, your background, how you got into the industry, to begin with?

Kevin Morgan:

Growing up, my dad was a phone man. He was an employee of Ma Bell. Worked for Southern Bell Telephone Company in Florida. I think as a descendant of a communications person, my dad, it was one of those things I thought, I think I could go into this industry. A funny story, I recall, my dad was like a central office technician and back when I was very young, they had a strike. I remember holding the signs and walking around the central office with my dad. He gave me the sign and I was picketing with dad. I was doing the right thing and going up against management and it was great because all of his buddies on the CO side, all his technicians’ guys would say, “Look at Jim’s son. Look at that guy. He’s got a boy out there, he’s teaching him right.”

Kevin Morgan:

Got my engineering degree and then went on the other side on management. I’m not sure dad was too happy, but I got into the management side. My first job out of college was at Bell South, which has become AT&T and stayed there, 10 years worked in the science and technologies department. Back in the early nineties, we were challenged in Bell South to roll out an ATM network. Asynchronous transfer mode over through North Carolina information highway. I was in charge of product evaluation and testing for the ATM switches in the early days. That was one of my very first experiences with working with fiber optics in the lab and running all the tests for SONET and various other technologies. It was always amazing to me, for every trouble that I had in the lab, just about 99% of them were at the physical layer. It was, you weren’t making the connection right, it wasn’t seeing the signal right. We didn’t have the right amount of quality for a signal.

Fiber Optics Making the Connection

Kevin Morgan:

The software seemed to always work, but if you didn’t have a good connection, it didn’t matter how your software worked. That was kind of an aha moment for me in the lab and engineering, that this is an important aspect that needs to be fixed. It needs to have some attention. I was really just from that point on thinking about, okay, fiber optics, making the connection, and this is something that’s important that’s going to keep a lot of people employed for a long time. So I thought, let’s go that route. And that’s where I went. So I stayed 10 years with Bell South to finish my career. Then 20 years I spent with Adtran, a communications equipment company based out of Huntsville, Alabama. Product management, product marketing, international marketing, and a lot of different roles there, just about every kind of function and product management and marketing that we could think of. Then I had an opportunity five years ago to come to join Clearfield. I jumped at the chance because it certainly is, as you mentioned, right in the wheelhouse for my passion.

Brad Hine:

Kevin, as I look at your experience, and as you just kind of walk through your chronology in the industry, you started as an engineer. You started on the tech side. Obviously, there are times when you were more on the tech side and then more on the business side. How important has it been for you to experience both sides of those equations at three or four different companies?

Kevin Morgan:

It’s critical. It really is. For anyone with a career in technology, I think you get to a point where you have a selection for your career path. If you want to continue to go down the technical route and technology route, and it has its benefits, or if you want to apply that technology to business practices and business learning. I was just never the type of engineer that was going to be satisfied in a lab just developing a product or trying to come up with new ideas from a product standpoint. It has its place and thank God we have folks that are driven by that.

Kevin Morgan:

What really helped, I’m a pretty competitive person and what was fun for me was becoming a product manager. And when you become product manager of a portfolio of products, you really need to have an understanding of business. So for me, being a product manager and trying to put my competition out of business, that was fun. It was a really competitive situation. So I’m really happy that when I came on board with Adtran, we had about 15% market share and I was assigned a technology called high bit-rate digital subscriber line, HDSL. It was a T1 replacement technology back in the day. And within about five years, we had grown our market share from 15 to 85%. Put a couple of customers out of business. And ultimately we were the only ones standing in that realm. Took a portfolio that was generating about $40 million a year, took it to $200 million a year. So that’s fun. I get energized by that. And that’s where I still see an opportunity to apply technology and understanding down to a bit byte-level what’s going on with the technology.

Kevin Morgan:

I run into people all the time who gets the engineering mindset. They can tell me every bit of nuance from a technical perspective about a product, a technology, but really difficult to bridge the gap to tell that story in a way that’s meaningful for your target customer. I think you really need to understand the technology in order to know what to emphasize to know what’s important for those end-user customers. They may not be well-versed in K1, K2 bytes of the SONET framing structure, but they want to know that they got a reliable connection. You focus on what’s important.

Brad Hine:

Well, you hit the nail on the head, and I can speak from experience also coming from the product realm for a 15-year period. Innovation is awesome and you may have engineers that can do something that no one else can, but there has to be that business need, and you have to fit it into your constituency also to know that they can use it properly. A great example, Kevin. As you know, no fiber optic story is really the same. I’m sure you’ve experienced that, but you made a comment a little earlier where you said fiber may not always be the best technology, you need the full toolkit. Clearly less labor-intensive and less capital-intensive. Do you have any examples where you’ve had to go away from the fiber in the ground only and have some wins and successes outside with a different technology?

Fiber Broadband High-speed Service

Kevin Morgan:

What we’re seeing now, for those really in there, we talked about the rural areas, some of our customers, as the population densities are much less in a rural setting, but they need high-speed internet service just as much as the city folks do. One of our customers Midco is a Midwest-based company, Midcontinent, and they wanted to be able to provide high-speed broadband service. And it wasn’t feasible for them to have fiber to the home or technology rolled out to all those customers. We help them deploy a hybrid network where you have a fixed wireless access technology that they could mount their antennas and radios at the top of the grain elevators that were the high structures in their area.

