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Changing the Way We Build Broadband

By Jochai Ben-Avie | Read the original article on Impact Entrepreneur

By Jochai Ben-Avie | Read the original article on Impact Entrepreneur

From small towns to big cities, affordable, high-speed internet is critical in today’s world. Families depend on it. Communities increasingly live or die by how reliable their internet is. As the pandemic made clear, broadband is now a lifeline, not a luxury. Yet, one in three Americans doesn’t have internet at speeds fast enough to use Zoom.

Consider Macon County, Alabama — a majority Black, rural Appalachian community where 28% of households live below the poverty line. Until recently, 40% of residents in the County didn’t have internet at broadband speeds. For those who did — costs were high, with 56% reporting cutting spending on food and other essentials to pay their broadband bill. This, unfortunately, is a familiar picture across the US where many rural areas still struggle to get even basic connectivity.

While Joe Turnham, the Director of the Macon County Economic Development Authority has many priorities in his work to stimulate local industry, he understood early on that broadband was foundational for all of them. Says Turnham, “I knew pretty quickly we may go out of business here if we didn’t address the broadband issue. I had great sites that couldn’t get 100 Mbps up and down, and you can’t build a future like that.”

The market alone will not close the digital divide

Despite being an essential utility, building out the nation’s internet infrastructure has been largely left to market forces with highly uneven results: 40 million Americans are still waiting to be connected.

Large traditional internet service providers have not and will not invest in communities where the economics don’t fit their business models. And sparse, rural populations and low-income areas rarely provide the profit margins they demand.

This has resulted in historically marginalized people being disproportionately excluded. A Markup investigation found that major ISPs frequently offer the worst deals in low-income, historically redlined neighborhoods. And Pew data shows you’re far more likely to be without internet if you’re Black or Hispanic, live in a rural area, or earn a low income.

The invisible hand of the market is not going to fix this. But just because the economics are hard, it doesn’t mean it can’t be done. Broadband is the path to so many of life’s essentials: jobs, education, healthcare, government services. A full two-thirds of the UN’s targets for the Sustainable Development Goals are directly related to digital technology. If we’re to create a fairer, healthier, more prosperous world, we must find ways to connect everyone.

Building broadband from the community up

We need to change the way we build broadband. Joe Turnham and his colleagues in Alabama demonstrate how it can be done.

Knowing that Macon County couldn’t afford to sit and wait for a big brand name ISP, Turnham reached out to local leaders and organizations that shared an interest in bringing high-speed internet to the community. The group assessed what resources existed and how they could be creatively leveraged.

The result was a coalition of stakeholders raising over $3 million to connect 1,500 homes and businesses across the county. Public grant funding was supplemented with philanthropic dollars from Rural LISC and financing from Connect Humanity. The local utilities board also gave in-kind access to 11,000 poles to reduce deployment costs. This blended capital approach made the economics work for a rural ISP, which stepped in with additional capital to complete the build.

Keeping the benefits local

As a condition of our loan, Connect Humanity required a community benefits agreement, establishing safeguards and reporting requirements to ensure commitments made to the community were met by the ISP. Where networks remain in private hands, such agreements help protect community interests, providing accountability to, for example, ensure rates stay affordable and the ISPs build in the neighborhoods they say they will.

The new fiber network in Macon County is already proving to be a game-changing investment for the community. Last month, auto parts maker Samkee opened a new factory in Tuskegee , part of a $128 million investment that was contingent on high-speed internet being available. Improved connectivity has also enabled a new telehealth facility at Tuskegee University.

Macon County is just one of hundreds of communities across the country showing how broadband can be built differently, finding creative solutions to expand internet access while delivering benefits for residents — whether that’s by reinvesting revenues to help more people get online, providing free service for families of school aged children, or, like Macon County, strategically leveraging networks for economic development. What’s more, these community-focused ISPs frequently provide better , cheaper, faster service than traditional providers.

Blending capital, tailored for community success

That said, these efforts remain the exception, not the rule. The movement of community-focused broadband remains constrained by a lack of mission-oriented capital.

