Two Internet service providers are merging to cover a larger area of Texas, Arkansas and Oklahoma, but an expert in community broadband networks cautions that consolidation can often hurt customer service.

The two former companies – 360 Communications of Durant, Oklahoma, and 903 Broadband of Leonard, Texas – were roughly the same size, which means the combination is a doubling in size for both. Upon the merger in August that became 360 Broadband, the new company had nearly 16,000 subscribers and 88 employees across 10,000 square miles and 30 counties: 20 in Oklahoma, six in Texas, and four in Arkansas. The company’s services are provided via a hybrid network containing both fiber elements and almost 250 wireless towers.

Drew Beverage, chief strategy officer for 360 Broadband, said it seemed smart to combine the two companies for funding opportunities.

“At the federal level, at the state level, it makes sense for the two companies to come together to combine resources to be able to play in that arena,” he told the Deesmealz. “And not only provide better customer service, give us better options to be able to go after some of that federal money to build out more resources to build out more rural space. And we're talking about the most rural of towns.”

Christopher Mitchell, who runs the Community Broadband Networks program at the Institute for Local Self-Reliance, said in general, he is concerned about consolidation and the impact it has.

“We worry that local customer service will be harmed, and get worse,” he told the Deesmealz. He added, however, that he knows there is a high cost of building and operating compared to many other businesses.

“And so, if you don't have 5,000 to 10,000 subscribers, it can be hard to be able to grow the network in ways that you would like. And so it's kind of expected, I feel like for some ISPs to grow through mergers,” he said. “As they get bigger and bigger, we really worry about their ability to meet all of the local needs.”

Beverage served on the Oklahoma Rural Broadband Expansion Council for one year. He said making sure people know about the Affordable Connectivity Program is important. The program provides a discount of up to $30 per month toward Internet service for eligible households and up to $75 per month for households on qualifying Tribal lands. 360 Broadband will now cover Choctaw and Chickasaw Nations, Beverage added.

“If nobody has ever been around someone that builds broadband, they might not know that that is offered to them,” he said. “But I think it will have a huge impact for the small communities, the more we build, to be able to get reasonable, reliable broadband service.”

Mitchell said that it’s important for a new company from a merger to try to remain rooted in the communities they are serving.

“We find that when an ISP is rooted in the community, with its technicians, and its ownership - all being within a community - that they tend to make more investments in higher quality services, and they provide better customer service,” he said. “As they spend less time in the community - as they become a larger, more regional ISP - they may not put as much attention into the community that they previously had.”

Beverage said they hired locally from the communities they serve,

“I think it's a lot of buy-in from our staff, knowing that we're bringing Internet to their family members, loved ones, the community that they grew up in,” Beverage said. “And so I think there's a big difference there: the money is not in rural Internet, the money is where there's a population that can give you a better ROI. But we have a passion to serve rural communities.”

Mitchell said it’s also important to keep in mind who is operating and running a combined company.

“If it's still a company that is owned by a few people who are deeply committed to providing high-quality internet access, that may still be able to provide a high quality service,” he said. “If it's owned by private equity, which is focused on a long-term, maximization of profits or even a short-term maximization of profits, then the experience is less likely to go well for the customers.

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