Kevin Morgan:

If you go and you Google fiber connectivity for grain elevators, you probably don’t find very many solutions popping up. That’s kind of a one-off. They came to us and said, “Hey, what can you do to help us design a customized solution that can fit in this for this application?” We’ve sent our application engineers out there and we’ve worked with them. They’re a long-time customer. They’ve deployed many of our other fiber home products. It was just a matter of getting engaged and understanding and seeking to listen to the customer and trying to understand what their needs were and then collaborating on a solution and coming up with something we could deliver. That’s exactly what happened. We designed a special fitting and connector so that it would fit right for their application of the top of the grain elevators. They were really pleased because part of the challenge was getting the fiber from the top of the elevator down to the ground where they could perform the splicing and things like that. Using our field ship products, it just fits the bill.

Fiber: Internet of Things

Brad Hine:

Now our conversations going from fixed-line broadband, some fixed wireless innovation. Now you’re starting to talk about some IoT opportunities with farming and sharing relevant data for things like that. I mean, where do we actually go from here? We’re in the middle of a lot of these projects currently, CAF 2 and RDOF, when will we start to see some of this implemented? How soon and what will we see? Will we see more of this IOT infusion?

Kevin Morgan:

If I just look at technology and what’s possible and actually what we’re experiencing, we’re seeing this, I would say an explosion of devices at the very edge of the network in the homes, businesses, cars, public places, airports, where these devices are a hundred percent on all the time they’re connected to the network. Any device that’s connected to the network, the internet, is a device that would be participating in this internet of things. The amount of information that’s collected can vary by device. Of course, if you have a high-definition video camera, you’re going to be generating a lot of information that needs to be processed. What we’re seeing is, as you come up with these new IoT devices, whether it’s a toaster or refrigerator or microwave in a home or sound system, like a Sonos system, or if you’re doing your video camera surveillance, all of these devices are generating data, generating the need for bandwidth and need for processing.

Kevin Morgan:

There’s a push now to develop edge computing multi-access edge compute MEC is a term that defines basically the concept of pushing out-processing from the cloud core to the edge of the cloud. When you do that, you really need to have a very high-speed, reliable, secure connection to those processing centers. Typically you have a data center that’s really insecure, fiber intense, and has a lot of chillers and air conditioners chilling down the equipment that’s processing servers. All that’s moving out toward the edge of the network. When I talk about the edge of the network, I’m envisioning these microwave data centers that could be housed in a cabinet. We make active cabinets today that are secure. They provide their own power sources. They can have battery backup and a lot of fiber. When you look at a MEC application, those are the three things you need, a secure location, logically and physically, a lot of power, and a lot of fiber.

Fiber to the Home

Kevin Morgan:

This is where things are going. It’s a different application though, but traditional fiber to the home, fiber to the business, but it’s still using a fiber access network. We’re starting to see hybrid formations of fiber going to, as we mentioned earlier, fixed wireless or being a fiber to the antenna, to now I see in the future in the next few years, us really developing micro edge data centers that are fiber fit. So I think that’s kind of exciting because it does play into the premise of your question, what about IOT, where does that fit? That’ll have a relevant play there with wireless and fiber.

Craig Corbin:

Kevin, it’s obvious that we could talk for hours about that topic and so much more, but so impressed with what you guys are doing there at Clearfield, being able to serve your customer base so well, listening to what their needs are, understanding that and then being able to deliver on time. We appreciate being able to define that. As we begin to wrap up, obviously you have seen a lot in your time in the industry, and I know that many stories I’m sure to come to mind, anything in particular, as we wrap up, that’s been a highlight for you or something that’s really been something you’ve enjoyed over the years?

Kevin Morgan:

I like to really do things that really drives me. One of the things I’m really proud of at Clearfield is our ability to deliver. We have industry-leading lead times. One of the things that’s a hallmark of our service to our customers. We have, like I said, over 700 service provider customers throughout North America. They are the beneficiaries of the processes that we put in place to be able to handle the demand that can grow 40% and still maintain a three to four-week lead time on products. We see lead times in our industry that our competitors pushing out tremendously because of the demand, because of the number of fiber needs that are out there, our competitors are challenged and they’re pushing out their lead times for product.

Kevin Morgan:

When you look at government-funded programs like CAF and RDOF, guess what? You have milestones to hit. If you have milestones to hit and you don’t hit them, then you have penalties that the government collects. One of the things that are just as exciting about working at Clearfield as the technology, is the service we provide to the customers and the difference that makes. Because if you designed the greatest network and you can’t get your product on time, what good is it? You need to have the ability to deliver the products on time when they’re needed. We’re really super excited about our supply chain, our ability to operate and be efficient and meet the needs of our customers and do it in a way that it’s part of our doing business. That’s what you get. That’s a hallmark of our company.

Kevin Morgan:

Beyond the plug and play benefits and the product technology benefits, we’ve got a really good business model that I believe our customers appreciate and we feel like that we’re going to be able to gain share this year as a result of that because we know there are milestones to hit and the competition’s having trouble. We’re here for them.