Traditional lenders are often unfamiliar with community broadband business models and rarely offer capital at sizes, rates, and terms that work for the sector. Government grants, while useful, are not going to be enough to close the digital divide, and with byzantine rules and substantial match requirements, they are out of reach of many of the communities that most need them.

This is where impact finance can be transformational. By catalyzing capital tailored to community broadband needs, impact investors can propel these efforts from the margins to the mainstream.

Three years ago, we founded Connect Humanity to show that with the right partnerships and investment structures, it is not only possible to sustainably invest in building broadband in the hardest-to-reach areas of the country, but also profitable.

It’s working. By blending philanthropic and commercial capital, we’ve structured low-cost, flexible investments enabling Macon County and other community broadband partners to put 100,000+ people on the path to high-speed connectivity. Our next priority is raising a fund for Appalachia — one of the least connected regions in the country.

Far more is needed. Greater participation of impact finance is critical to enable the growth of the community-focused ISPs best placed to connect underserved communities. That’s why we’re partnering with other capital providers to help them make community broadband part of their portfolio. We’re ready to talk with anyone who wants to learn more.

It’s time to shift the way broadband is built in America. We can close the digital divide while building local power, wealth, and opportunity. Social investors have an opportunity to drive this change, catalyzing billions in public and private capital for communities long ignored. There’s no time to waste.

Auto parts maker Samkee Corp. opens first U.S. factory in Tuskegee

By Jerry Underwood | Read the original article on Made in Alabama

TUSKEGEE, Alabama — Commerce Secretary Ellen McNair joined officials of Samkee Corp. and local leaders today to mark the opening of the auto parts maker’s new production facility in Tuskegee Commerce Park.

South Korea-based Samkee invested $128 million to build its first U.S. factory, which will employ over 170 people at full operation while providing a massive economic boost for rural Macon County.

“Samkee is a first-class addition to Alabama’s dynamic auto industry, and the opening of this state-of-the-art facility in Tuskegee demonstrates that the industry continues to gain horsepower in the state,” Commerce Secretary McNair said.

“I’m confident that Samkee will grow and thrive in its new U.S. industrial home, just as many others have done in Alabama.”

Over 300 company, state and local stakeholders gathered inside the Tuskegee plant to attend today’s ceremony, which culminated a project that was first announced in February 2023.

Founded in 1978, Samkee specializes in automotive aluminum components, including parts for engines, transmissions, electric vehicles and batteries, along with alloys. The company currently operates factories in South Korea.

Samkee will serve as a Tier 1 supplier to Hyundai Motor Manufacturing Alabama’s assembly plant in Montgomery.

“We are excited to have our first U.S. manufacturing footprint here in Tuskegee. This was only possible due to strong state and local leadership and supports from the entire community,” said Chihwan Kim, CEO of Samkee Corp.

“This important investment will help us continue our sustainable growth in the auto industry as well as strengthen automotive supply chain in the U.S.”

Support system

The Samkee project received a high level of community support, including site improvements, access road updating and new upgraded utilities — all of which will serve other parcels within the Tuskegee Commerce Park. In addition, a new electrical substation is being built to accommodate Samkee’s future needs.

“The City of Tuskegee is very thankful and excited to begin casting a bright future with our newest partner, Samkee America,” Tuskegee Mayor Tony Haygood said. “Our rapid deployment and success in such a short period of time is an outstanding example of what we can accomplish when we all work together.

“The new jobs and investments throughout the county will benefit our citizens for years to come.”

The Utilities Board of Tuskegee played a major role in the recruitment of Samkee, and UBT General Manager Gerald Long said today’s grand opening ceremony represented a milestone for the community.

“UBT is proud to welcome Samkee to Macon County,” Long said. “Attracting them and pulling this project off was a hard-fought effort. We will continue to work to ensure that Samkee’s new entry to Tuskegee is a successful and prosperous one.”

The Macon County Economic Development Authority (MCEDA) also played a pivotal role in bringing Samkee to Tuskegee.

