- This tiny wireless carrier’s service area in North Carolina sits in some of the hardest hit regions of Hurricane Helene
- At the peak of the damage, nearly 70% of Carolina West’s network was down
- The storm only exacerbated already tough times for the regional carrier
Hurricane Helene caused devastating damage smack dab where Carolina West Wireless offers wireless services in western North Carolina. At the peak of the storm’s damage, nearly 70% of its network was down.
Nearly a month later, only a few sites remain out of service, including a site in the mountain community of Chimney Rock, which was nearly wiped off the map. That site is now reachable but telecom backhaul isn’t available, so it remains off line at last check.
Bringing everything back to pre-Hurricane Helene levels will be a lengthy process, but Carolina West CEO Slayton Stewart said they’re confident it can be done. The remaining sites will be restored within the next 30 to 60 days, although fully assessing and repairing all the damage at each location will take months.
“We obviously took a lot of pride in getting our network back up. We had so many people that were not only willing to help [but] to work non-stop, long hours,” Stewart told Fierce.
That said, “we may have had the easy job of getting the network back up. Not that it was easy by any means, but the longer job is really the emotional damage and physical damage to the community. It’s going to take months and years to recover physically and mentally from the disaster,” he said.
Fortunately, in the immediate aftermath of the hurricane, Carolina West was able to take advantage of FCC-mandated mutual aid agreements with other carriers, working closely with Verizon, AT&T, T-Mobile and UScellular to ensure the areas most impacted by the storm received priority, particularly where Carolina West is the only carrier providing service. Others, like Appalachian Wireless, C-Spire, NexTech, SkyLine/SkyBest and Wilkes Communications, stepped up to provide support in the form of people and back-up generators.
“It really highlights how important our rural network is,” Stewart remarked.
While overseeing his company’s response to the hurricane, Stewart, the outgoing chairman of CTIA, managed to make an October 8 speech at the MWC24 show in Las Vegas where he acknowledged the storm’s damage and thanked his team of 130 people at Carolina West for working ’round the clock to restore communications.
He also spoke at length about the hardships that regional carriers like his face across the country – Appalachian Wireless in Kentucky, Cellcom in Wisconsin and Smith Bagley in the Southwest, to name a few. They’re all seeing significant declines in the kinds of federal subsidies that have enabled them to make viable businesses providing wireless coverage in sparsely populated areas.
It’s serious. Some of Carolina West’s unprofitable cell sites are at risk of being decommissioned if federal funding doesn’t materialize. “Unless we have some type of funding mechanism to keep these sites that have become uneconomic for us, it’s going to be hard for us to keep the sites up,” Stewart said.
What’s going on?
For years, Carolina West operated a number of cell sites built with Universal Service Fund (USF) support, but it’s seen a decline of almost 80% in recent years, making it difficult to maintain these sites.
Generally speaking, USF funds are collected through charges that carriers pass on to consumers through monthly phone bills and while those funds have been declining, the actual administration of the program is being challenged. In July, the U.S. Circuit Court of Appeals for the Fifth Circuit ruled that the current funding mechanism for the USF is unconstitutional. The FCC is appealing.
At the same time, regional carriers are getting squeezed by the national carriers that are increasing their rural coverage, which takes roaming revenue away from carriers like Carolina West. Whereas it used to be in the sole wireless provider in 60% or so of its coverage area, it’s now the sole provider in about 30%.
With USF support waning, shrinking roaming revenue and an inability to count on the 5G Fund or other funding mechanisms, Carolina West in May filed a petition with the FCC. The waiver request basically says that for unprofitable cell sites, “unless we get some ongoing funding for those sites, we’re not going to be able to keep those sites up,” Stewart said. And if they turn the sites down, “those customers are going to lose critical connectivity.”
The amount of towers being considered for decommissioning, the number of people served by those sites and how much money the company seeks to keep the sites operational are all redacted in the filing, which covers all 11 of the counties that Carolina West serves in North Carolina.
The petition remains pending at the FCC. A spokesman for the agency gave Fierce no update on the status of the petition.
Tough decisions
For smaller operators, market conditions will remain challenging and they’ll have tough choices to make, said industry analyst Chetan Sharma, CEO of Chetan Sharma Consulting.
“Each operator will have to assess if they can operate the business profitably in the medium-to-long term and what levers can they play with to keep the margins up,” Sharma told Fierce.
“Sometimes, it will come down to doing a P&L assessment of each tower and if the traffic isn’t there, the revenues won’t be there either and it might make more sense to decommission the site,” he said.
That would be bad for consumers who depend on these remote cell sites for day-to-day communications and 911. Satellite coverage might sound promising, but it’s not a direct replacement for terrestrial towers.
Things could be worse. Carolina West is primarily an Ericsson shop and it never used Huawei infrastructure, which some of its peers are struggling to rip out and replace due to national security concerns. Carolina West considered using Huawei, which offered significantly lower prices than Ericsson and Nokia at the time, but ultimately Carolina West decided it was important to keep the continuity of Ericsson as its primary vendor, according to Stewart.
Looking ahead
Despite the challenges, it’s not sitting idle when it comes to investing in the parts of its network that are in more populated areas. Carolina West offers 5G non-standalone (NSA) service in the largest cities in its coverage area and expects to move to 5G standalone (SA) in 2025, continuing into 2026 and 2027. The carrier has been one of the more aggressive rural carriers to acquire spectrum for 5G, including 2.5 GHz, C-band and 3.45 GHz licenses.
Formed in 1991, Carolina West Wireless is owned by a partnership consisting of wireline co-operative phone companies Skyline Telephone and Surry Telephone.
So, given all the challenges to keep the business humming along, is there a temptation to throw in the towel and sell out?
“We are owned by the local telcos,” Stewart said. “It gets harder to make the business work these days, but historically, they’ve had no desire to sell the company. Their focus is providing service to the local community.”
For the foreseeable future, it looks like Carolina West will persevere – come hell or high water.