A Positive Financial Year Contributes to Network Refresh
I am happy to report that MCNC had good financial results for fiscal 2017 (FY17). We operate on a fiscal year of July 1 to June 30 and as such we have recently closed our books for FY17. The FY17 results were presented to our board of directors July 25 and showed revenues favorable to budget and a bottom line that contributes to our network refresh pool.
Many of you have heard us use the term “network refresh” but just in case you’re not familiar with it, I want to briefly explain it and share how it benefits NCREN.
- What is a network refresh pool? Basically, it’s an accumulation of funds we use to cover the future replacement costs of certain portions of the NCREN infrastructure.
- Why is network refresh needed? One of the more significant NCREN assets is MCNC’s fiber infrastructure. You might recall that MCNC was a recipient of two Broadband Technologies Opportunities Program (BTOP) grants from the American Recovery and Reinvestment Act of 2009 (also known as the stimulus plan). These grants allowed us to construct fiber to underserved and un-served areas of North Carolina. As with any asset being used, we anticipate the fiber will need to be replaced several years down the road and we can’t expect the federal government to fund the replacements. Through the network refresh, we plan ahead to prepare for the future needs of the network.
- How does MCNC maintain its network refresh? After discussing the need for refresh with the financial leadership of our major constituencies and with their agreement, we developed a pricing strategy of pricing equal to break-even plus a bit more every year to ultimately cover the costs to refresh the fiber when needed.
I hope you now have a better understanding of just one of the components we use to ensure a strong and dynamic network infrastructure. As CFO, it is my pleasure to watch over and guide MCNC’s fiscal health and to help provide our customers the best MCNC experience possible.