Broadband Adoption Is About Value More Than Price

Yesterday I had the great fortune to tag along with Gary Evans and his team from Hiawatha Broadband Communications (HBC) as they embarked on a series of meetings in DC to discuss broadband policy.

While lots of interesting issues were touched on, the one that kept drawing my attention was HBC's assertion that while they're not the low price provider in any market they serve, they're the dominant provider in every community they're in.

As a quick frame of reference, HBC is a broadband provider in rural southeastern Minnesota. They operate a legacy HFC network, but their buildout nowadays is focused on fiber-to-the-home, bringing it to rural communities, some of which have less than 1,000 people.

When asked to explain how they've become the dominant provider without having the cheapest services, they cited a number of reasons.

Number one is customer service. An example they gave is that in one small community they serve, the multi-state incumbent only brings their network technician to town on Thursdays. So if your TV broke Thursday night, you had to go without service for a week. HBC, on the other hand, sets up a local customer service agent in every community they serve, and have a stellar reputation for fixing problems within hours rather than days. What they've proven is that customers are willing to pay a bit more if they can get good customer service.

Number two is their commitment to the communities they serve. In addition to hiring local customer service reps, HBC also has TV production capabilities that they use to capture local events, like high school sports. They also go out of their way to find opportunities to donate to worthwhile causes in their communities. In these ways they prove to their customers that they're fully invested in the areas they serve.

The third piece of the puzzle of their value proposition is the quality of the service they deliver. Their networks are more reliable than their competitors on multiple levels: they fix any issues faster, they have fewer issues in the first place because of fiber's fewer moving parts, and they do a better job of actually delivering the bandwidth their customers pay for.

While there's lots of talk nowadays about the importance of focusing on spurring broadband adoption in policy circles, those conversations are often limited to how can you make broadband cheaper and more relevant to users. Though the latter of these is still very important to consider, HBC is proving that the former isn't as big of a deal as some make it out to be.

And the proof's really in the pudding: HBC is realizing takerates in excess of 60% and often even above 70% in the rural markets they serve, which I believe is higher than the national average despite HBC operating in competitive markets.

Why? Because their customers feel respected, feel valued, that their needs are being met by a network operator who cares about each and every individual customer.

One of my great hopes is that all network operators can be inspired by HBC's experiences, to take more time to treat their customers right. As that can only help as we push to overcome the broadband adoption gap in America.