‘Before Broadband Was Cool’

MBC celebrates 20 years of fulfilling a need for speed

March 2024

by Laura Emery, Staff Writer

For the past two decades, Mid-Atlantic Broadband Communities Corporation, a nonprofit based out of South Boston, Va., has been making great strides in securing southern Virginia’s future, one fiber connection at a time.

MBC provides high-speed broadband connectivity through an open-access, middle-mile fiber network that connects national carriers and telecommunication service providers — like AT&T, Verizon, Shentel, Lumos, Cox, etc. — with healthcare organizations, schools, libraries and other businesses in rural communities. MBC has a 2,300-mile network and supports 233 cell towers.

Being at the helm of a company that successfully changed the digital landscape in southern Virginia and has revenues of more than $17 million a year, it’s no wonder President & CEO Tad Deriso was named to Virginia Business’ Virginia 500: The 2020 Power List, and in 2019, to its 50 Most Influential Virginians list. “I’m not sure how that happened,” he says, jokingly.

The company, by all standards, is thriving. When MBC made its first customer connection in 2006, it had only four employees on the payroll. There are now 30 employees working for MBC.

Some company highlights include MBC being awarded $16 million in 2010 for a project to connect all K-12 schools in southern Virginia without any already-existing fiber connection. “That was a big deal for the communities,” Deriso explains.

But, says Deriso, he is most proud of MBC’s partnership with Microsoft and its TechSpark Initiative in 2019 that helped launch the SOVA Innovation Hub, a 15,000-square-foot two-story building in downtown South Boston, Va. — the first new building built downtown in over 40 years.

“The MBC team was growing and we needed to expand our office space. So I thought, ‘Why don’t we take a leadership position and build our own building that serves our expansion needs but also helps our communities? And what if we could get Microsoft to support new investments into programs that can accelerate economic growth for our communities in southern Virginia through their philanthropic side?’ Yes, Microsoft is a highly profitable multi-trillion-dollar corporation, but they care about giving back to their communities and helping people achieve more — and that tracks with us and our mission,” Deriso explains.

The new facility offers coworking spaces and brings together local nonprofit organizations from all over southern Virginia to offer programs that develop digital skills and entrepreneurial training.

MBC was also recently awarded a $16.4 million federal grant from the National Telecommunications and Information Administration to expand its middle-mile fiber infrastructure across 12 additional localities in Southside Virginia.

But through all the success, Deriso hasn’t lost sight of the hard work it took to get the company off the ground. Nor has he forgotten the reason for its inception: revitalizing southern Virginia and helping to create jobs and investments.

He credits David Hudgins, former director of economic development for Old Dominion Electric Cooperative, as “the guy who made it all happen.”

For his part, Hudgins says, “Somebody had to do something.”

ON A MISSION

It was in 1997 that Hudgins says he first had a “realization” that rural Virginia was “winding down.” A wave of layoffs had recently swept through the state and it had many concerned about the future of southern Virginia.

In his role as director of economic development for the generation and transmission cooperative headquartered in Glen Allen, Va., Hudgins knew the battered economy would ultimately impact ODEC’s members, which included — at the time — 12 of Virginia’s electric cooperatives. A majority of its member cooperatives serve residents in rural areas, so a hit to rural economies was a hit to ODEC’s member cooperatives.

“Something had to happen to give businesses the ability to compete in the struggling economy,” Hudgins remembers. “We needed to do something to create jobs and investments. And the solution was to bridge the digital divide in southern Virginia with high-speed broadband.”

As Hudgins recounts what occurred between 1997 and 2004 when Mid-Atlantic Broadband Cooperative was born, he repeatedly uses the expression, “long story short.”

But there was nothing “short” — or easy — about the work it took to take on such an immense forward-thinking project. After all, as Hudgins says playfully, “This was before broadband was cool.”

MONEY TALKS

ODEC’s then-CEO Jack Reasor was on board with the idea of creating an independently operated wholesale telecommunications company. So, in 2001, ODEC hired Deriso, who was director of client services with CHR Solutions at the time.

“I had been consulting with rural telephone cooperatives, higher education establishments, rural utilities, government entities, etc., all around the country — so I was used to that environment. But when we worked with cooperatives, what really stuck out to me was the seventh cooperative principle — Concern for Community. And I recognized that was the driver for ODEC,” Deriso recalls.

Hudgins explains, “We needed $250,000 in seed money to get this thing going.” ODEC’s board of directors approved appropriation of the funds toward the creation of Mid-Atlantic Broadband Cooperative. “Without them approving that $250,000, it wouldn’t have happened,” Hudgins says.

In 2004, Mid-Atlantic Broadband Cooperative, Inc., was founded under the cooperative business model — the first step to solving the rural telecommunications infrastructure challenge.

“This is what cooperatives do. We fill a void left by these big utility incumbents — which is exactly what we did in the 1930s when cooperatives banded together to bring electricity to unserved rural areas. If it weren’t for the co-op system, it wouldn’t have happened until much, much later,” says Hudgins.

What followed was a whirlwind of work for Deriso and Hudgins. “David and I traveled from Richmond to Washington, D.C., to the Eastern Shore to the Cumberland Gap trying to get this thing going,” Deriso says. “David had such a passion to make it work. He is a true champion for rural Virginia. David would not take ‘no’ for an answer. He deftly managed the project, despite there being so many challenges and obstacles.”