“Samkee and our community developed an immediate trust and friendship that yielded this great result,” MCEDA Executive Director Joe Turnham. “We have adopted Samkee into the fabric of Macon County.

“Samkee’s motto is: “Casting the Future.” Now both Samkee and Macon County are casting that future together,” he added.

Local impact

Samkee’s manufacturing plant is expected to have a significant economic impact on Macon County, according to an analysis by the Center for Business and Economic Research (CBER) at the University of Alabama.

The analysis projects that the Samkee factory will generate $140.2 million in annual economic output in Macon County, contributing over $37 million to the county’s GDP.

New direct taxes revenues for schools and community from the project are estimated at nearly $1.5 million per year.

Brenda Tuck, Rural Development Manager for the Alabama Department of Commerce, said Samkee’s investment project illustrates that the state’s rural counties remain a powerful magnet for foreign direct investment, particularly within the auto industry.

Since 2015, foreign companies have invested over $2 billion in growth projects in Alabama’s rural counties , with auto-related projects accounting for a large share of the total, according to data from the Alabama Department of Commerce.

“Alabama’s rural communities offer manufacturers like Samkee all the essentials they need to find long-term success with their ventures,” Tuck said.

“It’s clear to me that opportunities are flourishing in the state’s rural communities, and the business world is beginning to take full advantage of the possibilities.”

Reimagine Rural: The unique challenge of bringing broadband to rural America

Rural America disproportionately lacks access to high-speed broadband, an essential component of modern life. Though the issue—and many attempts to address it—go back much farther, the 2022 Infrastructure Investment and Jobs Act appropriated $42.5 billion for the Broadband Equity, Access, and Deployment (BEAD) Program to close the gap once and for all. In this episode, Tony Pipa visits Macon County, Alabama, and also talks with leaders from Jal, New Mexico, and Humboldt County, California to learn how they have overcome their challenges to bring broadband to their rural communities. And the director of the new BEAD program lays out the federal government’s broadband agenda.

Listen on Brookings or subscribe on any platform here.

Why REAL Park

REAL Park Overview

Company Site Selection

Location decisions for users are singular opportunities to improve competitive advantage. Finding the optimal location is predicated on both financial and resource optimization around labor costs, power, transportation costs, occupancy costs, taxes, and incentives.

New Deliveries Bring New Opportunities

The I-85 corridor between Montgomery, AL and Newnan, GA (“I-85 South Corridor”) is home to Hyundai Motor Group (includes Hyundai Motor and Kia) South Korea’s largest automaker, ranked third in global car sales. This helps to make Alabama the No.2 auto exporting state and in the Top 5 for auto production which includes more than 150 Tier 1 and 2 automotive suppliers in the state.

Per Cushman & Wakefield research, since the Inflation Reduction Act (IRA) was signed in August 2022, 77 electric vehicle (EV) projects were announced in the U.S., totaling more than $80 billion in investments and nearly 49,000 in projected new jobs. Nearly half of these projects are concentrated in the Southeast. Suppliers and secondary vendors, recognizing the strategic advantage of proximity, are purposefully situating themselves in the same geographic area as plants and auto makers. This spatial proximity not only reduces shipping costs but also increases overall production efficiency in the electric vehicle ecosystem.

Hyundai is capitalizing on the EV production with the addition of the Santa Fe Hybrid, the electrified Genesis GV70 SUV as well as KIA adding the EV9 SUV into production during 2024. Furthermore Hyundai is scheduled to open an EV battery module plant in Montgomery during 2024 and Hyundai has stated that its goal is to be one of the worlds top three electric manufacturers by 2030.

The REAL Park Opportunity

REAL PARK is a 620-acre industrial park conveniently situated between KIA and Hyundai on the I-85 corridor. The optimizing location provides the right combination for automotive and other industries to control supply chain costs through the accessible transportation infrastructure, availability of heavy power, financial incentives from state and county combined with an available workforce.

Contact us

Joe Turnham
608 Dibble Street, Suite 7
Tuskegee, AL 36083