Anterix And LCRA Spectrum Deal Foreshadows A Surge In Broadband Orders From Electric Utilities

Diligently, company by company, Anterix has been reshaping utility communications.

On April 24, the Woodland Park, NJ-based company announced that the Lower Colorado River Authority (LCRA) was acquiring spectrum for a private broadband network for $30 million.

That announcement has a significance way beyond the details of the Texas transaction. It amounts to a major breakthrough for Anterix, and possibly the beginning of a new era in utility communications.

Communications’ New Place

The journey for Anterix began a decade ago with Morgan O’Brien, the dynamic and legendary co-founder of Nextel, proselytizing the utilities on the value to them of private broadband networks using the 900 MHz spectrum, acquired by his new company, which became Anterix.

Six of those years were treading water as the Federal Communications Commission finalized rules for the 900 MHz spectrum for private broadband network use.

The idea of O’Brien and some of his former colleagues from Nextel, including current President and CEO Rob Schwartz, was to take utility communications to a new place: private LTE broadband networks.

Initially, enthusiasm was tempered: Utilities are known to be cautious, and they have reason to be. Electric service is a real-time proposition, like air traffic control.

In the same way that the Federal Aviation Administration has difficulty in adopting new technology and new practices, utilities tend to stick with what they know. The FAA can’t suspend air traffic control while it trains controllers on new technologies. Utilities can’t shut down while they retool, nor can they afford to be too experimental. They favor that which has served them in the past over what might serve them in the future.

But Anterix continued to make its case for speed of data transmission, resiliency beyond that available on public networks, and greatly enhanced cybersecurity. The company realized a new utility world would need a new level of communications capacity with everything from push-to-talk to massive data while providing incredible speed.

One of the selling points made by O’Brien and Schwartz is that private broadband gives utilities a new tool for their toolbox. For example, with high-speed, low-latency broadband, a utility can know and act upon a line failure in the 1.4 seconds before it hits the ground. Actionable intelligence.

Now Anterix finds itself in the right place at the right time: Broadband is moving from nice to have to need to have. Major forces are changing the utilities as new realities are thrusting into the utility consciousness.

Top among these was mounting concern about cybersecurity, but data has also begun to play a major role in utility operations. The increase in renewable generation, with bi-directional power flows, has upped the critical need for fast data flows: Decisions which really are split-second.

Before signing with LCRA, Anterix had completed four private broadband network deals with Ameren
AEE
, San Diego Gas and Electric, Evergy and Xcel. With LCRA, Anterix makes its first sale to a public power entity, one which has needs beyond the simple utility function.

Anatomy Of LCRA

This lies in the nature of LCRA. It was created in 1934 by the Texas legislature, but it isn’t a regular state agency. It is almost autonomous; it gets no state funding, and isn’t subject to normal state management.

LRCA manages 600 miles of the Colorado River, running through the Hill Country of Texas. It provides electricity and water for 1.4 million Texans. It has no retail customers, but instead serves 30 utilities, mostly public and rural electric cooperatives.

Its 5,600 miles of transmission lines cover 68 counties. It manages and maintains six hydroelectric dams which are operational when water is being discharged for other reasons. It owns coal, gas and renewable generating and has revenues of $1.2 billion.

It manages more than 40 parks along the river, from access points to full overnight camping facilities.

Like the TVA and the Salt River Project, LCRA has a conservation and social role as well as a power and water supply mission.

“This will help us take our wireless communications system to the next level,” said Ken Price, LCRA chief operating officer.

“The network will provide a host of upgrades that will benefit LCRA and our customers by significantly improving data transmission, overall communications and resilience,” he added.

LCRA will be sharing its new capability when it comes online with a variety of retail utilities, schools, public transport systems, and others who can benefit from broadband.

Anterix has 14 major utilities actively considering licensing spectrum for private broadband networks, but the future is bright beyond that.

Tim Gray, Anterix chief financial officer, told a Morgan Stanley
MS
technology conference that as spectrum is finite, the asset held by Anterix commands a premium. Lifting the veil on the future, he said that there are 60 prospects in the pipeline to lease Anterix spectrum for LTE broadband, which could yield value of $3 billion.

There is a quickening of the pace around Anterix.

Clint Vince, head of the global energy practice at Dentons, said, “A number of experts have correctly observed that you can’t modernize the electric grid without modernizing communications.”

Supporting Anterix is what the company calls its ecosystem: a band of more than 100 leading companies in the communications and electricity spheres, which offers solutions to issues and challenges as companies build out their LTE private broadband networks. These include GE, Hitachi, Motorola, Siemens, and many more.

With five major utility customers, offering distribution, transmission, generation and water management services, as well as a robust ecosystem of solution developers, Anterix says it has “derisked” any utility’s decision about whether to pursue private wireless broadband. In fact, it adds, it may now be riskier not to move forward.

For utility command-and-control over communications, the future has come knocking. It is at the door now.

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