A major challenge was fundraising. “You know what they say,” Hudgins says. “It’s not about the money, but it’s about the money. If we solve the money problem, we knew we could solve the broadband problem.” And a lot of money was needed to take it to the next level — to the tune of $12 million to fund the first phase of the project (building the fiber backbone).

The U.S. Department of Commerce’s Economic Development Administration was willing to offer a $6 million capital grant — the second-largest grant in EDA history east of the Mississippi, according to Hudgins.

But there was a catch. MBC had to find a way to match it — which Hudgins managed to do “in the nick of time.”

One evening while dining at Richmond’s The Tobacco Company Restaurant, Hudgins ran into Carthan Currin, who had just been appointed by Gov. James S. Gilmore as executive director of the Virginia Tobacco Indemnification and Community Revitalization Commission. Currin was meeting with VTC Chairman Charles Hawkins a few days later. Hudgins saw an opportunity. He recalls, with a laugh, “I said, Carthan, look, I got a project I want to talk to you about.”

In 2004, MBC was awarded a $6 million capital grant from the EDA, which was matched with a $6 million capital grant from the VTC.

“We used the grant dollars to build the infrastructure that’s a critical economic development asset for southern Virginia, and it’s something that will be here for many decades to come,” Deriso explains.

MBC was grateful for the leadership and support of VTC Chairman Charles Hawkins and Carthan Currin who, according to Hudgins, “wrangled the $6 million match through a 32-member commission — a task that should not be underestimated.” MBC is also grateful to Neal Noyes, an EDA director who helped secure the initial grant for MBC, in addition to helping to direct a previous $1.5 million grant to develop broadband in southwest Virginia. “These men were critical to getting the ball rolling, proving we had a real, funded project and not a wish-and-a-promise project,” Hudgins adds.

Deriso agrees: “Sen. Hawkins, Carthan Currin, Neal Noyes … they had the passion, saw the vision. We wouldn’t be where we are today without their support.”

Additional capital grants of $24 million were awarded by the VTC in 2005 and 2006 to finish the first phase of the network, which was completed in September of 2006.

BUILD IT — THEY WILL COME

By 2007, MBC had successfully built more than 600 route miles of new fiber connecting 20 counties and four cities to the network.

“What we do is very similar to what ODEC does,” Deriso explains. “ODEC is a generation and transmission cooperative. They own and run the power plants that provide power to many local electric co-ops, which then distribute it to their members. Well, there was nothing in telecom like that. So we basically became like an ODEC, where MBC was connecting the primary internet drains, or the hubs, in Northern Virginia, Richmond, Atlanta, etc., and bringing that massive capacity into rural Virginia, and then the ISPs — and now many of the electric cooperatives — are using our network to get to those primary internet connection hubs.”

Deriso managed the initial planning and network buildout, directed engineering and construction partners, developed relationships with ISPs, carriers and content providers, negotiated strategic infrastructure-sharing agreements, and built an internal team to support sustainable operations.

In 2012, MBC made a strategic decision to transition from a 501(c)(12) cooperative to a 501(c)(4) nonprofit corporation and changed its name from Mid-Atlantic Broadband Cooperative to Mid-Atlantic Broadband Communities Corporation.

But its business model, pricing structure, customer focus and guiding principle remained the same.

“The whole idea is to level the playing field. If you’re a business, you should pay the same in rural Virginia as you would pay in Northern Virginia for broadband capacity. That was, and still is, the guiding principle,” says Deriso.

A NEED FOR SPEED

Deriso says that the 2020 COVID-19 pandemic was a huge growth driver for high-speed broadband. “It’s the same concept as power. It’s getting cold, so we turn up the heat and use more power. When we use more power, your local electric cooperative needs more power — so ODEC delivers more power. Same thing with us. But in our world, it’s not billion-dollar power stations, it’s multi-billion-dollar data centers.”

If you didn’t have high-speed broadband during the COVID pandemic, it was difficult — and, for many in rural areas, impossible — to transition to remote work and remote learning, or to access healthcare services, apply for public assistance, or order groceries or prescriptions.

According to the Broadband Commission for Sustainable Development, “Quarantine measures due to COVID-19 resulted in an acceleration in the adoption of digital services and broadband infrastructure.”

Hudgins says, “The pandemic changed the mindset from high-speed broadband ‘would be nice to have’ to ‘got to have it.’”

JOB WELL DONE

According to Deriso, the reason for the company’s continued success is simple: “We do well by doing good,” he says. “We put in infrastructure that makes a huge difference in the way people live, work and play in southern Virginia — and that’s the most gratifying, along with seeing it all come together and knowing that the original vision worked.”

MBC has accomplished, over the last two decades, all that it was created to do. It has enabled more than 2,000 jobs and $10 billion in private-sector investments in the region.

“Tad’s work at the helm of MBC has been stellar, especially when it comes to helping the community and being a catalyst for change in Southside Virginia,” says Hudgins.

Deriso says the company’s future is bright. “We will continue to build out our infrastructure and expand to where our customers need it, getting out into more rural areas. We also hope to continue partnering with electric cooperatives as they build out their infrastructure to ensure their members have access to high-speed internet services,” he says.

In short, MBC is all about connections: connections to the internet, connections to the community, and connections to new jobs and new investments in southern Virginia.

“At the end of the day,” says Hudgins, “the success story of MBC speaks to the relevancy of cooperatives, that there is still a place — even in the 21st century — for people pulling together to make things happen that wouldn’t happen otherwise.”